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)
J. Kevin Gao, Esq.
169 Lackawanna Avenue
Parsippany, NJ 07054
(Name and address of agent for service)
Registrant's telephone number, including area code: (212) 576-7000
Date of fiscal year end: December 31
Date of reporting period: December 31, 2010
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, 2010
MESSAGE FROM THE PRESIDENT
The stock market advanced in 2010, with major U.S. indexes providing solid
double-digit returns. Small- and mid-capitalization stocks generally
outperformed large-capitalization stocks, and growth stocks outperformed value
stocks at all capitalization levels.
The market's progress, however, was not without turbulence. Stock prices fell in
January but climbed in February and most of March. An April drilling rig
explosion in the Gulf of Mexico led to a massive oil spill and a moratorium on
deepwater drilling in the region. Meanwhile, concerns about the quality of
sovereign debt in Greece led investors to reassess the financial strength of
other peripheral European nations, including Spain, Portugal, and Ireland.
Stocks declined again, reaching their low point for the year in early July, but
turned around shortly before the Gulf oil leak was capped and shortly after the
Federal Open Market Committee ("FOMC") reaffirmed its belief that inflation was
likely to remain subdued for some time.
International stocks also had a strong year, but European stocks advanced
considerably less than the global stock market. The European debt crisis called
for sustained coordination between the International Monetary Fund, the European
Union, the European Central Bank and leaders of several eurozone nations.
Greece, Spain, Portugal and Ireland all saw their debt downgraded by major
rating agencies. Fortunately, austerity measures and bailout plans for ailing
European economies as well as stress tests on leading European banks helped
restore a measure of investor confidence.
In the United States, the FOMC kept the federal funds target rate in a range
between zero and 0.25% throughout 2010. In November, the FOMC announced that it
would engage in a second round of quantitative easing (or direct purchases of
Treasury securities) "to promote a stronger pace of economic recovery" and help
ensure that inflation, over time, would be at levels consistent with the
Committee's mandate.
With short-term interest rates at very low levels, many inves-tors sought yield
by investing in longer-term securities or by accepting higher levels of risk.
High-yield corporate bonds, emerging-market debt and floating-rate loans were
all beneficiaries of this trend. In 2010, institutional leveraged-loan volume
was more than three times its level in 2009.
Rising stock and bond markets are always encouraging news. Since past
performance is no guarantee of future results, however, many investors wonder
what they can do to make the most of their investments when what lies ahead
remains uncertain. At MainStay VP Series Fund, Inc., we believe that realistic
expectations, broad diversification and gradual Portfolio adjustments can help
investors pursue their long-range goals.
Rather than trying to time the market or speculate about where stock prices or
securities markets are likely to move next, each of our Portfolios pursues a
specific investment objective using well-defined investment strategies that have
withstood the test of time. While positive returns are good news, we believe
that a consistent investment approach can help investors pursue opportunities
not only in the short-term but also over full market cycles.
The reports that follow provide more detailed information about the securities,
market conditions and specific decisions that influenced the performance of each
of our Portfolios in 2010. We are pleased with the progress our Portfolios have
achieved, and we hope you will consider this information carefully as part of
your long-term investment planning.
Sincerely,
-s- Stephen P. Fisher
Stephen P. Fisher
President
Not part of the Annual Report
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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-122
---------------------------------------------
MainStay VP Growth Allocation
Portfolio M-138
---------------------------------------------
MainStay VP Growth Equity Portfolio M-150
---------------------------------------------
MainStay VP High Yield Corporate Bond
Portfolio M-164
---------------------------------------------
MainStay VP ICAP Select Equity
Portfolio M-188
---------------------------------------------
MainStay VP Income Builder Portfolio M-200
---------------------------------------------
MainStay VP International Equity
Portfolio M-224
---------------------------------------------
MainStay VP Large Cap Growth Portfolio M-240
---------------------------------------------
MainStay VP Mid Cap Core Portfolio M-252
---------------------------------------------
MainStay VP Moderate Allocation
Portfolio M-268
---------------------------------------------
MainStay VP Moderate Growth Allocation
Portfolio M-280
---------------------------------------------
MainStay VP S&P 500 Index Portfolio M-292
---------------------------------------------
MainStay VP U.S. Small Cap Portfolio M-310
---------------------------------------------
Notes to Financial Statements M-324
---------------------------------------------
Report of Independent Registered
Public Accounting Firm M-354
---------------------------------------------
Board Consideration and Approval of
Management and Subadvisory Agreements M-355
---------------------------------------------
Shareholder Reports and Quarterly
Portfolio Disclosure M-359
---------------------------------------------
Directors and Officers M-360
---------------------------------------------
</Table>
--------------------------------------------------------------------------------
INVESTORS SHOULD REFER TO THE MAINSTAY VP SERIES FUND, INC. PROSPECTUS DATED MAY
1, 2010, FOR A DISCUSSION OF EACH PORTFOLIO'S INVESTMENT OBJECTIVES, STRATEGIES
AND RISKS. YOU MAY OBTAIN COPIES OF THE PROSPECTUS AND STATEMENT OF ADDITIONAL
INFORMATION FREE OF CHARGE, UPON REQUEST, BY CALLING TOLL-FREE 800-598-2019, OR
BY WRITING TO NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION, 51 MADISON
AVENUE, ROOM 251, NEW YORK, NEW YORK 10010. THESE DOCUMENTS ARE ALSO AVAILABLE
AT MAINSTAYINVESTMENTS.COM.
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-314. 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 1-10
Year U.S. Corporate & Government Index (40% weighted).
BANK OF AMERICA MERRILL LYNCH 1-10 YEAR U.S. CORPORATE & GOVERNMENT 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 ALL U.S. 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 U.S. 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.
INCOME BUILDER COMPOSITE INDEX consists of the MSCI World Index and the Barclays
Capital U.S. Aggregate Bond Index weighed 50%/50%, respectively.
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. More
information about the Lipper peer group for an individual Portfolio can be found
in the Portfolio's Investment and Performance Comparison.
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 December 31, 2010, the MSCI EAFE(R) Index
has consisted of the following 22 developed-market country indices: Australia,
Austria, Belgium, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland,
Israel, 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 December 31, 2010, 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, Israel, 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.
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
M-2
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 2,500 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(R) 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(R) 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.
mainstayinvestments.com M-3
MAINSTAY VP BALANCED 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. THE PERFORMANCE TABLE AND GRAPH 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.
(LINE GRAPH)
<Table>
<Caption>
BANK OF
AMERICA MERRILL
LYNCH 1-10
MAINSTAY VP MAINSTAY VP RUSSEL MIDCAP YEAR U.S
BALANCED PORTFOLIO BALANCED PORTFOLIO (R) VALUE BALANCED COMPOSITE CORPORATE &
INITIAL CLASS SERVICE CLASS INDEX INDEX GOVERNMENT INDEX
------------------ ------------------ ------------- ------------------ ----------------
05/02/05 10000 10000 10000 10000 10000
10581 10555 11481 10930 10132
11713 11655 13802 12413 10547
12042 11952 13606 12685 11325
9049 8959 8375 9758 11790
11137 10999 11240 12011 12463
12/31/10 12654 12466 14022 14119 13215
</Table>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED DECEMBER 31, 2010
--------------------------------------------------------------------------------
<Table>
<Caption>
SINCE GROSS
ONE FIVE INCEPTION EXPENSE
CLASS YEAR YEARS (5/2/05) RATIO(2)
----------------------------------------------------------------
Initial Class Shares 13.62% 3.64% 4.24% 0.85%
----------------------------------------------------------------
Service Class Shares 13.34 3.38 3.96 1.10
----------------------------------------------------------------
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE FIVE SINCE INCEPTION
YEAR YEARS (5/2/05)
Russell Midcap(R) Value Index(3) 24.75% 4.08% 6.15%
------------------------------------------------------------------------------------------------------------------------
Balanced Composite Index(3) 17.55 5.25 6.27
------------------------------------------------------------------------------------------------------------------------
Bank of America Merrill Lynch 1-10 Year U.S. Corporate & Government Index(3) 6.03 5.46 5.04
------------------------------------------------------------------------------------------------------------------------
Average Lipper Variable Products Mixed-Asset Target Allocation Growth Portfolio(4) 13.14 3.53 4.84
------------------------------------------------------------------------------------------------------------------------
</Table>
1. Performance figures reflect certain fee waivers, without which total returns
may have been lower. These voluntary waives may be discontinued at any time.
For information on current fee waivers please refer to the notes to the
financial statement.
2. The gross expense ratios presented reflect the Portfolio's "Total Annual
Portfolio Operating Expenses" from the most recent Prospectus and may differ
from other expense ratios disclosed in this report.
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. Results are based on total returns with all
dividend and capital gain distributions reinvested.
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, 2010, to December 31,
2010, 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 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, 2010, to December 31, 2010. 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, 2010. 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 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 7/1/10 12/31/10 PERIOD(1) 12/31/10 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,139.60 $4.31 $1,021.20 $4.08
-------------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,138.10 $5.66 $1,019.90 $5.35
-------------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
(0.80% for Initial Class and 1.05% 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, 2010 (Unaudited)
(PORTFOLIO COMPOSITION PIE CHART)
<Table>
Common Stocks 60.6
U.S. Government & Federal Agencies 18.3
Corporate Bonds 14.8
Yankee Bonds 2.9
Exchange Traded Fund 1.6
Mortgage-Backed Securities 1.2
Short-Term Investments 0.6
Asset-Backed Security 0.2
Other Assets, Less Liabilities (0.2)
</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, 2010 (excluding short-term
investments)
<Table>
1. United States Treasury Notes, 0.375%-2.625%, due
5/15/12-11/15/20
2. Federal National Mortgage Association, 2.75%-5.50%, due
3/15/11-10/15/15
3. S&P 500 Index-SPDR Trust Series 1
4. Verizon Communications, Inc., 6.10%, due 4/15/18
5. JPMorgan Chase & Co., 4.40%-6.625%, due 3/15/12-7/22/20
6. Anadarko Petroleum Corp., 6.20%, due 3/15/40
7. Procter & Gamble Co. (The), 1.80%, due 11/15/15
8. Annaly Capital Management, Inc.
9. Comcast Corp. Class A
10. Estee Lauder Cos., Inc. (The) Class A
</Table>
M-6 MainStay VP Balanced Portfolio
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
Questions answered by Harvey Fram of Madison Square Investors the Portfolio's
Subadvisor and Thomas 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, 2010?
For the 12 months ended December 31, 2010, MainStay VP Balanced Portfolio
returned 13.62% for Initial Class shares and 13.34% for Service Class shares.
Both share classes outperformed the 13.14% return of the average Lipper(2)
Variable Products Mixed-Asset Target Allocation Growth Portfolio and the 6.03%
return of the Bank of America Merrill Lynch 1-10 year U.S. Corporate &
Government Index(2) but underperformed the 24.75% return of the Russell
Midcap(R) Value Index(2) and the 17.55% return of the Portfolio's Balanced
Composite Index(2) for the 12 months ended December 31, 2010. The Russell
Midcap(R) Value Index is the Portfolio's broad-based securities-market index.
The Bank of America Merrill Lynch 1-10 Year U.S. Corporate & Government Index(2)
is a secondary benchmark for the Portfolio.
DURING THE REPORTING PERIOD, HOW WAS THE PORTFOLIO'S PERFORMANCE MATERIALLY
AFFECTED BY INVESTMENTS IN DERIVATIVES?
During the reporting period, the Portfolio used interest-rate derivatives to
manage the Portfolio's duration.(3) These derivatives generally had a positive
impact on performance during the year.
WHAT NOTABLE FACTORS AFFECTED THE PORTFOLIO'S PERFORMANCE RELATIVE TO ITS PEERS
AND ITS BENCHMARK DURING 2010?
During the reporting period the equity portion of the Portfolio maintained a
larger-capitalization, less-value-oriented posture than the Russell Midcap(R)
Value Index. At the same time, the Portfolio maintained a smaller-
capitalization, more-value-oriented posture than many of its peers. During the
reporting period, this positioning hurt the Portfolio's performance relative to
its benchmark but helped performance relative to the Port-folio's peers, as mid-
cap value stocks outperformed large-cap core stocks by a substantial margin.
Apart from size and style, system-wide influences that are typically relied upon
to generate excess returns--such as valuation and technical metrics--had
unusually limited impact on the Portfolio's performance. Instead, factors unique
to each individual security were atypically significant. These security-specific
effects, some positive and some negative, normally have little overall impact
across the Portfolio's many holdings. But during the reporting period, they
presented a drag on performance. Also constraining returns was the Portfolio's
market beta (or level of risk in relation to the market as a whole), which was a
little lower than that of the Russell Midcap(R) Value Index.
WHICH SECTORS WERE THE STRONGEST CONTRIBUTORS TO THE EQUITY PORTION OF THE
PORTFOLIO'S RELATIVE PERFORMANCE, AND WHICH SECTORS WERE PARTICULARLY WEAK?
After accounting for capitalization and style effects, the contribution to
relative performance attributable to sector and industry exposures in the equity
portion of the Portfolio was relatively small. Being persistently underweight
financials and utilities had a small but positive effect. Controlled exposure to
materials and consumer staples also added marginally to returns. (In both
sectors, the Portfolio was neutral to the benchmark early in the reporting
period and overweight in later months.)
Those small gains were partially offset by maintaining an overweight position in
health care, holding an underweight position in consumer discretionary in the
last few months of the reporting period and being overweight in information
technology early in the reporting period.
DURING THE REPORTING PERIOD, WHICH INDIVIDUAL STOCKS MADE THE STRONGEST
CONTRIBUTIONS TO THE PORTFOLIO'S ABSOLUTE PERFORMANCE AND WHICH STOCKS DETRACTED
THE MOST?
The stocks that made the greatest positive contributions to the Portfolio's
total return during the reporting period were engine manufacturer Cummins, oil
and gas exploration firm Anadarko Petroleum and media conglomerate Time Warner
Cable. The steady rise in Cummins' share price may be attributable to strong
overseas operations and growing demand for natural gas-powered engines, despite
recent declines in the price of natural gas relative to oil. The Portfolio made
a large purchase of Anadarko Petroleum during the summer, following the Gulf oil
spill and a sharp drop in share prices for most drilling and exploration
companies. The stock price recovered as damage from the spill was contained and
the moratorium on drilling was lifted. Time Warner Cable's shares appreciated on
solid revenue growth and an aggressive share-repurchase campaign.
Among the largest detractors from performance in the equity portion of the
Portfolio were investment manager BlackRock, computer hardware and IT services
company Hewlett-Packard, and electric utility Mirant, which was subsequently
acquired by GenOn Energy. BlackRock may have been weighed down a bit by its
acquisition of Barclays Global Investors in late 2009. Hewlett-Packard has
wrestled with the sudden departure of CEO Mark Hurd and the legal battle that
ensued. Excess power
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 indexes and other indexes, 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.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
mainstayinvestments.com M-7
capacity in the United States likely contributed to Mirant's weak performance.
DID THE EQUITY PORTION OF THE PORTFOLIO MAKE ANY SIGNIFICANT PURCHASES OR SALES
DURING THE REPORTING PERIOD?
Since the Portfolio is committed to remaining broadly diversified, no purchases
or sales are especially large as a percent of Portfolio assets compared to other
Variable Product Portfolios, and it would be a mistake to attach too much
importance to any short list of transactions.
In the equity portion of the Portfolio, among the largest net purchases during
the reporting period were for-profit educator Apollo Group, pharmaceutical
company Eli Lilly and HMO operator Humana. Topping the list of largest net sales
were oil services company Schlumberger, New York office building operator SL
Green Realty and health care and insurance services company CIGNA.
HOW DID THE EQUITY PORTION OF THE PORTFOLIO'S SECTOR WEIGHTINGS CHANGE DURING
THE REPORTING PERIOD?
Sector exposures are typically a byproduct of our security selection process.
Although carefully monitored, these exposures are not deliberately targeted.
During the reporting period, the equity portion of the Portfolio's largest
increases in exposure relative to the benchmark came in the consumer staples,
materials and financials sectors. Over the same period, the largest reductions
in exposure relative to the benchmark were in utilities, information technology
and energy.
HOW WAS THE EQUITY PORTION OF THE PORTFOLIO POSITIONED AT THE END OF DECEMBER
2010?
As of December 31, 2010, the most substantially overweight sector positions in
the equity portion of the Portfolio were in consumer staples, health care and
telecommunication services. The most substantially underweight positions were in
financials, utilities and information technology. As noted previously, these
exposures were an inadvertent result of the Portfolio's bottom-
up stock-selection methodology and did not necessarily reflect our view on the
outlook for sector performance.
DURING THE REPORTING PERIOD, WHAT FACTORS AFFECTED THE PERFORMANCE OF THE FIXED-
INCOME PORTION OF THE PORTFOLIO RELATIVE TO THE BANK OF AMERICA MERRILL LYNCH
1-10 YEAR U.S. CORPORATE & GOVERNMENT INDEX?
Throughout the year, the fixed-income portion of the Portfolio held overweight
positions relative to the Bank of America Merrill Lynch 1-10 Year U.S. Corporate
& Government Index in corporate bonds and commercial mortgage-backed securities.
These securities tend to carry spread(4) risk premiums relative to Treasurys,
and they performed well in 2010.
Commercial mortgage-backed securities were the best-
performing sector of the investment-grade bond market, and the Portfolio's
position had a positive impact on relative performance. Corporate bonds also
showed strong performance. Financials was one of the best-performing sectors in
the corporate bond market, and the Portfolio had an overweight position relative
to the Portfolio's fixed-income benchmark
in financials, including securities issued by banks, insurance companies and
real estate investment trusts (REITS).
WHAT WAS THE DURATION STRATEGY OF THE FIXED-INCOME PORTION OF THE PORTFOLIO
DURING THE REPORTING PERIOD?
The duration of the fixed-income portion of the Portfolio varied over the course
of the year. In the latter part of the second quarter, the Portfolio maintained
a long duration relative to the Bank of America Merrill Lynch 1-10 Year U.S.
Corporate & Government Index. Generally speaking, rates rallied during this
period, and the Portfolio's duration positioning benefited returns. For much of
the third and fourth quarters, the fixed-income portion of the Portfolio
maintained a relatively neutral duration relative to its fixed-income benchmark.
During November, the Portfolio had a modestly longer duration, which detracted
from performance.
WHAT SPECIFIC FACTORS, RISKS OR MARKET FORCES PROMPTED SIGNIFICANT DECISIONS IN
THE FIXED-INCOME PORTION OF THE PORTFOLIO DURING THE REPORTING PERIOD?
We generally maintained an overweight position across higher-risk assets during
the year. This had a beneficial impact on returns.
DURING THE REPORTING PERIOD, WHICH MARKET SEGMENTS WERE THE STRONGEST
CONTRIBUTORS TO THE PERFORMANCE OF THE FIXED-INCOME PORTION OF THE PORTFOLIO AND
WHICH MARKET SEGMENTS WERE PARTICULARLY WEAK?
Commercial mortgage-backed securities and corporate bonds were among the best-
performing market sectors during the reporting period. We maintained an
overweight position relative to the benchmark in corporate bonds throughout the
year. We also maintained an overweight position in commercial mortgage-backed
securities. This positioning had a beneficial impact on returns.
HOW DID THE PORTFOLIO'S SECTOR WEIGHTINGS CHANGE DURING THE REPORTING PERIOD?
Asset allocation favored riskier assets during the reporting period. We
increased the Portfolio's allocation to corporate bonds through most of the
year. An exception came during the third quarter, when we modestly reduced the
Portfolio's allocation to corporate bonds. We took this action because we
anticipated rising levels of new supply.
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.
M-8 MainStay VP Balanced Portfolio
HOW WAS THE FIXED-INCOME PORTION OF THE PORTFOLIO POSITIONED AT THE END OF
DECEMBER 2010?
As of December 31, 2010, the Portfolio maintained overweight positions relative
to the Bank of America Merrill Lynch Corporate & Government 1-10 Year Bond Index
in corporate bonds, commercial mortgage-backed securities and asset-backed
securities. As of the same date, the Portfolio was underweight relative to the
benchmark in U.S. Treasurys and U.S. government securities.
Effective January 1, 2011, Harvey Fram replaced Tony Elavia as a portfolio
manager for the equity portion of the Portfolio. New York Life Investments
continues to serve as the Portfolio's Manager overseeing the investment
portfolio of the Portfolio and continues to provide day-to-day portfolio
management services for the fixed-income portion of the Portfolio. Also
effective January 1, 2011, Jae Yoon became an additional portfolio manager.
Thomas Girard will continue to serve as a portfolio manager for the fixed-income
portion of the Portfolio. For more information regarding these portfolio
management changes, please refer to the relevant Prospectus supplement dated
December 3, 2010.
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
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, 2010
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
LONG-TERM BONDS 37.4%+
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 $ 252,491
------------
Total Asset-Backed Security
(Cost $249,996) 252,491
------------
CORPORATE BONDS 14.8%
-------------------------------------------------------
AEROSPACE & DEFENSE 0.7%
Boeing Co. (The)
4.875%, due 2/15/20 290,000 312,182
Goodrich Corp.
4.875%, due 3/1/20 60,000 63,048
L-3 Communications Corp.
5.20%, due 10/15/19 150,000 152,493
Lockheed Martin Corp.
4.25%, due 11/15/19 300,000 305,005
Northrop Grumman Corp.
5.05%, due 8/1/19 100,000 106,804
Raytheon Co.
3.125%, due 10/15/20 200,000 184,418
------------
1,123,950
------------
BANKS 2.6%
Bank of America Corp.
5.65%, due 5/1/18 400,000 408,709
BB&T Corp.
3.375%, due 9/25/13 500,000 523,623
Citigroup, Inc.
5.85%, due 8/2/16 250,000 268,304
6.00%, due 8/15/17 350,000 379,644
Fifth Third Bancorp
4.50%, due 6/1/18 125,000 120,469
Goldman Sachs Group, Inc.
(The)
5.375%, due 3/15/20 175,000 180,838
6.00%, due 6/15/20 100,000 108,066
X JPMorgan Chase & Co.
4.40%, due 7/22/20 300,000 295,274
6.625%, due 3/15/12 350,000 372,051
KeyBank N.A.
5.80%, due 7/1/14 50,000 53,576
KeyCorp
6.50%, due 5/14/13 100,000 108,572
Morgan Stanley
5.50%, due 1/26/20 200,000 201,605
5.625%, due 9/23/19 200,000 203,937
PNC Funding Corp.
4.375%, due 8/11/20 350,000 345,906
Wells Fargo & Co.
3.75%, due 10/1/14 500,000 521,942
------------
4,092,516
------------
BEVERAGES 0.4%
Anheuser-Busch Cos., Inc.
6.00%, due 4/15/11 250,000 253,522
Anheuser-Busch InBev
Worldwide, Inc.
3.00%, due 10/15/12 250,000 257,953
Coca-Cola Co. (The)
3.15%, due 11/15/20 200,000 187,658
------------
699,133
------------
BUILDING MATERIALS 0.2%
CRH America, Inc.
4.125%, due 1/15/16 100,000 99,361
Masco Corp.
4.80%, due 6/15/15 300,000 295,360
------------
394,721
------------
CHEMICALS 0.3%
Dow Chemical Co. (The)
4.25%, due 11/15/20 50,000 47,895
5.70%, due 5/15/18 325,000 351,562
Eastman Chemical Co.
3.00%, due 12/15/15 100,000 98,775
------------
498,232
------------
COSMETICS & PERSONAL CARE 0.1%
X Procter & Gamble Co. (The)
1.80%, due 11/15/15 150,000 147,054
------------
DIVERSIFIED FINANCIAL SERVICES 0.6%
General Electric Capital
Corp.
5.90%, due 5/13/14 600,000 664,055
6.00%, due 8/7/19 250,000 278,148
------------
942,203
------------
ELECTRIC 1.7%
CenterPoint Energy Houston
Electric LLC
7.00%, due 3/1/14 325,000 371,427
Duke Energy Corp.
3.35%, due 4/1/15 350,000 360,306
Duke Energy Ohio, Inc.
5.45%, due 4/1/19 200,000 222,950
Florida Power Corp.
4.55%, due 4/1/20 200,000 208,369
FPL Group Capital, Inc.
2.55%, due 11/15/13 225,000 230,031
</Table>
+ Percentages indicated are based on Portfolio net assets.
X Among the Portfolio's 10 largest holdings or issuers held, as of December 31,
2010, excluding short-term investments. 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>
PRINCIPAL
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
ELECTRIC (CONTINUED)
Great Plains Energy, Inc.
2.75%, due 8/15/13 $ 250,000 $ 252,546
Kansas City Power & Light Co.
7.15%, due 4/1/19 250,000 295,107
Kentucky Utilities Co.
3.25%, due 11/1/20 (a)(b) 200,000 188,639
Pacific Gas & Electric Co.
3.50%, due 10/1/20 150,000 142,792
Peco Energy Co.
5.00%, due 10/1/14 275,000 301,643
Pepco Holdings, Inc.
2.70%, due 10/1/15 100,000 97,466
------------
2,671,276
------------
ENVIRONMENTAL CONTROLS 0.3%
Republic Services, Inc.
5.00%, due 3/1/20 225,000 236,752
5.50%, due 9/15/19 250,000 272,634
------------
509,386
------------
FINANCE--CONSUMER LOANS 0.4%
HSBC Finance Corp.
7.00%, due 5/15/12 200,000 214,589
John Deere Capital Corp.
7.00%, due 3/15/12 450,000 483,009
------------
697,598
------------
FINANCE--CREDIT CARD 0.6%
American Express Co.
2.75%, due 9/15/15 150,000 147,553
5.50%, due 9/12/16 400,000 439,435
Capital One Bank USA N.A.
8.80%, due 7/15/19 250,000 307,509
------------
894,497
------------
FINANCE--INVESTMENT BANKER/BROKER 0.3%
Bear Stearns Cos., Inc. (The)
5.70%, due 11/15/14 412,000 452,685
------------
FINANCE--OTHER SERVICES 0.1%
National Rural Utilities
Cooperative Finance Corp.
1.90%, due 11/1/15 100,000 96,532
5.45%, due 4/10/17 100,000 110,268
------------
206,800
------------
FOOD 0.2%
Kraft Foods, Inc.
4.125%, due 2/9/16 275,000 288,673
Safeway, Inc.
5.00%, due 8/15/19 100,000 102,866
------------
391,539
------------
GAS 0.1%
Sempra Energy
6.50%, due 6/1/16 125,000 145,114
------------
HEALTH CARE--SERVICES 0.4%
CIGNA Corp.
4.375%, due 12/15/20 75,000 73,212
Laboratory Corp. of America
Holdings
4.625%, due 11/15/20 200,000 198,196
Roche Holdings, Inc.
5.00%, due 3/1/14 (a) 300,000 328,522
------------
599,930
------------
INSURANCE 0.9%
ACE INA Holdings, Inc.
2.60%, due 11/23/15 175,000 172,281
Hartford Financial Services
Group, Inc.
5.50%, due 3/30/20 125,000 126,802
Lincoln National Corp.
6.25%, due 2/15/20 300,000 327,235
MetLife Global Funding I
5.125%, due 6/10/14 (a) 300,000 326,324
Principal Financial Group,
Inc.
8.875%, due 5/15/19 90,000 113,227
Prudential Financial, Inc.
4.50%, due 11/15/20 250,000 244,487
Travelers Cos., Inc. (The)
3.90%, due 11/1/20 50,000 48,572
------------
1,358,928
------------
LODGING 0.4%
Marriott International, Inc.
5.625%, due 2/15/13 100,000 107,249
6.20%, due 6/15/16 200,000 218,669
Wyndham Worldwide Corp.
6.00%, due 12/1/16 300,000 313,930
------------
639,848
------------
MEDIA 0.6%
CBS Corp.
4.625%, due 5/15/18 50,000 49,836
NBC Universal, Inc.
4.375%, due 4/1/21 (a) 175,000 169,856
5.15%, due 4/30/20 (a) 175,000 181,409
TCM Sub LLC
3.55%, due 1/15/15 (a) 400,000 408,271
Time Warner Cable, Inc.
6.75%, due 7/1/18 100,000 116,568
------------
925,940
------------
MINING 0.3%
Alcoa, Inc.
6.15%, due 8/15/20 350,000 359,415
</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, 2010 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
MINING (CONTINUED)
Rio Tinto Finance USA, Ltd.
3.50%, due 11/2/20 $ 200,000 $ 189,854
------------
549,269
------------
MISCELLANEOUS--MANUFACTURING 0.3%
ITT Corp.
4.90%, due 5/1/14 300,000 322,068
6.125%, due 5/1/19 100,000 112,719
------------
434,787
------------
OIL & GAS 0.2%
X Anadarko Petroleum Corp.
6.20%, due 3/15/40 200,000 195,236
Marathon Oil Corp.
6.50%, due 2/15/14 150,000 168,858
------------
364,094
------------
PACKAGING & CONTAINERS 0.2%
Bemis Co., Inc.
5.65%, due 8/1/14 240,000 262,741
------------
PIPELINES 0.5%
Energy Transfer Partners,
L.P.
9.00%, due 4/15/19 150,000 187,916
Plains All American Pipeline,
L.P.
8.75%, due 5/1/19 200,000 248,199
Williams Partners, L.P.
3.80%, due 2/15/15 270,000 279,019
------------
715,134
------------
REAL ESTATE 0.1%
AMB Property, L.P.
6.625%, due 12/1/19 150,000 164,574
------------
REAL ESTATE INVESTMENT TRUSTS 0.8%
Boston Properties, L.P.
4.125%, due 5/15/21 75,000 71,103
Brandywine Operating
Partnership, L.P.
5.70%, due 5/1/17 350,000 349,117
ERP Operating, L.P.
5.25%, due 9/15/14 250,000 272,640
Federal Realty Investment
Trust 5.90%, due 4/1/20 115,000 121,959
Hospitality Properties Trust
6.30%, due 6/15/16 170,000 178,781
Liberty Property, L.P.
5.125%, due 3/2/15 100,000 106,594
UDR, Inc.
5.25%, due 1/15/15 175,000 182,763
------------
1,282,957
------------
RETAIL 0.2%
Home Depot, Inc.
5.25%, due 12/16/13 250,000 274,386
------------
SOFTWARE 0.1%
Oracle Corp.
3.875%, due 7/15/20 (a) 150,000 149,113
------------
TELECOMMUNICATIONS 1.1%
AT&T Corp.
7.30%, due 11/15/11 300,000 316,917
Cellco Partnership/Verizon
Wireless Capital LLC
5.55%, due 2/1/14 500,000 551,353
Harris Corp.
4.40%, due 12/15/20 100,000 99,995
X Verizon Communications,
Inc.
6.10%, due 4/15/18 700,000 795,145
------------
1,763,410
------------
TRANSPORTATION 0.1%
Burlington Northern Santa Fe
LLC
4.70%, due 10/1/19 100,000 104,512
------------
Total Corporate Bonds
(Cost $22,311,201) 23,456,327
------------
MORTGAGE-BACKED SECURITIES 1.2%
-------------------------------------------------------
COMMERCIAL MORTGAGE LOANS
(COLLATERALIZED MORTGAGE OBLIGATIONS) 1.2%
Banc of America Commercial
Mortgage, Inc.
Series 2006-2, Class A4
5.74%, due 5/10/45 (c) 272,000 297,775
Bear Stearns Commercial
Mortgage Securities
Series 2007-PW16, Class A4
5.717%, due 6/11/40 (c) 200,000 213,393
Citigroup Commercial Mortgage
Trust Series 2006-C5, Class
A4
5.431%, due 10/15/49 320,000 341,779
Commercial Mortgage Pass-
Through Certificates
Series 2006-C8, Class A4
5.306%, due 12/10/46 200,000 208,597
Greenwich Capital Commercial
Funding Corp.
Series 2007-GG9, Class A4
5.444%, due 3/10/39 210,000 221,252
JP Morgan Chase Commercial
Mortgage Securities Corp.
Series 2006-LDP7, Class A4
5.872%, due 4/15/45 (c) 200,000 218,722
</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>
PRINCIPAL
AMOUNT VALUE
MORTGAGE-BACKED SECURITIES (CONTINUED)
Morgan Stanley Capital I
Series 2006-HQ8, Class A4
5.388%, due 3/12/44 (c) $ 200,000 $ 215,274
Series 2007-HQ11, Class A4
5.447%, due 2/12/44 (d) 212,500 220,526
------------
Total Mortgage-Backed
Securities
(Cost $1,706,476) 1,937,318
------------
U.S. GOVERNMENT & FEDERAL AGENCIES 18.3%
-------------------------------------------------------
FEDERAL HOME LOAN BANK 0.3%
3.625%, due 5/29/13 400,000 426,297
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION 0.7%
3.25%, due 2/25/11 500,000 502,079
4.125%, due 9/27/13 350,000 379,271
5.125%, due 4/18/11 200,000 202,855
------------
1,084,205
------------
X FEDERAL NATIONAL MORTGAGE ASSOCIATION 1.9%
2.75%, due 4/11/11 500,000 503,459
2.875%, due 12/11/13 350,000 367,927
3.625%, due 8/15/11 500,000 510,049
4.375%, due 10/15/15 350,000 385,260
4.875%, due 5/18/12 500,000 529,829
5.375%, due 11/15/11 500,000 521,540
5.50%, due 3/15/11 200,000 202,101
------------
3,020,165
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION
(MORTGAGE PASS-THROUGH SECURITIES) 0.7%
5.00%, due 10/1/24 500,000 530,703
5.50%, due 12/1/37 500,000 535,356
------------
1,066,059
------------
X UNITED STATES TREASURY NOTES 14.7%
0.375%, due 8/31/12 1,000,000 998,203
0.50%, due 11/30/12 1,200,000 1,198,453
0.50%, due 11/15/13 1,500,000 1,480,663
0.75%, due 8/15/13 400,000 399,188
1.00%, due 7/15/13 3,100,000 3,115,252
1.125%, due 12/15/12 2,410,000 2,434,758
1.25%, due 8/31/15 2,805,000 2,728,081
1.375%, due 5/15/12 36,000 36,478
1.375%, due 9/15/12 1,195,000 1,212,318
1.375%, due 3/15/13 2,000,000 2,028,516
1.375%, due 11/30/15 500,000 485,898
1.75%, due 4/15/13 4,425,000 4,526,642
1.75%, due 7/31/15 50,000 49,840
1.875%, due 8/31/17 415,000 396,163
2.125%, due 5/31/15 105,000 106,674
2.125%, due 12/31/15 250,000 251,191
2.25%, due 11/30/17 250,000 243,106
2.375%, due 7/31/17 300,000 296,063
2.50%, due 4/30/15 870,000 899,430
2.625%, due 11/15/20 420,000 396,178
------------
23,283,095
------------
Total U.S. Government &
Federal Agencies
(Cost $28,701,714) 28,879,821
------------
YANKEE BONDS 2.9% (E)
-------------------------------------------------------
BANKS 1.0%
Bank of Nova Scotia
1.65%, due 10/29/15 (a) 425,000 406,248
3.40%, due 1/22/15 225,000 233,530
Credit Suisse/New York NY
5.30%, due 8/13/19 225,000 237,661
HSBC Bank PLC
3.50%, due 6/28/15 (a) 250,000 256,276
Svenska Handelsbanken AB
4.875%, due 6/10/14 (a) 150,000 159,448
Westpac Banking Corp.
3.00%, due 12/9/15 300,000 299,437
------------
1,592,600
------------
CHEMICALS 0.1%
Potash Corp. of Saskatchewan,
Inc.
3.25%, due 12/1/17 100,000 96,903
------------
FINANCE--INVESTMENT BANKER/BROKER 0.1%
BNP Paribas Home Loan Covered
Bonds S.A.
2.20%, due 11/2/15 (a) 250,000 239,430
------------
FOOD 0.2%
Delhaize Group
5.875%, due 2/1/14 220,000 242,783
------------
MINING 0.2%
Teck Resources, Ltd.
3.85%, due 8/15/17 50,000 50,719
4.50%, due 1/15/21 200,000 203,343
------------
254,062
------------
OIL & GAS 0.4%
BP Capital Markets PLC
4.50%, due 10/1/20 100,000 99,759
Petroleos Mexicanos
4.875%, due 3/15/15 200,000 210,500
</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, 2010 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
YANKEE BONDS (CONTINUED)
OIL & GAS (CONTINUED)
Shell International Finance
B.V.
4.00%, due 3/21/14 $ 350,000 $ 372,434
------------
682,693
------------
PHARMACEUTICALS 0.1%
Novartis Securities
Investment, Ltd.
5.125%, due 2/10/19 175,000 193,556
------------
SOVEREIGN 0.1%
Svensk Exportkredit AB
3.25%, due 9/16/14 200,000 209,483
------------
TELECOMMUNICATIONS 0.7%
America Movil SAB de C.V.
5.00%, due 3/30/20 125,000 129,931
Deutsche Telekom
International Finance B.V.
6.00%, due 7/8/19 250,000 282,812
France Telecom S.A.
2.125%, due 9/16/15 100,000 97,344
Telefonica Emisiones SAU
5.134%, due 4/27/20 350,000 336,959
Vodafone Group PLC
5.625%, due 2/27/17 200,000 223,270
------------
1,070,316
------------
Total Yankee Bonds
(Cost $4,440,080) 4,581,826
------------
Total Long-Term Bonds
(Cost $57,409,467) 59,107,783
------------
<Caption>
SHARES
COMMON STOCKS 60.6%
-------------------------------------------------------
AEROSPACE & DEFENSE 0.1%
L-3 Communications Holdings,
Inc. 1,923 135,552
------------
AGRICULTURE 0.4%
Philip Morris International,
Inc. 10,731 628,085
------------
AUTO MANUFACTURERS 0.4%
Oshkosh Corp. (f) 20,176 711,002
------------
AUTO PARTS & EQUIPMENT 0.4%
Autoliv, Inc. 3,912 308,813
Goodyear Tire & Rubber Co.
(The) (f) 21,904 259,563
------------
568,376
------------
BANKS 2.5%
BancorpSouth, Inc. 10,925 174,254
Capital One Financial Corp. 18,941 806,129
CapitalSource, Inc. 15,301 108,637
X JPMorgan Chase & Co. 34,932 1,481,815
M&T Bank Corp. 5,213 453,792
Marshall & Ilsley Corp. 44,941 310,992
Regions Financial Corp. 87,782 614,474
------------
3,950,093
------------
BEVERAGES 0.1%
Molson Coors Brewing Co.
Class B 4,466 224,149
------------
BIOTECHNOLOGY 0.8%
Gilead Sciences, Inc. (f) 29,087 1,054,113
United Therapeutics Corp. (f) 2,803 177,206
------------
1,231,319
------------
BUILDING MATERIALS 0.1%
Armstrong World Industries,
Inc. 5,185 222,955
------------
CHEMICALS 1.3%
Ashland, Inc. 25,601 1,302,067
Cabot Corp. 13,954 525,368
Cytec Industries, Inc. 4,865 258,137
Huntsman Corp. 2,776 43,333
------------
2,128,905
------------
COAL 0.5%
Arch Coal, Inc. 20,759 727,811
------------
COMMERCIAL SERVICES 2.0%
Apollo Group, Inc. Class A
(f) 39,159 1,546,389
Monster Worldwide, Inc. (f) 21,207 501,121
Moody's Corp. 12,270 325,646
R.R. Donnelley & Sons Co. 24,034 419,874
Washington Post Co. Class B 699 307,211
------------
3,100,241
------------
COMPUTERS 0.3%
Hewlett-Packard Co. 11,333 477,119
------------
COSMETICS & PERSONAL CARE 2.7%
Colgate-Palmolive Co. 15,423 1,239,547
X Estee Lauder Cos., Inc.
(The) Class A 19,180 1,547,826
X Procter & Gamble Co. (The) 22,853 1,470,133
------------
4,257,506
------------
DISTRIBUTION & WHOLESALE 0.2%
Tech Data Corp. (f) 6,002 264,208
------------
</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>
SHARES VALUE
COMMON STOCKS (CONTINUED)
ELECTRIC 3.6%
Ameren Corp. 23,347 $ 658,152
Consolidated Edison, Inc. 5,756 285,325
DTE Energy Co. 21,738 985,166
GenOn Energy, Inc. (f) 232,356 885,276
Hawaiian Electric Industries,
Inc. 2,528 57,613
Integrys Energy Group, Inc. 9,531 462,349
ITC Holdings Corp. 1,478 91,607
Pepco Holdings, Inc. 13,143 239,860
PG&E Corp. 5,442 260,345
Pinnacle West Capital Corp. 8,967 371,682
Progress Energy, Inc. 33,725 1,466,363
------------
5,763,738
------------
ELECTRICAL COMPONENTS & EQUIPMENT 0.4%
Energizer Holdings, Inc. (f) 4,087 297,942
General Cable Corp. (f) 4,051 142,150
Hubbel, Inc. Class B 1,946 117,013
SunPower Corp. Class A (f) 11,674 149,777
------------
706,882
------------
ENGINEERING & CONSTRUCTION 0.3%
Shaw Group, Inc. (The) (f) 14,817 507,186
------------
FINANCE--CREDIT CARD 0.6%
Discover Financial Services 48,599 900,539
------------
FINANCE--INVESTMENT BANKER/BROKER 0.1%
Raymond James Financial, Inc. 3,752 122,690
------------
FINANCE--OTHER SERVICES 0.1%
NASDAQ OMX Group, Inc. (The)
(f) 8,916 211,398
------------
FOOD 1.8%
ConAgra Foods, Inc. 16,939 382,483
H.J. Heinz Co. 14,087 696,743
J.M. Smucker Co. (The) 2,436 159,923
Safeway, Inc. 31,222 702,183
Tyson Foods, Inc. Class A 18,613 320,516
Whole Foods Market, Inc. (f) 12,397 627,164
------------
2,889,012
------------
FOREST PRODUCTS & PAPER 0.6%
International Paper Co. 33,127 902,379
MeadWestvaco Corp. 4,149 108,538
------------
1,010,917
------------
GAS 0.8%
Energen Corp. 9,718 468,991
NiSource, Inc. 42,117 742,102
Sempra Energy 734 38,520
------------
1,249,613
------------
HEALTH CARE--PRODUCTS 0.3%
Johnson & Johnson 9,060 560,361
------------
HEALTH CARE--SERVICES 1.3%
Humana, Inc. (f) 26,623 1,457,343
UnitedHealth Group, Inc. 14,780 533,706
------------
1,991,049
------------
HOUSEWARES 0.1%
Toro Co. (The) 1,861 114,712
------------
INSURANCE 6.6%
Allied World Assurance Co.
Holdings, Ltd. 14,578 866,516
American Financial Group,
Inc. 28,145 908,802
Arch Capital Group, Ltd. (f) 10,228 900,575
Aspen Insurance Holdings,
Ltd. 10,414 298,049
Assurant, Inc. 20,767 799,945
Axis Capital Holdings, Ltd. 31,064 1,114,576
Berkshire Hathaway, Inc.
Class B (f) 13,150 1,053,447
Calpine Corp. (f) 15,444 206,023
Endurance Specialty Holdings,
Ltd. 15,546 716,204
Everest Re Group, Ltd. 2,005 170,064
Genworth Financial, Inc.
Class A (f) 26,799 352,139
MetLife, Inc. 22,943 1,019,587
Old Republic International
Corp. 9,688 132,048
OneBeacon Insurance Group,
Ltd. Class A 3,545 53,742
PartnerRe, Ltd. 4,882 392,269
Reinsurance Group of America,
Inc. 2,579 138,518
RenaissanceRe Holdings, Ltd. 2,209 140,691
Transatlantic Holdings, Inc. 3,991 206,015
Unitrin, Inc. 3,286 80,639
Unum Group 35,388 857,097
------------
10,406,946
------------
INTERNET 0.4%
eBay, Inc. (f) 12,034 334,906
IAC/InterActiveCorp (f) 11,100 318,570
------------
653,476
------------
INVESTMENT MANAGEMENT/ADVISORY SERVICES 1.7%
Ameriprise Financial, Inc. 6,365 366,306
BlackRock, Inc. 1,483 282,630
Eaton Vance Corp. 3,368 101,815
Federated Investors, Inc.
Class B 6,571 171,963
Franklin Resources, Inc. 4,748 528,025
Janus Capital Group, Inc. 21,447 278,168
</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, 2010 (CONTINUED)
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
INVESTMENT MANAGEMENT/ADVISORY SERVICES (CONTINUED)
Legg Mason, Inc. 21,054 $ 763,628
Waddell & Reed Financial,
Inc. Class A 4,379 154,535
------------
2,647,070
------------
IRON & STEEL 0.6%
Reliance Steel & Aluminum Co. 18,014 920,515
------------
MACHINERY--DIVERSIFIED 0.8%
Cummins, Inc. 12,261 1,348,833
------------
MEDIA 3.8%
X Comcast Corp. Class A 72,047 1,582,872
DIRECTV Class A (f) 15,286 610,370
Liberty Global, Inc. Class A
(f) 7,689 272,037
Time Warner Cable, Inc. 21,032 1,388,743
Time Warner, Inc. 36,008 1,158,377
Walt Disney Co. (The) 25,576 959,356
------------
5,971,755
------------
METAL FABRICATE & HARDWARE 0.2%
Timken Co. (The) 6,100 291,153
------------
MINING 0.9%
Freeport-McMoRan Copper &
Gold, Inc. 11,551 1,387,160
------------
MISCELLANEOUS--MANUFACTURING 3.3%
Carlisle Cos., Inc. 9,529 378,682
Dover Corp. 3,771 220,415
General Electric Co. 68,890 1,259,998
ITT Corp. 17,891 932,300
Parker Hannifin Corp. 12,736 1,099,117
Textron, Inc. 29,939 707,758
Trinity Industries, Inc. 25,133 668,789
------------
5,267,059
------------
OIL & GAS 6.7%
X Anadarko Petroleum Corp. 23,159 1,763,789
Chevron Corp. 14,508 1,323,855
Comstock Resources, Inc. (f) 5,596 137,438
ConocoPhillips 22,375 1,523,738
Marathon Oil Corp. 17,597 651,617
Murphy Oil Corp. 14,584 1,087,237
Occidental Petroleum Corp. 13,283 1,303,062
Patterson-UTI Energy, Inc. 13,537 291,722
QEP Resources, Inc. 8,723 316,732
Questar Corp. 8,675 151,032
Unit Corp. (f) 15,139 703,661
Valero Energy Corp. 59,223 1,369,236
------------
10,623,119
------------
OIL & GAS SERVICES 0.4%
Schlumberger, Ltd. 4,505 376,168
SEACOR Holdings, Inc. 1,846 186,612
------------
562,780
------------
PACKAGING & CONTAINERS 0.1%
Temple-Inland, Inc. 6,001 127,461
------------
PHARMACEUTICALS 2.8%
AmerisourceBergen Corp. 24,816 846,722
Eli Lilly & Co. 38,686 1,355,557
Endo Pharmaceuticals
Holdings, Inc. (f) 4,298 153,482
Express Scripts, Inc. (f) 22,967 1,241,366
Forest Laboratories, Inc. (f) 20,851 666,815
Herbalife, Ltd. 2,919 199,572
------------
4,463,514
------------
REAL ESTATE 0.2%
CB Richard Ellis Group, Inc.
Class A (f) 19,046 390,062
------------
REAL ESTATE INVESTMENT TRUSTS 3.3%
X Annaly Capital Management,
Inc. 88,489 1,585,723
Apartment Investment &
Management Co. Class A 9,007 232,741
Duke Realty Corp. 44,637 556,177
Hospitality Properties Trust 5,314 122,434
Liberty Property Trust 6,066 193,627
Macerich Co. (The) 14,358 680,138
ProLogis 51,338 741,321
Public Storage 8,586 870,792
Senior Housing Properties
Trust 8,040 176,398
------------
5,159,351
------------
RETAIL 2.3%
Big Lots, Inc. (f) 4,222 128,602
BJ's Wholesale Club, Inc. (f) 8,635 413,617
Ross Stores, Inc. 19,038 1,204,154
Signet Jewelers, Ltd. (f) 2,633 114,272
Wal-Mart Stores, Inc. 26,823 1,446,564
Williams-Sonoma, Inc. 8,307 296,477
------------
3,603,686
------------
SEMICONDUCTORS 0.7%
Intel Corp. 50,646 1,065,085
------------
SOFTWARE 0.7%
Adobe Systems, Inc. (f) 34,508 1,062,156
------------
TELECOMMUNICATIONS 2.6%
Amdocs, Ltd. (f) 13,704 376,449
AT&T, Inc. 39,650 1,164,917
EchoStar Corp. Class A (f) 1,392 34,758
Frontier Communications Corp. 76,771 746,982
</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>
SHARES VALUE
COMMON STOCKS (CONTINUED)
TELECOMMUNICATIONS (CONTINUED)
Leap Wireless International,
Inc. (f) 2,628 $ 32,219
Tellabs, Inc. 20,900 141,702
X Verizon Communications,
Inc. 43,921 1,571,494
------------
4,068,521
------------
TRANSPORTATION 0.7%
Ryder System, Inc. 9,599 505,292
Union Pacific Corp. 5,811 538,447
------------
1,043,739
------------
Total Common Stocks
(Cost $79,413,489) 95,718,859
------------
EXCHANGE TRADED FUND 1.6% (G)
-------------------------------------------------------
X S&P 500 Index-SPDR Trust
Series 1 19,804 2,490,947
------------
Total Exchange Traded Fund
(Cost $2,206,656) 2,490,947
------------
<Caption>
PRINCIPAL
AMOUNT VALUE
SHORT-TERM INVESTMENTS 0.6%
-------------------------------------------------------
REPURCHASE AGREEMENT 0.3%
State Street Bank and Trust
Co.
0.01%, dated 12/31/10
due 1/3/11
Proceeds at Maturity
$542,897 (Collateralized by
United States Treasury
Notes with rate of 2.50%
and maturity date of
4/30/15, with a Principal
Amount of $540,000 and a
Market Value of $560,250) $ 542,896 542,896
------------
Total Repurchase Agreement
(Cost $542,896) 542,896
------------
U.S. GOVERNMENT 0.3%
United States Treasury Bill
0.183%, due 1/20/11 (h) 400,000 399,992
------------
Total U.S. Government
(Cost $399,992) 399,992
------------
Total Short-Term Investments
(Cost $942,888) 942,888
------------
Total Investments
(Cost $139,972,500) (i) 100.2% 158,260,477
Other Assets, Less
Liabilities (0.2) (257,155)
---------- ------------
Net Assets 100.0% $158,003,322
========== ============
</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, 2010 is
$188,639, which represents 0.1% of the
Portfolio's net assets.
(c) Collateral strip rate--Bond whose
interest is based on the weighted net
interest rate of the collateral. Coupon
rate adjusts periodically based on a
predetermined schedule. Rate shown is the
rate in effect at December 31, 2010.
(d) Floating rate--Rate shown is the rate in
effect at December 31, 2010.
(e) Yankee Bond--dollar-denominated bond
issued in the United States by a foreign
bank or corporation.
(f) Non-income producing security.
(g) Exchange Traded Fund--An investment
vehicle that represents a basket of
securities that is traded on an exchange.
(h) Interest rate presented is yield to
maturity.
(i) At December 31, 2010, cost is
$140,656,095 for federal income tax
purposes and net unrealized appreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $19,851,744
Gross unrealized depreciation (2,247,362)
-----------
Net unrealized appreciation $17,604,382
===========
</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, 2010 (CONTINUED)
The following is a summary of the fair valuations according to the inputs used
as of December 31, 2010, 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 $ -- $ 252,491 $ -- $ 252,491
Corporate Bonds -- 23,456,327 -- 23,456,327
Mortgage-Backed Securities -- 1,937,318 -- 1,937,318
U.S. Government & Federal Agencies -- 28,879,821 -- 28,879,821
Yankee Bonds -- 4,581,826 -- 4,581,826
----------- ----------- -------- ------------
Total Long-Term Bonds -- 59,107,783 -- 59,107,783
----------- ----------- -------- ------------
Common Stocks 95,718,859 -- -- 95,718,859
Exchange Traded Fund 2,490,947 -- -- 2,490,947
Short-Term Investments
Repurchase Agreement -- 542,896 -- 542,896
U.S. Government -- 399,992 -- 399,992
----------- ----------- -------- ------------
Total Short-Term Investments -- 942,888 -- 942,888
----------- ----------- -------- ------------
Total Investments in Securities $98,209,806 $60,050,671 $-- $158,260,477
=========== =========== ======== ============
</Table>
(a) For a complete listing of investments and their industries, see the
Portfolio of Investments.
For the period ended December 31, 2010, the Portfolio did not have any transfers
between Level 1 and Level 2 fair value measurements. (See Note 2)
At December 31, 2010, the Portfolio did not hold any investments with
significant unobservable inputs (Level 3). (See Note 2)
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, 2010
<Table>
ASSETS
--------------------------------------------------
Investment in securities, at value
(identified cost $139,972,500) $158,260,477
Receivables:
Investment securities sold 1,980,888
Dividends and interest 620,171
Fund shares sold 30,454
------------
Total assets 160,891,990
------------
LIABILITIES
--------------------------------------------------
Payables:
Investment securities purchased 2,479,066
Fund shares redeemed 238,092
Manager (See Note 3) 92,552
Professional fees 33,803
NYLIFE Distributors (See Note 3) 31,042
Shareholder communication 10,361
Custodian 2,958
Directors 352
Accrued expenses 442
------------
Total liabilities 2,888,668
------------
Net assets $158,003,322
============
NET ASSETS CONSIST OF
--------------------------------------------------
Capital stock (par value of $.01 per
share)
200 million shares authorized $ 145,530
Additional paid-in capital 161,218,267
------------
161,363,797
Undistributed net investment income 2,364,348
Accumulated net realized loss on
investments and futures
transactions (24,012,800)
Net unrealized appreciation on
investments 18,287,977
------------
Net assets $158,003,322
============
INITIAL CLASS
Net assets applicable to outstanding
shares $ 9,598,312
============
Shares of capital stock outstanding 880,034
============
Net asset value per share
outstanding $ 10.91
============
SERVICE CLASS
Net assets applicable to outstanding
shares $148,405,010
============
Shares of capital stock outstanding 13,672,949
============
Net asset value per share
outstanding $ 10.85
============
</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, 2010
<Table>
INVESTMENT INCOME
-------------------------------------------------
INCOME
Dividends $ 2,098,668
Interest 1,813,421
-----------
Total income 3,912,089
-----------
EXPENSES
Manager (See Note 3) 1,079,602
Distribution and service--Service
Class (See Note 3) 337,504
Professional fees 55,950
Shareholder communication 33,000
Custodian 31,174
Directors 4,846
Miscellaneous 7,732
-----------
Total expenses before waiver 1,549,808
Expense waiver from Manager (See
Note 3) (31,124)
-----------
Net expenses 1,518,684
-----------
Net investment income 2,393,405
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
-------------------------------------------------
Net realized gain (loss) on:
Security transactions 7,684,978
Futures transactions (18,644)
-----------
Net realized gain on investments and
futures transactions 7,666,334
-----------
Net change in unrealized
appreciation (depreciation) on
investments 8,279,490
-----------
Net realized and unrealized gain on
investments and futures
transactions 15,945,824
-----------
Net increase in net assets resulting
from operations $18,339,229
===========
</Table>
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, 2010 AND DECEMBER 31, 2009
<Table>
<Caption>
2010 2009
INCREASE IN NET ASSETS
--------------------------------------------------------
Operations:
Net investment income $ 2,393,405 $ 1,844,320
Net realized gain (loss)
on investments and
futures transactions 7,666,334 (13,751,710)
Net change in unrealized
appreciation
(depreciation) on
investments and futures
contracts 8,279,490 37,960,248
--------------------------
Net increase in net assets
resulting from operations 18,339,229 26,052,858
--------------------------
Dividends to shareholders:
From net investment
income:
Initial Class (129,995) (250,434)
Service Class (1,684,854) (3,468,689)
--------------------------
Total dividends to
shareholders (1,814,849) (3,719,123)
--------------------------
Capital share transactions:
Net proceeds from sale of
shares 23,308,187 9,900,172
Net asset value of shares
issued to shareholders in
reinvestment of dividends 1,814,849 3,719,123
Cost of shares redeemed (22,320,084) (23,882,814)
--------------------------
Increase (decrease) in
net assets derived from
capital share
transactions 2,802,952 (10,263,519)
--------------------------
Net increase in net
assets 19,327,332 12,070,216
NET ASSETS
--------------------------------------------------------
Beginning of year 138,675,990 126,605,774
--------------------------
End of year $158,003,322 $138,675,990
==========================
Undistributed net investment
income at end of year $ 2,364,348 $ 1,844,311
==========================
</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-21
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
----------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
2010 2009 2008 2007 2006
Net asset value at beginning of
year $ 9.74 $ 8.15 $ 10.89 $11.25 $ 10.46
------ ------ ------- ------ -------
Net investment income 0.19 0.15 (a) 0.25 0.27 (a) 0.22
Net realized and unrealized gain
(loss) on investments 1.13 1.73 (2.96) 0.05 0.90
------ ------ ------- ------ -------
Total from investment operations 1.32 1.88 (2.71) 0.32 1.12
------ ------ ------- ------ -------
Less dividends and distributions:
From net investment income (0.15) (0.29) -- (0.26) (0.22)
From net realized gain on
investments -- -- (0.03) (0.42) (0.11)
------ ------ ------- ------ -------
Total dividends and distributions (0.15) (0.29) (0.03) (0.68) (0.33)
------ ------ ------- ------ -------
Net asset value at end of year $10.91 $ 9.74 $ 8.15 $10.89 $ 11.25
====== ====== ======= ====== =======
Total investment return 13.62% 23.07% (24.85%) 2.80% 10.70%
Ratios (to average net
assets)/Supplemental Data:
Net investment income 1.89% 1.69% 2.44% 2.31% 2.26%
Net expenses 0.82% 0.84% 0.83% 0.82% 0.85%
Expenses (before waiver) 0.84% 0.84% 0.83% 0.82% 0.85%
Portfolio turnover rate 118% 176% 92% 83% 45%
Net assets at end of year (in
000's) $9,598 $8,557 $ 7,232 $9,932 $13,577
</Table>
<Table>
(a) Per share data based on average shares outstanding during the period.
</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
--------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
2010 2009 2008 2007 2006
$ 9.69 $ 8.11 $ 10.86 $ 11.22 $ 10.44
-------- -------- -------- -------- --------
0.16 0.12 (a) 0.24 0.24 (a) 0.20
1.13 1.72 (2.96) 0.05 0.89
-------- -------- -------- -------- --------
1.29 1.84 (2.72) 0.29 1.09
-------- -------- -------- -------- --------
(0.13) (0.26) -- (0.23) (0.20)
-- -- (0.03) (0.42) (0.11)
-------- -------- -------- -------- --------
(0.13) (0.26) (0.03) (0.65) (0.31)
-------- -------- -------- -------- --------
$ 10.85 $ 9.69 $ 8.11 $ 10.86 $ 11.22
======== ======== ======== ======== ========
13.34% 22.76% (25.04%) 2.55% 10.42%
1.65% 1.43% 2.18% 2.09% 2.01%
1.07% 1.09% 1.08% 1.07% 1.10%
1.09% 1.09% 1.08% 1.07% 1.10%
118% 176% 92% 83% 45%
$148,405 $130,119 $119,374 $196,622 $175,576
</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. THE PERFORMANCE TABLE AND GRAPH 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.
(LINE GRAPH)
<Table>
<Caption>
BANK OF
AMERICA MERRILL
MAINSTAY VP MAINSTAY VP BARCLAYS CAPITAL LYNCH U.S.
BOND PORTFOLIO BOND PORTFOLIO U.S. AGGREGATE CORPORATE &
INITIAL CLASS SERVICE CLASS BOND INDEX GOVERNMENT INDEX
-------------- -------------- ---------------- ----------------
12/31/00 10000 10000 10000 10000
12/31/01 10927 10899 10844 10843
12/31/02 11963 11903 11957 12030
12/31/03 12504 12411 12447 12575
12/31/04 13016 12887 12987 13098
12/31/05 13300 13131 13303 13427
12/31/06 13905 13694 13879 13941
12/31/07 14811 14550 14846 14955
12/31/08 15363 15055 15624 15695
12/31/09 16557 16184 16551 16454
12/31/10 17856 17411 17633 17578
</Table>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED DECEMBER 31, 2010
--------------------------------------------------------------------------------
<Table>
<Caption>
GROSS
EXPENSE
CLASS ONE YEAR FIVE YEARS TEN YEARS(1) RATIO(2)
-----------------------------------------------------------------------------
Initial Class Shares 7.84% 6.07% 5.97% 0.55%
-----------------------------------------------------------------------------
Service Class Shares(3) 7.58 5.81 5.70 0.80
-----------------------------------------------------------------------------
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE FIVE TEN
YEAR YEARS YEARS
Barclays Capital U.S. Aggregate Bond Index(4) 6.54% 5.80% 5.84%
-----------------------------------------------------------------------------------------------------------
Bank of America Merrill Lynch U.S. Corporate & Government Master Index(4) 6.83 5.54 5.80
-----------------------------------------------------------------------------------------------------------
Average Lipper Variable Products Intermediate Investment Grade Debt Portfolio(5) 7.09 5.41 5.37
-----------------------------------------------------------------------------------------------------------
</Table>
1. Performance figures shown for the ten-year period ended December 31, 2010
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 5.95% for Initial Class shares and 5.69% for Service
Class shares for the ten-year period.
2. The gross expense ratios presented reflect the Portfolio's "Total Annual
Portfolio Operating Expenses" from the most recent Prospectus and may differ
from other expense ratios disclosed in this report.
3. 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.
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.
5. The Average Lipper Variable Products Intermediate Investment Grade Debt
Portfolio is representative of portfolios that invest primarily in
investment-grade debt issues (rated in the top four grades) with dollar-
weighted average maturities of five to ten years. Lipper Inc. is an
independent monitor of fund performance. Results are based on total returns
with all dividend and capital gain distributions reinvested.
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, 2010, to December 31,
2010, 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 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, 2010, to December 31, 2010. 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, 2010. 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 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 7/1/10 12/31/10 PERIOD(1) 12/31/10 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,016.20 $2.80 $1,022.40 $2.80
-------------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,014.90 $4.06 $1,021.20 $4.08
-------------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
(0.55% for Initial Class and 0.80% 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, 2010 (Unaudited)
(PORTFOLIO COMPOSITION PIE CHART)
<Table>
U.S. Government & Federal Agencies 57.50
Corporate Bonds 27.30
Mortgage-Backed Securities 6.30
Yankee Bonds 5.40
Short-Term Investments 4.20
Asset-Backed Securities 2.60
Medium Term Note 0.10
Other Assets, Less Liabilities (3.40)
</Table>
See Portfolio of Investments beginning on page M-29 for specific holdings within
these categories.
TOP TEN ISSUERS HELD AS OF DECEMBER 31, 2010 (excluding short-term investments)
<Table>
1. United States Treasury Notes, 0.375%-3.375%, due
5/15/12-11/15/20
2. Federal Home Loan Mortgage Corporation (Mortgage Pass-
Through Securities), 4.00%-7.00%, due 7/1/17-11/1/40
3. Federal National Mortgage Association (Mortgage Pass-Through
Securities), 3.50%-7.50%, due 5/1/16-11/1/40
4. Government National Mortgage Association (Mortgage Pass-
Through Securities), 4.00%-7.00%, due 7/15/31-7/15/40
5. Federal Home Loan Mortgage Corporation, 3.75%-5.50%, due
6/28/13-2/1/40
6. Federal National Mortgage Association, 2.75%-4.625%, due
10/15/13-3/13/14
7. United States Treasury Bonds, 3.875%-6.25%, due
8/15/23-11/15/40
8. Bear Stearns Commercial Mortgage Securities, 5.456%-5.793%,
due 9/11/38-9/11/42
9. General Electric Capital Corp., 2.125%-6.00%, due
6/15/12-1/14/38
10. Bank of America Corp., 4.50%-5.65%, due 4/1/15-7/1/20
</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, 2010?
For the 12 months ended December 31, 2010, MainStay VP Bond Portfolio returned
7.84% for Initial Class shares and 7.58% for Service Class shares. Both share
classes outperformed the 7.09% return of the average Lipper(2) Variable Products
Intermediate Investment Grade Debt Portfolio and the 6.54% return of the
Barclays Capital U.S. Aggregate Bond Index(2) for the 12 months ended December
31, 2010. The Barclays Capital U.S. Aggregate Bond Index is the Portfolio's
broad-based securities market index.
WHAT WERE THE MOST SIGNIFICANT FACTORS AND RISKS THAT INFLUENCED THE BOND
MARKETS DURING 2010?
For most of the first quarter of 2010, the growth outlook for U.S. gross
domestic product (GDP) was optimistic and favorable. By the end of the quarter,
however, it became clear that a midcycle slowdown was occurring. Second-quarter
GDP growth disappointed, raising concerns about the possibility of a return to
recession. As the economy's disappointing growth became more apparent, Treasury
rates rallied through the summer.
By midsummer, economic concerns led to debate about a second round of
quantitative easing, or direct security purchases by the Federal Reserve. On
November 3, 2010, the Federal Reserve announced its intention to purchase an
additional $600 billion of long-term Treasury securities. Although Treasury
yields initially dropped on the news, they rose shortly thereafter. Quantitative
easing continued, despite widespread criticism that the program could trigger
inflation and weaken the U.S. dollar. Over the remainder of 2010, interest rates
rose steadily as the economy slowly improved.
Spreads(3) on risky assets were tighter in 2010 than they were in 2009. The
tightening, however, was not linear. A strong asset rally was interrupted in the
spring, when the European credit crisis led to volatility across bond markets.
Spreads regained their momentum and tightened in the summer and fall.
WHAT FACTORS AFFECTED THE PORTFOLIO'S RELATIVE PERFORMANCE DURING THE REPORTING
PERIOD?
Throughout the year, the Portfolio held overweight positions in corporate bonds
and commercial mortgage-backed securities, which carry spread risk premiums
relative to Treasurys. These sectors performed well in 2010. Commercial
mortgage-backed securities were the best-performing sector of the investment-
grade bond market, and our overweight position had a positive impact on
performance.
The Portfolio also held an overweight position relative to the Barclays Capital
U.S. Aggregate Bond Index in corporate bonds, which also showed strong
performance. Financials was one of the best-performing sectors of the corporate
bond market, and the Portfolio had an overweight position in financials,
including securities issued by banks, insurance companies and real estate
investment trusts (REITS).
DURING THE REPORTING PERIOD, HOW WAS THE PORTFOLIO'S PERFORMANCE MATERIALLY
AFFECTED BY INVESTMENTS IN DERIVATIVES?
During the reporting period, the Portfolio used interest-rate derivatives to
manage the Portfolio's duration.(4) These derivatives generally had a positive
impact on performance during the year.
WHAT WAS THE PORTFOLIO'S DURATION STRATEGY DURING THE REPORTING PERIOD?
The duration of the Portfolio varied over the course of the year. In the latter
part of the second quarter, the Portfolio maintained a long duration relative to
the Barclay's Capital U.S. Aggregate Bond Index. Generally speaking, rates
rallied during this period, and the Portfolio's duration positioning benefited
returns. For much of the third and fourth quarters, the Portfolio maintained a
relatively neutral duration relative to the benchmark. During November, the
Portfolio had a modestly long duration, which detracted from performance.
WHAT SPECIFIC FACTORS, RISKS OR MARKET FORCES PROMPTED SIGNIFICANT DECISIONS FOR
THE PORTFOLIO DURING THE REPORTING PERIOD?
We generally maintained an overweight position across higher-risk assets during
the year. This had a beneficial impact on returns.
During 2010, we emphasized assets that typically trade at a positive spread to
Treasurys. However, during much of the reporting period, we maintained an
underweight position in residential mortgage-backed securities because we
anticipated that the asset class would come under pressure once the Federal
Reserve stopped purchasing mortgage-backed securities. Mortgages had positive
excess returns during the year, and the underweight position in residential
mortgage-backed securities detracted modestly from the Portfolio's performance.
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 indexes and other indexes, 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.
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-27
DURING THE REPORTING PERIOD, WHICH MARKET SEGMENTS WERE THE STRONGEST
CONTRIBUTORS TO THE PORTFOLIO'S PERFORMANCE AND WHICH MARKET SEGMENTS WERE
PARTICULARLY WEAK?
Commercial mortgage-backed securities and corporate bonds were among the best-
performing market sectors during the reporting period. We maintained an
overweight position relative to the benchmark in these asset classes throughout
the year. This positioning had a beneficial impact on returns.
HOW DID THE PORTFOLIO'S SECTOR WEIGHTINGS CHANGE DURING THE REPORTING PERIOD?
Asset allocation favored riskier assets during the reporting period. We
increased our allocation to corporate bonds through most of the year. An
exception was during the third quarter, when our allocation to corporate bonds
declined modestly. We took this action because we anticipated rising levels of
new supply.
The Portfolio maintained an underweight position relative to the Barclays
Capital U.S. Aggregate Bond Index in mortgage-backed securities during most of
the reporting period. In the fourth quarter, we increased the Portfolio's
allocation to the sector but remained underweight relative to the benchmark at
year-end.
HOW WAS THE PORTFOLIO POSITIONED AT THE END OF DECEMBER 2010?
As of December 31, 2010, the Portfolio maintained overweight positions relative
to the Barclays Capital U.S. Aggregate Bond Index in corporate bonds, commercial
mortgage-backed securities and asset-backed securities. As of the same date, the
Portfolio was underweight relative to the benchmark in Treasurys and U.S.
government securities.
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
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 preceeding pages
has not been audited.
M-28 MainStay VP Bond Portfolio
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2010
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
LONG-TERM BONDS 99.2%+
ASSET-BACKED SECURITIES 2.6%
-------------------------------------------------------
AUTOMOBILE 0.5%
Harley-Davidson Motorcycle
Trust
Series 2007-3, Class B
6.04%, due 8/15/14 $ 1,000,000 $ 1,050,748
Mercedes-Benz Auto
Receivables Trust
Series 2009-1, Class A3
1.67%, due 1/15/14 1,500,000 1,514,945
Navistar Financial Corp.
Owner Trust
Series 2010-B, Class A2
0.81%, due 1/18/13 (a) 1,000,000 999,637
Nissan Auto Lease Trust
Series 2010-B, Class A3
1.12%, due 12/15/13 1,000,000 998,322
------------
4,563,652
------------
DIVERSIFIED FINANCIAL SERVICES 0.2%
Marriott Vacation Club Owner
Trust
Series 2007-2A, Class A
5.808%, due 10/20/29 (a) 1,849,868 1,944,742
------------
HOME EQUITY 1.6%
Chase Funding Mortgage Loan
Asset-Backed Certificates
Series 2002-2, Class 1A5
6.33%, due 4/25/32 415,138 420,364
CIT Group Home Equity Loan
Trust
Series 2003-1, Class A4
3.93%, due 3/20/32 630,243 617,970
Citicorp Residential
Mortgage Securities, Inc.
Series 2006-1, Class A3
5.706%, due 7/25/36 (b) 517,618 522,638
Citifinancial Mortgage
Securities, Inc.
Series 2003-3, Class AF5
4.553%, due 8/25/33 (b) 604,151 609,791
Citigroup Mortgage Loan
Trust, Inc.
Series 2006-WF2, Class A2C
5.852%, due 5/25/36 562,124 348,431
Countrywide Asset-Backed
Certificates
Series 2006-S8, Class A3
5.555%, due 4/25/36 (e) 1,265,573 726,787
Series 2006-S5, Class A3
5.762%, due 6/25/35 1,316,053 408,754
Series 2007-S1, Class A3
5.81%, due 11/25/36 (e) 630,718 283,920
Credit-Based Asset Servicing
and Securitization LLC
Series 2007-CB2, Class A2C
4.885%, due 2/25/37 1,000,000 601,885
Series 2007-CB4, Class A2B
5.723%, due 4/25/37 (b) 500,000 365,125
Equity One ABS, Inc.
Series 2003-4, Class AF6
4.833%, due 10/25/34 (b) 1,384,679 1,408,835
JPMorgan Mortgage
Acquisition Corp.
Series 2007-CH1, Class AF3
5.532%, due 10/25/36 991,499 893,008
Series 2007-CH2, Class AF3
5.552%, due 1/25/37 1,000,000 661,852
Series 2006-WF1, Class A6
6.00%, due 7/25/36 931,928 550,369
Morgan Stanley Mortgage Loan
Trust
Series 2006-17XS, Class
A3A
5.651%, due 10/25/46 1,931,238 1,241,241
Popular ABS Mortgage Pass-
Through Trust
Series 2005-5, Class AF3
5.086%, due 11/25/35
(b)(e) 2,486,966 2,464,879
Residential Asset Mortgage
Products, Inc.
Series 2003-RZ5, Class A7
4.97%, due 9/25/33 (b) 647,956 655,671
Saxon Asset Securities Trust
Series 2003-1, Class AF5
5.455%, due 6/25/33 (b) 1,357,771 1,231,088
------------
14,012,608
------------
STUDENT LOANS 0.3%
CNH Equipment Trust Series
2010-C, Class A3
1.17%, due 5/15/15 1,000,000 998,441
Entergy Texas Restoration
Funding LLC
Series 2009-A, Class A1
2.12%, due 2/1/16 930,227 949,590
------------
1,948,031
------------
Total Asset-Backed
Securities
(Cost $26,294,132) 22,469,033
------------
CORPORATE BONDS 27.3%
-------------------------------------------------------
AEROSPACE & DEFENSE 1.5%
Boeing Co. (The)
4.875%, due 2/15/20 2,300,000 2,475,927
Goodrich Corp.
4.875%, due 3/1/20 400,000 420,321
</Table>
+ Percentages indicated are based on Portfolio net assets.
X Among the Portfolio's 10 largest issuers held, as of December 31, 2010,
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, 2010 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
AEROSPACE & DEFENSE (CONTINUED)
L-3 Communications Corp.
5.20%, due 10/15/19 $ 1,200,000 $ 1,219,945
Lockheed Martin Corp.
4.25%, due 11/15/19 2,000,000 2,033,366
Northrop Grumman Corp.
1.85%, due 11/15/15 3,800,000 3,643,486
5.05%, due 8/1/19 780,000 833,067
Raytheon Co.
4.875%, due 10/15/40 1,450,000 1,358,119
6.40%, due 12/15/18 1,175,000 1,374,441
------------
13,358,672
------------
AGRICULTURE 0.1%
Archer-Daniels-Midland Co.
5.45%, due 3/15/18 1,000,000 1,112,640
------------
AUTO MANUFACTURERS 0.1%
DaimlerChrysler N.A. Holding
Corp.
6.50%, due 11/15/13 1,000,000 1,132,069
------------
BANKS 4.5%
American Express Bank FSB
6.00%, due 9/13/17 2,000,000 2,228,804
X Bank of America Corp.
4.50%, due 4/1/15 4,000,000 4,065,340
5.625%, due 7/1/20 925,000 943,030
5.65%, due 5/1/18 1,300,000 1,328,304
BB&T Corp.
3.375%, due 9/25/13 3,000,000 3,141,741
Citigroup, Inc.
6.00%, due 8/15/17 2,750,000 2,982,917
Fifth Third Bancorp
4.50%, due 6/1/18 850,000 819,188
Goldman Sachs Group, Inc.
(The)
5.375%, due 3/15/20 1,700,000 1,756,714
6.00%, due 6/15/20 400,000 432,266
6.15%, due 4/1/18 2,000,000 2,202,386
JPMorgan Chase & Co.
4.40%, due 7/22/20 5,375,000 5,290,322
JPMorgan Chase Bank N.A.
6.00%, due 10/1/17 1,550,000 1,718,271
KeyBank N.A.
5.80%, due 7/1/14 740,000 792,918
Mercantile-Safe Deposit &
Trust Co.
5.70%, due 11/15/11 750,000 780,181
Morgan Stanley
5.50%, due 1/26/20 2,300,000 2,318,457
5.625%, due 9/23/19 800,000 815,746
PNC Bank N.A.
6.875%, due 4/1/18 1,000,000 1,143,059
PNC Funding Corp.
4.375%, due 8/11/20 3,000,000 2,964,906
SunTrust Bank
5.20%, due 1/17/17 134,000 134,665
Wachovia Bank N.A.
6.60%, due 1/15/38 850,000 935,913
Wells Fargo & Co.
3.75%, due 10/1/14 2,750,000 2,870,684
------------
39,665,812
------------
BEVERAGES 0.7%
Anheuser-Busch InBev
Worldwide, Inc.
3.00%, due 10/15/12 2,000,000 2,063,624
4.125%, due 1/15/15 1,400,000 1,474,504
Coca-Cola Co. (The)
3.15%, due 11/15/20 2,250,000 2,111,150
Coca-Cola Enterprises, Inc.
5.00%, due 8/15/13 500,000 548,282
------------
6,197,560
------------
BUILDING MATERIALS 0.5%
CRH America, Inc.
4.125%, due 1/15/16 675,000 670,687
Masco Corp.
4.80%, due 6/15/15 3,500,000 3,445,862
------------
4,116,549
------------
CHEMICALS 0.5%
Dow Chemical Co. (The)
4.25%, due 11/15/20 750,000 718,424
5.70%, due 5/15/18 2,750,000 2,974,752
Eastman Chemical Co.
3.00%, due 12/15/15 1,075,000 1,061,834
------------
4,755,010
------------
COMMERCIAL SERVICES 0.0%++
McKesson Corp.
5.25%, due 3/1/13 375,000 402,770
------------
COSMETICS & PERSONAL CARE 0.3%
Procter & Gamble Co. (The)
1.80%, due 11/15/15 2,600,000 2,548,933
------------
DIVERSIFIED FINANCIAL SERVICES 1.1%
X General Electric Capital
Corp.
2.125%, due 12/21/12 4,000,000 4,109,744
5.625%, due 5/1/18 3,000,000 3,271,542
5.875%, due 1/14/38 1,000,000 1,038,049
</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)
DIVERSIFIED FINANCIAL SERVICES (CONTINUED)
General Electric Capital Corp. (continued)
6.00%, due 6/15/12 $ 1,500,000 $ 1,603,513
------------
10,022,848
------------
ELECTRIC 3.1%
Arizona Public Service Co.
5.50%, due 9/1/35 1,275,000 1,193,218
Carolina Power & Light Co.
6.125%, due 9/15/33 500,000 546,979
CenterPoint Energy Houston
Electric LLC
7.00%, due 3/1/14 1,250,000 1,428,564
Duke Energy Carolinas LLC
7.00%, due 11/15/18 2,000,000 2,446,056
Duke Energy Corp.
3.35%, due 4/1/15 2,500,000 2,573,615
Entergy Mississippi, Inc.
5.15%, due 2/1/13 500,000 528,719
Florida Power Corp.
4.55%, due 4/1/20 1,700,000 1,771,133
FPL Group Capital, Inc.
2.55%, due 11/15/13 1,675,000 1,712,453
Great Plains Energy, Inc.
2.75%, due 8/15/13 2,000,000 2,020,372
Kansas City Power & Light
Co.
7.15%, due 4/1/19 900,000 1,062,386
Kentucky Utilities Co.
5.125%, due 11/1/40 (a) 2,300,000 2,256,399
Nisource Finance Corp.
5.40%, due 7/15/14 890,000 976,008
Peco Energy Co.
5.00%, due 10/1/14 750,000 822,661
5.35%, due 3/1/18 1,500,000 1,663,921
Pepco Holdings, Inc.
2.70%, due 10/1/15 1,000,000 974,665
San Diego Gas & Electric Co.
4.50%, due 8/15/40 2,000,000 1,803,200
South Carolina Electric &
Gas Co.
6.50%, due 11/1/18 600,000 710,792
Union Electric Co.
5.30%, due 8/1/37 800,000 783,112
6.70%, due 2/1/19 1,500,000 1,748,511
------------
27,022,764
------------
ENVIRONMENTAL CONTROLS 0.5%
Republic Services, Inc.
5.00%, due 3/1/20 2,000,000 2,104,460
5.50%, due 9/15/19 2,000,000 2,181,072
------------
4,285,532
------------
FINANCE--CREDIT CARD 0.8%
American Express Credit
Corp.
7.30%, due 8/20/13 1,500,000 1,690,287
Capital One Bank USA N.A.
8.80%, due 7/15/19 4,000,000 4,920,156
------------
6,610,443
------------
FINANCE--INVESTMENT BANKER/BROKER 0.5%
Citigroup Funding, Inc.
2.25%, due 12/10/12 4,000,000 4,114,452
------------
FINANCE--OTHER SERVICES 0.2%
National Rural Utilities
Cooperative Finance Corp.
1.90%, due 11/1/15 800,000 772,254
5.45%, due 4/10/17 1,000,000 1,102,685
------------
1,874,939
------------
FOOD 0.7%
Kraft Foods, Inc.
4.125%, due 2/9/16 2,375,000 2,493,085
Kroger Co. (The)
7.70%, due 6/1/29 1,000,000 1,222,159
Safeway, Inc.
5.00%, due 8/15/19 750,000 771,498
6.25%, due 3/15/14 1,750,000 1,944,121
------------
6,430,863
------------
FOREST PRODUCTS & PAPER 0.2%
International Paper Co.
7.30%, due 11/15/39 1,225,000 1,395,818
------------
GAS 0.2%
Sempra Energy
6.50%, due 6/1/16 1,300,000 1,509,183
------------
HEALTH CARE--SERVICES 0.8%
CIGNA Corp.
4.375%, due 12/15/20 930,000 907,831
Laboratory Corp. of America
Holdings
4.625%, due 11/15/20 2,000,000 1,981,960
Roche Holdings, Inc.
5.00%, due 3/1/14 (a) 2,700,000 2,956,697
WellPoint, Inc.
5.80%, due 8/15/40 1,000,000 1,018,476
------------
6,864,964
------------
INSURANCE 2.2%
ACE INA Holdings, Inc.
2.60%, due 11/23/15 1,675,000 1,648,976
Hartford Financial Services
Group, Inc.
5.50%, due 3/30/20 1,050,000 1,065,137
</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, 2010 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
INSURANCE (CONTINUED)
Lincoln National Corp.
6.25%, due 2/15/20 $ 2,850,000 $ 3,108,729
MetLife Global Funding I
5.125%, due 6/10/14 (a) 2,700,000 2,936,914
Northwestern Mutual Life
Insurance Co.
6.063%, due 3/30/40 (a) 2,500,000 2,761,360
Pricoa Global Funding I
4.625%, due 6/25/12 (a) 2,700,000 2,832,589
Principal Financial Group,
Inc.
8.875%, due 5/15/19 810,000 1,019,046
Prudential Financial, Inc.
4.50%, due 11/15/20 2,550,000 2,493,772
Travelers Cos., Inc. (The)
3.90%, due 11/1/20 1,250,000 1,214,296
------------
19,080,819
------------
LODGING 0.7%
Marriott International, Inc.
5.625%, due 2/15/13 940,000 1,008,140
6.20%, due 6/15/16 1,850,000 2,022,686
Wyndham Worldwide Corp.
6.00%, due 12/1/16 2,650,000 2,773,053
------------
5,803,879
------------
MACHINERY--DIVERSIFIED 0.3%
Deere & Co.
5.375%, due 10/16/29 1,100,000 1,163,580
6.95%, due 4/25/14 1,000,000 1,161,093
------------
2,324,673
------------
MEDIA 1.3%
CBS Corp.
4.625%, due 5/15/18 950,000 946,881
Comcast Cable Communications
Holdings, Inc.
8.375%, due 3/15/13 766,000 871,629
DIRECTV Holdings LLC/DIRECTV
Financing Co., Inc.
4.60%, due 2/15/21 2,000,000 1,973,986
NBC Universal, Inc.
4.375%, due 4/1/21 (a) 1,800,000 1,747,093
5.15%, due 4/30/20 (a) 1,800,000 1,865,923
TCM Sub LLC
3.55%, due 1/15/15 (a) 2,900,000 2,959,960
Time Warner, Inc.
6.10%, due 7/15/40 1,000,000 1,049,286
------------
11,414,758
------------
MINING 0.5%
Alcoa, Inc.
6.15%, due 8/15/20 2,800,000 2,875,323
Rio Tinto Finance USA, Ltd.
3.50%, due 11/2/20 1,950,000 1,851,074
------------
4,726,397
------------
MISCELLANEOUS--MANUFACTURING 0.4%
ITT Corp.
4.90%, due 5/1/14 2,250,000 2,415,512
6.125%, due 5/1/19 1,000,000 1,127,184
------------
3,542,696
------------
OIL & GAS 0.9%
Anadarko Petroleum Corp.
6.20%, due 3/15/40 1,800,000 1,757,128
Apache Corp.
5.10%, due 9/1/40 750,000 728,728
EOG Resources, Inc.
4.10%, due 2/1/21 1,700,000 1,671,987
Marathon Oil Corp.
6.50%, due 2/15/14 1,250,000 1,407,151
Motiva Enterprises LLC
5.20%, due 9/15/12 (a) 600,000 634,892
Pemex Project Funding Master
Trust
5.75%, due 3/1/18 2,000,000 2,138,374
------------
8,338,260
------------
PACKAGING & CONTAINERS 0.2%
Bemis Co., Inc.
5.65%, due 8/1/14 1,460,000 1,598,342
------------
PHARMACEUTICALS 0.2%
Eli Lilly & Co.
6.57%, due 1/1/16 1,225,000 1,439,717
------------
PIPELINES 0.6%
Energy Transfer Partners,
L.P.
9.00%, due 4/15/19 1,020,000 1,277,832
Plains All American
Pipeline, L.P.
8.75%, due 5/1/19 1,450,000 1,799,443
Williams Partners, L.P.
3.80%, due 2/15/15 2,340,000 2,418,163
------------
5,495,438
------------
REAL ESTATE 0.2%
AMB Property, L.P.
6.625%, due 12/1/19 1,250,000 1,371,449
------------
REAL ESTATE INVESTMENT TRUSTS 1.0%
AvalonBay Communities, Inc.
6.625%, due 9/15/11 439,000 455,601
Boston Properties, L.P.
4.125%, due 5/15/21 775,000 734,726
</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
CORPORATE BONDS (CONTINUED)
REAL ESTATE INVESTMENT TRUSTS (CONTINUED)
Brandywine Operating
Partnership, L.P.
5.70%, due 5/1/17 $ 2,772,000 $ 2,765,003
Federal Realty Investment
Trust
5.90%, due 4/1/20 1,050,000 1,113,543
Hospitality Properties Trust
6.30%, due 6/15/16 1,250,000 1,314,565
Liberty Property, L.P.
5.125%, due 3/2/15 750,000 799,455
UDR, Inc.
5.25%, due 1/15/15 1,600,000 1,670,973
------------
8,853,866
------------
RETAIL 0.3%
Home Depot, Inc.
5.875%, due 12/16/36 350,000 364,052
Lowe's Cos., Inc.
5.80%, due 4/15/40 1,500,000 1,587,616
Yum! Brands, Inc.
6.875%, due 11/15/37 500,000 567,456
------------
2,519,124
------------
SOFTWARE 0.1%
Oracle Corp.
3.875%, due 7/15/20 (a) 1,350,000 1,342,016
------------
TELECOMMUNICATIONS 1.5%
Cellco Partnership/Verizon
Wireless Capital LLC
5.55%, due 2/1/14 3,000,000 3,308,118
8.50%, due 11/15/18 1,500,000 1,962,825
Embarq Corp.
7.995%, due 6/1/36 250,000 272,970
Harris Corp.
4.40%, due 12/15/20 750,000 749,960
SBC Communications, Inc.
5.10%, due 9/15/14 1,500,000 1,641,146
5.875%, due 2/1/12 2,500,000 2,631,902
Verizon Communications, Inc.
7.35%, due 4/1/39 2,000,000 2,459,958
------------
13,026,879
------------
TRANSPORTATION 0.4%
Burlington Northern Santa Fe
LLC
4.70%, due 10/1/19 2,000,000 2,090,242
5.75%, due 5/1/40 1,000,000 1,034,617
------------
3,124,859
------------
TRUCKING & LEASING 0.2%
TTX Co.
5.00%, due 4/1/12 (a) 2,050,000 2,122,759
------------
Total Corporate Bonds
(Cost $227,348,031) 239,547,752
------------
MEDIUM TERM NOTE 0.1%
-------------------------------------------------------
BANKS 0.1%
Morgan Stanley
6.625%, due 4/1/18 600,000 650,861
------------
Total Medium Term Note
(Cost $613,818) 650,861
------------
MORTGAGE-BACKED SECURITIES 6.3%
-------------------------------------------------------
COMMERCIAL MORTGAGE LOANS
(COLLATERALIZED MORTGAGE OBLIGATIONS) 6.3%
Banc of America Commercial
Mortgage, Inc.
Series 2006-2, Class A4
5.74%, due 5/10/45 (c) 3,600,000 3,941,145
Banc of America Funding
Corp.
Series 2006-7, Class T2A3
5.695%, due 10/25/36 857,376 582,641
Bear Stearns Adjustable Rate
Mortgage Trust
Series 2005-8, Class A4
5.107%, due 8/25/35 (a)(c) 500,000 478,291
X Bear Stearns Commercial
Mortgage Securities
Series 2006-PW11, Class A3
5.456%, due 3/11/39 (c) 1,000,000 1,045,369
Series 2006-PW11, Class AM
5.456%, due 3/11/39 (c) 500,000 525,073
Series 2006-PW13, Class A3
5.518%, due 9/11/41 1,000,000 1,048,836
Series 2006-PW12, Class
AAB
5.697%, due 9/11/38 (c) 1,000,000 1,074,605
Series 2007-PW16, Class A4
5.717%, due 6/11/40 (c) 1,700,000 1,813,840
Series 2007-T28, Class A3
5.793%, due 9/11/42 5,000,000 5,359,919
Citigroup Commercial
Mortgage Trust
Series 2006-C5, Class A4
5.431%, due 10/15/49 3,700,000 3,951,817
Commercial Mortgage Pass-
Through Certificates
Series 2006-C8, Class A4
5.306%, due 12/10/46 1,900,000 1,981,674
Credit Suisse Mortgage
Capital Certificates
Series 2006-C1, Class AM
5.539%, due 2/15/39 (d) 5,000,000 5,063,899
</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, 2010 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
MORTGAGE-BACKED SECURITIES (CONTINUED)
COMMERCIAL MORTGAGE LOANS
(COLLATERALIZED MORTGAGE OBLIGATIONS) (CONTINUED)
Greenwich Capital Commercial
Funding Corp.
Series 2007-GG9, Class A4
5.444%, due 3/10/39 $ 2,000,000 $ 2,107,157
JP Morgan Chase Commercial
Mortgage Securities Corp.
Series 2007-CB20, Class A3
5.819%, due 2/12/51 1,000,000 1,049,462
Series 2006-LDP7, Class A4
5.872%, due 4/15/45 (c) 2,000,000 2,187,218
Series 2007-LD12, Class A3
5.989%, due 2/15/51 (c) 1,000,000 1,047,388
LB-UBS Commercial Mortgage
Trust
Series 2007-C6, Class AAB
5.855%, due 7/15/40 1,000,000 1,066,444
Series 2007-C6, Class A3
5.933%, due 7/15/40 1,000,000 1,048,071
Merrill Lynch Mortgage Trust
Series 2005-LC1, Class A3
5.289%, due 1/12/44 (d) 2,500,000 2,585,953
Series 2007-C1, Class A3
5.826%, due 6/12/50 (c) 2,240,000 2,358,376
Merrill Lynch/Countrywide
Commercial Mortgage Trust
Series 2006-4, Class A3
5.172%, due 12/12/49 (c) 2,080,000 2,152,878
Series 2007-8, Class A2
5.928%, due 8/12/49 (c) 1,000,000 1,055,584
Morgan Stanley Capital I
Series 2006-HQ8, Class A4
5.388%, due 3/12/44 (c) 2,000,000 2,152,744
Series 2007-HQ11, Class A4
5.447%, due 2/12/44 (d) 1,500,000 1,556,657
Series 2007-IQ14, Class
AAB
5.654%, due 4/15/49 (d) 1,000,000 1,055,961
Series 2006-HQ9, Class AM
5.773%, due 7/12/44 (d) 1,000,000 1,026,996
Structured Adjustable Rate
Mortgage Loan Trust
Series 2006-8, Class 4A3
5.51%, due 9/25/36 (c) 1,000,000 765,637
TBW Mortgage-Backed Pass-
Through Certificates
Series 2006-6, Class A2B
5.66%, due 1/25/37 2,000,000 1,255,078
Wachovia Bank Commercial
Mortgage Trust
Series 2006-C29, Class AM
5.339%, due 11/15/48 2,000,000 2,018,266
Series 2006-C28, Class A4
5.572%, due 10/15/48 2,200,000 2,303,805
------------
Total Mortgage-Backed
Securities
(Cost $52,230,224) 55,660,784
------------
U.S. GOVERNMENT & FEDERAL AGENCIES 57.5%
-------------------------------------------------------
X FEDERAL HOME LOAN MORTGAGE CORPORATION
1.7%
3.75%, due 6/28/13 6,900,000 7,389,569
4.75%, due 1/19/16 2,000,000 2,237,784
5.50%, due 7/18/16 4,000,000 4,632,616
5.50%, due 2/1/40 869,791 927,721
------------
15,187,690
------------
X FEDERAL HOME LOAN MORTGAGE CORPORATION
(MORTGAGE PASS-THROUGH SECURITIES) 14.2%
4.00%, due 1/1/25 826,999 850,517
4.00%, due 3/1/25 877,242 903,696
4.00%, due 5/1/25 965,687 994,809
4.00%, due 1/1/39 961,341 955,948
4.00%, due 9/1/39 2,878,705 2,860,757
4.00%, due 11/1/40 1,999,999 1,988,779
4.50%, due 4/1/22 677,452 714,288
4.50%, due 4/1/23 159,387 166,759
4.50%, due 6/1/24 349,520 365,249
4.50%, due 7/1/24 827,845 865,098
4.50%, due 5/1/25 1,659,922 1,736,694
4.50%, due 9/1/35 1,079,982 1,113,459
4.50%, due 9/1/38 840,925 863,050
4.50%, due 2/1/39 1,459,675 1,497,168
4.50%, due 4/1/39 1,455,371 1,492,753
4.50%, due 6/1/39 2,623,366 2,690,749
4.50%, due 11/1/39 7,315,524 7,503,427
4.50%, due 12/1/39 965,027 989,814
4.50%, due 2/1/40 10,055,518 10,313,799
4.50%, due 4/1/40 921,965 945,646
4.50%, due 8/1/40 928,084 951,922
4.50%, due 9/1/40 2,970,687 3,046,990
4.50%, due 11/1/40 3,994,752 4,097,359
5.00%, due 4/1/23 473,249 501,718
5.00%, due 1/1/25 8,827,707 9,325,645
5.00%, due 6/1/25 941,756 994,877
5.00%, due 8/1/35 585,001 616,468
5.00%, due 8/1/37 2,646,201 2,777,791
5.00%, due 2/1/38 815,444 855,821
5.00%, due 4/1/38 548,458 575,616
5.00%, due 9/1/38 254,402 266,998
5.00%, due 2/1/39 3,303,458 3,467,030
5.00%, due 3/1/40 4,824,200 5,062,589
</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)
X FEDERAL HOME LOAN MORTGAGE CORPORATION
(MORTGAGE PASS-THROUGH SECURITIES) (CONTINUED)
5.00%, due 4/1/40 $ 938,942 $ 985,340
5.50%, due 12/1/18 545,751 585,915
5.50%, due 9/1/21 705,656 757,147
5.50%, due 9/1/22 526,331 565,888
5.50%, due 8/1/37 1,048,795 1,124,063
5.50%, due 9/1/37 5,979,608 6,379,735
5.50%, due 1/1/38 4,222,947 4,505,527
5.50%, due 8/1/38 2,630,939 2,806,167
5.50%, due 9/1/38 1,754,698 1,871,565
5.50%, due 10/1/38 2,479,099 2,644,215
5.50%, due 12/1/38 6,761,230 7,211,548
5.50%, due 1/1/39 2,138,264 2,281,347
6.00%, due 7/1/21 1,644,630 1,804,210
6.00%, due 8/1/36 2,879,987 3,129,983
6.00%, due 2/1/37 427,276 464,366
6.00%, due 9/1/37 2,738,644 2,969,524
6.00%, due 11/1/37 1,242,779 1,347,550
6.00%, due 12/1/37 4,826,496 5,233,391
6.00%, due 10/1/38 43,399 47,058
6.50%, due 7/1/17 155,741 170,463
6.50%, due 11/1/35 198,193 221,922
6.50%, due 8/1/37 409,433 454,359
6.50%, due 11/1/37 788,196 874,683
6.50%, due 9/1/39 2,000,000 2,219,456
7.00%, due 1/1/33 861,447 982,129
7.00%, due 9/1/33 237,333 270,689
------------
124,261,523
------------
X FEDERAL NATIONAL MORTGAGE ASSOCIATION 1.6%
2.75%, due 3/13/14 6,600,000 6,898,406
4.625%, due 10/15/13 6,000,000 6,585,900
------------
13,484,306
------------
X FEDERAL NATIONAL MORTGAGE ASSOCIATION
(MORTGAGE PASS-THROUGH SECURITIES) 13.3%
3.50%, due 11/1/25 1,000,000 1,009,218
3.50%, due 8/1/40 3,854,408 3,684,806
3.50%, due 11/1/40 4,000,000 3,823,992
4.00%, due 10/1/20 612 635
4.00%, due 3/1/22 286,812 296,505
4.00%, due 11/1/23 TBA (e) 10,500,000 10,813,362
4.00%, due 12/1/24 381,089 393,057
4.00%, due 12/1/25 4,965,018 5,132,587
4.00%, due 9/1/40 952,173 948,171
4.00%, due 10/1/40 2,990,658 2,978,086
4.00%, due 11/1/40 3,494,052 3,479,364
4.50%, due 5/1/24 4,883,779 5,127,968
4.50%, due 3/1/40 3,749,735 3,852,493
4.50%, due 9/1/40 199,129 204,586
5.00%, due 1/1/21 113,280 121,015
5.00%, due 4/1/23 1,251,886 1,328,885
5.00%, due 9/1/23 485,422 515,230
5.00%, due 12/1/23 2,755,190 2,924,376
5.00%, due 3/1/34 1,752,510 1,869,974
5.00%, due 4/1/34 4,516,229 4,818,934
5.00%, due 2/1/36 2,142,152 2,261,633
5.00%, due 5/1/37 9,479 9,975
5.00%, due 2/1/38 1,153,954 1,214,105
5.00%, due 3/1/38 577,571 609,425
5.00%, due 4/1/38 4,769,812 5,018,445
5.00%, due 5/1/38 9,867,729 10,382,096
5.00%, due 7/1/38 927,700 986,355
5.00%, due 6/1/39 1,712,466 1,802,094
5.00%, due 10/1/39 5,726,578 6,038,827
5.50%, due 5/1/16 35,157 37,735
5.50%, due 1/1/21 14,676 15,824
5.50%, due 12/1/21 54,396 58,552
5.50%, due 1/1/22 371,232 399,596
5.50%, due 2/1/22 23,855 25,665
5.50%, due 7/1/35 262,266 282,040
5.50%, due 4/1/36 678,846 727,908
5.50%, due 12/1/36 1,000,000 1,072,273
5.50%, due 2/1/37 4,631,326 4,962,588
5.50%, due 6/1/37 802,681 859,440
5.50%, due 8/1/37 1,510,053 1,623,908
5.50%, due 12/1/37 1,000,000 1,070,711
5.50%, due 2/1/38 1,000,000 1,070,555
5.50%, due 3/1/38 4,600,614 4,925,207
5.50%, due 4/1/38 1,000,001 1,070,711
5.50%, due 7/1/38 1,000,000 1,070,555
5.50%, due 9/1/38 1,000,000 1,070,555
6.00%, due 1/1/36 11,163 12,168
6.00%, due 3/1/36 467,419 509,506
6.00%, due 10/1/38 4,541,144 4,941,515
6.00%, due 12/1/38 5,092,686 5,540,093
6.50%, due 10/1/36 839,285 935,837
6.50%, due 1/1/37 1,389,585 1,549,444
6.50%, due 8/1/37 195,712 217,676
6.50%, due 10/1/37 639,087 710,811
7.00%, due 9/1/37 236,317 267,613
7.00%, due 10/1/37 11,225 12,712
7.00%, due 11/1/37 22,398 25,364
7.50%, due 7/1/28 80,603 92,286
------------
116,805,047
------------
X GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
(MORTGAGE PASS-THROUGH SECURITIES) 4.1%
4.00%, due 1/3/40 TBA (e) 2,000,000 2,013,438
4.50%, due 9/15/35 312,566 326,108
</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, 2010 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
U.S. GOVERNMENT & FEDERAL AGENCIES (CONTINUED)
X GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
(MORTGAGE PASS-THROUGH SECURITIES) (CONTINUED)
4.50%, due 1/15/39 $ 916,892 $ 953,180
4.50%, due 5/15/39 5,527,677 5,746,444
4.50%, due 6/15/39 2,995,883 3,114,449
4.50%, due 2/15/40 935,604 972,632
4.50%, due 5/15/40 931,701 968,574
4.50%, due 6/15/40 981,545 1,020,392
5.00%, due 1/6/38 TBA (e) 1,000,000 1,063,125
5.00%, due 1/15/39 372,880 396,689
5.00%, due 3/15/39 3,145,428 3,346,266
5.00%, due 8/15/39 376,556 400,599
5.00%, due 7/15/40 1,900,683 2,022,043
5.50%, due 7/15/35 312,906 339,452
5.50%, due 8/15/35 337,129 365,730
5.50%, due 5/15/36 395,961 428,811
5.50%, due 7/15/36 253,423 274,448
5.50%, due 6/15/38 589,594 637,772
5.50%, due 8/15/38 852,929 922,625
5.50%, due 1/15/39 397,579 430,066
5.50%, due 7/15/39 908,192 982,592
5.50%, due 12/15/39 315,430 341,278
6.00%, due 1/15/36 565,225 623,186
6.00%, due 11/15/37 328,901 362,217
6.00%, due 12/15/37 2,028,367 2,234,043
6.00%, due 9/15/38 2,086,814 2,297,547
6.00%, due 10/15/38 1,267,934 1,395,973
6.50%, due 1/15/36 336,760 380,546
6.50%, due 3/15/36 242,012 275,067
6.50%, due 6/15/36 458,600 518,227
6.50%, due 9/15/36 94,644 107,068
6.50%, due 7/15/37 497,893 561,619
7.00%, due 7/15/31 78,157 89,661
------------
35,911,867
------------
X UNITED STATES TREASURY BONDS 1.3%
3.875%, due 8/15/40 3,700,000 3,408,048
4.25%, due 11/15/40 4,600,000 4,525,250
4.50%, due 8/15/39 1,700,000 1,745,687
6.25%, due 8/15/23 1,300,000 1,633,938
------------
11,312,923
------------
X UNITED STATES TREASURY NOTES 21.3%
0.375%, due 9/30/12 9,800,000 9,776,647
0.50%, due 11/30/12 10,000,000 9,987,110
0.50%, due 11/15/13 7,000,000 6,909,763
0.625%, due 6/30/12 3,000,000 3,008,910
0.75%, due 9/15/13 13,500,000 13,456,759
0.75%, due 12/15/13 7,000,000 6,950,237
1.00%, due 7/15/13 9,700,000 9,747,724
1.125%, due 12/15/12 8,085,000 8,168,057
1.375%, due 5/15/12 11,000,000 11,146,091
1.375%, due 1/15/13 14,250,000 14,467,084
1.375%, due 11/30/15 3,000,000 2,915,391
2.375%, due 7/31/17 5,300,000 5,230,438
2.50%, due 3/31/15 4,340,000 4,492,247
2.50%, due 4/30/15 7,160,000 7,402,208
2.625%, due 8/15/20 1,610,000 1,526,356
2.625%, due 11/15/20 5,370,000 5,065,419
2.75%, due 12/31/17 15,000,000 15,032,820
3.125%, due 4/30/17 31,300,000 32,432,184
3.25%, due 6/30/16 12,700,000 13,389,572
3.375%, due 11/15/19 5,360,000 5,471,804
------------
186,576,821
------------
Total U.S. Government &
Federal Agencies
(Cost $496,206,970) 503,540,177
------------
YANKEE BONDS 5.4% (F)
-------------------------------------------------------
BANKS 1.9%
Bank of Nova Scotia
1.65%, due 10/29/15 (a) 4,000,000 3,823,516
3.40%, due 1/22/15 1,800,000 1,868,238
Credit Suisse A.G.
5.40%, due 1/14/20 750,000 765,956
Credit Suisse/New York NY
5.30%, due 8/13/19 1,025,000 1,082,677
HSBC Bank PLC
3.50%, due 6/28/15 (a) 2,450,000 2,511,507
4.125%, due 8/12/20 (a) 1,800,000 1,730,016
Nordea Bank Sweden AB
5.25%, due 11/30/12 (a) 800,000 855,776
Svenska Handelsbanken AB
4.875%, due 6/10/14 (a) 1,000,000 1,062,988
Westpac Banking Corp.
4.875%, due 11/19/19 2,500,000 2,627,012
------------
16,327,686
------------
BEVERAGES 0.2%
Diageo Capital PLC
5.75%, due 10/23/17 1,750,000 1,984,869
------------
CHEMICALS 0.1%
Potash Corp. of
Saskatchewan, Inc.
5.625%, due 12/1/40 1,150,000 1,160,601
------------
FINANCE--INVESTMENT BANKER/BROKER 0.3%
BNP Paribas Home Loan
Covered Bonds S.A.
2.20%, due 11/2/15 (a) 3,000,000 2,873,160
------------
</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.
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
YANKEE BONDS (CONTINUED)
MINING 0.3%
Teck Resources, Ltd.
3.85%, due 8/15/17 $ 700,000 $ 710,070
4.50%, due 1/15/21 1,900,000 1,931,753
------------
2,641,823
------------
OIL & GAS 0.3%
BP Capital Markets PLC
4.50%, due 10/1/20 750,000 748,192
Petroleos Mexicanos
4.875%, due 3/15/15 800,000 842,000
Shell International Finance
B.V.
4.00%, due 3/21/14 750,000 798,072
------------
2,388,264
------------
PHARMACEUTICALS 0.2%
Novartis Securities
Investment, Ltd.
5.125%, due 2/10/19 1,575,000 1,742,004
------------
PIPELINES 0.4%
TransCanada Pipelines, Ltd.
4.00%, due 6/15/13 500,000 529,950
7.25%, due 8/15/38 1,000,000 1,243,467
7.625%, due 1/15/39 950,000 1,228,416
------------
3,001,833
------------
SOVEREIGN 0.2%
Svensk Exportkredit AB
3.25%, due 9/16/14 1,425,000 1,492,565
------------
TELECOMMUNICATIONS 1.5%
America Movil SAB de CV
6.125%, due 3/30/40 2,000,000 2,120,960
Deutsche Telekom
International Finance B.V.
6.00%, due 7/8/19 2,800,000 3,167,494
6.75%, due 8/20/18 1,920,000 2,270,450
France Telecom S.A.
2.125%, due 9/16/15 1,000,000 973,437
Telecom Italia Capital S.A.
5.25%, due 10/1/15 250,000 255,965
Telefonica Emisiones SAU
5.134%, due 4/27/20 2,800,000 2,695,675
Vodafone Group PLC
5.625%, due 2/27/17 1,750,000 1,953,607
13,437,588
------------
Total Yankee Bonds
(Cost $44,340,324) 47,050,393
------------
Total Long-Term Bonds
(Cost $847,033,499) 868,919,000
------------
SHORT-TERM INVESTMENTS 4.2%
-------------------------------------------------------
FINANCIAL COMPANY COMMERCIAL PAPER 2.2%
BNP Paribas Finance, Inc.
0.21%, due 1/6/11 (g) 19,100,000 19,099,443
------------
Total Financial Company
Commercial Paper
(Cost $19,099,443) 19,099,443
------------
REPURCHASE AGREEMENT 0.0%++
State Street Bank and Trust
Co.
0.01%, dated 12/31/10
due 1/3/11
Proceeds at Maturity
$31,381
(Collateralized by a
United States Treasury
Note with a rate of 2.50%
and a maturity date of
4/30/15, with a Principal
Amount of $35,000 and a
Market Value of $36,313) 31,381 31,381
------------
Total Repurchase Agreement
(Cost $31,381) 31,381
------------
U.S. GOVERNMENT 2.0%
United States Treasury Bill
0.037%, due 1/20/11 (g) 17,900,000 17,899,642
------------
Total U.S. Government
(Cost $17,899,622) 17,899,642
------------
Total Short-Term Investments
(Cost $37,030,446) 37,030,466
------------
Total Investments
(Cost $884,063,945) (h) 103.4% 905,949,466
Other Assets, Less
Liabilities (3.4) (29,859,997)
----------- ------------
Net Assets 100.0% $876,089,469
=========== ============
</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) Subprime mortgage investment and other
asset-backed securities. The total market
value of the securities at December 31,
2010 is $7,258,027, which represents 0.8%
of the Portfolio's net assets.
(c) Collateral strip rate--Bond whose
interest is based on the weighted net
interest rate of the collateral. Coupon
rate adjusts periodically based on a
predetermined schedule. Rate shown is the
rate in effect at December 31, 2010.
(d) Floating rate--Rate shown is the rate in
effect at December 31, 2010.
</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-37
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2010 (CONTINUED)
<Table>
(e) TBA--Securities purchased on a forward
commitment basis with an approximate
principal amount and maturity date. The
actual principal amount and maturity date
will be determined upon settlement. The
market value of these securities at
December 31, 2010 is $13,889,925, which
represents 1.6% of the Portfolio's net
assets. All or a portion of these
securities were acquired under a mortgage
dollar roll agreement.
(f) Yankee Bond--dollar-denominated bond
issued in the United States by a foreign
bank or corporation.
(g) Interest rate presented is yield to
maturity.
(h) At December 31, 2010, cost is
$884,369,698 for federal income tax
purposes and net unrealized appreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $ 31,848,636
Gross unrealized depreciation (10,268,868)
------------
Net unrealized appreciation $ 21,579,768
============
</Table>
The following is a summary of the fair valuations according to the inputs used
as of December 31, 2010, 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 $ -- $ 22,469,033 $ -- $ 22,469,033
Corporate Bonds -- 239,547,752 -- 239,547,752
Medium Term Note -- 650,861 -- 650,861
Mortgage-Backed Securities -- 55,660,784 -- 55,660,784
U.S. Government & Federal Agencies -- 503,540,177 -- 503,540,177
Yankee Bonds -- 47,050,393 -- 47,050,393
-------- ------------ -------- ------------
Total Long-Term Bonds -- 868,919,000 -- 868,919,000
-------- ------------ -------- ------------
Short-Term Investments
Financial Company Commercial Paper -- 19,099,443 -- 19,099,443
Repurchase Agreement -- 31,381 -- 31,381
U.S. Government -- 17,899,642 -- 17,899,642
-------- ------------ -------- ------------
Total Short-Term Investments -- 37,030,466 -- 37,030,466
-------- ------------ -------- ------------
Total Investments in Securities $-- $905,949,466 $-- $905,949,466
======== ============ ======== ============
</Table>
(a) For a complete listing of investments and their industries, see the
Portfolio of Investments.
For the period ended December 31, 2010, the Portfolio did not have any transfers
between Level 1 and Level 2 fair value measurements. (See Note 2)
At December 31, 2010, the Portfolio did not hold any investments with
significant unobservable inputs (Level 3). (See Note 2)
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 ASSETS AND LIABILITIES AS OF DECEMBER 31, 2010
<Table>
ASSETS
--------------------------------------------------
Investment in securities, at value
(identified cost $884,063,945) $905,949,466
Receivables:
Interest 5,950,533
Fund shares sold 780,450
------------
Total assets 912,680,449
------------
LIABILITIES
--------------------------------------------------
Payables:
Investment securities purchased 35,786,403
Manager (See Note 3) 360,694
Fund shares redeemed 238,049
Shareholder communication 71,033
NYLIFE Distributors (See Note 3) 68,109
Professional fees 58,500
Custodian 4,923
Directors 2,087
Accrued expenses 1,182
------------
Total liabilities 36,590,980
------------
Net assets $876,089,469
============
NET ASSETS CONSIST OF
--------------------------------------------------
Capital stock (par value of $.01 per
share) 200 million shares
authorized $ 600,349
Additional paid-in capital 815,060,190
------------
815,660,539
Undistributed net investment income 26,857,313
Accumulated net realized gain on
investments and futures
transactions 11,686,096
Net unrealized appreciation on
investments 21,885,521
------------
Net assets $876,089,469
============
INITIAL CLASS
Net assets applicable to outstanding
shares $554,818,163
============
Shares of capital stock outstanding 37,917,646
============
Net asset value per share
outstanding $ 14.63
============
SERVICE CLASS
Net assets applicable to outstanding
shares $321,271,306
============
Shares of capital stock outstanding 22,117,258
============
Net asset value per share
outstanding $ 14.53
============
</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-39
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2010
<Table>
INVESTMENT INCOME
-------------------------------------------------
INCOME
Interest $30,970,352
-----------
EXPENSES
Manager (See Note 3) 3,994,245
Distribution and service--Service
Class (See Note 3) 698,086
Shareholder communication 217,623
Professional fees 149,080
Custodian 63,653
Directors 27,617
Miscellaneous 31,985
-----------
Total expenses 5,182,289
-----------
Net investment income 25,788,063
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
-------------------------------------------------
Net realized gain (loss) on:
Security transactions 13,979,687
Futures transactions (27,529)
-----------
Net realized gain on investments and
futures transactions 13,952,158
-----------
Net change in unrealized
appreciation (depreciation) on
investments 18,781,524
-----------
Net realized and unrealized gain on
investments and futures
transactions 32,733,682
-----------
Net increase in net assets resulting
from operations $58,521,745
===========
</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.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2010 AND DECEMBER 31, 2009
<Table>
<Caption>
2010 2009
INCREASE IN NET ASSETS
----------------------------------------------------------
Operations:
Net investment income $ 25,788,063 $ 25,327,340
Net realized gain on
investments and futures
transactions 13,952,158 10,384,129
Net change in unrealized
appreciation
(depreciation) on
investments 18,781,524 11,774,992
----------------------------
Net increase in net assets
resulting from operations 58,521,745 47,486,461
----------------------------
Dividends and distributions
to shareholders:
From net investment
income:
Initial Class (16,585,825) (21,915,205)
Service Class (9,305,652) (8,941,088)
----------------------------
(25,891,477) (30,856,293)
----------------------------
From net realized gain on
investments:
Initial Class (6,894,075) (1,792,095)
Service Class (4,070,171) (766,418)
----------------------------
(10,964,246) (2,558,513)
----------------------------
Total dividends and
distributions to
shareholders (36,855,723) (33,414,806)
----------------------------
Capital share transactions:
Net proceeds from sale of
shares 231,847,321 166,741,328
Net asset value of shares
issued to shareholders in
reinvestment of dividends
and distributions 36,855,723 33,414,806
Cost of shares redeemed (152,295,098) (110,257,248)
----------------------------
Increase in net assets
derived from capital
share transactions 116,407,946 89,898,886
----------------------------
Net increase in net
assets 138,073,968 103,970,541
NET ASSETS
----------------------------------------------------------
Beginning of year 738,015,501 634,044,960
----------------------------
End of year $ 876,089,469 $ 738,015,501
============================
Undistributed net investment
income at end of year $ 26,857,313 $ 25,891,451
============================
</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-41
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
2010 2009 2008 2007 2006
Net asset value at beginning of
year $ 14.17 $ 13.82 $ 13.96 $ 13.60 $ 13.16
-------- -------- -------- -------- --------
Net investment income 0.48 (a) 0.56 (a) 0.64 (a) 0.53 0.58
Net realized and unrealized gain
(loss) on investments 0.64 0.51 (0.16) 0.35 0.02
-------- -------- -------- -------- --------
Total from investment operations 1.12 1.07 0.48 0.88 0.60
-------- -------- -------- -------- --------
Less dividends and distributions:
From net investment income (0.47) (0.67) (0.62) (0.52) (0.16)
From net realized gain on
investments (0.19) (0.05) (0.00)++ -- --
-------- -------- -------- -------- --------
Total dividends and distributions (0.66) (0.72) (0.62) (0.52) (0.16)
-------- -------- -------- -------- --------
Net asset value at end of year $ 14.63 $ 14.17 $ 13.82 $ 13.96 $ 13.60
======== ======== ======== ======== ========
Total investment return 7.84% 7.77% 3.72% 6.52% 4.55%
Ratios (to average net
assets)/Supplemental Data:
Net investment income 3.26% 3.97% 4.58% 4.89% 4.66%
Net expenses 0.55% 0.55% 0.54% 0.50% 0.52%
Portfolio turnover rate (b) 127% 158% 304% 265% 166%
Net assets at end of year (in
000's) $554,818 $515,186 $451,804 $508,892 $410,139
</Table>
<Table>
++ Less than one cent per share.
(a) Per share data based on average shares outstanding during the period.
(b) The portfolio turnover rates not including mortgage dollar rolls were 97%,
151%, 297%, 256% and 147% for the fiscal years ended December 31, 2010, 2009,
2008, 2007 and 2006, 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,
2010 2009 2008 2007 2006
$ 14.09 $ 13.75 $ 13.90 $ 13.55 $ 13.12
-------- -------- -------- -------- --------
0.44 (a) 0.52 (a) 0.60 (a) 0.49 0.57
0.63 0.51 (0.15) 0.35 0.00 ++
-------- -------- -------- -------- --------
1.07 1.03 0.45 0.84 0.57
-------- -------- -------- -------- --------
(0.44) (0.64) (0.60) (0.49) (0.14)
(0.19) (0.05) (0.00)++ -- --
-------- -------- -------- -------- --------
(0.63) (0.69) (0.60) (0.49) (0.14)
-------- -------- -------- -------- --------
$ 14.53 $ 14.09 $ 13.75 $ 13.90 $ 13.55
======== ======== ======== ======== ========
7.58% 7.50% 3.47% 6.25% 4.29%
2.99% 3.70% 4.34% 4.64% 4.41%
0.80% 0.80% 0.79% 0.75% 0.77%
127% 158% 304% 265% 166%
$321,271 $222,830 $182,241 $139,595 $103,352
</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. THE PERFORMANCE TABLE AND GRAPH 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.
(LINE GRAPH)
<Table>
<Caption>
MAINSTAY LIPPER VARIABLE
VP CASH PRODUCTS MONEY
MANAGEMENT PORTFOLIO MARKET FUND
INITIAL CLASS AVERAGE
-------------------- ---------------
12/31/00 10000 10000
12/31/01 10384 10376
12/31/02 10525 10512
12/31/03 10595 10582
12/31/04 10684 10673
12/31/05 11001 10963
12/31/06 11504 11464
12/31/07 12063 12015
12/31/08 12325 12290
12/31/09 12331 12315
12/31/10 12332 12317
</Table>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED DECEMBER 31, 2010
--------------------------------------------------------------------------------
<Table>
<Caption>
GROSS
EXPENSE
CLASS ONE YEAR FIVE YEARS TEN YEARS(1) RATIO(2)
-----------------------------------------------------------------------------------
Initial Class Shares 0.01% 2.31% 2.12% 0.48%
-----------------------------------------------------------------------------------
7-DAY CURRENT YIELD: 0.01%(3)
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE FIVE TEN
YEAR YEARS YEARS
Lipper Variable Products Money Market Fund Average(4) 0.01% 2.34% 2.11%
--------------------------------------------------------------------------------
</Table>
1. Performance figures reflect certain fee waivers, without which total returns
may have been lower. For information on current expense limitations, please
refer to the notes to the financial statements. Performance figures shown for
the ten-year period ended December 31, 2010 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
2.10% for Initial Class shares for the ten-year period.
2. The gross expense ratios presented reflect the Portfolio's "Total Annual
Portfolio Operating Expenses" from the most recent Prospectus and may differ
from other expense ratios disclosed in this report.
3. As of December 31, 2010, 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.
4. The Lipper Variable Products Money Market Fund 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 60 days.
These portfolios intend to keep constant net asset value. Lipper Inc. is an
independent monitor of fund performance. Results are based on total returns
with all dividend and capital gain distributions reinvested.
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, 2010, to December 31,
2010, 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 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, 2010, to December 31, 2010. 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, 2010. 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 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 7/1/10 12/31/10 PERIOD(1) 12/31/10 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,000.00 $1.26 $1,023.90 $1.28
-------------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's net annualized expense ratio of 0.25%
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, 2010 (Unaudited)
(PORTFOLIO COMPOSITION PIE CHART)
<Table>
Other Commercial Paper 36.80
Financial Company Commercial Paper 18.60
Treasury Repurchase Agreements 16.60
Treasury Debt 9.80
Government Agency Debt 9.00
Other Notes 6.70
Asset-Backed Commercial Paper 2.50
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, 2010?
For the seven-day period ended December 31, 2010, 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, 2010, Initial Class shares of MainStay VP Cash
Management Portfolio returned 0.01%. The Portfolio performed in line with the
0.01% return of the Lipper(2) Variable Products Money Market Fund Average for
the 12 months ended December 31, 2010.
WHAT SIGNIFICANT FACTORS AND RISKS INFLUENCED THE MARKETS IN WHICH THE PORTFOLIO
INVESTED DURING THE REPORTING PERIOD?
Short-term interest rates remained low during 2010, and the supply of commercial
paper continued to decline. During the year, new SEC guidelines went into effect
mandating that money market funds maintain dollar-weighted average maturities of
60 days or less. The new guidelines also reduced the amount of the Portfolio's
assets that could be invested in second-tier commercial paper and mandated that
stress
tests be conducted on a regular basis. In light of these new regulations,
effective May 1, 2010, the Portfolio maintains a dollar-weighted average
maturity of 60 days or less and a dollar-weighted average life to maturity of
120 days or less.
WHAT FACTORS AFFECTED THE PORTFOLIO'S PERFORMANCE DURING THE REPORTING PERIOD?
Increased exposure to Treasury bills and repurchase agreements hurt the
Portfolio's performance, while maintaining what we considered to be a longer-
than-neutral duration in the early portion of the reporting period helped the
Portfolio's results. Our investments in FDIC-backed floating-rate securities
continued to have a positive impact on performance, as did our investments in
asset-backed securities.
WHAT WAS THE PORTFOLIO'S DURATION(3) STRATEGY DURING THE REPORTING PERIOD?
The longer duration that we maintained early in the reporting period helped
Portfolio's return because the yield curve(4) remained upward-sloping. During
the second quarter of 2010, we shortened the Portfolio's duration to be
compliant with the new money market regulations. Since the new regulations
called for a shorter duration than was previously permitted (60 days as opposed
to 90), the positive impact of having had a longer duration was gradually muted
during the second half of 2010.
WHAT SPECIFIC FACTORS, RISKS OR MARKET FORCES PROMPTED SIGNIFICANT DECISIONS FOR
THE PORTFOLIO DURING THE REPORTING PERIOD?
The Federal Reserve maintained the targeted federal funds rate in a range near
zero, which gave us the confidence to go out further on an upward-sloping yield
curve. The results were investments in longer-dated Treasury coupon securities,
callable agency coupon securities and asset-backed securities. Asset-backed
securities must be booked to their legal maturity even though the average lives
are generally much shorter. We were comfortable using duration in this
environment (that is, having a longer average life) because Federal Reserve
policy remained highly accommodative.
We hedged this positioning by participating in the floating-rate securities
market. These securities allowed us to accomplish two things. If for some reason
rates rose, we would participate; and in our opinion, floating-rate securities
offered compelling yields compared to alternative investments.
We maintained a negative view of foreign banks, a perspective that was
reinforced by market concerns about European sovereign debt. For the most part,
we continued to stay away from this sector, except for some shorter-dated
commercial paper investments in some of the stronger issuers.
DURING THE REPORTING PERIOD, WHICH MARKET SEGMENTS WERE THE STRONGEST
CONTRIBUTORS TO THE PORTFOLIO'S PERFORMANCE AND WHICH MARKET SEGMENTS WERE
PARTICULARLY WEAK?
The market segments that made the strongest contributions to the Portfolio's
performance during the reporting period were corporate and FDIC-backed floating-
rate securities, asset-backed securities and callable agency securities.
Investments in Treasury bills and repurchase agreements were the Portfolio's
strongest detractors.
DID THE PORTFOLIO MAKE ANY SIGNIFICANT PURCHASES OR SALES DURING THE REPORTING
PERIOD?
During the reporting period, significant purchases included a Pepsi corporate
floater due 7/15/2011, a Federal Home Loan Bank callable 0.34 security due
11/15/2011, and a General Electric Equipment ABS transaction: GE Equipment
Midticket
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 indexes and other indexes, 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
Trust 2010-1 A1 due 9/14/11. There were no significant sales during the
reporting period.
HOW DID THE PORTFOLIO'S SECTOR WEIGHTINGS CHANGE DURING THE REPORTING PERIOD?
During the reporting period, the Portfolio increased its sector weightings in
asset-backed securities, repurchase agreements, floating-rate securities and
commercial paper. Over the same period, the Portfolio decreased its sector
weightings in government and agency securities and corporate bonds.
HOW WAS THE PORTFOLIO POSITIONED AT THE END OF DECEMBER 2010?
As of December 31, 2010, the Portfolio had no significant overweight or
underweight positions.
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
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, 2010
<Table>
<Caption>
PRINCIPAL AMORTIZED
AMOUNT COST
SHORT-TERM INVESTMENTS 100.0%+
-------------------------------------------------------
ASSET-BACKED COMMERCIAL PAPER 2.5%
Straight-A Funding LLC
0.082%, due 3/9/11 (a) $ 8,260,000 $ 8,258,745
0.25%, due 1/10/11 (a)(b) 8,750,000 8,749,453
------------
17,008,198
------------
FINANCIAL COMPANY COMMERCIAL PAPER 18.6%
American Honda Finance Corp.
0.21%, due 1/20/11 (a) 8,260,000 8,259,085
0.22%, due 2/23/11 (a) 8,500,000 8,497,247
BNP Paribas Finance, Inc.
0.21%, due 1/6/11 (a) 7,600,000 7,599,778
0.25%, due 1/7/11 (a) 8,500,000 8,499,646
Caterpillar Financial
Services Corp.
0.18%, due 1/25/11 (a) 3,545,000 3,544,575
European Investment Bank
0.22%, due 1/24/11 (a) 5,250,000 5,249,262
General Electric Capital
Corp.
0.16%, due 2/14/11 (a) 8,250,000 8,248,387
John Deere Capital Corp.
0.23%, due 1/12/11 (a)(b) 8,500,000 8,499,403
National Cooperative
Services
0.30%, due 2/3/11 (a) 8,260,000 8,257,728
National Rural Utilities
Cooperative Finance Corp.
0.25%, due 1/18/11 (a) 3,600,000 3,599,575
0.25%, due 1/24/11 (a) 5,060,000 5,059,192
PACCAR Financial Corp.
0.20%, due 1/4/11 (a) 8,750,000 8,749,854
Private Export Funding Corp.
0.19%, due 2/7/11 (a)(b) 6,750,000 6,748,682
0.31%, due 5/11/11 (a)(b) 8,435,000 8,425,557
Societe Generale North
America, Inc.
0.25%, due 1/3/11 (a) 10,000,000 9,999,861
0.255%, due 1/5/11 (a) 8,250,000 8,249,766
Toyota Motor Credit Corp.
0.20%, due 1/6/11 (a) 7,085,000 7,084,803
------------
124,572,401
------------
GOVERNMENT AGENCY DEBT 9.0%
Federal Farm Credit Bank
0.24%, due 11/4/11 (c) 6,880,000 6,880,000
0.293%, due 9/16/11 (c) 5,250,000 5,249,815
Federal Home Loan Bank
0.333%, due 7/29/11 (c) 8,750,000 8,750,000
0.34%, due 11/15/11 8,565,000 8,565,000
0.41%, due 12/9/11 3,360,000 3,360,000
Federal Home Loan Mortgage
Corporation (Discount
Note)
0.25%, due 5/2/11 (a) 2,275,000 2,273,088
Federal National Mortgage
Association
0.221%, due 9/19/11 (c) 8,500,000 8,500,323
Federal National Mortgage
Association (Discount
Notes)
0.243%, due 4/11/11 (a) 4,420,000 4,416,927
0.33%, due 2/22/11 (a) 6,000,000 5,997,140
International Bank for
Reconstruction &
Development
0.171%, due 3/1/11 6,800,000 6,797,994
------------
60,790,287
------------
OTHER COMMERCIAL PAPER 36.8%
Abbot Laboratories
0.17%, due 1/20/11 (a)(b) 5,075,000 5,074,545
Apache Corp.
0.38%, due 1/5/11 (a) 2,700,000 2,699,886
Archer-Daniels-Midland Co.
0.22%, due 1/27/11 (a)(b) 6,250,000 6,249,007
0.24%, due 2/16/11 (a)(b) 8,500,000 8,497,393
Basin Electric Power
Cooperative, Inc.
0.23%, due 2/23/11 (a)(b) 4,950,000 4,948,324
0.24%, due 1/27/11 (a)(b) 7,500,000 7,498,700
Becton, Dickinson & Co.
0.18%, due 1/19/11 (a) 8,500,000 8,499,235
Coca-Cola Co. (The)
0.23%, due 1/11/11 (a) 8,750,000 8,749,441
Duke Energy Corp.
0.33%, due 1/4/11 (a)(b) 2,700,000 2,699,926
Emerson Electric Co.
0.17%, due 1/3/11 (a)(b) 6,800,000 6,799,936
Google, Inc.
0.18%, due 2/7/11 (a)(b) 8,750,000 8,748,381
0.19%, due 3/15/11 (a)(b) 6,000,000 5,997,688
Hewlett-Packard Co.
0.15%, due 1/7/11 (a)(b) 8,250,000 8,249,794
0.18%, due 1/5/11 (a)(b) 10,000,000 9,999,800
Johnson & Johnson
0.15%, due 1/4/11 (a)(b) 8,500,000 8,499,894
Medtronic, Inc.
0.20%, due 1/28/11 (a)(b) 8,750,000 8,748,687
0.22%, due 2/22/11 (a)(b) 9,000,000 8,997,140
Nestle Capital Corp.
0.24%, due 4/1/11 (a)(b) 8,750,000 8,744,750
NextEra Energy Capital
Holdings, Inc.
0.36%, due 1/10/11 (a) 2,700,000 2,699,757
Novartis Finance Corp.
0.18%, due 1/5/11 (a) 6,600,000 6,599,868
0.19%, due 1/7/11 (a) 8,250,000 8,249,739
NSTAR
0.20%, due 1/4/11 (a) 6,750,000 6,749,887
</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, 2010 (CONTINUED)
<Table>
<Caption>
PRINCIPAL AMORTIZED
AMOUNT COST
SHORT-TERM INVESTMENTS (CONTINUED)
OTHER COMMERCIAL PAPER (CONTINUED)
PepsiCo, Inc.
0.18%, due 2/8/11 (a)(b) $ 8,435,000 $ 8,433,397
Procter & Gamble
International Funding SCA
0.16%, due 1/24/11 (a)(b) 3,864,000 3,863,605
0.18%, due 1/14/11 (a)(b) 8,460,000 8,459,450
Schlumberger Technology
Corp.
0.21%, due 1/24/11 (a) 7,500,000 7,498,994
0.22%, due 1/18/11 (a) 6,200,000 6,199,356
South Carolina Fuel Co.,
Inc.
0.33%, due 1/12/11 (a)(b) 2,700,000 2,699,728
Southern Co.
0.27%, due 1/11/11 (a) 2,740,000 2,739,795
Southern Co. Funding Corp.
0.25%, due 1/3/11 (a)(b) 8,500,000 8,499,882
0.26%, due 1/19/11 (a)(b) 4,950,000 4,949,356
Virginia Electric and Power
Co.
0.35%, due 1/10/11 (a) 2,700,000 2,699,764
Walt Disney Co. (The)
0.17%, due 2/7/11 (a)(b) 9,000,000 8,998,427
0.17%, due 2/22/11 (a)(b) 8,250,000 8,247,974
Wisconsin Energy Corp.
0.30%, due 1/4/11 (a) 2,700,000 2,699,933
WW Grainger, Inc.
0.19%, due 1/6/11 (a) 8,500,000 8,499,776
0.20%, due 1/19/11 (a) 8,435,000 8,434,156
------------
246,925,371
------------
OTHER NOTES 6.7%
Ally Auto Receivables Trust
Series 2010-4, Class A1
0.336%, due 11/15/11 1,869,068 1,869,068
Series 2010-2, Class A1
0.586%, due 7/15/11 532,622 532,622
Berkshire Hathaway Finance
Corp.
0.266%, due 2/10/11 (c) 10,900,000 10,900,127
BMW Vehicle Lease Trust
Series 2010-1, Class A1
0.298%, due 10/17/11 1,887,302 1,887,302
CarMax Auto Owner Trust
Series 2010-3, Class A1
0.313%, due 11/15/11 1,616,716 1,616,716
CNH Equipment Trust
Series 2010-C, Class A1
0.427%, due 12/9/11 2,170,541 2,170,541
Ford Credit Auto Owner Trust
Series 2010-B, Class A1
0.506%, due 8/15/11 (b) 778,458 778,458
GE Equipment Midticket LLC
Series 2010-1, Class A1
0.351%, due 9/14/11 (b) 1,090,561 1,090,561
General Electric Capital
Corp.
0.382%, due 3/11/11 (c)(d) 5,500,000 5,500,000
Holmes Master Issuer PLC
Series 2010-1A, Class A1
0.41%, due 10/15/11 (b)(c) 3,400,000 3,400,000
Hyundai Auto Receivables
Trust
Series 2010-B, Class A1
0.371%, due 9/15/11 919,800 919,800
John Deere Owner Trust
Series 2010-A, Class A1
0.344%, due 5/16/11 250,065 250,065
Mercedes-Benz Auto
Receivables Trust Series
2010-1, Class A1
0.309%, due 5/13/11 69,467 69,467
Navistar Financial Corp.
Owner Trust
Series 2010-B, Class A1
0.345%, due 10/18/11 (b) 1,829,503 1,829,503
Series 2010-A, Class A1
0.608%, due 6/20/11 (b) 1,072,660 1,072,660
Nissan Auto Receivables
Owner Trust Series 2010-A,
Class A1
0.356%, due 10/17/11 2,278,515 2,278,515
PepsiCo, Inc.
0.319%, due 7/15/11 (c) 5,250,000 5,251,451
Volkswagen Auto Lease Trust
Series 2010-A, Class A1
0.299%, due 11/21/11 2,792,700 2,792,700
Volvo Financial Equipment
LLC
Series 2010-1A, Class A1
0.51%, due 5/16/11 (b) 991,532 991,532
------------
45,201,088
------------
TREASURY DEBT 9.8%
United States Treasury Bills
0.103%, due 1/13/11 (a) 6,750,000 6,749,768
0.195%, due 6/30/11 (a) 8,310,000 8,301,898
United States Treasury Notes
0.875%, due 1/31/11 7,500,000 7,503,086
0.875%, due 3/31/11 12,125,000 12,142,543
1.00%, due 8/31/11 8,750,000 8,790,758
1.00%, due 9/30/11 8,680,000 8,726,459
1.00%, due 10/31/11 8,325,000 8,373,456
1.00%, due 12/31/11 5,065,000 5,098,141
------------
65,686,109
------------
</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
SHORT-TERM INVESTMENTS (CONTINUED)
TREASURY REPURCHASE AGREEMENTS 16.6%
Deutsche Bank Securities,
Inc.
0.18%, dated 12/31/10
due 1/3/10
Proceeds at Maturity
$37,100,557
(Collateralized by a
United States Treasury
Note with a rate of 2.125%
and a maturity date of
12/31/15, with a Principal
Amount of $37,747,700 and
a Market Value of
$37,842,069) $37,100,000 $ 37,100,000
Morgan Stanley Co.
0.08%, dated 12/31/10
due 1/3/10
Proceeds at Maturity
$37,035,247
(Collateralized by a
United States Treasury
Note with a rate of 1.875%
and a maturity date of
7/15/13, with a Principal
Amount of $29,545,500 and
a Market Value of
$37,775,703) 37,035,000 37,035,000
SG Americas Securities LLC
0.20%, dated 12/31/10
due 1/3/10
Proceeds at Maturity
$37,100,618
(Collateralized by a
United States Treasury
Note with a rate of 0.50%
and a maturity date of
10/15/13, with a Principal
Amount of $38,289,000 and
a Market Value of
$37,842,079) 37,100,000 37,100,000
------------
111,235,000
------------
Total Short-Term Investments
(Amortized Cost
$671,418,454) (e) 100.0% 671,418,454
Other Assets, Less
Liabilities (0.0)++ (208,193)
----------- ------------
Net Assets 100.0% $671,210,261
=========== ============
</Table>
<Table>
++ Less than one-tenth of a percent.
(a) Interest rate presented is yield to
maturity.
(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--Rate shown is the rate in
effect at December 31, 2010.
(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) The amortized cost also represents the
aggregate cost for federal income tax
purposes.
</Table>
The following is a summary of the fair valuations according to the inputs used
as of December 31, 2010, 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
Short-Term Investments
Asset-Backed Commercial Paper $ -- $ 17,008,198 $ -- $ 17,008,198
Financial Company Commercial Paper -- 124,572,401 -- 124,572,401
Government Agency Debt -- 60,790,287 -- 60,790,287
Other Commercial Paper -- 246,925,371 -- 246,925,371
Other Notes -- 45,201,088 -- 45,201,088
Treasury Debt -- 65,686,109 -- 65,686,109
Treasury Repurchase Agreements -- 111,235,000 -- 111,235,000
-------- ------------ -------- ------------
Total Investments in Securities $-- $671,418,454 $-- $671,418,454
======== ============ ======== ============
</Table>
For the period ended December 31, 2010, the Portfolio did not have any transfers
between Level 1 and Level 2 fair value measurements. (See Note 2)
At December 31, 2010, the Portfolio did not hold any investments with
significant unobservable inputs (Level 3). (See Note 2)
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, 2010 (CONTINUED)
INDUSTRY DIVERSIFICATION
The table below sets forth the diversification of the VP Cash Management
Portfolio investments by industry.
<Table>
<Caption>
AMORTIZED
COST PERCENT +
Agriculture $ 14,746,400 2.2%
Automobile 15,646,811 2.3
Banks 18,249,627 2.7
Beverages 22,434,289 3.3
Computers 18,249,594 2.7
Cosmetics & Personal Care 12,323,055 1.8
Distribution & Wholesale 16,933,932 2.5
Diversified Financial Services 123,581,710 18.5
Electric 46,185,324 6.9
Electrical Components & Equipment 6,799,936 1.0
Food 8,744,750 1.3
Health Care--Products 34,744,956 5.2
Holding Companies--Diversified 2,699,728 0.4
Insurance 10,900,127 1.6
Internet 14,746,069 2.2
Media 17,246,401 2.6
Multi-National 12,047,256 1.8
Oil & Gas 16,398,236 2.4
Other ABS 4,502,699 0.7
Pharmaceuticals 19,924,152 3.0
Repurchase Agreements 111,235,000 16.6
U.S. Government & Agency 119,678,402 17.8
WL Collateral CMO 3,400,000 0.5
------------ -----
671,418,454 100.0
Other Assets, Less Liabilities (208,193) (0.0)++
------------ -----
Net Assets $671,210,261 100.0%
============ =====
</Table>
<Table>
+ Percentages indicated are based on Portfolio net assets.
++ Less than one-tenth of a percent.
</Table>
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, 2010
<Table>
ASSETS
--------------------------------------------------
Investment in securities, at value
(amortized cost $560,183,454) $560,183,454
Repurchase agreements , at value
(identified cost $111,235,000) 111,235,000
Cash 300
Receivables:
Fund shares sold 1,702,274
Interest 148,884
------------
Total assets 673,269,912
------------
LIABILITIES
--------------------------------------------------
Payables:
Fund shares redeemed 1,789,085
Manager (See Note 3) 93,932
Shareholder communication 59,379
Professional fees 45,636
Custodian 2,555
Directors 1,744
Accrued expenses 227
Dividend payable 67,093
------------
Total liabilities 2,059,651
------------
Net assets $671,210,261
============
NET ASSETS CONSIST OF
--------------------------------------------------
Capital stock (par value of $.01 per
share) 2.45 billion
shares authorized $ 6,712,310
Additional paid-in capital 664,503,901
------------
671,216,211
Distributions in excess of net
investment income (5,950)
------------
Net assets applicable to outstanding
shares $671,210,261
============
Shares of capital stock outstanding 671,230,963
============
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, 2010
<Table>
INVESTMENT INCOME
--------------------------------------------------
INCOME
Interest $ 1,873,220
-----------
EXPENSES
Manager (See Note 3) 3,144,818
Shareholder communication 197,482
Professional fees 166,694
Directors 25,404
Custodian 24,786
Miscellaneous 27,903
-----------
Total expenses before waiver 3,587,087
Expense waiver from Manager (See
Note 3) (1,757,271)
-----------
Net expenses 1,829,816
-----------
Net investment income 43,404
-----------
REALIZED GAIN ON INVESTMENTS
--------------------------------------------------
Net realized gain on investments 21,521
-----------
Net increase in net assets resulting
from operations $ 64,925
===========
</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, 2010 AND DECEMBER 31, 2009
<Table>
<Caption>
2010 2009
DECREASE IN NET ASSETS
----------------------------------------------------------
Operations:
Net investment income $ 43,404 $ 470,251
Net realized gain on
investments 21,521 11,848
-----------------------------
Net increase in net
assets resulting from
operations 64,925 482,099
-----------------------------
Dividends to shareholders:
From net investment
income (131,787) (470,251)
-----------------------------
Capital share transactions:
Net proceeds from sale of
shares 484,805,595 495,040,021
Net asset value of shares
issued to shareholders
in reinvestment of
dividends 131,787 470,251
Cost of shares redeemed (578,778,542) (826,291,881)
-----------------------------
Decrease in net assets
derived from capital
share transactions (93,841,160) (330,781,609)
-----------------------------
Net decrease in net
assets (93,908,022) (330,769,761)
NET ASSETS
----------------------------------------------------------
Beginning of year 765,118,283 1,095,888,044
-----------------------------
End of year $ 671,210,261 $ 765,118,283
=============================
Undistributed
(distributions in excess
of)
net investment income at
end of year $ (5,950) $ 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,
2010 2009 2008 2007 2006
Net asset value at beginning of
year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- ---------- -------- --------
Net investment income 0.00 ++ 0.00 ++ 0.02 0.05 0.04
Net realized and unrealized gain
(loss) on investments 0.00 ++ 0.00 ++ 0.00 ++ 0.00 ++ (0.00)++
-------- -------- ---------- -------- --------
Total from investment operations 0.00 ++ 0.00 ++ 0.02 0.05 0.04
-------- -------- ---------- -------- --------
Less dividends:
From net investment income (0.00)++ (0.00)++ (0.02) (0.05) (0.04)
-------- -------- ---------- -------- --------
Net asset value at end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ========== ======== ========
Total investment return 0.01% 0.05% 2.18% 4.86% 4.57%
Ratios (to average net
assets)/Supplemental Data:
Net investment income 0.01% 0.05% 2.02% 4.71% 4.50%
Net expenses 0.25% 0.41% 0.50% 0.50% 0.52%
Expenses (before waiver) 0.50% 0.51% 0.50% 0.50% 0.52%
Net assets at end of year (in
000's) $671,210 $765,118 $1,095,888 $605,222 $351,753
</Table>
<Table>
++ Less than one cent per share.
</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. THE PERFORMANCE TABLE AND GRAPH 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.
(LINE GRAPH)
<Table>
<Caption>
MAINSTAY VP MAINSTAY VP
COMMON STOCK COMMON STOCK S&P 500 RUSSELL 1000
INITIAL CLASS SERVICE CLASS (R) INDEX (R) INDEX
------------- ------------- --------- ------------
12/31/00 10000 10000 10000 10000
12/31/01 8291 8270 8811 8755
12/31/02 6281 6249 6864 6859
12/31/03 7937 7878 8833 8910
12/31/04 8802 8714 9794 9926
12/31/05 9480 9359 10275 10548
12/31/06 11041 10873 11898 12178
12/31/07 11609 11403 12552 12882
12/31/08 7385 7236 7908 8039
12/31/09 9038 8833 10001 10324
12/31/10 10178 9922 11507 11986
</Table>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED DECEMBER 31, 2010
--------------------------------------------------------------------------------
<Table>
<Caption>
GROSS
EXPENSE
CLASS ONE YEAR FIVE YEARS TEN YEARS(1) RATIO(2)
-----------------------------------------------------------------------------
Initial Class Shares 12.60% 1.43% 0.18% 0.60%
-----------------------------------------------------------------------------
Service Class Shares(3) 12.32 1.18 -0.08 0.85
-----------------------------------------------------------------------------
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE FIVE TEN
YEAR YEARS YEARS
S&P 500(R) Index(4) 15.06% 2.29% 1.41%
----------------------------------------------------------------------------------------
Russell 1000(R) Index(4) 16.10 2.59 1.83
----------------------------------------------------------------------------------------
Average Lipper Variable Products Large-Cap Core Portfolio(5) 13.45 1.75 1.41
----------------------------------------------------------------------------------------
</Table>
1. Performance figures shown for the ten-year period ended December 31, 2010
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 0.16% for Initial Class shares and -0.09% for Service
Class shares for the ten-year period.
2. The gross expense ratios presented reflect the Portfolio's "Total Annual
Portfolio Operating Expenses" from the most recent Prospectus and may differ
from other expense ratios disclosed in this report.
3. 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.
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.
5. 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.
Results are based on total returns with all dividend and capital gain
distributions reinvested.
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, 2010, to December 31,
2010, 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 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, 2010, to December 31, 2010. 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, 2010. 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 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 7/1/10 12/31/10 PERIOD(1) 12/31/10 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,222.10 $3.36 $1,022.20 $3.06
-------------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,220.60 $4.76 $1,020.90 $4.33
-------------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
(0.60% for Initial Class and 0.85% 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, 2010 (Unaudited)
<Table>
<Caption>
Oil, Gas & Consumable Fuels 11.5%
Insurance 5.5
Computers & Peripherals 5.4
Software 5.0
Pharmaceuticals 4.9
Diversified Financial Services 4.4
Diversified Telecommunication
Services 4.0
Media 3.3
Health Care Providers & Services 3.2
Capital Markets 2.9
Specialty Retail 2.7
Tobacco 2.7
Communications Equipment 2.6
Semiconductors & Semiconductor
Equipment 2.6
IT Services 2.5
Beverages 2.3
Food & Staples Retailing 2.3
Industrial Conglomerates 2.2
Chemicals 2.1
Machinery 2.1
Hotels, Restaurants & Leisure 1.7
Commercial Banks 1.6
Energy Equipment & Services 1.5
Metals & Mining 1.5
Household Products 1.4
Internet Software & Services 1.4
Multiline Retail 1.3
Biotechnology 1.1
Aerospace & Defense 1.0
Automobiles 1.0
Electric Utilities 1.0
Electrical Equipment 1.0
Food Products 1.0
Air Freight & Logistics 0.9
Internet & Catalog Retail 0.9
Multi-Utilities 0.9
Textiles, Apparel & Luxury Goods 0.8
Wireless Telecommunication Services 0.6
Real Estate Investment Trusts 0.5
Airlines 0.4
Commercial Services & Supplies 0.4
Road & Rail 0.4
Trading Companies & Distributors 0.4
Construction & Engineering 0.3
Gas Utilities 0.3
Office Electronics 0.3
Real Estate Management & Development 0.3
Auto Components 0.2
Containers & Packaging 0.2
Diversified Consumer Services 0.2
Exchange Traded Funds 0.2
Health Care Equipment & Supplies 0.2
Household Durables 0.2
Paper & Forest Products 0.2
Electronic Equipment & Instruments 0.1
Independent Power Producers & Energy
Traders 0.1
Leisure Equipment & Products 0.1
Life Sciences Tools & Services 0.1
Personal Products 0.1
Consumer Finance 0.0++
Distributors 0.0++
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 of a percent.
TOP TEN HOLDINGS AS OF DECEMBER 31, 2010 (excluding short-term investment)
<Table>
1. ExxonMobil Corp.
2. Apple, Inc.
3. Microsoft Corp.
4. Chevron Corp.
5. International Business Machines Corp.
6. JPMorgan Chase & Co.
7. AT&T, Inc.
8. Bank of America Corp.
9. Wells Fargo & Co.
10. Intel Corp.
</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, 2010?
For the 12 months ended December 31, 2010, MainStay VP Common Stock Portfolio
returned 12.60% for Initial Class shares and 12.32% for Service Class shares.
Both share classes underperformed the 13.45% return of the average Lipper(5)
Variable Products Large-Cap Core Portfolio and the 15.06% return of the S&P
500(R) Index(1) for the 12 months ended December 31, 2010. The S&P 500(R) Index
is the Portfolio's broad-based securities-market index.
WHAT FACTORS AFFECTED THE PORTFOLIO'S RELATIVE
PERFORMANCE DURING THE REPORTING PERIOD?
The primary reason for the Portfolio's underperformance of its benchmark and
peers can be traced to the fear of a double-dip recession, primarily during the
third quarter of 2010. Stocks that had previously appeared to be inexpensive saw
their prices continue to decline on market concerns about whether future
earnings growth would materialize. At the same time, recession fears forced
interest rates lower, driving up demand for defensive stocks with high dividend
yields.
WHICH SECTORS WERE THE STRONGEST CONTRIBUTORS TO THE PORTFOLIO'S RELATIVE
PERFORMANCE, AND WHICH SECTORS WERE PARTICULARLY WEAK?
Materials, consumer discretionary and energy were the strongest-contributing
sectors to the Portfolio's performance relative to the S&P 500(R) Index. Rising
emerging-market demand led to higher commodity prices and strengthened results
in the materials and energy sectors. The Portfolio benefited from overweight
positions in stocks such as copper producer Freeport-McMoRan Copper & Gold.
Consumer discretionary was one of the best-performing sectors in the S&P
500((R)) Index, driven higher by stronger-than-expected retail spending within
the United States. An overweight position in the consumer discretionary sector
helped the Portfolio's performance.
During the reporting period, information technology, financials and consumer
staples were the Portfolio's weakest sectors relative to the S&P 500(R) Index.
Information technology accounted for more than half of the Portfolio's
underperformance, as stocks that we believed to be attractively valued, such as
Western Digital and Hewlett-Packard, faced price erosion as the weak economy
raised concerns about future earnings growth. High-yielding consumer staples
became a safe haven during the third quarter, but an underweight position in
that sector detracted from the Portfolio's performance. In financials, much of
the Portfolio's underperformance came in the first quarter as the low-quality
rally of 2009 continued.
DURING THE REPORTING PERIOD, WHICH INDIVIDUAL STOCKS MADE THE STRONGEST
CONTRIBUTIONS TO THE PORTFOLIO'S ABSOLUTE PERFORMANCE AND WHICH STOCKS DETRACTED
THE MOST?
On an absolute basis, the strongest contributors to the Portfolio's performance
were computers & peripherals company Apple, oil and gas company ExxonMobil and
mining company Freeport-McMoRan Copper & Gold.
The stocks that detracted most from the Portfolio's performance were diversified
financial services company Bank of America, computer giant Hewlett-Packard and
health care services company Medco Health Solutions.
DID THE PORTFOLIO MAKE ANY SIGNIFICANT PURCHASES OR SALES DURING THE REPORTING
PERIOD?
Among the stocks that met the Portfolio's purchase criteria in 2010 were
ExxonMobil and Prudential Financial. In our view, ExxonMobil was an attractively
valued way to gain exposure to the rising price of oil. We believed that
Prudential Financial was attractively valued within the financials sector.
Among the stocks the Portfolio sold during the reporting period were
pharmaceutical company Pfizer and household products manufacturer Procter &
Gamble. These and other defensive holdings were sold to make way for stocks that
were more economically sensitive (more likely to respond to positive
developments in the economy).
HOW DID THE PORTFOLIO'S SECTOR WEIGHTINGS CHANGE DURING THE REPORTING PERIOD?
Over the course of the year, the Portfolio's most significant sector-weighting
increases relative to the S&P 500(R) Index were in consumer staples and energy.
In consumer staples, we purchased stocks with relatively high dividend yields.
The Portfolio increased its already overweight position in the energy sector, as
the price of oil rose with the prospect of continuing to do so.
The Portfolio decreased its weightings in the consumer discretionary and
information technology sectors, but remained overweight relative to the S&P
500(R) Index in both sectors.
HOW WAS THE PORTFOLIO POSITIONED AT THE END OF DECEMBER 2010?
As of December 31, 2010, the Portfolio's most significantly overweight sectors
relative to the S&P 500(R) Index were consumer discretionary and
telecommunication services. We believed that both sectors would be likely to
benefit from continued economic strength, although in consumer discretionary,
overweight positions in stocks such as Family Dollar Stores and Wal-Mart Stores
benefited from the discount retailing trend.
1. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indexes and other indexes, averages
and service providers mentioned in the reports.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
M-60 MainStay VP Common Stock Portfolio
As of the same date, the Portfolio's most significantly underweight sectors were
industrials and health care. In industrials, almost all of the Portfolio's
underweight position was due to our negative view on aerospace & defense.
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
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, 2010
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS 99.8%+
-----------------------------------------------------
AEROSPACE & DEFENSE 1.0%
Boeing Co. (The) 21,385 $ 1,395,585
Honeywell International, Inc. 79,711 4,237,437
Raytheon Co. 393 18,211
United Technologies Corp. 11,743 924,409
------------
6,575,642
------------
AIR FREIGHT & LOGISTICS 0.9%
FedEx Corp. 51,232 4,765,088
United Parcel Service, Inc.
Class B 11,951 867,404
------------
5,632,492
------------
AIRLINES 0.4%
Southwest Airlines Co. 208,235 2,702,890
------------
AUTO COMPONENTS 0.2%
BorgWarner, Inc. (a) 3,816 276,126
Goodyear Tire & Rubber Co.
(The) (a) 13,993 165,817
Johnson Controls, Inc. 14,579 556,918
------------
998,861
------------
AUTOMOBILES 1.0%
Ford Motor Co. (a) 295,557 4,962,402
Harley-Davidson, Inc. 34,007 1,179,023
------------
6,141,425
------------
BEVERAGES 2.3%
Coca-Cola Co. (The) 80,763 5,311,783
Coca-Cola Enterprises, Inc. 62,512 1,564,675
Constellation Brands, Inc.
Class A (a) 41,646 922,459
Dr. Pepper Snapple Group, Inc. 66,665 2,343,941
Molson Coors Brewing Co. Class
B 6,374 319,911
PepsiCo, Inc. 67,352 4,400,106
------------
14,862,875
------------
BIOTECHNOLOGY 1.1%
Amgen, Inc. (a) 98,186 5,390,411
Biogen Idec, Inc. (a) 1,093 73,286
Cephalon, Inc. (a) 20,996 1,295,873
------------
6,759,570
------------
CAPITAL MARKETS 2.9%
Ameriprise Financial, Inc. 7,613 438,128
Bank of New York Mellon Corp.
(The) 178,962 5,404,652
Charles Schwab Corp. (The) 13,849 236,956
Goldman Sachs Group, Inc.
(The) 23,059 3,877,602
Legg Mason, Inc. 536 19,441
Morgan Stanley 19,625 533,996
Northern Trust Corp. 67,576 3,744,386
State Street Corp. 98,928 4,584,324
------------
18,839,485
------------
CHEMICALS 2.1%
Ashland, Inc. 17,538 891,983
Cytec Industries, Inc. 10,959 581,485
Dow Chemical Co. (The) 28,124 960,153
E.I. du Pont de Nemours & Co. 43,983 2,193,872
Ecolab, Inc. 33,017 1,664,717
Lubrizol Corp. (The) 14,761 1,577,656
PPG Industries, Inc. 46,111 3,876,552
Scotts Miracle-Gro Co. (The)
Class A 3,356 170,384
Sherwin-Williams Co. (The) 16,744 1,402,310
Valspar Corp. 1,413 48,720
------------
13,367,832
------------
COMMERCIAL BANKS 1.6%
PNC Financial Services Group,
Inc. 8,073 490,193
X Wells Fargo & Co. 323,891 10,037,382
------------
10,527,575
------------
COMMERCIAL SERVICES & SUPPLIES 0.4%
Avery Dennison Corp. 20,730 877,708
Corrections Corp. of America
(a) 8,002 200,530
Republic Services, Inc. 5,229 156,138
Waste Management, Inc. 44,715 1,648,642
------------
2,883,018
------------
COMMUNICATIONS EQUIPMENT 2.6%
Cisco Systems, Inc. (a) 427,945 8,657,327
Harris Corp. 36,056 1,633,337
Motorola, Inc. (a) 503,448 4,566,273
QUALCOMM, Inc. 25,023 1,238,388
Tellabs, Inc. 106,188 719,955
------------
16,815,280
------------
COMPUTERS & PERIPHERALS 5.4%
X Apple, Inc. (a) 51,029 16,459,914
Dell, Inc. (a) 220,332 2,985,498
EMC Corp. (a) 250,623 5,739,267
Hewlett-Packard Co. 128,242 5,398,988
Lexmark International, Inc.
Class A (a) 21,912 762,976
SanDisk Corp. (a) 30,167 1,504,127
Western Digital Corp. (a) 53,828 1,824,769
------------
34,675,539
------------
</Table>
+ Percentages indicated are based on Portfolio net assets.
X Among the Portfolio's 10 largest holdings, as of December 31, 2010, 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)
CONSTRUCTION & ENGINEERING 0.3%
KBR, Inc. 33,988 $ 1,035,614
Shaw Group, Inc. (The) (a) 18,914 647,426
URS Corp. (a) 408 16,977
------------
1,700,017
------------
CONSUMER FINANCE 0.0%++
Discover Financial Services 2,454 45,473
------------
CONTAINERS & PACKAGING 0.2%
Ball Corp. 14,234 968,624
Sealed Air Corp. 19,719 501,848
------------
1,470,472
------------
DISTRIBUTORS 0.0%++
Genuine Parts Co. 3,716 190,779
------------
DIVERSIFIED CONSUMER SERVICES 0.2%
Apollo Group, Inc. Class A (a) 17,241 680,847
DeVry, Inc. 1,951 93,609
Sotheby's 14,939 672,255
------------
1,446,711
------------
DIVERSIFIED FINANCIAL SERVICES 4.4%
X Bank of America Corp. 802,326 10,703,029
Citigroup, Inc. (a) 986,356 4,665,464
X JPMorgan Chase & Co. 299,376 12,699,530
------------
28,068,023
------------
DIVERSIFIED TELECOMMUNICATION SERVICES 4.0%
X AT&T, Inc. 403,501 11,854,859
Frontier Communications Corp. 89,913 874,854
Qwest Communications
International, Inc. 589,817 4,488,507
Verizon Communications, Inc. 217,797 7,792,777
Windstream Corp. 43,722 609,485
------------
25,620,482
------------
ELECTRIC UTILITIES 1.0%
Allegheny Energy, Inc. 10,034 243,224
Duke Energy Corp. 71,371 1,271,118
Edison International 42,596 1,644,206
Entergy Corp. 7,766 550,066
NextEra Energy, Inc. 46,571 2,421,226
Pinnacle West Capital Corp. 9,512 394,272
------------
6,524,112
------------
ELECTRICAL EQUIPMENT 1.0%
Emerson Electric Co. 92,493 5,287,825
Hubbel, Inc. Class B 7,216 433,898
Rockwell Automation, Inc. 764 54,786
Thomas & Betts Corp. (a) 7,686 371,234
------------
6,147,743
------------
ELECTRONIC EQUIPMENT & INSTRUMENTS 0.1%
Jabil Circuit, Inc. 11,789 236,841
Vishay Intertechnology, Inc.
(a) 12,395 181,959
------------
418,800
------------
ENERGY EQUIPMENT & SERVICES 1.5%
Diamond Offshore Drilling,
Inc. 13,482 901,541
Halliburton Co. 18,638 760,990
Helmerich & Payne, Inc. 9,934 481,600
Nabors Industries, Ltd. (a) 58,720 1,377,571
Oceaneering International,
Inc. (a) 12,067 888,493
Patterson-UTI Energy, Inc. 23,229 500,585
Rowan Cos., Inc. (a) 22,372 781,007
Schlumberger, Ltd. 34,670 2,894,945
Superior Energy Services, Inc.
(a) 11,864 415,121
Tidewater, Inc. 7,763 417,960
------------
9,419,813
------------
FOOD & STAPLES RETAILING 2.3%
BJ's Wholesale Club, Inc. (a) 8,234 394,409
Costco Wholesale Corp. 62,171 4,489,368
Kroger Co. (The) 36,140 808,090
Safeway, Inc. 35,826 805,727
Wal-Mart Stores, Inc. 144,289 7,781,506
Walgreen Co. 19,468 758,473
------------
15,037,573
------------
FOOD PRODUCTS 1.0%
Archer-Daniels-Midland Co. 4,436 133,435
ConAgra Foods, Inc. 27,977 631,721
Corn Products International,
Inc. 16,872 776,112
Kraft Foods, Inc. Class A 1,156 36,426
Sara Lee Corp. 184,911 3,237,792
Smithfield Foods, Inc. (a) 19,115 394,342
Tyson Foods, Inc. Class A 83,202 1,432,738
------------
6,642,566
------------
GAS UTILITIES 0.3%
Atmos Energy Corp. 1,313 40,966
Energen Corp. 6,815 328,892
Nicor, Inc. 8,814 439,995
ONEOK, Inc. 11,150 618,490
Questar Corp. 26,553 462,288
UGI Corp. 1,494 47,180
------------
1,937,811
------------
HEALTH CARE EQUIPMENT & SUPPLIES 0.2%
CareFusion Corp. (a) 56,750 1,458,475
------------
HEALTH CARE PROVIDERS & SERVICES 3.2%
Aetna, Inc. 44,925 1,370,662
AmerisourceBergen Corp. 52,630 1,795,736
Cardinal Health, Inc. 98,098 3,758,134
CIGNA Corp. 10,445 382,914
</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, 2010 (CONTINUED)
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
HEALTH CARE PROVIDERS & SERVICES (CONTINUED)
DaVita, Inc. (a) 135 $ 9,381
Express Scripts, Inc. (a) 47,717 2,579,104
Health Net, Inc. (a) 21,429 584,797
Humana, Inc. (a) 47,244 2,586,136
Lincare Holdings, Inc. 12,199 327,299
McKesson Corp. 20,373 1,433,852
UnitedHealth Group, Inc. 146,954 5,306,509
WellPoint, Inc. (a) 7,815 444,361
------------
20,578,885
------------
HOTELS, RESTAURANTS & LEISURE 1.7%
Darden Restaurants, Inc. 34,196 1,588,062
Marriott International, Inc.
Class A 71,935 2,988,180
McDonald's Corp. 20,502 1,573,734
Panera Bread Co. Class A (a) 6,814 689,645
Starbucks Corp. 53,254 1,711,051
Starwood Hotels & Resorts
Worldwide, Inc. 6,998 425,338
Wyndham Worldwide Corp. 33,738 1,010,790
Wynn Resorts, Ltd. 8,402 872,464
------------
10,859,264
------------
HOUSEHOLD DURABLES 0.2%
D.R. Horton, Inc. 26,225 312,864
Pulte Group, Inc. (a) 31,665 238,121
Whirlpool Corp. 6,892 612,216
------------
1,163,201
------------
HOUSEHOLD PRODUCTS 1.4%
Energizer Holdings, Inc. (a) 5,594 407,802
Kimberly-Clark Corp. 20,173 1,271,706
Procter & Gamble Co. (The) 110,378 7,100,617
------------
8,780,125
------------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS 0.1%
NRG Energy, Inc. (a) 22,935 448,150
------------
INDUSTRIAL CONGLOMERATES 2.2%
3M Co. 4,307 371,694
General Electric Co. 413,270 7,558,708
Textron, Inc. 76,524 1,809,028
Tyco International, Ltd. 106,302 4,405,155
------------
14,144,585
------------
INSURANCE 5.5%
ACE, Ltd. 69,920 4,352,520
Aflac, Inc. 14,189 800,685
American Financial Group, Inc. 10,360 334,525
Assurant, Inc. 20,071 773,135
Berkshire Hathaway, Inc. Class
B (a) 58,994 4,726,009
Chubb Corp. (The) 69,908 4,169,313
Fidelity National Financial,
Inc. Class A 43,285 592,139
Hartford Financial Services
Group, Inc. (The) 124,084 3,286,985
Principal Financial Group,
Inc. 76,981 2,506,501
Progressive Corp. (The) 81,172 1,612,888
Prudential Financial, Inc. 82,375 4,836,236
Reinsurance Group of America,
Inc. 13,310 714,880
Travelers Cos., Inc. (The) 82,077 4,572,510
Unum Group 25,299 612,742
W.R. Berkley Corp. 8,882 243,189
XL Group PLC 45,435 991,392
------------
35,125,649
------------
INTERNET & CATALOG RETAIL 0.9%
Amazon.com, Inc. (a) 17,151 3,087,180
Expedia, Inc. 58,059 1,456,700
Netflix, Inc. (a) 5,786 1,016,600
------------
5,560,480
------------
INTERNET SOFTWARE & SERVICES 1.4%
AOL, Inc. (a) 23,770 563,587
Google, Inc. Class A (a) 12,306 7,309,395
VeriSign, Inc. 32,787 1,071,151
------------
8,944,133
------------
IT SERVICES 2.5%
Broadridge Financial
Solutions, Inc. 28,012 614,303
Fidelity National Information
Services, Inc. 40,801 1,117,539
X International Business
Machines Corp. 91,775 13,468,899
SAIC, Inc. (a) 7,258 115,112
Total System Services, Inc. 44,071 677,812
------------
15,993,665
------------
LEISURE EQUIPMENT & PRODUCTS 0.1%
Eastman Kodak Co. (a) 20,260 108,594
Polaris Industries, Inc. 5,102 398,058
------------
506,652
------------
LIFE SCIENCES TOOLS & SERVICES 0.1%
Pharmaceutical Product
Development, Inc. 26,556 720,730
------------
MACHINERY 2.1%
AGCO Corp. (a) 20,742 1,050,790
Caterpillar, Inc. 45,802 4,289,815
Cummins, Inc. 6,766 744,328
Gardner Denver, Inc. 6,364 437,970
Joy Global, Inc. 1,448 125,614
Lincoln Electric Holdings,
Inc. 1,943 126,820
Oshkosh Corp. (a) 20,163 710,544
PACCAR, Inc. 77,633 4,457,687
Parker Hannifin Corp. 1,041 89,838
SPX Corp. 11,166 798,257
Timken Co. (The) 17,898 854,272
------------
13,685,935
------------
</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)
MEDIA 3.3%
Cablevision Systems Corp.
Class A 18,832 $ 637,275
CBS Corp. Class B 53,703 1,023,042
Comcast Corp. Class A 266,371 5,852,171
DIRECTV Class A (a) 121,838 4,864,991
Gannett Co., Inc. 5,228 78,891
Interpublic Group of Cos.,
Inc. (The) (a) 136,520 1,449,842
McGraw-Hill Cos., Inc. (The) 33,355 1,214,456
Omnicom Group, Inc. 5,542 253,824
Time Warner Cable, Inc. 69,311 4,576,605
Walt Disney Co. (The) 21,855 819,781
Washington Post Co. Class B 1,542 677,709
------------
21,448,587
------------
METALS & MINING 1.5%
Freeport-McMoRan Copper &
Gold, Inc. 56,278 6,758,425
Newmont Mining Corp. 44,606 2,740,147
------------
9,498,572
------------
MULTI-UTILITIES 0.9%
Alliant Energy Corp. 5,643 207,493
CenterPoint Energy, Inc. 38,188 600,315
CMS Energy Corp. 46,924 872,787
DTE Energy Co. 47,132 2,136,022
Integrys Energy Group, Inc. 21,550 1,045,391
MDU Resources Group, Inc. 2,012 40,783
OGE Energy Corp. 12,360 562,874
------------
5,465,665
------------
MULTILINE RETAIL 1.3%
Big Lots, Inc. (a) 18,987 578,344
Dollar Tree, Inc. (a) 18,643 1,045,500
Family Dollar Stores, Inc. 35,758 1,777,530
Macy's, Inc. 48,620 1,230,086
Target Corp. 58,838 3,537,929
------------
8,169,389
------------
OFFICE ELECTRONICS 0.3%
Xerox Corp. 149,520 1,722,470
------------
OIL, GAS & CONSUMABLE FUELS 11.5%
Anadarko Petroleum Corp. 23,872 1,818,092
Arch Coal, Inc. 24,505 859,145
X Chevron Corp. 148,424 13,543,690
Cimarex Energy Co. 12,416 1,099,188
ConocoPhillips 131,974 8,987,429
X ExxonMobil Corp. 328,389 24,011,804
Hess Corp. 54,051 4,137,064
Marathon Oil Corp. 127,552 4,723,251
Murphy Oil Corp. 53,536 3,991,109
Newfield Exploration Co. (a) 7,616 549,190
Occidental Petroleum Corp. 22,778 2,234,522
Peabody Energy Corp. 15,582 996,936
QEP Resources, Inc. 32,455 1,178,441
Sunoco, Inc. 33,646 1,356,270
Tesoro Corp. (a) 12,969 240,445
Valero Energy Corp. 157,983 3,652,567
Williams Cos., Inc. 15,867 392,232
------------
73,771,375
------------
PAPER & FOREST PRODUCTS 0.2%
International Paper Co. 39,633 1,079,603
MeadWestvaco Corp. 18,862 493,430
------------
1,573,033
------------
PERSONAL PRODUCTS 0.1%
Estee Lauder Cos., Inc. (The)
Class A 9,549 770,604
------------
PHARMACEUTICALS 4.9%
Abbott Laboratories 48,570 2,326,989
Bristol-Myers Squibb Co. 198,115 5,246,085
Eli Lilly & Co. 142,375 4,988,820
Endo Pharmaceuticals Holdings,
Inc. (a) 25,782 920,675
Forest Laboratories, Inc. (a) 55,687 1,780,870
Johnson & Johnson 131,794 8,151,459
King Pharmaceuticals, Inc. (a) 14,187 199,328
Merck & Co., Inc. 87,058 3,137,570
Pfizer, Inc. 270,316 4,733,233
------------
31,485,029
------------
REAL ESTATE INVESTMENT TRUSTS 0.5%
Camden Property Trust 4,831 260,777
Duke Realty Corp. 6,553 81,650
Hospitality Properties Trust 92 2,120
Liberty Property Trust 657 20,971
Public Storage 18,354 1,861,463
Rayonier, Inc. 17,904 940,318
Senior Housing Properties
Trust 722 15,841
Simon Property Group, Inc. 1,103 109,738
------------
3,292,878
------------
REAL ESTATE MANAGEMENT & DEVELOPMENT 0.3%
CB Richard Ellis Group, Inc.
Class A (a) 54,571 1,117,614
Jones Lang LaSalle, Inc. 9,501 797,324
------------
1,914,938
------------
ROAD & RAIL 0.4%
CSX Corp. 15,887 1,026,459
J.B. Hunt Transport Services,
Inc. 6,648 271,305
Kansas City Southern (a) 4,635 221,831
Ryder System, Inc. 14,656 771,492
------------
2,291,087
------------
</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, 2010 (CONTINUED)
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 2.6%
Advanced Micro Devices, Inc.
(a) 68,827 $ 563,005
Altera Corp. 5,934 211,132
Analog Devices, Inc. 16,178 609,425
Applied Materials, Inc. 79,987 1,123,817
X Intel Corp. 457,255 9,616,073
Lam Research Corp. (a) 18,505 958,189
LSI Corp. (a) 120,787 723,514
Micron Technology, Inc. (a) 204,570 1,640,651
Novellus Systems, Inc. (a) 8,596 277,823
Teradyne, Inc. (a) 44,431 623,811
Texas Instruments, Inc. 501 16,283
------------
16,363,723
------------
SOFTWARE 5.0%
Autodesk, Inc. (a) 41,629 1,590,228
BMC Software, Inc. (a) 37,382 1,762,187
Compuware Corp. (a) 60,357 704,366
Intuit, Inc. (a) 64,392 3,174,526
McAfee, Inc. (a) 6,950 321,855
MICROS Systems, Inc. (a) 10,753 471,627
X Microsoft Corp. 505,184 14,104,737
Novell, Inc. (a) 16,672 98,698
Oracle Corp. 164,200 5,139,460
Solera Holdings, Inc. 5,248 269,327
Symantec Corp. (a) 220,502 3,691,204
Synopsys, Inc. (a) 33,162 892,389
------------
32,220,604
------------
SPECIALTY RETAIL 2.7%
Advance Auto Parts, Inc. 18,762 1,241,106
Aeropostale, Inc. (a) 10,276 253,201
American Eagle Outfitters,
Inc. 14,680 214,768
AutoZone, Inc. (a) 7,727 2,106,303
Foot Locker, Inc. 11,620 227,984
GameStop Corp. Class A (a) 13,622 311,671
Gap, Inc. (The) 122,616 2,714,718
Home Depot, Inc. (The) 492 17,250
Limited Brands, Inc. 73,918 2,271,500
Office Depot, Inc. (a) 6,393 34,522
PetSmart, Inc. 26,361 1,049,695
Ross Stores, Inc. 33,604 2,125,453
TJX Cos., Inc. 82,440 3,659,512
Williams-Sonoma, Inc. 23,718 846,496
------------
17,074,179
------------
TEXTILES, APPAREL & LUXURY GOODS 0.8%
NIKE, Inc. Class B 28,387 2,424,817
VF Corp. 24,104 2,077,283
Warnaco Group, Inc. (The) (a) 6,539 360,103
------------
4,862,203
------------
TOBACCO 2.7%
Altria Group, Inc. 227,208 5,593,861
Lorillard, Inc. 23,229 1,906,172
Philip Morris International,
Inc. 154,354 9,034,339
Reynolds American, Inc. 22,126 721,750
------------
17,256,122
------------
TRADING COMPANIES & DISTRIBUTORS 0.4%
W.W. Grainger, Inc. 16,645 2,298,841
------------
WIRELESS TELECOMMUNICATION SERVICES 0.6%
MetroPCS Communications, Inc.
(a) 49,402 623,947
Sprint Nextel Corp. (a) 605,303 2,560,432
Telephone and Data Systems,
Inc. 17,795 650,407
------------
3,834,786
------------
Total Common Stocks
(Cost $563,243,839) 638,736,873
------------
EXCHANGE TRADED FUND 0.2% (B)
-----------------------------------------------------
S&P 500 Index-SPDR Trust
Series 1 11,496 1,445,967
------------
Total Exchange Traded Fund
(Cost $1,435,141) 1,445,967
------------
Total Investments
(Cost $564,678,980) (c) 100.0% 640,182,840
Other Assets, Less Liabilities 0.0++ 228,288
------- ------------
Net Assets 100.0% $640,411,128
======= ============
</Table>
<Table>
++ Less than one-tenth of a percent.
(a) Non-income producing security.
(b) Exchange Traded Fund--An investment
vehicle that represents a basket of
securities that is traded on an exchange.
(c) At December 31, 2010, cost is
$579,423,110 for federal income tax
purposes and net unrealized appreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $ 81,614,158
Gross unrealized depreciation (20,854,428)
------------
Net unrealized appreciation $ 60,759,730
============
</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.
The following is a summary of the fair valuations according to the inputs used
as of December 31, 2010, 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 $638,736,873 $ -- $ -- $638,736,873
Exchange Traded Fund 1,445,967 -- -- 1,445,967
------------ -------- -------- ------------
Total Investments in Securities $640,182,840 $-- $-- $640,182,840
============ ======== ======== ============
</Table>
(a) For a complete listing of investments and their industries, see the
Portfolio of Investments.
For the period ended December 31, 2010, the Portfolio did not have any transfers
between Level 1 and Level 2 fair value measurements. (See Note 2)
At December 31, 2010, the Portfolio did not hold any investments with
significant unobservable inputs (Level 3). (See Note 2)
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, 2010
<Table>
ASSETS
---------------------------------------------------
Investment in securities, at value
(identified cost $564,678,980) $ 640,182,840
Cash 3,425
Receivables:
Dividends and interest 670,725
Fund shares sold 72,875
-------------
Total assets 640,929,865
-------------
LIABILITIES
---------------------------------------------------
Payables:
Manager (See Note 3) 292,996
Fund shares redeemed 110,697
Shareholder communication 49,675
Professional fees 47,268
NYLIFE Distributors (See Note 3) 13,835
Custodian 2,053
Directors 1,459
Accrued expenses 754
-------------
Total liabilities 518,737
-------------
Net assets $ 640,411,128
=============
NET ASSETS CONSIST OF
---------------------------------------------------
Capital stock (par value of $.01 per
share)
200 million shares authorized $ 399,478
Additional paid-in capital 782,152,756
-------------
782,552,234
Undistributed net investment income 8,271,279
Accumulated net realized loss on
investments (225,916,245)
Net unrealized appreciation on
investments 75,503,860
-------------
Net assets $ 640,411,128
=============
INITIAL CLASS
Net assets applicable to outstanding
shares $ 574,582,398
=============
Shares of capital stock outstanding 35,822,528
=============
Net asset value per share
outstanding $ 16.04
=============
SERVICE CLASS
Net assets applicable to outstanding
shares $ 65,828,730
=============
Shares of capital stock outstanding 4,125,250
=============
Net asset value per share
outstanding $ 15.96
=============
</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, 2010
<Table>
INVESTMENT INCOME
-------------------------------------------------
INCOME
Dividends $12,127,672
Interest 103
-----------
Total income 12,127,775
-----------
EXPENSES
Manager (See Note 3) 3,304,350
Shareholder communication 157,651
Distribution and service--Service
Class (See Note 3) 154,151
Professional fees 119,253
Custodian 38,375
Directors 20,608
Miscellaneous 23,538
-----------
Total expenses 3,817,926
-----------
Net investment income 8,309,849
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
-------------------------------------------------
Net realized gain on investments 36,165,303
Net change in unrealized
appreciation (depreciation) on
investments 30,987,612
-----------
Net realized and unrealized gain on
investments 67,152,915
-----------
Net increase in net assets resulting
from operations $75,462,764
===========
</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, 2010 AND DECEMBER 31, 2009
<Table>
<Caption>
2010 2009
INCREASE (DECREASE) IN NET ASSETS
----------------------------------------------------------
Operations:
Net investment income $ 8,309,849 $ 9,822,218
Net realized gain (loss)
on investments 36,165,303 (116,878,806)
Net change in unrealized
appreciation
(depreciation) on
investments 30,987,612 231,791,692
----------------------------
Net increase in net assets
resulting from operations 75,462,764 124,735,104
----------------------------
Dividends to shareholders:
From net investment
income:
Initial Class (8,982,888) (11,018,098)
Service Class (864,856) (969,797)
----------------------------
Total dividends to
shareholders (9,847,744) (11,987,895)
----------------------------
Capital share transactions:
Net proceeds from sale of
shares 56,718,385 33,977,280
Net asset value of shares
issued to shareholders in
reinvestment of dividends 9,847,744 11,987,895
Cost of shares redeemed (127,479,442) (159,594,680)
----------------------------
Decrease in net assets
derived from capital
share transactions (60,913,313) (113,629,505)
----------------------------
Net increase (decrease)
in net assets 4,701,707 (882,296)
NET ASSETS
----------------------------------------------------------
Beginning of year 635,709,421 636,591,717
----------------------------
End of year $ 640,411,128 $ 635,709,421
============================
Undistributed net investment
income
at end of year $ 8,271,279 $ 9,852,615
============================
</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
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-71
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
2010 2009 2008 2007 2006
Net asset value at beginning of
year $ 14.48 $ 12.06 $ 23.60 $ 24.51 $ 21.62
-------- -------- -------- -------- --------
Net investment income 0.20 (a) 0.21 (a) 0.22 0.32 (a) 0.31 (a)
Net realized and unrealized gain
(loss) on investments 1.60 2.48 (8.72) 1.01 3.26
-------- -------- -------- -------- --------
Total from investment operations 1.80 2.69 (8.50) 1.33 3.57
-------- -------- -------- -------- --------
Less dividends and distributions:
From net investment income (0.24) (0.27) (0.30) (0.32) (0.14)
From net realized gain on
investments -- -- (2.74) (1.92) (0.54)
-------- -------- -------- -------- --------
Total dividends and distributions (0.24) (0.27) (3.04) (2.24) (0.68)
-------- -------- -------- -------- --------
Net asset value at end of year $ 16.04 $ 14.48 $ 12.06 $ 23.60 $ 24.51
======== ======== ======== ======== ========
Total investment return 12.60% 22.40% (36.39%) 5.14% 16.47%
Ratios (to average net
assets)/Supplemental Data:
Net investment income 1.40% 1.66% 1.44% 1.26% 1.35%
Net expenses 0.61% 0.60% 0.56% 0.50% 0.52%
Portfolio turnover rate 107% 100% 111% 105% 90%
Net assets at end of year (in
000's) $574,582 $573,296 $585,158 $932,918 $950,660
</Table>
<Table>
(a) Per share data based on average shares outstanding during the period.
</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,
2010 2009 2008 2007 2006
$ 14.41 $ 12.00 $ 23.48 $ 24.41 $ 21.56
------- ------- ------- ------- -------
0.17 (a) 0.17 (a) 0.23 0.25 (a) 0.25 (a)
1.59 2.47 (8.72) 1.02 3.24
------- ------- ------- ------- -------
1.76 2.64 (8.49) 1.27 3.49
------- ------- ------- ------- -------
(0.21) (0.23) (0.25) (0.28) (0.10)
-- -- (2.74) (1.92) (0.54)
------- ------- ------- ------- -------
(0.21) (0.23) (2.99) (2.20) (0.64)
------- ------- ------- ------- -------
$ 15.96 $ 14.41 $ 12.00 $ 23.48 $ 24.41
======= ======= ======= ======= =======
12.32% 22.08% (36.55%) 4.88% 16.18%
1.15% 1.39% 1.18% 1.01% 1.11%
0.86% 0.85% 0.81% 0.75% 0.77%
107% 100% 111% 105% 90%
$65,829 $62,413 $51,434 $83,279 $65,138
</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. THE PERFORMANCE TABLE AND GRAPH 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.
(LINE GRAPH)
<Table>
<Caption>
MAINSTAY VP MAINSTAY VP BARCLAYS CAPITAL
CONSERVATIVE ALLOCATION CONSERVATIVE ALLOCATION S&P 500(R) MSCI EAFE(R) U.S AGGREGATE
INITIAL CLASS SERVICE CLASS INDEX INDEX BOND INDEX
----------------------- ----------------------- ---------- ------------ ----------------
2/13/2006 10000 10000 10000 10000 10000
12/31/2006 10820 10797 11386 12152 10457
12/31/2007 11631 11577 12012 13509 11185
12/31/2008 9489 9422 7568 7649 11771
12/31/2009 11604 11488 9570 10080 12469
12/31/2010 12999 12838 11012 10861 13285
</Table>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED DECEMBER 31, 2010
--------------------------------------------------------------------------------
<Table>
<Caption>
SINCE GROSS
INCEPTION EXPENSE
CLASS ONE YEAR (2/13/06) RATIO(2)
---------------------------------------------------------
Initial Class Shares 12.03% 5.52% 0.93%
---------------------------------------------------------
Service Class Shares 11.75 5.25 1.18
---------------------------------------------------------
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE SINCE INCEPTION
YEAR (2/13/06)
S&P 500(R) Index(3) 15.06% 1.99%
---------------------------------------------------------------------------------------------------------------------
MSCI EAFE(R) Index(3) 7.75 1.70
---------------------------------------------------------------------------------------------------------------------
Barclays Capital U.S. Aggregate Bond Index(3) 6.54 5.98
---------------------------------------------------------------------------------------------------------------------
Average Lipper Variable Products Mixed-Asset Target Allocation Conservative Portfolio(4) 9.51 3.81
---------------------------------------------------------------------------------------------------------------------
</Table>
1. Performance figures reflect certain fee waivers and/or expense limitations,
without which total returns may have been lower. For information on current
expense limitations, please refer to the notes to the financial statements.
2. The gross expense ratios presented reflect the Portfolio's "Total Annual
Portfolio Operating Expenses" from the most recent Prospectus and may differ
from other expense ratios disclosed in this report.
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
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. Results are based on total returns
with all dividend and capital gain distributions reinvested.
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, 2010, to December 31,
2010, 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 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, 2010, to December 31, 2010. 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, 2010. 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 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 7/1/10 12/31/10 PERIOD(1) 12/31/10 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,118.90 $0.27 $1,025.00 $ 0.26
-------------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,117.50 $1.60 $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
Portfolios/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, 2010
(Unaudited)
(PORTFOLIO COMPOSITION PIE CHART)
<Table>
Current Income 50.50
Growth of Capital 21.10
Capital Appreciation 14.40
Total Return 13.90
Other Assets, Less Liabilities 0.10
</Table>
See Portfolio of Investments on page M-79 for specific holdings within these
categories.
M-76 MainStay VP Conservative Allocation Portfolio
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
Questions answered by portfolio manager Jonathan Swaney of New York Life
Investments,(1) the Portfolio's Manager.
HOW DID MAINSTAY VP CONSERVATIVE ALLOCATION PORTFOLIO PERFORM RELATIVE TO ITS
PEERS AND ITS BENCHMARK FOR THE 12 MONTHS ENDED DECEMBER 31, 2010?
For the 12 months ended December 31, 2010, MainStay VP Conservative Allocation
Portfolio returned 12.03% for Initial Class shares and 11.75% for Service Class
shares. Both share classes outperformed the 9.51% return of the average
Lipper(2) Variable Products Mixed-Asset Target Allocation Conservative Portfolio
and underperformed the 15.06% return of the S&P 500(R) Index(2) for the 12
months ended December 31, 2010. The S&P 500(R) Index is the Portfolio's broad-
based securities-market index.
WHAT FACTORS AFFECTED THE PORTFOLIO'S PERFORMANCE RELATIVE TO ITS PEERS AND ITS
BENCHMARK DURING THE REPORTING PERIOD?
The Portfolio invests in other mutual funds referred to as Underlying
Portfolios/Funds. The Underlying Portfolios/Funds may invest in fixed-income
securities or in domestic or international stocks at various capitalization
levels. The Portfolio's primary benchmark, on the other hand, consists entirely
of U.S. large-cap stocks.
Within the fixed-income portion of the Portfolio, investments in Underlying
Portfolios/Funds that focus on asset classes outside the traditional investment-
grade bond universe (especially high-yield bonds and convertible bonds)
substantially strengthened the Portfolio's performance relative to the 6.54%
return of the Barclays Capital U.S. Aggregate Bond Index(2) (the Portfolio's
fixed-income benchmark) and relative to the Portfolio's peers.
The Portfolio's performance relative to the S&P 500(R) Index was helped by
Underlying Portfolios/Funds that invested in mid- and small-capitalization
stocks. These Underlying Portfolios/Funds, however, provided the Portfolio with
less of an advantage--perhaps even a disadvantage--relative to the Portfolio's
peers, because peer Portfolios tend to invest in equal or greater measure in
Underlying Portfolios/Funds focused on mid- and small-cap stocks.
Weighing down returns modestly was an emphasis on Underlying Equity
Portfolios/Funds that tend to invest in high-quality stocks (or stocks of
companies that offer stable, positive and growing cash flows and earnings). For
at least part of the reporting period, lower-quality stocks, which had been
heavily penalized during the credit crisis of 2008 and early 2009, experienced
the most rapid price increases as the market recovered. The Portfolio's "quality
tilt" was not a virtue in that environment.
HOW DID YOU ALLOCATE THE PORTFOLIO'S ASSETS DURING THE REPORTING PERIOD AND WHY?
In managing the Portfolio, we considered a variety of infor-
mation, including the Portfolio-level characteristics of the Underlying
Portfolios/Funds in which the Portfolio invests, such as capitalization, style
biases and sector exposure. We also examined the attributes of the Underlying
Portfolios'/Funds' holdings, such as valuation metrics, earnings data and
technical indicators. Finally, we evaluated the historical success of the
portfolio managers responsible for the Underlying Portfolios/Funds. In general,
we sought Underlying Equity Portfolios/Funds that had a track record of capable
portfolio management, a presence in attractively valued market segments and
investments in companies with strong management, fairly priced securities and
strong price and earnings momentum. Underlying Fixed Income Portfolios/Funds
were selected based upon the type and country of issuance of the securities in
which they invested and the average credit quality and duration(3) of those
securities.
During the 12-month reporting period, these techniques were not especially
successful in that they steered the Portfolio into investments in Underlying
Equity Portfolios/Funds that, as a group, failed to match our return
expectations.
While many factors may have been involved, one that stood out was the
Portfolio's tilt toward Underlying Equity Portfolios/Funds that prized earnings
stability. We preferred these Underlying Equity Portfolios/Funds because high-
quality stocks have historically been rewarded with higher returns than lower-
quality stocks. For much of the reporting period, however, the reverse was true.
Instead, investors purchased the most risk-laden and lowest-quality securities,
anticipating that these securities would be the most likely to benefit from a
recovery. This persistent "junk rally" was a substantial drag on the performance
of the Portfolio.
HOW DID THE PORTFOLIO'S ALLOCATIONS CHANGE OVER THE COURSE OF THE REPORTING
PERIOD?
During the reporting period, the Portfolio reduced its positions in MainStay VP
Large Cap Growth Portfolio and MainStay VP Growth Equity Portfolio, with much of
the proceeds going to MainStay Epoch U.S. All Cap Fund. This shift reflected an
effort to reduce the Portfolio's previous growth bias and to adopt a more
neutral style posture. The move was mildly counterproductive in that growth
stocks generally fared better than their value counterparts during the second
half of 2010.
During the reporting period, we also introduced a position in MainStay VP
Convertible Portfolio. This was a positive development, as convertible bonds,
which are sensitive to changes in
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 indexes and other indexes, 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.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
mainstayinvestments.com M-77
equity prices, rose sharply along with the stock market in recent months.
WERE THERE ANY OTHER SIGNIFICANT ALLOCATION CHANGES DURING THE REPORTING PERIOD?
The Portfolio established a new position in MainStay Global High Income Fund
during the summer of 2010. The investment was made to reflect the improved
creditworthiness of many emerging-market borrowers, the attractive yields
available on emerging-market debt and the potential for further devaluation of
the U.S. dollar.
Near the start of the year, the Portfolio also established a position in
MainStay Epoch Global Choice Fund. The investment was made to better diversify
the international equity portion of the Portfolio across management styles and
to help counter a small bias toward value within that portion of the Portfolio.
WHICH UNDERLYING EQUITY PORTFOLIOS/FUNDS HAD THE HIGHEST TOTAL RETURNS DURING
THE REPORTING PERIOD, AND WHICH UNDERLYING EQUITY PORTFOLIOS/FUNDS HAD THE
LOWEST TOTAL RETURNS?
During the reporting period, the highest returns among the Underlying Equity
Portfolios/Funds in which the Portfolio invested came from MainStay VP U.S.
Small Cap Portfolio, MainStay VP Mid Cap Core Portfolio and MainStay VP ICAP
Select Equity Portfolio. The lowest returns, although still decidedly positive,
came from MainStay VP International Equity Portfolio, MainStay ICAP
International Fund and MainStay Epoch Global Choice Fund.
WHICH UNDERLYING EQUITY PORTFOLIOS/FUNDS MADE THE STRONGEST CONTRIBUTIONS TO THE
PORTFOLIO'S OVERALL PERFORMANCE, AND WHICH UNDERLYING EQUITY PORTFOLIOS/FUNDS
WERE THE GREATEST DETRACTORS?
The Portfolio's positions in MainStay VP Mid Cap Core Portfolio and MainStay MAP
Fund, both of which posted strong returns for the year, made the greatest
contributions to the performance of the equity portion of the Portfolio. While
none of the Under-
lying Equity Portfolios/Funds in which the Portfolio invested had negative
returns for the reporting period, the weakest contributors included very small
positions in MainStay 130/30 Growth Fund and MainStay VP Growth Equity
Portfolio.
WHAT FACTORS AND RISKS AFFECTED THE PORTFOLIO'S INVESTMENTS IN UNDERLYING FIXED
INCOME PORTFOLIOS/FUNDS DURING THE REPORTING PERIOD?
During the reporting period, the market reflected lingering concerns about the
strength of the economy. These concerns--along with efforts by the Federal
Reserve to contain borrowing costs--brought long-term interest rates down to
levels not seen in many decades. Interest rates rebounded in the fourth quarter.
Meanwhile, improving corporate profitability led to a further narrowing of
credit spreads(4) at the lower end of the quality spectrum.
DURING THE REPORTING PERIOD, WHICH FIXED-INCOME MARKET SEGMENTS WERE STRONG
PERFORMERS AND WHICH SEGMENTS WERE PARTICULARLY WEAK?
In general, long duration and low quality were favored during the reporting
period. High-yield bonds and emerging-market debt performed best. Cash or cash
equivalents, which effectively had no nominal return, fared worst, followed by
high-grade, short-term securities.
WHICH UNDERLYING FIXED INCOME PORTFOLIOS/FUNDS
MADE THE STRONGEST CONTRIBUTIONS TO THE PORTFOLIO'S PERFORMANCE, AND WHICH
UNDERLYING FIXED INCOME PORTFOLIOS/FUNDS MADE THE WEAKEST CONTRIBUTIONS?
Not unexpectedly, the largest fixed-income contribution to
the Portfolio's return came from what was, by a comfortable margin, the
Portfolio's largest Underlying Fixed Income Portfolio/Fund position--MainStay VP
Bond Portfolio. The Portfolio's position in MainStay High Yield Opportunities
Fund was noteworthy for having contributed to return on a scale disproportionate
to the size of the investment.
None of the Underlying Fixed Income Portfolios/Funds in which the Portfolio
invested had a negative total return during the reporting period, and all
outperformed the Barclays Capital U.S. Aggregate Bond Index. That said, the
Portfolio's weakest fixed-income contribution came from MainStay Global High
Income Fund, which was among the Portfolio's strongest-performing Underlying
Fixed Income Portfolios/Funds but was also the Portfolio's smallest fixed-income
position. The Portfolio's second-weakest fixed-income contribution came from
MainStay VP Floating Rate Portfolio.
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.
Effective January 1, 2011, Madison Square Investors LLC no longer serves as
Subadvisor to the Portfolio, and New York Life Investments has assumed the day-
to-day portfolio management of the Portfolio. In addition, effective January 1,
2011, Jae Yoon replaced Tony Elavia as a portfolio manager for the Portfolio.
Jonathan Swaney continues to serve as a portfolio manager for the Portfolio. For
more information regarding these portfolio management changes, please refer to
the Prospectus supplement dated December 3, 2010.
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 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 Conservative Allocation Portfolio on this page and
the preceeding pages has not been audited.
M-78 MainStay VP Conservative Allocation Portfolio
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2010
<Table>
<Caption>
SHARES VALUE
AFFILIATED INVESTMENT COMPANIES 99.9%+
------------------------------------------------------
EQUITY FUNDS 40.7%
MainStay 130/30 Core Fund
Class I (a) 3,713,171 $ 28,814,206
MainStay 130/30 Growth Fund
Class I (b) 32,433 280,870
MainStay 130/30 International
Fund Class I (a) 973,029 6,704,167
MainStay Epoch Global Choice
Fund Class I 136,628 2,034,395
MainStay Epoch U.S. All Cap
Fund Class I 1,004,626 23,548,425
MainStay ICAP Equity Fund
Class I 387,979 14,052,608
MainStay ICAP International
Fund Class I 219,642 6,477,253
MainStay MAP Fund Class I 539,819 17,220,225
MainStay VP Common Stock
Portfolio Initial Class 664,402 10,656,799
MainStay VP Growth Equity
Portfolio Initial Class 2,603 64,080
MainStay VP ICAP Select
Equity Portfolio Initial
Class 1,114,533 13,973,579
MainStay VP International
Equity Portfolio Initial
Class 505,966 6,486,544
MainStay VP Large Cap Growth
Portfolio Initial Class
(a)(b) 826,709 12,367,268
MainStay VP Mid Cap Core
Portfolio Initial Class (a) 1,864,288 22,122,876
MainStay VP U.S. Small Cap
Portfolio Initial Class 519,761 4,839,540
------------
Total Equity Funds
(Cost $143,032,064) 169,642,835
------------
FIXED INCOME FUNDS 59.2%
MainStay Global High Income
Fund Class I (a) 256,807 3,027,754
MainStay High Yield
Opportunities Fund Class I
(a) 1,706,240 20,167,754
MainStay Intermediate Term
Bond Fund Class I 2,266,758 23,868,965
MainStay VP Bond Portfolio
Initial Class (a) 9,178,731 134,304,923
MainStay VP Convertible
Portfolio Initial Class (a) 1,034,463 12,375,225
MainStay VP Floating Rate
Portfolio Initial Class (a) 4,093,348 37,916,171
MainStay VP High Yield
Corporate Bond Portfolio
Initial Class 1,522,382 14,601,298
------------
Total Fixed Income Funds
(Cost $235,683,075) 246,262,090
------------
Total Investments
(Cost $378,715,139) (c) 99.9% 415,904,925
Other Assets, Less
Liabilities 0.1 456,081
--------- ------------
Net Assets 100.0% 416,361,006
========= ============
</Table>
<Table>
+ Percentages indicated are based on
Portfolio net assets.
(a) The Portfolio's ownership exceeds 5% of
the outstanding shares of the Underlying
Portfolio's/Fund's share class. (See Note
3)
(b) Non-income producing Underlying
Portfolio/Fund.
(c) At December 31, 2010, cost is
$379,338,899 for federal income tax
purposes and net unrealized appreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $37,310,817
Gross unrealized depreciation (744,791)
-----------
Net unrealized appreciation $36,566,026
===========
</Table>
The following is a summary of the fair valuations according to the inputs used
as of December 31, 2010, 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
Affiliated Investment Companies
Equity Funds $169,642,835 $ -- $ -- $169,642,835
Fixed Income Funds 246,262,090 -- -- 246,262,090
------------ -------- -------- ------------
Total Investments in Securities $415,904,925 $-- $-- $415,904,925
============ ======== ======== ============
</Table>
For the period ended December 31, 2010, the Portfolio did not have any transfers
between Level 1 and Level 2 fair value measurements. (See Note 2)
At December 31, 2010, the Portfolio did not hold any investments with
significant unobservable inputs (Level 3). (See Note 2)
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-79
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2010
<Table>
ASSETS
--------------------------------------------------
Investment in affiliated investment
companies, at value (identified
cost $378,715,139) $415,904,925
Cash 343,587
Receivables:
Fund shares sold 546,560
------------
Total assets 416,795,072
------------
LIABILITIES
--------------------------------------------------
Payables:
Investment securities purchased 190,899
Fund shares redeemed 99,701
NYLIFE Distributors (See Note 3) 85,038
Professional fees 29,427
Shareholder communication 26,683
Directors 906
Custodian 750
Accrued expenses 662
------------
Total liabilities 434,066
------------
Net assets $416,361,006
============
NET ASSETS CONSIST OF
--------------------------------------------------
Capital stock (par value of $.01 per
share) 200 million
shares authorized $ 369,137
Additional paid-in capital 391,939,056
------------
392,308,193
Undistributed net investment income 10,259,769
Accumulated net realized loss on
investments (23,396,742)
Net unrealized appreciation on
investments 37,189,786
------------
Net assets $416,361,006
============
INITIAL CLASS
Net assets applicable to outstanding
shares $ 8,122,826
============
Shares of capital stock outstanding 716,424
============
Net asset value per share
outstanding $ 11.34
============
SERVICE CLASS
Net assets applicable to outstanding
shares $408,238,180
============
Shares of capital stock outstanding 36,197,258
============
Net asset value per share
outstanding $ 11.28
============
</Table>
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 OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2010
<Table>
INVESTMENT INCOME
-------------------------------------------------
INCOME
Dividend distributions from
affiliated investment companies $ 9,685,656
-----------
EXPENSES
Distribution and service--Service
Class (See Note 3) 854,248
Shareholder communication 77,835
Professional fees 70,221
Directors 11,593
Custodian 11,555
Miscellaneous 12,980
-----------
Total expenses 1,038,432
-----------
Net investment income 8,647,224
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
-------------------------------------------------
Net realized gain on affiliated
investment company transactions 6,084,099
Realized capital gain distributions
from affiliated investment
companies 2,083,956
-----------
Net realized gain on investments
from affiliated investment
companies 8,168,055
-----------
Net change in unrealized
appreciation (depreciation) on
investments 23,382,083
-----------
Net realized and unrealized gain on
Investments 31,550,138
-----------
Net increase in net assets resulting
from operations $40,197,362
===========
</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
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2010 AND DECEMBER 31, 2009
<Table>
<Caption>
2010 2009
INCREASE IN NET ASSETS
--------------------------------------------------------
Operations:
Net investment income $ 8,647,224 $ 8,325,356
Net realized gain (loss)
on investments from
affiliated investment
company transactions 8,168,055 (21,342,822)
Net change in unrealized
appreciation
(depreciation) on
investments 23,382,083 62,163,269
--------------------------
Net increase in net assets
resulting from operations 40,197,362 49,145,803
--------------------------
Dividends and distributions
to shareholders:
From net investment
income:
Initial Class (190,594) (165,727)
Service Class (8,614,894) (7,517,855)
--------------------------
(8,805,488) (7,683,582)
--------------------------
From net realized gain on
investments:
Initial Class -- (93,468)
Service Class -- (4,538,183)
--------------------------
-- (4,631,651)
--------------------------
Total dividends and
distributions to
shareholders (8,805,488) (12,315,233)
--------------------------
Capital share transactions:
Net proceeds from sale of
shares 122,390,834 73,304,368
Net asset value of shares
issued to shareholders in
reinvestment of dividends
and distributions 8,805,488 12,315,233
Cost of shares redeemed (44,361,127) (37,743,281)
--------------------------
Increase in net assets
derived from capital
share transactions 86,835,195 47,876,320
--------------------------
Net increase in net
assets 118,227,069 84,706,890
NET ASSETS
--------------------------------------------------------
Beginning of year 298,133,937 213,427,047
--------------------------
End of year $416,361,006 $298,133,937
==========================
Undistributed net investment
income at end of year $ 10,259,769 $ 8,805,460
==========================
</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.
This page intentionally left blank
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,
2010 2009 2008 2007 2006
Net asset value at beginning of
period $10.37 $ 8.89 $ 11.01 $10.68 $10.00
------ ------ ------- ------ ------
Net investment income 0.29 (a) 0.34 (a) 0.32 (a) 0.30 0.19 (a)
Net realized and unrealized gain
(loss) on investments 0.95 1.63 (2.35) 0.50 0.63
------ ------ ------- ------ ------
Total from investment operations 1.24 1.97 (2.03) 0.80 0.82
------ ------ ------- ------ ------
Less dividends and distributions:
From net investment income (0.27) (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 (0.27) (0.49) (0.09) (0.47) (0.14)
------ ------ ------- ------ ------
Net asset value at end of period $11.34 $10.37 $ 8.89 $11.01 $10.68
====== ====== ======= ====== ======
Total investment return 12.03% 22.28% (18.41%) 7.49% 8.20%(b)
Ratios (to average net
assets)/Supplemental Data:
Net investment income 2.66% 3.54% 3.16% 3.28% 2.04%++
Net expenses (c) 0.05% 0.05% 0.06% 0.09% 0.25%++
Expenses (before
reimbursement/recoupment) (c) 0.05% 0.05% 0.06% 0.08% 0.28%++
Portfolio turnover rate 26% 38% 44% 11% 23%
Net assets at end of period (in
000's) $8,123 $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 investment 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,
2010 2009 2008 2007 2006
$ 10.33 $ 8.86 $ 10.99 $ 10.67 $ 10.00
-------- -------- -------- -------- -------
0.27 (a) 0.33 (a) 0.30 (a) 0.26 0.18 (a)
0.94 1.61 (2.35) 0.51 0.62
-------- -------- -------- -------- -------
1.21 1.94 (2.05) 0.77 0.80
-------- -------- -------- -------- -------
(0.26) (0.29) (0.00)++ (0.28) (0.10)
-- (0.18) (0.08) (0.17) (0.03)
-------- -------- -------- -------- -------
(0.26) (0.47) (0.08) (0.45) (0.13)
-------- -------- -------- -------- -------
$ 11.28 $ 10.33 $ 8.86 $ 10.99 $ 10.67
======== ======== ======== ======== =======
11.75% 21.93% (18.62%) 7.23% 7.97%(b)
2.47% 3.39% 2.95% 3.48% 1.96%++
0.30% 0.30% 0.31% 0.34% 0.50%++
0.30% 0.30% 0.31% 0.33% 0.53%++
26% 38% 44% 11% 23%
$408,238 $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. THE PERFORMANCE TABLE AND GRAPH 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.
(LINE GRAPH)
<Table>
<Caption>
BANK OF
AMERICA MERRILL
MAINSTAY VP MAINSTAY VP LYNCH ALL
CONVERTIBLE PORTFOLIO CONVERTIBLE PORTFOLIO U.S. CONVERTIBLE
INITIAL CLASS SERVICE CLASS INDEX
--------------------- --------------------- ----------------
12/31/00 10000 10000 10000
12/31/01 9782 9759 9556
12/31/02 9009 8966 8736
12/31/03 11012 10932 11107
12/31/04 11684 11571 12175
12/31/05 12454 12302 12298
12/31/06 13754 13553 13877
12/31/07 15798 15528 14505
12/31/08 10361 10158 9323
12/31/09 15134 14801 13903
12/31/10 17837 17401 16235
</Table>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED DECEMBER 31, 2010
--------------------------------------------------------------------------------
<Table>
<Caption>
GROSS
EXPENSE
CLASS ONE YEAR FIVE YEARS TEN YEARS(1) RATIO(2)
-----------------------------------------------------------------------------
Initial Class Shares 17.86% 7.45% 5.96% 0.66%
-----------------------------------------------------------------------------
Service Class Shares(3) 17.56 7.18 5.70 0.91
-----------------------------------------------------------------------------
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE FIVE TEN
YEAR YEARS YEARS
Bank of America Merrill Lynch All U.S. Convertible Index(4) 16.77% 5.71% 4.96%
---------------------------------------------------------------------------------------
Average Lipper Convertible Securities Fund(5) 16.91 5.11 4.54
---------------------------------------------------------------------------------------
</Table>
1. Performance figures shown for the ten-year period ended December 31, 2010
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 5.95% for Initial Class shares and 5.69% for Service
Class shares for the ten-year period.
2. The gross expense ratios presented reflect the Portfolio's "Total Annual
Portfolio Operating Expenses" from the most recent Prospectus and may differ
from other expense ratios disclosed in this report.
3. 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.
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.
5. The Average Lipper Convertible Securities Fund is representative of funds
that invest primarily in convertible bonds and/or convertible preferred
stock. Lipper Inc. is an independent monitor of fund performance. Results are
based on total returns with all dividend and capital gain distributions
reinvested.
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, 2010, to December 31,
2010, 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 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, 2010, to December 31, 2010. 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, 2010. 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 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 7/1/10 12/31/10 PERIOD(1) 12/31/10 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,216.80 $3.69 $1,021.90 $3.36
-------------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,215.30 $5.08 $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-87
PORTFOLIO COMPOSITION AS OF DECEMBER 31, 2010 (Unaudited)
(COMPOSITION PIE CHART)
<Table>
Convertible Bonds 75.8
Convertible Preferred Stocks 12.2
Common Stocks 8.6
Short-Term Investment 3.2
Other Assets, Less Liabilities 0.2
</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, 2010 (excluding short-term
investment)
<Table>
1. JPMorgan Chase & Co., 1.50%, due 6/25/15
2. Core Laboratories, L.P., 0.25%, due 10/31/11
3. Cameron International Corp., 2.50%, due 6/15/26
4. Teva Pharmaceutical Finance Co. B.V. Series D, 1.75%, due
2/1/26
5. Citigroup, Inc., 7.50%
6. Fisher Scientific International, Inc., 3.25%, due 3/1/24
7. Incyte Corp., Ltd., 4.75%, due 10/1/15
8. Peabody Energy Corp., 4.75%, due 12/15/66
9. BioMarin Pharmaceutical, Inc., 1.875%, due 4/23/17
10. Allegheny Technologies, Inc., 4.25%, due 6/1/14
</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, 2010?
For the 12 months ended December 31, 2010, MainStay VP Convertible Portfolio
returned 17.86% for Initial Class shares and 17.56% for Service Class shares.
Both share classes outperformed the 16.91% return of the average Lipper(1)
Convertible Securities Fund and the 16.77% return of the Bank of America Merrill
Lynch All U.S. Convertible Index(1) for the 12 months ended December 31, 2010.
The Bank of America Merrill Lynch All U.S. Convertible Index is the Portfolio's
broad-based securities-market index.
WHAT FACTORS AFFECTED THE PORTFOLIO'S RELATIVE PERFORMANCE DURING THE REPORTING
PERIOD?
The Portfolio's performance relative to the Bank of America Merrill Lynch All
U.S. Convertible Index was primarily affected by sector allocation and credit
quality. The Portfolio's overweight positions in the energy and materials
sectors enhanced the Portfolio's relative performance during the reporting
period.
An overweight position in the health care sector detracted slightly from the
Portfolio's relative performance. Several of the Portfolio's larger health care
holdings performed poorly during the reporting period, and in general, the
health care sector underperformed the overall convertible bond market, as
investors expressed a preference for economically sensitive sectors (those
likely to benefit from an increase in economic activity), such as materials and
consumer durables. In addition, an overweight position in investment-grade
convertible bonds detracted from the Portfolio's relative performance, as
investment-grade convertible bonds underperformed the benchmark by 888 basis
points and underperformed speculative-grade convertible bonds by 1258 basis
points.
DURING THE REPORTING PERIOD WHICH MARKET SEGMENTS WERE THE STRONGEST
CONTRIBUTORS TO THE PORTFOLIO'S ABSOLUTE PERFORMANCE AND WHICH MARKET SEGMENTS
WERE THE WEAKEST CONTRIBUTORS?
During the reporting period, the Portfolio's strongest-contributing market
segments were biotechnology, oil services, and materials.
The Portfolio saw substantial gains from several of its holdings in the
biotechnology industry. The convertible bonds of Incyte Genomics and Biomarin
Pharmaceutical were strong performers, and investors with an increased appetite
for risk bid up the price of these companies' common shares on the expectation
that they both would successfully bring new drugs to market.
The Portfolio also benefited from several strong-performing convertible bonds in
the oil services & equipment sector. The Portfolio's single best-performing
security in terms of dollars gained was a convertible-bond holding in Core
Laboratories. The company's stock and convertible bonds performed well after
Core Laboratories exceeded earnings estimates and raised future earnings
guidance in consecutive quarters.
The Portfolio's convertible bond holdings in several materials companies, such
as Allegheny Technologies and U.S. Steel, performed well during the reporting
period. Investors favored the convertible bonds of economically sensitive
companies that are likely to prosper should the nascent economic recovery gain
strength.
The Portfolio's weakest-contributing market segment was food retailing. A
convertible-bond position in Great Atlantic & Pacific Tea Co. was the
Portfolio's worst-performing security. The bonds declined sharply after the
company reported several quarters of poor operating performance and speculation
grew that the company might seek bankruptcy protection.
Another weak contributor was medical devices. Several of the Portfolio's
holdings in this area, such as a convertible-bond position in Nuvasive and a
position in the common stock of Boston Scientific, were poor performers during
2010. Both companies reported disappointing results as cost pressures and the
poor economy continued to weigh on sales of medical devices, particularly those
used for elective surgeries.
The financials sector detracted from the Portfolio's performance. Common stock
of Morgan Stanley and convertible bonds of Janus were relatively weak performers
during the reporting period. Neither holding hurt the Portfolio's performance in
a meaningful way. Given the convertible market's sharp advance, however, any
declining security stood out as a substantial underperformer.
WHICH INDIVIDUAL SECURITIES WERE THE STRONGEST CONTRIBUTORS TO THE PORTFOLIO'S
ABSOLUTE PERFORMANCE, AND WHICH INDIVIDUAL SECURITIES WERE PARTICULARLY WEAK?
As mentioned, Core Laboratories and Incyte Genomics were among the strongest
individual contributors to the Portfolio's performance. The convertible bonds of
Biovail were also strong contributors, following the announcement that the
company would merge with Valeant Pharmaceuticals--a merger that might reduce
redundant costs and increase Biovail's profitability.
As mentioned, the single weakest contributor to the Portfolio's performance was
Great Atlantic & Pacific Tea Co. The second weakest contributor was Teva
Pharmaceutical Finance, whose convertible bonds fell largely because of a
general investor preference for economically sensitive companies. Investors also
appeared to be concerned that a large percentage of the company's profits
depended on a single product, Copaxone, used to treat multiple sclerosis. The
Portfolio also saw weak performance from the common stock of Hewlett-Packard.
The
1. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indexes and other indexes, 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
stock fell when the company's chief executive officer was unexpectedly fired for
submitting inaccurate expense reports.
DID THE PORTFOLIO MAKE ANY SIGNIFICANT PURCHASES OR SALES DURING THE REPORTING
PERIOD?
In 2010, we added to the Portfolio's position in AMR convertible bonds. The
bonds offer the potential to participate in the up-side of AMR common stock,
which we expect to do well with increased levels of business and leisure travel.
Should our expectations prove incorrect, the bonds should offer downside
protection and a high yield relative to the common shares.
During the reporting period, we initiated a position in convertible preferred
shares of Apache Corp. that the company issued in part to fund the purchase of
several properties from BP. We believe that the properties were purchased at an
attractive price and should enhance Apache's oil production and reserves.
The Portfolio increased its convertible bond holding in Ford Motor because we
expect the company to materially benefit from a stabilizing economy in the
United States and increased auto sales in developing regions of the world.
We sold the Portfolio's position in Whiting Petroleum after the company
converted its convertible preferred shares into common stock.
We sold a portion of the Portfolio's holding in the convertible bonds of Newell
Rubbermaid following the tremendous price increase in the company's common
stock, which eliminated much of the downside protection that had been inherent
in the convertible bonds.
We trimmed the Portfolio's convertible bond position in Transocean Offshore
after a significant decline in the company's common stock rendered the bonds
relatively unattractive and unlikely to participate in much of the potential
upside of the company's common stock.
DID THE PORTFOLIO'S SECTOR WEIGHTINGS CHANGE OVER THE COURSE OF THE REPORTING
PERIOD?
There were no meaningful sector weighting changes in the Portfolio during the
reporting period.
HOW WAS THE PORTFOLIO POSITIONED AT THE END OF DECEMBER 2010?
As of December 31, 2010, the Portfolio remained overweight in the health care,
energy and materials sectors. As of the same date, the Portfolio held
underweight positions in the financials and technology sectors. As of December
31, 2010, the Portfolio held market-weight positions in other sectors.
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 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, 2010
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
CONVERTIBLE SECURITIES 88.0%+
CONVERTIBLE BONDS 75.8%
-------------------------------------------------------
AEROSPACE & DEFENSE 3.0%
GenCorp, Inc.
4.063%, due 12/31/39 $ 6,515,000 $ 6,140,387
L-3 Communications Corp.
3.00%, due 8/1/35 943,000 950,073
3.00%, due 8/1/35 (a) 4,360,000 4,392,700
Triumph Group, Inc.
2.625%, due 10/1/26 2,773,000 4,648,241
------------
16,131,401
------------
AIRLINES 1.7%
AMR Corp.
6.25%, due 10/15/14 8,143,000 9,262,662
------------
AUTO MANUFACTURERS 1.3%
Ford Motor Co.
4.25%, due 11/15/16 3,562,000 7,137,357
------------
AUTO PARTS & EQUIPMENT 1.9%
ArvinMeritor, Inc.
4.00%, due 2/15/27 4,060,000 4,471,075
BorgWarner, Inc.
3.50%, due 4/15/12 2,519,000 5,645,709
------------
10,116,784
------------
BANKS 3.5%
X JPMorgan Chase & Co.
1.50%, due 6/25/15 (a) 11,715,347 18,587,570
------------
BIOTECHNOLOGY 5.0%
American Oriental
Bioengineering, Inc.
5.00%, due 7/15/15 (a) 1,924,000 1,594,515
Amgen, Inc.
0.375%, due 2/1/13 7,831,000 7,870,155
Gilead Sciences, Inc.
1.00%, due 5/1/14 (a) 6,111,000 6,324,885
X Incyte Corp., Ltd.
4.75%, due 10/1/15 5,295,000 11,020,219
------------
26,809,774
------------
BUILDING MATERIALS 0.5%
Cemex SAB de C.V.
4.875%, due 3/15/15 (a) 2,558,000 2,807,405
------------
COAL 2.9%
Alpha Natural Resources,
Inc.
2.375%, due 4/15/15 3,400,000 4,564,500
X Peabody Energy Corp.
4.75%, due 12/15/66 8,441,000 10,962,749
------------
15,527,249
------------
COMMERCIAL SERVICES 0.8%
Hertz Global Holdings, Inc.
5.25%, due 6/1/14 2,223,000 4,273,717
------------
COMPUTERS 3.5%
Cadence Design Systems, Inc.
2.625%, due 6/1/15 (a) 5,949,000 7,547,794
EMC Corp.
1.75%, due 12/1/13 6,450,000 9,747,562
SanDisk Corp.
1.50%, due 8/15/17 1,152,000 1,306,080
------------
18,601,436
------------
DISTRIBUTION & WHOLESALE 0.7%
WESCO International, Inc.
6.00%, due 9/15/29 1,763,000 3,645,003
------------
ELECTRONICS 1.0%
TTM Technologies, Inc.
3.25%, due 5/15/15 4,539,000 5,452,474
------------
ENERGY--ALTERNATE SOURCES 1.6%
Covanta Holding Corp.
3.25%, due 6/1/14 7,223,000 8,631,485
------------
ENGINEERING & CONSTRUCTION 0.4%
MasTec, Inc.
4.00%, due 6/15/14 1,794,000 2,170,740
------------
ENTERTAINMENT 0.4%
Lions Gate Entertainment,
Inc.
3.625%, due 3/15/25 2,138,000 2,121,965
------------
FOOD 0.8%
Spartan Stores, Inc.
3.375%, due 5/15/27 (a) 4,469,000 4,256,722
3.375%, due 5/15/27 254,000 241,935
------------
4,498,657
------------
HEALTH CARE--PRODUCTS 2.8%
China Medical Technologies,
Inc.
4.00%, due 8/15/13 9,780,000 8,361,900
Teleflex, Inc.
3.875%, due 8/1/17 6,470,000 6,825,850
------------
15,187,750
------------
</Table>
+ Percentages indicated are based on Portfolio net assets.
X Among the Portfolio's 10 largest holdings or issuers held, as of December 31,
2010, 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, 2010 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
CONVERTIBLE BONDS (CONTINUED)
HEALTH CARE--SERVICES 2.1%
X Fisher Scientific
International, Inc.
3.25%, due 3/1/24 $ 7,998,000 $ 11,207,197
------------
INSURANCE 0.8%
American Equity Investment
Life Holding Co.
3.50%, due 9/15/15 (a) 2,591,000 3,067,096
MGIC Investment Corp.
5.00%, due 5/1/17 834,000 962,228
------------
4,029,324
------------
INTERNET 2.9%
At Home Corp.
4.75%, due 12/31/49
(b)(c)(d)(e) 2,335,418 234
Equinix, Inc.
4.75%, due 6/15/16 1,951,000 2,407,046
GSI Commerce, Inc.
2.50%, due 6/1/27 572,000 624,195
Symantec Corp.
1.00%, due 6/15/13 3,386,000 3,864,273
TeleCommunication Systems,
Inc.
4.50%, due 11/1/14 (a) 3,772,000 3,597,545
VeriSign, Inc.
3.25%, due 8/15/37 4,525,000 5,096,281
------------
15,589,574
------------
INVESTMENT COMPANY 0.2%
KKR Financial Holdings LLC
7.50%, due 1/15/17 763,000 1,054,848
------------
IRON & STEEL 3.5%
X Allegheny Technologies,
Inc.
4.25%, due 6/1/14 6,599,000 9,989,236
Steel Dynamics, Inc.
5.125%, due 6/15/14 3,046,000 3,876,035
United States Steel Corp.
4.00%, due 5/15/14 2,457,000 4,778,865
------------
18,644,136
------------
LODGING 0.3%
Home Inns & Hotels
Management, Inc.
2.00%, due 12/15/15 (a) 1,465,000 1,472,325
------------
MEDIA 0.9%
Central European Media
Enterprises, Ltd.
3.50%, due 3/15/13 (a) 5,486,000 4,896,255
------------
MISCELLANEOUS--MANUFACTURING 0.8%
Ingersoll-Rand Co.
4.50%, due 4/15/12 1,696,000 4,507,120
------------
OIL & GAS 2.6%
BPZ Resources, Inc.
6.50%, due 3/1/15 1,730,000 1,814,338
Chesapeake Energy Corp.
2.50%, due 5/15/37 3,058,000 2,744,555
St. Mary Land & Exploration
Co.
3.50%, due 4/1/27 3,719,000 4,546,477
Transocean, Inc.
Series C
1.50%, due 12/15/37 4,838,000 4,704,955
------------
13,810,325
------------
OIL & GAS SERVICES 5.5%
X Cameron International
Corp.
2.50%, due 6/15/26 9,799,000 14,282,043
X Core Laboratories, L.P.
0.25%, due 10/31/11 7,759,000 15,149,447
------------
29,431,490
------------
PHARMACEUTICALS 11.5%
X BioMarin Pharmaceutical,
Inc.
1.875%, due 4/23/17 7,456,000 10,745,960
Biovail Corp.
5.375%, due 8/1/14 (a) 3,923,000 8,179,455
Cephalon, Inc.
2.00%, due 6/1/15 2,000,000 2,817,500
2.50%, due 5/1/14 4,030,000 4,589,163
Isis Pharmaceuticals, Inc.
2.625%, due 2/15/27 4,893,000 4,801,256
Omnicare, Inc.
3.75%, due 12/15/25 3,717,000 4,163,040
Salix Pharmaceuticals, Ltd.
2.75%, due 5/15/15 5,375,000 6,873,281
X Teva Pharmaceutical
Finance Co. B.V.
Series D
1.75%, due 2/1/26 12,185,000 13,418,731
Viropharma, Inc.
2.00%, due 3/15/17 5,167,000 5,812,875
------------
61,401,261
------------
REAL ESTATE INVESTMENT TRUSTS 1.7%
Host Hotels & Resorts, L.P.
2.50%, due 10/15/29 (a) 3,722,000 5,261,978
SL Green Operating
Partnership, L.P.
3.00%, due 10/15/17 (a) 3,769,000 3,867,936
------------
9,129,914
------------
</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)
SEMICONDUCTORS 3.5%
Intel Corp.
3.25%, due 8/1/39 (a) $ 1,481,000 $ 1,782,754
Microchip Technology, Inc.
2.125%, due 12/15/37 4,693,000 5,766,524
Micron Technology, Inc.
1.875%, due 6/1/14 381,000 361,950
4.25%, due 10/15/13 2,917,000 5,148,505
ON Semiconductor Corp.
2.625%, due 12/15/26 4,665,000 5,487,206
------------
18,546,939
------------
SOFTWARE 2.2%
Microsoft Corp.
(zero coupon), due 6/15/13
(a) 5,171,000 5,578,216
Nuance Communications, Inc.
2.75%, due 8/15/27 2,869,000 3,381,834
SYNNEX Corp.
4.00%, due 5/15/18 (a) 2,451,000 3,023,921
------------
11,983,971
------------
TELECOMMUNICATIONS 5.5%
Anixter International, Inc.
1.00%, due 2/15/13 3,522,000 3,957,848
Ciena Corp.
0.875%, due 6/15/17 924,000 762,300
4.00%, due 3/15/15 (a) 3,952,000 4,969,640
Ixia
3.00%, due 12/15/15 (a) 5,051,000 5,638,179
SBA Communications Corp.
1.875%, due 5/1/13 5,610,000 6,318,262
Virgin Media, Inc.
6.50%, due 11/15/16 4,744,000 7,875,040
------------
29,521,269
------------
Total Convertible Bonds
(Cost $343,343,669) 406,189,377
------------
<Caption>
SHARES
CONVERTIBLE PREFERRED STOCKS 12.2%
-------------------------------------------------------
AUTO MANUFACTURERS 2.1%
General Motors Co.
4.75% 151,000 8,170,610
General Motors Corp.
6.25% 165,300 1,322,400
Motors Liquidation Co.
5.25% 190,500 1,552,575
------------
11,045,585
------------
BANKS 3.2%
X Citigroup, Inc.
7.50% 84,200 11,509,298
Wells Fargo & Co.
7.50% Series L 5,600 5,603,080
------------
17,112,378
------------
ELECTRIC 0.5%
PPL Corp.
9.50% 53,500 2,940,895
------------
HAND & MACHINE TOOLS 1.0%
Stanley Black & Decker, Inc.
4.75% 48,700 5,285,898
------------
INSURANCE 0.9%
Hartford Financial Services
Group, Inc.
7.25% 188,572 4,829,329
------------
OIL & GAS 2.8%
Apache Corp.
6.00% 146,900 9,733,594
Energy XXI Bermuda Ltd.
5.63% 11,500 3,608,596
SandRidge Energy, Inc. (a)
7.00% 13,800 1,655,683
------------
14,997,873
------------
PHARMACEUTICALS 0.8%
Omnicare Capital Trust II
4.00% 107,100 4,144,770
------------
TELECOMMUNICATIONS 0.9%
Crown Castle International
Corp.
6.25% 78,900 4,832,625
------------
Total Convertible Preferred
Stocks
(Cost $57,967,230) 65,189,353
------------
Total Convertible Securities
(Cost $401,310,899) 471,378,730
------------
COMMON STOCKS 8.6%
-------------------------------------------------------
AEROSPACE & DEFENSE 0.0%++
Triumph Group, Inc. 2,286 204,391
------------
APPAREL 0.6%
Iconix Brand Group, Inc. (f) 173,600 3,352,216
------------
AUTO PARTS & EQUIPMENT 0.2%
ArvinMeritor, Inc. (f) 54,583 1,120,043
------------
</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, 2010 (CONTINUED)
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
BANKS 0.4%
Bank of America Corp. 112,600 $ 1,502,084
Morgan Stanley 22,700 617,667
------------
2,119,751
------------
COMPUTERS 0.4%
Hewlett-Packard Co. 47,800 2,012,380
------------
ELECTRONICS 0.1%
TTM Technologies, Inc. (f) 19,100 284,781
------------
ENGINEERING & CONSTRUCTION 0.2%
McDermott International,
Inc. (f) 65,000 1,344,850
------------
HEALTH CARE--PRODUCTS 0.3%
Boston Scientific Corp. (f) 214,700 1,625,279
------------
INTERNET 0.4%
GSI Commerce, Inc. (f) 60,600 1,405,920
TeleCommunication Systems,
Inc. (f) 152,700 713,109
------------
2,119,029
------------
MACHINERY--DIVERSIFIED 0.1%
Babcock & Wilcox Co. (f) 32,500 831,675
------------
OIL & GAS 0.7%
Forest Oil Corp. (f) 26,200 994,814
Frontier Oil Corp. (f) 54,300 977,943
Transocean, Ltd. (f) 24,000 1,668,240
------------
3,640,997
------------
OIL & GAS SERVICES 2.1%
Baker Hughes, Inc. 39,700 2,269,649
Gulf Island Fabrication,
Inc. 13,100 369,158
Halliburton Co. 143,492 5,858,779
ION Geophysical Corp. (f) 360,900 3,060,432
------------
11,558,018
------------
PHARMACEUTICALS 1.4%
Merck & Co., Inc. 110,553 3,984,330
ViroPharma, Inc. (f) 190,300 3,295,996
------------
7,280,326
------------
RETAIL 0.6%
Costco Wholesale Corp. 42,092 3,039,463
------------
SEMICONDUCTORS 0.0%++
FormFactor, Inc. (f) 1,341 11,908
------------
SOFTWARE 0.6%
Microsoft Corp. 108,500 3,029,320
------------
TRANSPORTATION 0.5%
Tidewater, Inc. 49,600 2,670,464
------------
Total Common Stocks
(Cost $46,034,855) 46,244,891
------------
<Caption>
PRINCIPAL
AMOUNT
SHORT-TERM INVESTMENT 3.2%
-------------------------------------------------------
REPURCHASE AGREEMENT 3.2%
State Street Bank and Trust
Co.
0.01%, dated 12/31/10
due 1/3/11
Proceeds at Maturity
$17,355,358
(Collateralized by a
United States
Treasury Note with a rate
of 2.50% and a maturity
date of 4/30/15, with a
Principal Amount of
$17,065,000 and a Market
Value of $17,704,938) $17,355,344 17,355,344
------------
Total Short-Term Investment
(Cost $17,355,344) 17,355,344
------------
Total Investments
(Cost $464,701,098) (g) 99.8% 534,978,965
Other Assets, Less
Liabilities 0.2 1,171,898
----------- ------------
Net Assets 100.0% $536,150,863
=========== ============
</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) Fair valued security--The total market
value of this security at December 31,
2010 is $234, which represents less than
one-tenth of a percent of the Portfolio's
net assets.
(c) Issue in default.
(d) Illiquid security--The total market value
of this security at December 31, 2010 is
$234, which represents less than one-
tenth of a percent of the Portfolio's net
assets.
(e) Restricted security.
(f) Non-income producing security.
(g) At December 31, 2010, cost is
$465,560,575 for federal income tax
purposes and net unrealized appreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $78,256,295
Gross unrealized depreciation (8,837,905)
-----------
Net unrealized appreciation $69,418,390
===========
</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, 2010, 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) $ -- $406,189,143 $234 $406,189,377
Convertible Preferred Stocks 65,189,353 -- -- 65,189,353
------------ ------------ ---- ------------
Total Convertible Securities 65,189,353 406,189,143 234 471,378,730
------------ ------------ ---- ------------
Common Stocks 46,244,891 -- -- 46,244,891
Short-Term Investment
Repurchase Agreement -- 17,355,344 -- 17,355,344
------------ ------------ ---- ------------
Total Investments in Securities $111,434,244 $423,544,487 $234 $534,978,965
============ ============ ==== ============
</Table>
(a) For a complete listing of investments and their industries, 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 Portfolio recognizes transfers between the levels as of the beginning of the
period.
For the period ended December 31, 2010, the Portfolio did not have any transfers
between Level 1 and Level 2 fair value measurements. (See Note 2)
The following is a reconciliation of investments in which significant
unobservable inputs (Level 3) were used in determining value:
<Table>
<Caption>
BALANCE CHANGE IN BALANCE
AS OF ACCRUED REALIZED UNREALIZED TRANSFERS TRANSFERS AS OF
INVESTMENTS DECEMBER 31, DISCOUNTS GAIN APPRECIATION IN TO OUT OF DECEMBER 31,
IN SECURITIES 2009 (PREMIUMS) (LOSS) (DEPRECIATION) PURCHASES SALES LEVEL 3 LEVEL 3 2010
Convertible Bonds
Internet $234 $ -- $ -- $ -- $ -- $ -- $ -- $ -- $234
---- -------- -------- -------- -------- -------- -------- -------- ----
Total $234 $-- $-- $-- $-- $-- $-- $-- $234
---- -------- -------- -------- -------- -------- -------- -------- ----
<Caption>
CHANGE IN
UNREALIZED
APPRECIATION
(DEPRECIATION)
FROM
INVESTMENTS
STILL HELD AT
INVESTMENTS DECEMBER 31,
IN SECURITIES 2010 (A)
Convertible Bonds
Internet $ --
--------
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, 2010
<Table>
ASSETS
--------------------------------------------------
Investment in securities, at value
(identified cost $464,701,098) $534,978,965
Receivables:
Dividends and interest 2,135,667
Fund shares sold 134,765
Investment securities sold 57,154
------------
Total assets 537,306,551
------------
LIABILITIES
--------------------------------------------------
Due to custodian 735
Payables:
Investment securities purchased 525,617
Manager (See Note 3) 268,262
Fund shares redeemed 207,915
NYLIFE Distributors (See Note 3) 64,808
Professional fees 52,149
Shareholder communication 32,801
Custodian 1,557
Directors 1,114
Accrued expenses 730
------------
Total liabilities 1,155,688
------------
Net assets $536,150,863
============
NET ASSETS CONSIST OF
--------------------------------------------------
Capital stock (par value of $.01 per
share) 200 million
shares authorized $ 449,854
Additional paid-in capital 467,602,005
------------
468,051,859
Undistributed net investment income 11,892,636
Accumulated net realized loss on
investments (14,071,499)
Net unrealized appreciation on
investments 70,277,867
------------
Net assets $536,150,863
============
INITIAL CLASS
Net assets applicable to outstanding
shares $223,632,531
============
Shares of capital stock outstanding 18,693,775
============
Net asset value per share
outstanding $ 11.96
============
SERVICE CLASS
Net assets applicable to outstanding
shares $312,518,332
============
Shares of capital stock outstanding 26,291,629
============
Net asset value per share
outstanding $ 11.89
============
</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, 2010
<Table>
INVESTMENT INCOME
-------------------------------------------------
INCOME
Interest (a) $12,818,986
Dividends 2,711,934
-----------
Total income 15,530,920
-----------
EXPENSES
Manager (See Note 3) 2,714,625
Distribution and service--Service
Class (See Note 3) 651,214
Professional fees 110,077
Shareholder communication 101,123
Custodian 21,474
Directors 14,927
Miscellaneous 18,449
-----------
Total expenses 3,631,889
-----------
Net investment income 11,899,031
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
-------------------------------------------------
Net realized gain on investments 17,032,357
Net change in unrealized
appreciation (depreciation) on
investments 48,162,500
-----------
Net realized and unrealized gain on
investments 65,194,857
-----------
Net increase in net assets resulting
from operations $77,093,888
===========
</Table>
(a) Interest recorded net of foreign withholding taxes in the amount of $15,167.
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, 2010 AND DECEMBER 31, 2009
<Table>
<Caption>
2010 2009
INCREASE IN NET ASSETS
--------------------------------------------------------
Operations:
Net investment income $ 11,899,031 $ 13,325,460
Net realized gain (loss)
on investments 17,032,357 (17,591,802)
Net change in unrealized
appreciation
(depreciation) on
investments 48,162,500 125,260,453
--------------------------
Net increase in net assets
resulting from operations 77,093,888 120,994,111
--------------------------
Dividends to shareholders:
From net investment
income:
Initial Class (5,449,793) (3,413,090)
Service Class (7,497,522) (3,613,593)
--------------------------
Total dividends to
shareholders (12,947,315) (7,026,683)
--------------------------
Capital share transactions:
Net proceeds from sale of
shares 108,175,014 68,157,853
Net asset value of shares
issued to shareholders in
reinvestment of dividends 12,947,315 7,026,683
Cost of shares redeemed (57,947,321) (37,266,165)
--------------------------
Increase in net assets
derived from capital
share transactions 63,175,008 37,918,371
--------------------------
Net increase in net
assets 127,321,581 151,885,799
NET ASSETS
--------------------------------------------------------
Beginning of year 408,829,282 256,943,483
--------------------------
End of year $536,150,863 $408,829,282
==========================
Undistributed net investment
income at
end of year $ 11,892,636 $ 12,940,920
==========================
</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
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-99
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
2010 2009 2008 2007 2006
Net asset value at beginning of
year $ 10.45 $ 7.29 $ 13.98 $ 12.75 $ 11.82
-------- -------- -------- -------- --------
Net investment income 0.30 (a) 0.38 (a) 0.27 0.28 0.22 (a)
Net realized and unrealized gain
(loss) on investments 1.53 2.98 (5.13) 1.63 1.02
-------- -------- -------- -------- --------
Total from investment operations 1.83 3.36 (4.86) 1.91 1.24
-------- -------- -------- -------- --------
Less dividends and distributions:
From net investment income (0.32) (0.20) (0.27) (0.32) (0.31)
From net realized gain on
investments -- -- (1.56) (0.36) --
-------- -------- -------- -------- --------
Total dividends and distributions (0.32) (0.20) (1.83) (0.68) (0.31)
-------- -------- -------- -------- --------
Net asset value at end of year $ 11.96 $ 10.45 $ 7.29 $ 13.98 $ 12.75
======== ======== ======== ======== ========
Total investment return 17.86% 46.08% (34.42%) 14.86% 10.44%
Ratios (to average net
assets)/Supplemental Data:
Net investment income 2.77% 4.30% 2.32% 1.64% 1.80%
Net expenses 0.66% 0.66% 0.65% 0.62% 0.63%
Portfolio turnover rate 83% 73% 107% 119% 76%
Net assets at end of year (in
000's) $223,633 $181,366 $135,743 $242,925 $246,179
</Table>
<Table>
(a) Per share data based on average shares outstanding during the year.
</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,
2010 2009 2008 2007 2006
$ 10.39 $ 7.26 $ 13.92 $ 12.71 $ 11.80
-------- -------- -------- -------- --------
0.27 (a) 0.36 (a) 0.25 0.18 0.19 (a)
1.53 2.95 (5.11) 1.68 1.00
-------- -------- -------- -------- --------
1.80 3.31 (4.86) 1.86 1.19
-------- -------- -------- -------- --------
(0.30) (0.18) (0.24) (0.29) (0.28)
-- -- (1.56) (0.36) --
-------- -------- -------- -------- --------
(0.30) (0.18) (1.80) (0.65) (0.28)
-------- -------- -------- -------- --------
$ 11.89 $ 10.39 $ 7.26 $ 13.92 $ 12.71
======== ======== ======== ======== ========
17.56% 45.71% (34.58%) 14.57% 10.16%
2.52% 4.03% 2.12% 1.39% 1.55%
0.91% 0.91% 0.90% 0.87% 0.88%
83% 73% 107% 119% 76%
$312,518 $227,463 $121,201 $157,565 $120,515
</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. THE PERFORMANCE TABLE AND GRAPH 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.
(LINE GRAPH)
<Table>
<Caption>
MAINSTAY VP MAINSTAY VP
FLOATING RATE FLOATING RATE CREDIT SUISSE
PORTFOLIO INITIAL PORTFOLIO LEVERAGED LOAN
CLASS SERVICE CLASS INDEX
----------------- ------------- --------------
05/02/05 10000 10000 10000
12/31/05 10210 10191 10392
12/31/06 10822 10775 11154
12/31/07 11103 11027 11364
12/31/08 8575 8495 8097
12/31/09 11450 11316 11729
12/31/10 12375 12200 12899
</Table>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED DECEMBER 31, 2010
--------------------------------------------------------------------------------
<Table>
<Caption>
SINCE GROSS
INCEPTION EXPENSE
CLASS ONE YEAR FIVE YEARS (5/2/05) RATIO(1)
-----------------------------------------------------------------------
Initial Class Shares 8.08% 3.92% 3.83% 0.68%
-----------------------------------------------------------------------
Service Class Shares 7.81 3.66 3.57 0.93
-----------------------------------------------------------------------
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE FIVE SINCE INCEPTION
YEAR YEARS (5/2/05)
Credit Suisse Leveraged Loan Index(2) 9.98% 4.42% 4.59%
------------------------------------------------------------------------------
Average Lipper Loan Participation Fund(3) 9.33 3.50 3.65
------------------------------------------------------------------------------
</Table>
1. The gross expense ratios presented reflect the Portfolio's "Total Annual
Portfolio Operating Expenses" from the most recent Prospectus and may differ
from other expense ratios disclosed in this report.
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 Loan Participation Fund is representative of funds 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. Results are based on total returns
with all dividend and capital gain distributions reinvested.
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, 2010, to December 31,
2010, 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 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, 2010, to December 31, 2010. 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, 2010. 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 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 7/1/10 12/31/10 PERIOD(1) 12/31/10 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,055.30 $3.47 $1,021.80 $3.41
-------------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,054.00 $4.76 $1,020.60 $4.69
-------------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
(0.67% for Initial Class and 0.92% 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, 2010 (Unaudited)
(PIE CHART)
<Table>
<Caption>
FLOATING RATE
LOANS 82.5
------------------------- --- ----
Corporate Bonds 8.00
Short-Term Investments 6.40
Foreign Floating Rate Loans 4.10
Yankee Bonds 0.80
Common Stocks 0.10
Other Assets, Less Liabilities (1.90)
</Table>
See Portfolio of Investments beginning on page M-106 for specific holdings
within these categories.
TOP TEN ISSUERS HELD AS OF DECEMBER 31, 2010 (excluding short-term investments)
<Table>
1. TransDigm, Inc., 5.00%-7.75%, due 12/6/16-12/15/18
2. Community Health Systems, Inc., 2.544%-3.794%, due
7/25/14-1/25/17
3. Aramark Corp., 2.136%-3.553%, due 1/27/14-7/26/16
4. NRG Energy, Inc., 2.041%-3.553%, due 2/1/13-8/31/15
5. Intelsat Corp., 2.79%, due 1/3/14
6. Biomet, Inc., 3.293%, due 3/25/15
7. Ford Motor Co., 3.026%, due 12/16/13
8. Fidelity National Information Solutions, Inc., 5.25%, due
7/18/16
9. HCA, Inc., 1.553%-8.50%, due 11/19/12-4/15/19
10. Bucyrus International, Inc., 4.25%, due 2/19/16
</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 THE MAINSTAY VP FLOATING RATE PORTFOLIO PERFORM RELATIVE TO ITS PEERS
AND ITS BENCHMARK DURING THE 12 MONTHS ENDED DECEMBER 31, 2010?
For the 12 months ended December 31, 2010, MainStay VP Floating Rate Portfolio
returned 8.08% for Initial Class shares and 7.81% for Service Class shares. Both
share classes underperformed the 9.33% return of the average Lipper(2) Loan
Participation Fund and the 9.98% return of the Credit Suisse Leveraged Loan
Index(2) for the 12 months ended December 31, 2010. The Credit Suisse Leveraged
Loan Index is the Portfolio's broad-based securities-market index.
WHAT FACTORS AFFECTED THE LEVERAGED LOAN MARKET DURING THE REPORTING PERIOD?
After the historic sell-off in 2008 and remarkable gains in 2009, the leveraged
loan market experienced more modest volatility in 2010 by recent standards. A
strong rally in risk credit during the first quarter was partially offset by
weaker performance in May and June on concerns over economic difficulties in
Greece and other European markets. The year ended on a strong note, however,
with volume rebounding
in the fourth quarter and strong demand for deals backing dividends and a return
of the covenant-lite deal. Covenant-lite deals carry fewer maintenance covenants
for borrowers than traditional loans and involve higher risk for lenders. In the
fourth quarter, the Credit Suisse Leveraged Loan Index rose 3.30%.
For the year, the default rate by principal amount was relatively benign at
1.87%, and investors were drawn to a combination of call protection, short
duration and floating rates of interest.
WHAT FACTORS AFFECTED THE PORTFOLIO'S RELATIVE PERFORMANCE DURING THE REPORTING
PERIOD?
The Portfolio underperformed the Credit Suisse Leveraged Loan Index primarily
because the Portfolio maintained an overweight position in credits rated BB and
an underweight position in unrated loans and credits rated CCC and below.(3)
During the reporting period, riskier credits (unrated loans and credits rated
CCC and below) outperformed, with significant rallies in the first and fourth
quarters. The cash balance necessary to meet redemptions also contributed to the
Portfolio's underperformance of its benchmark.
During the spring and summer of 2010, credits rated BB outperformed riskier
credits, which partially offset the Portfolio's underperformance relative to its
benchmark in other periods.
WHAT WAS THE PORTFOLIO'S DURATION(4) STRATEGY DURING THE REPORTING PERIOD?
The Portfolio invests in floating-rate loans that have an effective duration of
less than three months. The floating-rate loans may have final maturities of
five to seven years, but as long as nine years, but their underlying interest-
rate contracts, which are typically pegged to LIBOR,(2) reset every 30, 60, 90
or 180 days. The weighted average reset figure for the Portfolio at the end of
the reporting period was 45 days. Since actual reset dates may vary for
different loans in the Portfolio, the actual period between a shift in interest
rates and the time when the Portfolio would "catch up" may differ.
HOW WAS THE PORTFOLIO POSITIONED AT THE END OF DECEMBER 2010?
As of December 31, 2010, the Portfolio was significantly underweight relative to
the Credit Suisse Leveraged Loan Index in unrated loans and loans rated CCC or
lower. As of the same date, the Portfolio held 2.08% of its net assets in
unrated loans and loans rated CCC or lower while 21.53% of the Credit Suisse
Leveraged Loan Index was made up of those riskier assets.
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 & 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. 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.
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.
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 will
come to pass. This material does not constitute investment advice and is not
intended as an endorsement of any specific investment.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
Information about VP Floating Rate Portfolio on this page and the preceeding
pages has not been audited.
mainstayinvestments.com M-105
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2010
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
LONG-TERM BONDS 95.4%+
CORPORATE BONDS 8.0%
-------------------------------------------------------
AEROSPACE & DEFENSE 0.9%
Oshkosh Corp.
8.25%, due 3/1/17 $ 1,600,000 $ 1,740,000
Spirit Aerosystems, Inc.
7.50%, due 10/1/17 435,000 452,400
X TransDigm, Inc.
7.75%, due 12/15/18 (a) 2,500,000 2,587,500
------------
4,779,900
------------
BEVERAGE, FOOD & TOBACCO 0.1%
Dole Food Co., Inc.
8.00%, due 10/1/16 (a) 750,000 791,250
------------
BROADCASTING & ENTERTAINMENT 0.1%
CSC Holdings LLC
8.625%, due 2/15/19 700,000 791,000
------------
BUILDINGS & REAL ESTATE 0.4%
Building Materials Corp. of
America
6.875%, due 8/15/18 (a) 1,200,000 1,188,000
CB Richard Ellis Services,
Inc.
6.625%, due 10/15/20 (a) 900,000 900,000
------------
2,088,000
------------
CHEMICALS, PLASTICS & RUBBER 1.9%
Ashland, Inc.
9.125%, due 6/1/17 650,000 749,125
Hexion U.S. Finance
Corp./Hexion Nova Scotia
Finance ULC
8.875%, due 2/1/18 2,500,000 2,671,875
Lyondell Chemical Co.
11.00%, due 5/1/18 3,991,902 4,520,829
Nalco Co.
6.625%, due 1/15/19 (a) 1,000,000 1,022,500
8.25%, due 5/15/17 1,200,000 1,300,500
------------
10,264,829
------------
CONTAINERS, PACKAGING & GLASS 1.3%
Berry Plastics Corp.
4.177%, due 9/15/14 500,000 457,500
Crown Americas LLC/Crown
Americas Capital Corp. II
7.625%, due 5/15/17 1,200,000 1,290,000
Greif, Inc.
7.75%, due 8/1/19 650,000 711,750
Silgan Holdings, Inc.
7.25%, due 8/15/16 2,000,000 2,130,000
Solo Cup Co.
10.50%, due 11/1/13 2,000,000 2,090,000
------------
6,679,250
------------
DIVERSIFIED NATURAL RESOURCES, PRECIOUS METALS &
MINERALS 0.3%
Boise Paper Holdings
LLC/Boise Co-Issuer Co.
8.00%, due 4/1/20 700,000 749,000
Boise Paper Holdings
LLC/Boise Finance Co.
9.00%, due 11/1/17 1,000,000 1,092,500
------------
1,841,500
------------
DIVERSIFIED/CONGLOMERATE SERVICE 0.4%
Corrections Corp. of America
7.75%, due 6/1/17 2,000,000 2,122,500
------------
ECOLOGICAL 0.2%
Clean Harbors, Inc.
7.625%, due 8/15/16 1,035,000 1,099,688
------------
HEALTHCARE, EDUCATION & CHILDCARE 0.2%
X HCA, Inc.
8.50%, due 4/15/19 800,000 876,000
------------
HOTELS, MOTELS, INNS & GAMING 0.5%
Ameristar Casinos, Inc.
9.25%, due 6/1/14 1,590,000 1,701,300
MGM Resorts International
10.375%, due 5/15/14 200,000 224,500
11.125%, due 11/15/17 550,000 632,500
------------
2,558,300
------------
LEISURE, AMUSEMENT, MOTION PICTURES & ENTERTAINMENT
0.1%
Cinemark USA, Inc.
8.625%, due 6/15/19 600,000 649,500
------------
MACHINERY 0.2%
SPX Corp.
6.875%, due 9/1/17 (a) 750,000 796,875
------------
MACHINERY (NON-AGRICULTURE, NON-CONSTRUCT & NON-
ELECTRONIC) 0.1%
CPM Holdings, Inc.
10.625%, due 9/1/14 (a) 725,000 775,750
------------
</Table>
+ Percentages indicated are based on Portfolio net assets.
X Among the Portfolio's 10 largest issuers held, as of December 31, 2010,
excluding short-term investments. May be subject to change daily.
M-106 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
MINING, STEEL, IRON & NON-PRECIOUS METALS 0.6%
Consol Energy, Inc.
8.00%, due 4/1/17 (a) $ 3,000,000 $ 3,195,000
------------
OIL & GAS 0.2%
Energy Transfer Equity, L.P.
7.50%, due 10/15/20 788,000 811,640
------------
PRINTING & PUBLISHING 0.2%
Nielsen Finance LLC
11.625%, due 2/1/14 700,000 810,250
------------
TELECOMMUNICATIONS 0.3%
GCI, Inc.
7.25%, due 2/15/14 1,595,000 1,614,937
------------
Total Corporate Bonds
(Cost $39,534,881) 42,546,169
------------
FLOATING RATE LOANS 82.5% (B)
-------------------------------------------------------
AEROSPACE & DEFENSE 2.8%
Pelican Products, Inc.
New Term Loan B
5.75%, due 11/30/16 3,000,000 3,009,375
SI Organization, Inc. (The)
Term Loan B
5.75%, due 11/19/16 2,850,000 2,864,250
Spirit Aerosystems, Inc.
Term Loan B2
3.539%, due 9/30/16 2,021,737 2,022,157
X TransDigm, Inc.
Term Loan B
5.00%, due 12/6/16 5,000,000 5,046,875
Triumph Group, Inc.
Term Loan B
4.50%, due 6/16/16 1,745,625 1,752,171
------------
14,694,828
------------
AUTOMOBILE 7.5%
Allison Transmission, Inc.
Term Loan B
3.027%, due 8/7/14 3,284,097 3,205,417
Dana Corp.
Term Loan B
4.534%, due 1/30/15 3,773,868 3,787,432
Federal-Mogul Corp.
Term Loan C
2.199%, due 12/28/15 1,666,988 1,553,872
Term Loan B
2.206%, due 12/29/14 2,297,297 2,141,410
X Ford Motor Co.
Term Loan B1
3.026%, due 12/16/13 5,813,891 5,785,594
Goodyear Tire & Rubber Co.
(The)
2nd Lien Term Loan
1.96%, due 4/30/14 3,500,000 3,403,750
KAR Holdings, Inc.
Term Loan B
3.02%, due 10/18/13 3,877,008 3,848,900
Key Safety Systems, Inc.
1st Lien Term Loan
2.521%, due 3/8/14 1,443,206 1,338,573
Metaldyne Co. LLC
Term Loan B
7.75%, due 10/28/16 2,992,500 3,029,906
Pinafore LLC
Term Loan B
6.25%, due 9/29/16 3,459,864 3,504,348
Sensata Technologies Finance
Co. LLC
US Term Loan
2.038%, due 4/26/13 2,899,637 2,825,696
Tenneco, Inc.
Tranche B Term Loan
5.053%, due 6/3/16 (c) 597,000 600,358
Tranche B1 Credit Linked
Deposit
5.265%, due 3/17/14 (c) 1,250,000 1,257,031
United Components, Inc.
Term Loan B
6.25%, due 3/23/17 (c) 3,192,000 3,212,748
------------
39,495,035
------------
BEVERAGE, FOOD & TOBACCO 3.6%
American Seafoods Group LLC
Term Loan B
5.50%, due 5/7/15 (c) 1,467,404 1,468,626
Constellation Brands, Inc.
Term Loan B
1.813%, due 6/5/13 1,004,466 997,553
Extended Term Loan B
3.063%, due 6/5/15 1,495,534 1,502,637
Dean Foods Co.
Extended Term Loan B2
3.543%, due 4/2/17 4,387,607 4,291,079
Dole Food Co., Inc.
Term Loan C
5.039%, due 3/2/17 2,623,474 2,635,497
Term Loan B
5.059%, due 3/2/17 1,056,255 1,061,096
Michael Foods Group, Inc.
Term Loan B
6.261%, due 6/29/16 3,752,019 3,797,355
</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-107
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2010 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
FLOATING RATE LOANS (CONTINUED)
BEVERAGE, FOOD & TOBACCO (CONTINUED)
Wm. Bolthouse Farms, Inc.
New 1st Lien Term Loan
5.501%, due 2/11/16 $ 3,459,625 $ 3,462,507
------------
19,216,350
------------
BROADCASTING & ENTERTAINMENT 7.1%
Atlantic Broadband Finance
LLC
Term Loan B
5.00%, due 11/27/15 2,757,764 2,773,276
BBHI Acquisition LLC
Term Loan B
4.50%, due 12/14/17 2,000,000 2,010,714
Charter Communications
Operating LLC
Extended Term Loan
3.56%, due 9/6/16 1,979,899 1,951,850
New Term Loan
7.25%, due 3/6/14 3,293,738 3,414,312
CSC Holdings, Inc.
Incremental B2 Term Loan
2.011%, due 3/29/16 4,376,065 4,391,110
Gray Television, Inc.
Term Loan B
3.789%, due 12/31/14 2,447,745 2,385,530
Insight Midwest Holdings LLC
Term Loan A
1.26%, due 10/7/13 1,115,385 1,087,500
Initial Term Loan
2.021%, due 4/7/14 1,234,138 1,197,885
Knology Inc.
New Term Loan B
5.50%, due 10/17/16 4,833,333 4,863,542
LodgeNet Entertainment Corp.
Term Loan
2.31%, due 4/4/14 548,840 505,848
Mediacom Broadband Group
(FKA MCC Iowa)
Tranche D1 Term Loan
2.01%, due 1/31/15 1,920,000 1,839,999
Mediacom Broadband LLC
Tranche F Term Loan
4.50%, due 10/23/17 746,250 734,435
Univision Communications
Inc.
Extended Term Loan
4.511%, due 3/31/17 5,143,849 4,884,820
Weather Channel (The)
Replacement Term Loan
5.00%, due 9/14/15 5,389,904 5,417,974
------------
37,458,795
------------
BUILDINGS & REAL ESTATE 1.8%
Armstrong World Industries,
Inc.
Term Loan B
5.00%, due 5/23/17 2,142,857 2,156,250
Brickman Group Holdings Inc.
New Term Loan B
7.25%, due 10/14/16 3,333,333 3,372,223
Building Materials Corp. of
America
1st Lien Term Loan
3.063%, due 2/24/14 2,730,112 2,723,854
Central Parking Corp.
Term Loan
2.563%, due 5/22/14 259,109 202,105
Letter of Credit Term Loan
2.688%, due 5/22/14 94,828 73,966
Realogy Corp.
Letter of Credit
0.111%, due 10/10/13 159,744 149,500
Term Loan
3.286%, due 10/10/13 1,172,704 1,097,504
------------
9,775,402
------------
CHEMICALS, PLASTICS & RUBBER 6.7%
Celanese U.S. Holdings LLC
Synthetic Letter of Credit
0.261%, due 4/2/14 571,429 569,682
Extended Term Loan C
3.29%, due 10/31/16 3,407,304 3,421,148
CF Industries, Inc.
Term Loan B1
4.25%, due 4/6/15 2,271,516 2,280,021
General Chemical Corp.
Tranche B Term Loan
6.751%, due 10/6/15 2,948,250 2,970,362
Huntsman International LLC
New Term Loan
1.783%, due 4/21/14 2,237,924 2,184,151
INEOS U.S. Finance LLC
Term Loan A2
7.001%, due 12/14/12 43,345 44,339
Term Loan B2
7.501%, due 12/16/13 1,994,187 2,054,844
Term Loan C2
8.001%, due 12/16/14 2,132,900 2,197,776
ISP Chemco, Inc.
Term Loan
1.813%, due 6/4/14 1,050,936 1,027,946
Nalco Co.
Term Loan B1
4.50%, due 10/5/17 2,394,000 2,411,356
</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)
CHEMICALS, PLASTICS & RUBBER (CONTINUED)
Polymer Group, Inc.
Tranche 2 Extending
7.00%, due 11/24/14 $ 2,032,665 $ 2,027,583
Rockwood Specialties Group,
Inc.
Tranche H
6.00%, due 5/15/14 4,109,595 4,122,437
Solutia, Inc.
Term Loan B
4.50%, due 3/17/17 5,433,360 5,456,284
Univar Inc.
Extended Opco Term Loan
6.25%, due 11/30/16 4,674,010 4,697,380
------------
35,465,309
------------
CONTAINERS, PACKAGING & GLASS 4.3%
Berry Plastics Corp.
Term Loan C
2.284%, due 4/3/15 1,984,536 1,868,937
BWAY Corp.
New Term Loan B
5.522%, due 6/16/17 3,002,058 3,013,316
Crown Americas LLC
Term B Dollar Loan
2.02%, due 11/15/12 804,242 797,808
Graham Packaging Co., L.P.
Term Loan C
6.75%, due 4/5/14 3,774,530 3,806,882
Term Loan D
6.00%, due 9/23/16 798,000 806,146
Graphic Packaging
International, Inc.
Term Loan B
2.29%, due 5/16/14 1,592,111 1,567,632
Term Loan C
3.04%, due 5/16/14 2,931,029 2,911,977
Reynolds Group Holdings Inc.
Term Loan D
6.50%, due 5/5/16 3,200,000 3,226,221
Smurfit-Stone Container
Enterprises, Inc.
Exit Term Loan B
6.75%, due 7/15/16 4,975,000 5,047,139
------------
23,046,058
------------
DIVERSIFIED NATURAL RESOURCES, PRECIOUS METALS &
MINERALS 0.9%
Georgia-Pacific Corp.
New Term Loan B
2.302%, due 12/21/12 1,561,185 1,558,879
Term Loan B1
2.303%, due 12/20/12 691,212 690,191
New Term Loan C
3.552%, due 12/23/14 2,448,113 2,453,851
------------
4,702,921
------------
DIVERSIFIED/CONGLOMERATE MANUFACTURING 1.2%
X Bucyrus International,
Inc.
Term Loan
4.25%, due 2/19/16 5,472,964 5,487,959
Goodyear Engineered Products
Delayed Draw Term Loan
2.77%, due 7/31/14 121,250 106,498
Initial Term Loan
2.77%, due 7/31/14 846,563 743,564
------------
6,338,021
------------
DIVERSIFIED/CONGLOMERATE SERVICE 5.1%
Advantage Sales & Marketing,
Inc.
Term Loan B
5.25%, due 12/18/17 2,000,000 2,003,500
Dealer Computer Services,
Inc.
Term Loan B
5.25%, due 4/21/17 4,081,868 4,104,829
X Fidelity National
Information Solutions,
Inc.
Term Loan B
5.25%, due 7/18/16 5,546,359 5,607,551
Fifth Third Processing
Solutions LLC
Term Loan B
5.50%, due 11/3/16 4,200,000 4,226,250
First Data Corp.
Term Loan B1
3.011%, due 9/24/14 1,849,399 1,704,338
Term Loan B3
3.011%, due 9/24/14 948,391 874,891
ServiceMaster Co.
Delayed Draw Term Loan
2.77%, due 7/24/14 313,966 300,583
Term Loan
2.775%, due 7/24/14 3,152,740 3,018,354
SunGard Data Systems, Inc.
Tranche A
2.013%, due 2/28/14 2,803,946 2,729,468
Tranche B
3.911%, due 2/26/16 967,944 958,567
VeriFone, Inc.
Term Loan B
3.02%, due 10/31/13 660,000 660,000
</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, 2010 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
FLOATING RATE LOANS (CONTINUED)
DIVERSIFIED/CONGLOMERATE SERVICE (CONTINUED)
Verint Systems, Inc.
Term Loan B
5.25%, due 5/25/14 (c) $ 897,283 $ 895,039
------------
27,083,370
------------
ECOLOGICAL 0.3%
Big Dumpster Merger Sub,
Inc.
Delayed Draw Term Loan B
2.52%, due 2/5/13 (c) 269,864 210,022
Term Loan B
2.52%, due 2/5/13 (c) 640,927 498,801
Synagro Technologies, Inc.
Term Loan B
2.27%, due 4/2/14 965,000 851,613
------------
1,560,436
------------
FINANCE 2.0%
Harbourvest Partners LLC
Term Loan B
6.25%, due 12/14/16 2,187,500 2,192,969
Hertz Corp. (The)
Synthetic Letter of Credit
0.284%, due 12/21/12 688,374 682,255
Tranche B Term Loan
2.02%, due 12/21/12 3,707,747 3,674,789
MSCI, Inc.
New Term Loan
4.75%, due 6/1/16 3,980,000 4,001,146
Rental Services Corp.
2nd Lien Term Loan
3.80%, due 11/29/13 119,378 116,333
------------
10,667,492
------------
GROCERY 1.0%
Roundy's Supermarkets, Inc.
Extended Term Loan
7.00%, due 11/3/13 2,169,214 2,165,826
SUPERVALU, Inc.
Term Loan A
1.136%, due 6/2/11 1,122,135 1,114,981
Term Loan B1
1.538%, due 6/1/12 1,214,201 1,196,120
Extended Term Loan B2
3.038%, due 10/5/15 573,950 566,417
------------
5,043,344
------------
HEALTHCARE, EDUCATION & CHILDCARE 10.7%
Alliance Healthcare
Services, Inc.
Term Loan B
5.50%, due 6/1/16 3,420,475 3,416,199
AMR HoldCo., Inc.
New Term Loan
3.273%, due 4/8/15 2,221,875 2,213,543
Bausch & Lomb, Inc.
Delayed Draw Term Loan
3.511%, due 4/24/15 567,539 564,698
Term Loan
3.543%, due 4/24/15 2,337,425 2,321,832
X Biomet, Inc.
Term Loan B
3.293%, due 3/25/15 5,891,888 5,867,690
X Community Health Systems,
Inc.
Delayed Draw Term Loan
2.544%, due 7/25/14 240,334 234,116
Term Loan
2.544%, due 7/25/14 4,666,572 4,545,825
Extended Term Loan B
3.794%, due 1/25/17 2,346,127 2,336,013
DaVita, Inc.
New Term Loan B
4.50%, due 10/20/16 3,000,000 3,024,108
Fresenius Medical Care
Holdings, Inc.
Tranche B Term Loan
1.671%, due 3/31/13 769,774 761,108
Gentiva Health Services,
Inc.
New Term Loan B
6.75%, due 8/15/16 1,242,188 1,252,539
X HCA, Inc.
Term Loan A
1.553%, due 11/19/12 588,225 578,850
Term Loan B
2.553%, due 11/18/13 3,122,019 3,088,067
Extended Term Loan B2
3.553%, due 3/31/17 1,000,000 997,083
Health Management
Associates, Inc.
Term Loan B
2.053%, due 2/28/14 3,678,394 3,603,906
Lifepoint Hospitals, Inc.
Extended Term Loan B
3.04%, due 4/15/15 2,000,000 1,996,000
Mylan Laboratories, Inc.
Term Loan B
3.563%, due 10/2/14 1,274,726 1,276,511
Quintiles Transnational
Corp.
Term Loan B
2.31%, due 3/29/13 1,939,667 1,929,969
Royalty Pharma Finance Trust
Term Loan B
2.553%, due 4/16/13 2,872,649 2,858,252
</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)
HEALTHCARE, EDUCATION & CHILDCARE (CONTINUED)
Rural/Metro Operating Co.
LLC
Term Loan B
6.00%, due 11/24/16 $ 2,400,000 $ 2,421,960
Select Medical Corp.
Extended Term Loan B
4.037%, due 8/22/14 721,727 721,727
Universal Health Services,
Inc.
Term Loan B
5.50%, due 11/15/16 2,800,000 2,833,981
Vanguard Health Holding Co.
II LLC
Term Loan B
5.00%, due 1/29/16 3,473,816 3,486,120
Warner Chilcott Co. LLC
Term Loan A
6.00%, due 10/30/14 854,237 854,237
Term Loan B2
6.25%, due 4/30/15 1,630,950 1,639,274
Warner Chilcott PLC
Additional Term Loan
6.25%, due 4/30/15 920,700 925,815
Term Loan B1
6.25%, due 4/30/15 979,524 984,523
------------
56,733,946
------------
HOME AND OFFICE FURNISHINGS, HOUSEWARES & DURABLE
CONSUMER PRODUCTS 0.6%
Jarden Corp.
Term Loan B4
3.553%, due 1/26/15 1,480,774 1,489,411
Term Loan B5
3.553%, due 1/26/15 1,542,656 1,551,654
------------
3,041,065
------------
HOTELS, MOTELS, INNS & GAMING 1.6%
Las Vegas Sands LLC
Extended Delayed Draw Term
Loan
3.03%, due 11/23/16 696,914 669,763
Extended Term Loan B
3.03%, due 11/23/16 2,540,573 2,440,764
Penn National Gaming, Inc.
Term Loan B
2.027%, due 10/3/12 5,274,964 5,247,123
------------
8,357,650
------------
INSURANCE 0.9%
Hub International Holdings,
Inc.
Add on Term Loan B
6.75%, due 6/13/14 994,962 991,977
Multiplan, Inc.
Term Loan B
6.50%, due 8/26/17 3,489,231 3,523,035
------------
4,515,012
------------
LEISURE, AMUSEMENT, MOTION PICTURES & ENTERTAINMENT
3.8%
AMC Entertainment, Inc.
Term Loan
1.761%, due 1/28/13 2,079,964 2,067,381
Cedar Fair, L.P.
Term Loan B
5.50%, due 12/15/16 5,169,854 5,218,781
Cinemark USA, Inc.
Extended Term Loan
3.529%, due 4/29/16 1,915,650 1,924,031
Regal Cinemas Corp.
New Term Loan
3.803%, due 11/21/16 5,055,382 5,072,762
Six Flags Theme Parks, Inc.
Add on Term Loan B
5.50%, due 6/30/16 3,660,714 3,690,458
Universal City Development
Partners, Ltd.
New Term Loan B
5.50%, due 11/6/14 1,985,000 2,001,128
------------
19,974,541
------------
MACHINERY (NON-AGRICULTURE, NON-CONSTRUCT & NON-
ELECTRONIC) 2.9%
Alliance Laundry Systems LLC
Term Loan B
6.25%, due 9/23/16 2,936,842 2,967,435
Baldor Electric Co.
Term Loan B
5.25%, due 1/31/14 5,084,771 5,086,327
Gleason Corp.
New U.S. Term Loan
2.052%, due 6/30/13 (c) 825,974 804,293
Goodman Global Holdings,
Inc.
First Lien Term Loan
5.75%, due 10/28/16 1,620,938 1,627,016
2nd Lien Term Loan
9.00%, due 10/30/17 200,000 205,950
Manitowoc Co., Inc. (The)
Term Loan B
8.00%, due 11/6/14 705,123 709,970
RBS Global, Inc.
Term Loan B2
2.563%, due 7/19/13 2,014,681 1,962,636
Rexnord Corp.
Term Loan B
2.813%, due 7/19/13 1,934,426 1,901,783
------------
15,265,410
------------
</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, 2010 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
FLOATING RATE LOANS (CONTINUED)
MINING, STEEL, IRON & NON-PRECIOUS METALS 0.2%
Walter Industries, Inc.
Term Loan
2.514%, due 10/3/12 $ 920,279 $ 919,128
------------
OIL & GAS 1.0%
Dresser, Inc.
Term Loan
2.534%, due 5/4/14 3,689,032 3,677,504
2nd Lien Term Loan
6.034%, due 5/4/15 800,000 798,500
IFM Colonial Pipeline 2 LLC
Term Loan B
2.29%, due 2/27/12 972,209 962,081
------------
5,438,085
------------
PERSONAL & NONDURABLE CONSUMER PRODUCTS (MANUFACTURING
ONLY) 0.9%
JohnsonDiversey, Inc.
Term Loan B
5.25%, due 11/24/15 3,204,314 3,226,343
Spectrum Brands, Inc.
New Term Loan
8.00%, due 6/16/16 1,586,667 1,615,425
------------
4,841,768
------------
PERSONAL TRANSPORTATION 0.2%
United Airlines, Inc.
Term Loan B
2.313%, due 2/3/14 1,367,572 1,317,356
------------
PERSONAL, FOOD & MISCELLANEOUS SERVICES 1.2%
X Aramark Corp.
Synthetic Letter of Credit
2.136%, due 1/27/14 254,038 251,588
Term Loan
2.178%, due 1/27/14 3,185,645 3,154,926
Extended Letter of Credit
3.511%, due 7/26/16 185,121 184,709
Extended Term Loan B
3.553%, due 7/26/16 2,814,880 2,808,625
------------
6,399,848
------------
PRINTING & PUBLISHING 3.0%
Affiliated Media, Inc.
New Term Loan
8.50%, due 3/19/14 67,618 66,265
Dex Media East LLC
New Term Loan
2.796%, due 10/24/14 575,617 465,530
F&W Media, Inc.
Term Loan
7.75%, due 6/9/14 (c)(d) 506,420 506,420
New 2nd Lien Term Loan
15.00%, due 12/9/14 (c)(d) 219,231 219,231
Getty Images, Inc.
New Term Loan
5.25%, due 11/7/16 3,643,375 3,674,160
Hanley Wood LLC
New Term Loan B
2.563%, due 3/8/14 656,507 269,168
Lamar Media Corp.
Term Loan B
4.25%, due 12/30/16 3,502,370 3,515,503
Merrill Communications LLC
Term Loan
8.50%, due 12/24/12 1,867,789 1,853,780
Nielsen Finance LLC
Class A Term Loan
2.264%, due 8/9/13 118,792 117,201
Class B Term Loan
4.014%, due 5/2/16 494,994 491,635
Class C Term Loan
4.014%, due 5/2/16 2,946,069 2,912,926
Penton Media, Inc.
New Term Loan B
5.00%, due 8/1/14 (c) 1,210,419 935,048
R.H. Donnelley, Inc.
New Term Loan
9.00%, due 10/24/14 589,385 462,878
SuperMedia, Inc.
Exit Term Loan
11.00%, due 12/31/15 673,715 460,371
------------
15,950,116
------------
PRINTING, PUBLISHING, & BROADCASTING 0.7%
Visant Corp.
Term Loan B
7.00%, due 12/22/16 3,491,250 3,527,618
------------
RETAIL STORE 2.4%
Michaels Stores, Inc.
Term Loan B1
2.563%, due 10/31/13 1,778,742 1,730,040
Term Loan B2
4.813%, due 7/31/16 2,263,657 2,259,614
NBTY, Inc.
Term Loan B
6.25%, due 10/2/17 600,000 607,495
</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)
RETAIL STORE (CONTINUED)
Neiman Marcus Group, Inc.
(The)
Extended Term Loan B2
4.303%, due 4/6/16 $ 3,333,809 $ 3,295,263
Pantry, Inc. (The)
Delayed Draw Term Loan B
2.02%, due 5/15/14 205,019 197,160
Term Loan B
2.02%, due 5/15/14 712,032 684,737
Pilot Travel Centers LLC
Term Loan B
5.25%, due 6/30/16 2,581,677 2,615,239
Yankee Candle Co., Inc.
(The)
Term Loan B
2.285%, due 2/6/14 1,578,512 1,553,651
------------
12,943,199
------------
TELECOMMUNICATIONS 2.8%
X Intelsat Corp.
Term Loan B2-A
2.79%, due 1/3/14 1,965,815 1,965,815
Term Loan B2-B
2.79%, due 1/3/14 1,965,208 1,965,209
Term Loan B2-C
2.79%, due 1/3/14 1,965,208 1,965,208
MetroPCS Wireless, Inc.
Term Loan B
2.563%, due 11/4/13 247,055 246,669
Extended Term Loan
3.813%, due 11/4/16 4,681,175 4,694,343
Syniverse Technologies, Inc.
Term Loan B
5.25%, due 12/21/17 (c) 2,000,000 2,025,000
Windstream Corp.
Tranche B2
3.04%, due 12/17/15 1,975,000 1,980,996
------------
14,843,240
------------
TEXTILES & LEATHER 0.9%
Phillips-Van Heusen Corp.
Tranche B
4.75%, due 5/6/16 4,436,334 4,490,373
Spring Windows Fashions LLC
Term Loan B
3.063%, due 12/31/12 (c) 375,198 357,376
------------
4,847,749
------------
UTILITIES 4.4%
AES Corp.
Term Loan
2.859%, due 8/10/11 1,000,000 998,438
BRSP LLC
Term Loan B
7.50%, due 6/4/14 2,803,603 2,817,621
Calpine Corp.
1st Priority Term Loan
3.145%, due 3/29/14 1,015,768 1,013,954
Covanta Energy Corp.
Synthetic Letter of Credit
1.803%, due 2/10/14 494,845 486,804
Term Loan B
1.813%, due 2/10/14 967,461 951,740
Dynegy Holdings, Inc.
Synthetic Letter of Credit
4.02%, due 4/2/13 1,886,914 1,869,056
Term Loan B
4.02%, due 4/2/13 110,653 109,606
KGen LLC
Synthetic Letter of Credit
0.153%, due 2/8/14 281,250 267,187
1st Lien Term Loan
2.063%, due 2/10/14 313,498 297,824
New Development Holdings,
Inc.
Term Loan
7.00%, due 7/3/17 3,900,412 3,958,918
X NRG Energy, Inc.
Term Loan
2.041%, due 2/1/13 1,196,599 1,187,410
Synthetic Letter of Credit
2.053%, due 2/1/13 1,007,587 999,850
Extended Letter of Credit
3.553%, due 8/31/15 2,888,889 2,886,000
Extended Term Loan B
3.553%, due 8/31/15 1,105,556 1,104,635
Texas Competitive Electric
Holdings Co. LLC
Term Loan B2
3.764%, due 10/10/14 955,253 736,848
Term Loan B3
3.764%, due 10/10/14 1,949,734 1,501,517
TPF Generation Holdings LLC
Synthetic Revolver
0.203%, due 12/15/11 94,479 92,046
Synthetic Letter of Credit
0.203%, due 12/13/13 301,388 293,627
Term Loan B
2.303%, due 12/15/13 688,430 670,703
2nd Lien Term Loan C
4.553%, due 12/15/14 500,000 456,562
</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, 2010 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
FLOATING RATE LOANS (CONTINUED)
UTILITIES (CONTINUED)
TPF II LC LLC
Term Loan B
3.053%, due 10/15/14 (c) $ 606,297 $ 582,045
------------
23,282,391
------------
Total Floating Rate Loans
(Cost $434,180,646) 436,745,483
------------
FOREIGN FLOATING RATE LOANS 4.1% (B)
-------------------------------------------------------
BROADCASTING & ENTERTAINMENT 1.0%
UPC Financing Partnership
Term Loan T
4.251%, due 12/30/16 4,203,424 4,155,085
Term Loan X
4.251%, due 12/29/17 1,296,576 1,275,102
------------
5,430,187
------------
CHEMICALS, PLASTICS & RUBBER 0.5%
Brenntag Holding GmbH & Co.
Term Loan B2
3.769%, due 1/20/14 2,194,072 2,189,959
Acquisition Term Loan
3.786%, due 1/20/14 369,179 368,487
------------
2,558,446
------------
CONTAINERS, PACKAGING & GLASS 0.1%
BWAY Corp.
New Term Loan C
5.56%, due 6/16/17 281,443 282,498
------------
ELECTRONICS 0.9%
Flextronics International,
Ltd.
Term Loan B
2.508%, due 10/1/12 2,944,502 2,911,376
Term Loan A
2.508%, due 10/1/14 1,541,621 1,518,882
Delayed Draw A1-A Term
Loan
2.511%, due 10/1/14 442,995 436,460
------------
4,866,718
------------
FINANCE 0.2%
Ashtead Group PLC
Term Loan
2.063%, due 8/31/11 1,338,000 1,320,439
------------
HOME AND OFFICE FURNISHINGS, HOUSEWARES & DURABLE
CONSUMER PRODUCTS 0.0++
Sunbeam Corp. (Canada), Ltd.
Term Loan
2.053%, due 1/24/12 260,569 258,614
------------
LEISURE, AMUSEMENT, MOTION PICTURES & ENTERTAINMENT
0.1%
Bombardier Recreational
Products, Inc.
Term Loan
3.27%, due 6/28/13 (c) 389,608 366,231
------------
PRINTING & PUBLISHING 0.2%
Yell Group PLC
New Term Loan B1
4.011%, due 7/31/14 2,010,139 932,705
------------
TELECOMMUNICATIONS 1.1%
Intelsat Jackson Holdings
Ltd.
New Term Loan
5.25%, due 4/6/18 (c) 2,000,000 2,018,214
Intelsat Subsidiary Holding
Co.
Tranche B Term Loan
2.79%, due 7/3/13 941,797 941,797
Telesat Canada
U.S. Term I Loan
3.27%, due 10/31/14 2,691,824 2,678,924
U.S. Term II Loan
3.27%, due 10/31/14 231,223 230,115
------------
5,869,050
------------
Total Foreign Floating Rate
Loans
(Cost $22,906,565) 21,884,888
------------
YANKEE BONDS 0.8% (E)
-------------------------------------------------------
AEROSPACE & DEFENSE 0.5%
Bombardier, Inc.
7.50%, due 3/15/18 (a) 2,800,000 3,003,000
------------
MINING, STEEL, IRON & NON-PRECIOUS METALS 0.3%
FMG Resources August 2006
Pty, Ltd.
6.375%, due 2/1/16 (a) 1,500,000 1,500,000
------------
Total Yankee Bonds
(Cost $4,300,000) 4,503,000
------------
Total Long-Term Bonds
(Cost $500,922,092) 505,679,540
------------
</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>
SHARES VALUE
COMMON STOCKS 0.1%
-------------------------------------------------------
LEISURE, AMUSEMENT, MOTION PICTURES & ENTERTAINMENT
0.1%
MGM Studios, Inc. (c)(d) 10,945 $ 259,944
------------
PRINTING & PUBLISHING 0.0%++
F&W Publications, Inc.
(c)(d)(f) 1,650 7,524
SuperMedia, Inc. (f) 3,538 30,816
------------
38,340
------------
Total Common Stocks
(Cost $523,942) 298,284
------------
<Caption>
PRINCIPAL
AMOUNT
SHORT-TERM INVESTMENTS 6.4%
-------------------------------------------------------
FINANCIAL COMPANY COMMERCIAL PAPER 1.9%
National Rural Utilities
Cooperative
Finance Corp.
0.21%, due 1/18/11 (g) $ 5,000,000 4,999,504
PACCAR Financial Corp.
0.19%, due 1/6/11 (g) 5,000,000 4,999,868
------------
Total Financial Company
Commercial Paper
(Cost $9,999,372) 9,999,372
------------
OTHER COMMERCIAL PAPER 1.8%
Archer Daniels Midland
0.23%, due 1/18/11 (a)(g) 5,000,000 4,999,457
Basin Electric Power
Cooperative
0.24%, due 2/2/11 (a)(g) 4,500,000 4,499,040
------------
Total Other Commercial Paper
(Cost $9,498,497) 9,498,497
------------
REPURCHASE AGREEMENTS 2.7%
BNP Paribas
0.17%, dated 12/31/10
due 1/3/11
Proceeds at Maturity
$12,653,179
(Collateralized by U.S.
Government Agency
Obligation securities with
zero coupon and maturity
dates between 2/2/11 and
1/15/30, with a Principal
Amount of $26,108,000 and
a Market Value of
$12,906,721) 12,653,000 12,653,000
State Street Bank and Trust
Co.
0.01%, dated 12/31/10
due 1/3/11
Proceeds at Maturity
$1,874,253 (Collateralized
by a United States
Treasury Note with a rate
of 2.125% and a maturity
date of 5/31/15, with a
Principal Amount of
$1,880,000 and a Market
Value of $1,911,960) $ 1,874,251 1,874,251
------------
Total Repurchase Agreements
(Cost $14,527,251) 14,527,251
------------
Total Short-Term Investments
(Cost $34,025,120) 34,025,120
------------
Total Investments
(Cost $535,471,154) (h) 101.9% 540,002,944
Other Assets, Less
Liabilities (1.9) (10,282,495)
----------- ------------
Net Assets 100.0% $529,720,449
=========== ============
</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) Floating Rate Loan--generally pays
interest at rates which are periodically
re-determined at a margin above the
London InterBank Offered Rate ("LIBOR")
or other short-term rates. The rate shown
is the rate(s) in effect at December 31,
2010. 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.
(c) Illiquid security. The total market
value of these securities at December 31,
2010 is $16,223,951, which represents
3.1% of the Portfolio's net assets.
(d) Fair valued security. The total market
value of these securities at December 31,
2010 is $993,119, which represents 0.2%
of the Portfolio's net assets.
(e) Yankee Bond--dollar-denominated bond
issued in the United States by a foreign
bank or corporation.
(f) Non-income producing security.
(g) Interest rate presented is yield to
maturity.
(h) At December 31, 2010, cost is
$535,420,438 for federal income tax
purposes and net unrealized appreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $ 9,651,937
Gross unrealized depreciation (5,069,431)
-----------
Net unrealized appreciation $ 4,582,506
===========
</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, 2010 (CONTINUED)
The following is a summary of the fair valuations according to the inputs used
as of December 31, 2010, 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
Corporate Bonds $ -- $ 42,546,169 $ -- $ 42,546,169
Floating Rate Loans (b) -- 436,019,832 725,651 436,745,483
Foreign Floating Rate Loans -- 21,884,888 -- 21,884,888
Yankee Bonds -- 4,503,000 -- 4,503,000
------- ------------ -------- ------------
Total Long-Term Bonds -- 504,953,889 725,651 505,679,540
------- ------------ -------- ------------
Common Stocks (c) 30,816 -- 267,468 298,284
Short-Term Investments
Commercial Paper -- 19,497,869 -- 19,497,869
Repurchase Agreements -- 14,527,251 -- 14,527,251
------- ------------ -------- ------------
Total Short-Term Investments -- 34,025,120 -- 34,025,120
------- ------------ -------- ------------
Total Investments in Securities $30,816 $538,979,009 $993,119 $540,002,944
======= ============ ======== ============
</Table>
(a) For a complete listing of investments and their industries, see the
Portfolio of Investments.
(b) The level 3 securities valued at $506,420 and $219,231 are held in Printing
& Publishing, within the Floating Rate Loans section of the Portfolio of
Investments.
(c) The level 3 securities valued at $259,944 and $7,524 are held in Leisure,
Amusement, Motion Pictures & Entertainment and Printing & Publishing,
respectively, within the Common Stocks section of the Portfolio of
Investments.
For the period ended December 31, 2010, the Portfolio did not have any transfers
between Level 1 and Level 2 fair value measurements. (See Note 2)
The following is a reconciliation of investments in which significant
unobservable inputs (Level 3) were used in determining value:
<Table>
<Caption>
BALANCE
AS OF ACCRUED REALIZED
DECEMBER 31, DISCOUNTS GAIN
INVESTMENTS IN SECURITIES 2009 (PREMIUMS) (LOSS)
Long-Term Bonds
Floating Rate Loans
Printing & Publishing $ -- $ -- $ --
Common Stock
Leisure, Amusement, Motion
Pictures & Entertainment -- -- --
Printing & Publishing -- -- --
-------- -------- --------
Total $-- $-- $--
======== ======== ========
<Caption>
CHANGE IN
UNREALIZED
APPRECIATION
(DEPRECIATION)
FROM
CHANGE IN BALANCE INVESTMENTS
UNREALIZED TRANSFERS TRANSFERS AS OF STILL HELD AT
APPRECIATION IN TO OUT OF DECEMBER 31, DECEMBER 31,
INVESTMENTS IN SECURITIES (DEPRECIATION) PURCHASES SALES LEVEL 3 LEVEL 3 2010 2010 (A)
Long-Term Bonds
Floating Rate Loans
Printing & Publishing $ -- $ 729,478 $(3,827) $ -- $ -- $725,651 $ --
Common Stock
Leisure, Amusement, Motion
Pictures & Entertainment -- 259,944 -- -- -- 259,944 --
Printing & Publishing (10,542) 18,066 -- -- -- 7,524 (10,542)
-------- ---------- ------- -------- -------- -------- --------
Total $(10,542) $1,007,488 $(3,827) $-- $-- $993,119 $(10,542)
======== ========== ======= ======== ======== ======== ========
</Table>
(a) Included in "Net change in unrealized appreciation (depreciation) on
investments" in the Statement of Operations.
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.
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2010
<Table>
ASSETS
--------------------------------------------------
Investment in securities, at value
(identified cost $535,471,154) $540,002,944
Cash 1,156,303
Cash denominated in foreign
currencies
(identified cost $74,702) 79,062
Receivables:
Investment securities sold 2,878,699
Interest 2,654,281
Fund shares sold 448,811
Other assets 1,175
------------
Total assets 547,221,275
------------
LIABILITIES
--------------------------------------------------
Payables:
Investment securities purchased 16,942,750
Manager (See Note 3) 265,699
Fund shares redeemed 101,879
NYLIFE Distributors (See Note 3) 80,449
Professional fees 70,714
Shareholder communication 34,931
Custodian 2,427
Directors 1,186
Accrued expenses 791
------------
Total liabilities 17,500,826
------------
Net assets $529,720,449
============
NET ASSETS CONSIST OF
--------------------------------------------------
Capital stock (par value of $.01 per
share) 200 million shares
authorized $ 571,867
Additional paid-in capital 537,604,493
------------
538,176,360
Undistributed net investment income 106,719
Accumulated net realized loss on
investments and foreign currency
transactions (13,098,780)
Net unrealized appreciation on
investments 4,531,790
Net unrealized appreciation on
translation of other assets and
liabilities in foreign currencies 4,360
------------
Net assets $529,720,449
============
INITIAL CLASS
Net assets applicable to outstanding
shares $145,964,521
============
Shares of capital stock outstanding 15,758,013
============
Net asset value per share
outstanding $ 9.26
============
SERVICE CLASS
Net assets applicable to outstanding
shares $383,755,928
============
Shares of capital stock outstanding 41,428,710
============
Net asset value per share
outstanding $ 9.26
============
</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-117
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2010
<Table>
INVESTMENT INCOME
-------------------------------------------------
INCOME
Interest (a) $22,080,419
-----------
EXPENSES
Manager (See Note 3) 2,828,781
Distribution and service--Service
Class (See Note 3) 872,146
Professional fees 131,944
Shareholder communication 107,139
Custodian 32,013
Directors 15,758
Miscellaneous 44,170
-----------
Total expenses 4,031,951
-----------
Net investment income 18,048,468
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
-------------------------------------------------
Net realized gain on:
Security transactions 1,448,160
Foreign currency transactions 366
-----------
Net realized gain on investments and
foreign currency transactions 1,448,526
-----------
Net change in unrealized
appreciation (depreciation) on:
Investments and unfunded
commitments 16,150,542
Translation of other assets and
liabilities in foreign
currencies 4,360
-----------
Net change in unrealized
appreciation (depreciation) on
investments, unfunded commitments
and foreign currency translations 16,154,902
-----------
Net realized and unrealized gain on
investments, unfunded commitments
and foreign currency transactions 17,603,428
-----------
Net increase in net assets resulting
from operations $35,651,896
===========
</Table>
(a) Interest recorded net of foreign withholding taxes in the amount of $425.
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.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2010 AND DECEMBER 31, 2009
<Table>
<Caption>
2010 2009
INCREASE IN NET ASSETS
--------------------------------------------------------
Operations:
Net investment income $ 18,048,468 $ 10,777,678
Net realized gain (loss)
on investments and
foreign currency
transactions 1,448,526 (3,044,137)
Net change in unrealized
appreciation
(depreciation) on
investments, unfunded
commitments and foreign
currency translations 16,154,902 70,599,898
--------------------------
Net increase in net assets
resulting from operations 35,651,896 78,333,439
--------------------------
Dividends to shareholders:
From net investment
income:
Initial Class (4,903,864) (2,827,510)
Service Class (13,130,968) (7,927,689)
--------------------------
Total dividends to
shareholders (18,034,832) (10,755,199)
--------------------------
Capital share transactions:
Net proceeds from sale of
shares 139,685,994 170,904,194
Net asset value of shares
issued to shareholders in
reinvestment of dividends 18,034,832 10,755,199
Cost of shares redeemed (61,534,949) (36,053,319)
--------------------------
Increase in net assets
derived from capital
share transactions 96,185,877 145,606,074
--------------------------
Net increase in net
assets 113,802,941 213,184,314
NET ASSETS
--------------------------------------------------------
Beginning of year 415,917,508 202,733,194
--------------------------
End of year $529,720,449 $415,917,508
==========================
Undistributed net investment
income at
end of year $ 106,719 $ 52,624
==========================
</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
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
---------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
2010 2009 2008 2007 2006
Net asset value at beginning of
year $ 8.92 $ 6.93 $ 9.47 $ 9.86 $ 9.91
-------- -------- ------- ------- -------
Net investment income 0.36 0.30 0.46 0.64 0.62
Net realized and unrealized gain
(loss) on investments 0.34 1.99 (2.54) (0.39) (0.05)
-------- -------- ------- ------- -------
Total from investment operations 0.70 2.29 (2.08) 0.25 0.57
-------- -------- ------- ------- -------
Less dividends:
From net investment income (0.36) (0.30) (0.46) (0.64) (0.62)
-------- -------- ------- ------- -------
Net asset value at end of year $ 9.26 $ 8.92 $ 6.93 $ 9.47 $ 9.86
======== ======== ======= ======= =======
Total investment return 8.08% 33.54% (22.77%) 2.60% 5.99%
Ratios (to average net
assets)/Supplemental Data:
Net investment income 4.02% 3.70% 5.29% 6.57% 6.37%
Net expenses 0.67% 0.68% 0.69% 0.67% 0.70%
Portfolio turnover rate 11% 17% 7% 9% 6%
Net assets at end of year (in
000's) $145,965 $106,754 $52,378 $55,132 $51,569
</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.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
SERVICE CLASS
--------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------------
2010 2009 2008 2007 2006
$ 8.92 $ 6.93 $ 9.47 $ 9.86 $ 9.91
-------- -------- -------- -------- --------
0.34 0.28 0.44 0.61 0.60
0.34 1.99 (2.54) (0.39) (0.05)
-------- -------- -------- -------- --------
0.68 2.27 (2.10) 0.22 0.55
-------- -------- -------- -------- --------
(0.34) (0.28) (0.44) (0.61) (0.60)
-------- -------- -------- -------- --------
$ 9.26 $ 8.92 $ 6.93 $ 9.47 $ 9.86
======== ======== ======== ======== ========
7.81% 33.21% (22.97%) 2.34% 5.73%
3.77% 3.44% 5.09% 6.32% 6.12%
0.92% 0.93% 0.94% 0.92% 0.95%
11% 17% 7% 9% 6%
$383,756 $309,163 $150,355 $280,400 $232,856
</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-121
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. THE PERFORMANCE TABLE AND GRAPH 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.
(LINE GRAPH)
<Table>
<Caption>
MainStay VP MainStay VP Barclays Capital
Government Portfolio Government Portfolio U.S. Government
Initial Class Service Class Bond Index
--------- -------------------- -------------------- ----------------
12/31/00 10000 10000 10000
12/31/01 10664 10638 10844
12/31/02 11714 11656 11957
12/31/03 11935 11847 12447
12/31/04 12331 12210 12987
12/31/05 12625 12465 13303
12/31/06 13137 12938 13879
12/31/07 14015 13769 14846
12/31/08 15389 15081 15624
12/31/09 15637 15286 16551
12/31/10 16474 16064 16952
</Table>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED DECEMBER 31, 2010
--------------------------------------------------------------------------------
<Table>
<Caption>
GROSS
EXPENSE
CLASS ONE YEAR FIVE YEARS TEN YEARS(1) RATIO(2)
-------------------------------------------------------------------------------------------
Initial Class Shares 5.35% 5.47% 5.12% 0.56%
-------------------------------------------------------------------------------------------
Service Class Shares(3) 5.09 5.21 4.85 0.81
-------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE FIVE TEN
YEAR YEARS YEARS
Barclays Capital U.S. Government Bond Index(4) 5.52% 5.45% 5.42%
------------------------------------------------------------------------------------------------
Average Lipper Variable Products General U.S. Government Portfolio(5) 5.89 4.84 5.10
------------------------------------------------------------------------------------------------
</Table>
1. Performance figures shown for the ten-year period ended December 31, 2010
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 5.10% for Initial Class shares and 4.84% for Service
Class shares for the ten-year period.
2. The gross expense ratios presented reflect the Portfolio's "Total Annual
Portfolio Operating Expenses" from the most recent Prospectus and may differ
from other expense ratios disclosed in this report.
3. 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.
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.
5. 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.
Results are based on total returns with all dividend and capital gain
distributions reinvested.
M-122 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, 2010, to December 31,
2010, 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 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, 2010, to December 31, 2010. 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, 2010. 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 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 7/1/10 12/31/10 PERIOD(1) 12/31/10 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,002.30 $2.83 $1,022.40 $2.85
-------------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,001.00 $4.09 $1,021.10 $4.13
-------------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
(0.56% for Initial Class and 0.81% 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-123
PORTFOLIO COMPOSITION AS OF DECEMBER 31, 2010 (Unaudited)
(PIE CHART)
<Table>
U.S. Government & Federal Agencies 88.00
Corporate Bonds 4.70
Short-Term Investment 3.40
Mortgage-Backed Securities 2.80
Asset-Backed Securities 1.20
Municipal Bond 1.10
Other Assets, Less Liabilities (1.20)
</Table>
See Portfolio of Investments beginning on page M-127 for specific holdings
within these categories.
TOP TEN HOLDINGS AS OF DECEMBER 31, 2010 (excluding short-term investment)
<Table>
1. Federal National Mortgage Association (Mortgage Pass-Through
Securities), 3.50%, due 11/1/25
2. Government National Mortgage Association (Mortgage Pass-
Through Securities), 4.50%, due 5/20/40
3. United States Treasury Notes, 4.75%, due 8/15/17
4. United States Treasury Bonds, 4.375%, due 5/15/40
5. United States Treasury Notes, 0.375%, due 8/31/12
6. Federal National Mortgage Association, 5.375%, due 6/12/17
7. Federal National Mortgage Association (Mortgage Pass-Through
Securities), 3.50%, due 11/1/20
8. Federal National Mortgage Association (Mortgage Pass-Through
Securities), 5.50%, due 6/1/33
9. Federal National Mortgage Association (Mortgage Pass-Through
Securities), 5.00%, due 5/1/36
10. Overseas Private Investment Corporation, 5.142%, due
12/15/23
</Table>
M-124 MainStay VP Government Portfolio
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
Questions answered by Gary Goodenough 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, 2010?
For the 12 months ended December 31, 2010, MainStay VP Government Portfolio
returned 5.35% for Initial Class shares and 5.09% for Service Class shares. Both
share classes underperformed the 5.89% return of the average Lipper(1) Variable
Products General U.S. Government Portfolio and the 5.52% return of the Barclays
Capital U.S. Government Bond Index.(1) The Barclays Capital U.S. Government Bond
Index is
the Portfolio's broad-based securities-market index.
WHAT FACTORS AFFECTED THE PORTFOLIO'S RELATIVE PERFORMANCE DURING THE REPORTING
PERIOD?
The Portfolio underperformed the Barclays Capital U.S. Government Bond Index and
the average Lipper peer. Duration(2) largely determined these relationships.
Portfolios with longer durations would have had superior performance because
Treasury yields declined during the reporting period. Longer-duration Portfolios
tend to be more sensitive to interest rate changes. The Port-
folio's duration was probably between the durations of the median(3) and average
Lipper Portfolios, which would partially explain why the return of the
Portfolio's Initial Class shares
was bracketed by the Lipper median and average returns. The Portfolio had a
shorter duration than the Barclays Capital U.S. Government Bond Index, which
explains much of the Portfolio's performance relative to its benchmark.
The Portfolio had a modest exposure (less than 1% of net assets) to
securitizations(4) of residential mortgages that do not conform to agency
standards. During the reporting period, prices of these securities rebounded as
buyers were attracted to the securities' return potential in anticipation of an
eventual housing-market recovery.
The Portfolio's relative performance as compared to our estimate of the median
of the peer group benefited from a heavier commitment to higher-coupon mortgage-
backed securities issued by Fannie Mae, Freddie Mac and Ginnie Mae. Later in the
year, the Portfolio benefited from an increased commitment to agency mortgage
pass-through securities.(5) Buying mortgages and selling Treasurys also helped
boost the Portfolio's yield, which adds to the overall performance of the
Portfolio.
WHAT WAS THE PORTFOLIO'S DURATION STRATEGY DURING THE REPORTING PERIOD?
The Portfolio typically maintains an intermediate duration. We adjust the
duration within this range by first estimating the median duration of peer
portfolios and then tactically adjusting the Portfolio's duration modestly in
the direction we believe interest rates are likely to move over the near- to
medium-term.
Lower mortgage rates make outstanding loans easier to refinance, and the
durations of mortgage-backed securities usually shorten as mortgage rates follow
Treasury yields lower. We lengthened the Portfolio's duration in September, to
bring it closer to the median peer Portfolio, but when Treasury yields reversed
direction and rose during the fourth quarter, our decision to extend duration
probably hampered performance.
WHAT SPECIFIC FACTORS, RISKS OR MARKET FORCES PROMPTED SIGNIFICANT DECISIONS FOR
THE PORTFOLIO DURING THE REPORTING PERIOD?
During 2010, tighter underwriting standards limited refinancing opportunities,
even for homeowners with pristine credit and substantial equity in their homes.
We expected the reduced availability of credit to slow principal payment rates
from loans issued from 2003 through 2005. This expectation gave us the
confidence to emphasize higher-coupon mortgage-backed securities originated
before 2006.
The pending Basel III accords,(6) which establish international standards for
bank capitalization, retained a differential between the risk weighting for
Ginnie Mae mortgage-backed securities and securities issued by Fannie Mae and
Freddie Mac. The decision renewed the attractiveness of Ginnie Mae mortgages for
overseas investors. We expected that Ginnie Mae mortgage-backed securities would
appreciate in value faster than Fannie Mae and Freddie Mac issues, and we
positioned the Portfolio accordingly.
During the reporting period, we introduced more credit risk as a secondary
driver of Portfolio performance. We expected an improving outlook for corporate
bonds and commercial mortgage-backed securities because prospects for credit-
related sectors were aligned with the Federal Open Market Committee's decision
to keep the federal funds target rate in a range close to zero and because low
interest rates were likely to spark
1. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indexes and other indexes, averages
and service providers mentioned in the reports.
2. 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.
3. The median of a given group of values is determined by arranging the values
in order and taking the middle value (for an odd-numbered group) or the
average of the two middle values (for an even numbered group). The average of
a group is the sum of the values in the group divided by the number of
members. The average may, and often does, differ from the median.
4. A securitization is a financial instrument created by an issuer by combining
a pool of financial assets (such as mortgages). The financial instrument is
then marketed to investors, sometimes in tiers.
5. Mortgage pass-through securities consist of a pool of residential mortgage
loans, in which homeowner's monthly payments of principal, interest and
prepayments pass through the original bank through a government agency or
investment bank to investors.
6. The Basel III accords seek to strengthen global capital and liquidity
regulations with the goal of promoting a stronger banking sector.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
mainstayinvestments.com M-125
healthy demand for higher-yielding product. The Portfolio ended the reporting
period with roughly 8% of its net assets invested in non-government-related
securities.
DURING THE REPORTING PERIOD, WHICH MARKET SEGMENTS WERE THE STRONGEST
CONTRIBUTORS TO THE PORTFOLIO'S PERFORMANCE AND WHICH MARKET SEGMENTS WERE
PARTICULARLY WEAK?
In residential mortgage-backed securities, overweight positions in Ginnie Mae
securities and higher-coupon Fannie Mae and Freddie Mac issues benefited the
Portfolio's performance. Asset-backed and commercial mortgage-backed securities
rebounded from the illiquidity of prior periods, and the Portfolio's overweight
positions in these sectors prospered.
As previously noted, inflation-protected Treasury securities (TIPS) surged ahead
of nominal Treasurys at the end of the reporting period. The Portfolio would
have benefited from more exposure to TIPS, despite their lower levels of coupon
income.
HOW DID THE PORTFOLIO'S SECTOR WEIGHTINGS CHANGE DURING THE REPORTING PERIOD?
In early September, we sold about a third of the Portfolio's allocation to
agency mortgage pass-through securities (lowering the exposure from about 60% of
net assets to about 40%). The reasons were threefold: the average price of
agency pass-through securities was above par; the risk of the bonds' being
called at par increased as mortgage rates moved toward new lows; and the Federal
Reserve opted not to reinvest the principal payments from its mortgage
portfolio. Sale proceeds were mostly rotated into Treasurys, with the balance
going to cash and callable agency debentures.
In October and November, we increased the Portfolio's mortgage exposure to about
55% of net assets. The Portfolio benefited from this increased commitment to
agency mortgage pass-through securities during the fourth quarter. As previously
noted, our decision to buy mortgages and sell Treasurys also added value by
introducing yield to the Portfolio. We bought lower-coupon securities, with
prices closer to par, to mitigate par call risk.
HOW WAS THE PORTFOLIO POSITIONED AT THE END OF THE REPORTING PERIOD?
Relative to our estimate of the median peer Portfolio, the Portfolio ended the
reporting period overweight in U.S. Treasurys, overweight agency mortgage pass-
through securities and underweight agency debentures. The Portfolio also held
modestly overweight positions in asset-backed securities, corporate bonds and
commercial mortgage-backed securities. The majority of the Portfolio's assets
have durations between one and
six years. To maintain a Portfolio duration near our 4.2 year estimate of the
median peer Portfolio's duration, about 9%
of net assets were invested in longer-duration Treasurys and agency debentures.
These securities helped balance the Portfolio's concentration in shorter-
duration product.
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 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.
M-126 MainStay VP Government Portfolio
PORTFOLIO OF INVESTMENTS(+++) DECEMBER 31, 2010
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
LONG-TERM BONDS 97.8%+
ASSET-BACKED SECURITIES 1.2%
-------------------------------------------------------
CREDIT CARDS 0.2%
Chase Issuance Trust
Series 2006-C4, Class C4
0.55%, due 1/15/14 (a) $ 855,000 $ 850,216
------------
DIVERSIFIED FINANCIAL SERVICES 0.3%
Massachusetts RRB Special
Purpose Trust
Series 2001-1, Class A
6.53%, due 6/1/15 908,428 976,096
------------
HOME EQUITY 0.2%
Citicorp Residential
Mortgage Securities, Inc.
Series 2006-3, Class A3
5.61%, due 11/25/36 (b) 210,882 211,805
Series 2006-1, Class A3
5.706%, due 7/25/36 (b) 530,558 535,704
------------
747,509
------------
UTILITIES 0.5%
Atlantic City Electric
Transition Funding LLC
Series 2002-1, Class A4
5.55%, due 10/20/23 1,650,000 1,878,295
------------
Total Asset-Backed
Securities
(Cost $4,153,508) 4,452,116
------------
CORPORATE BONDS 4.7%
-------------------------------------------------------
AGRICULTURE 1.3%
Altria Group, Inc.
9.70%, due 11/10/18 3,600,000 4,749,214
------------
AUTO MANUFACTURERS 1.0%
DaimlerChrysler N.A. Holding
Corp.
6.50%, due 11/15/13 3,235,000 3,662,243
------------
BANKS 0.3%
KeyCorp
6.50%, due 5/14/13 1,000,000 1,085,715
------------
ELECTRIC 0.8%
Great Plains Energy, Inc.
2.75%, due 8/15/13 3,000,000 3,030,558
------------
PIPELINES 0.6%
Energy Transfer Partners,
L.P.
9.00%, due 4/15/19 1,900,000 2,380,276
------------
REAL ESTATE INVESTMENT TRUSTS 0.7%
Duke Realty, L.P.
6.75%, due 3/15/20 2,350,000 2,549,485
------------
Total Corporate Bonds
(Cost $16,605,502) 17,457,491
------------
MORTGAGE-BACKED SECURITIES 2.8%
-------------------------------------------------------
COMMERCIAL MORTGAGE LOANS
(COLLATERALIZED MORTGAGE OBLIGATIONS) 2.8%
Banc of America Commercial
Mortgage, Inc.
Series 2005-5, Class A2
5.001%, due 10/10/45 183,705 184,178
Bear Stearns Commercial
Mortgage Securities
Series 2005-PW10, Class A4
5.405%, due 12/11/40 (a) 1,380,000 1,474,415
Citigroup Mortgage Loan
Trust, Inc.
Series 2006-AR6, Class 1A1
5.946%, due 8/25/36 (c) 1,020,569 949,350
Citigroup/Deutsche Bank
Commercial Mortgage Trust
Series 2006-CD3, Class A5
5.617%, due 10/15/48 802,000 860,264
Four Times Square Trust
Series 2006-4TS, Class A
5.401%, due 12/13/28 (d) 530,000 550,209
GE Capital Commercial
Mortgage Corp.
Series 2004-C2, Class A4
4.893%, due 3/10/40 1,200,000 1,268,757
GS Mortgage Securities Corp.
Series 2004-GG2, Class A6
5.396%, due 8/10/38 (c) 2,000,000 2,148,246
Merrill Lynch Mortgage Trust
Series 2003-KEY1, Class A4
5.236%, due 11/12/35 (a) 1,000,000 1,060,008
Mortgage Equity Conversion
Asset Trust
Series 2007-FF2, Class A
0.72%, due 2/25/42
(a)(d)(e)(f) 1,345,605 1,286,399
RBSCF Trust
Series 2010-MB1, Class A2
3.686%, due 4/15/15 (d) 800,000 822,293
------------
Total Mortgage-Backed
Securities
(Cost $10,513,614) 10,604,119
------------
</Table>
+ Percentages indicated are based on Portfolio net assets.
X Among the Portfolio's 10 largest holdings, as of December 31, 2010, 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-127
PORTFOLIO OF INVESTMENTS(+++) DECEMBER 31, 2010 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
MUNICIPAL BOND 1.1%
-------------------------------------------------------
MICHIGAN 1.1%
Michigan Finance Authority
Series E
4.75%, due 8/22/11 $ 3,900,000 $ 3,959,631
------------
Total Municipal Bond
(Cost $3,921,157) 3,959,631
------------
U.S. GOVERNMENT & FEDERAL AGENCIES 88.0%
-------------------------------------------------------
FANNIE MAE (COLLATERALIZED MORTGAGE OBLIGATION) 0.1%
Series 2006-B1, Class AB
6.00%, due 6/25/16 368,806 377,926
------------
FANNIE MAE GRANTOR TRUST (COLLATERALIZED MORTGAGE
OBLIGATION) 0.7%
Series 2003-T1, Class B
4.491%, due 11/25/12 2,660,000 2,820,562
------------
FANNIE MAE STRIP (COLLATERALIZED MORTGAGE OBLIGATIONS)
0.1%
Series 360, Class 2, IO
5.00%, due 8/1/35 (g) 1,185,060 226,896
Series 361, Class 2, IO
6.00%, due 10/1/35 (g) 196,678 39,253
------------
266,149
------------
FEDERAL HOME LOAN BANK 1.1%
5.125%, due 8/14/13 3,725,000 4,124,570
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION 0.4%
4.75%, due 11/17/15 1,395,000 1,562,713
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION
(MORTGAGE PASS-THROUGH SECURITIES) 8.1%
2.553%, due 3/1/35 (a) 58,277 60,633
3.50%, due 10/1/25 1,593,268 1,605,218
3.50%, due 11/1/25 7,101,205 7,154,464
4.00%, due 3/1/25 4,610,957 4,765,136
4.00%, due 7/1/25 1,792,044 1,851,966
5.00%, due 1/1/20 1,601,049 1,708,369
5.00%, due 6/1/33 3,278,672 3,472,848
5.00%, due 8/1/33 1,817,643 1,918,823
5.00%, due 5/1/36 1,185,645 1,245,716
5.04%, due 6/1/35 (a) 968,693 1,028,186
5.50%, due 1/1/21 1,131,428 1,216,108
5.50%, due 1/1/33 3,476,533 3,735,240
5.653%, due 2/1/37 (a) 364,832 385,076
6.50%, due 4/1/37 281,415 312,294
------------
30,460,077
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION 9.6%
1.20%, due 9/27/13 4,750,000 4,741,421
2.50%, due 5/15/14 5,350,000 5,550,705
2.75%, due 3/13/14 5,925,000 6,192,887
4.625%, due 5/1/13 3,285,000 3,531,451
5.375%, due 6/12/17 8,425,000 9,700,385
6.625%, due 11/15/30 4,900,000 6,182,668
------------
35,899,517
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION
(MORTGAGE PASS-THROUGH SECURITIES) 36.7%
2.10%, due 11/1/34 (a) 366,706 380,640
2.48%, due 4/1/34 (a) 603,104 629,583
3.50%, due 11/1/20 9,075,916 9,403,080
3.50%, due 10/1/25 3,578,509 3,611,499
3.50%, due 11/1/25 25,721,335 25,958,454
4.50%, due 7/1/18 4,725,294 5,005,858
4.50%, due 11/1/18 3,800,151 4,025,785
4.50%, due 6/1/23 5,562,644 5,840,776
5.00%, due 11/1/17 2,458,106 2,629,021
5.00%, due 9/1/20 253,295 270,591
5.00%, due 11/1/33 5,913,105 6,254,002
5.00%, due 6/1/35 4,740,177 5,007,528
5.00%, due 1/1/36 636,222 671,708
5.00%, due 2/1/36 6,090,642 6,430,354
5.00%, due 5/1/36 7,570,824 7,993,096
5.50%, due 11/1/17 1,670,012 1,800,128
5.50%, due 6/1/19 1,237,214 1,346,437
5.50%, due 11/1/19 1,319,710 1,436,216
5.50%, due 4/1/21 2,343,637 2,527,099
5.50%, due 6/1/21 310,213 333,916
5.50%, due 6/1/33 7,989,953 8,612,356
5.50%, due 11/1/33 5,010,050 5,400,324
5.50%, due 12/1/33 4,992,794 5,381,723
5.50%, due 6/1/34 1,313,501 1,413,769
5.50%, due 3/1/35 2,140,817 2,304,237
5.50%, due 12/1/35 970,132 1,043,279
5.50%, due 4/1/36 5,679,239 6,107,444
5.50%, due 1/1/37 750,940 817,415
5.50%, due 7/1/37 600,470 653,626
5.50%, due 8/1/37 1,227,496 1,320,047
6.00%, due 12/1/16 97,660 106,312
6.00%, due 1/1/33 638,589 703,471
6.00%, due 3/1/33 737,143 812,039
6.00%, due 9/1/34 107,383 117,790
6.00%, due 9/1/35 2,196,894 2,427,642
6.00%, due 10/1/35 255,067 281,365
6.00%, due 4/1/36 2,216,716 2,419,081
6.00%, due 6/1/36 2,410,071 2,627,075
6.00%, due 11/1/36 1,874,802 2,055,327
6.00%, due 4/1/37 455,221 492,795
6.50%, due 10/1/31 231,859 260,706
</Table>
M-128 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 NATIONAL MORTGAGE ASSOCIATION
(MORTGAGE PASS-THROUGH SECURITIES) (CONTINUED)
6.50%, due 7/1/32 $ 110,570 $ 124,327
6.50%, due 2/1/37 221,026 245,831
6.50%, due 8/1/47 388,812 427,222
------------
137,710,974
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
(COLLATERALIZED MORTGAGE OBLIGATION) 0.6%
Series 2006-32, Class A
5.079%, due 1/16/30 2,223,294 2,341,437
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
(MORTGAGE PASS-THROUGH SECURITIES) 9.5%
4.00%, due 9/20/40 3,982,052 4,014,497
4.50%, due 5/20/40 15,882,658 16,511,240
5.00%, due 4/15/34 3,381,490 3,605,855
5.00%, due 6/1/38
TBA (h) 1,800,000 1,910,250
5.50%, due 6/15/33 1,972,061 2,142,450
5.50%, due 12/15/35 1,050,243 1,139,344
5.50%, due 6/1/36
TBA (h) 3,810,000 4,117,181
6.00%, due 8/15/32 527,475 582,389
6.00%, due 10/15/32 709,541 783,409
6.50%, due 7/15/28 88,658 100,692
6.50%, due 8/15/28 129,817 147,437
6.50%, due 7/15/32 476,097 540,528
------------
35,595,272
------------
X OVERSEAS PRIVATE INVESTMENT CORPORATION 2.1%
5.142%, due 12/15/23 (i) 7,276,521 7,975,794
------------
TENNESSEE VALLEY AUTHORITY 2.3%
4.65%, due 6/15/35 (i) 4,395,000 4,283,943
6.25%, due 12/15/17 (i) 3,485,000 4,182,697
------------
8,466,640
------------
UNITED STATES TREASURY BONDS 4.9%
4.375%, due 5/15/40 13,955,000 14,022,542
6.875%, due 8/15/25 3,220,000 4,304,235
------------
18,326,777
------------
UNITED STATES TREASURY NOTES 11.1%
0.375%, due 8/31/12 12,200,000 12,178,077
1.50%, due 7/15/12 7,300,000 7,421,195
2.00%, due 7/15/14
T.I.P.S. (j) 3,480,720 3,762,167
2.625%, due 8/15/20 1,820,000 1,725,445
3.50%, due 5/15/20 735,000 752,919
4.75%, due 8/15/17 13,825,000 15,677,329
------------
41,517,132
------------
UNITED STATES TREASURY STRIP PRINCIPAL 0.7%
(zero coupon), due 8/15/28 5,615,000 2,589,969
------------
Total U.S. Government &
Federal Agencies
(Cost $322,520,424) 330,035,509
------------
Total Long-Term Bonds
(Cost $357,714,205) 366,508,866
------------
SHORT-TERM INVESTMENT 3.4%
-------------------------------------------------------
REPURCHASE AGREEMENT 3.4%
State Street Bank and Trust
Co.
0.01%, dated 12/31/10
due 1/3/11
Proceeds at Maturity
$12,944,811
(Collateralized by a
United States Treasury
Note with a rate of 1.375%
and a maturity date of
5/15/13, with a Principal
Amount of $13,005,000 and
a Market Value of
$13,203,977) 12,944,800 12,944,800
------------
Total Short-Term Investment
(Cost $12,944,800) 12,944,800
------------
Total Investments
(Cost $370,659,005) (k) 101.2% 379,453,666
Other Assets, Less
Liabilities (1.2) (4,482,476)
----------- ------------
Net Assets 100.0% $374,971,190
=========== ============
</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, 2010.
(b) Subprime mortgage investment and other
asset-backed securities. The total market
value of the securities at December 31,
2010 is $747,509, which represents 0.2%
of the Portfolio's net assets.
(c) Collateral strip rate--Bond whose
interest is based on the weighted net
interest rate of the collateral. Coupon
rate adjusts periodically based on a
predetermined schedule. Rate shown is the
rate in effect at December 31, 2010.
(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) Illiquid security--The total market value
of this security at December 31, 2010 is
$1,286,399, which represents 0.3% of the
Portfolio's net assets.
(f) Fair valued security--The total market
value of this security at December 31,
2010 is $1,286,399, which represents 0.3%
of the Portfolio's 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-129
PORTFOLIO OF INVESTMENTS(+++) DECEMBER 31, 2010 (CONTINUED)
<Table>
(g) 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.
(h) 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, 2010 is $6,027,431, which
represents 1.6% of the Portfolio's net
assets. All or a portion of these
securities were acquired under a mortgage
dollar roll agreement.
(i) United States Government Guaranteed
Security.
(j) 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.
(k) At December 31, 2010, cost is
$370,659,005 for federal income tax
purposes and net unrealized appreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $12,247,770
Gross unrealized depreciation (3,453,109)
-----------
Net unrealized appreciation $ 8,794,661
===========
</Table>
The following is a summary of the fair valuations according to the inputs used
as of December 31, 2010, 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 $ -- $ 4,452,116 $ -- $ 4,452,116
Corporate Bonds -- 17,457,491 -- 17,457,491
Mortgage-Backed Securities (b) -- 9,317,720 1,286,399 10,604,119
Municipal Bond -- 3,959,631 -- 3,959,631
U.S. Government & Federal Agencies -- 330,035,509 -- 330,035,509
-------- ------------ ---------- ------------
Total Long-Term Bonds -- 365,222,467 1,286,399 366,508,866
-------- ------------ ---------- ------------
Short-Term Investment
Repurchase Agreement -- 12,944,800 -- 12,944,800
-------- ------------ ---------- ------------
Total Investments in Securities $-- $378,167,267 $1,286,399 $379,453,666
======== ============ ========== ============
</Table>
(a) For a complete listing of investments and their industries, see the
Portfolio of Investments.
(b) The level 3 security valued at $1,286,399 is held in Commercial Mortgage
Loans (Collateralized Mortgage Obligations) within the Mortgage-Backed
Securities section of the Portfolio of Investments.
The Portfolio recognizes transfers between the levels as of the beginning of the
period.
For the period ended December 31, 2010, the Portfolio did not have any transfers
between Level 1 and Level 2 fair value measurements. (See Note 2)
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.
The following is a reconciliation of investments in which significant
unobservable inputs (Level 3) were used in determining value:
<Table>
<Caption>
BALANCE
AS OF ACCRUED REALIZED
DECEMBER 31, DISCOUNTS GAIN
INVESTMENTS IN SECURITIES 2009 (PREMIUMS) (LOSS)
Long-Term Bonds
Mortgage-Backed Securities
Commercial Mortgage $1,307,086 $611 $925
Loans (Collateralized
Mortgage Obligations)
---------- ---- ----
Total $1,307,086 $611 $925
========== ==== ====
<Caption>
CHANGE IN
UNREALIZED
APPRECIATION
(DEPRECIATION)
FROM
CHANGE IN BALANCE INVESTMENTS
UNREALIZED TRANSFERS TRANSFERS AS OF STILL HELD AT
APPRECIATION IN TO OUT OF DECEMBER 31, DECEMBER
INVESTMENTS IN SECURITIES (DEPRECIATION) PURCHASES SALES LEVEL 3 LEVEL 3 2010 31, 2010 (A)
Long-Term Bonds
Mortgage-Backed Securities
Commercial Mortgage $31,921 $ -- $(54,144) $ -- $ -- $1,286,399 $29,262
Loans (Collateralized
Mortgage Obligations)
------- -------- -------- -------- -------- ---------- -------
Total $31,921 $-- $(54,144) $-- $-- $1,286,399 $29,262
======= ======== ======== ======== ======== ========== =======
</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-131
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2010
<Table>
ASSETS
--------------------------------------------------
Investment in securities, at value
(identified cost $370,659,005) $379,453,666
Receivables:
Interest 1,930,085
Investment securities sold 56,108
Fund shares sold 54,704
------------
Total assets 381,494,563
------------
LIABILITIES
--------------------------------------------------
Payables:
Investment securities purchased 6,024,141
Fund shares redeemed 214,909
Manager (See Note 3) 161,173
NYLIFE Distributors (See Note 3) 47,549
Professional fees 42,975
Shareholder communication 28,456
Custodian 2,483
Directors 966
Accrued expenses 721
------------
Total liabilities 6,523,373
------------
Net assets $374,971,190
============
NET ASSETS CONSIST OF
--------------------------------------------------
Capital stock (par value of $.01 per
share) 200 million shares
authorized $ 326,113
Additional paid-in capital 351,912,702
------------
352,238,815
Undistributed net investment income 11,260,102
Accumulated net realized gain on
investments 2,677,612
Net unrealized appreciation on
investments 8,794,661
------------
Net assets $374,971,190
============
INITIAL CLASS
Net assets applicable to outstanding
shares $153,178,469
============
Shares of capital stock outstanding 13,264,786
============
Net asset value per share
outstanding $ 11.55
============
SERVICE CLASS
Net assets applicable to outstanding
shares $221,792,721
============
Shares of capital stock outstanding 19,346,510
============
Net asset value per share
outstanding $ 11.46
============
</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.
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2010
<Table>
INVESTMENT INCOME
-------------------------------------------------
INCOME
Interest $12,551,252
-----------
EXPENSES
Manager (See Note 3) 1,873,797
Distribution and service--Service
Class (See Note 3) 522,987
Shareholder communication 89,640
Professional fees 88,407
Custodian 26,260
Directors 12,832
Miscellaneous 17,149
-----------
Total expenses 2,631,072
-----------
Net investment income 9,920,180
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
-------------------------------------------------
Net realized gain on investments 4,743,931
Net change in unrealized
appreciation (depreciation) on
investments 3,507,059
-----------
Net realized and unrealized gain on
investments 8,250,990
-----------
Net increase in net assets resulting
from operations $18,171,170
===========
</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-133
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2010 AND DECEMBER 31, 2009
<Table>
<Caption>
2010 2009
INCREASE (DECREASE) IN NET ASSETS
---------------------------------------------------------
Operations:
Net investment income $ 9,920,180 $ 11,654,575
Net realized gain on
investments and futures
transactions 4,743,931 5,127,945
Net change in unrealized
appreciation
(depreciation) on
investments 3,507,059 (11,691,678)
---------------------------
Net increase in net assets
resulting from operations 18,171,170 5,090,842
---------------------------
Dividends and distributions
to shareholders:
From net investment
income:
Initial Class (5,047,806) (6,340,122)
Service Class (6,630,255) (6,522,185)
---------------------------
(11,678,061) (12,862,307)
---------------------------
From net realized gain on
investments:
Initial Class (2,422,887) (168,814)
Service Class (3,407,890) (183,586)
---------------------------
(5,830,777) (352,400)
---------------------------
Total dividends and
distributions to
shareholders (17,508,838) (13,214,707)
---------------------------
Capital share transactions:
Net proceeds from sale of
shares 106,775,633 64,572,878
Net asset value of shares
issued to shareholders in
reinvestment of dividends
and distributions 17,508,838 13,214,707
Cost of shares redeemed (99,942,992) (143,278,348)
---------------------------
Increase (decrease) in
net assets derived from
capital share
transactions 24,341,479 (65,490,763)
---------------------------
Net increase (decrease)
in net assets 25,003,811 (73,614,628)
NET ASSETS
---------------------------------------------------------
Beginning of year 349,967,379 423,582,007
---------------------------
End of year $374,971,190 $ 349,967,379
===========================
Undistributed net investment
income at
end of year $ 11,260,102 $ 11,678,047
===========================
</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.
This page intentionally left blank
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
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
2010 2009 2008 2007 2006
Net asset value at beginning of
year $ 11.47 $ 11.72 $ 11.02 $ 10.85 $ 10.53
-------- -------- -------- -------- --------
Net investment income (a) 0.33 0.36 0.44 0.51 0.47
Net realized and unrealized gain
(loss) on investments 0.30 (0.17) 0.60 0.21 (0.04)
-------- -------- -------- -------- --------
Total from investment operations 0.63 0.19 1.04 0.72 0.43
-------- -------- -------- -------- --------
Less dividends and distributions:
From net investment income (0.37) (0.43) (0.34) (0.55) (0.11)
From net realized gain on
investments (0.18) (0.01) -- -- --
-------- -------- -------- -------- --------
Total dividends and distributions (0.55) (0.44) (0.34) (0.55) (0.11)
-------- -------- -------- -------- --------
Net asset value at end of year $ 11.55 $ 11.47 $ 11.72 $ 11.02 $ 10.85
======== ======== ======== ======== ========
Total investment return 5.35% 1.61% 9.80% 6.69% 4.06%
Ratios (to average net
assets)/Supplemental Data:
Net investment income 2.79% 3.12% 3.91% 4.61% 4.45%
Net expenses 0.56% 0.56% 0.57% 0.56% 0.57%
Portfolio turnover rate 127%(b) 141%(b) 72%(b) 15% 83%(b)
Net assets at end of year (in
000's) $153,178 $167,267 $206,744 $170,115 $189,235
</Table>
<Table>
(a) Per share data based on average shares outstanding during the period.
(b) The portfolio turnover rates not including mortgage dollar rolls are 30%, 24%,
50%, and 25% for the years ended December 31, 2010, 2009, 2008, and 2006,
respectively.
</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.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
SERVICE CLASS
------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
2010 2009 2008 2007 2006
$ 11.40 $ 11.66 $ 10.97 $ 10.81 $ 10.50
-------- -------- -------- ------- -------
0.30 0.33 0.40 0.48 0.45
0.28 (0.17) 0.62 0.20 (0.05)
-------- -------- -------- ------- -------
0.58 0.16 1.02 0.68 0.40
-------- -------- -------- ------- -------
(0.34) (0.41) (0.33) (0.52) (0.09)
(0.18) (0.01) -- -- --
-------- -------- -------- ------- -------
(0.52) (0.42) (0.33) (0.52) (0.09)
-------- -------- -------- ------- -------
$ 11.46 $ 11.40 $ 11.66 $ 10.97 $ 10.81
======== ======== ======== ======= =======
5.09% 1.36% 9.53% 6.42% 3.80%
2.53% 2.87% 3.59% 4.36% 4.20%
0.81% 0.81% 0.82% 0.81% 0.82%
127%(b) 141%(b) 72%(b) 15% 83%(b)
$221,793 $182,700 $216,838 $89,533 $69,104
</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-137
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. THE PERFORMANCE TABLE AND GRAPH 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.
(LINE GRAPH)
<Table>
<Caption>
MAINSTAY VP MAINSTAY VP
GROWTH ALLOCATION GROWTH ALLOCATION
PORTFOLIO INITIAL PORTFOLIO SERVICE S&P 500(R) MSCI EAFE(R)
CLASS CLASS INDEX INDEX
----------------- ----------------- ---------- ------------
2/13/2006 10000 10000 10000 10000
12/31/2006 11242 11218 11386 12152
12/31/2007 12412 12355 12012 13509
12/31/2008 7748 7691 7568 7649
12/31/2009 9920 9823 9570 10080
12/31/2010 11411 11272 11012 10861
</Table>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED DECEMBER 31, 2010
--------------------------------------------------------------------------------
<Table>
<Caption>
SINCE GROSS
INCEPTION EXPENSE
CLASS ONE YEAR (2/13/06) RATIO(2)
---------------------------------------------------------
Initial Class Shares 15.03% 2.74% 1.16%
---------------------------------------------------------
Service Class Shares 14.75 2.48 1.41
---------------------------------------------------------
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE SINCE INCEPTION
YEAR (2/13/06)
S&P 500(R) Index(3) 15.06% 1.99%
-----------------------------------------------------------------------------------------
MSCI EAFE(R) Index(3) 7.75 1.70
-----------------------------------------------------------------------------------------
Average Lipper Variable Products Multi-Cap Core Portfolio(4) 15.79 1.93
-----------------------------------------------------------------------------------------
</Table>
1. Performance figures reflect certain fee waivers and/or expense limitations,
without which total returns may have been lower. For information on current
expense limitations, please refer to the notes to the financial statements.
2. The gross expense ratios presented reflect the Portfolio's "Total Annual
Portfolio Operating Expenses" from the most recent Prospectus and may differ
from other expense ratios disclosed in this report.
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 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. Results are based on total returns with all dividend and
capital gain distributions reinvested.
M-138 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, 2010, to December 31,
2010, 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 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, 2010, to December 31, 2010. 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, 2010. 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 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 7/1/10 12/31/10 PERIOD(1) 12/31/10 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,243.50 $0.34 $1,024.90 $0.31
-------------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,242.00 $1.75 $1,023.60 $1.58
-------------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
(0.06% for Initial Class and 0.31% 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
Portfolios/Funds in which it invests. Such indirect expenses are not included
in the above-reported expense figures.
mainstayinvestments.com M-139
INVESTMENT OBJECTIVES OF UNDERLYING PORTFOLIOS/FUNDS AS OF DECEMBER 31, 2010
(UNAUDITED)
(COMPOSITION PIE CHART)
<Table>
Growth of Capital 52.90
Capital Appreciation 27.60
Total Return 19.50
Other Assets, Less Liabilities (0.00)
</Table>
See Portfolio of Investments on page M-143 for specific holdings within these
categories.
++ Less than one-tenth of a percent.
M-140 MainStay VP Growth Allocation Portfolio
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
Questions answered by portfolio manager Jonathan Swaney of New York Life
Investments,(1) the Portfolio's Manager.
HOW DID MAINSTAY VP GROWTH ALLOCATION PORTFOLIO PERFORM RELATIVE TO ITS PEERS
AND ITS BENCHMARK FOR THE 12 MONTHS ENDED DECEMBER 31, 2010?
For the 12 months ended December 31, 2010, MainStay VP Growth Allocation
Portfolio returned 15.03% for Initial Class
shares and 14.75% for Service Class shares. Both share classes underperformed
the 15.79% return of the average Lipper(2) Variable Products Multi-Cap Core
Portfolio and the 15.06% return of the S&P 500(R) Index(2) for the 12 months
ended December 31, 2010. The S&P 500(R) Index is the Portfolio's broad-based
securities-market index.
WHAT FACTORS AFFECTED THE PORTFOLIO'S PERFORMANCE RELATIVE TO ITS PEERS AND ITS
BENCHMARK DURING THE REPORTING PERIOD?
The Portfolio invests in other mutual funds referred to as Underlying
Portfolios/Funds. The Underlying Portfolios/Funds may invest in domestic or
international stocks at various capitalization levels. The Portfolio's primary
benchmark, on the other hand, consists entirely of U.S. large-cap stocks.
The Portfolio's performance relative to the S&P 500(R) Index was helped by
Underlying Portfolios/Funds that invested in mid- and small-capitalization
stocks. These Underlying Portfolios/Funds, however, provided the Portfolio with
less of an advantage--perhaps even a disadvantage--relative to its peers,
because peer portfolios tend to invest in equal or greater measure in Underlying
Portfolios/Funds focused on mid- and small-cap stocks.
Weighing down returns modestly was an emphasis on Underlying Equity
Portfolios/Funds that tend to invest in high-quality stocks (or stocks of
companies that offer stable, positive and growing cash flows and earnings). For
at least part of the reporting period, lower-quality stocks, which had been
heavily penalized during the credit crisis of 2008 and early 2009, experienced
the most rapid price increases as the market recovered. The Portfolio's "quality
tilt" was not a virtue in that environment.
HOW DID YOU ALLOCATE THE PORTFOLIO'S ASSETS DURING THE REPORTING PERIOD AND WHY?
In managing the Portfolio, we considered a variety of information, including the
Portfolio-level characteristics of the Underlying Portfolios/Funds in which the
Portfolio invests, such as capitalization, style biases and sector exposure. We
also examined the attributes of the Underlying Portfolios'/Funds' holdings, such
as valuation metrics, earnings data and technical indicators. Finally, we
evaluated the historical success of the portfolio managers responsible for the
Underlying Portfolios/Funds. In general, we sought Underlying Portfolios/Funds
that had a track record of capable portfolio management, a presence in attrac-
tively valued market segments and investments in companies with strong
management, fairly priced securities and strong price and earnings momentum.
During the 12-month reporting period, these techniques were not especially
successful in that they steered the Portfolio into investments in Underlying
Equity Portfolios/Funds that, as a group, failed to match our return
expectations.
While many factors may have been involved, one that stood out was the
Portfolio's tilt toward Underlying Equity Portfolios/Funds that prized earnings
stability. We preferred these Underlying Equity Portfolios/Funds because high-
quality stocks have historically been rewarded with higher returns than lower-
quality stocks. For much of the reporting period, however, the reverse was true.
Instead, investors purchased the most risk-laden and lowest-quality securities,
anticipating that these securities would be the most likely to benefit from a
recovery. This persistent "junk rally" was a substantial drag on the performance
of the Portfolio.
HOW DID THE PORTFOLIO'S ALLOCATIONS CHANGE OVER THE COURSE OF THE REPORTING
PERIOD?
During the reporting period, the Portfolio reduced its positions in MainStay VP
Large Cap Growth Portfolio and MainStay 130/30 Growth Fund, with the much of the
proceeds going to MainStay Epoch U.S. All Cap Fund. This shift reflected an
effort to reduce the Portfolio's previous growth bias and to adopt a more
neutral style posture. The move was mildly counterproductive in that growth
stocks generally fared better than their value counterparts during the second
half of 2010.
WERE THERE ANY OTHER SIGNIFICANT ALLOCATION CHANGES DURING THE REPORTING PERIOD?
Near the start of the year, the Portfolio established a position in MainStay
Epoch Global Choice Fund. The investment was made to better diversify the
international equity portion of the Portfolio across management styles and to
help counter a small bias toward value within that portion of the Portfolio.
WHICH UNDERLYING EQUITY PORTFOLIOS/FUNDS HAD THE HIGHEST TOTAL RETURNS DURING
THE REPORTING PERIOD, AND WHICH UNDERLYING EQUITY PORTFOLIOS/FUNDS HAD THE
LOWEST TOTAL RETURNS?
During the reporting period, the highest returns among the Underlying
Portfolios/Funds in which the Portfolio invested came from MainStay VP U.S.
Small Cap Portfolio, MainStay VP Mid Cap Core Portfolio and MainStay VP ICAP
Select Equity Portfolio. The lowest returns, although still decidedly positive,
came from MainStay VP International Equity Portfolio, MainStay ICAP
International Fund and MainStay Epoch Global Choice Fund.
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 indexes and other indexes, 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-141
WHICH UNDERLYING PORTFOLIOS/FUNDS MADE THE STRONGEST CONTRIBUTIONS TO THE
PORTFOLIO'S OVERALL PERFORMANCE, AND WHICH UNDERLYING PORTFOLIOS/FUNDS WERE THE
GREATEST DETRACTORS?
The Portfolio's positions in MainStay VP Mid Cap Core Portfolio and MainStay MAP
Fund, both of which posted strong returns for the year, made the greatest
contributions to the performance of the Portfolio. While none of the Underlying
Portfolios/Funds in which the Portfolio invested had negative returns for the
reporting period, among the weakest contributors were very small positions in
MainStay 130/30 Growth Fund and MainStay VP Growth Equity Portfolio.
Effective January 1, 2011, Madison Square Investors LLC no longer serves as
Subadvisor to the Portfolio, and New York Life Investments has assumed the day-
to-day portfolio management of the Portfolio. In addition, effective January 1,
2011, Jae Yoon replaced Tony Elavia as a portfolio manager for the Portfolio.
Jonathan Swaney continues to serve as a portfolio manager for the Portfolio. For
more information regarding these portfolio management changes, please refer to
the Prospectus supplement dated December 3, 2010.
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 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 Allocation Portfolio on this page and the
preceding pages has not been audited.
M-142 MainStay VP Growth Allocation Portfolio
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2010
<Table>
<Caption>
SHARES VALUE
AFFILIATED INVESTMENT COMPANIES 100.0%+
------------------------------------------------------
EQUITY FUNDS 100.0%
MainStay 130/30 Core Fund
Class I (a) 3,383,688 $ 26,257,417
MainStay 130/30 Growth Fund
Class I (a)(b) 55,374 479,542
MainStay 130/30 International
Fund
Class I (a) 2,321,302 15,993,769
MainStay Epoch Global Choice
Fund
Class I (a) 340,245 5,066,252
MainStay Epoch U.S. All Cap
Fund
Class I (a) 1,314,629 30,814,900
MainStay ICAP Equity Fund
Class I 458,369 16,602,129
MainStay ICAP International
Fund
Class I 543,192 16,018,731
MainStay MAP Fund
Class I 786,935 25,103,237
MainStay VP Common Stock
Portfolio
Initial Class 981,704 15,746,236
MainStay VP Growth Equity
Portfolio
Initial Class 8,392 206,626
MainStay VP ICAP Select
Equity Portfolio
Initial Class 1,322,906 16,586,080
MainStay VP International
Equity Portfolio
Initial Class (a) 1,249,293 16,016,080
MainStay VP Large Cap Growth
Portfolio
Initial Class (a)(b) 1,170,617 17,512,013
MainStay VP Mid Cap Core
Portfolio
Initial Class (a) 3,520,161 41,772,559
MainStay VP U.S. Small Cap
Portfolio
Initial Class (a) 935,626 8,711,684
------------
Total Investments
(Cost $221,247,898) (c) 100.0% 252,887,255
Other Assets, Less
Liabilities (0.0)++ (94,217)
--------- ------------
Net Assets 100.0% $252,793,038
========= ============
</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
Portfolio's/Fund's share class. (See Note
3)
(b) Non-income producing Underlying
Portfolio/Fund.
(c) At December 31, 2010, cost is
$223,861,939 for federal income tax
purposes and net unrealized appreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $31,639,357
Gross unrealized depreciation (2,614,041)
-----------
Net unrealized appreciation $29,025,316
===========
</Table>
The following is a summary of the fair valuations according to the inputs used
as of December 31, 2010, 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
Affiliated Investment Companies--Equity Funds $252,887,255 $ -- $ -- $252,887,255
------------ -------- -------- ------------
Total Investments in Securities $252,887,255 $-- $-- $252,887,255
============ ======== ======== ============
</Table>
For the period ended December 31, 2010, the Portfolio did not have any transfers
between Level 1 and Level 2 fair value measurements. (See Note 2)
At December 31, 2010, the Portfolio did not hold any investments with
significant unobservable inputs (Level 3). (See Note 2)
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-143
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2010
<Table>
ASSETS
--------------------------------------------------
Investment in affiliated investment
companies, at value (identified
cost $221,247,898) $252,887,255
Cash 30,668
Receivables:
Fund shares sold 56,299
------------
Total assets 252,974,222
------------
LIABILITIES
--------------------------------------------------
Payables:
Fund shares redeemed 59,037
NYLIFE Distributors (See Note 3) 46,619
Investment securities purchased 30,708
Professional fees 26,816
Shareholder communication 16,313
Custodian 599
Directors 554
Accrued expenses 538
------------
Total liabilities 181,184
------------
Net assets $252,793,038
============
NET ASSETS CONSIST OF
--------------------------------------------------
Capital stock (par value of $.01 per
share) 200 million shares
authorized $ 257,968
Additional paid-in capital 264,952,053
------------
265,210,021
Undistributed net investment income 1,802,535
Accumulated net realized loss on
investments (45,858,875)
Net unrealized appreciation on
investments 31,639,357
------------
Net assets $252,793,038
============
INITIAL CLASS
Net assets applicable to outstanding
shares $ 30,384,349
============
Shares of capital stock outstanding 3,091,498
============
Net asset value per share
outstanding $ 9.83
============
SERVICE CLASS
Net assets applicable to outstanding
shares $222,408,689
============
Shares of capital stock outstanding 22,705,348
============
Net asset value per share
outstanding $ 9.80
============
</Table>
M-144 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 OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2010
<Table>
INVESTMENT INCOME
-------------------------------------------------
INCOME
Dividend distributions from
affiliated investment companies $ 2,430,239
-----------
EXPENSES
Distribution and service--Service
Class (See Note 3) 495,527
Professional fees 56,286
Shareholder communication 49,239
Custodian 9,310
Directors 7,510
Miscellaneous 9,824
-----------
Total expenses 627,696
-----------
Net investment income 1,802,543
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
-------------------------------------------------
Net realized loss on affiliated
investment company transactions (4,043,968)
Net change in unrealized
appreciation (depreciation) on
investments 34,854,559
-----------
Net realized and unrealized gain on
investments 30,810,591
-----------
Net increase in net assets resulting
from operations $32,613,134
===========
</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-145
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2010 AND DECEMBER 31, 2009
<Table>
<Caption>
2010 2009
INCREASE IN NET ASSETS
--------------------------------------------------------
Operations:
Net investment income $ 1,802,543 $ 2,294,355
Net realized loss on
investments from
affiliated investment
company transactions (4,043,968) (36,152,506)
Net change in unrealized
appreciation
(depreciation) on
investments 34,854,559 79,285,564
--------------------------
Net increase in net assets
resulting from operations 32,613,134 45,427,413
--------------------------
Dividends and distributions
to shareholders:
From net investment
income:
Initial Class (313,787) (493,803)
Service Class (1,980,557) (3,337,200)
--------------------------
(2,294,344) (3,831,003)
--------------------------
From net realized gain on
investments:
Initial Class -- (405,537)
Service Class -- (3,070,349)
--------------------------
-- (3,475,886)
--------------------------
Total dividends and
distributions to
shareholders (2,294,344) (7,306,889)
--------------------------
Capital share transactions:
Net proceeds from sale of
shares 35,838,115 34,962,763
Net asset value of shares
issued to shareholders in
reinvestment of dividends
and distributions 2,294,344 7,306,889
Cost of shares redeemed (27,275,371) (19,453,418)
--------------------------
Increase in net assets
derived from capital
share transactions 10,857,088 22,816,234
--------------------------
Net increase in net
assets 41,175,878 60,936,758
NET ASSETS
--------------------------------------------------------
Beginning of year 211,617,160 150,680,402
--------------------------
End of year $252,793,038 $211,617,160
==========================
Undistributed net investment
income at
end of year $ 1,802,535 $ 2,294,336
==========================
</Table>
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.
This page intentionally left blank
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
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
------------------------------------------------------------------------
FEBRUARY 13,
2006**
THROUGH
YEAR ENDED DECEMBER 31, DECEMBER 31,
2010 2009 2008 2007 2006
Net asset value at beginning of
period $ 8.64 $ 7.02 $ 11.69 $ 11.10 $10.00
------- ------- ------- ------- ------
Net investment income 0.09 (a) 0.12 (a) 0.11 (a) 0.07 0.08 (a)
Net realized and unrealized gain
(loss) on investments 1.20 1.83 (4.50) 1.11 1.17
------- ------- ------- ------- ------
Total from investment operations 1.29 1.95 (4.39) 1.18 1.25
------- ------- ------- ------- ------
Less dividends and distributions:
From net investment income (0.10) (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 (0.10) (0.33) (0.28) (0.59) (0.15)
------- ------- ------- ------- ------
Net asset value at end of period $ 9.83 $ 8.64 $ 7.02 $ 11.69 $11.10
======= ======= ======= ======= ======
Total investment return 15.03% 28.04% (37.58%) 10.41% 12.42%(b)
Ratios (to average net
assets)/Supplemental Data:
Net investment income 1.03% 1.56% 1.14% 0.75% 0.90%++
Net expenses (c) 0.06% 0.06% 0.07% 0.07% 0.24%++
Expenses (before reimbursement)
(c) 0.06% 0.06% 0.07% 0.09% 0.24%++
Portfolio turnover rate 48% 47% 42% 16% 61%
Net assets at end of period (in
000's) $30,384 $24,774 $15,699 $17,160 $7,312
</Table>
<Table>
** Commencement of operations.
++ Annualized.
(a) Per share data based on average shares outstanding during the period.
(b) Total investment 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-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.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
SERVICE CLASS
------------------------------------------------------------------------------------
FEBRUARY 13,
2006**
THROUGH
YEAR ENDED DECEMBER 31, DECEMBER 31,
2010 2009 2008 2007 2006
$ 8.62 $ 7.00 $ 11.67 $ 11.08 $ 10.00
-------- -------- -------- -------- -------
0.07 (a) 0.10 (a) 0.09 (a) 0.05 0.07 (a)
1.20 1.83 (4.50) 1.10 1.15
-------- -------- -------- -------- -------
1.27 1.93 (4.41) 1.15 1.22
-------- -------- -------- -------- -------
(0.09) (0.16) (0.05) (0.11) (0.07)
-- (0.15) (0.21) (0.45) (0.07)
-------- -------- -------- -------- -------
(0.09) (0.31) (0.26) (0.56) (0.14)
-------- -------- -------- -------- -------
$ 9.80 $ 8.62 $ 7.00 $ 11.67 $ 11.08
======== ======== ======== ======== =======
14.75% 27.72% (37.75%) 10.14% 12.18%(b)
0.77% 1.29% 0.90% 0.52% 0.72%++
0.31% 0.31% 0.32% 0.32% 0.49%++
0.31% 0.31% 0.32% 0.34% 0.49%++
48% 47% 42% 16% 61%
$222,409 $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-149
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. THE PERFORMANCE TABLE AND GRAPH 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.
(LINE GRAPH)
<Table>
<Caption>
MAINSTAY VP MAINSTAY VP
GROWTH EQUITY GROWTH EQUITY
PORTFOLIO INITIAL PORTFOLIO RUSSELL 1000(R) S&P(R) 500
CLASS SERVICE CLASS GROWTH INDEX INDEX
----------------- ------------- --------------- ----------
12/31/00 10000 10000 10000 10000
7678 7659 7958 8811
5311 5285 5739 6864
6745 6695 7446 8833
7025 6956 7915 9794
7616 7520 8332 10275
7955 7834 9088 11898
8940 8783 10161 12552
5465 5355 6255 7908
7333 7168 8583 10001
12/31/10 8228 8023 10017 11507
</Table>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED DECEMBER 31, 2010
--------------------------------------------------------------------------------
<Table>
<Caption>
GROSS
EXPENSE
CLASS ONE YEAR FIVE YEARS TEN YEARS(1) RATIO(2)
-----------------------------------------------------------------------------
Initial Class Shares 12.21% 1.56% -1.93% 0.69%
-----------------------------------------------------------------------------
Service Class Shares(3) 11.93 1.31 -2.18 0.94
-----------------------------------------------------------------------------
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE FIVE TEN
YEAR YEARS YEARS
Russell 1000(R) Growth Index(4) 16.71% 3.75% 0.02%
------------------------------------------------------------------------------------------
S&P 500(R) Index(4) 15.06 2.29 1.41
------------------------------------------------------------------------------------------
Average Lipper Variable Products Large-Cap Growth Portfolio(5) 15.62 2.85 0.05
------------------------------------------------------------------------------------------
</Table>
1. Performance figures shown for the ten-year period ended December 31, 2010
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 -1.95% for Initial Class shares and -2.21% for
Service Class shares for the ten-year period.
2. The gross expense ratios presented reflect the Portfolio's "Total Annual
Portfolio Operating Expenses" from the most recent Prospectus and may differ
from other expense ratios disclosed in this report.
3. 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.
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.
5. 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. Results are based on total returns with all dividend and
capital gain distributions reinvested.
M-150 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, 2010, to December 31,
2010, 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 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, 2010, to December 31, 2010. 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, 2010. 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 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 7/1/10 12/31/10 PERIOD(1) 12/31/10 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,259.80 $3.65 $1,022.00 $3.26
-------------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,258.20 $5.07 $1,020.70 $4.53
-------------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
(0.64% for Initial Class and 0.89% 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-151
INDUSTRY COMPOSITION AS OF DECEMBER 31, 2010 (Unaudited)
<Table>
<Caption>
Software 7.6%
Computers & Peripherals 7.0
Oil, Gas & Consumable Fuels 6.8
Machinery 5.9
Communications Equipment 4.9
Internet Software & Services 4.2
Energy Equipment & Services 4.1
IT Services 4.0
Chemicals 3.4
Hotels, Restaurants & Leisure 3.4
Health Care Providers & Services 3.0
Biotechnology 2.9
Semiconductors & Semiconductor
Equipment 2.9
Capital Markets 2.8
Aerospace & Defense 2.5
Internet & Catalog Retail 2.5
Multiline Retail 2.5
Consumer Finance 2.3
Pharmaceuticals 2.3
Electrical Equipment 2.1
Beverages 2.0
Diversified Financial Services 2.0
Specialty Retail 2.0
Life Sciences Tools & Services 1.9
Textiles, Apparel & Luxury Goods 1.7
Wireless Telecommunication Services 1.4
Household Products 1.2
Road & Rail 1.2
Construction & Engineering 1.1
Metals & Mining 1.0
Electronic Equipment & Instruments 0.9
Personal Products 0.9
Health Care Equipment & Supplies 0.8
Food & Staples Retailing 0.7
Health Care Technology 0.7
Auto Components 0.5
Media 0.5
Airlines 0.4
Diversified Consumer Services 0.2
Short-Term Investments 2.2
Other Assets, Less Liabilities -0.4
-----
100.0%
=====
</Table>
See Portfolio of Investments beginning on page M-154 for specific holdings
within these categories.
TOP TEN HOLDINGS AS OF DECEMBER 31, 2010 (excluding short-term investments)
<Table>
1. Apple, Inc.
2. Google, Inc. Class A
3. ExxonMobil Corp.
4. Oracle Corp.
5. Schlumberger, Ltd.
6. QUALCOMM, Inc.
7. International Business Machines Corp.
8. Microsoft Corp.
9. PepsiCo, Inc.
10. Cognizant Technology Solutions Corp. Class A
</Table>
M-152 MainStay VP Growth Equity Portfolio
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
Questions answered by Harish Kumar, CFA, of Madison Square Investors LLC, the
Portfolio's Subadvisor.
HOW DID MAINSTAY VP GROWTH EQUITY PORTFOLIO PERFORM RELATIVE TO ITS PEERS AND
ITS BENCHMARK FOR THE 12
MONTHS ENDED DECEMBER 31, 2010?
For the 12 months ended December 31, 2010, MainStay VP Growth Equity Portfolio
returned 12.21% for Initial Class shares and 11.93% for Service Class shares.
Both share classes underperformed the 15.62% return of the average Lipper(1)
Variable Products Large-Cap Growth Portfolio and the 16.71% return of the
Russell 1000(R) Growth Index(1) for the 12 months ended December 31, 2010. The
Russell 1000(R) Growth Index
is the Portfolio's broad-based securities-market index.
WHAT FACTORS AFFECTED THE PORTFOLIO'S RELATIVE PERFORMANCE DURING THE REPORTING
PERIOD?
The Fund's underperformance of the Russell 1000(R) Growth Index came primarily
from stock selection in the financials and energy sectors.
WHICH SECTORS WERE THE STRONGEST CONTRIBUTORS TO THE PORTFOLIO'S RELATIVE
PERFORMANCE, AND WHICH SECTORS WERE PARTICULARLY WEAK?
During the reporting period, the sectors that made the strongest contributions
to the Portfolio's performance relative to the Russell 1000(R) Growth Index were
information technology, industrials and utilities. The weakest-contributing
sectors relative to the Portfolio's benchmark were financials, energy and
consumer staples.
DURING THE REPORTING PERIOD, WHICH INDIVIDUAL STOCKS MADE THE STRONGEST
CONTRIBUTIONS TO THE PORTFOLIO'S ABSOLUTE PERFORMANCE AND WHICH STOCKS DETRACTED
THE MOST?
On the basis of absolute performance, the individual stocks that made the
strongest contributions to the Portfolio's performance were computers &
peripherals company Apple, software company Oracle and IT services company
Cognizant Technology Solutions. Apple benefited from a strong product line-up
(iPad, iPhone, iPod and Mac) that generated tremendous demand from consumers,
Oracle benefited from increased enterprise spending on database/middleware and
from the successful acquisition of Sun Microsystems, and Congizant Technologies
benefited from solid demand for offshore outsourcing services.
Major detractors from the Portfolio's performance included software giant
Microsoft, computers & peripherals company Hewlett-Packard and communications
equipment company Cisco Systems. Microsoft generated negative total returns, as
it was unable to address the rapidly growing consumer mobility market and lost
ground to Apple and Google. Hewlett-Packard generated negative total returns
when the loss of the company's CEO raised investor concerns. Cisco Systems
generated negative total returns because it lost market share to competitors.
The company also suffered from weaker government spending.
DID THE PORTFOLIO MAKE ANY SIGNIFICANT PURCHASES OR SALES DURING THE REPORTING
PERIOD?
During the reporting period, the Portfolio initiated new positions in athletic
apparel and equipment company Nike and semiconductor company Broadcom. Both of
these companies had compelling valuations. NIKE benefited from a rebound in
consumer spending and high exposure to faster-growing international markets.
Broadcom benefited from its exposure to the rapidly growing smart-phone market.
Significant sales during the reporting period included positions in
pharmaceutical company Mylan Laboratories and biotechnology company Amgen. In
our view, both of these companies were valued fairly and provided limited upside
potential.
HOW DID THE PORTFOLIO'S SECTOR WEIGHTINGS CHANGE DURING THE REPORTING PERIOD?
During the reporting period, the Portfolio increased its weightings relative to
the Russell 1000(R) Growth Index in the health care and consumer discretionary
sectors and decreased its weighting relative to the benchmark in energy and
industrials.
HOW WAS THE PORTFOLIO POSITIONED AT THE END OF DECEMBER 2010?
As of December 31, 2010, the Portfolio was overweight relative to the Russell
1000(R) Growth Index in the financials and health care sectors. As of the same
date, the Portfolio was underweight relative to the Index in the consumer
staples and consumer discretionary sectors.
1. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indexes and other indexes, averages
and service providers mentioned in the reports.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
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 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.
mainstayinvestments.com M-153
PORTFOLIO OF INVESTMENTS(+++) DECEMBER 31, 2010
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS 98.2%+
-------------------------------------------------------
AEROSPACE & DEFENSE 2.5%
Goodrich Corp. 27,013 $ 2,379,035
Precision Castparts Corp. 38,735 5,392,299
Rockwell Collins, Inc. 63,084 3,675,274
------------
11,446,608
------------
AIRLINES 0.4%
Delta Air Lines, Inc. (a) 162,200 2,043,720
------------
AUTO COMPONENTS 0.5%
TRW Automotive Holdings Corp.
(a) 43,453 2,289,973
------------
BEVERAGES 2.0%
X PepsiCo, Inc. 142,599 9,315,993
------------
BIOTECHNOLOGY 2.9%
Alexion Pharmaceuticals, Inc.
(a) 40,973 3,300,375
Celgene Corp. (a) 93,097 5,505,757
Gilead Sciences, Inc. (a) 128,154 4,644,301
------------
13,450,433
------------
CAPITAL MARKETS 2.8%
Ameriprise Financial, Inc. 84,918 4,887,031
Goldman Sachs Group, Inc.
(The) 27,309 4,592,281
TD Ameritrade Holding Corp. 186,650 3,544,484
------------
13,023,796
------------
CHEMICALS 3.4%
E.I. du Pont de Nemours & Co. 75,010 3,741,499
Ecolab, Inc. 60,282 3,039,418
Praxair, Inc. 58,813 5,614,877
Sigma-Aldrich Corp. 52,350 3,484,416
------------
15,880,210
------------
COMMUNICATIONS EQUIPMENT 4.9%
Cisco Systems, Inc. (a) 323,702 6,548,491
Juniper Networks, Inc. (a) 118,905 4,389,973
X QUALCOMM, Inc. 235,928 11,676,077
------------
22,614,541
------------
COMPUTERS & PERIPHERALS 7.0%
X Apple, Inc. (a) 78,161 25,211,612
EMC Corp. (a) 330,938 7,578,480
------------
32,790,092
------------
CONSTRUCTION & ENGINEERING 1.1%
Fluor Corp. 76,082 5,041,193
------------
CONSUMER FINANCE 2.3%
American Express Co. 153,979 6,608,779
Capital One Financial Corp. 91,157 3,879,642
------------
10,488,421
------------
DIVERSIFIED CONSUMER SERVICES 0.2%
DeVry, Inc. 23,054 1,106,131
------------
DIVERSIFIED FINANCIAL SERVICES 2.0%
CME Group, Inc. 14,782 4,756,108
JPMorgan Chase & Co. 112,995 4,793,248
------------
9,549,356
------------
ELECTRICAL EQUIPMENT 2.1%
Cooper Industries PLC 69,686 4,061,997
Emerson Electric Co. 96,834 5,536,000
------------
9,597,997
------------
ELECTRONIC EQUIPMENT & INSTRUMENTS 0.9%
Amphenol Corp. Class A 77,864 4,109,662
------------
ENERGY EQUIPMENT & SERVICES 4.1%
Cameron International Corp.
(a) 55,358 2,808,311
Dresser-Rand Group, Inc. (a) 76,559 3,260,648
X Schlumberger, Ltd. 154,503 12,901,001
------------
18,969,960
------------
FOOD & STAPLES RETAILING 0.7%
Costco Wholesale Corp. 54 3,899
Wal-Mart Stores, Inc. 63,128 3,404,493
------------
3,408,392
------------
HEALTH CARE EQUIPMENT & SUPPLIES 0.8%
Covidien PLC 77,434 3,535,636
------------
HEALTH CARE PROVIDERS & SERVICES 3.0%
AmerisourceBergen Corp. 169,163 5,771,842
DaVita, Inc. (a) 11,133 773,632
Express Scripts, Inc. (a) 114,060 6,164,943
HealthSouth Corp. (a) 70,775 1,465,750
------------
14,176,167
------------
HEALTH CARE TECHNOLOGY 0.7%
Cerner Corp. (a) 33,690 3,191,791
------------
HOTELS, RESTAURANTS & LEISURE 3.4%
Las Vegas Sands Corp. (a) 53,214 2,445,183
McDonald's Corp. 113,890 8,742,196
Starwood Hotels & Resorts
Worldwide, Inc. 77,874 4,733,182
------------
15,920,561
------------
</Table>
+ Percentages indicated are based on Portfolio net assets.
X Among the Portfolio's 10 largest holdings, as of December 31, 2010, excluding
short-term investments. May be subject to change daily.
M-154 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.
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
HOUSEHOLD PRODUCTS 1.2%
Procter & Gamble Co. (The) 86,147 $ 5,541,837
------------
INTERNET & CATALOG RETAIL 2.5%
Amazon.com, Inc. (a) 40,047 7,208,460
Priceline.com, Inc. (a) 10,995 4,393,052
------------
11,601,512
------------
INTERNET SOFTWARE & SERVICES 4.2%
Baidu, Inc., Sponsored ADR
(a)(b) 20,948 2,022,110
X Google, Inc. Class A (a) 29,816 17,709,810
------------
19,731,920
------------
IT SERVICES 4.0%
X Cognizant Technology
Solutions Corp. Class A (a) 122,106 8,949,149
X International Business
Machines Corp. 66,625 9,777,885
------------
18,727,034
------------
LIFE SCIENCES TOOLS & SERVICES 1.9%
Agilent Technologies, Inc.
(a) 109,033 4,517,237
Thermo Fisher Scientific,
Inc. (a) 78,697 4,356,666
------------
8,873,903
------------
MACHINERY 5.9%
Cummins, Inc. 42,703 4,697,757
Danaher Corp. 162,647 7,672,059
Deere & Co. 67,204 5,581,292
Flowserve Corp. 35,093 4,183,788
Ingersoll-Rand PLC 113,427 5,341,277
------------
27,476,173
------------
MEDIA 0.5%
Scripps Networks Interactive
Class A 49,330 2,552,828
------------
METALS & MINING 1.0%
Freeport-McMoRan Copper &
Gold, Inc. 40,170 4,824,015
------------
MULTILINE RETAIL 2.5%
Macy's, Inc. 188,678 4,773,554
Target Corp. 116,340 6,995,524
------------
11,769,078
------------
OIL, GAS & CONSUMABLE FUELS 6.8%
Apache Corp. 39,511 4,710,897
EOG Resources, Inc. 36,623 3,347,708
X ExxonMobil Corp. 211,829 15,488,936
Occidental Petroleum Corp. 47,987 4,707,525
Southwestern Energy Co. (a) 88,795 3,323,597
------------
31,578,663
------------
PERSONAL PRODUCTS 0.9%
Estee Lauder Cos., Inc. (The)
Class A 51,797 4,180,018
------------
PHARMACEUTICALS 2.3%
Abbott Laboratories 68,973 3,304,497
Hospira, Inc. (a) 74,251 4,135,038
Shire PLC, Sponsored ADR (b) 45,371 3,283,953
------------
10,723,488
------------
ROAD & RAIL 1.2%
Union Pacific Corp. 59,861 5,546,720
------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 2.9%
Broadcom Corp. Class A 107,133 4,665,642
Marvell Technology Group,
Ltd. (a) 228,200 4,233,110
Texas Instruments, Inc. 139,914 4,547,205
------------
13,445,957
------------
SOFTWARE 7.6%
Autodesk, Inc. (a) 84,728 3,236,610
Citrix Systems, Inc. (a) 46,896 3,208,155
Intuit, Inc. (a) 86,318 4,255,477
X Microsoft Corp. 334,220 9,331,422
X Oracle Corp. 488,291 15,283,508
VMware, Inc. Class A (a) 3,184 283,090
------------
35,598,262
------------
SPECIALTY RETAIL 2.0%
Home Depot, Inc. (The) 160,273 5,619,171
O'Reilly Automotive, Inc. (a) 59,883 3,618,131
------------
9,237,302
------------
TEXTILES, APPAREL & LUXURY GOODS 1.7%
NIKE, Inc. Class B 90,839 7,759,467
------------
WIRELESS TELECOMMUNICATION SERVICES 1.4%
American Tower Corp. Class A
(a) 123,226 6,363,391
------------
Total Common Stocks
(Cost $383,714,485) 457,482,201
------------
</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-155
PORTFOLIO OF INVESTMENTS(+++) DECEMBER 31, 2010 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
SHORT-TERM INVESTMENTS 2.2%
-------------------------------------------------------
REPURCHASE AGREEMENT 0.0%++
State Street Bank and Trust
Co.
0.01%, dated 12/31/10
due 1/3/11
Proceeds at Maturity
$75,313 (Collateralized by
a United States Treasury
Note with a rate of 2.50%
and a maturity date of
4/30/15, with a Principal
Amount of $75,000 and a
Market Value of $77,813) $ 75,313 $ 75,313
------------
Total Repurchase Agreement
(Cost $75,313) 75,313
------------
U.S. GOVERNMENT 2.2%
United States Treasury Bills
0.012%, due 1/6/11 (c) 8,600,000 8,599,983
0.05%, due 1/27/11 (c)(d) 1,000,000 999,963
0.135%, due 4/7/11 (c) 600,000 599,785
------------
Total U.S. Government
(Cost $10,198,740) 10,199,731
------------
Total Short-Term Investments
(Cost $10,274,053) 10,275,044
------------
Total Investments
(Cost $393,988,538) (f) 100.4% 467,757,245
Other Assets, Less
Liabilities (0.4) (1,865,730)
---------- ------------
Net Assets 100.0% $465,891,515
========== ============
</Table>
<Table>
<Caption>
CONTRACTS UNREALIZED
LONG APPRECIATION (E)
FUTURES CONTRACTS 0.0%++
---------------------------------------------------------
Standard & Poor's 500 Index
Mini March 2011 65 $55,439
-------
Total Futures Contracts
(Settlement Value
$4,072,250) $55,439
=======
</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) ADR--American Depositary Receipt.
(c) Interest rate presented is yield to
maturity.
(d) Represents a security, or a portion
thereof, which is maintained at the
broker as collateral for futures
contracts.
(e) Represents the difference between the
value of the contracts at the time they
were opened and the value at December 31,
2010.
(f) At December 31, 2010, cost is
$394,996,364 for federal income tax
purposes and net unrealized appreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $76,830,092
Gross unrealized depreciation (4,069,211)
-----------
Net unrealized appreciation $72,760,881
===========
</Table>
M-156 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, 2010, 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 $457,482,201 $ -- $ -- $457,482,201
Short-Term Investments
Repurchase Agreement -- 75,313 -- 75,313
U.S. Government -- 10,199,731 -- 10,199,731
------------ ----------- -------- ------------
Total Short-Term Investments -- 10,275,044 -- 10,275,044
------------ ----------- -------- ------------
Total Investments in Securities 457,482,201 10,275,044 -- 467,757,245
------------ ----------- -------- ------------
Other Financial Instruments
Futures Contracts Long (b) 55,439 -- -- 55,439
------------ ----------- -------- ------------
Total Investments in Securities and Other
Financial Instruments $457,537,640 $10,275,044 $-- $467,812,684
============ =========== ======== ============
</Table>
(a) For a complete listing of investments and their industries, see the
Portfolio of Investments.
(b) The value listed for these securities reflects unrealized appreciation as
shown on the Portfolio of Investments.
For the period ended December 31, 2010, the Portfolio did not have any transfers
between Level 1 and Level 2 fair value measurements. (See Note 2)
At December 31, 2010, the Portfolio did not hold any investments with
significant unobservable inputs (Level 3). (See Note 2)
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
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2010
<Table>
ASSETS
--------------------------------------------------
Investment in securities, at value
(identified cost $393,988,538) $467,757,245
Receivables:
Investment securities sold 11,056,909
Dividends and interest 549,131
Fund shares sold 115,668
------------
Total assets 479,478,953
------------
LIABILITIES
--------------------------------------------------
Payables:
Investment securities purchased 13,173,347
Manager (See Note 3) 239,835
Fund shares redeemed 80,910
Professional fees 44,474
Shareholder communication 30,401
NYLIFE Distributors (See Note 3) 10,202
Variation margin on futures
contracts 5,905
Directors 1,032
Custodian 754
Accrued expenses 578
------------
Total liabilities 13,587,438
------------
Net assets $465,891,515
============
NET ASSETS CONSIST OF
--------------------------------------------------
Capital stock (par value of $.01 per
share) 200 million shares
authorized $ 189,302
Additional paid-in capital 462,957,697
------------
463,146,999
Undistributed net investment income 1,894,147
Accumulated net realized loss on
investments and futures
transactions (72,973,777)
Net unrealized appreciation on
investments and futures contracts 73,824,146
------------
Net assets $465,891,515
============
INITIAL CLASS
Net assets applicable to outstanding
shares $417,193,769
============
Shares of capital stock outstanding 16,944,092
============
Net asset value per share
outstanding $ 24.62
============
SERVICE CLASS
Net assets applicable to outstanding
shares $ 48,697,746
============
Shares of capital stock outstanding 1,986,103
============
Net asset value per share
outstanding $ 24.52
============
</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.
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2010
<Table>
INVESTMENT INCOME
-------------------------------------------------
INCOME
Dividends (a) $ 4,985,636
Interest 481
-----------
Total income 4,986,117
-----------
EXPENSES
Manager (See Note 3) 2,685,647
Distribution and service--Service
Class (See Note 3) 110,491
Professional fees 100,138
Shareholder communication 44,433
Custodian 18,360
Directors 14,955
Miscellaneous 18,238
-----------
Total expenses 2,992,262
-----------
Net investment income 1,993,855
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
-------------------------------------------------
Net realized gain on:
Security transactions 26,140,221
Futures transactions 318,084
-----------
Net realized gain on investments and
futures transactions 26,458,305
-----------
Net change in unrealized
appreciation (depreciation) on:
Investments 22,266,707
Futures contracts 55,439
-----------
Net change in unrealized
appreciation (depreciation) on
investments and futures contracts 22,322,146
-----------
Net realized and unrealized gain on
investments and futures
transactions 48,780,451
-----------
Net increase in net assets resulting
from operations $50,774,306
===========
</Table>
(a) Dividends recorded net of foreign withholding taxes in the amount of $9,139.
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
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2010 AND DECEMBER 31, 2009
<Table>
<Caption>
2010 2009
INCREASE (DECREASE) IN NET ASSETS
--------------------------------------------------------
Operations:
Net investment income $ 1,993,855 $ 2,221,836
Net realized gain (loss)
on investments, futures
transactions and foreign
currency transactions 26,458,305 (10,348,982)
Net change in unrealized
appreciation
(depreciation) on
investments and futures
contracts 22,322,146 129,367,301
--------------------------
Net increase in net assets
resulting from operations 50,774,306 121,240,155
--------------------------
Dividends to shareholders:
From net investment
income:
Initial Class (2,041,096) (2,207,215)
Service Class (140,277) (104,825)
--------------------------
Total dividends to
shareholders (2,181,373) (2,312,040)
--------------------------
Capital share transactions:
Net proceeds from sale of
shares 12,766,836 14,743,786
Net asset value of shares
issued to shareholders in
reinvestment of dividends 2,181,373 2,312,040
Cost of shares redeemed (65,162,611) (55,110,983)
--------------------------
Decrease in net assets
derived from capital
share transactions (50,214,402) (38,055,157)
--------------------------
Net increase (decrease) 80,872,958
in net assets (1,621,469)
NET ASSETS
--------------------------------------------------------
Beginning of year 467,512,984 386,640,026
--------------------------
End of year $465,891,515 $467,512,984
==========================
Undistributed net investment
income at
end of year $ 1,894,147 $ 2,221,971
==========================
</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.
This page intentionally left blank
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
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
2010 2009 2008 2007 2006
Net asset value at beginning of
year $ 22.04 $ 16.52 $ 27.23 $ 24.26 $ 23.31
-------- -------- -------- -------- --------
Net investment income (loss) 0.13 0.12 0.10 (a) 0.13 0.05
Net realized and unrealized gain
(loss) on investments 2.57 5.51 (10.68) 2.88 0.99
-------- -------- -------- -------- --------
Total from investment operations 2.70 5.63 (10.58) 3.01 1.04
-------- -------- -------- -------- --------
Less dividends:
From net investment income (0.12) (0.11) (0.13) (0.04) (0.09)
-------- -------- -------- -------- --------
Net asset value at end of year $ 24.62 $ 22.04 $ 16.52 $ 27.23 $ 24.26
======== ======== ======== ======== ========
Total investment return 12.21% 34.18% (38.87%) 12.39% 4.45%
Ratios (to average net
assets)/Supplemental Data:
Net investment income (loss) 0.48% 0.57% 0.43% 0.40% 0.13%
Net expenses 0.65% 0.68% 0.64% 0.60% 0.62%
Portfolio turnover rate 126% 157% 54% 85% 28%
Net assets at end of year (in
000's) $417,194 $423,086 $350,412 $681,500 $738,278
</Table>
<Table>
(a) Per share data based on average shares outstanding during the period.
</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.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
SERVICE CLASS
---------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
2010 2009 2008 2007 2006
$ 21.96 $ 16.45 $ 27.07 $ 24.14 $ 23.21
------- ------- ------- ------- -------
0.05 0.05 0.04 (a) 0.04 (0.03)
2.58 5.51 (10.60) 2.89 1.00
------- ------- ------- ------- -------
2.63 5.56 (10.56) 2.93 0.97
------- ------- ------- ------- -------
(0.07) (0.05) (0.06) -- (0.04)
------- ------- ------- ------- -------
$ 24.52 $ 21.96 $ 16.45 $ 27.07 $ 24.14
======= ======= ======= ======= =======
11.93% 33.85% (39.03%) 12.11% 4.19%
0.23% 0.32% 0.18% 0.15% (0.12%)
0.90% 0.93% 0.89% 0.85% 0.87%
126% 157% 54% 85% 28%
$48,698 $44,427 $36,228 $64,887 $60,806
</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-163
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. THE PERFORMANCE TABLE AND GRAPH 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.
(LINE GRAPH)
<Table>
<Caption>
MAINSTAY VP MAINSTAY VP
HIGH YIELD HIGH YIELD
CORPORATE BOND CORPORATE BOND CREDIT SUISSE
PORTFOLIO INITIAL PORTFOLIO SERVICE HIGH YIELD
CLASS CLASS INDEX
----------------- ----------------- -------------
12/31/00 10000 10000 10000
12/31/01 10491 10467 10580
12/31/02 10707 10658 10909
12/31/03 14600 14499 13956
12/31/04 16458 16304 15625
12/31/05 16942 16737 15978
12/31/06 18982 18706 17882
12/31/07 19420 19090 18355
12/31/08 14737 14452 13551
12/31/09 21049 20589 20899
12/31/10 23716 23141 23913
</Table>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED DECEMBER 31, 2010
--------------------------------------------------------------------------------
<Table>
<Caption>
GROSS
EXPENSE
CLASS ONE YEAR FIVE YEARS TEN YEARS(1) RATIO(2)
-------------------------------------------------------------------------------------------
Initial Class Shares 12.67% 6.96% 9.02% 0.62%
-------------------------------------------------------------------------------------------
Service Class Shares(3) 12.39 6.69 8.75 0.87
-------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE FIVE TEN
YEAR YEARS YEARS
Credit Suisse High Yield Index(4) 14.42% 8.40% 9.11%
--------------------------------------------------------------------------------------------
Average Lipper Variable Products High Current Yield Portfolio(5) 13.61 6.24 6.79
--------------------------------------------------------------------------------------------
</Table>
1. Performance figures shown for the ten-year period ended December 31, 2010
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 9.01% for Initial Class shares and 8.74% for Service
Class shares for the ten-year period.
2. The gross expense ratios presented reflect the Portfolio's "Total Annual
Portfolio Operating Expenses" from the most recent Prospectus and may differ
from other expense ratios disclosed in this report.
3. 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.
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.
5. 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. Results are based on total returns with all dividend and
capital gain distributions reinvested.
M-164 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, 2010, to December 31,
2010, 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 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, 2010, to December 31, 2010. 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, 2010. 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 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 7/1/10 12/31/10 PERIOD(1) 12/31/10 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,080.80 $3.20 $1,022.10 $3.11
-------------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,079.50 $4.51 $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-165
PORTFOLIO COMPOSITION AS OF DECEMBER 31, 2010 (Unaudited)
(COMPOSITION PIE CHART)
<Table>
Corporate Bonds 78.6
Yankee Bonds 9.9
Short-Term Investment 4.8
Loan Assignments & Participations 3.2
Other Assets, Less Liabilities 1.8
Convertible Bonds 0.9
Foreign Bond 0.3
Preferred Stock 0.3
Common Stocks 0.2
Warrants 0.0
</Table>
See Portfolio of Investments beginning on page M-168 for specific holdings
within these categories.
++ Less than one-tenth of a percent.
TOP TEN ISSUERS HELD AS OF DECEMBER 31, 2010 (excluding short-term investment)
<Table>
1. Ford Motor Credit Co. LLC, 5.552%-12.00%, due
6/15/11-1/15/20
2. Georgia-Pacific Corp., 7.00%-8.875%, due 5/15/11-5/15/31
3. HCA, Inc., 1.553%-9.875%, due 2/1/11-4/15/19
4. Intelsat Subsidiary Holding Co., Ltd., 8.50%-8.875%,
due 1/15/13-1/15/15
5. Nova Chemicals Corp., 3.568%-8.375%, due 1/15/12-11/1/16
6. Videotron Ltee, 6.375%-9.125%, due 1/15/14-4/15/18
7. Reliant Energy, Inc., 7.625%-7.875%, due 6/15/14-6/15/17
8. Texas Industries, Inc., 9.25%, due 8/15/20
9. Crum & Forster Holdings Corp., 7.75%, due 5/1/17
10. Ally Financial, Inc., 6.25%-8.30%, due 2/12/15-9/15/20
</Table>
M-166 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 BENCH-MARK DURING 12 MONTHS ENDED DECEMBER 31, 2010?
For the 12 months ended December 31, 2010, MainStay VP High Yield Corporate Bond
Portfolio returned 12.67% for Initial Class shares and 12.39% for Service Class
shares. Both share classes underperformed the 13.61% return of the average
Lipper(1) Variable Products High Current Yield Portfolio and the 14.42% return
of the Credit Suisse High Yield Index(1) for the 12 months ended December 31,
2010. The Credit Suisse High Yield Index is the Portfolio's broad-based
securities-market index.
WHAT FACTORS AFFECTED THE PORTFOLIO'S RELATIVE PERFORMANCE DURING THE REPORTING
PERIOD?
The Portfolio underperformed the Credit Suisse High Yield Index as a result of
our bottom-up investment style, which focuses on individual companies to
determine risk-group weightings in the context of historical yield spreads.(2)
The Portfolio remained conservatively positioned throughout the reporting
period, based on our belief that the valuations of riskier high-yield bonds were
unattractive and business fundamentals for many high-yield issuers were weak.
DURING THE REPORTING PERIOD, WHICH MARKET SEGMENTS WERE THE STRONGEST
CONTRIBUTORS TO THE PORTFOLIO'S PERFORMANCE AND WHICH MARKET SEGMENTS WERE
PARTICULARLY WEAK?
The three most significant positive contributors to the Portfolio's performance
were investments in the energy, financials and transportation industries.
Automotive finance companies Ford Motor Credit and Ally Financial were notable
contributors to performance, as were hospital operator HCA and forest products
producer Georgia Pacific. Although no industries generated negative absolute
returns during the reporting period, the Portfolio's investments in the retail,
aerospace, and food and drug industries contributed the least to performance.
DID THE PORTFOLIO MAKE ANY SIGNIFICANT PURCHASES OR SALES DURING THE REPORTING
PERIOD?
During the reporting period, the Portfolio purchased bonds of Consol Energy, the
largest U.S. producer of high-BTU bituminous coal. The Portfolio also purchased
bonds of TRW Auto-motive, a global supplier of automotive safety systems, and
Treehouse Foods, a leading private-label food producer. Each of these purchases
had a positive impact on the Portfolio's performance during the portion of the
reporting period it was held in the Portfolio.
During the reporting period, the Portfolio sold positions in drugstore operator
Rite Aid, and global building materials supplier Lafarge. Both positions were
positive contributors to the Portfolio's performance during the respective
portions of the reporting period they were held in the Portfolio.
HOW DID THE PORTFOLIO'S INDUSTRY WEIGHTINGS CHANGE DURING THE REPORTING PERIOD?
During the reporting period, the Portfolio increased its weightings in the
consumer products and food/tobacco industries. The Portfolio slightly decreased
its weightings in the utility and energy industries.
HOW WAS THE PORTFOLIO POSITIONED AT THE END OF DECEMBER 2010?
As of December 31, 2010, the Portfolio held overweight positions relative to the
Credit Suisse High Yield Index in the transportation, health care and
cable/wireless video industries. As of the same date, the Portfolio was
underweight relative to the Credit Suisse High Yield Index in the media, retail
and information technology industries. The Portfolio was generally overweight in
industries that were more defensive and in companies of higher quality. This
positioning reflected the uncertain economic outlook for many high-yield
issuers. Another reason the Portfolio was overweight higher-quality high-yield
bonds at the end of the reporting period was because we viewed the valuations of
many riskier bonds as unattractive.
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 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 will
come to pass. This material does not constitute investment advice and is not
intended as an endorsement of any specific investment.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
Information about MainStay VP High Yield Corporate Bond Portfolio on this page
and the preceding pages has not been audited.
mainstayinvestments.com M-167
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2010
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
LONG-TERM BONDS 92.9%+
CONVERTIBLE BONDS 0.9%
---------------------------------------------------------
HOLDING COMPANIES--DIVERSIFIED 0.4%
American Real Estate
Partners, L.P./American
Real Estate Finance Corp.
4.00%, due 8/15/13 (a)(b) $ 325,000 $ 307,532
Icahn Enterprises, L.P.
4.00%, due 8/15/13 (b) 7,780,000 7,361,825
--------------
7,669,357
--------------
INTERNET 0.0%++
At Home Corp.
0.525%, due 12/28/18
(c)(d)(e)(f) 1,869,975 187
4.75%, due 12/31/49
(c)(d)(e)(f) 9,032,054 903
--------------
1,090
--------------
RETAIL 0.2%
Asbury Automotive Group,
Inc.
3.00%, due 9/15/12 3,365,000 3,343,969
Penske Auto Group, Inc.
3.50%, due 4/1/26 1,350,000 1,363,500
--------------
4,707,469
--------------
TELECOMMUNICATIONS 0.3%
NII Holdings, Inc.
3.125%, due 6/15/12 4,845,000 4,778,381
--------------
Total Convertible Bonds
(Cost $16,224,242) 17,156,297
--------------
CORPORATE BONDS 78.6%
---------------------------------------------------------
ADVERTISING 0.7%
Interpublic Group of Cos.,
Inc.
6.25%, due 11/15/14 3,100,000 3,344,125
Lamar Media Corp.
Series B
6.625%, due 8/15/15 1,945,000 1,974,175
6.625%, due 8/15/15 715,000 732,875
7.875%, due 4/15/18 3,775,000 4,010,937
9.75%, due 4/1/14 3,297,000 3,791,550
--------------
13,853,662
--------------
AEROSPACE & DEFENSE 1.1%
Alliant Techsystems, Inc.
6.875%, due 9/15/20 3,480,000 3,580,050
BE Aerospace, Inc.
8.50%, due 7/1/18 2,660,000 2,912,700
DAE Aviation Holdings, Inc.
11.25%, due 8/1/15 (a) 4,865,000 5,035,275
TransDigm, Inc.
7.75%, due 12/15/18 (a) 9,065,000 9,382,275
--------------
20,910,300
--------------
AGRICULTURE 0.1%
Alliance One International,
Inc.
10.00%, due 7/15/16 1,745,000 1,788,625
--------------
AIRLINES 0.0%++
Northwest Airlines, Inc.
(Escrow Shares)
7.625%, due 11/15/23
(c)(d)(g) 3,847,600 8,657
7.875%, due 12/31/49
(c)(d)(g) 3,986,900 3,987
8.70%, due 3/15/49
(c)(d)(g) 155,000 155
8.875%, due 6/1/49
(c)(d)(g) 1,996,000 1,996
9.875%, due 3/15/37
(c)(d)(g) 2,108,000 2,108
10.00%, due 2/1/49
(c)(d)(g) 7,315,600 7,316
--------------
24,219
--------------
APPAREL 0.9%
Hanesbrands, Inc.
6.375%, due 12/15/20 (a) 4,245,000 4,032,750
8.00%, due 12/15/16 3,795,000 4,070,137
Unifi, Inc.
11.50%, due 5/15/14 8,721,000 9,244,260
--------------
17,347,147
--------------
AUTO MANUFACTURERS 0.2%
Ford Motor Co.
6.50%, due 8/1/18 1,125,000 1,164,375
Oshkosh Corp.
8.25%, due 3/1/17 1,580,000 1,718,250
8.50%, due 3/1/20 1,580,000 1,734,050
--------------
4,616,675
--------------
AUTO PARTS & EQUIPMENT 2.4%
Affinia Group, Inc.
9.00%, due 11/30/14 1,570,000 1,613,175
10.75%, due 8/15/16 (a) 2,493,000 2,767,230
Allison Transmission, Inc.
11.25%, due 11/1/15
(a)(h) 1,323,000 1,442,070
Cooper Standard Automotive,
Inc.
8.50%, due 5/1/18 (a) 4,065,000 4,308,900
FleetPride Corp.
11.50%, due 10/1/14 (a) 5,900,000 5,634,500
Goodyear Tire & Rubber Co.
(The)
8.25%, due 8/15/20 6,865,000 7,105,275
10.50%, due 5/15/16 1,935,000 2,205,900
Johnson Controls, Inc.
5.25%, due 1/15/11 2,180,000 2,182,520
</Table>
+ Percentages indicated are based on Portfolio net assets.
X Among the Portfolio's 10 largest issuers held, as of December 31, 2010,
excluding short-term investment. May be subject to change daily.
M-168 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)
AUTO PARTS & EQUIPMENT (CONTINUED)
Lear Corp. (Escrow Shares)
8.75%, due 12/1/16
(c)(e)(g) $ 2,681,000 $ 4,022
Tenneco, Inc.
6.875%, due 12/15/20 (a) 5,065,000 5,178,962
7.75%, due 8/15/18 (a) 3,395,000 3,598,700
TRW Automotive, Inc.
7.00%, due 3/15/14 (a) 5,310,000 5,681,700
8.875%, due 12/1/17 (a) 3,050,000 3,416,000
--------------
45,138,954
--------------
BANKS 2.0%
X Ally Financial, Inc.
6.25%, due 12/1/17 (a) 1,040,000 1,040,000
7.50%, due 9/15/20 (a) 3,817,000 4,003,079
8.30%, due 2/12/15 8,905,000 9,795,500
CapitalSource, Inc.
12.75%, due 7/15/14 (a) 5,150,000 6,025,500
GMAC, Inc.
6.75%, due 12/1/14 7,410,000 7,799,025
6.875%, due 9/15/11 1,095,000 1,125,113
8.00%, due 11/1/31 3,480,000 3,749,700
Provident Funding
Associates
10.25%, due 4/15/17 (a) 3,255,000 3,377,062
--------------
36,914,979
--------------
BEVERAGES 0.7%
Constellation Brands, Inc.
8.375%, due 12/15/14 1,620,000 1,769,850
Cott Beverages, Inc.
8.125%, due 9/1/18 2,905,000 3,130,137
8.375%, due 11/15/17 7,930,000 8,564,400
--------------
13,464,387
--------------
BUILDING MATERIALS 2.2%
Associated Materials LLC
9.125%, due 11/1/17 (a) 3,535,000 3,694,075
Building Materials Corp. of
America
6.875%, due 8/15/18 (a) 4,820,000 4,771,800
7.00%, due 2/15/20 (a) 955,000 981,262
7.50%, due 3/15/20 (a) 5,640,000 5,738,700
Compression Polymers Corp.
10.50%, due 7/1/13 3,460,000 3,529,200
X Texas Industries, Inc.
9.25%, due 8/15/20 (a) 15,290,000 16,245,625
USG Corp.
8.375%, due 10/15/18 (a) 2,565,000 2,513,700
9.75%, due 8/1/14 (a) 2,705,000 2,853,775
--------------
40,328,137
--------------
CHEMICALS 1.7%
CF Industries, Inc.
6.875%, due 5/1/18 2,580,000 2,760,600
7.125%, due 5/1/20 2,085,000 2,283,075
Georgia Gulf Corp.
9.00%, due 1/15/17 (a) 6,320,000 6,857,200
Huntsman International LLC
5.50%, due 6/30/16 1,005,000 972,338
Nalco Co.
8.25%, due 5/15/17 575,000 623,156
Olin Corp.
8.875%, due 8/15/19 2,885,000 3,195,137
Omnova Solutions, Inc.
7.875%, due 11/1/18 (a) 3,630,000 3,657,225
Phibro Animal Health Corp.
9.25%, due 7/1/18 (a) 10,075,000 10,377,250
--------------
30,725,981
--------------
COAL 1.0%
Arch Coal, Inc.
7.25%, due 10/1/20 1,110,000 1,171,050
8.75%, due 8/1/16 2,070,000 2,256,300
Consol Energy, Inc.
8.00%, due 4/1/17 (a) 8,175,000 8,706,375
Peabody Energy Corp.
6.50%, due 9/15/20 3,485,000 3,720,237
7.375%, due 11/1/16 845,000 937,950
7.875%, due 11/1/26 2,235,000 2,424,975
--------------
19,216,887
--------------
COMMERCIAL SERVICES 1.8%
Corrections Corp. of
America
6.25%, due 3/15/13 1,030,000 1,040,300
7.75%, due 6/1/17 1,455,000 1,544,119
El Comandante Capital Corp.
(Escrow Shares) (zero
coupon), due 12/31/50
(c)(e)(g) 2,412,000 173,664
Ford Holdings LLC
9.30%, due 3/1/30 5,760,000 6,710,400
Great Lakes Dredge & Dock
Corp.
7.75%, due 12/15/13 4,854,000 4,896,472
iPayment, Inc.
9.75%, due 5/15/14 5,800,000 5,452,000
Knowledge Learning Corp.,
Inc.
7.75%, due 2/1/15 (a) 7,845,000 7,688,100
Lender Processing Services,
Inc.
8.125%, due 7/1/16 3,380,000 3,464,500
Quebecor World, Inc.
(Litigation Recovery
Trust--Escrow Shares)
6.50%, due 8/1/49
(c)(e)(g) 150,000 7,800
9.75%, due 1/15/49
(c)(e)(g) 8,530,000 443,560
</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-169
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2010 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
COMMERCIAL SERVICES (CONTINUED)
Service Corp. International
7.625%, due 10/1/18 $ 1,618,000 $ 1,698,900
--------------
33,119,815
--------------
COMPUTERS 0.4%
SunGard Data Systems, Inc.
4.875%, due 1/15/14 3,625,000 3,625,000
10.625%, due 5/15/15 3,425,000 3,776,063
--------------
7,401,063
--------------
DISTRIBUTION & WHOLESALE 0.6%
ACE Hardware Corp.
9.125%, due 6/1/16 (a) 4,815,000 5,152,050
American Tire Distributors,
Inc.
9.75%, due 6/1/17 (a) 4,970,000 5,367,600
--------------
10,519,650
--------------
ELECTRIC 4.3%
AES Eastern Energy, L.P.
Series 1999-A
9.00%, due 1/2/17 6,121,507 6,396,974
Calpine Construction
Finance Co., L.P. and
CCFC Finance Corp.
8.00%, due 6/1/16 (a) 13,635,000 14,487,187
Calpine Corp.
7.25%, due 10/15/17 (a) 10,177,000 10,177,000
Energy Future Intermediate
Holding Co. LLC/EFIH
Finance, Inc.
10.00%, due 12/1/20 4,390,000 4,527,288
GenOn Escrow Corp.
9.50%, due 10/15/18 (a) 6,410,000 6,369,938
Ipalco Enterprises, Inc.
7.25%, due 4/1/16 (a) 1,615,000 1,724,013
8.625%, due 11/14/11 795,000 824,813
NRG Energy, Inc.
7.25%, due 2/1/14 3,675,000 3,748,500
PNM Resources, Inc.
9.25%, due 5/15/15 2,825,000 3,121,625
Public Service Co. of New
Mexico
7.95%, due 5/15/18 2,305,000 2,590,481
Reliant Energy Mid-Atlantic
Power Holdings LLC
Series C
9.681%, due 7/2/26 1,190,000 1,270,325
X Reliant Energy, Inc.
7.625%, due 6/15/14 2,975,000 3,041,938
7.875%, due 6/15/17 14,950,000 14,501,500
RRI Energy, Inc.
6.75%, due 12/15/14 6,780,000 6,915,600
--------------
79,697,182
--------------
ELECTRICAL COMPONENTS & EQUIPMENT 0.4%
Belden, Inc.
7.00%, due 3/15/17 2,240,000 2,268,000
9.25%, due 6/15/19 4,810,000 5,272,963
--------------
7,540,963
--------------
ELECTRONICS 0.2%
Stoneridge, Inc.
9.50%, due 10/15/17 (a) 3,110,000 3,358,800
--------------
ENERGY--ALTERNATE SOURCES 0.3%
Headwaters, Inc.
11.375%, due 11/1/14 4,510,000 4,932,813
--------------
ENGINEERING & CONSTRUCTION 0.5%
New Enterprise Stone & Lime
Co.
11.00%, due 9/1/18 (a) 7,490,000 7,115,500
Tutor Perini Corp.
7.625%, due 11/1/18 (a) 1,780,000 1,788,900
--------------
8,904,400
--------------
ENTERTAINMENT 3.1%
American Casino &
Entertainment Properties
LLC
11.00%, due 6/15/14 2,880,000 2,923,200
FireKeepers Development
Authority
13.875%, due 5/1/15 (a) 870,000 1,028,775
Greektown Superholdings,
Inc.
13.00%, due 7/1/15 (a) 6,595,000 7,382,600
Isle of Capri Casinos, Inc.
7.00%, due 3/1/14 1,875,000 1,837,500
Jacobs Entertainment, Inc.
9.75%, due 6/15/14 7,415,000 7,211,087
Mohegan Tribal Gaming
Authority
6.125%, due 2/15/13 1,210,000 1,004,300
8.00%, due 4/1/12 1,656,000 1,382,760
NAI Entertainment Holdings
LLC
8.25%, due 12/15/17 (a) 9,265,000 9,728,250
Peninsula Gaming LLC
8.375%, due 8/15/15 1,665,000 1,750,331
10.75%, due 8/15/17 4,559,000 4,912,322
Penn National Gaming, Inc.
6.75%, due 3/1/15 7,510,000 7,622,650
Pinnacle Entertainment,
Inc.
7.50%, due 6/15/15 2,305,000 2,310,763
8.625%, due 8/1/17 3,490,000 3,804,100
Speedway Motorsports, Inc.
6.75%, due 6/1/13 700,000 705,250
8.75%, due 6/1/16 2,985,000 3,216,338
</Table>
M-170 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)
ENTERTAINMENT (CONTINUED)
United Artists Theatre
Circuit, Inc.
Series BA7
9.30%, due 7/1/15 (c)(e) $ 599,757 $ 419,830
--------------
57,240,056
--------------
ENVIRONMENTAL CONTROLS 0.8%
Clean Harbors, Inc.
7.625%, due 8/15/16 2,524,000 2,681,750
Darling International, Inc.
8.50%, due 12/15/18 (a) 3,600,000 3,753,000
Geo Sub Corp.
11.00%, due 5/15/12 8,780,000 8,362,950
--------------
14,797,700
--------------
FINANCE--AUTO LOANS 2.7%
AmeriCredit Corp.
8.50%, due 7/1/15 5,177,000 5,397,022
Credit Acceptance Corp.
9.125%, due 2/1/17 (a) 1,070,000 1,123,500
X Ford Motor Credit Co.
LLC
5.552%, due 6/15/11 (b) 5,535,000 5,618,025
5.625%, due 9/15/15 1,805,000 1,869,043
7.25%, due 10/25/11 8,545,000 8,831,651
7.50%, due 8/1/12 3,130,000 3,327,844
8.00%, due 6/1/14 10,630,000 11,711,145
8.00%, due 12/15/16 155,000 173,206
8.125%, due 1/15/20 3,735,000 4,345,348
12.00%, due 5/15/15 1,510,000 1,899,488
General Motors Acceptance
Corp. LLC
6.75%, due 12/1/14 5,080,000 5,322,880
--------------
49,619,152
--------------
FINANCE--CONSUMER LOANS 0.4%
SLM Corp.
8.00%, due 3/25/20 5,040,000 5,110,081
8.45%, due 6/15/18 1,585,000 1,647,389
--------------
6,757,470
--------------
FINANCE--OTHER SERVICES 0.6%
Nationstar
Mortgage/Nationstar
Capital Corp.
10.875%, due 4/1/15 (a) 7,510,000 7,378,575
Salton Sea Funding Corp.
Series E
8.30%, due 5/30/11 (e) 871 881
SquareTwo Financial Corp.
11.625%, due 4/1/17 (a) 4,185,000 4,122,225
--------------
11,501,681
--------------
FOOD 2.7%
American Seafoods Group
LLC/American Seafoods
Finance, Inc.
10.75%, due 5/15/16 (a) 4,740,000 5,048,100
American Stores Co.
8.00%, due 6/1/26 4,855,000 4,151,025
ASG Consolidated LLC/ASG
Finance, Inc.
15.00%, due 5/15/17
(a)(h) 3,633,983 3,488,624
B&G Foods, Inc.
7.625%, due 1/15/18 3,185,000 3,352,212
C&S Group Enterprises LLC
8.375%, due 5/1/17 (a) 3,575,000 3,414,125
Dean Foods Co.
9.75%, due 12/15/18 (a) 3,655,000 3,682,412
Smithfield Foods, Inc.
10.00%, due 7/15/14 (a) 4,540,000 5,232,350
Stater Brothers Holdings
7.75%, due 4/15/15 1,047,000 1,075,793
TreeHouse Foods, Inc.
6.03%, due 9/30/13 (c)(e) 6,300,000 6,315,750
7.75%, due 3/1/18 3,070,000 3,327,113
Tyson Foods, Inc.
8.25%, due 10/1/11 1,185,000 1,238,325
10.50%, due 3/1/14 7,735,000 9,146,637
--------------
49,472,466
--------------
FOREST PRODUCTS & PAPER 2.4%
ABI Escrow Corp.
10.25%, due 10/15/18 (a) 9,075,000 9,937,125
Bowater Canada Finance
(Escrow Shares)
9.375%, due 12/15/21
(c)(e)(g) 2,459,300 172,151
Clearwater Paper Corp.
7.125%, due 11/1/18 (a) 2,870,000 2,963,275
X Georgia-Pacific Corp.
7.00%, due 1/15/15 (a) 1,092,000 1,132,950
7.125%, due 1/15/17 (a) 1,231,000 1,311,015
7.25%, due 6/1/28 4,180,000 4,524,850
7.375%, due 12/1/25 1,310,000 1,414,800
7.75%, due 11/15/29 64,000 72,240
8.00%, due 1/15/24 3,469,000 3,963,333
8.125%, due 5/15/11 7,670,000 7,919,275
8.875%, due 5/15/31 6,895,000 8,480,850
Georgia-Pacific LLC
9.50%, due 12/1/11 595,000 636,650
Weyerhaeuser Co.
6.75%, due 3/15/12 2,100,000 2,218,526
6.875%, due 12/15/33 495,000 464,434
--------------
45,211,474
--------------
</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-171
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2010 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
HAND & MACHINE TOOLS 0.0%++
Baldor Electric Co.
8.625%, due 2/15/17 $ 750,000 $ 840,000
--------------
HEALTH CARE--PRODUCTS 1.0%
Alere, Inc.
8.625%, due 10/1/18 (a) 2,155,000 2,187,325
Biomet, Inc.
10.00%, due 10/15/17 4,835,000 5,282,237
11.625%, due 10/15/17 4,310,000 4,762,550
Hanger Orthopedic Group,
Inc.
7.125%, due 11/15/18 5,590,000 5,576,025
--------------
17,808,137
--------------
HEALTH CARE--SERVICES 3.8%
Alliance HealthCare
Services, Inc.
8.00%, due 12/1/16 3,740,000 3,450,150
American Renal Holdings
8.375%, due 5/15/18 (a) 2,830,000 2,900,750
Capella Healthcare, Inc.
9.25%, due 7/1/17 (a) 3,850,000 4,081,000
Centene Corp.
7.25%, due 4/1/14 2,660,000 2,739,800
Community Health Systems,
Inc.
8.875%, due 7/15/15 6,105,000 6,410,250
DaVita, Inc.
6.375%, due 11/1/18 3,010,000 2,994,950
6.625%, due 11/1/20 1,896,000 1,877,040
Gentiva Health Services,
Inc.
11.50%, due 9/1/18 4,170,000 4,545,300
HCA Holdings, Inc.
7.75%, due 5/15/21 (a) 2,570,000 2,570,000
X HCA, Inc.
5.75%, due 3/15/14 3,050,000 3,004,250
6.30%, due 10/1/12 5,035,000 5,148,287
6.75%, due 7/15/13 3,095,000 3,180,113
7.19%, due 11/15/15 93,000 91,140
7.875%, due 2/1/11 3,700,000 3,709,250
8.50%, due 4/15/19 1,470,000 1,609,650
9.00%, due 12/15/14 440,000 460,900
9.125%, due 11/15/14 480,000 503,400
9.875%, due 2/15/17 1,355,000 1,490,500
HealthSouth Corp.
8.125%, due 2/15/20 3,090,000 3,321,750
MultiPlan, Inc.
9.875%, due 9/1/18 (a) 7,760,000 8,245,000
Res-Care, Inc.
10.75%, due 1/15/19 (a) 3,480,000 3,584,400
Select Medical Corp.
7.625%, due 2/1/15 3,655,000 3,655,000
Vanguard Health Holding Co.
II LLC/Vanguard Holding
Co. II, Inc.
8.00%, due 2/1/18 1,015,000 1,040,375
8.00%, due 2/1/18 (a) 640,000 652,800
--------------
71,266,055
--------------
HOLDING COMPANIES--DIVERSIFIED 0.5%
Leucadia National Corp.
8.125%, due 9/15/15 4,480,000 4,883,200
Susser Holdings LLC/Susser
Finance Corp.
8.50%, due 5/15/16 4,640,000 4,976,400
--------------
9,859,600
--------------
HOUSEHOLD PRODUCTS & WARES 1.3%
Central Garden and Pet Co.
8.25%, due 3/1/18 4,785,000 4,844,812
Diversey, Inc.
8.25%, due 11/15/19 1,500,000 1,627,500
Jarden Corp.
6.125%, due 11/15/22 1,210,000 1,155,550
7.50%, due 5/1/17 5,940,000 6,259,275
Prestige Brands, Inc.
8.25%, due 4/1/18 (a) 3,560,000 3,684,600
Spectrum Brands, Inc.
9.50%, due 6/15/18 (a) 6,505,000 7,147,369
--------------
24,719,106
--------------
HOUSEWARES 0.4%
Libbey Glass, Inc.
10.00%, due 2/15/15 (a) 6,175,000 6,638,125
--------------
INSURANCE 1.9%
AIG SunAmerica Global
Financing VI
6.30%, due 5/10/11 (a) 2,690,000 2,730,350
X Crum & Forster Holdings
Corp.
7.75%, due 5/1/17 15,470,000 16,088,800
HUB International Holdings,
Inc.
9.00%, due 12/15/14 (a) 5,165,000 5,229,563
Ironshore Holdings (US),
Inc.
8.50%, due 5/15/20 (a) 4,190,000 4,381,483
Lumbermens Mutual Casualty
Co.
8.45%, due 12/1/97
(a)(c)(d)(e) 555,000 5,550
9.15%, due 7/1/26
(a)(c)(d)(e) 12,235,000 122,350
USI Holdings Corp.
4.161%, due 11/15/14
(a)(b) 770,000 673,750
9.75%, due 5/15/15 (a) 2,599,000 2,624,990
Willis North America, Inc.
6.20%, due 3/28/17 2,430,000 2,496,956
--------------
34,353,792
--------------
</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)
INTERNET 0.3%
Expedia, Inc.
8.50%, due 7/1/16 (a) $ 4,795,000 $ 5,250,525
--------------
INVESTMENT MANAGEMENT/ADVISORY SERVICES 0.6%
Janus Capital Group, Inc.
6.125%, due 9/15/11 1,275,000 1,302,299
6.50%, due 6/15/12 285,000 308,239
6.95%, due 6/15/17 3,743,000 3,899,558
Pinafore LLC/Pinafore, Inc.
9.00%, due 10/1/18 (a) 5,085,000 5,491,800
--------------
11,001,896
--------------
IRON & STEEL 0.6%
Allegheny Ludlum Corp.
6.95%, due 12/15/25 2,545,000 2,653,297
Allegheny Technologies,
Inc.
8.375%, due 12/15/11 85,000 88,486
9.375%, due 6/1/19 2,600,000 3,037,440
Ryerson, Inc.
7.662%, due 11/1/14 (b) 1,370,000 1,274,100
12.00%, due 11/1/15 4,090,000 4,284,275
--------------
11,337,598
--------------
LEISURE TIME 0.4%
Brunswick Corp.
11.25%, due 11/1/16 (a) 1,760,000 2,094,400
Harley-Davidson Funding
Corp.
5.25%, due 12/15/12 (a) 255,000 267,045
6.80%, due 6/15/18 (a) 2,795,000 2,944,150
Town Sports International
Holdings, Inc.
11.00%, due 2/1/14 2,610,000 2,583,900
--------------
7,889,495
--------------
LODGING 0.9%
MGM Mirage, Inc.
13.00%, due 11/15/13 1,825,000 2,158,062
San Pasqual Casino
8.00%, due 9/15/13 (a) 1,815,000 1,817,269
Seminole Hard Rock
Entertainment,
Inc./Seminole Hard Rock
International LLC
2.802%, due 3/15/14
(a)(b) 3,760,000 3,440,400
Sheraton Holding Corp.
7.375%, due 11/15/15 2,580,000 2,902,500
Starwood Hotels & Resorts
Worldwide, Inc.
6.25%, due 2/15/13 2,575,000 2,755,250
7.875%, due 5/1/12 4,224,000 4,498,560
--------------
17,572,041
--------------
MACHINERY--DIVERSIFIED 0.5%
Briggs & Stratton Corp.
6.875%, due 12/15/20 3,660,000 3,733,200
8.875%, due 3/15/11 4,965,000 5,064,300
--------------
8,797,500
--------------
MEDIA 3.4%
CCO Holdings LLC / CCO
Holdings Capital Corp.
7.25%, due 10/30/17 1,245,000 1,263,675
7.875%, due 4/30/18 1,585,000 1,640,475
Charter Communications
Operating LLC
8.00%, due 4/30/12 (a) 13,479,000 14,152,950
Charter Communications
Operating LLC/Charter
Communications Operating
Capital
10.875%, due 9/15/14 (a) 565,000 631,388
CSC Holdings, Inc.
6.75%, due 4/15/12 2,155,000 2,238,506
8.50%, due 4/15/14 6,575,000 7,224,281
HSN, Inc.
11.25%, due 8/1/16 6,555,000 7,480,894
Morris Publishing Group LLC
10.00%, due 9/1/14 (e) 2,267,721 2,205,359
Nielsen Finance LLC/Nielsen
Finance Co.
7.75%, due 10/15/18 (a) 7,060,000 7,307,100
ProQuest LLC/ProQuest Notes
Co.
9.00%, due 10/15/18 (a) 6,210,000 6,396,300
Rainbow National Services
LLC
8.75%, due 9/1/12 (a) 2,940,000 2,947,350
10.375%, due 9/1/14 (a) 8,515,000 8,834,312
Ziff Davis Media, Inc.
(Escrow Shares)
8.788%, due 7/15/11
(c)(e)(g)(h) 935,355 20,391
--------------
62,342,981
--------------
METAL FABRICATE & HARDWARE 0.5%
Mueller Water Products,
Inc.
7.375%, due 6/1/17 2,705,000 2,610,325
8.75%, due 9/1/20 5,200,000 5,746,000
Neenah Foundry Co.
15.00%, due 7/29/15 (e) 1,189,999 1,167,687
--------------
9,524,012
--------------
MINING 0.5%
Freeport-McMoRan Copper &
Gold, Inc.
8.25%, due 4/1/15 613,000 645,949
8.375%, due 4/1/17 7,105,000 7,859,906
--------------
8,505,855
--------------
MISCELLANEOUS--MANUFACTURING 2.0%
Actuant Corp.
6.875%, due 6/15/17 4,450,000 4,550,125
</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, 2010 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
MISCELLANEOUS--MANUFACTURING (CONTINUED)
Amsted Industries, Inc.
8.125%, due 3/15/18 (a) $ 10,055,000 $ 10,670,869
FGI Operating Co., Inc.
10.25%, due 8/1/15 3,480,000 3,654,000
Koppers, Inc.
7.875%, due 12/1/19 5,005,000 5,367,862
Polypore International,
Inc.
7.50%, due 11/15/17 (a) 4,610,000 4,702,200
SPX Corp.
6.875%, due 9/1/17 (a) 4,285,000 4,552,812
7.625%, due 12/15/14 4,095,000 4,453,313
--------------
37,951,181
--------------
OFFICE FURNISHINGS 0.3%
Interface, Inc.
7.625%, due 12/1/18 (a) 5,270,000 5,441,275
--------------
OIL & GAS 9.1%
Anadarko Petroleum Corp.
6.375%, due 9/15/17 3,189,000 3,473,800
Atlas Energy Operating Co.
LLC/Atlas Energy Finance
Corp.
12.125%, due 8/1/17 2,580,000 3,263,700
Berry Petroleum Co.
10.25%, due 6/1/14 3,915,000 4,492,462
BreitBurn Energy Partners,
L.P.
8.625%, due 10/15/20 (a) 5,465,000 5,492,325
Chaparral Energy, Inc.
8.50%, due 12/1/15 6,330,000 6,440,775
Chesapeake Energy Corp.
6.50%, due 8/15/17 9,615,000 9,663,075
6.875%, due 8/15/18 2,565,000 2,603,475
Comstock Resources, Inc.
6.875%, due 3/1/12 3,565,000 3,569,456
Concho Resources,
Inc./Midland TX
7.00%, due 1/15/21 5,485,000 5,622,125
Continental Resources, Inc.
8.25%, due 10/1/19 3,620,000 4,018,200
Denbury Resources, Inc.
7.50%, due 4/1/13 1,298,000 1,310,980
7.50%, due 12/15/15 3,065,000 3,172,275
8.25%, due 2/15/20 5,415,000 5,875,275
Forest Oil Corp.
8.00%, due 12/15/11 3,885,000 4,059,825
8.50%, due 2/15/14 410,000 447,925
Frontier Oil Corp.
8.50%, due 9/15/16 2,230,000 2,374,950
Hilcorp Energy I,
L.P./Hilcorp Finance Co.
7.75%, due 11/1/15 (a) 7,600,000 7,847,000
9.00%, due 6/1/16 (a) 2,895,000 3,061,463
Holly Corp.
9.875%, due 6/15/17 4,550,000 4,959,500
KCS Energy, Inc.
7.125%, due 4/1/12 6,575,000 6,591,437
Linn Energy LLC
9.875%, due 7/1/18 3,685,000 4,035,075
Linn Energy LLC/Linn Energy
Finance Corp.
11.75%, due 5/15/17 3,820,000 4,373,900
Newfield Exploration Co.
6.625%, due 9/1/14 6,425,000 6,553,500
6.625%, due 4/15/16 5,060,000 5,199,150
Penn Virginia Corp.
10.375%, due 6/15/16 2,400,000 2,676,000
PetroHawk Energy Corp.
7.875%, due 6/1/15 1,725,000 1,796,156
10.50%, due 8/1/14 3,615,000 4,121,100
Petroquest Energy, Inc.
10.00%, due 9/1/17 8,075,000 8,458,562
Pioneer Drilling Co.
9.875%, due 3/15/18 3,325,000 3,516,188
Plains Exploration &
Production Co.
7.75%, due 6/15/15 2,100,000 2,189,250
10.00%, due 3/1/16 4,640,000 5,185,200
Pride International, Inc.
6.875%, due 8/15/20 3,745,000 3,885,438
Range Resources Corp.
7.50%, due 5/15/16 310,000 321,625
8.00%, due 5/15/19 2,980,000 3,244,475
Rosetta Resources, Inc.
9.50%, due 4/15/18 2,550,000 2,754,000
Stone Energy Corp.
6.75%, due 12/15/14 4,640,000 4,524,000
8.625%, due 2/1/17 2,400,000 2,436,000
W&T Offshore, Inc.
8.25%, due 6/15/14 (a) 3,725,000 3,622,563
Whiting Petroleum Corp.
6.50%, due 10/1/18 3,785,000 3,822,850
7.00%, due 2/1/14 7,891,000 8,285,550
--------------
169,340,605
--------------
OIL & GAS SERVICES 0.4%
American Petroleum Tankers
LLC/AP Tankers Co.
10.25%, due 5/1/15 (a) 3,555,000 3,679,425
</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)
OIL & GAS SERVICES (CONTINUED)
Complete Production
Services, Inc.
8.00%, due 12/15/16 $ 3,815,000 $ 3,948,525
--------------
7,627,950
--------------
PACKAGING & CONTAINERS 1.6%
Ball Corp.
6.75%, due 9/15/20 1,635,000 1,716,750
7.125%, due 9/1/16 2,790,000 3,006,225
7.375%, due 9/1/19 2,805,000 3,015,375
Greif, Inc.
6.75%, due 2/1/17 3,324,000 3,473,580
Owens-Brockway Glass
Container, Inc.
6.75%, due 12/1/14 4,035,000 4,105,613
7.375%, due 5/15/16 1,750,000 1,859,375
Plastipak Holdings, Inc.
10.625%, due 8/15/19 (a) 8,948,000 10,055,314
Silgan Holdings, Inc.
7.25%, due 8/15/16 2,295,000 2,444,175
--------------
29,676,407
--------------
PHARMACEUTICALS 1.7%
BioScrip, Inc.
10.25%, due 10/1/15 3,325,000 3,424,750
Catalent Pharma Solutions,
Inc.
9.50%, due 4/15/15 (h) 6,901,515 6,970,530
Lantheus Medical Imaging,
Inc.
9.75%, due 5/15/17 (a) 2,465,000 2,575,925
Mylan, Inc.
7.625%, due 7/15/17 (a) 5,010,000 5,329,388
7.875%, due 7/15/20 (a) 2,940,000 3,167,850
Quintiles Transnational
Corp.
9.50%, due 12/30/14
(a)(h) 4,740,000 4,858,500
Valeant Pharmaceuticals
International
6.75%, due 10/1/17 (a) 2,200,000 2,189,000
7.00%, due 10/1/20 (a) 2,200,000 2,172,500
--------------
30,688,443
--------------
PIPELINES 2.3%
ANR Pipeline Co.
7.375%, due 2/15/24
11.50%, beginning 11/1/11 395,000 482,128
9.625%, due 11/1/21 7,515,000 10,544,665
Cedar Brakes II LLC
9.875%, due 9/1/13 (a) 2,681,007 2,859,240
Copano Energy LLC
8.125%, due 3/1/16 3,405,000 3,507,150
Copano Energy LLC/Copano
Energy Finance Corp.
7.75%, due 6/1/18 7,365,000 7,512,300
Crosstex Energy, L.P.
/Crosstex Energy Finance
Corp.
8.875%, due 2/15/18 2,440,000 2,613,850
El Paso Natural Gas Co.
7.50%, due 11/15/26 1,435,000 1,582,934
MarkWest Energy Partners,
L.P./MarkWest Energy
Finance Corp.
6.75%, due 11/1/20 3,530,000 3,530,000
8.50%, due 7/15/16 6,065,000 6,398,575
Northwest Pipeline Corp.
7.125%, due 12/1/25 2,195,000 2,680,117
--------------
41,710,959
--------------
REAL ESTATE INVESTMENT TRUSTS 0.8%
Host Hotels & Resorts, Inc.
6.00%, due 11/1/20 (a) 650,000 640,250
Host Hotels & Resorts, L.P.
6.875%, due 11/1/14 2,145,000 2,209,350
Host Marriott, L.P.
6.375%, due 3/15/15 2,675,000 2,715,125
Series Q
6.75%, due 6/1/16 9,400,000 9,599,750
--------------
15,164,475
--------------
RETAIL 3.3%
AmeriGas Partners, L.P.
7.25%, due 5/20/15 4,265,000 4,382,287
AmeriGas Partners,
L.P./AmeriGas Eagle
Finance Corp.
7.125%, due 5/20/16 995,000 1,029,825
Asbury Automotive Group,
Inc.
7.625%, due 3/15/17 675,000 681,750
8.375%, due 11/15/20 (a) 5,855,000 6,045,287
AutoNation, Inc.
6.75%, due 4/15/18 5,495,000 5,673,587
DineEquity, Inc.
9.50%, due 10/30/18 (a) 8,705,000 9,227,300
Dunkin Finance Corp.
9.625%, due 12/1/18 (a) 2,860,000 2,888,600
J.C. Penney Corp., Inc.
7.125%, due 11/15/23 4,215,000 4,351,988
Limited Brands, Inc.
8.50%, due 6/15/19 1,555,000 1,776,588
Penske Auto Group, Inc.
7.75%, due 12/15/16 7,629,000 7,781,580
Phillips-Van Heusen Corp.
7.375%, due 5/15/20 2,540,000 2,698,750
QVC, Inc.
7.125%, due 4/15/17 (a) 1,405,000 1,471,738
Roadhouse Financing, Inc.
10.75%, due 10/15/17 (a) 1,230,000 1,328,400
</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, 2010 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
RETAIL (CONTINUED)
Sally Holdings LLC
9.25%, due 11/15/14 $ 4,990,000 $ 5,239,500
Sonic Automotive, Inc.
9.00%, due 3/15/18 5,640,000 5,936,100
--------------
60,513,280
--------------
SEMICONDUCTORS 0.1%
Advanced Micro Devices,
Inc.
7.75%, due 8/1/20 (a) 2,410,000 2,500,375
--------------
SOFTWARE 0.4%
Fidelity National
Information Services,
Inc.
7.625%, due 7/15/17 (a) 3,245,000 3,415,363
7.875%, due 7/15/20 (a) 955,000 1,009,913
SS&C Technologies, Inc.
11.75%, due 12/1/13 3,513,000 3,627,172
--------------
8,052,448
--------------
TELECOMMUNICATIONS 4.4%
Alcatel-Lucent USA, Inc.
6.45%, due 3/15/29 6,580,000 5,198,200
CC Holdings GS V LLC/Crown
Castle GS III Corp.
7.75%, due 5/1/17 (a) 9,690,000 10,586,325
Clearwire Communications
LLC/Clearwire Finance,
Inc.
12.00%, due 12/1/15 (a) 7,455,000 8,046,913
12.00%, due 12/1/17 (a) 1,130,000 1,169,550
Crown Castle International
Corp.
7.125%, due 11/1/19 6,835,000 7,228,012
9.00%, due 1/15/15 940,000 1,036,350
DigitalGlobe, Inc.
10.50%, due 5/1/14 3,070,000 3,503,638
GCI, Inc.
7.25%, due 2/15/14 5,550,000 5,619,375
8.625%, due 11/15/19 4,835,000 5,233,887
GeoEye, Inc.
9.625%, due 10/1/15 2,060,000 2,327,800
iPCS, Inc.
2.412%, due 5/1/13 (b) 925,000 890,313
Lucent Technologies, Inc.
6.50%, due 1/15/28 3,620,000 2,877,900
MetroPCS Wireless, Inc.
6.625%, due 11/15/20 5,510,000 5,248,275
7.875%, due 9/1/18 3,445,000 3,574,187
PAETEC Holding Corp.
9.875%, due 12/1/18 (a) 3,423,000 3,517,133
Qwest Corp.
7.50%, due 10/1/14 1,010,000 1,131,200
SBA Telecommunications,
Inc.
8.25%, due 8/15/19 3,905,000 4,266,212
Sprint Capital Corp.
6.875%, due 11/15/28 5,655,000 4,948,125
Sprint Nextel Corp.
8.375%, due 8/15/17 5,235,000 5,614,537
--------------
82,017,932
--------------
TEXTILES 0.2%
INVISTA
9.25%, due 5/1/12 (a) 3,126,000 3,180,705
--------------
TRANSPORTATION 1.0%
AMGH Merger Sub, Inc.
9.25%, due 11/1/18 (a) 3,065,000 3,218,250
KAR Holdings, Inc.
4.287%, due 5/1/14 (b) 2,475,000 2,345,062
8.75%, due 5/1/14 5,110,000 5,314,400
10.00%, due 5/1/15 2,162,000 2,291,720
Syncreon Global Ireland,
Ltd./Syncreon Global
Finance US, Inc.
9.50%, due 5/1/18 (a) 4,490,000 4,557,350
--------------
17,726,782
--------------
TRUCKING & LEASING 0.2%
Greenbrier Cos., Inc.
8.375%, due 5/15/15 3,540,000 3,584,250
--------------
Total Corporate Bonds
(Cost $1,377,162,520) 1,457,288,423
--------------
FOREIGN BOND 0.3%
---------------------------------------------------------
MEDIA 0.3%
Shaw Communications, Inc.
7.50%, due 11/20/13 C$5,470,000 6,177,585
--------------
Total Foreign Bond
(Cost $4,364,092) 6,177,585
--------------
LOAN ASSIGNMENTS & PARTICIPATIONS 3.2% (I)
---------------------------------------------------------
AEROSPACE & DEFENSE 0.1%
DAE Aviation Holdings, Inc.
Tranche B1 Term Loan
4.04%, due 7/31/14 $ 1,133,506 1,116,504
Tranche B2 Term Loan
4.04%, due 7/31/14 1,094,780 1,078,358
--------------
2,194,862
--------------
</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
LOAN ASSIGNMENTS & PARTICIPATIONS (CONTINUED)
AUTO MANUFACTURERS 0.5%
Ford Motor Co.
Term Loan B1
3.026%, due 12/15/13 $ 8,358,764 $ 8,318,082
--------------
COMMERCIAL SERVICES 0.3%
Lender Processing Services,
Inc.
Term Loan A
2.261%, due 7/2/13 1,904,833 1,881,023
Ocwen Financial Corp.
Term Loan
9.00%, due 7/28/15 3,828,679 3,828,679
--------------
5,709,702
--------------
ELECTRIC 0.8%
Calpine Corp.
1st Priority Term Loan
3.145%, due 3/29/14 558,013 557,016
Texas Competitive Electric
Holdings Co. LLC
Term Loan B2
3.764%, due 10/10/14 10,318,388 7,959,233
Term Loan B3
3.764%, due 10/10/14 6,543,268 5,039,062
--------------
13,555,311
--------------
FOOD 0.1%
American Seafoods Group
LLC/American Seafoods
Finance, Inc.
Term Loan B
5.50%, due 5/2/15 2,352,738 2,354,697
--------------
HEALTH CARE--SERVICES 0.7%
X HCA, Inc.
Term Loan A
1.553%, due 11/16/12 1,662,753 1,636,253
Term Loan B
2.553%, due 11/18/13 6,419,543 6,349,731
Sun Healthcare Group, Inc.
New Term Loan B
8.00%, due 10/15/16 4,786,222 4,762,291
--------------
12,748,275
--------------
MACHINERY 0.0%++
BHM Technologies LLC
Exit Term Loan B
8.50%, due 11/26/13
(c)(d)(e)(g) 1,848,560 4,991
--------------
MEDIA 0.4%
Nielsen Finance LLC
Class A Term Loan
2.264%, due 8/9/13 7,623,276 7,521,177
--------------
METAL FABRICATE & HARDWARE 0.3%
Neenah Corp.
Exit Term Loan
11.00%, due 1/2/15 (c)(e) 6,000,000 6,000,000
--------------
Total Loan Assignments &
Participations
(Cost $62,856,572) 58,407,097
--------------
YANKEE BONDS 9.9% (J)
---------------------------------------------------------
CHEMICALS 1.2%
X Nova Chemicals Corp.
3.568%, due 11/15/13 (b) 10,200,000 10,021,500
6.50%, due 1/15/12 7,500,000 7,781,250
8.375%, due 11/1/16 3,835,000 4,084,275
--------------
21,887,025
--------------
COMMERCIAL SERVICES 0.4%
National Money Mart Co.
10.375%, due 12/15/16 6,565,000 7,090,200
--------------
DIVERSIFIED FINANCIAL SERVICES 0.4%
Smurfit Capital Funding PLC
7.50%, due 11/20/25 8,295,000 7,652,137
--------------
ENTERTAINMENT 0.3%
MU Finance PLC
8.375%, due 2/1/17 (a) 6,325,000 6,427,781
--------------
FOREST PRODUCTS & PAPER 0.2%
PE Paper Escrow GmbH
12.00%, due 8/1/14 (a) 3,130,000 3,621,260
--------------
HEALTH CARE--PRODUCTS 0.6%
DJO Finance LLC/DJO Finance
Corp.
9.75%, due 10/15/17 (a) 3,310,000 3,409,300
10.875%, due 11/15/14 7,440,000 8,118,900
--------------
11,528,200
--------------
INSURANCE 0.4%
Fairfax Financial Holdings,
Ltd.
7.375%, due 4/15/18 3,015,000 3,124,294
7.75%, due 7/15/37 135,000 131,119
8.30%, due 4/15/26 4,645,000 4,708,868
--------------
7,964,281
--------------
</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, 2010 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
YANKEE BONDS (CONTINUED)
LEISURE TIME 0.3%
Willis Group Holdings, Ltd.
(Trinity Acquisition,
Ltd.)
12.875%, due 12/31/16
(a)(c)(e) $ 3,350,000 $ 4,586,988
--------------
MEDIA 1.6%
Quebecor Media, Inc.
7.75%, due 3/15/16 10,879,000 11,232,567
X Videotron Ltee
6.375%, due 12/15/15 2,425,000 2,479,563
6.875%, due 1/15/14 1,120,000 1,134,000
9.125%, due 4/15/18 12,630,000 14,082,450
--------------
28,928,580
--------------
MINING 0.4%
Novelis, Inc.
8.375%, due 12/15/17 (a) 4,805,000 4,973,175
8.75%, due 12/15/20 (a) 2,860,000 2,967,250
--------------
7,940,425
--------------
OIL & GAS SERVICES 0.4%
Expro Finance Luxembourg
SCA
8.50%, due 12/15/16 (a) 8,560,000 8,174,800
--------------
PHARMACEUTICALS 0.7%
ConvaTec Healthcare E S.A.
10.50%, due 12/15/18 (a) 5,235,000 5,306,981
Warner Chilcott Co.
LLC/Warner Chilcott
Finance LLC
7.75%, due 9/15/18 (a) 7,665,000 7,741,650
--------------
13,048,631
--------------
TELECOMMUNICATIONS 2.9%
X Intelsat Subsidiary
Holding Co., Ltd.
8.50%, due 1/15/13 17,635,000 17,657,044
8.875%, due 1/15/15 (a) 6,110,000 6,247,475
8.875%, due 1/15/15 1,415,000 1,453,913
Nortel Networks, Ltd.
10.125%, due 7/15/13 (d) 1,065,000 899,925
10.75%, due 7/15/16 (d) 1,540,000 1,301,300
Sable International
Finance, Ltd.
7.75%, due 2/15/17 (a) 6,430,000 6,799,725
Virgin Media Finance PLC
8.375%, due 10/15/19 4,455,000 4,867,087
9.50%, due 8/15/16 4,930,000 5,570,900
Virgin Media Secured
Finance PLC
6.50%, due 1/15/18 8,580,000 9,030,450
--------------
53,827,819
--------------
TRANSPORTATION 0.1%
Kansas City Southern de
Mexico S.A. de C.V.
7.375%, due 6/1/14 1,380,000 1,442,100
--------------
Total Yankee Bonds
(Cost $173,587,649) 184,120,227
--------------
Total Long-Term Bonds
(Cost $1,634,195,075) 1,723,149,629
--------------
<Caption>
SHARES
COMMON STOCKS 0.2%
---------------------------------------------------------
BEVERAGES 0.0%++
Cott Corp.(g) 5,200 46,852
--------------
COMMERCIAL SERVICES 0.0%++
Quad/Graphics, Inc. (g) 13,423 553,833
--------------
FOREST PRODUCTS & PAPER 0.1%
AbitibiBowater, Inc. (g) 37,796 894,631
--------------
MEDIA 0.0%++
Adelphia Contingent Value
Vehicle (c)(e)(g) 2,207,279 22,073
--------------
METAL FABRICATE & HARDWARE 0.1%
Neenah Enterprises, Inc.
(c)(e)(g) 230,859 1,348,217
--------------
Total Common Stocks
(Cost $4,154,761) 2,865,606
--------------
PREFERRED STOCK 0.3%
---------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS 0.3%
Sovereign Real Estate
Investment Corp.
12.00% (a)(e) 4,700 5,369,750
--------------
Total Preferred Stock
(Cost $6,397,287) 5,369,750
--------------
<Caption>
NUMBER OF
WARRANTS
WARRANTS 0.0%++
---------------------------------------------------------
FOOD 0.0%++
ASG Corp.
Expires 5/15/18 (e)(g) 3,370 421,250
--------------
</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>
NUMBER OF
WARRANTS VALUE
WARRANTS (CONTINUED)
MEDIA 0.0%++
ION Media Networks, Inc.,
Second Lien
Expires 12/19/12
(c)(e)(g) 365 $ 4
Unsecured Certificates
Expires 12/19/12
(c)(e)(g) 360 3
--------------
7
--------------
Total Warrants
(Cost $1,099) 421,257
--------------
<Caption>
PRINCIPAL
AMOUNT
SHORT-TERM INVESTMENT 4.8%
---------------------------------------------------------
REPURCHASE AGREEMENT 4.8%
State Street Bank and Trust
Co.
0.01%, dated 12/31/10
due 1/3/11
Proceeds at Maturity
$88,923,189
(Collateralized by a
United States Treasury
Note with a rate of
1.375% and a maturity
date of 5/15/13, with a
Principal Amount of
$89,335,000 and a Market
Value of $90,701,826) $ 88,923,115 88,923,115
--------------
Total Short-Term Investment
(Cost $88,923,115) 88,923,115
--------------
Total Investments
(Cost $1,733,671,337) (k) 98.2% 1,820,729,357
Other Assets, Less
Liabilities 1.8 32,430,541
------------ --------------
Net Assets 100.0% $1,853,159,898
============ ==============
</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) Floating rate--Rate shown is the rate in
effect at December 31, 2010.
(c) Fair valued security. The total market
value of these securities at December 31,
2010 is $19,672,653, which represents
1.1% of the Portfolio's net assets.
(d) Issue in default.
(e) Illiquid security. The total market
value of these securities at December 31,
2010 is $28,813,361, which represents
1.6% of the Portfolio's net assets.
(f) Restricted security.
(g) Non-income producing security.
(h) PIK ("Payment in Kind")--interest or
dividend payment is made with additional
securities.
(i) Floating Rate Loan--generally pays
interest at rates which are periodically
re-determined at a margin above the
London InterBank Offered Rate ("LIBOR")
or other short-term rates. The rate shown
is the rate(s) in effect at December 31,
2010. 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) Yankee Bond--dollar-denominated bond
issued in the United States by a foreign
bank or corporation.
(k) At December 31, 2010, cost is
$1,735,998,491 for federal income tax
purposes and net unrealized appreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $108,065,781
Gross unrealized depreciation (23,334,915)
------------
Net unrealized appreciation $ 84,730,866
============
</Table>
The following abbreviation is used in the above portfolio:
C$--Canadian Dollar
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, 2010 (CONTINUED)
The following is a summary of the fair valuations according to the inputs used
as of December 31, 2010, 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) $ -- $ 17,155,207 $ 1,090 $ 17,156,297
Corporate Bonds (c) -- 1,449,579,136 7,709,287 1,457,288,423
Foreign Bond -- 6,177,585 -- 6,177,585
Loan Assignments & Participations (d) -- 52,402,106 6,004,991 58,407,097
Yankee Bonds (e) -- 179,533,239 4,586,988 184,120,227
---------- -------------- ----------- --------------
Total Long-Term Bonds -- 1,704,847,273 18,302,356 1,723,149,629
---------- -------------- ----------- --------------
Common Stocks (f) 1,495,316 -- 1,370,290 2,865,606
Preferred Stock 5,369,750 -- -- 5,369,750
Warrants (g) 421,250 -- 7 421,257
Short-Term Investment
Repurchase Agreement -- 88,923,115 -- 88,923,115
---------- -------------- ----------- --------------
Total Investments in Securities $7,286,316 $1,793,770,388 $19,672,653 $1,820,729,357
========== ============== =========== ==============
</Table>
(a) For a complete listing of investments and their industries, 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 $24,219, $4,022, $625,024, $419,830,
$6,315,750, $172,151, $127,900 and $20,391 are held in Airlines, Auto Parts
& Equipment, Commercial Services, Entertainment, Food, Forest Products &
Paper, Insurance and Media, respectively, within the Corporate Bonds section
of the Portfolio of Investments.
(d) The level 3 securities valued at $4,991 and $6,000,000 are held in Machinery
and Metal, Fabricate & Hardware, respectively, within the Loan Assignments &
Participations section of the Portfolio of Investments.
(e) The level 3 security valued at $4,586,988 is held in Leisure Time within the
Yankee Bonds section of the Portfolio of Investments.
(f) The level 3 securities valued at $22,073 and $1,348,217 are held in Media
and Metal, Fabricate & Hardware, respectively, within the Common Stocks
section of the Portfolio of Investments.
(g) The level 3 security valued at $7 is held in Media within the Warrants
section of the Portfolio of Investments.
The Portfolio recognizes transfers between the levels as of the beginning of the
period.
For the period ended December 31, 2010, the Portfolio did not have any transfers
between Level 1 and Level 2 fair value measurements. (See Note 2)
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.
The following is a reconciliation of investments in which significant
unobservable inputs (Level 3) were used in determining value:
<Table>
<Caption>
BALANCE
AS OF ACCRUED
DECEMBER 31, DISCOUNTS REALIZED
INVESTMENTS IN SECURITIES 2009 (PREMIUMS) GAIN (LOSS)
Long-Term Bonds
Convertible Bonds
Internet $ 1,090 $ -- $ --
Corporate Bonds
Airlines -- -- --
Auto Parts & Equipment -- -- --
Commercial Services 625,024 -- --
Entertainment 412,585 15,566 16,708
Food -- -- --
Forest Products & Paper -- -- --
Insurance -- -- --
Media 275,699 4,904 (519,986)
Loan Assignments &
Participations
Machinery 246,534 (613,381) (53,641)
Metal, Fabricate &
Hardware -- -- --
Yankee Bonds
Leisure Time 4,557,203 -- --
Common Stocks
Machinery 1,720 -- --
Media 22,073 -- --
Metal, Fabricate &
Hardware -- -- --
Preferred Stock
Machinery 21 -- --
Warrants
Media -- -- --
---------- --------- ---------
Total $6,141,949 $(592,911) $(556,919)
========== ========= =========
<Caption>
CHANGE IN
UNREALIZED
APPRECIATION
(DEPRECIATION)
FROM
CHANGE IN BALANCE INVESTMENTS
UNREALIZED TRANSFERS TRANSFERS AS OF STILL HELD AT
APPRECIATION IN TO OUT OF DECEMBER 31, DECEMBER 31,
INVESTMENTS IN SECURITIES (DEPRECIATION) PURCHASES SALES LEVEL 3 LEVEL 3 2010 2010 (A)
Long-Term Bonds
Convertible Bonds
Internet $ -- $ -- $ -- $ -- $ -- $ 1,090 $ --
Corporate Bonds
Airlines (2,503,778) -- -- 2,527,997 -- 24,219 (2,503,778)
Auto Parts & Equipment 4,022 -- -- -- -- 4,022 4,022
Commercial Services -- -- -- -- -- 625,024 --
Entertainment 62,856 -- (87,885) -- -- 419,830 44,409
Food 110,250 6,205,500 -- -- -- 6,315,750 110,250
Forest Products & Paper 172,151 -- -- -- -- 172,151 172,151
Insurance (2,522,941) -- -- 2,650,841 -- 127,900 (2,522,941)
Media 543,605 63,772 (347,603) -- -- 20,391 (242,196)
Loan Assignments &
Participations
Machinery 430,557 38,850 (43,928) -- -- 4,991 338,830
Metal, Fabricate &
Hardware -- 6,000,000 -- -- -- 6,000,000 --
Yankee Bonds
Leisure Time 29,785 -- -- -- -- 4,586,988 29,785
Common Stocks
Machinery (1,720) -- -- -- -- -- --
Media -- -- -- -- -- 22,073 --
Metal, Fabricate &
Hardware (607,159) 1,955,376 -- -- -- 1,348,217 (607,159)
Preferred Stock
Machinery (21) -- -- -- -- -- --
Warrants
Media (1,092) 1,099 -- -- -- 7 (1,092)
----------- ----------- --------- --------------- -------- ----------- -----------
Total $(4,283,485) $14,264,597 $(479,416) $5,178,838 $-- $19,672,653 $(5,177,719)
=========== =========== ========= =============== ======== =========== ===========
</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-181
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2010
<Table>
ASSETS
---------------------------------------------------
Investment in securities, at value
(identified cost $1,733,671,337) $1,820,729,357
Cash denominated in foreign
currencies
(identified cost $751,709) 825,413
Receivables:
Dividends and interest 30,749,249
Fund shares sold 1,605,759
Investment securities sold 971,251
--------------
Total assets 1,854,881,029
--------------
LIABILITIES
---------------------------------------------------
Unrealized depreciation on unfunded
commitments 60,000
Due to custodian 1,352
Payables:
Manager (See Note 3) 872,232
Fund shares redeemed 320,117
NYLIFE Distributors (See Note 3) 235,146
Shareholder communication 124,980
Professional fees 95,082
Custodian 6,034
Directors 4,244
Accrued expenses 1,944
--------------
Total liabilities 1,721,131
--------------
Net assets $1,853,159,898
==============
NET ASSETS CONSIST OF
---------------------------------------------------
Capital stock (par value of $.01
per share) 700 million shares
authorized $ 1,940,287
Additional paid-in capital 1,845,305,955
--------------
1,847,246,242
Undistributed net investment income 117,517,343
Accumulated net realized loss on
investments and foreign currency
transactions (198,676,198)
Net unrealized appreciation on
investments 87,058,020
Net unrealized depreciation on
unfunded commitments (60,000)
Net unrealized appreciation on
translation of other assets and
liabilities in foreign currencies 74,491
--------------
Net assets $1,853,159,898
==============
INITIAL CLASS
Net assets applicable to
outstanding shares $ 729,070,990
==============
Shares of capital stock outstanding 76,015,479
==============
Net asset value per share
outstanding $ 9.59
==============
SERVICE CLASS
Net assets applicable to
outstanding shares $1,124,088,908
==============
Shares of capital stock outstanding 118,013,209
==============
Net asset value per share
outstanding $ 9.53
==============
</Table>
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.
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2010
<Table>
INVESTMENT INCOME
--------------------------------------------------
INCOME
Interest $134,742,348
Dividends 689,933
------------
Total income 135,432,281
------------
EXPENSES
Manager (See Note 3) 9,487,573
Distribution and service--Service
Class (See Note 3) 2,444,380
Shareholder communication 381,948
Professional fees 301,270
Custodian 77,990
Directors 56,977
Miscellaneous 61,730
------------
Total expenses 12,811,868
------------
Net investment income 122,620,413
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
--------------------------------------------------
Net realized gain on:
Security transactions 4,608,126
Foreign currency transactions 6,203
------------
Net realized gain on investments and
foreign currency transactions 4,614,329
------------
Net change in unrealized
appreciation (depreciation) on:
Investments and unfunded
commitments 71,962,426
Translation of other assets and
liabilities in foreign
currencies 42,706
------------
Net change in unrealized
appreciation (depreciation) on
investments, unfunded commitments
and foreign currency translations 72,005,132
------------
Net realized and unrealized gain on
investments, unfunded commitments
and foreign currency transactions 76,619,461
------------
Net increase in net assets resulting
from operations $199,239,874
============
</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
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2010 AND DECEMBER 31, 2009
<Table>
<Caption>
2010 2009
INCREASE IN NET ASSETS
-----------------------------------------------------------
Operations:
Net investment income $ 122,620,413 $ 100,701,891
Net realized gain (loss)
on investments and
foreign currency
transactions 4,614,329 (89,004,096)
Net change in unrealized
appreciation
(depreciation) on
investments, unfunded
commitments and foreign
currency translations 72,005,132 423,718,858
------------------------------
Net increase in net
assets resulting from
operations 199,239,874 435,416,653
------------------------------
Dividends to shareholders:
From net investment
income:
Initial Class (41,531,735) (47,978,241)
Service Class (59,612,582) (53,876,110)
------------------------------
Total dividends to
shareholders (101,144,317) (101,854,351)
------------------------------
Capital share transactions:
Net proceeds from sale of
shares 323,356,249 312,411,274
Net asset value of shares
issued to shareholders
in reinvestment of
dividends 101,144,317 101,854,351
Cost of shares redeemed (229,600,507) (125,228,237)
------------------------------
Increase in net assets
derived from capital
share transactions 194,900,059 289,037,388
------------------------------
Net increase in net
assets 292,995,616 622,599,690
NET ASSETS
-----------------------------------------------------------
Beginning of year 1,560,164,282 937,564,592
------------------------------
End of year $1,853,159,898 $1,560,164,282
==============================
Undistributed net
investment income at end
of year $ 117,517,343 $ 98,842,153
==============================
</Table>
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.
This page intentionally left blank
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
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
2010 2009 2008 2007 2006
Net asset value at beginning of
year $ 9.03 $ 6.79 $ 10.08 $ 10.55 $ 9.59
-------- -------- -------- -------- --------
Net investment income (a) 0.70 0.67 0.76 0.80 0.72
Net realized and unrealized gain
(loss) on investments 0.43 2.22 (3.16) (0.55) 0.44
Net realized and unrealized gain
(loss) on foreign currency
transactions 0.00 ++ 0.00 ++ (0.00)++ (0.00)++ (0.00)++
-------- -------- -------- -------- --------
Total from investment operations 1.13 2.89 (2.40) 0.25 1.16
-------- -------- -------- -------- --------
Less dividends:
From net investment income (0.57) (0.65) (0.89) (0.72) (0.20)
-------- -------- -------- -------- --------
Net asset value at end of year $ 9.59 $ 9.03 $ 6.79 $ 10.08 $ 10.55
======== ======== ======== ======== ========
Total investment return 12.67% 42.82% (24.11%) 2.31% 12.04%
Ratios (to average net
assets)/Supplemental Data:
Net investment income 7.40% 8.23% 8.20% 7.53% 7.20%
Net expenses 0.61% 0.62% 0.59% 0.55% 0.56%
Portfolio turnover rate 45% 43% 24% 45% 48%
Net assets at end of year (in
000's) $729,071 $700,295 $506,827 $866,747 $969,910
</Table>
<Table>
++ Less than one cent per share.
(a) Per share data based on average shares outstanding during the period.
</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.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
SERVICE CLASS
----------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
2010 2009 2008 2007 2006
$ 8.98 $ 6.76 $ 10.03 $ 10.51 $ 9.56
---------- -------- -------- -------- --------
0.67 0.65 0.73 0.77 0.69
0.44 2.21 (3.14) (0.55) 0.44
0.00 ++ 0.00 ++ (0.00)++ (0.00)++ (0.00)++
---------- -------- -------- -------- --------
1.11 2.86 (2.41) 0.22 1.13
---------- -------- -------- -------- --------
(0.56) (0.64) (0.86) (0.70) (0.18)
---------- -------- -------- -------- --------
$ 9.53 $ 8.98 $ 6.76 $ 10.03 $ 10.51
========== ======== ======== ======== ========
12.39% 42.47% (24.30%) 2.05% 11.76%
7.16% 7.90% 7.99% 7.28% 6.95%
0.86% 0.87% 0.84% 0.80% 0.81%
45% 43% 24% 45% 48%
$1,124,089 $859,870 $430,738 $603,312 $509,917
</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-187
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. THE PERFORMANCE TABLE AND GRAPH 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.
(LINE GRAPH)
<Table>
<Caption>
MAINSTAY VP MAINSTAY VP
ICAP SELECT ICAP SELECT
EQUITY PORTFOLIO EQUITY PORTFOLIO S&P 500(R) S&P 500(R)
INITIAL CLASS SERVICE CLASS INDEX VALUE INDEX
---------------- ---------------- ---------- -----------
12/31/00 10000 10000 10000 10000
9549 9526 8811 8829
7367 7330 6864 6988
9425 9356 8833 9209
10497 10394 9794 10656
11068 10935 10275 11276
13204 13013 11898 13621
14110 13871 12552 13893
8806 8636 7908 8444
11395 11147 10001 10232
12/31/10 13460 13134 11507 11777
</Table>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED DECEMBER 31, 2010
--------------------------------------------------------------------------------
<Table>
<Caption>
GROSS
EXPENSE
CLASS ONE YEAR FIVE YEARS TEN YEARS(1) RATIO(2)
-----------------------------------------------------------------------------
Initial Class Shares 18.12% 3.99% 3.02% 0.82%
-----------------------------------------------------------------------------
Service Class Shares(3) 17.82 3.73 2.76 1.07
-----------------------------------------------------------------------------
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE FIVE TEN
YEAR YEARS YEARS
S&P 500(R) Index(4) 15.06% 2.29% 1.41%
----------------------------------------------------------------------------------------
S&P 500(R) Value Index(4) 15.10 0.87 1.65
----------------------------------------------------------------------------------------
Average Lipper Variable Products Large-Cap Core Portfolio(5) 13.45 1.75 1.41
----------------------------------------------------------------------------------------
</Table>
1. Performance figures shown for the ten-year period ended December 31, 2010
reflect nonrecurring reimbursements from affiliates for printing and mailing
costs. If these nonrecurring reimbursements had not been made, the total
returns would have been 3.01% for Initial Class shares and 2.76% for Service
Class shares for the ten-year period.
2. The gross expense ratios presented reflect the Portfolio's "Total Annual
Portfolio Operating Expenses" from the most recent Prospectus and may differ
from other expense ratios disclosed in this report.
3. 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.
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.
5. 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 portfolios 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. Results are based on total returns with all dividend and capital
gain distributions reinvested.
M-188 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, 2010, to December 31,
2010, 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 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, 2010, to December 31, 2010. 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, 2010. 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 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 7/1/10 12/31/10 PERIOD(1) 12/31/10 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,222.80 $4.54 $1,021.10 $4.13
-------------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,221.30 $5.93 $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-189
INDUSTRY COMPOSITION AS OF DECEMBER 31, 2010 (Unaudited)
<Table>
<Caption>
Oil, Gas & Consumable Fuels 14.8%
Pharmaceuticals 13.8
Beverages 10.9
Insurance 7.1
Capital Markets 7.0
Commercial Banks 6.3
Wireless Telecommunication Services 4.0
Software 3.9
Aerospace & Defense 3.8
Media 3.7
Auto Components 3.4
Metals & Mining 3.3
Specialty Retail 3.3
Communications Equipment 2.7
Chemicals 2.4
Health Care Equipment & Supplies 2.4
Semiconductors & Semiconductor
Equipment 2.4
IT Services 1.6
Food & Staples Retailing 1.0
Short-Term Investment 2.2
Other Assets, Less Liabilities -0.0++
-----
100.0%
=====
</Table>
See Portfolio of Investments beginning on page M-193 for specific holdings
within these categories.
++ Less than one-tenth of a percent.
TOP TEN HOLDINGS AS OF DECEMBER 31, 2010 (excluding short-term investment)
<Table>
1. PepsiCo, Inc.
2. ConocoPhillips
3. Pfizer, Inc.
4. Occidental Petroleum Corp.
5. Merck & Co., Inc.
6. Sanofi-Aventis, Sponsored ADR
7. Vodafone Group PLC, Sponsored ADR
8. Microsoft Corp.
9. Marathon Oil Corp.
10. Coca-Cola Co. (The)
</Table>
M-190 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 Portfolio'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, 2010?
For the 12 months ended December 31, 2010, MainStay VP ICAP Select Equity
Portfolio returned 18.12% for Initial Class shares and 17.82% for Service Class
shares. Both share classes outperformed the 13.45% return of the average
Lipper(1) Variable Products Large-Cap Core Portfolio and the 15.06% return of
the S&P 500(R) Index(1) for the 12 months ended December 31, 2010. The S&P
500(R) Index is the Portfolio's broad-based securities-market index.
WHAT FACTORS AFFECTED THE PORTFOLIO'S RELATIVE PERFORMANCE DURING THE REPORTING
PERIOD?
Stock selection in the industrials, energy and materials sectors added to the
Portfolio's performance relative to the S&P 500(R) Index. On the other hand,
stock selection in the health care and information technology sectors detracted
from the Portfolio's relative performance. An overweight position in the health
care sector also detracted from the Portfolio's performance relative to the S&P
500(R) Index.
WHICH SECTORS WERE THE STRONGEST CONTRIBUTORS TO THE PORTFOLIO'S RELATIVE
PERFORMANCE, AND WHICH SECTORS WERE PARTICULARLY WEAK?
During the reporting period, the sectors that contributed most strongly to the
Portfolio's performance relative to the S&P 500(R) Index were industrials,
energy and financials. Stock selection was the primary driver in each case, as
the Portfolio's holdings outperformed those of the Index.
The sectors that detracted the most from the Portfolio's performance relative to
the S&P 500(R) Index were health care, infor-mation technology and consumer
discretionary. Stock selection was the primary driver in these cases as well.
DURING THE REPORTING PERIOD, WHICH INDIVIDUAL STOCKS MADE THE STRONGEST
CONTRIBUTIONS TO THE PORTFOLIO'S ABSOLUTE PERFORMANCE AND WHICH STOCKS DETRACTED
THE MOST?
On an absolute basis, the stocks that made the greatest positive contributions
to the Portfolio's return during the reporting period included integrated oil
and gas producer Conoco-Phillips, diversified manufacturing firm Honeywell
International and engine and power systems manufacturer Cummins.
ConocoPhillips outperformed as the company's efforts to divest underperforming
assets and improve returns began to pay off. Honeywell also showed strong
performance. The company has improved its business mix and profit outlook by
focusing on market segments with higher return potential and moving away from
areas that are more cyclical or commoditized. Cummins benefitted as the
recovering economy unleashed pent-up demand for the company's diesel engines,
both domestically and in emerging markets. ConocoPhillips and Honeywell remained
in the Portfolio at the end of the reporting period. Cummins was sold because it
achieved our price target.
Detractors from performance included networking equipment provider Cisco
Systems, diversified pharmaceutical firm Sanofi-Aventis and computers &
peripherals company Hewlett-Packard. Cisco Systems underperformed when its sales
and growth outlook disappointed investors. We sold the Portfolio's position in
the stock during the reporting period. We also sold the Portfolio's position in
Hewlett-Packard when the departure of the company's chief executive officer
raised questions about HP's ability to continue to improve margins and growth
through cost-cutting and restructuring. Sanofi-Aventis remained in the Portfolio
at the end of the reporting period because we still believed that the stock was
attractive.
DID THE PORTFOLIO MAKE ANY SIGNIFICANT PURCHASES OR SALES DURING THE REPORTING
PERIOD?
During a period characterized by ongoing, if somewhat restrained, economic
recovery, the stock market remained volatile but continued to rebound overall.
In this environment, we continued to look for stocks that had both attractive
valu-ations and specific catalysts that could trigger appreciation over a 12- to
18-month time frame.
During the reporting period, we added integrated oil firm ConocoPhillips to the
Portfolio. We believed that the stock
was attractively valued and that management was focused on improving returns by
divesting underperforming assets, cutting costs and capital expenditures, and
then using free cash to reduce debt and repurchase shares. We also added
insurance carrier Aflac on the belief that the company's investment portfolio
performance and its sales in Japan were likely to exceed expectations. In
addition, we bought Microsoft, the world's largest software company, as we
believed that the rapid adoption of its new operating system, Windows 7, and
other applications during a potentially large spending cycle for new enterprise
technology should enhance earnings power.
During 2010, we sold the Portfolio's positions in diversified financial services
firm JPMorgan Chase, mining and construction equipment manufacturer Caterpillar
and semiconductor manufacturer Intel. All three positions were eliminated when
we found other stocks that we believed had greater upside potential and were
more attractive on a relative-valuation basis.
1. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indexes and other indexes, 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-191
HOW DID THE PORTFOLIO'S SECTOR WEIGHTINGS CHANGE DURING THE REPORTING PERIOD?
During the reporting period, the Portfolio increased its sector weightings
relative to the S&P 500(R) Index in consumer staples and energy. In both cases,
the Portfolio moved from an under-
weight position at the beginning of the reporting period to an overweight
position at the end of December 2010.
The Portfolio substantially decreased its relative sector weighting in the
industrials sector during the reporting period, moving from overweight to
underweight as the Portfolio sold or trimmed several stocks in the sector. The
Portfolio also reduced its exposure to the information technology sector, which
was already underweight relative to the S&P 500(R) Index when the reporting
period began.
HOW WAS THE PORTFOLIO POSITIONED AT THE END OF DECEMBER 2010?
As of December 31, 2010, the Portfolio's most substantially overweight positions
relative to the S&P 500(R) Index were in the health care and financials sectors.
As of the same date, the Portfolio's most substantially underweight positions
were in information technology and industrials. This positioning reflected our
view on the prospects for the economy and the relative attractiveness of the
individual 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
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-192 MainStay VP ICAP Select Equity Portfolio
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2010
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS 97.8%+
--------------------------------------------------------
AEROSPACE & DEFENSE 3.8%
Honeywell International,
Inc. 866,250 $ 46,049,850
--------------
AUTO COMPONENTS 3.4%
Johnson Controls, Inc. 1,070,850 40,906,470
--------------
BEVERAGES 10.9%
X Coca-Cola Co. (The) 712,700 46,874,279
Molson Coors Brewing Co.
Class B 295,700 14,841,183
X PepsiCo, Inc. 1,080,300 70,575,999
--------------
132,291,461
--------------
CAPITAL MARKETS 7.0%
BlackRock, Inc. 134,050 25,547,249
Charles Schwab Corp. (The) 968,750 16,575,312
Goldman Sachs Group, Inc.
(The) 255,400 42,948,064
--------------
85,070,625
--------------
CHEMICALS 2.4%
Monsanto Co. 422,050 29,391,562
--------------
COMMERCIAL BANKS 6.3%
BB&T Corp. 1,112,900 29,258,141
Wells Fargo & Co. 1,508,600 46,751,514
--------------
76,009,655
--------------
COMMUNICATIONS EQUIPMENT 2.7%
QUALCOMM, Inc. 672,000 33,257,280
--------------
FOOD & STAPLES RETAILING 1.0%
CVS Caremark Corp. 348,900 12,131,253
--------------
HEALTH CARE EQUIPMENT & SUPPLIES 2.4%
Covidien PLC 633,450 28,923,327
--------------
INSURANCE 7.1%
Aflac, Inc. 578,550 32,647,576
Aon Corp. 573,750 26,398,238
MetLife, Inc. 604,050 26,843,982
--------------
85,889,796
--------------
IT SERVICES 1.6%
Accenture PLC Class A 398,850 19,340,237
--------------
MEDIA 3.7%
Viacom, Inc. Class B 1,135,050 44,959,330
--------------
METALS & MINING 3.3%
Newmont Mining Corp. 642,300 39,456,489
--------------
OIL, GAS & CONSUMABLE FUELS 14.8%
X ConocoPhillips 1,008,300 68,665,230
X Marathon Oil Corp. 1,275,400 47,228,062
X Occidental Petroleum
Corp. 645,584 63,331,790
--------------
179,225,082
--------------
PHARMACEUTICALS 13.8%
X Merck & Co., Inc. 1,501,140 54,101,086
X Pfizer, Inc. 3,703,550 64,849,160
X Sanofi-Aventis,
Sponsored ADR (a) 1,517,250 48,900,968
--------------
167,851,214
--------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 2.4%
Texas Instruments, Inc. 912,683 29,662,198
--------------
SOFTWARE 3.9%
X Microsoft Corp. 1,697,400 47,391,408
--------------
SPECIALTY RETAIL 3.3%
Lowe's Cos., Inc. 1,602,400 40,188,192
--------------
WIRELESS TELECOMMUNICATION SERVICES 4.0%
X Vodafone Group PLC,
Sponsored ADR (a) 1,818,650 48,066,919
--------------
Total Common Stocks
(Cost $1,008,734,540) 1,186,062,348
--------------
</Table>
+ Percentages indicated are based on Portfolio net assets.
X Among the Portfolio's 10 largest holdings, as of December 31, 2010, 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-193
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2010 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
SHORT-TERM INVESTMENT 2.2%
--------------------------------------------------------
REPURCHASE AGREEMENT 2.2%
State Street Bank and Trust
Co.
0.01%, dated 12/31/10
due 1/3/11
Proceeds at Maturity
$26,471,855
(Collateralized by a
United States
Treasury Note with a rate
of 1.375% and a maturity
date of 5/15/13, with a
Principal Amount of
$26,595,000 and a Market
Value of $27,001,904) $26,471,833 $ 26,471,833
--------------
Total Short-Term Investment
(Cost $26,471,833) 26,471,833
--------------
Total Investments
(Cost $1,035,206,373) (b) 100.0% 1,212,534,181
Other Assets, Less
Liabilities (0.0)++ (14,145)
----------- --------------
Net Assets 100.0% $1,212,520,036
=========== ==============
</Table>
<Table>
++ Less than one-tenth of a percent.
(a) ADR--American Depositary Receipt.
(b) At December 31, 2010, cost is
$1,049,488,343 for federal income tax
purposes and net unrealized appreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $184,868,671
Gross unrealized depreciation (21,822,833)
------------
Net unrealized appreciation $163,045,838
============
</Table>
The following is a summary of the fair valuations according to the inputs used
as of December 31, 2010, 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 $1,186,062,348 $ -- $ -- $1,186,062,348
Short-Term Investment
Repurchase Agreement -- 26,471,833 -- 26,471,833
-------------- ----------- -------- --------------
Total Investments in Securities $1,186,062,348 $26,471,833 $-- $1,212,534,181
============== =========== ======== ==============
</Table>
(a) For a complete listing of investments and their industries, see the
Portfolio of Investments.
For the period ended December 31, 2010, the Portfolio did not have any transfers
between Level 1 and Level 2 fair value measurements. (See Note 2)
At December 31, 2010, the Portfolio did not hold any investments with
significant unobservable inputs (Level 3). (See Note 2)
M-194 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, 2010
<Table>
ASSETS
---------------------------------------------------
Investment in securities, at value
(identified cost $1,035,206,373) $1,212,534,181
Receivables:
Investment securities sold 2,420,967
Dividends and interest 2,330,361
Fund shares sold 235,360
--------------
Total assets 1,217,520,869
--------------
LIABILITIES
---------------------------------------------------
Payables:
Investment securities purchased 3,614,815
Manager (See Note 3) 768,920
Fund shares redeemed 367,441
NYLIFE Distributors (See Note 3) 100,236
Shareholder communication 77,822
Professional fees 65,860
Directors 2,652
Custodian 2,031
Accrued expenses 1,056
--------------
Total liabilities 5,000,833
--------------
Net assets $1,212,520,036
==============
NET ASSETS CONSIST OF
---------------------------------------------------
Capital stock (par value of $.01
per share) 400 million shares
authorized $ 970,452
Additional paid-in capital 1,331,117,377
--------------
1,332,087,829
Undistributed net investment income 15,244,920
Accumulated net realized loss on
investments (312,140,521)
Net unrealized appreciation on
investments 177,327,808
--------------
Net assets $1,212,520,036
==============
INITIAL CLASS
Net assets applicable to
outstanding shares $ 731,165,465
==============
Shares of capital stock outstanding 58,317,769
==============
Net asset value per share
outstanding $ 12.54
==============
SERVICE CLASS
Net assets applicable to
outstanding shares $ 481,354,571
==============
Shares of capital stock outstanding 38,727,428
==============
Net asset value per share
outstanding $ 12.43
==============
</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-195
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2010
<Table>
INVESTMENT INCOME
--------------------------------------------------
INCOME
Dividends (a) $ 25,341,182
Interest 3,221
------------
Total income 25,344,403
------------
EXPENSES
Manager (See Note 3) 8,469,883
Distribution and service--Service
Class (See Note 3) 1,068,154
Shareholder communication 275,397
Professional fees 183,590
Directors 37,543
Custodian 27,982
Miscellaneous 40,096
------------
Total expenses 10,102,645
------------
Net investment income 15,241,758
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
--------------------------------------------------
Net realized gain on investments 117,931,686
Net change in unrealized
appreciation (depreciation) on
investments 54,510,774
------------
Net realized and unrealized gain on
investments 172,442,460
------------
Net increase in net assets resulting
from operations $187,684,218
============
</Table>
(a) Dividends recorded net of foreign withholding taxes in the amount of
$434,242.
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.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2010 AND DECEMBER 31, 2009
<Table>
<Caption>
2010 2009
INCREASE IN NET ASSETS
-----------------------------------------------------------
Operations:
Net investment income $ 15,241,758 $ 8,859,542
Net realized gain (loss)
on investments 117,931,686 (153,422,397)
Net change in unrealized
appreciation
(depreciation) on
investments 54,510,774 326,482,871
------------------------------
Net increase in net
assets resulting from
operations 187,684,218 181,920,016
------------------------------
Dividends to shareholders:
From net investment
income:
Initial Class (5,721,985) (8,840,272)
Service Class (3,140,351) (3,870,673)
------------------------------
Total dividends to
shareholders (8,862,336) (12,710,945)
------------------------------
Capital share transactions:
Net proceeds from sale of
shares 95,405,163 58,794,455
Net asset value of shares
issued in connection
with the acquisition of
VP Mid Cap Value
Portfolio (See Note 12) -- 283,971,931
Net asset value of shares
issued to shareholders
in reinvestment of
dividends 8,862,336 12,710,945
Cost of shares redeemed (158,248,716) (91,976,204)
------------------------------
Increase (decrease) in
net assets derived
from capital share
transactions (53,981,217) 263,501,127
------------------------------
Net increase in net
assets 124,840,665 432,710,198
NET ASSETS
-----------------------------------------------------------
Beginning of year 1,087,679,371 654,969,173
------------------------------
End of year $1,212,520,036 $1,087,679,371
==============================
Undistributed net
investment income at end
of year $ 15,244,920 $ 8,862,331
==============================
</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
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------
2010 2009 2008 2007 2006
Net asset value at beginning of
year $ 10.70 $ 8.41 $ 14.22 $ 13.75 $ 11.61
-------- -------- -------- -------- --------
Net investment income 0.18 0.11 0.05 0.11 0.19 (a)
Net realized and unrealized gain
(loss) on investments 1.76 2.36 (5.38) 0.87 2.04
-------- -------- -------- -------- --------
Total from investment operations 1.94 2.47 (5.33) 0.98 2.23
-------- -------- -------- -------- --------
Less dividends and distributions:
From net investment income (0.10) (0.18) (0.06) (0.07) (0.03)
From net realized gain on
investments -- -- (0.42) (0.44) (0.06)
-------- -------- -------- -------- --------
Total dividends and distributions (0.10) (0.18) (0.48) (0.51) (0.09)
-------- -------- -------- -------- --------
Net asset value at end of year $ 12.54 $ 10.70 $ 8.41 $ 14.22 $ 13.75
======== ======== ======== ======== ========
Total investment return 18.12% 29.41% (37.59%) 6.86% 19.31%
Ratios (to average net
assets)/Supplemental Data:
Net investment income 1.46% 1.32% 1.98% 1.45% 1.50%
Net expenses 0.81% 0.80% 0.78% 0.80% 0.88%#
Expenses (before
waiver/reimbursement) 0.81% 0.82% 0.83% 0.85% 0.94%#
Portfolio turnover rate 57% 85% 152% 117% 130%
Net assets at end of year (in
000's) $731,165 $686,907 $456,377 $250,237 $137,191
</Table>
<Table>
# Includes fees paid indirectly which amounted to less than one-hundredth and
0.01% of a percent of the average net assets for the year ended December 31,
2006.
(a) Per share data based on average shares outstanding during the period.
</Table>
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.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
SERVICE CLASS
-------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------------------
2010 2009 2008 2007 2006
$ 10.62 $ 8.36 $ 14.14 $ 13.71 $ 11.59
-------- -------- -------- -------- -------
0.13 0.07 0.12 0.03 0.15 (a)
1.76 2.35 (5.43) 0.90 2.05
-------- -------- -------- -------- -------
1.89 2.42 (5.31) 0.93 2.20
-------- -------- -------- -------- -------
(0.08) (0.16) (0.05) (0.06) (0.02)
-- -- (0.42) (0.44) (0.06)
-------- -------- -------- -------- -------
(0.08) (0.16) (0.47) (0.50) (0.08)
-------- -------- -------- -------- -------
$ 12.43 $ 10.62 $ 8.36 $ 14.14 $ 13.71
======== ======== ======== ======== =======
17.82% 29.09% (37.75%) 6.59% 19.00%
1.21% 1.04% 1.71% 1.18% 1.23%
1.06% 1.05% 1.03% 1.05% 1.13%#
1.06% 1.07% 1.08% 1.10% 1.19%#
57% 85% 152% 117% 130%
$481,355 $400,773 $198,592 $158,831 $46,349
</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-199
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. THE PERFORMANCE TABLE AND GRAPH 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.
(LINE GRAPH)
<Table>
<Caption>
MAINSTAY VP MAINSTAY VP
INCOME BUILDER INCOME BUILDER
PORTFOLIO INITIAL PORTFOLIO SERVICE MSCI WORLD RUSSELL 1000(R) INCOME BUILDER
CLASS CLASS INDEX INDEX COMPOSITE INDEX
----------------- ----------------- ---------- --------------- ---------------
12/31/00 10000 10000 10000 10000 10000
12/31/01 8931 8909 8318 8755 9549
12/31/02 7452 7415 6664 6859 9036
12/31/03 8918 8852 8870 8910 10664
12/31/04 9486 9393 10175 9926 11678
12/31/05 10102 9974 11141 10548 12380
12/31/06 11062 10894 13376 12178 13868
12/31/07 11893 11683 14585 12882 14997
12/31/08 8691 8517 8647 8039 11962
12/31/09 10735 10493 11240 10324 14118
12/31/10 12323 12015 12562 11986 15492
<Caption>
BARCLAYS CAPITAL
U.S. AGGREGATE
BOND INDEX
----------------
12/31/00 10000
12/31/01 10844
12/31/02 11957
12/31/03 12447
12/31/04 12987
12/31/05 13303
12/31/06 13879
12/31/07 14846
12/31/08 15624
12/31/09 16551
12/31/10 17633
</Table>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED DECEMBER 31, 2010
--------------------------------------------------------------------------------
<Table>
<Caption>
GROSS
EXPENSE
CLASS ONE YEAR FIVE YEARS TEN YEARS(1) RATIO(2)
-----------------------------------------------------------------------------
Initial Class Shares 14.79% 4.05% 2.11% 0.71%
-----------------------------------------------------------------------------
Service Class Shares(3) 14.51 3.79 1.85 0.96
-----------------------------------------------------------------------------
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE FIVE TEN
YEAR YEARS YEARS
MSCI World Index(4) 11.76% 2.43% 2.31%
--------------------------------------------------------------------------------------------------------------
Russell 1000(R) Index(4) 16.10 2.59 1.83
--------------------------------------------------------------------------------------------------------------
Income Builder Composite Index(4) 9.73 4.59 4.47
--------------------------------------------------------------------------------------------------------------
Barclays Capital U.S. Aggregate Bond Index(4) 6.54 5.80 5.84
--------------------------------------------------------------------------------------------------------------
Average Lipper Variable Products Mixed-Asset Target Allocation Growth Portfolio(5) 13.14 3.53 3.04
--------------------------------------------------------------------------------------------------------------
</Table>
1. Performance figures shown for the ten-year period ended December 31, 2010
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 2.09% for Initial Class shares and 1.83% for Service
Class shares for the ten-year period.
2. The gross expense ratios presented reflect the Portfolio's "Total Annual
Portfolio Operating Expenses" from the most recent Prospectus and may differ
from other expense ratios disclosed in this report.
3. 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.
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.
5. 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. Results are based on total returns with all
dividend and capital gain distributions reinvested.
M-200 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, 2010, to December 31,
2010, 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 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, 2010, to December 31, 2010. 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, 2010. 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 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 7/1/10 12/31/10 PERIOD(1) 12/31/10 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,180.50 $3.46 $1,022.00 $3.21
-------------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,179.00 $4.83 $1,020.80 $4.48
-------------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
(0.63% for Initial Class and 0.88% 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-201
PORTFOLIO COMPOSITION AS OF DECEMBER 31, 2010 (Unaudited)
(COMPOSITION PIE CHART)
<Table>
Common Stocks 47.80
Corporate Bonds 21.20
Convertible Bonds 8.20
Short-Term Investment 6.70
Loan Assignments & Participations 3.20
Asset-Backed Securities 3.00
U.S. Government & Federal Agencies 2.50
Convertible Preferred Stocks 2.10
Yankee Bonds 1.50
Foreign Bonds 1.20
Mortgage-Backed Securities 1.20
Other Assets, Less Liabilities 0.80
Futures Contracts Long 0.50
Foreign Government Bonds 0.10
Warrants 0.00
</Table>
See Portfolio of Investments beginning on page M-207 for specific holdings
within these categories.
++ Less than one-tenth of a percent.
TOP TEN HOLDINGS OR ISSUERS HELD AS OF DECEMBER 31, 2010 (excluding short-term
investment)
<Table>
1. United States Treasury Bonds, 3.875%-4.375%, due
11/15/39-8/15/40
2. Clear Channel Communications, Inc., 5.50%-6.875%, due
12/15/16-6/15/18
3. MGM Mirage, Inc., 7.50%, due 6/1/16
4. Swisscom A.G.
5. K Hovnanian Enterprises, Inc., 10.625%, due 10/15/16
6. Northern Rock Asset Management PLC, 9.375%, due 10/17/21
7. Nestle S.A. Registered
8. Linn Energy LLC, 8.625%, due 4/15/20
9. CenturyTel, Inc.
10. Energy Future Intermediate Holding Co. LLC/EFIH Finance,
Inc., 10.00%, due 12/1/20
</Table>
M-202 MainStay VP Income Builder Portfolio
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
Questions answered by William W. Priest, CFA, Eric Sappenfield and Michael
Welhoelter, CFA, of Epoch Investment Partners, Inc. ("Epoch") the Portfolio's
Co-Subadvisor and Louis N. Cohen, Gary Goodenough, Dan Roberts, Michael Kimble
and Taylor Wagensen of MacKay Shields LLC ("MacKay Shields"), the Portfolio's
Co-Subadvisor.
HOW DID THE MAINSTAY VP INCOME BUILDER PORTFOLIO PERFORM RELATIVE TO ITS PEERS
AND ITS BENCHMARK DURING THE 12 MONTHS ENDED DECEMBER 31, 2010?
For the 12 months ended December 31, 2010, MainStay VP Income Builder Portfolio
returned 14.79% for Initial Class shares and 14.51% for Service Class shares.
Over the same period, both share classes outperformed the 13.14% return of the
average Lipper(1) Variable Products Mixed-Asset Target Allocation Growth
Portfolio, the 11.76% return of the MSCI World Index,(1 )the 6.54% return of the
Barclays Capital U.S. Aggregate Bond Index(1) and the 9.73% return of the Income
Builder Composite Index.(1) Both share classes underperformed the 16.10% return
of the Russell 1000(R) Index(1) for the 12 months ended December 31, 2010. The
MSCI World Index is the Portfolio's broad-based securities-market index. The
Barclays Capital U.S. Aggregate Bond Index is a secondary benchmark for the
Portfolio.
DURING THE REPORTING PERIOD, HOW WAS THE PORTFOLIO MATERIALLY AFFECTED BY
INVESTMENTS IN DERIVATIVES?
During the reporting period, co-Subadvisor Epoch did not use any derivatives. To
increase the Portfolio's equity exposure and sensitivity, however, co-Subadvisor
MacKay Shields added equity futures to the Portfolio, which had a positive
impact on the Portfolio's overall performance.
WHAT FACTORS AFFECTED THE PORTFOLIO'S RELATIVE PERFORMANCE DURING THE REPORTING
PERIOD?
The equity portion of the Portfolio outperformed the MSCI World Index during the
reporting period because of favorable stock selection in a number of sectors,
including utilities, information technology, consumer staples, telecommunication
services and materials.
Returns in the equity portion of the Portfolio were slightly hampered by sector
allocation. Although the equity portion of the Portfolio was helped by a
significantly underweight position in financials, this was offset primarily by a
large overweight position in utilities, which slightly underperformed during
2010.
At the country level, strong stock selection and a slightly overweight position
in the United States helped relative per-formance in the equity portion of the
Portfolio. Additionally, investing in one particular company in Taiwan, HTC
Corp., also contributed to the Portfolio's outperformance.
IN THE EQUITY PORTION OF THE PORTFOLIO, WHICH SECTORS WERE THE STRONGEST
CONTRIBUTORS TO RELATIVE PERFORMANCE AND WHICH WERE THE WEAKEST?
In the equity portion of the Portfolio, the strongest sector contributor
relative to the MSCI World Index was information technology, which benefited
from strong stock selection. Financials made the second-strongest contribution
to relative performance. In financials, the equity portion of the Portfolio
benefited from a significantly underweight position in a sector that performed
poorly and from positive stock selection. Consumer staples was also a strong
contributor, benefiting from positive stock selection and a slightly overweight
position in a sector that performed well.
In the equity portion of the Portfolio, the weakest sector contributor to the
Portfolio's relative performance was consumer discretionary. Although consumer
discretionary was among the top-performing sectors in the MSCI World Index,
consumer discretionary holdings in the equity portion of the Portfolio trailed
those of the benchmark. Poor stock selection and a slightly underweight position
in industrials contributed to underperformance in that sector. Poor stock
selection in the energy sector also detracted from relative performance in the
equity portion of the Portfolio.
DURING THE REPORTING PERIOD, WHICH INDIVIDUAL STOCKS MADE THE STRONGEST
CONTRIBUTIONS TO THE ABSOLUTE PERFORMANCE OF THE EQUITY PORTION OF THE PORTFOLIO
AND WHICH STOCKS DETRACTED THE MOST.
During 2010, the stocks that made the strongest contributions to absolute
performance in the equity portion of the Portfolio included Taiwan-based smart
phone maker HTC Corp., which rose on increased market penetration of its Android
phones in the United States and other wireless markets. CenturyLink, a
telecommunication services provider based in the United States, was also a
strong contributor. The company reported solid results from the successful
integration of Embarq Corp. and from progress on the acquisition of Qwest Corp.
BCE Inc. provides a full range of communication services to residential and
business customers in Canada. The company's stock rose strongly as the company
reported continued good results and improved its dividend payout.
The worst detractor from absolute performance in the equity portion of the
Portfolio was global oil and gas drilling contractor Diamond Offshore Drilling.
The company had a negative total return during the reporting period because of
softer rig revenue and the impact of the Gulf of Mexico drilling moratorium on
expected cash flows. Another detractor was Spanish financial group Banco
Santander, which was hurt by Europe's sovereign debt crisis and growing economic
stress in Spain. Spanish telecommunication services provider Telefonica S.A. was
also a weak contributor. The company was affected by the sovereign debt issues
in Europe.
1. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indexes and other indexes, 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-203
DID THE EQUITY PORTION OF THE PORTFOLIO MAKE ANY SIGNIFICANT PURCHASES OR SALES
DURING THE REPORTING PERIOD?
During the reporting period, the equity portion of the Portfolio purchased
Rueckversicherungs-Gesellschaft, one of the world's largest insurance companies.
The company has a solid capital base and we feel that it has strong
opportunities to grow cash flows. We also purchased a position in Daimler A.G.,
one of the world's largest automotive groups. The company has exposure to
higher-end consumers in developed economies, and in our opinion, it has strong
growth opportunities in several developing markets, including China. Taiwan-
based smart phone maker HTC Corp. was another new purchase in the equity portion
of the Portfolio. As previously noted, the stock rose on increased market
penetration of its Android phones in the United States and other wireless
markets.
As the reporting period progressed, we viewed it as increasingly likely that
Canadian Oil Sands Ltd. would allocate future free cash flow to capital
expenditures rather than dividends. Consequently, we sold the Portfolio's equity
position in the company. We also eliminated the Portfolio's position in
international oil and gas company BP after the Gulf of Mexico disaster put the
company's dividend at risk. Our decision to sell the stock was affirmed as
management ultimately canceled the dividend. We sold the Portfolio's position in
OGE Energy Corp., which provides energy and energy services to the south central
United States. We eliminated the position as the stock reached our price target.
HOW DID THE PORTFOLIO'S EQUITY SECTOR WEIGHTINGS CHANGE DURING THE REPORTING
PERIOD?
The equity portion of the Portfolio increased its allocation to information
technology during the reporting period but remained significantly underweight
relative to the MSCI World Index. We added to the Portfolio's telecommunication
services position and remained significantly overweight in the sector. Although
we added to consumer discretionary holdings, the equity portion of the Portfolio
remained slightly underweight in the sector.
We decreased the Portfolio's equity allocation to utilities but remained
significantly overweight relative to the benchmark. During the reporting period,
we reduced the Portfolio's equity position in the energy sector from market-
neutral to underweight. In addition, we slightly reduced the Portfolio's equity
allocation to consumer staples.
HOW WAS THE EQUITY PORTION OF THE PORTFOLIO POSITIONED AT THE END OF DECEMBER
2010?
As of December 31, 2010, the equity portion of the Portfolio was significantly
overweight relative to the MSCI World Index in telecommunication services,
utilities and consumer staples. As of the same date, the equity portion of the
Portfolio was signif-icantly underweight relative to the benchmark in
financials, infor-mation technology and materials.
WHAT FACTORS AFFECTED THE RELATIVE PERFORMANCE OF THE FIXED-INCOME PORTION OF
THE PORTFOLIO DURING THE REPORTING PERIOD?
We believe that the performance the fixed-income portion of the Portfolio
relative to the Barclays Capital U.S. Aggregate Bond Index(1) resulted from our
efforts to increase the beta(2) of the Portfolio prior to the beginning of the
reporting period. We achieved this by increasing exposure to lower-quality
fixed-income issues, by holding bonds that were less defensive in nature and by
increasing exposure to cyclicals and the financial sector, specifically banking.
To increase our weighting in high yield we decreased the Portfolio's positions
in Treasurys and mortgage-backed securities.
WHAT WAS THE PORTFOLIO'S DURATION(3) STRATEGY DURING THE REPORTING PERIOD?
The duration of the fixed-income portion of the Portfolio was in line with the
duration of the Barclays Capital U.S. Aggregate Bond Index toward the beginning
of the reporting period, but we shortened duration by the end of the reporting
period and may continue to reduce duration as inflation becomes more of a
concern. Throughout the reporting period the Portfolio had a significant and
increasing allocation to high-yield bonds, which tend to have shorter durations.
In addition, these securities tend to have a low correlation to Treasurys and
thus have a lower sensitivity to interest rates.
WHAT SPECIFIC FACTORS, RISKS OR MARKET FORCES PROMPTED SIGNIFICANT DECISIONS FOR
THE FIXED-INCOME PORTION OF THE PORTFOLIO DURING THE REPORTING PERIOD?
During the reporting period, the high-yield market substantially outperformed
the Barclay's Capital U.S. Aggregate Bond Index, the Portfolio's fixed-income
benchmark. Throughout the reporting period the Portfolio had a significant
allocation to high-yield securities, and this position was the biggest
contributor to the Portfolio's fixed-income performance. The Portfolio's
overweight position in convertible bonds also had a positive impact on
performance.
The continued efforts of global central banks to keep rates low pushed investors
to increase their risk appetite to pursue higher yields. As a result, investors
who typically limit themselves to investment-grade securities reached for yield
by focusing on corporate bonds, both within and outside the investment-grade
universe.
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.
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.
M-204 MainStay VP Income Builder Portfolio
High-yield spreads(4) relative to Treasurys tightened during 2010. Supply and
demand were both strong, with new issuance at a historically high level and
inflows into retail mutual funds con-tinuing at a record pace. As predicted by
Moody's Investors Service, defaults continued to decline. Most experts agree
there are no longer any serious questions about whether the global economy has
begun to recover, and the idea of a "double dip recession" has lost momentum.
DURING THE REPORTING PERIOD, WHICH MARKET SEGMENTS WERE THE STRONGEST
CONTRIBUTORS TO THE PERFORMANCE OF THE FIXED-INCOME PORTION OF THE PORTFOLIO AND
WHICH MARKET SEGMENTS WERE PARTICULARLY WEAK?
During the reporting period, high-yield corporate debt was the biggest
contributor to absolute performance in the fixed-income portion of the
Portfolio. The financials sector was a leading performer in both the high-yield
and investment-grade corporate bond markets. Our overweight position relative to
the Barclay's Capital U.S. Aggregate Bond Index in financials was the largest
positive contributor to relative performance in the fixed-income portion of the
Portfolio. As banks around the world continued to report good results (albeit
with slower growth rates and some concerns with new capital requirements under
the Basel III accords),(5) we continued to see value in the financials sector
and the fixed-income portion of the Portfolio remained overweight relative to
the benchmark in the sector at the end of December 2010.
The Portfolio's positions in the auto industry have also been strong performers.
Automakers have seen a recovery in their market. General Motors has reorganized
through bankruptcy, and Ford has experienced a significant operational rebound.
At the end of 2009, Ford Motor reported its first annual profit in four years,
and the company's bonds were recently upgraded.
The rally in the high-yield corporate bond market continued to be led by lower-
quality credits. As a result, our positions in higher-quality credits, though
positive contributors during the reporting period, generally underperformed on a
relative basis. Consistent with this theme, sectors such as energy, which are
considered to be more defensive, were laggards during the reporting period.
DID THE PORTFOLIO MAKE ANY SIGNIFICANT FIXED-INCOME PURCHASES OR SALES DURING
THE REPORTING PERIOD?
The largest sector increase in the fixed-income portion of the Portfolio was in
high-yield corporate bonds. Significant purchases within the high-yield asset
class included Ford Motor, Freescale Semiconductor and American International
Group
(AIG). We swapped part of our holdings in Ford Motor for a convertible bond from
the same company that we felt represented a better risk-reward opportunity. We
purchased AIG as part of our effort to increase exposure to the financials
sector. Freescale Semiconductor benefited from the cyclical recovery during the
period.
The largest allocation decrease in the fixed-income portion of the Portfolio was
in mortgages. Although the Portfolio increased high-yield exposure overall, some
of the significant sales in that sector included mining company Teck Resources,
automaker Ford Motor and lodging company Harrah's. We sold our position in Teck
Resources when the company's debt was upgraded to investment-grade status and
began trading at very tight spreads. We sold part of our position in Ford Motor
bonds to swap into other bonds within the company that we believed represented a
better risk-reward opportunity. The Harrah's sale was due to relative value
concerns.
HOW DID THE PORTFOLIO'S FIXED-INCOME SECTOR WEIGHTINGS CHANGE DURING THE
REPORTING PERIOD?
During the reporting period, we increased the Portfolio's holdings in high-yield
bonds and floating-rate notes and decreased the Portfolio's exposure to Treasury
securities, mortgages, investment-grade corporate bonds and agencies. With a
positive expectation for the economy and evidence that fundamentals were
improving, we increased our exposure to cyclical names within the Portfolio's
credit positions. Auto-related companies received a substantial lift from the
economy's revival and financials realized gains from the steep yield curve(6)
and improving economy.
We decreased holdings in the fixed-income portion of the Portfolio in the metals
& mining, health services and support services sectors. We reduced the
Portfolio's holdings in these defensive sectors to increase the beta of the
fixed-income portion of the Portfolio.
HOW WAS THE FIXED-INCOME PORTION OF PORTFOLIO POSITIONED AT THE END OF DECEMBER
2010?
As of December 31, 2010, the Portfolio's largest overweight positions relative
to the Barclays Capital U.S. Aggregate Bond Index were in high-yield bonds,
floating-rate notes and convertibles. We favored cyclical sectors because we had
favorable expectations for the economy and the high-yield market in general. We
also favored financials--specifically banks--in light of the governmental
support that they had received and the steepness of the yield curve, which is
conducive to earnings for these companies.
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.
5. The Basel III accords seek to strengthen global capital and liquidity
regulations with the goal of promoting a stronger banking sector.
6. 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.
mainstayinvestments.com M-205
As of December 31, 2010, the fixed-income portion of the Portfolio was
underweight in securities that have higher interest-rate sensitivity, such as
Treasurys and mortgage-backed securities.
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
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-206 MainStay VP Income Builder Portfolio
PORTFOLIO OF INVESTMENTS(+++) DECEMBER 31, 2010
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
LONG-TERM BONDS 42.1%+
ASSET-BACKED SECURITIES 3.0%
--------------------------------------------------------
AIRLINES 0.5%
Northwest Airlines, Inc.
Series 2007-1, Class A
7.027%, due 11/1/19 $ 1,498,487 $ 1,528,456
------------
HOME EQUITY 2.2%
Citicorp Residential
Mortgage Securities, Inc.
Series 2006-3, Class A3
5.61%, due 11/25/36 (a) 93,549 93,959
Series 2006-1, Class A3
5.706%, due 7/25/36 (a) 232,928 235,187
Citigroup Mortgage Loan
Trust, Inc.
Series 2007-AHL2, Class
A3A
0.331%, due 5/25/37 (b) 1,071,383 874,150
GSAA Home Equity Trust
Series 2006-14, Class A1
0.311%, due 9/25/36 (b) 3,340,846 1,643,753
JP Morgan Mortgage
Acquisition Corp.
Series 2007-HE1, Class AF1
0.361%, due 3/25/47 (b) 740,923 549,326
Master Asset Backed
Securities Trust
Series 2006-HE4, Class A1
0.311%, due 11/25/36 (b) 405,149 181,462
Merrill Lynch Mortgage
Investors Trust
Series 2007-MLN1, Class
A2A
0.371%, due 3/25/37 (b) 2,334,132 1,622,558
Soundview Home Equity Loan
Trust
Series 2006-EQ2, Class A2
0.371%, due 1/25/37 (b) 1,233,664 1,093,558
------------
6,293,953
------------
STUDENT LOANS 0.3%
Keycorp Student Loan Trust
Series 2000-A, Class A2
0.608%, due 5/25/29 (b) 863,153 740,287
------------
Total Asset-Backed
Securities
(Cost $8,420,248) 8,562,696
------------
CONVERTIBLE BONDS 8.2%
--------------------------------------------------------
AEROSPACE & DEFENSE 0.4%
L-3 Communications Corp.
3.00%, due 8/1/35 534,000 538,005
Triumph Group, Inc.
2.625%, due 10/1/26 352,000 590,040
------------
1,128,045
------------
AUTO PARTS & EQUIPMENT 0.5%
ArvinMeritor, Inc.
4.00%, due 2/15/27 560,000 616,700
BorgWarner, Inc.
3.50%, due 4/15/12 321,000 719,441
------------
1,336,141
------------
BIOTECHNOLOGY 0.2%
Life Technologies Corp.
1.50%, due 2/15/24 475,000 575,938
------------
COAL 0.2%
Peabody Energy Corp.
4.75%, due 12/15/66 460,000 597,425
------------
COMPUTERS 0.5%
EMC Corp.
1.75%, due 12/1/13 675,000 1,020,093
SanDisk Corp.
1.50%, due 8/15/17 361,000 409,284
------------
1,429,377
------------
ELECTRONICS 0.2%
TTM Technologies, Inc.
3.25%, due 5/15/15 547,000 657,084
------------
HEALTH CARE--SERVICES 0.4%
Fisher Scientific
International, Inc.
3.25%, due 3/1/24 687,000 962,659
------------
IRON & STEEL 1.1%
Allegheny Technologies, Inc.
4.25%, due 6/1/14 877,000 1,327,559
ArcelorMittal
5.00%, due 5/15/14 393,000 569,850
Steel Dynamics, Inc.
5.125%, due 6/15/14 470,000 598,075
United States Steel Corp.
4.00%, due 5/15/14 356,000 692,420
------------
3,187,904
------------
MINING 0.4%
Newmont Mining Corp.
1.25%, due 7/15/14 854,000 1,228,692
------------
MISCELLANEOUS--MANUFACTURING 1.1%
Danaher Corp.
(zero coupon), due 1/22/21 1,034,000 1,421,750
Ingersoll-Rand Co.
4.50%, due 4/15/12 245,000 651,087
</Table>
+ Percentages indicated are based on Portfolio net assets.
X Among the Portfolio's 10 largest holdings or issuers held, as of December 31,
2010, 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-207
PORTFOLIO OF INVESTMENTS(+++) DECEMBER 31, 2010 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
CONVERTIBLE BONDS (CONTINUED)
MISCELLANEOUS--MANUFACTURING (CONTINUED)
Textron, Inc.
4.50%, due 5/1/13 $ 469,000 $ 893,445
------------
2,966,282
------------
OIL & GAS 0.4%
Chesapeake Energy Corp.
2.50%, due 5/15/37 506,000 454,135
St. Mary Land & Exploration
Co.
3.50%, due 4/1/27 509,000 622,253
------------
1,076,388
------------
OIL & GAS SERVICES 0.9%
Cameron International Corp.
2.50%, due 6/15/26 1,070,000 1,559,525
Core Laboratories, L.P.
0.25%, due 10/31/11 444,000 866,910
------------
2,426,435
------------
PHARMACEUTICALS 0.8%
ALZA Corp.
(zero coupon), due 7/28/20 1,113,000 986,396
Teva Pharmaceutical Finance
Co. B.V.
Series D
1.75%, due 2/1/26 1,166,000 1,284,058
------------
2,270,454
------------
REAL ESTATE INVESTMENT TRUSTS 0.1%
SL Green Operating
Partnership, L.P.
3.00%, due 10/15/17 (c) 217,000 222,696
------------
RETAIL 0.2%
Costco Wholesale Corp.
(zero coupon), due 8/19/17 373,000 613,119
------------
SEMICONDUCTORS 0.6%
Intel Corp.
3.25%, due 8/1/39 (c) 456,000 548,910
Microchip Technology, Inc.
2.125%, due 12/15/37 489,000 600,859
ON Semiconductor Corp.
2.625%, due 12/15/26 529,000 622,236
------------
1,772,005
------------
SOFTWARE 0.2%
SYNNEX Corp.
4.00%, due 5/15/18 (c) 452,000 557,655
------------
Total Convertible Bonds
(Cost $20,061,626) 23,008,299
------------
CORPORATE BONDS 21.2%
--------------------------------------------------------
AEROSPACE & DEFENSE 0.5%
BAE Systems Holdings, Inc.
5.20%, due 8/15/15 (c) 1,325,000 1,413,074
------------
AGRICULTURE 0.1%
Lorillard Tobacco Co.
8.125%, due 6/23/19 165,000 183,600
------------
AIRLINES 1.6%
Continental Airlines, Inc.
Series A
7.25%, due 11/10/19 437,569 487,889
7.875%, due 1/2/20 1,206,022 1,181,902
Delta Air Lines, Inc.
12.25%, due 3/15/15 (c) 1,860,000 2,097,150
U.S. Airways 2010-1 Class A
Pass Through Trust
Series A
6.25%, due 4/22/23 750,000 746,250
------------
4,513,191
------------
AUTO MANUFACTURERS 0.2%
Ford Motor Co.
6.625%, due 10/1/28 500,000 483,750
------------
BANKS 1.8%
AgriBank FCB
9.125%, due 7/15/19 200,000 237,516
BAC Capital Trust VI
5.625%, due 3/8/35 800,000 677,460
Bank of America Corp.
6.50%, due 8/1/16 50,000 54,255
8.00%, due 12/29/49 (b) 1,000,000 1,007,800
CIT Group, Inc.
7.00%, due 5/1/14 281,000 283,810
7.00%, due 5/1/16 319,000 320,196
Citigroup, Inc.
8.50%, due 5/22/19 102,500 127,247
JPMorgan Chase & Co.
7.90%, due 4/29/49 (b) 1,300,000 1,381,887
Wells Fargo & Co.
7.98%, due 3/29/49 (b) 800,000 844,000
------------
4,934,171
------------
BIOTECHNOLOGY 0.5%
Amgen, Inc.
5.85%, due 6/1/17 1,250,000 1,426,872
------------
</Table>
M-208 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)
BUILDING MATERIALS 1.2%
Boise Cascade LLC
7.125%, due 10/15/14 $ 860,000 $ 840,650
USG Corp.
6.30%, due 11/15/16 2,265,000 1,981,875
9.75%, due 1/15/18 545,000 528,650
------------
3,351,175
------------
CHEMICALS 0.1%
Dow Chemical Co. (The)
8.55%, due 5/15/19 240,000 300,779
------------
COMMERCIAL SERVICES 0.9%
Avis Budget Car Rental LLC
7.625%, due 5/15/14 208,000 213,200
9.625%, due 3/15/18 1,010,000 1,088,275
Hertz Corp. (The)
7.375%, due 1/15/21 (c) 300,000 303,000
Quebecor World, Inc.
(Litigation Recovery
Trust--Escrow Shares)
9.75%, due 1/15/49
(c)(d)(e)(f) 70,000 3,640
United Rentals North
America, Inc.
9.25%, due 12/15/19 745,000 828,812
------------
2,436,927
------------
COMPUTERS 0.1%
Unisys Corp.
14.25%, due 9/15/15 (c) 280,000 333,900
------------
DIVERSIFIED FINANCIAL SERVICES 0.4%
Alterra Finance LLC
6.25%, due 9/30/20 75,000 74,466
GE Capital Trust II
5.50%, due 9/15/67 (b) E 410,000 478,050
General Electric Capital
Corp.
6.50%, due 9/15/67 (b) L 490,000 705,898
------------
1,258,414
------------
ELECTRIC 0.9%
X Energy Future
Intermediate Holding Co.
LLC/EFIH Finance, Inc.
10.00%, due 12/1/20 $ 2,479,000 2,556,526
------------
ENTERTAINMENT 0.3%
Mohegan Tribal Gaming
Authority
6.125%, due 2/15/13 945,000 784,350
------------
ENVIRONMENTAL CONTROLS 0.2%
EnergySolutions,
Inc./EnergySolutions LLC
10.75%, due 8/15/18 (c) 600,000 654,750
------------
FINANCE--CONSUMER LOANS 0.4%
American General Finance
Corp.
6.90%, due 12/15/17 1,350,000 1,090,125
------------
FINANCE--CREDIT CARD 0.2%
American Express Co.
6.80%, due 9/1/66 (b) 700,000 693,000
------------
FINANCE--OTHER SERVICES 0.3%
Cantor Fitzgerald, L.P.
7.875%, due 10/15/19 (c) 800,000 823,858
------------
FOOD 0.2%
Smithfield Foods, Inc.
7.75%, due 7/1/17 500,000 520,000
------------
FOREST PRODUCTS & PAPER 0.2%
Boise Paper Holdings
LLC/Boise
Co-Issuer Co.
8.00%, due 4/1/20 600,000 642,000
------------
HEALTH CARE--PRODUCTS 0.1%
Bausch & Lomb, Inc.
9.875%, due 11/1/15 250,000 267,500
------------
HEALTH CARE--SERVICES 0.0%++
CIGNA Corp.
4.375%, due 12/15/20 135,000 131,782
------------
HOME BUILDERS 1.4%
X K Hovnanian Enterprises,
Inc.
10.625%, due 10/15/16 2,670,000 2,736,750
MDC Holdings, Inc.
5.625%, due 2/1/20 1,100,000 1,084,996
------------
3,821,746
------------
INSURANCE 2.6%
Allstate Corp. (The)
6.50%, due 5/15/67 (b) 1,725,000 1,729,313
Hartford Financial Services
Group, Inc. (The)
6.10%, due 10/1/41 1,725,000 1,629,135
Hartford Life, Inc.
7.65%, due 6/15/27 245,000 255,028
Liberty Mutual Group, Inc.
7.80%, due 3/7/87 (c) 1,195,000 1,177,075
</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-209
PORTFOLIO OF INVESTMENTS(+++) DECEMBER 31, 2010 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
INSURANCE (CONTINUED)
Pacific Life Insurance Co.
7.90%, due 12/30/23 (c) $ 1,000,000 $ 1,121,231
Progressive Corp. (The)
6.70%, due 6/15/67 (b) 1,450,000 1,489,875
------------
7,401,657
------------
LODGING 1.1%
X MGM Mirage, Inc.
7.50%, due 6/1/16 3,470,000 3,244,450
------------
MEDIA 2.3%
Cequel Communications
Holdings/LLC and Cequel
Capital Corp.
8.625%, due 11/15/17 (c) 1,475,000 1,541,375
X Clear Channel
Communications, Inc.
5.50%, due 12/15/16 4,390,000 2,853,500
6.875%, due 6/15/18 1,010,000 628,725
Comcast Corp.
5.70%, due 7/1/19 800,000 874,606
Morris Publishing Group LLC
10.00%, due 9/1/14 (d) 15,220 14,801
NBC Universal, Inc.
5.15%, due 4/30/20 (c) 55,000 57,014
Time Warner Cable, Inc.
8.25%, due 2/14/14 200,000 232,152
Time Warner, Inc.
7.70%, due 5/1/32 115,000 140,379
Ziff Davis Media, Inc.
(Escrow Shares)
8.788%, due 7/15/11
(b)(d)(f)(g) 10,669 233
------------
6,342,785
------------
MINING 0.4%
Alcoa, Inc.
5.90%, due 2/1/27 440,000 429,286
Century Aluminum Co.
8.00%, due 5/15/14 606,000 637,057
------------
1,066,343
------------
MISCELLANEOUS--MANUFACTURING 0.5%
Amsted Industries, Inc.
8.125%, due 3/15/18 (c) 1,400,000 1,485,750
------------
OFFICE EQUIPMENT/SUPPLIES 0.1%
Xerox Corp.
8.25%, due 5/15/14 270,000 315,163
------------
OIL & GAS 1.7%
ConocoPhillips
6.50%, due 2/1/39 1,000,000 1,189,103
X Linn Energy LLC
8.625%, due 4/15/20 (c) 2,405,000 2,591,388
Nabors Industries, Inc.
5.00%, due 9/15/20 (c) 1,000,000 970,043
Pemex Project Funding Master
Trust
6.625%, due 6/15/35 75,000 76,312
------------
4,826,846
------------
OIL & GAS SERVICES 0.2%
Basic Energy Services, Inc.
7.125%, due 4/15/16 500,000 485,000
------------
PIPELINES 0.4%
NGPL Pipeco LLC
7.119%, due 12/15/17 (c) 390,000 426,963
ONEOK, Inc.
6.00%, due 6/15/35 130,000 125,934
Panhandle Eastern Pipeline
Co., L.P.
6.20%, due 11/1/17 430,000 458,126
------------
1,011,023
------------
REAL ESTATE INVESTMENT TRUSTS 0.0%++
ProLogis
7.375%, due 10/30/19 75,000 81,921
------------
RETAIL 0.0%++
CVS Caremark Corp.
5.789%, due 1/10/26 (c)(f) 60,229 60,364
------------
SEMICONDUCTORS 0.3%
Freescale Semiconductor,
Inc.
9.25%, due 4/15/18 (c) 700,000 770,000
------------
Total Corporate Bonds
(Cost $55,236,298) 59,712,792
------------
FOREIGN BONDS 1.2%
--------------------------------------------------------
BANKS 0.3%
EGG Banking PLC
6.875%, due 12/29/21 (b) L 500,000 737,166
------------
FINANCE--MORTGAGE LOAN/BANKER 0.9%
X Northern Rock Asset
Management PLC
9.375%, due 10/17/21 2,000,000 2,650,469
------------
Total Foreign Bonds
(Cost $2,894,972) 3,387,635
------------
</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
FOREIGN GOVERNMENT BONDS 0.1%
--------------------------------------------------------
FOREIGN SOVEREIGN 0.1%
Republic of Panama
9.375%, due 4/1/29 $ 105,000 $ 147,262
Republic of Venezuela
6.00%, due 12/9/20 217,000 124,775
------------
Total Foreign Government
Bonds
(Cost $281,366) 272,037
------------
LOAN ASSIGNMENTS & PARTICIPATIONS 3.2% (H)
--------------------------------------------------------
AEROSPACE & DEFENSE 0.8%
Hawker Beechcraft
Acquisition Co. LLC
Term Loan
2.272%, due 3/26/14 2,569,302 2,243,550
LC Facility Deposits
2.303%, due 3/26/14 154,004 134,479
------------
2,378,029
------------
AUTOMOBILE 0.8%
Allison Transmission, Inc.
Term Loan B
3.027%, due 8/7/14 997,122 973,233
Autotrader.com, Inc.
New Term Loan B
4.75%, due 12/11/16 1,245,000 1,250,059
------------
2,223,292
------------
COMMERCIAL SERVICES 0.7%
Quad/Graphics, Inc.
Term Loan B
5.50%, due 4/14/16 1,990,000 1,951,030
------------
ELECTRIC 0.2%
Calpine Corp.
1st Priority Term Loan
3.145%, due 3/29/14 447,961 447,161
------------
HEALTHCARE, EDUCATION & CHILDCARE 0.4%
Warner Chilcott Corp.
Term Loan B4
3.764%, due 2/22/16 1,073,000 1,082,083
------------
HOTELS, RESTAURANTS & LEISURE 0.2%
Gateway Casinos &
Entertainment, Ltd.
Canadian Term Loan
6.60%, due 4/20/16 C$ 600,000 604,571
------------
MACHINERY 0.0%++
BHM Technologies LLC
Exit Term Loan B
8.50%, due 11/26/13 (d)(f) 31,090 84
------------
PACKAGING & CONTAINERS 0.1%
Reynolds Group Holdings,
Inc.
Incremental Term Loan
6.25%, due 5/5/16 395,000 397,414
------------
Total Loan Assignments &
Participations
(Cost $9,088,553) 9,083,664
------------
MORTGAGE-BACKED SECURITIES 1.2%
--------------------------------------------------------
COMMERCIAL MORTGAGE LOANS
(COLLATERALIZED MORTGAGE OBLIGATIONS) 1.2%
Banc of America Commercial
Mortgage, Inc.
Series 2007-2, Class A4
5.689%, due 4/10/49 (i) 290,000 303,043
Bayview Commercial Asset
Trust
Series 2006-4A, Class A1
0.491%, due 12/25/36
(b)(c)(d) 200,559 152,988
Bear Stearns Commercial
Mortgage Securities
Series 2005-PW10, Class A4
5.405%, due 12/11/40 (b) 130,000 138,894
Series 2007-PW16, Class A4
5.717%, due 6/11/40 (i) 290,000 309,420
Citigroup Commercial
Mortgage Trust
Series 2008-C7, Class A4
6.179%, due 12/10/49 (i) 150,000 161,235
Deutsche ALT-A Securities,
Inc. Alternate Loan Trust
Series 2005-5, Class 1A3
5.50%, due 11/25/35 (b) 340,646 333,689
Four Times Square Trust
Series 2006-4TS, Class A
5.401%, due 12/13/28 (c) 480,000 498,302
Morgan Stanley Capital I
Series 2007-IQ15, Class A4
5.879%, due 6/11/49 (i) 200,000 214,156
Mortgage Equity Conversion
Asset Trust
Series 2007-FF2, Class A
0.73%, due 2/25/42
(b)(c)(d)(f) 466,125 445,615
Timberstar Trust
Series 2006-1, Class A
5.668%, due 10/15/36 (c) 160,000 170,975
</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, 2010 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
MORTGAGE-BACKED SECURITIES (CONTINUED)
COMMERCIAL MORTGAGE LOANS
(COLLATERALIZED MORTGAGE OBLIGATIONS) (CONTINUED)
WaMu Mortgage Pass Through
Certificates
Series 2006-AR14, Class
1A1
5.489%, due 11/25/36 (i) $ 653,537 $ 591,566
------------
Total Mortgage-Backed
Securities
(Cost $3,032,638) 3,319,883
------------
U.S. GOVERNMENT & FEDERAL AGENCIES 2.5%
--------------------------------------------------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION
(MORTGAGE PASS-THROUGH SECURITIES) 0.2%
6.00%, due 4/1/37 408,254 441,951
------------
X UNITED STATES TREASURY BONDS 1.8%
3.875%, due 8/15/40 4,500,000 4,144,923
4.375%, due 11/15/39 800,000 804,250
4.375%, due 5/15/40 155,000 155,750
------------
5,104,923
------------
UNITED STATES TREASURY NOTES 0.5%
1.25%, due 10/31/15 725,000 701,664
2.625%, due 8/15/20 535,000 507,205
2.625%, due 11/15/20 200,000 188,656
------------
1,397,525
------------
Total U.S. Government &
Federal Agencies
(Cost $7,205,827) 6,944,399
------------
YANKEE BONDS 1.5% (J)
--------------------------------------------------------
BANKS 0.3%
Lloyds TSB Bank PLC
4.375%, due 1/12/15 (c) 200,000 199,954
Royal Bank of Scotland PLC
(The)
4.875%, due 8/25/14 (c) 310,000 317,493
UBS A.G.
3.875%, due 1/15/15 150,000 154,593
------------
672,040
------------
DIVERSIFIED FINANCIAL SERVICES 0.0%++
Irish Life & Permanent Group
Holdings PLC
3.60%, due 1/14/13 (c) 100,000 89,702
------------
ELECTRIC 0.1%
TransAlta Corp.
5.75%, due 12/15/13 100,000 109,095
------------
INSURANCE 0.2%
Oil Insurance, Ltd.
7.558%, due 12/29/49
(b)(c) 580,000 535,688
------------
MISCELLANEOUS--MANUFACTURING 0.5%
Bombardier, Inc.
7.75%, due 3/15/20 (c) 1,400,000 1,508,500
------------
OIL & GAS 0.1%
Gazprom International S.A.
7.201%, due 2/1/20 (c) 173,911 184,780
TNK-BP Finance S.A.
7.50%, due 7/18/16 (c) 100,000 110,875
------------
295,655
------------
SAVINGS & LOANS 0.2%
Swiss Re Capital I, L.P.
6.854%, due 5/29/49 (c) 600,000 573,164
------------
TRANSPORTATION 0.1%
Hapag-Lloyd A.G.
9.75%, due 10/15/17 (b)(c) 300,000 324,750
------------
Total Yankee Bonds
(Cost $3,994,364) 4,108,594
------------
Total Long-Term Bonds
(Cost $110,215,892) 118,399,999
------------
<Caption>
SHARES
COMMON STOCKS 47.8%
--------------------------------------------------------
AEROSPACE & DEFENSE 1.1%
BAE Systems PLC 307,900 1,584,154
Meggitt PLC 249,950 1,441,878
------------
3,026,032
------------
AGRICULTURE 3.7%
Altria Group, Inc. 79,050 1,946,211
British American Tobacco PLC 17,450 670,227
Imperial Tobacco Group PLC 78,900 2,420,894
Lorillard, Inc. 24,750 2,030,985
Philip Morris International,
Inc. 43,250 2,531,423
Reynolds American, Inc. 25,500 831,810
------------
10,431,550
------------
AUTO MANUFACTURERS 0.8%
Daimler A.G. (e) 19,750 1,338,862
Ford Motor Co. (e) 52,500 881,475
------------
2,220,337
------------
</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>
SHARES VALUE
COMMON STOCKS (CONTINUED)
BANKS 1.0%
CIT Group, Inc. (e) 28,000 $ 1,318,800
Citigroup, Inc. (e) 165,000 780,450
Westpac Banking Corp. 32,600 740,554
------------
2,839,804
------------
BEVERAGES 2.5%
Coca-Cola Co. (The) 12,050 792,528
Coca-Cola Enterprises, Inc. 29,350 734,631
Diageo PLC, Sponsored ADR
(k) 31,450 2,337,678
InBev N.V. 43,050 2,462,186
PepsiCo, Inc. 10,950 715,364
------------
7,042,387
------------
BUILDING MATERIALS 0.1%
U.S. Concrete, Inc. (d)(e) 35,009 268,169
------------
CHEMICALS 1.3%
Air Liquide S.A. 6,096 770,945
BASF A.G. 18,700 1,491,832
E.I. du Pont de Nemours &
Co. 27,800 1,386,664
------------
3,649,441
------------
COMMERCIAL SERVICES 0.3%
Automatic Data Processing,
Inc. 16,550 765,934
Quad/Graphics, Inc. (e) 8 330
------------
766,264
------------
COMPUTERS 0.8%
HTC Corp. 42,200 1,302,625
Quanta Computer, Inc. 496,000 1,041,113
------------
2,343,738
------------
DISTRIBUTION & WHOLESALE 0.3%
Genuine Parts Co. 15,950 818,873
------------
ELECTRIC 4.9%
CMS Energy Corp. 52,550 977,430
CPFL Energia S.A. 50,800 1,260,819
DPL, Inc. 24,350 626,039
Duke Energy Corp. 76,250 1,358,012
National Grid PLC 253,150 2,182,613
NSTAR 17,700 746,763
Progress Energy, Inc. 14,600 634,808
SCANA Corp. 17,600 714,560
Scottish & Southern Energy
PLC 71,500 1,365,576
Southern Co. (The) 34,600 1,322,758
TECO Energy, Inc. 72,400 1,288,720
Terna S.p.A. 295,300 1,246,966
------------
13,725,064
------------
ELECTRICAL COMPONENTS & EQUIPMENT 0.3%
Emerson Electric Co. 12,450 711,767
------------
ENGINEERING & CONSTRUCTION 0.6%
Vinci S.A. 33,100 1,799,339
------------
ENVIRONMENTAL CONTROLS 0.2%
Waste Management, Inc. 17,700 652,599
------------
FINANCE--OTHER SERVICES 0.3%
NYSE Euronext 24,800 743,504
------------
FOOD 2.2%
H.J. Heinz Co. 14,950 739,427
Kellogg Co. 16,750 855,590
X Nestle S.A. Registered 44,900 2,629,171
Orkla ASA 69,700 677,285
Unilever PLC 21,600 661,070
WM Morrison Supermarkets PLC 150,050 626,031
------------
6,188,574
------------
FOOD SERVICES 0.3%
Compass Group PLC 107,400 972,869
------------
GAS 1.4%
Nicor, Inc. 20,900 1,043,328
NiSource, Inc. 107,650 1,896,793
Vectren Corp. 37,250 945,405
------------
3,885,526
------------
HEALTH CARE--PRODUCTS 0.7%
Johnson & Johnson 30,300 1,874,055
------------
HOUSEHOLD PRODUCTS & WARES 1.0%
Kimberly-Clark Corp. 24,150 1,522,416
Tupperware Brands Corp. 28,750 1,370,513
------------
2,892,929
------------
INSURANCE 1.6%
Arthur J. Gallagher & Co. 46,800 1,360,944
Muenchener
Rueckversicherungs-
Gesellschaft A.G.
Registered 8,950 1,356,849
SCOR SE 42,400 1,076,523
Travelers Cos., Inc. (The) 13,550 754,871
------------
4,549,187
------------
MEDIA 2.4%
Comcast Corp. Class A 50,650 1,054,027
Pearson PLC 141,950 2,230,847
Regal Entertainment Group
Class A 91,950 1,079,493
</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-213
PORTFOLIO OF INVESTMENTS(+++) DECEMBER 31, 2010 (CONTINUED)
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
MEDIA (CONTINUED)
Shaw Communications, Inc. 29,000 $ 622,699
Vivendi S.A. 70,250 1,896,276
------------
6,883,342
------------
METAL FABRICATE & HARDWARE 0.2%
Assa Abloy AB 23,850 671,991
------------
MINING 0.4%
BHP Billiton, Ltd.,
Sponsored ADR (k) 11,050 1,026,766
------------
MISCELLANEOUS--MANUFACTURING 0.4%
Honeywell International,
Inc. 23,200 1,233,312
------------
OFFICE EQUIPMENT/SUPPLIES--0.5%
Pitney Bowes, Inc. 61,850 1,495,533
------------
OIL & GAS 3.3%
Chevron Corp. 10,850 990,063
ConocoPhillips 10,550 718,455
Diamond Offshore Drilling,
Inc. 18,200 1,217,034
ExxonMobil Corp. 14,200 1,038,304
Royal Dutch Shell PLC Class
A, ADR (k) 31,460 2,100,899
StatoilHydro A.S.A.,
Sponsored ADR (k) 60,650 1,441,650
Total S.A. 32,900 1,743,183
------------
9,249,588
------------
PACKAGING & CONTAINERS 0.2%
Bemis Co., Inc. 21,300 695,658
------------
PHARMACEUTICALS 2.4%
Abbott Laboratories 16,100 771,351
AstraZeneca PLC, Sponsored
ADR (k) 42,000 1,939,980
Bristol-Myers Squibb Co. 59,250 1,568,940
Merck & Co., Inc. 40,450 1,457,818
Roche Holding A.G.,
Genusscheine 6,910 1,012,481
------------
6,750,570
------------
PIPELINES 0.8%
Kinder Morgan Energy
Partners, L.P. 20,500 1,440,330
Spectra Energy Corp. 28,450 710,966
------------
2,151,296
------------
RETAIL 0.6%
McDonald's Corp. 9,800 752,248
Next PLC 29,050 894,514
------------
1,646,762
------------
SAVINGS & LOANS 0.3%
Hudson City Bancorp, Inc. 55,700 709,618
------------
SEMICONDUCTORS 0.9%
Microchip Technology, Inc. 38,200 1,306,822
Taiwan Semiconductor
Manufacturing Co, Ltd.,
Sponsored ADR (k) 95,950 1,203,213
------------
2,510,035
------------
SOFTWARE 1.2%
Microsoft Corp. 61,950 1,729,644
Oracle Corp. 49,250 1,541,525
------------
3,271,169
------------
TELECOMMUNICATIONS 7.7%
AT&T, Inc. 54,950 1,614,431
BCE, Inc. 71,400 2,537,741
X CenturyTel, Inc. 56,100 2,590,137
China Mobile, Ltd.,
Sponsored ADR (k) 13,500 669,870
France Telecom S.A. 109,000 2,271,516
Mobistar S.A. 16,370 1,061,167
Philippine Long Distance
Telephone Co., Sponsored
ADR (k) 11,200 652,624
Rogers Communications, Inc.
Class B 33,400 1,162,265
X Swisscom A.G. 6,400 2,813,946
Telefonica S.A. 88,750 2,011,992
Verizon Communications, Inc. 50,150 1,794,367
Vodafone Group PLC 902,800 2,333,726
------------
21,513,782
------------
TRANSPORTATION 0.8%
FirstGroup PLC 344,150 2,137,134
------------
WATER 0.3%
United Utilities Group PLC 105,750 976,058
------------
Total Common Stocks
(Cost $116,875,153) 134,324,622
------------
CONVERTIBLE PREFERRED STOCKS 2.1%
--------------------------------------------------------
AUTO MANUFACTURERS 0.9%
Ford Motor Co. Capital Trust
II
6.50% 36,000 1,866,960
General Motors Co.
4.75% 10,900 589,799
------------
2,456,759
------------
BANKS 0.2%
Citigroup, Inc.
7.50% 4,500 615,105
------------
INSURANCE 0.7%
Hartford Financial Services
Group, Inc.
7.25% 30,100 770,861
</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
CONVERTIBLE PREFERRED STOCKS (CONTINUED)
INSURANCE (CONTINUED)
MetLife, Inc.
6.50% 40,350 $ 1,000,680
------------
1,771,541
------------
INVESTMENT MANAGEMENT/ADVISORY SERVICES--0.2%
Affiliated Managers Group,
Inc.
5.10% 12,100 609,235
------------
LEISURE TIME 0.0%++
Callaway Golf Co.
7.50% 600 79,302
------------
TELECOMMUNICATIONS 0.1%
Crown Castle International
Corp.
6.25% 4,600 281,750
------------
Total Convertible Preferred
Stocks
(Cost $5,339,541) 5,813,692
------------
<Caption>
NUMBER OF
WARRANTS
WARRANTS 0.0%++
--------------------------------------------------------
MEDIA 0.0%++
ION Media Networks, Inc.
Expires 12/12/39 (d)(e)(f) 8 0 (l)
------------
Total Warrants
(Cost $13) 0 (l)
------------
<Caption>
PRINCIPAL
AMOUNT
SHORT-TERM INVESTMENT 6.7%
--------------------------------------------------------
REPURCHASE AGREEMENT 6.7%
State Street Bank and Trust
Co.
0.01%, dated 12/31/10
due 1/3/11
Proceeds at Maturity
$18,693,141
(Collateralized by United
States Treasury Notes with
rates between 1.375% and
2.50% and maturity dates
between 5/15/13 and
4/30/15, with a Principal
Amount of $18,760,000 and
a
Market Value of
$19,073,557) $18,693,125 $ 18,693,125
------------
Total Short-Term Investment
(Cost $18,693,125) 18,693,125
------------
Total Investments
(Cost $251,123,724) (o) 98.7% 277,231,438
Other Assets, Less
Liabilities 1.3 3,765,429
------------ ------------
Net Assets 100.0% $280,996,867
============ ============
</Table>
<Table>
<Caption>
CONTRACTS UNREALIZED
LONG APPRECIATION (M)
FUTURES CONTRACTS 0.5%
---------------------------------------------------------
Standard & Poor's 500 Index
Mini March 2011 (n) 885 $1,446,975
----------
Total Futures Contracts
(Settlement Value
$55,445,250) $1,446,975
==========
</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) Subprime mortgage investment and other
asset-backed securities. The total market
value of the securities at December 31,
2010 is $329,146, which represents 0.1%
of the Portfolio's net assets.
(b) Floating rate--Rate shown is the rate in
effect at December 31, 2010.
(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 these securities at December 31,
2010 is $885,530, which represents 0.3%
of the Portfolio's net assets.
(e) Non-income producing security.
(f) Fair valued security. The total market
value of these securities at December 31,
2010 is $509,936, which represents 0.2%
of the Portfolio's net assets.
(g) PIK ("Payment in Kind")--interest or
dividend payment is made with additional
securities.
</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, 2010 (CONTINUED)
<Table>
(h) Floating Rate Loan--generally pays
interest at rates which are periodically
re-determined at a margin above the
London InterBank Offered Rate ("LIBOR")
or other short-term rates. The rate shown
is the rate(s) in effect at December 31,
2010. 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.
(i) Collateral strip rate--Bond whose
interest is based on the weighted net
interest rate of the collateral. Coupon
rate adjusts periodically based on a
predetermined schedule. Rate shown is the
rate in effect at December 31, 2010.
(j) Yankee Bond--dollar-denominated bond
issued in the United States by a foreign
bank or corporation.
(k) ADR--American Depositary Receipt.
(l) Less than one dollar.
(m) Represents the difference between the
value of the contracts at the time they
were opened and the value at December 31,
2010.
(n) At December 31, 2010, cash in the amount
of $3,982,500 is on deposit with the
broker for futures transactions.
(o) At December 31, 2010, cost is
$251,185,446 for federal income tax
purposes and net unrealized appreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $30,214,100
Gross unrealized depreciation (4,168,108)
-----------
Net unrealized appreciation $26,045,992
===========
</Table>
The following abbreviation is used in the above portfolio:
C$--Canadian Dollar
E--Euro
L--Pound Sterling
The following is a summary of the fair valuations according to the inputs used
as of December 31, 2010, for valuing the Portfolio's assets and liabilities.
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 $ -- $ 8,562,696 $ -- $ 8,562,696
Convertible Bonds -- 23,008,299 -- 23,008,299
Corporate Bonds (b) -- 59,648,555 64,237 59,712,792
Foreign Bonds -- 3,387,635 -- 3,387,635
Foreign Government Bonds -- 272,037 -- 272,037
Loan Assignments & Participations (c) -- 9,083,580 84 9,083,664
Mortgage-Backed Securities (d) -- 2,874,268 445,615 3,319,883
U.S. Government & Federal Agencies -- 6,944,399 -- 6,944,399
Yankee Bonds -- 4,108,594 -- 4,108,594
------------ ------------ -------- ------------
Total Long-Term Bonds -- 117,890,063 509,936 118,399,999
------------ ------------ -------- ------------
Common Stocks 134,324,622 -- -- 134,324,622
Convertible Preferred Stocks 5,813,692 -- -- 5,813,692
Warrants (e) -- -- 0 (e) 0 (e)
Short-Term Investment
Repurchase Agreement -- 18,693,125 -- 18,693,125
------------ ------------ -------- ------------
Total Investments in Securities 140,138,314 136,583,188 509,936 277,231,438
------------ ------------ -------- ------------
Other Financial Instruments
Foreign Currency Forward Contracts (f) -- 1,692,989 -- 1,692,989
Futures Contracts Long (g) 1,446,975 -- -- 1,446,975
------------ ------------ -------- ------------
Total Investments in Securities and Other
Financial Instruments $141,585,289 $138,276,177 $509,936 $280,371,402
============ ============ ======== ============
</Table>
(a) For a complete listing of investments and their industries, see the
Portfolio of Investments.
(b) The level 3 securities valued at $3,640, $233 and $60,364 are held in
Commercial Services, Media and Retail, respectively, within the Corproate
Bonds section of the Portfolio of Investments.
(c) The level 3 security valued at $84 is held in Machinery within the Loan
Assignment & Participations section of the Portfolio of Investments.
(d) The level 3 security valued at $445,615 is held in Commercial Mortgage Loans
(Collateralized Mortgage Obligations) within the Mortgage-Backed Securities
section of the Portfolio of Investments.
(e) The level 3 security valued at less than one dollar is held in Media within
the Warrants section of the Portfolio of Investments.
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.
(f) The value listed for these securities reflects unrealized appreciation as
shown on the table for foreign currency forward contracts. (See Note 6)
(g) The value listed for these securities reflects unrealized appreciation as
shown on the Portfolio of Investments.
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) $ -- $(1,477,730) $ -- $(1,477,730)
-------- ----------- -------- -----------
Total Other Financial Instruments $-- $(1,477,730) $-- $(1,477,730)
======== =========== ======== ===========
</Table>
(a) The value listed for these securities reflects unrealized depreciation as
shown on the table of foreign currency forward contracts. (See Note 6)
The Portfolio recognizes transfers between the levels as of the beginning of the
period.
As of December 31, 2010, foreign securities with a total value of $49,389,049
were transferred from Level 2 to Level 1 as the prices of these securities were
based on quoted prices compared with the prior year prices which were adjusted
for events after the market close. The 2009 prices were adjusted by applying
factors provided by a third party vendor in accordance with the Portfolio's
policies and procedures. Fair values at December 31, 2010 for these securities
are based on quoted prices in active markets for identical investments. (See
Note 2)
The following is a reconciliation of investments in which significant
unobservable inputs (Level 3) were used in determining value:
ASSET VALUATION INPUTS
<Table>
<Caption>
BALANCE
AS OF ACCRUED REALIZED
DECEMBER 31, DISCOUNTS GAIN
INVESTMENTS IN SECURITIES 2009 (PREMIUMS) (LOSS)
Long-Term Bonds
Asset-Backed Securities
Credit Cards $137,216 $ (13) $ (68)
Corporate Bonds
Commercial Services 3,640 -- --
Media 3,145 -- (6,259)
Retail 59,102 104 (65)
Loan Assignments &
Participations
Machinery 4,146 (7,753) (903)
Mortgage-Backed Securities
Commercial Mortgage Loans
(Collateralized
Mortgage Obligations) 452,781 -- --
Common Stocks
Machinery 29 -- --
Preferred Stock
Machinery 0 (a) -- --
Warrants --
Media -- -- --
-------- ------- -------
Total $660,059 $(7,662) $(7,295)
======== ======= =======
<Caption>
CHANGE IN
UNREALIZED
APPRECIATION
(DEPRECIATION)
FROM
CHANGE IN BALANCE INVESTMENTS
UNREALIZED TRANSFERS TRANSFERS AS OF STILL HELD AT
APPRECIATION IN TO OUT OF DECEMBER 31, DECEMBER 31,
INVESTMENTS IN SECURITIES (DEPRECIATION) PURCHASES SALES LEVEL 3 LEVEL 3 2010 2010 (B)
Long-Term Bonds
Asset-Backed Securities
Credit Cards $ 406 $ -- $(137,541) $-- $-- $ -- $ --
Corporate Bonds
Commercial Services -- -- -- -- -- 3,640 --
Media 6,582 31,617 (34,852) -- -- 233 9,828
Retail 3,742 -- (2,519) -- -- 60,364 3,661
Loan Assignments &
Participations
Machinery 4,356 977 (739) -- -- 84 5,370
Mortgage-Backed Securities
Commercial Mortgage Loans
(Collateralized
Mortgage Obligations) 11,590 -- (18,756) -- -- 445,615 3,915
Common Stocks -- --
Machinery (29) -- -- -- -- -- --
Preferred Stock
Machinery 0 (a) -- -- -- -- -- --
Warrants
Media (13) 13 -- -- -- 0 (a) --
------- ------- --------- --- --- -------- -------
Total $26,634 $32,607 $(194,407) $-- $-- $509,936 $22,774
======= ======= ========= === === ======== =======
</Table>
(a) Less than one dollar.
(b) 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-217
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2010
<Table>
ASSETS
--------------------------------------------------
Investment in securities, at value
(identified cost $251,123,724) $277,231,438
Cash collateral on deposit at broker 3,982,500
Cash denominated in foreign
currencies
(identified cost $422,446) 418,033
Cash 52
Receivables:
Dividends and interest 1,833,352
Fund shares sold 73,637
Investment securities sold 7,500
Unrealized appreciation on foreign
currency forward contracts 1,692,989
------------
Total assets 285,239,501
------------
LIABILITIES
--------------------------------------------------
Payables:
Investment securities purchased 2,340,598
Manager (See Note 3) 134,949
Fund shares redeemed 133,650
Variation margin on futures
contracts 66,375
Professional fees 50,449
Shareholder communication 18,897
NYLIFE Distributors (See Note 3) 12,193
Custodian 7,151
Directors 642
Unrealized depreciation on foreign
currency forward contracts 1,477,730
------------
Total liabilities 4,242,634
------------
Net assets $280,996,867
============
NET ASSETS CONSIST OF
--------------------------------------------------
Capital stock (par value of $.01 per
share) 200 million shares
authorized $ 197,730
Additional paid-in capital 275,895,880
------------
276,093,610
Undistributed net investment income 10,763,557
Accumulated net realized loss on
investments, futures transactions
and foreign currency transactions (33,631,257)
Net unrealized appreciation on
investments and futures contracts 27,554,689
Net unrealized appreciation on
translation of other assets and
liabilities in foreign currencies
and foreign currency forward
contracts 216,268
------------
Net assets $280,996,867
============
INITIAL CLASS
Net assets applicable to outstanding
shares $222,426,280
============
Shares of capital stock outstanding 15,638,727
============
Net asset value per share
outstanding $ 14.22
============
SERVICE CLASS
Net assets applicable to outstanding
shares $ 58,570,587
============
Shares of capital stock outstanding 4,134,296
============
Net asset value per share
outstanding $ 14.17
============
</Table>
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.
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2010
<Table>
INVESTMENT INCOME
-------------------------------------------------
INCOME
Interest $ 8,231,943
Dividends (a) 6,426,863
-----------
Total income 14,658,806
-----------
EXPENSES
Manager (See Note 3) 1,521,195
Distribution and service--Service
Class (See Note 3) 125,607
Custodian 70,343
Professional fees 65,556
Shareholder communication 36,017
Directors 9,065
Miscellaneous 26,275
-----------
Total expenses 1,854,058
-----------
Net investment income 12,804,748
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
-------------------------------------------------
Net realized gain (loss) on:
Security transactions 8,558,104
Futures transactions 5,890,286
Foreign currency transactions (1,701,061)
-----------
Net realized gain on investments,
futures transactions and foreign
currency transactions 12,747,329
-----------
Net change in unrealized
appreciation (depreciation) on:
Investments 9,989,123
Futures contracts 1,403,807
Translation of other assets and
liabilities in foreign
currencies and foreign currency
forward contracts 44,644
-----------
Net change in unrealized
appreciation (depreciation) on
investments, futures contracts and
foreign currency translations 11,437,574
-----------
Net realized and unrealized gain on
investments, futures transactions
and foreign currency transactions 24,184,903
-----------
Net increase in net assets resulting
from operations $36,989,651
===========
</Table>
(a) Dividends recorded net of foreign withholding taxes in the amount of
$312,816.
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
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2010 AND DECEMBER 31, 2009
<Table>
<Caption>
2010 2009
INCREASE IN NET ASSETS
--------------------------------------------------------
Operations:
Net investment income $ 12,804,748 $ 8,116,132
Net realized gain (loss)
on investments, futures
transactions and foreign
currency transactions 12,747,329 (18,670,103)
Net change in unrealized
appreciation
(depreciation) on
investments, futures
contracts and foreign
currency translations 11,437,574 63,919,939
--------------------------
Net increase in net assets
resulting from operations 36,989,651 53,365,968
--------------------------
Dividends to shareholders:
From net investment
income:
Initial Class (6,662,864) (7,478,197)
Service Class (1,538,206) (1,392,387)
--------------------------
Total dividends to
shareholders (8,201,070) (8,870,584)
--------------------------
Capital share transactions:
Net proceeds from sale of
shares 12,386,834 7,465,746
Net asset value of shares
issued to shareholders in
reinvestment of dividends 8,201,070 8,870,584
Cost of shares redeemed (39,189,251) (46,014,338)
--------------------------
Decrease in net assets
derived from capital
share transactions (18,601,347) (29,678,008)
--------------------------
Net increase in net
assets 10,187,234 14,817,376
NET ASSETS
--------------------------------------------------------
Beginning of year 270,809,633 255,992,257
--------------------------
End of year $280,996,867 $270,809,633
==========================
Undistributed net investment
income at
end of year $ 10,763,557 $ 8,014,176
==========================
</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.
This page intentionally left blank
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
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
2010 2009 2008 2007 2006
Net asset value at beginning of
year $ 12.78 $ 10.71 $ 18.40 $ 18.78 $ 17.48
-------- -------- -------- -------- --------
Net investment income 0.64 (a) 0.37 (a) 0.47 0.47 (a) 0.37 (a)
Net realized and unrealized gain
(loss) on investments 1.31 2.12 (5.40) 0.97 1.30
Net realized and unrealized gain
(loss) on foreign currency
transactions (0.08) 0.01 -- -- --
-------- -------- -------- -------- --------
Total from investment operations 1.87 2.50 (4.93) 1.44 1.67
-------- -------- -------- -------- --------
Less dividends and distributions:
From net investment income (0.43) (0.43) (0.56) (0.45) (0.12)
From net realized gain on
investments -- -- (2.20) (1.37) (0.25)
-------- -------- -------- -------- --------
Total dividends and distributions (0.43) (0.43) (2.76) (1.82) (0.37)
-------- -------- -------- -------- --------
Net asset value at end of year $ 14.22 $ 12.78 $ 10.71 $ 18.40 $ 18.78
======== ======== ======== ======== ========
Total investment return 14.79% 23.51% (26.92%) 7.51% 9.50%
Ratios (to average net assets)/
Supplemental Data:
Net investment income 4.85% 3.26% 2.55% 2.42% 2.06%
Net expenses 0.65% 0.71% 0.65% 0.58% 0.59%
Portfolio turnover rate 61%(b) 161%(b) 94% (b) 76% 61%(b)
Net assets at end of year (in
000's) $222,426 $224,119 $217,037 $373,886 $408,052
</Table>
<Table>
(a) Per share data based on average shares outstanding during the period.
(b) The portfolio turnover rates not including mortgage dollar rolls were 60%,
39%, 141%, 78%, and 51% for the years ended December 31, 2010, 2009, 2008, and
2006, respectively.
</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.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
SERVICE CLASS
---------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
2010 2009 2008 2007 2006
$ 12.74 $ 10.67 $ 18.33 $ 18.72 $ 17.43
------- ------- ------- ------- -------
0.61 (a) 0.35 (a) 0.40 0.42 (a) 0.33 (a)
1.30 2.10 (5.35) 0.97 1.29
(0.08) 0.01 -- -- --
------- ------- ------- ------- -------
1.83 2.46 (4.95) 1.39 1.62
------- ------- ------- ------- -------
(0.40) (0.39) (0.51) (0.41) (0.08)
-- -- (2.20) (1.37) (0.25)
------- ------- ------- ------- -------
(0.40) (0.39) (2.71) (1.78) (0.33)
------- ------- ------- ------- -------
$ 14.17 $ 12.74 $ 10.67 $ 18.33 $ 18.72
======= ======= ======= ======= =======
14.51% 23.21% (27.10%) 7.24% 9.23%
4.59% 3.03% 2.30% 2.17% 1.81%
0.90% 0.96% 0.90% 0.83% 0.84%
61%(b) 161%(b) 94%(b) 76% 61%(b)
$58,571 $46,691 $38,955 $58,724 $55,833
</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-223
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. THE PERFORMANCE TABLE AND GRAPH 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.
(LINE GRAPH)
<Table>
<Caption>
MAINSTAY VP MAINSTAY VP
INTERNATIONAL EQUITY INTERNATIONAL EQUITY
PORTFOLIO INITIAL PORTFOLIO SERVICE MSCI EAFE
CLASS CLASS (R) INDEX
-------------------- -------------------- ---------
12/31/00 10000 10000 10000
8598 8576 7856
8218 8177 6604
10684 10605 9152
12536 12413 11004
13538 13374 12494
17779 17521 15785
18657 18340 17548
13867 13597 9936
16552 16189 13093
12/31/10 17362 16940 14108
</Table>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED DECEMBER 31, 2010
--------------------------------------------------------------------------------
<Table>
<Caption>
GROSS
EXPENSE
CLASS ONE YEAR FIVE YEARS TEN YEARS(1) RATIO(2)
-----------------------------------------------------------------------------
Initial Class Shares 4.90% 5.10% 5.67% 1.01%
-----------------------------------------------------------------------------
Service Class Shares(3) 4.63 4.84 5.41 1.26
-----------------------------------------------------------------------------
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE FIVE TEN
YEAR YEARS YEARS
MSCI EAFE(R) Index(4) 7.75% 2.46% 3.50%
-------------------------------------------------------------------------------------------
Average Lipper Variable Products International Core Portfolio(5) 9.21 3.02 3.59
-------------------------------------------------------------------------------------------
</Table>
1. Performance figures shown for the ten-year period ended December 31, 2010
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 5.67% for Initial Class shares and 5.41% for Service
Class shares for the ten-year period.
2. The gross expense ratios presented reflect the Portfolio's "Total Annual
Portfolio Operating Expenses" from the most recent Prospectus and may differ
from other expense ratios disclosed in this report.
3. 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.
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.
5. 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. Results are based on total returns with all dividend and capital
gain distributions reinvested.
M-224 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, 2010, to December 31,
2010, 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 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, 2010, to December 31, 2010. 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, 2010. 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 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 7/1/10 12/31/10 PERIOD(1) 12/31/10 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,200.40 $5.38 $1,020.30 $4.94
-------------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,198.90 $6.76 $1,019.10 $6.21
-------------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
(0.97% for Initial Class and 1.22% 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-225
PORTFOLIO COMPOSITION AS OF DECEMBER 31, 2010 (Unaudited)
(PIE CHART)
<Table>
Common Stocks 91.3
Other Assets, Less
Liabilities 3.8
Warrants 3.5
Short-Term
Investment 1.4
Futures Contracts 0.0
</Table>
See Portfolio of Investments beginning on page M-230 for specific holdings
within these categories.
++ Less than one-tenth of a percent.
TOP TEN HOLDINGS OR ISSUERS HELD AS OF DECEMBER 31, 2010 (excluding short-term
investment)
<Table>
1. Roche Holding A.G., Genusscheine
2. Man Group PLC
3. Nintendo Co., Ltd. ADR (a)
4. NTT DoCoMo, Inc.
5. Ryanair Holdings PLC Class A
6. Tesco PLC
7. Nokia Oyj, Sponsored ADR
8. Syngenta A.G., ADR
9. Scottish & Southern Energy PLC
10. Nestle S.A. Registered
</Table>
(a) Security trades on more than one exchange.
M-226 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, 2010?
For the 12 months ended December 31, 2010, MainStay VP International Equity
Portfolio returned 4.90% for Initial Class shares and 4.63% for Service Class
shares. Both share classes underperformed the 9.21% return of the average
Lipper(1) Variable Products International Core Portfolio and the 7.75% return of
the Morgan Stanley Capital International (MSCI) EAFE(R) Index(1) for the 12
months ended December 31, 2010. The MSCI EAFE(R) Index is the Portfolio's broad-
based securities-market index.
WHAT FACTORS AFFECTED THE PORTFOLIO'S RELATIVE PERFORMANCE DURING THE REPORTING
PERIOD?
We attribute the Portfolio's underperformance of its benchmark to multiple
factors. Security selection within the consumer discretionary, industrials and
energy sectors was subpar. In the pharmaceuticals industry, an overweight
position detracted from the Portfolio's relative performance during the
reporting period, as did stock selection. On the positive side, the Portfolio's
underweight position in the banks industry group helped the Portfolio's
performance relative to the MSCI EAFE(R) Index during the reporting period.
Stock selection in the telecommunication services sector also contributed
positively to the Portfolio's relative performance.
International stock markets declined in the early part of the reporting period
and recovered later in the year. Given our strategy of investing in "quality at
the right price" as the markets travel through their cycle, there will be times
when the Portfolio underperforms relative to the MSCI EAFE(R) Index. We believe
that the risk/reward trade-off remains in favor of companies with stable
revenues, quality balance sheets and reasonable valuations. We remain focused on
the analysis of individual business models and attempt to invest in quality
companies at reasonable valuations. Our strategy does not focus on or attempt to
anticipate market perceptions. This has directed the Portfolio toward companies
in the information technology, telecommunication services and consumer staples
sectors at the expense of the materials and industrials sectors.
DURING THE REPORTING PERIOD, HOW WAS THE PORTFOLIO'S PERFORMANCE MATERIALLY
AFFECTED BY INVESTMENTS IN DERIVATIVES?
Around the beginning of the reporting period, we began purchasing equity futures
contracts in three markets, which when combined are highly correlated to the
MSCI EAFE(R) Index. This strategy was employed to reduce the Portfolio's return
volatility relative to its benchmark and peers. The Portfolio's use of futures
contracts added to performance. The Portfolio also entered into currency
forwards contracts to manage currency risk relative to the benchmark. This
strategy contributed positively to the Portfolio's performance.
WHICH MARKET SEGMENTS WERE THE STRONGEST CONTRIB-UTORS TO THE PORTFOLIO'S
RELATIVE PERFORMANCE, AND WHICH MARKET SEGMENTS WERE PARTICULARLY WEAK?
Sector, industry group and industry weightings in the Portfolio result from our
bottom-up research on companies that fall into these groups. During the
reporting period, the Portfolio held overweight positions in the diversified
financials industry group, the software industry and the health care and
telecommunication services sectors. Over the same period, the Portfolio held
underweight positions in the banks industry group and the materials, industrials
and energy sectors. In our view, the risk/reward characteristics for many stocks
in cyclical sectors such as materials and industrials were unfavorable relative
to other investment opportunities. We felt that the valuations of several stocks
in these sectors were stretched, which partly explains why the Portfolio
remained underweight in materials and industrials.
WHAT CONVINCED YOU THAT VALUATIONS WERE STRETCHED?
Although headline valuations are not overly demanding at 10 times 2011 consensus
earnings, an analysis of cash-flow metrics reveals that stocks are discounting a
sustained period of near-peak returns across certain cyclical sectors such as
materials and industrials. We see significant risks in a volatile macro
environment with the potential for value-destroying
capital-allocation decisions, particularly for stocks discounting such strong
returns.
With China accounting for over 40% of global demand in key commodities, global
demand is highly sensitive to China's GDP development. China's resource-
intensive stimulus efforts have offset the sharp deterioration in demand from
the Organization for Economic Cooperation and Development (OECD) and have
supported commodity prices for the last 18 months. As China rebalances its
economy, however, we believe that reduced lending activity may result in slowing
construction and a period of GDP growth that is less resource intensive. If a
recovery in OECD demand fails to absorb the slack created by slowing Chinese
construction activity, lower commodity prices could put pressure on valuations.
Capital allocation is an additional source of risk across these sectors, with
corporate strategy currently driven by growth ambitions and managements'
assessment of the cost to buy capacity rather than the cost to build it. As cash
flows have increased with rising commodity prices, managements are favoring
growth-capital expenditures and merger and acquisition activity over cash
returns to shareholders--a pattern last seen when commodity prices peaked in
2008. According to Bernstein Research, capital expenditures in these sectors is
forecast to
1. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indexes and other indexes, averages
and service providers mentioned in the reports.
Not all MainStay VP Portfolio and/or share classes are available under all
policies.
mainstayinvestments.com M-227
advance from $70 billion in 2009 to $110 billion in 2011, exceeding the 2008
peak of $95 billion.
Growth-capital expenditures will be dilutive to returns as unit costs for new
projects will be significantly higher than legacy production assets. BHP
Billiton's recent bid for PotashCorp headlines a string of recent activity that
appears likely to continue. The last round of merger and acquisition activity
ultimately proved value-destructive to shareholders, as highlighted by Rio
Tinto's purchase of Alcan at the top of the aluminum cycle, Vale's acquisition
of Inco at the top of the nickel cycle and Xstrata's string of deals toward the
peak of the commodity price cycle. Rio and Xstrata ultimately had to rely on
capital funding to survive the market turmoil of late 2008 and early 2009. At
current stock prices, we do not believe investors are being compensated to take
the risks associated with commodity prices, rising growth-capital expenditures
and increased merger and acquisition activity.
WHY DID THE PORTFOLIO MAINTAIN OVERWEIGHT POSITIONS IN THE HEALTH CARE AND
TELECOMMUNICATION SERVICES SECTORS?
Although the health care sector has historically traded at premium valuations,
it has sharply de-rated (become subject to lower ratings and lower expectations)
in recent years. This has occurred amid concerns about expiring patents on high-
revenue proprietary drugs, a lack of breakthrough innovations, increasing
threats from generic drug manufacturers, regulatory headwinds and slower growth
prospects. Nevertheless, we believe we have positioned the Portfolio to benefit
from a variety of secular growth themes in the sector, driven by companies with
innovative product pipelines and less patent pressure than that facing the
broader industry.
Although the telecommunication services sector has also historically traded at
premium valuations, it, too, has de-rated sharply in recent years amid concerns
about increased regulation, competitive pricing pressure and the overall
maturation of the sector. That said, we like the highly cash-generative sector,
which has seen increasing return on invested capital (ROIC) in recent years.
Driving the sector's ROIC improvements has been increasing discipline in
capital-allocation decisions, which has led to reductions in capital
expenditures throughout the sector and increasing shareholder returns.
Meanwhile, the industry's economics have improved as approaches to pricing voice
and data usage have become more rational. Our positioning within this sector is
currently geared more heavily toward wireless companies, as we believe long-term
usage growth in wireless will outpace that in wireline communications.
WHICH MARKET SEGMENTS WERE THE STRONGEST CONTRIB-UTORS TO THE PORTFOLIO'S
RELATIVE PERFORMANCE, AND WHICH MARKET SEGMENTS WERE PARTICULARLY WEAK.
The financials, telecommunication services and utilities sectors were the
largest sector contributors to the Portfolio's performance relative to the MSCI
EAFE(R) Index during the reporting period, primarily as a result of our security
selection. The most significant sector detractor from the Portfolio's relative
performance was consumer discretionary, as security selection suffered. An
overweight position in industrials also detracted from relative performance.
Other market segments that were weak performers were the pharmaceuticals
industry and the energy sector.
DURING THE REPORTING PERIOD, WHICH INDIVIDUAL STOCKS MADE THE STRONGEST
CONTRIBUTIONS TO THE PORTFOLIO'S ABSOLUTE PERFORMANCE AND WHICH STOCKS DETRACTED
THE MOST?
In terms of absolute performance, the Portfolio's strongest individual stock
contribution during the reporting period came from Japanese telecommunications
company NTT DoCoMo. The company exceeded expectations as costs came in lower
than forecast. In addition, the company benefited from an increasing number of
mobile subscribers during the reporting period. Japan-based Nintendo was also a
strong contributor on excellent sales of Wii games and portable game devices
during the holiday season. Another strong contributor was Man Group, a U.K.-
based alternative asset manager with a robust distribution platform. During the
reporting period, Man Group provided strong investment performance and witnessed
increases in market expectations surrounding the company's ability to generate
asset inflows.
The most substantial detractor in the Portfolio was U.K.-based energy
exploration company BP. After a massive explosion and oil leak into the Gulf of
Mexico, we reevaluated the company's prospects and eliminated the Portfolio's
position. Hong Kong listed apparel retailer Esprit Holdings was also a major
detractor during the reporting period. Nevertheless, we continue to like the
growth prospects and valuation of the company. In the financials sector, Greek
bank Piraeus detracted from performance when sovereign debt issues in many
European nations led to declining share prices for banks.
DID THE PORTFOLIO MAKE ANY SIGNIFICANT PURCHASES OR SALES DURING THE REPORTING
PERIOD?
We increased the Portfolio's exposure to the financials sector during the
reporting period by adding to names like Man Group and Switzerland-based capital
markets firm Credit Suisse. In our view, these companies represented the highest
quality within the financials sector. When the international markets sold off
earlier in the year, we viewed it as an opportunity to add to the Portfolio's
positions. Given recent events in Greece, however, our views on Piraeus have
changed and the position was sold earlier in the year.
The Portfolio either sold or trimmed a number of positions, including Swiss food
products company Nestle, Danish pharmaceuticals company Novartis Novo Nordisk
and Italian gas utility Snam Rete Gas. These stocks had performed well and were
headed toward or had exceeded their intrinsic values.
M-228 MainStay VP International Equity Portfolio
HOW WAS THE PORTFOLIO POSITIONED AT THE END OF DECEMBER 2010?
As of December 31, 2010, the Portfolio maintained overweight positions relative
to the MSCI EAFE(R) Index in health care and telecommunication services. As of
the same date, the Portfolio remained underweight relative to the benchmark
index in materials and industrials.
During the reporting period, we increased investments in Japan and elsewhere in
Asia. As a result, the Portfolio's weightings in those regions increased
relative to the Portfolio's weighting in Europe. The Portfolio's weightings
result from our bottom-up stock-selection process and do not reflect opinions
about specific sectors, industries or geographic regions.
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
preceeding pages has not been audited.
mainstayinvestments.com M-229
PORTFOLIO OF INVESTMENTS(+++) DECEMBER 31, 2010
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS 91.3%+
-------------------------------------------------------
AUSTRALIA 1.4%
BHP Billiton, Ltd., Sponsored
ADR (Metals & Mining) (a) 87,600 $ 8,139,792
------------
BELGIUM 2.0%
Belgacom S.A. (Diversified
Telecommunication Services) 158,200 5,311,491
Mobistar S.A. (Wireless
Telecommunication Services) 87,468 5,670,018
------------
10,981,509
------------
BERMUDA 1.4%
Esprit Holdings, Ltd.
(Specialty Retail) 1,671,685 7,936,030
------------
BRAZIL 0.9%
Cia Siderurgica Nacional
S.A., Sponsored ADR (Metals
& Mining) (a) 156,900 2,615,523
Vale S.A., Sponsored ADR
(Metals & Mining) (a) 70,300 2,430,271
------------
5,045,794
------------
CANADA 2.6%
Fairfax Financial Holdings,
Ltd. (Insurance) 6,900 2,825,964
IGM Financial, Inc. (Capital
Markets) 61,500 2,688,112
Tim Hortons, Inc. (Hotels,
Restaurants & Leisure) 224,800 9,292,246
------------
14,806,322
------------
CHINA 0.3%
China Construction Bank Corp.
Class H (Commercial Banks) 1,738,429 1,565,588
------------
CZECH REPUBLIC 0.5%
CEZ AS (Electric Utilities) 64,000 2,673,774
------------
DENMARK 0.4%
Topdanmark A/S (Insurance)
(b) 17,100 2,260,871
------------
FINLAND 3.6%
X Nokia Oyj, Sponsored ADR
(Communications Equipment)
(a) 1,796,600 18,540,912
Sampo Oyj (Insurance) 61,300 1,642,399
------------
20,183,311
------------
FRANCE 4.7%
Alstom S.A. (Electrical
Equipment) 111,500 5,335,598
BNP Paribas S.A. (Commercial
Banks) 65,240 4,150,650
Bouygues S.A. (Construction &
Engineering) 162,900 7,021,373
EDF S.A. (Electric Utilities) 43,200 1,771,966
Neopost S.A. (Office
Electronics) 54,700 4,765,834
Total S.A. (Oil, Gas &
Consumable Fuels) 64,100 3,396,293
------------
26,441,714
------------
GERMANY 4.1%
Allianz SE, ADR (Insurance)
(a) 189,300 2,246,991
Allianz SE (Insurance) 12,000 1,426,046
Beiersdorf A.G. (Personal
Products) 14,900 826,799
Deutsche Boerse A.G.
(Diversified Financial
Services) 160,000 11,075,254
Hannover Rueckversicherung
A.G. (Insurance) 140,795 7,551,173
------------
23,126,263
------------
GREECE 1.0%
OPAP S.A. (Hotels,
Restaurants & Leisure) 341,563 5,906,212
------------
HONG KONG 2.5%
China Mobile, Ltd., Sponsored
ADR (Wireless
Telecommunication Services)
(a) 176,700 8,767,854
CNOOC, Ltd., ADR (Oil, Gas &
Consumable Fuels) (a) 22,100 5,267,977
------------
14,035,831
------------
IRELAND 0.6%
Ryanair Holdings PLC,
Sponsored ADR (Airlines)
(a) 101,350 3,117,526
------------
ITALY 2.5%
Assicurazioni Generali S.p.A.
(Insurance) 69,512 1,319,951
ENI S.p.A. (Oil, Gas &
Consumable Fuels) 204,600 4,467,470
Intesa Sanpaolo S.p.A.
(Commercial Banks) 247,400 671,119
MediaSet S.p.A. (Media) 599,909 3,629,508
Mediolanum S.p.A. (Insurance) 311,800 1,288,516
Snam Rete Gas S.p.A. (Gas
Utilities) 537,471 2,671,787
------------
14,048,351
------------
JAPAN 20.7%
Astellas Pharma, Inc.
(Pharmaceuticals) 157,700 6,011,596
Capcom Co., Ltd. (Software) 234,500 3,772,102
Daito Trust Construction Co.,
Ltd. (Real Estate
Management & Development) 98,600 6,752,260
Daiwa Securities Group, Inc.
(Capital Markets) 1,820,000 9,370,119
Hirose Electric Co., Ltd.
(Electronic Equipment &
Instruments) 26,000 2,930,164
Japan Tobacco, Inc. (Tobacco) 1,369 5,066,936
Murata Manufacturing Co.,
Ltd. (Electronic Equipment
& Instruments) 10,700 749,883
X Nintendo Co., Ltd., ADR
(Software) (a) 14,000 508,620
</Table>
+ Percentages indicated are based on Portfolio net assets.
X Among the Portfolio's 10 largest holdings, as of December 31, 2010, excluding
short-term investment. Any of the ten largest holdings may be a security
traded on more than one exchange. May be subject to change daily.
M-230 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)
JAPAN (CONTINUED)
X Nintendo Co., Ltd.
(Software) 73,800 $ 21,660,968
Nissin Foods Holdings Co.,
Ltd. (Food Products) 212,000 7,598,473
X NTT DoCoMo, Inc. (Wireless
Telecommunication Services) 11,556 20,182,791
OBIC Co., Ltd. (IT Services) 3,760 774,322
Sankyo Co., Ltd. (Leisure
Equipment & Products) 133,300 7,527,781
Shin-Etsu Chemical Co., Ltd.
(Chemicals) 94,900 5,142,998
Square Enix Holdings Co.,
Ltd. (Software) 204,000 3,618,180
Suruga Bank, Ltd. (Commercial
Banks) 385,000 3,584,924
Tokio Marine Holdings, Inc.
(Insurance) 38,500 1,150,874
Toyota Motor Corp., Sponsored
ADR (Automobiles) (a) 73,300 5,763,579
Toyota Motor Corp.
(Automobiles) 110,000 4,362,606
------------
116,529,176
------------
MEXICO 1.8%
Grupo Televisa S.A.,
Sponsored ADR (Media)
(a)(b) 392,000 10,164,560
------------
NETHERLANDS 2.1%
Koninklijke Ahold N.V. (Food
& Staples Retailing) 896,100 11,826,099
------------
NORWAY 0.4%
StatoilHydro A.S.A. (Oil, Gas
& Consumable Fuels) 98,800 2,346,797
------------
REPUBLIC OF KOREA 0.2%
SK Telecom Co., Ltd., ADR
(Wireless Telecommunication
Services) (a) 73,000 1,359,990
------------
SINGAPORE 0.7%
DBS Group Holdings, Ltd.
(Commercial Banks) 126,000 1,405,945
Singapore Airport Terminal
Services, Ltd.
(Transportation
Infrastructure) 676,000 1,517,030
Singapore Technologies
Engineering, Ltd.
(Aerospace & Defense) 455,800 1,214,662
------------
4,137,637
------------
SPAIN 4.8%
Enagas (Gas Utilities) 494,000 9,845,871
Gestevision Telecinco S.A.
(Media) 335,900 3,694,144
Grifols S.A. (Biotechnology) 539,600 7,354,888
Indra Sistemas S.A. (IT
Services) 343,900 5,875,392
------------
26,770,295
------------
SWITZERLAND 16.5%
ABB, Ltd., Sponsored ADR
(Electrical Equipment)
(a)(b) 371,800 8,346,910
Actelion, Ltd. Registered
(Biotechnology) (b) 165,900 9,084,578
Credit Suisse Group A.G.,
Sponsored ADR (Capital
Markets) (a) 229,100 9,257,931
X Nestle S.A. Registered
(Food Products) 205,510 12,033,874
Nobel Biocare Holding A.G.
(Health Care Equipment &
Supplies) 366,400 6,908,697
X Roche Holding A.G.,
Genusscheine
(Pharmaceuticals) 164,866 24,156,837
X Syngenta A.G., ADR
(Chemicals) (a) 242,300 14,242,394
UBS A.G. (Capital Markets)
(b) 558,400 9,196,848
------------
93,228,069
------------
UNITED KINGDOM 14.9%
Barclays PLC (Commercial
Banks) 802,500 3,273,705
BHP Billiton PLC, ADR (Metals
& Mining) (a) 13,500 1,086,750
De La Rue PLC (Commercial
Services & Supplies) 322,800 4,124,357
easyJet PLC (Airlines) (b) 91,200 625,635
Johnson Matthey PLC
(Chemicals) 212,000 6,736,182
Lloyds TSB Group PLC
(Commercial Banks) (b) 3,862,972 3,956,951
X Man Group PLC (Capital
Markets) 5,126,100 23,656,611
Royal Dutch Shell PLC Class
A, ADR (Oil, Gas &
Consumable Fuels) (a) 145,200 9,696,456
X Scottish & Southern Energy
PLC (Electric Utilities) 642,560 12,272,231
X Tesco PLC (Food & Staples
Retailing) 2,832,999 18,771,938
------------
84,200,816
------------
UNITED STATES 0.7%
Philip Morris International,
Inc. (Tobacco) 41,100 2,405,583
Synthes, Inc. (Health Care
Equipment & Supplies) 9,900 1,337,294
------------
3,742,877
------------
Total Common Stocks
(Cost $488,733,517) 514,575,204
------------
<Caption>
NUMBER OF
WARRANTS
WARRANTS 3.5%
-------------------------------------------------------
IRELAND 3.5%
X Ryanair Holdings PLC Class
A
Strike Price E 0.000001
Expires 4/3/18 (Airlines)
(b)(c) 3,850,425 19,372,140
------------
Total Warrants
(Cost $16,967,907) 19,372,140
------------
</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-231
PORTFOLIO OF INVESTMENTS(+++) DECEMBER 31, 2010 (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT
SHORT-TERM INVESTMENT 1.4%
-------------------------------------------------------
REPURCHASE AGREEMENT 1.4%
UNITED STATES 1.4%
State Street Bank and Trust
Co.
0.01%, dated 12/31/10
due 1/3/11
Proceeds at Maturity
$7,938,298
(Collateralized by a United
States Treasury Note with a
rate of 1.375% and a
maturity date of 5/15/13,
with a Principal
Amount of $7,980,000 and a
Market Value of $8,102,094)
(Capital Markets) $7,938,292 $ 7,938,292
------------
Total Short-Term Investment
(Cost $7,938,292) 7,938,292
------------
Total Investments
(Cost $513,639,716) (f) 96.2% 541,885,636
Other Assets, Less
Liabilities 3.8 21,641,678
---------- ------------
Net Assets 100.0% $563,527,314
========== ============
</Table>
<Table>
<Caption>
UNREALIZED
CONTRACTS APPRECIATION
LONG (DEPRECIATION) (D)
FUTURES CONTRACTS 0.0%++
----------------------------------------------------------
Dow Jones EURO STOXX 50
Index
March 2011 (10 Year) (e) 671 $(629,373)
FTSE 100 Index
March 2011 (10 Year) (e) 139 127,496
Topix Index
March 2011 (10 Year) (e) 114 224,658
---------
Total Futures Contracts
(Settlement Value
$50,404,466) $(277,219)
=========
</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) 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,
2010.
(e) At December 31, 2010, cash in the amount
of $2,858,839 is on deposit with the
broker for futures transactions.
(f) At December 31, 2010, cost is
$516,603,855 for federal income tax
purposes and net unrealized appreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $ 54,975,701
Gross unrealized depreciation (29,693,920)
------------
Net unrealized appreciation $ 25,281,781
============
</Table>
The following abbreviation is used in the above portfolio:
E--Euro
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.
The following is a summary of the fair valuations according to the inputs used
as of December 31, 2010, for valuing the Portfolio's assets and liabilities.
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 $514,575,204 $ -- $ -- $514,575,204
Warrants 19,372,140 -- -- 19,372,140
Short-Term Investment
Repurchase Agreement -- 7,938,292 -- 7,938,292
------------ ---------- -------- ------------
Total Investments in Securities 533,947,344 7,938,292 -- 541,885,636
------------ ---------- -------- ------------
Other Financial Instruments
Futures Contracts Long (b) 352,154 -- -- 352,154
Foreign Currency Forward Contracts (c) -- 60,608 -- 60,608
------------ ---------- -------- ------------
Total Investments in Securities and Other
Financial Instruments $534,299,498 $7,998,900 $ -- $542,298,398
============ ========== ======== ============
</Table>
(a) For a complete listing of investments and their industries, see the
Portfolio of Investments.
(b) The value listed for these securities reflects unrealized appreciation as
shown on the Portfolio of Investments.
(c) The value listed for these securities reflects unrealized appreciation as
shown on the table of foreign currency forward contracts. (See Note 6)
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 Long (a) $(629,373) $ -- $ -- $ (629,373)
Foreign Currency Forward Contracts (b) -- (1,809,058) -- (1,809,058)
--------- ----------- -------- -----------
Total Investments Sold Short and Other Financial
Instruments $(629,373) $(1,809,058) $-- $(2,438,431)
========= =========== ======== ===========
</Table>
(a) The value listed for these securities reflects unrealized depreciation as
shown on the Portfolio of Investments.
(b) The value listed for these securities reflects unrealized depreciation as
shown on the table of foreign currency forward contracts. (See Note 6)
The Portfolio recognizes transfers between the levels as of the beginning of the
period.
As of December 31, 2010, foreign securities with a total value of $318,308,777
were transferred from Level 2 to Level 1 as the prices of these securities were
based on quoted prices compared with the prior year prices which were adjusted
for events after the market close. The 2009 prices were adjusted by applying
factors provided by a third party vendor in accordance with the Portfolio's
policies and procedures. Fair values at December 31, 2010 for these securities
are based on quoted prices in active markets for identical investments. (See
Note 2)
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, 2010 (CONTINUED)
The table below sets forth the diversification of MainStay VP International
Equity Portfolio investments by industry.
INDUSTRY DIVERSIFICATION
<Table>
<Caption>
VALUE PERCENT +
Aerospace & Defense $ 1,214,662 0.2%
Airlines 23,115,301 4.2
Automobiles 10,126,185 1.8
Biotechnology 16,439,466 2.9
Capital Markets 62,107,913 11.1
Chemicals 26,121,574 4.6
Commercial Banks 18,608,882 3.2
Commercial Services &
Supplies 4,124,357 0.7
Communications Equipment 18,540,912 3.3
Construction & Engineering 7,021,373 1.3
Diversified Financial
Services 11,075,254 2.0
Diversified Telecommunication
Services 5,311,491 1.0
Electric Utilities 16,717,971 3.0
Electrical Equipment 13,682,508 2.5
Electronic Equipment &
Instruments 3,680,047 0.6
Food & Staples Retailing 30,598,037 5.4
Food Products 19,632,347 3.5
Gas Utilities 12,517,658 2.3
Health Care Equipment &
Supplies 8,245,991 1.5
Hotels, Restaurants & Leisure 15,198,458 2.6
IT Services 6,649,714 1.1
Insurance 21,712,785 3.8
Leisure Equipment & Products 7,527,781 1.3
Media 17,488,212 3.2
Metals & Mining 14,272,336 2.5
Office Electronics 4,765,834 0.8
Oil, Gas & Consumable Fuels 25,174,993 4.4
Personal Products 826,799 0.1
Pharmaceuticals 30,168,433 5.4
Real Estate Management &
Development 6,752,260 1.2
Software 29,559,870 5.3
Specialty Retail 7,936,030 1.4
Tobacco 7,472,519 1.3
Transportation Infrastructure 1,517,030 0.3
Wireless Telecommunication
Services 35,980,653 6.4
------------ -----
541,885,636 96.2
Other Assets, Less
Liabilities 21,641,678 3.8
------------ -----
Net Assets $563,527,314 100.0%
============ =====
</Table>
<Table>
+ Percentages indicated are based on
Portfolio net assets.
</Table>
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.
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2010
<Table>
ASSETS
--------------------------------------------------
Investment in securities, at value
(identified cost $513,639,716) $541,885,636
Cash denominated in foreign
currencies
(identified cost $19,705,015) 20,152,496
Foreign cash collateral on deposit
at broker
(identified cost $2,834,491) (See
Note 6) 2,858,839
Cash 25,483
Receivables:
Dividends and interest 1,059,363
Fund shares sold 139,811
Variation margin on futures
contracts 1,129
Unrealized appreciation on foreign
currency forward contracts 60,608
------------
Total assets 566,183,365
------------
LIABILITIES
--------------------------------------------------
Payables:
Manager (See Note 3) 415,804
Fund shares redeemed 178,813
Variation margin on futures
contracts 83,674
NYLIFE Distributors (See Note 3) 61,940
Professional fees 55,163
Shareholder communication 37,105
Custodian 12,138
Directors 1,260
Accrued expenses 1,096
Unrealized depreciation on foreign
currency forward contracts 1,809,058
------------
Total liabilities 2,656,051
------------
Net assets $563,527,314
============
NET ASSETS CONSIST OF
--------------------------------------------------
Capital stock (par value of $.01 per
share) 200 million shares
authorized $ 441,461
Additional paid-in capital 612,300,174
------------
612,741,635
Undistributed net investment income 13,456,756
Accumulated net realized loss on
investments, futures transactions
and foreign currency transactions (89,425,522)
Net unrealized appreciation on
investments and futures contracts 27,968,701
Net unrealized depreciation on
translation of other assets and
liabilities in foreign currencies
and foreign currency forward
contracts (1,214,256)
------------
Net assets $563,527,314
============
INITIAL CLASS
Net assets applicable to outstanding
shares $265,519,220
============
Shares of capital stock outstanding 20,712,880
============
Net asset value per share
outstanding $ 12.82
============
SERVICE CLASS
Net assets applicable to outstanding
shares $298,008,094
============
Shares of capital stock outstanding 23,433,205
============
Net asset value per share
outstanding $ 12.72
============
</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 OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2010
<Table>
INVESTMENT INCOME
-------------------------------------------------
INCOME
Dividends (a) $17,289,936
Interest 15,204
-----------
Total income 17,305,140
-----------
EXPENSES
Manager (See Note 3) 4,618,615
Distribution and service--Service
Class (See Note 3) 679,104
Custodian 225,101
Professional fees 119,961
Shareholder communication 116,452
Directors 17,506
Miscellaneous 19,863
-----------
Total expenses 5,796,602
-----------
Net investment income 11,508,538
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
-------------------------------------------------
Net realized gain on:
Security transactions 4,939,447
Futures transactions 3,151,387
Foreign currency transactions 1,474,772
-----------
Net realized gain on investments,
futures transactions and foreign
currency transactions 9,565,606
-----------
Net change in unrealized
appreciation (depreciation) on:
Investments 7,857,382
Futures contracts (1,864,585)
Translation of other assets and
liabilities in foreign
currencies and foreign currency
forward contracts (848,139)
-----------
Net change in unrealized
appreciation (depreciation) on
investments, futures contracts and
foreign currency translations 5,144,658
-----------
Net realized and unrealized gain on
investments, futures transactions
and foreign currency transactions 14,710,264
-----------
Net increase in net assets resulting
from operations $26,218,802
===========
</Table>
(a) Dividends recorded net of foreign withholding taxes in the amount of
$1,512,503.
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.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2010 AND DECEMBER 31, 2009
<Table>
<Caption>
2010 2009
INCREASE IN NET ASSETS
--------------------------------------------------------
Operations:
Net investment income $ 11,508,538 $ 12,012,691
Net realized gain (loss)
on investments, futures
transactions and foreign
currency transactions 9,565,606 (17,916,306)
Net change in unrealized
appreciation
(depreciation) on
investments, futures
contracts and foreign
currency translations 5,144,658 86,822,751
--------------------------
Net increase in net assets
resulting from operations 26,218,802 80,919,136
--------------------------
Dividends to shareholders:
From net investment
income:
Initial Class (8,129,092) (16,571,711)
Service Class (8,626,963) (15,834,103)
--------------------------
Total dividends to
shareholders (16,756,055) (32,405,814)
--------------------------
Capital share transactions:
Net proceeds from sale of
shares 81,922,077 41,547,694
Net asset value of shares
issued to shareholders in
reinvestment of dividends 16,756,055 32,405,814
Cost of shares redeemed (63,586,275) (70,237,568)
--------------------------
Increase in net assets
derived from capital
share transactions 35,091,857 3,715,940
--------------------------
Net increase in net
assets 44,554,604 52,229,262
NET ASSETS
--------------------------------------------------------
Beginning of year 518,972,710 466,743,448
--------------------------
End of year $563,527,314 $518,972,710
==========================
Undistributed net investment
income at end of year $ 13,456,756 $ 16,797,492
==========================
</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-237
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
2010 2009 2008 2007 2006
Net asset value at beginning of
year $ 12.63 $ 11.30 $ 18.29 $ 18.68 $ 14.39
-------- -------- -------- -------- --------
Net investment income 0.29 (b) 0.32 (a) 0.59 (a) 0.39 (a) 0.29 (a)
Net realized and unrealized gain
(loss) on investments 0.30 1.74 (5.71) 0.62 4.38
Net realized and unrealized gain
(loss) on foreign currency
transactions 0.01 0.13 0.31 (0.04) (0.16)
-------- -------- -------- -------- --------
Total from investment operations 0.60 2.19 (4.81) 0.97 4.51
-------- -------- -------- -------- --------
Less dividends and distributions:
From net investment income (0.41) (0.86) (0.24) (0.13) (0.05)
From net realized gain on
investments -- -- (1.94) (1.23) (0.17)
-------- -------- -------- -------- --------
Total dividends and distributions (0.41) (0.86) (2.18) (1.36) (0.22)
-------- -------- -------- -------- --------
Net asset value at end of year $ 12.82 $ 12.63 $ 11.30 $ 18.29 $ 18.68
======== ======== ======== ======== ========
Total investment return 4.90% 19.36% (25.67%) 4.93% 31.33%
Ratios (to average net
assets)/Supplemental Data:
Net investment income 2.34% 2.75% 3.87% 1.99% 1.79%
Net expenses 0.98% 0.99% 0.96% 0.89% 0.92%
Portfolio turnover rate 42% 83% 89% 54% 44%
Net assets at end of year (in
000's) $265,519 $256,710 $244,533 $358,292 $355,382
</Table>
<Table>
(a) Per share data based on average shares outstanding during the period.
(b) Included in net investment income per share and the ratio of net investment
income to average net assets are $0.04 per share and 0.30%, respectively,
resulting from a special one-time dividend from Ryanair Holdings PLC that paid
$0.30 per share.
</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.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
SERVICE CLASS
--------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
2010 2009 2008 2007 2006
$ 12.54 $ 11.22 $ 18.17 $ 18.59 $ 14.35
-------- -------- -------- -------- --------
0.23 (b) 0.28 (a) 0.54 (a) 0.32 (a) 0.25 (a)
0.32 1.73 (5.67) 0.63 4.35
0.01 0.13 0.31 (0.03) (0.16)
-------- -------- -------- -------- --------
0.56 2.14 (4.82) 0.92 4.44
-------- -------- -------- -------- --------
(0.38) (0.82) (0.19) (0.11) (0.03)
-- -- (1.94) (1.23) (0.17)
-------- -------- -------- -------- --------
(0.38) (0.82) (2.13) (1.34) (0.20)
-------- -------- -------- -------- --------
$ 12.72 $ 12.54 $ 11.22 $ 18.17 $ 18.59
======== ======== ======== ======== ========
4.63% 19.06% (25.86%) 4.67% 31.00%
2.10% 2.47% 3.60% 1.68% 1.50%
1.23% 1.24% 1.21% 1.14% 1.17%
42% 83% 89% 54% 44%
$298,008 $262,263 $222,210 $303,642 $217,511
</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-239
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. THE PERFORMANCE TABLE AND GRAPH 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.
(LINE GRAPH)
<Table>
<Caption>
MAINSTAY VP MAINSTAY VP
LARGE CAP LARGE CAP
GROWTH PORTFOLIO GROWTH PORTFOLIO RUSSELL 1000(R) S&P 500(R)
INITIAL CLASS SERVICE CLASS GROWTH INDEX INDEX
---------------- ---------------- --------------- ----------
12/31/00 10000 10000 10000 10000
12/31/01 8344 8323 7958 8811
12/31/02 5990 5961 5739 6864
12/31/03 7671 7614 7446 8833
12/31/04 7493 7419 7915 9794
12/31/05 7819 7723 8332 10275
12/31/06 8385 8262 9088 11898
12/31/07 10175 10001 10161 12552
12/31/08 6227 6107 6255 7908
12/31/09 8721 8530 8583 10001
12/31/10 10132 9886 10017 11507
</Table>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED DECEMBER 31, 2010
--------------------------------------------------------------------------------
<Table>
<Caption>
GROSS
EXPENSE
CLASS ONE YEAR FIVE YEARS TEN YEARS(1) RATIO(2)
-----------------------------------------------------------------------------
Initial Class Shares 16.18% 5.32% 0.13% 0.81%
-----------------------------------------------------------------------------
Service Class Shares(3) 15.89 5.06 -0.11 1.06
-----------------------------------------------------------------------------
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE FIVE TEN
YEAR YEARS YEARS
Russell 1000(R) Growth Index(4) 16.71% 3.75% 0.02%
------------------------------------------------------------------------------------------
S&P 500(R) Index(4) 15.06 2.29 1.41
------------------------------------------------------------------------------------------
Average Lipper Variable Products Large-Cap Growth Portfolio(5) 15.62 2.85 0.05
------------------------------------------------------------------------------------------
</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 ten-year period ended December 31, 2010
reflect nonrecurring reimbursements from affiliates for printing and mailing
costs. If these nonrecurring reimbursements had not been made, the total
returns would have been 0.12% for Initial Class shares and -0.13% for Service
Class shares for the ten-year period.
2. The gross expense ratios presented reflect the Portfolio's "Total Annual
Portfolio Operating Expenses" from the most recent Prospectus and may differ
from other expense ratios disclosed in this report.
3. 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.
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.
5. 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. Results are based on total returns with all dividend and
capital gain distributions reinvested.
M-240 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, 2010, to December 31,
2010, 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 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, 2010, to December 31, 2010. 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, 2010. 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 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 7/1/10 12/31/10 PERIOD(1) 12/31/10 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,292.80 $4.57 $1,021.20 $4.02
-------------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,291.20 $6.01 $1,020.00 $5.30
-------------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
(0.79% for Initial Class and 1.04% 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-241
INDUSTRY COMPOSITION AS OF DECEMBER 31, 2010 (Unaudited)
<Table>
<Caption>
Computers & Peripherals 8.3%
Software 8.3
Machinery 6.1
Energy Equipment & Services 5.9
Internet & Catalog Retail 5.9
IT Services 5.7
Capital Markets 5.1
Internet Software & Services 4.2
Communications Equipment 3.8
Diversified Financial Services 3.6
Metals & Mining 3.4
Aerospace & Defense 2.9
Road & Rail 2.9
Health Care Providers & Services 2.8
Oil, Gas & Consumable Fuels 2.6
Multiline Retail 2.3
Semiconductors & Semiconductor
Equipment 2.1
Construction & Engineering 1.8
Wireless Telecommunication Services 1.6
Pharmaceuticals 1.4
Health Care Equipment & Supplies 1.3
Specialty Retail 1.3
Air Freight & Logistics 1.2
Hotels, Restaurants & Leisure 1.1
Personal Products 1.1
Automobiles 1.0
Electronic Equipment & Instruments 1.0
Food & Staples Retailing 1.0
Health Care Technology 1.0
Life Sciences Tools & Services 1.0
Beverages 0.9
Biotechnology 0.9
Food Products 0.9
Media 0.9
Textiles, Apparel & Luxury Goods 0.9
Chemicals 0.8
Auto Components 0.7
Short-Term Investment 2.3
Other Assets, Less Liabilities -0.0++
-----
100.0%
=====
</Table>
See Portfolio of Investments beginning on page M-244 for specific holdings
within these categories.
++ Less than one-tenth of a percent.
TOP TEN HOLDINGS AS OF DECEMBER 31, 2010 (excluding short-term investment)
<Table>
1. Apple, Inc.
2. Cognizant Technology Solutions Corp. Class
A
3. Oracle Corp.
4. QUALCOMM, Inc.
5. Union Pacific Corp.
6. Priceline.com, Inc.
7. Goldman Sachs Group, Inc. (The)
8. Google, Inc. Class A
9. Express Scripts, Inc.
10. Schlumberger, Ltd.
</Table>
M-242 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 LLC, the Portfolio'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, 2010?
For the 12 months ended December 31, 2010, MainStay VP Large Cap Growth
Portfolio returned 16.18% for Initial Class shares and 15.89% for Service Class
shares. Both share classes outperformed the 15.62% return of the average
Lipper(1) Variable Products Large-Cap Growth Portfolio and underperformed the
16.71% return of the Russell 1000(R) Growth Index(1) for the 12 months ended
December 31, 2010. The Russell 1000(R) Growth Index is the Portfolio's broad-
based securities-market index.
WHAT FACTORS AFFECTED THE PORTFOLIO'S RELATIVE PERFORMANCE DURING THE REPORTING
PERIOD?
During the reporting period, stock selection had a positive impact on the
Portfolio's performance relative to the Russell 1000(R) Growth Index. However,
the negative impact of sector allocation caused the Portfolio to underperform
its benchmark during the reporting period.
WHICH SECTORS WERE THE STRONGEST CONTRIBUTORS TO THE PORTFOLIO'S RELATIVE
PERFORMANCE, AND WHICH SECTORS WERE PARTICULARLY WEAK?
During 2010, the sectors that made the strongest contributions to the
Portfolio's performance relative to the Russell 1000(R) Growth Index were
information technology, industrials and consumer staples. The sectors that
detracted the most from the Portfolio's performance relative to the Index were
health care, telecommunication services and financials.
DURING THE REPORTING PERIOD, WHICH INDIVIDUAL STOCKS MADE THE STRONGEST
CONTRIBUTIONS TO THE PORTFOLIO'S ABSOLUTE PERFORMANCE AND WHICH STOCKS DETRACTED
THE MOST?
During the reporting period, the individual stocks that made the strongest
contributions to the Portfolio's absolute performance were computers &
peripherals company Apple, IT services company Cognizant Technology Solutions
and Internet reser-
vations company Priceline.com. Major detractors from the Portfolio's absolute
performance included pharmacy company Medco Health Solutions, computers &
peripherals company Hewlett-Packard and payments technology company Visa.
WERE ANY OTHER STOCKS PARTICULARLY NOTEWORTHY DURING THE REPORTING PERIOD?
Chinese Internet search-engine company Baidu, railroad company Union Pacific and
metals & mining company Cliffs Natural Resources were also strong contributors
to the Portfolio's returns.
DID THE PORTFOLIO MAKE ANY SIGNIFICANT PURCHASES OR SALES DURING THE REPORTING
PERIOD?
In the second quarter, the Portfolio meaningfully trimmed its position in
Priceline.com on increased concerns about the possibility of a global economic
slowdown. We added back much of the position near the end of the same quarter at
substantially lower prices, just as the concerns generally abated. During the
second half of 2010, the company's stock price advanced markedly.
HOW DID THE PORTFOLIO'S SECTOR WEIGHTINGS CHANGE DURING THE REPORTING PERIOD?
During 2010, the Portfolio's sector weightings remained relatively consistent.
The sector that experienced the greatest relative change was energy. As a result
of a rebalancing of the Russell 1000(R) Growth Index near midyear, the Portfolio
shifted from an overweight to an underweight position relative to its benchmark.
HOW WAS THE PORTFOLIO POSITIONED AT THE END OF DECEMBER 2010?
As of December 31, 2010, the Portfolio retained its most substantially
overweight sector positions in information technology and financials. These
positions were similar to those at the beginning of the year. On the same date,
the Portfolio's most substantially underweight positions--in health care and
consumer staples--also showed little change from the beginning of the reporting
period.
1. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indexes and other indexes, averages
and service providers mentioned in the reports.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
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
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.
mainstayinvestments.com M-243
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2010
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS 97.7%+
-------------------------------------------------------
AEROSPACE & DEFENSE 2.9%
Goodrich Corp. 38,500 $ 3,390,695
United Technologies Corp. 83,500 6,573,120
------------
9,963,815
------------
AIR FREIGHT & LOGISTICS 1.2%
C.H. Robinson Worldwide, Inc. 53,100 4,258,089
------------
AUTO COMPONENTS 0.7%
BorgWarner, Inc. (a) 31,400 2,272,104
------------
AUTOMOBILES 1.0%
Ford Motor Co. (a) 205,900 3,457,061
------------
BEVERAGES 0.9%
PepsiCo, Inc. 49,200 3,214,236
------------
BIOTECHNOLOGY 0.9%
Celgene Corp. (a) 54,400 3,217,216
------------
CAPITAL MARKETS 5.1%
Franklin Resources, Inc. 43,100 4,793,151
X Goldman Sachs Group, Inc.
(The) 59,200 9,955,072
TD Ameritrade Holding Corp. 169,100 3,211,209
------------
17,959,432
------------
CHEMICALS 0.8%
Ecolab, Inc. 57,900 2,919,318
------------
COMMUNICATIONS EQUIPMENT 3.8%
Juniper Networks, Inc. (a) 80,500 2,972,060
X QUALCOMM, Inc. 208,700 10,328,563
------------
13,300,623
------------
COMPUTERS & PERIPHERALS 8.3%
X Apple, Inc. (a) 52,400 16,902,144
EMC Corp. (a) 355,800 8,147,820
NetApp, Inc. (a) 73,600 4,045,056
------------
29,095,020
------------
CONSTRUCTION & ENGINEERING 1.8%
Fluor Corp. 92,600 6,135,676
------------
DIVERSIFIED FINANCIAL SERVICES 3.6%
CME Group, Inc. 12,200 3,925,350
IntercontinentalExchange,
Inc. (a) 25,000 2,978,750
JPMorgan Chase & Co. 130,600 5,540,052
------------
12,444,152
------------
ELECTRONIC EQUIPMENT & INSTRUMENTS 1.0%
Amphenol Corp. Class A 66,300 3,499,314
------------
ENERGY EQUIPMENT & SERVICES 5.9%
FMC Technologies, Inc. (a) 87,200 7,752,952
Halliburton Co. 95,500 3,899,265
X Schlumberger, Ltd. 107,900 9,009,650
------------
20,661,867
------------
FOOD & STAPLES RETAILING 1.0%
Costco Wholesale Corp. 49,200 3,552,732
------------
FOOD PRODUCTS 0.9%
Green Mountain Coffee
Roasters, Inc. (a) 92,600 3,042,836
------------
HEALTH CARE EQUIPMENT & SUPPLIES 1.3%
Edwards Lifesciences Corp.
(a) 18,200 1,471,288
Varian Medical Systems, Inc.
(a) 42,300 2,930,544
------------
4,401,832
------------
HEALTH CARE PROVIDERS & SERVICES 2.8%
X Express Scripts, Inc. (a) 182,800 9,880,340
------------
HEALTH CARE TECHNOLOGY 1.0%
Cerner Corp. (a) 38,500 3,647,490
------------
HOTELS, RESTAURANTS & LEISURE 1.1%
Yum! Brands, Inc. 76,200 3,737,610
------------
INTERNET & CATALOG RETAIL 5.9%
Amazon.com, Inc. (a) 48,300 8,694,000
Netflix, Inc. (a) 10,900 1,915,130
X Priceline.com, Inc. (a) 24,950 9,968,772
------------
20,577,902
------------
INTERNET SOFTWARE & SERVICES 4.2%
Baidu, Inc., Sponsored ADR
(a)(b) 48,300 4,662,399
X Google, Inc. Class A (a) 16,750 9,948,998
------------
14,611,397
------------
IT SERVICES 5.7%
X Cognizant Technology
Solutions Corp. Class A (a) 200,700 14,709,303
Visa, Inc. Class A 75,900 5,341,842
------------
20,051,145
------------
LIFE SCIENCES TOOLS & SERVICES 1.0%
Agilent Technologies, Inc.
(a) 84,800 3,513,264
------------
</Table>
+ Percentages indicated are based on Fund net assets.
X Among the Portfolio's 10 largest holdings, as of December 31, 2010, excluding
short-term investment. May be subject to change daily.
M-244 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.
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
MACHINERY 6.1%
Danaher Corp. 189,900 $ 8,957,583
Deere & Co. 73,900 6,137,395
Illinois Tool Works, Inc. 113,800 6,076,920
------------
21,171,898
------------
MEDIA 0.9%
Scripps Networks Interactive
Class A 59,900 3,099,825
------------
METALS & MINING 3.4%
Cliffs Natural Resources,
Inc. 87,700 6,841,477
Walter Energy, Inc. 38,000 4,857,920
------------
11,699,397
------------
MULTILINE RETAIL 2.3%
Dollar General Corp. (a) 109,700 3,364,499
Kohl's Corp. (a) 84,100 4,569,994
------------
7,934,493
------------
OIL, GAS & CONSUMABLE FUELS 2.6%
Occidental Petroleum Corp. 57,200 5,611,320
Peabody Energy Corp. 54,700 3,499,706
------------
9,111,026
------------
PERSONAL PRODUCTS 1.1%
Estee Lauder Cos., Inc. (The)
Class A 48,400 3,905,880
------------
PHARMACEUTICALS 1.4%
Shire PLC, Sponsored ADR (b) 69,100 5,001,458
------------
ROAD & RAIL 2.9%
X Union Pacific Corp. 110,500 10,238,930
------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 2.1%
ASML Holding N.V. 100,006 3,834,230
Texas Instruments, Inc. 102,900 3,344,250
------------
7,178,480
------------
SOFTWARE 8.3%
Autodesk, Inc. (a) 128,900 4,923,980
Citrix Systems, Inc. (a) 87,900 6,013,239
Intuit, Inc. (a) 72,500 3,574,250
X Oracle Corp. 346,100 10,832,930
Salesforce.com, Inc. (a) 20,800 2,745,600
VMware, Inc. Class A (a) 8,000 711,280
------------
28,801,279
------------
SPECIALTY RETAIL 1.3%
O'Reilly Automotive, Inc. (a) 72,400 4,374,408
------------
TEXTILES, APPAREL & LUXURY GOODS 0.9%
NIKE, Inc. Class B 37,800 3,228,876
------------
WIRELESS TELECOMMUNICATION SERVICES 1.6%
American Tower Corp. Class A
(a) 108,900 5,623,596
------------
Total Common Stocks
(Cost $259,517,710) 340,784,017
------------
<Caption>
PRINCIPAL
AMOUNT
SHORT-TERM INVESTMENT 2.3%
-------------------------------------------------------
REPURCHASE AGREEMENT 2.3%
State Street Bank and Trust
Co.
0.01%, dated 12/31/10
due 1/3/11
Proceeds at Maturity
$7,979,192 (Collateralized
by a United States Treasury
Note with a rate of 2.50%
and a maturity date of
4/30/15, with a Principal
Amount of $7,845,000 and a
Market Value of $8,139,188) $7,979,185 7,979,185
------------
Total Short-Term Investment
(Cost $7,979,185) 7,979,185
------------
Total Investments
(Cost $267,496,895)(c) 100.0% 348,763,202
Other Assets, Less
Liabilities (0.0)++ (104,309)
---------- ------------
Net Assets 100.0% $348,658,893
========== ============
</Table>
<Table>
++ Less than one-tenth of a percent.
(a) Non-income producing security.
(b) ADR--American Depositary Receipt.
(c) At December 31, 2010, cost is
$268,718,201 for federal income tax
purposes and net unrealized appreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $81,569,854
Gross unrealized depreciation (1,524,853)
-----------
Net unrealized appreciation $80,045,001
===========
</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-245
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2010 (CONTINUED)
The following is a summary of the fair valuations according to the inputs used
as of December 31, 2010, 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 $340,784,017 $ -- $ -- $340,784,017
Short-Term Investment
Repurchase Agreement -- 7,979,185 -- 7,979,185
------------ ---------- -------- ------------
Total Investments in Securities $340,784,017 $7,979,185 $-- $348,763,202
============ ========== ======== ============
</Table>
(a) For a complete listing of investments and their industries, see the
Portfolio of Investments.
For the period ended December 31, 2010, the Portfolio did not have any transfers
between Level 1 and Level 2 fair value measurements. (See Note 2)
At December 31, 2010, the Portfolio did not hold any investments with
significant unobservable inputs (Level 3). (See Note 2)
M-246 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, 2010
<Table>
ASSETS
--------------------------------------------------
Investment in securities, at value
(identified cost $267,496,895) $348,763,202
Receivables:
Dividends and interest 222,522
Fund shares sold 93,554
------------
Total assets 349,079,278
------------
LIABILITIES
--------------------------------------------------
Payables:
Manager (See Note 3) 218,406
Fund shares redeemed 104,875
Professional fees 38,388
NYLIFE Distributors (See Note 3) 34,387
Shareholder communication 20,534
Custodian 1,424
Directors 698
Accrued expenses 1,673
------------
Total liabilities 420,385
------------
Net assets $348,658,893
============
NET ASSETS CONSIST OF
--------------------------------------------------
Capital stock (par value of $.01 per
share) 200 million shares
authorized $ 234,595
Additional paid-in capital 318,163,364
------------
318,397,959
Accumulated net realized loss on
investments (51,005,373)
Net unrealized appreciation on
investments 81,266,307
------------
Net assets $348,658,893
============
INITIAL CLASS
Net assets applicable to outstanding
shares $184,347,622
============
Shares of capital stock outstanding 12,322,997
============
Net asset value per share
outstanding $ 14.96
============
SERVICE CLASS
Net assets applicable to outstanding
shares $164,311,271
============
Shares of capital stock outstanding 11,136,506
============
Net asset value per share
outstanding $ 14.75
============
</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-247
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2010
<Table>
INVESTMENT INCOME (LOSS)
-------------------------------------------------
INCOME
Dividends (a) $ 2,039,937
Interest 731
-----------
Total income 2,040,668
-----------
EXPENSES
Manager (See Note 3) 2,363,107
Distribution and service--Service
Class (See Note 3) 337,660
Professional fees 79,032
Shareholder communication 69,133
Custodian 16,216
Directors 10,596
Miscellaneous 15,935
-----------
Total expenses before waiver 2,891,679
Expense waiver from Manager (See
Note 3) (31,315)
-----------
Net expenses 2,860,364
-----------
Net investment loss (819,696)
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
-------------------------------------------------
Net realized gain on investments 30,626,739
Net change in unrealized
appreciation (depreciation) on
investments 15,907,268
-----------
Net realized and unrealized gain on
investments 46,534,007
-----------
Net increase in net assets resulting
from operations $45,714,311
===========
</Table>
(a) Dividends recorded net of foreign withholding taxes in the amount of
$11,460.
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.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2010 AND DECEMBER 31, 2009
<Table>
<Caption>
2010 2009
INCREASE (DECREASE) IN NET ASSETS
---------------------------------------------------------
Operations:
Net investment loss $ (819,696) $ (223,196)
Net realized gain (loss)
on investments and
foreign currency
transactions 30,626,739 (17,840,058)
Net change in unrealized
appreciation
(depreciation) on
investments 15,907,268 118,741,471
---------------------------
Net increase in net assets
resulting from operations 45,714,311 100,678,217
---------------------------
Capital share transactions:
Net proceeds from sale of
shares 86,045,286 53,105,240
Cost of shares redeemed (131,982,884) (58,699,753)
---------------------------
Decrease in net assets
derived from capital
share transactions (45,937,598) (5,594,513)
---------------------------
Net increase (decrease)
in net assets (223,287) 95,083,704
NET ASSETS
---------------------------------------------------------
Beginning of year 348,882,180 253,798,476
---------------------------
End of year $ 348,658,893 $348,882,180
===========================
</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
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------
2010 2009 2008 2007 2006
Net asset value at beginning of
year $ 12.88 $ 9.19 $ 15.04 $ 12.39 $ 11.57
-------- -------- -------- -------- --------
Net investment income (loss) (a) (0.02) 0.00++ (0.01) 0.02 0.01
Net realized and unrealized gain
(loss) on investments 2.10 3.69 (5.83) 2.63 0.83
-------- -------- -------- -------- --------
Total from investment operations 2.08 3.69 (5.84) 2.65 0.84
-------- -------- -------- -------- --------
Less dividends:
From net investment income -- -- (0.01) (0.00)++ (0.02)
-------- -------- -------- -------- --------
Net asset value at end of year $ 14.96 $ 12.88 $ 9.19 $ 15.04 $ 12.39
======== ======== ======== ======== ========
Total investment return 16.15% (b) 40.15%(b) (38.80%) 21.35% 7.24%
Ratios (to average net
assets)/Supplemental Data:
Net investment income (loss) (0.16%) 0.00%(c) (0.05%) 0.11% 0.07%
Net expenses 0.80% 0.80% 0.76% 0.70% 0.79%#
Expenses (before
waiver/reimbursement) 0.81% 0.81% 0.78% 0.72% 0.81%#
Portfolio turnover rate 98% 68% 111% 82% 96%
Net assets at end of year (in
000's) $184,348 $230,769 $184,911 $266,473 $181,657
</Table>
<Table>
++ Less than one cent per share.
# Includes fees paid indirectly which amounted to 0.01% of average net assets
for the year ended December 31, 2006.
(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) Less than one-hundredth of a percent.
</Table>
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.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
SERVICE CLASS
-----------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------------------
2010 2009 2008 2007 2006
$ 12.73 $ 9.11 $ 14.93 $ 12.33 $ 11.53
-------- -------- ------- ------- -------
(0.05) (0.03) (0.04) (0.02) (0.02)
2.07 3.65 (5.78) 2.62 0.82
-------- -------- ------- ------- -------
2.02 3.62 (5.82) 2.60 0.80
-------- -------- ------- ------- -------
-- -- -- -- (0.00)++
-------- -------- ------- ------- -------
$ 14.75 $ 12.73 $ 9.11 $ 14.93 $ 12.33
======== ======== ======= ======= =======
15.87% (b) 39.74% (b) (38.94%) 21.05% 6.97%
(0.39%) (0.26%) (0.29%) (0.13%) (0.18%)
1.05% 1.05% 1.01% 0.95% 1.04% #
1.06% 1.06% 1.03% 0.97% 1.06% #
98% 68% 111% 82% 96%
$164,311 $118,113 $68,887 $75,403 $39,592
</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
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. THE PERFORMANCE TABLE AND GRAPH 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.
(LINE GRAPH)
<Table>
<Caption>
MAINSTAY VP MAINSTAY VP
MID CAP MID CAP
CORE PORTFOLIO CORE PORTFOLIO RUSSELL MIDCAP(R)
INITIAL CLASS SERVICE CLASS INDEX
-------------- -------------- -----------------
07/02/01 10000 10000 10000
9414 9402 9626
8197 8167 8068
11102 11032 11300
13574 13456 13585
15726 15550 15304
18079 17832 17640
18988 18682 18627
10968 10765 10904
15019 14703 15318
12/31/10 18569 18133 19221
</Table>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED DECEMBER 31, 2010
--------------------------------------------------------------------------------
<Table>
<Caption>
SINCE GROSS
INCEPTION EXPENSE
CLASS ONE YEAR FIVE YEARS (7/2/01) RATIO(1)
--------------------------------------------------------------------------
Initial Class Shares 23.64% 3.38% 6.72% 0.95%
--------------------------------------------------------------------------
Service Class Shares(2) 23.33 3.12 6.46 1.20
--------------------------------------------------------------------------
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE FIVE SINCE INCEPTION
YEAR YEARS (7/2/01)
Russell Midcap(R) Index(3) 25.48% 4.66% 7.12%
------------------------------------------------------------------------------------------------
Average Lipper Variable Products Mid-Cap Core Portfolio(4) 24.78 4.28 6.42
------------------------------------------------------------------------------------------------
</Table>
1. The gross expense ratios presented reflect the Portfolio's "Total Annual
Portfolio Operating Expenses" from the most recent Prospectus and may differ
from other expense ratios disclosed in this report.
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 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. Results are based on total returns with all dividend and capital
gain distributions reinvested.
M-252 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, 2010, to December 31,
2010, 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 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, 2010, to December 31, 2010. 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, 2010. 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 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 7/1/10 12/31/10 PERIOD(1) 12/31/10 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,269.70 $5.15 $1,020.70 $4.58
-------------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,268.10 $6.57 $1,019.40 $5.85
-------------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
(0.90% for Initial Class and 1.15% 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-253
INDUSTRY COMPOSITION AS OF DECEMBER 31, 2010 (Unaudited)
<Table>
<Caption>
Insurance 7.5%
Oil, Gas & Consumable Fuels 6.9
Machinery 5.7
Specialty Retail 5.3
Software 5.0
Semiconductors & Semiconductor
Equipment 4.3
Real Estate Investment Trusts 3.5
Health Care Providers & Services 3.3
Chemicals 3.2
Hotels, Restaurants & Leisure 3.2
Energy Equipment & Services 3.0
Media 2.9
Diversified Telecommunication
Services 2.6
Computers & Peripherals 2.4
Food Products 2.1
Internet Software & Services 2.0
Pharmaceuticals 1.9
IT Services 1.8
Multi-Utilities 1.8
Wireless Telecommunication Services 1.8
Auto Components 1.7
Multiline Retail 1.6
Beverages 1.5
Communications Equipment 1.5
Construction & Engineering 1.5
Airlines 1.4
Commercial Banks 1.3
Electric Utilities 1.3
Paper & Forest Products 1.3
Internet & Catalog Retail 1.2
Exchange Traded Funds 1.1
Life Sciences Tools & Services 1.1
Real Estate Management & Development 1.1
Personal Products 1.0
Biotechnology 0.9
Capital Markets 0.9
Trading Companies & Distributors 0.9
Diversified Financial Services 0.8
Electronic Equipment & Instruments 0.7
Gas Utilities 0.7
Electrical Equipment 0.6
Food & Staples Retailing 0.6
Health Care Equipment & Supplies 0.6
Road & Rail 0.6
Professional Services 0.5
Textiles, Apparel & Luxury Goods 0.5
Automobiles 0.4
Diversified Consumer Services 0.4
Household Durables 0.4
Tobacco 0.4
Commercial Services & Supplies 0.3
Consumer Finance 0.2
Household Products 0.2
Metals & Mining 0.2
Containers & Packaging 0.1
Independent Power Producers & Energy
Traders 0.1
Industrial Conglomerates 0.1
Short-Term Investment 0.1
Other Assets, Less Liabilities -0.0++
-----
100.0%
=====
</Table>
See Portfolio of Investments beginning on page M-257 for specific holdings
within these categories.
++ Less than one-tenth of a percent.
TOP TEN HOLDINGS AS OF DECEMBER 31, 2010 (excluding short-term investment)
<Table>
1. Qwest Communications International, Inc.
2. Valero Energy Corp.
3. Murphy Oil Corp.
4. Intuit, Inc.
5. Annaly Capital Management, Inc.
6. AmerisourceBergen Corp.
7. Frontier Communications Corp.
8. W.W. Grainger, Inc.
9. Hartford Financial Services Group, Inc.
(The)
10. Western Digital Corp.
</Table>
M-254 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, 2010?
For the 12 months ended December 31, 2010, MainStay VP Mid Cap Core Portfolio
returned 23.64% for Initial Class shares and 23.33% for Service Class Shares.
Both share classes underperformed the 24.78% return of the average Lipper(1)
Variable Products Mid-Cap Core Portfolio and the 25.48% return of the Russell
Midcap(R) Index(1) for the 12 months ended December 31, 2010. The Russell
Midcap(R) Index is the Port-folio's broad-based securities-market index.
WHAT FACTORS AFFECTED THE PORTFOLIO'S RELATIVE PERFORMANCE DURING THE REPORTING
PERIOD?
An emphasis on higher-quality stocks (that is, stocks of companies with positive
and relatively dependable earnings) hurt the Portfolio's relative performance,
particularly in December 2010. Continuing with the lower-quality theme from
2009, the smallest market-cap segment of the Russell Midcap(R) Index beat out
the larger-market-cap segments, and what we viewed as the most attractively
valued stocks underperformed the rest of the stocks in the benchmark. In this
perverse environment, the Portfolio trailed the Russell Midcap(R) Index. Most of
the Portfolio's underperformance occurred in December, when stocks with zero or
negative earnings surged ahead of higher-quality issues. Lower-quality stocks
gained almost 13% in one month, while the benchmark as a whole returned only
about 7%.
WHICH SECTORS WERE THE STRONGEST CONTRIBUTORS TO THE PORTFOLIO'S RELATIVE
PERFORMANCE, AND WHICH SECTORS WERE PARTICULARLY WEAK?
During 2010, the Portfolio's performance benefited from an underweight position
relative to the Russell Midcap(R) Index in consumer staples, positive stock
selection in health care and
an overweight position in telecommunication services. On the other hand, an
overweight position relative to the benchmark
in information technology and stock selection in the financials
and materials sectors detracted from the Portfolio's relative performance.
DURING THE REPORTING PERIOD, WHICH INDIVIDUAL STOCKS MADE THE STRONGEST
CONTRIBUTIONS TO THE PORTFOLIO'S ABSOLUTE PERFORMANCE AND WHICH STOCKS DETRACTED
THE MOST?
During 2010, the Portfolio's top contributor to absolute performance was metal-
processing company Timken, which benefited by being a critical supplier to
automakers and the wind energy industry. The Portfolio also benefited from an
overweight posi-
tion in specialty retailer Limited Brands, which delivered positive earnings and
sales surprises throughout the year. In the second half of the year, the
Portfolio's overweight position in farm machinery company AGCO also helped the
Portfolio's performance when rising commodity prices pushed the company's stock
price higher.
An overweight position in computer memory company Micron made the stock the
greatest detractor from the Portfolio's performance when the stock faltered
because of extra chip inventory and production concerns. Maintaining an
overweight position in computer hardware manufacturer Western Digital also
detracted when the company delivered disappointing earnings. An overweight
position in commercial printing services company R.R. Donnelley & Sons also had
a negative impact
on performance.
DID THE PORTFOLIO MAKE ANY SIGNIFICANT PURCHASES OR SALES DURING THE REPORTING
PERIOD?
The Portfolio purchased integrated telecommunications company CenturyTel in the
last quarter of 2010, on the basis of the stock's momentum. The Portfolio also
purchased telecommunications company Frontier Communications during the year,
based on earnings quality and momentum. In the fourth quarter of 2010, the
Portfolio purchased coal producer Arch Coal when our proprietary model gave the
company strong scores for sales and earnings quality.
The Portfolio began the reporting period with an overweight position relative to
the Russell Midcap(R) Index in health care services company Quest Diagnostics,
which runs medical labs and provides testing services. In March, however, the
Portfolio began selling the shares when our proprietary model detected
deteriorating credit quality and earnings quality. During the reporting period
the Portfolio also sold positions in health insurance company Unum Group on poor
earnings quality and medical products company Hospira on valuation.
HOW DID THE PORTFOLIO'S SECTOR WEIGHTINGS CHANGE DURING THE REPORTING PERIOD?
During 2010, the Portfolio increased its position in telecommunication services
from modestly underweight to overweight relative to the Russell Midcap(R) Index.
At the same time, the Portfolio purchased consumer staples, moving from a
substantially underweight position to a modestly underweight position.
During the reporting period, the Portfolio trimmed a strong overweight position
in materials to an underweight position, while reducing an overweight position
in health care to an underweight position.
1. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indexes and other indexes, 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-255
HOW WAS THE PORTFOLIO POSITIONED AT THE END OF DECEMBER 2010?
As of December 31, 2010, the Portfolio was overweight relative to the Russell
Midcap(R) Index in the information technology and consumer discretionary
sectors, which we believe should fare well in an ongoing economic recovery. As
of the same date, the Portfolio held underweight positions relative to the
Russell Midcap(R) Index in financials (especially banks) and utilities.
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
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 preceeding
pages has not been audited.
M-256 MainStay VP Mid Cap Core Portfolio
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2010
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS 98.8%+
-------------------------------------------------------
AIRLINES 1.4%
Delta Air Lines, Inc. (a) 20,328 $ 256,133
Southwest Airlines Co. 361,576 4,693,256
United Continental Holdings,
Inc. (a) 228,212 5,436,010
------------
10,385,399
------------
AUTO COMPONENTS 1.7%
Autoliv, Inc. 37,370 2,949,988
Federal Mogul Corp. Class A
(a) 46,358 957,293
Lear Corp. (a) 26,579 2,623,613
TRW Automotive Holdings Corp.
(a) 103,068 5,431,683
------------
11,962,577
------------
AUTOMOBILES 0.4%
Harley-Davidson, Inc. 74,404 2,579,587
------------
BEVERAGES 1.5%
Coca-Cola Enterprises, Inc. 133,967 3,353,194
Constellation Brands, Inc.
Class A (a) 58,382 1,293,161
Dr. Pepper Snapple Group,
Inc. 165,140 5,806,323
Molson Coors Brewing Co.
Class B 1,157 58,070
------------
10,510,748
------------
BIOTECHNOLOGY 0.9%
Cephalon, Inc. (a) 80,932 4,995,123
Myriad Genetics, Inc. (a) 61,189 1,397,557
------------
6,392,680
------------
CAPITAL MARKETS 0.9%
Ameriprise Financial, Inc. 52,257 3,007,390
Ares Capital Corp. 21,307 351,139
Legg Mason, Inc. 30,098 1,091,655
Raymond James Financial, Inc. 49,998 1,634,935
SEI Investments Co. 5,358 127,467
T. Rowe Price Group, Inc. 3,524 227,439
------------
6,440,025
------------
CHEMICALS 3.2%
Ashland, Inc. 52,748 2,682,764
Cytec Industries, Inc. 80,270 4,259,126
Ecolab, Inc. 22,302 1,124,467
Lubrizol Corp. (The) 52,723 5,635,034
Nalco Holding Co. 57,612 1,840,127
PPG Industries, Inc. 11,779 990,261
Scotts Miracle-Gro Co. (The)
Class A 95,895 4,868,589
Sherwin-Williams Co. (The) 17,724 1,484,385
------------
22,884,753
------------
COMMERCIAL BANKS 1.3%
BOK Financial Corp. 24,960 1,332,864
CIT Group, Inc. (a) 78,056 3,676,438
Cullen/Frost Bankers, Inc. 5,542 338,727
East-West Bancorp, Inc. 85,726 1,675,943
First Citizens BancShares,
Inc. Class A 11,023 2,083,898
Popular, Inc. (a) 84,726 266,040
------------
9,373,910
------------
COMMERCIAL SERVICES & SUPPLIES 0.3%
Avery Dennison Corp. 39,639 1,678,315
Covanta Holding Corp. 15,492 266,308
Iron Mountain, Inc. 1,622 40,566
------------
1,985,189
------------
COMMUNICATIONS EQUIPMENT 1.5%
CommScope, Inc. (a) 12,698 396,431
EchoStar Corp. Class A (a) 19,252 480,722
Harris Corp. 103,249 4,677,180
Tellabs, Inc. 738,497 5,007,010
------------
10,561,343
------------
COMPUTERS & PERIPHERALS 2.4%
Lexmark International, Inc.
Class A (a) 70,287 2,447,393
NetApp, Inc. (a) 2,335 128,332
SanDisk Corp. (a) 53,073 2,646,220
Seagate Technology (a) 378,302 5,685,879
X Western Digital Corp. (a) 182,064 6,171,969
------------
17,079,793
------------
CONSTRUCTION & ENGINEERING 1.5%
KBR, Inc. 185,312 5,646,457
Shaw Group, Inc. (The) (a) 143,092 4,898,039
------------
10,544,496
------------
CONSUMER FINANCE 0.2%
Discover Financial Services 95,079 1,761,814
------------
CONTAINERS & PACKAGING 0.1%
Ball Corp. 8,279 563,386
------------
DIVERSIFIED CONSUMER SERVICES 0.4%
Apollo Group, Inc. Class A
(a) 15,207 600,524
Career Education Corp. (a) 9,793 203,009
ITT Educational Services,
Inc. (a) 28,303 1,802,618
------------
2,606,151
------------
DIVERSIFIED FINANCIAL SERVICES 0.8%
Interactive Brokers Group,
Inc. 97,967 1,745,772
Leucadia National Corp. 91 2,656
Moody's Corp. 119,669 3,176,015
NYSE Euronext 21,789 653,234
------------
5,577,677
------------
</Table>
+ Percentages indicated are based on Portfolio net assets.
X Among the Portfolio's 10 largest holdings, as of December 31, 2010, 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-257
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2010 (CONTINUED)
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
DIVERSIFIED TELECOMMUNICATION SERVICES 2.6%
X Frontier Communications
Corp. 657,614 $ 6,398,584
X Qwest Communications
International, Inc. 1,276,679 9,715,527
Windstream Corp. 187,724 2,616,873
------------
18,730,984
------------
ELECTRIC UTILITIES 1.3%
Allegheny Energy, Inc. 25,189 610,581
Edison International 111,205 4,292,513
FirstEnergy Corp. 14,772 546,860
Progress Energy, Inc. 81,888 3,560,490
------------
9,010,444
------------
ELECTRICAL EQUIPMENT 0.6%
General Cable Corp. (a) 108,338 3,801,581
Hubbel, Inc. Class B 1,818 109,316
Regal-Beloit Corp. 2,154 143,801
------------
4,054,698
------------
ELECTRONIC EQUIPMENT & INSTRUMENTS 0.7%
Jabil Circuit, Inc. 66,116 1,328,270
Vishay Intertechnology, Inc.
(a) 232,058 3,406,612
Vishay Precision Group, Inc.
(a) 29,751 560,509
------------
5,295,391
------------
ENERGY EQUIPMENT & SERVICES 3.0%
Diamond Offshore Drilling,
Inc. 38,165 2,552,094
Dresser-Rand Group, Inc. (a) 123,156 5,245,214
Exterran Holdings, Inc. (a) 170,511 4,083,738
Nabors Industries, Ltd. (a) 66,196 1,552,958
Oceaneering International,
Inc. (a) 23,793 1,751,879
Patterson-UTI Energy, Inc. 64,269 1,384,997
SEACOR Holdings, Inc. 33,360 3,372,362
Superior Energy Services,
Inc. (a) 52,694 1,843,763
------------
21,787,005
------------
FOOD & STAPLES RETAILING 0.6%
BJ's Wholesale Club, Inc. (a) 83,515 4,000,368
Safeway, Inc. 9,728 218,783
------------
4,219,151
------------
FOOD PRODUCTS 2.1%
Corn Products International,
Inc. 112,694 5,183,924
Dean Foods Co. (a) 863 7,629
Del Monte Foods Co. 17,300 325,240
Sara Lee Corp. 201,821 3,533,886
Smithfield Foods, Inc. (a) 41,715 860,580
Tyson Foods, Inc. Class A 280,238 4,825,698
------------
14,736,957
------------
GAS UTILITIES 0.7%
Energen Corp. 52,526 2,534,905
ONEOK, Inc. 5,306 294,324
Questar Corp. 107,956 1,879,514
------------
4,708,743
------------
HEALTH CARE EQUIPMENT & SUPPLIES 0.6%
CareFusion Corp. (a) 139,973 3,597,306
Cooper Cos., Inc. (The) 11,888 669,770
------------
4,267,076
------------
HEALTH CARE PROVIDERS & SERVICES 3.3%
X AmerisourceBergen Corp. 189,588 6,468,743
CIGNA Corp. 49,141 1,801,509
DaVita, Inc. (a) 16,451 1,143,180
Health Management Associates,
Inc. Class A (a) 14,088 134,400
Health Net, Inc. (a) 181,099 4,942,192
Humana, Inc. (a) 109,948 6,018,553
Lincare Holdings, Inc. 100,656 2,700,600
Universal Health Services,
Inc. Class B 16,982 737,358
------------
23,946,535
------------
HOTELS, RESTAURANTS & LEISURE 3.2%
Brinker International, Inc. 242,164 5,056,384
Darden Restaurants, Inc. 64,660 3,002,810
Marriott International, Inc.
Class A 36,074 1,498,514
Panera Bread Co. Class A (a) 38,016 3,847,599
Penn National Gaming, Inc.
(a) 12,324 433,189
Royal Caribbean Cruises, Ltd.
(a) 109,305 5,137,335
Wendy's/Arby's Group, Inc.
Class A 451,090 2,084,036
Wyndham Worldwide Corp. 869 26,035
Wynn Resorts, Ltd. 21,545 2,237,233
------------
23,323,135
------------
HOUSEHOLD DURABLES 0.4%
D.R. Horton, Inc. 31,117 371,226
Garmin, Ltd. 14,186 439,624
Leggett & Platt, Inc. 23,657 538,433
Pulte Group, Inc. (a) 143,974 1,082,684
Whirlpool Corp. 6,855 608,930
------------
3,040,897
------------
HOUSEHOLD PRODUCTS 0.2%
Church & Dwight Co., Inc. 372 25,676
Energizer Holdings, Inc. (a) 15,029 1,095,614
------------
1,121,290
------------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS 0.1%
GenOn Energy, Inc. (a) 38,261 145,775
NRG Energy, Inc. (a) 26,510 518,005
------------
663,780
------------
</Table>
M-258 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)
INDUSTRIAL CONGLOMERATES 0.1%
Textron, Inc. 43,737 $ 1,033,943
------------
INSURANCE 7.5%
Allied World Assurance Co.
Holdings, Ltd. 82,553 4,906,950
American Financial Group,
Inc. 150,646 4,864,359
Arch Capital Group, Ltd. (a) 47,030 4,140,992
Aspen Insurance Holdings,
Ltd. 168,075 4,810,306
Assurant, Inc. 84,973 3,273,160
Assured Guaranty, Ltd. 28,414 502,928
Axis Capital Holdings, Ltd. 134,140 4,812,943
CNA Financial Corp. (a) 45,762 1,237,862
Endurance Specialty Holdings,
Ltd. 86,386 3,979,803
Fidelity National Financial,
Inc. Class A 31,615 432,493
X Hartford Financial
Services Group, Inc. (The) 233,108 6,175,031
PartnerRe, Ltd. 38,319 3,078,932
Principal Financial Group,
Inc. 136,693 4,450,724
Progressive Corp. (The) 13,048 259,264
RenaissanceRe Holdings, Ltd. 58,092 3,699,879
Symetra Financial Corp. 39,971 547,603
Validus Holdings, Ltd. 72,600 2,222,286
XL Group PLC 21,651 472,425
------------
53,867,940
------------
INTERNET & CATALOG RETAIL 1.2%
Expedia, Inc. 155,090 3,891,208
Liberty Media Corp.
Interactive Class A (a) 118,656 1,871,205
Netflix, Inc. (a) 15,112 2,655,178
Priceline.com, Inc. (a) 1,163 464,677
------------
8,882,268
------------
INTERNET SOFTWARE & SERVICES 2.0%
AOL, Inc. (a) 199,617 4,732,919
IAC/InterActiveCorp (a) 169,441 4,862,957
VeriSign, Inc. 151,954 4,964,337
------------
14,560,213
------------
IT SERVICES 1.8%
Amdocs, Ltd. (a) 199,750 5,487,133
Broadridge Financial
Solutions, Inc. 189,755 4,161,327
Computer Sciences Corp. 366 18,154
Convergys Corp. (a) 78,695 1,036,413
DST Systems, Inc. 3,237 143,561
Fidelity National Information
Services, Inc. 40,480 1,108,747
Total System Services, Inc. 65,393 1,005,744
------------
12,961,079
------------
LIFE SCIENCES TOOLS & SERVICES 1.1%
Bio-Rad Laboratories, Inc.
Class A (a) 13,684 1,421,084
Covance, Inc. (a) 27,869 1,432,745
Pharmaceutical Product
Development, Inc. 191,581 5,199,508
------------
8,053,337
------------
MACHINERY 5.7%
AGCO Corp. (a) 111,557 5,651,478
Bucyrus International, Inc.
Class A 10,058 899,185
CNH Global N.V. (a) 69,527 3,319,219
Cummins, Inc. 26,418 2,906,244
Gardner Denver, Inc. 422 29,042
Harsco Corp. 10,330 292,546
Joy Global, Inc. 6,197 537,590
Manitowoc Co., Inc. (The) 243,290 3,189,532
Navistar International Corp.
(a) 93,243 5,399,702
Oshkosh Corp. (a) 155,969 5,496,347
SPX Corp. 36,355 2,599,019
Timken Co. (The) 113,295 5,407,570
Toro Co. (The) 79,836 4,921,091
Valmont Industries, Inc. 6,114 542,495
------------
41,191,060
------------
MEDIA 2.9%
Cablevision Systems Corp.
Class A 102,668 3,474,285
DISH Network Corp. Class A
(a) 128,498 2,526,271
Gannett Co., Inc. 83,649 1,262,263
Interpublic Group of Cos.,
Inc. (The) (a) 507,659 5,391,339
John Wiley & Sons, Inc. Class
A 78 3,529
McGraw-Hill Cos., Inc. (The) 3,510 127,799
Sirius XM Radio, Inc. (a) 338,961 555,896
Virgin Media, Inc. 173,654 4,730,335
Washington Post Co. Class B 5,445 2,393,077
------------
20,464,794
------------
METALS & MINING 0.2%
Titanium Metals Corp. (a) 300 5,154
Walter Energy, Inc. 12,080 1,544,307
------------
1,549,461
------------
MULTI-UTILITIES 1.8%
Consolidated Edison, Inc. 3,245 160,855
DTE Energy Co. 123,255 5,585,916
Integrys Energy Group, Inc. 103,168 5,004,680
MDU Resources Group, Inc. 123,558 2,504,521
Xcel Energy, Inc. 670 15,778
------------
13,271,750
------------
MULTILINE RETAIL 1.6%
Big Lots, Inc. (a) 104,502 3,183,131
Dollar General Corp. (a) 15,020 460,663
</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-259
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2010 (CONTINUED)
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
MULTILINE RETAIL (CONTINUED)
Dollar Tree, Inc. (a) 38,970 $ 2,185,438
Family Dollar Stores, Inc. 114,743 5,703,874
------------
11,533,106
------------
OIL, GAS & CONSUMABLE FUELS 6.9%
Alpha Natural Resources, Inc.
(a) 87,839 5,272,975
Arch Coal, Inc. 146,028 5,119,742
Atlas Energy, Inc. (a) 34,261 1,506,456
Cimarex Energy Co. 53,846 4,766,986
Holly Corp. 82,796 3,375,593
X Murphy Oil Corp. 98,695 7,357,712
Newfield Exploration Co. (a) 13,425 968,077
Peabody Energy Corp. 28,002 1,791,568
Plains Exploration &
Production Co. (a) 11,218 360,547
QEP Resources, Inc. 100,350 3,643,709
SM Energy Co. 9,307 548,462
Sunoco, Inc. 136,517 5,503,000
X Valero Energy Corp. 319,011 7,375,534
Whiting Petroleum Corp. (a) 13,943 1,633,980
------------
49,224,341
------------
PAPER & FOREST PRODUCTS 1.3%
Domtar Corp. 64,016 4,860,095
International Paper Co. 18,356 500,017
MeadWestvaco Corp. 150,366 3,933,575
------------
9,293,687
------------
PERSONAL PRODUCTS 1.0%
Alberto-Culver Co. 8,053 298,283
Avon Products, Inc. 113 3,284
Estee Lauder Cos., Inc. (The)
Class A 22,164 1,788,635
Herbalife, Ltd. 76,727 5,245,825
------------
7,336,027
------------
PHARMACEUTICALS 1.9%
Endo Pharmaceuticals
Holdings, Inc. (a) 128,474 4,587,807
Forest Laboratories, Inc. (a) 163,044 5,214,147
King Pharmaceuticals, Inc.
(a) 43,464 610,669
Warner Chilcott PLC Class A 154,667 3,489,287
------------
13,901,910
------------
PROFESSIONAL SERVICES 0.5%
FTI Consulting, Inc. (a) 104,882 3,910,001
------------
REAL ESTATE INVESTMENT TRUSTS 3.5%
X Annaly Capital Management,
Inc. 363,232 6,509,118
Apartment Investment &
Management Co. Class A 12,819 331,243
AvalonBay Communities, Inc. 8,955 1,007,885
Camden Property Trust 4,139 223,423
Duke Realty Corp. 89,853 1,119,569
Equity Residential 88,076 4,575,548
Federal Realty Investment
Trust 11,163 869,933
HCP, Inc. 48,813 1,795,830
Hospitality Properties Trust 15,748 362,834
Liberty Property Trust 9,101 290,504
ProLogis 55,221 797,391
Rayonier, Inc. 99,285 5,214,448
Taubman Centers, Inc. 532 26,855
Ventas, Inc. 20,832 1,093,263
Vornado Realty Trust 9,732 810,968
------------
25,028,812
------------
REAL ESTATE MANAGEMENT & DEVELOPMENT 1.1%
CB Richard Ellis Group, Inc.
Class A (a) 130,862 2,680,054
Howard Hughes Corp. (The) (a) 1,758 95,670
Jones Lang LaSalle, Inc. 61,635 5,172,409
------------
7,948,133
------------
ROAD & RAIL 0.6%
Hertz Global Holdings, Inc.
(a) 34,991 507,019
Ryder System, Inc. 74,348 3,913,679
------------
4,420,698
------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 4.3%
Advanced Micro Devices, Inc.
(a) 231,914 1,897,057
Altera Corp. 48,695 1,732,568
Analog Devices, Inc. 24,667 929,206
Cypress Semiconductor Corp.
(a) 138,514 2,573,590
Fairchild Semiconductor
International, Inc. (a) 312,857 4,883,698
Lam Research Corp. (a) 78,151 4,046,659
LSI Corp. (a) 252,278 1,511,145
Marvell Technology Group,
Ltd. (a) 74,588 1,383,607
Micron Technology, Inc. (a) 698,884 5,605,050
ON Semiconductor Corp. (a) 51,022 504,097
Rambus, Inc. (a) 12,339 252,703
Teradyne, Inc. (a) 382,661 5,372,560
------------
30,691,940
------------
SOFTWARE 5.0%
Autodesk, Inc. (a) 105,412 4,026,738
BMC Software, Inc. (a) 116,642 5,498,504
CA, Inc. 77,999 1,906,296
Citrix Systems, Inc. (a) 64,816 4,434,062
Compuware Corp.(a) 133,683 1,560,081
X Intuit, Inc. (a) 144,627 7,130,111
McAfee, Inc. (a) 16,209 750,639
MICROS Systems, Inc. (a) 89,156 3,910,382
Novell, Inc. (a) 40,810 241,595
Rovi Corp. (a) 10,984 681,118
Salesforce.com, Inc. (a) 5,528 729,696
</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)
SOFTWARE (CONTINUED)
Solera Holdings, Inc. 4,787 $ 245,669
Synopsys, Inc. (a) 176,104 4,738,959
------------
35,853,850
------------
SPECIALTY RETAIL 5.3%
Advance Auto Parts, Inc. 83,646 5,533,183
Aeropostale, Inc. (a) 125,974 3,103,999
American Eagle Outfitters,
Inc. 134,523 1,968,071
AutoZone, Inc. (a) 17,482 4,765,418
Foot Locker, Inc. 18,778 368,424
GameStop Corp. Class A (a) 64,532 1,476,492
Limited Brands, Inc. 188,623 5,796,385
PetSmart, Inc. 100,930 4,019,033
Ross Stores, Inc. 72,146 4,563,235
Signet Jewelers, Ltd. (a) 36,129 1,567,999
Williams-Sonoma, Inc. 146,826 5,240,220
------------
38,402,459
------------
TEXTILES, APPAREL & LUXURY GOODS 0.5%
Coach, Inc. 64,445 3,564,453
------------
TOBACCO 0.4%
Lorillard, Inc. 35,000 2,872,100
------------
TRADING COMPANIES & DISTRIBUTORS 0.9%
X W.W. Grainger, Inc. 44,831 6,191,609
------------
WIRELESS TELECOMMUNICATION SERVICES 1.8%
Leap Wireless International,
Inc. (a) 83,622 1,025,206
MetroPCS Communications, Inc.
(a) 298,227 3,766,607
NII Holdings, Inc. (a) 77,462 3,459,453
Telephone and Data Systems,
Inc. 104,140 3,806,317
United States Cellular Corp.
(a) 13,712 684,777
------------
12,742,360
------------
Total Common Stocks
(Cost $579,920,626) 708,866,945
------------
EXCHANGE TRADED FUNDS 1.1%(B)
-------------------------------------------------------
S&P 500 Index--SPDR Trust
Series 1 34,580 4,349,473
S&P MidCap 400 Index--MidCap
SPDR Trust Series 1 24,805 4,084,887
------------
Total Exchange Traded Funds
(Cost $8,357,488) 8,434,360
------------
<Caption>
PRINCIPAL
AMOUNT
SHORT-TERM INVESTMENT 0.1%
-------------------------------------------------------
REPURCHASE AGREEMENT 0.1%
State Street Bank and Trust
Co.
0.01%, dated 12/31/10
due 1/3/11
Proceeds at Maturity
$539,777
(Collateralized by a United
States
Treasury Note with a rate
of 2.50% and a
maturity date of 4/30/15,
with a Principal
Amount of $535,000 and a
Market Value of
$555,063) $ 539,776 $ 539,776
------------
Total Short-Term Investment
(Cost $539,776) 539,776
------------
Total Investments
(Cost $588,817,890)(c) 100.0% 717,841,081
Other Assets, Less
Liabilities (0.0)++ (335,661)
---------- ------------
Net Assets 100.0% $717,505,420
========== ============
</Table>
<Table>
++ Less than one-tenth of a percent.
(a) Non-income producing security.
(b) Exchange Traded Fund--An investment
vehicle that represents a basket of
securities that is traded on an exchange.
(c) At December 31, 2010, cost is
$595,493,288 for federal income tax
purposes and net unrealized appreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $131,858,647
Gross unrealized depreciation (9,510,854)
------------
Net unrealized appreciation $122,347,793
============
</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, 2010 (CONTINUED)
The following is a summary of the fair valuations according to the inputs used
as of December 31, 2010, 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 $708,866,945 $ -- $ -- $708,866,945
Exchange Traded Funds 8,434,360 -- -- 8,434,360
Short-Term Investment
Repurchase Agreement -- 539,776 -- 539,776
------------ -------- -------- ------------
Total Investments in Securities $717,301,305 $539,776 $-- $717,841,081
============ ======== ======== ============
</Table>
(a) For a complete listing of investments and their industries, see the
Portfolio of Investments.
For the period ended December 31, 2010, the Portfolio did not have any transfers
between Level 1 and Level 2 fair value measurements. (See Note 2)
At December 31, 2010, the Portfolio did not hold any investments with
significant unobservable inputs (Level 3). (See Note 2)
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.
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2010
<Table>
ASSETS
--------------------------------------------------
Investment in securities, at value
(identified cost $588,817,890) $717,841,081
Receivables:
Investment securities sold 45,123,965
Dividends and interest 778,302
Fund shares sold 49,412
------------
Total assets 763,792,760
------------
LIABILITIES
--------------------------------------------------
Payables:
Investment securities purchased 45,436,462
Manager (See Note 3) 513,232
Fund shares redeemed 177,359
NYLIFE Distributors (See Note 3) 63,107
Professional fees 47,072
Shareholder communication 45,282
Custodian 2,573
Directors 1,538
Accrued expenses 715
------------
Total liabilities 46,287,340
------------
Net assets $717,505,420
============
NET ASSETS CONSIST OF
--------------------------------------------------
Capital stock (par value of $.01 per
share) 200 million shares
authorized $ 606,590
Additional paid-in capital 632,737,026
------------
633,343,616
Undistributed net investment income 4,755,440
Accumulated net realized loss on
investments (49,616,827)
Net unrealized appreciation on
investments 129,023,191
------------
Net assets $717,505,420
============
INITIAL CLASS
Net assets applicable to outstanding
shares $417,904,215
============
Shares of capital stock outstanding 35,216,664
============
Net asset value per share
outstanding $ 11.87
============
SERVICE CLASS
Net assets applicable to outstanding
shares $299,601,205
============
Shares of capital stock outstanding 25,442,293
============
Net asset value per share
outstanding $ 11.78
============
</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
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2010
<Table>
INVESTMENT INCOME
--------------------------------------------------
INCOME
Dividends $ 11,530,771
Interest 419
------------
Total income 11,531,190
------------
EXPENSES
Manager (See Note 3) 5,568,175
Distribution and service--Service
Class (See Note 3) 674,863
Shareholder communication 124,513
Professional fees 122,663
Custodian 42,328
Directors 21,767
Miscellaneous 25,029
------------
Total expenses 6,579,338
------------
Net investment income 4,951,852
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
--------------------------------------------------
Net realized gain on investments 77,550,675
Net change in unrealized
appreciation (depreciation) on
investments 54,530,640
------------
Net realized and unrealized gain on
investments 132,081,315
------------
Net increase in net assets resulting
from operations $137,033,167
============
</Table>
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.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2010 AND DECEMBER 31, 2009
<Table>
<Caption>
2010 2009
INCREASE IN NET ASSETS
---------------------------------------------------------
Operations:
Net investment income $ 4,951,852 $ 2,062,077
Net realized gain (loss)
on investments and
foreign currency
transactions 77,550,675 (24,878,236)
Net change in unrealized
appreciation
(depreciation) on
investments 54,530,640 111,914,079
---------------------------
Net increase in net assets
resulting from operations 137,033,167 89,097,920
---------------------------
Dividends to shareholders:
From net investment
income:
Initial Class (1,333,926) (965,845)
Service Class (692,754) (239,781)
---------------------------
Total dividends to
shareholders (2,026,680) (1,205,626)
---------------------------
Capital share transactions:
Net proceeds from sale of
shares 105,449,893 131,404,171
Net asset value of shares
issued in connection with
the acquisition of
MainStay VP Mid Cap
Growth Portfolio (See
Note 12) -- 227,149,817
Net asset value of shares
issued to shareholders in
reinvestment of dividends 2,026,680 1,205,626
Cost of shares redeemed (130,105,305) (43,211,017)
---------------------------
Increase (decrease) in
net assets derived from
capital share
transactions (22,628,732) 316,548,597
---------------------------
Net increase in net
assets 112,377,755 404,440,891
NET ASSETS
---------------------------------------------------------
Beginning of year 605,127,665 200,686,774
---------------------------
End of year $ 717,505,420 $605,127,665
===========================
Undistributed net investment
income at end of year $ 4,755,440 $ 2,075,987
===========================
</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
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------
2010 2009 2008 2007 2006
Net asset value at beginning of
year $ 9.63 $ 7.07 $ 14.86 $ 15.68 $ 13.72
-------- -------- -------- -------- --------
Net investment income 0.10 0.07 (a) 0.06 0.04 0.07
Net realized and unrealized gain
(loss) on investments 2.18 2.54 (6.29) 0.82 1.99
-------- -------- -------- -------- --------
Total from investment operations 2.28 2.61 (6.23) 0.86 2.06
-------- -------- -------- -------- --------
Less dividends and distributions:
From net investment income (0.04) (0.05) (0.04) (0.07) --
From net realized gain on
investments -- -- (1.52) (1.61) (0.10)
-------- -------- -------- -------- --------
Total dividends and distributions (0.04) (0.05) (1.56) (1.68) (0.10)
-------- -------- -------- -------- --------
Net asset value at end of year $ 11.87 $ 9.63 $ 7.07 $ 14.86 $ 15.68
======== ======== ======== ======== ========
Total investment return 23.64% 36.93% (42.24%) 5.03% 14.96%
Ratios (to average net
assets)/Supplemental Data:
Net investment income 0.86% 0.84% 0.54% 0.25% 0.51%
Net expenses 0.90% 0.94% 0.93% 0.91% 0.93%
Portfolio turnover rate 169% 192% 173% 166% 166%
Net assets at end of year (in
000's) $417,904 $348,595 $108,882 $202,966 $199,356
</Table>
<Table>
++ Less than one cent per share.
(a) Per share data based on average shares outstanding during the period.
</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.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
SERVICE CLASS
-------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------------------
2010 2009 2008 2007 2006
$ 9.57 $ 7.02 $ 14.75 $ 15.59 $ 13.68
-------- -------- ------- -------- --------
0.07 0.05 (a) 0.03 0.00 ++ 0.04
2.17 2.52 (6.24) 0.81 1.97
-------- -------- ------- -------- --------
2.24 2.57 (6.21) 0.81 2.01
-------- -------- ------- -------- --------
(0.03) (0.02) (0.00)++ (0.04) --
-- -- (1.52) (1.61) (0.10)
-------- -------- ------- -------- --------
(0.03) (0.02) (1.52) (1.65) (0.10)
-------- -------- ------- -------- --------
$ 11.78 $ 9.57 $ 7.02 $ 14.75 $ 15.59
======== ======== ======= ======== ========
23.33% 36.58% (42.38%) 4.77% 14.67%
0.61% 0.61% 0.29% 0.01% 0.26%
1.15% 1.19% 1.18% 1.16% 1.18%
169% 192% 173% 166% 166%
$299,601 $256,533 $91,805 $167,083 $132,240
</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
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. THE PERFORMANCE TABLE AND GRAPH 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.
(LINE GRAPH)
<Table>
<Caption>
MAINSTAY VP MAINSTAY VP
MODERATE ALLOATION MODERATE ALLOATION BARCLAYS CAPITAL
PORTFOLIO INITIAL PORTFOLIO SERVICE S&P 500(R) MSCI EAFE(R) U.S. AGGREGATE
CLASS CLASS INDEX INDEX BOND INDEX
------------------ ------------------ ---------- ------------ ----------------
2/13/2006 10000 10000 10000 10000 10000
10993 10969 11386 12152 10457
11953 11897 12012 13509 11185
8943 8877 7568 7649 11771
11108 11007 9570 10080 12469
12/31/2010 12563 12417 11012 10861 13285
</Table>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED DECEMBER 31, 2010
--------------------------------------------------------------------------------
<Table>
<Caption>
SINCE GROSS
INCEPTION EXPENSE
CLASS ONE YEAR (2/13/06) RATIO(2)
---------------------------------------------------------
Initial Class Shares 13.09% 4.78% 1.01%
---------------------------------------------------------
Service Class Shares 12.81 4.53 1.26
---------------------------------------------------------
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE SINCE INCEPTION
YEAR (2/13/06)
S&P 500(R) Index(3) 15.06% 1.99%
-----------------------------------------------------------------------------------------------------------------
MSCI EAFE(R) Index(3) 7.75 1.70
-----------------------------------------------------------------------------------------------------------------
Barclays Capital U.S. Aggregate Bond Index(3) 6.54 5.98
-----------------------------------------------------------------------------------------------------------------
Average Lipper Variable Products Mixed-Asset Target Allocation Moderate Portfolio(4) 11.28 3.32
-----------------------------------------------------------------------------------------------------------------
</Table>
1. Performance figures reflect certain fee waivers and/or expense limitations,
without which total returns may have been lower. For information on current
expense limitations, please refer to the notes to the financial statements.
2. The gross expense ratios presented reflect the Portfolio's "Total Annual
Portfolio Operating Expenses" from the most recent Prospectus and may differ
from other expense ratios disclosed in this report.
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 Moderate
Portfolio is representative of portfolios that, by portfolio practice,
maintain a mix of between 40%-60% equity securities, with the remainder
invested in bonds, cash, and cash equivalents. Lipper Inc. is an independent
monitor of fund performance. Results are based on total returns with all
dividend and capital gain distributions reinvested.
M-268 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, 2010, to December 31,
2010, 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 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, 2010, to December 31, 2010. 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, 2010. 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 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 7/1/10 12/31/10 PERIOD(1) 12/31/10 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,158.10 $0.27 $1,025.00 $0.26
-------------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,156.60 $1.63 $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
Portfolios/Funds in which it invests. Such indirect expenses are not included
in the above-reported expense figures.
mainstayinvestments.com M-269
INVESTMENT OBJECTIVES OF UNDERLYING PORTFOLIOS/FUNDS AS OF DECEMBER 31, 2010
(Unaudited)
(COMPOSITION PIE CHART)
<Table>
Current Income 34.20
Growth of Capital 31.40
Total Return 17.20
Capital Appreciation 17.20
Other Assets, Less Liabilities 0.00
</Table>
See Portfolio of Investments beginning on page M-273 for specific holdings
within these categories.
++ Less than one-tenth of a percent.
M-270 MainStay VP Moderate Allocation Portfolio
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
Questions answered by portfolio manager Jonathan Swaney of New York Life
Investments,(1) the Portfolio's Manager.
HOW DID MAINSTAY VP MODERATE ALLOCATION PORTFOLIO PERFORM RELATIVE TO ITS PEERS
AND ITS BENCHMARK FOR THE 12 MONTHS ENDED DECEMBER 31, 2010?
For the 12 months ended December 31, 2010, MainStay VP Moderate Allocation
Portfolio returned 13.09% for Initial Class shares and 12.81% for Service Class
shares. Both share classes outperformed the 11.28% return of the average
Lipper(2) Variable Products Mixed-Asset Target Allocation Moderate Portfolio and
underperformed the 15.06% return of the S&P 500(R) Index(2) for the 12 months
ended December 31, 2010. The S&P 500(R) Index is the Portfolio's broad-based
securities-market index.
WHAT FACTORS AFFECTED THE PORTFOLIO'S PERFORMANCE RELATIVE TO ITS PEERS AND ITS
BENCHMARK DURING THE REPORTING PERIOD?
The Portfolio invests in other mutual funds referred to as Underlying
Portfolios/Funds. The Underlying Portfolios/Funds may invest in fixed-income
securities or in domestic or international stocks at various capitalization
levels. The Portfolio's primary benchmark, on the other hand, consists entirely
of U.S. large-cap stocks.
Within the fixed-income portion of the Portfolio, investments in Underlying
Portfolios/Funds that focus on asset classes outside the traditional investment-
grade bond universe (especially high-yield bonds and convertible bonds)
substantially strengthened performance relative to the 6.54% return of the
Barclays Capital U.S. Aggregate Bond Index(2) (the Portfolio's fixed-income
benchmark) and relative to the Portfolio's peers.
The Portfolio's performance relative to the S&P 500(R) Index was helped by
Underlying Portfolios/Funds with holdings in mid- and small-capitalization
stocks. These Underlying Portfolios/Funds, however, provided the Portfolio with
less of an advantage--perhaps even a disadvantage--relative to the Portfolio's
peers, because peer Portfolios tend to invest in equal or greater measure in
Underlying Portfolios/Funds focused on mid- and small-cap stocks.
Weighing down returns modestly was an emphasis on Underlying Equity
Portfolios/Funds that tend to invest in high-quality stocks (or stocks of
companies that offer stable, positive and growing cash flows and earnings). For
at least part of the reporting period, lower-quality stocks, which had been
heavily penalized during the credit crisis of 2008 and early 2009, experienced
the most rapid price increases as the market recovered. The Portfolio's "quality
tilt" was not a virtue in that environment.
HOW DID YOU ALLOCATE THE PORTFOLIO'S ASSETS DURING THE REPORTING PERIOD AND WHY?
In managing the Portfolio, we considered a variety of information, including the
Portfolio-level characteristics of the Underlying Portfolios/Funds in which the
Portfolio invests, such as capitalization, style biases and sector exposure. We
also examined the attributes of the Underlying Portfolios'/Funds' holdings, such
as valuation metrics, earnings data and technical indicators. Finally, we
evaluated the historical success of the portfolio managers responsible for the
Underlying Portfolios/Funds. In general, we sought Underlying Equity
Portfolios/Funds that had a track record of capable portfolio management, a
presence in attractively valued market segments and investments in companies
with strong management, fairly priced securities and strong price and earnings
momentum. Underlying Fixed Income Portfolios/Funds were selected based upon the
type and country of issuance of the securities in which they invested and the
average credit quality and duration(3) of those securities.
During the 12-month reporting period, these techniques were not especially
successful in that they steered the Portfolio into investments in Underlying
Equity Portfolios/Funds that, as a group, failed to match our return
expectations.
While many factors may have been involved, one that stood out was the
Portfolio's tilt toward Underlying Equity Portfolios/Funds that prized earnings
stability. We preferred these Underlying Equity Portfolios/Funds because high-
quality stocks have historically been rewarded with higher returns than lower-
quality stocks. For much of the reporting period, however, the reverse was true.
Instead, investors purchased the most risk-laden and lowest-quality securities,
anticipating that these securities would be the most likely to benefit from a
recovery. This persistent "junk rally" was a substantial drag on the performance
of the Portfolio.
HOW DID THE PORTFOLIO'S ALLOCATIONS CHANGE OVER THE COURSE OF THE REPORTING
PERIOD?
During the reporting period, the Portfolio reduced its positions in MainStay VP
Large Cap Growth Portfolio and MainStay 130/30 Growth Fund, with much of the
proceeds going to MainStay Epoch U.S. All Cap Fund. This shift reflected an
effort to reduce the Portfolio's previous growth bias and to adopt a more
neutral style posture. The move was mildly counterproductive in that growth
stocks generally fared better than their value counterparts during the second
half of 2010.
During the reporting period, we also introduced a position in MainStay VP
Convertible Portfolio. This was a positive development, as convertible bonds,
which are sensitive to changes in equity prices, rose sharply along with the
stock market in recent months.
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 indexes and other indexes, 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.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
mainstayinvestments.com M-271
WERE THERE ANY OTHER SIGNIFICANT ALLOCATION CHANGES DURING THE REPORTING PERIOD?
The Portfolio established a new position in MainStay Global High Income Fund
during the summer of 2010. The investment was made to reflect the improved
creditworthiness of many emerging-market borrowers, the attractive yields
available on emerging-market debt and the potential for further devaluation of
the U.S. dollar.
Near the start of the year, the Portfolio also established a position in
MainStay Epoch Global Choice Fund. The investment was made to better diversify
the international equity portion of the Portfolio across management styles and
to help counter a small bias toward value within that portion of the Portfolio.
WHICH UNDERLYING EQUITY PORTFOLIOS/FUNDS HAD THE HIGHEST TOTAL RETURNS DURING
THE REPORTING PERIOD, AND WHICH UNDERLYING EQUITY PORTFOLIOS/FUNDS HAD THE
LOWEST TOTAL RETURNS?
During the reporting period, the highest returns among the Underlying Equity
Portfolios/Funds in which the Portfolio invested came from MainStay VP U.S.
Small Cap Portfolio, MainStay VP Mid Cap Core Portfolio and MainStay VP ICAP
Select Equity Portfolio. The lowest returns, although still decidedly positive,
came from MainStay VP International Equity Portfolio, MainStay ICAP
International Fund and MainStay Epoch Global Choice Fund.
WHICH UNDERLYING EQUITY PORTFOLIOS/FUNDS MADE THE STRONGEST CONTRIBUTIONS TO THE
PORTFOLIO'S OVERALL PERFORMANCE, AND WHICH UNDERLYING EQUITY PORTFOLIOS/FUNDS
WERE THE GREATEST DETRACTORS?
The Portfolio's positions in MainStay VP Mid Cap Core Portfolio and MainStay MAP
Fund, both of which posted strong returns for the year, made the greatest
contributions to the performance of the equity portion of the Portfolio. While
none of the Under-
lying Equity Portfolios/Funds in which the Portfolio invested had negative
returns for the reporting period, among the weakest contributors were very small
positions in MainStay 130/30 Growth Fund and MainStay VP Growth Equity
Portfolio.
WHAT FACTORS AND RISKS AFFECTED THE PORTFOLIO'S INVESTMENTS IN UNDERLYING FIXED
INCOME PORTFOLIOS/FUNDS DURING THE REPORTING PERIOD?
During the reporting period, the market reflected lingering concerns about the
strength of the economy. These concerns--along with efforts by the Federal
Reserve to contain borrowing costs--brought long-term interest rates down to
levels not seen in many decades. These interest rates rebounded in the fourth
quarter. Meanwhile, improving corporate profitability led to a further narrowing
of credit spreads(4) at the lower end of the quality spectrum.
DURING THE REPORTING PERIOD, WHICH FIXED-INCOME MARKET SEGMENTS WERE STRONG
PERFORMERS AND WHICH SEGMENTS WERE PARTICULARLY WEAK?
In general, long duration and low quality were favored during the reporting
period. High-yield bonds and emerging-market debt performed best. Cash or cash
equivalents, which effectively had no nominal return, fared worst, followed by
high-grade, short-term securities.
WHICH UNDERLYING FIXED INCOME PORTFOLIOS/FUNDS MADE THE STRONGEST CONTRIBUTIONS
TO THE PORTFOLIO'S PERFORMANCE, AND WHICH UNDERLYING FIXED INCOME
PORTFOLIOS/FUNDS MADE THE WEAKEST CONTRIBUTIONS?
Not unexpectedly, the largest fixed-income contribution to the Portfolio's
return came from what was, by a comfortable margin, the Portfolio's largest
Underlying Fixed Income Portfolio/Fund--MainStay VP Bond Portfolio. The
Portfolio's position in MainStay High Yield Opportunities Fund was noteworthy
for having contributed to return on a scale disproportionate to the size of the
investment.
None of the Underlying Fixed Income Portfolios/Funds in which the Portfolio
invested had a negative total return during the reporting period, and all
outperformed the Barclays Capital U.S. Aggregate Bond Index. That said, the
Portfolio's weakest fixed-income contribution came from MainStay Global High
Income Fund, which was among the Portfolio's strongest-performing Underlying
Fixed Income Portfolios/Funds but was also the Portfolio's smallest fixed-income
position. The Portfolio's second-weakest fixed-income contribution came from
MainStay VP Floating Rate Portfolio.
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.
Effective January 1, 2011, Madison Square Investors LLC no longer serves as
Subadvisor to the Portfolio, and New York Life Investments has assumed the day-
to-day portfolio management of the Portfolio. In addition, effective January 1,
2011, Jae Yoon replaced Tony Elavia as a portfolio manager for the Portfolio.
Jonathan Swaney continues to serve as a portfolio manager for the Portfolio. For
more information regarding these portfolio management changes, please refer to
the Prospectus supplement dated December 3, 2010.
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 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 Moderate Allocation Portfolio on this page and the
preceding pages has not been audited.
M-272 MainStay VP Moderate Allocation Portfolio
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2010
<Table>
<Caption>
SHARES VALUE
AFFILIATED INVESTMENT COMPANIES 100.0%+
------------------------------------------------------
EQUITY FUNDS 60.0%
MainStay 130/30 Core Fund
Class I (a) 7,104,116 $ 55,127,937
MainStay 130/30 Growth Fund
Class I (a)(b) 59,424 514,610
MainStay 130/30 International
Fund
Class I (a) 2,748,287 18,935,696
MainStay Epoch Global Choice
Fund
Class I (a) 392,501 5,844,338
MainStay Epoch U.S. All Cap
Fund
Class I (a) 1,793,653 42,043,227
MainStay ICAP Equity Fund
Class I 843,201 30,540,739
MainStay ICAP International
Fund
Class I 638,894 18,840,981
MainStay MAP Fund
Class I 1,066,043 34,006,760
MainStay VP Common Stock
Portfolio
Initial Class 1,416,048 22,712,974
MainStay VP Growth Equity
Portfolio
Initial Class 5,026 123,741
MainStay VP ICAP Select
Equity Portfolio
Initial Class 2,428,283 30,444,859
MainStay VP International
Equity Portfolio
Initial Class (a) 1,469,428 18,838,244
MainStay VP Large Cap Growth
Portfolio
Initial Class (a)(b) 1,798,958 26,911,774
MainStay VP Mid Cap Core
Portfolio
Initial Class (a) 3,743,310 44,420,591
MainStay VP S&P 500 Index
Portfolio
Initial Class 2,743 69,798
MainStay VP U.S. Small Cap
Portfolio
Initial Class (a) 892,200 8,307,344
------------
Total Equity Funds
(Cost $309,249,171) 357,683,613
------------
FIXED INCOME FUNDS 40.0%
MainStay Global High Income
Fund
Class I (a) 252,827 2,980,828
MainStay High Yield
Opportunities Fund Class I
(a) 1,680,645 19,865,227
MainStay Intermediate Term
Bond Fund
Class I 2,169,977 22,849,861
MainStay VP Bond Portfolio
Initial Class (a) 8,852,693 129,534,273
MainStay VP Convertible
Portfolio
Initial Class (a) 993,240 11,882,076
MainStay VP Floating Rate
Portfolio
Initial Class (a) 4,031,429 37,342,623
MainStay VP High Yield
Corporate Bond Portfolio
Initial Class 1,499,567 14,382,472
------------
Total Fixed Income Funds
(Cost $229,662,970) 238,837,360
------------
Total Investments
(Cost $538,912,141) (c) 100.0% 596,520,973
Other Assets, Less
Liabilities 0.0++ 193,856
--------- ------------
Net Assets 100.0% $596,714,829
========= ============
</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
Portfolio's/Fund's share class. (See Note
3)
(b) Non-income producing Underlying
Portfolio/Fund.
(c) At December 31, 2010, cost is
$541,370,686 for federal income tax
purposes and net unrealized appreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $58,154,851
Gross unrealized depreciation (3,004,564)
-----------
Net unrealized appreciation $55,150,287
===========
</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-273
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2010 (CONTINUED)
The following is a summary of the fair valuations according to the inputs used
as of December 31, 2010, 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
Affiliated Investment Companies
Equity Funds $357,683,613 $ -- $ -- $357,683,613
Fixed Income Funds 238,837,360 -- -- 238,837,360
------------ -------- -------- ------------
Total Investments in Securities $596,520,973 $ -- $ -- $596,520,973
============ ======== ======== ============
</Table>
For the period ended December 31, 2010, the Portfolio did not have any transfers
between Level 1 and Level 2 fair value measurements. (See Note 2)
At December 31, 2010, the Portfolio did not hold any investments with
significant unobservable inputs (Level 3). (See Note 2)
M-274 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, 2010
<Table>
ASSETS
--------------------------------------------------
Investment in affiliated investment
companies, at value (identified
cost $538,912,141) $596,520,973
Cash 894,479
Receivables:
Fund shares sold 291,602
------------
Total assets 597,707,054
------------
LIABILITIES
--------------------------------------------------
Payables:
Investment securities purchased 626,715
Fund shares redeemed 174,822
NYLIFE Distributors (See Note 3) 118,744
Shareholder communication 36,086
Professional fees 32,873
Directors 1,226
Custodian 974
Accrued expenses 785
------------
Total liabilities 992,225
------------
Net assets $596,714,829
============
NET ASSETS CONSIST OF
--------------------------------------------------
Capital stock (par value of $.01 per
share) 200 million shares
authorized $ 549,304
Additional paid-in capital 574,934,279
------------
575,483,583
Undistributed net investment income 10,843,898
Accumulated net realized loss on
investments (47,221,484)
Net unrealized appreciation on
investments 57,608,832
------------
Net assets $596,714,829
============
INITIAL CLASS
Net assets applicable to outstanding
shares $ 24,136,477
============
Shares of capital stock outstanding 2,214,393
============
Net asset value per share
outstanding $ 10.90
============
SERVICE CLASS
Net assets applicable to outstanding
shares $572,578,352
============
Shares of capital stock outstanding 52,715,999
============
Net asset value per share
outstanding $ 10.86
============
</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-275
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2010
<Table>
INVESTMENT INCOME
-------------------------------------------------
INCOME
Dividend distributions from
affiliated investment companies $10,803,968
-----------
EXPENSES
Distribution and service--Service
Class (See Note 3) 1,181,461
Shareholder communication 107,686
Professional fees 87,703
Directors 16,181
Custodian 14,231
Miscellaneous 17,403
-----------
Total expenses 1,424,665
-----------
Net investment income 9,379,303
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
-------------------------------------------------
Net realized gain on affiliated
investment company transactions 3,268,644
Realized capital gain distributions
from affiliated investment
companies 1,905,608
-----------
Net realized gain on investments
from affiliated investment
companies 5,174,252
-----------
Net change in unrealized
appreciation (depreciation) on
investments 46,536,713
-----------
Net realized and unrealized gain on
Investments 51,710,965
-----------
Net increase in net assets resulting
from operations $61,090,268
===========
</Table>
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.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2010 AND DECEMBER 31, 2009
<Table>
<Caption>
2010 2009
INCREASE IN NET ASSETS
--------------------------------------------------------
Operations:
Net investment income $ 9,379,303 $ 9,790,945
Net realized gain (loss)
on investments from
affiliated investment
company transactions 5,174,252 (39,955,837)
Net change in unrealized
appreciation
(depreciation) on
investments 46,536,713 108,466,308
--------------------------
Net increase in net assets
resulting from operations 61,090,268 78,301,416
--------------------------
Dividends and distributions
to shareholders:
From net investment
income:
Initial Class (457,663) (459,029)
Service Class (9,807,208) (9,359,081)
--------------------------
(10,264,871) (9,818,110)
--------------------------
From net realized gain on
investments:
Initial Class -- (345,847)
Service Class -- (7,632,211)
--------------------------
-- (7,978,058)
--------------------------
Total dividends and
distributions to
shareholders (10,264,871) (17,796,168)
--------------------------
Capital share transactions:
Net proceeds from sale of
shares 167,493,165 99,883,315
Net asset value of shares
issued to shareholders in
reinvestment of dividends
and distributions 10,264,871 17,796,168
Cost of shares redeemed (72,569,600) (37,844,661)
--------------------------
Increase in net assets
derived from capital
share transactions 105,188,436 79,834,822
--------------------------
Net increase in net
assets 156,013,833 140,340,070
NET ASSETS
--------------------------------------------------------
Beginning of year 440,700,996 300,360,926
--------------------------
End of year $596,714,829 $440,700,996
==========================
Undistributed net investment
income at
end of year $ 10,843,898 $ 10,264,838
==========================
</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-277
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
------------------------------------------------------------------------
FEBRUARY 13,
2006**
YEAR ENDED DECEMBER 31, THROUGH
---------------------------------------------------- DECEMBER 31,
2010 2009 2008 2007 2006
Net asset value at beginning of
period $ 9.85 $ 8.30 $ 11.32 $ 10.86 $10.00
------- ------- ------- ------- ------
Net investment income 0.21 (a) 0.20 0.21 0.22 0.18 (a)
Net realized and unrealized gain
(loss) on investments 1.07 1.80 (3.06) 0.74 0.82
------- ------- ------- ------- ------
Total from investment operations 1.28 2.00 (2.85) 0.96 1.00
------- ------- ------- ------- ------
Less dividends and distributions:
From net investment income (0.23) (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 (0.23) (0.45) (0.17) (0.50) (0.14)
------- ------- ------- ------- ------
Net asset value at end of period $ 10.90 $ 9.85 $ 8.30 $ 11.32 $10.86
======= ======= ======= ======= ======
Total investment return 13.09% 24.22% (25.18%) 8.73% 9.93%(b)
Ratios (to average net
assets)/Supplemental Data:
Net investment income 2.10% 3.00% 2.56% 2.50% 1.96%++
Net expenses (c) 0.05% 0.05% 0.06% 0.06% 0.15%++
Expenses (before reimbursement)
(c) 0.05% 0.05% 0.06% 0.07% 0.15%++
Portfolio turnover rate 37% 40% 46% 10% 62%
Net assets at end of period (in
000's) $24,136 $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 investment 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-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.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
SERVICE CLASS
------------------------------------------------------------------------------------------
FEBRUARY 13,
2006**
YEAR ENDED DECEMBER 31, THROUGH
-------------------------------------------------------------- DECEMBER 31,
2010 2009 2008 2007 2006
$ 9.82 $ 8.28 $ 11.30 $ 10.85 $ 10.00
-------- -------- -------- -------- --------
0.19 (a) 0.19 0.19 0.20 0.14 (a)
1.06 1.78 (3.06) 0.72 0.83
-------- -------- -------- -------- --------
1.25 1.97 (2.87) 0.92 0.97
-------- -------- -------- -------- --------
(0.21) (0.24) (0.02) (0.23) (0.09)
-- (0.19) (0.13) (0.24) (0.03)
-------- -------- -------- -------- --------
(0.21) (0.43) (0.15) (0.47) (0.12)
-------- -------- -------- -------- --------
$ 10.86 $ 9.82 $ 8.28 $ 11.30 $ 10.85
======== ======== ======== ======== ========
12.81% 23.99% (25.38%) 8.46% 9.69%(b)
1.89% 2.76% 2.21% 2.29% 1.55%++
0.30% 0.30% 0.31% 0.31% 0.40%++
0.30% 0.30% 0.31% 0.32% 0.40%++
37% 40% 46% 10% 62%
$572,578 $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-279
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. THE PERFORMANCE TABLE AND GRAPH 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.
<Table>
<Caption>
MAINSTAY VP MAINSTAY VP
MODERATE GROWTH MODERATE GROWTH BARCLAYS CAPITAL
ALLOCATION PORTFOLIO ALLOCATION SERVICE S&P 500(R) MSCI EAFE(R) U.S. AGGREGATE
INITIAL CLASS CLASS INDEX INDEX BOND INDEX
-------------------- ------------------ ---------- ------------ ----------------
2/13/2006 10000 10000 10000 10000 10000
11192 11169 11386 12152 10457
12245 12188 12012 13509 11185
8266 8209 7568 7649 11771
10616 10516 9570 10080 12469
12/31/2010 12137 11994 11012 10861 13285
</Table>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED DECEMBER 31, 2010
--------------------------------------------------------------------------------
<Table>
<Caption>
SINCE GROSS
INCEPTION EXPENSE
CLASS ONE YEAR (2/13/06) RATIO(2)
---------------------------------------------------------
Initial Class Shares 14.33% 4.05% 1.10%
---------------------------------------------------------
Service Class Shares 14.05 3.79 1.35
---------------------------------------------------------
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE SINCE INCEPTION
YEAR (2/13/06)
S&P 500(R) Index(3) 15.06% 1.99%
---------------------------------------------------------------------------------------------------------------
MSCI EAFE(R) Index(3) 7.75 1.70
---------------------------------------------------------------------------------------------------------------
Barclays Capital U.S. Aggregate Bond Index(3) 6.54 5.98
---------------------------------------------------------------------------------------------------------------
Average Lipper Variable Products Mixed-Asset Target Allocation Growth Portfolio(4) 13.14 3.01
---------------------------------------------------------------------------------------------------------------
</Table>
1. Performance figures reflect certain fee waivers and/or expense limitations,
without which total returns may have been lower. For more information on
current expense limitations, please refer to the notes to financial
statements.
2. The gross expense ratios presented reflect the Portfolio's "Total Annual
Portfolio Operating Expenses" from the most recent Prospectus and may differ
from other expense ratios disclosed in this report.
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. Results are based on total returns with all
dividend and capital gain distributions reinvested.
M-280 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, 2010, to December 31,
2010, 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 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, 2010, to December 31, 2010. 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, 2010. 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 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 7/1/10 12/31/10 PERIOD(1) 12/31/10 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,205.30 $0.28 $1,025.00 $0.26
-------------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,203.80 $1.67 $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
Portfolios/Funds in which it invests. Such indirect expenses are not included
in the above-reported expense figures.
mainstayinvestments.com M-281
INVESTMENT OBJECTIVES OF UNDERLYING PORTFOLIOS/FUNDS AS OF DECEMBER 31, 2010
(Unaudited)
(COMPOSITION PIE CHART)
<Table>
Growth of Capital 41.80
Capital Appreciation 25.00
Current Income 17.20
Total Return 15.80
Other Assets, Less Liabilities 0.20
</Table>
See Portfolio of Investments on page M-285 for specific holdings within these
categories.
M-282 MainStay VP Moderate Growth Allocation Portfolio
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
Questions answered by portfolio manager Jonathan Swaney of New York Life
Investments,(1) the Portfolio's Manager.
HOW DID MAINSTAY VP MODERATE GROWTH ALLOCATION PORTFOLIO PERFORM RELATIVE TO ITS
PEERS AND ITS BENCH-
MARK FOR THE 12 MONTHS ENDED DECEMBER 31, 2010?
For the 12 months ended December 31, 2010, MainStay VP Moderate Growth
Allocation Portfolio returned 14.33% for Initial Class shares and 14.05% for
Service Class shares. Both share classes outperformed the 13.14% return of the
average Lipper(2) Variable Products Mixed-Asset Target Allocation Growth Port-
folio and underperformed the 15.06% return of the S&P 500(R) Index(2) for the 12
months ended December 31, 2010. The S&P 500(R) Index is the Portfolio's broad-
based securities-market index.
WHAT FACTORS AFFECTED THE PORTFOLIO'S PERFORMANCE RELATIVE TO ITS PEERS AND ITS
BENCHMARK DURING THE REPORTING PERIOD?
The Portfolio invests in other mutual funds referred to as Underlying
Portfolios/Funds. The Underlying Portfolios/Funds may invest in fixed-income
securities or in domestic or international stocks at various capitalization
levels. The Portfolio's primary benchmark, on the other hand, consists entirely
of U.S. large-cap stocks.
Within the fixed-income portion of the Portfolio, investments in Underlying
Portfolios/Funds that focus on asset classes outside the traditional investment-
grade bond universe (especially high-yield bonds and convertible bonds)
substantially strengthened performance relative to the 6.54% return of the
Barclays Capital U.S. Aggregate Bond Index(2) (the Portfolio's fixed-income
benchmark) and relative to the Portfolio's peers.
The Portfolio's performance relative to the S&P 500(R) Index was helped by
Underlying Portfolios/Funds with holdings in mid-capitalization stocks. These
Underlying Portfolios/Funds, however, provided the Portfolio with less of an
advantage--perhaps even a disadvantage--relative to the Portfolio's peers,
because peer Portfolios tend to invest in equal or greater measure in Underlying
Portfolios/Funds focused on mid- and small-cap stocks.
Weighing down returns modestly was an emphasis on Underlying Equity
Portfolios/Funds that tend to invest in high-quality stocks (or stocks of
companies that offer stable, positive and growing cash flows and earnings). For
at least part of the reporting period, lower-quality stocks, which had been
heavily penalized during the credit crisis of 2008 and early 2009, experienced
the most rapid price increases as the market recovered. The Portfolio's "quality
tilt" was not a virtue in that environment.
HOW DID YOU ALLOCATE THE PORTFOLIO'S ASSETS DURING THE REPORTING PERIOD AND WHY?
In managing the Portfolio, we considered a variety of information, including the
Portfolio-level characteristics of the Underlying Portfolios/Funds in which the
Portfolio invests, such as capitalization, style biases and sector exposure. We
also examined the attributes of the Underlying Portfolios'/Funds' holdings, such
as valuation metrics, earnings data and technical indicators. Finally, we
evaluated the historical success of the portfolio managers responsible for the
Underlying Portfolios/Funds. In general, we sought Underlying Equity
Portfolios/Funds that had a track record of capable portfolio management, a
presence in attractively valued market segments and investments in companies
with strong management, fairly priced securities and strong price and earnings
momentum. Underlying Fixed Income Portfolios/Funds were selected based upon the
type and country of issuance of the securities in which they invested and the
average credit quality and duration(3) of those securities.
During the 12-month reporting period, these techniques were not especially
successful in that they steered the Portfolio into investments in Underlying
Equity Portfolios/Funds that, as a group, failed to match our return
expectations.
While many factors may have been involved, one that stood out was the
Portfolio's tilt toward Underlying Equity Portfolios/Funds that prized earnings
stability. We preferred these Underlying Equity Portfolios/Funds because high-
quality stocks have historically been rewarded with higher returns than lower-
quality stocks. For much of the reporting period, however, the reverse was true.
Instead, investors purchased the most risk-laden and lowest-quality securities,
anticipating that these securities would be the most likely to benefit from a
recovery. This persistent "junk rally" was a substantial drag on the performance
of the Portfolio.
HOW DID THE PORTFOLIO'S ALLOCATIONS CHANGE OVER THE COURSE OF THE REPORTING
PERIOD?
During the reporting period, the Portfolio reduced its positions in MainStay VP
Large Cap Growth Portfolio and MainStay 130/30 Growth Fund, with much of the
proceeds going to MainStay Epoch U.S. All Cap Fund. This shift reflected an
effort to reduce the Portfolio's previous growth bias and to adopt a more
neutral style posture. The move was mildly counterproductive in that growth
stocks generally fared better than their value counterparts during the second
half of 2010.
During the reporting period, we also introduced a position in MainStay VP
Convertible Portfolio. This was a positive development, as convertible bonds,
which are sensitive to changes in
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 indexes and other indexes, 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.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
mainstayinvestments.com M-283
equity prices, rose sharply along with the stock market in recent months.
WERE THERE ANY OTHER SIGNIFICANT ALLOCATION CHANGES DURING THE REPORTING PERIOD?
The Portfolio established a new position in MainStay Global High Income Fund
during the summer of 2010. The investment was made to reflect the improved
creditworthiness of many emerging-market borrowers, the attractive yields
available on emerging-market debt and the potential for further devaluation of
the U.S. dollar.
Near the start of the year, the Portfolio also established a position in
MainStay Epoch Global Choice Fund. The investment was made to better diversify
the international equity portion of the Portfolio across management styles and
to help counter a small bias toward value within that portion of the Portfolio.
WHICH UNDERLYING EQUITY PORTFOLIOS/FUNDS HAD THE HIGHEST TOTAL RETURNS DURING
THE REPORTING PERIOD, AND WHICH UNDERLYING EQUITY PORTFOLIOS/FUNDS HAD THE
LOWEST TOTAL RETURNS?
During the reporting period, the highest returns among the Underlying Equity
Portfolios/Funds in which the Portfolio invested came from MainStay VP U.S.
Small Cap Portfolio, MainStay VP Mid Cap Core Portfolio and MainStay VP ICAP
Select Equity Portfolio. The lowest returns, although still decidedly positive,
came from MainStay VP International Equity Portfolio, MainStay ICAP
International Fund and MainStay Epoch Global Choice Fund.
WHICH UNDERLYING EQUITY PORTFOLIOS/FUNDS MADE THE STRONGEST CONTRIBUTIONS TO THE
PORTFOLIO'S OVERALL PERFORMANCE, AND WHICH UNDERLYING EQUITY PORTFOLIOS/FUNDS
WERE THE GREATEST DETRACTORS?
The Portfolio's positions in MainStay VP Mid Cap Core Portfolio and MainStay MAP
Fund, both of which posted strong returns for the year, made the greatest
contributions to the performance of the equity portion of the Portfolio. While
none of the Under-
lying Equity Portfolios/Funds in which the Portfolio invested had negative
returns for the reporting period, among the weakest contributors were very small
positions in MainStay 130/30 Growth Fund and MainStay VP Growth Equity
Portfolio.
WHAT FACTORS AND RISKS AFFECTED THE PORTFOLIO'S INVESTMENTS IN UNDERLYING FIXED
INCOME PORTFOLIOS/FUNDS DURING THE REPORTING PERIOD?
During the reporting period, the market reflected lingering concerns about the
strength of the economy. These concerns--along with efforts by the Federal
Reserve to contain borrowing costs--brought long-term interest rates down to
levels not seen in many decades. Interest rates rebounded in the fourth quarter.
Meanwhile, improving corporate profitability led to a further narrowing of
credit spreads(4) at the lower end of the quality spectrum.
DURING THE REPORTING PERIOD, WHICH FIXED-INCOME MARKET SEGMENTS WERE STRONG
PERFORMERS AND WHICH SEGMENTS WERE PARTICULARLY WEAK?
In general, long duration and low quality were favored during the reporting
period. High-yield bonds and emerging-market debt performed best. Cash or cash
equivalents, which effectively had no nominal return, fared worst, followed by
high-grade, short-term securities.
WHICH UNDERLYING FIXED INCOME PORTFOLIOS/FUNDS MADE THE STRONGEST CONTRIBUTIONS
TO THE PORTFOLIO'S PERFORMANCE, AND WHICH UNDERLYING FIXED INCOME
PORTFOLIOS/FUNDS MADE THE WEAKEST CONTRIBUTIONS?
Not unexpectedly, the largest fixed-income contribution to the Portfolio's
return came from what was, by a comfortable margin, the Portfolio's largest
Underlying Fixed Income Portfolio/Fund--MainStay VP Bond Portfolio. The
Portfolio's position in MainStay High Yield Opportunities Fund was noteworthy
for having contributed to return on a scale disproportionate to the size of the
investment.
None of the Underlying Fixed Income Portfolios/Funds in which the Portfolio
invested had a negative total return during the reporting period, and all
outperformed the Barclays Capital U.S. Aggregate Bond Index. That said, the
Portfolio's weakest fixed-income contribution came from MainStay Global High
Income Fund, which was among the Portfolio's strongest-performing Underlying
Fixed Income Portfolios/Funds but was also the Portfolio's smallest fixed-income
position. The Portfolio's second-weakest fixed-income contribution came from
MainStay VP Floating Rate Portfolio.
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.
Effective January 1, 2011, Madison Square Investors LLC no longer serves as
Subadvisor to the Portfolio, and New York Life Investments has assumed the day-
to-day portfolio management of the Portfolio. In addition, effective January 1,
2011, Jae Yoon replaced Tony Elavia as a portfolio manager for the Portfolio.
Jonathan Swaney continues to serve as a portfolio manager for the Portfolio. For
more information regarding these portfolio management changes, please refer to
the Prospectus supplement dated December 3, 2010.
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 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 Moderate Growth Allocation Portfolio on this page
and the preceding pages has not been audited.
M-284 MainStay VP Moderate Growth Allocation Portfolio
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2010
<Table>
<Caption>
SHARES VALUE
AFFILIATED INVESTMENT COMPANIES 99.8%+
------------------------------------------------------
EQUITY FUNDS 79.8%
MainStay 130/30 Core Fund
Class I (a) 7,222,552 $ 56,047,005
MainStay 130/30 Growth Fund
Class I (a)(b) 94,357 817,132
MainStay 130/30 International
Fund
Class I (a) 4,430,044 30,523,006
MainStay Epoch Global Choice
Fund
Class I (a) 647,034 9,634,334
MainStay Epoch U.S. All Cap
Fund
Class I (a) 2,864,389 67,141,274
MainStay ICAP Equity Fund
Class I 896,818 32,482,755
MainStay ICAP International
Fund
Class I 1,036,664 30,571,230
MainStay MAP Fund
Class I (a) 1,775,261 56,630,832
MainStay VP Common Stock
Portfolio
Initial Class (a) 1,843,305 29,566,052
MainStay VP Growth Equity
Portfolio
Initial Class 21,985 541,312
MainStay VP ICAP Select
Equity Portfolio
Initial Class 2,593,028 32,510,375
MainStay VP International
Equity Portfolio
Initial Class (a) 2,379,988 30,511,718
MainStay VP Large Cap Growth
Portfolio
Initial Class (a)(b) 2,401,829 35,930,504
MainStay VP Mid Cap Core
Portfolio
Initial Class (a) 7,205,062 85,500,029
MainStay VP S&P 500 Index
Portfolio
Initial Class 1,670 42,502
MainStay VP U.S. Small Cap
Portfolio
Initial Class (a) 1,496,428 13,933,363
------------
Total Equity Funds
(Cost $453,767,429) 512,383,423
------------
FIXED INCOME FUNDS 20.0%
MainStay Global High Income
Fund
Class I (a) 271,930 3,206,057
MainStay High Yield
Opportunities Fund Class I
(a) 1,806,224 21,349,571
MainStay Intermediate Term
Bond Fund
Class I 504,106 5,308,234
MainStay VP Bond Portfolio
Initial Class (a) 2,056,347 30,088,854
MainStay VP Convertible
Portfolio
Initial Class (a) 1,069,564 12,795,135
MainStay VP Floating Rate
Portfolio
Initial Class (a) 4,332,977 40,135,830
MainStay VP High Yield
Corporate Bond Portfolio
Initial Class 1,611,582 15,456,817
------------
Total Fixed Income Funds
(Cost $121,482,330) 128,340,498
------------
Total Investments
(Cost $575,249,759) (c) 99.8% 640,723,921
Other Assets, Less
Liabilities 0.2 1,361,688
--------- ------------
Net Assets 100.0% $642,085,609
========= ============
</Table>
<Table>
+ Percentages indicated are based on
Portfolio net assets.
(a) The Portfolio's ownership exceeds 5% of
the outstanding shares of the Underlying
Portfolio's/Fund's share class. (See Note
3)
(b) Non-income producing Underlying
Portfolio/Fund.
(c) At December 31, 2010, cost is
$580,002,493 for federal income tax
purposes and net unrealized appreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $68,908,873
Gross unrealized depreciation (8,187,445)
-----------
Net unrealized appreciation $60,721,428
===========
</Table>
The following is a summary of the fair valuations according to the inputs used
as of December 31, 2010, 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
Affiliated Investment Companies
Equity Funds $512,383,423 $ -- $ -- $512,383,423
Fixed Income Funds 128,340,498 -- -- 128,340,498
------------ -------- -------- ------------
Total Investments in Securities $640,723,921 $-- $-- $640,723,921
============ ======== ======== ============
</Table>
For the period ended December 31, 2010, the Portfolio did not have any transfers
between Level 1 and Level 2 fair value measurements. (See Note 2)
At December 31, 2010, the Portfolio did not hold any investments with
significant unobservable inputs (Level 3). (See Note 2)
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-285
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2010
<Table>
ASSETS
--------------------------------------------------
Investment in affiliated investment
companies, at value (identified
cost $575,249,759) $640,723,921
Cash 1,317,111
Receivables:
Fund shares sold 813,800
------------
Total assets 642,854,832
------------
LIABILITIES
--------------------------------------------------
Payables:
Investment securities purchased 495,587
NYLIFE Distributors (See Note 3) 124,361
Fund shares redeemed 74,376
Shareholder communication 38,473
Professional fees 33,237
Directors 1,307
Custodian 1,076
Accrued expenses 806
------------
Total liabilities 769,223
------------
Net assets $642,085,609
============
NET ASSETS CONSIST OF
--------------------------------------------------
Capital stock (par value of $.01 per
share) 200 million shares
authorized $ 618,069
Additional paid-in capital 639,491,155
------------
640,109,224
Undistributed net investment income 8,214,430
Accumulated net realized loss on
investments (71,712,207)
Net unrealized appreciation on
investments 65,474,162
------------
Net assets $642,085,609
============
INITIAL CLASS
Net assets applicable to outstanding
shares $ 38,098,088
============
Shares of capital stock outstanding 3,656,263
============
Net asset value per share
outstanding $ 10.42
============
SERVICE CLASS
Net assets applicable to outstanding
shares $603,987,521
============
Shares of capital stock outstanding 58,150,664
============
Net asset value per share
outstanding $ 10.39
============
</Table>
M-286 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 OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2010
<Table>
INVESTMENT INCOME
-------------------------------------------------
INCOME
Dividend distributions from
affiliated investment companies $ 9,137,754
-----------
EXPENSES
Distribution and service--Service
Class (See Note 3) 1,178,179
Shareholder communication 110,901
Professional fees 88,285
Directors 16,549
Custodian 13,244
Miscellaneous 17,379
-----------
Total expenses 1,424,537
-----------
Net investment income 7,713,217
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
-------------------------------------------------
Net realized loss on affiliated
investment company transactions (4,125,156)
Realized capital gain distributions
from affiliated investment
companies 741,811
-----------
Net realized loss on investments
from affiliated investment
companies (3,383,345)
-----------
Net change in unrealized
appreciation (depreciation) on
investments 69,461,445
-----------
Net realized and unrealized gain on
Investments 66,078,100
-----------
Net increase in net assets resulting
from operations $73,791,317
===========
</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-287
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2010 AND DECEMBER 31, 2009
<Table>
<Caption>
2010 2009
INCREASE IN NET ASSETS
--------------------------------------------------------
Operations:
Net investment income $ 7,713,217 $ 7,442,787
Net realized loss on
investments from
affiliated investment
company transactions (3,383,345) (58,483,811)
Net change in unrealized
appreciation
(depreciation) on
investments 69,461,445 141,298,611
--------------------------
Net increase in net assets
resulting from operations 73,791,317 90,257,587
--------------------------
Dividends and distributions
to shareholders:
From net investment
income:
Initial Class (527,275) (755,100)
Service Class (7,105,370) (8,995,783)
--------------------------
(7,632,645) (9,750,883)
--------------------------
From net realized gain on
investments:
Initial Class -- (565,414)
Service Class -- (7,378,241)
--------------------------
-- (7,943,655)
--------------------------
Total dividends and
distributions to
shareholders (7,632,645) (17,694,538)
--------------------------
Capital share transactions:
Net proceeds from sale of
shares 178,156,647 67,371,228
Net asset value of shares
issued to shareholders in
reinvestment of dividends
and distributions 7,632,645 17,694,538
Cost of shares redeemed (43,513,062) (39,409,686)
--------------------------
Increase in net assets
derived from capital
share transactions 142,276,230 45,656,080
--------------------------
Net increase in net
assets 208,434,902 118,219,129
NET ASSETS
--------------------------------------------------------
Beginning of year 433,650,707 315,431,578
--------------------------
End of year $642,085,609 $433,650,707
==========================
Undistributed net investment
income at
end of year $ 8,214,430 $ 7,632,598
==========================
</Table>
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.
This page intentionally left blank
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
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
------------------------------------------------------------------------
FEBRUARY 13,
2006**
YEAR ENDED DECEMBER 31, THROUGH
---------------------------------------------------- DECEMBER 31,
2010 2009 2008 2007 2006
Net asset value at beginning of
period $ 9.25 $ 7.55 $ 11.51 $ 11.04 $ 10.00
------- ------- ------- ------- -------
Net investment income 0.16 (a) 0.19 (a) 0.18 (a) 0.17 0.16 (a)
Net realized and unrealized gain
(loss) on investments 1.16 1.93 (3.92) 0.88 1.03
------- ------- ------- ------- -------
Total from investment operations 1.32 2.12 (3.74) 1.05 1.19
------- ------- ------- ------- -------
Less dividends and distributions:
From net investment income (0.15) (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 (0.15) (0.42) (0.22) (0.58) (0.15)
------- ------- ------- ------- -------
Net asset value at end of period $ 10.42 $ 9.25 $ 7.55 $ 11.51 $ 11.04
======= ======= ======= ======= =======
Total investment return 14.33% 28.42% (32.49%) 9.40% 11.92%(b)
Ratios (to average net
assets)/Supplemental Data:
Net investment income 1.69% 2.35% 1.83% 1.78% 1.70%++
Net expenses (c) 0.05% 0.05% 0.06% 0.05% 0.13%++
Expenses (before reimbursement)
(c) 0.05% 0.05% 0.06% 0.07% 0.13%++
Portfolio turnover rate 39% 45% 43% 15% 46%
Net assets at end of period (in
000's) $38,098 $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 investment 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-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.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
SERVICE CLASS
------------------------------------------------------------------------------------------
FEBRUARY 13,
2006**
YEAR ENDED DECEMBER 31, THROUGH
-------------------------------------------------------------- DECEMBER 31,
2010 2009 2008 2007 2006
$ 9.23 $ 7.53 $ 11.49 $ 11.03 $ 10.00
-------- -------- -------- -------- --------
0.14 (a) 0.17 (a) 0.16 (a) 0.14 0.13 (a)
1.15 1.93 (3.92) 0.87 1.04
-------- -------- -------- -------- --------
1.29 2.10 (3.76) 1.01 1.17
-------- -------- -------- -------- --------
(0.13) (0.22) (0.04) (0.19) (0.09)
-- (0.18) (0.16) (0.36) (0.05)
-------- -------- -------- -------- --------
(0.13) (0.40) (0.20) (0.55) (0.14)
-------- -------- -------- -------- --------
$ 10.39 $ 9.23 $ 7.53 $ 11.49 $ 11.03
======== ======== ======== ======== ========
14.05% 28.10% (32.65%) 9.13% 11.69%(b)
1.52% 2.08% 1.59% 1.54% 1.39%++
0.30% 0.30% 0.31% 0.30% 0.38%++
0.30% 0.30% 0.31% 0.32% 0.38%++
39% 45% 43% 15% 46%
$603,988 $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-291
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. THE PERFORMANCE TABLE AND GRAPH 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.
(LINE GRAPH)
<Table>
<Caption>
MAINSTAY VP MAINSTAY VP
S&P 500 S&P 500
INDEX PORTFOLIO INDEX PORTFOLIO S&P 500(R)
INITIAL CLASS SERVICE CLASS INDEX
--------------- --------------- ----------
12/31/00 10000 10000 10000
8789 8767 8811
6836 6803 6864
8764 8699 8833
9683 9588 9794
10145 10017 10275
11713 11536 11898
12324 12109 12552
7763 7608 7908
9801 9582 10001
12/31/10 11245 10965 11507
</Table>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED DECEMBER 31, 2010
--------------------------------------------------------------------------------
<Table>
<Caption>
GROSS
EXPENSE
CLASS ONE YEAR FIVE YEARS TEN YEARS(1) RATIO(2)
-----------------------------------------------------------------------------
Initial Class Shares 14.73% 2.08% 1.18% 0.35%
-----------------------------------------------------------------------------
Service Class Shares(3) 14.44 1.83 0.93 0.60
-----------------------------------------------------------------------------
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE FIVE TEN
YEAR YEARS YEARS
S&P 500(R) Index(4) 15.06% 2.29% 1.41%
-------------------------------------------------------------------------------------------------
Average Lipper Variable Products S&P 500 Index Objective Portfolio(5) 14.64 1.96 1.08
-------------------------------------------------------------------------------------------------
</Table>
1. Performance figures reflect certain fee waivers, without which total returns
may have been lower. These waivers are voluntary and may be discontinued at
any time. Performance figures shown for the ten-year period ended December
31, 2010 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 1.17% for Initial Class shares and 0.91% for
Service Class shares for the ten-year period.
2. The gross expense ratios presented reflect the Portfolio's "Total Annual
Portfolio Operating Expenses" from the most recent Prospectus and may differ
from other expense ratios disclosed in this report.
3. 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.
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.
5. 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. Results are based on total returns with all dividend and
capital gain distributions reinvested.
M-292 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, 2010, to December 31,
2010, 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 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, 2010, to December 31, 2010. 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, 2010. 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 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 7/1/10 12/31/10 PERIOD(1) 12/31/10 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,230.20 $1.69 $1,023.70 $1.53
-------------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,228.60 $3.09 $1,022.40 $2.80
-------------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
(0.30% for Initial Class and 0.55% 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-293
INDUSTRY COMPOSITION AS OF DECEMBER 31, 2010 (Unaudited)
<Table>
<Caption>
Oil, Gas & Consumable Fuels 9.4%
Pharmaceuticals 5.3
Computers & Peripherals 4.2
Diversified Financial Services 4.1
Software 3.8
Insurance 3.7
Media 3.0
Commercial Banks 2.9
IT Services 2.9
Diversified Telecommunication
Services 2.7
Aerospace & Defense 2.5
Beverages 2.5
Capital Markets 2.4
Industrial Conglomerates 2.4
Semiconductors & Semiconductor
Equipment 2.4
Food & Staples Retailing 2.3
Machinery 2.2
Communications Equipment 2.1
Energy Equipment & Services 2.1
Household Products 2.1
Chemicals 2.0
Health Care Providers & Services 1.9
Specialty Retail 1.9
Internet Software & Services 1.8
Electric Utilities 1.7
Food Products 1.7
Hotels, Restaurants & Leisure 1.6
Health Care Equipment & Supplies 1.5
Tobacco 1.5
Real Estate Investment Trusts 1.4
Biotechnology 1.2
Metals & Mining 1.2
Multi-Utilities 1.2
Air Freight & Logistics 1.1
Internet & Catalog Retail 0.8
Multiline Retail 0.8
Road & Rail 0.8
Consumer Finance 0.7
Automobiles 0.6
Commercial Services & Supplies 0.5
Electrical Equipment 0.5
Life Sciences Tools & Services 0.5
Textiles, Apparel & Luxury Goods 0.5
Electronic Equipment & Instruments 0.4
Household Durables 0.4
Wireless Telecommunication Services 0.3
Auto Components 0.2
Construction & Engineering 0.2
Containers & Packaging 0.2
Independent Power Producers & Energy
Traders 0.2
Personal Products 0.2
Airlines 0.1
Construction Materials 0.1
Distributors 0.1
Diversified Consumer Services 0.1
Gas Utilities 0.1
Health Care Technology 0.1
Leisure Equipment & Products 0.1
Office Electronics 0.1
Paper & Forest Products 0.1
Professional Services 0.1
Real Estate Management & Development 0.1
Thrifts & Mortgage Finance 0.1
Trading Companies & Distributors 0.1
Building Products 0.0++
Short-Term Investment 4.1
Other Assets, Less Liabilities 0.1
-----
100.0%
=====
</Table>
See Portfolio of Investments beginning on page M-296 for specific holdings
within these categories.
++ Less than one-tenth of a percent.
TOP TEN HOLDINGS AS OF DECEMBER 31, 2010 (excluding short-term investment)
<Table>
1. ExxonMobil Corp.
2. Apple, Inc.
3. Microsoft Corp.
4. General Electric Co.
5. Chevron Corp.
6. International Business Machines Corp.
7. Procter & Gamble Co. (The)
8. AT&T, Inc.
9. Johnson & Johnson
10. JPMorgan Chase & Co.
</Table>
M-294 MainStay VP S&P 500 Index Portfolio
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
Questions answered by portfolio managers 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, 2010?
For the 12 months ended December 31, 2010, MainStay VP S&P 500 Index Portfolio
returned 14.73% for Initial Class Shares and 14.44% for Service Class shares.
Initial class shares outperformed and Service Class shares underperformed the
14.64% return of the average Lipper(1) Variable Products S&P 500 Index Objective
Portfolio over the same period. Both share classes underperformed the 15.06%
return of the S&P 500(R) Index for the 12 months ended December 31, 2010. The
S&P 500(R) Index is the Portfolio's broad-based securities-market index.
DURING THE REPORTING PERIOD, HOW WAS THE PORTFOLIO'S PERFORMANCE MATERIALLY
AFFECTED BY INVESTMENTS IN DERIVATIVES?
MainStay VP S&P 500 Index Portfolio invests in futures contracts to provide an
efficient means of maintaining liquidity while remaining fully invested in the
market. Since these futures closely track the performance of the S&P 500(R)
Index, they had a positive impact on the Portfolio's overall performance.
DURING THE REPORTING PERIOD, WHICH S&P 500(R) INDUSTRIES HAD THE HIGHEST TOTAL
RETURNS AND WHICH INDUSTRIES HAD THE LOWEST TOTAL RETURNS?
On the basis of total return, the strongest performing S&P 500(R) Index
industries during the reporting period were automobiles, machinery and real
estate management & development. The industries with the lowest total returns
were diversified consumer services, construction materials, and independent
power producers & energy traders.
DURING THE REPORTING PERIOD, WHICH INDUSTRIES MADE THE STRONGEST CONTRIBUTIONS
TO THE PORTFOLIO'S PERFORMANCE AND WHICH INDUSTRIES MADE THE WEAKEST
CONTRIBUTIONS?
On the basis of impact, which takes weightings and total returns into account,
the industries that made the greatest positive contributions to the Portfolio's
performance during the reporting period were oil, gas & consumable fuels,
machinery, and computers & peripherals. Over the same period, the industries
that made the weakest contributions to the Portfolio's performance were
diversified consumer services, health care equipment & supplies, and
communications equipment.
DURING THE REPORTING PERIOD, WHICH INDIVIDUAL STOCKS IN THE S&P 500(R) INDEX HAD
THE HIGHEST TOTAL RETURNS AND WHICH INDIVIDUAL STOCKS HAD THE LOWEST TOTAL
RETURNS?
During the reporting period, the S&P 500(R) Index stocks with the highest total
returns were machinery company Cummins, hotel and resort operator Wynn Resorts,
Ltd., and insurance company American International Group.
Over the same period, the S&P 500(R) Index stocks with the lowest total returns
were food products company Dean Foods, tax services provider H&R Block and
private education company Apollo Group.
DURING THE REPORTING PERIOD, WHICH S&P 500(R) INDEX STOCKS MADE THE STRONGEST
CONTRIBUTIONS TO THE PORTFOLIO'S ABSOLUTE PERFORMANCE AND WHICH S&P 500(R) INDEX
STOCKS MADE THE WEAKEST CONTRIBUTIONS?
In terms of impact, which takes total returns and weighting into account, the
strongest contributors to the Portfolio's performance during the reporting
period were computers & peripherals company Apple, industrial conglomerate
General Electric and oil, gas & consumable fuels company Chevron.
Over the same period, the S&P 500(R) Index stocks that made the weakest
contributions to the Portfolio's performance were computers & peripherals
company Hewlett-Packard, communications equipment company Cisco Systems and
diversified financial services company Bank of America.
WERE THERE ANY CHANGES IN THE S&P 500(R) INDEX DURING THE REPORTING PERIOD?
During 2010, there were 16 additions to and 16 deletions from the S&P 500(R)
Index. In terms of index weight, significant additions to the Index included
Class B shares of insurance company Berkshire Hathaway and industrial
conglomerate Tyco International, Ltd. Significant deletions included road & rail
company Burlington Northern Santa Fe and diversified manufacturer Smith
International.
1. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indexes and other indexes, averages
and service providers mentioned in the reports.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
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
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 Index Portfolio on this page and
preceeding pages has not been audited.
mainstayinvestments.com M-295
PORTFOLIO OF INVESTMENTS(+++) DECEMBER 31, 2010
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS 95.8%+
-------------------------------------------------------
AEROSPACE & DEFENSE 2.5%
Boeing Co. (The) 58,892 $ 3,843,292
General Dynamics Corp. 30,615 2,172,440
Goodrich Corp. 10,090 888,626
Honeywell International,
Inc. 62,912 3,344,402
ITT Corp. 14,756 768,935
L-3 Communications Holdings,
Inc. 9,209 649,142
Lockheed Martin Corp. 23,928 1,672,807
Northrop Grumman Corp. 23,679 1,533,926
Precision Castparts Corp. 11,452 1,594,233
Raytheon Co. 29,438 1,364,157
Rockwell Collins, Inc. 12,657 737,397
United Technologies Corp. 74,424 5,858,657
------------
24,428,014
------------
AIR FREIGHT & LOGISTICS 1.1%
C.H. Robinson Worldwide,
Inc. 13,354 1,070,857
Expeditors International of
Washington, Inc. 17,086 932,896
FedEx Corp. 25,322 2,355,199
United Parcel Service, Inc.
Class B 79,742 5,787,674
------------
10,146,626
------------
AIRLINES 0.1%
Southwest Airlines Co. 60,068 779,683
------------
AUTO COMPONENTS 0.2%
Goodyear Tire & Rubber Co.
(The) (a) 19,558 231,762
Johnson Controls, Inc. 54,193 2,070,173
------------
2,301,935
------------
AUTOMOBILES 0.6%
Ford Motor Co. (a) 301,255 5,058,071
Harley-Davidson, Inc. 18,947 656,893
------------
5,714,964
------------
BEVERAGES 2.5%
Brown-Forman Corp. Class B 8,349 581,257
Coca-Cola Co. (The) 187,235 12,314,446
Coca-Cola Enterprises, Inc. 26,691 668,076
Constellation Brands, Inc.
Class A (a) 14,255 315,748
Dr. Pepper Snapple Group,
Inc. 18,310 643,779
Molson Coors Brewing Co.
Class B 12,714 638,116
PepsiCo, Inc. 128,060 8,366,160
------------
23,527,582
------------
BIOTECHNOLOGY 1.2%
Amgen, Inc. (a) 76,184 4,182,502
Biogen Idec, Inc. (a) 19,480 1,306,134
Celgene Corp. (a) 37,831 2,237,325
Cephalon, Inc. (a) 6,047 373,221
Genzyme Corp. (a) 20,517 1,460,810
Gilead Sciences, Inc. (a) 65,468 2,372,560
------------
11,932,552
------------
BUILDING PRODUCTS 0.0%++
Masco Corp. 28,877 365,583
------------
CAPITAL MARKETS 2.4%
Ameriprise Financial, Inc. 20,212 1,163,201
Bank of New York Mellon
Corp. (The) 100,052 3,021,570
Charles Schwab Corp. (The) 79,786 1,365,138
E*TRADE Financial Corp. (a) 16,012 256,192
Federated Investors, Inc.
Class B 7,398 193,606
Franklin Resources, Inc. 11,793 1,311,500
Goldman Sachs Group, Inc.
(The) 41,221 6,931,723
Invesco, Ltd. 37,664 906,196
Janus Capital Group, Inc. 14,770 191,567
Legg Mason, Inc. 12,440 451,199
Morgan Stanley 121,704 3,311,566
Northern Trust Corp. 19,493 1,080,107
State Street Corp. 40,394 1,871,858
T. Rowe Price Group, Inc. 20,638 1,331,976
------------
23,387,399
------------
CHEMICALS 2.0%
Air Products & Chemicals,
Inc. 17,110 1,556,154
Airgas, Inc. 6,000 374,760
CF Industries Holdings, Inc. 5,719 772,923
Dow Chemical Co. (The) 93,357 3,187,208
E.I. du Pont de Nemours &
Co. 73,612 3,671,767
Eastman Chemical Co. 5,820 489,346
Ecolab, Inc. 18,780 946,888
FMC Corp. 5,835 466,158
International Flavors &
Fragrances, Inc. 6,427 357,277
Monsanto Co. 43,507 3,029,827
PPG Industries, Inc. 13,291 1,117,374
Praxair, Inc. 24,637 2,352,094
Sherwin-Williams Co. (The) 7,269 608,779
Sigma-Aldrich Corp. 9,769 650,225
------------
19,580,780
------------
COMMERCIAL BANKS 2.9%
BB&T Corp. 55,796 1,466,877
Comerica, Inc. 14,195 599,597
Fifth Third Bancorp 64,086 940,782
First Horizon National Corp.
(a) 21,032 247,753
Huntington Bancshares, Inc. 69,579 478,008
KeyCorp 70,875 627,244
M&T Bank Corp. 9,580 833,939
Marshall & Ilsley Corp. 42,434 293,643
</Table>
+ Percentages indicated are based on Portfolio net assets.
V Among the Portfolio's 10 largest holdings, as of December 31, 2010, excluding
short-term investments. May be subject to change daily.
M-296 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)
COMMERCIAL BANKS (CONTINUED)
PNC Financial Services
Group, Inc. 42,288 $ 2,567,727
Regions Financial Corp. 101,130 707,910
SunTrust Banks, Inc. 40,238 1,187,423
U.S. Bancorp 154,326 4,162,172
Wells Fargo & Co. 423,238 13,116,146
Zions Bancorp 13,793 334,204
------------
27,563,425
------------
COMMERCIAL SERVICES & SUPPLIES 0.5%
Avery Dennison Corp. 8,852 374,794
Cintas Corp. 10,053 281,082
Iron Mountain, Inc. 16,202 405,212
Pitney Bowes, Inc. 16,622 401,920
R.R. Donnelley & Sons Co. 16,616 290,281
Republic Services, Inc. 24,661 736,377
Stericycle, Inc. (a) 6,860 555,111
Waste Management, Inc. 38,425 1,416,730
------------
4,461,507
------------
COMMUNICATIONS EQUIPMENT 2.1%
Cisco Systems, Inc. (a) 446,945 9,041,697
F5 Networks, Inc. (a) 6,515 847,993
Harris Corp. 10,381 470,259
JDS Uniphase Corp. (a) 17,828 258,150
Juniper Networks, Inc. (a) 41,862 1,545,545
Motorola, Inc. (a) 187,877 1,704,044
QUALCOMM, Inc. 130,444 6,455,674
Tellabs, Inc. 30,662 207,888
------------
20,531,250
------------
COMPUTERS & PERIPHERALS 4.2%
X Apple, Inc. (a) 73,967 23,858,796
Dell, Inc. (a) 136,189 1,845,361
EMC Corp. (a) 165,307 3,785,530
Hewlett-Packard Co. 182,546 7,685,187
Lexmark International, Inc.
Class A (a) 6,324 220,202
NetApp, Inc. (a) 28,740 1,579,550
QLogic Corp. (a) 8,787 149,555
SanDisk Corp. (a) 18,762 935,473
Western Digital Corp. (a) 18,465 625,963
------------
40,685,617
------------
CONSTRUCTION & ENGINEERING 0.2%
Fluor Corp. 14,393 953,680
Jacobs Engineering Group,
Inc. (a) 10,112 463,635
Quanta Services, Inc. (a) 16,988 338,401
------------
1,755,716
------------
CONSTRUCTION MATERIALS 0.1%
Vulcan Materials Co. 10,327 458,106
------------
CONSUMER FINANCE 0.7%
American Express Co. 84,257 3,616,310
Capital One Financial Corp. 36,762 1,564,591
Discover Financial Services 43,795 811,521
SLM Corp. (a) 39,067 491,854
------------
6,484,276
------------
CONTAINERS & PACKAGING 0.2%
Ball Corp. 7,150 486,557
Bemis Co., Inc. 8,795 287,245
Owens-Illinois, Inc. (a) 13,157 403,920
Sealed Air Corp. 12,837 326,702
------------
1,504,424
------------
DISTRIBUTORS 0.1%
Genuine Parts Co. 12,682 651,094
------------
DIVERSIFIED CONSUMER SERVICES 0.1%
Apollo Group, Inc. Class A
(a) 10,217 403,469
DeVry, Inc. 5,059 242,731
H&R Block, Inc. 24,806 295,440
------------
941,640
------------
DIVERSIFIED FINANCIAL SERVICES 4.1%
Bank of America Corp. 813,215 10,848,288
Citigroup, Inc. (a) 2,342,471 11,079,888
CME Group, Inc. 5,410 1,740,667
IntercontinentalExchange,
Inc. (a) 5,957 709,777
X JPMorgan Chase & Co. 315,219 13,371,590
Leucadia National Corp. 15,854 462,620
Moody's Corp. 16,411 435,548
NASDAQ OMX Group, Inc. (The)
(a) 12,012 284,804
NYSE Euronext 20,969 628,651
------------
39,561,833
------------
DIVERSIFIED TELECOMMUNICATION SERVICES 2.7%
X AT&T, Inc. 475,643 13,974,391
CenturyTel, Inc. 24,263 1,120,223
Frontier Communications
Corp. 79,891 777,340
Qwest Communications
International, Inc. 140,001 1,065,408
Verizon Communications, Inc. 227,544 8,141,524
Windstream Corp. 38,914 542,461
------------
25,621,347
------------
ELECTRIC UTILITIES 1.7%
Allegheny Energy, Inc. 13,640 330,634
American Electric Power Co.,
Inc. 38,604 1,388,972
Duke Energy Corp. 106,129 1,890,157
Edison International 26,221 1,012,130
Entergy Corp. 14,590 1,033,410
Exelon Corp. 53,216 2,215,914
FirstEnergy Corp. 24,542 908,545
NextEra Energy, Inc. 33,472 1,740,209
Northeast Utilities 14,174 451,867
</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-297
PORTFOLIO OF INVESTMENTS(+++) DECEMBER 31, 2010 (CONTINUED)
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
ELECTRIC UTILITIES (CONTINUED)
Pepco Holdings, Inc. 18,023 $ 328,920
Pinnacle West Capital Corp. 8,742 362,356
PPL Corp. 38,865 1,022,927
Progress Energy, Inc. 23,544 1,023,693
Southern Co. (The) 67,621 2,585,151
------------
16,294,885
------------
ELECTRICAL EQUIPMENT 0.5%
Emerson Electric Co. 60,573 3,462,958
Rockwell Automation, Inc. 11,415 818,570
Roper Industries, Inc. 7,583 579,569
------------
4,861,097
------------
ELECTRONIC EQUIPMENT & INSTRUMENTS 0.4%
Amphenol Corp. Class A 13,985 738,128
Corning, Inc. 125,713 2,428,775
FLIR Systems, Inc. (a) 12,733 378,807
Jabil Circuit, Inc. 15,782 317,061
Molex, Inc. 11,082 251,783
------------
4,114,554
------------
ENERGY EQUIPMENT & SERVICES 2.1%
Baker Hughes, Inc. 34,711 1,984,428
Cameron International Corp.
(a) 19,502 989,336
Diamond Offshore Drilling,
Inc. 5,595 374,138
FMC Technologies, Inc. (a) 9,657 858,604
Halliburton Co. 73,309 2,993,206
Helmerich & Payne, Inc. 8,514 412,759
Nabors Industries, Ltd. (a) 22,943 538,243
National-Oilwell Varco, Inc. 33,733 2,268,544
Rowan Cos., Inc. (a) 10,155 354,511
Schlumberger, Ltd. 109,991 9,184,249
------------
19,958,018
------------
FOOD & STAPLES RETAILING 2.3%
Costco Wholesale Corp. 34,859 2,517,168
CVS Caremark Corp. 109,334 3,801,543
Kroger Co. (The) 51,666 1,155,252
Safeway, Inc. 30,726 691,028
SUPERVALU, Inc. 17,110 164,769
Sysco Corp. 47,371 1,392,708
Wal-Mart Stores, Inc. 157,973 8,519,484
Walgreen Co. 75,032 2,923,247
Whole Foods Market, Inc. (a) 11,763 595,090
------------
21,760,289
------------
FOOD PRODUCTS 1.7%
Archer-Daniels-Midland Co. 51,469 1,548,187
Campbell Soup Co. 15,588 541,683
ConAgra Foods, Inc. 35,400 799,332
Dean Foods Co. (a) 14,621 129,250
General Mills, Inc. 51,702 1,840,074
H.J. Heinz Co. 25,623 1,267,314
Hershey Co. (The) 12,437 586,404
Hormel Foods Corp. 5,574 285,723
J.M. Smucker Co. (The) 9,620 631,553
Kellogg Co. 20,976 1,071,454
Kraft Foods, Inc. Class A 140,398 4,423,941
McCormick & Co., Inc. 10,725 499,034
Mead Johnson Nutrition Co. 16,471 1,025,320
Sara Lee Corp. 51,682 904,952
Tyson Foods, Inc. Class A 24,021 413,642
------------
15,967,863
------------
GAS UTILITIES 0.1%
Nicor, Inc. 3,657 182,557
ONEOK, Inc. 8,572 475,489
------------
658,046
------------
HEALTH CARE EQUIPMENT & SUPPLIES 1.5%
Baxter International, Inc. 47,037 2,381,013
Becton, Dickinson & Co. 18,683 1,579,087
Boston Scientific Corp. (a) 122,175 924,865
C.R. Bard, Inc. 7,541 692,038
CareFusion Corp. (a) 17,885 459,645
DENTSPLY International, Inc. 11,489 392,579
Intuitive Surgical, Inc. (a) 3,168 816,552
Medtronic, Inc. 86,927 3,224,122
St. Jude Medical, Inc. (a) 27,439 1,173,017
Stryker Corp. 27,483 1,475,837
Varian Medical Systems, Inc.
(a) 9,787 678,043
Zimmer Holdings, Inc. (a) 16,175 868,274
------------
14,665,072
------------
HEALTH CARE PROVIDERS & SERVICES 1.9%
Aetna, Inc. 32,262 984,314
AmerisourceBergen Corp. 22,446 765,857
Cardinal Health, Inc. 28,265 1,082,832
CIGNA Corp. 21,901 802,891
Coventry Health Care, Inc.
(a) 11,930 314,952
DaVita, Inc. (a) 7,821 543,481
Express Scripts, Inc. (a) 42,448 2,294,314
Humana, Inc. (a) 13,619 745,504
Laboratory Corp. of America
Holdings (a) 8,276 727,626
McKesson Corp. 20,436 1,438,286
Medco Health Solutions, Inc.
(a) 34,222 2,096,782
Patterson Cos., Inc. 7,792 238,669
Quest Diagnostics, Inc. 11,434 617,093
Tenet Healthcare Corp. (a) 39,083 261,465
UnitedHealth Group, Inc. 88,691 3,202,632
WellPoint, Inc. (a) 32,179 1,829,698
------------
17,946,396
------------
</Table>
M-298 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)
HEALTH CARE TECHNOLOGY 0.1%
Cerner Corp. (a) 5,710 $ 540,965
------------
HOTELS, RESTAURANTS & LEISURE 1.6%
Carnival Corp. 34,997 1,613,712
Darden Restaurants, Inc. 11,154 517,992
International Game
Technology 23,974 424,100
Marriott International, Inc.
Class A 23,082 958,826
McDonald's Corp. 85,191 6,539,261
Starbucks Corp. 59,560 1,913,663
Starwood Hotels & Resorts
Worldwide, Inc. 15,308 930,420
Wyndham Worldwide Corp. 14,386 431,004
Wynn Resorts, Ltd. 6,062 629,478
Yum! Brands, Inc. 37,593 1,843,937
------------
15,802,393
------------
HOUSEHOLD DURABLES 0.4%
D.R. Horton, Inc. 22,527 268,747
Fortune Brands, Inc. 12,265 738,966
Harman International
Industries, Inc. (a) 5,608 259,650
Leggett & Platt, Inc. 11,777 268,045
Lennar Corp. Class A 12,786 239,738
Newell Rubbermaid, Inc. 23,363 424,739
Pulte Group, Inc. (a) 27,327 205,499
Stanley Black & Decker, Inc. 13,329 891,310
Whirlpool Corp. 6,114 543,107
------------
3,839,801
------------
HOUSEHOLD PRODUCTS 2.1%
Clorox Co. (The) 11,179 707,407
Colgate-Palmolive Co. 39,124 3,144,396
Kimberly-Clark Corp. 32,948 2,077,042
X Procter & Gamble Co.
(The) 225,714 14,520,182
------------
20,449,027
------------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS 0.2%
AES Corp. (The) (a) 53,698 654,041
Constellation Energy Group,
Inc. 16,246 497,615
NRG Energy, Inc. (a) 20,381 398,245
------------
1,549,901
------------
INDUSTRIAL CONGLOMERATES 2.4%
3M Co. 57,405 4,954,051
X General Electric Co. 858,748 15,706,501
Textron, Inc. 22,072 521,782
Tyco International, Ltd. 40,070 1,660,501
------------
22,842,835
------------
INSURANCE 3.7%
ACE, Ltd. 27,281 1,698,242
Aflac, Inc. 37,906 2,139,036
Allstate Corp. (The) 43,318 1,380,978
American International
Group, Inc. (a) 10,867 626,157
Aon Corp. 26,422 1,215,676
Assurant, Inc. 8,575 330,309
Berkshire Hathaway, Inc.
Class B (a) 139,253 11,155,558
Chubb Corp. (The) 24,586 1,466,309
Cincinnati Financial Corp. 13,086 414,695
Genworth Financial, Inc.
Class A (a) 39,408 517,821
Hartford Financial Services
Group, Inc. (The) 35,776 947,706
Lincoln National Corp. 25,492 708,932
Loews Corp. 25,589 995,668
Marsh & McLennan Cos., Inc. 43,682 1,194,266
MetLife, Inc. 72,984 3,243,409
Principal Financial Group,
Inc. 25,798 839,983
Progressive Corp. (The) 53,732 1,067,655
Prudential Financial, Inc. 39,132 2,297,440
Torchmark Corp. 6,513 389,087
Travelers Cos., Inc. (The) 37,012 2,061,938
Unum Group 25,459 616,617
XL Group PLC 26,007 567,473
------------
35,874,955
------------
INTERNET & CATALOG RETAIL 0.8%
Amazon.com, Inc. (a) 28,480 5,126,400
Expedia, Inc. 16,731 419,781
Netflix, Inc. (a) 3,500 614,950
Priceline.com, Inc. (a) 3,895 1,556,247
------------
7,717,378
------------
INTERNET SOFTWARE & SERVICES 1.8%
Akamai Technologies, Inc.
(a) 14,616 687,683
eBay, Inc. (a) 92,942 2,586,576
Google, Inc. Class A (a) 20,110 11,944,737
Monster Worldwide, Inc. (a) 10,428 246,413
VeriSign, Inc. 14,029 458,327
Yahoo!, Inc. (a) 105,108 1,747,946
------------
17,671,682
------------
IT SERVICES 2.9%
Automatic Data Processing,
Inc. 39,608 1,833,058
Cognizant Technology
Solutions Corp. Class A
(a) 24,216 1,774,791
Computer Sciences Corp. 12,434 616,726
Fidelity National
Information Services, Inc. 21,233 581,572
Fiserv, Inc. (a) 12,088 707,873
X International Business
Machines Corp. 100,181 14,702,564
MasterCard, Inc. Class A 7,796 1,747,162
Paychex, Inc. 25,897 800,476
SAIC, Inc. (a) 23,640 374,930
Teradata Corp. (a) 13,478 554,754
Total System Services, Inc. 13,357 205,431
</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-299
PORTFOLIO OF INVESTMENTS(+++) DECEMBER 31, 2010 (CONTINUED)
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
IT SERVICES (CONTINUED)
Visa, Inc. Class A 39,294 $ 2,765,512
Western Union Co. (The) 53,140 986,810
------------
27,651,659
------------
LEISURE EQUIPMENT & PRODUCTS 0.1%
Hasbro, Inc. 11,054 521,528
Mattel, Inc. 28,961 736,478
------------
1,258,006
------------
LIFE SCIENCES TOOLS & SERVICES 0.5%
Agilent Technologies, Inc.
(a) 27,871 1,154,696
Life Technologies Corp. (a) 14,749 818,569
PerkinElmer, Inc. 9,486 244,928
Thermo Fisher Scientific,
Inc. (a) 32,008 1,771,963
Waters Corp. (a) 7,404 575,365
------------
4,565,521
------------
MACHINERY 2.2%
Caterpillar, Inc. 51,179 4,793,425
Cummins, Inc. 15,999 1,760,050
Danaher Corp. 43,080 2,032,084
Deere & Co. 34,118 2,833,500
Dover Corp. 15,019 877,861
Eaton Corp. 13,503 1,370,689
Flowserve Corp. 4,500 536,490
Illinois Tool Works, Inc. 39,987 2,135,306
Ingersoll-Rand PLC 25,902 1,219,725
PACCAR, Inc. 29,342 1,684,818
Pall Corp. 9,392 465,655
Parker Hannifin Corp. 12,979 1,120,088
Snap-On, Inc. 4,683 264,964
------------
21,094,655
------------
MEDIA 3.0%
Cablevision Systems Corp.
Class A 19,352 654,872
CBS Corp. Class B 54,812 1,044,169
Comcast Corp. Class A 225,897 4,962,957
DIRECTV Class A (a) 67,392 2,690,963
Discovery Communications,
Inc. Class A (a) 22,906 955,180
Gannett Co., Inc. 19,208 289,849
Interpublic Group of Cos.,
Inc. (The) (a) 39,370 418,109
McGraw-Hill Cos., Inc. (The) 24,872 905,590
Meredith Corp. 2,931 101,559
News Corp. Class A 183,593 2,673,114
Omnicom Group, Inc. 24,248 1,110,558
Scripps Networks Interactive
Class A 7,226 373,946
Time Warner Cable, Inc. 28,597 1,888,260
Time Warner, Inc. 89,449 2,877,574
Viacom, Inc. Class B 48,963 1,939,424
Walt Disney Co. (The) 152,691 5,727,439
Washington Post Co. Class B 480 210,960
------------
28,824,523
------------
METALS & MINING 1.2%
AK Steel Holding Corp. 8,834 144,612
Alcoa, Inc. 82,202 1,265,089
Allegheny Technologies, Inc. 7,932 437,688
Cliffs Natural Resources,
Inc. 10,908 850,933
Freeport-McMoRan Copper &
Gold, Inc. 37,865 4,547,208
Newmont Mining Corp. 39,641 2,435,147
Nucor Corp. 25,396 1,112,853
Titanium Metals Corp. (a) 7,262 124,761
United States Steel Corp. 11,550 674,751
------------
11,593,042
------------
MULTI-UTILITIES 1.2%
Ameren Corp. 19,242 542,432
CenterPoint Energy, Inc. 33,958 533,820
CMS Energy Corp. 18,512 344,323
Consolidated Edison, Inc. 23,371 1,158,500
Dominion Resources, Inc. 47,415 2,025,569
DTE Energy Co. 13,590 615,899
Integrys Energy Group, Inc. 6,224 301,926
NiSource, Inc. 22,392 394,547
PG&E Corp. 31,455 1,504,807
Public Service Enterprise
Group, Inc. 40,719 1,295,271
SCANA Corp. 9,071 368,283
Sempra Energy 19,308 1,013,284
TECO Energy, Inc. 17,272 307,442
Wisconsin Energy Corp. 9,415 554,167
Xcel Energy, Inc. 37,001 871,373
------------
11,831,643
------------
MULTILINE RETAIL 0.8%
Big Lots, Inc. (a) 6,094 185,623
Family Dollar Stores, Inc. 10,135 503,811
J.C. Penney Co., Inc. 19,034 614,989
Kohl's Corp. (a) 23,586 1,281,663
Macy's, Inc. 34,030 860,959
Nordstrom, Inc. 13,596 576,198
Sears Holdings Corp. (a) 3,561 262,624
Target Corp. 57,098 3,433,303
------------
7,719,170
------------
OFFICE ELECTRONICS 0.1%
Xerox Corp. 111,303 1,282,211
------------
OIL, GAS & CONSUMABLE FUELS 9.4%
Anadarko Petroleum Corp. 39,846 3,034,671
Apache Corp. 30,819 3,674,549
Cabot Oil & Gas Corp. 8,391 317,599
</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)
OIL, GAS & CONSUMABLE FUELS (CONTINUED)
Chesapeake Energy Corp. 52,652 $ 1,364,213
X Chevron Corp. 162,270 14,807,137
ConocoPhillips 118,469 8,067,739
CONSOL Energy, Inc. 18,174 885,801
Denbury Resources, Inc. (a) 32,155 613,839
Devon Energy Corp. 35,010 2,748,635
El Paso Corp. 56,698 780,164
EOG Resources, Inc. 20,406 1,865,312
EQT Corp. 12,009 538,484
X ExxonMobil Corp. 406,611 29,731,396
Hess Corp. 24,191 1,851,579
Marathon Oil Corp. 57,135 2,115,709
Massey Energy Co. 8,222 441,110
Murphy Oil Corp. 15,444 1,151,350
Newfield Exploration Co. (a) 10,797 778,572
Noble Energy, Inc. 14,071 1,211,232
Occidental Petroleum Corp. 65,386 6,414,367
Peabody Energy Corp. 21,666 1,386,191
Pioneer Natural Resources
Co. 9,338 810,725
QEP Resources, Inc. 14,112 512,407
Range Resources Corp. 12,892 579,882
Southwestern Energy Co. (a) 27,848 1,042,351
Spectra Energy Corp. 52,145 1,303,104
Sunoco, Inc. 9,703 391,128
Tesoro Corp. (a) 11,498 213,173
Valero Energy Corp. 45,592 1,054,087
Williams Cos., Inc. 47,048 1,163,027
------------
90,849,533
------------
PAPER & FOREST PRODUCTS 0.1%
International Paper Co. 35,187 958,494
MeadWestvaco Corp. 13,732 359,229
------------
1,317,723
------------
PERSONAL PRODUCTS 0.2%
Avon Products, Inc. 34,518 1,003,093
Estee Lauder Cos., Inc.
(The) Class A 9,185 741,230
------------
1,744,323
------------
PHARMACEUTICALS 5.3%
Abbott Laboratories 124,291 5,954,782
Allergan, Inc. 24,751 1,699,651
Bristol-Myers Squibb Co. 138,031 3,655,061
Eli Lilly & Co. 81,689 2,862,383
Forest Laboratories, Inc.
(a) 22,976 734,772
Hospira, Inc. (a) 13,470 750,144
X Johnson & Johnson 221,717 13,713,196
King Pharmaceuticals, Inc.
(a) 20,119 282,672
Merck & Co., Inc. 247,725 8,928,009
Mylan, Inc. (a) 35,008 739,719
Pfizer, Inc. 647,066 11,330,126
Watson Pharmaceuticals, Inc.
(a) 10,104 521,872
------------
51,172,387
------------
PROFESSIONAL SERVICES 0.1%
Dun & Bradstreet Corp. 4,029 330,741
Equifax, Inc. 10,062 358,207
Robert Half International,
Inc. 11,870 363,222
------------
1,052,170
------------
REAL ESTATE INVESTMENT TRUSTS 1.4%
Apartment Investment &
Management Co. Class A 9,434 243,775
AvalonBay Communities, Inc. 6,854 771,418
Boston Properties, Inc. 11,220 966,042
Equity Residential 22,818 1,185,395
HCP, Inc. 29,367 1,080,412
Health Care REIT, Inc. 11,478 546,812
Host Hotels & Resorts, Inc. 53,001 947,128
Kimco Realty Corp. 32,659 589,168
Plum Creek Timber Co., Inc. 13,007 487,112
ProLogis 44,816 647,143
Public Storage 11,225 1,138,439
Simon Property Group, Inc. 23,570 2,344,979
Ventas, Inc. 12,647 663,715
Vornado Realty Trust 13,058 1,088,123
Weyerhaeuser Co. 43,109 816,053
------------
13,515,714
------------
REAL ESTATE MANAGEMENT & DEVELOPMENT 0.1%
CB Richard Ellis Group, Inc.
Class A (a) 23,257 476,303
------------
ROAD & RAIL 0.8%
CSX Corp. 30,562 1,974,611
Norfolk Southern Corp. 29,678 1,864,372
Ryder System, Inc. 4,210 221,615
Union Pacific Corp. 39,743 3,682,586
------------
7,743,184
------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 2.4%
Advanced Micro Devices, Inc.
(a) 45,646 373,384
Altera Corp. 24,742 880,320
Analog Devices, Inc. 24,008 904,381
Applied Materials, Inc. 107,572 1,511,387
Broadcom Corp. Class A 36,721 1,599,200
First Solar, Inc. (a) 4,338 564,547
Intel Corp. 449,784 9,458,958
KLA-Tencor Corp. 13,504 521,795
Linear Technology Corp. 18,076 625,249
LSI Corp. (a) 49,474 296,349
MEMC Electronic Materials,
Inc. (a) 18,299 206,047
Microchip Technology, Inc. 14,964 511,919
</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, 2010 (CONTINUED)
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (CONTINUED)
Micron Technology, Inc. (a) 68,864 $ 552,289
National Semiconductor Corp. 19,269 265,141
Novellus Systems, Inc. (a) 7,401 239,200
NVIDIA Corp. (a) 46,190 711,326
Teradyne, Inc. (a) 14,579 204,689
Texas Instruments, Inc. 94,682 3,077,165
Xilinx, Inc. 20,847 604,146
------------
23,107,492
------------
SOFTWARE 3.8%
Adobe Systems, Inc. (a) 41,019 1,262,565
Autodesk, Inc. (a) 18,299 699,022
BMC Software, Inc. (a) 14,384 678,062
CA, Inc. 31,137 760,988
Citrix Systems, Inc. (a) 15,049 1,029,502
Compuware Corp. (a) 17,970 209,710
Electronic Arts, Inc. (a) 26,595 435,626
Intuit, Inc. (a) 22,764 1,122,265
McAfee, Inc. (a) 12,248 567,205
X Microsoft Corp. 607,095 16,950,092
Novell, Inc. (a) 28,337 167,755
Oracle Corp. 311,549 9,751,484
Red Hat, Inc. (a) 15,217 694,656
Salesforce.com, Inc. (a) 9,412 1,242,384
Symantec Corp. (a) 63,541 1,063,676
------------
36,634,992
------------
SPECIALTY RETAIL 1.9%
Abercrombie & Fitch Co.
Class A 7,110 409,749
AutoNation, Inc. (a) 5,063 142,777
AutoZone, Inc. (a) 2,190 596,972
Bed Bath & Beyond, Inc. (a) 21,247 1,044,290
Best Buy Co., Inc. 26,626 913,006
Carmax, Inc. (a) 18,000 573,840
GameStop Corp. Class A (a) 12,109 277,054
Gap, Inc. (The) 35,365 782,981
Home Depot, Inc. (The) 132,145 4,633,004
Limited Brands, Inc. 21,303 654,641
Lowe's Cos., Inc. 111,277 2,790,827
O'Reilly Automotive, Inc.
(a) 11,169 674,831
RadioShack Corp. 9,161 169,387
Ross Stores, Inc. 9,696 613,272
Staples, Inc. 58,774 1,338,284
Tiffany & Co. 10,161 632,725
TJX Cos., Inc. 32,259 1,431,977
Urban Outfitters, Inc. (a) 10,355 370,813
------------
18,050,430
------------
TEXTILES, APPAREL & LUXURY GOODS 0.5%
Coach, Inc. 23,933 1,323,734
NIKE, Inc. Class B 31,108 2,657,245
Polo Ralph Lauren Corp. 5,251 582,441
VF Corp. 6,958 599,641
------------
5,163,061
------------
THRIFTS & MORTGAGE FINANCE 0.1%
Hudson City Bancorp, Inc. 42,358 539,641
People's United Financial,
Inc. 29,873 418,521
------------
958,162
------------
TOBACCO 1.5%
Altria Group, Inc. 167,740 4,129,759
Lorillard, Inc. 12,212 1,002,117
Philip Morris International,
Inc. 146,305 8,563,231
Reynolds American, Inc. 27,226 888,112
------------
14,583,219
------------
TRADING COMPANIES & DISTRIBUTORS 0.1%
Fastenal Co. 11,868 711,012
W.W. Grainger, Inc. 4,796 662,375
------------
1,373,387
------------
WIRELESS TELECOMMUNICATION SERVICES 0.3%
American Tower Corp. Class A
(a) 32,293 1,667,611
MetroPCS Communications,
Inc. (a) 21,078 266,215
Sprint Nextel Corp. (a) 240,253 1,016,270
------------
2,950,096
------------
Total Common Stocks
(Cost $573,360,314) 921,413,116 (b)
------------
<Caption>
PRINCIPAL
AMOUNT
SHORT-TERM INVESTMENTS 4.1%
-------------------------------------------------------
REPURCHASE AGREEMENT 0.0%++
State Street Bank and Trust
Co.
0.01%, dated 12/31/10
due 1/3/11
Proceeds at Maturity
$10,514 (Collateralized by
a United States Treasury
Note with a rate of 2.500%
and a maturity date of
4/30/15, with a Principal
Amount of $15,000 and a
Market Value of $15,562) $ 10,514 10,514
------------
Total Repurchase Agreement
(Cost $10,514) 10,514
------------
</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>
PRINCIPAL
AMOUNT VALUE
SHORT-TERM INVESTMENTS (CONTINUED)
U.S. GOVERNMENT 4.1%
United States Treasury Bills
0.012%, due 1/6/11 (c) $34,500,000 $ 34,499,931
0.05%, due 1/27/11 (c)(d) 5,200,000 5,199,807
------------
Total U.S. Government
(Cost $39,684,531) 39,699,738
------------
Total Short-Term Investments
(Cost $39,695,045) 39,710,252
------------
Total Investments
(Cost $613,055,359) (f) 99.9% 961,123,368
Other Assets, Less
Liabilities 0.1 1,090,810
----------- ------------
Net Assets 100.0% $962,214,178
=========== ============
</Table>
<Table>
<Caption>
CONTRACTS UNREALIZED
LONG APPRECIATION (E)
FUTURES CONTRACTS 0.1%
---------------------------------------------------------
Standard & Poor's 500 Index
Mini March 2011 640 $538,660
--------
Total Futures Contracts
(Settlement Value
$40,096,000) (b) $538,660
========
</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) The combined market value of common
stocks and settlement value of Standard &
Poor's 500 Index futures contracts
represents 99.9% of net assets.
(c) Interest rate presented is yield to
maturity.
(d) Represents a security, or a portion
thereof, which is maintained at the
broker as collateral for futures
contracts.
(e) Represents the difference between the
value of the contracts at the time they
were opened and the value at December 31,
2010.
(f) At December 31, 2010, cost is
$640,845,621 for federal income tax
purposes and net unrealized appreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $401,132,525
Gross unrealized depreciation (80,854,778)
------------
Net unrealized appreciation $320,277,747
============
</Table>
The following is a summary of the fair valuations according to the inputs used
as of December 31, 2010, 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 $921,413,116 $ -- $ -- $921,413,116
Short-Term Investments
Repurchase Agreement -- 10,514 -- 10,514
U.S. Government -- 39,699,738 -- 39,699,738
------------ ----------- -------- ------------
Total Short-Term Investments -- 39,710,252 -- 39,710,252
------------ ----------- -------- ------------
Total Investments in Securities 921,413,116 39,710,252 -- 961,123,368
Other Financial Instruments
Futures Contracts Long (b) 538,660 -- -- 538,660
------------ ----------- -------- ------------
Total Investments in Securities and Other
Financial Instruments $921,951,776 $39,710,252 $-- $961,662,028
============ =========== ======== ============
</Table>
(a) For a complete listing of investments and their industries, see the
Portfolio of Investments.
(b) The value listed for these securities reflects unrealized appreciation as
shown on the Portfolio of Investments.
For the period ended December 31, 2010, the Portfolio did not have any transfers
between Level 1 and Level 2 fair value measurements. (See Note 2)
At December 31, 2010, the Portfolio did not hold any investments with
significant unobservable inputs (Level 3). (See Note 2)
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
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2010
<Table>
ASSETS
---------------------------------------------------
Investment in securities, at value
(identified cost $613,055,359) $ 961,123,368
Receivables:
Investment securities sold 3,021,845
Dividends and interest 1,136,645
Fund shares sold 124,381
-------------
Total assets 965,406,239
-------------
LIABILITIES
---------------------------------------------------
Payables:
Investment securities purchased 2,446,329
Fund shares redeemed 316,202
Manager (See Note 3) 202,152
Shareholder communication 63,029
Professional fees 57,693
NYLIFE Distributors (See Note 3) 50,972
Variation margin on futures
contracts 47,291
Custodian 4,401
Directors 2,140
Accrued expenses 1,852
-------------
Total liabilities 3,192,061
-------------
Net assets $ 962,214,178
=============
NET ASSETS CONSIST OF
---------------------------------------------------
Capital stock (par value of $.01 per
share) 200 million shares
authorized $ 378,457
Additional paid-in capital 731,989,294
-------------
732,367,751
Undistributed net investment income 14,942,427
Accumulated net realized loss on
investments and futures
transactions (133,702,669)
Net unrealized appreciation on
investments and futures contracts 348,606,669
-------------
Net assets $ 962,214,178
=============
INITIAL CLASS
Net assets applicable to outstanding
shares $ 719,103,211
=============
Shares of capital stock outstanding 28,260,523
=============
Net asset value per share
outstanding $ 25.45
=============
SERVICE CLASS
Net assets applicable to outstanding
shares $ 243,110,967
=============
Shares of capital stock outstanding 9,585,210
=============
Net asset value per share
outstanding $ 25.36
=============
</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.
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2010
<Table>
INVESTMENT INCOME
--------------------------------------------------
INCOME
Dividends $ 18,305,185
Interest 5,498
------------
Total income 18,310,683
------------
EXPENSES
Manager (See Note 3) 2,727,585
Distribution and service--Service
Class (See Note 3) 558,948
Shareholder communication 206,574
Professional fees 158,220
Custodian 40,249
Directors 30,760
Miscellaneous 34,631
------------
Total expenses before waiver 3,756,967
Expense waiver from Manager (See
Note 3) (454,598)
------------
Net expenses 3,302,369
------------
Net investment income 15,008,314
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
--------------------------------------------------
Net realized gain on:
Security transactions 1,814,188
Futures transactions 5,066,622
------------
Net realized gain on investments and
futures transactions 6,880,810
------------
Net change in unrealized
appreciation (depreciation) on:
Investments 103,889,813
Futures contracts (406,515)
------------
Net change in unrealized
appreciation (depreciation) on
investments and futures contracts 103,483,298
------------
Net realized and unrealized gain on
investments and futures
transactions 110,364,108
------------
Net increase in net assets resulting
from operations $125,372,422
============
</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
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2010 AND DECEMBER 31, 2009
<Table>
<Caption>
2010 2009
INCREASE IN NET ASSETS
----------------------------------------------------------
Operations:
Net investment income $ 15,008,314 $ 15,817,390
Net realized gain (loss)
on investments and
futures transactions 6,880,810 (28,935,012)
Net change in unrealized
appreciation
(depreciation) on
investments and futures
contracts 103,483,298 209,578,108
----------------------------
Net increase in net assets
resulting from operations 125,372,422 196,460,486
----------------------------
Dividends to shareholders:
From net investment
income:
Initial Class (12,153,990) (17,673,412)
Service Class (3,577,921) (4,818,930)
----------------------------
Total dividends to
shareholders (15,731,911) (22,492,342)
----------------------------
Capital share transactions:
Net proceeds from sale of
shares 28,214,228 34,656,962
Net asset value of shares
issued to shareholders in
reinvestment of dividends 15,731,911 22,492,342
Cost of shares redeemed (121,897,210) (110,551,622)
----------------------------
Decrease in net assets
derived from capital
share transactions (77,951,071) (53,402,318)
----------------------------
Net increase in net
assets 31,689,440 120,565,826
----------------------------
NET ASSETS
----------------------------------------------------------
Beginning of year 930,524,738 809,958,912
----------------------------
End of year $ 962,214,178 $ 930,524,738
============================
Undistributed net investment
income at end of year $ 14,942,427 $ 15,842,638
============================
</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.
This page intentionally left blank
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
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
----------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------------------
2010 2009 2008 2007 2006
Net asset value at beginning of
year $ 22.58 $ 18.35 $ 30.05 $ 29.01 $ 25.25
-------- -------- -------- ---------- ----------
Net investment income (a) 0.40 0.39 0.51 0.53 0.44
Net realized and unrealized gain
(loss) on investments 2.90 4.40 (11.61) 1.00 3.47
-------- -------- -------- ---------- ----------
Total from investment operations 3.30 4.79 (11.10) 1.53 3.91
-------- -------- -------- ---------- ----------
Less dividends:
From net investment income (0.43) (0.56) (0.60) (0.49) (0.15)
-------- -------- -------- ---------- ----------
Net asset value at end of year $ 25.45 $ 22.58 $ 18.35 $ 30.05 $ 29.01
======== ======== ======== ========== ==========
Total investment return 14.73% 26.26% (37.01%) 5.22% 15.45%
Ratios (to average net
assets)/Supplemental Data:
Net investment income 1.71% 1.99% 2.04% 1.73% 1.66%
Net expenses 0.30% 0.30% 0.30% 0.28% 0.35%
Expenses (before waiver) 0.35% 0.35% 0.35% 0.33% 0.35%
Portfolio turnover rate 4% 15% 5% 4% 5%
Net assets at end of year (in
000's) $719,103 $709,736 $630,244 $1,134,325 $1,241,402
</Table>
<Table>
(a) Per share data based on average shares outstanding during the period.
</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.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
SERVICE CLASS
--------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------------------
2010 2009 2008 2007 2006
$ 22.52 $ 18.30 $ 29.91 $ 28.90 $ 25.18
-------- -------- -------- -------- --------
0.34 0.34 0.45 0.45 0.38
2.88 4.38 (11.54) 0.99 3.44
-------- -------- -------- -------- --------
3.22 4.72 (11.09) 1.44 3.82
-------- -------- -------- -------- --------
(0.38) (0.50) (0.52) (0.43) (0.10)
-------- -------- -------- -------- --------
$ 25.36 $ 22.52 $ 18.30 $ 29.91 $ 28.90
======== ======== ======== ======== ========
14.44% 25.95% (37.17%) 4.96% 15.16%
1.46% 1.74% 1.79% 1.49% 1.41%
0.55% 0.55% 0.55% 0.53% 0.60%
0.60% 0.60% 0.60% 0.58% 0.60%
4% 15% 5% 4% 5%
$243,111 $220,788 $179,715 $301,185 $274,579
</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-309
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. THE PERFORMANCE TABLE AND GRAPH 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.
(LINE GRAPH)
<Table>
<Caption>
MAINSTAY VP MAINSTAY VP
U.S. SMALL U.S. SMALL
CAP PORTFOLIO CAP PORTFOLIO RUSSELL 2500(TM) RUSSELL 2000(R)
INITIAL CLASS SERVICE CLASS INDEX GROWTH INDEX
------------- ------------- ---------------- ---------------
12/31/00 10000 10000 10000 10000
12/31/01 9266 9243 10122 9077
12/31/02 6581 6548 8321 6330
12/31/03 9114 9046 12107 9403
12/31/04 9648 9552 14322 10748
12/31/05 10810 10672 15484 11195
12/31/06 12176 11992 17987 12689
12/31/07 16572 16280 18234 13583
12/31/08 8747 8571 11526 8348
12/31/09 12335 12058 15490 11226
12/31/10 15422 15039 19627 14491
</Table>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED DECEMBER 31, 2010
--------------------------------------------------------------------------------
<Table>
<Caption>
GROSS
EXPENSE
CLASS ONE YEAR FIVE YEARS TEN YEARS(1) RATIO(2)
-----------------------------------------------------------------------------
Initial Class Shares 25.03% 7.37% 4.43% 1.08%
-----------------------------------------------------------------------------
Service Class Shares(3) 24.72 7.10 4.16 1.33
-----------------------------------------------------------------------------
</Table>
<Table>
<Caption>
BENCHMARK PERFORMANCE ONE FIVE TEN
YEAR YEARS YEARS
Russell 2500(TM) Index(4) 26.71% 4.86% 6.98%
----------------------------------------------------------------------------------------
Russell 2000(R) Growth Index(4) 29.09 5.30 3.78
----------------------------------------------------------------------------------------
Average Lipper Variable Products Small-Cap Core Portfolio(5) 26.26 3.84 6.33
----------------------------------------------------------------------------------------
</Table>
1. Performance figures shown for the ten-year period ended December 31, 2010
reflect nonrecurring reimbursements from affiliates for printing and mailing
costs. If these nonrecurring reimbursements had not been made, the total
returns would have been 4.42% for Initial Class shares and 4.16% for Service
Class shares for the ten-year period.
2. The gross expense ratios presented reflect the Portfolio's "Total Annual
Portfolio Operating Expenses" from the most recent Prospectus and may differ
from other expense ratios disclosed in this report.
3. 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.
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.
5. The Average Lipper Variable Products Small-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 small-cap
ceiling. Small-cap core funds have more latitude in the companies in which
they invest. These portfolios 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 SmallCap 600(R) Index. Lipper Inc. is an independent
monitor of fund performance. Results are based on total returns with all
dividend and capital gain distributions reinvested.
M-310 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, 2010, to December 31,
2010, 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 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, 2010, to December 31, 2010. 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, 2010. 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 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 7/1/10 12/31/10 PERIOD(1) 12/31/10 PERIOD(1)
INITIAL CLASS SHARES $1,000.00 $1,299.70 $4.81 $1,021.00 $4.23
-------------------------------------------------------------------------------------------------------------
SERVICE CLASS SHARES $1,000.00 $1,298.00 $6.26 $1,019.80 $5.50
-------------------------------------------------------------------------------------------------------------
1. Expenses are equal to the Portfolio's annualized expense ratio of each class
(0.83% for Initial Class and 1.08% 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-311
INDUSTRY COMPOSITION AS OF DECEMBER 31, 2010 (Unaudited)
<Table>
<Caption>
Machinery 7.0%
Health Care Equipment & Supplies 5.6
Specialty Retail 4.9
Household Durables 4.7
Commercial Banks 4.6
Exchange Traded Funds 4.5
Insurance 4.3
Multi-Utilities 4.1
Aerospace & Defense 3.9
Thrifts & Mortgage Finance 3.8
Building Products 3.4
Textiles, Apparel & Luxury Goods 3.2
Chemicals 3.1
Electric Utilities 3.1
Auto Components 2.7
IT Services 2.4
Electrical Equipment 2.3
Pharmaceuticals 2.3
Electronic Equipment & Instruments 2.1
Food Products 2.0
Hotels, Restaurants & Leisure 1.9
Road & Rail 1.9
Communications Equipment 1.8
Biotechnology 1.6
Health Care Providers & Services 1.6
Professional Services 1.6
Wireless Telecommunication Services 1.6
Energy Equipment & Services 1.5
Semiconductors & Semiconductor
Equipment 1.5
Metals & Mining 1.3
Diversified Consumer Services 1.2
Software 1.2
Capital Markets 1.1
Internet Software & Services 0.9
Diversified Financial Services 0.8
Computers & Peripherals 0.0++
Short-Term Investment 4.5
Other Assets, Less Liabilities 0.0++
-----
100.0%
=====
</Table>
See Portfolio of Investment beginning on page M-315 for specific holdings within
these categories.
++ Less than one-tenth of a percent.
TOP TEN HOLDINGS AS OF DECEMBER 31, 2010 (excluding short-term investment)
<Table>
1. iShares Russell 2000 Index Fund
2. Endo Pharmaceuticals Holdings, Inc.
3. Woodward Governor Co.
4. Warnaco Group, Inc. (The)
5. Corn Products International, Inc.
6. Platinum Underwriters Holdings, Ltd.
7. Kennametal, Inc.
8. Harmonic, Inc.
9. Tupperware Brands Corp.
10. Westar Energy, Inc.
</Table>
M-312 MainStay VP U.S. Small Cap Portfolio
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
Questions answered by David N. Pearl, CFA, William W. Priest, CFA, and Michael
A. Welhoelter, CFA, of Epoch Investment Partners, Inc. ("Epoch"), the
Portfolio's Subadvisor.
HOW DID MAINSTAY VP U.S. SMALL CAP PORTFOLIO PERFORM RELATIVE TO ITS PEERS AND
ITS BENCHMARK DURING THE 12 MONTHS ENDED DECEMBER 31, 2010?
For the 12 months ended December 31, 2010, MainStay VP U.S. Small Cap Portfolio
returned 25.03% for Initial Class shares and 24.72% for Service Class shares.
Both share classes underperformed the 26.26% return of the average Lipper(1)
Variable Products Small-Cap Core Portfolio, the 26.71% return of the Russell
2500(TM) Index(1) and the 29.09% return of the Russell 2000 Growth(R) Index(1)
for the 12 months ended December 31, 2010. The Russell 2500(TM) Index is the
Portfolio's broad-based securities-market index.
WHAT FACTORS AFFECTED THE PORTFOLIO'S RELATIVE PERFORMANCE DURING THE REPORTING
PERIOD?
While stock selection was positive for the reporting period, performance lagged
the benchmark because of poor sector allocation.
WHICH SECTORS WERE THE STRONGEST CONTRIBUTORS TO THE PORTFOLIO'S RELATIVE
PERFORMANCE, AND WHICH SECTORS WERE PARTICULARLY WEAK?
Information technology was the strongest sector contributor to the Portfolio's
performance relative to the Russell 2500(TM) Index. The contribution was driven
by strong stock selection. On average, the Portfolio was underweight the sector
during the reporting period, which slightly detracted from relative performance.
Telecommunication services was the Portfolio's second-strongest sector
contributor, driven by strong stock selection. Strong stock selection and a
modestly overweight position in industrials made the sector another strong
contributor to the Portfolio's relative performance.
The sector that made the weakest contribution to the Portfolio's performance
relative to the Russell 2500(TM) Index was financials, where stock selection had
a negative impact that was slightly offset by the Portfolio's underweight
position. Energy was also a weak contributor, with poor stock selection and an
underweight position in the sector detracting from relative performance.
Although small, the Portfolio's residual cash position was also
a drag on relative performance.
DURING THE REPORTING PERIOD, WHICH INDIVIDUAL STOCKS MADE THE STRONGEST
CONTRIBUTIONS TO THE PORTFOLIO'S ABSOLUTE PERFORMANCE AND WHICH STOCKS DETRACTED
THE MOST?
Specialty pharmaceutical company Endo Pharmaceuticals received Priority Review
status(2) for one of its abuse-deterrent-formulated pain drugs earlier in 2010.
The company also benefited from the third quarter 2010 acquisition of Qualitest,
which provides better diversification of Endo Pharmaceuticals' product line. In
addition, the company benefited from increased demand for its products and
became the strongest single contributor to the Portfolio's absolute performance.
Another strong contributor on an absolute basis was Syniverse, a
telecommunications company that agreed to be acquired by private equity fund
Carlyle Group at a significant premium.
Network equipment supplier ADC Telecommunications was acquired by Tyco
Electronics during the reporting period, and the stock made a strong
contribution to the Portfolio's absolute performance.
Like many companies associated with oil and gas exploration in the Gulf of
Mexico, marine contractor Cal Dive International's stock price was negatively
affected by the Macondo oil well spill and subsequent drilling moratorium in the
Gulf. With a negative return, Cal Drive International was the weakest
contributor to the Portfolio's absolute performance during the reporting period.
Aerospace & defense supplier Alliant Techsystems was the Portfolio's second-
weakest contributor. We chose to exit the Portfolio's position in the stock as
the current administration's spending on a number of NASA's programs came under
scrutiny and we felt there were better risk/reward trade-offs elsewhere.
Another weak contributor was Washington Federal, Inc., a thrift holding company
based in Seattle. Its principal subsidiary is Washington Federal Savings, which
operates 160 branches in eight western states. The parent company has a very
well-capitalized balance sheet with significant excess capital and strong return
on assets. Washington Federal, Inc.'s net interest margins suffered from the
effects of quantitative easing, which brought mortgage rates to record lows. We
have seen a rebound off the lows and continue to hold the stock.
DID THE PORTFOLIO MAKE ANY SIGNIFICANT PURCHASES OR SALES DURING THE REPORTING
PERIOD?
During the reporting period, we added to the Portfolio's consumer discretionary
exposure and its holdings in the industrials sector.
Among our consumer discretionary purchases was Iconix Brand Group, a diversified
portfolio of brand names, including Candies, Danskin, Joe Boxer, Starter and
many others. We felt that the stock was a fairly low-risk play within the
apparel segment. The company partners with large retailers as the store's
private label brand and receives a predictable stream of guaranteed minimum
royalty payments from its retail partners.
1. Please refer to pages M-2 and M-3 for additional explanations and disclosure
regarding the Portfolios, their benchmark indexes and other indexes, averages
and service providers mentioned in the reports.
2. A Priority Review designation is given to drugs that offer major advances in
treatment or provide a treatment where no adequate therapy exists. The goal
for completing a Priority Review is six months rather than the standard ten
months.
Not all MainStay VP Portfolios and/or share classes are available under all
policies.
mainstayinvestments.com M-313
We also added men's retailer Jos. A. Bank Clothiers, which has maintained sales
and profitability during the downturn. The company is moving into the tuxedo
rental market through a joint venture that we believe will allow the company to
benefit without significant capital expenditure. We believe that Jos. A. Bank
Clothiers is well positioned for today's economic environment.
In the industrials sector, we added Mueller Industries to the Portfolio. The
company is a manufacturer of copper, brass, plastic and aluminum products.
Through scale and past investment in automation, Muller Industries has developed
a cost advantage in manufacturing and has generated positive free cash flow
throughout the past decade. In our opinion, the company is well positioned for
any uptick in the economy.
Another industrial stock that we added to the Portfolio was Esterline
Technologies, a worldwide supplier to the aerospace & defense industry. We
believe that as the airline/aerospace cycle continues to ramp up, companies such
as Esterline should benefit.
During the reporting period, we significantly reduced the Portfolio's exposure
to the financials and information technology sectors. As previously mentioned,
we sold the Portfolio's position in aerospace & defense supplier Alliant
Techsystems to pursue better risk/reward trade-offs elsewhere. We also sold the
Portfolio's position in Sybase, a database technology company that was acquired
by German financial technology provider SAP.
HOW DID THE PORTFOLIO'S SECTOR WEIGHTINGS CHANGE DURING THE REPORTING PERIOD?
During 2010, the Portfolio moved from an underweight position in industrials to
a significantly overweight position. In the consumer discretionary sector, the
Portfolio moved from a market-weight position to overweight relative to the
Russell 2500(TM) Index.
The Portfolio began the reporting period with an overweight position in
financials but moved to a significantly underweight position by the end of the
reporting period. In information technology, the Portfolio moved from a slightly
underweight position to one that was significantly underweight. In the materials
sector, the Portfolio reduced exposure from overweight relative to the Russell
2500(TM) Index to moderately underweight.
HOW WAS THE PORTFOLIO POSITIONED AT THE END OF DECEMBER 2010?
As of December 31, 2010, the Portfolio's most significantly overweight positions
relative to the Russell 2500(TM) Index were in industrials, consumer
discretionary and utilities. As of the same date, the Portfolio's most
significantly underweight positions relative to the benchmark were in
information technology, financials and energy.
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
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.
M-314 MainStay VP U.S. Small Cap Portfolio
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2010
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS 91.0%+
-------------------------------------------------------
AEROSPACE & DEFENSE 3.9%
Curtiss-Wright Corp. 107,400 $ 3,565,680
Esterline Technologies Corp.
(a) 47,200 3,237,448
Hexcel Corp. (a) 144,150 2,607,673
------------
9,410,801
------------
AUTO COMPONENTS 2.7%
Dana Holding Corp. (a) 151,400 2,605,594
Tenneco, Inc. (a) 93,650 3,854,634
------------
6,460,228
------------
BIOTECHNOLOGY 1.6%
Alkermes, Inc. (a) 320,299 3,933,272
------------
BUILDING PRODUCTS 3.4%
Armstrong World Industries,
Inc. 73,050 3,141,150
Masco Corp. 122,500 1,550,850
Simpson Manufacturing Co.,
Inc. 112,500 3,477,375
------------
8,169,375
------------
CAPITAL MARKETS 1.1%
Waddell & Reed Financial,
Inc. Class A 75,250 2,655,573
------------
CHEMICALS 3.1%
Methanex Corp. 132,950 4,041,680
Nalco Holding Co. 104,100 3,324,954
------------
7,366,634
------------
COMMERCIAL BANKS 4.6%
First Republic Bank/San
Francisco CA(a) 31,700 923,104
Investors Bancorp, Inc. (a) 197,200 2,587,264
Simmons First National Corp.
Class A 59,310 1,690,335
Texas Capital Bancshares,
Inc. (a) 127,650 2,715,115
UMB Financial Corp. 73,650 3,050,583
------------
10,966,401
------------
COMMUNICATIONS EQUIPMENT 1.8%
X Harmonic, Inc. (a) 502,000 4,302,140
------------
DIVERSIFIED CONSUMER SERVICES 1.2%
Service Corp. International 353,850 2,919,263
------------
DIVERSIFIED FINANCIAL SERVICES 0.8%
CBOE Holdings, Inc. 87,200 1,993,392
------------
ELECTRIC UTILITIES 3.1%
DPL, Inc. 122,500 3,149,475
X Westar Energy, Inc. 167,150 4,205,494
------------
7,354,969
------------
ELECTRICAL EQUIPMENT 2.3%
X Woodward Governor Co. 148,500 5,577,660
------------
ELECTRONIC EQUIPMENT & INSTRUMENTS 2.1%
DTS, Inc. (a) 81,027 3,974,374
MTS Systems Corp. 31,350 1,174,371
------------
5,148,745
------------
ENERGY EQUIPMENT & SERVICES 1.5%
Cal Dive International, Inc.
(a) 490,950 2,783,687
Dresser-Rand Group, Inc. (a) 21,538 917,303
------------
3,700,990
------------
FOOD PRODUCTS 2.0%
X Corn Products
International, Inc. 104,300 4,797,800
------------
HEALTH CARE EQUIPMENT & SUPPLIES 5.6%
Alere, Inc. (a) 83,450 3,054,270
Haemonetics Corp. (a) 54,000 3,411,720
SonoSite, Inc. (a) 114,500 3,618,200
Teleflex, Inc. 61,300 3,298,553
------------
13,382,743
------------
HEALTH CARE PROVIDERS & SERVICES 1.6%
Bio-Reference Laboratories,
Inc. (a) 173,000 3,837,140
------------
HOTELS, RESTAURANTS & LEISURE 1.9%
Multimedia Games, Inc. (a) 268,820 1,500,016
Shuffle Master, Inc. (a) 261,950 2,999,327
------------
4,499,343
------------
HOUSEHOLD DURABLES 4.7%
KB Home 207,400 2,797,826
Leggett & Platt, Inc. 97,200 2,212,272
Ryland Group, Inc. (The) 112,500 1,915,875
X Tupperware Brands Corp. 90,172 4,298,499
------------
11,224,472
------------
INSURANCE 4.3%
Arthur J. Gallagher & Co. 112,300 3,265,684
X Platinum Underwriters
Holdings, Ltd. 99,800 4,488,006
Validus Holdings, Ltd. 83,056 2,542,344
------------
10,296,034
------------
INTERNET SOFTWARE & SERVICES 0.9%
Digital River, Inc. (a) 62,237 2,142,198
------------
IT SERVICES 2.4%
Forrester Research, Inc. 46,185 1,629,869
NeuStar, Inc. Class A(a) 159,850 4,164,092
------------
5,793,961
------------
</Table>
+ Percentages indicated are based on Portfolio net assets.
X Among the Portfolio's 10 largest holdings, as of December 31, 2010, 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-315
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2010 (CONTINUED)
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
MACHINERY 7.0%
Actuant Corp. Class A 46,200 $ 1,229,844
Harsco Corp. 94,700 2,681,904
Kaydon Corp. 23,702 965,146
X Kennametal, Inc. 113,281 4,470,068
Mueller Industries, Inc. 124,509 4,071,444
Wabtec Corp. 67,187 3,553,520
------------
16,971,926
------------
METALS & MINING 1.3%
RTI International Metals,
Inc. (a) 113,300 3,056,834
------------
MULTI-UTILITIES 4.1%
CMS Energy Corp. 133,350 2,480,310
NSTAR 79,300 3,345,667
Vectren Corp. 159,250 4,041,765
------------
9,867,742
------------
PHARMACEUTICALS 2.3%
X Endo Pharmaceuticals
Holdings, Inc. (a) 156,950 5,604,685
------------
PROFESSIONAL SERVICES 1.6%
IHS, Inc. Class A (a) 48,100 3,866,759
------------
ROAD & RAIL 1.9%
Con-Way, Inc. 89,400 3,269,358
Genesee & Wyoming, Inc.
Class A(a) 23,966 1,269,000
------------
4,538,358
------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 1.5%
MEMC Electronic Materials,
Inc. (a) 104,500 1,176,670
Varian Semiconductor
Equipment Associates, Inc.
(a) 65,500 2,421,535
------------
3,598,205
------------
SOFTWARE 1.2%
Solera Holdings, Inc. 33,350 1,711,522
THQ, Inc. (a) 182,850 1,108,071
------------
2,819,593
------------
SPECIALTY RETAIL 4.9%
Express, Inc. 119,826 2,252,729
GameStop Corp. Class A (a) 153,800 3,518,944
JoS. A. Bank Clothiers, Inc.
(a) 61,700 2,487,744
Monro Muffler Brake, Inc. 68,325 2,363,362
Stage Stores, Inc. 72,110 1,250,387
------------
11,873,166
------------
TEXTILES, APPAREL & LUXURY GOODS 3.2%
Iconix Brand Group, Inc. (a) 155,500 3,002,705
X Warnaco Group, Inc. (The)
(a) 87,400 4,813,118
------------
7,815,823
------------
THRIFTS & MORTGAGE FINANCE 3.8%
Brookline Bancorp, Inc. 208,950 2,267,107
First Niagara Financial
Group, Inc. 219,800 3,072,804
Washington Federal, Inc. 221,900 3,754,548
------------
9,094,459
------------
WIRELESS TELECOMMUNICATION SERVICES 1.6%
NTELOS Holdings Corp. 196,914 3,751,212
------------
Total Common Stocks
(Cost $188,911,693) 218,791,896
------------
EXCHANGE TRADED FUNDS 4.5% (B)
-------------------------------------------------------
X iShares Russell 2000
Index Fund 104,750 8,194,593
iShares Russell 2000 Value
Index Fund 37,100 2,637,439
------------
Total Exchange Traded Funds
(Cost $9,667,503) 10,832,032
------------
<Caption>
NUMBER OF
WARRANTS
WARRANTS 0.0%++
-------------------------------------------------------
COMPUTERS & PERIPHERALS 0.0%++
Latronix, Inc.
Strike Price $0.01 Expires
2/9/11 (a)(c) 120 1
------------
Total Warrants
(Cost $0) 1
------------
<Caption>
PRINCIPAL
AMOUNT
SHORT-TERM INVESTMENT 4.5%
-------------------------------------------------------
REPURCHASE AGREEMENT 4.5%
State Street Bank and Trust
Co.
0.01%, dated 12/31/10
due 1/3/11
Proceeds at Maturity
$10,871,499
(Collateralized by a
United States Treasury
Note with a rate of 1.375%
and a maturity date of
5/15/13, with a Principal
Amount of $10,925,000 and
a Market Value of
$11,092,153) $10,871,490 10,871,490
------------
Total Short-Term Investment
(Cost $10,871,490) 10,871,490
------------
Total Investments
(Cost $209,450,686) (d) 100.0% 240,495,419
Other Assets, Less
Liabilities 0.0++ 37,593
----------- ------------
Net Assets 100.0% $240,533,012
=========== ============
</Table>
M-316 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>
++ Less than one-tenth of a percent.
(a) Non-income producing security.
(b) Exchange Traded Fund--An investment
vehicle that represents a basket of
securities that is traded on an exchange.
(c) Fair Valued Security. The totals market
value of this security at December 31,
2010 is $1, which represents less than
one-tenth of a percent of the Portfolio's
net assets.
(d) At December 31, 2010, cost is
$209,949,530 for federal income tax
purposes and net unrealized appreciation
is as follows:
</Table>
<Table>
Gross unrealized appreciation $35,634,654
Gross unrealized depreciation (5,088,765)
-----------
Net unrealized appreciation $30,545,889
===========
</Table>
The following is a summary of the fair valuations according to the inputs used
as of December 31, 2010, 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 $218,791,896 $ -- $ -- $218,791,896
Exchange Traded Funds 10,832,032 -- -- 10,832,032
Warrants (b) -- -- 1 1
Short-Term Investment
Repurchase Agreement -- 10,871,490 -- 10,871,490
------------ ----------- -------- ------------
Total Investments in Securities $229,623,928 $10,871,490 $ 1 $240,495,419
============ =========== ======== ============
</Table>
(a) For a complete listing of investments and their industries, 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.
The Portfolio recognizes transfers between the levels as of the beginning of the
period.
For the period ended December 31, 2010, the Portfolio did not have any transfers
between Level 1 and Level 2 fair value measurements. (See Note 2)
The following is a reconciliation of investments in which significant
unobservable inputs (Level 3) were used in determining value:
<Table>
<Caption>
BALANCE
AS OF ACCRUED REALIZED
DECEMBER 31, DISCOUNTS GAIN
INVESTMENTS IN SECURITIES 2009 (PREMIUMS) (LOSS)
Warrants Computers &
Peripherals $1 $-- $--
-- --- ---
Total $1 $-- $--
== === ===
<Caption>
CHANGE IN
UNREALIZED
APPRECIATION
(DEPRECIATION)
FROM
CHANGE IN BALANCE INVESTMENTS
UNREALIZED TRANSFERS TRANSFERS AS OF STILL HELD AT
APPRECIATION IN TO OUT OF DECEMBER 31, DECEMBER 31,
INVESTMENTS IN SECURITIES (DEPRECIATION) PURCHASES SALES LEVEL 3 LEVEL 3 2010 2010 (A)
Warrants Computers &
Peripherals $-- $-- $-- $-- $-- $1 $ --
--- --- --- --- --- -- -----
Total $-- $-- $-- $-- $-- $1 $--
=== === === === === == =====
</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-317
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2010
<Table>
ASSETS
--------------------------------------------------
Investment in securities, at value
(identified cost $209,450,686) $240,495,419
Receivables:
Investment securities sold 849,408
Dividends and interest 250,339
Fund shares sold 32,255
------------
Total assets 241,627,421
------------
LIABILITIES
--------------------------------------------------
Payables:
Investment securities purchased 742,635
Manager (See Note 3) 159,516
Fund shares redeemed 80,806
Shareholder communication 41,793
Professional fees 39,242
NYLIFE Distributors (See Note 3) 27,783
Directors 570
Custodian 261
Accrued expenses 1,803
------------
Total liabilities 1,094,409
------------
Net assets $240,533,012
============
NET ASSETS CONSIST OF
--------------------------------------------------
Capital stock (par value of $.01 per
share) 200 million shares
authorized $ 262,119
Additional paid-in capital 242,642,059
------------
242,904,178
Undistributed net investment income 2,013,346
Accumulated net realized loss on
investments (35,429,245)
Net unrealized appreciation on
investments 31,044,733
------------
Net assets $240,533,012
============
INITIAL CLASS
Net assets applicable to outstanding
shares $107,626,808
============
Shares of capital stock outstanding 11,559,005
============
Net asset value per share
outstanding $ 9.31
============
SERVICE CLASS
Net assets applicable to outstanding
shares $132,906,204
============
Shares of capital stock outstanding 14,652,868
============
Net asset value per share
outstanding $ 9.07
============
</Table>
M-318 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 OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2010
<Table>
INVESTMENT INCOME
-------------------------------------------------
INCOME
Dividends (a) $ 4,180,995
Interest 1,243
-----------
Total income 4,182,238
-----------
EXPENSES
Manager (See Note 3) 1,764,024
Distribution and service--Service
Class (See Note 3) 288,155
Professional fees 58,149
Shareholder communication 25,102
Custodian 13,181
Directors 7,542
Miscellaneous 12,724
-----------
Total expenses 2,168,877
-----------
Net investment income 2,013,361
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
-------------------------------------------------
Net realized gain on investments 23,682,269
Net change in unrealized
appreciation (depreciation) on
investments 21,309,190
-----------
Net realized and unrealized gain on
investments 44,991,459
-----------
Net increase in net assets resulting
from operations $47,004,820
===========
</Table>
(a) Dividends recorded net of foreign withholding taxes in the amount of
$13,571.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. mainstayinvestments.com
M-319
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2010 AND DECEMBER 31, 2009
<Table>
<Caption>
2010 2009
INCREASE IN NET ASSETS
Operations:
Net investment income
(loss) $ 2,013,361 $ (186,919)
Net realized gain on
investments 23,682,269 5,169,516
Net change in unrealized
appreciation
(depreciation) on
investments 21,309,190 20,585,979
--------------------------
Net increase in net assets
resulting from operations 47,004,820 25,568,576
--------------------------
Dividends to shareholders:
From net investment
income:
Initial Class (62,966) --
--------------------------
Total dividends to
shareholders (62,966) --
--------------------------
Capital share transactions:
Net proceeds from sale of
shares 97,227,983 20,647,806
Net asset value of shares
issued in connection with
the acquisition of
MainStay VP Small Cap
Growth Portfolio (See
Note 12) -- 107,146,056
Net asset value of shares
issued to shareholders in
reinvestment of dividends 62,966 --
Cost of shares redeemed (89,623,921) (15,858,842)
--------------------------
Increase in net assets
derived from capital
share transactions 7,667,028 111,935,020
--------------------------
Net increase in net
assets 54,608,882 137,503,596
NET ASSETS
--------------------------------------------------------
Beginning of year 185,924,130 48,420,534
--------------------------
End of year $240,533,012 $185,924,130
==========================
Undistributed net investment
income at
end of year $ 2,013,346 $ 67,952
==========================
</Table>
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.
This page intentionally left blank
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
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
INITIAL CLASS
--------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------
2010 2009 2008 2007 2006
Net asset value at beginning of
year $ 7.45 $ 5.28 $ 14.98 $ 11.45 $ 10.17
-------- ------- ------- ------- -------
Net investment income (loss) (a) 0.08 (0.00)++ (0.01) (0.03) (0.04)
Net realized and unrealized gain
(loss) on investments 1.78 2.17 (6.90) 4.18 1.32
-------- ------- ------- ------- -------
Total from investment operations 1.86 2.17 (6.91) 4.15 1.28
-------- ------- ------- ------- -------
Less dividends and distributions:
From net investment income (0.00)++ -- -- -- --
From net realized gain on
investments -- -- (2.79) (0.62) --
-------- ------- ------- ------- -------
Total dividends and distributions (0.00)++ -- (2.79) (0.62) --
-------- ------- ------- ------- -------
Net asset value at end of year $ 9.31 $ 7.45 $ 5.28 $ 14.98 $ 11.45
======== ======= ======= ======= =======
Total investment return 25.03% 41.10%(b) (47.22%) 36.10% 12.64%
Ratios (to average net
assets)/Supplemental Data:
Net investment income (loss) 0.98% (0.02%) (0.13%) (0.23%) (0.34%)
Net expenses 0.85% 1.08% 0.95% 0.92% 0.96% #
Expenses (before reimbursement) 0.85% 1.08% 0.95% 0.92% 0.97% #
Portfolio turnover rate 70% 186% 279% 179% 228%
Net assets at end of year (in
000's) $107,627 $76,143 $14,963 $36,128 $27,772
</Table>
<Table>
++ Less than one cent per share.
# Includes fees paid indirectly which amounted to 0.01% of average net assets
for the year ended December 31, 2006.
(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.
</Table>
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.
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
SERVICE CLASS
-----------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------------------
2010 2009 2008 2007 2006
$ 7.27 $ 5.17 $ 14.80 $ 11.35 $ 10.10
-------- -------- ------- ------- -------
0.07 (0.02) (0.04) (0.07) (0.07)
1.73 2.12 (6.80) 4.14 1.32
-------- -------- ------- ------- -------
1.80 2.10 (6.84) 4.07 1.25
-------- -------- ------- ------- -------
-- -- -- -- --
-- -- (2.79) (0.62) --
-------- -------- ------- ------- -------
-- -- (2.79) (0.62) --
-------- -------- ------- ------- -------
$ 9.07 $ 7.27 $ 5.17 $ 14.80 $ 11.35
======== ======== ======= ======= =======
24.76%(b) 40.62% (b) (47.35%) 35.76% 12.36%
0.84% (0.39%) (0.38%) (0.48%) (0.59%)
1.10% 1.33% 1.20% 1.17% 1.21% #
1.10% 1.33% 1.20% 1.17% 1.22% #
70% 186% 279% 179% 228%
$132,906 $109,781 $33,458 $62,478 $31,805
</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
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 (the "1940 Act"), as an open-end diversified management
investment company. The Portfolios (each a "Portfolio" and collectively, the
"Portfolios") are separate series of the Fund.
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>
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 1940 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>
The investment objectives for each of the Portfolios 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 a high level of current income while preserving capital
and maintaining 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 debt securities. Capital appreciation is a
secondary objective.
ICAP SELECT EQUITY: to seek a superior total return.
INCOME BUILDER: to seek to realize current income consistent with reasonable
opportunity for future growth of capital and income.
INTERNATIONAL EQUITY: to seek to provide long-term growth of capital
commensurate with an acceptable level of risk by investing in a portfolio
consisting primarily of non-U.S. equity securities. 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.
M-324 MainStay VP Series Fund, Inc.
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, Eclipse Funds Inc., 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 generally
accepted accounting principles ("GAAP") in the United States of America and
follows the significant accounting policies described below.
(A) SECURITIES VALUATION. Investments are valued as of the close of regular
trading on the New York Stock Exchange ("Exchange") (generally 4:00 p.m. Eastern
time) on each day the Portfolios are open for business ("valuation date").
"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 that 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 reflect the assumptions market participants would use in
pricing the asset or liability based on market data obtained from sources
independent of the reporting entity.
Unobservable inputs 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 valuation techniques used by the Portfolios to measure fair value during the
year ended December 31, 2010, 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 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.
The Portfolios have procedures to determine the fair value of securities and
other financial instruments for which market prices are not readily available or
which may not be reliably priced. Under these procedures, the Portfolios
primarily employ a market-based approach which may use related or comparable
assets or liabilities, recent transactions, market multiples, book values, and
other relevant information for the investment to determine the fair value of the
investment. The Portfolios may also use an income-based valuation approach in
which the anticipated future cash flows of the investment are discounted to
calculate fair value. Discounts may also be applied due to the nature or
duration of any restrictions on the disposition of the investments. Due to the
inherent uncertainty of valuations of such investments, the fair values may
differ significantly from the values that would have been used had an active
market existed. For the year ended December 31, 2010, there have been no changes
to the fair value methodologies.
The aggregate value by input level, as of December 31, 2010, for each
Portfolio's investments is included at the end of each Portfolio's respective
Portfolio of Investments.
Investments in Underlying Portfolios/Funds are valued at their net asset value
("NAV") at the close of business each day. These securities are generally
categorized as Level 1 in the hierarchy. Securities held by the Underlying
Portfolios/Funds are valued as described in the paragraphs below.
Equity securities and Exchange Traded Funds are valued at the latest quoted
sales prices as of the close of regular trading on the Exchange on each
valuation date. Securities that are not traded on the valuation date are valued
at the mean of the latest quoted bid and asked prices. Prices normally are taken
from the principal market in which each security trades. Futures contracts are
valued at the last posted settlement price on the market where such futures are
primarily traded. Options contracts are valued at the last posted settlement
price on the market where such options are principally traded. Investments in
other mutual funds, including Money Market Funds, are valued at their respective
NAV as of the close of the Exchange on the valuation
mainstayinvestments.com M-325
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
date. These securities are generally categorized as Level 1 in the hierarchy.
Debt securities (other than municipal debt securities) are valued at the
evaluated bid prices (evaluated mean prices in the case of municipal securities)
supplied by a pricing agent or brokers selected by the Portfolio's Manager (as
defined in Note 3(A)) in consultation with a 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
Portfolios' Manager, in consultation with a Portfolio's Subadvisor, if any, to
be representative of market values, at the regular close of trading of the
Exchange on each valuation date. Debt securities, including corporate bonds,
U.S. government & federal agency bonds, municipal bonds, foreign bonds, Yankee
bonds, convertible bonds, asset-backed securities, and mortgage-backed
securities, are generally categorized as Level 2 in the hierarchy.
The Cash Management Portfolio seeks to maintain a stable 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. Investments in the Cash
Management Portfolio are valued daily at their NAV and the securities it holds
are valued at their amortized cost. 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. These securities are generally categorized as Level 2 in the
hierarchy.
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. 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 the principal amount due at
maturity and cost. These securities are all generally categorized as Level 2 in
the hierarchy.
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 and are generally categorized as Level 2
in the hierarchy.
Loan assignments, participations and commitments are valued at the average of
bid quotations obtained from a pricing service, and are generally categorized as
Level 2 in the hierarchy. The Portfolios have engaged an independent pricing
service to provide market value quotations from dealers in loans.
Securities for which market quotations are not readily available are valued by
methods deemed in good faith by the Portfolios' 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 any, 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. These securities are generally categorized as
Level 3 in the hierarchy. At December 31, 2010, the Convertible, Floating Rate,
Government, High Yield Corporate Bond, Income Builder and U.S. Small Cap
Portfolios held securities with values of $234, $993,119, $1,286,399,
$19,672,653, $509,936 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 principally trade, including the
International Equity Portfolio, and the time at which the Portfolios' NAVs are
calculated. These events may include, but are not limited to, situations
relating to a single issuer 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, if any, conclude that such events may have affected the
accuracy of the last price reported on the local foreign market, the Manager or
Subadvisor, if any, may, pursuant to procedures adopted by the Board, adjust the
value of the local price to reflect the impact on the price of such securities
as a result of such events. In this instance, securities are generally
categorized as Level 3 in the hierarchy. Additionally, foreign 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 a Portfolio's policies and
procedures and are generally categorized as Level 2 in the hierarchy. At
December 31, 2010, foreign equity securities held by the Portfolios were not
fair valued.
The Portfolios adopted Financial Accounting Standards Board Accounting Standards
Update No. 2010-06 "Fair Value Measurements and Disclosures" (the "Update"),
effective June 30, 2010. The Update required the Portfolios to make disclosures
about the amounts and reasons for significant transfers in and out of Level 1
and Level 2 measurements in the fair value hierarchy and input and valuation
techniques used to measure fair value for both recurring and nonrecurring fair
value measurements that fall in either Level 2 or Level 3. The Update also
required that the Portfolios separately report information on purchases, sales,
issuances and settlements in the roll forward of activity in Level 3 fair value
measurements. The Portfolios recognize transfers between levels as of the
beginning of the period. Disclosures about the valuation techniques and inputs
used to measure fair value for investments that fall in either Level 2 or Level
3 fair value hierarchy are summarized under the Level 2 and Level 3 categories
listed above. The roll forward activity of Level 3 fair value measurements is
included at the end of each Portfolio's respective Portfolio of Investments.
Generally, a security is considered illiquid if it cannot be sold or disposed of
in the ordinary course of business at approximately the
M-326 MainStay VP Series Fund, Inc.
price at which it is valued. Its illiquidity might prevent the sale of such
security at a time when the Manager or Subadvisor, if any, might wish to sell
it. Illiquid 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 a 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.
(B) 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 ("Internal Revenue
Code"), applicable to regulated investment companies and to distribute all of
the Portfolio's 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 and state income tax returns for all open tax years
(current and prior three tax years), and has concluded that no provision for
federal or state income tax is required in the Portfolios' financial statements.
The Portfolios' federal and state income 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.
(C) 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 intend 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 applicable Portfolio, at NAV. Dividends and distributions to shareholders
are determined in accordance with federal income tax regulations and may differ
from GAAP.
(D) 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.
(E) 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
net assets on the date the expenses are incurred. The expenses borne by each
Portfolio, including those of 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.
(F) 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.
(G) 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
mainstayinvestments.com M-327
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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, a 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. 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.
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 maximum risk
exposure for any purchased option is limited to the premium initially paid for
the option. The Portfolios did not hold purchased or written options at the year
ended December 31, 2010.
(H) 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 (as defined
in Note 3 (A)), if any, to be creditworthy, pursuant to guidelines established
by the 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 1940 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, a
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.
(I) LOAN ASSIGNMENTS, PARTICIPATIONS AND COMMITMENTS. The Floating Rate, High
Yield Corporate Bond and Income Builder Portfolios may invest in loan
assignments and participations. Loan assignments and 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. 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 may 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, a 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 a 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, if any, are
marked to market and recorded in a Portfolio's Statement of Assets and
Liabilities. (See Note 5.)
(J) 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 a Portfolio's
M-328 MainStay VP Series Fund, Inc.
Statement of Assets and Liabilities. The contract or notional amounts and
variation margin reflect the extent of a 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 Balanced
Portfolio, Bond Portfolio, Government Portfolio and Income Builder Portfolio
invest in futures contracts to help manage the duration and yield curve of their
investment portfolios while minimizing the exposure to wider bid/ask spreads in
traditional bonds. The Growth Equity 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. The International Equity
Portfolio invests in futures contracts to reduce the Portfolio's return
volatility. 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.
(K) 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 entered 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 a Portfolio's
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 a Portfolio from
achieving the intended hedge or expose the Portfolio to the risk of currency
exchange loss. The unrealized appreciation (depreciation) on forward contracts
reflects a Portfolio's exposure at valuation date to credit loss in the event of
a counterparty's failure to perform its obligations. (See Note 6.)
(L) 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 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.
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 a 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.)
(M) 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 a 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. A 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.
(N) SECURITIES LENDING. In order to realize additional income, each Portfolio
other than the Cash Management and the Asset Allocation Portfolios may engage in
securities lending, subject to the limitations set forth in the 1940 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
Portfolios against counterparty risk. The loans will be collateralized by cash
or securities at least equal at all times to the market value of the
mainstayinvestments.com M-329
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 will
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 (as defined in Note 3(A))
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, 2010.
(O) 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 may enter into rights and warrants when securities are
acquired through a corporate action. With respect to warrants in international
markets, the securities may 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
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. A Portfolio could also lose the entire
value of the investment in warrants if the warrant is not exercised by the date
of its expiration. The International Equity Portfolio may invest in warrants
when the underlying security cannot 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 invested in warrants only if
received as part of a corporate action. The Portfolios are exposed to risk until
each sale is completed.
(P) 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, as amended. 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.)
(Q) 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--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 the Portfolios
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.
(R) 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.
(S) QUANTITATIVE DISCLOSURE OF DERIVATIVE HOLDINGS. The following tables show
additional disclosures about the Balanced, Bond, Growth Equity, High Yield
Corporate Bond, Income Builder, International Equity, S&P 500 Index and U.S.
Small Cap Portfolios' derivative and hedging activities, including how such
activities are accounted for and their effect on the Portfolios' financial
positions, performance and cash flows. These derivatives are not accounted for
as hedging instruments.
M-330 MainStay VP Series Fund, Inc.
BALANCED PORTFOLIO
The effect of derivative instruments on the Statement of Operations for the year
ended December 31, 2010 is as follows:
REALIZED GAIN (LOSS)
<Table>
<Caption>
INTEREST
STATEMENT OF RATE
OPERATIONS CONTRACTS
LOCATION RISK TOTAL
Net realized gain
(loss) on futures
Futures Contracts transactions $(18,644) $(18,644)
-------------------
Total Realized Gain
(Loss) $(18,644) $(18,644)
===================
</Table>
NUMBER OF CONTRACTS, NOTIONAL AMOUNTS OR SHARES/UNITS (1)
<Table>
<Caption>
INTEREST
RATE
CONTRACTS
RISK TOTAL
Futures Contracts Long (2) 18 18
Futures Contracts Short (2) (5) (5)
=================
</Table>
(1) Amount disclosed represents the weighted average held during the year ended
December 31, 2010.
(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, 2010 is as follows:
REALIZED GAIN (LOSS)
<Table>
<Caption>
INTEREST
STATEMENT OF RATE
OPERATIONS CONTRACTS
LOCATION RISK TOTAL
Net realized gain (loss)
Futures Contracts on futures transactions $(27,529) $(27,529)
-------------------
Total Realized Gain
(Loss) $(27,529) $(27,529)
===================
</Table>
NUMBER OF CONTRACTS, NOTIONAL AMOUNTS OR SHARES/UNITS (1)
<Table>
<Caption>
INTEREST
RATE
CONTRACTS
RISK TOTAL
Futures Contracts Long (2) 127 127
Futures Contracts Short (2) (101) (101)
=================
</Table>
(1) Amount disclosed represents the weighted average held during the year ended
December 31, 2010.
(2) Amount(s) represent(s) number of contracts or number of shares/units.
GROWTH EQUITY PORTFOLIO
Fair value of derivatives instruments as of December 31, 2010:
ASSET DERIVATIVES
<Table>
<Caption>
STATEMENT OF
ASSETS AND EQUITY
LIABILITIES CONTRACTS
LOCATION RISK TOTAL
Net Assets--Unrealized
appreciation (depreciation)
on investments and
Futures Contracts futures contracts (a) $55,439 $55,439
------------------
Total Fair Value $55,439 $55,439
==================
</Table>
(a) Includes cumulative unrealized appreciation (depreciation) of futures
contracts as 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, 2010 is as follows:
REALIZED GAIN (LOSS)
<Table>
<Caption>
STATEMENT OF EQUITY
OPERATIONS CONTRACTS
LOCATION RISK TOTAL
Net realized
gain (loss) on futures
Futures Contracts transactions $318,084 $318,084
-------------------
Total Realized Gain
(Loss) $318,084 $318,084
===================
</Table>
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION)
<Table>
<Caption>
STATEMENT OF EQUITY
OPERATIONS CONTRACTS
LOCATION RISK TOTAL
Net change in unrealized
appreciation (depreciation) on
Futures Contracts futures contracts $55,439 $55,439
------------------
Total Change in Unrealized
Appreciation (Depreciation) $55,439 $55,439
==================
</Table>
NUMBER OF CONTRACTS, NOTIONAL AMOUNTS OR SHARES/UNITS (1)
<Table>
<Caption>
EQUITY
CONTRACTS
RISK TOTAL
Futures Contracts Long (2) 64 64
=================
</Table>
(1) Amount disclosed represents the weighted average held during the year ended
December 31, 2010.
(2) Amount(s) represent(s) number of contracts or number of shares/units.
mainstayinvestments.com M-331
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
HIGH YIELD CORPORATE BOND PORTFOLIO
Fair value of derivatives instruments as of December 31, 2010:
ASSET DERIVATIVES
<Table>
<Caption>
STATEMENT OF
ASSETS AND EQUITY
LIABILITIES CONTRACTS
LOCATION RISK TOTAL
Investment in securities,
Warrants at value $421,257 $421,257
-------------------
Total Fair Value $421,257 $421,257
===================
</Table>
The effect of derivative instruments on the Statement of Operations for the year
ended December 31, 2010 is as follows:
REALIZED GAIN (LOSS)
<Table>
<Caption>
STATEMENT OF EQUITY
OPERATIONS CONTRACTS
LOCATION RISK TOTAL
Warrants Net realized gain (loss)
on security
transactions $(1,170,745) $(1,170,745)
------------------------
Total Realized
Gain (Loss) $(1,170,745) $(1,170,745)
========================
</Table>
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION)
<Table>
<Caption>
STATEMENT OF EQUITY
OPERATIONS CONTRACTS
LOCATION RISK TOTAL
Warrants Net change in unrealized
appreciation (depreciation)
on investments $1,437,508 $1,437,508
----------------------
Total Change in
Unrealized
Appreciation
(Depreciation) $1,437,508 $1,437,508
======================
</Table>
NUMBER OF CONTRACTS, NOTIONAL AMOUNTS OR SHARES/UNITS (1)
<Table>
<Caption>
EQUITY
CONTRACTS RISK TOTAL
Rights (2) 654,844 654,844
Warrants (2) 278,492 278,492
======================================================
</Table>
(1) Amount disclosed represents the weighted average held during the year ended
December 31, 2010.
(2) Amount(s) represent(s) number of contracts or number of shares/units.
INCOME BUILDER PORTFOLIO
Fair value of derivatives instruments as of December 31, 2010:
ASSET DERIVATIVES
<Table>
<Caption>
STATEMENT OF FOREIGN INTEREST
ASSETS AND EXCHANGE EQUITY RATE
LIABILITIES CONTRACTS CONTRACTS CONTRACTS
LOCATION RISK RISK RISK TOTAL
Futures Contracts Net Assets-
Unrealized
appreciation on
investments and
futures contracts
(a) $ -- $1,446,975 $-- $1,446,975
Forward Contracts Unrealized
appreciation on
foreign currency
forward contracts 1,692,989 -- -- 1,692,989
Warrants Investments in
securities, at value -- --(b) -- --(b)
---------------------------------------------------
Total Fair Value $1,692,989 $1,446,975 $-- $3,139,964
===================================================
</Table>
(a) Includes cumulative unrealized appreciation of futures contracts as reported
in Portfolio of Investments. Only current day's variation margin is reported
within the Statement of Assets & Liabilities.
(b) Less than one dollar.
M-332 MainStay VP Series Fund, Inc.
LIABILITY DERIVATIVES
<Table>
<Caption>
STATEMENT OF FOREIGN INTEREST
ASSETS AND EXCHANGE EQUITY RATE
LIABILITIES CONTRACTS CONTRACTS CONTRACTS
LOCATION RISK RISK RISK TOTAL
Forward Contracts Unrealized
depreciation on
foreign currency
forward contracts $1,477,730 $-- $-- $1,477,730
--------------------------------------------------
Total Fair Value $1,477,730 $-- $-- $1,477,730
==================================================
</Table>
The effect of derivative instruments on the Statement of Operations for the year
ended December 31, 2010 is as follows:
REALIZED GAIN (LOSS)
<Table>
<Caption>
FOREIGN INTEREST
STATEMENT OF EXCHANGE EQUITY RATE
OPERATIONS CONTRACTS CONTRACTS CONTRACTS
LOCATION RISK RISK RISK TOTAL
Rights Net realized gain
(loss) on security
transactions $ -- $ 69 $ -- $ 69
Warrants Net realized gain
(loss) on security
transactions -- 33,573 -- 33,573
Futures Contracts Net realized (loss)
on futures
transactions -- 5,934,023 (43,737) 5,890,286
Forward Contracts Net realized gain on
foreign currency
transactions (763,567) -- -- (763,567)
--------------------------------------------------
Total Realized Gain
(Loss) $(763,567) $5,967,665 $(43,737) $5,160,361
==================================================
</Table>
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION)
<Table>
<Caption>
FOREIGN INTEREST
STATEMENT OF EXCHANGE EQUITY RATE
OPERATIONS CONTRACTS CONTRACTS CONTRACTS
LOCATION RISK RISK RISK TOTAL
Warrants Net change in
unrealized
appreciation
(depreciation) on
security
transactions $ -- $ 22,822 $ -- $ 22,822
Futures Contracts Net change in
unrealized
appreciation
(depreciation) on
futures contracts -- 1,153,225 250,582 1,403,807
Forward Contracts Net change in
unrealized
appreciation
(depreciation) on
translation of other
assets and
liabilities in
foreign currencies
and foreign currency
forward contracts 43,103 -- -- 43,103
--------------------------------------------------
Total Change in
Unrealized Appreciation
(Depreciation) $43,103 $1,176,047 $250,582 $1,469,732
==================================================
</Table>
NUMBER OF CONTRACTS, NOTIONAL AMOUNTS OR SHARES/UNITS (1)
<Table>
<Caption>
INTEREST
FOREIGN EQUITY RATE
EXCHANGE CONTRACTS CONTRACTS
CONTRACTS RISK RISK RISK TOTAL
Rights (2) -- 61,900 -- 61,900
Warrants (2) -- 8,850 -- 8,850
Futures Contracts (2) -- 851 90 941
Forward Contracts Short (3) $63,537,602 -- -- $63,537,602
Forward Contracts Long (3) $45,964,014 $45,964,014
=======================================================
</Table>
(1) Amount disclosed represents the weighted average held during the year ended
December 31, 2010.
(2) Amount(s) represent(s) number of contracts or number of shares/units.
(3) Amount(s) represent(s) notional amount.
mainstayinvestments.com M-333
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
INTERNATIONAL EQUITY PORTFOLIO
Fair value of derivatives instruments as of December 31, 2010:
ASSET DERIVATIVES
<Table>
<Caption>
STATEMENT OF FOREIGN
ASSETS AND EXCHANGE EQUITY
LIABILITIES CONTRACTS CONTRACTS
LOCATION RISK RISK TOTAL
Warrants Investment in
securities, at value $ -- $19,372,140 $19,372,140
Forward Contracts Unrealized
appreciation on
foreign currency
forward contracts 60,608 -- 60,608
Futures Contracts Net
Assets--Unrealized
depreciation on
investments and
futures contracts
(a) -- 352,154 352,154
---------------------------------------
Total Fair Value $60,608 $19,724,294 $19,784,902
=======================================
</Table>
LIABILITY DERIVATIVES
<Table>
<Caption>
STATEMENT OF FOREIGN
ASSETS AND EXCHANGE EQUITY
LIABILITIES CONTRACTS CONTRACTS
LOCATION RISK RISK TOTAL
Futures Contracts Net
Assets--Unrealized
depreciation on
investments and
futures contracts
(a) $ -- $(629,373) $ (629,373)
Forward Contracts Unrealized
depreciation on
foreign currency
forward contracts (1,809,058) -- (1,809,058)
---------------------------------------
$(1,809,058) $(629,373) $(2,438,431)
=======================================
</Table>
(a) Includes cumulative unrealized appreciation (depreciation) of futures
contracts as 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, 2010 is as follows:
REALIZED GAIN (LOSS)
<Table>
<Caption>
FOREIGN
STATEMENT OF EXCHANGE EQUITY
OPERATIONS CONTRACTS CONTRACTS
LOCATION RISK RISK TOTAL
Rights Net realized gain on
security
transactions $ -- $ 279,905 $ 279,905
Futures Contracts Net realized gain
(loss) on futures
transactions -- 3,151,387 3,151,387
Forward Contracts Net realized gain
(loss) on foreign
currency
transactions 1,001,332 -- 1,001,332
Purchased Option -- (584,152) (584,152)
--------------------------------------
Total Realized Gain (Loss) $1,001,332 $2,847,140 $3,848,472
======================================
</Table>
M-334 MainStay VP Series Fund, Inc.
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION)
<Table>
<Caption>
FOREIGN
STATEMENT OF EXCHANGE EQUITY
OPERATIONS CONTRACTS CONTRACTS
LOCATION RISK RISK TOTAL
Warrants Net change in
unrealized
appreciation
(depreciation) on
security
transactions $ -- $ 921,789 $ 921,789
Futures Contracts Net change in
unrealized
appreciation
(depreciation) on
futures contracts -- (1,864,585) (1,864,585)
Forward Contracts Net change in
unrealized
appreciation
(depreciation) on
translation of other
assets and
liabilities in
foreign currencies
and foreign currency
forward contracts (1,517,082) -- (1,517,082)
-----------------------------------------
Total Change in Unrealized
Appreciation (Depreciation) $(1,517,082) $ (942,796) $(2,459,878)
=========================================
</Table>
NUMBER OF CONTRACTS, NOTIONAL AMOUNTS OR SHARES/UNITS (1)
<Table>
<Caption>
FOREIGN
EXCHANGE EQUITY
CONTRACTS CONTRACTS
RISK RISK TOTAL
Rights (2) -- 335,900 335,900
Purchased Options
(2) -- 765 765
Warrants (2) -- 3,671,876 3,671,876
Futures Contracts
(2) -- 916 916
Forward Contracts
Long (3) $ 39,084,738 -- $ 39,084,738
Forward Contracts
Short (3) $(39,084,738) -- $(39,084,738)
=====================================
</Table>
(1) Amount disclosed represents the weighted average held during the year ended
December 31, 2010.
(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, 2010:
ASSET DERIVATIVES
<Table>
<Caption>
STATEMENT OF
ASSETS AND EQUITY
LIABILITIES CONTRACTS
LOCATION RISK TOTAL
Net Assets--
Unrealized
appreciation on
investments and
Futures Contracts futures contracts (a) $538,660 $538,660
-------------------
Total Fair Value $538,660 $538,660
===================
</Table>
(a) Includes cumulative unrealized appreciation (depreciation) of futures
contracts as 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, 2010 is as follows:
REALIZED GAIN (LOSS)
<Table>
<Caption>
STATEMENT OF EQUITY
OPERATIONS CONTRACTS
LOCATION RISK TOTAL
Net realized
gain on
Futures Contracts futures transactions $5,066,622 $5,066,622
----------------------
Total Realized Gain $5,066,622 $5,066,622
======================
</Table>
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION)
<Table>
<Caption>
STATEMENT OF EQUITY
OPERATIONS CONTRACTS
LOCATION RISK TOTAL
Net change in
unrealized appreciation
(depreciation)
Futures Contracts on futures contracts $(406,515) $(406,515)
--------------------
Total Change in Unrealized
Appreciation (Depreciation) $(406,515) $(406,515)
====================
</Table>
NUMBER OF CONTRACTS, NOTIONAL AMOUNTS OR SHARES/UNITS (1)
<Table>
<Caption>
EQUITY
CONTRACTS RISK TOTAL
Futures Contracts (2) 540 540
======================
</Table>
(1) Amount disclosed represents the weighted average held during the year ended
December 31, 2010.
(2) Amount(s) represent(s) number of contracts or number of shares/units.
mainstayinvestments.com M-335
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
U.S. SMALL CAP PORTFOLIO
Fair value of derivatives instruments as of December 31, 2010:
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 year ended
December 31, 2010.
(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 the Portfolios' investment manager pursuant an Amended and
Restated Management Agreement ("Management Agreement"). New York Life
Investments manages the Bond, Cash Management, Conservative Allocation, Floating
Rate, Growth Allocation, Moderate Allocation and Moderate Growth Allocation
Portfolios and the fixed-income portion of the Balanced Portfolio directly
without the use of a subadvisor.
Madison Square Investors LLC ("Madison Square Investors"), a registered
investment adviser and an indirect, wholly-owned subsidiary of New York Life,
serves as Subadvisor to the following Portfolios: Common Stock, Growth Equity,
Mid Cap Core, S&P 500 Index, and the equity portion of Balanced, under the terms
of a Subadvisory Agreement with New York Life Investments.
Prior to January 1, 2011, Madison Square Investors served as the Subadvisor to
the Asset Allocation Portfolios. On December 2, 2010, the Board approved the
termination of the Subadvisory Agreement with Madison Square Investors,
effective January 1, 2011, after which New York Life Investments assumed the
day-to-day portfolio management of the Asset Allocation Portfolios.
Epoch Investment Partners, Inc. ("Epoch"), a registered investment adviser,
serves as the Subadvisor to the U.S. Small Cap Portfolio and the equity portion
of the Income Builder Portfolio pursuant to the terms of a Subadvisory Agreement
with New York Life Investments.
MacKay Shields LLC ("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 overall asset allocation and fixed-income portion
of Income Builder, under the terms of an Amended and Restated Subadvisory
Agreement ("Subadvisory Agreement") with New York Life Investments.
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 an Amended and Restated
Subadvisory Agreement ("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 an
Amended and Restated Subadvisory Agreement ("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. Except for the portion of salaries
and expenses that are the responsibility of the Portfolios, the Manager also
pays the salaries and expenses of all personnel affiliated with the Portfolios
and the operational expenses of 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 voluntarily
agreed to waive fees and/or reimburse expenses with respect to certain
Portfolios. The voluntary waivers/reimbursements may be discontinued at any
time. From time to time, the Manager may voluntarily limit the Cash Management
Portfolio's expenses to the extent it deems appropriate to enhance the
Portfolio's yield during periods when expenses may have a significant impact on
yield because of low interest rates. This limitation may be revised or
terminated by the Manager at any time without notice.
M-336 MainStay VP Series Fund, Inc.
<Table>
<Caption>
ANNUAL RATE ON
AVERAGE DAILY
NET ASSETS
Balanced Portfolio 0.75%(a)
--------------------------------------------------
Bond Portfolio 0.50%(b)
--------------------------------------------------
Cash Management Portfolio 0.45%(c)
--------------------------------------------------
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) Up to $1 billion and 0.70% in excess of $1 billion. Effective August 1,
2010, New York Life Investments has voluntarily agreed to waive a portion of
its management fee for the Balanced Portfolio so that the management fee on
average daily net assets is 0.70% up to $1 billion and 0.65% over $1
billion. This waiver is voluntary and may be discontinued at any time. For
the year ended December 31, 2010, the Manager waived its fees in the amount
of $31,124.
(b) Up to $500 million, 0.475% from $500 million to $1 billion and 0.45% in
excess of $1 billion.
(c) Up to $500 million, 0.40% from $500 million to $1 billion and 0.35% in
excess of $1 billion. For the year ended December 31, 2010, New York Life
Investments waived its fees in the amount of $1,757,271, which may not be
recouped by New York Life Investments.
(d) Up to $500 million, 0.525% from $500 million to $1 billion and 0.50% in
excess of $1 billion.
(e) Prior to August 1, 2010, New York Life Investments had 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. These waivers expired on July 31, 2010.
(f) Up to $1 billion and 0.50% in excess of $1 billion.
(g) Up to $1 billion, 0.55% from $1 billion to $5 billion and 0.525% in excess
of $5 billion.
(h) Up to $250 million, 0.75% from $250 million to $1 billion and 0.74% in
excess of $1 billion.
(i) Up to $1 billion and 0.55% in excess of $1 billion.
(j) Up to $500 million and 0.85% in excess of $500 million.
(k) Up to $500 million, 0.725% from $500 million to $1 billion and 0.70% in
excess of $1 billion. The Subadvisory Agreement between New York Life
Investments and Winslow on behalf of the Large Cap Growth Portfolio includes
breakpoints based on the aggregation of assets of all New York Life
Investments managed mutual funds subadvised by Winslow. Effective May 1,
2008, New York Life Investments has voluntarily agreed to waive a portion of
its management fee when the subadvisory fee is reduced as a result of
achieving breakpoints in the subadvisory fee schedule. The savings that
results from the reduced subadvisory fee will be shared equally with the
Portfolio provided that the amount of the management fee retained by New
York Life Investments, after payment of the subadvisory fee, exceeds 0.35%
of the average daily net assets of the Portfolio. Additionally, effective
July 1, 2010 the Manager has voluntarily agreed to waive $12,500 annually of
its management fee for the Portfolio. This fee waiver is in addition to the
management fee waiver which became effective May 1, 2008, is voluntary and
may be discontinued at any time. For the year ended December 31, 2010, New
York Life Investments waived its fees in the amount of $31,315.
(l) Up to $1 billion and 0.80% in excess of $1 billion.
(m) Up to $1 billion, 0.275% from $1 billion to $2 billion, 0.265% from $2
billion to $3 billion and 0.25% in excess of $3 billion. Effective May 1,
2008, New York Life Investments voluntarily agreed to waive a portion of its
management fee to 0.25% up to $1 billion, 0.225% from $1 billion to $2
billion, 0.215% from $2 billion to $3 billion and 0.20% in excess of $3
billion. For the year ended December 31, 2010, the Manager waived its fees
in the amount of $454,598.
(n) Up to $200 million, 0.75% from $200 million to $500 million, 0.725% from
$500 million to $1 billion and 0.70% in excess of $1 billion.
(B) DISTRIBUTION AND SERVICE FEES. NYLIFE Distributors LLC ("NYLIFE
Distributors" or the "Distributor"), an indirect, wholly-owned subsidiary of New
York Life, serves as distributor to the Service Class shares of all Portfolios
offering such shares, pursuant to a Distribution and Service Agreement. 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 1940 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.
(C) CAPITAL. At December 31, 2010, 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 8.33%
----------------------------------------------
MainStay 130/30 Growth Fund Class I 4.12
----------------------------------------------
MainStay 130/30 International Fund
Class I 5.18
----------------------------------------------
MainStay Epoch Global Choice Fund Class
I 3.50
----------------------------------------------
MainStay Epoch U.S. All Cap Fund Class
I 3.95
----------------------------------------------
MainStay Global High Income Fund Class
I 5.87
----------------------------------------------
MainStay High Yield Opportunities Fund
Class I 5.94
----------------------------------------------
MainStay ICAP Equity Fund Class I 1.90
----------------------------------------------
MainStay ICAP International Fund Class
I 1.05
----------------------------------------------
</Table>
mainstayinvestments.com M-337
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<Table>
<Caption>
CONSERVATIVE ALLOCATION PORTFOLIO (CONTINUED)
MainStay Intermediate Term Bond Fund Class I
4.94%
----------------------------------------------
MainStay MAP Fund Class I 2.23
----------------------------------------------
MainStay VP Bond Portfolio Initial
Class 24.21
----------------------------------------------
MainStay VP Common Stock Portfolio
Initial Class 1.85
----------------------------------------------
MainStay VP Convertible Portfolio
Initial Class 5.53
----------------------------------------------
MainStay VP Floating Rate Portfolio
Initial Class 25.98
----------------------------------------------
MainStay VP Growth Equity Portfolio
Initial Class 0.02
----------------------------------------------
MainStay VP High Yield Corporate Bond
Portfolio Initial Class 2.00
----------------------------------------------
MainStay VP ICAP Select Equity
Portfolio Initial Class 1.91
----------------------------------------------
MainStay VP International Equity
Portfolio Initial Class 2.44
----------------------------------------------
MainStay VP Large Cap Growth Portfolio
Initial Class 6.71
----------------------------------------------
MainStay VP Mid Cap Core Portfolio
Initial Class 5.29
----------------------------------------------
MainStay VP U.S. Small Cap Portfolio
Initial Class 4.50
----------------------------------------------
</Table>
<Table>
<Caption>
GROWTH ALLOCATION PORTFOLIO
MainStay 130/30 Core Fund Class I 7.59%
----------------------------------------------
MainStay 130/30 Growth Fund Class I 7.03
----------------------------------------------
MainStay 130/30 International Fund
Class I 12.36
----------------------------------------------
MainStay Epoch Global Choice Fund Class
I 8.72
----------------------------------------------
MainStay Epoch U.S. All Cap Fund Class
I 5.17
----------------------------------------------
MainStay ICAP Equity Fund Class I 2.25
----------------------------------------------
MainStay ICAP International Fund Class
I 2.60
----------------------------------------------
MainStay MAP Fund Class I 3.24
----------------------------------------------
MainStay VP Common Stock Portfolio
Initial Class 2.74
----------------------------------------------
MainStay VP Growth Equity Portfolio
Initial Class 0.05
----------------------------------------------
MainStay VP ICAP Select Equity
Portfolio Initial Class 2.27
----------------------------------------------
MainStay VP International Equity
Portfolio Initial Class 6.03
----------------------------------------------
MainStay VP Large Cap Growth Portfolio
Initial Class 9.50
----------------------------------------------
MainStay VP Mid Cap Core Portfolio
Initial Class 10.00
----------------------------------------------
MainStay VP U.S. Small Cap Portfolio
Initial Class 8.09
----------------------------------------------
</Table>
<Table>
<Caption>
MODERATE ALLOCATION PORTFOLIO
MainStay 130/30 Core Fund Class I 15.94%
----------------------------------------------
MainStay 130/30 Growth Fund Class I 7.54
----------------------------------------------
MainStay 130/30 International Fund
Class I 14.64
----------------------------------------------
MainStay Epoch Global Choice Fund Class
I 10.06
----------------------------------------------
MainStay Epoch U.S. All Cap Fund Class
I 7.06
----------------------------------------------
MainStay Global High Income Fund Class
I 5.78
----------------------------------------------
MainStay High Yield Opportunities Fund
Class I 5.85
----------------------------------------------
MainStay ICAP Equity Fund Class I 4.14
----------------------------------------------
MainStay ICAP International Fund Class
I 3.06
----------------------------------------------
MainStay Intermediate Term Bond Fund
Class I 4.73
----------------------------------------------
MainStay MAP Fund Class I 4.39
----------------------------------------------
MainStay VP Bond Portfolio Initial
Class 23.35%
----------------------------------------------
MainStay VP Common Stock Portfolio
Initial Class 3.95
----------------------------------------------
MainStay VP Convertible Portfolio
Initial Class 5.31
----------------------------------------------
MainStay VP Floating Rate Portfolio
Initial Class 25.58
----------------------------------------------
MainStay VP Growth Equity Portfolio
Initial Class 0.03
----------------------------------------------
MainStay VP High Yield Corporate Bond
Portfolio Initial Class 1.97
----------------------------------------------
MainStay VP ICAP Select Equity
Portfolio Initial Class 4.16
----------------------------------------------
MainStay VP International Equity
Portfolio Initial Class 7.09
----------------------------------------------
MainStay VP Large Cap Growth Portfolio
Initial Class 14.60
----------------------------------------------
MainStay VP Mid Cap Core Portfolio
Initial Class 10.63
----------------------------------------------
MainStay VP S&P 500 Index Portfolio
Initial Class 0.01
----------------------------------------------
MainStay VP U.S. Small Cap Portfolio
Initial Class 7.72
----------------------------------------------
</Table>
<Table>
<Caption>
MODERATE GROWTH ALLOCATION PORTFOLIO
MainStay 130/30 Core Fund Class I 16.21%
----------------------------------------------
MainStay 130/30 Growth Fund Class I 11.97
----------------------------------------------
MainStay 130/30 International Fund
Class I 23.59
----------------------------------------------
MainStay Epoch Global Choice Fund Class
I 16.58
----------------------------------------------
MainStay Epoch U.S. All Cap Fund Class
I 11.27
----------------------------------------------
MainStay Global High Income Fund Class
I 6.22
----------------------------------------------
MainStay High Yield Opportunities Fund
Class I 6.29
----------------------------------------------
MainStay ICAP Equity Fund Class I 4.40
----------------------------------------------
MainStay ICAP International Fund Class
I 4.97
----------------------------------------------
MainStay Intermediate Term Bond Fund
Class I 1.10
----------------------------------------------
MainStay MAP Fund Class I 7.32
----------------------------------------------
MainStay VP Bond Portfolio Initial
Class 5.42
----------------------------------------------
MainStay VP Common Stock Portfolio
Initial Class 5.15
----------------------------------------------
MainStay VP Convertible Portfolio
Initial Class 5.72
----------------------------------------------
MainStay VP Floating Rate Portfolio
Initial Class 27.50
----------------------------------------------
MainStay VP Growth Equity Portfolio
Initial Class 0.13
----------------------------------------------
MainStay VP High Yield Corporate Bond
Portfolio Initial Class 2.12
----------------------------------------------
MainStay VP ICAP Select Equity
Portfolio Initial Class 4.45
----------------------------------------------
MainStay VP International Equity
Portfolio Initial Class 11.49
----------------------------------------------
MainStay VP Large Cap Growth Portfolio
Initial Class 19.49
----------------------------------------------
MainStay VP Mid Cap Core Portfolio
Initial Class 20.46
----------------------------------------------
MainStay VP S&P 500 Index Portfolio
Initial Class 0.01
----------------------------------------------
MainStay VP U.S. Small Cap Portfolio
Initial Class 12.95
----------------------------------------------
</Table>
(D) 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,
M-338 MainStay VP Series Fund, Inc.
2010, these fees, which are included in Professional Fees shown on a Portfolio's
Statement of Operations, are as follows:
<Table>
Balanced Portfolio $ 3,191
----------------------------------------------
Bond Portfolio 18,022
----------------------------------------------
Cash Management Portfolio 16,235
----------------------------------------------
Common Stock Portfolio 13,638
----------------------------------------------
Conservative Allocation Portfolio 7,595
----------------------------------------------
Convertible Portfolio 9,894
----------------------------------------------
Floating Rate Portfolio 10,353
----------------------------------------------
Government Portfolio 8,316
----------------------------------------------
Growth Allocation Portfolio 4,990
----------------------------------------------
Growth Equity Portfolio $ 9,919
----------------------------------------------
High Yield Corporate Bond Portfolio 37,226
----------------------------------------------
ICAP Select Equity Portfolio 24,873
----------------------------------------------
Income Builder Portfolio 5,976
----------------------------------------------
International Equity Portfolio 11,614
----------------------------------------------
Large Cap Growth Portfolio 7,095
----------------------------------------------
Mid Cap Core Portfolio 14,625
----------------------------------------------
Moderate Allocation Portfolio 10,775
----------------------------------------------
Moderate Growth Allocation Portfolio 10,917
----------------------------------------------
S&P 500 Index Portfolio 20,445
----------------------------------------------
U.S. Small Cap Portfolio 4,817
----------------------------------------------
</Table>
NOTE 4-FEDERAL INCOME TAX
At December 31, 2010, the components of accumulated gain (loss) on a tax basis
were as follows:
<Table>
<Caption>
ACCUMULATED OTHER UNREALIZED TOTAL
ORDINARY CAPITAL TEMPORARY APPRECIATION/ ACCUMULATED
INCOME GAIN (LOSS) DIFFERENCES (DEPRECIATION) GAIN (LOSS)
Balanced Portfolio $ 2,364,348 $ (23,284,556) $ -- $ 17,559,733 $ (3,360,475)
------------------------------------------------------------------------------------------------------------------
Bond Portfolio 36,809,013 2,844,795 -- 20,775,122 60,428,930
------------------------------------------------------------------------------------------------------------------
Cash Management Portfolio -- -- (5,950) -- (5,950)
------------------------------------------------------------------------------------------------------------------
Common Stock Portfolio 8,271,279 (211,172,115) -- 60,759,730 (142,141,106)
------------------------------------------------------------------------------------------------------------------
Conservative Allocation
Portfolio 10,831,751 1,438,528 (24,783,492) 36,566,026 24,052,813
------------------------------------------------------------------------------------------------------------------
Convertible Portfolio 11,899,007 (12,790,390) (428,003) 69,418,390 68,099,004
------------------------------------------------------------------------------------------------------------------
Floating Rate Portfolio 106,719 (13,149,496) -- 4,586,866 (8,455,911)
------------------------------------------------------------------------------------------------------------------
Government Portfolio 14,154,214 35,317 (6,074) 8,548,918 22,732,375
------------------------------------------------------------------------------------------------------------------
Growth Allocation Portfolio 1,802,535 (5,033,030) (38,211,805) 29,025,317 (12,416,983)
------------------------------------------------------------------------------------------------------------------
Growth Equity Portfolio 1,894,147 (71,910,511) -- 72,760,880 2,744,516
------------------------------------------------------------------------------------------------------------------
High Yield Corporate Bond
Portfolio 117,667,726 (196,349,045) (150,383) 84,745,358 5,913,656
------------------------------------------------------------------------------------------------------------------
ICAP Select Equity Portfolio 15,244,920 (297,858,551) -- 163,045,838 (119,567,793)
------------------------------------------------------------------------------------------------------------------
Income Builder Portfolio 10,988,920 (32,122,560) (10,104) 26,047,001 4,903,257
------------------------------------------------------------------------------------------------------------------
International Equity Portfolio 14,967,531 (86,464,182) (3,128,931) 25,411,261 (49,214,321)
------------------------------------------------------------------------------------------------------------------
Large Cap Growth Portfolio -- (49,784,067) -- 80,045,001 30,260,934
------------------------------------------------------------------------------------------------------------------
Mid Cap Core Portfolio 4,755,440 (42,941,429) -- 122,347,793 84,161,804
------------------------------------------------------------------------------------------------------------------
Moderate Allocation Portfolio 10,843,898 1,512,814 (46,275,753) 55,150,287 21,231,246
------------------------------------------------------------------------------------------------------------------
Moderate Growth Allocation
Portfolio 8,214,430 (6,192,696) (60,766,776) 60,721,427 1,976,385
------------------------------------------------------------------------------------------------------------------
S&P 500 Index Portfolio 14,942,427 (105,373,747) -- 320,277,747 229,846,427
------------------------------------------------------------------------------------------------------------------
U.S. Small Cap Portfolio 2,013,346 (34,930,401) -- 30,545,889 (2,371,166)
------------------------------------------------------------------------------------------------------------------
</Table>
The difference between book-basis and tax-basis unrealized appreciation
(depreciation) is primarily due to wash sale deferrals, passive foreign
investment-company ("PFIC") inclusions, real estate investment trust ("REITs")
basis adjustments, non-taxable dividends, partnership basis adjustments, debt
modifications, straddle loss deferrals, Lehman adjustments and marking to market
of foreign currency forward contracts and futures contracts.
The other temporary differences are primarily due to dividends payable, loss
deferrals from related party transactions, post-October loss deferrals 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,
mainstayinvestments.com M-339
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
arising from permanent differences; net assets at December 31, 2010 are not
affected.
<Table>
<Caption>
UNDISTRIBUTED UNDISTRIBUTED ADDITIONAL
NET INCOME NET REALIZED PAID-IN
(LOSS) GAIN (LOSS) CAPITAL
Balanced Portfolio $ (58,519) $ 58,519 $ --
------------------------------------------------------------------
Bond Portfolio 1,069,276 (1,069,276) --
------------------------------------------------------------------
Cash Management
Portfolio 21,521 (21,521) --
------------------------------------------------------------------
Common Stock Portfolio (43,441) 43,441 --
------------------------------------------------------------------
Conservative
Allocation Portfolio 1,612,573 (1,612,573) --
------------------------------------------------------------------
Floating Rate
Portfolio 40,459 (40,459) --
------------------------------------------------------------------
Government Portfolio 1,339,936 (1,339,936) --
------------------------------------------------------------------
Growth Equity
Portfolio (140,306) 140,306 --
------------------------------------------------------------------
High Yield Corporate
Bond Portfolio (2,800,906) 11,045,869 (8,244,963)
------------------------------------------------------------------
ICAP Select Equity
Portfolio 3,167 192,366 (195,533)
------------------------------------------------------------------
Income Builder
Portfolio (1,854,297) 1,854,297 --
------------------------------------------------------------------
International Equity
Portfolio 1,906,781 (1,906,781) --
------------------------------------------------------------------
Large Cap Growth
Portfolio 819,696 9,038,106 (9,857,802)
------------------------------------------------------------------
Mid Cap Core Portfolio (245,719) 246,379 (660)
------------------------------------------------------------------
Moderate Allocation
Portfolio 1,464,628 (1,464,628) --
------------------------------------------------------------------
Moderate Growth
Allocation Portfolio 501,260 (501,260) --
------------------------------------------------------------------
S&P 500 Index
Portfolio (176,614) 42,113,315 (41,936,701)
------------------------------------------------------------------
U.S. Small Cap
Portfolio (5,001) 5,001 --
------------------------------------------------------------------
</Table>
The reclassifications for the Portfolios are primarily due to capital gain and
return of capital distributions from REITs and RICs, amendment fee income,
reclassifications of mortgage dollar roll income, reclassifications of
distributions, reclassifications of litigation settlements, foreign currency
gain (loss), partnership basis adjustments, distributions from partnership,
reclassification of consent fee income, interest income on defaulted securities,
income distributions received from underlying investments, PFIC gain (loss),
expiration of a portion of capital loss carryforward and net operating losses.
At December 31, 2010, 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, 2010, as if they arose on January 1, 2011.
<Table>
<Caption>
CAPITAL LOSS CAPITAL LOSS
AVAILABLE AMOUNTS DEFERRED
THROUGH (000'S) (000'S)
Balanced Portfolio 2016 $ 6,812
2017 16,473
---------------------------------------------------------------
Total $ 23,285 $ --
---------------------------------------------------------------
Common Stock Portfolio 2016 $101,126
2017 110,046
---------------------------------------------------------------
Total $211,172 $ --
---------------------------------------------------------------
Convertible Portfolio 2017 $ 12,790 $ 422
---------------------------------------------------------------
Floating Rate Portfolio 2015 $ 290
2016 10,397
2017 2,462
---------------------------------------------------------------
Total $ 13,149 $ --
---------------------------------------------------------------
Government Portfolio $ -- $ 6
---------------------------------------------------------------
Growth Allocation
Portfolio 2017 $ 4,350
2018 683
---------------------------------------------------------------
Total $ 5,033 $ --
---------------------------------------------------------------
Growth Equity Portfolio 2012 $ 12,450
2016 32,599
2017 26,862
---------------------------------------------------------------
Total $ 71,911 $ --
---------------------------------------------------------------
High Yield Corporate
Bond Portfolio 2011 61,979
2016 40,705
2017 93,665
---------------------------------------------------------------
Total $196,349 $ --
---------------------------------------------------------------
ICAP Select Equity
Portfolio 2016 $ 98,574
2017 199,285
---------------------------------------------------------------
Total $297,859 $ --
---------------------------------------------------------------
Income Builder
Portfolio 2016 $ 1,168
2017 30,955
---------------------------------------------------------------
Total $ 32,123 $ --
---------------------------------------------------------------
International Equity
Portfolio 2016 $ 47,174
2017 39,290
---------------------------------------------------------------
Total $ 86,464 $3,129*
---------------------------------------------------------------
Large Cap Growth
Portfolio 2012 $ 294
2014 941
2016 17,703
2017 30,846
---------------------------------------------------------------
Total $ 49,784 $ --
---------------------------------------------------------------
Mid Cap Core Portfolio 2017 $ 42,941 $ --
---------------------------------------------------------------
Moderate Growth
Allocation Portfolio 2017 $ 6,193
---------------------------------------------------------------
Total $ 6,193 $ --
---------------------------------------------------------------
</Table>
M-340 MainStay VP Series Fund, Inc.
<Table>
<Caption>
CAPITAL LOSS CAPITAL LOSS
AVAILABLE AMOUNTS DEFERRED
THROUGH (000'S) (000'S)
S&P 500 Index Portfolio 2011 $ 14,323
2012 1,932
2013 17,352
2014 29,971
2016 18,017
2017 23,779
---------------------------------------------------------------
Total $105,374 $ --
---------------------------------------------------------------
U.S. Small Cap
Portfolio 2015 $ 4,051
2016 28,045
2017 2,834
---------------------------------------------------------------
Total $ 34,930 $ --
---------------------------------------------------------------
</Table>
* Currency Loss Deferred (000's)
The following Portfolios utilized capital loss carryforwards during the year
ended December 31, 2010:
<Table>
<Caption>
CAPITAL LOSS
CARRYFORWARD
UTILIZED
Balanced Portfolio $ 7,315,106
-------------------------------------------------
Common Stock Portfolio 27,921,584
-------------------------------------------------
Conservative Allocation Portfolio 2,218,224
-------------------------------------------------
Convertible Portfolio 18,571,962
-------------------------------------------------
Floating Rate Portfolio 745,339
-------------------------------------------------
Growth Equity Portfolio $26,568,591
-------------------------------------------------
High Yield Corporate Bond Portfolio 3,412,015
-------------------------------------------------
ICAP Select Equity Portfolio 78,154,260
-------------------------------------------------
Income Builder Portfolio 15,886,853
-------------------------------------------------
International Equity Portfolio 5,927,600
-------------------------------------------------
Large Cap Growth Portfolio 28,047,820
-------------------------------------------------
Mid Cap Core Portfolio 72,235,466
-------------------------------------------------
Moderate Allocation Portfolio 6,242,916
-------------------------------------------------
Moderate Growth Allocation
Portfolio 1,996,740
-------------------------------------------------
S&P 500 Index Portfolio 8,971,730
-------------------------------------------------
U.S. Small Cap Portfolio 23,582,773
-------------------------------------------------
</Table>
The following Portfolios had capital loss carryforwards expire during the year
ended December 31, 2010:
<Table>
<Caption>
CAPITAL LOSS
CARRYFORWARD
EXPIRED
High Yield Corporate Bond Portfolio $ 8,011,025
-------------------------------------------------
Large Cap Growth Portfolio 9,038,106
-------------------------------------------------
S&P 500 Index Portfolio 41,936,701
-------------------------------------------------
</Table>
The tax character of distributions paid during the years ended December 31, 2010
and December 31, 2009 shown in the Statements of Changes in Net Assets, was as
follows:
<Table>
<Caption>
2010 2009
----------------------------------------- -----------------------------------------
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 $ 1,814,849 $ -- $ 3,719,123 $ --
-------------------------------------------------------------------------------------------------------------------------------
Bond Portfolio 35,615,637 1,240,086 33,414,806 --
-------------------------------------------------------------------------------------------------------------------------------
Cash Management Portfolio 131,787 -- 470,251 --
-------------------------------------------------------------------------------------------------------------------------------
Common Stock Portfolio 9,847,744 -- 11,987,895 --
-------------------------------------------------------------------------------------------------------------------------------
Conservative Allocation Portfolio 8,805,488 -- 7,683,585 4,631,648
-------------------------------------------------------------------------------------------------------------------------------
Convertible Portfolio 12,947,315 -- 7,026,683 --
-------------------------------------------------------------------------------------------------------------------------------
Floating Rate Portfolio 18,034,832 -- 10,755,199 --
-------------------------------------------------------------------------------------------------------------------------------
Government Portfolio 17,508,838 -- 12,862,318 352,389
-------------------------------------------------------------------------------------------------------------------------------
Growth Allocation Portfolio 2,294,344 -- 3,831,021 3,475,868
-------------------------------------------------------------------------------------------------------------------------------
Growth Equity Portfolio 2,181,373 -- 2,312,040 --
-------------------------------------------------------------------------------------------------------------------------------
High Yield Corporate Bond Portfolio 101,144,317 -- 101,854,351 --
-------------------------------------------------------------------------------------------------------------------------------
ICAP Select Equity Portfolio 8,862,336 -- 12,710,945 --
-------------------------------------------------------------------------------------------------------------------------------
Income Builder Portfolio 8,201,070 -- 8,870,584 --
-------------------------------------------------------------------------------------------------------------------------------
</Table>
mainstayinvestments.com M-341
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<Table>
<Caption>
2010 2009
----------------------------------------- -----------------------------------------
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
International Equity Portfolio $ 16,756,055 $ -- $ 32,405,814 $ --
-------------------------------------------------------------------------------------------------------------------------------
Large Cap Growth Portfolio -- -- -- --
-------------------------------------------------------------------------------------------------------------------------------
Mid Cap Core Portfolio 2,026,680 -- 1,205,626 --
-------------------------------------------------------------------------------------------------------------------------------
Moderate Allocation Portfolio 10,264,871 -- 9,818,148 7,978,020
-------------------------------------------------------------------------------------------------------------------------------
Moderate Growth Allocation Portfolio 7,632,645 -- 9,750,883 7,943,655
-------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index Portfolio 15,731,911 -- 22,492,342 --
-------------------------------------------------------------------------------------------------------------------------------
U.S. Small Cap Portfolio 62,966 -- -- --
-------------------------------------------------------------------------------------------------------------------------------
</Table>
NOTE 5-COMMITMENTS AND CONTINGENCIES
As of December 31, 2010, the following Portfolio had unfunded loan commitments
pursuant to the following loan agreement:
HIGH YIELD CORPORATE BOND PORTFOLIO
<Table>
<Caption>
UNFUNDED UNREALIZED
BORROWER COMMITMENT DEPRECIATION
Lender Processing Services,
Inc. Revolver due 7/2/13 $1,500,000 $(60,000)
------------------------------------------------------
Total $(60,000)
------------------------------------------------------
</Table>
NOTE 6-FOREIGN CURRENCY TRANSACTIONS AND FOREIGN CURRENCY FORWARD CONTRACTS
FLOATING RATE PORTFOLIO
As of December 31, 2010, the Portfolio held the following foreign currency:
<Table>
<Caption>
CURRENCY COST VALUE
Canadian Dollar CAD 78,612 USD 74,702 USD 79,062
---------------------------------------------------------
</Table>
HIGH YIELD CORPORATE BOND PORTFOLIO
As of December 31, 2010, the Portfolio held the following foreign currency:
<Table>
<Caption>
CURRENCY COST VALUE
Canadian Dollar CAD 820,708 USD 751,709 USD 825,413
-----------------------------------------------------------
</Table>
M-342 MainStay VP Series Fund, Inc.
INCOME BUILDER PORTFOLIO
As of December 31, 2010, the Portfolio held the following foreign currency
forward contracts:
<Table>
<Caption>
UNREALIZED
CONTRACT CONTRACT APPRECIATION/
AMOUNT AMOUNT (DEPRECIATION)
COUNTERPARTY SOLD PURCHASED
Foreign Currency Buy Contracts:
------------------------------------------------------------------------------------------------------------------
Euro vs. U.S. Dollar,
expiring 1/6/11 JPMorgan Chase Bank USD 24,238,700 EUR 18,500,000 USD 482,765
------------------------------------------------------------------------------------------------------------------
Japanese Yen vs. U.S. Dollar,
expiring 1/6/11 JPMorgan Chase Bank 12,144,766 JPY 1,000,000,000 172,154
------------------------------------------------------------------------------------------------------------------
Pound Sterling vs. U.S. Dollar,
expiring 1/6/11 JPMorgan Chase Bank 21,492,800 GBP 14,000,000 334,428
------------------------------------------------------------------------------------------------------------------
Foreign Currency Sale
Contracts:
------------------------------------------------------------------------------------------------------------------
Canadian Dollar vs. U.S.
Dollar,
expiring 1/6/11 JPMorgan Chase Bank CAD 595,000 USD 583,854 (14,534)
------------------------------------------------------------------------------------------------------------------
Euro vs. U.S. Dollar,
expiring 1/6/11 JPMorgan Chase Bank EUR 18,500,000 25,174,615 453,150
------------------------------------------------------------------------------------------------------------------
Euro vs. U.S. Dollar,
expiring 2/10/11 JPMorgan Chase Bank EUR 22,000,000 28,820,880 (575,329)
------------------------------------------------------------------------------------------------------------------
Japanese Yen vs. U.S. Dollar,
expiring 1/6/11 JPMorgan Chase Bank JPY 1,000,000,000 12,005,379 (311,541)
------------------------------------------------------------------------------------------------------------------
Japanese Yen vs. U.S. Dollar,
expiring 2/10/11 JPMorgan Chase Bank JPY1,050,000,000 12,755,722 (181,865)
------------------------------------------------------------------------------------------------------------------
Pound Sterling vs. U.S. Dollar,
expiring 1/6/11 JPMorgan Chase Bank GBP 14,000,000 22,077,720 250,492
------------------------------------------------------------------------------------------------------------------
Pound Sterling vs. U.S. Dollar,
expiring 2/10/11 JPMorgan Chase Bank GBP 16,500,000 25,323,788 (394,461)
------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on
foreign currency forward
contracts USD 215,259
------------------------------------------------------------------------------------------------------------------
</Table>
As of December 31, 2010, the Portfolio held the following foreign currencies:
<Table>
<Caption>
CURRENCY COST VALUE
Canadian Dollar CAD 9,216 USD 9,099 USD 9,269
--------------------------------------------------------------------------------------------------
Euro EUR 23,285 31,697 31,115
--------------------------------------------------------------------------------------------------
New Taiwan Dollar TWD 83 3 3
--------------------------------------------------------------------------------------------------
Pound Sterling GBP 242,221 381,647 377,646
--------------------------------------------------------------------------------------------------
Total USD 422,446 USD 418,033
--------------------------------------------------------------------------------------------------
</Table>
mainstayinvestments.com M-343
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
INTERNATIONAL EQUITY PORTFOLIO
As of December 31, 2010, the Portfolio held the following foreign currency
forward contracts:
<Table>
<Caption>
CONTRACT CONTRACT UNREALIZED
AMOUNT AMOUNT APPRECIATION/
COUNTERPARTY SOLD PURCHASED (DEPRECIATION)
Foreign Currency Sale Contracts:
------------------------------------------------------------------------------------------------------------------
Japanese Yen vs. Australian
Dollar,
expiring 1/11/11 HSBC Bank USA JPY 111,102,700 AUD 1,390,000 USD 52,118
------------------------------------------------------------------------------------------------------------------
Japanese Yen vs. Norwegian Krone,
expiring 3/14/11 HSBC Bank USA JPY169,201,800 NOK 12,261,000 8,490
------------------------------------------------------------------------------------------------------------------
Swiss Franc vs. Japanese Yen,
expiring 2/10/11 HSBC Bank USA CHF 20,275,000 JPY 1,704,052,925 (697,880)
------------------------------------------------------------------------------------------------------------------
Swiss Franc vs. Pound Sterling,
expiring 1/13/11 HSBC Bank USA CHF 6,735,000 GBP 4,427,076 (302,170)
------------------------------------------------------------------------------------------------------------------
Swiss Franc vs. Pound Sterling,
expiring 2/24/11 JP Morgan Chase Bank CHF 6,510,000 GBP 4,111,975 (558,359)
------------------------------------------------------------------------------------------------------------------
Swiss Franc vs. Swedish Krona,
expiring 3/2/11 HSBC Bank USA CHF 13,774,000 SEK 97,657,660 (250,649)
------------------------------------------------------------------------------------------------------------------
Net unrealized depreciation on
foreign currency forward
contracts USD (1,748,450)
------------------------------------------------------------------------------------------------------------------
</Table>
As of December 31, 2010, the Portfolio held the following foreign currencies:
<Table>
<Caption>
CURRENCY COST VALUE
Australian Dollar AUD 1,105,277 USD 1,010,298 USD 1,130,478
-------------------------------------------------------------------------------------------------------
Canadian Dollar CAD 313,057 307,479 314,851
-------------------------------------------------------------------------------------------------------
Czech Koruna CZK 187,019 10,582 9,979
-------------------------------------------------------------------------------------------------------
Danish Krone DKK 550,413 102,790 98,675
-------------------------------------------------------------------------------------------------------
Euro EUR 3,570,056 4,714,114 4,770,665(a)
-------------------------------------------------------------------------------------------------------
Hong Kong Dollar HKD 863,442 110,936 111,084
-------------------------------------------------------------------------------------------------------
Japanese Yen JPY 304,438,911 3,640,213 3,749,709(a)
-------------------------------------------------------------------------------------------------------
Norwegian Krone NOK 496,201 80,138 85,038
-------------------------------------------------------------------------------------------------------
Pound Sterling GBP 2,890,622 4,557,368 4,506,766(a)
-------------------------------------------------------------------------------------------------------
Singapore Dollar SGD 4,439,660 3,381,016 3,459,430
-------------------------------------------------------------------------------------------------------
Swedish Krona SEK 16,873,715 2,513,754 2,508,860
-------------------------------------------------------------------------------------------------------
Swiss Franc CHF 2,118,523 2,110,818 2,265,800
-------------------------------------------------------------------------------------------------------
Total USD 22,539,506 USD 23,011,335
-------------------------------------------------------------------------------------------------------
</Table>
(a) A portion of this amount is on deposit with broker as collateral for future
contracts
NOTE 7-RESTRICTED SECURITIES
As of December 31, 2010, the following Portfolios held restricted securities:
CONVERTIBLE PORTFOLIO
<Table>
<Caption>
DATE OF PRINCIPAL 12/31/10 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 $--(a) $234 0.0%++
--------------------------------------------------------------------------------------------------------
</Table>
++ Less than one-tenth of a percent.
(a) Less than one dollar.
M-344 MainStay VP Series Fund, Inc.
HIGH YIELD CORPORATE BOND PORTFOLIO
<Table>
<Caption>
DATE OF PRINCIPAL 12/31/10 PERCENT OF
ACQUISITION AMOUNT 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++
---------------------------------------------------------------------------------------------------------
Total $58,488 $1,090 0.0%++
---------------------------------------------------------------------------------------------------------
</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
redemption requests.
Effective September 1, 2010, under an amended credit agreement, the aggregate
commitment amount is $125,000,000 with an optional maximum amount of
$175,000,000. The commitment rate is an annual rate of 0.10% of the average
commitment amount, plus an annual 0.02% up-front payment payable, regardless of
usage, to The Bank of New York Mellon, which serves as the agent to the
syndicate. The commitment fee and up-front payment are allocated among certain
Portfolios and affiliated funds 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. Prior to
September 1, 2010, the aggregate commitment amount was $125,000,000 with an
annualized commitment fee rate of 0.10% of the average commitment amount, plus
an up-front payment of 0.04% paid to The Bank of New York Mellon. The line of
credit expires on August 31, 2011. There were no borrowings made or outstanding
with respect to the Portfolios on the Credit Agreement during the year ended
December 31, 2010.
NOTE 10-PURCHASES AND SALES OF SECURITIES (IN 000S)
During the year ended December 31, 2010, 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 $ 55,880 $ 53,680 $ 992,823 $ 840,665 $ -- $ -- $ -- $ --
---------------------------------------------------------------------------------------------------------------------
All Others 116,120 114,122 217,281 173,110 643,637 703,683 180,397 92,226
---------------------------------------------------------------------------------------------------------------------
Total $172,000 $167,802 $1,210,104 $1,013,775 $643,637 $703,683 $180,397 $92,226
---------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
CONVERTIBLE FLOATING RATE GOVERNMENT GROWTH ALLOCATION
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------------- ------------------ ------------------- -------------------
PURCHASES SALES PURCHASES SALES PURCHASES SALES PURCHASES SALES
U.S. Government Securities $ -- $ -- $ -- $ -- $458,935 $436,033 $ -- $ --
--------------------------------------------------------------------------------------------------------------------
All Others 407,043 361,456 342,818 48,199 56,832 18,762 118,448 108,231
--------------------------------------------------------------------------------------------------------------------
Total $407,043 $361,456 $342,818 $48,199 $515,767 $454,795 $118,448 $108,231
--------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
HIGH YIELD
GROWTH EQUITY CORPORATE BOND ICAP SELECT EQUITY INCOME BUILDER
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------------- ------------------- ------------------- -------------------
PURCHASES SALES PURCHASES SALES PURCHASES SALES PURCHASES SALES
U.S. Government Securities $ -- $ -- $ -- $ -- $ -- $ -- $ 10,934 $ 20,067
---------------------------------------------------------------------------------------------------------------------
All Others 540,163 579,439 991,365 710,891 611,967 664,625 139,828 145,600
---------------------------------------------------------------------------------------------------------------------
Total $540,163 $579,439 $991,365 $710,891 $611,967 $664,625 $150,762 $165,667
---------------------------------------------------------------------------------------------------------------------
</Table>
mainstayinvestments.com M-345
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<Table>
<Caption>
INTERNATIONAL
EQUITY LARGE CAP GROWTH MODERATE ALLOCATION
PORTFOLIO PORTFOLIO MID CAP CORE PORTFOLIO PORTFOLIO
------------------- ------------------- ---------------------- -------------------
PURCHASES SALES PURCHASES SALES PURCHASES SALES PURCHASES SALES
U.S. Government Securities $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
----------------------------------------------------------------------------------------------------------------------
All Others 228,870 204,257 302,304 351,058 1,096,539 1,110,914 289,596 183,465
----------------------------------------------------------------------------------------------------------------------
Total $228,870 $204,257 $302,304 $351,058 $1,096,539 $1,110,914 $289,596 $183,465
----------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MODERATE GROWTH
ALLOCATION S&P 500 INDEX U.S. SMALL CAP
PORTFOLIO PORTFOLIO PORTFOLIO
------------------- ------------------ -------------------
PURCHASES SALES PURCHASES SALES PURCHASES SALES
U.S. Government Securities $ -- $ -- $ -- $ -- $ -- $ --
------------------------------------------------------------------------------------------------------------
All Others 336,335 194,498 39,101 94,675 147,732 145,890
------------------------------------------------------------------------------------------------------------
Total $336,335 $194,498 $39,101 $94,675 $147,732 $145,890
------------------------------------------------------------------------------------------------------------
</Table>
NOTE 11-CAPITAL SHARE TRANSACTIONS
Transactions in capital shares for the year ended December 31, 2010, and the
year ended December 31, 2009, were as follows:
BALANCED PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31, 2010:
Shares sold 70,803 $ 721,891
Shares issued to shareholders
in
reinvestment of dividends 12,536 129,995
Shares redeemed (82,108) (835,975)
------------------------
Net increase (decrease) 1,231 $ 15,911
========================
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 increase (decrease) (8,439) $ (68,663)
========================
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31, 2010:
Shares sold 2,212,825 $ 22,586,296
Shares issued to shareholders
in
reinvestment of dividends 163,168 1,684,854
Shares redeemed (2,125,599) (21,484,109)
------------------------
Net increase (decrease) 250,394 $ 2,787,041
========================
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 increase (decrease) (1,295,068) $(10,194,856)
========================
</Table>
BOND PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31,
2010:
Shares sold 7,772,499 $ 115,047,996
Shares issued to
shareholders in
reinvestment of dividends
and distributions 1,582,441 23,479,900
Shares redeemed (7,791,677) (115,133,407)
-------------------------
Net increase (decrease) 1,563,263 $ 23,394,489
=========================
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 (decrease) 3,670,506 $ 53,387,596
=========================
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31,
2010:
Shares sold 7,925,050 $ 116,799,325
Shares issued to
shareholders in
reinvestment of dividends
and distributions 907,532 13,375,823
Shares redeemed (2,534,611) (37,161,691)
-------------------------
Net increase (decrease) 6,297,971 $ 93,013,457
=========================
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 (decrease) 2,565,472 $ 36,511,290
=========================
</Table>
M-346 MainStay VP Series Fund, Inc.
CASH MANAGEMENT PORTFOLIO
<Table>
<Caption>
INITIAL CLASS (AT $1 PER SHARE) SHARES
Year ended December 31, 2010:
Shares sold 484,783,397
Shares issued to shareholders in
reinvestment of dividends 131,787
Shares redeemed (578,755,595)
------------
Net increase (decrease) (93,840,411)
============
Year ended December 31, 2009:
Shares sold 495,013,225
Shares issued to shareholders in
reinvestment of dividends 470,187
Shares redeemed (826,246,338)
------------
Net increase (decrease) (330,762,926)
============
</Table>
COMMON STOCK PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31,
2010:
Shares sold 3,716,827 $ 52,840,329
Shares issued to
shareholders in
reinvestment of dividends 610,260 8,982,888
Shares redeemed (8,101,873) (119,715,160)
--------------------------
Net increase (decrease) (3,774,786) $ (57,891,943)
==========================
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 increase (decrease) (8,932,055) $(114,332,314)
==========================
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31,
2010:
Shares sold 266,283 $ 3,878,056
Shares issued to
shareholders in
reinvestment of dividends 59,022 864,856
Shares redeemed (531,355) (7,764,282)
--------------------------
Net increase (decrease) (206,050) $ (3,021,370)
==========================
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 (decrease) 44,580 $ 702,809
==========================
</Table>
CONSERVATIVE ALLOCATION PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31,
2010:
Shares sold 233,770 $ 2,508,664
Shares issued to
shareholders in
reinvestment of dividends 17,415 190,594
Shares redeemed (192,796) (2,083,174)
------------------------
Net increase (decrease) 58,389 $ 616,084
========================
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 (decrease) 209,887 $ 2,009,330
========================
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31,
2010:
Shares sold 11,160,746 $119,882,170
Shares issued to
shareholders in
reinvestment of dividends 790,890 8,614,894
Shares redeemed (3,954,218) (42,277,953)
------------------------
Net increase (decrease) 7,997,418 $ 86,219,111
========================
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 (decrease) 4,566,214 $ 45,866,990
========================
</Table>
CONVERTIBLE PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31, 2010:
Shares sold 3,739,275 $ 40,948,445
Shares issued to shareholders
in
reinvestment of dividends 499,632 5,449,793
Shares redeemed (2,903,739) (31,383,744)
------------------------
Net increase (decrease) 1,335,168 $ 15,014,494
========================
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 increase (decrease) (1,249,451) $ (9,649,904)
========================
</Table>
mainstayinvestments.com M-347
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<Table>
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31, 2010:
Shares sold 6,202,255 $ 67,226,569
Shares issued to shareholders
in
reinvestment of dividends 691,370 7,497,522
Shares redeemed (2,486,873) (26,563,577)
------------------------
Net increase (decrease) 4,406,752 $ 48,160,514
========================
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 (decrease) 5,195,023 $ 47,568,275
========================
</Table>
FLOATING RATE PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31,
2010:
Shares sold 4,062,853 $ 37,084,029
Shares issued to
shareholders in
reinvestment of dividends 538,330 4,902,500
Shares redeemed (808,897) (7,319,118)
------------------------
Net increase (decrease) 3,792,286 $ 34,667,411
========================
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 (decrease) 4,408,784 $ 37,296,491
========================
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31,
2010:
Shares sold 11,291,367 $102,601,965
Shares issued to
shareholders in
reinvestment of dividends 1,442,547 13,132,332
Shares redeemed (5,958,097) (54,215,831)
------------------------
Net increase (decrease) 6,775,817 $ 61,518,466
========================
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 (decrease) 12,960,373 $108,309,583
========================
</Table>
GOVERNMENT PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31, 2010:
Shares sold 1,900,332 $ 22,636,632
Shares issued to shareholders
in
reinvestment of dividends
and distributions 636,046 7,463,687
Shares redeemed (3,853,567) (45,434,717)
------------------------
Net increase (decrease) (1,317,189) $(15,334,398)
========================
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 increase (decrease) (3,051,625) $(35,629,354)
========================
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31, 2010:
Shares sold 7,124,650 $ 84,139,001
Shares issued to shareholders
in
reinvestment of dividends
and distributions 861,759 10,045,151
Shares redeemed (4,672,883) (54,508,275)
------------------------
Net increase (decrease) 3,313,526 $ 39,675,877
========================
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 increase (decrease) (2,570,122) $(29,861,409)
========================
</Table>
GROWTH ALLOCATION PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31, 2010:
Shares sold 441,970 $ 3,917,662
Shares issued to shareholders
in
reinvestment of dividends 34,620 313,787
Shares redeemed (251,745) (2,234,770)
------------------------
Net increase (decrease) 224,845 $ 1,996,679
========================
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 (decrease) 629,008 $ 4,438,193
========================
</Table>
M-348 MainStay VP Series Fund, Inc.
<Table>
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31, 2010:
Shares sold 3,641,746 $ 31,920,453
Shares issued to shareholders
in reinvestment of
dividends 219,118 1,980,557
Shares redeemed (2,833,911) (25,040,601)
------------------------
Net increase (decrease) 1,026,953 $ 8,860,409
========================
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 (decrease) 2,393,847 $ 18,378,041
========================
</Table>
GROWTH EQUITY PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31, 2010:
Shares sold 365,591 $ 8,026,392
Shares issued to shareholders
in reinvestment of
dividends 91,409 2,041,096
Shares redeemed (2,705,618) (59,440,399)
------------------------
Net increase (decrease) (2,248,618) $(49,372,911)
========================
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 increase (decrease) (2,019,238) $(35,066,712)
========================
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31, 2010:
Shares sold 217,650 $ 4,740,444
Shares issued to shareholders
in reinvestment of
dividends 6,305 140,277
Shares redeemed (260,881) (5,722,212)
------------------------
Net increase (decrease) (36,926) $ (841,491)
========================
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 increase (decrease) (179,477) $ (2,988,445)
========================
</Table>
HIGH YIELD CORPORATE BOND PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31,
2010:
Shares sold 8,124,260 $ 76,798,662
Shares issued to
shareholders in
reinvestment of dividends 4,431,997 41,531,735
Shares redeemed (14,075,786) (132,709,035)
--------------------------
Net increase (decrease) (1,519,529) $ (14,378,638)
==========================
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 (decrease) 2,884,812 $ 25,536,845
==========================
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31,
2010:
Shares sold 26,255,707 $ 246,557,587
Shares issued to
shareholders in
reinvestment of dividends 6,401,715 59,612,582
Shares redeemed (10,376,921) (96,891,472)
--------------------------
Net increase (decrease) 22,280,501 $ 209,278,697
==========================
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 (decrease) 32,002,123 $ 263,500,543
==========================
</Table>
ICAP SELECT EQUITY PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31,
2010:
Shares sold 4,078,684 $ 45,622,682
Shares issued to
shareholders in
reinvestment of dividends 494,494 5,721,985
Shares redeemed (10,427,175) (117,028,044)
--------------------------
Net increase (decrease) (5,853,997) $ (65,683,377)
==========================
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
(See Note 12) 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 (decrease) 9,925,879 $ 117,075,957
==========================
</Table>
mainstayinvestments.com M-349
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<Table>
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31,
2010:
Shares sold 4,455,529 $ 49,782,481
Shares issued to
shareholders in
reinvestment of dividends 273,591 3,140,351
Shares redeemed (3,722,488) (41,220,672)
--------------------------
Net increase (decrease) 1,006,632 $ 11,702,160
==========================
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
(See Note 12) 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 (decrease) 13,952,164 $ 146,425,170
==========================
</Table>
INCOME BUILDER PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31, 2010:
Shares sold 176,591 $ 2,368,688
Shares issued to shareholders
in
reinvestment of dividends 495,917 6,662,864
Shares redeemed (2,567,945) (33,951,739)
------------------------
Net increase (decrease) (1,895,437) $(24,920,187)
========================
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 increase (decrease) (2,727,612) $(30,156,721)
========================
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31, 2010:
Shares sold 752,169 $ 10,018,146
Shares issued to shareholders
in
reinvestment of dividends 114,873 1,538,206
Shares redeemed (397,535) (5,237,512)
------------------------
Net increase (decrease) 469,507 $ 6,318,840
========================
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 (decrease) 15,464 $ 478,713
========================
</Table>
INTERNATIONAL EQUITY PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31, 2010:
Shares sold 2,932,256 $ 35,803,378
Shares issued to shareholders
in
reinvestment of dividends 662,047 8,129,092
Shares redeemed (3,212,460) (39,595,257)
------------------------
Net increase (decrease) 381,843 $ 4,337,213
========================
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 increase (decrease) (1,307,315) $(12,325,509)
========================
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31, 2010:
Shares sold 3,786,501 $ 46,118,699
Shares issued to shareholders
in
reinvestment of dividends 707,789 8,626,963
Shares redeemed (1,982,005) (23,991,018)
------------------------
Net increase (decrease) 2,512,285 $ 30,754,644
========================
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 (decrease) 1,122,730 $ 16,041,449
========================
</Table>
LARGE CAP GROWTH PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31,
2010:
Shares sold 3,477,863 $ 46,417,544
Shares redeemed (9,077,080) (116,385,227)
-------------------------
Net increase (decrease) (5,599,217) $ (69,967,683)
=========================
Year ended December 31,
2009:
Shares sold 2,278,082 $ 24,344,939
Shares redeemed (4,466,773) (49,178,748)
-------------------------
Net increase (decrease) (2,188,691) $ (24,833,809)
=========================
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31,
2010:
Shares sold 3,071,566 $ 39,627,742
Shares redeemed (1,212,722) (15,597,657)
-------------------------
Net increase (decrease) 1,858,844 $ 24,030,085
=========================
Year ended December 31,
2009:
Shares sold 2,679,486 $ 28,760,301
Shares redeemed (960,329) (9,521,005)
-------------------------
Net increase (decrease) 1,719,157 $ 19,239,296
=========================
</Table>
M-350 MainStay VP Series Fund, Inc.
MID CAP CORE PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31,
2010:
Shares sold 8,072,649 $ 82,609,717
Shares issued to
shareholders in
reinvestment of dividends 125,159 1,333,926
Shares redeemed (9,172,695) (93,004,943)
------------------------
Net increase (decrease) (974,887) $ (9,061,300)
========================
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 (See Note 12) 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 (decrease) 20,788,886 $189,852,841
========================
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31,
2010:
Shares sold 2,215,872 $ 22,840,176
Shares issued to
shareholders in
reinvestment of dividends 65,462 692,754
Shares redeemed (3,638,925) (37,100,362)
------------------------
Net increase (decrease) (1,357,591) $(13,567,432)
========================
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 (See Note 12) 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 (decrease) 13,727,835 $126,695,756
========================
</Table>
MODERATE ALLOCATION PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31,
2010:
Shares sold 519,306 $ 5,336,581
Shares issued to
shareholders in
reinvestment of dividends 44,156 457,663
Shares redeemed (301,069) (3,008,518)
------------------------
Net increase (decrease) 262,393 $ 2,785,726
========================
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 (decrease) 423,980 $ 3,855,134
========================
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31,
2010:
Shares sold 15,843,158 $162,156,584
Shares issued to
shareholders in
reinvestment of dividends 948,977 9,807,208
Shares redeemed (6,987,527) (69,561,082)
------------------------
Net increase (decrease) 9,804,608 $102,402,710
========================
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 (decrease) 8,154,372 $ 75,979,688
========================
</Table>
MODERATE GROWTH ALLOCATION PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31,
2010:
Shares sold 534,079 $ 5,095,136
Shares issued to
shareholders in
reinvestment of dividends 54,214 527,275
Shares redeemed (265,665) (2,510,058)
------------------------
Net increase (decrease) 322,628 $ 3,112,353
========================
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 (decrease) 481,515 $ 3,976,946
========================
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31,
2010:
Shares sold 18,120,757 $173,061,511
Shares issued to
shareholders in
reinvestment of dividends 732,480 7,105,370
Shares redeemed (4,326,419) (41,003,004)
------------------------
Net increase (decrease) 14,526,818 $139,163,877
========================
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 (decrease) 4,604,029 $ 41,679,134
========================
</Table>
mainstayinvestments.com M-351
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
S&P 500 INDEX PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31, 2010:
Shares sold 442,105 $ 10,283,815
Shares issued to shareholders
in
reinvestment of dividends 519,742 12,153,990
Shares redeemed (4,131,308) (95,619,755)
------------------------
Net increase (decrease) (3,169,461) $(73,181,950)
========================
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 increase (decrease) (2,910,438) $(53,887,481)
========================
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31, 2010:
Shares sold 774,267 $ 17,930,413
Shares issued to shareholders
in
reinvestment of dividends 153,408 3,577,921
Shares redeemed (1,147,108) (26,277,455)
------------------------
Net increase (decrease) (219,433) $ (4,769,121)
========================
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
========================
</Table>
U.S. SMALL CAP PORTFOLIO
<Table>
<Caption>
INITIAL CLASS SHARES AMOUNT
Year ended December 31,
2010:
Shares sold 10,329,294 $ 83,044,687
Shares issued to
shareholders in
reinvestment of dividends 7,529 62,966
Shares redeemed (8,996,728) (72,512,122)
------------------------
Net increase (decrease) 1,340,095 $ 10,595,531
========================
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 (See Note
12) 7,069,240 50,312,188
Shares redeemed (1,478,518) (9,896,864)
------------------------
Net increase (decrease) 7,387,354 $ 51,935,511
========================
<Caption>
SERVICE CLASS SHARES AMOUNT
Year ended December 31,
2010:
Shares sold 1,799,662 $ 14,183,296
Shares redeemed (2,241,409) (17,111,799)
------------------------
Net increase (decrease) (441,747) $ (2,928,503)
========================
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 (See Note
12) 8,178,980 56,833,868
Shares redeemed (996,481) (5,961,978)
------------------------
Net increase (decrease) 8,623,529 $ 59,999,509
========================
</Table>
NOTE 12-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.
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>
M-352 MainStay VP Series Fund, Inc.
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>
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 1940 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>
NOTE 13-SUBSEQUENT EVENTS
In connection with the preparation of the financial statements of the Portfolios
as of and for the fiscal year ended December 31, 2010, events and transactions
subsequent to December 31, 2010 through the date the financial statements were
issued have been evaluated by the Portfolios' management for possible adjustment
and/or disclosure. No subsequent events requiring financial statement adjustment
or disclosure have been identified. The following disclosure change has occured
subsequent to December 31, 2010: termination of the Subadvisory Agreement with
Madison Square Investors with respect to the Asset Allocation Portfolios,
effective January 1, 2011, as disclosed in Note 3(A) to the financial
statements.
mainstayinvestments.com M-353
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, High Yield Corporate Bond
Portfolio, ICAP Select Equity Portfolio, Income Builder 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 (constituting MainStay VP Series Fund,
Inc., hereafter referred to as the "Fund") at December 31, 2010, 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, 2010 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, 2011
M-354 MainStay VP Series Fund, Inc.
BOARD CONSIDERATION AND APPROVAL OF MANAGEMENT AND SUBADVISORY AGREEMENTS
(UNAUDITED)
Section 15(c) of the Investment Company Act of 1940, as amended (the "1940 Act")
requires that each mutual fund's board of directors, including a majority of
directors who are not "interested persons" of the fund, as defined in the 1940
Act ("Independent Directors"), annually review and approve the fund's investment
advisory agreements. At its December 14-15, 2010 meeting, the Board of Directors
(the "Board") of MainStay VP Series Fund, Inc. (the "Fund") unanimously approved
the Management Agreements between New York Life Investment Management LLC ("New
York Life Investments") and the Fund, on behalf of each of the Fund's
Portfolios, and the Subadvisory Agreements between New York Life Investments and
each of Epoch Investment Partners, Inc. ("Epoch"), Institutional Capital LLC
("ICAP"), MacKay Shields LLC ("MacKay"), Madison Square Investors LLC ("MSI")
and Winslow Capital Management, Inc. ("Winslow") (collectively, the
"Subadvisors"), which serve as subadvisors to certain Portfolios (the
"Subadvised Portfolios").
The Board considered and approved these agreements (the "Agreements") for each
Portfolio at its June 2010 meeting. The Board's reconsideration and re-approval
of the Agreements in December 2010 was designed to enable the Board to review
certain contractual arrangements for the MainStay Group of Funds at its fourth
quarter meetings going forward.
In reaching its decisions to approve the Agreements, the Board particularly
considered information presented to the Board as part of its annual
consideration and approval of the Agreements at the Board's June 2010 meeting.
The Board also considered information prepared specifically in connection with a
contract review process that took place at various meetings between October 2010
and December 2010, as well as other relevant information furnished to it
throughout the year at regular and special Board meetings. Information requested
by and provided to the Board specifically in connection with the contract review
process included, among other things, reports on each Portfolio prepared by
Strategic Insight Mutual Fund Research and Consulting LLC ("Strategic Insight"),
an independent third-party service provider engaged by the Board to report
objectively on each Portfolio's investment performance, management and
subadvisory fees and ordinary operating expenses. The Board also referenced
information provided by New York Life Investments and the Subadvisors as part of
the June 2010 annual contract review process on the fees charged to other
investment advisory clients (including institutional separate accounts) that
follow investment strategies similar to the Portfolios, and the rationale for
any differences in a Portfolio's management and/or subadvisory fee and the fees
charged to such institutional products. In addition, the Board requested and
received information on the profitability of the Portfolios to New York Life
Investments and its affiliates and certain Subadvisors, discussed in greater
detail below, and responses to several comprehensive lists of questions
encompassing a variety of topics prepared on behalf of the Board by independent
legal counsel to the Board and the Independent Directors. Information provided
to the Board at its meetings throughout the year included, among other things,
detailed investment performance reports on each Portfolio prepared by the
Investment Consulting Group at New York Life Investments. The structure and
format for this regular reporting was developed in consultation with the Board.
The Board also received throughout the year, among other things, periodic
reports on legal and compliance matters, portfolio turnover, and sales and
marketing activity.
In determining to approve the Agreements, the members of the Board reviewed and
evaluated all of the information and factors they believed to be relevant and
appropriate in light of legal advice furnished to them by independent legal
counsel and through the exercise of their own business judgment. The broad
factors considered by the Board are discussed in greater detail below, and
included, among other things: (i) the nature, extent, and quality of the
services provided to the Portfolios by New York Life Investments and the
Subadvisors; (ii) the investment performance of each Portfolio, New York Life
Investments and the Subadvisors; (iii) the costs of the services provided, and
profits realized, by New York Life Investments and its affiliates and each
Subadvisor from their relationship with the Portfolios; (iv) the extent to which
economies of scale may be realized as the Portfolios grow, and the extent to
which economies of scale may benefit Portfolio investors; and (v) the
reasonableness of each Portfolio's management and subadvisory fee levels and
overall total ordinary operating expenses, particularly as compared to similar
funds and accounts managed by New York Life Investments and third-party "peer
funds" identified by Strategic Insight.
While individual members of the Board may have weighed certain factors
differently, the Board's decisions to approve the Agreements were based on a
comprehensive consideration of all the information provided to the Board,
including information provided to the Board throughout the year and specifically
in connection with the contract review process. The Board's conclusions with
respect to the Agreements also were based, in part, on the Board's consideration
of the Agreements earlier in the year and in prior years. In addition to
considering the above-referenced factors, the Board observed that in the
marketplace there are a range of investment options available to variable life
insurance policyholders and variable annuity contract owners that invest in the
Portfolios, and that these policyholders and contract owners, having had the
opportunity to consider alternative investment products and services, have
chosen to invest in the Portfolios. A more detailed discussion of the factors
that figured prominently in the Board's decisions to approve the Agreements is
provided below.
NATURE, EXTENT AND QUALITY OF SERVICES TO BE PROVIDED BY NEW YORK LIFE
INVESTMENTS AND THE SUBADVISORS
In considering the approval of the Agreements, the Board examined the nature,
extent and quality of the services that New York Life Investments provides to
the Portfolios. The Board evaluated New York Life Investments' experience in
serving as manager of the Portfolios, noting that New York Life Investments
manages other mutual funds, serves a variety of other investment advisory
clients, including other pooled investment vehicles, and has experience with
overseeing affiliated and non-affiliated subadvisors. The Board considered the
experience of senior personnel at New York Life Investments providing management
and administrative services to the Portfolios, as well as New York Life
Investments' reputation and financial condition. In this regard, the Board
considered the experience of each Portfolio's portfolio managers, the number of
accounts managed by the portfolio managers and New York Life Investments' method
for compensating
mainstayinvestments.com M-355
BOARD CONSIDERATION AND APPROVAL OF MANAGEMENT AND SUBADVISORY AGREEMENTS
(UNAUDITED) (CONTINUED)
portfolio managers. The Board considered New York Life Investments' performance
in fulfilling its responsibilities for overseeing the Portfolios' legal and
compliance environment, for overseeing the Subadvisors' compliance with the
Portfolios' policies and investment objectives, and for implementing Board
directives as they relate to the Portfolios. The Board considered New York Life
Investments' willingness to invest in personnel that benefit the Portfolios, and
noted that New York Life Investments also is responsible for paying all of the
salaries and expenses for the Fund's officers.
The Board also examined the nature, extent and quality of the services that each
Subadvisor provides to the Subadvised Portfolios. The Board evaluated each
Subadvisor's experience in serving as subadvisor to the Subadvised Portfolios
and managing other investment advisory clients. It examined each Subadvisor's
track record and experience in providing investment advisory services, the
experience of investment advisory, senior management and administrative
personnel at each Subadvisor, and each Subadvisor's overall legal and compliance
environment. The Board also reviewed each Subadvisor's willingness to invest in
personnel designed to benefit the Portfolios. In this regard, the Board
considered the experience of each Portfolio's portfolio managers, the number of
accounts managed by the portfolio managers and the method for compensating
portfolio managers.
Based on these considerations, the Board concluded, within the context of its
overall determinations regarding the Agreements, that the Portfolios likely
would continue to benefit from the nature, extent and quality of these services
as a result of New York Life Investments' and each Subadvisor's experience,
personnel, operations and resources.
INVESTMENT PERFORMANCE
In evaluating each Portfolio's investment performance, the Board considered
investment performance results in light of a Portfolio's investment objective,
strategies and risks, as disclosed in the Portfolio's prospectus. The Board
particularly considered the detailed investment performance reports provided by
New York Life Investments' Investment Consulting Group on the Portfolios
throughout the year. These reports include, among other things, information on
each Portfolio's gross and net returns, each Portfolio's investment performance
relative to relevant investment categories and Portfolio benchmarks, each
Portfolio's risk-adjusted investment performance, and each Portfolio's
investment performance as compared to similar competitor funds, as appropriate.
The Board also considered information provided by Strategic Insight showing the
investment performance of each Portfolio as compared to peer funds.
In considering a Portfolio's investment performance, the Board focused
principally on the Portfolio's long-term performance track record. The Board
also gave weight to its ongoing discussions with senior management at New York
Life Investments concerning Portfolio investment performance, as well as
discussions between the Portfolios' portfolio managers and the Board that
occurred at meetings from time to time throughout the year and in previous
years. The Board also considered any specific actions that New York Life
Investments had taken, or had agreed with the Board to take, to enhance
Portfolio investment performance, and the results of those actions. In
evaluating the investment performance of each Portfolio, the Board also took
into account whether a Portfolio had been in operation for a sufficient time
period to establish a meaningful investment performance track record.
With respect to the MainStay VP Conservative Allocation Portfolio, MainStay VP
Moderate Allocation Portfolio, Main-Stay VP Moderate Growth Allocation Portfolio
and MainStay VP Growth Allocation Portfolio (the "Asset Allocation Portfolios"),
which invest substantially all of their assets in other registered funds advised
by New York Life Investments (including the Portfolios), the Board principally
considered the rationale for selecting the underlying funds in which the Asset
Allocation Portfolios invest, including the investment performance of those
funds.
Based on these considerations, the Board concluded, within the context of its
overall determinations regarding the Agreements, that the long-term investment
performance of the Portfolios, along with ongoing efforts by New York Life
Investments and the Subadvisors to enhance investment returns, supported a
determination to approve the Agreements. The Portfolios disclose more
information about investment performance in the Portfolio Management Discussion
and Analysis, Investment and Performance Comparison and Financial Highlights
sections of this Annual Report and in the Portfolios' prospectus.
COSTS OF THE SERVICES PROVIDED, AND PROFITS TO BE REALIZED, BY NEW YORK LIFE
INVESTMENTS AND EACH SUBADVISOR
The Board considered the costs of the services provided by New York Life
Investments and the Subadvisors under the management and subadvisory agreements,
as applicable, and the profits realized by New York Life Investments and its
affiliates and the Subadvisors due to their relationships with the Portfolios
over various time periods. Because MacKay Shields, MSI and ICAP are affiliates
of New York Life Investments whose subadvisory fees are paid directly by New
York Life Investments, the Board considered the cost and profitability
information for New York Life Investments and these Subadvisors in the
aggregate.
In evaluating any costs and profits of New York Life Investments and its
affiliates and the Subadvisors due to their relationships with the Portfolios,
the Board considered, among other things, each party's investments in personnel,
systems, equipment and other resources necessary to manage the Portfolios, and
the fact that New York Life Investments is responsible for paying the
subadvisory fees for the Subadvised Portfolios. The Board acknowledged that New
York Life Investments and the Subadvisors must be in a position to pay and
retain experienced professional personnel to provide services to the Portfolios,
and that New York Life Investments' ability to maintain a strong financial
position is important in order for New York Life Investments to continue to
provide high-quality services to the Portfolios. The Board noted, for example,
costs borne by New York Life Investments and its affiliates due to new and
ongoing regulatory and compliance requirements. The Board also noted that the
Portfolios benefit from the allocation of certain fixed costs across the
MainStay Group of Funds.
In addition, although the Board did not receive specific profitability
information from Epoch (due to the fact that Epoch was appointed as Subadvisor
only recently) and Winslow, the Board considered representations from Epoch,
Winslow and New York Life Investments that the subadvisory fees paid by New York
Life Investments to Epoch for services provided to the MainStay VP Income
Builder Portfolio and
M-356 MainStay VP Series Fund, Inc.
MainStay VP U.S. Small Cap Portfolio and to Winslow for services provided to the
MainStay VP Large Cap Growth Portfolio were the result of arm's-length
negotiations. Because Epoch and Winslow are not affiliated with New York Life
Investments, and Epoch and Winslow's fees are paid directly by New York Life
Investments, the Board focused primarily on the profitability of the
relationship between New York Life Investments and its affiliates and the
Portfolios.
The Board noted the difficulty in obtaining reliable comparative data about
mutual fund managers' profitability, since such information generally is not
publicly available and may be impacted by numerous factors, including the
structure of a fund manager's organization, the types of funds it manages, and
the manager's capital structure and costs of capital. While recognizing the
difficulty in evaluating a manager's profitability with respect to the
Portfolios, and noting that other profitability methodologies may also be
reasonable, the Board concluded that the profitability methodology presented by
New York Life Investments to the Board, which was developed by New York Life
Investments in consultation with an independent consultant, was reasonable in
all material respects.
In considering the costs and profitability of the Portfolios, the Board also
considered certain fall-out benefits that may be realized by New York Life
Investments, its affiliates and the Subadvisors due to their relationships with
the Portfolios. The Board recognized, for example, the benefits to New York Life
Investments and the Subadvisors from legally permitted "soft-dollar"
arrangements by which brokers provide research and other services to New York
Life Investments and the Subadvisors in exchange for commissions paid by the
Portfolios with respect to trades on a Portfolio's portfolio securities. With
respect to Epoch and Winslow, the Board requested and received information from
these Subadvisors and New York Life Investments concerning other business
relationships between Epoch or Winslow and their affiliates and New York Life
Investments and its affiliates.
The Board further considered that, in addition to fees earned by New York Life
Investments for managing the Portfolios, New York Life Investments affiliates
also earn revenues from serving the Portfolios in various other capacities,
including as the Portfolios' distributor. The information provided to the Board
indicated that the profitability to New York Life Investments and its affiliates
arising directly from these other arrangements was not significant. The Board
noted that, although it assessed the overall profitability of the Portfolios to
New York Life Investments and its affiliates as part of the contract review
process, when considering the reasonableness of the fees to be paid to New York
Life Investments and its affiliates under the Agreements, the Board considered
the profitability of New York Life Investments' relationship with the Portfolios
on a pre-tax basis, and without regard to distribution expenses.
After evaluating the information presented to the Board, the Board concluded,
within the context of its overall determinations regarding the Agreements, that
any profits realized by New York Life Investments and its affiliates (including
MacKay Shields, MSI and ICAP) and Epoch due to their relationships with the
Portfolios supported the Board's determination to approve the Agreements. With
respect to Epoch and Winslow, the Board concluded that any profits to be
realized by Epoch and Winslow due to their relationships with the Portfolios are
the result of arm's-length negotiations between New York Life Investments and
Epoch or Winslow, and are based on subadvisory fees to be paid to Epoch and
Winslow by New York Life Investments, not the Portfolios.
EXTENT TO WHICH ECONOMIES OF SCALE MAY BE REALIZED AS THE PORTFOLIOS GROW
The Board also considered whether each Portfolio's expense structure permitted
economies of scale to be shared with Fund investors. The Board reviewed
information from New York Life Investments showing how each Portfolio's
management fee schedule compared to fee schedules of other funds and accounts
managed by New York Life Investments. The Board also reviewed information from
Strategic Insight showing how each Portfolio's management fee schedule
hypothetically would compare with fees paid for similar services by peer funds
at varying asset levels. The Board noted the extent to which each Portfolio
benefits from any breakpoints or expense limitations. While recognizing the
difficulty of determining economies of scale with precision, the Board
acknowledged that economies of scale may be shared with the Portfolios in a
number of ways, including, for example, through the imposition of management fee
breakpoints and by initially setting relatively lower management fees.
Based on this information, the Board concluded, within the context of its
overall determinations regarding the Agreements, that each Portfolio's expense
structure appropriately reflects economies of scale for the benefit of Portfolio
investors. The Board noted, however, that it would continue to evaluate the
reasonableness of each Portfolio's expense structure as the Portfolio grows over
time.
MANAGEMENT AND SUBADVISORY FEES AND TOTAL ORDINARY OPERATING EXPENSES
The Board evaluated the reasonableness of the fees to be paid under the
Agreements and each Portfolio's expected total ordinary operating expenses. With
respect to the Subadvised Portfolios, the Board primarily considered the
reasonableness of the overall management fees paid by the Portfolios to New York
Life Investments, since the fees to be paid to the Subadvisors under the
Agreements are paid by New York Life Investments, not the Subadvised Portfolios.
In assessing the reasonableness of each Portfolio's fees and expenses, the Board
primarily considered comparative data provided by Strategic Insight on the fees
and expenses charged by similar mutual funds managed by other investment
advisors. In addition, the Board considered information provided by New York
Life Investments and certain Subadvisors on fees charged to other investment
advisory clients, including institutional separate accounts and other funds with
similar investment objectives as the Portfolios. In this regard, the Board took
into account explanations from New York Life Investments and the Subadvisors
about the different scope of services provided to the Portfolios as compared
with other investment advisory clients. The Board particularly considered New
York Life Investments' rationale for differences in the management fees charged
to certain Portfolios compared with their "retail" fund counterparts.
In assessing the reasonableness of each Portfolio's management and subadvisory
fees and total ordinary operating expenses, the Board took
mainstayinvestments.com M-357
BOARD CONSIDERATION AND APPROVAL OF MANAGEMENT AND SUBADVISORY AGREEMENTS
(UNAUDITED) (CONTINUED)
note of any fee and expense arrangements that had been negotiated by the Board
with New York Life Investments in recent years.
Based on these considerations, the Board concluded that each Portfolio's
management and subadvisory fees and total ordinary operating expenses were
within a range that is competitive and, within the context of the Board's
overall conclusions regarding the Agreements, support a conclusion that these
fees and expenses are reasonable.
CONCLUSION
On the basis of the information provided to it and its evaluation thereof, the
Board, including the Independent Directors, unanimously voted to approve the
Agreements.
M-358 MainStay VP Series Fund, Inc.
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. In addition,
the Cash Management Portfolio is required to file its complete schedule of
portfolio holdings every month on Form N-MFP and will also make available its
complete schedule of portfolio holdings on its website at www.nylim.com, five
days after month-end. The Portfolios' Form N-Q is available without charge on
the SEC's website at www.sec.gov or by calling New York Life Investments at 800-
598-2019. Form N-MFP will be made available to the public by the SEC 60 days
after the month to which the information pertains, and a link to each of the
most recent 12 months of filings on Form N-MFP will be provided on the
Portfolios' website. You can also obtain and review copies of Forms N-Q and N-
MFP by 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).
mainstayinvestments.com M-359
DIRECTORS AND OFFICERS (UNAUDITED)
The Directors oversee the MainStay Group of Funds (which is comprised of Funds
that are series of The MainStay Funds, Eclipse Funds, Eclipse Funds Inc.,
MainStay Funds Trust, and MainStay VP Series Fund, Inc.) (collectively, the
"Fund Complex"), the Manager and, when applicable, the Subadvisor(s). Each
Director 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
Director shall tender his or her resignation upon reaching age 72. A Director
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 Directors. The
business address of each Director 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 Directors and is available without charge, upon
request, by calling 800-598-2019.
<Table>
<Caption>
TERM OF OFFICE, NUMBER OF
POSITION(S) HELD FUNDS IN FUND OTHER
WITH THE FUND COMPLEX DIRECTORSHIPS
NAME AND COMPLEX AND PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY
DATE OF BIRTH LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTOR DIRECTOR
-----------------------------------------------------------------------------------------------------------------------------
INTERESTED DIRECTOR*
JOHN Y. KIM Indefinite; Member of the Board of 66 None
9/24/60 ECLIPSE FUNDS: Trustee since Managers, President and Chief
2008 (2 funds); Executive Officer (since 2008)
ECLIPSE FUNDS INC.: Director of New York Life Investment
since 2008 (1 fund); Management LLC and New York
THE MAINSTAY FUNDS: Trustee Life Investment Management
since 2008 (14 funds); Holdings LLC; Executive Vice
MAINSTAY FUNDS TRUST: Trustee President, New York Life
since 2009 (29 funds); and Insurance Company (since
MAINSTAY VP SERIES FUND, INC.: 2008); Member of the Board,
MacKay Shields LLC (since
Director since 2008 (20 2008); Chairman of the Board,
portfolios). Institutional Capital LLC,
Madison Capital Funding LLC,
Madison Square Investors LLC
and McMorgan & Company LLC,
Chairman of the Board and
Chief Executive Officer,
NYLIFE Distributors LLC (since
2008); Chairman of the Board,
NYLCAP Manager, LLC (since
2008); Executive Vice
President, NYLIFE Insurance
Company of Arizona and
New York Life Insurance and
Annuity Corporation (since
2008); President, Prudential
Retirement, a business unit of
Prudential Financial, Inc.
(2002 to 2007)
-----------------------------------------------------------------------------------------------------------------------------
</Table>
* This Director 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., 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-360 MainStay VP Series Fund, Inc.
<Table>
<Caption>
TERM OF OFFICE, NUMBER OF
POSITION(S) HELD FUNDS IN FUND OTHER
WITH THE FUND COMPLEX DIRECTORSHIPS
NAME AND COMPLEX AND PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY
DATE OF BIRTH LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTOR DIRECTOR
-----------------------------------------------------------------------------------------------------------------------------
NON-INTERESTED DIRECTORS
SUSAN B. KERLEY Indefinite; President, Strategic 66 Trustee, Legg Mason
8/12/51 ECLIPSE FUNDS: Chairman since Management Advisors LLC (since Partners Funds, Inc., since
2005, and Trustee since 2000 1990) 1991 (60 portfolios)
(2 funds);
ECLIPSE FUNDS INC.: Chairman
since 2005 and Director since
1990
(1 fund);
THE MAINSTAY FUNDS: Chairman
and Board Member since 2007
(14 funds);
MAINSTAY FUNDS TRUST: Chairman
and Trustee since 2009 (29
funds); and
MAINSTAY VP SERIES FUND, INC.:
Chairman and Director since
2007 (20 portfolios).
-----------------------------------------------------------------------------------------------------------------------------
ALAN R. LATSHAW Indefinite; Retired; Partner, Ernst & 66 Trustee, State Farm
3/27/51 ECLIPSE FUNDS: Trustee and Young LLP (2002 to 2003); Associates Funds Trusts
Audit Committee Financial Partner, Arthur Andersen LLP since 2005 (4 portfolios);
Expert since 2007 (2 funds); (1989 to 2002); Consultant to Trustee, State Farm Mutual
ECLIPSE FUNDS INC.: Director the MainStay Funds Audit and Fund Trust since 2005 (15
and Audit Committee Financial Compliance Committee (2004 to portfolios); Trustee, State
Expert since 2007 (1 fund); 2006) Farm Variable Product Trust
THE MAINSTAY FUNDS: Trustee since 2005 (9 portfolios)
and Audit Committee Financial
Expert since 2006 (14 funds);
MAINSTAY FUNDS TRUST: Trustee
and Audit Committee Financial
Expert since 2009 (29 funds);
and
MAINSTAY VP SERIES FUND, INC.:
Director and Audit Committee
Financial Expert since 2007
(20 portfolios).
-----------------------------------------------------------------------------------------------------------------------------
PETER MEENAN Indefinite; Independent Consultant; 66 None
12/5/41 ECLIPSE FUNDS: Trustee since President and Chief Executive
2002 (2 funds); Officer, Babson--United, Inc.
ECLIPSE FUNDS INC.: Director (financial services firm)
since 2002 (1 fund); (2000 to 2004); Independent
THE MAINSTAY FUNDS: Trustee Consultant (1999 to 2000);
since 2007 (14 funds); Head of Global Funds, Citicorp
MAINSTAY FUNDS TRUST: Trustee (1995 to 1999)
since 2009 (29 funds); and
MAINSTAY VP SERIES FUND, INC.:
Director since 2007 (20
portfolios).
-----------------------------------------------------------------------------------------------------------------------------
</Table>
mainstayinvestments.com M-361
<Table>
<Caption>
TERM OF OFFICE, NUMBER OF
POSITION(S) HELD FUNDS IN FUND OTHER
WITH THE FUND COMPLEX DIRECTORSHIPS
NAME AND COMPLEX AND PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY
DATE OF BIRTH LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTOR DIRECTOR
-----------------------------------------------------------------------------------------------------------------------------
NON-INTERESTED DIRECTORS
RICHARD H. Indefinite; Managing Director, ICC Capital 66 None
NOLAN, JR. ECLIPSE FUNDS: Trustee since Management;
11/16/46 2007 (2 funds); President--Shields/Alliance,
ECLIPSE FUNDS INC.: Director Alliance Capital Management
since 2007 (1 fund); (1994 to 2004)
THE MAINSTAY FUNDS: Trustee
since 2007 (14 funds);
MAINSTAY FUNDS TRUST: Trustee
since 2009 (29 funds); and
MAINSTAY VP SERIES FUND, INC.:
Director since 2006 (20
portfolios).
-----------------------------------------------------------------------------------------------------------------------------
RICHARD S. Indefinite; Chairman and Chief Executive 66 None
TRUTANIC ECLIPSE FUNDS: Trustee since Officer Somerset & Company
2/13/52 2007 (2 funds); (financial advisory firm)
ECLIPSE FUNDS INC.: Director (since 2004); Managing
since 2007 (1 fund); Director The Carlyle Group
THE MAINSTAY FUNDS: Trustee (private investment firm)
since 1994 (14 funds); (2002 to 2004); Senior
MAINSTAY FUNDS TRUST: Trustee Managing Director, Partner and
since 2009 (29 funds); and Board Member, Groupe Arnault
MAINSTAY VP SERIES FUND, INC.: S.A. (private investment firm)
Director since 2007 (20 (1999 to 2002)
portfolios).
-----------------------------------------------------------------------------------------------------------------------------
ROMAN L. WEIL Indefinite; V. Duane Rath Professor 66 None
5/22/40 ECLIPSE FUNDS: Emeritus of Accounting,
Trustee and Audit Committee Chicago Booth School of
Financial Expert since 2007 (2 Business, University of
funds); Chicago; President, Roman L.
ECLIPSE FUNDS INC.: Director Weil Associates, Inc.
and Audit Committee Financial (consulting firm)
Expert since 2007 (1 fund);
THE MAINSTAY FUNDS: Trustee
and Audit Committee Financial
Expert since 2007 (14 funds);
MAINSTAY FUNDS TRUST: Trustee
since 2009 (29 funds); and
MAINSTAY VP SERIES FUND, INC.:
Director since 1994 and Audit
Committee Financial Expert
since 2003 (20 portfolios).
-----------------------------------------------------------------------------------------------------------------------------
</Table>
M-362 MainStay VP Series Fund, Inc.
<Table>
<Caption>
TERM OF OFFICE, NUMBER OF
POSITION(S) HELD FUNDS IN FUND OTHER
WITH THE FUND COMPLEX DIRECTORSHIPS
NAME AND COMPLEX AND PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY
DATE OF BIRTH LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTOR DIRECTOR
-----------------------------------------------------------------------------------------------------------------------------
NON-INTERESTED DIRECTORS
JOHN A. WEISSER Indefinite; Retired. Managing Director of 66 Trustee, Direxion Funds (32
ECLIPSE FUNDS: Salomon Brothers, Inc. (1971 portfolios) and Direxion
10/22/41 Trustee since 2007 (2 funds); to 1995) Insurance Trust (1
ECLIPSE FUNDS INC.: Director portfolio) since 2007;
since 2007 (1 fund); Trustee, Direxion Shares
THE MAINSTAY FUNDS: Trustee ETF Trust, since 2008 (36
since 2007 (14 funds); portfolios)
MAINSTAY FUNDS TRUST: Trustee
since 2009 (29 funds); and
MAINSTAY VP SERIES FUND, INC.:
Director since 1997 (20
portfolios).
-----------------------------------------------------------------------------------------------------------------------------
</Table>
mainstayinvestments.com M-363
The following individuals have been appointed by the Directors to serve as
Officers of the MainStay Group of Funds.
<Table>
<Caption>
POSITIONS(S) HELD
NAME AND WITH THE FUND PRINCIPAL OCCUPATION(S)
DATE OF BIRTH AND LENGTH OF SERVICE DURING PAST FIVE YEARS
--------------------------------------------------------------------------------
OFFICERS
JACK R. Treasurer and Principal Assistant Treasurer, New York
BENINTENDE Financial and Accounting Life Investment Management
5/12/64 Officer since 2007 Holdings LLC (since 2008);
Managing Director, New York
Life Investment Management LLC
(since 2007); Treasurer and
Principal Financial and
Accounting Officer, Eclipse
Funds, Eclipse Funds, Inc. and
The MainStay Funds (since
2007), MainStay Funds Trust
(since 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 A. Vice President and Chief Managing Director, Compliance
ENGELSMAN Compliance Officer since 2009 (since 2009), Director and
9/28/67 Associate General Counsel, New
York Life Investment
Management LLC (2005 to 2008);
Assistant Secretary, NYLIFE
Distributors LLC (2006 to
2008); Assistant Secretary
NYLIFE Distributors LLC (2006
to 2008); Vice President and
Chief Compliance Officer,
Eclipse Funds, Eclipse Funds,
Inc., The MainStay Funds and
MainStay Funds Trust (since
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 Bank
Asset Management (1999 to
2005)
--------------------------------------------------------------------------------
STEPHEN P. President since 2007 Manager, President and Chief
FISHER Operating Officer, NYLIFE
2/22/59 Distributors LLC (since 2008);
Chairman of the Board, NYLIM
Service Company LLC (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, Eclipse Funds,
Eclipse Funds, Inc. and The
MainStay Funds (since 2007),
MainStay Funds Trust (since
2009);
--------------------------------------------------------------------------------
J. KEVIN GAO Secretary and Chief Legal Managing Director and
10/13/67 Officer since 2010 Associate General Counsel, New
York Life Investment
Management LLC (since 2010);
Secretary and Chief Legal
Officer, Eclipse Funds,
Eclipse Funds, Inc., The
MainStay Funds and MainStay
Funds Trust (since 2010);
Director and Counsel of Credit
Suisse, Chief Legal Officer
and Secretary of Credit Suisse
Asset Management, LLC and
Credit Suisse Funds (2003 to
2010)
--------------------------------------------------------------------------------
SCOTT T. Vice Director, New York Life
HARRINGTON President -- Administration Investment Management LLC
2/8/59 since 2005 (including predecessor
advisory organizations) (since
2000); Executive Vice
President, New York Life Trust
Company and New York Life
Trust Company, FSB (since
2006); Vice
President--Administration,
Eclipse Funds, Eclipse Funds,
Inc. and The MainStay Funds
(since 2005), MainStay Funds
Trust (since 2009);
--------------------------------------------------------------------------------
</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., 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 Board to
serve a one-year term.
M-364 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) 2011 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) MSVP11-02/11
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"). 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, 2010 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 $796,215.
The aggregate fees billed for the fiscal year ended December 31, 2009 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
$776,895.
(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, 2010, and (ii) $0 for the fiscal year
ended December 31, 2009. 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) $103,800 during the fiscal
year ended December 31, 2010, and (ii) $97,800 during the fiscal year ended
December 31, 2009. 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, 2010, and (ii) $0 during the fiscal
year ended December 31, 2009.
(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, 2010 and December 31, 2009 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, 2010, and (ii) $0
for the fiscal year ended December 31, 2009.
(h) The Registrant's Audit Committee has determined that the non-audit services
rendered by PwC for the fiscal year ended December 31, 2010 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 9, 2011
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 9, 2011
By: /s/ Jack R. Benintende
-----------------------------------------
Jack R. Benintende
Treasurer and Principal Financial and
Accounting Officer
Date: March 9, 2011
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.