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PAGE 1
IDS Tax-Exempt Bond Fund
1994 annual report
(Icon of) shield with Greek column
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.
Distributed by American Express Financial Advisors Inc.
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PAGE 2
(Icon of) shield with Greek column
Double-barreled benefit
Most of the public facilities that we take for granted - schools,
water and sewer systems, highways, government buildings - are, in
effect, largely funded by loans from citizens. These loans take
the form of state and local government bonds (called "municipals"),
which are bought by investors, including Tax-Exempt Bond Fund. The
government gets the funding it needs, while the bond-buyers,
including fund shareholders, get ongoing interest income. But
there's another, bigger benefit with municipals: Investors pay no
federal taxes on the income they generate and potentially no state
taxes.
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PAGE 3
Contents
The purpose of this annual report is to tell investors how the fund
performed.
1994 annual report
From the president 4
From the portfolio manager 4
Ten largest holdings 6
Making the most of your fund 7
Long-term performance 8
Independent auditors' report 9
Financial statements 10
Notes to financial statements 13
Investments in securities 18
IDS mutual funds 27
Federal income tax information 30
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PAGE 4
To our shareholders
(Photo of) William R. Pearce, President of the fund
(Photo of) Terry Seierstad, Portfolio manager
From the president
All of the funds in the IDS MUTUAL FUND GROUP held shareholder
meetings on Nov. 9, 1994. The meetings, which were well-attended,
approved all of the proposals advanced by management. Among the
proposals were:
o The election of directors and the selection of KPMG Peat
Marwick LLP as independent auditors for each of the funds in
the group.
o A new investment management agreement that will become
effective for each fund when it begins offering multiple
classes of shares, now planned to occur in March, 1995.
o A change in investment policy that will permit the funds to
adopt a master/feeder structure if and when the board of each
fund determines that it is in the best interest of the
shareholder.
o And, finally, changes to the fund's "fundamental investment
polices" that, among other things, allow the board to modify
them should it deem appropriate.
No other business was presented at the meeting, which was concluded
by a report to shareholders from the IDS Investment Department.
Thanks to all of you for your effort in reviewing the proxy
material and voting your proxies.
William R. Pearce
From the portfolio manager
The fundamental investment truth that rising interest rates drive
down bond values was never more evident than during the past fiscal
year, which covered December 1993 through November 1994. Interest
rates rose substantially during the period, resulting in one of the
deepest declines the bond market has experienced in many decades.
The municipal bond sector of the market was especially hard hit, a
fact that was reflected in a decline in the fund's net asset value.
The dividend paid to shareholders, however, was essentially
unaffected.
The first two months of the period were markedly different, though,
as interest rates remained relatively stable, even falling a bit at
times. (Falling interest rates boost bond prices and, therefore,
the net asset value of funds such as this.) Naturally, the fund
benefited from this environment, enjoying positive returns in
December and January.
<PAGE>
Rate rise begins
But things changed quickly in early February, as the Federal
Reserve Board began raising short-term interest rates to cool down
the economy and head off an increase in the inflation rates.
Although we were not surprised by the Fed's action, professional
bond investors reacted much more negatively than we expected. They
sold bonds in great numbers, driving down prices in the process and
igniting a sustained and sharp increase in long-term interest
rates.
These developments were particularly damaging to our holdings of
longer-term bonds, because the longer the maturity, the more a
bond's price is affected by interest rate changes. Compounding the
situation was a greater redemption rate on the part of investors in
municipal bond mutual funds. Because mutual funds needed to sell
some bonds to cover redemptions, this created more downward
pressure on the municipal market. (The redemption rate for this
fund did not, however, require us to make major adjustments to the
portfolio.)
Market rebounds
While still very volatile, municipal bonds managed to regain some
of the lost ground during the spring and summer. In fact, the
market occasionally enjoyed some robust, albeit brief, rallies. By
fall, though, inflation fears and higher interest rates were again
driving the direction of the market, causing municipal bond prices
to resume their downtrend.
As for portfolio changes, we remained virtually fully invested
(held a minimal amount cash reserves) throughout the period and
added selectively to our holdings a AAA-rated bonds. These
additions enhanced the already-high quality level of the portfolio.
Despite the difficulties of the past fiscal year, some positive
factors remain intact in the municipal bond market: We expect the
supply of bonds to stay relatively small, which should help support
prices. The benefit of investing in tax-free securities is still a
very real factor for taxpayers in higher brackets. Municipal bond
prices are low, which should make them attractive to investors.
And, most important, we believe most of the interest-rate rise
among longer-term bonds is behind us. Assuming that scenario plays
out we expect the fund to perform considerably better in the months
ahead.
Terry L. Seierstad
(Note: Under federal law, some notes issued in the tax-free market
are subject to the alternative minimum tax. To eliminate any
federal income tax consequences for investors, we will continue to
refrain from purchasing these securities.)
<PAGE>
12-month performance
(All figures per share)
Net asset value (NAV)
Nov. 30, 1994 $ 3.54
Nov. 30, 1993 $ 4.19
Decrease $(0.65)
Distributions
Dec. 1, 1993 - Nov. 30, 1994
From tax-exempt
income $ 0.23
From taxable income $ 0.05
From capital gains $ 0.04
Total distributions $ 0.32
Total return* (8.3)%
*If you purchased shares in the fund during this period, your
return also would have been affected by the sales charge, as
described in the prospectus.
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PAGE 5
<TABLE>
<CAPTION>
IDS Tax-Exempt Bond Fund, Inc.
Your fund's ten largest holdings
(Pie chart)
The ten holdings listed here make up 18.71% of the fund's net assets
____________________________________________________________________________________
Percent Value
(of fund's net assets)(as of Nov. 30, 1994)
____________________________________________________________________________________
<S> <C> <C>
San Antonio Texas Water Refunding Revenue Bonds
6.40% 2007 2.36% $24,871,500
Delaware County Pennsylvania Industrial Development
Authority Pollution Control Refunding Revenue Bonds
Philadelphia Electric Company
7.375% 2021 2.20 23,173,953
Illinois Public Building Commission of Chicago Building
Revenue Bonds Board of Education of Chicago Series 1990A
6.50% 2018 2.15 22,708,990
Valdez Alaska Marine Terminal Refunding Revenue Bonds
SOhio Pipeline Series 1985
7.125% 2025 1.85 19,500,600
San Antonio Texas Electric & Gas Systems
Refunding Revenue Bonds Series 1989
6.50% 2012 1.83 19,248,400
Georgia Municipal Electric Authority
Special Obligation Bonds Project #1
4th Crossover Series X
6.50% 2020 1.77 18,643,858
Connecticut State General Obligation Bonds Series 1992A
6.40% 2006 1.72 18,198,360
Eastern North Carolina Municipal Power Agency System
Refunding Revenue Bonds Series 1989A
6.50% 2024 1.70 17,903,200
California Loma Linda University Medical Center Hospital
Refunding Revenue Bonds Series C
5.375% 2022 1.58 16,663,080
Washington Issaquah School District #411 King County
Unlimited Tax General Obligation Refunding Bonds 1992
6.375% 2008 1.55 16,320,323
</TABLE>
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PAGE 6
Making the most of your fund
Average annual total return
(as of Nov. 30, 1994)
1 year 5 years 10 years
- -12.86% +3.98% +8.01%
Your investment and return values fluctuate so that your shares,
when redeemed, may be worth more or less than the original cost.
Figures reflect the deduction of the maximum 5% sales charge. This
was a period of widely fluctuating security prices. Past
performance is no guarantee of future results.
Build your assets systematically
To keep your assets growing steadily, one of the best ways to
invest in the fund is by dollar-cost averaging -- a time-tested
strategy that can make market fluctuations work for you. To
dollar-cost average, simply invest a fixed amount of money
regularly. You'll automatically buy more shares when the fund's
share price is low, fewer shares when it is high.
This does not ensure a profit or avoid a loss if the market
declines. But, if you can continue to invest regularly through
changing market conditions, it can be an effective way to
accumulate shares to meet your long-term goals.
How dollar-cost averaging works
Month Amount Per-share Number of shares purchased
invested market price
Jan $100 $20 5.00
Feb 100 18 5.56
Mar 100 17 5.88
Apr 100 15 6.67
May 100 16 6.25
June 100 18 5.56
July 100 17 5.88
Aug 100 19 5.26
Sept 100 21 4.76
Oct 100 20 5.00
(footnotes to table) By investing an equal number of dollars each
month...
(arrow in table pointing to April) you automatically buy more
shares when the per share market price is low.
(arrow in table pointing to September) and fewer shares when the
per share market price is high.
You have paid an average price of only $17.91 per share over the 10
months, while the average market price actually was $18.10.
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PAGE 7
Your fund's long-term performance
Three ways to benefit from a mutual fund:
o your shares increase in value when the fund's investments do
well
o you receive capital gains when the gains on investments sold
by the fund exceed losses
o you receive income when the fund's stock dividends, interest
and short-term gains exceed its expenses.
All three make up your total return. And you potentially can
increase your investment if, like most investors, you reinvest your
dividends and capital gain distributions to buy additional shares
of the fund or another fund.
How your $10,000 has grown in IDS Tax-Exempt Bond Fund
Average annual total return
(as of Nov. 30, 1994)
1 year 5 years 10 years
- -12.86% +3.98% +8.01%
$21,609
$20,000 Tax-Exempt
Bond Fund
Lehman Muni Index
$9,500
'84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94
Assumes: Holding period from 11/30/84 to 11/30/94. Returns do not
reflect taxes payable on distributions. Also see "Performance" in
the fund's current prospectus. Reinvestment of all income and
capital gain distributions for the fund, with a value of $11,624.
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 Tax-Exempt
Bond Fund.
On the chart above you can see how the fund's total return compared
to widely cited performance measure, Lehman Brothers Municipal Bond
Index. In comparing Tax-Exempt Bond Fund to the index, you should
take into account the fact that the fund's performance reflects the
maximum sales charge of 5%, while such charges are not reflected in
the performance of the index. If you were actually to buy either
individual bonds or bond mututal funds, any sales charges that you
pay would reduce your total return as well.
<PAGE>
Your investment and return values fluctuate so that your shares,
when redeemed, may be worth more or less than the original cost.
Average annual total return figures reflect the deduction of the
maximum 5% sales charge. This was a period of widely fluctuating
security prices. Past performance is no guarantee of future
results.
<PAGE>
PAGE 8
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, 1994, 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, 1994, and the financial
highlights for each of the years in the three-year period ended
November 30, 1994, the eleven months ended November 30, 1991, and
for each of the years in the six-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, 1994, 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, 1994, and the financial highlights for the periods stated in
the first paragraph above, in conformity with generally accepted
accounting principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
January 6, 1995
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PAGE 9
<TABLE>
<CAPTION>
Financial statements
Statement of assets and liabilities
IDS Tax-Exempt Bond Fund, Inc.
Nov. 30, 1994
_____________________________________________________________________________________________________________
Assets
_____________________________________________________________________________________________________________
<S> <C>
Investments in securities, at value (Note 1)
(identified cost $1,082,850,359) $1,046,578,827
Accrued interest receivable 20,306,086
Receivable for investment securities sold 15,210,110
_____________________________________________________________________________________________________________
Total assets 1,082,095,023
_____________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________
Disbursements in excess cash on demand deposit 138,867
Dividends payable to shareholders 346,612
Payable for investment securities purchased 26,431,099
Accrued investment management and services fee 452,778
Accrued distribution fee 17,842
Accrued transfer agency fee 45,142
Other accrued expenses 236,237
_____________________________________________________________________________________________________________
Total liabilities 27,668,577
_____________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $1,054,426,446
_____________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________
Capital stock -- authorized 10,000,000,000 shares of $.01 par value;
outstanding 297,618,426 shares $ 2,976,184
Additional paid-in capital 1,127,424,503
Accumulated net realized loss (Notes 1 and 4) (39,702,709)
Unrealized depreciation (36,271,532)
_____________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding capital stock $1,054,426,446
_____________________________________________________________________________________________________________
Net asset value per share of outstanding capital stock $ 3.54
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
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PAGE 10
Financial statements
Statement of operations
IDS Tax-Exempt Bond Fund, Inc.
Year ended Nov. 30, 1994
_____________________________________________________________________________________________________________
Investment income
_____________________________________________________________________________________________________________
Income:
Interest $ 77,391,841
_____________________________________________________________________________________________________________
Expenses (Note 2):
Investment management and services fee 6,316,486
Distribution fee 227,564
Transfer agency fee 575,746
Compensation of directors 22,070
Compensation of officers 7,356
Custodian fees 37,166
Postage 93,133
Registration fees 39,323
Reports to shareholders 14,945
Audit fees 30,750
Administrative 14,026
Other 16,550
_____________________________________________________________________________________________________________
Total expenses 7,395,115
_____________________________________________________________________________________________________________
Investment income -- net 69,996,726
_____________________________________________________________________________________________________________
Realized and unrealized loss -- net
_____________________________________________________________________________________________________________
Net realized loss on security transactions (Note 3) (29,604,611)
Net change in unrealized appreciation or depreciation (141,085,176)
_____________________________________________________________________________________________________________
Net loss on investments (170,689,787)
_____________________________________________________________________________________________________________
Net decrease in net assets resulting from operations $ (100,693,061)
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
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<PAGE> 11
<TABLE>
<CAPTION>
Financial statements
Statements of changes in net assets
IDS Tax-Exempt Bond Fund, Inc.
Year ended Nov. 30,
_____________________________________________________________________________________________________________
Operations and distributions 1994 1993
_____________________________________________________________________________________________________________
<S> <C> <C>
Investment income -- net $ 69,996,726 $ 71,694,282
Net realized gain (loss) on investments (29,604,611) 27,788,192
Net change in unrealized appreciation or depreciation (141,085,176) 43,928,922
_____________________________________________________________________________________________________________
Net increase (decrease) in net assets resulting from operations (100,693,061) 143,411,396
_____________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (69,995,559) (71,687,635)
Net realized gain (28,014,289) (5,478,900)
_____________________________________________________________________________________________________________
Total distributions (98,009,848) (77,166,535)
_____________________________________________________________________________________________________________
Capital share transactions
_____________________________________________________________________________________________________________
Proceeds from sales of
33,342,008 and 51,016,103 shares (Note 2) 128,446,824 209,394,147
Net asset value of 17,804,910 and 12,737,284 shares
issued in reinvestment of distributions 70,563,152 52,523,554
Payments for redemptions of
61,882,421 and 75,320,334 shares (237,258,569) (309,695,896)
_____________________________________________________________________________________________________________
Decrease in net assets from capital share transactions
representing net reduction of 10,735,503 and
11,566,947 shares (38,248,593) (47,778,195)
_____________________________________________________________________________________________________________
Total increase (decrease) in net assets (236,951,502) 18,466,666
Net assets at beginning of year 1,291,377,948 1,272,911,282
_____________________________________________________________________________________________________________
Net assets at end of year 1,054,426,446 1,291,377,948
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
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PAGE 12
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 the board 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.
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.
<PAGE>
PAGE 13
Notes to financial statements
IDS Tax-Exempt Bond Fund, Inc.
___________________________________________________________________
1. Summary of significant accounting policies (continued)
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.
Securities purchased on a when-issued basis
Delivery and payment for securities that have been purchased by the
fund on a forward-commitment or when-issued basis can take place
one month or more after the transaction date. During this period,
such securities are subject to market fluctuations, and they may
effect the fund's net assets the same as owned securities. The fund
designates cash or liquid high-grade debt securities at least equal
to the amount of its commitment. As of Nov. 30, 1994, the fund had
entered into outstanding when-issued or forward commitments of
$12,565,215.
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.
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.
<PAGE>
PAGE 14
Notes to financial statements
IDS Tax-Exempt Bond Fund, Inc.
___________________________________________________________________
1. Summary of significant accounting policies (continued)
On the statement of assets and liabilities, as a result of
permanent book-to-tax differences, accumulated net realized loss
has been decreased by $5,230 resulting in a net reclassification
adjustment to decrease paid-in-captial by $5,230.
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.
___________________________________________________________________
2. Expenses and sales charges
Under terms of an agreement dated Nov. 14, 1991, the fund pays
American Express Financial Corporation 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 American Express Financial Corporation 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.
American Express Financial Corporation will assume and pay any
expenses (except taxes and brokerage commissions) that exceed the
most restrictive applicable state expense limitation.
Sales charges by American Express Financial Advisors inc. for
distributing fund shares were $1,969,064 for the year ended Nov.
30, 1994.
<PAGE>
PAGE 15
Notes to financial statements
IDS Tax-Exempt Bond Fund, Inc.
___________________________________________________________________
2. Expenses and sales charges (continued)
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 $11,436 for the year ended Nov. 30, 1994.
___________________________________________________________________
3. Securities transactions
Cost of purchases and proceeds from sales of securities (other than
short-term obligations) aggregated $775,076,135 and $887,011,705,
respectively, for the year ended Nov. 30, 1994. Realized gains and
losses are determined on an identified cost basis.
___________________________________________________________________
4. Capital loss carryover
For federal income tax purposes, the fund has a capital loss
carryover of $32,682,088 at Nov. 30, 1994, that will expire in 2002
if not offset by subsequent capital gains. It is unlikely the board
of directors will authorize a distribution of any net realized
capital gains until the available capital loss carryover has been
offset or expires.
<PAGE>
PAGE 16
<TABLE>
<CAPTION>
___________________________________________________________________
5. Financial hightlights
The table below shows certain important financial
information for evaluating the fund's results.
Fiscal period ended Nov. 30,
Per share income and capital changes*
1994 1993 1992 1991** 1990 1989 1988 1987 1986 1985
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value $4.19 $3.98 $3.93 $3.88 $3.98 $3.96 $3.93 $4.25 $3.78 $3.43
beginning of period
Income from investment operations:
Net investment income .23 .22 .22 .22 .26 .28 .28 .29 .30 .31
Net gains (losses) (.56) .23 .11 .05 (.01) .17 .03 (.32) .47 .35
(both realized and
unrealized)
Total from investment (.33) .45 .33 .27 .25 .45 .31 (.03) .77 .66
operations
Less distributions:
Dividends from net (.23) (.22) (.22) (.22) (.26) (.28) (.28) (.29) (.30) (.31)
investment income
Distributions from (.09) (.02) (.06) -- (.09) (.15) -- -- -- --
realized gains
Total distributions (.32) (.24) (.28) (.22) (.35) (.43) (.28) (.29) (.30) (.31)
Net asset value, $3.54 $4.19 $3.98 $3.93 $3.88 $3.98 $3.96 $3.93 $4.25 $3.78
end of period
Ratios/supplemental data
1994 1993 1992 1991** 1990 1989 1988 1987 1986 1985
Net assets, end of period $1,054 $1,291 $1,273 $1,188 $1,094 $1,010 $927 $885 $885 $649
(in millions)
Ratio of expenses to .61% .63% .64% .60%+ .61% .61% .60% .61% .60% .63%
average daily net assets
Ratio of net income to 5.82% 5.54% 5.68% 6.11%+ 6.61% 6.90% 7.16% 7.32% 7.38% 8.78%
average daily net assets
Portfolio turnover rate 66% 43% 63% 69% 112% 96% 54% 37% 23% 33%
(excluding short-term
securities)
Total return++ (8.3%) 11.7% 8.7% 8.3%+ 6.1% 12.1% 9.6% (2.6%) 23.7% 20.2%
*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.
</TABLE>
<PAGE>
PAGE 17
<TABLE>
<CAPTION>
Investments in securities
IDS Tax-Exempt Bond Fund, Inc. (Percentages represent value of
Nov. 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (92.9%)
_____________________________________________________________________________________________________________________________
Name of issuer and title of issue (b)(c) Coupon Maturity Principal Value(a)
rate amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Alaska (2.5%)
North Slope Borough General Obligation Bonds Series 1994B Zero Coupon
(CGIC Insured) 7.05% 2004 $ 3,000,000 (d,e) $ 1,594,980
North Slope Borough General Obligation Bonds Series 1994B Zero Coupon
(CGIC Insured) 7.15 2005 3,000,000 (d,e) 1,478,040
State Housing Finance Veterans Mortgage Corporation Collateralized Bonds
Series 1990 7.50 2030 4,235,000 4,234,915
Valdez Marine Terminal Refunding Revenue Bonds SOhio Pipeline
Series 1985 7.125 2025 20,000,000 19,500,600
______________
Total 26,808,535
_____________________________________________________________________________________________________________________________
Arizona (2.5%)
Phoenix Industrial Development Authority Single Family Mortgage
Revenue Capital Appreciation Bonds Zero Coupon 6.66 2014 39,000,000 (d) 9,103,380
Phoenix Junior Lien Street & Highway User Refunding Revenue Bonds
Series 1992 6.25 2011 10,350,000 9,748,872
Tucson Street & Highway User Revenue Bonds Series 1991B 6.25 2010 8,250,000 7,870,582
______________
Total 26,722,834
_____________________________________________________________________________________________________________________________
California (10.6%)
Fresno Health Facility Refunding Revenue Bonds Holy Cross Health System
(MBIA Insured) 5.625 2018 2,500,000 2,087,900
Loma Linda University Medical Center Hospital Refunding Revenue Bonds
Series C (MBIA Insured) 5.375 2022 21,000,000 16,663,080
Los Angeles County Metropolitan Transportation Authority
Sales Tax Revenue Bonds Series B (AMBAC Insured) 4.75 2018 6,500,000 4,792,775
Los Angeles County Metropolitan Transportation Authority
Sales Tax Revenue Bonds Series B (AMBAC Insured) 5.25 2023 15,000,000 11,712,750
Los Angeles County Sanitation District Financing Authority Capital
Series A 5.25 2019 6,000,000 4,689,240
Los Angeles Wastewater System
Refunding Revenue Bonds Series C (MBIA Insured) 5.60 2020 6,000,000 5,001,360
Oakland Redevelopment Agency Special Tax Assessment Bonds Inverse Floater 8.27 2019 6,000,000 (f) 4,447,500
San Diego County Certificates of Participation Capital Asset Leasing
Master Refunding Bonds Series 1993 Inverse Floater (AMBAC Insured) 7.08 2012 11,700,000 (f) 8,350,875
San Diego Sewer Revenue Bonds Series A (AMBAC Insured) 5.25 2020 3,300,000 2,604,954
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
PAGE 18
San Jose Redevelopment Agency Merged Area Tax Allocation Bonds
Series 1993 (MBIA Insured) 4.75 2024 9,000,000 6,396,030
San Marcos Public Facility Authority Tax Allocation
Refunding Revenue Bonds Series A (CGIC Insured) 5.50 2023 10,000,000 8,143,600
Southern California Public Power Authority Revenue Bonds Series 1993
Inverse Floater (FGIC Insured) 6.92 2012 12,100,000 (f) 7,698,625
State Public Works Board California Community Colleges Lease
Revenue Bonds Series 1994B 7.00 2019 10,000,000 (e) 9,838,000
Statewide Community Development Authority Certificate of Participation
Sutter Health Obligated Revenue Bonds (MBIA Insured) 5.50 2023 14,500,000 11,731,370
Statewide Community Development Authority Insurance
Certificate of Participation Childrens Hospital of Los Angeles
Revenue Bonds (MBIA Insured) 4.75 2021 4,000,000 2,884,400
University of California Refunding Revenue Bonds
Multiple Purpose Project Series C (AMBAC Insured) 5.125 2018 5,635,000 4,397,779
______________
Total 111,440,238
_____________________________________________________________________________________________________________________________
Connecticut (1.7%)
State General Obligation Bonds Series 1992A 6.40 2006 18,000,000 18,198,360
_____________________________________________________________________________________________________________________________
Delaware (0.2%)
State University Revenue Bonds Series 1989 6.00 2014 2,000,000 1,765,260
_____________________________________________________________________________________________________________________________
District of Columbia (1.8%)
General Obligation Bonds Series 1994B Zero Coupon (MBIA Insured) 6.64 2013-14 50,360,000 (d) 12,805,774
General Obligation Bonds Series 1994B Zero Coupon (MBIA Insured) 6.68 2012 22,070,000 (d) 6,323,938
______________
Total 19,129,712
_____________________________________________________________________________________________________________________________
Florida (4.5%)
Duvall County Housing Authority Single Family Mortgage
Refunding Revenue Bonds Series 1991 (FGIC Insured) 7.35 2024 3,430,000 3,436,380
Jacksonville Electric Revenue Bonds St. John's River Series A 6.00 2016 6,900,000 6,175,224
Jacksonville Electric Revenue Bonds St. John's River 2nd Series 1986 6.50 2020 10,000,000 9,473,500
Jacksonville Excise Taxes Refunding Revenue Bonds Series 1992
(AMBAC Insured) 6.50 2008 5,000,000 5,042,700
Lakeland Electric & Water Refunding Revenue Bonds Series 1986
(AMBAC Insured) 6.00 2012 5,500,000 5,069,900
St. John's River Water Management District Land Acquisition Revenue Bonds
Series 1989 (AMBAC Insured) 6.00 2009 7,000,000 6,566,280
State Board of Education Administration Capital Outlay
Public Education Bonds Series 1991C 6.50 2008-09 11,225,000 11,222,916
______________
Total 46,986,900
_____________________________________________________________________________________________________________________________
Georgia (3.3%)
Municipal Electric Authority Refunding Revenue Bonds
Series EE Project #1 Bonds (AMBAC Insured) 5.50 2026 4,000,000 3,218,120
Municipal Electric Authority Refunding Revenue Bonds
Series B (Secondary FGIC) 5.70 2019 10,500,000 8,825,040
Municipal Electric Authority Refunding Revenue Bonds
Series 1989T 6.50 2025 5,000,000 4,588,400
Municipal Electric Authority Special Obligation Bonds Project #1
4th Crossover Series X (Secondary MBIA) 6.50 2020 19,550,000 18,643,858
______________
Total 35,275,418
_____________________________________________________________________________________________________________________________
<PAGE>
PAGE 19
Hawaii (1.3%)
City & County of Honolulu General Obligation Bonds Series 1992A 6.30 2006 5,880,000 5,903,755
City & County of Honolulu Refunding & Improvement General Obligation Bonds
Series 1993B Inverse Floater 6.32 2006 5,300,000 (f) 3,981,625
City & County of Honolulu Refunding & Improvement General Obligation Bonds
Series 1993B Inverse Floater 6.62 2008 5,300,000 (f) 3,855,750
______________
Total 13,741,130
_____________________________________________________________________________________________________________________________
Illinois (6.9%)
Cook & Will Counties TWP High School District #206
Capital Appreciation Bonds Series 1994C Zero Coupon (AMBAC Insured) 6.55 2010 2,605,000 (d) 856,863
Cook County School District #170 Chicago Heights Capital Appreciation Bonds
Series 1994C Zero Coupon (AMBAC Insured) 6.40 2008 2,155,000 (d) 815,624
Cook County School District #170 Chicago Heights Capital Appreciation Bonds
Series 1994C Zero Coupon (AMBAC Insured) 6.50 2009 2,155,000 (d) 763,172
Cook County School District #170 Chicago Heights Capital Appreciation Bonds
Series 1994C Zero Coupon (AMBAC Insured) 6.50 2010 2,155,000 (d) 708,844
Cook County Unlimited Tax General Obligation Bonds Series 1989 6.50 2009 5,800,000 5,590,678
Health Facilities Authority Refunding Revenue Bonds
Edwards Hospital Series 1993A 6.00 2019 3,055,000 2,534,611
Health Facilities Authority Revenue Bonds Childrens Memorial Hospital
(MBIA Insured) 5.00 2022 8,400,000 6,115,368
Health Facilities Authority Refunding Revenue Bonds
University of Chicago Hospital Series 1993 Inverse Floater (MBIA Insured) 7.73 2014 5,000,000 (f) 3,531,250
Metropolitan Pier & Exposition Authority Dedicated State Tax
Capital Appreciation Revenue Bonds McCormick Place Expansion
Series A Zero Coupon (FGIC Insured) 6.55 2021 5,000,000 (d) 704,750
Metropolitan Pier & Exposition Authority McCormick Place Expansion Bonds
Series A Zero Coupon (FGIC Insured) 6.43 2017 8,250,000 (d) 1,617,495
Metropolitan Pier & Exposition Authority McCormick Place Expansion Bonds
Series A Zero Coupon (FGIC Insured) 6.50 2013 6,500,000 (d) 1,732,380
Metropolitan Pier & Exposition Authority McCormick Place Expansion Bonds
Series A Zero Coupon (FGIC Insured) 6.64 2010 11,000,000 (d) 3,697,100
Metropolitan Pier & Exposition Authority McCormick Place Expansion Bonds
Series A Zero Coupon (FGIC Insured) 6.72 2016 9,000,000 (d) 1,904,760
Northwest Suburban Joint Action Water Supply System Refunding Revenue Bonds
(MBIA Insured) 5.75 2012 4,815,000 4,209,755
Public Building Commission of Chicago Building Revenue Bonds
Board of Education of Chicago Series 1990A (MBIA Insured) 6.50 2018 23,500,000 22,708,990
Public Building Commission of Chicago Building Revenue Bonds
State Development Finance Authority Power Refunding Bonds Series 1991A 7.375 2021 10,000,000 9,677,200
State Development Finance Authority Regency Park Retirement Housing
Revenue Bonds Series 1991B Zero Coupon 6.50 2025 10,000,000 (d) 988,700
State Health Facility Authority Revenue Bonds Sisters Hospital Services
Series 1991B Inverse Floater 9.67 2015 5,200,000 (f) 4,667,000
______________
Total 72,824,540
_____________________________________________________________________________________________________________________________
<PAGE>
PAGE 20
Indiana (2.1%)
Municipal Power Agency Power Supply System Refunding Revenue Bonds
Series 1989A (AMBAC Insured) 6.50 2016 8,800,000 9,209,112
Seymour Economic Development Revenue Bonds Union Camp Series 1992 6.25 2012 2,870,000 2,656,673
Transportation Finance Authority Highway Revenue Bonds Series 1990A 7.25 2015 10,000,000 10,182,400
______________
Total 22,048,185
_____________________________________________________________________________________________________________________________
Iowa (0.4%)
State Finance Authority Single Family Mortgage-Backed Securities
Program Bonds Series 1991A 7.25 2016 4,220,000 4,187,717
_____________________________________________________________________________________________________________________________
Kansas (0.8%)
Reno & Labette Counties Single Family Mortgage Revenue Bonds
Escrowed to Maturity Zero Coupon 6.25 2015 25,000,000 (d) 5,426,500
Reno Sedgwick Finney Counties Single Family Mortgage Revenue Bonds
Escrowed to Maturity Zero Coupon (MBIA Insured) 6.02 2016 12,015,000 (d) 2,545,618
______________
Total 7,972,118
_____________________________________________________________________________________________________________________________
Kentucky (0.4%)
Jefferson County Pollution Control Revenue Bonds Louisville Gas & Electric
Series 1985A 9.25 2015 1,750,000 1,838,235
Owensboro Electric Light & Power Refunding Revenue Bonds Series B
Zero Coupon (AMBAC Insured) 6.65 2015 9,125,000 (d) 2,216,645
______________
Total 4,054,880
_____________________________________________________________________________________________________________________________
Louisiana (2.8%)
Industrial Development Board of Bastrop Percent Pollution Control
Refunding Revenue Bonds International Paper Company Series 1992A 6.90 2007 6,875,000 6,953,444
New Orleans Capital Appreciation Refunding Revenue Bonds
Zero Coupon (AMBAC Insured) 6.35 2014 12,270,000 (d) 3,063,083
New Orleans Capital Appreciation Refunding Revenue Bonds
Zero Coupon (AMBAC Insured) 6.36 2015 16,000,000 (d) 3,708,640
New Orleans Capital Appreciation Refunding Revenue Bonds
Zero Coupon (AMBAC Insured) 6.62 2012 6,250,000 (d) 1,820,500
New Orleans General Obligation Bonds Series 1986 (AMBAC Insured) 6.00 2004 4,685,000 4,675,255
New Orleans General Obligation Refunding Bonds Series 1991 (AMBAC Insured) 6.00 2004 1,165,000 1,149,517
New Orleans Home Mortgage Authority Special Obligation Refunding Bonds
Series 1992 6.25 2011 9,000,000 8,443,530
______________
Total 29,813,969
_____________________________________________________________________________________________________________________________
Maryland (2.5%)
Health & Educational Facility Authority Refunding Revenue Bonds
Sinai Hospital Baltimore (AMBAC Insured) 5.25 2019 5,000,000 3,940,850
Health & Educational Facility Authority Revenue Bonds
Frederick Memorial Hospital Series 1993 (FGIC Insured) 5.00 2028 10,000,000 7,325,500
State Community Development Administration Department of Housing &
Community Development Single Family Program Bonds Series 1991-1 7.30 2017 10,500,000 10,595,970
State Health & Higher Educational Facility Authority Revenue Bonds
Anne Arndel Medical Center (AMBAC Insured) 5.00 2023 5,500,000 4,099,535
______________
Total 25,961,855
_____________________________________________________________________________________________________________________________
<PAGE>
PAGE 21
Massachusetts (1.5%)
Health & Educational Facilities Authority Revenue Bonds
Valley Regional Health System Series C (Connie Lee Insured) 5.75 2018 3,500,000 2,913,995
State Health & Education Authority Beverly Hospital Inverse Floater
(MBIA Insured) 7.37 2020 2,950,000 (f) 1,921,187
State Municipal Wholesale Electric Power Supply System Revenue Bonds
Series 1992B 6.75 2017 10,000,000 10,591,300
______________
Total 15,426,482
_____________________________________________________________________________________________________________________________
Michigan (1.1%)
Detroit Water Supply System Refunding Revenue Bonds
Series 1992 (FGIC Insured) 6.25 2007 2,000,000 1,960,660
State Hospital Finance Authority Refunding Revenue Bonds
Detroit Medical Center Obligation Group Series 1993A 6.50 2018 5,000,000 4,443,900
State Strategic Fund Percent Limited Obligation Refunding Revenue Bonds
Ford Motor Company Series 1991A 7.10 2006 5,000,000 5,119,300
______________
Total 11,523,860
_____________________________________________________________________________________________________________________________
Minnesota (2.8%)
Cambridge 1st Mortgage Nursing Home Revenue Bonds
Cambridge Nursing Care Center (FHA Insured) 10.15 2013 2,965,000 2,986,407
Minneapolis & St. Paul Housing & Redevelopment Authority
Health Care System Series 1990A 7.40 2005 4,500,000 4,841,685
Osseo Independent School District #279 General Obligation
School Building Bonds Series 1994A Inverse Floater 6.60 2012 7,000,000 (f) 4,961,250
Regents of the University General Obligation Bonds
Series 1993A Inverse Floater 5.77 2003 5,000,000 (f) 3,912,500
State Housing Finance Agency Single Family Mortgage Bonds
Series 1990C (FHA Insured) 7.70 2014 3,215,000 3,260,621
State Housing Finance Agency Single Family Mortgage Revenue Bonds
Series 1988E 7.65 2014 10,055,000 10,087,377
______________
Total 30,049,840
_____________________________________________________________________________________________________________________________
Missouri (1.0%)
Lee's Summit Industrial Development Authority Bonds Pfizer Series 1984 10.50 2009 1,450,000 1,506,478
St. Louis Region Convention & Sports Complex Authority Series 1991C 7.90 2021 8,500,000 8,653,340
______________
Total 10,159,818
_____________________________________________________________________________________________________________________________
New Hampshire (0.4%)
Business Finance Authority Pollution Control & Solid Waste Disposal
Revenue Bonds James River Series 1993 6.625 2022 5,000,000 4,315,250
_____________________________________________________________________________________________________________________________
New Jersey (1.5%)
Turnpike Authority Revenue Bonds Series 1991C 6.50 2005 16,000,000 16,098,560
_____________________________________________________________________________________________________________________________
New Mexico (0.3%)
Mortgage Finance Authority Single Family Mortgage Program
Series 1987A (FGIC Insured) 7.00 2017 3,800,000 3,723,696
_____________________________________________________________________________________________________________________________
<PAGE>
PAGE 22
New York (6.7%)
City Municipal Water Finance Authority Water & Sewer System Revenue Bonds
Series A 5.50 2020 4,370,000 3,414,849
Dormitory Authority New York City Court Facility Lease
Revenue Bonds Series 1993A 5.25 2021 20,000,000 14,909,200
Dormitory Authority New York City University System Consolidated
2nd General Revenue Bonds Series A 5.75 2018 5,500,000 4,515,115
New York City General Obligation Bonds Series B 6.75 2017 10,000,000 9,297,700
New York City General Obligation Bonds Series 1995B 7.00 2016 10,000,000 9,653,100
State Dormitory Authority City University Revenue Bonds
Series F 5.00 2014 7,970,000 6,007,388
State Medical Care Facilities Mental Health Service Series A
(FGIC Insured) 5.50 2021 4,000,000 3,262,360
State Mortgage Agency Homeowner Mortgage Revenue Bonds Series TT 7.50 2015 15,945,000 16,308,705
State Urban Development Correctional Capital Facility Revenue Bonds
Series 4 5.375 2023 4,840,000 3,623,756
________________
Total 70,992,173
_____________________________________________________________________________________________________________________________
North Carolina (3.3%)
Eastern Municipal Power Agency System Refunding Revenue Bonds
Series 1989A 6.50 2024 20,000,000 17,903,200
Eastern Municipal Power Agecny System Series G 5.75 2016 8,000,000 6,524,720
State Municipal Power Agency #1 Catawba Electric Revenue Bonds Series 1993
Inverse Floater (MBIA Insured) 6.97 2012 15,000,000 (f) 10,181,250
______________
Total 34,609,170
_____________________________________________________________________________________________________________________________
Ohio (0.8%)
Columbus Sewerage System Refunding Revenue Bonds Series 1992 6.30 2005 3,500,000 3,499,965
State Building Authority Bonds Toledo Government Center 6.00 2007 4,620,000 4,432,058
______________
Total 7,932,023
_____________________________________________________________________________________________________________________________
Oregon (0.3%)
Hospital Facility Authority of Clackamas County Revenue Bonds
Kaiser-Permanente Series 1985 9.375 2015 2,750,000 2,901,690
_____________________________________________________________________________________________________________________________
Pennsylvania (3.8%)
Commonwealth General Obligation Bonds Series 1992-1 6.30 2005 11,000,000 10,981,630
Delaware County Industrial Development Authority Pollution Control
Refunding Revenue Bonds Philadelphia Electric Company 7.375 2021 23,540,000 23,173,953
State Housing Finance Agency Single Family Mortgage Revenue Bonds
Series 1987L 7.125 2014 6,165,000 6,431,328
______________
Total 40,586,911
_____________________________________________________________________________________________________________________________
South Carolina (2.3%)
Horry County Hospital Refunding Revenue Bonds Conway Hospital Series 1992 6.75 2012 4,000,000 3,594,320
Piedmont Municipal Power Agency Electric Refunding Revenue Bonds
Series 1986 6.00 2024 13,060,000 11,090,944
Piedmont Municipal Power Agency Electric Refunding Revenue Bonds
Series 1986A 5.75 2024 2,390,000 1,921,297
Public Service Revenue Bonds Series D 6.375 2022 8,000,000 7,125,760
______________
Total 23,732,321
_____________________________________________________________________________________________________________________________
<PAGE>
PAGE 23
Tennessee (0.6%)
Chattanooga Municipal Improvement & Sewer Facility Unlimited Tax Bonds 6.50 2009-11 6,000,000 5,916,600
_____________________________________________________________________________________________________________________________
Texas (12.9%)
Austin Utility System Capital Appreciation Combined Refunding
Revenue Bonds Series 1994A Zero Coupon (MBIA Insured) 6.60 2008 11,515,000 (d) 4,419,227
Austin Utility System Capital Appreciation Refunding Revenue Bonds
Zero Coupon (AMBAC Insured) 6.51 2010 5,055,000 (d) 1,688,572
Austin Utility System Capital Appreciation Refunding Revenue Bonds
Zero Coupon (MBIA Insured) 6.80 2010 16,000,000 (d) 5,344,640
Austin Utility System Combined Utility Refunding Revenue Bonds Series 1992
(AMBAC Insured) 6.25 2006 10,500,000 10,403,715
Coastal Water Authority Water Conveyance System Refunding Revenue Bonds
Series 1991 (AMBAC Insured) 6.25 2017 5,000,000 4,771,250
Corpus Christi Independent School District
Unlimited Tax School Building Bonds 6.00 2005-06 4,845,000 4,667,024
Cypress-Fairbanks Independent School District Harris County
Unlimited Tax Schoolhouse Bonds Series 1990 (FGIC Insured) 6.50 2008 1,500,000 1,553,610
Fort Worth Tarrant & Denton Counties Water & Sewer System
Refunding Revenue Bonds Series 1991B 6.30 2004 11,390,000 11,417,564
Fort Worth Tarrant & Denton Counties Water & Sewer System
Refunding Revenue Bonds Series 1991B 6.40 2005 8,760,000 8,758,861
Houston Water & Sewer System Junior Lien Refunding Revenue Bonds
Series C Zero Coupon (AMBAC Insured) 6.60 2008 8,000,000 (d) 3,060,880
Municipal Power Agency Bonds (BIG Insured) 6.25 2010 7,000,000 7,307,020
Municipal Power Agency Capital Appreciation Refunding Revenue Bonds
Zero Coupon (AMBAC Insured) 6.90 2009 6,500,000 (d) 2,368,925
North Central Texas Health Facilities Development Bonds
Kaiser Foundation of Texas 9.375 2015 4,500,000 4,762,080
San Antonio Electric & Gas Systems Refunding Revenue Bonds Series 1989 6.00 2014 6,000,000 5,406,360
San Antonio Electric & Gas Systems Refunding Revenue Bonds Series 1989 6.50 2012 20,000,000 19,248,400
San Antonio Electric & Gas Systems Refunding Revenue Bonds Series 1989A 6.50 2012 6,250,000 6,015,125
San Antonio Water Refunding Revenue Bonds (FGIC Insured) 6.40 2007 25,000,000 24,871,500
State Turnpike Authority Revenue Bonds 6.00 2020 10,000,000 10,129,100
______________
Total 136,193,853
_____________________________________________________________________________________________________________________________
Utah (1.3%)
Intermountain Power Authority Special Obligation Bonds
1st Crossover Series 6.00 2015 15,970,000 14,067,175
_____________________________________________________________________________________________________________________________
Virginia (1.3%)
Fairfax County Water Authority Refunding Revenue Bonds 5.75 2029 5,000,000 4,173,950
Loudoun County Sanitation Authority Water & Sewer Revenue Bonds
(MBIA Insured) 5.25 2025 2,580,000 1,989,954
State Transportation Board Revenue Bonds 6.00 2019 8,000,000 7,043,840
______________
Total 13,207,744
_____________________________________________________________________________________________________________________________
Washington (4.6%)
Auburn School District #408 King County Unlimited Tax
General Obligation Bonds Series 1992A 6.375 2006 8,000,000 7,976,640
Issaquah School District #411 King County Unlimited Tax
General Obligation Refunding Bonds 1992 6.375 2008 16,675,000 16,320,323
Public Power Supply System Nuclear Project #1 Revenue Bonds Series 1989A 6.00 2017 12,130,000 10,468,190
Public Power Supply System Nuclear Project #3 Capital Appreciation
Refunding Revenue Bonds Series B Zero Coupon (MBIA Insured) 6.61 2013 10,360,000 (d) 2,787,254
State Public Power Supply System Nuclear Project #1 Revenue Refunding Bonds
Bonneville Power Administration Series 1993A Inverse Floater
(FSA Insured) 7.47 2011 15,000,000 (f) 11,100,000
______________
Total 48,652,407
_____________________________________________________________________________________________________________________________
West Virginia (0.8%)
School Building Authority Capital Improvement Revenue Bonds Series 1990B
(MBIA Insured) 6.00 2020 9,730,000 8,484,852
_____________________________________________________________________________________________________________________________
Wyoming (1.3%)
Casper Industrial Development Revenue Bonds Albertson's 9.875 2010 2,525,000 2,683,696
Community Development Authority Single Family Mortgage Bonds
Federally Insured or Guaranteed Mortgage Loan 7.40 2031 3,510,000 3,520,916
State Farm Loan Board Capital Facilities Revenue Bonds Series 1994 6.10 2024 8,495,000 7,368,139
______________
Total 13,572,751
_____________________________________________________________________________________________________________________________
Total municipal bonds
(Cost: $1,015,350,359) $979,078,827
<PAGE>
PAGE 24
</TABLE>
<TABLE>
<CAPTION>
Short-term securities (6.4%)
_____________________________________________________________________________________________________________________________
Issuer (g,h) Effective Amount Value(a)
yield payable at
maturity
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
Municipal notes
Harris County Texas Pollution Control Revenue Bonds
Exxon V.R.D.B. Series 1984A
03-01-24 3.40% $ 2,300,000 $ 2,300,000
Jackson County Mississippi Pollution Control Revenue Bonds
Chevron V.R.D.B. Series 1993
06-01-23 3.40 1,000,000 1,000,000
Kemmerer Wyoming Pollution Control Revenue Bonds
Exxon V.R.D.B. Series 1984
11-01-14 3.55 1,400,000 1,400,000
Lincoln County Wyoming Pollution Control Revenue Bonds
Exxon V.R.B.D. Series 1984A
11-01-14 3.40 8,300,000 8,300,000
Lincoln County Wyoming Pollution Control Revenue Bonds
Exxon V.R.B.D. Series 1984D
11-01-14 3.40 7,700,000 7,700,000
New York City General Obligation Bonds V.R.D.B. Series 1994H-2
08-01-14 3.50 2,000,000 2,000,000
New York City General Obligation Bonds V.R.D.B. Series 1994H-3
08-01-22 3.50 500,000 500,000
New York City Municipal Water Finance Authority V.R.D.B.
Series 1992C
06-15-22 3.40 5,200,000 5,200,000
New York City Municipal Water Finance Authority V.R.D.B.
Series 1994C
06-15-23 3.40 10,200,000 10,200,000
New York State V.R.D.B. Series B-1
08-01-23 3.40 7,200,000 7,200,000
Peninsula Port Authority Virginia Shell Oil V.R.D.B.
12-01-05 3.45 4,400,000 4,400,000
Triborough Bridge & Tunnel Authority New York Special Obligation
V.R.D.B. Series 1994
01-01-24 3.50 5,100,000 5,100,000
Uinta County Wyoming Polution Control Revenue Bonds
Chevron V.R.D.B.
08-15-20 3.40 12,200,000 12,200,000
_____________________________________________________________________________________________________________________________
Total short-term securities
(Cost: $67,500,000) $ 67,500,000
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $1,082,850,359)(i) $1,046,578,827
_____________________________________________________________________________________________________________________________
<PAGE>
PAGE 25
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 11-30-94 11-30-93
_________________________________________________________________________________________________
AAA 46% 35%
AA 29 36
A 17 23
BBB and below 8 6
Non-rated - -
_________________________________________________________________________________________________
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
CGIC -- Capital Guaranty Insurance Company
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 the annualized effective yield on the date of acquisition.
(e) At Nov. 30, 1994 the cost of securities purchased on a when-issued basis was $12,565,215.
(f) Inverse floaters represent securities that pay interest at a rate that increases (decreases) in the same magnitude as,
or in a multiple of, a decline (increase) in market short-term rates. Interest rate disclosed is the rate in effect on
Nov. 30, 1994. Inverse floaters in the aggregate represent 6.5% of the fund's net assets as of Nov. 30, 1994.
(g) Interest rate varies to reflect current market conditions; rates shown are the effective rates on Nov. 30, 1994.
(h) The following abbreviation is used in portolio description:
V.R.D.B. -- Variable Rate Demand Bond
(i) At Nov. 30, 1994, the cost of securities for federal income tax purposes was $1,082,913,601 and the
aggregate gross unrealized appreciation and depreciation based on that cost was:
Unrealized appreciation $ 16,831,283
Unrealized depreciation (53,166,057)
________________________________________________________________________________________________________
Net unrealized depreciation $(36,334,774)
________________________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 26
IDS mutual funds
Cash equivalent investments
These money market funds have three main goals: conservation of
capital, constant liquidity and the highest possible current income
consistent with these objectives. Very limited risk.
IDS Cash Management Fund
Invests in such money market securities as high quality commercial
paper, bankers' acceptances, certificates of deposits (CDs) and
other bank securities.
(icon of) piggy bank
IDS Tax-Free Money Fund
Invests primarily in short-term bonds and notes issued by state and
local governments to seek high current income exempt from federal
income taxes.
(icon of) shield with piggy bank enclosed
Income investments
The funds in this group invest their assets primarily in corporate
bonds or government securities to seek interest income. Secondary
objective is capital growth. Risk varies by bond quality.
IDS Global Bond Fund
Invests primarily in debt securities of U.S. and foreign issuers to
seek high total return through income and growth of capital.
(icon of) globe
IDS Extra Income Fund
Invests mainly in long-term, high-yielding corporate fixed-income
securities in the lower rated, higher risk bond categories to seek
high current income. Secondary objective is capital growth.
(icon of) cornucopia
IDS Bond Fund
Invests mainly in corporate bonds, at least 50% in the higher
rated, lower risk bond categories, or the equivalent, and in
government bonds.
(icon of) greek column
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IDS Strategy, Income Fund
Invests primarily in corporate and government bonds to seek high
current income while conserving capital. Also may seek capital
appreciation when consistent with its primary goals.
(icon of) chess piece
IDS Selective Fund
Invests in high-quality corporate bonds and other highly rated debt
instruments including government securities and short-term
investments. Seeks current income and preservation of capital.
(icon of) skyline
IDS Federal Income Fund
Invests primarily in securities issued or guaranteed as to the
timely payment of principal and interest by the U.S. government,
its agencies and instrumentalities. Seeks a high level of current
income and safety of principal consistent with its type of
investments.
(icon of) federal building
IDS Strategy, Short-Term Income Fund
Invests primarily in short-term and intermediate-term bonds and
notes to seek a high level of current income.
(icon of) chess piece
Tax-exempt income investments
These funds provide tax-free income by investing in municipal
bonds. The income is generally free from federal income tax. Risk
varies by bond quality.
IDS High Yield Tax-Exempt Fund
Invests primarily in medium- and lower-quality municipal bonds and
notes. Lower-quality securities generally involve greater risk of
principal and income.
(icon of) shield with basket of apples enclosed
IDS State Tax-Exempt Funds
(CA, MA, MI, MN, NY, OH)
Invests primarily in high- and medium-grade municipal securities to
provide income to residents of each respective state that is exempt
from federal, state and local income taxes. (New York is the only
state that is exempt at the local level.)
(icon of) shield with U.S. enclosed
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IDS Tax-Exempt Bond Fund
Invests mainly in bonds and notes of state or local government
units, with at least 75% in the four highest rated, lowest risk
bond categories.
(icon of) shield with Greek column
IDS Insured Tax-Exempt Fund
Invests primarily in municipal securities that are insured as to
the timely payment of principal and interest. The insurance
feature minimizes credit risk of the fund but does not guarantee
the market value of the fund's shares.
(icon of) shield with eagle head
Growth and income investments
These funds focus on securities of medium to large, well-
established companies that offer long-term growth of capital and
reasonable income from dividends and interest. Moderate risk.
IDS International Fund
Invests primarily in common stocks of foreign companies that offer
potential for superior growth. The fund may invest up to 20% of
its assets in the U.S. market.
(icon of) three flags
IDS Strategy, Worldwide Growth Fund
Invests primarily in common stocks of companies throughout the
world that offer potential for superior growth. Holdings may range
from small- to large-capitalization stocks, including those of
companies involved in areas of rapid economic growth.
(icon of) chess piece
IDS Managed Retirement Fund
Invests in a combination of common stocks, fixed-income investments
and money market securities to seek a maximum total return through
a combination of growth of capital and current income.
(icon of) bird in a nest
IDS Equity Select Fund
Invests primarily in a combination of moderate growth stocks,
higher-yielding equities and bonds. Seeks growth of capital and
income.
(icon of) three apple trees
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IDS Blue Chip Advantage Fund
Invests in selected stocks from a major market index. Securities
purchased are those recommended by IDS research analysts as the
best from each industry represented on the index. Offers potential
for long-term growth as well as dividend income.
(icon of) ribbon
IDS Stock Fund
Invests in common stock of companies representing many sectors of
the economy. Seeks current income and growth of capital.
(icon of) building with columns
IDS Strategy, Equity Fund
Invests primarily in undervalued common stocks that offer potential
for growth of capital and income.
(icon of) chess piece
IDS Utilities Income Fund
Invests primarily in the stocks of public utility companies to seek
high current income and growth of income and capital with reduced
volatility.
(icon of) electrical cord
IDS Diversified Equity Income Fund
Invests primarily in high-yielding common stocks to seek high
current income and, secondarily, to benefit from the growth
potential offered by stock investments.
(icon of) four puzzle pieces
IDS Mutual
Invests in a balance between common stocks and senior securities
(preferred stocks and bonds). Seeks a balance of growth of capital
and current income.
(icon of) scale of justice
Growth investments
Funds in this group seek capital growth, primarily from common
stocks. They are high risk mutual funds with a potential for high
reward.
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IDS Discovery Fund
Invests in small- and medium-size, growth-oriented companies
emphasizing technological innovation and productivity enhancement.
Buys and holds larger growth-oriented stocks.
(icon of) ship
IDS Strategy, Aggressive Equity Fund
Invests primarily in common stocks of companies that are selected
for their potential for above-average growth. Above-average means
that their growth potential is better, in the opinion of the
portfolio's investment manager, than the Standard & Poor's
Corporation (S&P) 500 Stock Index.
(icon of) chess piece
IDS Growth Fund
Invests primarily in companies that have above-average potential
for long-term growth as a result of new management, marketing
opportunities or technological superiority.
(icon of) flower
IDS Global Growth Fund
Invests in stocks of companies throughout the world that are
positioned to meet market needs in a changing world economy. These
companies offer above-average potential for long-term growth.
(icon of) world
IDS New Dimensions Fund
Invests primarily in companies with significant growth potential
due to superiority in technology, marketing or management. The
Fund frequently changes its industry mix.
(icon of) dimension
IDS Progressive Fund
Invests primarily in undervalued common stocks. The fund holds
stocks for the long term with the goal of capital growth.
(icon of) shooting star
Specialty growth investment
This fund aggressively seeks capital growth as a hedge against
inflation.
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IDS Precious Metals Fund
Invests primarily in the securities of foreign or domestic
companies that explore for, mine and process or distribute gold and
other precious metals. This is the most aggressive and most
speculative IDS mutual fund.
(icon of) cart of precious gems
For more complete information about any of these funds, including
charges and expenses, you can obtain a prospectus by contacting
your financial advisor or writing to American Express Shareholder
Service, P.O. Box 534, Minneapolis, MN 55440-0534. Read it
carefully before you invest or send money.
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PAGE 32
Federal income tax information
IDS Tax-Exempt Bond Fund, Inc.
___________________________________________________________________
The fund is required by the Internal Revenue Code of 1986 to tell
its shareholders about the tax treatment of the dividends it pays
during its fiscal year. The dividends listed below were reported
to you on your year-end statement, in January.
IDS Tax-Exempt Bond Fund, Inc.
Fiscal year ended Nov. 30, 1994
Exempt-interest dividends -- taxable status
explained below.
Payable date Per share
Dec. 28, 1993 $0.02200
Jan. 26, 1994 0.01770
Feb. 24, 1994 0.01940
March 25, 1994 0.01800
April 25, 1994 0.01960
May 25, 1994 0.01840
June 27, 1994 0.02070
July 26, 1994 0.01760
Aug. 26, 1994 0.01880
Sept. 26, 1994 0.01944
Oct. 26, 1994 0.01802
Nov. 28, 1994 0.02041
Total $0.23007
Taxable dividend -- short-term capital gain --
taxable as dividend income.
Payable date Per share
Dec. 28, 1993 $0.05250
Capital gain distribution -- taxable as long-term
capital gain.
Payable date Per share
Dec. 28, 1993 $0.03850
Total distributions $0.32107
Federal taxation
Exempt-interest dividends are exempt from federal income taxes and
should not be included in shareholders' gross income.
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PAGE 33
Other taxation
Exempt-interest dividends may be subject to state and local taxes.
Each shareholder should consult a tax adviser about reporting this
income for state and local tax purposes.
Source of income by state
Percentages of income from municipal securities earned by the fund
from various states during the year ended Nov. 30, 1994 are listed
below.
Alaska 2.637%
Arizona 1.767
California 8.603
Colorado 0.238
Connecticut 1.494
Delaware 0.162
Florida 4.420
Georgia 2.962
Hawaii 1.997
Idaho 0.013
Illinois 7.673
Indiana 1.940
Iowa 0.395
Kansas 0.453
Kentucky 0.532
Louisiana 2.455
Maryland 2.016
Massachusetts 2.386
Michigan 1.054
Minnesota 3.548
Mississippi 0.027
Missouri 1.117
Nevada 0.186
New Hampshire 0.429
New Jersey 1.453
New Mexico 0.683
New York 5.779
North Carolina 3.473
Ohio 0.706
Oregon 1.368
Pennsylvania 3.771
Rhode Island 1.299
South Carolina 2.717
Tennessee 1.062
Texas 13.596
Utah 1.783
Virginia 2.778
Washington 5.285
Washington, DC 0.645
West Virginia 0.830
Wisconsin 2.880
Wyoming 1.388
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PAGE 34
Quick telephone reference
American Express 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
American Express Shareholder Service
Fund performance, objectives and account inquiries
612-671-3733
TTY Service
For the hearing impaired
800-846-4852
American Express 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
AMERICAN
EXPRESS
FINANCIAL
ADVISORS
IDS Tax-Exempt Bond Fund
IDS Tower 10
Minneapolis, MN 55440-0010
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PAGE 35
STATEMENT OF DIFFERENCES
Difference Description
1) The layout is different 1) Some of the layout in the
throughout the annual report. annual report to
shareholders is in two
columns.
2) Headings. 2) The headings in the
annual report are
placed in blue strip at
the top of the page.
3) There are pictures, icons 3) Each picture, icon and
and graphs throughout the graph is described in
annual report. parentheses.
4) Footnotes for charts and 4) The footnotes for each
graphs are described at chart or graph are typed
the left margin. below the description of
the chart or graph.
