<PAGE>
PAGE 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 31 (File No. 2-57328)
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 23 (File No. 811-2686)
IDS TAX-EXEMPT BOND FUND, INC.
IDS Tower 10, Minneapolis, Minnesota 55440-0010
Leslie L. Ogg - 901 Marquette Ave., Suite 2810,
Minneapolis, MN 55402-3268
(612) 330-9283
Approximate Date of Proposed Public Offering:
It is proposed that this filing will become effective (check
appropriate box)
immediately upon filing pursuant to paragraph (b)
X on Jan. 28, 1994, pursuant to paragraph (b) of rule 485
60 days after filing pursuant to paragraph (a)
on (date), pursuant to paragraph (a) of rule 485
The Registrant has registered an indefinite number or amount of
securities under the Securities Act of 1933 pursuant to Section 24f
of the Investment Company Act of 1940. Registrant will file its
24f-2 Notice for the year ending Nov. 30, 1993, on or about Jan.
28, 1994.
<PAGE>
PAGE 2
Cross reference sheet showing location in the prospectus and
statement of additional information of the information called for
by the items enumerated in Parts A and B of Form N-1A.
Negative answers omitted from prospectus are so indicated.
<TABLE>
<CAPTION>
Page Number in
Page Number Statement of
Item No. in Prospectus Item No. Additional Information
<S> <C> <C> <C>
1 3 10 28
2 5 11 29
3(a) 7 12 NA
(b) NA
(c) 7-10 13(a) 30-32,51-60
(b) 31-32
4(a) 5,20-21,21 (c) NA
(b) 20-21 (d) 34
(c) 20-21
14(a) 22-23*
5(a) 22-23 (b) 22-23*
(b) 25 (c) 23*
(c) NA
(d) 23 15(a) NA
(e) 24-25 (b) NA
(f) 25 (c) 23*
6(a) 22 16(a) 25*
(b) NA (b) 44-45
(c) NA (c) NA
(d) NA (d) None
(e) 3 (e) NA
(f) 17 (f) 46-47
(g) 18 (g) NA
(h) 50
7(a) 24-25 (i) 45,50
(b) 9-10
(c) 14-16 17(a) 32-34
(d) 11 (b) 34
(e) NA (c) 32-34
(f) 24-25 (d) 34
(e) 34
8(a) 12
(b) NA 18(a) 22*
(c) 11 (b) NA
(d) 13
19(a) 38-41
9 NA (b) 36-37
(c) NA
20 43-44
21(a) 45-46
(b) 46
(c) NA
22(a) NA
(b) 34
23 63-65
*Designates page number in prospectus, which is hereby incorporated
in the Statement of Additional Information.
</TABLE>
<PAGE>
PAGE 3
IDS Tax-Exempt Bond Fund
Prospectus
Jan. 28, 1994
The goal of IDS Tax-Exempt Bond Fund, Inc. is to earn as much
current income exempt from federal income taxes as possible with
only modest risk to the shareholder's investment by investing
primarily in investment grade bonds and other debt securities.
This prospectus contains facts that can help you decide if the fund
is the right investment for you. Read it before you invest and
keep it for future reference.
Additional facts about the fund are in a Statement of Additional
Information (SAI), filed with the Securities and Exchange
Commission. The SAI, dated Jan. 28, 1994, is incorporated here by
reference. For a free copy contact IDS Shareholder Service.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
SHARES IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND SHARES ARE NOT FEDERALLY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD, OR ANY OTHER AGENCY.
IDS Shareholder Service
P.O. Box 534
Minneapolis, MN
55440-0534
612-671-3733
TTY: 800-846-4852
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PAGE 4
Table of contents
The fund in brief
Goal
Types of fund investments
Manager and distributor
Portfolio manager
Sales charge and fund expenses
Sales charge
Operating expenses
Performance
Financial highlights
Total returns
Yield
Key terms
How to buy, exchange or sell shares
How to buy shares
How to exchange shares
How to sell shares
Reductions of the sales charge
Waivers of the sales charge
Special shareholder services
Services
Quick telephone reference
Distributions and taxes
Dividend and capital gain distributions
Reinvestments
Taxes
Investment policies
Facts about investments and their risks
Valuing assets
How the fund is organized
Shares
Voting rights
Shareholder meetings
Directors and officers
Investment manager and transfer agent
Distributor
About IDS
General information
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PAGE 5
The fund in brief
Goal
IDS Tax-Exempt Bond Fund seeks to provide shareholders with as much
current income exempt from federal income taxes as possible with
only modest risk to the shareholder's investment. Because any
investment involves risk, achieving this goal cannot be guaranteed.
Only shareholders can change the goal.
Types of fund investments
The fund is a diversified mutual fund that invests primarily in
investment grade bonds and other debt securities issued by or on
behalf of state or local governmental units whose interest is
exempt from federal income tax. The fund also may invest in lower-
rated or unrated debt securities considered to be comparable to
investment grade securities, derivative instruments and money
market instruments. Some of the fund's investments may be
considered speculative and involve additional investment risks.
Manager and distributor
The fund is managed by IDS Financial Corporation (IDS), a provider
of financial services since 1894. IDS currently manages more than
$35 billion in assets for the IDS MUTUAL FUND GROUP. Shares of the
fund are sold through IDS Financial Services Inc., a wholly owned
subsidiary of IDS.
Portfolio manager
Terry L. Seierstad joined IDS in 1982 and serves as vice president
and investment officer of certificate investments and senior
portfolio manager. He has served as portfolio manager of
certificate investments since 1988. He was portfolio manager of
IDS Life Special Income Fund, Inc., from 1990 until 1992. He was
appointed portfolio manager of this fund in 1993.
Sales charge and fund expenses
Sales charge
When you buy shares, you pay a maximum sales charge of 5% of the
public offering price. This charge can be reduced, depending on
your total investments in IDS funds. See "Reductions of the sales
charge."
Shareholder transaction expenses
Maximum sales charge on purchases
(as a percent of offering price).................5%
Operating expenses
The fund pays certain expenses out of its assets; the expenses are
reflected in the fund's daily share price and dividends, and are
not charged directly to shareholder accounts. The following chart
gives a projection of these expenses -- based on historical
expenses.<PAGE>
PAGE 6
Annual fund operating expenses
(% of average daily net assets):
Management fee 0.53%
12b-1 fee 0.02%
Other expenses 0.08%
Total 0.63%
Example: Suppose for each year for the next 10 years, fund
expenses are as above and annual return is 5%. If you sold your
shares at the end of the following years, for each $1,000 invested,
you would pay total expenses of:
1 year 3 years 5 years 10 years
$56 $69 $83 $125
This example does not represent actual expenses, past or future.
Actual expenses may be higher or lower than those shown. Because
the fund pays annual distribution fees, shareholders who stay in
the fund for more than 20 years may indirectly pay an equivalent
of more than a 7.25% sales charge, the maximum permitted by the
National Association of Securities Dealers.
Fund expenses include fees paid to IDS for:
o managing its portfolio, providing investment research and
administrative services
o distribution (known as 12b-1 fees, after the federal rule that
authorizes them)
o transfer agent services, including handling shareholder
accounts and records.
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PAGE 7
<TABLE>
<CAPTION>
IDS Tax-Exempt Bond Fund, Inc.
Performance
Financial highlights
Fiscal period ended Nov. 30,
Per share income and capital changes*
1993 1992 1991** 1990 1989 1988 1987 1986 1985 1984
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value $3.98 $3.93 $3.88 $3.98 $3.96 $3.93 $4.25 $3.78 $3.43 $3.43
beginning of period
Income from investment operations:
Net investment income .22 .22 .22 .26 .28 .28 .29 .30 .31 .31
Net gains (losses) on .23 .11 .05 (.01) .17 .03 (.32) .47 .35 --
securities (both realized
and unrealized)
Total from investment .45 .33 .27 .25 .45 .31 (.03) .77 .66 .31
operations
Less distributions:
Dividends from net (.22) (.22) (.22) (.26) (.28) (.28) (.29) (.30) (.31) (.31)
investment income
Distributions from (.02) (.06) -- (.09) (.15) -- -- -- -- --
realized gains
Total distributions (.24) (.28) (.22) (.35) (.43) (.28) (.29) (.30) (.31) (.31)
Net asset value, $4.19 $3.98 $3.93 $3.88 $3.98 $3.96 $3.93 $4.25 $3.78 $3.43
end of period
Ratios/supplemental data
1993 1992 1991** 1990 1989 1988 1987 1986 1985 1984
Net assets, end of period $1,291 $1,273 $1,188 $1,094 $1,010 $927 $885 $885 $649 $479
(in millions)
Ratio of expenses to .63% .64% .60%+ .61% .61% .60% .61% .60% .63% .66%
average daily net assets
Ratio of net income to 5.54% 5.68% 6.11%+ 6.61% 6.90% 7.16% 7.32% 7.38% 8.78% 9.20%
average daily net assets
Portfolio turnover rate 43% 63% 69% 112% 96% 54% 37% 23% 33% 35%
(excluding short-term
securities)
Total return++ 11.7% 8.7% 8.3%+ 6.1% 12.1% 9.6% (2.6)% 23.7% 20.2% 8.2%
*For a share outstanding throughout the period. Rounded to the nearest cent.
**The fund's fiscal year-end was changed from Dec. 31 to Nov. 30, effective 1991.
+Adjusted to an annual basis.
++Total return does not reflect payment of a sales charge.
The information in this table has been audited by KPMG Peat
Marwick, independent auditors. The independent auditors' report and
additional information about the performance of the fund is
contained in the fund's annual report, which if not included with
this prospectus, may be obtained without charge.
</TABLE>
<PAGE>
PAGE 8
Total returns
Average annual total returns as of Nov. 30, 1993, on purchases made
1, 5 and 10 years earlier
Purchase 1 year 5 years 10 years
made ago ago ago
Tax-Exempt Bond + 6.1% +8.2% + 9.8%
Lehman Brothers +11.1% +9.9% +10.7%
Municipal Bond
Index
Cumulative total returns as of Nov. 30, 1993, on purchases made 1,
5 and 10 years earlier
Purchase 1 year 5 years 10 years
made ago ago ago
Tax-Exempt Bond + 6.1% +48.5% +155.0%
Lehman Brothers +11.1% +52.0% +175.5%
Municipal Bond
Index
These examples show total returns from hypothetical investments in
the fund. These returns are compared to those of a popular index
for the same periods.
For purposes of calculation, information about the fund assumes a
sales charge of 5%, makes no adjustments for taxes an investor may
have paid on the reinvested income and capital gains, and covers a
period of widely fluctuating securities prices. Returns shown
should not be considered a representation of the fund's future
performance.
The fund invests primarily in debt securities that may be different
from those in the index. The index reflects reinvestment of all
distributions and changes in market prices, but excludes brokerage
commissions or other fees.
Lehman Brothers Municipal Bond Index is made up of a representative
list of general obligation, revenue, insured and prefunded bonds.
The index is frequently used as a general measure of tax-exempt
bond market performance. However, the securities used to create
the index may not be representative of the bonds held in the fund.
Yield
The fund's SEC standardized yield for the 30-day period ended Nov.
30, 1993, was 4.68%.
The fund calculates this 30-day SEC standardized yield by dividing:
o net investment income per share deemed earned during a 30-day
period by
<PAGE>
PAGE 9
o the public offering price per share on the last day of the
period, and
o converting the result to a yearly equivalent figure.
The fund's non-standardized (distribution) yield was 5.29% for the
same 30-day period ended Nov. 30, 1993.
The fund computes distribution yield by dividing:
o the total dividends paid over the 30-day period by
o the sum of each day's public offering price for that period,
and
o converting the result to a yearly equivalent figure.
The fund also may calculate a tax equivalent yield by dividing the
tax-exempt portion of its yield by one minus a stated income tax
rate. A tax equivalent yield demonstrates the taxable yield
necessary to produce an after-tax yield equivalent to that of a
fund that invests in exempt obligations.
The fund's yield varies from day to day, mainly because share
values and offering prices (which are calculated daily) vary in
response to changes in interest rates. Net investment income
normally changes much less in the short run. Thus, when interest
rates rise and share values fall, yield tends to rise. When
interest rates fall, yield tends to follow.
Past yields should not be considered an indicator of future yields.
Key terms
Net asset value (NAV) - Value of a single fund share. It is the
total market value of all of a fund's investments and other assets,
less any liabilities, divided by the number of shares outstanding.
The NAV is the price you receive when you sell your shares. It
usually changes from day to day, and is calculated at the close of
business, normally 3 p.m. Central time, each business day (any day
the New York Stock Exchange is open). NAV generally declines as
interest rates increase and rises as interest rates decline.
Public offering price - Price at which you buy shares. It is the
NAV plus the sales charge. NAVs and public offering prices of IDS
funds are listed each day in major newspapers and financial
publications.
Investment income - Dividends and interest earned on securities
held by the fund.
Capital gains or losses - Increase or decrease in value of the
securities the fund holds. Gains are realized when securities that
have increased in value are sold. A fund also may have unrealized
gains or losses when securities increase or decrease in value but
are not sold.
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PAGE 10
Distributions - Payments to shareholders of two types: investment
income (dividends) and realized net long-term capital gains
(capital gains distributions).
Total return - Sum of all of your returns for a given period,
assuming you reinvest all distributions. Calculated by taking the
total value of shares you own at the end of the period (including
shares acquired by reinvestment), less the price of shares you
purchased at the beginning of the period.
Average annual total return - The annually compounded rate of
return over a given time period (usually two or more years) --
total return for the period converted to an equivalent annual
figure.
Yield - Net investment income earned per share for a specified time
period, divided by the offering price at the end of the period.
How to buy, exchange or sell shares
How to buy shares
If you're investing in this fund for the first time, you'll need to
set up an account. Your financial planner will help you fill out
and submit an application. Once your account is set up, you can
choose among several convenient ways to invest.
Important: When opening an account, you must provide IDS with your
correct Taxpayer Identification Number (Social Security or Employer
Identification number). See "Distributions and taxes."
When you buy shares for a new or existing account, the price you
pay per share is determined at the close of business on the day
your investment is received and accepted at the Minneapolis
headquarters.
Purchase policies
o Investments must be received and accepted in the Minneapolis
headquarters on a business day before 3 p.m. Central time to
be included in your account that day and to receive that day's
share price. Otherwise your purchase will be processed the
next business day and you will pay the next day's share price.
o The minimums allowed for investment may change from time to
time.
o Wire orders can be accepted only on days when your bank, IDS,
the fund and Norwest Bank Minneapolis are open for business.
o Wire purchases are completed when wired payment is received
and the fund accepts the purchase.
o IDS and the fund are not responsible for any delays that occur
in wiring funds, including delays in processing by the bank.
o You must pay any fee the bank charges for wiring.<PAGE>
PAGE 11
o The fund reserves the right to reject any application for any
reason.
<TABLE>
<CAPTION>
Three ways to invest
1
<S> <C> <C>
By regular account Send your check and application Minimum amounts
(or your name and account number Initial investment: $2,000
if you have an established account) Additional
to: investments: $ 100
IDS Financial Services Inc. Account balances: $ 300*
P.O. Box 74
Minneapolis, MN 55440-0074
Your financial planner will help
you with this process.
2
By scheduled Contact your financial planner Minimum amounts
investment plan to set up one of the following Initial investment: $100
scheduled plans: Additional
investments: $100/mo
o automatic payroll deduction Account balances: none
(on active plans of
o bank authorization monthly payments)
o direct deposit of
Social Security check
o other plan approved by the fund
3
By wire If you have an established account, If this information is not
you may wire money to: included, the order may be
rejected and all money
Norwest Bank Minneapolis received by the fund, less
Routing No. 091000019 any costs the fund or IDS
Minneapolis, MN incurs, will be returned
Attn: Domestic Wire Dept. promptly.
Give these instructions: Minimum amounts
Credit IDS Account #00-30-015 Each wire investment: $1,000
for personal account # (your
account number) for (your name).
*If your account balance falls below $300, IDS will ask you in writing to bring it up to $300 or establish a scheduled
investment plan. If you don't do so within 30 days, your shares can be redeemed and the proceeds mailed to you.
</TABLE>
How to exchange shares
You can exchange your shares of the fund at no charge for shares of
any other publicly offered fund in the IDS MUTUAL FUND GROUP
available in your state, except IDS Planned Investment Account.
For complete information, including fees and expenses, read the
prospectus carefully before exchanging into a new fund.
If your exchange request arrives at the Minneapolis headquarters
before the close of business, your shares will be redeemed at the
net asset value set for that day. The proceeds will be used to
purchase new fund shares the same day. Otherwise, your exchange
will take place the next business day at that day's net asset
value.
For tax purposes, an exchange represents a sale and purchase and
may result in a gain or loss. However, you cannot create a tax
loss (or reduce a taxable gain) by exchanging from the fund within
91 days of your purchase. For further explanation, see the SAI.
<PAGE>
PAGE 12
How to sell shares
You can sell (redeem) your shares at any time. IDS Shareholder
Service will mail payment within seven days after receiving your
request.
When you sell shares, the amount you receive may be more or less
than the amount you invested. Your shares will be redeemed at net
asset value at the close of business on the day your request is
accepted at the Minneapolis headquarters. If your request arrives
after the close of business, the price per share will be the net
asset value at the close of business on the next business day.
A redemption is a taxable transaction. If the fund's net asset
value when you sell shares is more or less than the cost of your
shares, you will have a gain or loss, which can affect your tax
liability.
<TABLE>
<CAPTION>
Two ways to request an exchange or sale of shares
1
<S> <C>
By letter Include in your letter:
o the name of the fund(s)
o your account number(s) (for exchanges, both funds must
Regular mail: be registered in the same ownership)
IDS Shareholder Service o your Taxpayer Identification Number (TIN)
Attn: Redemptions o the dollar amount or number of shares you want to
PO Box 534 exchange or sell
Minneapolis, MN o signature of all registered account owners
55440-0534 o for redemptions, indicate how you want your sales
proceeds delivered to you
o any paper certificates of shares you hold
Express mail:
IDS Shareholder Service
Attn: Redemptions
10th Floor
733 Marquette Ave
Minneapolis, MN 55402
2
By phone
IDS Telephone Transaction o The fund and IDS will honor any telephone exchange
Service or redemption request believed to be authentic and will
800-437-3133 or use reasonable procedures to confirm that they are.
(612) 671-3800 This includes asking identifying questions and tape
recording calls. So long as reasonable procedures are
followed, neither the fund nor IDS will be liable for
any loss resulting from fraudulent requests.
o Phone exchange and redemption privileges automatically
apply to all accounts except custodial, corporate or
qualified retirement accounts unless you request these
privileges NOT apply by writing IDS Shareholder
Service. Each registered owner must sign the request.
o IDS answers phone requests promptly, but you may
experience delays when call volume is high. If you are
unable to get through, use mail procedure as an
alternative.
<PAGE>
PAGE 13
o Phone privileges may be modified or discontinued at any
time.
Minimum amount
Redemption: $100
Maximum amount
Redemption: $50,000
</TABLE>
Exchange policies:
o You may make up to three exchanges within any 30-day period,
with each limited to $300,000. These limits do not apply to
scheduled exchange programs and certain employee benefit plans
or other arrangements through which one shareholder represents
the interests of several. Exceptions may be allowed with pre-
approval of the fund.
o If your exchange creates a new account, it must satisfy the
minimum investment amount for new purchases.
o Once we receive your exchange request, you cannot cancel it.
o Shares of the new fund may not be used on the same day for
another exchange.
o If your shares are pledged as collateral, the exchange will be
delayed until written approval is obtained from the secured
party.
o IDS and the fund reserve the right to reject any exchange,
limit the amount, or modify or discontinue the exchange
privilege, to prevent abuse or adverse effects on the fund and
its shareholders. For example, if exchanges are too numerous
or too large, they may disrupt the fund's investment
strategies or increase its costs.
Redemption policies:
o A "change of mind" option allows you to change your mind after
requesting a redemption and to use all or part of the proceeds
to buy new shares in the same account at the net asset value,
rather than the offering price on the date of a new purchase.
To do so, send a written request within 30 days of the date
your redemption request was received. Include your account
number and mention this option. This privilege may be limited
or withdrawn at any time, and it may have tax consequences.
o A telephone redemption request will not be allowed within 30
days of a phoned-in address change.
Important: If you request a redemption of shares you recently
purchased by a check or money order that is not guaranteed, the
fund will wait for your check to clear. Please expect a minimum of
10 days from the date of purchase before IDS mails a check to you.
(A check may be mailed earlier if your bank provides evidence
satisfactory to the fund and IDS that your check has cleared.)<PAGE>
PAGE 14
<TABLE>
<CAPTION>
Three ways to receive payment when you sell shares
1
<S> <C>
By regular or express mail o Mailed to the address of record.
o Payable to names listed on the account.
NOTE: The express mail delivery charges
you pay will vary depending on the
courier you select.
2
By wire o Minimum wire redemption: $1,000.
o Request that money be wired to your bank.
o Bank account must be in the same
ownership as the IDS account.
NOTE: Pre-authorization required. For
instructions, contact your financial
planner or IDS Shareholder Service.
3
By scheduled payout plan o Minimum payment: $50.
o Contact your financial planner or IDS
Shareholder Service to set up regular
payments to you on a monthly, bimonthly,
quarterly, semiannual or annual basis.
o Buying new shares while under a payout
plan may be disadvantageous because of
sales charges.
</TABLE>
Reductions of the sales charge
You pay a 5% sales charge on the first $50,000 of your total
investment and less on investments after the first $50,000:
Total investment Sales charge as a
percent of:*
Public Net
offering amount
price invested
Up to $50,000 5.0% 5.26%
Next $50,000 4.5 4.71
Next $150,000 4.0 4.17
Next $250,000 3.0 3.09
Next $500,000 2.0 2.04
Next $2,000,000 1.0 1.01
More than $3,000,000 0.5 0.50
* To calculate the actual sales charge on an investment greater
than $50,000, amounts for each applicable increment must be
totaled. See the SAI.
Your sales charge may be reduced, depending on the totals of:
o the amount you are investing in this fund now,
o the amount of your existing investment in this fund, if any,
and
<PAGE>
PAGE 15
o the amount you and your immediate family (spouse or unmarried
children under 21) are investing or have in other funds in the
IDS MUTUAL FUND GROUP that carry a sales charge.
Other policies that affect your sales charge:
o IDS Cash Management Fund, IDS Tax-Free Money Fund and IDS
Planned Investment Account do not carry sales charges.
However, you may count investments in these funds if you
acquired shares in them by exchanging shares from IDS funds
that carry sales charges.
o IRA purchases or other employee benefit plan purchases made
through a payroll deduction plan or through a plan sponsored
by an employer, association of employers, employee
organization or other similar entity, may be added together to
reduce sales charges for all shares purchased through that
plan.
For more details, see the SAI.
Waivers of the sales charge
Sales charges do not apply to:
o Current or retired trustees, directors, officers or employees
of the fund or IDS or its subsidiaries, their spouses and
unmarried children under 21.
o Current or retired IDS planners, their spouses and unmarried
children under 21.
o Qualified employee benefit plans* if the plan:
- has at least $1 million invested in funds of the IDS MUTUAL
FUND GROUP; or
- has 500 or more participants; or
- uses a daily transfer recordkeeping service offering
participants daily access to IDS funds.
(Participants in certain qualified plans for which the initial
sales charge is waived may be subject to a deferred sales charge of
up to 4% on certain redemptions. For more information, see the
SAI.)
o Trust companies or similar institutions, and charitable
organizations that meet the definition in Section 501(c)(3) of
the Internal Revenue Code*. These must have at least $1
million invested in funds of the IDS MUTUAL FUND GROUP.
o Purchases made within 30 days after a redemption of shares (1)
of an IDS product in a qualified plan subject to a deferred
sales charge or (2) in IDS Strategy Fund, up to the amount
redeemed. Send the fund a written request along with your
payment, indicating the amount of the redemption and the date
on which it occurred.<PAGE>
PAGE 16
o Purchases made with dividend or capital gain distributions
from another fund in the IDS MUTUAL FUND GROUP that has a
sales charge.
*Eligibility must be determined in advance by IDS. To do so,
contact your financial planner.
Special shareholder services
Services
To help you track and evaluate the performance of your investments,
IDS provides these services:
Quarterly statements listing all of your holdings and transactions
during the previous three months.
Yearly tax statements featuring average-cost-basis reporting of
capital gains or losses if you redeem your shares along with
distribution information - which simplifies tax calculations.
A personalized mutual fund progress report detailing returns on
your initial investment and cash-flow activity in your account. It
calculates a total return to reflect your individual history in
owning fund shares. This report is available from your financial
planner.
Quick telephone reference
IDS Telephone Transaction Service
Redemptions and exchanges, dividend payments or reinvestments and
automatic payment arrangements
National/Minnesota: 800-437-3133
Mpls./St. Paul area: 671-3800
IDS Shareholder Service
Fund performance, objectives and account inquiries
612-671-3733
TTY Service
For the hearing impaired
800-846-4852
IDS Infoline
Automated account information (TouchToneR phones only), including
current fund prices and performance, account values and recent
account transactions
National/Minnesota: 800-272-4445
Mpls./St. Paul area: 671-1630
<PAGE>
PAGE 17
Distributions and taxes
The fund distributes to shareholders investment income and net
capital gains. It does so to qualify as a regulated investment
company and to avoid paying corporate income and excise taxes.
Dividend and capital gains distributions will have tax consequences
you should know about.
Dividend and capital gain distributions
The fund distributes its net investment income (dividends and
interest earned on securities held by the fund, less operating
expenses) to shareholders of record monthly. Short-term capital
gains distributed are included in the investment income. Net
realized capital gains, if any, from selling securities are
distributed at the end of the calendar year. Before they're
distributed, net capital gains are included in the value of each
share. After they're distributed, the value of each share drops by
the per-share amount of the distribution. (If your distributions
are reinvested, the total value of your holdings will not change.)
Reinvestments
Dividends and capital gain distributions are automatically
reinvested in additional shares of the fund, unless:
o you request the fund in writing or by phone to pay
distributions to you in cash, or
o you direct the fund to invest your distributions in any
publicly available IDS fund for which you've previously opened
an account, except for IDS Planned Investment Account.
You pay no sales charge on shares purchased through reinvestment in
any IDS fund. The reinvestment price is the net asset value at
close of business on the day the distribution is paid. (Your
quarterly statement from IDS will confirm the amount invested and
the number of shares purchased.)
If you choose cash distributions, you will receive only those
declared after your request has been processed.
If the U.S. Postal Service cannot deliver the checks for the cash
distributions, we will reinvest the checks into your account at the
then-current net asset value and make future distributions in the
form of additional shares.
<PAGE>
PAGE 18
Taxes
Dividends distributed from interest earned on tax-exempt securities
(exempt-interest dividends) are exempt from federal income taxes
but may be subject to state and local taxes. Dividends distributed
from other income earned and capital gain distributions are not
exempt from federal income taxes. Distributions are taxable in the
year the fund pays them regardless of whether you take them in cash
or reinvest them.
Each January, IDS sends you a statement showing the kinds and total
amount of all distributions you received during the previous year.
You must report all distributions on your tax returns, even if they
are reinvested in additional shares.
Interest on certain private activity bonds is a preference item for
purposes of the individual and corporate alternative minimum taxes.
To the extent a fund earns such income, it will flow through to its
shareholders and may be taxable to those shareholders who are
subject to the alternative minimum tax.
Because interest on municipal bonds and notes is tax-exempt for
federal income tax purposes, any interest on borrowed money used
directly or indirectly to purchase fund shares is not deductible on
your federal income tax return. You should consult a tax adviser
regarding its deductibility for state and local income tax
purposes.
"Buying a dividend" creates a tax liability. This means buying
shares shortly before an income or a capital gain distribution.
You pay the full pre-distribution price for the shares, then
receive a portion of your investment back as a distribution, which
is taxable.
Redemptions and exchanges subject you to a tax on any capital gain.
If you sell shares for more than their cost, the difference is a
capital gain. Your gain may be either short term (for shares held
for one year or less) or long term (for shares held for more than
one year).
Your Taxpayer Identification Number (TIN) is important. As with
any financial account you open, you must list your current and
correct Taxpayer Identification Number (TIN) -- either your Social
Security or Employer Identification number. The TIN must be
certified under penalties of perjury on your application when you
open an account at IDS.
<PAGE>
PAGE 19
If you don't provide the TIN to IDS, or the TIN you report is
incorrect, you could be subject to backup withholding of 31% of
taxable distributions and proceeds from certain sales and
exchanges. You also could be subject to further penalties, such
as:
o a $50 penalty for each failure to supply your correct TIN
o a civil penalty of $500 if you make a false statement that
results in no backup withholding
o criminal penalties for falsifying information
You also could be subject to backup withholding because you failed
to report interest or dividends on your tax return as required.
How to determine the correct TIN
Use the Social Security or
Employer Identification number
For this type of account: of:
Individual or joint accounts The individual or first person
listed on the account
Custodian account of a minor The minor
(Uniform Gift/Transfer to Minors
Act)
A living trust The grantor-trustee (the person
who puts the money into the
trust)
An irrevocable trust, pension The legal entity (not the
trust or estate personal representative or
trustee, unless no legal entity
is designated in the account
title)
Sole proprietorship or The owner or partnership
partnership
Corporate The corporation
Association, club or The organization
tax-exempt organization
For details on TIN requirements, ask your financial planner or
local IDS office for federal Form W-9, "Request for Taxpayer
Identification Number and Certification."
Important: This information is a brief and selective summary of
certain federal tax rules that apply to this fund. Tax matters are
highly individual and complex, and you should consult a qualified
tax adviser about your personal situation.
<PAGE>
PAGE 20
Investment policies
Under normal market conditions, the fund will invest at least 80%
of its total assets in bonds and other debt securities issued by or
on behalf of state or local governmental units whose interest, in
the opinion of counsel for the issuer, is exempt from federal
income tax. This policy may not be changed without shareholder
vote. This fund does not intend to purchase bonds or other debt
securities the interest from which is subject to the alternative
minimum tax. Other investments may include derivative instruments
and money market instruments.
The various types of investments the portfolio manager uses to
achieve investment performance are described in more detail in the
next section and in the SAI.
Facts about investments and their risks
Bonds and other debt securities exempt from federal income taxes:
The price of investment grade bonds fluctuate as interest rates
change or if its credit rating is upgraded or downgraded. At least
75% of its bonds and other debt securities must be rated in the top
four grades by Moody's Investors Service, Inc., Standard & Poor's
Corporation, Fitch Investors Service or comparable ratings given by
other independent rating agencies. The other 25% may be in rated
or non-rated issues that the fund's portfolio manager believes are
of comparable quality. All industrial revenue bonds must be rated.
Derivative instruments: The portfolio manager may use derivative
instruments in addition to securities to achieve investment
performance. Derivative instruments include futures, options and
forward contracts. Such instruments may be used to maintain cash
reserves while remaining fully invested, to offset anticipated
declines in values of investments to facilitate trading, to reduce
transaction costs, or to pursue higher investment returns.
Derivative instruments are characterized by requiring little or no
initial payment and a daily change in price based on or derived
from a security, a currency, a group of securities or currencies,
or an index. A number of strategies or combination of instruments
can be used to achieve the desired investment performance
characteristics. A small change in the value of the underlying
security, currency or index will cause a sizable gain or loss in
the price of the derivative instrument. Derivative instruments
allow the portfolio manager to change the investment performance
characteristics very quickly and at lower costs. Risks include
losses of premiums, rapid changes in prices, defaults by other
parties, and inability to close such instruments. The fund will
use derivative instruments only to achieve the same investment
performance characteristics it could achieve by directly holding
those securities and currencies permitted under the investment
policies. Subject to SEC guidelines, the fund will set aside cash
or appropriate liquid assets in a segregated account to cover its
portfolio obligations. No more than 5% of the fund's net assets <PAGE>
PAGE 21
can be used at any one time for good faith deposits on futures and
premiums for options on futures that do not offset existing
investment positions. The use of derivative instruments may
produce taxable income. For further information, see the options
and futures appendix in the SAI.
Securities and derivative instruments that are illiquid: Illiquid
means the security or derivative instrument cannot be sold quickly
in the normal course of business. Some investments cannot be
resold to the U.S. public because of their terms or government
regulations. All securities and derivative instruments, however,
can be sold in private sales, and many may be sold to other
institutions and qualified buyers or on foreign markets. The
portfolio manager will follow guidelines established by the board
of directors and consider relevant factors such as the nature of
the security and the number of likely buyers when determining
whether a security is illiquid. No more than 10% of the fund's net
assets will be held in securities and derivative instruments that
are illiquid.
Money market instruments: Short-term tax-exempt debt securities
rated in the top two grades are used to meet daily cash needs and
at various times to hold assets until better investment
opportunities arise. Under extraordinary conditions where, in the
opinion of the portfolio manager, appropriate short-term tax-exempt
securities are not available, the fund is authorized to make
certain taxable investments as described in the SAI.
The investment policies described above may be changed by the board
of directors.
Valuing assets
o Securities (except bonds) and assets with available market
values are valued on that basis.
o Securities maturing in 60 days or less are valued at amortized
cost.
o Bonds and assets without readily available market values are
valued according to methods selected in good faith by the
board of directors.
How the fund is organized
The fund is a diversified, open-end management investment company,
as defined in the Investment Company Act of 1940. Originally
incorporated on Sept. 30, 1976 in Nevada, the fund changed its
state of incorporation on June 13, 1986 by merging into a Minnesota
corporation incorporated on April 7, 1986. The fund headquarters
are at 901 S. Marquette Ave., Suite 2810, Minneapolis, MN 55402-
3268.
<PAGE>
PAGE 22
Shares
The fund is owned by its shareholders. All shares issued by the
fund are of the same class -- capital stock. Par value is 1 cent
per share. Both full and fractional shares can be issued.
The fund no longer issues stock certificates.
Voting rights
As a shareholder, you have voting rights over the fund's management
and fundamental policies. You are entitled to one vote for each
share you own.
Shareholder meetings
The fund does not hold annual shareholder meetings. However, the
directors may call meetings at their discretion, or on demand by
holders of 10% or more of the outstanding shares, to elect or
remove directors.
Directors and officers
Shareholders elect a board of directors who oversee the operations
of the fund and choose its officers. Its officers are responsible
for day-to-day business decisions based on policies set by the
board. The board has named an executive committee that has
authority to act on its behalf between meetings. The directors
also serve on the boards of all of the other funds in the IDS
MUTUAL FUND GROUP, except for Mr. Dudley, who is a director of all
publicly offered funds.
Directors and officers of the fund
President and interested director
William R. Pearce
President of all funds in the IDS MUTUAL FUND GROUP.
Independent directors
Robert F. Froehlke
Former president of all funds in the IDS MUTUAL FUND GROUP.
Donald M. Kendall
Former chairman and chief executive officer, PepsiCo, Inc.
Melvin R. Laird
Senior counsellor for national and international affairs, The
Reader's Digest Association, Inc.
Lewis W. Lehr
Former chairman and chief executive officer, Minnesota Mining and
Manufacturing Company (3M).
<PAGE>
PAGE 23
Edson W. Spencer
Former chairman and chief executive officer, Honeywell, Inc.
Wheelock Whitney
Chairman, Whitney Management Company.
Interested directors who are partners in law firms that have
represented IDS subsidiaries
Anne P. Jones
Partner, law firm of Sutherland, Asbill & Brennan.
Aulana L. Peters
Partner, law firm of Gibson, Dunn & Crutcher.
Interested directors who are officers and/or employees of IDS
William H. Dudley
Executive vice president, IDS.
David R. Hubers
President and chief executive officer, IDS.
John R. Thomas
Senior vice president, IDS.
Other officer
Leslie L. Ogg
Vice president of all funds in the IDS MUTUAL FUND GROUP and
general counsel and treasurer of the publicly offered funds.
Refer to the SAI for the directors' and officers' biographies.
Investment manager and transfer agent
The fund pay IDS for managing its portfolio, providing
administrative services and serving as transfer agent (handling
shareholder accounts).
Under its Investment Management and Services Agreement, IDS
determines which securities will be purchased, held or sold
(subject to the direction and control of the fund's board of
directors). For these services the fund pays IDS a two-part fee.
<PAGE>
PAGE 24
The first part is based on the combined average daily net assets of
all funds in the IDS MUTUAL FUND GROUP, as follows:
Net assets of
IDS MUTUAL Annual
FUND GROUP* fee
First $5 billion 0.46%
Each additional Decreasing
$5 billion percentages
More than $50 billion 0.32%
*Includes all funds except the money market funds.
The second part is equal to 0.13% of the fund's average daily net
assets during the fiscal year.
For the fiscal year ended Nov. 30, 1993, the fund paid IDS a total
investment management fee of 0.53% of its average daily net assets.
Under the Agreement, the fund also pays taxes, brokerage
commissions and nonadvisory expenses.
In addition, under a separate Transfer Agency Agreement, IDS
maintains shareholder accounts and records. The fund pays IDS an
annual fee of $15.50 per shareholder account for this service.
Distributor
The fund sells shares through IDS Financial Services Inc., a wholly
owned subsidiary of IDS, under a Distribution Agreement. Financial
planners representing IDS Financial Services Inc. provide
information to investors about individual investment programs, the
fund and its operations, new account applications, exchange and
redemption requests. The cost of these services is paid partially
by the fund's sales charge.
Portions of sales charges may be paid to securities dealers who
have sold the fund's shares, or to banks and other financial
institutions. The proceeds paid to others range from 0.8% to 4% of
the fund's offering price depending on the monthly sales volume.
To help defray costs not covered by sales charges, including costs
for marketing, sales administration, training, overhead, direct
marketing programs, advertising and related functions, the fund
pays IDS a 12b-1 fee. This fee is paid under a Plan and
Supplemental Agreement of Distribution that follows the terms of
Rule 12b-1 of the Investment Company Act of 1940 (and a Securities
and Exchange Commission order). Under this Agreement, the fund
pays IDS $6 per shareholder account per year. The total 12b-1 fee
paid by the fund for the year ended Nov. 30, 1993 was 0.02% of its
average daily net assets. This fee will not cover all of the costs
incurred by IDS.
<PAGE>
PAGE 25
Total management and distribution fees and expenses paid by the
fund in the fiscal year ended Nov. 30, 1993 were 0.63% of its
average daily net assets.
Total fees and expenses (excluding taxes and brokerage commissions)
cannot exceed the most restrictive applicable state expense
limitation.
About IDS
General information
The IDS family of companies offers not only mutual funds but also
insurance, annuities, investment certificates and a broad range of
financial management services.
Besides managing investments for all publicly offered funds in the
IDS MUTUAL FUND GROUP, IDS also manages investments for itself and
its subsidiaries, IDS Certificate Company and IDS Life Insurance
Company. Total assets under management on Nov. 30, 1993 were more
than $97 billion.
IDS Financial Services Inc. serves individuals and businesses
through its nationwide network of more than 175 offices and more
than 7,500 planners.
Other IDS subsidiaries provide investment management and related
services for pension, profit sharing, employee savings and
endowment funds of businesses and institutions.
IDS is located at IDS Tower 10, Minneapolis, MN 55440-0010. It is
a wholly owned subsidiary of American Express Company, a financial
services company with headquarters at American Express Tower, World
Financial Center, New York, NY 10285. The fund may pay brokerage
commissions to broker-dealer affiliates of American Express and
IDS.
<PAGE>
PAGE 26
Appendix
1994 Federal Tax-Exempt and Taxable Equivalent Yield Calculation
These tables will help you determine your federal taxable yield
equivalents for given rates of tax-exempt income.
Step 1: calculating your marginal tax rate.
Using your Taxable Income and Adjusted Gross Income figures as
guides, you can locate your Marginal Tax Rate in the table below.
First locate your Taxable Income in a filing status and income
range in the left-hand column. Then, locate your Adjusted Gross
Income at the top of the chart. At the point where your Taxable
Income line meets your Adjusted Gross Income column the percentage
indicated is an approximation of your Marginal Tax Rate. For
example: Let's assume you are married filing jointly, your taxable
income is $138,000 and your adjusted gross income is $175,000.
Under Taxable Income married filing jointly status, $138,000 is in
the $91,850-$140,000 range. Under Adjusted Gross Income, $175,000
is in the $167,700 to $290,200 column. The Taxable Income line and
Adjusted Gross Income column meet at 33.15%. This is the rate
you'll use in Step 2.
<TABLE>
<CAPTION>
Adjusted gross income
Taxable Income** $0 $111,800 $167,700 Over
to to to
$111,800(1) $167,700(2) $290,200(3) $290,200(2)
Married Filing Jointly
<S> <C> <C> <C> <C>
$ 0-$ 38,000 15.00%
38,000 - 91,850 28.00 28.84%
91,850 - 140,000 31.00 31.93 33.15%
140,000 - 250,000 36.00 37.08 38.49 37.08%
250,000+ 39.60 42.34*** 40.79
$0 $111,800 Over
to to
$111,800(1) $234,300(3) $234,950(2)
Single
$ 0-$ 22,700 15.00%
22,700 - 55,100 28.00
55,100 - 115,000 31.00 32.54%
115,000 - 250,000 36.00 37.79 37.08%
250,000+ 39.60 40.79
*Gross income with certain adjustments before taking itemized deductions and
personal exemptions.
**Amount subject to federal income tax after itemized deductions and personal
exemptions.
***This rate is applicable only in the limited case where your adjusted gross income is less than $290,200 and your taxable
income exceeds $250,000.
(1)No Phase-out - Assumes no phase-out of itemized deductions or personal
exemptions.
(2) Itemized Deductions Phase-out - Assumes a single taxpayer has one personal exemption and joint taxpayers have two
personal exemptions.
(3)Itemized Deductions and Personal Exemption Phase-outs - Assumes a single taxpayer has one personal exemption, joint
taxpayers have two personal exemptions and itemized deductions continue to phase-out.
If these assumptions do not apply to you, it will be necessary to construct your own personalized tax equivalency table.
/TABLE
<PAGE>
PAGE 27
Step 2: Determining your federal taxable yield equivalents
Using 33.15 percent, you may determine that a tax-exempt yield of 3
percent is equivalent to earning a taxable 4.49 percent yield.
<TABLE>
<CAPTION>
For these Tax-Exempt Rates:
3.00% 3.50% 4.00% 4.50% 5.00% 5.50% 6.00% 6.50%
Marginal Tax Rates Equal the Taxable Rates shown below:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
15.00% 3.53% 4.12% 4.71% 5.29% 5.88% 6.47% 7.06% 7.65%
28.00 4.17 4.86 5.56 6.25 6.94 7.64 8.33 9.03
28.84 4.22 4.92 5.62 6.32 7.03 7.73 8.43 9.13
31.00 4.35 5.07 5.80 6.52 7.25 7.97 8.70 8.42
31.93 4.41 5.14 5.88 6.61 7.35 8.08 8.81 9.55
32.54 4.45 5.19 5.93 6.67 7.41 8.15 8.89 9.63
33.15 4.49 5.24 5.98 6.73 7.48 8.23 8.98 9.72
36.00 4.69 5.47 6.25 7.03 7.81 8.59 9.38 10.16
37.08 4.77 5.56 6.36 7.15 7.95 8.74 9.54 10.33
37.79 4.82 5.63 6.43 7.23 8.04 8.84 9.64 10.44
38.49 4.88 5.69 6.50 7.32 8.13 8.94 9.75 10.57
39.60 4.97 5.79 6.62 7.45 8.28 9.11 9.93 10.76
40.79 5.07 5.91 6.76 7.60 8.44 9.41 10.27 11.12
42.34 5.20 6.07 6.94 7.80 8.67 9.54 10.41 11.27
</TABLE>
<PAGE>
PAGE 28
STATEMENT OF ADDITIONAL INFORMATION
FOR
IDS TAX-EXEMPT BOND FUND
Jan. 28, 1994
This Statement of Additional Information (SAI) is not a prospectus.
It should be read together with the fund's prospectus and the
financial statements contained in the fund's Annual Report which
may be obtained from your IDS personal financial planner or by
writing to IDS Shareholder Service, P.O. Box 534, Minneapolis, MN
55440-0534.
This SAI is dated Jan. 28, 1994, and it is to be used with the
fund's prospectus dated Jan. 28, 1994, and the fund's Annual Report
for the fiscal year ended Nov. 30, 1993.
<PAGE>
PAGE 29
TABLE OF CONTENTS
Goal and Investment Policies........................See Prospectus
Additional Investment Policies................................p. 3
Portfolio Transactions........................................p. 5
Performance Information.......................................p. 7
Valuing Fund Shares...........................................p. 9
Investing in the Fund.........................................p. 11
Redeeming Shares..............................................p. 14
Pay-out Plans.................................................p. 14
Taxes.........................................................p. 16
Agreements....................................................p. 17
Directors and Officers........................................p. 20
Custodian.....................................................p. 23
Independent Auditors..........................................p. 23
Financial Statements..............................See Annual Report
Prospectus....................................................p. 23
Appendix A: Description of Bond Ratings and
Short-term Securities............................p. 24
Appendix B: Options and Interest Rate Futures Contracts......p. 28
Appendix C: Dollar-Cost Averaging............................p. 34
<PAGE>
PAGE 30
ADDITIONAL INVESTMENT POLICIES
In addition to the investment goal and policies presented in the
prospectus, the fund has investment policies stated below that will
not be changed unless holders of a majority of the outstanding
shares agree to make the change.
These policies state the fund will not:
'Invest more than 5% of its total assets, at market value, in
securities of any one company, government or political subdivision
thereof, except the limitation will not apply to investments in
securities issued by the U.S. government, its agencies or
instrumentalities, and except that up to 25% of the fund's total
assets may be invested without regard to this 5% limitation. For
purposes of this policy, the terms of a municipal security
determine the issuer.
'Pledge or mortgage the fund's assets beyond 30% of the cost of
total assets. If the fund were ever to do so, valuation of the
pledged or mortgaged assets would be based on market values. For
purposes of this restriction, collateral arrangements for margin
deposits on interest rate futures contracts are not deemed to be a
pledge of assets.
'Borrow money or property, except as a temporary measure for
extraordinary or emergency purposes, in an amount not exceeding
one-third of the market value of its total assets (including
borrowings) less liabilities (other than borrowings) immediately
after the borrowing. The fund has not borrowed in the past and has
no present intention to borrow.
'Make cash loans. The fund, however, may make short-term
investments up to 10% of its net assets in debt securities where
the sellers agree to repurchase the securities at cost plus an
agreed-upon interest rate within a specified time.
'Invest in real estate, but the fund can invest in municipal bonds
and notes that are secured by real estate.
'Act as an underwriter (sell securities for others). However,
under the securities laws, the fund may be deemed to be an
underwriter when it purchases securities directly from the issuer
and later resells them.
'Invest more than 5% of its total assets, at cost, in securities
whose issuer or guarantor of principal and interest, including any
predecessors, has been in operation for less than three years.
'Invest in voting securities, securities of investment companies,
or exploration or development programs, such as oil, gas or mineral
programs.
<PAGE>
PAGE 31
'Buy on margin or sell short, except that it may enter into
interest rate futures contracts.
'Buy or sell commodities, except the fund may enter into interest
rate futures contracts and make margin deposits on such contracts.
'Lend portfolio securities in excess of 30% of its net assets, at
market value. In making such loans, the fund gets the market price
in cash, U.S. government securities, letters of credit or such
other collateral as may be permitted by regulatory agencies and
approved by the board of directors. If the market price of the
loaned securities goes up, the fund will get additional collateral.
Such loans are callable at the discretion of the fund. The fund
has not loaned securities in the past and has no present intention
of making such loans. The risks are that the borrower may not
provide additional collateral when required or return the
securities when due.
Unless changed by the board of directors, the fund will not:
'Invest in illiquid securities and derivative instruments if,
immediately after making such an investment, more than 10% of the
fund's net assets, at market, would be invested in such securities.
In determining the liquidity of municipal lease obligations, the
investment manager, under guidelines established by the board of
directors, will consider the essential nature of the lease
property, the likelihood that the municipality will continue
appropriating funding for the leased property, and other relevant
factors related to the general credit quality of the municipality
and the marketability of the municipal lease obligation.
The fund may invest in commercial paper issued in transactions not
involving a public offering under Section 4(2) of the Securities
Act of 1933 (4(2) paper). In determining the liquidity of 4(2)
paper, the investment manager, under guidelines established by the
board of directors, will evaluate relevant factors such as the
issuer and the size and nature of its commercial paper programs,
the willingness and ability of the issuer or dealer to repurchase
the paper, and the nature of the clearance and settlement
procedures for the paper.
For daily operations, the fund may invest its excess cash in short-
term tax-exempt securities. Under extraordinary conditions, where,
in the opinion of the investment manager, appropriate short-term
tax-exempt securities are not available, the fund is authorized to
make certain taxable investments as described in this SAI.
<PAGE>
PAGE 32
The fund may purchase some debt securities on a when-issued basis,
which means that it may take as long as 45 days after the purchase
before the securities are delivered to the fund. Payment and
interest terms, however, are fixed at the time the purchaser enters
into the commitment. Under normal market conditions, the fund does
not intend to commit more than 5% of its total assets to these
practices. The fund does not pay for the securities or start
earning interest on them until the contractual settlement date.
When-issued securities are subject to market fluctuations and may
affect the fund's total assets the same as owned securities.
The fund may invest up to 20% of its assets in certain taxable
investments for temporary defensive purposes. It may purchase
short-term U.S. and Canadian government securities. It may invest
in bank obligations including negotiable certificates of deposit,
non-negotiable fixed time deposits, bankers' acceptances and
letters of credit. The issuing bank or savings and loan generally
must have capital, surplus and undivided profits (as of the date of
its most recently published annual financial statements) in excess
of $100 million (or the equivalent in the instance of a foreign
branch of a U.S. bank) at the date of investment. The fund may
purchase short-term corporate notes and obligations rated in the
top two classifications by Moody's or S&P or the equivalent. It
also may use repurchase agreements with broker-dealers registered
under the Securities Exchange Act of 1934 and with commercial
banks. Repurchase agreements involve investments in debt
securities where the seller (broker-dealer or bank) agrees to
repurchase the securities from the fund at cost plus an agreed to
interest rate within a specified time. A risk of a repurchase
agreement is that if the seller seeks the protection of the
bankruptcy laws, the fund's ability to liquidate the security
involved could be impaired, and it might subsequently incur a loss
if the value of the security declines or if the other party to a
repurchase agreement defaults on its obligation.
For a description of bond ratings and short-term securities, see
Appendix A. For a discussion on options and interest rate futures
contracts, see Appendix B.
PORTFOLIO TRANSACTIONS
Subject to policies set by the board of directors, IDS Financial
Corporation (IDS) is authorized to determine, consistent with the
fund's investment goal and policies, which securities will be
purchased, held or sold. In determining where the buy and sell
orders are to be placed, IDS has been directed to use its best
efforts to obtain the best available price and most favorable
execution except where otherwise authorized by the board of
directors.
<PAGE>
PAGE 33
Normally, the fund's securities are traded on a principal rather
than an agency basis. In other words, IDS will trade directly with
the issuer or with a dealer who buys or sells for its own account,
rather than acting on behalf of another client. IDS does not pay
the dealer commissions. Instead, the dealer's profit, if any, is
the difference, or spread, between the dealer's purchase and sale
price for the security.
Each investment decision made for the fund is made independently
from any decision made for another fund in the IDS MUTUAL FUND
GROUP or other account advised by IDS or any IDS subsidiary. When
the fund buys or sells the same security as another fund or
account, IDS carries out the purchase or sale in a way the fund
agrees in advance is fair. Although sharing in large transactions
may adversely affect the price or volume purchased or sold by the
fund, the fund hopes to gain an overall advantage in execution.
On occasion, it may be desirable to compensate a broker for
research services or for brokerage services by paying a commission
that might not otherwise be charged or a commission in excess of
the amount another broker might charge. The board of directors has
adopted a policy authorizing IDS to do so to the extent authorized
by law, if IDS determines, in good faith, that such commission is
reasonable in relation to the value of the brokerage or research
services provided by a broker or dealer, viewed either in the light
of that transaction or IDS' overall responsibilities to the funds
in the IDS MUTUAL FUND GROUP.
Research provided by brokers supplements IDS' own research
activities. Such services include economic data on, and analysis
of, U.S. and foreign economies; information on specific industries;
information about specific companies, including earnings estimates;
purchase recommendations for stocks and bonds; portfolio strategy
services; political, economic, business and industry trend
assessments; historical statistical information; market data
services providing information on specific issues and prices; and
technical analysis of various aspects of the securities markets,
including technical charts. Research services may take the form of
written reports, computer software or personal contact by telephone
or at seminars or other meetings. IDS has obtained, and in the
future may obtain, computer hardware from brokers, including but
not limited to personal computers that will be used exclusively for
investment decision-making purposes, which include the research,
portfolio management and trading functions and other services to
the extent permitted under an interpretation by the Securities and
Exchange Commission.
The fund paid total brokerage commissions on financial futures
contracts of $35,700 for the fiscal year ended Nov. 30, 1993,
$464,800 for fiscal year 1992, and $1,874,720 for fiscal year 1991.
Substantially all firms through whom transactions were executed
provide research services.
<PAGE>
PAGE 34
No transactions were directed to brokers because of research
services they provided to the fund.
The fund acquired no securities of its regular brokers or dealers
or of the parents of those brokers or dealers that derived more
than 15% of gross revenue from securities-related activities during
the fiscal year ended Nov. 30, 1993.
The portfolio turnover rate was 43% in the fiscal year ended Nov.
30, 1993, and 63% in fiscal year 1992.
PERFORMANCE INFORMATION
The fund may quote various performance figures to illustrate past
performance. An explanation of the methods used by the fund to
compute performance follows below.
Average annual total return
The fund may calculate average annual total return for certain
periods by finding the average annual compounded rates of return
over the period that would equate the initial amount invested to
the ending redeemable value, 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 a period, at the
end of the period (or fractional portion thereof)
Aggregate total return
The fund may calculate aggregate total return for certain periods
representing the cumulative change in the value of an investment in
the fund over a specified period of time according to 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 a period, at the
end of the period (or fractional portion thereof)
Annualized yield
The fund may calculate an annualized yield by dividing the net
investment income per share deemed earned during a 30-day period by
the public offering price per share (including the maximum sales
charge) on the last day of the period and annualizing the results.
<PAGE>
PAGE 35
Yield is calculated according to the following formula:
Yield = 2[(a-b + 1)6 - 1]
cd
where: a = dividends and interest earned during the period
b = expenses accrued for the period (net of
reimbursements)
c = the average daily number of shares outstanding
during the period that were entitled to receive
dividends
d = the maximum offering price per share on the last
day of the period
The fund's annualized yield was 4.68% for the 30-day period ended
Nov. 30, 1993.
Distribution yield
Distribution yield is calculated according to the following
formula:
D divided by POP F equals DY
30 30
where: D = sum of dividends for 30 day period
POP = sum of public offering price for 30 day period
F = annualizing factor
DY = distribution yield
The fund's distribution yield was 5.29%, respectively, for the
30-day period ended Nov. 30, 1993.
Tax-Equivalent Yield
Tax-equivalent yield is calculated by dividing that portion of the
yield (as calculated above) which is tax-exempt by one minus a
stated income tax rate and adding the result to that portion, if
any, of the yield that is not tax-exempt. The following table
shows the fund's tax equivalent yield, based on federal but not
state tax rates, for the 30-day period ended Nov. 30, 1993.
Marginal
Income Tax Tax-Equivalent Yield
Bracket Distribution Annualized
15.0% 6.22% 5.51%
28.0% 7.35 6.50
33.0% 7.90 6.99
In its sales material and other communications, the fund may quote,
compare or refer to rankings, yields or returns as published by
independent statistical services or publishers and publications
such as The Bank Rate Monitor National Index, Barron's, Business
Week, Donoghue's Money Market Fund Report, Financial Services Week,<PAGE>
PAGE 36
Financial Times, Financial World, Forbes, Fortune, Global Investor,
Institutional Investor, Investor's Daily, Kiplinger's Personal
Finance, Lipper Analytical Services, Money, Mutual Fund Forecaster,
Newsweek, The New York Times, Personal Investor, Stanger Report,
Sylvia Porter's Personal Finance, USA Today, U.S. News and World
Report, The Wall Street Journal and Wiesenberger Investment
Companies Service.
VALUING FUND SHARES
The value of an individual share is determined by using the net
asset value before shareholder transactions for the day. On
Dec. 1, 1993, the first business day following the end of the
fiscal year, the computation looked like this:
<TABLE>
<CAPTION>
Net assets before Shares outstanding Net asset value
shareholder transactions at end of previous day of one share
<S> <C> <C> <C> <C>
$1,293,500,167 divided by 308,353,929 equals $4.195
</TABLE>
In determining net assets before shareholder transactions, the
fund's portfolio securities are valued as follows as of the close
of business of the New York Stock Exchange:
'Securities, except bonds other than convertibles, traded on a
securities exchange for which a last-quoted sales price is readily
available are valued at the last-quoted sales price on the exchange
where such security is primarily traded.
'Securities traded on a securities exchange for which a last-quoted
sales price is not readily available are valued at the mean of the
closing bid and asked prices, looking first to the bid and asked
prices on the exchange where the security is primarily traded and,
if none exist, to the over-the-counter market.
'Securities included in the NASDAQ National Market System are
valued at the last-quoted sales price in this market.
'Securities included in the NASDAQ National Market System for which
a last-quoted sales price is not readily available, and other
securities traded over-the-counter but not included in the NASDAQ
National Market System are valued at the mean of the closing bid
and asked prices.
'Futures and options traded on major exchanges are valued at the
last-quoted sales price on their primary exchange.
'Foreign securities traded outside the United States are generally
valued as of the time their trading is complete, which is usually
different from the close of the New York Stock Exchange. Foreign
securities quoted in foreign currencies are translated into U.S.
dollars at the current rate of exchange. Occasionally, events
affecting the value of such securities may occur between such times
and the close of the New York Stock Exchange that will not be
reflected in the computation of the fund's net asset value. If
events materially affecting the value of such securities occur<PAGE>
PAGE 37
during such period, these securities will be valued at their fair
value according to procedures decided upon in good faith by the
fund's board of directors.
'Short-term securities maturing more than 60 days from the
valuation date are valued at the readily available market price or
approximate market value based on current interest rates. Short-
term securities maturing in 60 days or less that originally had
maturities of more than 60 days at acquisition date are valued at
amortized cost using the market value on the 61st day before
maturity. Short-term securities maturing in 60 days or less at
acquisition date are valued at amortized cost. Amortized cost is
an approximation of market value determined by systematically
increasing the carrying value of a security if acquired at a
discount, or reducing the carrying value if acquired at a premium,
so that the carrying value is equal to maturity value on the
maturity date.
'Securities without a readily available market price, bonds other
than convertibles and other assets are valued at fair value as
determined in good faith by the board of directors. The board of
directors is responsible for selecting methods it believes provide
fair value. When possible, bonds are valued by a pricing service
independent from the fund. If a valuation of a bond is not
available from a pricing service, the bond will be valued by a
dealer knowledgeable about the bond if such a dealer is available.
The New York Stock Exchange, IDS and the fund will be closed on the
following holidays: New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day.
<PAGE>
PAGE 38
INVESTING IN THE FUND
Sales Charge
Shares of the fund are sold at the public offering price determined
at the close of business on the day an application is accepted.
The public offering price is the net asset value of one share plus
a sales charge. The public offering price for an investment of
less than $50,000, made Dec. 1, 1993, was determined by dividing
the net asset value of one share, $4.20, by 0.95 (1.00-0.05 for a
maximum 5% sales charge) for a public offering price of $4.42. The
sales charge is paid to IDS Financial Services Inc. by the person
buying the shares.
Calculation of the Sales Charge
Sales charges are determined as follows:
<TABLE>
<CAPTION>
Within each increment,
sales charge as a
percentage of:
Public Net
Amount of Investment Offering Price Amount Invested
<S> <C> <C>
First $ 50,000 5.0% 5.26%
Next 50,000 4.5 4.71
Next 150,000 4.0 4.17
Next 250,000 3.0 3.09
Next 500,000 2.0 2.04
Next 2,000,000 1.0 1.01
More than 3,000,000 0.5 0.50
</TABLE>
Sales charges on an investment greater than $50,000 are calculated
for each increment separately and then totaled. The resulting
total sales charge, expressed as a percentage of the public
offering price and of the net amount invested, will vary depending
on the proportion of the investment at different sales charge
levels.
For example, compare an investment of $60,000 with an investment of
$85,000. The $60,000 investment is composed of $50,000 that incurs
a sales charge of $2,500 (5.0% x $50,000) and $10,000 that incurs a
sales charge of $450 (4.5% x $10,000). The total sales charge of
$2,950 is 4.92% of the public offering price and 5.17% of the net
amount invested.
In the case of the $85,000 investment, the first $50,000 also
incurs a sales charge of $2,500 (5.0% x $50,000) and $35,000 incurs
a sales charge of $1,575 (4.5% x $35,000). The total sales charge
of $4,075 is 4.79% of the public offering price and 5.04% of the
net amount invested.
<PAGE>
PAGE 39
The following table shows the range of sales charges as a
percentage of the public offering price and of the net amount
invested on total investments at each applicable level.
<TABLE>
<CAPTION>
On total investment, sales
charge as a percentage of
Public Net
Offering Price Amount Invested
Amount of Investment ranges from:
<S> <C> <C>
First $ 50,000 5.00% 5.26%
More than 50,000 to 100,000 5.00-4.75 5.26-4.99
More than 100,000 to 250,000 4.75-4.30 4.99-4.49
More than 250,000 to 500,000 4.30-3.65 4.49-3.79
More than 500,000 to 1,000,000 3.65-2.83 3.79-2.91
More than 1,000,000 to 3,000,000 2.83-1.61 2.91-1.63
More than 3,000,000 1.61-0.50 1.63-0.50
</TABLE>
Reducing the Sales Charge
Sales charges are based on the total amount of your investments in
the fund. The amount of all prior investments plus any new
purchase is referred to as your "total amount invested." For
example, suppose you have made an investment of $20,000 and later
decide to invest $40,000 more. Your total amount invested would be
$60,000. As a result, $10,000 of your $40,000 investment qualifies
for the lower 4.5% sales charge that applies to investments of more
than $50,000 to $100,000.
The total amount invested includes any shares held in the fund in
the name of a member of your immediate family (spouse and unmarried
children under 21). For instance, if your spouse already has
invested $20,000 and you want to invest $40,000, your total amount
invested will be $60,000 and therefore you will pay the lower
charge of 4.5% on $10,000 of the $40,000.
Until a spouse remarries, the sales charge is waived for spouses
and unmarried children under 21 of deceased trustees, directors,
officers or employees of the fund or IDS or its subsidiaries and
deceased planners.
The total amount invested also includes any investment you or your
immediate family already have in the other publicly offered funds
in the IDS MUTUAL FUND GROUP where the investment is subject to a
sales charge. For example, suppose you already have an investment
of $25,000 in IDS Stock Fund and $5,000 in this fund. If you
invest $40,000 more in this fund, your total amount invested in the
funds will be $70,000 and therefore $20,000 of your $40,000
investment will incur a 4.5% sales charge.
<PAGE>
PAGE 40
Systematic Investment Programs
After you make your investment of $2,000 or more, you can arrange
to make additional payments of $100 or more on a regular basis.
These minimums do not apply to all systematic investment programs.
You decide how often you want to make payments - monthly, quarterly
or semiannually. You are not obligated to make any payments. You
can omit payments or discontinue the investment program alto-
gether. The fund also can change the program or end it at any
time. If there is no obligation, why do it? Putting money aside
is an important part of financial planning. With a systematic
investment program, you have a goal to work for.
How does this work? When you send in your payment, your money is
invested at the public offering price. Your regular investment
amount will purchase more shares when the net asset value per share
decreases, and fewer shares when the net asset value per share
increases. Each purchase is a separate transaction. After each
purchase your new shares will be added to your account. Shares
bought through these programs are exactly the same as any other
fund shares. They can be bought and sold at any time. A
systematic investment program is not an option or an absolute right
to buy shares.
The systematic investment program itself cannot ensure a profit,
nor can it protect against a loss in a declining market. If you
decide to discontinue the program and redeem your shares when their
net asset value is less than what you paid for them, you will incur
a loss.
For a discussion on dollar-cost averaging, see Appendix C.
Automatic Directed Dividends
Dividends, including capital gain distributions, paid by another
fund in the IDS MUTUAL FUND GROUP subject to a sales charge, may be
used to automatically purchase shares of this fund without paying a
sales charge. Dividends may be directed to existing accounts only.
Dividends declared by a fund are exchanged to this fund the
following day. Dividends can be exchanged into one fund but cannot
be split to make purchases in two or more funds. Automatic
directed dividends are available between accounts of any ownership
except:
'Between a non-custodial account and an IRA, or 401(k) plan account
or other qualified retirement account of which IDS Bank & Trust
acts as custodian;
'Between two IDS Bank & Trust custodial accounts with different
owners (for example, you may not exchange dividends from your IRA
to the IRA of your spouse);
<PAGE>
PAGE 41
'Between different kinds of custodial accounts with the same
ownership (for example, you may not exchange dividends from your
IRA to your 401(k) plan account, although you may exchange
dividends from one IRA to another IRA).
Moreover, dividends may be directed from accounts established under
the Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to
Minors Act (UTMA) only into other UGMA or UTMA accounts with
identical ownership.
Each fund has a different investment goal described in its
prospectus along with other information, including fees and expense
ratios. Before exchanging dividends into another fund, you should
read its prospectus. You will receive a confirmation that the
automatic directed dividend service has been set up for your
account.
REDEEMING SHARES
You have a right to redeem your shares at any time. For an
explanation of redemption procedures, please see the prospectus.
During an emergency, the board of directors can suspend the
computation of net asset value, stop accepting payments for
purchase of shares or suspend the duty of the fund to redeem shares
for more than seven days. Such emergency situations would occur
if:
'The New York Stock Exchange closes for reasons other than the
usual weekend and holiday closings or trading on the Exchange is
restricted, or
'Disposal of the fund's securities is not reasonably practicable or
it is not reasonably practicable for the fund to determine the fair
value of its net assets, or
'The SEC, under the provisions of the Investment Company Act of
1940, as amended, declares a period of emergency to exist.
Should the fund stop selling shares, the directors may make a
deduction from the value of the assets held by the fund to cover
the cost of future liquidations of the assets so as to distribute
fairly these costs among all shareholders.
PAY-OUT PLANS
You can use any of several pay-out plans to redeem your investment
in regular installments at no extra cost. While the plans differ
on how the pay-out is figured, they all are based on the redemption
of your investment. Net investment income dividends and any
capital gain distributions will automatically be reinvested, unless
you elect to receive them in cash.
<PAGE>
PAGE 42
IDS normally will not accept an application for a systematic
investment in any fund in the IDS MUTUAL FUND GROUP subject to a
sales charge while a pay-out plan for any of those funds is in
effect. Occasional investments, however, may be accepted.
To start any of these plans, submit an authorization form supplied
by IDS Shareholder Service. For a copy, write or call IDS
Shareholder Service, P.O. Box 534, Minneapolis, MN 55440-0534,
612-671-3733. Your authorization must be received in the
Minneapolis headquarters at least five days before the date you
want your payments to begin. The initial payment must be at least
$50. Payments will be made on a monthly, bimonthly, quarterly,
semiannual or annual basis. Your choice is effective until you
change or cancel it.
The following pay-out plans are designed to take care of the needs
of most shareholders in a way IDS can handle efficiently and at a
reasonable cost. If you need a more irregular schedule of
payments, it may be necessary for you to make a series of
individual redemptions, in which case you will have to send in a
separate redemption request for each pay-out. The fund reserves
the right to change or stop any pay-out plan and to stop making
such plans available.
Plan #1: Pay-out for a fixed period of time
If you choose this plan, a varying number of shares will be
redeemed at net asset value at regular intervals during the time
period you choose. This plan is designed to end in complete re-
demption of all shares in your account by the end of the fixed
period.
Plan #2: Redemption of a fixed number of shares
If you choose this plan, a fixed number of shares will be redeemed
at net asset value for each payment and that amount will be sent to
you. The length of time these payments continue is based on the
number of shares in the account.
Plan #3: Redemption of a fixed dollar amount
If you decide on a fixed dollar amount, whatever number of shares
is necessary to make the payment will be redeemed in regular
installments until your account is closed.
Plan #4: Redemption of a percentage of net asset value
Payments are made based on a fixed percentage of the net asset
value of the shares in your account computed on the day of each
payment. Percentages range from 0.25% to 0.75%. For example, if
you are on this plan and arrange to take 0.5% each month, you will
get $50 if the value of your account is $10,000 on the payment
date.
<PAGE>
PAGE 43
EXCHANGES
If you buy shares in one of the funds and then exchange into
another fund, it is considered a sale and subsequent purchase of
shares. Under tax laws, if this exchange is done within 91 days,
any sales charge waived on a subsequent purchase of shares applies
to the new shares acquired in the exchange. Therefore, you cannot
create a tax loss or reduce a tax gain attributable to the sales
charge when exchanging shares within 91 days.
TAXES
All distributions of net investment income during the year will
have the same percentage designated as tax-exempt. This annual
percentage is expected to be substantially the same as the
percentage of tax-exempt income actually earned during any
particular distribution period. For the fiscal year ended
November 30, 1993, 100% of the income distribution was designated
as exempt from federal income taxes.
Capital gain distributions received by individual and corporate
shareholders should be treated as long-term capital gains
regardless of how long they owned their shares. Short-term capital
gains earned by the fund are paid to shareholders as part of their
ordinary income dividend and are taxable.
If you are a "substantial user" (or related person) of facilities
financed by industrial development bonds, you should consult your
tax adviser before investing. The income from such bonds may not
be tax-exempt for you.
Interest on private activity bonds, generally issued after August
1986, is a preference item for purposes of the individual and
corporate alternative minimum taxes. "Private-activity" (non-
governmental purpose) municipal bonds include industrial revenue
bonds, student-loan bonds, and multi-and single-family housing
bonds. An exception is made for private-activity bonds issued for
qualified-501(c)(3)-organizations, including non-profit colleges,
universities and hospitals. These bonds will continue to be tax-
exempt and will not be subject to the alternative minimum tax for
individuals.
State law determines whether interest income on a particular
municipal bond is tax-exempt for state tax purposes. It also
determines the tax treatment of those bonds when earned by a mutual
fund and paid to the fund's Shareholders. The fund will tell you
the percentage of interest income from municipal bonds it received
during the year on a state-by-state basis. Your tax adviser should
help you report this income for state tax purposes.
<PAGE>
PAGE 44
Under federal tax law and an election made by the fund under
federal tax rules, by the end of a calendar year the fund must
declare and pay dividends representing 98% of ordinary income
through Dec. 31 and 98% of net capital gains (both long-term and
short-term) for the 12-month period ending Dec. 31 of that calendar
year. The fund is subject to an excise tax equal to 4% of the
excess, if any, of the amount required to be distributed over the
amount actually distributed. The fund intends to comply with
federal tax law and avoid any excise tax.
This is a brief summary that relates to federal income taxation
only. Shareholders should consult their tax adviser for more
complete information as to the application of federal, state and
local income tax laws to fund distributions.
AGREEMENTS
Investment Management and Services Agreement
The fund has an Investment Management and Services Agreement with
IDS. For its services, IDS is paid a fee composed of an asset
charge in two parts. The first part, the group asset charge, is
based on the combined daily net assets of all funds in the IDS
MUTUAL FUND GROUP, except the money market funds, including any new
fund that may be organized in the future. The daily rate of the
group asset charge is based upon the following schedule:
Group Asset Charge
Group assets Annual rate at Effective
(billions) each asset level annual rate
First $5 0.460% 0.460%
Next $5 0.440 0.450
Next $5 0.420 0.440
Next $5 0.400 0.430
Next $5 0.390 0.422
Next $5 0.380 0.415
Next $5 0.360 0.407
Next $5 0.350 0.400
Next $5 0.340 0.393
Next $5 0.330 0.387
Over $50 0.320
The aggregate net assets of all non-money market funds in the IDS
MUTUAL FUND GROUP were $41,214,914,729 on Nov. 30, 1993, and the
daily rate applied to the fund's assets was equal to approximately
0.40% on an annual basis.
<PAGE>
PAGE 45
The second part of the asset charge is calculated at an annual rate
of 0.13% and is based on the unique characteristics of the fund,
including the fund's use of services provided by IDS in the areas
of investment research, portfolio management, investment services
and fund accounting. The total fee is calculated for each calendar
day on the basis of net assets as of the close of business two
business days prior to the day for which the calculation is made.
The management fee is paid monthly. The total amount paid was
$6,920,342 for the fiscal year ended Nov. 30, 1993, $6,797,317 for
fiscal year 1992, and $5,690,393 for fiscal year 1991.
Under the current Agreement, the fund also pays taxes, brokerage
commissions and nonadvisory expenses, that include custodian fees;
audit and certain legal fees; fidelity bond premiums; registration
fees for shares; fund office expenses; consultants' fees;
compensation of directors, officers and employees; corporate filing
fees; Investment Company Institute dues; organizational expenses;
expenses incurred in connection with lending portfolio securities
of the fund; and expenses properly payable by the fund, approved by
the board of directors. The fund paid nonadvisory expenses of
$455,438 for the fiscal year ended Nov. 30, 1993, $275,539 for
fiscal year 1992, and $350,995 for fiscal year 1991.
Transfer Agency Agreement
The fund has a Transfer Agency Agreement with IDS. This agreement
governs IDS' responsibility for administering and/or performing
transfer agent functions, for acting as service agent in connection
with dividend and distribution functions and for performing
shareholder account administration agent functions in connection
with the issuance, exchange and redemption or repurchase of the
fund's shares. Under the agreement, IDS will earn a fee from the
fund determined by multiplying the number of shareholder accounts
at the end of the day by a rate of $15.50 per year and dividing by
the number of days in the year. The fees paid to IDS may be
changed from time to time upon agreement of the parties without
shareholder approval. The fund paid fees of $592,702 for the
fiscal year ended Nov. 30, 1993.
Distribution Agreement
Under a Distribution Agreement, sales charges deducted for
distributing fund shares are paid to IDS Financial Services Inc.
daily. These charges amounted to $2,948,572 for the fiscal year
ended Nov. 30, 1993. After paying commissions to personal
financial planners, and other expenses, the amount retained was
$1,017,634. The amounts were $3,765,849 and $1,360,628 for fiscal
year 1992, and $5,791,686 and $2,005,004 for fiscal year 1991.
<PAGE>
PAGE 46
Additional information about commissions and compensation for the
fiscal year ended Nov. 30, 1993, is contained in the following
table:
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
Net Compensation
Name of Underwriting on Redemption
Principal Discounts and and Brokerage Other
Underwriter Commissions Repurchases Commissions Compensation
<S> <C> <C> <C> <C>
IDS None $4,241 None $236,240*
IDS Financial
Services Inc. $2,948,572 None None None
*Distribution fees paid pursuant to the Plan and Supplemental Agreement of Distribution.
</TABLE>
Plan and Supplemental Agreement of Distribution
To help IDS defray the cost of distribution and servicing, not
covered by the sales charges received under the Distribution
Agreement, the fund and IDS entered into a Plan and Supplemental
Agreement of Distribution (Plan).
These costs relate to most aspects of distributing the fund's
shares except compensation to the sales force. A substantial
portion of the costs are not specifically identified to any one
fund in the IDS MUTUAL FUND GROUP. Under the Plan, IDS is paid a
fee determined by multiplying the number of shareholder accounts at
the end of each day by a rate of $6 per year and dividing by the
number of days in the year.
The Plan must be approved annually by the directors including a
majority of the disinterested directors, if it is to continue for
more than a year. At least quarterly, the directors must review
written reports concerning the amounts expended under the Plan and
the purposes for which such expenditures were made. The Plan and
any agreement related to it may be terminated at any time by vote
of a majority of directors who are not interested persons of the
fund and have no direct or indirect financial interest in the
operation of the Plan or in any agreement related to the Plan, or
by vote of a majority of the outstanding voting securities of the
fund or by IDS. The Plan (or any agreement related to it) shall
terminate in the event of its assignment as that term is defined in
the Investment Company Act of 1940, as amended. The Plan may not
be amended to increase the amount to be spent for distribution
without shareholders' approval, and all material amendments to the
Plan must be approved by a majority of directors, including a
majority of directors who are not interested persons of the fund
and who do not have a financial interest in the operation of the
Plan or any agreement related to it. The selection and nomination
of such disinterested directors is the responsibility of such
disinterested directors. No interested person of the fund, and no
director who is not an interested person, has any direct or
indirect financial interest in the operation of the Plan or any
related agreement.
<PAGE>
PAGE 47
Total fees and nonadvisory expenses cannot exceed the most
restrictive applicable state limitation. Currently, the most
restrictive applicable state expense limitation, subject to
exclusion of certain expenses, is 2.5 percent of the first $30
million of the fund's average daily net assets, 2 percent of the
next $70 million and 1.5 percent of average daily net assets over
$100 million, on an annual basis. At the end of each month, if the
fees and expenses of the fund exceed this limitation for the fund's
fiscal year in progress, IDS will assume all expenses in excess of
the limitation. IDS then may bill the fund for such expenses in
subsequent months up to the end of that fiscal year, but not after
that date. No interest charges are assessed by IDS for expenses it
assumes.
DIRECTORS AND OFFICERS
The following is a list of the fund's directors who, except for Mr.
Dudley, also are directors of all other funds in the IDS MUTUAL
FUND GROUP. Mr. Dudley is a director of all publicly offered
funds. All shares have cumulative voting rights when voting on the
election of directors.
William H. Dudley**
2900 IDS Tower
Minneapolis, MN
Executive vice president and director of IDS.
Robert F. Froehlke+
901 S. Marquette Ave.
Minneapolis, MN
Former president of all funds in the IDS MUTUAL FUND GROUP.
Director, the ICI Mutual Insurance Co., Institute for Defense
Analyses, Marshall Erdman and Associates, Inc. (architectural
engineering) and Public Oversight Board of the American Institute
of Certified Public Accountants.
David R. Hubers**
2900 IDS Tower
Minneapolis, MN
President, chief executive officer and director of IDS.
Previously, senior vice president, finance and chief financial
officer of IDS.
Anne P. Jones***
Sutherland, Asbill & Brennan
1275 Pennsylvania Ave., N.W.
Washington, D.C.
Partner, law firm of Sutherland, Asbill & Brennan. Director,
Motorola, Inc. and C-Cor Electronics, Inc.<PAGE>
PAGE 48
Donald M. Kendall
PepsiCo, Inc.
Purchase, NY
Former chairman and chief executive officer, PepsiCo, Inc.
Director, Atlantic Richfield Company.
Melvin R. Laird
Reader's Digest Association, Inc.
1730 Rhode Island Ave., N.W.
Washington, D.C.
Senior counsellor for national and international affairs, The
Reader's Digest Association, Inc. Chairman of the board, COMSAT
Corporation, former nine-term congressman, secretary of defense and
presidential counsellor. Director, Martin Marietta Corp.,
Metropolitan Life Insurance Co., The Reader's Digest Association,
Inc., Science Applications International Corp., Wallace Reader's
Digest funds and Public Oversight Board (SEC Practice Section,
American Institute of Certified Public Accountants).
Lewis W. Lehr'
3050 Minnesota World Trade Center
30 E. Seventh St.
St. Paul, MN
Former chairman of the board and chief executive officer, Minnesota
Mining and Manufacturing Company (3M). Director, Jack Eckerd
Corporation (drugstores). Advisory Director, Peregrine Inc.
(microelectronics).
William R. Pearce+*
901 S. Marquette Ave.
Minneapolis, MN
President of all funds in the IDS MUTUAL FUND GROUP since June
1993. Former vice chairman of the board, Cargill, Incorporated
(commodity merchants and processors).
Aulana L. Peters'***
Gibson, Dunn & Crutcher
333 S. Grand Ave.
Los Angeles, CA
Partner, law firm of Gibson, Dunn & Crutcher from January 1980 to
May 1984 and since August 1988. Commissioner, Securities and
Exchange Commission from June 1984 to July 1988. Director,
American Institute of CPA's (accounting), Minnesota Mining and
Manufacturing Company (3M), Mobil Corporation (energy), New York
Stock Exchange and Northrop Corporation (defense).
<PAGE>
PAGE 49
Edson W. Spencer+'
840 TCF Tower
Minneapolis, MN
President, Spencer Associates Inc. (consulting). Chairman of the
board, Mayo Foundation (healthcare). Former chairman of the board
and chief executive officer, Honeywell, Inc. Director, Boise
Cascade Corporation (forest products) and CBS Inc. Member of
International Advisory Councils, Robert Bosch (Germany) and NEC
(Japan).
John R. Thomas+**
2900 IDS Tower
Minneapolis, MN
Senior vice president and director of IDS.
Wheelock Whitney+
1900 Foshay Tower
821 Marquette Ave.
Minneapolis, MN
Chairman, Whitney Management Company (manages family assets).
+ Member of executive committee.
' Member of joint audit committee.
* Interested person by reason of being an officer and employee of
the fund.
**Interested person by reason of being an officer, director,
employee and/or shareholder of IDS or American Express.
***Interested person by reason of being a partner in a law firm
that has represented IDS or its subsidiaries.
The board also has appointed officers who are responsible for day-
to-day business decisions based on policies it has established.
Besides Mr. Pearce, who is president, the fund's other officer is:
Leslie L. Ogg
901 S. Marquette Ave.
Minneapolis, MN
Vice president of all funds in the IDS MUTUAL FUND GROUP and
general counsel and treasurer of the publicly offered funds.
On Nov. 30, 1993, the fund's directors and officers as a group
owned less than 1% of the outstanding shares. During the fiscal
year ended Nov. 30, 1993, no director or officer earned more than
$60,000 from this fund. All directors and officers as a group
earned $82,788, including $24,853 of retirement plan expense, from
this fund.
<PAGE>
PAGE 50
CUSTODIAN
The fund's securities and cash are held by First Bank National
Association, 180 E. Fifth St., St. Paul, MN 55101-1631, through a
custodian agreement. The custodian is permitted to deposit some or
all of its securities in central depository systems as allowed by
federal law.
INDEPENDENT AUDITORS
The fund's financial statements contained in its Annual Report to
shareholders, for the fiscal year ended Nov. 30, 1993, were audited
by independent auditors, KPMG Peat Marwick, 4200 Norwest Center,
90 S. Seventh St., Minneapolis, MN 55402-3900. The independent
auditors also provide other accounting and tax-related services as
requested by the fund.
FINANCIAL STATEMENTS
The Independent Auditors' Report and the Financial Statements,
including Notes to the Financial Statements and the Schedule of
Investments in Securities, contained in the 1993 Annual Report to
IDS Tax-Exempt Bond Fund shareholders, pursuant to Section 30(d) of
the Investment Company Act of 1940, as amended, are hereby
incorporated in this SAI by reference. No other portion of the
Annual Report, however, is incorporated by reference.
PROSPECTUS
The prospectus dated Jan. 28, 1994, is hereby incorporated in this
SAI by reference.
<PAGE>
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APPENDIX A
DESCRIPTION OF BOND RATINGS AND SHORT-TERM SECURITIES
Bond Ratings
The ratings concern the quality of the issuing corporation. They
are not an opinion of the market value of the security. Such
ratings are opinions on whether the principal and interest will be
repaid when due. A security's ratings may change which could
affect its price. Ratings by Moody's Investors Service, Inc. are
Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C and D. Ratings by Standard &
Poor's Corporation are AAA, AA, A, BBB, BB, B, CCC, CC, C and D.
Bonds rated Aaa and AAA are judged to be of the best quality.
Interest and principal are secure. Prices are responsive only to
interest rate fluctuations.
Bonds rated Aa and AA are also judged to be high-grade although
margins of protection for interest and principal may not be quite
as good as Aaa or AAA rated securities. Long-term risk may appear
greater than the Aaa or AAA group. Prices are primarily responsive
to interest rate fluctuations.
Bonds rated A are considered upper-medium grade. Protection for
interest and principal is deemed adequate but susceptible to future
impairment. The market prices of such obligations move primarily
with interest rate fluctuations but also with changing economic or
trade conditions.
Bonds rated Baa and BBB are considered medium-grade obligations.
Protection for interest and principal is adequate over the short-
term; however, these obligations have certain speculative
characteristics. They are susceptible to changing economic
conditions and require constant review. Such bonds are more
responsive to business and trade conditions than to interest rate
fluctuations.
Bonds rated Ba and BB are considered to have speculative elements.
Their future cannot be considered well assured. The protection of
interest and principal payments may be very moderate and not well
safeguarded during future good and bad times. Uncertainty of
position characterizes these bonds.
Bonds rated B or lower lack characteristics of the desirable
investments. There may be small assurance over any long period of
time of the payment of interest and principal or of the maintenance
of other contract terms. Some of these bonds are of poor standing
and may be in default or have other marked short-comings.
Bonds rated Caa and CCC are of poor standing. Such issues may be
in default or there may be elements of danger with respect to
principal or interest.
<PAGE>
PAGE 52
Bonds rated Ca and CC represent obligations that are highly
speculative. Such issues are often in default or have other marked
shortcomings.
Bonds rated C are obligations with a higher degree of speculation.
These securities have major risk exposures to default.
Bonds rated D are in payment default. The D rating is used when
interest payments or principal payments are not made on the due
date.
Definitions of Zero-Coupon and Pay-In-Kind Securities
A zero-coupon security is a security that is sold at a deep
discount from its face value and makes no periodic interest
payments. The buyer of such a security receives a rate of return
by gradual appreciation of the security, which is redeemed at face
value on the maturity date.
A pay-in-kind security is a security in which the issuer has the
option to make interest payments in cash or in additional
securities. The securities issued as interest usually have the
same terms, including maturity date, as the pay-in-kind securities.
Non-rated securities will be considered for investment when they
possess a risk comparable to that of rated securities consistent
with the fund's objectives and policies. When assessing the risk
involved in each nonrated security, the fund will consider the
financial condition of the issuer or the protection afforded by the
terms of the security.
Inverse Floaters
The fund may invest in securities called " inverse floaters".
Inverse floaters are created by underwriters using the interest
payments on municipal bonds. A portion of the interest received is
paid to holders of instruments based on current interest rates for
short-term securities. What is left over, less a servicing fee, is
paid to holders of the inverse floaters. As interest rates go
down, the holders of the inverse floaters receive more income and
an increase in the price for the inverse floaters. As interest
rates go up, the holders of the inverse floaters receive less
income and a decrease in the price for the inverse floaters.
Short-term Tax-exempt Securities
A portion of the fund's assets are in cash and short-term
securities for day-to-day operating purposes. The investments will
usually be in short-term municipal bonds and notes. These include:
(1) Tax anticipation notes sold to finance working capital needs of
municipalities in anticipation of receiving taxes on a future date.
<PAGE>
PAGE 53
(2) Bond anticipation notes sold on an interim basis in anticipation
of a municipality issuing a longer term bond in the future.
(3) Revenue anticipation notes issued in anticipation of revenues
from sources other than taxes, such as federal revenues available
under the Federal Revenue Sharing Program.
(4) Tax and revenue anticipation notes issued in anticipation of
revenues from taxes and other sources of revenue, except bond
placements.
(5) Construction loan notes insured by the Federal Housing
Administration which remain outstanding until permanent financing
by the Federal National Mortgage Association (FNMA) or the
Government National Mortgage Association (GNMA) at the end of the
project construction period.
(6) Tax-exempt commercial paper with a stated maturity of 365 days
or less issued by agencies of state and local governments to
finance seasonal working capital needs or as short-term financing
in anticipation of longer-term financing.
(7) Project notes issued by local housing authorities to finance
urban renewal and public housing projects. These notes are
guaranteed by the full faith and credit of the U.S. government.
(8) Variable rate demand notes, on which the yield is adjusted at
periodic intervals not exceeding 31 days and on which the principal
may be repaid after not more than seven days' notice, are
considered short-term regardless of the stated maturity.
Short-term Taxable Securities and Repurchase Agreements
Depending on market conditions, a portion of the fund's investments
may be invested in short-term taxable securities. These include:
(1) Obligations of the U.S. government, its agencies and
instrumentalities resulting principally from lending programs of
the U.S. government;
(2) U.S. Treasury bills with maturities up to one year. The
difference between the purchase price and the maturity value or
resale price is the interest income to the fund;
(3) Certificates of deposit or receipts with fixed interest rates
issued by banks in exchange for deposit of funds;
(4) Bankers' acceptances arising from short-term credit arrangements
designed to enable businesses to obtain funds to finance commercial
transactions;
(5) Letters of credit which are short-term notes issued in bearer
form with a bank letter of credit obligating the bank to pay the
bearer the amount of the note;<PAGE>
PAGE 54
(6) Commercial paper rated in the two highest grades by Standard &
Poor's or Moody's. Commercial paper is generally defined as
unsecured short-term notes issued in bearer form by large well-
known corporations and finance companies. These ratings reflect a
review of management, economic evaluation of the industry
competition, liquidity, long-term debt and ten-year earnings
trends:
Standard & Poor's rating A-1 indicates that the degree of safety
regarding timely payment is either overwhelming or very strong.
Standard & Poor's rating A-2 indicates that capacity for timely
payment on issues with this designation is strong.
Moody's rating Prime-1 (P-1) indicates a superior capacity for
repayment of short-term promissory obligations.
Moody's rating Prime-2 (P-2) indicates a strong capacity for
repayment of short-term promissory obligations.
(7) Repurchase agreements involving acquisition of securities by the
fund with a concurrent agreement by the seller, usually a bank or
securities dealer, to reacquire the securities at cost plus
interest within a specified time. From this investment, the fund
receives a fixed rate of return that is insulated from market rate
changes while it holds the security.
<PAGE>
PAGE 55
APPENDIX B
OPTIONS AND INTEREST RATE FUTURES CONTRACTS
The fund may buy put and call options, write covered call options
and write cash-secured put options on debt securities. The fund
may enter into interest rate futures contracts (futures contracts),
buy put and call options on futures contracts and write covered put
and call options on futures contracts. Options in the over-the-
counter market will be purchased only when the investment manager
believes a liquid secondary market exists for the options and only
from dealers and institutions the investment manager believes
present a minimal credit risk. Some options are exercisable only
on a specific date. In that case, or if a liquid secondary market
does not exist, the fund could be required to buy or sell
securities at disadvantageous prices, thereby incurring losses.
OPTIONS. An option is a contract. A person who buys a call option
for a security has the right to buy the security at a set price for
the length of the contract. A person who sells a call option is
called a writer. The writer of a call option agrees to sell the
security at the set price when the buyer wants to exercise the
option, no matter what the market price of the security is at that
time. A person who buys a put option has the right to sell a
security at a set price for the length of the contract. A person
who writes a put option agrees to buy the security at the set price
if the purchaser wants to exercise the option, no matter what the
market price of the security is at that time. An option is covered
if the writer owns the security (in the case of a call) or sets
aside the cash (in the case of a put) that would be required upon
exercise.
The price paid by the buyer for an option is called a premium. In
addition the buyer generally pays a broker a commission. The
writer receives a premium, less a commission, at the time the
option is written. The cash received is retained by the writer
whether or not the option is exercised. A writer of a call option
may have to sell the security for a below-market price if the
market price rises above the exercise price. A writer of a put
option may have to pay an above-market price for the security if
its market price decreases below the exercise price.
Options can be used to produce incremental earnings, protect gains
and facilitate buying and selling securities for investment
purposes. The use of options and futures contracts may benefit the
fund and its shareholders by improving the fund's liquidity and by
helping to stabilize the value of its net assets.
<PAGE>
PAGE 56
Buying options. Put and call options may be used as a trading
technique to facilitate buying and selling securities for
investment reasons. They also may be used for investment. Options
are used as a trading technique to take advantage of any disparity
between the price of the underlying security in the securities
market and its price on the options market. It is anticipated the
trading technique will be utilized only to effect a transaction
when the price of the security plus the option price will be as
good or better than the price at which the security could be bought
or sold directly. When the option is purchased, the fund pays a
premium and a commission. It then pays a second commission on the
purchase or sale of the underlying security when the option is
exercised. For record-keeping and tax purposes, the price obtained
on the purchase of the underlying security will be the combination
of the exercise price, the premium and both commissions. When
using options as a trading technique, commissions on the option
will be set as if only the underlying securities were traded.
Put and call options also may be held by the fund for investment
purposes. Options permit the fund to experience the change in the
value of a security with a relatively small initial cash
investment. The risk the fund assumes when it buys an option is
the loss of the premium. To be beneficial to the fund, the price
of the underlying security must change within the time set by the
option contract. Furthermore, the change must be sufficient to
cover the premium paid, the commissions paid both in the
acquisition of the option and in a closing transaction or in the
exercise of the option and subsequent sale (in the case of a call)
or purchase (in the case of a put) of the underlying security.
Even then the price change in the underlying security does not
ensure a profit since prices in the option market may not reflect
such a change.
Writing covered options. The fund will write covered options when
it feels it is appropriate and will follow these guidelines:
'Underlying securities will continue to be bought or sold solely on
the basis of investment considerations consistent with the fund's
goal.
'All options written by the fund will be covered. For covered call
options if a decision is made to sell the security, the fund will
attempt to terminate the option contract through a closing purchase
transaction.
'The fund will write options only as permitted under federal or
state laws or regulations, such as those that limit the amount of
total assets subject to the options. While no limit has been set
by the fund, it will conform to the requirements of those states.
For example, California limits the writing of options to 50% of the
assets of a fund. Some regulations also affect the Custodian. <PAGE>
PAGE 57
When a covered call option is written, the Custodian segregates the
underlying securities and issues a receipt. There are certain
rules regarding banks issuing such receipts that may restrict the
amount of covered call options written. Furthermore, the fund is
limited to pledging not more than 15% of the cost of its total
assets.
Net premiums on call options closed or premiums on expired call
options are treated as short-term capital gains. Since the fund is
taxed as a regulated investment company under the Internal Revenue
Code, any gains on options and other securities held less than
three months must be limited to less than 30% of its annual gross
income.
If a covered call option is exercised, the security is sold by the
fund. The fund will recognize a capital gain or loss based upon
the difference between the proceeds and the security's basis.
Options on many securities are listed on options exchanges. If the
fund writes listed options, it will follow the rules of the options
exchange. Options are valued at the close of the New York Stock
Exchange. An option listed on a national exchange, CBOE or NASDAQ
will be valued at the last quoted sales price or, if such a price
is not readily available, at the mean of the last bid and asked
prices.
FUTURES CONTRACTS. A futures contract is an agreement between two
parties to buy and sell a security for a set price on a future
date. They have been established by boards of trade which have
been designated contracts markets by the Commodity Futures Trading
Commission (CFTC). Futures contracts trade on these markets in a
manner similar to the way a stock trades on a stock exchange, and
the boards of trade, through their clearing corporations, guarantee
performance of the contracts. Currently, there are futures
contracts based on such debt securities as long-term U.S. Treasury
bonds, Treasury notes, GNMA modified pass-through mortgage-backed
securities, three-month U.S. Treasury bills and bank certificates
of deposit. While futures contracts based on debt securities do
provide for the delivery and acceptance of securities, such
deliveries and acceptances are very seldom made. Generally, the
futures contract is terminated by entering into an offsetting
transaction. An offsetting transaction for a futures contract sale
is effected by the fund entering into a futures contract purchase
for the same aggregate amount of the specific type of financial
instrument and same delivery date. If the price in the sale
exceeds the price in the offsetting purchase, the fund immediately
is paid the difference and realizes a gain. If the offsetting
purchase price exceeds the sale price, the fund pays the difference
and realizes a loss. Similarly, closing out a futures contract
purchase is effected by the fund entering into a futures contract
sale. If the offsetting sale price exceeds the purchase price, the
fund realizes a gain, and if the offsetting sale price is less than
the purchase price, the fund realizes a loss. At the time a
futures contract is made, a good-faith deposit called initial
margin is set up within a segregated account at the fund's <PAGE>
PAGE 58
custodian bank. The initial margin deposit is approximately 1.5%
of a contract's face value. Daily thereafter, the futures contract
is valued and the payment of variation margin is required so that
each day the fund would pay out cash in an amount equal to any
decline in the contract's value or receive cash equal to any
increase. At the time a futures contract is closed out, a nominal
commission is paid, which is generally lower than the commission on
a comparable transaction in the cash markets.
The purpose of a futures contract, in the case of a portfolio
holding long-term debt securities, is to gain the benefit of
changes in interest rates without actually buying or selling long-
term debt securities. For example, if the fund owned long-term
bonds and interest rates were expected to increase, it might enter
into futures contracts to sell securities which would have much the
same effect as selling some of the long-term bonds it owned.
Futures contracts are based on types of debt securities referred to
above, which have historically reacted to an increase or decline in
interest rates in a fashion similar to the debt securities the fund
owns. If interest rates did increase, the value of the debt
securities in the portfolio would decline, but the value of the
fund's futures contracts would increase at approximately the same
rate, thereby keeping the net asset value of the fund from
declining as much as it otherwise would have. If, on the other
hand, the fund held cash reserves and interest rates were expected
to decline, the fund might enter into interest rate futures
contracts for the purchase of securities. If short-term rates were
higher than long-term rates, the ability to continue holding these
cash reserves would have a very beneficial impact on the fund's
earnings. Even if short-term rates were not higher, the fund would
still benefit from the income earned by holding these short-term
investments. At the same time, by entering into futures contracts
for the purchase of securities, the fund could take advantage of
the anticipated rise in the value of long-term bonds without
actually buying them until the market had stabilized. At that
time, the futures contracts could be liquidated and the fund's cash
reserves could then be used to buy long-term bonds on the cash
market. The fund could accomplish similar results by selling bonds
with long maturities and investing in bonds with short maturities
when interest rates are expected to increase or by buying bonds
with long maturities and selling bonds with short maturities when
interest rates are expected to decline. But by using futures
contracts as an investment tool, given the greater liquidity in the
futures market than in the cash market, it might be possible to
accomplish the same result more easily and more quickly.
Successful use of futures contracts depends on the investment
manager's ability to predict the future direction of interest
rates. If the investment manager's prediction is incorrect, the
fund would have been better off had it not entered into futures
contracts.
<PAGE>
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OPTIONS ON FUTURES CONTRACTS. Options give the holder a right to
buy or sell futures contracts in the future. Unlike a futures
contract, which requires the parties to the contract to buy and
sell a security on a set date, an option on a futures contract
merely entitles its holder to decide on or before a future date
(within nine months of the date of issue) whether to enter into
such a contract. If the holder decides not to enter into the
contract, all that is lost is the amount (premium) paid for the
option. Furthermore, because the value of the option is fixed at
the point of sale, there are no daily payments of cash to reflect
the change in the value of the underlying contract. However, since
an option gives the buyer the right to enter into a contract at a
set price for a fixed period of time, its value does change daily
and that change is reflected in the net asset value of the fund.
RISKS. There are risks in engaging in each of the management tools
described above. The risk the fund assumes when it buys an option
is the loss of the premium paid for the option. Purchasing options
also limits the use of monies that might otherwise be available for
long-term investments.
The risk involved in writing options on futures contracts the fund
owns, or on securities held in its portfolio, is that there could
be an increase in the market value of such contracts or securities.
If that occurred, the option would be exercised and the asset sold
at a lower price than the cash market price. To some extent, the
risk of not realizing a gain could be reduced by entering into a
closing transaction. The fund could enter into a closing
transaction by purchasing an option with the same terms as the one
it had previously sold. The cost to close the option and terminate
the fund's obligation, however, might be more or less than the
premium received when it originally wrote the option. Furthermore,
the fund might not be able to close the option because of
insufficient activity in the options market.
A risk in employing futures contracts to protect against the price
volatility of portfolio securities is that the prices of securities
subject to futures contracts may not correlate perfectly with the
behavior of the cash prices of the fund's portfolio securities.
The correlation may be distorted because the futures market is
dominated by short-term traders seeking to profit from the
difference between a contract or security price and their cost of
borrowed funds. Such distortions are generally minor and would
diminish as the contract approached maturity.
Another risk is that the fund's investment manager could be
incorrect in anticipating as to the direction or extent of various
interest rate movements or the time span within which the movements
take place. For example, if the fund sold futures contracts for
the sale of securities in anticipation of an increase in interest
rates, and interest rates declined instead, the fund would lose
money on the sale.
<PAGE>
PAGE 60
TAX TREATMENT. As permitted under federal income tax laws, the
fund intends to identify futures contracts as mixed straddles and
not mark them to market, that is, not treat them as having been
sold at the end of the year at market value. Such an election may
result in the fund being required to defer recognizing losses
incurred by entering into futures contracts and losses on
underlying securities identified as being hedged against.
Federal income-tax treatment of gains or losses from transactions
in options on futures contracts and indexes is presently unclear,
although the fund's tax advisers currently believe marking to
market is not required. Depending on developments, and although no
assurance is given, the fund may seek Internal Revenue Service
(IRS) rulings clarifying questions concerning such treatment.
Certain provisions of the Internal Revenue Code may also limit the
fund's ability to engage in futures contracts and related options
transactions. For example, at the close of each quarter of the
fund's taxable year, at least 50% of the value of its assets must
consist of cash, government securities and other securities,
subject to certain diversification requirements. Less than 30% of
its gross income must be derived from sales of securities held less
than three months.
The IRS has ruled publicly that an exchange-traded call option is a
security for purposes of the 50-percent-of-assets test and that its
issuer is the issuer of the underlying security, not the writer of
the option, for purposes of the diversification requirements. In
order to avoid realizing a gain within the three-month period, the
fund may be required to defer closing out a contract beyond the
time when it might otherwise be advantageous to do so. The fund
also may be restricted in purchasing put options for the purpose of
hedging underlying securities because of applying the short sale
holding period rules with respect to such underlying securities.
Accounting for futures contracts will be according to generally
accepted accounting principles. Initial margin deposits will be
recognized as assets due from a broker (the fund's agent in
acquiring the futures position). During the period the futures
contract is open, changes in value of the contract will be
recognized as unrealized gains or losses by marking to market on a
daily basis to reflect the market value of the contract at the end
of each day's trading. Variation margin payments will be made or
received depending upon whether gains or losses are incurred. All
contracts and options will be valued at the last-quoted sales price
on their primary exchange.
<PAGE>
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APPENDIX C
DOLLAR-COST AVERAGING
A technique that works well for many investors is one that
eliminates random buy and sell decisions. One such system is
dollar-cost averaging. Dollar-cost averaging involves building a
portfolio through the investment of fixed amounts of money on a
regular basis regardless of the price or market condition. This
may enable an investor to smooth out the effects of the volatility
of the financial markets. By using this strategy, more shares will
be purchased when the price is low and less when the price is high.
As the accompanying chart illustrates, dollar-cost averaging tends
to keep the average price paid for the shares lower than the
average market price of shares purchased, although there is no
guarantee.
While this does not ensure a profit and does not protect against a
loss if the market declines, it is an effective way for many
shareholders who can continue investing through changing market
conditions to accumulate shares in a fund to meet long term goals.
Dollar-cost averaging
Regular Market Price Shares
Investment of a Share Acquired
$100 $ 6.00 16.7
100 4.00 25.0
100 4.00 25.0
100 6.00 16.7
100 5.00 20.0
$500 $25.00 103.4
Average market price of a share over 5 periods:
$5.00 ($25.00 divided by 5).
The average price you paid for each share:
$4.84 ($500 divided by 103.4).
<PAGE>
PAGE 62
Independent auditors' report
___________________________________________________________________
The board of directors and shareholders
IDS Tax-Exempt Bond Fund, Inc.:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments in securities,
of IDS Tax-Exempt Bond Fund, Inc. as of November 30, 1993, and the
related statement of operations for the year then ended and the
statements of changes in net assets for each of the years in the
two-year period ended November 30, 1993, and the financial
highlights for each of the years in the two-year period ended
November 30, 1993, the eleven months ended November 30, 1991, and
for each of the years in the seven-year period ended December 31,
1990. These financial statements and the financial highlights are
the responsibility of fund management. Our responsibility is to
express an opinion on these financial statements and the financial
highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements and the financial highlights are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. Investment securities held in custody are
confirmed to us by the custodian. As to securities purchased and
sold, but not received or delivered, we request confirmations
from brokers, and where replies are not received, we carry out
other appropriate auditing procedures. 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 financial position of IDS
Tax-Exempt Bond Fund, Inc. at November 30, 1993, and the results of
its operations for the year then ended and the changes in its net
assets for each of the years in the two-year period ended November
30, 1993, and the financial highlights for the periods stated in
the first paragraph above, in conformity with generally accepted
accounting principles.
KPMG Peat Marwick
Minneapolis, Minnesota
January 7, 1994
<PAGE>
PAGE 63
<TABLE>
<CAPTION>
Financial statements
Statement of assets and liabilities
IDS Tax-Exempt Bond Fund, Inc.
Nov. 30, 1993
_____________________________________________________________________________________________________________
Assets
_____________________________________________________________________________________________________________
<S> <C>
Investments in securities, at value (Note 1)
(identified cost $1,173,944,718) $1,278,758,362
Cash in bank on demand deposit 1,039,680
Accrued interest receivable 23,190,809
Receivable for investment securities sold 21,274,311
_____________________________________________________________________________________________________________
Total assets 1,324,263,162
_____________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________
Dividends payable to shareholders 1,402,784
Payable for investment securities purchased 30,532,757
Accrued investment management and services fee 602,034
Accrued distribution fee 20,531
Accrued transfer agency fee 50,671
Other accrued expenses 276,437
_____________________________________________________________________________________________________________
Total liabilities 32,885,214
_____________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $1,291,377,948
_____________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________
Capital stock -- authorized 10,000,000,000 shares of $.01 par value;
outstanding 308,353,929 shares $ 3,083,539
Additional paid-in capital 1,165,570,971
Excess of distributions over net investment income (1,167)
Accumulated net realized gain on investments (Note 1) 17,910,961
Unrealized appreciation of investments 104,813,644
_____________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding capital stock $1,291,377,948
_____________________________________________________________________________________________________________
Net asset value per share of outstanding capital stock $ 4.19
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
/TABLE
<PAGE>
PAGE 64
<TABLE>
<CAPTION>
Financial statements
Statement of operations
IDS Tax-Exempt Bond Fund, Inc.
Year ended Nov. 30, 1993
_____________________________________________________________________________________________________________
Investment income
_____________________________________________________________________________________________________________
<S> <C>
Income:
Interest $ 79,899,004
_____________________________________________________________________________________________________________
Expenses (Note 2):
Investment management and services fee 6,920,342
Distribution fee 236,240
Transfer agency fee 592,702
Compensation of directors 59,178
Compensation of officers 23,610
Custodian fees 50,465
Postage 134,833
Registration fees 52,500
Reports to shareholders 41,212
Audit fees 30,000
Administrative 26,371
Other 37,269
_____________________________________________________________________________________________________________
Total expenses 8,204,722
_____________________________________________________________________________________________________________
Investment income -- net 71,694,282
_____________________________________________________________________________________________________________
Realized and unrealized gain on investments -- net
_____________________________________________________________________________________________________________
Net realized gain on security transactions (Note 3) 23,850,454
Net realized gain on closed interest rate futures contracts 3,937,738
_____________________________________________________________________________________________________________
Net realized gain on investments 27,788,192
Net change in unrealized appreciation or depreciation of investments 43,928,922
_____________________________________________________________________________________________________________
Net gain on investments 71,717,114
_____________________________________________________________________________________________________________
Net increase in net assets resulting from operations $143,411,396
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
/TABLE
<PAGE>
PAGE 65
<TABLE>
<CAPTION>
Financial statements
Statements of changes in net assets
IDS Tax-Exempt Bond Fund, Inc.
Year ended Nov. 30,
______________________________________________________________________________________________________________
Operations and distributions 1993 1992
______________________________________________________________________________________________________________
<S> <C> <C>
Investment income -- net $ 71,694,282 $ 70,466,712
Net realized gain on investments 27,788,192 19,933,965
Net change in unrealized appreciation or depreciation of investments 43,928,922 15,984,117
_____________________________________________________________________________________________________________
Net increase in net assets resulting from operations 143,411,396 106,384,794
_____________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (71,687,635) (70,477,950)
Net realized gain on investments (5,478,900) (16,678,203)
_____________________________________________________________________________________________________________
Total distributions (77,166,535) (87,156,153)
_____________________________________________________________________________________________________________
Capital share transactions
_____________________________________________________________________________________________________________
Proceeds from sales of
51,016,103 and 93,020,626 shares (Note 2) 209,394,147 366,852,871
Net asset value of 12,737,284 and 15,067,631 shares
issued in reinvestment of distributions 52,523,554 59,429,102
Payments for redemptions of
75,320,334 and 90,868,410 shares (309,695,896) (360,705,118)
_____________________________________________________________________________________________________________
Increase (decrease) in net assets from capital share transactions
representing net reduction of
11,566,947 and net addition of 17,219,847 shares (47,778,195) 65,576,855
_____________________________________________________________________________________________________________
Total increase in net assets 18,466,666 84,805,496
Net assets at beginning of year 1,272,911,282 1,188,105,786
_____________________________________________________________________________________________________________
Net assets at end of year
(including undistributed net investment income of
$(1,167) and $(7,814)) $1,291,377,948 $1,272,911,282
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 66
Notes to financial statements
IDS Tax-Exempt Bond Fund, Inc.
___________________________________________________________________
1. Summary of significant accounting policies
The fund is registered under the Investment Company Act of 1940 (as
amended) as a diversified, open-end management investment company.
Significant accounting policies followed by the fund are summarized
below:
Valuation of securities
All securities are valued at the close of each business day.
Securities for which market quotations are not readily available
are valued at fair value according to methods selected in good
faith by theboard of directors. Determination of fair value
involves, among other things, reference to market indexes, matrixes
and data from independent brokers. Short-term securities maturing
in more than 60 days from the valuation date are valued at the
market price or approximate market value based on current
interest rates; those maturing in 60 days or less are valued at
amortized cost.
Option transactions
In order to produce incremental earnings, protect gains, and
facilitate buying and selling of securities for investment
purposes, the fund may buy and sell put and call options and write
covered call options on portfolio securities and may write cash-
secured put options. The risk in writing a call option is that the
fund gives up the opportunity of profit if the market price of the
security increases. The risk in writing a put option is that the
fund may incur a loss if the market price of the security
decreases and the option is exercised. The risk in buying an option
is that the fund pays a premium whether or not the option is
exercised. The fund also has the additional risk of not being able
to enter into a closing transaction if a liquid secondary market
does not exist. The fund also may write over-the-counter options
where the completion of the obligation is dependent upon the credit
standing of the other party.
<PAGE>
PAGE 67
Notes to financial statements
IDS Tax-Exempt Bond Fund, Inc.
___________________________________________________________________
1. Summary of significant accounting policies
Option contracts are valued daily at the closing prices on their
primary exchanges and unrealized appreciation or depreciation is
recorded. The fund will realize a gain or loss upon expiration or
closing of the option transaction. When options on debt securities
or futures are exercised, the fund will realize a gain or loss.
When other options are exercised, the proceeds on sales for a
written call option, the purchase cost for a written put option or
the cost of a security for a purchased put or call option is
adjusted by the amount of premium received or paid.
Futures transactions
In order to gain exposure to or protect itself from changes in the
market, the fund may buy and sell interest rate futures contracts.
Risks of entering into futures contracts and related options
include the possibility that there may be an illiquid market and
that a change in the value of the contract or option may not
correlate with changes in the value of the underlying securities.
Upon entering into a futures contract, the fund is required to
deposit either cash or securities in an amount (initial margin)
equal to a certain percentage of the contract value. Subsequent
payments (variation margin) are made or received by the fund each
day. The variation margin payments are equal to the daily changes
in the contract value and are recorded as unrealized gains and
losses. The fund recognizes a realized gain or loss when the
contract is closed or expires.
Federal taxes
Since the fund's policy is to comply with all sections of the
Internal Revenue Code applicable to regulated investment companies
and to distribute all of its taxable income to shareholders, no
provision for income or excise taxes is required.
<PAGE>
PAGE 68
Notes to financial statements
IDS Tax-Exempt Bond Fund, Inc.
___________________________________________________________________
1. Summary of significant accounting policies
Net investment income (loss) and net realized gains (losses) may
differ for financial statement and tax purposes primarily because
of the deferral of losses on certain futures contracts, the
recognition of certain foreign currency gains (losses) as ordinary
income (loss) for tax purposes, and losses deferred due to "wash
sale" transactions. The character of distributions made during the
year from net investment income or net realized gains may differ
from their ultimate characterization for federal income tax
purposes. Also, due to the timing of dividend distributions, the
fiscal year in which amounts are distributed may differ from the
year that the income or realized gains (losses) were recorded
by the fund.
Dividends to shareholders
Dividends from net investment income, declared daily and payable
monthly, are reinvested in additional shares of the fund at net
asset value or payable in cash. Capital gains, when available, are
distributed along with the last income dividend of the calendar
year.
Other
Security transactions are accounted for on the date securities are
purchased or sold. Interest income, including level-yield
amortization of premium and discount, is accrued daily.
<PAGE>
PAGE 69
Notes to financial statements
IDS Tax-Exempt Bond Fund, Inc.
___________________________________________________________________
2. Expenses and sales charges
Under terms of an agreement dated Nov. 14, 1991, the fund pays IDS
Financial Corporation (IDS) a fee for managing its investments,
recordkeeping and other specified services. The fee is a percentage
of the fund's average daily net assets consisting of a group asset
charge in reducing percentages from 0.46% to 0.32% annually on the
combined net assets of all non-money market funds in the IDS MUTUAL
FUND GROUP and an individual annual asset charge of 0.13% of
average daily net assets.
The fund also pays IDS a distribution fee at an annual rate of $6
per shareholder account and a transfer agency fee at an annual rate
of $15.50 per shareholder account. The transfer agency fee is
reduced by earnings on monies pending shareholder redemptions.
IDS will assume and pay any expenses (except taxes and brokerage
commissions) that exceed the most restrictive applicable state
expense limitation.
Sales charges by IDS Financial Services Inc. for distributing fund
shares were $2,948,572 for the year ended Nov. 30, 1993.
The fund has a retirement plan for its independent directors. Upon
retirement, directors receive monthly payments equal to one-half of
the retainer fee for as many months as they served as directors up
to 120 months. There are no death benefits. The plan is not funded
but the fund recognizes the cost of payments during the time the
directors serve on the board. The retirement plan expense amounted
to $24,853 for the year ended Nov. 30, 1993.
<PAGE>
PAGE 70
Notes to financial statements
IDS Tax-Exempt Bond Fund, Inc.
___________________________________________________________________
3. Securities transactions
Cost of purchases and proceeds from sales of securities (other than
short-term obligations) aggregated $567,834,206 and $546,539,544,
respectively, for the year ended Nov. 30, 1993. Realized gains and
losses are determined on an identified cost basis.
___________________________________________________________________
4. Financial highlights
"Financial highlights" showing per share data and selected
information is presented on page 5 of the prospectus.
<PAGE>
PAGE 71
<TABLE>
<CAPTION>
Investments in securities
IDS Tax-Exempt Bond Fund, Inc. (Percentages represent value of
Nov. 30, 1993 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (97.7%)
_____________________________________________________________________________________________________________________________
Coupon Principal
Name of issuer and title of issue (b)(c) rate Maturity amount Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Alaska (3.2%)
Municipality of Anchorage Hospital Revenue Bonds Sisters of Providence
Series 1985 9.625% 2005 $ 3,000,000 $ 3,394,500
North Slope Borough General Obligation Bonds
Series 1992A Zero Coupon (MBIA Insured) 6.04 2003 10,500,000 (d) 6,407,940
State Housing Finance Veterans Mortgage Corporation Collateralized Bonds
Series 1990 7.50 2030 8,700,000 9,341,451
Valdez Marine Terminal Refunding Revenue Bonds SOhio Pipeline
Series 1985 7.125 2025 20,000,000 22,331,200
______________
Total 41,475,091
_____________________________________________________________________________________________________________________________
Arizona (1.5%)
Phoenix Junior Lien Street & Highway User Refunding Revenue Bonds
Series 1992 6.25 2011 10,350,000 10,940,468
Tucson Street & Highway User Revenue Bonds Series 1991B 6.25 2010 8,250,000 8,724,787
______________
Total 19,665,255
_____________________________________________________________________________________________________________________________
California (3.9%)
Anaheim Public Finance Authority Electric Utilities Revenue Bonds
San Juan 4 2nd Series (FGIC Insured) 5.75 2022 5,000,000 5,040,950
Los Angeles State Building Authority Lease Revenue Bonds
State Department of General Services Series 1993A 5.625 2011 3,250,000 3,339,115
Oakland Redevelopment Agency Special Tax Assessment Bonds Inverse Floater 8.879 2019 6,000,000 (e) 6,472,500
San Diego County Certificates of Participation Capital Asset Leasing
Master Refunding Bonds Series 1993 Inverse Floater (AMBAC Insured) 8.07 2012 11,700,000 (e) 11,919,375
Southern California Public Power Authority Revenue Bonds Series 1993
Inverse Floater (FGIC Insured) 7.47 2012 12,100,000 (e) 11,479,875
State Housing Authority Finance Agency Bonds Series 1991A 7.375 2017 10,890,000 11,741,053
______________
Total 49,992,868
_____________________________________________________________________________________________________________________________
Connecticut (1.5%)
State General Obligation Bonds Series 1992A 6.40 2006 18,000,000 19,686,060
_____________________________________________________________________________________________________________________________
Delaware (0.2%)
State University Revenue Bonds Series 1989 6.00 2014 2,000,000 2,040,700
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities./TABLE
<PAGE>
PAGE 72
<TABLE>
<CAPTION>
Investments in securities
IDS Tax-Exempt Bond Fund, Inc. (Percentages represent value of
Nov. 30, 1993 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Coupon Principal
Name of issuer and title of issue (b)(c) rate Maturity amount Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Florida (4.8%)
Duvall County Housing Authority Single Family Mortgage
Refunding Revenue Bonds Series 1991 (FGIC Insured) 7.35 % 2024 $ 3,495,000 $ 3,815,736
Jacksonville Electric Revenue Bonds St. John's River Series A 6.00 2016 6,900,000 7,037,172
Jacksonville Electric Revenue Bonds St. John's River 2nd Series 1986 6.50 2020 10,000,000 10,335,400
Jacksonville Excise Taxes Refunding Revenue Bonds Series 1992
(AMBAC Insured) 6.20 2004 4,340,000 4,810,152
Jacksonville Excise Taxes Refunding Revenue Bonds Series 1992
(AMBAC Insured) 6.50 2008 5,000,000 5,522,650
Lakeland Electric & Water Refunding Revenue Bonds Series 1986
(AMBAC Insured) 6.00 2012 5,500,000 5,637,390
Orlando Orange County Expressway Authority Junior Lien Refunding Revenue
Bonds Series 1993A (FGIC Insured) 5.125 2020 6,000,000 5,647,380
St. John's River Water Management District Land Acquisition Revenue Bonds
Series 1989 (AMBAC Insured) 6.00 2009 7,000,000 7,206,570
State Board of Education Administration Capital Outlay
Public Education Bonds Series 1991C 6.50 2008-09 11,225,000 12,185,187
______________
Total 62,197,637
_____________________________________________________________________________________________________________________________
Georgia (2.9%)
Municipal Electric Authority Refunding Revenue Bonds Series B 5.70 2019 10,500,000 10,639,860
Municipal Electric Authority Refunding Revenue Bonds Series 1989T 6.50 2025 5,000,000 5,257,250
Municipal Electric Authority Special Obligation Bonds Project #1
4th Crossover Series X 6.50 2020 19,550,000 21,975,764
______________
Total 37,872,874
_____________________________________________________________________________________________________________________________
Hawaii (1.9%)
City & County of Honolulu General Obligation Bonds Series 1992A 6.25 2005 5,880,000 6,445,480
City & County of Honolulu General Obligation Bonds Series 1992A 6.30 2006 5,880,000 6,452,594
City & County of Honolulu Refunding & Improvement General Obligation Bonds
Series 1993B Inverse Floater 7.72 2006 5,300,000 (e) 5,565,000
City & County of Honolulu Refunding & Improvement General Obligation Bonds
Series 1993B Inverse Floater 8.02 2008 5,300,000 (e) 5,591,500
______________
Total 24,054,574
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities./TABLE
<PAGE>
PAGE 73
<TABLE>
<CAPTION>
Investments in securities
IDS Tax-Exempt Bond Fund, Inc. (Percentages represent value of
Nov. 30, 1993 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Coupon Principal
Name of issuer and title of issue (b)(c) rate Maturity amount Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Illinois (7.8%)
Chicago O'Hare International Airport General Airport Revenue Bonds
Series 1983B 9.625% 2013 $ 6,240,000 $ 6,462,893
Chicago Refunding General Obligation Bonds (MBIA Insured) 6.00 2013 2,750,000 2,921,187
Cook County Unlimited Tax General Obligation Bonds Series 1989 6.50 2009 5,800,000 6,021,154
Educational Facility Authority Adjustable Demand Revenue Bonds
University of Chicago Series 1985 7.10 2020 3,250,000 (f) 3,469,668
Health Facilities Authority Refunding Revenue Bonds
Masonic Medical Center Series 1993 5.50 2019 7,000,000 6,347,110
Health Facilities Authority Refunding Revenue Bonds
University of Chicago Hospital Series 1993 Inverse Floater (MBIA Insured) 10.707 2014 5,000,000 (e) 5,037,500
Metropolitan Pier & Exposition Authority McCormick Place Expansion Bonds
Series 1992A 6.50 2027 20,395,000 21,338,473
Northwest Suburban Joint Action Water Supply System Refunding Revenue Bonds
(MBIA Insured) 5.75 2012 4,815,000 4,839,508
Public Building Commission of Chicago Building Revenue Bonds
Board of Education of Chicago Series 1990A (MBIA Insured) 6.50 2018 23,500,000 25,977,370
Public Building Commission of Chicago Building Revenue Bonds
State Development Finance Authority Power Refunding Bonds Series 1991A 7.375 2021 10,000,000 11,373,500
State Development Finance Authority Regency Park Retirement Housing
Revenue Bonds Series 1991B Zero Coupon 6.50 2025 10,000,000 (d) 1,188,300
State Health Facility Authority Revenue Bonds Sisters Hospital Services
Series 1991B Inverse Floater 10.707 2015 5,200,000 (e) 6,064,500
______________
Total 101,041,163
_____________________________________________________________________________________________________________________________
Indiana (1.9%)
Municipal Power Agency Power Supply System Refunding Revenue Bonds
Series 1989A (AMBAC Insured) 6.50 2016 8,800,000 9,842,976
Seymour Economic Development Revenue Bonds Union Camp Series 1992 6.25 2012 2,870,000 3,097,448
Transportation Finance Authority Highway Revenue Bonds Series 1990A 7.25 2015 10,000,000 12,147,700
______________
Total 25,088,124
_____________________________________________________________________________________________________________________________
Iowa (0.4%)
State Finance Authority Single Family Mortgage-Backed Securities
Program Bonds Series 1991A 7.25 2016 4,220,000 4,542,619
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities./TABLE
<PAGE>
PAGE 74
<TABLE>
<CAPTION>
Investments in securities
IDS Tax-Exempt Bond Fund, Inc. (Percentages represent value of
Nov. 30, 1993 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Coupon Principal
Name of issuer and title of issue (b)(c) rate Maturity amount Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Kansas (0.8%)
Reno & Labette Counties Single Family Mortgage Revenue Bonds
Escrowed to Maturity Zero Coupon 6.25 % 2015 $25,000,000 (d) $ 6,523,500
Reno Sedgwick Finney Counties Single Family Mortgage Revenue Bonds
Escrowed to Maturity Zero Coupon (MBIA Insured) 6.02 2016 17,015,000 (d) 4,350,395
______________
Total 10,873,895
_____________________________________________________________________________________________________________________________
Kentucky (1.1%)
Boone County Pollution Control Refunding Revenue Bonds
Dayton Power & Light Series A 6.50 2022 11,065,000 11,750,919
Jefferson County Pollution Control Revenue Bonds Louisville Gas & Electric
Series 1985A 9.25 2015 1,750,000 1,926,033
______________
Total 13,676,952
_____________________________________________________________________________________________________________________________
Louisiana (2.5%)
Industrial Development Board of Bastrop Percent Pollution Control
Refunding Revenue Bonds International Paper Company Series 1992A 6.90 2007 6,875,000 7,545,518
New Orleans Capital Appreciation Refunding Bonds
Zero Coupon (AMBAC Insured) 5.75 2009 17,500,000 (d) 7,153,825
New Orleans General Obligation Bonds Series 1986 (AMBAC Insured) 6.00 2004 4,685,000 5,115,786
New Orleans General Obligation Refunding Bonds Series 1991 (AMBAC Insured) 6.00 2004 1,165,000 1,199,391
New Orleans Home Mortgage Authority Special Obligation Refunding Bonds
Series 1992 6.25 2011 9,000,000 9,873,630
Parish of Pointe Coupee Pollution Control Refunding Revenue Bonds
Gulf States Utilities Series 1993 6.70 2013 1,350,000 1,427,841
______________
Total 32,315,991
_____________________________________________________________________________________________________________________________
Maryland (1.6%)
State Community Development Administration Department of Housing &
Community Development Single Family Program Bonds Series 1991-1 7.30 2017 10,500,000 11,474,715
State Health and Higher Educational Facility Authority Revenue Bonds
Frederick Memorial Hospital Series 1993 (FGIC Insured) 5.00 2028 10,000,000 9,100,700
______________
Total 20,575,415
_____________________________________________________________________________________________________________________________
Massachusetts (2.3%)
State Health & Education Authority Beverly Hospital Inverse Floater
(MBIA Insured) 8.48 2020 2,950,000 (e) 3,101,188
State Municipal Wholesale Electric Power Supply System Revenue Bonds
Series 1992B 6.75 2017 20,000,000 21,551,400
See accompanying notes to investments in securities./TABLE
<PAGE>
PAGE 75
<TABLE>
<CAPTION>
Investments in securities
IDS Tax-Exempt Bond Fund, Inc. (Percentages represent value of
Nov. 30, 1993 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Coupon Principal
Name of issuer and title of issue (b)(c) rate Maturity amount Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Massachusetts (cont'd)
State Municipal Wholesale Electric Power Supply System Revenue Bonds
Series 1993A Inverse Floater (AMBAC Insured) 7.72 % 2018 $ 5,000,000 (e) $ 4,718,750
______________
Total 29,371,338
_____________________________________________________________________________________________________________________________
Michigan (1.0%)
Detroit Water Supply System Refunding Revenue Bonds
Series 1992 (FGIC Insured) 6.25 2007 2,000,000 2,159,020
State Hospital Finance Authority Refunding Revenue Bonds
Detroit Medical Center Obligation Group Series 1993A 6.50 2018 5,000,000 5,328,900
State Strategic Fund Percent Limited Obligation Refunding Revenue Bonds
Ford Motor Company Series 1991A 7.10 2006 5,000,000 5,740,850
______________
Total 13,228,770
_____________________________________________________________________________________________________________________________
Minnesota (3.7%)
Cambridge 1st Mortgage Nursing Home Revenue Bonds
Cambridge Nursing Care Center (FHA Insured) 10.15 2013 3,110,000 3,136,684
Minneapolis & St. Paul Housing & Redevelopment Authority
Health Care System Series 1990A 7.40 2005 4,500,000 5,195,565
Osseo Independent School District #279 General Obligation
School Building Bonds Series 1994A Inverse Floater 7.55 2012 7,000,000 (e) 6,991,250
Regents of the University General Obligation Bonds
Series 1993A Inverse Floater 6.477 2003 5,000,000 (e) 5,093,750
St. Louis Park Health Care Facilities Revenue Bonds
Health System Minnesota Obligated Group Series 1993 (AMBAC Insured) 5.20 2023 10,000,000 9,507,600
State Housing Finance Agency Single Family Mortgage Bonds
Series 1990C (FHA Insured) 7.70 2014 5,810,000 6,392,394
State Housing Finance Agency Single Family Mortgage Revenue Bonds
Series 1988E 7.65 2014 10,695,000 11,355,630
______________
Total 47,672,873
_____________________________________________________________________________________________________________________________
Missouri (0.9%)
Lee's Summit Industrial Development Authority Bonds Pfizer Series 1984 10.50 2009 1,450,000 1,590,230
St. Louis Region Convention & Sports Complex Authority Series 1991C 7.90 2021 8,500,000 9,587,320
______________
Total 11,177,550
_____________________________________________________________________________________________________________________________
Nevada (0.4%)
Clark County School District Series B Zero Coupon (FGIC Insured) 5.76 2009 12,050,000 (d) 5,075,340
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities./TABLE
<PAGE>
PAGE 76
<TABLE>
<CAPTION>
Investments in securities
IDS Tax-Exempt Bond Fund, Inc. (Percentages represent value of
Nov. 30, 1993 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Coupon Principal
Name of issuer and title of issue (b)(c) rate Maturity amount Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
New Hampshire (0.4%)
Business Finance Authority Pollution Control & Solid Waste Disposal
Revenue Bonds James River Series 1993 6.625% 2022 $ 5,000,000 $ 5,140,450
_____________________________________________________________________________________________________________________________
New Jersey (1.8%)
Turnpike Authority Revenue Bonds Series 1984 12.00 2005 6,000,000 6,226,620
Turnpike Authority Revenue Bonds Series 1991C 6.50 2005 16,000,000 17,555,360
______________
Total 23,781,980
_____________________________________________________________________________________________________________________________
New Mexico (1.2%)
Lordsburg Pollution Control Phelps Dodge Corporation
Refunding Revenue Bonds Series 1993B 6.50 2013 10,000,000 10,860,600
Mortgage Finance Authority Single Family Mortgage Program Series 1987A
(FGIC Insured) 7.00 2017 4,475,000 4,769,007
______________
Total 15,629,607
_____________________________________________________________________________________________________________________________
New York (4.8%)
Battery Park City Authority Senior Refunding Revenue Bonds Series 1993A 5.25 2017 23,400,000 22,032,972
City Municipal Water Finance Authority Water & Sewer System Revenue Bonds
Series B 6.375 2022 13,435,000 13,994,165
State Local Government Assistance Series 1991A 6.50 2020 8,000,000 8,583,280
State Mortgage Agency Homeowner Mortgage Revenue Bonds Series TT 7.50 2015 15,945,000 17,763,686
________________
Total 62,374,103
_____________________________________________________________________________________________________________________________
North Carolina (4.9%)
Eastern Municipal Power Agency System Refunding Revenue Bonds
Series 1989A 6.50 2024 20,000,000 20,483,800
Eastern Municipal Power Agency System Refunding Revenue Bonds Series 1993B 6.25 2012 27,140,000 28,058,960
State Municipal Power Agency #1 Catawba Electric Revenue Bonds Series 1993
Inverse Floater (MBIA Insured) 7.845 2012 15,000,000 (e) 14,625,000
______________
Total 63,167,760
_____________________________________________________________________________________________________________________________
Ohio (0.9%)
Columbus Sewerage System Refunding Revenue Bonds Series 1992 6.30 2005 3,500,000 3,852,870
Cuyahoga County Hospital Facility Revenue Bonds Health Cleveland
Fairview General Hospital & Lutheran Medical Center Series 1993 6.25 2010 1,500,000 1,578,915
See accompanying notes to investments in securities./TABLE
<PAGE>
PAGE 77
<TABLE>
<CAPTION>
Investments in securities
IDS Tax-Exempt Bond Fund, Inc. (Percentages represent value of
Nov. 30, 1993 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Coupon Principal
Name of issuer and title of issue (b)(c) rate Maturity amount Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Ohio (cont'd)
Cuyahoga County Hospital Facility Revenue Bonds Health Cleveland
Fairview General Hospital & Lutheran Medical Center Series 1993 6.30 % 2015 $ 1,000,000 $ 1,052,460
State Building Authority Bonds Toledo Government Center 6.00 2007 4,620,000 4,675,394
______________
Total 11,159,639
_____________________________________________________________________________________________________________________________
Oregon (1.3%)
Hospital Facility Authority of Clackamas County Revenue Bonds
Kaiser-Permanente Series 1985 9.375 2015 2,750,000 3,064,490
Hospital Facility Authority of Clackamas County Revenue Bonds
Sister of Providence Series 1985 9.625 2005 2,750,000 3,111,625
State Housing & Community Services Department Mortgage Revenue Bonds
Single Family Mortgage Series B 6.875 2028 10,000,000 10,275,300
______________
Total 16,451,415
_____________________________________________________________________________________________________________________________
Pennsylvania (3.7%)
Commonwealth General Obligation Bonds Series 1992-1 6.30 2005 11,000,000 12,053,690
Delaware County Industrial Development Authority Pollution Control
Refunding Revenue Bonds Philadelphia Electric Company 7.375 2021 23,540,000 26,291,355
State Housing Finance Agency Single Family Mortgage Revenue Bonds
Series 1987L 7.125 2014 6,165,000 6,693,341
State Intergovernmental Cooperation Authority Special Tax Revenue Bonds
Philadelphia Funding Series 1993 (MBIA Insured) 5.60 2015 2,500,000 2,514,575
______________
Total 47,552,961
_____________________________________________________________________________________________________________________________
Rhode Island (1.3%)
State & Providence Plantations General Obligation Refunding Bonds
Series 1992A (FGIC Insured) 6.25 2007 16,000,000 17,363,200
_____________________________________________________________________________________________________________________________
South Carolina (3.2%)
Darlington County Annual Tender Pollution Control Revenue Bonds
Carolina Power & Light Series 1983 6.60 2010 12,000,000 12,937,800
Horry County Hospital Refunding Revenue Bonds Conway Hospital Series 1992 6.75 2012 4,000,000 4,229,080
Piedmont Municipal Power Agency Electric Refunding Revenue Bonds
Series 1986 6.00 2024 13,060,000 13,114,721
Piedmont Municipal Power Agency Electric Refunding Revenue Bonds
Series 1986A 5.75 2024 2,390,000 2,376,305
Public Service Revenue Bonds Series D 6.375 2022 8,000,000 8,249,520
______________
Total 40,907,426
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
PAGE 78
<TABLE>
<CAPTION>
Investments in securities
IDS Tax-Exempt Bond Fund, Inc. (Percentages represent value of
Nov. 30, 1993 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Coupon Principal
Name of issuer and title of issue (b)(c) rate Maturity amount Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Tennessee (1.5%)
Chattanooga Municipal Improvement & Sewer Facility Unlimited Tax Bonds 6.50 % 2009-11 $ 6,000,000 $ 6,487,680
Knox County Health Education & Housing Facility Board Hospital Refunding
Revenue Bonds Fort Sanders Alliance Obligation Group
Series 1993 (MBIA Insured) 5.25 2015 5,000,000 4,832,700
Knox County Health Education & Housing Facility Board Hospital Refunding
Revenue Bonds Fort Sanders Alliance Obligation Group
Series 1993 (MBIA Insured) 5.75 2014 8,000,000 8,300,240
______________
Total 19,620,620
_____________________________________________________________________________________________________________________________
Texas (14.1%)
Austin Utility System Combined Utility Refunding Revenue Bonds Series 1992
(AMBAC Insured) 6.25 2006 10,500,000 11,532,885
Coastal Water Authority Water Conveyance System Refunding Revenue Bonds
Series 1991 (AMBAC Insured) 6.25 2017 5,000,000 5,546,600
Corpus Christi Independent School District
Unlimited Tax School Building Bonds 6.00 2005-06 4,845,000 4,944,766
Cypress-Fairbanks Independent School District Harris County
Unlimited Tax Schoolhouse Bonds Series 1990 (FGIC Insured) 6.50 2008 1,500,000 1,679,325
Fort Worth Tarrant & Denton Counties Water & Sewer System
Refunding Revenue Bonds Series 1991B 6.30 2004 11,390,000 12,240,264
Fort Worth Tarrant & Denton Counties Water & Sewer System
Refunding Revenue Bonds Series 1991B 6.40 2005 8,760,000 9,417,000
Houston Water & Sewer System Junior Lien Refunding Revenue Bonds
Series C Zero Coupon (AMBAC Insured) 5.92 2007 17,030,000 (d) 7,869,222
Houston Water & Sewer System Junior Lien Refunding Revenue Bonds
Series C Zero Coupon (AMBAC Insured) 6.05 2008 19,260,000 (d) 8,348,825
Municipal Power Agency Bonds (BIG Insured) 6.25 2010 7,000,000 7,421,540
North Central Texas Health Facilities Development Bonds
Kaiser Foundation of Texas 9.375 2015 4,500,000 5,029,335
Orange County Industrial Development Revenue Bonds Wal-Mart Stores 10.75 2009 1,840,000 2,006,133
Randall County Industrial Development Revenue Bonds Wal-Mart Stores 10.75 2009 1,840,000 2,006,133
Round Rock Independent School District Capital Appreciation Refunding Bonds
Permanent School Fund Guarantee Zero Coupon 5.97 2008 13,580,000 (d) 6,136,123
San Antonio Electric & Gas Systems Refunding Revenue Bonds Series 1989 6.00 2014 6,000,000 6,194,640
San Antonio Electric & Gas Systems Refunding Revenue Bonds Series 1989 6.50 2012 20,000,000 21,309,200
San Antonio Electric & Gas Systems Refunding Revenue Bonds Series 1989A 6.50 2012 6,250,000 6,659,125
San Antonio Water Refunding Revenue Bonds (FGIC Insured) 6.40 2007 25,000,000 27,264,750
State General Obligation Capital Appreciation Refunding Bonds
Superconducting Series C Zero Coupon (FGIC Insured) 5.92 2010 4,965,000 (d) 1,935,655
See accompanying notes to investments in securities.
/TABLE
<PAGE>
PAGE 79
<TABLE>
<CAPTION>
Investments in securities
IDS Tax-Exempt Bond Fund, Inc. (Percentages represent value of
Nov. 30, 1993 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Coupon Principal
Name of issuer and title of issue (b)(c) rate Maturity amount Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Texas (cont'd)
State Municipal Power Agency Refunding Revenue Bonds Series 1993
Zero Coupon (MBIA Insured) 6.10 % 2013-14 $76,000,000 (d) $ 23,942,320
State Turnpike Authority Revenue Bonds 6.00 2020 10,000,000 10,806,700
______________
Total 182,290,541
_____________________________________________________________________________________________________________________________
Utah (1.6%)
Emery County Pollution Control Revenue Bonds Utah Power & Light 10.70 2014 2,000,000 2,146,740
Intermountain Power Authority Special Obligation Bonds 1st Crossover Series 6.00 2015 15,970,000 16,205,078
West Valley City Industrial Development Revenue Bonds Albertson's 10.875 2009 1,825,000 1,920,083
______________
Total 20,271,901
_____________________________________________________________________________________________________________________________
Virginia (2.3%)
Augusta County Industrial Development Authority Hospital Refunding Revenue
Bonds Augusta Hospital Series 1993 (AMBAC Insured) 5.125 2021 8,700,000 8,062,899
State Housing Development Authority Commonwealth Mortgage Bonds
Series 1992A 7.10 2017 12,500,000 13,575,250
State Transportation Board Revenue Bonds 6.00 2019 8,000,000 8,218,320
______________
Total 29,856,469
_____________________________________________________________________________________________________________________________
Washington (4.9%)
Auburn School District #408 King County Unlimited Tax
General Obligation Bonds Series 1992A 6.375 2006 8,000,000 8,928,480
Issaquah School District #411 King County Unlimited Tax
General Obligation Refunding Bonds 1992 6.375 2008 16,675,000 18,440,716
Public Power Supply System Nuclear Project #1 Revenue Bonds Series 1989A 6.00 2017 12,130,000 12,232,013
Seattle Light & Power Refunding Revenue Bonds 5.875 2009-10 8,310,000 8,824,140
State Public Power Supply System Nuclear Project #1 Refunding Revenue Bonds
Bonneville Power Administration Series 1993A Inverse Floater (FSA Insured) 8.37 2011 15,000,000 (e) 15,450,000
______________
Total 63,875,349
_____________________________________________________________________________________________________________________________
West Virginia (0.9%)
School Building Authority Capital Improvement Revenue Bonds Series 1990B
(MBIA Insured) 6.00 2020 9,730,000 9,935,984
State Parkways Economic Development & Tourism Authority
Capital Appreciation Refunding Bonds Zero Coupon (FGIC Insured) 5.99 2007 2,735,000 (d) 1,321,196
______________
Total 11,257,180
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
/TABLE
<PAGE>
PAGE 80
<TABLE>
<CAPTION>
Investments in securities
IDS Tax-Exempt Bond Fund, Inc. (Percentages represent value of
Nov. 30, 1993 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Coupon Principal
Name of issuer and title of issue (b)(c) rate Maturity amount Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Wisconsin (3.6%)
Health & Educational Facility Authority Revenue Bonds
Sisters of the Sorrowful Mother Ministry Series 1993A (MBIA Insured) 6.125% 2013 $ 4,000,000 $ 4,182,800
Milwaukee Metropolitan Sewerage District General Obligation
Capital Purpose Bonds Series 1992 6.25 2005 26,000,000 28,727,660
State General Obligation Refunding Bonds Series 1992 6.10 2005 8,500,000 9,328,920
Weston Pollution Control Refunding Revenue Bonds Wisconsin Public Service 9.70 2014 3,500,000 3,610,180
______________
Total 45,849,560
_____________________________________________________________________________________________________________________________
Wyoming (1.0%)
Casper Industrial Development Revenue Bonds Albertson's 9.875 2010 2,525,000 2,849,564
Community Development Authority Single Family Mortgage Bonds
Federally Insured or Guaranteed Mortgage Loan 7.40 2031 4,700,000 5,277,677
Gillette Pollution Control Revenue Bonds Black Hills Power & Light
Series 1984 10.50 2014 5,035,000 5,370,331
______________
Total 13,497,572
_____________________________________________________________________________________________________________________________
Total municipal bonds
(Cost: $1,156,884,971) $1,261,672,822
_____________________________________________________________________________________________________________________________
<CAPTION>
Short-term securities (1.3%)
_____________________________________________________________________________________________________________________________
Annualized Amount
yield on date payable at
Issuer (g) of purchase maturity Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
Municipal notes
California State R.A.N.
06-28-94 2.70% $2,000,000 $ 2,011,940
Los Angeles County T.R.A.N.
06-30-94 2.71 5,000,000 5,014,900
New York City R.A.N.
06-30-94 2.71 10,000,000 10,058,700
_____________________________________________________________________________________________________________________________
Total short-term securities
(Cost: $17,059,747) $ 17,085,540
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $1,173,944,718)(h) $1,278,758,362
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
/TABLE
<PAGE>
PAGE 81
<TABLE>
<CAPTION>
Investments in securities
IDS Tax-Exempt Bond Fund, Inc.
Nov. 30, 1993
_____________________________________________________________________________________________________________________________
Notes to investments in securities
_____________________________________________________________________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Investments in bonds, by rating category as a percentage of total bonds, are as follows:
(Unaudited)
__________________________________________
Rating 11-30-93 11-30-92
_______________________________________________________________________________________________________
<S> <C> <C>
AAA 35% 34%
AA 36 45
A 23 17
BBB and below 6 3
Non-rated - 1
_______________________________________________________________________________________________________
Total 100% 100%
_______________________________________________________________________________________________________
(c) The following abbreviations are used in portfolio descriptions to identify the insurer of the issue:
AMBAC -- American Municipal Bond Association Corporation
BIG -- Bond Investors Guarantee
FGIC -- Financial Guarantee Insurance Corporation
FHA -- Federal Housing Authority
FSA -- Financial Security Assurance
MBIA -- Municipal Bond Investors Assurance
(d) For zero coupon bonds, the interest rate disclosed represents effective yield on the date of acquisition.
(e) Inverse floaters represent securities which pay interest at a rate that increases (decreases) based on (decreases)
increases of market short-term rates. Interest rate disclosed is the rate in effect on Nov. 30, 1993.
(f) Interest rate varies to reflect current market conditions; rate shown is the effective rate on Nov. 30, 1993.
(g) The following abbreviations are used in portfolio descriptions:
R.A.N. -- Revenue Anticipation Note
T.R.A.N. -- Tax & Revenue Anticipation Note
(h) At Nov. 30, 1993, the cost of securities for federal income tax purposes was $1,173,758,070 and the aggregate gross
unrealized appreciation and depreciation based on that cost was:
Unrealized appreciation $107,683,082
Unrealized depreciation (2,682,790)
______________________________________________________________________________________________________
Net unrealized appreciation $105,000,292
______________________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 82
Part C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
(a)Financial Statements.
Financial Statements included with prospectus:
Independent Auditors Report dated January 7, 1994.
Statements:
Statement of Assets and Liabilities, Nov. 30, 1993.
Statement of Operations, year ended Nov. 30, 1993.
Statements of Changes in Net Assets, for the years ended
Nov. 30, 1993 and Nov. 30, 1992.
Notes to Financial Statements.
Schedules:
1. Investments in Securities, Nov. 30, 1993.
Notes to Investment in Securities.
Financial Statements to be filed by Amendment.
(b)Exhibits
1. Copy of Articles of Incorporation amended October 17, 1988,
filed as Exhibit 1 to Post-Effective Amendment No. 23 to this
Registration Statement is herein incorporated by reference.
2. Copy of By-Laws as amended June 14, 1987, filed as Exhibit 2 to
Post-Effective Amendment No. 20 to this Registration Statement is
herein incorporated by reference.
3. Not Applicable.
4. Copy of Stock certificate, filed as Exhibit 4 to Registrant's
Registration Statement No. 2-57382 on September 30, 1976, is
incorporated herein by reference.
5. Copy of Investment Management and Services Agreement between
Registrant and IDS Financial Corporation dated Nov. 14, 1991, filed
as Exhibit 5 to Registrant's Post-Effective Amendment No. 27 to
Registration Statement No. 2-57328 is herein incorporated by
reference.
6. Copy of Distribution Agreement between Registrant and IDS
Financial Services Inc. dated January 1, 1987, filed as Exhibit 6
to Post-Effective Amendment No. 20 to this registration statement
is herein incorporated by reference.
7. All employees who have attained age 21 and completed one year
of service participate in a thrift plan. The Fund contributes each
year an amount equal to 15 percent of their annual salaries, the
maximum amount, permitted under Section 404 (a) of the Internal
Revenue Code or up to a maximum of 0.08 of 1% of the Fund's net
income before income taxes and other adjustments. Employees of <PAGE>
PAGE 83
the Fund become eligible to participate in a retirement plan on the
first day of the month following completion of one year of
employment or attainment of age 21, whichever comes later.
Contributions to the retirement plan cease no later than the time
at which the participant reaches the normal retirement age of 65.
8. Copy of amendment to Custodian Agreement, dated August 5, 1987,
filed as Exhibit 8 to IDS Selective Fund, Inc., Post-Effective
Amendment No. 69, to Registration Statement No. 2-10700, is herein
incorporated by reference.
9. Copy of Transfer Agency Agreement between the Registrant and
IDS Financial Corporation dated November 14, 1991, filed as Exhibit
9 to Registrant's Post-Effective Amendment No. 27 to Registration
Statement No. 2-57328 is herein incorporated by reference.
10. Not Applicable.
11. Copy of Independent Auditor's Report filed herewith
electronically.
12. None.
13. Not Applicable.
14. Copy of Keogh, IRA and other retirement plans, filed as
Exhibits 14(a) through 14(n) to IDS Growth Fund, Inc., Post
Effective Amendment No. 34 to Registration Statement No. 2-38355
are incorporated herein by reference.
15. Copy of Plan and Supplemental Agreement of Distribution
between Registrant and IDS Financial Services dated January 1,
1987, filed as Exhibit 15 to Post-Effective Amendment No. 20 to
this Registration Statement is herein incorporated by reference.
16. Copy of Schedule for computation of each performance quotation
provided in the Registration Statement in response to Item 22,
filed electronically as Exhibit 16 to Post-Effective Amendment No.
29 is herein incorporated by reference.
17.(A) Directors' Power of Attorney to sign amendments to this
Registration Statement dated Oct. 14, 1993, filed electronically as
Exhibit 17(a) to Post-Effective Amendment No. 31 is incorporated
herein by reference.
(B) Officers' Power of Attorney to sign amendments to this
Registration Statement dated June 1, 1993, filed electronically as
Exhibit 17(b) to Post-Effective Amendment No. 31 is incorporated
herein by reference.
<PAGE>
PAGE 84
Item 25. Persons Controlled by or Under Common Control with
Registrant
None
Item 26. Number of Holders of Securities
(1) (2)
Number of Record
Holders as of
Title of Class Jan. 14, 1994
Common Stock 38,924
<PAGE>
PAGE 85
Item 27. Indemnification
The Articles of Incorporation of the registrant provide that the
Fund shall indemnify any person who was or is a party or is
threatened to be made a party, by reason of the fact that she or he
is or was a director, officer, employee or agent of the Fund, or is
or was serving at the request of the Fund as a director, officer,
employee or agent of another company, partnership, joint venture,
trust or other enterprise, to any threatened, pending or completed
action, suit or proceeding, wherever brought, and the Fund may
purchase liability insurance and advance legal expenses, all to the
fullest extent permitted by the laws of the State of Minnesota, as
now existing or hereafter amended. The By-laws of the registrant
provide that present or former directors or officers of the Fund
made or threatened to be made a party to or involved (including as
a witness) in an actual or threatened action, suit or proceeding
shall be indemnified by the Fund to the full extent authorized by
the Minnesota Business Corporation Act, all as more fully set forth
in the By-laws filed as an exhibit to this registration statement.
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
Any indemnification hereunder shall not be exclusive of any other
rights of indemnification to which the directors, officers,
employees or agents might otherwise be entitled. No
indemnification shall be made in violation of the Investment
Company Act of 1940.
<PAGE>
<PAGE> 1
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)
Directors and officers of IDS Financial Corporation who are
directors and/or officers of one or more other companies:
Ronald G. Abrahamson, Vice President--Field Administration
IDS Financial Services Inc. Vice President-Field
IDS Tower 10 Manager Support
Minneapolis, MN 55440
Jerome R. Amundson, Vice President and Controller--Mutual Funds
Operations
IDS Financial Services Inc. Vice President and
IDS Tower 10 Controller-Mutual Funds
Minneapolis, MN 55440 Operations
Douglas A. Alger, Vice President--Compensation and Benefits
IDS Financial Services Inc. Vice President-
IDS Tower 10 Compensation and
Minneapolis, MN 55440 Benefits
Peter J. Anderson, Director, Senior Vice President--Advisory Group
and Equity Management
IDS Securities Corporation Executive Vice President-
IDS Advisory Group Inc. Investments
IDS Tower 10 Director, President and
Minneapolis, MN 55440 Chairman of the Board
IDS Capital Holdings Inc. Director and President
IDS International, Inc. Director, Chairman of the
Board and Executive Vice
President
IDS Financial Services Inc. Senior Vice President-
Advisory Group and Equity
Management
IDS Fund Management Limited Director
NCM Capital Management Group, Inc. Director
2 Mutual Plaza
501 Willard Street
Durham, NC 27701
<PAGE>
<PAGE> 2
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Kent L. Ashton, Vice President--Group Management Office, Banking
and Certificates Group
IDS Financial Services Inc. President-Group Management
IDS Tower 10 Office, Banking and
Minneapolis, MN 55440 Certificates
Timothy V. Bechtold, Vice President--Insurance Product Development
IDS Financial Services Inc. Vice President-Insurance
IDS Tower 10 Product Development
Minneapolis, MN 55440
IDS Life Insurance Company Vice President-Insurance
Product Development
John D. Begley, Vice President--Mid-Central Region
IDS Insurance Agency of Alabama Inc. Vice President-Mid-Central
Region
IDS Insurance Agency of Arkansas Inc. Vice President-Mid-Central
Region
IDS Insurance Agency of Massachusetts Vice President-Mid-Central
Inc. Region
IDS Insurance Agency of New Mexico Inc. Vice President-Mid-Central
Region
IDS Insurance Agency of North Carolina Vice President-Mid-Central
Inc. Region
IDS Insurance Agency of Ohio Inc. Vice President-Mid-Central
Inc. Region
IDS Insurance Agency of Wyoming Inc. Vice President-Mid-Central
Region
IDS Financial Services Inc. Vice President-
IDS Tower 10 Mid-Central Region
Minneapolis, MN 55440
Carl E. Beihl, Vice President--Strategic Planning and Architecture
IDS Financial Services Inc. Vice President,
IDS Tower 10 Strategic Planning
Minneapolis, MN 55440 and Architecture
Alan F. Bignall, Vice President--Financial Planning Systems
IDS Financial Services Inc. Vice President-
IDS Tower 10 Product Systems
Minneapolis, MN 55440 Services
<PAGE>
<PAGE> 3
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Brent L. Bisson, Vice President--Northwest Region
IDS Financial Services Inc. Vice President-
IDS Tower 10 Northwest Region
Minneapolis, MN 55440
IDS Insurance Agency of Alabama Inc. Vice President-
Northwest Region
IDS Insurance Agency of Arkansas Inc. Vice President-
Northwest Region
IDS Insurance Agency of Massachusetts Vice President-
Inc. Northwest Region
IDS Insurance Agency of New Mexico Vice President-
Inc. Northwest Region
IDS Insurance Agency of North Carolina Vice President-
Inc. Northwest Region
IDS Insurance Agency of Ohio Inc. Vice President-
Northwest Region
IDS Insurance Agency of Wyoming Inc. Vice President-
Northwest Region
Thomas J. Brakke, Vice President--Investment Services and
Investment Research
IDS Financial Corporation Vice President-Investment
IDS Tower 10 Services and Investment
Minneapolis, MN 55440 Research
Karl J. Breyer, Director, Senior Vice President and General Counsel
IDS Financial Services Inc. Senior Vice President
IDS Tower 10 and General Counsel
Minneapolis, MN 55440
IDS Aircraft Services Corporation Director and President
John L. Burbidge, Vice President--Government Relations
IDS Life Insurance Company
IDS Financial Services Inc. Vice President-
IDS Tower 10 Customer Relations
Minneapolis, MN 55440
<PAGE>
<PAGE> 4
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Harold E. Burke, Vice President and Assistant General Counsel
IDS Financial Services Inc. Vice President and
IDS Tower 10 Assistant General
Minneapolis, MN 55440 Counsel
Orison Y. Chaffee III, Vice President--Field Real Estate
IDS Financial Services Inc. Vice President-Field
IDS Tower 10 Real Estate
Minneapolis, MN 55440
James Choat, Senior Region Vice President
IDS Financial Services Inc. Senior Region Vice
IDS Tower 10 President
Minneapolis, MN 55440
IDS Insurance Agency of Alabama Inc. Vice President--North
Central Region
IDS Insurance Agency of Arkansas Inc. Vice President--North
Central Region
IDS Insurance Agency of Massachusetts Vice President--North
Inc. Central Region
IDS Insurance Agency of New Mexico Vice President--North
Inc. Central Region
IDS Insurance Agency of North Carolina Vice President--North
Inc. Central Region
IDS Insurance Agency of Ohio Inc. Vice President--North
Central Region
IDS Insurance Agency of Wyoming Inc. Vice President-- North
Central Region
Kenneth J. Ciak, Vice President and General Manager--IDS Property
Casualty
IDS Property Casualty Insurance Co. Director, President
1 WEG Blvd
DePere, Wisconsin 54115
IDS Financial Services Inc. Vice President and General
Manager-IDS Property
Casualty
<PAGE>
<PAGE> 5
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Roger C. Corea, Vice President--Northeast Region
IDS Financial Services Inc. Vice President-
IDS Tower 10 Northeast Region
Minneapolis, MN 55440
IDS Life Insurance Co. of New York Director
Box 5144
Albany, NY 12205
IDS Insurance Agency of Alabama Inc. Vice President -
Northeast Region
IDS Insurance Agency of Arkansas Inc. Vice President -
Northeast Region
IDS Insurance Agency of Massachusetts Vice President -
Inc. Northeast Region
IDS Insurance Agency of New Mexico Inc. Vice President -
Northeast Region
IDS Insurance Agency of North Carolina Vice President -
Inc. Northeast Region
IDS Insurance Agency of Ohio, Inc. Vice President -
Northeast Region
IDS Insurance Agency of Wyoming Inc. Vice President -
Northeast Region
Kevin F. Crowe, Vice President--Field Management Development
IDS Financial Services Inc. Vice President - Field
IDS Tower 10 Marketing Development
Minneapolis, MN 55440
Alan R. Dakay, Vice President--Institutional Insurance Marketing
IDS Financial Services Inc. Vice President -
IDS Tower 10 Institutional Insurance
Minneapolis, MN 55440 Marketing
American Enterprise Life Insurance Co. Director
IDS Life Insurance Company Vice President -
Institutional Insurance
Marketing
<PAGE>
<PAGE> 6
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
William F. Darland, Vice President--South Central Region
IDS Insurance Agency of Alabama Inc. Vice President-
South Central Region
IDS Insurance Agency of Arkansas Inc. Vice President -
South Central Region
IDS Insurance Agency of Massachusetts Vice President-
Inc. South Central Region
IDS Insurance Agency of New Mexico Inc. Vice President-
South Central Region
IDS Insurance Agency of North Carolina Vice President-
Inc. South Central Region
IDS Insurance Agency of Ohio Inc. Vice President-
South Central Region
IDS Insurance Agency of Wyoming Inc. Vice President-
South Central Region
IDS Financial Services Inc. Vice President-
IDS Tower 10 South Central Region
Minneapolis, MN 55440
Michael P. Ducar, Vice President--Investment Services
IDS Financial Services Inc. Vice President-
IDS Tower 10 Investment Services
Minneapolis, MN 55440
William H. Dudley, Director, Executive Vice President--Investment
and Brokerage Operations
IDS Financial Services Inc. Director, Executive Vice
IDS Tower 10 President-Investment and
Minneapolis, MN 55440 Brokerage Operations
IDS Capital Holdings Inc. Director
IDS Futures Corporation Director
IDS Advisory Group Inc. Director
IDS Futures III Corporation Director
IDS International, Inc. Director
IDS Securities Services Chairman, President and
Chief Executive Officer
IDS Securities Corporation Director, Chairman of the
Board, President and
Chief Executive Officer
IDS Life Insurance Company Vice President
American Enterprise Investment Director
Services Inc.
American Enterprise Investment Director
Services Inc.
<PAGE>
<PAGE> 7
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Roger S. Edgar, Director, Senior Vice President--Information
Systems
IDS Financial Services Inc. Senior Vice President-
IDS Tower 10 Information Systems
Minneapolis, MN 55440
Gordon L. Eid, Director, Senior Vice President and Deputy General
Counsel
IDS Insurance Agency of Alabama Inc. Director, Vice President
IDS Insurance Agency of Arkansas Inc. Director, Vice President
IDS Insurance Agency of Massachusetts Director, Vice President
Inc.
IDS Insurance Agency of New Mexico Inc. Director, Vice President
IDS Insurance Agency of North Carolina Director, Vice President
Inc.
IDS Insurance Agency of Ohio Inc. Director, Vice President
IDS Insurance Agency of Wyoming Inc. Director, Vice President
IDS Real Estate Services, Inc. Vice President
IDS Financial Services Inc. Senior Vice President and
IDS Tower 10 General Counsel
Minneapolis, MN 55440
Investors Syndicate Development Corp. Director
Edwin W. Elder III, Vice President--Operations/IDS Property
Casualty
IDS Property Casualty Insurance Co. Vice President-Operations
1 WEG Blvd.
Depere, WI 54115
Elizabeth A. Elder, Vice President--Systems Services
IDS Financial Services Inc. Vice President-Systems
IDS Tower 10 Services
Minneapolis, MN 55440
Mark A. Ernst, Vice President--Tax and Business Services
IDS Financial Services Inc. Vice President-Tax and
IDS Tower 10 Business Services
Minneapolis, MN 55440
IDS Tax and Business Services Vice President-Tax and
Business Services
<PAGE>
<PAGE> 8
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Gordon M. Fines, Vice President--Mutual Fund Equity Investments
IDS Financial Services Inc. Vice President-
Mutual Fund Equity
Investments
IDS International Inc. Vice President and
Portfolio Manager
IDS Advisory Group Inc. Executive Vice President
IDS Tower 10
Minneapolis, MN 55440
Louis C. Fornetti, Director, Senior Vice President--Corporate
Controller
IDS Financial Services Inc. Senior Vice President-
Corporate Controller
IDS Property Casualty Insurance Co. Director; Vice President
IDS Tower 10
Minneapolis, MN 55440
American Enterprise Investment Vice President
Services Inc.
IDS Capital Holdings Inc. Director and Senior
Vice President
IDS Certificate Company Vice President
IDS Insurance Agency of Alabama Inc. Vice President
IDS Insurance Agency of Arkansas Inc. Vice President
IDS Insurance Agency of Massachusetts Vice President
Inc.
IDS Insurance Agency of New Mexico Inc. Vice President
IDS Insurance Agency of North Carolina Vice President
Inc.
IDS Insurance Agency of Ohio Inc. Vice President
IDS Insurance Agency of Wyoming Inc. Vice President
IDS Life Series Fund, Inc. Vice President
IDS Life Variable Annuity Funds A&B Vice President
IDS Real Estate Services, Inc. Vice President
IDS Securities Corporation Vice President
Investors Syndicate Development Corp. Vice President
<PAGE>
<PAGE> 9
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Douglas L. Forsberg, Vice President--Securities Services
IDS Financial Services Inc. Vice President-
Securities Services
IDS Securities Services Vice President and
General Manager
American Enterprise Investment Director, President and
Services Inc. Chief Executive Officer
Robert G. Gilbert, Vice President--Real Estate
IDS Financial Services Inc. Vice President-
IDS Tower 10 Real Estate
Minneapolis, MN 55440
John J. Golden, Vice President--Field Compensation Development
IDS Financial Services Inc. Vice President-Field
IDS Tower 10 Compensation
Minneapolis, MN 55440
Harvey Golub, Director
American Express Company Director and President
American Express Tower
World Financial Center
New York, New York 10285
American Express Travel Chairman and Chief
Related Services Company, Inc. Executive Officer
IDS Bond Fund, Inc. Director
IDS California Tax-Exempt Trust Trustee
IDS Discovery Fund, Inc. Director
IDS Equity Plus Fund, Inc. Director
IDS Extra Income Fund, Inc. Director
IDS Federal Income Fund, Inc. Director
IDS Global Series, Inc. Director
IDS Growth Fund, Inc. Director
IDS High Yield Tax-Exempt Fund, Inc. Director
IDS International Fund, Inc. Director
IDS Investors Series, Inc. Director
IDS Managed Retirement Fund, Inc. Director
IDS Market Advantage Series, Inc. Director
IDS Money Market Series, Inc. Director
IDS New Dimensions Fund, Inc. Director
<PAGE>
<PAGE> 10
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
IDS Precious Metals Fund, Inc. Director
IDS Progressive Fund, Inc. Director
IDS Selective Fund, Inc. Director
IDS Special Tax-Exempt Series Trust Trustee
IDS Stock Fund, Inc. Director
IDS Strategy Fund, Inc. Director
IDS Tax-Exempt Bond Fund, Inc. Director
IDS Tax-Free Money Fund, Inc. Director
IDS Utilities Income Fund, Inc. Director
IDS Life Capital Resource Fund, Inc. Director
IDS Life Special Income Fund, Inc. Director
IDS Life Managed Fund, Inc. Director
IDS Life Moneyshare Fund, Inc. Director
National Computer Systems, Inc. Director
11000 Prairie Lakes Drive
Minneapolis, MN 55440
Morris Goodwin Jr., Vice President and Corporate Treasurer
American Express Minnesota Foundation Director, Vice President
and Treasurer
American Enterprise Investment Vice President and
Services Inc. Treasurer
IDS Aircraft Services Corporation Vice President and
Treasurer
IDS Advisory Group Inc. Vice President and
Treasurer
IDS Cable Corporation Vice President and
Treasurer
IDS Cable II Corporation Vice President and
Treasurer
IDS Capital Holdings Inc. Vice President and
Treasurer
IDS Certificate Company Vice President and
Treasurer
IDS Insurance Agency of Alabama Inc. Vice President and
Treasurer
IDS Insurance Agency of Arkansas Inc. Vice President and
Treasurer
IDS Insurance Agency of Massachusetts Vice President and
Inc. Treasurer
IDS Insurance Agency of New Mexico Inc. Vice President and
Treasurer
IDS Insurance Agency of North Carolina Vice President and
Inc. Treasurer
IDS Insurance Agency of Ohio Inc. Vice President and
Treasurer
<PAGE>
<PAGE> 11
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
IDS Insurance Agency of Wyoming Inc. Vice President and
Treasurer
IDS International, Inc. Vice President and
Treasurer
IDS Life Series, Inc. Vice President and
Treasurer
IDS Life Variable Annuity Funds A&B Vice President and
Treasurer
IDS Management Corporation Vice President and
Treasurer
IDS Partnership Leasing Corporation Vice President and
Treasurer
IDS Partnership Services Corporation Vice President and
Treasurer
IDS Plan Services of California, Inc. Vice President and
Treasurer
IDS Property Casualty Insurance Co. Vice President and
Treasurer
IDS Real Estate Services, Inc Vice President and
Treasurer
IDS Real Estate Corporation Vice President and
Treasurer
IDS Realty Corporation Vice President and
Treasurer
IDS Securities Corporation Vice President and
Treasurer
Investors Syndicate Development Corp. Vice President and
Treasurer
Peninsular Properties, Inc. Vice President and
Treasurer
IDS Plan Services of California, Inc. Vice President and
Treasurer
IDS Financial Services Inc. Vice President and
IDS Tower 10 Corporate Treasurer
Minneapolis, MN 55440
Sloan Financial Group, Inc. Director
2 Mutual Plaza
501 Willard Street
Durham, NC 27701
NCM Capital Management Group, Inc. Director
2 Mutual Plaza
501 Willard Street
Durham, NC 27701
<PAGE>
<PAGE> 12
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Sara J. Grady, Vice President--Human Resources and Organizational
Development
IDS Financial Services Inc. Vice President-Human
IDS Tower 10 Resources and
Minneapolis, MN 55440 Organization Development
David A. Hammer, Vice President and Marketing Controller
IDS Financial Services Inc. Vice President and
IDS Tower 10 Marketing Controller
Minneapolis, MN 55440
IDS Plan Services of California, Inc. Director
Robert L. Harden, Vice President--Mid-Atlantic Region
IDS Insurance Agency of Alabama Inc. Vice President-
Mid Atlantic Region
IDS Insurance Agency of Arkansas Inc. Vice President-
Mid Atlantic Region
IDS Insurance Agency of Massachusetts Vice President-
Inc. Mid Atlantic Region
IDS Insurance Agency of New Mexico Inc. Vice President-
Mid Atlantic Region
IDS Insurance Agency of North Carolina Vice President-
Inc. Mid Atlantic Region
IDS Insurance Agency of Ohio Inc. Vice President-
Mid Atlantic Region
IDS Insurance Agency of Wyoming Inc. Vice President-
Mid Atlantic Region
IDS Financial Services Inc. Vice President-
IDS Tower 10 Mid Atlantic Region
Minneapolis, MN 55440
Lorraine R. Hart, Vice President--Insurance Investments
IDS Financial Services Inc. Vice President-Insurance
IDS Tower 10 Investments
Minneapolis, MN 55440
American Enterprise Life Vice President-Investments
Insurance Company
IDS Life Insurance Company Vice President-Investments
<PAGE>
<PAGE> 13
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Mark S. Hays, Vice President--Senior Portfolio Manager, IDS
International
IDS Financial Services Inc. Vice President-Senior
IDS Tower 10 Portfolio Manager, IDS
Minneapolis, MN 55440 International
IDS Fund Management Limited Director
IDS International, Inc. Senior Vice President
Robert H. Healy, Vice President--Senior Portfolio Manager
IDS Securities Corporation Vice President and Chief
Investment Officer
IDS Securities Services Exec. Vice President and
Chief Investment Officer
IDS Advisory Group Inc. Senior Vice President
IDS Financial Services Inc. Vice President-
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
James G. Hirsh, Vice President and Assistant General Counsel
IDS Insurance Agency of Alabama Inc. Vice President
IDS Insurance Agency of Arkansas Inc. Vice President
IDS Insurance Agency of Massachusetts Vice President
Inc.
IDS Insurance Agency of New Mexico Inc. Vice President
IDS Insurance Agency of North Carolina Vice President
Inc.
IDS Insurance Agency of Ohio Inc. Vice President
IDS Insurance Agency of Wyoming Inc. Vice President
IDS Financial Services Inc. Vice President and
Assistant General Counsel
IDS Securities Services Vice President and General
Counsel
IDS Securities Corporation Director, Vice President
IDS Tower 10 and General Counsel
Minneapolis, MN 55440
Raymond E. Hirsch, Vice President--Senior Portfolio Manager
IDS Financial Services Inc. Vice President-Senior
IDS Tower 10 Portfolio Manager
Minneapolis, MN 55440
<PAGE>
<PAGE> 14
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Kevin P. Howe, Vice President--Government and Customer Relations
IDS Financial Services Inc. Vice President-
IDS Tower 10 Government and
Minneapolis, MN 55440 Customer Relations
American Enterprise Investment Vice President and
Services Inc. Compliance Officer
David R. Hubers, Director; Senior Vice President--Finance, and
Chief Financial Officer
IDS Financial Services Inc. Senior Vice President-
IDS Tower 10 Finance and Chief
Minneapolis, MN 55440 Financial Officer
IDS Bank & Trust Director
IDS Aircraft Services Corporation Director and Vice President
IDS Capital Holdings Inc. Director and Senior
Vice President
IDS Certificate Company Director
IDS Deposit Corp. Director
IDS Life Insurance Company Director
IDS Life Insurance Company of New York Director
IDS Property Casualty Insurance Co. Director and Chairman of
the Board
Peninsular Properties, Inc. Director and Chairman of
Board
Marietta Johns, Director; Senior Vice President--ACUMA Ltd.
ACUMA Ltd. Senior Vice President
ACUMA House
The Glanty, Egham
Surrey TW 20 9 AT
UK
IDS Financial Services Inc. Senior Region Vice
President
IDS Insurance Agency of Alabama Inc. Vice President-
Southwest Region
IDS Insurance Agency of Arkansas Inc. Vice President-
Southwest Region
IDS Insurance Agency of Massachusetts Vice President-
Inc. Southwest Region
IDS Insurance Agency of New Mexico Inc. Vice President-
Southwest Region
IDS Insurance Agency of North Carolina Vice President-
Southwest Region
IDS Insurance Agency of Ohio Inc. Vice President-
Southwest Region
IDS Insurance Agency of Wyoming Inc. Vice President-
Southwest Region
<PAGE>
<PAGE> 15
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Douglas R. Jordal, Vice President--Taxes
IDS Financial Services Inc. Vice President-Taxes
IDS Tower 10
Minneapolis, MN 55440
IDS Aircraft Services Corporation Vice President
Craig A. Junkins, Vice President--Financial Planning and Marketing
IDS Financial Services Inc. Vice President-Financial
IDS Tower 10 Planning and Marketing
Minneapolis, MN 55440
Susan D. Kinder, Director and Senior Vice President--Human
Resources
IDS Financial Services Inc. Director, Senior Vice
IDS Tower 10 President-Human Resources
Minneapolis, MN 55440
Richard W. Kling, Vice President--Insurance Marketing and Products
IDS Financial Services Inc. Vice President-
Insurance Marketing and
Products
IDS Insurance Agency of Alabama Inc. Director; Executive Vice
President
IDS Insurance Agency of Arkansas Inc. Director; Executive Vice
President
IDS Insurance Agency of Massachusetts Director; Executive Vice
Inc. President
IDS Insurance Agency of New Mexico Inc. Director; Executive Vice
President
IDS Insurance Agency of North Carolina Director; Executive Vice
Inc. President
IDS Insurance Agency of Ohio Inc. Director; Executive Vice
President
IDS Insurance Agency of Wyoming Inc. Director; Executive Vice
President
IDS Life Series Fund, Inc. Director
IDS Life Variable Annuity Funds A&B Member of Board of Managers
IDS Life Insurance Company Director; Executive Vice
IDS Tower 10 President-Marketing and
Minneapolis, MN 55440 Products
IDS Life Insurance Company Director
of New York
P.O. Box 5144
Albany, NY 12205
<PAGE>
<PAGE> 16
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Harold Knutson, Vice President--System Services
IDS Financial Services Inc. Vice President--
IDS Tower 10 System Services
Minneapolis, MN 55440
Paul F. Kolkman, Vice President--Corporate Actuary
IDS Financial Services Inc. Vice President-
Corporate Actuary
IDS Life Insurance Company Director; Vice President-
Finance
IDS Life Series Fund, Inc. Vice President and Chief
IDS Tower 10 Actuary
Minneapolis, MN 55440
Claire Kolmodin, Vice President--Service Quality
IDS Financial Services Inc. Vice President-
IDS Tower 10 Service Quality
Minneapolis, MN 55440
Christopher Kudrna, Vice President--Systems and Technology
Development
IDS Life Insurance Company Director; Vice President,
Systems and Technology
Development
IDS Financial Services Inc. Vice President-Systems and
IDS Tower 10 Technology Development
Minneapolis, MN 55440
Steven C. Kumagai, Director and Senior Vice President--Associate
General Sales Manager
IDS Financial Services Inc. Director; Senior Vice
IDS Tower 10 President-Associate
Minneapolis, MN 55440 General Sales Manager
Edward Labenski, Vice President--Senior Portfolio Manager
IDS Financial Services Inc. Vice President-
Senior Portfolio
Manager
IDS Advisory Group Inc. Senior Vice President
IDS Tower 10
Minneapolis, MN 55440
<PAGE>
<PAGE> 17
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Peter L. Lamaison, Vice President--IDS International Division
IDS Financial Services Inc. Vice President-
IDS International
Division
IDS Fund Management Limited Director and Chairman of
the Board
IDS International, Inc. Director; President and
IDS Tower 10 Chief Executive Officer
Minneapolis, MN 55440
Kurt A. Larson, Vice President--Senior Portfolio Manager
IDS Financial Services Inc. Vice President-
IDS Tower 10 Senior Portfolio Manager
Minneapolis, MN 55440
Ryan R. Larson, Vice President--Annuity Product Development
IDS Financial Services Inc. Vice President-
Annuity Product
Development
IDS Life Insurance Company Vice President,
IDS Tower 10 Annuity Product
Minneapolis, MN 55440 Development
Peter A. Lefferts, Director; Senior Vice President--Banking and
Certificates
IDS Deposit Corp. Director, President
and Chief Executive Officer
IDS Bank & Trust Director, President and
Chief Executive Officer
Investors Syndicate Development Corp. Director, Chairman of the
Board and President
IDS Plan Services of California, Inc. Director
IDS Sales Support Inc. Director
IDS Certificate Company Director, Chairman of the
IDS Tower 10 Board and President
Minneapolis, MN 55440
<PAGE>
<PAGE> 18
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Douglas A. Lennick, Director; Senior Vice President and General
Sales Manager
IDS Financial Services Inc. Director; Senior Vice
IDS Tower 10 President and General Sales
Minneapolis, MN 55440 Manager
Dickson W. Lewis, Vice President--Consumer and Business Marketing
IDS Financial Services Inc. Vice President-
IDS Tower 10 Consumer and Business
Minneapolis, MN 55440 Marketing
Mary Malevich, Vice President--Senior Portfolio Manager
IDS Financial Services Inc. Vice President-
Senior Portfolio
Manager
IDS International Inc. Vice President and
Portfolio Manager
IDS Advisory Group Inc. Executive Vice President
IDS Tower 10
Minneapolis, MN 55440
James M. McAlear, Jr., Vice President and Senior Portfolio Manager
IDS International
IDS Fund Management Limited Director
IDS Financial Services Inc. Vice President and
Senior Portfolio
Manager, IDS
International
IDS International, Inc. Senior Vice President
IDS Tower 10
Minneapolis, MN 55440
William J. McKinney, Vice President--Field Management Support
IDS Financial Services Inc. Vice President-Field
IDS Tower 10 Management Support
Minneapolis, MN 55440
<PAGE>
<PAGE> 19
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Thomas Medcalf, Vice President--Senior Portfolio Manager
IDS Advisory Group Inc. Executive Vice President
IDS Financial Services Inc. Vice President-Senior
IDS Tower 10 Portfolio Manager
Minneapolis, MN 55440
William C. Melton, Vice President-Chief Economist
IDS Financial Services Inc. Vice President-
IDS Tower 10 Chief Economist
Minneapolis, MN 55440
Earlon L. Milbrath, Vice President--U.K. Venture
IDS Financial Services Inc. Vice President-
IDS Tower 10 U.K. Venture
Minneapolis, MN 55440
Janis E. Miller, Vice President--Mutual Funds Products and
Marketing
IDS Financial Services Inc. Vice President-Mutual Funds
IDS Tower 10 Products and Marketing
Minneapolis, MN 55440
James A. Mitchell, Director; Senior Vice President--Insurance
Operations
American Enterprise Life Insurance Director and Chairman of
Company the Board
P.O. Box 534
Minneapolis, MN 55440
IDS Plan Services of California, Inc. Director
IDS Property Casualty Insurance Co. Director
IDS Insurance Agency of Alabama Inc. Director and President
IDS Insurance Agency of Arkansas Inc. Director and President
IDS Insurance Agency of Massachusetts Director and President
Inc.
IDS Insurance Agency of New Mexico Inc. Director and President
IDS Insurance Agency of North Carolina Director and President
Inc.
IDS Insurance Agency of Ohio Inc. Director and President
IDS Insurance Agency of Wyoming Inc. Director and President
<PAGE>
<PAGE> 20
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
IDS Life Insurance Company Director and President
IDS Tower 10
Minneapolis, MN 55440
IDS Financial Services Inc. Senior Vice President-
Insurance Operations
IDS Life Series Fund, Inc. Director and President
IDS Life Variable Annuity Funds A Member of the Board of
and B Managers, Chairman and
President
IDS Life Capital Resource Fund, Inc. Director and Executive
Vice President
IDS Life Special Income Fund, Inc. Director and Executive
Vice President
IDS Life Managed Fund, Inc. Director and Executive
Vice President
IDS Life Moneyshare Fund, Inc. Director and Executive
IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Life Insurance Company Director and Chairman
of New York of the Board
P.O. Box 5144
Albany, NY 12205
Pamela J. Moret, Vice President and Assistant General Counsel
IDS Financial Services Inc. Vice President and
IDS Tower 10 Assistant General Counsel
Minneapolis, MN 55440
Robert J. Neis, Vice President--EDP Services
IDS Financial Services Inc. Vice President-
IDS Tower 10 EDP Services
Minneapolis, MN 55440
<PAGE>
<PAGE> 21
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Vernon F. Palen, Vice President--Rocky Mountain Region
IDS Financial Services Inc. Vice President-Rocky
IDS Tower 10 Mountain Region
Minneapolis, MN 55440
IDS Insurance Agency of Alabama Inc. Vice President-
Rocky Mountain Region
IDS Insurance Agency of Arkansas Inc. Vice President-
Rocky Mountain Region
IDS Insurance Agency of Massachusetts Vice President-
Inc. Rocky Mountain Region
IDS Insurance Agency of New Mexico Inc. Vice President-
Rocky Mountain Region
IDS Insurance Agency of North Carolina Vice President-
Inc. Rocky Mountain Region
IDS Insurance Agency of Ohio Inc. Vice President-
Rocky Mountain Region
IDS Insurance Agency of Wyoming Inc. Vice President-
Rocky Mountain Region
James R. Palmer, Vice President--Insurance Operations
IDS Financial Services Inc. Vice President-
IDS Tower 10 Insurance Operations
Minneapolis, MN 55440
IDS Life Insurance Company Vice President-Taxes
George M. Perry, Vice President--Corporate Strategy and Development
IDS Financial Services Inc. Vice President-
IDS Tower 10 Corporate Strategy
Minneapolis, MN 55440 and Development
IDS Property Casualty Insurance Co. Director
IDS Insurance Agency of Alabama Inc. Director and Executive
Vice President
IDS Insurance Agency of Arkansas Inc. Director and Executive
Vice President
IDS Insurance Agency of Massachusetts Director and Executive
Inc. Vice President
IDS Insurance Agency of New Mexico Inc. Director and Executive
Inc. Vice President
IDS Insurance Agency of North Carolina Director and Executive
Inc. Vice President
IDS Insurance Agency of Ohio Inc. Director and Executive
Vice President
IDS Insurance Agency of Wyoming Inc. Director and Executive
Vice President
<PAGE>
<PAGE> 22
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Susan B. Plimpton, Vice President -- American Express Marketing
IDS Financial Services Inc. Vice President--
IDS Tower 10 American Express Marketing
Minneapolis, MN 55440
Ronald W. Powell, Vice President and Assistant General Counsel
IDS Realty Corporation Vice President and
Secretary
IDS Financial Services Inc. Vice President and
Assistant General Counsel
IDS Cable Corporation Vice President and
Assistant Secretary
IDS Cable II Corporation Vice President and
Assistant Secretary
IDS Management Corporation Vice President and
Assistant Secretary
IDS Partnership Leasing Corporation Vice President and
Assistant Secretary
IDS Plan Services of California, Inc. Vice President and
Assistant Secretary
IDS Realty Corporation Vice President and
Assistant Secretary
IDS Life Series Fund, Inc. Secretary
IDS Life Variable Annuity Funds Secretary
A and B
IDS Partnership Services Corporation Vice President and
IDS Tower 10 Assistant Secretary
Minneapolis, MN 55440
James M. Punch, Vice President--TransAction Services
IDS Financial Services Inc. Vice President-Trans
IDS Tower 10 Action Services
Minneapolis, MN 55440
Frederick C. Quirsfeld, Vice President--Taxable Mutual Fund
Investments
IDS Financial Services Inc. Vice President--
IDS Tower 10 Taxable Mutual Fund
Minneapolis, MN 55440 Investments
<PAGE>
<PAGE> 23
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
James D. Robinson III, Director
American Express Company Director, Chairman,
American Express Tower Chief Executive Officer
World Financial Center Chief Quality Officer
New York, New York 10285
Union Pacific Corporation Director
The Business Council of New York Director
State, Inc.
Advisory Committee for Trade Policy Chairman
and Negotiations
New York City Partnership Chairman
New York Chamber of Commerce Chairman
and Industry
The Business Round Table Co-Chairman
Board of Governors Vice Chairman
United Way of America Vice Chairman
Memorial Hospital for Cancer Member, Board of Managers
and Allied Diseases
Council on Foreign Relations Member, Board of Directors
The Brookings Institution Member, Board of Trustees
Japan Society Member, Board of Directors
American Express Bank Ltd. Director
Shearson Lehman Holdings Inc. Director
Bristol-Meyers Squibb Company Director
345 Park Avenue
New York, NY
Coca-Cola Company Director
310 North Avenue, NW
Atlanta, GA 30313
Memorial Sloane-Kettering Chairman Board of Managers
Cancer Center Chairman Board of Overseers
New York, NY
Roger B. Rogos, Vice President--Great Lakes Region
IDS Insurance Agency of Alabama Inc. Vice President-
Great Lakes Region
IDS Insurance Agency of Arkansas Inc. Vice President-
Great Lakes Region
IDS Insurance Agency of Massachusetts Vice President-
Inc. Great Lakes Region
IDS Insurance Agency of New Mexico Inc. Vice President-
Great Lakes Region
IDS Insurance Agency of North Carolina Vice President-
Inc. Great Lakes Region
<PAGE>
<PAGE> 24
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
IDS Insurance Agency of Ohio Inc. Vice President-
Great Lakes Region
IDS Insurance Agency of Wyoming Inc. Vice President-
Great Lakes Region
IDS Financial Services Inc. Vice President-Great Lakes
IDS Tower 10 Region
Minneapolis, MN 55440
ReBecca K. Roloff, Vice President--Insurance Operations
IDS Life Insurance Company Director; Executive Vice
IDS Tower 10 President-Insurance
Minneapolis, MN 55440 Operations
IDS Financial Services Inc. Vice President-Insurance
Operations
Robert A. Rudell, Vice President--Sales and Marketing, IDS
Institutional Marketing
IDS Financial Services Inc. Vice President-Sales and
IDS Tower 10 Marketing, IDS
Minneapolis, Mn 55440 Institutional Marketing
John P. Ryan, Vice President and General Auditor
IDS Financial Services Inc. Vice President and General
IDS Tower 10 Auditor
Minneapolis, MN 55440
James H. Sadlowske, Vice President--System Services
IDS Financial Services Inc. Vice President-
IDS Tower 10 System Services
Minneapolis, MN 55440
<PAGE>
<PAGE> 25
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Erven A. Samsel, Senior Region Vice President
IDS Financial Services Inc. Senior Region Vice
IDS Tower 10 President
Minneapolis, MN 55440
IDS Insurance Agency of Alabama Inc. Vice President-
New England Region
IDS Insurance Agency of Arkansas Inc. Vice President-
New England Region
IDS Insurance Agency of Massachusetts Vice President-
New England Region
IDS Insurance Agency of New Mexico Inc. Vice President-
New England Region
IDS Insurance Agency of North Carolina Vice President-
New England Region
IDS Insurance Agency of Ohio Inc. Vice President-
New England Region
IDS Insurance Agency of Wyoming Inc. Vice President-
New England Region
Carol A. Sander, Director, Senior Vice President--Communications
American Express Minnesota Foundation Director
IDS Financial Services Inc. Senior Vice President-
IDS Tower 10 Communications
Minneapolis, MN 55440
R. Reed Saunders, Director; Senior Vice President-Financial
Planning and Marketing
IDS Property Casualty Insurance Co. Director
IDS Financial Services Inc. Director and Senior Vice
IDS Tower 10 President-Financial
Minneapolis, MN 55440 Planning and Marketing
Stuart A. Sedlacek, Vice President--Quantitative Investment
Management
IDS Financial Services Inc. Vice President-
IDS Tower 10 Quantitative
Minneapolis, MN 55440 Investment Management
<PAGE>
<PAGE> 26
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
F. Dale Simmons, Vice President--Senior Portfolio Manager,
Insurance Investments
IDS Financial Services Inc. Vice President-Senior
IDS Tower 10 Portfolio Manager
Minneapolis, MN 55440 Insurance Investments
IDS Partnership Services Corporation Vice President
IDS Real Estate Services Inc. Vice President
IDS Realty Corporation Vice President
Peninsular Properties, Inc. Director and President
Julian W. Sloter, Vice President--Southeast Region
IDS Insurance Agency of Alabama Inc. Vice President-
Southeast Region
IDS Insurance Agency of Arkansas Inc. Vice President-
Southeast Region
IDS Insurance Agency of Massachusetts Vice President-
Inc. Southeast Region
IDS Insurance Agency of New Mexico Inc. Vice President-
Southeast Region
IDS Insurance Agency of North Carolina Vice President-
Inc. Southeast Region
IDS Insurance Agency of Ohio Inc. Vice President-
Southeast Region
IDS Insurance Agency of Wyoming Inc. Vice President-
Southeast Region
IDS Financial Services Inc. Vice President--Southeast
IDS Tower 10 Region
Minneapolis, MN 55440
William A. Smith, Director; Vice President--Finance and CFO/UK
IDS Financial Corporation Vice President-
IDS Tower 10 Finance and CFO/UK
Minneapolis, MN 55440
IDS Life Capital Resource Fund, Inc. Treasurer
IDS Life Special Income Fund, Inc. Treasurer
IDS Life Managed Fund, Inc. Treasurer
IDS Life Moneyshare Fund, Inc. Treasurer
James B. Solberg, Vice President--Advanced Financial Planning
IDS Financial Services Inc. Vice President-
IDS Tower 10 Advanced Financial Planning
Minneapolis, MN 55440
<PAGE>
<PAGE> 27
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
James W. Sowles, Vice President--Certificate Administration
IDS Financial Services Inc. Vice President-
Certificate Administration
IDS Certificate Company Vice President-
IDS Tower 10 Administration
Minneapolis, MN 55440
Bridget Sperl, Vice President--Human Resources Management Services
IDS Financial Services Inc. Vice President-Human
IDS Tower 10 Resources Management
Minneapolis, MN 55440
Jeffrey E. Stiefler, Director, President and Chief Executive
Officer
IDS Financial Services Inc. Chairman, President and
IDS Tower 10 Chief Executive Officer
Minneapolis, MN 55440
American Express Director
Minnesota Foundation
IDS Advisory Group Inc. Director
IDS Bank & Trust Director
IDS Capital Holdings Inc. Director
IDS Plan Services of California, Inc. Director and Chairman of
the Board
IDS Certificate Company Director
IDS International, Inc. Director
IDS Life Insurance Company Director and Chairman of
the Board
IDS Property and Casualty Insurance Director
Company
Lois A. Stilwell, Vice President--Sales Training and Communications
IDS Financial Services Inc. Vice President-
IDS Tower 10 Sales Training and
Minneapolis, MN 55440 Communications
<PAGE>
<PAGE> 28
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
William A. Stoltzmann, Vice President and Assistant General Counsel
IDS Financial Services Inc. Vice President and
Assistant General Counsel
IDS Life Insurance Company Vice President, General
IDS Tower 10 Counsel and Secretary
Minneapolis, MN 55440
IDS Life Variable Annuity Funds General Counsel and
A and B Assistant Secretary
IDS Life Series Fund, Inc. General Counsel and
Assistant Secretary
American Enterprise Life Insurance Director, Vice President,
Company General Counsel
P.O. Box 534 and Secretary
Minneapolis, MN 55440
James J. Strauss, Vice President--Corporate Planning and Analysis
IDS Financial Services Inc. Vice President-
IDS Tower 10 Corporate Planning and
Minneapolis, MN 55440 Analysis
Fenton R. Talbott, Director
ACUMA Ltd. President and Chief
ACUMA House Executive Officer
The Glanty, Egham
Surrey TW 20 9 AT
UK
Neil Taylor, Vice President--National Sales/UK
IDS Financial Services Inc. Vice President - National
IDS Tower 10 Sales/UK
Minneapolis, MN 55440
<PAGE>
<PAGE> 29
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
John R. Thomas, Director; Senior Vice President--Mutual Funds
Operations
IDS Financial Services Inc. Senior Vice President-
IDS Tower 10 Mutual Funds Operations
Minneapolis, MN 55440
IDS Blue Chip Advantage Fund Director
IDS Bond Fund, Inc. Director
IDS California Tax-Exempt Trust Trustee
IDS Cash Management Fund, Inc. Director
IDS Discovery Fund, Inc. Director
IDS Diversified Equity Income Fund Director
IDS Equity Plus Fund, Inc. Director
IDS Extra Income Fund, Inc. Director
IDS Federal Income Fund, Inc. Director
IDS Global Bond Fund, Inc. Director
IDS Global Growth Fund Director
IDS Growth Fund, Inc. Director
IDS High Yield Tax-Exempt Fund, Inc. Director
IDS Managed Retirement Fund, Inc. Director
IDS Market Advantage Series, Inc. Director
IDS Mutual Director
IDS New Dimensions Fund, Inc. Director
IDS Planned Investment Account Director
IDS Precious Metals Fund, Inc. Director
IDS Progressive Fund, Inc. Director
IDS Selective Fund, Inc. Director
IDS Special Tax-Exempt Series Trust Trustee
IDS Stock Fund, Inc. Director
IDS Strategy Fund, Inc. Director
IDS Tax-Exempt Bond Fund, Inc. Director
IDS Tax-Free Money Fund, Inc. Director
IDS Utilities Income Fund, Inc. Director
American Express Minnesota Foundation Director
IDS Cable Corporation Director
IDS Cable II Corporation Director
IDS Futures Corporation Director and President
IDS Futures III Corporation Director and President
IDS Management Corporation Director and President
IDS Partnership Leasing Corporation Director and President
IDS Partnership Services Corporation Director
IDS Realty Corporation Director and President
<PAGE>
<PAGE> 30
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Melinda S. Urion, Vice President--Insurance Controller
IDS Financial Corporation Vice President-Insurance
IDS Tower 10 Controller
Minneapolis, MN 55440
IDS Life Insurance Company Director, Vice President,
Controller and Treasurer
IDS Life Series Fund, Inc. Vice President and
Controller
American Enterprise Life Vice President, Controller
Insurance Company and Treasurer
Wesley W. Wadman, Vice President--Senior Portfolio Manager
IDS Fund Management Limited Director
IDS Financial Services Inc. Vice President-
Senior Portfolio Manager
IDS Advisory Group Inc. Executive Vice President
IDS International, Inc. Senior Vice President
IDS Tower 10
Minneapolis, MN 55440
Norman Weaver, Jr., Senior Region Vice President
IDS Financial Services Inc. Senior Region Vice
IDS Tower 10 President
Minneapolis, MN 55440
IDS Insurance Agency of Alabama Inc. Vice President-
Pacific Region
IDS Insurance Agency of Arkansas Inc. Vice President-
Pacific Region
IDS Insurance Agency of Massachusetts Vice President-
Inc. Pacific Region
IDS Insurance Agency of New Mexico Inc. Vice President-
Pacific Region
IDS Insurance Agency of North Carolina Vice President-
Inc. Pacific Region
IDS Insurance Agency of Ohio Inc. Vice President-
Pacific Region
IDS Insurance Agency of Wyoming Inc. Vice President-
Pacific Region
<PAGE>
<PAGE> 31
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Michael L. Weiner, Vice President--Corporate Tax Operations
IDS Capital Holdings Inc. Vice President
IDS Financial Services Inc. Vice President-Corporate
Tax Operations
IDS Futures III Corporation Vice President, Treasurer
and Secretary
IDS Futures Brokerage Group Vice President
IDS Futures Corporation Vice President, Treasurer
IDS Tower 10 and Secretary
Minneapolis, MN 55440
William N. Westhoff, Director and Senior Vice President--Fixed
Income Management
IDS Financial Services Inc. Senior Vice President-
IDS Tower 10 Fixed Income Management
Minneapolis, MN 55440
American Enterprise Life Insurance Director, Vice President-
Company Investments
Investors Syndicate Development Corp. Director, Vice President
IDS Life Insurance Company of New York Investment Officer
IDS Partnership Services Corporation Director, Vice President
IDS Property Casualty Insurance Company Vice President-Investments
IDS Real Estate Services Inc. Director, Chairman of the
Board and President
IDS Realty Corporation Director, Vice President
Edwin Wistrand, Vice President and Assistant General Counsel
IDS Financial Services Inc. Vice President and
IDS Tower 10 Assistant General Counsel
Minneapolis, MN 55440
<PAGE>
<PAGE> 32
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Michael Woodward, Senior Region Vice President
IDS Financial Services Inc. Senior Region Vice
IDS Tower 10 President
Minneapolis, MN 55440
IDS Insurance Agency of Alabama Inc. Vice President-
Atlantic Region
IDS Insurance Agency of Arkansas Inc. Vice President-
Atlantic Region
IDS Insurance Agency of Massachusetts Vice President-
Inc. Atlantic Region
IDS Insurance Agency of New Mexico Inc. Vice President-
Atlantic Region
IDS Insurance Agency of North Carolina Vice President-
Inc. Atlantic Region
IDS Insurance Agency of Ohio Inc. Vice President-
Atlantic Region
IDS Insurance Agency of Wyoming Inc. Vice President-
Atlantic Region
IDS Life Insurance Company of New York Director
<PAGE>
<PAGE> 33
Item 29. Principal Underwriters.
(a) IDS Financial Services Inc. acts as principal underwriter
for the following investment companies:
IDS Bond Fund, Inc.; IDS California Tax-Exempt Trust; IDS
Discovery Fund, Inc.; IDS Equity Plus Fund, Inc.; IDS Extra
Income Fund, Inc.; IDS Federal Income Fund, Inc.; IDS Global
Series, Inc.; IDS Growth Fund, Inc.; IDS High Yield Tax-Exempt
Fund, Inc.; IDS International Fund, Inc.; IDS Investor's
Series, Inc.; IDS Managed Retirement Fund, Inc.; IDS Market
Advantage Series, Inc.; IDS Money Market Series, Inc.; IDS New
Dimensions Fund, Inc.; IDS Precious Metals Fund, Inc.; IDS
Progressive Fund, Inc.; IDS Selective Fund, Inc.; IDS Special
Tax-Exempt Series Trust; IDS Stock Fund, Inc.; IDS Strategy
Fund, Inc.; IDS Tax-Exempt Bond Fund, Inc.; IDS Tax-Free Money
Fund, Inc.; IDS Utilities Income Fund, Inc. and IDS
Certificate Company.
(b) As to each director, officer or partner of the principal
underwriter:
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Ronald G. Abrahamson Vice President- None
IDS Tower 10 Field Administration
Minneapolis, MN 55440
Jerome R. Amundson Vice President and None
IDS Tower 10 Controller-Mutual Funds
Minneapolis, MN 55440 Operations
Douglas A. Alger Vice President- None
IDS Tower 10 Compensation and Benefits
Minneapolis, MN 55440
Peter J. Anderson Senior Vice President- None
IDS Tower 10 Advisory Group and
Minneapolis, MN 55440 Equity Management
Kent L. Ashton Vice President-Group None
IDS Tower 10 Management Office,
Minneapolis, MN 55440 Banking and Certificates
Timothy V. Bechtold Vice President-Insurance None
IDS Tower 10 Product Development
Minneapolis, MN 55440
<PAGE>
<PAGE> 34
Item 29. (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
John D. Begley Vice President- None
Olentangy Valley Center Mid-Central Region
Suite 300
7870 Olentangy River Rd.
Columbus, OH 43235
Carl E. Beihl Vice President- None
IDS Tower 10 Strategic Planning and
Minneapolis, MN 55440 Architecture
Alan F. Bignall Vice President- None
IDS Tower 10 Financial Planning
Minneapolis, MN 55440 Systems
Brent L. Bisson Vice President- None
Seafirst Financial Northwest Region
Center, Suite 1730
601 W. Riverside Ave.
Spokane, WA 99201
Thomas J. Brakke Vice President- None
IDS Tower 10 Investment Services
Minneapolis, MN 55440 and Investment Research
Karl J. Breyer Senior Vice President None
IDS Tower 10 and Special Counsel
Minneapolis, MN 55440
John L. Burbidge Vice President- None
IDS Tower 10 Government Relations
Minneapolis, MN 55440
Harold E. Burke Vice President None
IDS Tower 10 and Assistant
Minneapolis, MN 55440 General Counsel
Orison Y. Chaffee III Vice President-Field None
IDS Tower 10 Real Estate
Minneapolis, MN 55440
James E. Choat Senior Region Vice None
Suite 124 President
6210 Campbell Rd.
Dallas, TX 75248
Kenneth J. Ciak Vice President and None
IDS Property Casualty General Manager-
1400 Lombardi Avenue IDS Property Casualty
Green Bay, WI 54304
Roger C. Corea Vice President- None
345 Woodcliff Drive Northeast Region
Fairport, NY 14450
<PAGE>
<PAGE> 35
Item 29. (continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Kevin F. Crowe Vice President- None
IDS Tower 10 Field Management
Minneapolis, MN 55440 Development
Alan R. Dakay Vice President- None
IDS Tower 10 Institutional Insurance
Minneapolis, MN 55440 Marketing
William F. Darland Vice President- None
Suite 108C South Central Region
301 Sovereign Court
Manchester, MO 63011
Michael P. Ducar Vice President- None
IDS Tower 10 Investment Services
Minneapolis, MN 55440
William H. Dudley Director, Executive Director/
IDS Tower 10 Vice President- Trustee
Minneapolis MN 55440 Investment and Brokerage
Operations
Roger S. Edgar Senior Vice President- None
IDS Tower 10 Information Systems
Minneapolis, MN 55440
Gordon L. Eid Senior Vice President None
IDS Tower 10 and General Counsel
Minneapolis, MN 55440
Edwin W. Elder III Vice President-Operations None
IDS Property Casualty Insurance Co.
1 WEG Blvd.
DePere, WI 54115
Elizabeth A. Elder Vice President- None
IDS Tower 10 Systems Services
Minneapolis, MN 55440
Mark A. Ernst Vice President- None
IDS Tower 10 Tax and Business Services
Minneapolis, MN 55440
Gordon M. Fines Vice President- None
IDS Tower 10 Mutual Fund Equity
Minneapolis MN 55440 Investments
Louis C. Fornetti Senior Vice President- None
IDS Tower 10 Corporate Controller
Minneapolis, MN 55440
<PAGE>
<PAGE> 36
Item 29. (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Douglas L. Forsberg Vice President- None
IDS Tower 10 Securities Services
Minneapolis, MN 55440
Robert G. Gilbert Vice President- None
IDS Tower 10 Real Estate
Minneapolis, MN 55440
John J. Golden Vice President- None
IDS Tower 10 Field Compensation
Minneapolis, MN 55440 Development
Morris Goodwin Jr. Vice President and None
IDS Tower 10 Corporate Treasurer
Minneapolis, MN 55440
Sara J. Grady Vice President-Human None
IDS Tower 10 Resources and Organization
Minneapolis, MN 55440 Development
David A. Hammer Vice President None
IDS Tower 10 and Marketing
Minneapolis, MN 55440 Controller
Robert L. Harden Vice President None
Suite 403 Mid-Atlantic Region
8500 Leesburg Pike
Vienna, VA 22180
Lorraine R. Hart Vice President- None
IDS Tower 10 Insurance Investments
Minneapolis, MN 55440
Mark S. Hays Vice President-Senior None
IDS Tower 10 Portfolio Manager, IDS
Minneapolis, MN 55440 International
Robert H. Healy Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
James G. Hirsh Vice President and None
IDS Tower 10 Assistant General
Minneapolis, MN 55440 Counsel
Raymond E. Hirsch Vice President-Senior None
IDS Tower 10 Portfolio Manager
Minneapolis, MN 55440
<PAGE>
<PAGE> 37
Item 29. (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Kevin P. Howe Vice President- None
IDS Tower 10 Government and
Minneapolis, MN 55440 Customer Relations
David R. Hubers Senior Vice President- None
IDS Tower 10 Finance and Chief
Minneapolis, MN 55440 Financial Officer
Marietta Johns Senior Region Vice None
IDS Tower 10 President
Minneapolis, MN 55440
Douglas R. Jordal Vice President-Taxes None
IDS Tower 10
Minneapolis, MN 55440
Craig A. Junkins Vice President - Financial None
IDS Tower 10 Planning and Marketing
Minneapolis, MN 55440
Susan D. Kinder Senior Vice President- None
IDS Tower 10 Human Resources
Minneapolis, MN 55440
Richard W. Kling Vice President- None
IDS Tower 10 Insurance Marketing
Minneapolis, MN 55440 and Products
Harold Knutson Vice President- None
IDS Tower 10 System Services
Minneapolis, MN 55440
Paul F. Kolkman Vice President- None
IDS Tower 10 Corporate Actuary
Minneapolis, MN 55440
Claire Kolmodin Vice President- None
IDS Tower 10 Service Quality
Minneapolis, MN 55440
Christopher Kudrna Vice President- None
IDS Tower 10 Systems and Technology
Minneapolis, MN 55440 Development
Steven C. Kumagai Director; Senior Vice None
IDS Tower 10 President- Associate
Minneapolis, MN 55440 General Sales Manager
Edward Labenski Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
<PAGE>
<PAGE> 38
Item 29. (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Peter L. Lamaison Vice President- None
One Broadgate IDS International
London, England Division
Kurt A. Larson Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
Ryan R. Larson Vice President- None
IDS Tower 10 Annuity Product
Minneapolis, MN 55440 Development
Douglas A. Lennick Director; Senior Vice None
IDS Tower 10 President and General
Minneapolis, MN 55440 Sales Manager
Dickson W. Lewis Vice President- None
IDS Tower 10 Consumer and Business
Minneapolis, MN 55440 Marketing
Mary J. Malevich Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
James M. McAlear, Jr. Vice President and None
One Broadgate Senior Portfolio
London, England Manager-IDS
International
William J. McKinney Vice President- None
IDS Tower 10 Field Management
Minneapolis, MN 55440 Support
Thomas Medcalf Vice President- None
IDS Tower 10 Senior Portfolio Manager
Minneapolis, MN 55440
William C. Melton Vice President- None
IDS Tower 10 Chief Economist
Minneapolis, MN 55440
Earlon L. Milbrath Vice President- None
IDS Tower 10 U.K. Venture
Minneapolis, MN 55440
Janis E. Miller Vice President-Mutual None
IDS Tower 10 Funds Products and
Minneapolis, MN 55440 Marketing
James A. Mitchell Senior Vice President- None
IDS Tower 10 Insurance Operations
Minneapolis, MN 55440
<PAGE>
<PAGE> 39
Item 29. (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Pamela J. Moret Vice President and None
IDS Tower 10 Assistant General
Minneapolis, MN 55440 Counsel
Robert J. Neis Vice President- None
IDS Tower 10 EDP Services
Minneapolis, MN 55440
Vernon F. Palen Vice President-Rocky None
Suite D-222 Mountain Region
7100 E. Lincoln Drive
Scottsdale, AZ 85253
James R. Palmer Vice President- None
IDS Tower 10 Insurance Operations
Minneapolis, MN 55440
George M. Perry Vice President- None
IDS Tower 10 Corporate Strategy
Minneapolis, MN 55440 and Development
Susan B. Plimpton Vice President- None
IDS Tower 10 American Express
Minneapolis, MN 55440 Marketing
Ronald W. Powell Vice President and None
IDS Tower 10 Assistant General
Minneapolis, MN 55440 Counsel
James M. Punch Vice President- None
IDS Tower 10 TransAction Services
Minneapolis, MN 55440
Frederick C. Quirsfeld Vice President-Taxable None
IDS Tower 10 Mutual Fund Investments
Minneapolis, MN 55440
Roger B. Rogos Vice President- None
Suite 15, Parkside Place Great Lakes
945 Boardman-Canfield Rd Region
Youngstown, Ohio 44512
ReBecca K. Roloff Vice President- None
IDS Tower 10 Insurance
Minneapolis, MN 55440 Operations
Robert A. Rudell Vice President- None
IDS Tower 10 Sales and Marketing,
Minneapolis, MN 55440 IDS Institutional
Marketing
<PAGE>
<PAGE> 40
Item 29. (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
John P. Ryan Vice President and None
IDS Tower 10 General Auditor
Minneapolis, MN 55440
James H. Sadlowske Vice President- None
IDS Tower 10 System Services
Minneapolis, MN 55440
Erven A. Samsel Senior Region Vice None
45 Braintree Hill Park President
Braintree, MA 02184
Carol A. Sander Senior Vice President- None
IDS Tower 10 Communications
Minneapolis, MN 55440
R. Reed Saunders Director; Senior None
IDS Tower 10 Vice President-
Minneapolis, MN 55440 Financial Planning and
Marketing
Stuart A. Sedlacek Vice President- None
IDS Tower 10 Quantitative
Minneapolis, MN 55440 Investment Management
F. Dale Simmons Vice President-Senior None
IDS Tower 10 Portfolio Manager
Minneapolis, MN 55440 Insurance Investments
Julian W. Sloter Vice President- None
9040 Roswell Rd. Southeast Region
River Ridge-Suite 600
Atlanta, GA 30350
William A. Smith Vice President- None
IDS Tower 10 Finance and CFO/UK
Minneapolis, MN 55440
James B. Solberg Vice President- None
IDS Tower 10 Advanced Financial
Minneapolis, MN 55440 Planning
James W. Sowles Vice President- None
IDS Tower 10 Certificate
Minneapolis, MN 55440 Administration
Bridget Sperl Vice President- None
IDS Tower 10 Human Resources
Minneapolis, MN 55440 Management Services
<PAGE>
<PAGE> 41
Item 29. (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Jeffrey E. Stiefler Director, Chief None
IDS Tower 10 Executive Officer and
Minneapolis, MN 55440 President
Lois Stilwell Vice President- None
IDS Tower 10 Sales Training and
Minneapolis, MN 55440 Communications
William A. Stoltzmann Vice President and None
IDS Tower 10 Assistant General
Minneapolis, MN 55440 Counsel
James J. Strauss Vice President- None
IDS Tower 10 Corporate Planning
Minneapolis, MN 55440 and Analysis
Neil Taylor Vice President- None
IDS Tower 10 National Sales/UK
Minneapolis, MN 55440
John R. Thomas Senior Vice President- Director/
IDS Tower 10 Mutual Funds Operations Trustee
Minneapolis, MN 55440
Melinda S. Urion Vice President- None
IDS Tower 10 Insurance Controller
Minneapolis, MN 55440
Wesley W. Wadman Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
Norman Weaver Jr. Senior Region Vice None
Suite 215 President
1501 Westcliff Drive
Newport Beach, CA 92660
Michael L. Weiner Vice President- None
IDS Tower 10 Corporate Tax
Minneapolis, MN 55440 Operations
William N. Westhoff Senior Vice President- None
IDS Tower 10 Fixed Income Management
Minneapolis, MN 55440
Edwin Wistrand Vice President and None
IDS Tower 10 Assistant General
Minneapolis, MN 55440 Counsel
<PAGE>
<PAGE> 42
Item 29. (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Michael Woodward Senior Region Vice None
Suite 815 President
8585 Broadway
Merrillville, IN 46410
Item 29(c). Not applicable.
Item 30. Location of Accounts and Records
IDS Financial Corporation
IDS Tower 10
Minneapolis, MN 55440
Item 31. Management Services
Not Applicable.
Item 32. Undertakings
(a) Not Applicable.
(b) Not Applicable.
(c) The Registrant undertakes to furnish each person
to whom a prospectus is delivered with a copy of
the Registrant's latest annual report to
shareholders, upon request and without charge.
<PAGE>
PAGE 86
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, IDS Tax-Exempt Bond
Fund, Inc., certifies that it meets all of the requirements for
effectiveness of this Amendment to its Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 has duly
caused this Amendment to its Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
City of Minneapolis and the State of Minnesota on the 26th day of
January 1994.
IDS TAX-EXEMPT BOND FUND, INC.
By /s/ William R. Pearce**
William R. Pearce, President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to its Registration Statement has been signed below by
the following persons in the capacities indicated on the 26th day
of January 1994.
Signature Capacity
President,
/s/ William R. Pearce** Principal Executive
William R. Pearce Officer and Director
Treasurer, Principal
/s/ Leslie L. Ogg** Financial Officer and
Leslie L. Ogg Principal Accounting
Officer
/s/ William H. Dudley * Director
William H. Dudley
/s/ Robert F. Froehlke* Director
Robert F. Froehlke
/s/ David R. Hubers* Director
David R. Hubers
/s/ Anne P. Jones* Director
Anne P. Jones
<PAGE>
PAGE 87
Signature Capacity
/s/ Donald M. Kendall* Director*
Donald M. Kendall
/s/ Melvin R. Laird* Director
Melvin R. Laird
/s/ Lewis W. Lehr* Director
Lewis W. Lehr
/s/ Aulana L. Peters* Director
Aulana L. Peters
/s/ Edson W. Spencer * Director
Edson W. Spencer
/s/ John R. Thomas* Director
John R. Thomas
/s/ Wheelock Whitney* Director
Wheelock Whitney
*Signed pursuant to Directors' Power of Attorney dated Oct. 14,
1993 filed electronically as Exhibit 17(a) to Registrant's Post-
Effective Amendment No. 30 by:
Leslie L. Ogg
**Signed pursuant to Officers' Power of Attorney dated June 1, 1993
filed electronically as Exhibit 17(b) to Registrant's Post-
Effective Amendment No. 30 by:
Leslie L. Ogg
<PAGE>
PAGE 88
CONTENTS OF THIS
POST-EFFECTIVE AMENDMENT NO. 31
TO REGISTRATION STATEMENT NO. 2-57328
This post-effective amendment comprises the following papers and
documents:
The facing sheet.
Cross reference sheet.
Part A.
The prospectus.
Part B.
Statement of Additional Information.
Financial Information
Part C.
Other information.
The Signatures.
Exhibits.
<PAGE>
PAGE 1
EXHIBIT INDEX
B(11) Independent Auditors' Report
<PAGE>
PAGE 1
INDEPENDENT AUDITORS' CONSENT
___________________________________________________________________
The Board of Directors and Shareholders
IDS Tax-Exempt Bond Fund, Inc.:
We consent to the use of our report incorporated herein by
reference and to the references to our Firm under the headings
"Financial Highlights" in Part A and "INDEPENDENT AUDITORS" in Part
B of the Registration Statement.
KPMG Peat Marwick
Minneapolis, Minnesota
January 26, 1994
