The prospectus containing information for the American Express Retirement
Advisor Variable Annuity(SM)filed electronically in Registrant's Post-Effective
Amendment No. 2 to Registration Statement No. 333-79311 on Form N-4, filed on or
about April 28, 2000, is incorporated by reference.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
for
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITYSM
IDS Life Variable Account 10
May 1, 2000
Revised as of July 21, 2000
IDS Life Variable Account 10 is a separate account established and maintained by
IDS Life Insurance Company (IDS Life).
This Statement of Additional Information (SAI) is not a prospectus. It should be
read together with the prospectus dated the same date as this SAI, which may be
obtained by writing or calling us at the address and telephone number below. The
prospectus is incorporated in this SAI by reference.
IDS Life Insurance Company
200 AXP Financial Center
Minneapolis, MN 55474
800-437-0602
<PAGE>
TABLE OF CONTENTS
Performance Information................................................p.3
Calculating Annuity Payouts............................................p.18
Rating Agencies........................................................p.19
Principal Underwriter..................................................p.19
Independent Auditors...................................................p.19
Financial Statements
<PAGE>
PERFORMANCE INFORMATION
------------------------------------------------------------------------------
The subaccounts may quote various performance figures to illustrate past
performance. We base total return and current yield quotations (if applicable)
on standardized methods of computing performance as required by the Securities
and Exchange Commission (SEC). An explanation of the methods used to compute
performance follows below.
Average Annual Total Return
We will express quotations of average annual total return for the subaccounts in
terms of the average annual compounded rate of return of a hypothetical
investment in the contract over a period of one, five and ten years (or, if
less, up to the life of the subaccounts), calculated according to the following
formula:
P(1+T)n = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = Ending Redeemable Value of a hypothetical $1,000 payment
made at the beginning of the period, at the end of the
period (or fractional portion thereof)
We calculated the following performance figures on the basis of historical
performance of each fund. We show actual performance from the date the
subaccounts begin investing in the funds. For some subaccounts, we do not
provide any performance information because they are new and have not had any
activity to date. We also show performance from the commencement date of the
funds as if the contract existed at the time, which it did not. Although we base
performance figures on historical earnings, past performance does not guarantee
future results.
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return For Nonqualified Annuities (Without Purchase Payment
Credits) Without Surrender For Periods Ending Dec. 31, 1999
Performance Since
Commencement of the Performance Since
Subaccount Commencement of the Fund**
Since Since
Subaccount Investing In: 1 Year Commencement 1 Year 5 Years 10 Years Commencement
---------- ------------- ------ ------------ ------ ------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
AXPSM VARIABLE PORTFOLIO
BC1 Blue Chip Advantage Fund (9/99;9/99)* --% 13.74% --% --% --% 10.98%
BD1 Bond Fund (9/99;10/81) -- 1.40 0.69 6.93 7.10 9.62
CR1 Capital Resource Fund (9/99;10/81) -- 17.13 22.52 20.15 14.36 14.83
CM1 Cash Management Fund (9/99;10/81) -- 1.06 3.68 4.07 3.86 5.52
DE1 Diversified Equity Income Fund -- 5.65 -- -- -- 2.53
(9/99;9/99)
EM1 Emerging Markets Fund (5/00;5/00)+ -- -- -- -- -- --
EI1 Extra Income Fund (9/99;5/96) -- 1.89 5.18 -- -- 4.46
FI1 Federal Income Fund (9/99;9/99) -- 0.40 -- -- -- 0.30
GB1 Global Bond Fund (9/99;5/96) -- -0.47 -5.37 -- -- 3.03
GR1 Growth Fund (9/99;9/99) -- 19.65 -- -- -- 17.89
IE1 International Fund (9/99;1/92) -- 30.37 44.19 14.99 -- 12.25
MF1 Managed Fund (9/99;4/86) -- 10.16 13.70 17.05 12.41 11.76
ND1 New Dimensions Fund(R)(9/99;5/96) -- 21.45 30.70 -- -- 25.10
IV1 S&P 500 Index Fund (5/00;5/00)+ -- -- -- -- -- --
SC1 Small Cap Advantage Fund (9/99;9/99) -- 14.37 -- -- -- 12.35
SA1 Strategy Aggressive Fund (9/99;1/92) -- 54.11 69.36 23.56 -- 15.86
AIM V.I.
1CA Capital Appreciation Fund (9/99;5/93) -- 33.67 43.21 24.34 -- 21.11
1CD Capital Development Fund (9/99;5/98) -- 29.55 27.82 -- -- 10.09
American Century VARIABLE PORTFOLIOS, INC.
1IF VP International (9/99;5/94) -- 45.42 62.44 20.97 -- 17.07
1VA VP Value (9/99;5/96) -- -4.19 -1.84 -- -- 9.99
CALVERT CVS
1SR Social Balanced Portfolio (5/00;9/86) -- -- 11.11 16.85 10.94 10.54
FIDELITY VIP
1GI III Growth & Income Portfolio -- 7.14 6.62 -- -- 19.63
(Service Class) (9/99;12/96)
1MP III Mid Cap Portfolio (Service -- 28.69 47.28 -- -- 51.32
Class) (9/99;12/98)
1OS Overseas Portfolio (Service Class) -- 24.18 40.99 16.16 10.29 9.68
(9/99;1/87)
FRANKLIN TEMPLETON VIP TRUST
1RE Franklin Real Estate Fund - Class 2 -- -0.58 -7.62 6.45 7.59 7.28
(9/99;1/89)***
1SI Franklin Value Securities Fund - -- 4.60 0.38 -- -- -14.08
Class 2 (9/99;5/98)***
1IS Templeton International Smaller -- 5.40 22.70 -- -- 4.20
Companies Fund - Class 2
(9/99;5/96)***
GOLDMAN SACHS VIT
1SE CORESM Small Cap Equity Fund -- 16.92 16.37 -- -- 2.37
(9/99;2/98)****
1UE CORESM U.S. Equity Fund (9/99;2/98) -- 12.67 23.07 -- -- 19.53
1MC Mid Cap Value Fund (9/99;4/98) -- -2.07 -1.95 -- -- -9.80
</TABLE>
* (Commencement date of the subaccount; Commencement date of the Fund)
** Current applicable charges deducted from fund performance include a $30
contract administrative charge and a 0.95% mortality and expense risk
fee. Premium taxes are not reflected in these total returns
+ Fund had not commenced operations as of Dec. 31, 1999.
*** Class 2 shares were issued Jan. 6, 1999. Prior to Jan. 6, 1999,
Class 2 performance represents the historical results of Class 1
Shares. Performance of Class 2 Shares for periods after its Jan. 6,
1999 inception will reflect Class 2's additional 12b-1 fee expense
which also affects all future performance. Figures assume reinvestment
of dividends and capital gains.
**** CoreSM is a service mark of Goldman, Sachs & Co.
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return For Nonqualified Annuities (Without Purchase Payment
Credits) Without Surrender For Periods Ending Dec. 31, 1999
Performance Since
Commencement of the Performance Since
Subaccount Commencement of the Fund**
Since Since
Subaccount Investing In: 1 Year Commencement 1 Year 5 Years 10 Years Commencement
---------- ------------- ------ ------------ ------ ------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
JANUS ASPEN SERIES
1AG Aggressive Growth Portfolio - -- -- 121.13 34.52 -- 32.68
Service Shares (5/00;9/93)*
1GT Global Technology Portfolio - -- -- -- -- -- --
Service Shares (5/00;1/00)+
1IG International Growth Portfolio - -- -- 77.84 31.99 -- 27.28
Service Shares (5/00;5/94)
LAZARD RETIREMENT SERIES
1IP International Equity Portfolio -- 8.82 20.21 -- -- 24.97
(9/99;9/98)
MFS(R) VARIABLE INSURANCE TRUST (VIT)
1MG Growth Series - Service Class -- -- -- -- -- 39.07
(5/00;5/99)
1MD New Discovery Series - Service Class -- -- 68.71 -- -- 37.91
(5/00;4/98)
PUTNAM VARIABLE TRUST
1IN Putnam VT International New -- 56.95 100.85 -- -- 50.24
Opportunities Fund - Class IB Shares
(9/99;4/98)*****
1VS Putnam VT Vista Fund - Class IB -- 37.78 51.18 -- -- 29.77
Shares (9/99;1/97)*****
ROYCE CAPITAL FUND
1MI Micro-Cap Portfolio (9/99;12/96) -- 16.41 26.85 -- -- 16.16
THIRD AVENUE
1SV Value Portfolio (9/99;9/99) -- 8.06 -- -- -- 8.06
WANGER
1IT International Small Cap (9/99;5/95) -- 55.89 124.28 -- -- 37.40
1SP U.S. Small Cap (9/99;5/95) -- 14.83 23.66 -- -- 25.20
WARBURG PINCUS TRUST
1EG Emerging Growth Portfolio (9/99;9/99) -- 34.51 -- -- -- 34.51
</TABLE>
* (Commencement date of the subaccount; Commencement date of the Fund)
** Current applicable charges deducted from fund performance include a $30
contract administrative charge and a 0.95% mortality and expense risk fee.
Premium taxes are not reflected in these total returns.
+ Fund had not commenced operations as of Dec. 31, 1999.
***** Each of the above Funds' Class IB Shares commenced operations on April 30,
1998. For periods prior to inception of Class IB Shares, performance
information for Class IB Shares is based upon performance of the Fund's
Class IA Shares adjusted to reflect the fees paid by Class IB Shares,
including the 12b-1 fee of 0.15%.
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return For Nonqualified Annuities (Without Purchase Payment
Credits) With a Seven-Year Surrender Charge Schedule For Periods Ending Dec. 31,
1999
Performance Since
Commencement of the Performance Since
Subaccount Commencement of the Fund**
Since Since
Subaccount Investing In: 1 Year Commencement 1 Year 5 Years 10 Years Commencement
---------- ------------- ------ ------------ ------ ------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
AXPSM VARIABLE PORTFOLIO
BC1 Blue Chip Advantage Fund (9/99;9/99)* --% 6.74% --% --% --% 3.98%
BD1 Bond Fund (9/99;10/81) -- -5.00 -5.66 6.32 7.10 9.62
CR1 Capital Resource Fund (9/99;10/81) -- 10.13 15.52 19.77 14.36 14.83
CM1 Cash Management Fund (9/99;10/81) -- -5.32 -2.88 3.37 3.86 5.52
DE1 Diversified Equity Income Fund -- -1.05 -- -- -- -3.95
(9/99;9/99)
EM1 Emerging Markets Fund (5/00;5/00)+ -- -- -- -- -- --
EI1 Extra Income Fund (9/99;5/96) -- -4.54 -1.48 -- -- 3.23
FI1 Federal Income Fund (9/99;9/99) -- -5.93 -- -- -- -6.03
GB1 Global Bond Fund (9/99;5/96) -- -6.74 -11.29 -- -- 1.75
GR1 Growth Fund (9/99;9/99) -- 12.65 -- -- -- 10.89
IE1 International Fund (9/99;1/92) -- 23.37 37.19 14.53 -- 12.25
MF1 Managed Fund (9/99;4/86) -- 3.16 6.70 16.62 12.41 11.76
ND1 New Dimensions Fund(R)(9/99;5/96) -- 14.45 23.70 -- -- 24.34
IV1 S&P 500 Index Fund (5/00;5/00)+ -- -- -- -- -- --
SC1 Small Cap Advantage Fund (9/99;9/99) -- 7.37 -- -- -- 5.35
SA1 Strategy Aggressive Fund (9/99;1/92) -- 47.11 62.36 23.22 -- 15.86
AIM V.I.
1CA Capital Appreciation Fund (9/99;5/93) -- 26.67 36.21 24.01 -- 21.01
1CD Capital Development Fund (9/99;5/98) -- 22.55 20.82 -- -- 6.11
American Century variable portfolios, inc.
1IF VP International (9/99;5/94) -- 38.42 55.44 20.59 -- 16.82
1VA VP Value (9/99;5/96) -- -10.19 -8.02 -- -- 8.92
CALVERT CVS
1SR Social Balanced Portfolio (5/00;9/86) -- -- 4.11 16.42 10.94 10.54
FIDELITY VIP
1GI III Growth & Income Portfolio -- 0.34 -0.14 -- -- 18.21
(Service Class) (9/99;12/96)
1MP III Mid Cap Portfolio (Service -- 21.69 40.28 -- -- 44.40
Class) (9/99;12/98)
1OS Overseas Portfolio (Service Class) -- 17.18 33.99 15.71 10.29 9.68
(9/99;1/87)
FRANKLIN TEMPLETON VIP TRUST
1RE Franklin Real Estate Fund - Class 2 -- -6.84 -13.38 5.82 7.59 7.28
(9/99;1/89)***
1SI Franklin Value Securities Fund - -- -2.02 -5.95 -- -- -17.35
Class 2 (9/99;5/98)***
1IS Templeton International Smaller -- -1.27 15.70 -- -- 2.96
Companies Fund - Class 2
(9/99;5/96)***
GOLDMAN SACHS VIT
1SE CORESM Small Cap Equity Fund -- 9.92 9.37 -- -- -1.20
(9/99;2/98)****
1UE CORESM U.S. Equity Fund (9/99;2/98) -- 5.67 16.07 -- -- 16.30
1MC Mid Cap Value Fund (9/99;4/98) -- -8.22 -8.11 -- -- -13.20
</TABLE>
* (Commencement date of the subaccount; Commencement date of the Fund)
** Current applicable charges deducted from fund performance include a $30
contract administrative charge and a 0.95% mortality and expense risk fee
and applicable surrender charges associated with the seven-year surrender
charge schedule. Premium taxes are not reflected in these total returns.
+ Fund had not commenced operations as of Dec. 31, 1999.
*** Class 2 shares were issued Jan. 6, 1999. Prior to Jan. 6, 1999,
Class 2 performance represents the historical results of Class 1
Shares. Performance of Class 2 Shares for periods after its Jan. 6,
1999 inception will reflect Class 2's additional 12b-1 fee expense
which also affects all future performance. Figures assume reinvestment
of dividends and capital gains.
**** CoreSM is a service mark of Goldman, Sachs & Co.
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return For Nonqualified Annuities (Without Purchase Payment
Credits) With a Seven-Year Surrender Charge Schedule For Periods Ending Dec. 31,
1999
Performance Since
Commencement of the Performance Since
Subaccount Commencement of the Fund**
Since Since
Subaccount Investing In: 1 Year Commencement 1 Year 5 Years 10 Years Commencement
---------- ------------- ------ ------------ ------ ------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
JANUS ASPEN SERIES
1AG Aggressive Growth Portfolio - -- -- 114.13 34.27 -- 32.61
Service Shares (5/00;9/93)*
1GT Global Technology Portfolio - -- -- -- -- -- --
Service Shares (5/00;1/00)+
1IG International Growth Portfolio - -- -- 70.84 31.72 -- 27.10
Service Shares (5/00;5/94)
LAZARD RETIREMENT SERIES
1IP International Equity Portfolio -- 1.90 13.21 -- -- 20.06
(9/99;9/98)
MFS(R) VARIABLE INSURANCE TRUST (VIT)
1MG Growth Series - Service Class -- -- -- -- -- 32.07
(5/00;5/99)
1MD New Discovery Series - Service Class -- -- 61.71 -- -- 34.51
(5/00;4/98)
PUTNAM VARIABLE TRUST
1IN Putnam VT International New -- 49.95 93.85 -- -- 47.03
Opportunities Fund - Class IB Shares
(9/99;4/98)*****
1VS Putnam VT Vista Fund - Class IB -- 30.78 44.18 -- -- 28.57
Shares (9/99;1/97)*****
ROYCE CAPITAL FUND
1MI Micro-Cap Portfolio (9/99;12/96) -- 9.41 19.85 -- -- 14.66
THIRD AVENUE
1SV Value Portfolio (9/99;9/99) -- 1.19 -- -- -- 1.19
WANGER
1IT International Small Cap (9/99;5/95) -- 48.89 117.28 -- -- 37.13
1SP U.S. Small Cap (9/99;5/95) -- 7.83 16.66 -- -- 24.82
WARBURG PINCUS TRUST
1EG Emerging Growth Portfolio (9/99;9/99) -- 27.51 -- -- -- 27.51
</TABLE>
* (Commencement date of the subaccount; Commencement date of the Fund)
** Current applicable charges deducted from fund performance include a $30
contract administrative charge and a 0.95% mortality and expense risk fee
and applicable surrender charges associated with the seven-year surrender
charge schedule. Premium taxes are not reflected in these total returns.
+ Fund had not commenced operations as of Dec. 31, 1999.
***** Each of the above Funds' Class IB Shares commenced operations on April 30,
1998. For periods prior to inception of Class IB Shares, performance
information for Class IB Shares is based upon performance of the Fund's
Class IA Shares adjusted to reflect the fees paid by Class IB Shares,
including the 12b-1 fee of 0.15%.
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return For Nonqualified Annuities (Without Purchase Payment Credits) With a
Ten-Year Surrender Charge Schedule For Periods Ending Dec. 31, 1999
Performance Since
Commencement of the Performance Since
Subaccount Commencement of the Fund**
Since Since
Subaccount Investing In: 1 Year Commencement 1 Year 5 Years 10 Years Commencement
---------- ------------- ------ ------------ ------ ------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
AXPSM VARIABLE PORTFOLIO
BC1 Blue Chip Advantage Fund (9/99;9/99)* --% 5.74 --% --% --% 2.98%
BD1 Bond Fund (9/99;10/81) -- -5.91 -6.57 6.00 7.05 9.62
CR1 Capital Resource Fund (9/99;10/81) -- 9.13 14.52 19.57 14.33 14.83
CM1 Cash Management Fund (9/99;10/81) -- -6.23 -3.81 3.02 3.79 5.52
DE1 Diversified Equity Income Fund -- -2.00 -- -- -- -4.88
(9/99;9/99)
EM1 Emerging Markets Fund (5/00;5/00)+ -- -- -- -- -- --
EI1 Extra Income Fund (9/99;5/96) -- -5.46 -2.43 -- -- 2.72
FI1 Federal Income Fund (9/99;9/99) -- -6.84 -- -- -- -6.93
GB1 Global Bond Fund (9/99;5/96) -- -7.64 -12.14 -- -- 1.23
GR1 Growth Fund (9/99;9/99) -- 11.65 -- -- -- 9.89
IE1 International Fund (9/99;1/92) -- 22.37 36.19 14.29 -- 12.08
MF1 Managed Fund (9/99;4/86) -- 2.16 5.70 16.40 12.38 11.76
ND1 New Dimensions Fund(R)(9/99;5/96) -- 13.45 22.70 -- -- 24.04
IV1 S&P 500 Index Fund (5/00;5/00)+ -- -- -- -- -- --
SC1 Small Cap Advantage Fund (9/99;9/99) -- 6.37 -- -- -- 4.35
SA1 Strategy Aggressive Fund (9/99;1/92) -- 46.11 61.36 23.04 -- 15.72
AIM V.I.
1CA Capital Appreciation Fund (9/99;5/93) -- 25.67 35.21 23.84 -- 20.91
1CD Capital Development Fund (9/99;5/98) -- 21.55 19.82 -- -- 5.53
American Century variable portfolios, inc.
1IF VP International (9/99;5/94) -- 37.42 54.44 20.40 -- 16.64
1VA VP Value (9/99;5/96) -- -11.05 -8.90 -- -- 8.48
CALVERT CVS
1SR Social Balanced Portfolio (5/00;9/86) -- -- 3.11 16.20 10.90 10.54
FIDELITY VIP
1GI III Growth & Income Portfolio -- -0.63 -1.11 -- -- 17.98
(Service Class) (9/99;12/96)
1MP III Mid Cap Portfolio (Service -- 20.69 39.28 -- -- 43.41
Class) (9/99;12/98)
1OS Overseas Portfolio (Service Class) -- 16.18 32.99 15.49 10.25 9.68
(9/99;1/87)
FRANKLIN TEMPLETON VIP TRUST
1RE Franklin Real Estate Fund - Class 2 -- -7.73 -14.21 5.50 7.54 7.28
(9/99;1/89)***
1SI Franklin Value Securities Fund - -- -2.97 -6.85 -- -- -17.82
Class 2 (9/99;5/98)***
1IS Templeton International Smaller -- -2.23 14.70 -- -- 2.45
Companies Fund - Class 2
(9/99;5/96)***
GOLDMAN SACHS VIT
1SE CORESM Small Cap Equity Fund -- 8.92 8.37 -- -- -1.72
(9/99;2/98)****
1UE CORESM U.S. Equity Fund (9/99;2/98) -- 4.67 15.07 -- -- 15.84
1MC Mid Cap Value Fund (9/99;4/98) -- -9.10 -9.00 -- -- -13.69
</TABLE>
* (Commencement date of the subaccount; Commencement date of the Fund)
** Current applicable charges deducted from fund performance include a $30
contract administrative charge and a 0.95% mortality and expense risk fee
and applicable surrender charges associated with the ten-year surrender
charge schedule. Premium taxes are not reflected in these total returns.
+ Fund had not commenced operations as of Dec. 31, 1999.
*** Class 2 shares were issued Jan. 6, 1999. Prior to Jan. 6, 1999,
Class 2 performance represents the historical results of Class 1
Shares. Performance of Class 2 Shares for periods after its Jan. 6,
1999 inception will reflect Class 2's additional 12b-1 fee expense
which also affects all future performance. Figures assume reinvestment
of dividends and capital gains.
**** CoreSM is a service mark of Goldman, Sachs & Co.
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return For Nonqualified Annuities (Without Purchase Payment
Credits) With a Ten-Year Surrender Charge Schedule For Periods Ending Dec. 31,
1999
Performance Since
Commencement of the Performance Since
Subaccount Commencement of the Fund**
Since Since
Subaccount Investing In: 1 Year Commencement 1 Year 5 Years 10 Years Commencement
---------- ------------- ------ ------------ ------ ------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
JANUS ASPEN SERIES
1AG Aggressive Growth Portfolio - -- -- 113.13 34.15 -- 32.54
Service Shares (5/00;9/93)*
1GT Global Technology Portfolio - -- -- -- -- -- --
Service Shares (5/00;1/00)+
1IG International Growth Portfolio - -- -- 70.84 31.72 -- 27.10
Service Shares (5/00;5/94)
LAZARD RETIREMENT SERIES
1IP International Equity Portfolio -- 0.92 12.21 -- -- 19.35
(9/99;9/98)
MFS(R) VARIABLE INSURANCE TRUST (VIT)
1MG Growth Series - Service Class -- -- -- -- -- 31.07
(5/00;5/99)
1MD New Discovery Series - Service Class -- -- 60.71 -- -- 34.02
(5/00;4/98)
PUTNAM VARIABLE TRUST
1IN Putnam VT International New -- 48.95 92.85 -- -- 46.56
Opportunities Fund - Class IB Shares
(9/99;4/98)*****
1VS Putnam VT Vista Fund - Class IB -- 29.78 43.18 -- -- 28.36
Shares (9/99;1/97)*****
ROYCE CAPITAL FUND
1MI Micro-Cap Portfolio (9/99;12/96) -- 8.41 18.85 -- -- 14.40
THIRD AVENUE
1SV Value Portfolio (9/99;9/99) -- 0.21 -- -- -- 0.21
WANGER
1IT International Small Cap (9/99;5/95) -- 47.89 116.28 -- -- 36.99
1SP U.S. Small Cap (9/99;5/95) -- 6.83 15.66 -- -- 24.63
WARBURG PINCUS TRUST
1EG Emerging Growth Portfolio -- 26.51 -- -- -- 26.51
(9/99;9/99)
</TABLE>
* (Commencement date of the subaccount; Commencement date of the Fund)
** Current applicable charges deducted from fund performance include a $30
contract administrative charge and a 0.95% mortality and expense risk fee
and applicable surrender charges associated with the ten-year surrender
charge schedule. Premium taxes are not reflected in these total returns.
+ Fund had not commenced operations as of Dec. 31, 1999.
***** Each of the above Funds' Class IB Shares commenced operations on April 30,
1998. For periods prior to inception of Class IB Shares, performance
information for Class IB Shares is based upon performance of the Fund's
Class IA Shares adjusted to reflect the fees paid by Class IB Shares,
including the 12b-1 fee of 0.15%.
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return For Qualified Annuities (Without Purchase Payment
Credits) Without Surrender For Periods Ending Dec. 31, 1999
Performance Since
Commencement of the Performance Since
Subaccount Commencement of the Fund**
Since Since
Subaccount Investing In: 1 Year Commencement 1 Year 5 Years 10 Years Commencement
---------- ------------- ------ ------------ ------ ------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
AXPSM VARIABLE PORTFOLIO
BC2 Blue Chip Advantage Fund (9/99;9/99)* --% 11.48 --% --% --% 11.04%
BD2 Bond Fund (9/99;10/81) -- 1.46 0.89 7.15 7.31 9.84
CR2 Capital Resource Fund (9/99;10/81) -- 17.20 22.77 20.39 14.59 15.07
CM2 Cash Management Fund (9/99;10/81) -- 1.11 3.89 4.27 4.07 5.74
DE2 Diversified Equity Income Fund -- 4.11 -- -- -- 2.59
(9/99;9/99)
EM2 Emerging Markets Fund (5/00;5/00)+ -- -- -- -- -- --
EI2 Extra Income Fund (9/99;5/96) -- 1.55 5.39 -- -- 4.67
FI2 Federal Income Fund (9/99;9/99) -- 0.45 -- -- -- 0.36
GB2 Global Bond Fund (9/99;5/96) -- -0.42 -5.18 -- -- 3.24
GR2 Growth Fund (9/99;9/99) -- 17.14 -- -- -- 17.96
IE2 International Fund (9/99;1/92) -- 30.44 13.44 9.78 -- 9.12
MF2 Managed Fund (9/99;4/86) -- 8.81 13.93 17.28 12.64 11.99
ND2 New Dimensions Fund(R)(9/99;5/96) -- 19.12 30.96 -- -- 25.35
IV2 S&P 500 Index Fund (5/00;5/00)+ -- -- -- -- -- --
SC2 Small Cap Advantage Fund (9/99;9/99) -- 14.43 -- -- -- 12.42
SA2 Strategy Aggressive Fund (9/99;1/92) -- 54.20 69.69 23.81 -- 16.09
AIM V.I.
2CA Capital Appreciation Fund (9/99;5/93) -- 33.75 43.49 24.59 -- 21.35
2CD Capital Development Fund (9/99;5/98) -- 29.62 28.08 -- -- 10.31
American Century variable portfolios, inc.
2IF VP International (9/99;5/94) -- 45.50 62.76 21.21 -- 17.30
2VA VP Value (9/99;5/96) -- -4.14 -1.65 -- -- 10.21
CALVERT CVS
2SR Social Balanced Portfolio (5/00;9/86) -- -- 11.33 17.08 11.16 10.76
FIDELITY VIP
2GI III Growth & Income Portfolio -- 5.62 6.83 -- -- 19.87
(Service Class) (9/99;12/96)
2MP III Mid Cap Portfolio (Service -- 28.76 47.58 -- -- 51.63
Class) (9/99;12/98)
2OS Overseas Portfolio (Service Class) -- 24.25 41.27 16.39 10.51 9.90
(9/99;1/87)
FRANKLIN TEMPLETON VIP TRUST
2RE Franklin Real Estate Fund - Class 2 -- -0.53 -7.12 7.12 8.13 7.79
(9/99;1/89)***
2SI Franklin Value Securities Fund - -- 4.66 0.58 -- -- -13.90
Class 2 (9/99;5/98)***
2IS Templeton International Smaller -- 5.46 22.94 -- -- 4.40
Companies Fund - Class 2
(9/99;5/96)***
GOLDMAN SACHS VIT
2SE CORESM Small Cap Equity Fund -- 16.96 16.58 -- -- 2.57
(9/99;2/98)****
2UE CORESM U.S. Equity Fund (9/99;2/98) -- 10.27 23.32 -- -- 19.77
2MC Mid Cap Value Fund (9/99;4/98) -- -2.01 -1.75 -- -- -9.61
</TABLE>
* (Commencement date of the subaccount; Commencement date of the Fund)
** Current applicable charges deducted from fund performance include a $30
contract administrative charge and a 0.75% mortality and expense risk fee.
Premium taxes are not reflected in these total returns.
+ Fund had not commenced operations as of Dec. 31, 1999.
*** Class 2 shares were issued Jan. 6, 1999. Prior to Jan. 6, 1999,
Class 2 performance represents the historical results of Class 1
Shares. Performance of Class 2 Shares for periods after its Jan. 6,
1999 inception will reflect Class 2's additional 12b-1 fee expense
which also affects all future performance. Figures assume reinvestment
of dividends and capital gains.
**** CoreSM is a service mark of Goldman, Sachs & Co.
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return For Qualified Annuities (Without Purchase Payment
Credits) Without Surrender For Periods Ending Dec. 31, 1999
Performance Since
Commencement of the Performance Since
Subaccount Commencement of the Fund**
Since Since
Subaccount Investing In: 1 Year Commencement 1 Year 5 Years 10 Years Commencement
---------- ------------- ------ ------------ ------ ------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
JANUS ASPEN SERIES
2AG Aggressive Growth Portfolio - -- -- 121.54 34.78 -- 32.94
Service Shares (5/00;9/93)*
2GT Global Technology Portfolio - -- -- -- -- -- --
Service Shares (5/00;1/00)+
2IG International Growth Portfolio - -- -- 78.18 32.25 -- 27.53
Service Shares (5/00;5/94)
LAZARD RETIREMENT SERIES
2IP International Equity Portfolio -- 8.88 20.45 -- -- 25.22
(9/99;9/98)
MFS(R) VARIABLE INSURANCE TRUST (VIT)
2MG Growth Series - Service Class -- -- -- -- -- 39.25
(5/00;5/99)
2MD New Discovery Series - Service Class -- -- 69.04 -- -- 38.17
(5/00;4/98)
PUTNAM VARIABLE TRUST
2IN Putnam VT International New -- 57.03 101.25 -- -- 50.54
Opportunities Fund - Class IB Shares
(9/99;4/98)*****
2VS Putnam VT Vista Fund - Class IB -- 34.57 51.50 -- -- 30.03
Shares (9/99;1/97)*****
ROYCE CAPITAL FUND
2MI Micro-Cap Portfolio (9/99;12/96) -- 16.47 27.13 -- -- 16.40
THIRD AVENUE
2SV Value Portfolio (9/99;9/99) -- 8.12 -- -- -- 8.12
WANGER
2IT International Small Cap (9/99;5/95) -- 55.98 124.71 -- -- 37.67
2SP U.S. Small Cap (9/99;5/95) -- 14.89 23.90 -- -- 25.44
WARBURG PINCUS TRUST
2EG Emerging Growth Portfolio (9/99;9/99) -- 34.58 -- -- -- 34.58
</TABLE>
* (Commencement date of the subaccount; Commencement date of the Fund)
** Current applicable charges deducted from fund performance include a $30
contract administrative charge and a 0.75% mortality and expense risk fee.
Premium taxes are not reflected in these total returns.
+ Fund had not commenced operations as of Dec. 31, 1999.
***** Each of the above Funds' Class IB Shares commenced operations on April 30,
1998. For periods prior to inception of Class IB Shares, performance
information for Class IB Shares is based upon performance of the Fund's
Class IA Shares adjusted to reflect the fees paid by Class IB Shares,
including the 12b-1 fee of 0.15%.
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return For Qualified Annuities (Without Purchase Payment
Credits) With a Seven-Year Surrender Charge Schedule For Periods Ending Dec. 31,
1999
Performance Since
Commencement of the Performance Since
Subaccount Commencement of the Fund**
Since Since
Subaccount Investing In: 1 Year Commencement 1 Year 5 Years 10 Years Commencement
---------- ------------- ------ ------------ ------ ------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
AXPSM VARIABLE PORTFOLIO
BC2 Blue Chip Advantage Fund (9/99;9/99)* --% 4.48 --% --% --% 4.04%
BD2 Bond Fund (9/99;10/81) -- -4.95 -5.47 6.54 7.31 9.84
CR2 Capital Resource Fund (9/99;10/81) -- 10.20 15.77 20.01 14.59 15.07
CM2 Cash Management Fund (9/99;10/81) -- -5.27 -2.68 3.59 4.07 5.74
DE2 Diversified Equity Income Fund -- -2.48 -- -- -- -3.89
(9/99;9/99)
EM2 Emerging Markets Fund (5/00;5/00)+ -- -- -- -- -- --
EI2 Extra Income Fund (9/99;5/96) -- -4.86 -1.29 -- -- 3.44
FI2 Federal Income Fund (9/99;9/99) -- -5.88 -- -- -- -5.97
GB2 Global Bond Fund (9/99;5/96) -- -6.69 -11.11 -- -- 1.97
GR2 Growth Fund (9/99;9/99) -- 10.14 -- -- -- 10.96
IE2 International Fund (9/99;1/92) -- 23.44 6.44 9.22 -- 9.12
MF2 Managed Fund (9/99;4/86) -- 1.89 6.93 16.85 12.64 11.99
ND2 New Dimensions Fund(R)(9/99;5/96) -- 12.12 23.96 -- -- 24.60
IV2 S&P 500 Index Fund (5/00;5/00)+ -- -- -- -- -- --
SC2 Small Cap Advantage Fund (9/99;9/99) -- 7.43 -- -- -- 5.42
SA2 Strategy Aggressive Fund (9/99;1/92) -- 47.20 62.69 23.47 -- 16.09
AIM V.I.
2CA Capital Appreciation Fund (9/99;5/93) -- 26.75 36.49 24.26 -- 21.25
2CD Capital Development Fund (9/99;5/98) -- 22.62 21.08 -- -- 6.33
American Century variable portfolios, inc.
2IF VP International (9/99;5/94) -- 38.50 55.76 20.84 -- 17.05
2VA VP Value (9/99;5/96) -- -10.15 -7.83 -- -- 9.15
CALVERT CVS
2SR Social Balanced Portfolio (5/00;9/86) -- -- 4.33 16.66 11.16 10.76
FIDELITY VIP
2GI III Growth & Income Portfolio -- -1.08 0.06 -- -- 18.46
(Service Class) (9/99;12/96)
2MP III Mid Cap Portfolio (Service -- 21.76 40.58 -- -- 44.71
Class) (9/99;12/98)
2OS Overseas Portfolio (Service Class) -- 17.25 34.27 15.95 10.51 9.90
(9/99;1/87)
FRANKLIN TEMPLETON VIP TRUST
2RE Franklin Real Estate Fund - Class 2 -- -6.79 -12.92 6.50 8.13 7.79
(9/99;1/89)***
2SI Franklin Value Securities Fund - -- -1.97 -5.76 -- -- -17.18
Class 2 (9/99;5/98)***
2IS Templeton International Smaller -- -1.22 15.94 -- -- 3.17
Companies Fund - Class 2
(9/99;5/96)***
GOLDMAN SACHS VIT
2SE CORESM Small Cap Equity Fund -- 9.96 9.58 -- -- -1.01
(9/99;2/98)****
2UE CORESM U.S. Equity Fund (9/99;2/98) -- 3.27 16.32 -- -- 16.55
2MC Mid Cap Value Fund (9/99;4/98) -- -8.17 -7.93 -- -- -13.03
</TABLE>
* (Commencement date of the subaccount; Commencement date of the Fund)
** Current applicable charges deducted from fund performance include a $30
contract administrative charge and a 0.75% mortality and expense risk fee
and applicable surrender charges associated with the seven-year surrender
charge schedule. Premium taxes are not reflected in these total returns.
+ Fund had not commenced operations as of Dec. 31, 1999.
*** Class 2 shares were issued Jan. 6, 1999. Prior to Jan. 6, 1999,
Class 2 performance represents the historical results of Class 1
Shares. Performance of Class 2 Shares for periods after its Jan. 6,
1999 inception will reflect Class 2's additional 12b-1 fee expense
which also affects all future performance. Figures assume reinvestment
of dividends and capital gains.
**** CoreSM is a service mark of Goldman, Sachs & Co.
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return For Qualified Annuities (Without Purchase Payment
Credits) With a Seven-Year Surrender Charge Schedule For Periods Ending Dec. 31,
1999
Performance Since
Commencement of the Performance Since
Subaccount Commencement of the Fund**
Since Since
Subaccount Investing In: 1 Year Commencement 1 Year 5 Years 10 Years Commencement
---------- ------------- ------ ------------ ------ ------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
JANUS ASPEN SERIES
2AG Aggressive Growth Portfolio - -- -- 114.54 34.54 -- 32.87
Service Shares (5/00;9/93)*
2GT Global Technology Portfolio - -- -- -- -- -- --
Service Shares (5/00;1/00)+
2IG International Growth Portfolio - -- -- 71.18 31.98 -- 27.36
Service Shares (5/00;5/94)
LAZARD RETIREMENT SERIES
2IP International Equity Portfolio -- 1.96 13.45 -- -- 20.31
(9/99;9/98)
MFS(R) VARIABLE INSURANCE TRUST (VIT)
2MG Growth Series - Service Class -- -- -- -- -- 32.25
(5/00;5/99)
2MD New Discovery Series - Service Class -- -- 62.04 -- -- 34.78
(5/00;4/98)
PUTNAM VARIABLE TRUST
2IN Putnam VT International New -- 50.03 94.25 -- -- 47.33
Opportunities Fund - Class IB Shares
(9/99;4/98)*****
2VS Putnam VT Vista Fund - Class IB -- 27.57 44.50 -- -- 28.84
Shares (9/99;1/97)*****
ROYCE CAPITAL FUND
2MI Micro-Cap Portfolio (9/99;12/96) -- 9.47 20.13 -- -- 14.90
THIRD AVENUE
2SV Value Portfolio (9/99;9/99) -- 1.25 -- -- -- 1.25
WANGER
2IT International Small Cap (9/99;5/95) -- 48.98 117.71 -- -- 37.40
2SP U.S. Small Cap (9/99;5/95) -- 7.89 16.90 -- -- 25.07
2EG Emerging Growth Portfolio (9/99;9/99) -- 27.58 -- -- -- 27.58
</TABLE>
* (Commencement date of the subaccount; Commencement date of the Fund)
** Current applicable charges deducted from fund performance include a $30
contract administrative charge and a 0.75% mortality and expense risk fee
and applicable surrender charges associated with the seven-year surrender
charge schedule. Premium taxes are not reflected in these total returns.
+ Fund had not commenced operations as of Dec. 31, 1999.
***** Each of the above Funds' Class IB Shares commenced operations on April 30,
1998. For periods prior to inception of Class IB Shares, performance
information for Class IB Shares is based upon performance of the Fund's
Class IA Shares adjusted to reflect the fees paid by Class IB Shares,
including the 12b-1 fee of 0.15%.
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return For Qualified Annuities (Without Purchase Payment
Credits) With a Ten-Year Surrender Charge Schedule For Periods Ending Dec. 31,
1999
Performance Since
Commencement of the Performance Since
Subaccount Commencement of the Fund**
Since Since
Subaccount Investing In: 1 Year Commencement 1 Year 5 Years 10 Years Commencement
---------- ------------- ------ ------------ ------ ------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
AXPSM VARIABLE PORTFOLIO
BC2 Blue Chip Advantage Fund (9/99;9/99)* --% 3.48 --% --% --% 3.04%
BD2 Bond Fund (9/99;10/81) -- -5.86 -6.38 6.22 7.26 9.84
CR2 Capital Resource Fund (9/99;10/81) -- 9.20 14.77 19.82 14.56 15.07
CM2 Cash Management Fund (9/99;10/81) -- -6.18 -3.62 3.24 4.00 5.74
DE2 Diversified Equity Income Fund -- -3.42 -- -- -- -4.82
(9/99;9/99)
EM2 Emerging Markets Fund (5/00;5/00)+ -- -- -- -- -- --
EI2 Extra Income Fund (9/99;5/96) -- -5.78 -2.24 -- -- 2.94
FI2 Federal Income Fund (9/99;9/99) -- -3.42 -- -- -- -6.87
GB2 Global Bond Fund (9/99;5/96) -- -7.58 -11.96 -- -- 1.45
GR2 Growth Fund (9/99;9/99) -- 9.14 -- -- -- 9.96
IE2 International Fund (9/99;1/92) -- 22.44 5.44 8.94 -- 8.91
MF2 Managed Fund (9/99;4/86) -- 0.90 5.93 16.64 12.60 11.99
ND2 New Dimensions Fund(R)(9/99;5/96) -- 11.12 22.96 -- -- 24.29
IV2 S&P 500 Index Fund (5/00;5/00)+ -- -- -- -- -- --
SC2 Small Cap Advantage Fund (9/99;9/99) -- 6.43 -- -- -- 4.42
SA2 Strategy Aggressive Fund (9/99;1/92) -- 46.20 61.69 23.29 -- 15.96
AIM V.I.
2CA Capital Appreciation Fund (9/99;5/93) -- 25.75 35.49 24.09 -- 21.15
2CD Capital Development Fund (9/99;5/98) -- 21.62 20.08 -- -- 5.76
American Century variable portfolios, inc.
2IF VP International (9/99;5/94) -- 37.50 54.76 20.65 -- 16.88
2VA VP Value (9/99;5/96) -- -11.00 -8.72 -- -- 8.71
CALVERT CVS
2SR Social Balanced Portfolio (5/00;9/86) -- -- 3.33 16.44 11.12 10.76
FIDELITY VIP
2GI III Growth & Income Portfolio -- -2.03 -0.91 -- -- 18.22
(Service Class) (9/99;12/96)
2MP III Mid Cap Portfolio (Service -- 20.76 39.58 -- -- 43.72
Class) (9/99;12/98)
2OS Overseas Portfolio (Service Class) -- 16.25 33.27 15.73 10.47 9.90
(9/99;1/87)
FRANKLIN TEMPLETON VIP TRUST
2RE Franklin Real Estate Fund - Class 2 -- -7.68 -13.75 6.19 8.08 7.79
(9/99;1/89)***
2SI Franklin Value Securities Fund - -- -2.91 -6.67 -- -- -17.66
Class 2 (9/99;5/98)***
2IS Templeton International Smaller -- -2.18 14.94 -- -- 2.66
Companies Fund - Class 2
(9/99;5/96)***
GOLDMAN SACHS VIT
2SE CORESM Small Cap Equity Fund -- 8.96 8.58 -- -- -1.53
(9/99;2/98)****
2UE CORESM U.S. Equity Fund (9/99;2/98) -- 2.27 15.32 -- -- 16.08
2MC Mid Cap Value Fund (9/99;4/98) -- -9.05 -8.81 -- -- -13.52
</TABLE>
* (Commencement date of the subaccount; Commencement date of the Fund)
** Current applicable charges deducted from fund performance include a $30
contract administrative charge and a 0.75% mortality and expense risk fee
and applicable surrender charges associated with the ten-year surrender
charge schedule. Premium taxes are not reflected in these total returns.
+ Fund had not commenced operations as of Dec. 31, 1999.
*** Class 2 shares were issued Jan. 6, 1999. Prior to Jan. 6, 1999,
Class 2 performance represents the historical results of Class 1
Shares. Performance of Class 2 Shares for periods after its Jan. 6,
1999 inception will reflect Class 2's additional 12b-1 fee expense
which also affects all future performance. Figures assume reinvestment
of dividends and capital gains.
**** CoreSM is a service mark of Goldman, Sachs & Co.
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return For Qualified Annuities (Without Purchase Payment
Credits) With a Ten-Year Surrender Charge Schedule For Periods Ending Dec. 31,
1999
Performance Since
Commencement of the Performance Since
Subaccount Commencement of the Fund**
Since Since
Subaccount Investing In: 1 Year Commencement 1 Year 5 Years 10 Years Commencement
---------- ------------- ------ ------------ ------ ------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
JANUS ASPEN SERIES
2AG Aggressive Growth Portfolio - -- -- 113.54 34.42 -- 32.80
Service Shares (5/00;9/93)*
2GT Global Technology Portfolio - -- -- -- -- -- --
Service Shares (5/00;1/00)+
2IG International Growth Portfolio - -- -- 70.18 31.85 -- 27.24
Service Shares (5/00;5/94)
LAZARD RETIREMENT SERIES
2IP International Equity Portfolio -- 0.97 12.45 -- -- 19.60
(9/99;9/98)
MFS(R) VARIABLE INSURANCE TRUST (VIT)
2MG Growth Series - Service Class -- -- -- -- -- 31.25
(5/00;5/99)
2MD New Discovery Series - Service Class -- -- 61.04 -- -- 34.29
(5/00;4/98)
PUTNAM VARIABLE TRUST
2IN Putnam VT International New -- 49.03 93.25 -- -- 46.87
Opportunities Fund - Class IB Shares
(9/99;4/98)*****
2VS Putnam VT Vista Fund - Class IB -- 26.57 43.50 -- -- 28.63
Shares (9/99;1/97)*****
ROYCE CAPITAL FUND
2MI Micro-Cap Portfolio (9/99;12/96) -- 8.47 19.13 -- -- 14.65
THIRD AVENUE
2SV Value Portfolio (9/99;9/99) -- 0.27 -- -- -- 0.27
WANGER
2IT International Small Cap (9/99;5/95) -- 47.98 116.71 -- -- 37.27
2SP U.S. Small Cap (9/99;5/95) -- 6.89 15.90 -- -- 24.88
WARBURG PINCUS TRUST
2EG Emerging Growth Portfolio (9/99;9/99) -- 26.58 -- -- -- 26.58
</TABLE>
* (Commencement date of the subaccount; Commencement date of the Fund)
** Current applicable charges deducted from fund performance include a $30
contract administrative charge and a 0.75% mortality and expense risk fee
and applicable surrender charges associated with the ten-year surrender
charge schedule. Premium taxes are not reflected in these total returns.
+ Fund had not commenced operations as of Dec. 31, 1999.
***** Each of the above Funds' Class IB Shares commenced operations on April 30,
1998. For periods prior to inception of Class IB Shares, performance
information for Class IB Shares is based upon performance of the Fund's
Class IA Shares adjusted to reflect the fees paid by Class IB Shares,
including the 12b-1 fee of 0.15%.
Cumulative Total Return
Cumulative total return represents the cumulative change in the value of an
investment for a given period (reflecting change in a subaccount's accumulation
unit value). We compute cumulative total return by using the following formula:
ERV - P
---------
P
where: P = a hypothetical initial payment of $1,000
ERV = Ending Redeemable Value of a hypothetical $1,000
payment made at the beginning of the period, at the
end of the period (or fractional portion thereof).
Total return figures reflect the deduction of the surrender charge which assumes
you withdraw the entire contract value at the end of the one, five and ten year
periods (or, if less, up to the life of the subaccount). We also may show
performance figures without the deduction of a surrender charge. In addition,
total return figures reflect the deduction of all other applicable charges
including the contract administrative charge and mortality and expense risk fee.
<PAGE>
Annualized Calculation of Yield for Subaccounts Investing in Money Market Funds
Annualized Simple Yield
For the subaccounts investing in money market funds, we base quotations of
simple yield on:
(a) the change in the value of a hypothetical subaccount (exclusive of
capital changes and income other than investment income) at the
beginning of a particular seven-day period;
(b) less a pro rata share of the subaccount expenses accrued over the
period;
(c) dividing this difference by the value of the subaccount at the
beginning of the period to obtain the base period return; and
(d) multiplying the base period return by 365/7.
The subaccount's value includes:
o any declared dividends,
o the value of any shares purchased with dividends paid during the
period, and
o any dividends declared for such shares.
It does not include:
o the effect of any applicable surrender charge, or
o any realized or unrealized gains or losses.
Annualized Compound Yield
We calculate compound yield using the base period return described above, which
we then compound according to the following formula:
Compound Yield = [(Base Period Return + 1)365/7] -1
<TABLE>
<CAPTION>
Annualized Yields Based on the Seven-Day Period Ending Dec. 31, 1999
Subaccount Investing In Simple Yield Compound Yield
---------- ------------ ------------ --------------
<S> <C> <C> <C>
CM1 AXPSM Variable Portfolio - Cash Management Fund 5.03% 5.16%
CM2 AXPSM Variable Portfolio - Cash Management Fund 5.26 5.40
</TABLE>
You must consider (when comparing an investment in subaccounts investing in
money market funds with fixed annuities) that fixed annuities often provide an
agreed-to or guaranteed yield for a stated period of time, whereas the
subaccount's yield fluctuates. In comparing the yield of the subaccount to a
money market fund, you should consider the different services that the contract
provides.
<PAGE>
Annualized Yield for Subaccounts Investing in Income Funds
For the subaccounts investing in income funds, we base quotations of yield on
all investment income earned during a particular 30-day period, less expenses
accrued during the period (net investment income) and compute it by dividing net
investment income per accumulation unit by the value of an accumulation unit on
the last day of the period, according to the following formula:
YIELD = 2[( a-b + 1)6 - 1]
cd
where: a = dividends and investment income earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of accumulation units outstanding
during the period that were entitled to receive dividends
d = the maximum offering price per accumulation unit on the last
day of the period
The subaccount earns yield from the increase in the net asset value of shares of
the fund in which it invests and from dividends declared and paid by the fund,
which are automatically invested in shares of the fund.
Annualized Yield Based on 30-Day Period Ended Dec. 31, 1999
Subaccount Investing In Yield
---------- ------------ -----
BD1 AXPSM Variable Portfolio - Bond Fund 7.08%
BD2 AXPSM Variable Portfolio - Bond Fund 7.34
EI1 AXPSM Variable Portfolio - Extra Income Fund 10.62
EI2 AXPSM Variable Portfolio - Extra Income Fund 10.28
FI1 AXPSM Variable Portfolio - Federal Income Fund 5.09
FI2 AXPSM Variable Portfolio - Federal Income Fund 5.15
GB1 AXPSM Variable Portfolio - Global Bond Fund 5.71
GB2 AXPSM Variable Portfolio - Global Bond Fund 5.65
The yield on the subaccount's accumulation unit may fluctuate daily and does not
provide a basis for determining future yields.
Independent rating or statistical services or publishers or publications such as
those listed below may quote subaccount performance, compare it to rankings,
yields or returns, or use it in variable annuity accumulation or settlement
illustrations they publish or prepare.
The Bank Rate Monitor National Index, Barron's, Business Week, CDA
Technologies, Donoghue's Money Market Fund Report, Financial Services
Week, Financial Times, Financial World, Forbes, Fortune, Global
Investor, Institutional Investor, Investor's Business Daily,
Kiplinger's Personal Finance, Lipper Analytical Services, Money,
Morningstar, Mutual Fund Forecaster, Newsweek, The New York Times,
Personal Investor, Stanger Report, Sylvia Porter's Personal Finance,
USA Today, U.S. News & World Report, The Wall Street Journal and
Wiesenberger Investment Companies Service.
<PAGE>
CALCULATING ANNUITY PAYOUTS
The Variable Account
We do the following calculations separately for each of the subaccounts of the
variable account. The separate monthly payouts, added together, make up your
total variable annuity payout.
Initial Payout: To compute your first monthly payment, we:
o determine the dollar value of your contract on the valuation date and then
deduct any applicable premium tax; then
o apply the result to the annuity table contained in the contract or another
table at least as favorable.
The annuity table shows the amount of the first monthly payment for each $1,000
of value which depends on factors built into the table, as described below.
Annuity Units: We then convert the value of your subaccount to annuity units. To
compute the number of units credited to you, we divide the first monthly payment
by the annuity unit value (see below) on the valuation date. The number of units
in your subaccount is fixed. The value of the units fluctuates with the
performance of the underlying fund.
Subsequent Payouts: To compute later payouts, we multiply:
o the annuity unit value on the valuation date; by
o the fixed number of annuity units credited to you.
Annuity Unit Values: We originally set this value at $1 for each subaccount. To
calculate later values we multiply the last annuity value by the product of:
o the net investment factor; and
o the neutralizing factor.
The purpose of the neutralizing factor is to offset the effect of the assumed
rate built into the annuity table. With an assumed investment rate of 5%, the
neutralizing factor is 0.999866 for a one day valuation period.
Net Investment Factor:
We determine the net investment factor by:
o adding the fund's current net asset value per share plus the per share
amount of any accrued income or capital gain dividends to obtain a current
adjusted net asset value per share; then
o dividing that sum by the previous adjusted net asset value per share; and
o subtracting the percentage factor representing the mortality and expense
risk fee from the result.
Because the net asset value of the fund may fluctuate, the net investment factor
may be greater or less than one, and the annuity unit value may increase or
decrease. You bear this investment risk in a variable subaccount.
<PAGE>
The Fixed Account
We guarantee your fixed annuity payout amounts. Once calculated, your payout
will remain the same and never change. To calculate your annuity payouts we:
o take the value of your fixed account at the settlement date or the date you
selected to begin receiving your annuity payouts; then
o using an annuity table, we apply the value according to the annuity payout
plan you select.
The annuity payout table we use will be the one in effect at the time you choose
to begin your annuity payouts. The values in the table will be equal to or
greater than the table in your contract.
RATING AGENCIES
The following chart reflects the ratings given to us by independent rating
agencies. These agencies evaluate the financial soundness and claims-paying
ability of insurance companies based on a number of different factors. This
information does not relate to the management or performance of the subaccounts
of the contract. This information relates only to the fixed account and reflects
our ability to make annuity payouts and to pay death benefits and other
distributions from the contract.
Rating Agency Rating
--------------- ------------
A.M. Best A+
(Superior)
Duff & Phelps AAA
Moody's Aa2
PRINCIPAL UNDERWRITER
The principal underwriter for the contract is IDS Life which offers the contract
on a continuous basis.
The contract is new and, therefore, we have not received any surrender charges
or paid any commissions.
INDEPENDENT AUDITORS
The financial statements appearing in this SAI have been audited by Ernst &
Young LLP (1400 Pillsbury Center, 200 South Sixth Street, Minneapolis, MN 55402)
independent auditors, as stated in their report appearing herein.
<PAGE>
FINANCIAL STATEMENTS
IDS Life Variable Account 10 - American Express Retirement Advisor Variable
Annuity (SM)
Annual Financial Information
Report of Independent Auditors
The Board of Directors
IDS Life Insurance Company
We have audited the accompanying individual and combined statements of net
assets of the segregated asset subaccounts of IDS Life Variable Account 10
(comprised of subaccounts BC1, BC2, BD1, BD2, CR1, CR2, CM1, CM2, DE1, DE2, EI1,
EI2, FI1, FI2, GB1, GB2, GR1, GR2, IE1, IE2, MF1, MF2, ND1, ND2, SC1, SC2, SA1,
SA2, 1CA, 2CA, 1CD, 2CD, 1IF, 2IF, 1VA, 2VA, 1GI, 2GI, 1MP, 2MP, 1OS, 2OS, 1RE,
2RE, 1IS, 2IS, 1SI, 2SI, 1SE, 2SE, 1UE, 2UE, 1MC, 2MC, 1IP, 2IP, 1IN, 2IN, 1VS,
2VS, 1MI, 2MI, 1SV, 2SV, 1IT, 2IT, 1SP, 2SP, 1EG and 2EG) as of December 31,
1999, and the related statements of operations and changes in net assets for the
periods indicated therein. These financial statements are the responsibility of
the management of IDS Life Insurance Company. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the 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. Our
procedures included confirmation of securities owned at December 31, 1999 with
the affiliated and unaffiliated mutual fund managers. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the individual and combined financial position of the
segregated asset subaccounts of IDS Life Variable Account 10 (as described
above) at December 31, 1999, and the individual and combined results of their
operations and changes in their net assets for the periods indicated therein, in
conformity with accounting principles generally accepted in the United States.
ERNST & YOUNG LLP
Minneapolis, Minnesota
March 17, 2000
<PAGE>
<TABLE>
<CAPTION>
IDS Life Variable Account 10 -- AXP Retirement Advisor Variable AnnuitySM
Statements of Net Assets
December 31, 1999
Segregated Asset Subaccounts
Assets BC1 BC2 BD1 BD2
Investments in shares of mutual funds and portfolios:
<S> <C> <C> <C> <C>
at cost $ 8,340,461 $ 7,740,222 $ 11,764,925 $ 7,268,808
----------- ----------- ------------ -----------
at market value $ 8,922,487 $ 8,243,991 $ 11,741,709 $ 7,259,035
Dividends receivable -- -- 56,314 34,069
Accounts receivable from IDS Life for contract
purchase payments 126,579 96,372 50,401 2,854
Receivable from mutual funds and portfolios for
share redemptions -- -- -- --
------ ----- ------ -----
Total assets 9,049,066 8,340,363 11,848,424 7,295,958
========= ========= ========== =========
Liabilities
Payable to IDS Life for:
Mortality and expense risk fee 5,781 4,075 7,418 3,566
Payable to mutual funds and portfolios for investments
purchased -- -- -- --
---- --- ---- ---
Total liabilities 5,781 4,075 7,418 3,566
----- ----- ----- -----
Net assets applicable to contracts in accumulation period $ 9,043,285 $ 8,336,288 $ 11,841,006 $ 7,292,392
Net assets applicable to contracts in payment period -- -- -- --
-------- ------ ----- ------
Total net assets $ 9,043,285 $ 8,336,288 $ 11,841,006 $ 7,292,392
=========== =========== ============ ===========
Accumulation units outstanding 8,144,701 7,503,378 11,675,134 7,185,953
========= ========= ========== =========
Net asset value per accumulation unit $ 1.11 $ 1.11 $ 1.01 $ 1.01
====== ====== ====== ======
Assets CR1 CR2 CM1 CM2
Investments in shares of mutual funds and portfolios:
at cost $ 3,545,916 $ 5,870,376 $ 85,931,081 $ 65,125,174
----------- ----------- ------------ ------------
at market value $ 3,675,437 $ 6,070,686 $ 85,931,061 $ 65,125,157
Dividends receivable -- -- 299,391 239,605
Accounts receivable from IDS Life for contract
purchase payments 7,100 69,844 2,202,485 946,907
Receivable from mutual funds and portfolios for
share redemptions -- -- -- --
----- -------- ------ -----
Total assets 3,682,537 6,140,530 88,432,937 66,311,669
========= ========= ========== ==========
Liabilities
Payable to IDS Life for:
Mortality and expense risk fee 2,214 2,892 53,621 34,128
Payable to mutual funds and portfolios for investments
purchased -- -- -- --
---- --- ---- -----
Total liabilities 2,214 2,892 53,621 34,128
----- ----- ------ ------
Net assets applicable to contracts in accumulation period $ 3,680,323 $ 6,085,769 $ 88,379,316 $ 66,277,541
Net assets applicable to contracts in payment period -- 51,869 -- --
------- ----- ------- ----
Total net assets $ 3,680,323 $ 6,137,638 $ 88,379,316 $ 66,277,541
=========== =========== ============ ============
Accumulation units outstanding 3,227,001 5,332,889 87,424,293 65,522,124
========= ========= ========== ==========
Net asset value per accumulation unit $ 1.14 $ 1.14 $ 1.01 $ 1.01
====== ====== ====== ======
Assets DE1 DE2 EI1 EI2
Investments in shares of mutual funds and portfolios:
at cost $ 3,354,582 $ 3,130,415 $ 9,882,491 $ 7,746,628
----------- ----------- ----------- -----------
at market value $ 3,452,432 $ 3,204,387 $ 9,951,851 $ 7,761,527
Dividends receivable -- -- 71,950 49,018
Accounts receivable from IDS Life for contract
purchase payments 79,673 29,698 232,353 60,178
Receivable from mutual funds and portfolios for share
redemptions -- -- -- --
------ ----- ------- -----
Total assets 3,532,105 3,234,085 10,256,154 7,870,723
========= ========= ========== =========
Liabilities
Payable to IDS Life for:
Mortality and expense risk fee 2,299 1,776 6,443 3,483
Payable to mutual funds and portfolios for investments
purchased -- -- -- --
---- ----- ----- ----
Total liabilities 2,299 1,776 6,443 3,483
----- ----- ----- -----
Net assets applicable to contracts in accumulation period $ 3,529,806 $ 3,232,309 $ 10,249,711 $ 7,867,240
Net assets applicable to contracts in payment period -- -- -- --
------- ------ ---- -----
Total net assets $ 3,529,806 $ 3,232,309 $ 10,249,711 $ 7,867,240
=========== =========== ============ ===========
Accumulation units outstanding 3,440,938 3,149,027 10,137,005 7,774,094
========= ========= ========== =========
Net asset value per accumulation unit $ 1.03 $ 1.03 $ 1.01 $ 1.01
====== ====== ====== ======
Assets FI1 FI2 GB1 GB2
Investments in shares of mutual funds and portfolios:
at cost $ 12,612,627 $ 10,690,674 $ 2,368,551 $ 1,531,955
------------ ------------ ----------- -----------
at market value $ 12,548,146 $ 10,639,849 $ 2,339,001 $ 1,513,916
Dividends receivable 45,364 39,341 9,031 5,821
Accounts receivable from IDS Life for contract
purchase payments 241,893 495,557 22,132 34,694
Receivable from mutual funds and portfolios for
share redemptions -- -- -- --
------ ----- ----- -----
Total assets 12,835,403 11,174,747 2,370,164 1,554,431
========== ========== ========= =========
Liabilities
Payable to IDS Life for:
Mortality and expense risk fee 8,385 5,726 1,585 804
Payable to mutual funds and portfolios for investments
purchased -- -- -- --
---- ---- ---- ---
Total liabilities 8,385 5,726 1,585 804
----- ----- ----- ---
Net assets applicable to contracts in accumulation period $ 12,827,018 $ 11,169,021 $ 2,368,579 $ 1,553,627
Net assets applicable to contracts in payment period -- -- -- --
-------- ------- ----- -----
Total net assets $ 12,827,018 $ 11,169,021 $ 2,368,579 $ 1,553,627
============ ============ =========== ===========
Accumulation units outstanding 12,795,965 11,135,246 2,367,731 1,552,116
========== ========== ========= =========
Net asset value per accumulation unit $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ======
Assets GR1 GR2 IE1 IE2
Investments in shares of mutual funds and portfolios:
at cost $ 14,581,563 $ 17,946,468 $ 2,586,290 $ 3,100,177
------------ ------------ ----------- -----------
at market value $ 16,057,261 $ 19,668,014 $ 2,750,899 $ 3,270,927
Dividends receivable -- -- -- --
Accounts receivable from IDS Life for contract
purchase payments 245,118 297,109 16,511 10,148
Receivable from mutual funds and portfolios for
share redemptions -- -- -- --
----- ------ ----- ----
Total assets 16,302,379 19,965,123 2,767,410 3,281,075
========== ========== ========= =========
Liabilities
Payable to IDS Life for:
Mortality and expense risk fee 9,736 9,466 1,511 1,538
Payable to mutual funds and portfolios for investments
purchased -- -- -- --
--- ---- ---- ----
Total liabilities 9,736 9,466 1,511 1,538
----- ----- ----- -----
Net assets applicable to contracts in accumulation period $ 16,292,643 $ 19,935,382 $ 2,765,899 $ 3,279,537
Net assets applicable to contracts in payment period -- 20,275 -- --
--- ------ --- ------
Total net assets $ 16,292,643 $ 19,955,657 $ 2,765,899 $ 3,279,537
============ ============ =========== ===========
Accumulation units outstanding 13,812,928 16,891,257 2,173,305 2,575,364
========== ========== ========= =========
Net asset value per accumulation unit $ 1.18 $ 1.18 $ 1.27 $ 1.27
====== ====== ====== ======
Assets MF1 MF2 ND1 ND2
Investments in shares of mutual funds and portfolios:
at cost $ 6,827,525 $ 5,419,833 $ 34,372,353 $ 33,869,008
----------- ----------- ------------ ------------
at market value $ 7,036,639 $ 5,591,957 $ 37,716,666 $ 37,120,591
Dividends receivable -- -- -- --
Accounts receivable from IDS Life for contract
purchase payments 75,964 88,815 937,370 452,382
Receivable from mutual funds and portfolios for share
redemptions -- -- -- --
----- ------ ----- -----
Total assets 7,112,603 5,680,772 38,654,036 37,572,973
========= ========= ========== ==========
Liabilities
Payable to IDS Life for:
Mortality and expense risk fee 4,407 2,763 23,155 17,884
Payable to mutual funds and portfolios for investments
purchased -- -- -- --
---- ---- ---- -----
Total liabilities 4,407 2,763 23,155 17,884
----- ----- ------ ------
Net assets applicable to contracts in accumulation period $ 7,108,196 $ 5,678,009 $ 38,630,881 $ 37,535,733
Net assets applicable to contracts in payment period -- -- -- 19,356
---- ------ ---- ------
Total net assets $ 7,108,196 $ 5,678,009 $ 38,630,881 $ 37,555,089
=========== =========== ============ ============
Accumulation units outstanding 6,539,086 5,220,299 32,482,584 31,537,411
========= ========= ========== ==========
Net asset value per accumulation unit $ 1.09 $ 1.09 $ 1.19 $ 1.19
====== ====== ====== ======
Assets SC1 SC2 SA1 SA2
Investments in shares of mutual funds and portfolios:
at cost $ 3,063,756 $ 3,087,705 $ 5,056,239 $ 5,719,628
----------- ----------- ----------- -----------
at market value $ 3,309,203 $ 3,314,330 $ 5,799,202 $ 6,696,598
Dividends receivable -- -- -- --
Accounts receivable from IDS Life for contract
purchase payments 97,579 28,147 110,082 78,194
Receivable from mutual funds and portfolios for share
redemptions -- -- -- --
---- ---- ----- -----
Total assets 3,406,782 3,342,477 5,909,284 6,774,792
========= ========= ========= =========
Liabilities
Payable to IDS Life for:
Mortality and expense risk fee 2,008 1,632 3,071 2,935
Payable to mutual funds and portfolios for investments
purchased -- -- -- --
---- ---- ---- ---
Total liabilities 2,008 1,632 3,071 2,935
----- ----- ----- -----
Net assets applicable to contracts in accumulation period $ 3,404,774 $ 3,340,845 $ 5,906,213 $ 6,771,857
Net assets applicable to contracts in payment period -- -- -- --
------ ------ ------ ----
Total net assets $ 3,404,774 $ 3,340,845 $ 5,906,213 $ 6,771,857
=========== =========== =========== ===========
Accumulation units outstanding 3,029,109 2,970,291 3,901,133 4,470,245
========= ========= ========= =========
Net asset value per accumulation unit $ 1.12 $ 1.12 $ 1.51 $ 1.51
====== ====== ====== ======
Assets 1CA 2CA 1CD 2CD
Investments in shares of mutual funds and portfolios:
at cost $ 5,917,680 $ 5,017,833 $ 2,101,888 $ 1,865,352
----------- ----------- ----------- -----------
at market value $ 6,776,829 $ 5,699,060 $ 2,391,964 $ 2,122,028
Dividends receivable -- -- -- --
Accounts receivable from IDS Life for contract
purchase payments 122,571 72,031 35,498 65,858
Receivable from mutual funds and portfolios for share
redemptions 4,229 2,711 1,429 972
----- ----- ----- ---
Total assets 6,903,629 5,773,802 2,428,891 2,188,858
========= ========= ========= =========
Liabilities
Payable to IDS Life for:
Mortality and expense risk fee 4,229 2,711 1,429 972
Payable to mutual funds and portfolios for investments
purchased 122,571 72,031 35,498 65,858
------- ------ ------ ------
Total liabilities 126,800 74,742 36,927 66,830
------- ------ ------ ------
Net assets applicable to contracts in accumulation period $ 6,776,829 $ 5,699,060 $ 2,391,964 $ 2,122,028
Net assets applicable to contracts in payment period -- -- -- --
------ ----- ------ -----
Total net assets $ 6,776,829 $ 5,699,060 $ 2,391,964 $ 2,122,028
=========== =========== =========== ===========
Accumulation units outstanding 5,159,901 4,336,748 1,892,365 1,677,796
========= ========= ========= =========
Net asset value per accumulation unit $ 1.31 $ 1.31 $ 1.26 $ 1.26
====== ====== ====== ======
Assets 1IF 2IF 1VA 2VA
Investments in shares of mutual funds and portfolios:
at cost $ 2,426,525 $ 2,090,627 $ 4,401,177 $ 3,387,139
----------- ----------- ----------- -----------
at market value $ 3,010,123 $ 2,575,936 $ 4,392,300 $ 3,365,883
Dividends receivable -- -- -- --
Accounts receivable from IDS Life for contract
purchase payments 17,643 63,241 77,738 61,232
Receivable from mutual funds and portfolios for share
redemptions 1,877 1,253 2,756 1,775
----- ----- ----- -----
Total assets 3,029,643 2,640,430 4,472,794 3,428,890
========= ========= ========= =========
Liabilities
Payable to IDS Life for:
Mortality and expense risk fee 1,877 1,253 2,756 1,775
Payable to mutual funds and portfolios for investments
purchased 17,643 63,241 77,738 61,232
------ ------ ------ ------
Total liabilities 19,520 64,494 80,494 63,007
------ ------ ------ ------
Net assets applicable to contracts in accumulation period $ 3,010,123 $ 2,575,936 $ 4,392,300 $ 3,365,883
Net assets applicable to contracts in payment period -- -- -- --
----- ------ ----- -----
Total net assets $ 3,010,123 $ 2,575,936 $ 4,392,300 $ 3,365,883
=========== =========== =========== ===========
Accumulation units outstanding 2,093,734 1,790,650 4,774,965 3,656,963
========= ========= ========= =========
Net asset value per accumulation unit $ 1.44 $ 1.44 $ 0.92 $ 0.92
====== ====== ====== ======
Assets 1GI 2GI 1MP 2MP
Investments in shares of mutual funds and portfolios:
at cost $ 18,384,586 $ 15,814,032 $ 7,423,180 $ 6,094,471
------------ ------------ ----------- -----------
at market value $ 18,937,955 $ 16,305,525 $ 8,563,900 $ 7,066,173
Dividends receivable -- -- 52,306 43,451
Accounts receivable from IDS Life for contract
purchase payments 591,559 61,922 144,755 41,355
Receivable from mutual funds and portfolios for share
redemptions 11,711 8,363 5,338 3,665
------ ----- ----- -----
Total assets 19,541,225 16,375,810 8,766,299 7,154,644
========== ========== ========= =========
Liabilities
Payable to IDS Life for:
Mortality and expense risk fee 11,711 8,363 5,338 3,665
Payable to mutual funds and portfolios for investments
purchased 591,559 61,922 144,755 41,355
------- ------ ------- ------
Total liabilities 603,270 70,285 150,093 45,020
------- ------ ------- ------
Net assets applicable to contracts in accumulation period $ 18,937,955 $ 16,305,525 $ 8,616,183 $ 7,089,136
Net assets applicable to contracts in payment period -- -- 23 20,488
------- ----- -- ------
Total net assets $ 18,937,955 $ 16,305,525 $ 8,616,206 $ 7,109,624
============ ============ =========== ===========
Accumulation units outstanding 18,137,421 15,602,831 6,945,013 5,709,401
========== ========== ========= =========
Net asset value per accumulation unit $ 1.04 $ 1.05 $ 1.24 $ 1.24
====== ====== ====== ======
Assets 1OS 2OS 1RE 2RE
Investments in shares of mutual funds and portfolios:
at cost $ 3,915,758 $ 3,722,290 $ 636,248 $ 825,640
----------- ----------- --------- ---------
at market value $ 4,429,715 $ 4,197,953 $ 654,603 $ 848,254
Dividends receivable -- -- -- --
Accounts receivable from IDS Life for contract
purchase payments 46,198 58,362 15,403 7,220
Receivable from mutual funds and portfolios for
share redemptions 2,724 2,094 422 437
----- ----- --- ---
Total assets 4,478,637 4,258,409 670,428 855,911
========= ========= ======= =======
Liabilities
Payable to IDS Life for:
Mortality and expense risk fee 2,724 2,094 422 388
Payable to mutual funds and portfolios for investments
purchased 46,198 58,362 15,403 7,220
------ ------ ------ -----
Total liabilities 48,922 60,456 15,825 7,608
------ ------ ------ -----
Net assets applicable to contracts in accumulation period $ 4,429,715 $ 4,197,953 $ 654,603 $ 848,303
Net assets applicable to contracts in payment period -- -- -- --
----- ------ ---- ------
Total net assets $ 4,429,715 $ 4,197,953 $ 654,603 $ 848,303
=========== =========== ========= =========
Accumulation units outstanding 3,611,816 3,420,658 683,371 885,005
========= ========= ======= =======
Net asset value per accumulation unit $ 1.23 $ 1.23 $ 0.96 $ 0.96
====== ====== ====== ======
Assets 1SI 2SI 1IS 2IS
Investments in shares of mutual funds and portfolios:
at cost $ 549,517 $ 542,286 $ 1,023,029 $ 879,384
--------- --------- ----------- ---------
at market value $ 567,167 $ 563,783 $ 1,069,184 $ 911,568
Dividends receivable -- -- -- --
Accounts receivable from IDS Life for contract
purchase payments 116,493 2,222 7,880 7,047
Receivable from mutual funds and portfolios for share
redemptions 285 269 649 380
--- --- --- ---
Total assets 683,945 566,274 1,077,713 918,995
======= ======= ========= =======
Liabilities
Payable to IDS Life for:
Mortality and expense risk fee 285 269 547 380
Payable to mutual funds and portfolios for investments
purchased 116,493 2,222 7,880 7,047
------- ----- ----- -----
Total liabilities 116,778 2,491 8,427 7,427
------- ----- ----- -----
Net assets applicable to contracts in accumulation period $ 567,167 $ 563,783 $ 1,069,286 $ 911,568
Net assets applicable to contracts in payment period -- -- -- --
------ ---- ----- -----
Total net assets $ 567,167 $ 563,783 $ 1,069,286 $ 911,568
========= ========= =========== =========
Accumulation units outstanding 589,712 585,846 1,052,855 897,107
======= ======= ========= =======
Net asset value per accumulation unit $ 0.96 $ 0.96 $ 1.02 $ 1.02
====== ====== ====== ======
Assets 1SE 2SE 1UE 2UE
Investments in shares of mutual funds and portfolios:
at cost $ 2,725,507 $ 1,917,308 $ 10,359,345 $ 9,381,210
----------- ----------- ------------ -----------
at market value $ 3,017,070 $ 2,121,185 $ 10,953,123 $ 9,912,956
Dividends receivable -- 3,582 -- --
Accounts receivable from IDS Life for contract
purchase payments 74,283 46,439 253,437 77,400
Receivable from mutual funds and portfolios for share
redemptions 1,827 1,020 6,723 4,956
----- ----- ----- -----
Total assets 3,093,180 2,172,226 11,213,283 9,995,312
========= ========= ========== =========
Liabilities
Payable to IDS Life for:
Mortality and expense risk fee 1,827 1,020 6,723 4,956
Payable to mutual funds and portfolios for investments
purchased 74,283 46,439 253,437 77,400
------ ------ ------- ------
Total liabilities 76,110 47,459 260,160 82,356
------ ------ ------- ------
Net assets applicable to contracts in accumulation period $ 3,017,070 $ 2,124,767 $ 10,953,123 $ 9,912,956
Net assets applicable to contracts in payment period -- -- -- --
---- ----- ----- -----
Total net assets $ 3,017,070 $ 2,124,767 $ 10,953,123 $ 9,912,956
=========== =========== ============ ===========
Accumulation units outstanding 2,665,253 1,876,209 9,951,016 8,980,927
========= ========= ========= =========
Net asset value per accumulation unit $ 1.13 $ 1.13 $ 1.10 $ 1.10
====== ====== ====== ======
Assets 1MC 2MC 1IP 2IP
Investments in shares of mutual funds and portfolios:
at cost $ 1,885,525 $ 1,522,954 $ 2,550,213 $ 2,004,758
----------- ----------- ----------- -----------
at market value $ 1,917,102 $ 1,549,468 $ 2,680,901 $ 2,122,181
Dividends receivable -- -- -- --
Accounts receivable from IDS Life for contract
purchase payments 20,333 1,768 65,123 8,121
Receivable from mutual funds and portfolios for share
redemptions 1,183 819 1,658 1,141
----- --- ----- -----
Total assets 1,938,618 1,552,055 2,747,682 2,131,443
========= ========= ========= =========
Liabilities
Payable to IDS Life for:
Mortality and expense risk fee 1,183 819 1,658 1,141
Payable to mutual funds and portfolios for investments
purchased 20,333 1,768 65,123 8,121
------ ----- ------ -----
Total liabilities 21,516 2,587 66,781 9,262
------ ----- ------ -----
Net assets applicable to contracts in accumulation period $ 1,917,102 $ 1,549,468 $ 2,680,901 $ 2,122,181
Net assets applicable to contracts in payment period -- -- -- --
----- ------ ------ ------
Total net assets $ 1,917,102 $ 1,549,468 $ 2,680,901 $ 2,122,181
=========== =========== =========== ===========
Accumulation units outstanding 2,022,724 1,633,700 2,504,403 1,981,118
========= ========= ========= =========
Net asset value per accumulation unit $ 0.95 $ 0.95 $ 1.07 $ 1.07
====== ====== ====== ======
Assets 1IN 2IN 1VS 2VS
Investments in shares of mutual funds and portfolios:
at cost $ 9,944,779 $ 7,361,537 $ 8,808,330 $ 6,242,378
----------- ----------- ----------- -----------
at market value $12,408,688 $ 9,204,802 $ 9,817,341 $ 6,918,021
Dividends receivable -- -- -- --
Accounts receivable from IDS Life for contract
purchase payments 134,217 144,670 263,878 50,356
Receivable from mutual funds and portfolios for share
redemptions 7,484 4,507 5,841 3,456
----- ----- ----- -----
Total assets 12,550,389 9,353,979 10,087,060 6,971,833
========== ========= ========== =========
Liabilities
Payable to IDS Life for:
Mortality and expense risk fee 7,484 4,507 5,841 3,456
Payable to mutual funds and portfolios for investments
purchased 134,217 144,670 263,878 50,356
------- ------- ------- ------
Total liabilities 141,701 149,177 269,719 53,812
------- ------- ------- ------
Net assets applicable to contracts in accumulation period $ 12,408,688 $ 9,204,802 $ 9,817,341 $ 6,917,980
Net assets applicable to contracts in payment period -- -- -- 41
------ ---- ------- -----
Total net assets $ 12,408,688 $ 9,204,802 $ 9,817,341 $ 6,918,021
============ =========== =========== ===========
Accumulation units outstanding 8,199,597 6,078,883 7,245,003 5,083,557
========= ========= ========= =========
Net asset value per accumulation unit $ 1.51 $ 1.51 $ 1.36 $ 1.36
====== ====== ====== ======
Assets 1MI 2MI 1SV 2SV
Investments in shares of mutual funds and portfolios:
at cost $ 2,111,886 $ 1,385,251 $ 2,084,708 $ 1,887,826
----------- ----------- ----------- -----------
at market value $ 2,173,432 $ 1,415,465 $ 2,208,733 $ 2,026,059
Dividends receivable -- -- -- --
Accounts receivable from IDS Life for contract
purchase payments 53,889 3,945 21,872 23,441
Receivable from mutual funds and portfolios for share
redemptions 1,264 704 1,353 1,052
----- --- ----- -----
Total assets 2,228,585 1,420,114 2,231,958 2,050,552
========= ========= ========= =========
Liabilities
Payable to IDS Life for:
Mortality and expense risk fee 1,264 704 1,353 1,052
Payable to mutual funds and portfolios for investments
purchased 53,889 3,945 21,872 23,441
------ ----- ------ ------
Total liabilities 55,153 4,649 23,225 24,493
------ ----- ------ ------
Net assets applicable to contracts in accumulation period $ 2,173,432 $ 1,415,465 $ 2,208,733 $ 2,026,059
Net assets applicable to contracts in payment period -- -- -- --
----- ------ ------ -----
Total net assets $ 2,173,432 $ 1,415,465 $ 2,208,733 $ 2,026,059
=========== =========== =========== ===========
Accumulation units outstanding 1,886,045 1,227,570 2,043,367 1,873,052
========= ========= ========= =========
Net asset value per accumulation unit $ 1.15 $ 1.15 $ 1.08 $ 1.08
====== ====== ====== ======
Assets 1IT 2IT 1SP 2SP
Investments in shares of mutual funds and portfolios:
at cost $ 1,676,343 $ 1,532,620 $ 2,933,382 $ 2,671,164
----------- ----------- ----------- -----------
at market value $ 2,031,976 $ 1,867,844 $ 3,132,024 $ 2,850,015
Dividends receivable -- -- -- --
Accounts receivable from IDS Life for contract
purchase payments 80,267 51,257 45,698 64,688
Receivable from mutual funds and portfolios for share
redemptions 1,089 786 1,763 1,277
----- --- ----- -----
Total assets 2,113,332 1,919,887 3,179,485 2,915,980
========= ========= ========= =========
Liabilities
Payable to IDS Life for:
Mortality and expense risk fee 1,089 734 1,763 1,277
Payable to mutual funds and portfolios for investments
purchased 80,267 51,257 45,698 64,688
------ ------ ------ ------
Total liabilities 81,356 51,991 47,461 65,965
------ ------ ------ ------
Net assets applicable to contracts in accumulation period $ 2,031,976 $ 1,867,896 $ 3,132,024 $ 2,850,015
Net assets applicable to contracts in payment period -- -- -- --
----- ------ ------ -------
Total net assets $ 2,031,976 $ 1,867,896 $ 3,132,024 $ 2,850,015
=========== =========== =========== ===========
Accumulation units outstanding 1,342,920 1,233,713 2,723,041 2,476,379
========= ========= ========= =========
Net asset value per accumulation unit $ 1.51 $ 1.51 $ 1.15 $ 1.15
====== ====== ====== ======
Combined
Variable
Assets 1EG 2EG Account
Investments in shares of mutual funds and portfolios:
at cost $ 3,263,376 $ 2,093,976 $ 555,898,449
----------- ----------- -------------
at market value $ 3,777,614 $ 2,420,059 $ 587,688,921
Dividends receivable -- -- 949,243
Accounts receivable from IDS Life for contract
purchase payments 55,796 43,162 10,336,407
Receivable from mutual funds and portfolios for share
redemptions 2,285 1,161 106,688
----- ----- -------
Total assets 3,835,695 2,464,382 599,081,259
========= ========= ===========
Liabilities
Payable to IDS Life for:
Mortality and expense risk fee 2,285 1,161 330,787
Payable to mutual funds and portfolios for investments
purchased 55,796 43,162 3,200,268
------ ------ ---------
Total liabilities 58,081 44,323 3,531,055
------ ------ ---------
Net assets applicable to contracts in accumulation period $ 3,777,614 $ 2,420,059 $ 595,438,152
Net assets applicable to contracts in payment period -- -- 112,052
----- ----- -------
Total net assets $ 3,777,614 $ 2,420,059 $ 595,550,204
=========== =========== =============
Accumulation units outstanding 2,872,085 1,838,182
========= =========
Net asset value per accumulation unit $ 1.32 $ 1.32
====== ======
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life Variable Account 10 -- AXP Retirement Advisor Variable Annuity (SM)
Statements of Operations
Period ended December 31, 1999
Segregated Asset Subaccounts(1)
Investment income BC1 BC2 BD1 BD2
<S> <C> <C> <C> <C>
Dividend income from mutual funds and portfolios $ 6,772 $ 5,765 $ 86,087 $ 59,818
Mortality and expense risk fee 9,359 6,367 11,304 6,238
----- ----- ------ -----
Investment income (loss) - net (2,587) (602) 74,783 53,580
====== ==== ====== ======
Realized and unrealized gain (loss) on investments - net
Realized gain (loss) on sales of investments in
mutual funds and portfolios:
Proceeds from sales 3,630 33,210 426,478 182,817
Cost of investments sold 3,511 33,072 427,455 182,460
----- ------ ------- -------
Net realized gain (loss) on investments 119 138 (977) 357
Net change in unrealized appreciation or
depreciation of investments 582,026 503,769 (23,216) (9,773)
------- ------- ------- ------
Net gain (loss) on investments 582,145 503,907 (24,193) (9,416)
------- ------- ------- ------
Net increase (decrease) in net assets resulting
from operations $ 579,558 $ 503,305 $ 50,590 $ 44,164
========= ========= ======== ========
Investment income CR1 CR2 CM1 CM2
Dividend income from mutual funds and portfolios $ 183,607 $ 325,161 $ 516,305 $ 405,856
Mortality and expense risk fee 3,463 4,483 95,329 59,218
----- ----- ------ ------
Investment income (loss) - net 180,144 320,678 420,976 346,638
======= ======= ======= =======
Realized and unrealized gain (loss) on investments - net
Realized gain (loss) on sales of investments in
mutual funds and portfolios:
Proceeds from sales 24,926 72,979 42,956 1,358,047
Cost of investments sold 24,698 71,180 42,956 1,358,047
------ ------ ------ ---------
Net realized gain (loss) on investments 228 1,799 -- --
Net change in unrealized appreciation or
depreciation of investments 129,521 200,310 (20) (17)
------- ------- --- ---
Net gain (loss) on investments 129,749 202,109 (20) (17)
------- ------- --- ---
Net increase (decrease) in net assets resulting
from operations $ 309,893 $ 522,787 $ 420,956 $ 346,621
========= ========= ========= =========
Investment income DE1 DE2 EI1 EI2
Dividend income from mutual funds and portfolios $ 7,449 $ 6,972 $ 112,895 $ 78,119
Mortality and expense risk fee 4,013 2,874 10,474 5,760
----- ----- ------ -----
Investment income (loss) - net 3,436 4,098 102,421 72,359
===== ===== ======= ======
Realized and unrealized gain (loss) on investments - net
Realized gain (loss) on sales of investments in
mutual funds and portfolios:
Proceeds from sales 1,777 1,143 89,091 129,710
Cost of investments sold 1,735 1,125 88,848 130,694
----- ----- ------ -------
Net realized gain (loss) on investments 42 18 243 (984)
Net change in unrealized appreciation or
depreciation of investments 97,850 73,972 69,360 14,899
------ ------ ------ ------
Net gain (loss) on investments 97,892 73,990 69,603 13,915
------ ------ ------ ------
Net increase (decrease) in net assets resulting
from operations $ 101,328 $ 78,088 $ 172,024 $ 86,274
========= ======== ========= ========
Investment income FI1 FI2 GB1 GB2
Dividend income from mutual funds and portfolios $ 87,849 $ 65,644 $ 13,388 $ 8,842
Mortality and expense risk fee 15,784 9,385 2,527 1,331
------ ----- ----- -----
Investment income (loss) - net 72,065 56,259 10,861 7,511
====== ====== ====== =====
Realized and unrealized gain (loss) on investments - net
Realized gain (loss) on sales of investments in
mutual funds and portfolios:
Proceeds from sales 278,632 769,739 77,446 541
Cost of investments sold 279,403 770,817 78,427 546
------- ------- ------ ---
Net realized gain (loss) on investments (771) (1,078) (981) (5)
Net change in unrealized appreciation or
depreciation of investments (64,481) (50,825) (29,550) (18,039)
------- ------- ------- -------
Net gain (loss) on investments (65,252) (51,903) (30,531) (18,044)
------- ------- ------- -------
Net increase (decrease) in net assets resulting
from operations $ 6,813 $ 4,356 $ (19,670) $ (10,533)
======= ======= ========= =========
Investment income GR1 GR2 IE1 IE2
Dividend income from mutual funds and portfolios $ 9,895 $ 11,139 $ 148,076 $ 246,226
Mortality and expense risk fee 15,651 14,326 2,303 2,426
------ ------ ----- -----
Investment income (loss) - net (5,756) (3,187) 145,773 243,800
====== ====== ======= =======
Realized and unrealized gain (loss) on investments - net
Realized gain (loss) on sales of investments in
mutual funds and portfolios:
Proceeds from sales 6,098 25,509 16,038 47,489
Cost of investments sold 5,812 23,642 15,686 47,208
----- ------ ------ ------
Net realized gain (loss) on investments 286 1,867 352 281
Net change in unrealized appreciation or
depreciation of investments 1,475,698 1,721,546 164,609 170,750
--------- --------- ------- -------
Net gain (loss) on investments 1,475,984 1,723,413 164,961 171,031
--------- --------- ------- -------
Net increase (decrease) in net assets resulting
from operations $ 1,470,228 $ 1,720,226 $ 310,734 $ 414,831
=========== =========== ========= =========
Investment income MF1 MF2 ND1 ND2
Dividend income from mutual funds and portfolios $ 190,813 $ 147,789 $ 175,961 $ 161,503
Mortality and expense risk fee 7,149 4,395 35,949 27,115
----- ----- ------ ------
Investment income (loss) - net 183,664 143,394 140,012 134,388
======= ======= ======= =======
Realized and unrealized gain (loss) on investments - net
Realized gain (loss) on sales of investments in
mutual funds and portfolios:
Proceeds from sales 25,527 5,288 25,765 10,338
Cost of investments sold 25,118 5,379 24,430 9,975
------ ----- ------ -----
Net realized gain (loss) on investments 409 (91) 1,335 363
Net change in unrealized appreciation or
depreciation of investments 209,114 172,124 3,344,313 3,251,583
------- ------- --------- ---------
Net gain (loss) on investments 209,523 172,033 3,345,648 3,251,946
------- ------- --------- ---------
Net increase (decrease) in net assets resulting
from operations $ 393,187 $ 315,427 $ 3,485,660 $ 3,386,334
========= ========= =========== ===========
Investment income SC1 SC2 SA1 SA2
Dividend income from mutual funds and portfolios $ 13,105 $ 13,192 $ 157,457 $ 203,100
Mortality and expense risk fee 3,274 2,483 4,179 4,260
----- ----- ----- -----
Investment income (loss) - net 9,831 10,709 153,278 198,840
===== ====== ======= =======
Realized and unrealized gain (loss) on investments - net
Realized gain (loss) on sales of investments in
mutual funds and portfolios:
Proceeds from sales 1,563 2,708,655 1,171 27,417
Cost of investments sold 1,529 2,690,974 1,169 24,645
----- --------- ----- ------
Net realized gain (loss) on investments 34 17,681 2 2,772
Net change in unrealized appreciation or
depreciation of investments 245,447 226,625 742,963 976,970
------- ------- ------- -------
Net gain (loss) on investments 245,481 244,306 742,965 979,742
------- ------- ------- -------
Net increase (decrease) in net assets resulting
from operations $ 255,312 $ 255,015 $ 896,243 $ 1,178,582
========= ========= ========= ===========
Investment income 1CA 2CA 1CD 2CD
Dividend income from mutual funds and portfolios $ 104,087 $ 82,137 $-- $--
Mortality and expense risk fee 6,666 4,145 2,242 1,528
----- ----- ----- -----
Investment income (loss) - net 97,421 77,992 (2,242) (1,528)
====== ====== ====== ======
Realized and unrealized gain (loss) on investments - net
Realized gain (loss) on sales of investments in
mutual funds and portfolios:
Proceeds from sales 27,663 4 27,014 21,602
Cost of investments sold 25,765 4 25,079 20,006
------ - ------ ------
Net realized gain (loss) on investments 1,898 -- 1,935 1,596
Net change in unrealized appreciation or
depreciation of investments 859,149 681,227 290,076 256,676
------- ------- ------- -------
Net gain (loss) on investments 861,047 681,227 292,011 258,272
------- ------- ------- -------
Net increase (decrease) in net assets resulting
from operations $ 958,468 $ 759,219 $ 289,769 $ 256,744
========= ========= ========= =========
Investment income 1IF 2IF 1VA 2VA
Dividend income from mutual funds and portfolios $-- $-- $-- $--
Mortality and expense risk fee 2,948 1,939 4,716 3,075
----- ----- ----- -----
Investment income (loss) - net (2,948) (1,939) (4,716) (3,075)
====== ====== ====== ======
Realized and unrealized gain (loss) on investments - net
Realized gain (loss) on sales of investments in
mutual funds and portfolios:
Proceeds from sales 1 43,247 22,835 27,396
Cost of investments sold 1 40,472 22,160 27,980
- ------ ------ ------
Net realized gain (loss) on investments -- 2,775 675 (584)
Net change in unrealized appreciation or
depreciation of investments 583,598 485,309 (8,877) (21,256)
------- ------- ------ -------
Net gain (loss) on investments 583,598 488,084 (8,202) (21,840)
------- ------- ------ -------
Net increase (decrease) in net assets resulting
from operations $ 580,650 $ 486,145 $ (12,918) $ (24,915)
========= ========= ========= =========
Investment income 1GI 2GI 1MP 2MP
Dividend income from mutual funds and portfolios $-- $-- $ 52,306 $ 43,451
Mortality and expense risk fee 19,386 13,669 8,558 5,857
------ ------ ----- -----
Investment income (loss) - net (19,386) (13,669) 43,748 37,594
======= ======= ====== ======
Realized and unrealized gain (loss) on investments - net
Realized gain (loss) on sales of investments in
mutual funds and portfolios:
Proceeds from sales 19 17 13 266,497
Cost of investments sold 19 17 13 256,449
-- -- -- -------
Net realized gain (loss) on investments -- -- -- 10,048
Net change in unrealized appreciation or
depreciation of investments 553,369 491,493 1,140,720 971,702
------- ------- --------- -------
Net gain (loss) on investments 553,369 491,493 1,140,720 981,750
------- ------- --------- -------
Net increase (decrease) in net assets resulting
from operations $ 533,983 $ 477,824 $ 1,184,468 $ 1,019,344
========= ========= =========== ===========
Investment income 1OS 2OS 1RE 2RE
Dividend income from mutual funds and portfolios $-- $-- $-- $--
Mortality and expense risk fee 4,319 3,218 675 727
----- ----- --- ---
Investment income (loss) - net (4,319) (3,218) (675) (727)
====== ====== ==== ====
Realized and unrealized gain (loss) on investments - net
Realized gain (loss) on sales of investments in
mutual funds and portfolios:
Proceeds from sales 6,577 265,613 11,057 3
Cost of investments sold 6,508 260,557 11,175 3
----- ------- ------ -
Net realized gain (loss) on investments 69 5,056 (118) --
Net change in unrealized appreciation or
depreciation of investments 513,957 475,663 18,355 22,614
------- ------- ------ ------
Net gain (loss) on investments 514,026 480,719 18,237 22,614
------- ------- ------ ------
Net increase (decrease) in net assets resulting
from operations $ 509,707 $ 477,501 $ 17,562 $ 21,887
========= ========= ======== ========
Investment income 1SI 2SI 1IS 2IS
Dividend income from mutual funds and portfolios $-- $-- $-- $--
Mortality and expense risk fee 430 467 1,094 529
--- --- ----- ---
Investment income (loss) - net (430) (467) (1,094) (529)
==== ==== ====== ====
Realized and unrealized gain (loss) on investments - net
Realized gain (loss) on sales of investments in
mutual funds and portfolios:
Proceeds from sales -- 318 3 45,191
Cost of investments sold -- 320 3 45,194
--- --- - ------
Net realized gain (loss) on investments -- (2) -- (3)
Net change in unrealized appreciation or
depreciation of investments 17,650 21,497 46,155 32,184
------ ------ ------ ------
Net gain (loss) on investments 17,650 21,495 46,155 32,181
------ ------ ------ ------
Net increase (decrease) in net assets resulting
from operations $ 17,220 $ 21,028 $ 45,061 $ 31,652
======== ======== ======== ========
Investment income 1SE 2SE 1UE 2UE
Dividend income from mutual funds and portfolios $ 4,992 $ 3,582 $ 121,813 $ 113,993
Mortality and expense risk fee 3,021 1,640 11,183 8,056
----- ----- ------ -----
Investment income (loss) - net 1,971 1,942 110,630 105,937
===== ===== ======= =======
Realized and unrealized gain (loss) on investments - net
Realized gain (loss) on sales of investments in
mutual funds and portfolios:
Proceeds from sales 5 5,860 35,994 14,432
Cost of investments sold 5 5,603 33,790 13,640
- ----- ------ ------
Net realized gain (loss) on investments -- 257 2,204 792
Net change in unrealized appreciation or
depreciation of investments 291,563 203,877 593,778 531,746
------- ------- ------- -------
Net gain (loss) on investments 291,563 204,134 595,982 532,538
======= ======= ======= =======
Net increase (decrease) in net assets resulting
from operations $ 293,534 $ 206,076 $ 706,612 $ 638,475
========= ========= ========= =========
Investment income 1MC 2MC 1IP 2IP
Dividend income from mutual funds and portfolios $ 11,299 $ 9,907 $ 20,808 $ 18,758
Mortality and expense risk fee 2,052 1,445 2,668 2,027
----- ----- ----- -----
Investment income (loss) - net 9,247 8,462 18,140 16,731
===== ===== ====== ======
Realized and unrealized gain (loss) on investments - net
Realized gain (loss) on sales of investments in
mutual funds and portfolios:
Proceeds from sales 1,596 63,300 8,785 5,072
Cost of investments sold 1,561 64,252 8,591 4,985
----- ------ ----- -----
Net realized gain (loss) on investments 35 (952) 194 87
Net change in unrealized appreciation or
depreciation of investments 31,577 26,514 130,688 117,423
------ ------ ------- -------
Net gain (loss) on investments 31,612 25,562 130,882 117,510
------ ------ ------- -------
Net increase (decrease) in net assets resulting
from operations $ 40,859 $ 34,024 $ 149,022 $ 134,241
======== ======== ========= =========
Investment income 1IN1 2IN1 1VS1 2VS1
Dividend income from mutual funds and portfolios $-- $-- $ 537,157 $ 426,628
Mortality and expense risk fee 11,652 6,830 9,068 5,054
------ ----- ----- -----
Investment income (loss) - net (11,652) (6,830) 528,089 421,574
======= ====== ======= =======
Realized and unrealized gain (loss) on investments - net
Realized gain (loss) on sales of investments in
mutual funds and portfolios:
Proceeds from sales 7 14 14 9
Cost of investments sold 7 14 14 9
- -- -- -
Net realized gain (loss) on investments -- -- -- --
Net change in unrealized appreciation or
depreciation of investments 2,463,909 1,843,265 1,009,011 675,643
--------- --------- --------- -------
Net gain (loss) on investments 2,463,909 1,843,265 1,009,011 675,643
--------- --------- --------- -------
Net increase (decrease) in net assets resulting
from operations $ 2,452,257 $ 1,836,435 $ 1,537,100 $ 1,097,217
=========== =========== =========== ===========
1For the period Sept. 15, 1999 (commencement of operations) to Dec. 31, 1999.
2For the period Sept. 21, 1999 (commencement of operations) to Dec. 31, 1999.
Investment income 1MI1 2MI1 1SV2 2SV2
Dividend income from mutual funds and portfolios $ 140,724 $ 97,888 $-- $--
Mortality and expense risk fee 2,104 1,031 2,131 1,787
----- ----- ----- -----
Investment income (loss) - net 138,620 96,857 (2,131) (1,787)
======= ====== ====== ======
Realized and unrealized gain (loss) on investments - net
Realized gain (loss) on sales of investments in
mutual funds and portfolios:
Proceeds from sales 2 326,475 2,099 48,587
Cost of investments sold 2 323,822 2,113 47,864
- ------- ----- ------
Net realized gain (loss) on investments -- 2,653 (14) 723
Net change in unrealized appreciation or
depreciation of investments 61,546 30,214 124,025 138,233
------ ------ ------- -------
Net gain (loss) on investments 61,546 32,867 124,011 138,956
------ ------ ------- -------
Net increase (decrease) in net assets resulting
from operations $ 200,166 $ 129,724 $ 121,880 $ 137,169
========= ========= ========= =========
1For the period Sept. 15, 1999 (commencement of operations) to Dec. 31, 1999.
2For the period Sept. 21, 1999 (commencement of operations) to Dec. 31, 1999.
Investment income 1IT1 2IT1 1SP1 2SP1
Dividend income from mutual funds and portfolios $-- $-- $-- $--
Mortality and expense risk fee 1,448 1,112 2,628 1,851
----- ----- ----- -----
Investment income (loss) - net (1,448) (1,112) (2,628) (1,851)
====== ====== ====== ======
Realized and unrealized gain (loss) on investments - net
Realized gain (loss) on sales of investments in
mutual funds and portfolios:
Proceeds from sales 255 -- 2 --
Cost of investments sold 254 -- 2 --
--- -
Net realized gain (loss) on investments 1 -- -- --
Net change in unrealized appreciation or
depreciation of investments 355,633 335,224 198,642 178,851
------- ------- ------- -------
Net gain (loss) on investments 355,634 335,224 198,642 178,851
======= ======= ======= =======
Net increase (decrease) in net assets resulting
from operations $ 354,186 $ 334,112 $ 196,014 $ 177,000
========= ========= ========= =========
1For the period Sept. 15, 1999 (commencement of operations) to Dec. 31, 1999.
2For the period Sept. 21, 1999 (commencement of operations) to Dec. 31, 1999.
Combined
Variable
Investment income 1EG2 2EG2 Account
Dividend income from mutual funds and portfolios $ 19,793 $ 12,276 $ 5,270,384
Mortality and expense risk fee 3,459 1,699 541,553
----- ----- -------
Investment income (loss) - net 16,334 10,577 4,728,831
====== ====== =========
Realized and unrealized gain (loss) on investments - net
Realized gain (loss) on sales of investments in
mutual funds and portfolios:
Proceeds from sales 1 945 7,672,504
Cost of investments sold 1 899 7,619,694
- --- ---------
Net realized gain (loss) on investments -- 46 52,810
Net change in unrealized appreciation or
depreciation of investments 514,238 326,083 31,790,472
------- ------- ----------
Net gain (loss) on investments 514,238 326,129 31,843,282
------- ------- ----------
Net increase (decrease) in net assets resulting
from operations $ 530,572 $ 336,706 $ 36,572,113
========= ========= ============
1For the period Sept. 15, 1999 (commencement of operations) to Dec. 31, 1999.
2For the period Sept. 21, 1999 (commencement of operations) to Dec. 31, 1999.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
Period ended December 31, 1999
Segregated Asset Subaccounts1
Operations BC1 BC2 BD1 BD2
<S> <C> <C> <C> <C>
Investment income (loss) - net $ (2,587) $ (602) $ 74,783 $ 53,580
Net realized gain (loss) on investments 119 138 (977) 357
Net change in unrealized appreciation or
depreciation of investments 582,026 503,769 (23,216) (9,773)
------- ------- ------- ------
Net increase (decrease) in net assets
resulting from operations 579,558 503,305 50,590 44,164
======= ======= ====== ======
Contract transactions
Contract purchase payments 7,433,114 7,101,931 11,484,828 6,956,813
Net transfers2 1,035,077 734,585 313,214 345,360
Transfers for policy loans -- -- -- (4,036)
Annuity payments -- -- -- --
Contract terminations:
Surrender benefits (4,464) (3,533) (3,858) (43,861)
Death benefits -- -- (3,768) (6,048)
------ ------ ------ ------
Increase (decrease) from contract transactions 8,463,727 7,832,983 11,790,416 7,248,228
--------- --------- ---------- ---------
Net assets at beginning of year -- -- -- --
--------- --------- ---------- ---------
Net assets at end of year $ 9,043,285 $ 8,336,288 $ 11,841,006 $ 7,292,392
=========== =========== ============ ===========
Accumulation unit activity
Units outstanding at beginning of year -- -- -- --
Contract purchase payments 7,162,609 6,810,380 11,373,968 6,895,987
Net transfers2 986,160 696,257 308,700 343,400
Transfers for policy loans -- -- -- (4,057)
Contract terminations:
Surrender benefits (4,068) (3,259) (3,810) (43,401)
Death benefits -- -- (3,724) (5,976)
-------- ------- ------ ------
Units outstanding at end of year 8,144,701 7,503,378 11,675,134 7,185,953
========= ========= ========== =========
1For the period Sept. 15, 1999 (commencement of operations) to Dec. 31, 1999.
2Includes transfer activity from (to) other subaccounts and transfers from (to)
IDS Life's fixed account.
Segregated Asset Subaccounts1
Operations CR1 CR2 CM1 CM2
Investment income (loss) - net $ 180,144 $ 320,678 $ 420,976 $ 346,638
Net realized gain (loss) on investments 228 1,799 -- --
Net change in unrealized appreciation or
depreciation of investments 129,521 200,310 (20) (17)
------- ------- --- ---
Net increase (decrease) in net assets resulting
from operations 309,893 522,787 420,956 346,621
======= ======= ======= =======
Contract transactions
Contract purchase payments 3,111,030 5,526,328 109,375,412 85,241,344
Net transfers2 263,751 97,735 (21,277,400) (19,097,300)
Transfers for policy loans -- -- -- (135,836)
Annuity payments -- (278) -- --
Contract terminations:
Surrender benefits (4,351) (8,934) (24,995) (37,313)
Death benefits -- -- (114,657) (39,975)
------ ------- -------- -------
Increase (decrease) from contract transactions 3,370,430 5,614,851 87,958,360 65,930,920
--------- --------- ---------- ----------
Net assets at beginning of year -- -- -- --
--------- --------- ---------- ----------
Net assets at end of year $ 3,680,323 $ 6,137,638 $ 88,379,316 $ 66,277,541
=========== =========== ============ ============
Accumulation unit activity
Units outstanding at beginning of year -- -- -- --
Contract purchase payments 2,978,006 5,287,001 108,634,311 84,680,749
Net transfers2 253,016 99,898 (21,071,326) (18,947,088)
Transfers for policy loans -- -- -- (134,817)
Contract terminations:
Surrender benefits (4,021) (54,010) (24,769) (37,017)
Death benefits -- -- (113,923) (39,703)
------ ------ -------- -------
Units outstanding at end of year 3,227,001 5,332,889 87,424,293 65,522,124
========= ========= ========== ==========
1For the period Sept. 15, 1999 (commencement of operations) to Dec. 31, 1999.
2Includes transfer activity from (to) other subaccounts and transfers from (to)
IDS Life's fixed account.
Segregated Asset Subaccounts1
Operations DE1 DE2 EI1 EI2
Investment income (loss) - net $ 3,436 $ 4,098 $ 102,421 $ 72,359
Net realized gain (loss) on investments 42 18 243 (984)
Net change in unrealized appreciation or
depreciation of investments 97,850 73,972 69,360 14,899
------ ------ ------ ------
Net increase (decrease) in net assets
resulting from operations 101,328 78,088 172,024 86,274
======= ====== ======= ======
Contract transactions
Contract purchase payments 3,052,274 2,819,613 9,162,394 7,046,617
Net transfers2 381,448 347,588 919,468 740,456
Transfers for policy loans -- (2,929) -- (1,362)
Annuity payments -- -- (167) --
Contract terminations:
Surrender benefits (1,452) (3,891) (4,008) (4,745)
Death benefits (3,792) (6,160) -- --
------ ------ ------- ------
Increase (decrease) from contract transactions 3,428,478 3,154,221 10,077,687 7,780,966
--------- --------- ---------- ---------
Net assets at beginning of year -- -- -- --
--------- --------- ---------- ---------
Net assets at end of year $ 3,529,806 $ 3,232,309 $ 10,249,711 $ 7,867,240
=========== =========== ============ ===========
Accumulation unit activity
Units outstanding at beginning of year -- -- -- --
Contract purchase payments 3,066,645 2,814,906 9,219,216 7,069,480
Net transfers2 379,466 346,936 932,432 710,749
Transfers for policy loans -- (2,892) -- (1,370)
Contract terminations:
Surrender benefits (1,433) (3,849) (14,643) (4,765)
Death benefits (3,740) (6,074) -- --
------ ------ ------ ------
Units outstanding at end of year 3,440,938 3,149,027 10,137,005 7,774,094
========= ========= ========== =========
1For the period Sept. 15, 1999 (commencement of operations) to Dec. 31, 1999.
2Includes transfer activity from (to) other subaccounts and transfers from (to)
IDS Life's fixed account.
Segregated Asset Subaccounts1
Operations FI1 FI2 GB1 GB2
Investment income (loss) - net $ 72,065 $ 56,259 $ 10,861 $ 7,511
Net realized gain (loss) on investments (771) (1,078) (981) (5)
Net change in unrealized appreciation or
depreciation of investments (64,481) (50,825) (29,550) (18,039)
------- ------- ------- -------
Net increase (decrease) in net assets
resulting from operations 6,813 4,356 (19,670) (10,533)
===== ===== ======= =======
Contract transactions
Contract purchase payments 14,336,568 12,246,539 2,072,704 1,343,061
Net transfers2 (1,420,267) (1,058,145) 317,070 223,877
Transfers for policy loans -- -- -- (2,046)
Annuity payments -- -- -- --
Contract terminations:
Surrender benefits (88,589) (11,705) (1,525) (732)
Death benefits (7,507) (12,024) -- --
------ ------- ----- ------
Increase (decrease) from contract transactions 12,820,205 11,164,665 2,388,249 1,564,160
---------- ---------- --------- ---------
Net assets at beginning of year -- -- -- --
---------- ---------- --------- ---------
Net assets at end of year $ 12,827,018 $ 11,169,021 $ 2,368,579 $ 1,553,627
============ ============ =========== ===========
Accumulation unit activity
Units outstanding at beginning of year -- -- -- --
Contract purchase payments 14,318,437 12,212,010 2,054,070 1,332,987
Net transfers2 (1,426,679) (1,053,115) 315,167 221,882
Transfers for policy loans -- -- -- (2,024)
Contract terminations:
Surrender benefits (88,311) (11,669) (1,506) (729)
Death benefits (7,482) (11,980) -- --
------ ------- ----- ------
Units outstanding at end of year 12,795,965 11,135,246 2,367,731 1,552,116
========== ========== ========= =========
1For the period Sept. 15, 1999 (commencement of operations) to Dec. 31, 1999.
2Includes transfer activity from (to) other subaccounts and transfers from (to)
IDS Life's fixed account.
Segregated Asset Subaccounts1
Operations GR1 GR2 IE1 IE2
Investment income (loss) - net $ (5,756) $ (3,187) $ 145,773 $ 243,800
Net realized gain (loss) on investments 286 1,867 352 281
Net change in unrealized appreciation
or depreciation of investments 1,475,698 1,721,546 164,609 170,750
--------- --------- ------- -------
Net increase (decrease) in net assets
resulting from operations 1,470,228 1,720,226 310,734 414,831
========= ========= ======= =======
Contract transactions
Contract purchase payments 12,920,916 16,592,001 2,134,769 2,647,146
Net transfers2 1,906,148 1,670,102 322,635 220,086
Transfers for policy loans -- (17,061) -- --
Annuity payments -- (247) -- --
Contract terminations:
Surrender benefits (4,649) (9,364) (2,239) (2,526)
Death benefits -- -- -- --
-------- ------- ------- ------
Increase (decrease) from contract transactions 14,822,415 18,235,431 2,455,165 2,864,706
---------- ---------- --------- ---------
Net assets at beginning of year -- -- -- --
---------- ---------- --------- ---------
Net assets at end of year $ 16,292,643 $ 19,955,657 $ 2,765,899 $ 3,279,537
============ ============ =========== ===========
Accumulation unit activity
Units outstanding at beginning of year -- -- -- --
Contract purchase payments 12,046,112 15,400,990 1,892,810 2,385,192
Net transfers2 1,770,848 1,533,999 282,373 192,407
Transfers for policy loans -- (15,706) -- --
Contract terminations:
Surrender benefits (4,032) (28,026) (1,878) (2,235)
Death benefits -- -- -- --
-------- ------- ------- ------
Units outstanding at end of year 13,812,928 16,891,257 2,173,305 2,575,364
========== ========== ========= =========
1For the period Sept. 15, 1999 (commencement of operations) to Dec. 31, 1999.
2Includes transfer activity from (to) other subaccounts and transfers from (to)
IDS Life's fixed account.
Segregated Asset Subaccounts1
Operations MF1 MF2 ND1 ND2
Investment income (loss) - net $ 183,664 $ 143,394 $ 140,012 $ 134,388
Net realized gain (loss) on investments 409 (91) 1,335 363
Net change in unrealized appreciation or
depreciation of investments 209,114 172,124 3,344,313 3,251,583
------- ------- --------- ---------
Net increase (decrease) in net assets
resulting from operations 393,187 315,427 3,485,660 3,386,334
======= ======= ========= =========
Contract transactions
Contract purchase payments 6,071,982 5,083,910 31,310,027 30,126,003
Net transfers2 644,363 284,874 3,851,864 4,080,510
Transfers for policy loans -- -- -- (8,431)
Annuity payments -- -- (247) (1,064)
Contract terminations:
Surrender benefits (1,336) (6,202) (12,517) (21,866)
Death benefits -- -- (3,906) (6,397)
------- ------- ------ ------
Increase (decrease) from contract transactions 6,715,009 5,362,582 35,145,221 34,168,755
--------- --------- ---------- ----------
Net assets at beginning of year -- -- -- --
--------- --------- ---------- ----------
Net assets at end of year $ 7,108,196 $ 5,678,009 $ 38,630,881 $ 37,555,089
=========== =========== ============ ============
Accumulation unit activity
Units outstanding at beginning of year -- -- -- --
Contract purchase payments 5,922,803 4,952,443 28,968,153 27,841,928
Net transfers2 617,528 273,875 3,544,018 3,800,123
Transfers for policy loans -- -- -- (7,719)
Contract terminations:
Surrender benefits (1,245) (6,019) (25,986) (91,026)
Death benefits -- -- (3,601) (5,895)
------- ------- ------ ------
Units outstanding at end of year 6,539,086 5,220,299 32,482,584 31,537,411
========= ========= ========== ==========
1For the period Sept. 15, 1999 (commencement of operations) to Dec. 31, 1999.
2Includes transfer activity from (to) other subaccounts and transfers from (to)
IDS Life's fixed account.
Segregated Asset Subaccounts1
Operations SC1 SC2 SA1 SA2
Investment income (loss) - net $ 9,831 $ 10,709 $ 153,278 $ 198,840
Net realized gain (loss) on investments 34 17,681 2 2,772
Net change in unrealized appreciation or
depreciation of investments 245,447 226,625 742,963 976,970
------- ------- ------- -------
Net increase (decrease) in net assets
resulting from operations 255,312 255,015 896,243 1,178,582
======= ======= ======= =========
Contract transactions
Contract purchase payments 2,653,515 2,663,423 4,360,849 4,744,466
Net transfers2 497,807 424,091 654,792 859,140
Transfers for policy loans -- (1,155) -- --
Annuity payments (143) -- -- --
Contract terminations:
Surrender benefits (1,717) (529) (5,671) (10,331)
Death benefits -- -- -- --
-------- ------- ------- ------
Increase (decrease) from contract transactions 3,149,462 3,085,830 5,009,970 5,593,275
--------- --------- --------- ---------
Net assets at beginning of year -- -- -- --
--------- --------- --------- ---------
Net assets at end of year $ 3,404,774 $ 3,340,845 $ 5,906,213 $ 6,771,857
=========== =========== =========== ===========
Accumulation unit activity
Units outstanding at beginning of year -- -- -- --
Contract purchase payments 2,555,169 2,569,999 3,400,022 3,813,282
Net transfers2 484,382 401,900 505,167 664,753
Transfers for policy loans -- (1,113) -- --
Contract terminations:
Surrender benefits (10,442) (495) (4,056) (7,790)
Death benefits -- -- -- --
-------- ------- ------- ------
Units outstanding at end of year 3,029,109 2,970,291 3,901,133 4,470,245
========= ========= ========= =========
1For the period Sept. 15, 1999 (commencement of operations) to Dec. 31, 1999.
2Includes transfer activity from (to) other subaccounts and transfers from (to)
IDS Life's fixed account.
Segregated Asset Subaccounts1
Operations 1CA 2CA 1CD 2CD
Investment income (loss) - net $ 97,421 $ 77,992 $ (2,242) $ (1,528)
Net realized gain (loss) on investments 1,898 -- 1,935 1,596
Net change in unrealized appreciation or
depreciation of investments 859,149 681,227 290,076 256,676
------- ------- ------- -------
Net increase (decrease) in net assets
resulting from operations 958,468 759,219 289,769 256,744
======= ======= ======= =======
Contract transactions
Contract purchase payments 5,107,384 4,183,527 1,839,913 1,383,121
Net transfers2 711,052 756,963 262,326 482,191
Transfers for policy loans -- 9 -- --
Annuity payments -- -- -- --
Contract terminations:
Surrender benefits (75) (658) (44) (28)
Death benefits -- -- -- --
-------- ------- ------- ------
Increase (decrease) from contract transactions 5,818,361 4,939,841 2,102,195 1,865,284
--------- --------- --------- ---------
Net assets at beginning of year -- -- -- --
--------- --------- --------- ---------
Net assets at end of year $ 6,776,829 $ 5,699,060 $ 2,391,964 $ 2,122,028
=========== =========== =========== ===========
Accumulation unit activity
Units outstanding at beginning of year -- -- -- --
Contract purchase payments 4,542,912 3,684,401 1,659,747 1,256,610
Net transfers2 617,051 652,901 232,656 421,210
Transfers for policy loans -- -- -- --
Contract terminations:
Surrender benefits (62) (554) (38) (24)
Death benefits -- -- -- --
-------- ------- ------- ------
Units outstanding at end of year 5,159,901 4,336,748 1,892,365 1,677,796
========= ========= ========= =========
1For the period Sept. 15, 1999 (commencement of operations) to Dec. 31, 1999.
2Includes transfer activity from (to) other subaccounts and transfers from (to)
IDS Life's fixed account.
Segregated Asset Subaccounts1
Operations 1IF 2IF 1VA 2VA
Investment income (loss) - net $ (2,948) $ (1,939) $ (4,716) $ (3,075)
Net realized gain (loss) on investments -- 2,775 675 (584)
Net change in unrealized appreciation or
depreciation of investments 583,598 485,309 (8,877) (21,256)
------- ------- ------ -------
Net increase (decrease) in net assets
resulting from operations 580,650 486,145 (12,918) (24,915)
======= ======= ======= =======
Contract transactions
Contract purchase payments 1,999,856 1,691,173 3,777,935 2,999,761
Net transfers2 429,804 407,485 628,524 393,293
Transfers for policy loans -- (5,437) -- 2
Annuity payments -- -- -- --
Contract terminations:
Surrender benefits (187) (3,430) (1,241) (2,258)
Death benefits -- -- -- --
-------- ------- ------- ------
Increase (decrease) from contract transactions 2,429,473 2,089,791 4,405,218 3,390,798
--------- --------- --------- ---------
Net assets at beginning of year -- -- -- --
--------- --------- --------- ---------
Net assets at end of year $ 3,010,123 $ 2,575,936 $ 4,392,300 $ 3,365,883
=========== =========== =========== ===========
Accumulation unit activity
Units outstanding at beginning of year -- -- -- --
Contract purchase payments 1,730,284 1,454,910 4,092,189 3,231,208
Net transfers2 363,593 342,202 684,142 428,242
Transfers for policy loans -- (3,831) -- --
Contract terminations:
Surrender benefits (143) (2,631) (1,366) (2,487)
Death benefits -- -- -- --
-------- ------- ------- ------
Units outstanding at end of year 2,093,734 1,790,650 4,774,965 3,656,963
========= ========= ========= =========
1For the period Sept. 15, 1999 (commencement of operations) to Dec. 31, 1999.
2Includes transfer activity from (to) other subaccounts and transfers from (to)
IDS Life's fixed account.
Segregated Asset Subaccounts1
Operations 1GI 2GI 1MP 2MP
Investment income (loss) - net $ (19,386) $ (13,669) $ 43,748 $ 37,594
Net realized gain (loss) on investments -- -- -- 10,048
Net change in unrealized appreciation
or depreciation of investments 553,369 491,493 1,140,720 971,702
------- ------- --------- -------
Net increase (decrease) in net assets
resulting from operations 533,983 477,824 1,184,468 1,019,344
======= ======= ========= =========
Contract transactions
Contract purchase payments 15,741,210 13,409,862 6,375,769 5,111,676
Net transfers2 2,672,550 2,443,726 1,062,042 995,983
Transfers for policy loans -- (4,840) -- (2,566)
Annuity payments -- -- -- (248)
Contract terminations:
Surrender benefits (2,211) (8,767) (2,185) (8,145)
Death benefits (7,577) (12,280) (3,888) (6,420)
------ ------- ------ ------
Increase (decrease) from contract transactions 18,403,972 15,827,701 7,431,738 6,090,280
---------- ---------- --------- ---------
Net assets at beginning of year -- -- -- --
---------- ---------- --------- ---------
Net assets at end of year $ 18,937,955 $ 16,305,525 $ 8,616,206 $ 7,109,624
============ ============ =========== ===========
Accumulation unit activity
Units outstanding at beginning of year -- -- -- --
Contract purchase payments 15,529,921 13,239,175 5,965,971 4,839,333
Net transfers2 2,617,031 2,388,834 984,780 905,320
Transfers for policy loans -- (4,699) -- (2,341)
Contract terminations:
Surrender benefits (2,129) (8,488) (2,102) (26,910)
Death benefits (7,402) (11,991) (3,636) (6,001)
------ ------- ------ ------
Units outstanding at end of year 18,137,421 15,602,831 6,945,013 5,709,401
========== ========== ========= =========
1For the period Sept. 15, 1999 (commencement of operations) to Dec. 31, 1999.
2Includes transfer activity from (to) other subaccounts and transfers from (to)
IDS Life's fixed account.
Segregated Asset Subaccounts1
Operations 1OS 2OS 1RE 2RE
Investment income (loss) - net $ (4,319) $ (3,218) $ (675) $ (727)
Net realized gain (loss) on investments 69 5,056 (118) --
Net change in unrealized appreciation or
depreciation of investments 513,957 475,663 18,355 22,614
------- ------- ------ ------
Net increase (decrease) in net assets
resulting from operations 509,707 477,501 17,562 21,887
======= ======= ====== ======
Contract transactions
Contract purchase payments 3,319,653 3,100,261 453,462 644,456
Net transfers2 601,976 622,039 187,577 187,834
Transfers for policy loans -- (696) -- --
Annuity payments -- -- -- --
Contract terminations:
Surrender benefits (1,621) (1,152) (303) --
Death benefits -- -- (3,695) (5,874)
------- -------- ------ ------
Increase (decrease) from contract transactions 3,920,008 3,720,452 637,041 826,416
--------- --------- ------- -------
Net assets at beginning of year -- -- -- --
--------- --------- ------- -------
Net assets at end of year $ 4,429,715 $ 4,197,953 $ 654,603 $ 848,303
=========== =========== ========= =========
Accumulation unit activity
Units outstanding at beginning of year -- -- -- --
Contract purchase payments 3,063,564 2,864,852 493,488 691,728
Net transfers2 549,802 557,449 194,209 199,636
Transfers for policy loans -- (636) -- --
Contract terminations:
Surrender benefits (1,550) (1,007) (325) --
Death benefits -- -- (4,001) (6,359)
------- -------- ------ ------
Units outstanding at end of year 3,611,816 3,420,658 683,371 885,005
========= ========= ======= =======
1For the period Sept. 15, 1999 (commencement of operations) to Dec. 31, 1999.
2Includes transfer activity from (to) other subaccounts and transfers from (to)
IDS Life's fixed account.
Segregated Asset Subaccounts1
Operations 1SI 2SI 1IS 2IS
Investment income (loss) - net $ (430) $ (467) $ (1,094) $ (529)
Net realized gain (loss) on investments -- (2) -- (3)
Net change in unrealized appreciation or
depreciation of investments 17,650 21,497 46,155 32,184
------ ------ ------ ------
Net increase (decrease) in net assets
resulting from operations 17,220 21,028 45,061 31,652
------ ------ ------ ------
Contract transactions
Contract purchase payments 390,967 443,196 882,752 817,794
Net transfers2 159,814 100,926 143,139 62,525
Transfers for policy loans -- (1,367) -- --
Annuity payments -- -- -- --
Contract terminations:
Surrender benefits (834) -- (1,666) (403)
Death benefits -- -- -- --
------- ------- ------- ------
Increase (decrease) from contract transactions 549,947 542,755 1,024,225 879,916
Net assets at beginning of year -- -- -- --
------- ------- ------- ------
Net assets at end of year $ 567,167 $ 563,783 $ 1,069,286 $ 911,568
========= ========= =========== =========
Accumulation unit activity
Units outstanding at beginning of year -- -- -- --
Contract purchase payments 418,504 477,931 907,205 834,324
Net transfers2 172,094 109,379 147,298 63,196
Transfers for policy loans -- (1,464) -- --
Contract terminations:
Surrender benefits (886) -- (1,648) (413)
Death benefits -- -- -- --
------ ------ ------- ------
Units outstanding at end of year 589,712 585,846 1,052,855 897,107
======= ======= ========= =======
1For the period Sept. 15, 1999 (commencement of operations) to Dec. 31, 1999.
2Includes transfer activity from (to) other subaccounts and transfers from (to)
IDS Life's fixed account.
Segregated Asset Subaccounts1
Operations 1SE 2SE 1UE 2UE
Investment income (loss) - net $ 1,971 $ 1,942 $ 110,630 $ 105,937
Net realized gain (loss) on investments -- 257 2,204 792
Net change in unrealized appreciation or
depreciation of investments 291,563 203,877 593,778 531,746
------- ------- ------- -------
Net increase (decrease) in net assets
resulting from operations 293,534 206,076 706,612 638,475
======= ======= ======= =======
Contract transactions
Contract purchase payments 2,253,298 1,589,356 8,368,472 7,827,059
Net transfers2 472,295 329,796 1,880,455 1,490,338
Transfers for policy loans -- -- -- (4,373)
Annuity payments -- -- -- (244)
Contract terminations:
Surrender benefits (2,057) (461) (2,416) (38,299)
Death benefits -- -- -- --
-------- ------- ------- ------
Increase (decrease) from contract transactions 2,723,536 1,918,691 10,246,511 9,274,481
--------- --------- ---------- ---------
Net assets at beginning of year -- -- -- --
--------- --------- ---------- ---------
Net assets at end of year $ 3,017,070 $ 2,124,767 $ 10,953,123 $ 9,912,956
=========== =========== ============ ===========
Accumulation unit activity
Units outstanding at beginning of year -- -- -- --
Contract purchase payments 2,204,317 1,557,541 8,137,134 7,616,924
Net transfers2 462,798 319,102 1,816,102 1,423,309
Transfers for policy loans -- -- -- (4,147)
Contract terminations:
Surrender benefits (1,862) (434) (2,220) (55,159)
Death benefits -- -- -- --
-------- ------- ------- ------
Units outstanding at end of year 2,665,253 1,876,209 9,951,016 8,980,927
========= ========= ========= =========
1For the period Sept. 15, 1999 (commencement of operations) to Dec. 31, 1999.
2Includes transfer activity from (to) other subaccounts and transfers from (to)
IDS Life's fixed account.
Segregated Asset Subaccounts1
Operations 1MC 2MC 1IP 2IP
Investment income (loss) - net $ 9,247 $ 8,462 $ 18,140 $ 16,731
Net realized gain (loss) on investments 35 (952) 194 87
Net change in unrealized appreciation or
depreciation of investments 31,577 26,514 130,688 117,423
------ ------ ------- -------
Net increase (decrease) in net assets
resulting from operations 40,859 34,024 149,022 134,241
====== ====== ======= =======
Contract transactions
Contract purchase payments 1,624,627 1,278,447 1,993,477 1,541,460
Net transfers2 251,809 239,262 538,601 450,491
Transfers for policy loans -- (2,265) -- --
Annuity payments (193) -- (199) --
Contract terminations:
Surrender benefits -- -- -- (4,011)
Death benefits -- -- -- --
-------- ------- ------- ------
Increase (decrease) from contract transactions 1,876,243 1,515,444 2,531,879 1,987,940
--------- --------- --------- ---------
Net assets at beginning of year -- -- -- --
--------- --------- --------- ---------
Net assets at end of year $ 1,917,102 $ 1,549,468 $ 2,680,901 $ 2,122,181
=========== =========== =========== ===========
Accumulation unit activity
Units outstanding at beginning of year -- -- -- --
Contract purchase payments 1,751,803 1,378,191 1,973,700 1,540,067
Net transfers2 284,474 257,926 543,216 445,014
Transfers for policy loans -- (2,417) -- --
Contract terminations:
Surrender benefits (13,553) -- (12,513) (3,963)
Death benefits -- -- -- --
-------- ------- ------- ------
Units outstanding at end of year 2,022,724 1,633,700 2,504,403 1,981,118
========= ========= ========= =========
1For the period Sept. 15, 1999 (commencement of operations) to Dec. 31, 1999.
2Includes transfer activity from (to) other subaccounts and transfers from (to)
IDS Life's fixed account.
Segregated Asset Subaccounts
Operations 1IN1 2IN1 1VS1 2VS1
Investment income (loss) - net $ (11,652) $ (6,830) $ 528,089 $ 421,574
Net realized gain (loss) on investments -- -- -- --
Net change in unrealized appreciation or
depreciation of investments 2,463,909 1,843,265 1,009,011 675,643
--------- --------- --------- -------
Net increase (decrease) in net assets
resulting from operations 2,452,257 1,836,435 1,537,100 1,097,217
========= ========= ========= =========
Contract transactions
Contract purchase payments 8,535,266 5,909,629 7,028,603 4,793,250
Net transfers3 1,430,140 1,468,630 1,252,334 1,037,971
Transfers for policy loans -- (723) -- (6,501)
Annuity payments -- -- -- (252)
Contract terminations:
Surrender benefits (4,850) (2,266) (696) (3,664)
Death benefits (4,125) (6,903) -- --
------ ------ -------- ------
Increase (decrease) from contract transactions 9,956,431 7,368,367 8,280,241 5,820,804
--------- --------- --------- ---------
Net assets at beginning of year -- -- -- --
--------- --------- --------- ---------
Net assets at end of year $ 12,408,688 $ 9,204,802 $ 9,817,341 $ 6,918,021
============ =========== =========== ===========
Accumulation unit activity
Units outstanding at beginning of year -- -- -- --
Contract purchase payments 7,060,160 4,917,565 6,168,604 4,236,058
Net transfers3 1,146,075 1,169,160 1,076,943 874,498
Transfers for policy loans -- (479) -- (5,052)
Contract terminations:
Surrender benefits (3,252) (1,698) (544) (21,947)
Death benefits (3,386) (5,665) -- --
------ ------ ------- --------
Units outstanding at end of year 8,199,597 6,078,883 7,245,003 5,083,557
========= ========= ========= =========
1For the period Sept. 15, 1999 (commencement of operations) to Dec. 31, 1999.
2For the period Sept. 21, 1999 (commencement of operations) to Dec. 31, 1999.
3Includes transfer activity from (to) other subaccounts and transfers from (to)
IDS Life's fixed account.
Segregated Asset Subaccounts
Operations 1MI1 2MI1 1SV2 2SV2
Investment income (loss) - net $ 138,620 $ 96,857 $ (2,131) $ (1,787)
Net realized gain (loss) on investments -- 2,653 (14) 723
Net change in unrealized appreciation or
depreciation of investments 61,546 30,214 124,025 138,233
------ ------ ------- -------
Net increase (decrease) in net assets
resulting from operations 200,166 129,724 121,880 137,169
======= ======= ======= =======
Contract transactions
Contract purchase payments 1,609,563 1,028,429 1,572,645 1,669,098
Net transfers3 363,725 257,313 514,208 256,673
Transfers for policy loans -- -- -- (698)
Annuity payments -- -- -- --
Contract terminations:
Surrender benefits (22) (1) -- (36,183)
Death benefits -- -- -- --
-------- ------- ------- ------
Increase (decrease) from contract transactions 1,973,266 1,285,741 2,086,853 1,888,890
--------- --------- --------- ---------
Net assets at beginning of year -- -- -- --
--------- --------- -------- ---------
Net assets at end of year $ 2,173,432 $ 1,415,465 $ 2,208,733 $ 2,026,059
=========== =========== =========== ===========
Accumulation unit activity
Units outstanding at beginning of year -- -- -- --
Contract purchase payments 1,539,605 983,406 1,539,862 1,657,064
Net transfers3 346,461 244,164 503,505 250,547
Transfers for policy loans -- -- -- (669)
Contract terminations:
Surrender benefits (21) -- -- (33,890)
Death benefits -- -- -- --
-------- ------- ------- ------
Units outstanding at end of year 1,886,045 1,227,570 2,043,367 1,873,052
========= ========= ========= =========
1For the period Sept. 15, 1999 (commencement of operations) to Dec. 31, 1999.
2For the period Sept. 21, 1999 (commencement of operations) to Dec. 31, 1999.
3Includes transfer activity from (to) other subaccounts and transfers from (to)
IDS Life's fixed account.
Segregated Asset Subaccounts
Operations 1IT1 2IT1 1SP1 2SP1
Investment income (loss) - net $ (1,448) $ (1,112) $ (2,628) $ (1,851)
Net realized gain (loss) on investments 1 -- -- --
Net change in unrealized appreciation or
depreciation of investments 355,633 335,224 198,642 178,851
------- ------- ------- -------
Net increase (decrease) in net assets
resulting from operations 354,186 334,112 196,014 177,000
======= ======= ======= =======
Contract transactions
Contract purchase payments 1,310,346 1,184,921 2,500,578 2,150,975
Net transfers3 367,444 349,599 436,774 527,819
Transfers for policy loans -- (706) -- (5,051)
Annuity payments -- -- -- --
Contract terminations:
Surrender benefits -- (30) (1,342) (728)
Death benefits -- -- -- --
-------- ------- ------- ------
Increase (decrease) from contract transactions 1,677,790 1,533,784 2,936,010 2,673,015
--------- --------- --------- ---------
Net assets at beginning of year -- -- -- --
--------- --------- --------- ---------
Net assets at end of year $ 2,031,976 $ 1,867,896 $ 3,132,024 $ 2,850,015
=========== =========== =========== ===========
Accumulation unit activity
Units outstanding at beginning of year -- -- -- --
Contract purchase payments 1,062,898 934,849 2,318,078 1,988,261
Net transfers3 280,022 299,511 406,223 493,274
Transfers for policy loans -- (626) -- (4,487)
Contract terminations:
Surrender benefits -- (21) (1,260) (669)
Death benefits -- -- -- --
-------- ------- ------- ------
Units outstanding at end of year 1,342,920 1,233,713 2,723,041 2,476,379
========= ========= ========= =========
1For the period Sept. 15, 1999 (commencement of operations) to Dec. 31, 1999.
2For the period Sept. 21, 1999 (commencement of operations) to Dec. 31, 1999.
3Includes transfer activity from (to) other subaccounts and transfers from (to)
IDS Life's fixed account.
Segregated Asset Subaccounts
Combined
Variable
Operations 1EG2 2EG2 Account
Investment income (loss) - net $ 16,334 $ 10,577 $ 4,728,831
Net realized gain (loss) on investments -- 46 52,810
Net change in unrealized appreciation or
depreciation of investments 514,238 326,083 31,790,472
------- ------- ----------
Net increase (decrease) in net assets
resulting from operations 530,572 336,706 36,572,113
======= ======= ==========
Contract transactions
Contract purchase payments 2,696,796 1,724,400 553,484,000
Net transfers3 552,346 362,709 6,425,430
Transfers for policy loans -- -- (208,068)
Annuity payments -- -- (3,282)
Contract terminations:
Surrender benefits (2,100) (3,756) (464,993)
Death benefits -- -- (254,996)
-------- -------- --------
Increase (decrease) from contract transactions 3,247,042 2,083,353 558,978,091
Net assets at beginning of year -- -- --
-------- ------- ----------
Net assets at end of year $ 3,777,614 $ 2,420,059 $ 595,550,204
=========== =========== =============
Accumulation unit activity
Units outstanding at beginning of year -- --
Contract purchase payments 2,390,678 1,523,280
Net transfers3 483,019 318,154
Transfers for policy loans -- --
Contract terminations:
Surrender benefits (1,612) (3,252)
Death benefits -- --
-------- -------
Units outstanding at end of year 2,872,085 1,838,182
========= =========
1For the period Sept. 15, 1999 (commencement of operations) to Dec. 31, 1999.
2For the period Sept. 21, 1999 (commencement of operations) to Dec. 31, 1999.
3Includes transfer activity from (to) other subaccounts and transfers from (to)
IDS Life's fixed account.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life Variable Account 10 - American Express Retirement Advisor Variable
Annuity
Notes to Financial Statements
1. ORGANIZATION
IDS Life Variable Account 10 (the Account) was established under Minnesota law
on Aug. 23, 1995 as a segregated asset account of IDS Life Insurance Company
(IDS Life). The Account is registered as a unit investment trust under the
Investment Company Act of 1940, as amended (the 1940 Act). Operations of the
Account commenced on March 5, 1996.
The Account is comprised of various subaccounts. Each subaccount invests
exclusively in shares of the following funds or portfolios (collectively, the
Funds), which are registered under the 1940 Act as diversified (non-diversified
for Global Bond and Warburg Pincus Trust/Emerging Growth Portfolio), open-end
management investment companies and have the following investment managers.
Subaccount Invests exclusively in shares of Investment Manager
<S> <C> <C>
BC1 AXPSM Variable Portfolio-- Blue Chip Advantage Fund IDS Life Insurance Company 1
BC2
BD1 AXPSM Variable Portfolio-- Bond Fund IDS Life Insurance Company 1
BD2
CR1 AXPSM Variable Portfolio-- Capital Resource Fund IDS Life Insurance Company 1
CR2
CM1 AXPSM Variable Portfolio-- Cash Management Fund IDS Life Insurance Company 1
CM2
DE1 AXPSM Variable Portfolio-- Diversified Equity IDS Life Insurance Company 1
DE2 Income Fund
EI1 AXPSM Variable Portfolio-- Extra Income Fund IDS Life Insurance Company 1
EI2
FI1 AXPSM Variable Portfolio-- Federal Income Fund IDS Life Insurance Company 1
FI2
GB1 AXPSM Variable Portfolio-- Global Bond Fund IDS Life Insurance Company 1
GB2
GR1 AXPSM Variable Portfolio-- Growth Fund IDS Life Insurance Company 1
GR2
IE1 AXPSM Variable Portfolio-- International Fund IDS Life Insurance Company 2
IE2
MF1 AXPSM Variable Portfolio-- Managed Fund IDS Life Insurance Company 1
MF2
ND1 AXPSM Variable Portfolio-- New Dimensions Fund(R) IDS Life Insurance Company 1
ND2
SC1 AXPSM Variable Portfolio-- Small Cap Advantage Fund IDS Life Insurance Company 3
SC2
SA1 AXPSM Variable Portfolio-- Strategy Aggressive Fund IDS Life Insurance Company 1
SA2
1CA AIM V.I. Capital Appreciation Fund A I M Advisors, Inc.
2CA
1CD AIM V.I. Capital Development Fund A I M Advisors, Inc.
2CD
1IF American Century VP International American Century Investment Management, Inc.
2IF
1VA American Century VP Value American Century Investment Management, Inc.
2VA
1GI Fidelity VIP III Growth & Income Portfolio - Fidelity Management & Research Company (FMR) 4
2GI Service Class
1MP Fidelity VIP III Mid Cap Portfolio - Service Class FMR 4
2MP
1OS Fidelity VIP Overseas Portfolio - Service Class FMR 5
2OS
1RE FTVIPT Franklin Real Estate Securities Fund - Class Franklin Advisers, Inc.
2RE 2
1SI FTVIPT Franklin Value Securities Fund - Class 2 Franklin Advisory Services, LLC
2SI
1IS FTVIPT Templeton International Smaller Companies Templeton Investment Counsel, Inc.
2IS Fund - Class 2
1SE Goldman Sachs VIT CORESM Small Cap Equity Fund Goldman Sachs Asset Management
2SE
1UE Goldman Sachs VIT CORESM U.S. Equity Fund Goldman Sachs Asset Management
2UE
1MC Goldman Sachs VIT Mid Cap Value Fund Goldman Sachs Asset Management
2MC
1IP Lazard Retirement International Equity Portfolio Lazard Asset Management
2IP
1IN Putnam VT International New Opportunities Fund - Putnam Investment Management, Inc.
2IN Class IB Shares
1VS Putnam VT Vista Fund - Class IB Shares Putnam Investment Management, Inc.
2VS
1MI Royce Micro-Cap Portfolio Royce & Associates, Inc.
2MI
1SV Third Avenue Value Portfolio The Investment Adviser EQSF Advisers, Inc.
2SV
1IT Wanger International Small Cap Wanger Asset Management, L.P.
2IT
1SP Wanger U.S. Small Cap Wanger Asset Management, L.P.
2SP
1EG Warburg Pincus Trust - Emerging Growth Portfolio Warburg Pincus Asset Management, Inc.
2EG
1 American Express Financial Corporation (AEFC) is the investment advisor.
2 AEFC is the investment advisor. American Express Asset Management
International Inc. is the sub-investment advisor.
3 AEFC is the investment advisor. Kenwood Capital Management LLC is the sub-investment
advisor.
4 FMR U.K. and FMR Far East are the sub-investment advisors.
5 FMR U.K., FMR Far East, Fidelity International Investment Advisors (FIIA) and
FIIA U.K.are the sub-investment advisors.
The assets of each subaccount of the Account are not chargeable with liabilities
arising out of the business conducted by any other segregated asset account or
by IDS Life.
IDS Life serves as issuer of the contract.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Investments in the Funds
Investments in shares of the Funds are stated at market value which is the net
asset value per share as determined by the respective Funds. Investment
transactions are accounted for on the date the shares are purchased and sold.
The cost of investments sold and redeemed is determined on the average cost
method. Dividend distributions received from the Funds are reinvested in
additional shares of the Funds and are recorded as income by the subaccounts on
the ex-dividend date.
Unrealized appreciation or depreciation of investments in the accompanying
financial statements represents the subaccounts' share of the Funds'
undistributed net investment income, undistributed realized gain or loss and the
unrealized appreciation or depreciation on their investment securities.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of increase and decrease in net assets from
operations during the period. Actual results could differ from those estimates.
Federal Income Taxes
IDS Life is taxed as a life insurance company. The Account is treated as part of
IDS Life for federal income tax purposes. Under existing federal income tax law,
no income taxes are payable with respect to any investment income of the
Account.
3. MORTALITY AND EXPENSE RISK FEE
IDS Life makes contractual assurances to the Account that possible future
adverse changes in administrative expenses and mortality experience of the
contract owners and annuitants will not affect the Account. The mortality and
expense risk fee paid to IDS Life is computed daily and is equal, on an annual
basis, to 0.95% of the average daily net assets of the subaccounts for
nonqualified annuities, and 0.75% of the average daily net assets of the
subaccounts for qualified annuities.
4. CONTRACT ADMINISTRATIVE CHARGES
IDS Life deducts a contract administrative charge of $30 per year on each
contract anniversary. This charge cannot be increased and does not apply after
annuity payouts begin. IDS Life does not expect to profit from this charge. This
charge reimburses IDS Life for expenses incurred in establishing and maintaining
the annuity records. This charge is waived when the contract value, or total
purchase payments less any payments surrendered, is $50,000 or more on the
current contract anniversary. The $30 annual charge is deducted at the time of
any full surrender.
5. SURRENDER CHARGE
IDS Life will use a surrender charge to help it recover certain expenses
relating to the sale of the annuity. The surrender charge applies if all or part
of the surrender amount is from purchase payments received within seven or ten
years before surrender (depending on surrender charge period selected at time of
application). Charges by IDS Life for surrenders are not identified on an
individual segregated asset account basis. Charges for all segregated asset
accounts amounted to $19,803,247 in 1999 and $17,936,810 in 1998. Such charges
are not treated as a separate expense of the subaccounts. They are ultimately
deducted from contract surrender benefits paid by IDS Life. This charge is
waived if the withdrawal meets certain provisions as stated in the contract.
6. INVESTMENT IN SHARES
The subaccounts' investment in shares of the Funds as of Dec. 31, 1999 were as
follows:
Subaccount Investment Shares NAV
<S> <C> <C> <C>
BC1 AXPSM Variable Portfolio-- Blue Chip Advantage Fund 804,975 $11.08
BC2 743,762 11.08
BD1 AXPSM Variable Portfolio-- Bond Fund 1,113,577 10.54
BD2 688,442 10.54
CR1 AXPSM Variable Portfolio-- Capital Resource Fund 100,985 36.40
CR2 166,796 36.40
CM1 AXPSM Variable Portfolio-- Cash Management Fund 85,939,386 1.00
CM2 65,131,467 1.00
DE1 AXPSM Variable Portfolio-- Diversified Equity Income Fund 338,830 10.19
DE2 314,486 10.19
EI1 AXPSM Variable Portfolio-- Extra Income Fund 1,160,431 8.58
EI2 905,029 8.58
FI1 AXPSM Variable Portfolio-- Federal Income Fund 1,265,076 9.92
FI2 1,072,686 9.92
GB1 AXPSM Variable Portfolio-- Global Bond Fund 241,370 9.69
GB2 156,226 9.69
GR1 AXPSM Variable Portfolio-- Growth Fund 1,374,900 11.68
GR2 1,684,070 11.68
IE1 AXPSM Variable Portfolio-- International Fund 141,927 19.38
IE2 168,757 19.38
MF1 AXPSM Variable Portfolio-- Managed Fund 355,097 19.82
MF2 282,193 19.82
ND1 AXPSM Variable Portfolio-- New Dimensions Fund(R) 1,650,116 22.86
ND2 1,624,037 22.86
SC1 AXPSM Variable Portfolio-- Small Cap Advantage Fund 297,383 11.13
SC2 297,844 11.13
SA1 AXPSM Variable Portfolio-- Strategy Aggressive Fund 242,483 23.92
SA2 280,006 23.92
1CA AIM V.I. Capital Appreciation Fund 190,467 35.58
2CA 160,176 35.58
1CD AIM V.I. Capital Development Fund 201,174 11.89
2CD 178,472 11.89
1IF American Century VP International 240,810 12.50
2IF 206,075 12.50
1VA American Century VP Value 738,202 5.95
2VA 565,695 5.95
1GI Fidelity VIP III Growth & Income Portfolio - Service Class 1,098,489 17.24
2GI 945,797 17.24
1MP Fidelity VIP III Mid Cap Portfolio - Service Class 561,936 15.24
2MP 463,660 15.24
1OS Fidelity VIP Overseas Portfolio - Service Class 161,787 27.38
2OS 153,322 27.38
1RE FTVIPT Franklin Real Estate Securities Fund - Class 2 43,992 14.88
2RE 57,006 14.88
1SI FTVIPT Franklin Value Securities Fund - Class 2 71,976 7.88
2SI 71,546 7.88
1IS FTVIPT Templeton International Smaller Companies Fund - Class 2 96,584 11.07
2IS 82,346 11.07
1SE Goldman Sachs VIT CORESM Small Cap Equity Fund 284,629 10.60
2SE 200,112 10.60
1UE Goldman Sachs VIT CORESM U.S. Equity Fund 783,485 13.98
2UE 709,081 13.98
1MC Goldman Sachs VIT Mid Cap Value Fund 227,684 8.42
2MC 184,022 8.42
1IP Lazard Retirement International Equity Portfolio 198,732 13.49
2IP 157,315 13.49
1IN Putnam VT International New Opportunities Fund - Class IB 533,019 23.28
2IN Shares 395,395 23.28
1VS Putnam VT Vista Fund - Class IB Shares 475,416 20.65
2VS 335,013 20.65
1MI Royce Micro-Cap Portfolio 354,557 6.13
2MI 230,908 6.13
1SV Third Avenue Value Portfolio 203,758 10.84
2SV 186,906 10.84
1IT Wanger International Small Cap 46,530 43.67
2IT 42,772 43.67
1SP Wanger U.S. Small Cap 125,885 24.88
2SP 114,550 24.88
1EG Warburg Pincus Trust - Emerging Growth Portfolio 289,136 13.07
2EG 185,161 13.07
7. INVESTMENT TRANSACTIONS
The subaccounts' purchases of the Funds' shares, including reinvestment of
dividend distributions, were as follows:
Year ended Dec. 31,
Subaccount Investment 1999
<S> <C> <C>
BC1 AXPSM Variable Portfolio-- Blue Chip Advantage Fund $8,343,972 1
BC2 7,773,294 1
BD1 AXPSM Variable Portfolio -- Bond Fund 12,192,380 1
BD2 7,451,268 1
CR1 AXPSM Variable Portfolio -- Capital Resource Fund 3,570,614 1
CR2 5,941,556 1
CM1 AXPSM Variable Portfolio -- Cash Management Fund 85,974,037 1
CM2 66,483,221 1
DE1 AXPSM Variable Portfolio -- Diversified Equity Income Fund 3,356,317 1
DE2 3,131,540 1
EI1 AXPSM Variable Portfolio -- Extra Income Fund 9,971,339 1
EI2 7,877,322 1
FI1 AXPSM Variable Portfolio -- Federal Income Fund 12,892,030 1
FI2 11,461,491 1
GB1 AXPSM Variable Portfolio -- Global Bond Fund 2,446,978 1
GB2 1,532,501 1
GR1 AXPSM Variable Portfolio -- Growth Fund 14,587,375 1
GR2 17,970,110 1
IE1 AXPSM Variable Portfolio -- International Fund 2,601,976 1
IE2 3,147,385 1
MF1 AXPSM Variable Portfolio -- Managed Fund 6,852,643 1
MF2 5,425,212 1
ND1 AXPSM Variable Portfolio -- New Dimensions Fund(R) 34,396,783 1
ND2 33,878,983 1
SC1 AXPSM Variable Portfolio -- Small Cap Advantage Fund 3,065,285 1
SC2 5,778,679 1
SA1 AXPSM Variable Portfolio -- Strategy Aggressive Fund 5,057,408 1
SA2 5,744,273 1
1CA AIM V.I. Capital Appreciation Fund 5,943,445 1
2CA 5,017,837 1
1CD AIM V.I. Capital Development Fund 2,126,967 1
2CD 1,885,358 1
1IF American Century VP International 2,426,526 1
2IF 2,131,099 1
1VA American Century VP Value 4,423,337 1
2VA 3,415,119 1
1GI Fidelity VIP III Growth & Income Portfolio - Service Class 18,384,605 1
2GI 15,814,049 1
1MP Fidelity VIP III Mid Cap Portfolio - Service Class 7,423,193 1
2MP 6,350,920 1
1OS Fidelity VIP Overseas Portfolio - Service Class 3,922,266 1
2OS 3,982,847 1
1RE FTVIPT Franklin Real Estate Securities Fund - Class 2 647,423 1
2RE 825,643 1
1SI FTVIPT Franklin Value Securities Fund - Class 2 549,517 1
2SI 542,606 1
1IS FTVIPT Templeton International Smaller Companies Fund - Class 2 1,023,032 1
2IS 924,578 1
1SE Goldman Sachs VIT CORESM Small Cap Equity Fund 2,725,512 1
2SE 1,922,911 1
1UE Goldman Sachs VIT CORESM U.S. Equity Fund 10,393,135 1
2UE 9,394,850 1
1MC Goldman Sachs VIT Mid Cap Value Fund 1,887,086 1
2MC 1,587,206 1
1IP Lazard Retirement International Equity Portfolio 2,558,804 1
2IP 2,009,743 1
1IN Putnam VT International New Opportunities Fund - Class IB 9,944,786 1
2IN Shares 7,361,551 1
1VS Putnam VT Vista Fund - Class IB Shares 8,808,344 1
2VS 6,242,387 1
1MI Royce Micro-Cap Portfolio 2,111,888 1
2MI 1,709,073 1
1SV Third Avenue Value Portfolio 2,086,821 2
2SV 1,935,690 2
1IT Wanger International Small Cap 1,676,597 1
2IT 1,532,620 1
1SP Wanger U.S. Small Cap 2,933,384 1
2SP 2,671,164 1
1EG Warburg Pincus Trust - Emerging Growth Portfolio 3,263,377 2
2EG 2,094,875 2
Combined Variable Account $563,518,143
1 Operations commenced on Sept. 15, 1999.
2 Operations commenced on Sept. 21, 1999.
8. YEAR 2000 ISSUE (unaudited)
The Year 2000 issue is the result of computer programs having been written using
two digits rather than four to define a year. Any programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than 2000. This could result in the failure of major systems or miscalculations,
which could have a material impact on the operations of IDS Life and the
Account. All of the major systems used by the IDS Life and by the Account are
maintained by AEFC and are utilized by multiple subsidiaries and affiliates of
AEFC. IDS Life and the Account's businesses are heavily dependent upon AEFC's
computer systems and have significant interactions with systems of third
parties.
A comprehensive review of AEFC's computer systems and business processes,
including those specific to IDS Life and the Account, was conducted to identify
the major systems that could be affected by the Year 2000 issue. Steps were
taken to resolve potential problems including modification to existing software
and the purchase of new software. As of Dec. 31, 1999, AEFC completed its
program of corrective measures on its internal systems and applications,
including Year 2000 compliance testing. As of Dec. 31, 1999, AEFC had also
completed an evaluation of the Year 2000 readiness of other third parties whose
system failures could have an impact on IDS Life's and the Account's operations.
AEFC's Year 2000 project also included establishing Year 2000 contingency plans
for all key business units. Business continuation plans, which address business
continuation in the event of a system disruption, are in place for all key
business units. As of Dec. 31, 1999, these plans had been amended to include
specific Year 2000 considerations.
In assessing its Year 2000 initiatives and the results of actual production
since Jan. 1, 2000, management believes no material adverse consequences were
experienced, and there was no material effect on IDS Life's and the Account's
business, results of operations, or financial condition as a result of the Year
2000 issue.
</TABLE>
<PAGE>
<PAGE>
IDS LIFE INSURANCE COMPANY
FINANCIAL INFORMATION
REPORT OF INDEPENDENT AUDITORS
THE BOARD OF DIRECTORS
IDS LIFE INSURANCE COMPANY
We have audited the accompanying consolidated balance sheets of IDS Life
Insurance Company (a wholly-owned subsidiary of American Express Financial
Corporation) as of December 31, 1999 and 1998, and the related consolidated
statements of income, stockholder's equity and cash flows for each of the three
years in the period ended December 31, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the 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. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of IDS Life Insurance
Company at December 31, 1999 and 1998, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1999, in conformity with accounting principles generally accepted
in the United States.
ERNST & YOUNG LLP
February 3, 2000
Minneapolis, Minnesota
--------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY F-1
<PAGE>
IDS LIFE INSURANCE COMPANY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31, ($ THOUSANDS) 1999 1998
<S> <C> <C>
ASSETS
------------------------------------------------------------------
Investments:
Fixed maturities:
Held to maturity, at amortized cost
(fair value:
1999, $7,105,743; 1998, $8,420,035) $ 7,156,292 $ 7,964,114
Available for sale, at fair value
(amortized cost:
1999, $13,703,137; 1998,
$13,344,949) 13,049,549 13,613,139
------------------------------------------------------------------
20,205,841 21,577,253
Mortgage loans on real estate 3,606,377 3,505,458
Policy loans 561,834 525,431
Other investments 506,797 366,604
------------------------------------------------------------------
Total investments 24,880,849 25,974,746
Cash and cash equivalents 32,333 22,453
Amounts recoverable from reinsurers 327,168 262,260
Amounts due from brokers 145 327
Other accounts receivable 48,578 47,963
Accrued investment income 343,449 366,574
Deferred policy acquisition costs 2,665,175 2,496,352
Deferred income taxes, net 216,020 --
Other assets 33,089 30,487
Separate account assets 35,894,732 27,349,401
------------------------------------------------------------------
Total assets $64,441,538 $56,550,563
------------------------------------------------------------------
LIABILITIES AND STOCKHOLDER'S EQUITY
------------------------------------------------------------------
Liabilities:
Future policy benefits:
Fixed annuities $20,552,159 $21,172,303
Universal life-type insurance 3,391,203 3,343,671
Traditional life insurance 226,842 225,306
Disability income and long-term care
insurance 811,941 660,320
Policy claims and other policyholders'
funds 24,600 70,309
Deferred income taxes, net -- 16,930
Amounts due to brokers 148,112 195,406
Other liabilities 579,678 410,285
Separate account liabilities 35,894,732 27,349,401
------------------------------------------------------------------
Total liabilities 61,629,267 53,443,931
------------------------------------------------------------------
Commitments and contingencies
Stockholder's equity:
Capital stock, $30 par value per
share;
100,000 shares authorized, issued and
outstanding 3,000 3,000
Additional paid-in capital 288,327 288,327
Accumulated other comprehensive (loss)
income, net of tax:
Net unrealized securities (losses) gains (411,230) 169,584
------------------------------------------------------------------
Retained earnings 2,932,174 2,645,721
------------------------------------------------------------------
Total stockholder's equity 2,812,271 3,106,632
------------------------------------------------------------------
Total liabilities and stockholder's
equity $64,441,538 $56,550,563
==================================================================
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
F-2 IDS LIFE INSURANCE COMPANY
<PAGE>
IDS LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, ($ THOUSANDS) 1999 1998 1997
<S> <C> <C> <C>
REVENUES:
-----------------------------------------------------------------------------
Premiums:
Traditional life insurance $ 53,790 $ 53,132 $ 52,473
Disability income and long-term care
insurance 201,637 176,298 154,021
-----------------------------------------------------------------------------
Total premiums 255,427 229,430 206,494
Policyholder and contractholder charges 411,994 383,965 341,726
Management and other fees 473,108 401,057 340,892
Net investment income 1,919,573 1,986,485 1,988,389
Net realized gain on investments 26,608 6,902 860
-----------------------------------------------------------------------------
Total revenues 3,086,710 3,007,839 2,878,361
-----------------------------------------------------------------------------
BENEFITS AND EXPENSES:
-----------------------------------------------------------------------------
Death and other benefits:
Traditional life insurance 29,819 29,835 28,951
Universal life-type insurance and
investment contracts 118,561 108,349 92,814
Disability income and long-term care
insurance 30,622 27,414 22,333
Increase in liabilities for future
policy benefits:
Traditional life insurance 7,311 6,052 3,946
Disability income and long-term care
insurance 87,620 73,305 63,631
Interest credited on universal life-type
insurance and investment contracts 1,240,575 1,317,124 1,386,448
Amortization of deferred policy
acquisition costs 332,705 382,642 322,731
Other insurance and operating expenses 335,180 287,326 276,596
-----------------------------------------------------------------------------
Total benefits and expenses 2,182,393 2,232,047 2,197,450
-----------------------------------------------------------------------------
Income before income taxes 904,317 775,792 680,911
Income taxes 267,864 235,681 206,664
-----------------------------------------------------------------------------
Net income $ 636,453 $ 540,111 $ 474,247
=============================================================================
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY F-3
<PAGE>
IDS LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
ACCUMULATED
OTHER
TOTAL ADDITIONAL COMPREHENSIVE
STOCKHOLDER'S CAPITAL PAID-IN (LOSS) INCOME, RETAINED
THREE YEARS ENDED DECEMBER 31, 1999 ($ THOUSANDS) EQUITY STOCK CAPITAL NET OF TAX EARNINGS
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1996 $2,444,080 $3,000 $283,615 $ 86,102 $2,071,363
Comprehensive income:
Net income 474,247 -- -- -- 474,247
Unrealized holding gains arising during the year,
net of deferred policy acquisition costs of
($7,714) and taxes of ($75,215) 139,686 -- -- 139,686 --
Reclassification adjustment for losses included in
net income, net of tax of ($308) 571 -- -- 571 --
Other comprehensive income 140,257 -- -- 140,257 --
---------------------------------------------------------------------------------------------------------------------
Comprehensive income 614,504 -- -- -- --
Capital contribution from parent 7,232 -- 7,232 -- --
Cash dividends to parent (200,000) -- -- -- (200,000)
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1997 2,865,816 3,000 290,847 226,359 2,345,610
Comprehensive income:
Net income 540,111 -- -- -- 540,111
Unrealized holding losses arising during the year,
net of deferred policy acquisition costs of
$6,333 and taxes of $32,826 (60,964) -- -- (60,964) --
Reclassification adjustment for losses included in
net income, net of tax of ($2,254) 4,189 -- -- 4,189 --
Other comprehensive loss (56,775) -- -- (56,775) --
Comprehensive income 483,336 -- -- -- --
Other changes (2,520) -- (2,520) -- --
---------------------------------------------------------------------------------------------------------------------
Cash dividends to parent (240,000) -- -- -- (240,000)
---------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1998 3,106,632 3,000 288,327 169,584 2,645,721
---------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1998 $3,106,632 $3,000 $288,327 $ 169,584 $2,645,721
Comprehensive income:
Net income 636,453 -- -- -- 636,453
Unrealized holding losses arising during the year,
net of deferred policy acquisition costs of
$28,444 and taxes of $304,936 (566,311) -- -- (566,311) --
Reclassification adjustment for gains included in
net income, net of tax of $7,810 (14,503) -- -- (14,503) --
---------------------------------------------------------------------------------------------------------------------
Other comprehensive loss (580,814) -- -- (580,814) --
Comprehensive income 55,639 -- -- -- --
---------------------------------------------------------------------------------------------------------------------
Cash dividends to parent (350,000) -- -- -- (350,000)
---------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1999 $2,812,271 $3,000 $288,327 $(411,230) $2,932,174
---------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
F-4 IDS LIFE INSURANCE COMPANY
<PAGE>
IDS LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, ($ THOUSANDS) 1999 1998 1997
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
-------------------------------------------------------------------------------
Net income $ 636,453 $ 540,111 $ 474,247
Adjustments to reconcile net income to
net cash provided by operating
activities: Policy loans, excluding
universal life-type insurance:
Issuance (56,153) (53,883) (54,665)
Repayment 54,105 57,902 46,015
Change in amounts recoverable from
reinsurers (64,908) (56,544) (47,994)
Change in other accounts receivable (615) (10,068) 6,194
Change in accrued investment income 23,125 (9,184) (14,077)
Change in deferred policy acquisition
costs, net (140,379) (10,443) (156,486)
Change in liabilities for future policy
benefits for traditional life,
disability income and long-term care
insurance 153,157 138,826 112,915
Change in policy claims and other
policyholders' funds (45,709) 1,964 (15,289)
Deferred income tax provision (benefit) 79,796 (19,122) 19,982
Change in other liabilities 169,395 64,902 13,305
(Accretion of discount), amortization of
premium, net (17,907) 9,170 (5,649)
Net realized gain on investments (26,608) (6,902) (860)
Policyholder and contractholder charges,
non-cash (175,059) (172,396) (160,885)
Other, net (5,324) 10,786 7,161
-------------------------------------------------------------------------------
Net cash provided by operating
activities $ 583,369 $ 485,119 $ 223,914
CASH FLOWS FROM INVESTING ACTIVITIES:
-------------------------------------------------------------------------------
Fixed maturities held to maturity:
Purchases $ (3,030) $ (1,020) $ (1,996)
Maturities, sinking fund payments and
calls 741,949 1,162,731 686,503
Sales 66,547 236,963 236,761
Fixed maturities available for sale:
Purchases (3,433,128) (4,100,238) (3,160,133)
Maturities, sinking fund payments and
calls 1,442,507 2,967,311 1,206,213
Sales 1,691,389 278,955 457,585
Other investments, excluding policy
loans:
Purchases (657,383) (555,647) (524,521)
Sales 406,684 579,038 335,765
Change in amounts due from brokers 182 8,073 2,647
Change in amounts due to brokers (47,294) (186,052) 119,471
-------------------------------------------------------------------------------
Net cash provided by (used in) investing
activities 208,423 390,114 (641,705)
CASH FLOWS FROM FINANCING ACTIVITIES:
-------------------------------------------------------------------------------
Activity related to universal life-type
insurance and investment contracts:
Considerations received 2,031,630 1,873,624 2,785,758
Surrenders and other benefits (3,669,759) (3,792,612) (3,736,242)
Interest credited to account balances 1,240,575 1,317,124 1,386,448
Universal life-type insurance policy
loans:
Issuance (102,239) (97,602) (84,835)
Repayment 67,881 67,000 54,513
Capital transaction with parent -- -- 7,232
Dividends paid (350,000) (240,000) (200,000)
-------------------------------------------------------------------------------
Net cash (used in) provided by financing
activities (781,912) (872,466) 212,874
-------------------------------------------------------------------------------
Net increase (decrease) in cash and cash
equivalents 9,880 2,767 (204,917)
Cash and cash equivalents at beginning
of year 22,453 19,686 224,603
-------------------------------------------------------------------------------
Cash and cash equivalents at end of year $ 32,333 $ 22,453 $ 19,686
-------------------------------------------------------------------------------
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY F-5
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ($ THOUSANDS)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS
IDS Life Insurance Company (the Company) is a stock life insurance company
organized under the laws of the State of Minnesota. The Company is a
wholly-owned subsidiary of American Express Financial Corporation (AEFC), which
is a wholly owned subsidiary of American Express Company. The Company serves
residents of all states except New York. IDS Life Insurance Company of New York
is a wholly owned subsidiary of the Company and serves New York State residents.
The Company also wholly owns American Enterprise Life Insurance Company,
American Centurion Life Assurance Company, American Partners Life Insurance
Company and American Express Corporation.
The Company's principal products are deferred annuities and universal life
insurance, which are issued primarily to individuals. It offers single premium
and flexible premium deferred annuities on both a fixed and variable dollar
basis. Immediate annuities are offered as well. The Company's insurance products
include universal life (fixed and variable), whole life, single premium life and
term products (including waiver of premium and accidental death benefits). The
Company also markets disability income and long-term care insurance.
BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries. All significant intercompany accounts
and transactions have been eliminated in consolidation.
The accompanying consolidated financial statements have been prepared in
conformity with accounting principles generally accepted in the United States
which vary in certain respects from reporting practices prescribed or permitted
by state insurance regulatory authorities (see Note 4).
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
INVESTMENTS
Fixed maturities that the Company has both the positive intent and the ability
to hold to maturity are classified as held to maturity and carried at amortized
cost. All other fixed maturities and all marketable equity securities are
classified as available for sale and carried at fair value. Unrealized gains and
losses on securities classified as available for sale are reported as a separate
component of accumulated other comprehensive (loss) income, net of the related
deferred policy acquisition costs effect and deferred taxes.
Realized investment gain or loss is determined on an identified cost basis.
Prepayments are anticipated on certain investments in mortgage-backed securities
in determining the constant effective yield used to recognize interest income.
Prepayment estimates are based on information received from brokers who deal in
mortgage-backed securities.
--------------------------------------------------------------------------------
F-6 IDS LIFE INSURANCE COMPANY
<PAGE>
Mortgage loans on real estate are carried at amortized cost less reserves for
mortgage loan losses. The estimated fair value of the mortgage loans is
determined by a discounted cash flow analysis using mortgage interest rates
currently offered for mortgages of similar maturities.
Impairment of mortgage loans is measured as the excess of a loan's recorded
investment over its present value of expected principal and interest payments
discounted at the loan's effective interest rate, or the fair value of
collateral. The amount of the impairment is recorded in a reserve for mortgage
loan losses. The reserve for mortgage loan losses is maintained at a level that
management believes is adequate to absorb estimated losses in the portfolio. The
level of the reserve account is determined based on several factors, including
historical experience, expected future principal and interest payments,
estimated collateral values, and current economic and political conditions.
Management regularly evaluates the adequacy of the reserve for mortgage
loan losses.
The Company generally stops accruing interest on mortgage loans for which
interest payments are delinquent more than three months. Based on management's
judgment as to the ultimate collectibility of principal, interest payments
received are either recognized as income or applied to the recorded investment
in the loan.
The cost of interest rate caps and floors is amortized to investment income over
the life of the contracts and payments received as a result of these agreements
are recorded as investment income when realized. The amortized cost of interest
rate caps and floors is included in other investments. Amounts paid or received
under interest rate swap agreements are recognized as an adjustment to
investment income.
The Company may purchase and write index options to hedge the fee income earned
on the management of equity securities in separate accounts and the underlying
mutual funds. These index options are carried at market value and are included
in other investments or other liabilities, as appropriate. Gains or losses on
index options that qualify as hedges are deferred and recognized in management
and other fees in the same period as the hedged fee income.
The Company also uses index options to manage the risks related to a certain
annuity product that pay interest based upon the relative change in a major
stock market index between the beginning and end of the product's term.
Purchased options used in conjunction with this product are reported in other
investments and written options are included in other liabilities. The
amortization of the cost of purchased options, the proceeds of written options
and the changes in intrinsic value of the contracts are included in net
investment income.
Policy loans are carried at the aggregate of the unpaid loan balances which do
not exceed the cash surrender values of the related policies.
When evidence indicates a decline, which is other than temporary, in the
underlying value or earning power of individual investments, such investments
are written down to the fair value by a charge to income.
STATEMENTS OF CASH FLOWS
The Company considers investments with a maturity at the date of their
acquisition of three months or less to be cash equivalents. These securities are
carried principally at amortized cost, which approximates fair value.
--------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY F-7
<PAGE>
Supplementary information to the consolidated statements of cash flows for the
years ended December 31 is summarized as follows:
<TABLE>
<CAPTION>
1999 1998 1997
-----------------------------------------------------------------
<S> <C> <C> <C>
Cash paid during the year for:
Income taxes $214,940 $215,003 $174,472
Interest on borrowings 4,521 14,529 8,213
</TABLE>
RECOGNITION OF PROFITS ON ANNUITY CONTRACTS AND INSURANCE POLICIES
Profits on fixed deferred annuities are recognized by the Company over the lives
of the contracts, using primarily the interest method. Profits represent the
excess of investment income earned from investment of contract considerations
over interest credited to contract owners and other expenses.
The retrospective deposit method is used in accounting for universal life-type
insurance. Under this method, profits are recognized over the lives of the
policies in proportion to the estimated gross profits expected to be realized.
Premiums on traditional life, disability income and long-term care insurance
policies are recognized as revenue when due, and related benefits and expenses
are associated with premium revenue in a manner that results in recognition of
profits over the lives of the insurance policies. This association is
accomplished by means of the provision for future policy benefits and the
deferral and subsequent amortization of policy acquisition costs.
Policyholder and contractholder charges include the monthly cost of insurance
charges, issue and administrative fees and surrender charges. These charges also
include the minimum death benefit guarantee fees received from the variable life
insurance separate accounts. Management and other fees include investment
management fees from underlying proprietary mutual funds and mortality and
expense risk fees received from the variable annuity and variable life insurance
separate accounts.
DEFERRED POLICY ACQUISITION COSTS
The costs of acquiring new business, principally sales compensation, policy
issue costs, underwriting and certain sales expenses, have been deferred on
insurance and annuity contracts. The deferred acquisition costs for most single
premium deferred annuities and installment annuities are amortized using
primarily the interest method. The costs for universal life-type insurance and
certain installment annuities are amortized as a percentage of the estimated
gross profits expected to be realized on the policies. For traditional life,
disability income and long-term care insurance policies, the costs are amortized
over an appropriate period in proportion to premium revenue.
Amortization of deferred policy acquisition costs requires the use of
assumptions including interest margins, mortality margins, persistency rates,
maintenance expense levels and, for variable products, separate account
performance. For universal life-type insurance and deferred annuities, actual
experience is reflected in the Company's amortization models monthly. As actual
experience differs from the current assumptions, management considers the need
to change key assumptions underlying the amortization models prospectively. The
impact of changing prospective assumptions is reflected in the period that such
changes are made and is generally referred to as an unlocking adjustment. During
1999, unlocking adjustments resulted in a net decrease in amortization of $56.8
million. Net unlocking adjustments in 1998 and 1997 were not significant.
LIABILITIES FOR FUTURE POLICY BENEFITS
Liabilities for universal-life type insurance and fixed and variable deferred
annuities are accumulation values.
--------------------------------------------------------------------------------
F-8 IDS LIFE INSURANCE COMPANY
<PAGE>
Liabilities for equity indexed deferred annuities are determined as the present
value of guaranteed benefits and the intrinsic value of index-based benefits.
Liabilities for fixed annuities in a benefit status are based on established
industry mortality tables and interest rates ranging from 5% to 9.5%, depending
on year of issue.
Liabilities for future benefits on traditional life insurance are based on the
net level premium method, using anticipated mortality, policy persistency and
interest earning rates. Anticipated mortality rates are based on established
industry mortality tables. Anticipated policy persistency rates vary by policy
form, issue age and policy duration with persistency on cash value plans
generally anticipated to be better than persistency on term insurance plans.
Anticipated interest rates range from 4% to 10%, depending on policy form, issue
year and policy duration.
Liabilities for future disability income and long-term care policy benefits
include both policy reserves and claim reserves. Policy reserves are based on
the net level premium method, using anticipated morbidity, mortality, policy
persistency and interest earning rates. Anticipated morbidity and mortality
rates are based on established industry morbidity and mortality tables.
Anticipated policy persistency rates vary by policy form, issue age, policy
duration and, for disability income policies, occupation class. Anticipated
interest rates for disability income and long-term care policy reserves are 3%
to 9.5% at policy issue and grade to ultimate rates of 5% to 7% over 5 to 10
years.
Claim reserves are calculated based on claim continuance tables and anticipated
interest earnings. Anticipated claim continuance rates are based on established
industry tables. Anticipated interest rates for claim reserves for both
disability income and long-term care range from 5% to 8%.
REINSURANCE
The maximum amount of life insurance risk retained by the Company is $750 on any
policy insuring a single life and $1,500 on any policy insuring a joint-life
combination. Beginning in 1999, the Company retains only 20% of the mortality
risk on new variable universal life insurance policies. Risk not retained is
reinsured with other life insurance companies, primarily on a yearly renewable
term basis. Long-term care policies are primarily reinsured on a coinsurance
basis. The Company retains all disability income and waiver of premium risk.
Beginning in 2000, the Company will retain all accidental death benefit risk.
FEDERAL INCOME TAXES
The Company's taxable income is included in the consolidated federal income tax
return of American Express Company. The Company provides for income taxes on a
separate return basis, except that, under an agreement between AEFC and American
Express Company, tax benefit is recognized for losses to the extent they can be
used on the consolidated tax return. It is the policy of AEFC and its
subsidiaries that AEFC will reimburse subsidiaries for all tax benefits.
Included in other liabilities at December 31, 1999 and 1998 are $852 receivable
from and $26,291 payable to, respectively, AEFC for federal income taxes.
SEPARATE ACCOUNT BUSINESS
The separate account assets and liabilities represent funds held for the
exclusive benefit of the variable annuity and variable life insurance contract
owners. The Company receives investment management fees from the proprietary
mutual funds used as investment options for variable annuities and variable life
insurance. The Company receives mortality and expense risk fees from the
separate accounts.
--------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY F-9
<PAGE>
The Company makes contractual mortality assurances to the variable annuity
contract owners that the net assets of the separate accounts will not be
affected by future variations in the actual life expectancy experience of the
annuitants and beneficiaries from the mortality assumptions implicit in the
annuity contracts. The Company makes periodic fund transfers to, or withdrawals
from, the separate account assets for such actuarial adjustments for variable
annuities that are in the benefit payment period. The Company also guarantees
that the rates at which administrative fees are deducted from contract funds
will not exceed contractual maximums.
For variable life insurance, the Company guarantees that the rates at which
insurance charges and administrative fees are deducted from contract funds will
not exceed contractual maximums. The Company also guarantees that the death
benefit will continue payable at the initial level regardless of investment
performance so long as minimum premium payments are made.
ACCOUNTING CHANGES
American Institute of Certified Public Accountants (AICPA) Statement of Position
(SOP) 98-1, "Accounting for Costs of Computer Software Developed or Obtained for
Internal Use" became effective January 1, 1999. The SOP requires the
capitalization of certain costs incurred after the date of adoption to develop
or obtain software for internal use. Software utilized by the Company is owned
by AEFC and capitalized by AEFC. As a result, the new rule did not have a
material impact on the Company's results of operations or financial condition.
Effective January 1, 1999, the Company adopted AICPA SOP 97-3, "Accounting by
Insurance and Other Enterprises for Insurance-Related Assessments," providing
guidance for the timing of recognition of liabilities related to guaranty fund
assessments. The Company had historically carried a liability for estimated
guaranty fund assessment exposure. Adoption of the SOP did not have a material
impact on the Company's results of operations or financial condition.
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities," which is effective January 1, 2001. This Statement
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts, and for
hedging activities. It requires the recognition of all derivatives as either
assets or liabilities on the balance sheet and measure those instruments at fair
value. The accounting for changes in the fair value of a derivative depends on
the intended use of the derivative and the resulting designation. The ultimate
financial effect of adoption of the new rule will depend on the derivatives in
place at adoption and cannot be estimated at this time.
2. INVESTMENTS
Fair values of investments in fixed maturities represent quoted market prices
and estimated values when quoted prices are not available. Estimated values are
determined by established procedures involving, among other things, review of
market indices, price levels of current offerings of comparable issues, price
estimates and market data from independent brokers and financial files.
--------------------------------------------------------------------------------
F-10 IDS LIFE INSURANCE COMPANY
<PAGE>
The amortized cost, gross unrealized gains and losses and fair values of
investments in fixed maturities and equity securities at December 31, 1999 are
as follows:
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
HELD TO MATURITY COST GAINS LOSSES VALUE
------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Government agency
obligations $ 37,613 $ 236 $ 2,158 $ 35,691
State and municipal
obligations 9,681 150 -- 9,831
Corporate bonds and
obligations 5,713,475 91,571 113,350 5,691,696
Mortgage-backed securities 1,395,523 4,953 31,951 1,368,525
------------------------------------------------------------------------------
$7,156,292 $96,910 $147,459 $7,105,743
------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
AVAILABLE FOR SALE COST GAINS LOSSES VALUE
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Government agency
obligations $ 46,325 $ 612 $ 2,231 $ 44,706
State and municipal
obligations 13,226 519 191 13,554
Corporate bonds and
obligations 7,960,352 60,120 560,450 7,460,022
Mortgage-backed securities 5,683,234 9,692 161,659 5,531,267
--------------------------------------------------------------------------------
Total fixed maturities 13,703,137 70,943 724,531 13,049,549
Equity securities 3,000 16 -- 3,016
--------------------------------------------------------------------------------
$13,706,137 $70,959 $724,531 $13,052,565
--------------------------------------------------------------------------------
</TABLE>
The amortized cost, gross unrealized gains and losses and fair values of
investments in fixed maturities and equity securities at December 31, 1998 are
as follows:
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
HELD TO MATURITY COST GAINS LOSSES VALUE
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Government agency
obligations $ 39,888 $ 4,460 $ -- $ 44,348
State and municipal
obligations 9,683 490 -- 10,173
Corporate bonds and
obligations 6,305,476 447,752 27,087 6,726,141
Mortgage-backed securities 1,609,067 30,458 152 1,639,373
-------------------------------------------------------------------------------
$7,964,114 $483,160 $27,239 $8,420,035
-------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY F-11
<PAGE>
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
AVAILABLE FOR SALE COST GAINS LOSSES VALUE
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Government agency
obligations $ 52,043 $ 3,324 $ -- $ 55,367
State and municipal
obligations 11,060 1,231 -- 12,291
Corporate bonds and
obligations 7,332,344 271,174 155,181 7,448,337
Mortgage-backed securities 5,949,502 151,511 3,869 6,097,144
--------------------------------------------------------------------------------
Total fixed maturities 13,344,949 427,240 159,050 13,613,139
Equity securities 3,000 158 -- 3,158
--------------------------------------------------------------------------------
$13,347,949 $427,398 $159,050 $13,616,297
--------------------------------------------------------------------------------
</TABLE>
The amortized cost and fair value of investments in fixed maturities at
December 31, 1999 by contractual maturity are shown below. Expected maturities
will differ from contractual maturities because borrowers may have the right to
call or prepay obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>
AMORTIZED FAIR
HELD TO MATURITY COST VALUE
----------------------------------------------------------------
<S> <C> <C>
Due in one year or less $ 238,740 $ 239,747
Due from one to five years 2,996,713 3,012,721
Due from five to ten years 1,922,199 1,893,918
Due in more than ten years 603,117 590,832
Mortgage-backed securities 1,395,523 1,368,525
----------------------------------------------------------------
$7,156,292 $7,105,743
----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
AMORTIZED FAIR
AVAILABLE FOR SALE COST VALUE
------------------------------------------------------------------
<S> <C> <C>
Due in one year or less $ 271,381 $ 274,415
Due from one to five years 595,747 592,533
Due from five to ten years 4,936,041 4,669,573
Due in more than ten years 2,216,734 1,981,761
Mortgage-backed securities 5,683,234 5,531,267
------------------------------------------------------------------
$13,703,137 $13,049,549
------------------------------------------------------------------
</TABLE>
During the years ended December 31, 1999, 1998 and 1997, fixed maturities
classified as held to maturity were sold with amortized cost of $68,470,
$230,036 and $229,848, respectively. Net gains and losses on these sales were
not significant. The sale of these fixed maturities was due to significant
deterioration in the issuers' credit worthiness.
Fixed maturities available for sale were sold during 1999 with proceeds of
$1,691,389 and gross realized gains and losses of $36,568 and $14,255,
respectively. Fixed maturities available for sale were sold during 1998 with
proceeds of $278,955 and gross realized gains and losses of $15,658 and $22,102,
respectively. Fixed maturities available for sale were sold during 1997 with
proceeds of $457,585 and gross realized gains and losses of $6,639 and $7,518,
respectively.
At December 31, 1999, bonds carried at $14,559 were on deposit with various
states as required by law.
--------------------------------------------------------------------------------
F-12 IDS LIFE INSURANCE COMPANY
<PAGE>
At December 31, 1999, investments in fixed maturities comprised 81 percent of
the Company's total invested assets. These securities are rated by Moody's and
Standard & Poor's (S&P), except for securities carried at approximately $3.7
billion which are rated by AEFC's internal analysts using criteria similar to
Moody's and S&P. A summary of investments in fixed maturities, at amortized
cost, by rating on December 31 is as follows:
<TABLE>
<CAPTION>
RATING 1999 1998
------------------------------------------------------------------
<S> <C> <C>
Aaa/AAA $ 7,144,280 $ 7,629,628
Aaa/AA 1,920 2,277
Aa/AA 301,728 308,053
Aa/A 314,168 301,325
A/A 2,598,300 2,525,283
A/BBB 1,014,566 1,148,736
Baa/BBB 6,319,549 6,237,014
Baa/BB 348,849 492,696
Below investment grade 2,816,069 2,664,051
------------------------------------------------------------------
$20,859,429 $21,309,063
------------------------------------------------------------------
</TABLE>
At December 31, 1999, 90 percent of the securities rated Aaa/AAA are GNMA, FNMA
and FHLMC mortgage-backed securities. No holdings of any other issuer are
greater than one percent of the Company's total investments in fixed maturities.
At December 31, 1999, approximately 14 percent of the Company's invested assets
were mortgage loans on real estate. Summaries of mortgage loans by region of the
United States and by type of real estate are as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1999 DECEMBER 31, 1998
ON BALANCE COMMITMENTS ON BALANCE COMMITMENTS
REGION SHEET TO PURCHASE SHEET TO PURCHASE
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
East North Central $ 715,998 $ 10,380 $ 750,705 $ 16,393
West North Central 555,635 42,961 491,006 81,648
South Atlantic 867,838 23,317 839,233 21,020
Middle Atlantic 428,051 1,806 476,448 6,169
New England 259,243 4,415 263,761 2,824
Pacific 238,299 3,466 195,851 16,946
West South Central 144,607 4,516 136,841 1,412
East South Central 43,841 -- 46,029 --
Mountain 381,148 9,380 345,379 8,473
----------------------------------------------------------------------------------
3,634,660 100,241 3,545,253 154,885
Less allowance for losses 28,283 -- 39,795 --
----------------------------------------------------------------------------------
$3,606,377 $100,241 $3,505,458 $154,885
----------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY F-13
<PAGE>
<TABLE>
<CAPTION>
DECEMBER 31, 1999 DECEMBER 31, 1998
ON BALANCE COMMITMENTS ON BALANCE COMMITMENTS
PROPERTY TYPE SHEET TO PURCHASE SHEET TO PURCHASE
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Department/retail stores $1,158,712 $ 33,829 $1,139,349 $ 59,305
Apartments 887,538 11,343 960,808 9,272
Office buildings 931,234 26,062 783,576 50,450
Industrial buildings 309,845 5,525 298,549 13,263
Hotels/motels 103,625 -- 109,185 14,122
Medical buildings 114,045 -- 124,369 --
Nursing/retirement homes 45,935 -- 46,696 --
Mixed use 66,893 -- 65,151 --
Other 16,833 23,482 17,570 8,473
----------------------------------------------------------------------------------
3,634,660 100,241 3,545,253 154,885
Less allowance for losses 28,283 -- 39,795 --
----------------------------------------------------------------------------------
$3,606,377 $100,241 $3,505,458 $154,885
----------------------------------------------------------------------------------
</TABLE>
Mortgage loan fundings are restricted by state insurance regulatory authorities
to 80 percent or less of the market value of the real estate at the time of
origination of the loan. The Company holds the mortgage document, which gives it
the right to take possession of the property if the borrower fails to perform
according to the terms of the agreement. Commitments to purchase mortgages are
made in the ordinary course of business. The fair value of the mortgage
commitments is $nil.
At December 31, 1999 and 1998, the Company's recorded investment in impaired
loans was $21,375 and $24,941, respectively, with allowances of $5,750 and
$6,662, respectively. During 1999 and 1998, the average recorded investment in
impaired loans was $23,815 and $37,873, respectively.
The Company recognized $1,190, $1,809 and $2,981 of interest income related to
impaired loans for the years ended December 31, 1999, 1998 and 1997
respectively.
The following table presents changes in the allowance for losses related to all
loans:
<TABLE>
<CAPTION>
1999 1998 1997
--------------------------------------------------------------
<S> <C> <C> <C>
Balance, January 1 $39,795 $38,645 $37,495
Provision (reduction) for
investment losses (9,512) 7,582 8,801
Loan payoffs (500) (800) (3,851)
Foreclosures and writeoffs (1,500) (5,632) (3,800)
--------------------------------------------------------------
Balance, December 31 $28,283 $39,795 $38,645
--------------------------------------------------------------
</TABLE>
At December 31, 1999, the Company had no commitments to purchase investments
other than mortgage loans.
--------------------------------------------------------------------------------
F-14 IDS LIFE INSURANCE COMPANY
<PAGE>
Net investment income for the years ended December 31 is summarized as follows:
<TABLE>
<CAPTION>
1999 1998 1997
-----------------------------------------------------------------------
<S> <C> <C> <C>
Interest on fixed maturities $1,598,059 $1,676,984 $1,692,481
Interest on mortgage loans 285,921 301,253 305,742
Other investment income 70,892 43,518 25,089
Interest on cash equivalents 5,871 5,486 5,914
-----------------------------------------------------------------------
1,960,743 2,027,241 2,029,226
Less investment expenses 41,170 40,756 40,837
-----------------------------------------------------------------------
$1,919,573 $1,986,485 $1,988,389
-----------------------------------------------------------------------
</TABLE>
Net realized gain (loss) on investments for the years ended December 31 is
summarized as follows:
<TABLE>
<CAPTION>
1999 1998 1997
--------------------------------------------------------------
<S> <C> <C> <C>
Fixed maturities $22,387 $12,084 $16,115
Mortgage loans 10,211 (5,933) (6,424)
Other investments (5,990) 751 (8,831)
--------------------------------------------------------------
$26,608 $ 6,902 $ 860
--------------------------------------------------------------
</TABLE>
Changes in net unrealized appreciation (depreciation) of investments for the
years ended December 31 are summarized as follows:
<TABLE>
<CAPTION>
1999 1998 1997
------------------------------------------------------------------
<S> <C> <C> <C>
Fixed maturities available for sale $(921,778) $(93,474) $223,441
Equity securities (142) (203) 53
</TABLE>
3. INCOME TAXES
The Company qualifies as a life insurance company for federal income tax
purposes. As such, the Company is subject to the Internal Revenue Code
provisions applicable to life insurance companies.
The income tax expense (benefit) for the years ended December 31 consists of the
following:
<TABLE>
<CAPTION>
1999 1998 1997
-----------------------------------------------------------------
<S> <C> <C> <C>
Federal income taxes:
Current $178,444 $244,946 $176,879
Deferred 79,796 (16,602) 19,982
-----------------------------------------------------------------
258,240 228,344 196,861
State income taxes-current 9,624 7,337 9,803
-----------------------------------------------------------------
Income tax expense $267,864 $235,681 $206,664
-----------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY F-15
<PAGE>
Increases (decreases) to the income tax provision applicable to pretax income
based on the statutory rate are attributable to:
<TABLE>
<CAPTION>
1999 1998 1997
PROVISION RATE PROVISION RATE PROVISION RATE
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Federal income taxes
based on the statutory
rate $316,511 35.0% $271,527 35.0% $238,319 35.0%
Tax-excluded interest and
dividend income (9,626) (1.1) (12,289) (1.6) (10,294) (1.5)
State taxes, net of
federal benefit 6,256 0.7 4,769 0.6 6,372 0.9
Affordable housing
credits (31,000) (3.4) (19,688) (2.5) (20,705) (3.0)
Other, net (14,277) (1.6) (8,638) (1.1) (7,028) (1.0)
-------------------------------------------------------------------------------
Total income taxes $267,864 29.6% $235,681 30.4% $206,664 30.4%
-------------------------------------------------------------------------------
</TABLE>
A portion of life insurance company income earned prior to 1984 was not subject
to current taxation but was accumulated, for tax purposes, in a policyholders'
surplus account. At December 31, 1999, the Company had a policyholders' surplus
account balance of $20,114. The policyholders' surplus account is only taxable
if dividends to the stockholder exceed the stockholder's surplus account or if
the Company is liquidated. Deferred income taxes of $7,040 have not been
established because no distributions of such amounts are contemplated.
Significant components of the Company's deferred tax assets and liabilities as
of December 31 are as follows:
<TABLE>
<CAPTION>
1999 1998
------------------------------------------------------------
<S> <C> <C>
Deferred tax assets:
Policy reserves $733,647 $756,769
Unrealized loss on available for sale
investments 221,431 --
Investments, other 1,873 --
Life insurance guaranty fund assessment
reserve 4,789 15,289
Other -- 4,253
------------------------------------------------------------
Total deferred tax assets 961,740 776,311
------------------------------------------------------------
Deferred tax liabilities:
Deferred policy acquisition costs 740,837 698,471
Unrealized gain on available for sale
investments -- 91,315
Investments, other -- 3,455
Other 4,883 --
------------------------------------------------------------
Total deferred tax liabilities 745,720 793,241
------------------------------------------------------------
Net deferred tax assets (liabilities) $216,020 $(16,930)
------------------------------------------------------------
</TABLE>
The Company is required to establish a valuation allowance for any portion of
the deferred tax assets that management believes will not be realized. In the
opinion of management, it is more likely than not that the Company will realize
the benefit of the deferred tax assets and, therefore, no such valuation
allowance has been established.
4. STOCKHOLDER'S EQUITY
Retained earnings available for distribution as dividends to the parent are
limited to the Company's surplus as determined in accordance with accounting
practices prescribed by state insurance regulatory authorities. Statutory
unassigned surplus
--------------------------------------------------------------------------------
F-16 IDS LIFE INSURANCE COMPANY
<PAGE>
aggregated $1,693,356 as of December 31, 1999 and $1,598,203 as of December 31,
1998 (see Note 3 with respect to the income tax effect of certain
distributions). In addition, any dividend distributions in 2000 in excess of
approximately $418,845 would require approval of the Department of Commerce of
the State of Minnesota.
Statutory net income for the years ended December 31 and capital and surplus as
of December 31 are summarized as follows:
<TABLE>
<CAPTION>
1999 1998 1997
-----------------------------------------------------------------------
<S> <C> <C> <C>
Statutory net income $ 478,173 $ 429,903 $ 379,615
Statutory capital and surplus 1,978,406 1,883,405 1,765,290
</TABLE>
5. RELATED PARTY TRANSACTIONS
The Company loans funds to AEFC under a collateral loan agreement. The balance
of the loan was $nil at December 31, 1999 and 1998. This loan can be increased
to a maximum of $75,000 and pays interest at a rate equal to the preceding
month's effective new money rate for the Company's permanent investments.
Interest income on related party loans totaled $nil, $nil and $103 in 1999, 1998
and 1997, respectively.
The Company participates in the American Express Company Retirement Plan which
covers all permanent employees age 21 and over who have met certain employment
requirements. Employer contributions to the plan are based on participants' age,
years of service and total compensation for the year. Funding of retirement
costs for this plan complies with the applicable minimum funding requirements
specified by ERISA. The Company's share of the total net periodic pension cost
was $223, $211 and $201 in 1999, 1998 and 1997, respectively.
The Company also participates in defined contribution pension plans of American
Express Company which cover all employees who have met certain employment
requirements. Company contributions to the plans are a percent of either each
employee's eligible compensation or basic contributions. Costs of these plans
charged to operations in 1999, 1998 and 1997 were $1,906, $1,503 and $1,245,
respectively.
The Company participates in defined benefit health care plans of AEFC that
provide health care and life insurance benefits to retired employees and retired
financial advisors. The plans include participant contributions and service
related eligibility requirements. Upon retirement, such employees are considered
to have been employees of AEFC. AEFC expenses these benefits and allocates the
expenses to its subsidiaries. The Company's share of postretirement benefits in
1999, 1998 and 1997 was $1,147, $1,352 and $1,330, respectively.
Charges by AEFC for use of joint facilities, technology support, marketing
services and other services aggregated $485,177, $411,337 and $414,155 for 1999,
1998 and 1997, respectively. Certain of these costs are included in deferred
policy acquisition costs.
6. COMMITMENTS AND CONTINGENCIES
At December 31, 1999, 1998 and 1997, traditional life insurance and universal
life-type insurance in force aggregated $89,271,957, $81,074,928 and $74,730,720
respectively, of which $8,281,576, $4,912,313 and $4,351,904 were reinsured at
the respective year ends. The Company also reinsures a portion of the risks
assumed under disability income and long-term care policies. Under all
reinsurance agreements, premiums ceded to reinsurers amounted to $76,970,
$66,378 and $60,495 and reinsurance recovered from reinsurers amounted to
$27,816, $20,982, and $19,042 for the years ended December 31, 1999, 1998 and
1997, respectively. Reinsurance contracts do not relieve the Company from its
primary obligation to policyholders.
--------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY F-17
<PAGE>
In January 2000, AEFC reached an agreement in principle to settle three
class-action lawsuits. The Company had been named as a co-defendant in all three
lawsuits. It is expected the settlement will provide $215 million of benefits to
more than 2 million class participants. The agreement in principle to settle
also provides for release by class members of all insurance and annuity market
conduct claims dating back to 1985 and is subject to a number of contingencies
including a definitive agreement and court approval. The settlement costs
allocated to the Company are included in the accompanying 1999 statement of
income and did not have a material impact on the Company's consolidated
financial position or results from operations.
The Company is named as a defendant in various other lawsuits. The outcome of
any litigation cannot be predicted with certainty. In the opinion of management,
however, the ultimate resolution of these lawsuits, taken in aggregate should
not have a material adverse effect on the Company's consolidated financial
position.
The IRS routinely examines the Company's federal income tax returns and is
currently completing the audit for the 1990 through 1992 tax years. Management
does not believe there will be a material adverse effect on the Company's
consolidated financial position as a result of this audit.
7. LINES OF CREDIT
The Company has available lines of credit with its parent aggregating $200,000
($100,000 committed and $100,000 uncommitted). The interest rate for any
borrowings is established by reference to various indices plus 20 to 45 basis
points, depending on the term. Borrowings outstanding under this agreement were
$50,000 uncommitted at December 31, 1999 and $nil at December 31, 1998.
8. DERIVATIVE FINANCIAL INSTRUMENTS
The Company enters into transactions involving derivative financial instruments
to manage its exposure to interest rate risk and equity market risk, including
hedging specific transactions. The Company does not hold derivative instruments
for trading purposes. The Company manages risks associated with these
instruments as described below.
Market risk is the possibility that the value of the derivative financial
instruments will change due to fluctuations in a factor from which the
instrument derives its value, primarily an interest rate or equity market index.
The Company is not impacted by market risk related to derivatives held for
non-trading purposes beyond that inherent in cash market transactions.
Derivatives held for purposes other than trading are largely used to manage risk
and, therefore, the cash flow and income effects of the derivatives are inverse
to the effects of the underlying transactions.
Credit risk is the possibility that the counterparty will not fulfill the terms
of the contract. The Company monitors credit risk related to derivative
financial instruments through established approval procedures, including setting
concentration limits by counterparty, and requiring collateral, where
appropriate. A vast majority of the Company's counterparties are rated A or
better by Moody's and Standard & Poor's.
Credit risk related to interest rate caps and floors and index options is
measured by the replacement cost of the contracts. The replacement cost
represents the fair value of the instruments.
The notional or contract amount of a derivative financial instrument is
generally used to calculate the cash flows that are received or paid over the
life of the agreement. Notional amounts are not recorded on the balance sheet.
Notional amounts far exceed the related credit risk.
--------------------------------------------------------------------------------
F-18 IDS LIFE INSURANCE COMPANY
<PAGE>
The Company's holdings of derivative financial instruments are as follows:
<TABLE>
<CAPTION>
NOTIONAL CARRYING FAIR TOTAL CREDIT
DECEMBER 31, 1999 AMOUNT AMOUNT VALUE EXPOSURE
----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets:
Interest rate caps $2,500,000 $ 9,685 $ 12,773 $12,773
Interest rate floors 1,000,000 602 319 319
Options purchased 180,897 49,789 61,745 61,745
Liabilities:
Options written 43,262 (1,677) (2,402) --
Off balance sheet:
Interest rate swaps 1,267,000 -- (17,582) --
------- -------- -------
$58,399 $ 54,853 $74,837
======= ======== =======
</TABLE>
<TABLE>
<CAPTION>
NOTIONAL CARRYING FAIR TOTAL CREDIT
DECEMBER 31, 1998 AMOUNT AMOUNT VALUE EXPOSURE
----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets:
Interest rate caps $3,400,000 $ 15,985 $ 4,256 $ 4,256
Interest rate floors 1,000,000 1,082 13,971 13,971
Options purchased 110,912 24,094 29,453 29,453
Liabilities:
Options purchased/written 265,454 (10,526) (11,062) --
Off balance sheet:
Interest rate swaps 1,667,000 -- (73,477) --
-------- -------- -------
$ 30,635 $(36,859) $47,680
======== ======== =======
</TABLE>
The fair values of derivative financial instruments are based on market values,
dealer quotes or pricing models. The interest rate caps, floors and swaps expire
on various dates from 2000 to 2003. The purchased and written options expire on
various dates from 2000 to 2006.
Interest rate caps, swaps and floors are used principally to manage the
Company's interest rate risk. These instruments are used to protect the margin
between interest rates earned on investments and the interest rates credited to
related annuity contract holders.
The Company also uses interest rate swaps to manage interest rate risk related
to the level of fee income earned on the management of fixed income securities
in separate accounts and the underlying mutual funds. The amount of fee income
received is based upon the daily market value of the separate account and mutual
fund assets. As a result, changing interest rate conditions could impact the
Company's fee income significantly. The Company entered into interest rate swaps
to hedge anticipated fee income for 1999 related to separate accounts and mutual
funds which invest in fixed income securities. Interest was reported in
management and other fees.
The Company offers an annuity product that pays interest based upon the relative
change in a major stock market index between the beginning and end of the
product's term. As a means of hedging its obligation under the provisions of
this product, the Company purchases and writes options on the major stock market
index.
--------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY F-19
<PAGE>
Index options are used to manage the equity market risk related to the fee
income that the Company receives from its separate accounts and the underlying
mutual funds. The amount of the fee income received is based upon the daily
market value of the separate account and mutual fund assets. As a result, the
Company's fee income could be impacted significantly by fluctuations in the
equity market. The Company entered into index option collars (combination of
puts and calls) to hedge anticipated fee income for 1999 and 1998 related to
separate accounts and mutual funds which invest in equity securities. Testing
demonstrated the impact of these instruments on the income statement closely
correlates with the amount of fee income the Company realizes. At December 31,
1999 deferred losses on purchased put and written call index options were $nil.
At December 31, 1998 deferred losses on purchased put and written call index
options were $2,933 and deferred gains on written call index options were
$7,435, respectively.
9. FAIR VALUES OF FINANCIAL INSTRUMENTS
The Company discloses fair value information for most on- and off-balance sheet
financial instruments for which it is practicable to estimate that value. Fair
values of life insurance obligations and all non-financial instruments, such as
deferred acquisition costs are excluded.
Off-balance sheet intangible assets, such as the value of the field force, are
also excluded. Management believes the value of excluded assets and liabilities
is significant. The fair value of the Company, therefore, cannot be estimated by
aggregating the amounts presented.
<TABLE>
<CAPTION>
1999 1998
CARRYING FAIR CARRYING FAIR
FINANCIAL ASSETS VALUE VALUE VALUE VALUE
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investments:
Fixed maturities (Note 2):
Held to maturity $ 7,156,292 $ 7,105,743 $ 7,964,114 $ 8,420,035
Available for sale 13,049,549 13,049,549 13,613,139 13,613,139
Mortgage loans on real
estate (Note 2) 3,606,377 3,541,958 3,505,458 3,745,617
Other:
Equity securities (Note 2) 3,016 3,016 3,158 3,158
Derivative financial
Instruments (Note 8) 60,076 74,837 41,161 47,680
Other 2,258 2,258 28,872 28,872
Cash and cash equivalents
(Note 1) 32,333 32,333 22,453 22,453
Separate account assets (Note
1) 35,894,732 35,894,732 27,349,401 27,349,401
</TABLE>
<TABLE>
<CAPTION>
1999 1998
CARRYING FAIR CARRYING FAIR
FINANCIAL LIABILITIES VALUE VALUE VALUE VALUE
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Future policy benefits for
fixed annuities $19,189,170 $18,591,859 $19,855,203 $19,144,838
Derivative financial
instruments (Note 8) 1,677 19,984 10,526 84,539
Separate account liabilities 31,869,184 31,016,081 25,005,732 24,179,115
</TABLE>
At December 31, 1999 and 1998, the carrying amount and fair value of future
policy benefits for fixed annuities exclude life insurance-related contracts
carried at $1,270,094 and $1,226,985, respectively, and policy loans of $92,895
and $90,115, respectively. The fair value of these benefits is based on the
status of the annuities at December 31, 1999 and 1998. The fair value of
deferred
--------------------------------------------------------------------------------
F-20 IDS LIFE INSURANCE COMPANY
<PAGE>
annuities is estimated as the carrying amount less any applicable surrender
charges and related loans. The fair value for annuities in non-life contingent
payout status is estimated as the present value of projected benefit payments at
rates appropriate for contracts issued in 1999 and 1998.
At December 31, 1999 and 1998, the fair value of liabilities related to separate
accounts is estimated as the carrying amount less any applicable surrender
charges and less variable insurance contracts carried at $4,025,548 and
$2,343,669, respectively.
10. YEAR 2000 (UNAUDITED)
The Year 2000 issue is the result of computer programs having been written using
two digits rather than four to define a year. Any programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than 2000. This could result in the failure of major systems or miscalculations,
which could have a material impact on the operations of the Company. All of the
major systems used by the Company are maintained by AEFC and are utilized by
multiple subsidiaries and affiliates of AEFC. The Company's businesses are
heavily dependent upon AEFC's computer systems and have significant interaction
with systems of third parties.
A comprehensive review of AEFC's computer systems and business processes,
including those specific to the Company, was conducted to identify the major
systems that could be affected by the Year 2000 issue. Steps were taken to
resolve potential problems including modification to existing software and the
purchase of new software. As of December 31, 1999, AEFC had completed its
program of corrective measures on its internal systems and applications,
including Year 2000 compliance testing. As of December 31, 1999, AEFC had also
completed an evaluation of the Year 2000 readiness of other third parties whose
system failures could have an impact on the Company's operations.
AEFC's Year 2000 project also included establishing Year 2000 contingency plans
for all key business units. Business continuation plans, which address business
continuation in the event of a system disruption, are in place for all key
business units. At December 31, 1999, these plans had been amended to include
specific Year 2000 considerations.
In assessing its Year 2000 initiatives and the results of actual production
since January 1, 2000, management believes no material adverse consequences were
experienced, and there was no material effect on the Company's business, results
of operations, or financial condition as a result of the Year 2000 issue.
--------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY F-21
