<PAGE>
PAGE 1
1993 ANNUAL REPORT
IDS Life Variable Annuity Fund B
Invests in a wide range of securities to provide long-term capital
appreciation for contract owners
FINANCIAL PLANNING
IDS
An American Express company
AMERICAN
EXPRESS
Managed by IDS Life Insurance Company
<PAGE>
PAGE 2
Message from the President
(Photo of) James A. Mitchell
Dear Contract Owner,
IDS Life Variable Annuity Fund B outperformed the broad stock
market during the past year, providing contract owners with a solid
increase on their investment. The Fund's portfolio manager and his
team review the past period and discuss prospects for the future in
their comments on the next page.
The stock market's ongoing fluctuations reinforce the fact that a
focus on long-term financial objectives is an especially important
guideline in today's investment environment. The Fund's approach
of investing for the long term in high-quality growth stocks has
benefited contract owners in the past and, despite short-term
movements in the market, should continue to be beneficial in the
future.
One way to benefit from short-term market movements is by making
regular investments of fixed amounts of money in an investment that
is expected to grow in value over time. This systematic approach,
called dollar-cost averaging, smoothes the effects of stock market
volatility and can reduce the average cost of buying accumulation
units. If your contract allows additional payments, those extra
purchases enable you to dollar-cost average. Subject to
restrictions, if your contract has a fixed account, you also can
establish a systematic transfer program from the fixed account to
the variable account.
In essence, you may take advantage of market fluctuations by
purchasing more accumulation units when the price is low and fewer
units when the price is high. This may help you achieve what every
investor wants: to buy at the lowest average price. While
dollar-cost averaging does not ensure a profit and does not protect
against a loss if the market declines, it is an effective way for
many contract owners who continue investing through changing market
conditions to obtain accumulation units at a lower average cost to
meet long-term goals.
Your IDS personal financial planner can tell you more about
systematic investing and how it can help you meet your financial
objectives. Your planner also can help you make sure your
investment strategies continue to meet the objectives in your
financial plan. As your objectives and time horizons change, talk
to your planner about the broad range of IDS and IDS Life products
and services designed to help you meet a variety of investment and
protection needs.
Sincerely,
James A. Mitchell
President and Chief Executive Officer
IDS Life Insurance Company
<PAGE>
PAGE 3
From Your Portfolio Management Team: A Perspective
(Photo of) Gordon Fines
Gordon Fines leads the management team for IDS Life Variable
Annuity Fund B. He also manages IDS New Dimensions Fund and serves
as president of Growth Spectrum Advisors.
Although it was a somewhat unsettled period for the stock market,
investing in stocks again proved to be rewarding for contract
owners during the past year.
On Dec. 31, 1993, the accumulation unit value of the IDS Life
Variable Annuity Fund B was $12.69, compared with $11.60 at the
beginning of the year. (If you purchased additional accumulation
units during this period, your return would have been affected by
the sales and administrative charges, as described in the
prospectus.)
The stock market fluctuated considerably during the past 12 months,
with stocks advancing and retreating on a variety of economic and
political developments. Although the underlying trend was
moderately higher, the environment rewarded only certain stock
groups and, in most cases, only on a temporary basis. Because the
market severely penalized certain stocks, it was at least as
important to avoid the vulnerable stocks as it was to own the
profitable ones.
Growth stocks -- the foundation of the portfolio -- got off to a
poor start, as profit-hungry investors began selling shares that
had risen strongly in previous months. The sell-off was especially
evident among growth stocks in the health care sector, whose future
was called into question by the administration's plans to revamp
the nation's health care system.
Fortunately, we had already reduced our holdings in the health care
sector, so the portfolio was not greatly affected by that trend.
The same was true for growth stocks in the retailing sector,
although their downturn was far less dramatic. Formerly a
substantial portion of our holdings, retailing was pared back
considerably after the beginning of the year. To guard against the
possibility of big drops in individual issues, we also increased
the number of stocks in the portfolio. This increased
diversification proved beneficial in subsequent months.
By May, things began looking better for growth stocks. With the
economy displaying only modest improvement, investors became
increasingly attracted to growth companies because of the
relatively high profits they were able to generate. This positive
environment lasted until October, when signs of a stronger economy
began to draw more investors toward "cyclical" stocks, which
respond best during an economic pickup.
Although we owned a broad range of issues, a sizable portion of our
gain for the year came from three sectors: telecommunications,
technology and financial services. Looking at our best-performing
stocks regardless of sector, Southwest Airlines, Motorola, MCI <PAGE>
PAGE 4
Communications and McCaw Cellular (both in telecommunications) and
Promus (a hotel/casino operator) were among those posting excellent
gains.
As for the current year, we think that health care services stocks
are in good position to gain ground, and we continue to like the
outlook for telecommunications and technology stocks. If the
market, and growth stocks in particular, advance during the year,
we expect these groups to respond particularly well and benefit the
Fund accordingly.
<TABLE>
<CAPTION>
Ten Largest Holdings Dec. 31, 1993
__________________________________________________________________________________________
Percent of
Fund's
Common Stocks Value Net Assets
__________________________________________________________________________________________
<S> <C> <C>
Cisco Systems . . . . . . . . . . . . . . . . . 20,886,800 3.91%
Manufacturer of computer network products
Time Warner . . . . . . . . . . . . . . . . . 17,257,500 3.23
Publishing, entertainment and video
Motorola . . . . . . . . . . . . . . . . . . 16,165,625 3.02
Manufacturer of semiconductors and communication equipment
Brinker Int'l . . . . . . . . . . . . . . . . 15,525,000 2.91
Limited menu restaurants
Southwest Airlines . . . . . . . . . . . . . . . 15,000,000 2.81
Airline that serves the U.S. Southwest
First Financial Management . . . . . . . . . . . . 14,982,000 2.80
Financial data processing services
Federal National Mortgage . . . . . . . . . . . . . 13,737,500 2.57
Provides residential mortgage funds
CSX . . . . . . . . . . . . . . . . . . . . 12,960,000 2.42
Railroad holding and transportation
American International Group . . . . . . . . . . . . 12,723,750 2.38
Major international insurance holding company
Promus . . . . . . . . . . . . . . . . . . . 11,437,500 2.14
Hotel and casino operations
__________________________________________________________________________________________
Total . . . . . . . . . . . . . . . . . . . $150,675,675 28.19%
__________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 5
Investment Illustration
On the chart below you can see how IDS Life Variable Annuity Fund
B's total return compared to the Standard & Poor's 500 Index (S&P
500), an unmanaged list of common stocks, frequently used as a
general measure of market performance. In comparing the Fund to
the S&P 500, you should take into account the fact that the Fund's
performance reflects a 5.65 percent total sales and administrative
charge, while nosuch sales charge is reflected in the performance
of the S&P 500.
Investment performance of the Fund, after charges, is reflected in
the unit value calculation. There are no dividend or capital gain
distributions, therefore, the assumed units purchased would remain
constant throughout the period.
How your $10,000 has grown in IDS Life Variable Annuity Fund B
<TABLE><CAPTION>
_________________________________________________________________________________________________ $50,000
_________________________________________________________________________________________________ 40,000
S&P 500
Stock Index
_________________________________________________________________________________________________ 30,000
.
.
__________________________________________________ Fund B _______________________________________ 20,000
Annuity Value
.________________________________________________________________________________________________ 10,000
9,435
_________________________________________________________________________________________________ 0
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993
9,435 9,254 11,354 13,255 17,035 18,219 23,951 24,458 36,452 38,901 42,567
Dec. 31
Unit Value 2.813 2.759 3.385 3.952 5.079 5.432 7.141 7.292 10.868 11.598 12.691
</TABLE>
The above represents an assumed investment of $10,000 into a single
payment annuity contract on Dec. 31, 1983. Values are calculated
on Dec. 31 of each year. (No new contracts are currently being
sold.)
Average Annual Total Return on Each of Three Investments
Period Average
Date of investment annual total
investment held in years return
__________________________________________________________________
Dec. 31, 1983 10 +16.26%
Dec. 31, 1988 5 +18.50
Dec. 31, 1992 1 + 9.42
__________________________________________________________________
The returns reflect the deduction of a sales and administrative
charge and a mortality and expense risk charge.
Your investment and return value fluctuate so that your
accumulation units, when redeemed, may be worth more or less than
their original cost. This was a period of fluctuating security
prices. Past performance is no guarantee of future results.
<PAGE>
PAGE 6
Annual Financial Information
____________________________________________________________
Report of Independent Auditors
The Board of Managers and Contract Owners
IDS Life Variable Annuity Fund B:
We have audited the accompanying statement of assets, liabilities
and contract owners' equity of IDS Life Variable Annuity Fund B,
including the schedule of investments in securities, as of December
31, 1993, the related statement of operations for the year then
ended, the statement of changes in contract owners' equity for each
of the two years in the period then ended, and the selected per
unit data and ratios presented under "Financial Highlights" for
each of the five years in the period then ended. These financial
statements and per unit data and ratios are the responsibility of
the Fund's management. Our responsibility is to express an opinion
on these financial statements and per unit data and ratios 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 per unit data and ratios are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of
investments owned at December 31, 1993, by correspondence with the
custodian and brokers. 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 and selected per unit data
and ratios referred to above present fairly, in all material
respects, the financial position of IDS Life Variable Annuity Fund
B at December 31, 1993, the results of its operations for the year
then ended, the changes in its contract owners' equity for each of
the two years in the period then ended, and the selected per unit
data and ratios for each of the five years in the period then ended
in conformity with generally accepted accounting principles.
ERNST & YOUNG
Minneapolis, Minnesota
January 24, 1994
<PAGE>
PAGE 7
<TABLE>
<CAPTION>
_____________________________________________________________________________________________________________________________
Statement of Assets, Liabilities and Contract Owners' Equity Dec. 31, 1993
Assets
_____________________________________________________________________________________________________________________________
<S> <C>
Investments in securities, at value (Note 1)
(Identified cost, $389,261,171) . . . . . . . . . . . . . . . . . . . . . . . . . . .$536,658,181
Cash in bank on demand deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . 278,845
Receivable for investment securities sold . . . . . . . . . . . . . . . . . . . . . . . . 864,206
Dividends and interest receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . 379,160
Receivable from IDS Life Insurance Company for contract purchase payments. . . . . . . . . . . . . . 31,682
_____________________________________________________________________________________________________________________________
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$538,212,074
_____________________________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________________________
Payable for investment securities purchased. . . . . . . . . . . . . . . . . . . . . . . .$ 3,476,224
Payable for contract terminations . . . . . . . . . . . . . . . . . . . . . . . . . . . 158,874
Payable to IDS Life Insurance Company for:
Mortality and expense assurance fee . . . . . . . . . . . . . . . . . . . . . . . . . . 14,661
Investment management fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,865
_____________________________________________________________________________________________________________________________
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,655,624
_____________________________________________________________________________________________________________________________
Contract owners' equity
_____________________________________________________________________________________________________________________________
Contracts in accumulation period - 41,447,618 units at $12.69 per unit (Note 5) . . . . . . . . . . . 525,991,210
Contracts in payment period - 23,493 annuity units . . . . . . . . . . . . . . . . . . . . 8,565,240
_____________________________________________________________________________________________________________________________
Total contract owners' equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . 534,556,450
_____________________________________________________________________________________________________________________________
Total liabilities and contract owners' equity . . . . . . . . . . . . . . . . . . . . . . $538,212,074
_____________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE> <PAGE>
PAGE 8
<TABLE>
<CAPTION>
_____________________________________________________________________________________________________________________________
Statement of Operations Year ended Dec. 31, 1993
Investment loss - net
_____________________________________________________________________________________________________________________________
<S> <C>
Income:
Dividends (net of foreign taxes withheld of $32,240) . . . . . . . . . . . . . . . . . . . . .$ 4,194,414
Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,161,381
_____________________________________________________________________________________________________________________________
Total income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,355,795
_____________________________________________________________________________________________________________________________
Expenses:
Mortality and expense assurance fee (Note 2). . . . . . . . . . . . . . . . . . . . . . . . 5,163,853
Investment management fee and brokerage charges (Note 3) . . . . . . . . . . . . . . . . . . . 2,067,477
_____________________________________________________________________________________________________________________________
Total expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,231,330
_____________________________________________________________________________________________________________________________
Investment loss - net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (875,535)
_____________________________________________________________________________________________________________________________
Realized and unrealized gain (loss) on investments - net
_____________________________________________________________________________________________________________________________
Net realized gain on investments (Note 4). . . . . . . . . . . . . . . . . . . . . . . . . 58,967,445
Net change in unrealized appreciation or depreciation of investments. . . . . . . . . . . . . . . .(11,397,737)
_____________________________________________________________________________________________________________________________
Net gain on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,569,708
_____________________________________________________________________________________________________________________________
Net increase in contract owners' equity from operations . . . . . . . . . . . . . . . . . . . .$46,694,173
_____________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 9
<TABLE>
<CAPTION>
_____________________________________________________________________________________________________________________________
Statement of Changes in Contract Owners' Equity Years ended Dec. 31,
Operations 1993 1992
_____________________________________________________________________________________________________________________________
<S> <C> <C>
Investment loss - net. . . . . . . . . . . . . . . . . . . . . . . . .$ (875,535) $ (1,338,878)
Net realized gain on investments . . . . . . . . . . . . . . . . . . . . . 58,967,445 74,758,030
Net change in unrealized appreciation or depreciation of investments . . . . . . . . . (11,397,737) (42,533,158)
_____________________________________________________________________________________________________________________________
Net increase in contract owners' equity from operations . . . . . . . . . . . . . 46,694,173 30,885,994
_____________________________________________________________________________________________________________________________
Contract Transactions
_____________________________________________________________________________________________________________________________
Net contract purchase payments (Note 2). . . . . . . . . . . . . . . . . . . 6,198,963 6,708,633
Repayment of temporary withdrawals . . . . . . . . . . . . . . . . . . . . 7,315 6,542
Net transfers from (to) fixed annuities. . . . . . . . . . . . . . . . . . . 4,463,825 (4,730,672)
Actuarial adjustment for mortality assurance on
annuities in payment period (Note 2). . . . . . . . . . . . . . . . . . . . (414,512) 132,633
Contract termination payments and temporary withdrawals . . . . . . . . . . . . . (27,401,827) (26,671,196)
Annuity payments . . . . . . . . . . . . . . . . . . . . . . . . . . (1,141,910) (1,058,355)
_____________________________________________________________________________________________________________________________
Net decrease from contract transactions. . . . . . . . . . . . . . . . . . . (18,288,146) (25,612,415)
_____________________________________________________________________________________________________________________________
Net increase in contract owners' equity. . . . . . . . . . . . . . . . . . . 28,406,027 5,273,579
_____________________________________________________________________________________________________________________________
Contract owners' equity at beginning of year . . . . . . . . . . . . . . . . . 506,150,423 500,876,844
_____________________________________________________________________________________________________________________________
Contract owners' equity at end of year . . . . . . . . . . . . . . . . . . . $534,556,450 $506,150,423
_____________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 10
Notes to Financial Statements
___________________________________________________________________
1. Organization and Summary of Significant Accounting Policies
IDS Life Variable Annuity Fund B (the Fund) is organized as a
segregated asset account of IDS Life Insurance Company (IDS Life)
under Minnesota law and is registered under the Investment Company
Act of 1940 as a diversified, open-end management investment
company. The Fund's assets are held for the exclusive benefit of
its variable annuity contract owners and are not chargeable with
any liabilities arising from the other business activities of IDS
Life. The significant accounting policies followed by the Fund are
summarized as follows:
Investments in Securities
Securities traded on national securities exchanges are valued at
the last quoted sales price on the principal exchange on which
traded. Securities traded in the over-the-counter market are
valued at the mean of the last quoted bid and asked price.
Short-term securities which mature in 60 days or less are valued at
amortized cost. Those 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. Short-term securities
originally purchased with maturities of more than 60 days but which
currently mature in 60 days or less are valued on an amortized cost
basis using the market value or approximate market value on the
61st day before maturity. Bonds and other securities are valued at
fair value as determined by the Board of Managers when market
quotations are not readily available. Determination of fair value
involves among other things, references to market indices, matrix
pricing and data from independent brokers.
Security transactions are accounted for on the date the securities
are purchased and sold. Dividend income is recorded on the
ex-dividend date.
Option Contracts
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. 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.
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 an option is 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 11
Futures Contracts
In order to gain exposure to or protect itself from changes in the
market, the Fund may buy and sell stock index futures contracts and
related options. 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 the 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.
Foreign Currency Translations and
Forward Foreign Currency Contracts
Securities and other assets and liabilities denominated in foreign
currencies are translated daily into U.S. dollars at the closing
rate of exchange. Foreign currency amounts related to the purchase
or sale of securities, income and expenses are translated at the
rate of exchange on the transaction date. It is not practicable to
identify that portion of realized and unrealized gain or loss
arising from changes in the exchange rates from the portion arising
from changes in the market value of investments.
The Fund may also enter into forward foreign currency exchange
contracts for operational purposes. The net U.S. dollar value of
foreign currency underlying all contractual commitments held by the
Fund and the resulting unrealized appreciation or depreciation are
determined using foreign currency exchange rates from an
independent pricing service. The Fund is subject to the credit
risk that the other party will not complete the obligations of the
contract.
Federal Income Taxes
IDS Life is taxed as a life insurance company. The Fund is treated
as part of IDS Life for federal income tax purposes. Under current
federal income tax law, no taxes are payable with respect to any
income of the Fund.
___________________________________________________________________
2. Mortality and Expense Assurance Fee and Sales Charges
IDS Life makes contractual assurances to the Fund that possible
future adverse changes in administrative expenses and mortality
experience of the annuitants and beneficiaries will not affect the
Fund. The mortality and expense assurance fee paid to IDS Life is
computed daily and is equal on an annual basis to 1 percent of the
average daily net assets of the Fund.
Charges by IDS Life for its sales and administrative services
applicable to the variable annuity contracts amounted to $234,942
in 1993 and $256,654 in 1992. Such charges are not an expense of
the Fund. They are deducted from contract purchase payments and
are not included in the net contract purchase payments to the Fund.<PAGE>
PAGE 12
___________________________________________________________________
3. Investment Management Agreement
The Fund has an Investment Management Agreement with IDS Life. For
its services, IDS Life is paid a fee based on the aggregate average
daily net assets of the Fund. The investment management fee paid
to IDS Life is computed daily and is equal on an annual basis to
0.4 percent of the average daily net assets of the Fund.
In addition to paying its own management fee, the Fund also pays
all brokerage commissions and charges in the purchase and sale of
assets. Brokerage charges are paid to IDS Life for reimbursement of
charges incurred in the purchase and sale of foreign securities.
_________________________________________________________________
4. Security Transactions and Basis for Determining
Realized Gain and Loss
Cost of purchases and proceeds from sales of securities (other than
short-term obligations) aggregated $290,882,772 and $303,498,325
for the year ended Dec. 31, 1993. Net realized gain on investments
has been determined on the basis of identified costs.
Brokerage commissions paid to brokers affiliated with IDS Life were
$63,678 for the year ended Dec. 31, 1993.
_________________________________________________________________
5. Accumulation Units
The changes in number of outstanding units applicable to contracts
in the accumulation period were as follows:
<TABLE>
<CAPTION>
Years ended Dec. 31, 1993 1992
_____________________________________________________________________________________________________________________________
<S> <C> <C>
Units outstanding at beginning of year. . . . . . . . . . . . . . . . . . . 42,900,879 45,306,745
Additions for contract purchase payments and repayments . . . . . . . . . . . . . 518,156 639,612
Net transfers from (to) fixed annuities . . . . . . . . . . . . . . . . . . 360,903 (464,418)
Deductions for contract terminations and withdrawals . . . . . . . . . . . . . . (2,332,320) (2,581,060)
_____________________________________________________________________________________________________________________________
Units outstanding at end of year. . . . . . . . . . . . . . . . . . . . . 41,447,618 42,900,879
_____________________________________________________________________________________________________________________________
</TABLE>
_________________________________________________________________
6. Financial Highlights
The table below shows certain important financial information for
evaluating the Fund's results.
<PAGE>
PAGE 13
<TABLE>
<CAPTION>
Years ended Dec. 31, 1993 1992 1991 1990 1989
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Accumulation unit value at beginning of year. . . . . . . . . . . $11.60 $10.87 $ 7.29 $7.14 $5.43
_____________________________________________________________________________________________________________________________
Income from investment operations:
Net investment income (loss) . . . . . . . . . . . . . . . . (.02) (.03) .02 .07 .05
Net gains (losses) on securities, both realized
and unrealized. . . . . . . . . . . . . . . . . . . . . 1.11 0.76 3.56 .08 1.66
_____________________________________________________________________________________________________________________________
Total from investment operations. . . . . . . . . . . . . . . 1.09 0.73 3.58 .15 1.71
_____________________________________________________________________________________________________________________________
Accumulation unit value at end of year. . . . . . . . . . . . . $12.69 $11.60 $10.87 $7.29 $7.14
_____________________________________________________________________________________________________________________________
Total Return* . . . . . . . . . . . . . . . . . . . . . 9.42% 6.72% 49.03% 2.12% 31.46%
_____________________________________________________________________________________________________________________________
Ratios/Supplemental Data
_____________________________________________________________________________________________________________________________
Total contract owner's equity at end of year
(000 omitted) . . . . . . . . . . . . . . . . . . . . .$534,556 $506,150 $500,877 $355,049 $376,790
Ratio of operating expenses to average net assets . . . . . . . . . 1.40% 1.40% 1.41% 1.41% 1.43%
Ratio of net investment income (loss) to average
net assets . . . . . . . . . . . . . . . . . . . . . . (0.17)% (0.28)% 0.26% 0.93% 0.75%
Portfolio turnover rate. . . . . . . . . . . . . . . . . . 64% 74% 67% 56% 53%
_____________________________________________________________________________________________________________________________
*Total return does not reflect payment of a sales charge.
</TABLE>
The foregoing table pertains to accumulation units only. There are
two kinds of units. As long as you are paying into the Fund they
are called "accumulation" units, when you begin to receive your
annuity, they change to "annuity" units.
The value of an annuity unit (assuming a 3.5 percent investment
rate) was $5.41 as of Dec. 31, 1993, $5.11 as of Dec. 31, 1992,
$4.96 as of Dec. 31, 1991, $3.46 as of Dec. 31, 1990 and $3.51 as
of Dec. 31, 1989. The value of an annuity unit (assuming a 5
percent investment rate) was $3.78 as of Dec. 31, 1993, $3.63 as of
Dec. 31, 1992, $3.57 as of Dec. 31, 1991, $2.53 as of Dec. 31, 1990
and $2.60 as of Dec. 31, 1989.
<PAGE>
PAGE 14
_________________________________________________________________
Investments in Securities, Dec. 31, 1993
_________________________________________________________________
(Percentages represent value of investments compared to total net
assets)
Common Stocks
__________________________________________________________________
Issuer Shares Value(a)
__________________________________________________________________
Airlines (2.8%)
Southwest Airlines. . . . . . . 400,000 $ 15,000,000
__________________________________________________________________
Automotive & Related (3.7%)
Chrysler . . . . . . . . . . 204,000 10,863,000
Eaton . . . . . . . . . . . 176,000 8,888,000
____________
19,751,000
__________________________________________________________________
Banks & Thrifts (2.2%)
First Chicago . . . . . . . . 255,800 11,063,350
Norwest . . . . . . . . . . 38,900 948,188
____________
12,011,538
__________________________________________________________________
Beverages & Tobacco (1.9%)
Coca-Cola. . . . . . . . . . 234,400 10,460,100
__________________________________________________________________
Chemicals (0.9%)
Great Lakes Chemical . . . . . . 65,000 4,850,625
__________________________________________________________________
Computers & Office Equipment (7.5%)
COMPAQ Computer. . . . . . . . 115,000(b) 8,510,000
Computer Association Int'l . . . . 68,000 2,720,000
Informix . . . . . . . . . . 142,000(b) 3,017,500
Microsoft. . . . . . . . . . 70,000(b) 5,643,750
Oracle Systems . . . . . . . . 336,000(b) 9,660,000
Sun Microsystems . . . . . . . 360,000(b) 10,485,000
____________
40,036,250
__________________________________________________________________
Electronics (2.0%)
Intel . . . . . . . . . . . 175,000 10,850,000
__________________________________________________________________
<PAGE>
PAGE 15
__________________________________________________________________
Issuer Shares Value(a)
__________________________________________________________________
Financial Services (10.3%)
Dean Witter . . . . . . . . . 204,000 7,063,500
Federal National Mortgage . . . . 175,000 13,737,500
First Financial Management . . . . 264,000 14,982,000
H & R Block . . . . . . . . . 120,000 4,890,000
Merrill Lynch & Co. . . . . . . 178,000 7,476,000
Primerica. . . . . . . . . . 180,000 6,997,500
____________
55,146,500
__________________________________________________________________
Foreign (5.8%)
Cable & Wireless . . . . . . . 216,000 5,184,000
Ericsson . . . . . . . . . . 138,000 5,571,750
Grupo Televisa . . . . . . . . 140,000(d) 9,800,000
Magna International . . . . . . 124,000 6,169,000
Talisman . . . . . . . . . . 200,000(b) 4,399,380
____________
31,124,130
__________________________________________________________________
Health Care (2.2%)
Genentech. . . . . . . . . . 90,000(b) 4,545,000
Medtronic. . . . . . . . . . 85,000 6,980,625
____________
11,525,625
__________________________________________________________________
Health Care Services (1.9%)
HEALTHSOUTH Rehabilitation . . . . 135,000(b) 3,408,750
United Healthcare . . . . . . . 85,800 6,510,075
____________
9,918,825
__________________________________________________________________
Household Products (1.1%)
Gillette . . . . . . . . . . 95,000 5,664,375
__________________________________________________________________
Industrial Transportation (2.4%)
CSX. . . . . . . . . . . . 160,000 12,960,000
__________________________________________________________________
Insurance (4.5%)
American International Group . . . 145,000 12,723,750
Equitable. . . . . . . . . . 422,000 11,394,000
___________
24,117,750
__________________________________________________________________
<PAGE>
PAGE 16
__________________________________________________________________
Issuer Shares Value (a)
__________________________________________________________________
Leisure Time & Entertainment (5.0%)
Int'l Game Technology. . . . . . 202,000 5,959,000
Mattel. . . . . . . . . . . 115,000 3,176,875
Promus. . . . . . . . . . . 250,000 11,437,500
Walt Disney . . . . . . . . . 140,000 5,967,500
____________
26,540,875
__________________________________________________________________
Media (8.8%)
Comcast . . . . . . . . . . 227,000 8,257,125
News Corp . . . . . . . . . 160,000 8,440,000
Tele-Communications, Class A . . . 265,000(b) 8,016,250
Time Warner. . . . . . . . . 390,000 17,257,500
Viacom, Class B . . . . . . . 110,000(b) 4,936,250
____________
46,907,125
__________________________________________________________________
Metals (1.3%)
Nucor . . . . . . . . . . . 130,000 6,890,000
__________________________________________________________________
Natural Gas (2.1%)
Enron . . . . . . . . . . . 284,000 8,236,000
Enron Oil & Gas. . . . . . . . 73,000 2,847,000
____________
11,083,000
__________________________________________________________________
Restaurants & Lodging (4.0%)
Brinker Int'l . . . . . . . . 337,500(b) 15,525,000
Wendy's Int'l . . . . . . . . 340,000 5,907,500
____________
21,432,500
__________________________________________________________________
Retail (5.7%)
Home Depot . . . . . . . . . 280,000 11,060,000
J.C. Penney . . . . . . . . . 140,000 7,332,500
Office Depot. . . . . . . . . 200,000(b) 6,725,000
Wal-Mart Stores . . . . . . . 215,000 5,375,000
____________
30,492,500
__________________________________________________________________
Telecommunications Equipment & Services (8.2%)
Cisco Systems . . . . . . . . 323,200(b) 20,886,800
General Instrument. . . . . . . 52,000(b) 2,918,500
Motorola . . . . . . . . . . 175,000 16,165,625
Scientific Atlanta. . . . . . . 85,000 2,805,000
SynOptics Communications. . . . . 36,800(b) 1,025,800
____________
43,801,725
__________________________________________________________________<PAGE>
PAGE 17
__________________________________________________________________
Issuer Shares Value (a)
__________________________________________________________________
Utilities -Telephone (6.1%)
McCaw Cellular . . . . . . . . 150,000(b) 7,575,000
MCI Communications. . . . . . . 304,600 8,604,950
Pacific Telesis. . . . . . . . 159,000 8,586,000
U.S. West. . . . . . . . . . 176,000 8,074,000
____________
32,839,950
__________________________________________________________________
Total Common Stocks (90.4%)
(Cost: $336,007,383) . . . . . . . . . . . $483,404,393
<PAGE>
PAGE 18
__________________________________________________________________
Short-term Securities
__________________________________________________________________
Annualized
Yield on
Date of Principal
Issuer Purchase Amount Value(a)
__________________________________________________________________
U.S. Government & Agency (2.2%)
Federal Home Loan Bank,
01-25-94. . . . . . . . . 3.20% $3,250,000 $ 3,243,110
FNMA,
01-28-94. . . . . . . . . 3.35 3,400,000 3,391,636
U.S. Treasury Bills,
02-10-94. . . . . . . . . 3.44 5,000,000 4,981,528
____________
11,616,274
__________________________________________________________________
Banker's Acceptance (0.3%)
Republic National Bank NY,
01-05-94. . . . . . . . . 3.27 1,500,000 1,499,463
__________________________________________________________________
Commercial Paper (7.5%)
CPC International,
02-11-94. . . . . . . . . 3.26 2,450,000(c) 2,440,932
Commerzbank,
04-04-94. . . . . . . . . 3.33 1,400,000 1,388,101
Eiger Capital
01-13-94. . . . . . . . . 3.33 2,011,000 2,008,775
01-19-94. . . . . . . . . 3.23 5,700,000 5,690,794
01-28-94. . . . . . . . . 3.27 900,000(c) 897,793
GE Capital,
03-25-94. . . . . . . . . 3.38 1,600,000 1,587,642
Michigan Consolidated,
01-14-94. . . . . . . . . 3.30 1,700,000 1,698,005
Mobil Australia,
01-27-94. . . . . . . . . 3.28 5,600,000(c) 5,586,775
Nat'l Australia Funding,
01-28-94. . . . . . . . . 3.30 5,000,000 4,987,625
St. Paul Companies,
01-20-94. . . . . . . . . 3.30 2,200,000 2,196,180
Societe Generale NA,
01-12-94. . . . . . . . . 3.30 3,200,000 3,196,822
Toyota Motor Credit,
01-04-94. . . . . . . . . 3.18 900,000 899,761
USAA Capital
01-12-94. . . . . . . . . 3.33 375,000 374,620
01-21-94. . . . . . . . . 3.28 1,900,000 1,896,590
01-27-94. . . . . . . . . 3.28 2,700,000 2,693,701
01-27-94. . . . . . . . . 3.28 2,600,000 2,593,935
____________
40,138,051
__________________________________________________________________
<PAGE>
PAGE 19
Total Short-term Securities (10.0%)
(Cost: $53,253,788 . . . . . . . . . . . $ 53,253,788
__________________________________________________________________
Total Investments in Securities (100.4%)
(Cost: $389,261,171(e) . . . . . . . . . . $536,658,181
__________________________________________________________________
Notes to Investments in Securities
__________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the
financial statements.
(b) Presently non-income producing.
(c) Commercial paper sold within terms of a private placement
memorandum, exempt from registration under section 4.2 of the
Securities Act of 1933, as amended, and may be sold only to
dealers in that program or other "accredited investors."
These securities have been determined to be liquid under
guidelines established by the Board of Managers.
(d) Represents security sold under Rule 144A and is exempt from
registration under the Securities Act of 1993, as amended.
This security has been determined to be liquid under
guidelines established by the Board of Managers.
(e) At Dec. 31, 1993, the cost of securities for federal income
tax purposes was $389,261,171 and the aggregate gross
unrealized appreciation and depreciation based on that cost
was:
Unrealized appreciation. . . . . . . . . $153,792,335
Unrealized depreciation. . . . . . . . . (6,395,325)
_____________________________________________________________
Net unrealized appreciation . . . . . . . $147,397,010
_____________________________________________________________
<PAGE>
PAGE 20
Managers and Officers
_________________________________________________________________
Board of Managers
Richard W. Kling
executive vice president, marketing and products, director, IDS
Life Insurance Company
Carl N. Platou
president emeritus, Fairview Hospital and Healthcare Services
Edward Landes
retired, former development consultant
James A. Mitchell
president and chief executive officer, director, IDS Life Insurance
Company
Gordon H. Ritz
president, Con Rad Broadcasting Corp.
Principal Officers
James A. Mitchell
chairman of the board and president
Louis C. Fornetti
vice president
Morris Goodwin, Jr.
vice president and treasurer
Robert O. Schneider
controller
Colleen C. Harvey
secretary
Additional Information
_________________________________________________________________
The investment objective of IDS Life Variable Annuity Fund B is to
invest in securities which offer opportunities for long-term
capital appreciation consistent with accumulating Fund value and
providing annuity payments under variable annuity contracts issued
by IDS Life.
There is a sales and administrative charge to the contract owner
included in the purchase payment.
This report is for the information of contract owners of IDS Life
Variable Annuity Fund B but it may be used as sales literature when
preceded or accompanied by the current prospectus. For details and
other material information, see the current prospectus.
<PAGE>
PAGE 21
Issuer and Investment Manager:
IDS Life Insurance Company,
Minneapolis, Minn.
Custodian:
IDS Band & Trust,
Minneapolis, Minn.
Sub-Custodian:
First Bank National Association
St Paul, Minn.
1993 ANNUAL REPORT
IDS Life Variable Annuity Fund B
_________________________________________________________________
IDS Life Insurance Company
IDS Tower 10
Minneapolis, Minnesota 55440-0010
