IDS Life
Variable
Annuity
Fund B
Invests in a wide range of securities with the objective of long-term capital
appreciation for contract owners.
1997 ANNUAL REPORT
AMERICAN EXPRESS Financial Advisors
Managed by IDS Life Insurance Company
<PAGE>
IDS Life Variable Annuity Fund B
Message From the Executive Vice President
(picture of) Pam Moret
If you're an experienced investor, you know that the past few years have been
unusually strong for the stock market. Perhaps just as important, history shows
that bull markets don't last forever. Though they're often unpredictable,
declines -- whether they're brief or long-lasting, moderate or substantial --
are always a possibility. We saw evidence of that last October, when declines in
Asian markets spawned a sharp drop in several financial markets worldwide,
including the U.S.
That fact reinforces the need for investors to periodically review their
long-term financial goals and examine whether their investment program remains
on track to achieving them. Your quarterly investment statements are one part of
that monitoring process. The other is a meeting with your American Express
financial advisor. That becomes even more important if there's a major change in
your financial situation or in the financial markets.
Pam Moret
Executive Vice President,
Variable Assets
IDS Life Insurance Company
<PAGE>
IDS Life Variable Annuity Fund B
From Your Portfolio Manager: A Perspective
(picture of) Mitzi Malevich
Taking advantage of strong performance by the U.S. stock market, the Fund
produced a substantial return during the past fiscal year -- January through
December 1997.
On Dec. 31, 1997, the accumulation unit value of IDS Life Variable Fund B was
$24.71, compared with $20.26 at the beginning of the year. The increase
represented a gain of 21.96%. (If you purchased additional accumulation units
during the period, your return would have been affected by the sales and
administrative charges, as described in the Fund's prospectus.)
For most of the year, stocks experienced highly favorable conditions: The
economy continued to grow at a solid pace; inflation remained low; corporate
profits were healthy; and long-term interest rates followed a generally
declining path.
Aside from a relatively brief setback in the spring, stocks responded with a
powerful rally that lasted until early August. From that point, the market
struggled a bit in the face of periodic concerns about interest rates, corporate
profits and, late in the year, the financial turmoil in Southeast Asia. Overall,
though, it was an excellent year to be invested in U.S. stocks.
To the Fund's benefit, the market's advance was most often led by
large-capitalization growth stocks -- the core of its investment portfolio.
Within that broad group, the Fund's largest area of investment was in
technology-related stocks, which were especially strong overall, although they
experienced sharp downturns in the spring and late fall. Consumer-related
stocks, including those of healthcare companies, constituted another substantial
investment and proved to be comparatively consistent, positive performers.
Financial services stocks, although a considerably smaller area of investment,
also provided very good results for the year.
Consistent with my management style, there was little portfolio turnover during
the 12 months, and I maintained only a small amount of cash reserves, preferring
instead to keep the great majority of assets working in stocks. While this
low-cash strategy adds to volatility in the Fund's value, I believe it benefits
the Fund's performance in the long run.
As the new year begins, most of the underpinnings that have supported stocks for
some time remain in place: The economy continues to grow, inflation remains at
bay and long-term interest rates are low. While upheaval in smaller foreign
markets may cause some near-term concern about the prospects for corporate
profits and, thus, stock prices, I think the longer-term outlook is still very
promising.
Mitzi Malevich
<PAGE>
IDS Life Variable Annuity Fund B
The Fund's Ten Largest Holdings
Percent Value
of Fund's as of
Net Assets Dec. 31, 1997
Pfizer 4.72% $ 35,789,999
Tellabs 4.18 31,725,000
Medtronic 4.14 31,387,500
HEALTHSOUTH Rehabilitation 3.93 29,825,700
Coca-Cola 3.51 26,596,700
Washington Mutual 3.37 25,525,000
Guidant 3.28 24,900,000
Travelers Group 3.20 24,243,750
Schlumberger 3.19 24,150,000
Merrill Lynch & Co 3.08 23,340,000
---- ----------
Total 36.60% $277,483,649
<PAGE>
<TABLE>
<CAPTION>
IDS Life Variable Annuity Fund B
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 no such 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
$60,000
50,000
40,000
S&P 500 X Fund B
Stock Index X Annuity Value
30,000
20,000
10,000
X 9,435
0
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dec. 31 $9,435 10,091 13,265 13,546 20,189 21,545 23,575 22,634 30,748 37,638 45,895
Unit Value $5.079 5.432 7.141 7.292 10.868 11.598 12.691 12.184 16.552 20.261 24.706
</TABLE>
<PAGE>
The above represents an assumed investment of $10,000 into a single payment
annuity contract on Dec. 31, 1987. 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
Date of Period Average
Investment investment annual total
held in years return
Dec. 31, 1987 10 +16.46%
Dec. 31, 1992 5 +14.98%
Dec. 31, 1996 1 +15.05%
The returns reflect the deduction of a sales and administrative charge and
mortality and expense risk charges.
Your investment and return values 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>
IDS Life Variable Annuity Fund B
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, 1997, 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, 1997, 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, 1997, 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 LLP
Minneapolis, Minnesota
February 5, 1998
<PAGE>
<TABLE>
<CAPTION>
IDS Life Variable Annuity Fund B
Statement of assets, liabilities and contract owners' equity Dec. 31, 1997
Assets
Investments in securities, at value (Note 1)
<S> <C>
(identified cost, $404,350,870) $758,019,981
Cash in bank on demand deposit 88,869
Dividends and interest receivable 282,692
Receivable from IDS Life Insurance Company for contract purchase payments 10,524,237
----------
Total assets $768,915,779
============
Liabilities
Payable for contract terminations 10,714,476
Payable to IDS Life Insurance Company for:
Mortality and expense assurance fee 4,775
Investment management fee 24,207
------
Total liabilities 10,743,458
Contract owners' equity
Contracts in accumulation period-- 30,121,701 units at $24.71 per unit (Note 5) 744,190,039
Contracts in payment period 13,982,282
----------
Total contract owners' equity 758,172,321
-----------
Total liabilities and contract owners' equity $768,915,779
------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life Variable Annuity Fund B
Statement of operations Year ended Dec. 31, 1997
Investment income (loss) -- net
Income:
<S> <C>
Dividends $ 3,665,515
Interest 1,415,262
Less foreign taxes withheld (27)
---
Total income 5,080,750
---------
Expenses:
Mortality and expense assurance fee (Note 2) 7,467,475
Investment management fee (Note 3) 2,987,154
- ---------
Total expenses 10,454,629
----------
Investment income (loss) -- net (5,373,879)
----------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on investments 96,927,180
Net change in unrealized appreciation (depreciation) on investments 53,298,606
----------
Net gain (loss) on investments 150,225,786
-----------
Net increase (decrease) in contract owners' equity from operations $144,851,907
------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statement of changes in contract owners' equity
Year ended Dec. 31,
Operations 1997 1996
<S> <C> <C>
Investment income (loss)-- net $ (5,373,879) $ (3,287,202)
Net realized gain (loss) on investments 96,927,180 34,858,038
Net change in unrealized appreciation (depreciation) on investments 53,298,606 100,833,861
---------- -----------
Net increase (decrease) in contract owners' equity from operations 144,851,907 132,404,697
----------- -----------
Contract transactionsNet contract purchase payments (Note 2) 4,071,103 4,562,048
Repayment of temporary withdrawals 904 2,466
Net transfers from (to) fixed annuities (2,818,958) (628,930)
Actuarial adjustment for mortality assurance on
annuities in payment period (Note 2) (95,074) 234,526
Contract termination payments and temporary withdrawals (59,835,894) (74,998,671)
Annuity payments (1,908,645) (1,610,595)
---------- ----------
Net increase (decrease) from contract transactions (60,586,564) (72,439,156)
----------- -----------
Net increase (decrease) in contract owners' equity 84,265,343 59,965,541
---------- ----------
Contract owners' equity at beginning of year 673,906,978 613,941,437
----------- -----------
Contract owners' equity at end of year $758,172,321 $673,906,978
------------ ------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
IDS Life Variable Annuity Fund B
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:
Use of estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of increase and decrease in net assets from operations
during the period. Actual results could differ from those estimates.
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 that 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 indexes, matrices 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.
During the year ended Dec. 31, 1997, the Fund did not buy or sell any put or
call options or write any covered call or put options. There were no option
contracts outstanding at Dec. 31, 1997.
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.
During the year ended Dec. 31, 1997, the Fund did not buy or sell stock index
futures contracts and related options. There were no stock index futures
contracts outstanding at Dec. 31, 1997.
Foreign currency translations and 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 and 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 and to protect against adverse exchange rate fluctuation.
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.
There were no forward foreign currency exchange contracts outstanding at Dec.
31, 1997.
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 $146,651 for the year ended Dec. 31, 1997
and $167,677 for the year ended Dec. 31, 1996. 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.
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 $206,037,394 and $274,933,070 for the year ended Dec.
31, 1997. Net realized gain on investments has been determined on the basis of
identified costs.
Brokerage commissions paid to brokers affiliated with IDS Life were $1,356 for
the year ended Dec. 31, 1997.
<PAGE>
<TABLE>
<CAPTION>
5. Accumulation units
The changes in number of outstanding units
applicable to contracts in the accumulation
period were as follows: Year ended Year ended
Dec. 31, 1997 Dec. 31, 1996
<S> <C> <C>
Units outstanding at beginning of year 32,644,907 36,471,678
Additions for contract purchase payments and repayments 179,720 248,900
Net transfers from (to) fixed annuities (134,272) (20,106)
Deductions for contract terminations and withdrawals (2,568,654) (4,055,565)
---------- ----------
Units outstanding at end of year 30,121,701 32,644,907
---------- ----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
6. Financial highlights
The table below shows certain important
financial information for evaluating the
Fund's results. Fiscal year ended Dec. 31,
1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
Accumulation unit value at beginning of year $20.26 $16.55 $12.18 $12.69 $11.60
------ ------ ------ ------ ------
Income from investment operations:
Net investment income (loss) (.16) (.09) (.03) .03 (.02)
Net gains (losses) on securities, both realized
and unrealized 4.61 3.80 4.40 (.54) 1.11
---- ---- ---- ---- ----
Total from investment operations 4.45 3.71 4.37 (.51) 1.09
---- ---- ---- ---- ----
Accumulation unit value at end of year $24.71 $20.26 $16.55 $12.18 $12.69
------ ------ ------ ------ ------
Total returna 21.96% 22.42% 35.88% (4.00%) 9.42%
----- ----- ----- ----- ----
Ratios/supplemental data
Total contract owner's equity at end of year
(000 omitted) $758,172 $673,907 $613,941 $494,520 $534,556
Ratio of operating expenses to average net assets 1.40% 1.40% 1.40% 1.40% 1.40%
Ratio of net investment income (loss) to average
net assets (.72%) (.50%) (.19%) .25% (.17%)
Portfolio turnover rate 29% 12% 44% 61% 64%
Average brokerage commission rateb $.0500 $.0548 -- -- --
------ ------ -------- ------- -------
a Total return does not reflect payment of a sales charge.
b Effective fiscal year 1996, the Fund is required to disclose an average
brokerage commission rate per share for security trades on which commissions are
charged. The comparability of this information may be affected by the fact that
commission rates per share vary significantly among foreign countries.
The foregoing table pertains to accumulation units only. There are two kinds of
units. As long as contract owners are paying into the Fund they are called
"accumulation" units. When contract owners begin to receive the annuity, they
change to "annuity" units.
The value of an annuity unit (assuming a 3.5 percent investment rate) was $9.17
as of Dec. 31, 1997, $7.78 as of Dec. 31, 1996, $6.58 as of Dec. 31, 1995, $5.02
as of Dec. 31, 1994 and $5.41 as of Dec. 31, 1993. The value of an annuity unit
(assuming a 5 percent investment rate) was $6.05 as of Dec. 31, 1997, $5.21 as
of Dec. 31, 1996, $4.47 as of Dec. 31, 1995, $3.46 as of Dec. 31, 1994 and $3.78
as of Dec. 31, 1993.
</TABLE>
<PAGE>
IDS Life Variable Annuity Fund B
Schedule 1
Investments in securities, Dec. 31, 1997
(Percentages represent value of investments compared to net assets)
Common stocks (97.0%)
Issuer Shares Value(a)
Aerospace & defense (1.2%)
Boeing.............................. 180,000 $ 8,808,750
Airlines (0.9%)
Northwest Airlines Cl A............. 150,000(b) 7,181,250
Banks and savings & loans (3.4%)
First Chicago NBD................... 50 4,175
Washington Mutual................... 400,000 25,525,000
Total 25,529,175
Beverages & tobacco (3.5%)
Coca-Cola........................... 399,200 26,596,700
Building materials & construction (2.4%)
Tyco Intl........................... 400,000 18,025,000
Chemicals (2.0%)
USA Waste Services.................. 380,000(b) 14,915,000
Communications equipment & services (8.5%)
ADC Telecommunications.............. 360,000(b) 15,030,000
Andrew Corp......................... 507,425(b) 12,178,200
MasTec.............................. 250,000(b) 5,718,750
Tellabs............................. 600,000(b) 31,725,000
Total 64,651,950
Computers & office equipment (14.3%)
Cambridge Technology Partners....... 200,000(b) 8,325,000
Cisco Systems....................... 360,000(b) 20,070,000
Compaq Computer..................... 375,000(b) 21,164,063
Hewlett-Packard..................... 200,000 12,500,000
IKON Office Solutions............... 300,000 8,437,500
Intl Business Machines.............. 100,000 10,456,250
Microsoft........................... 160,000(b) 20,680,000
Solectron........................... 160,000(b) 6,650,000
Total 108,282,813
Electronics (5.5%)
Applied Materials................... 435,200(b) 13,110,400
Intel............................... 250,000 17,562,500
Maxim Integrated Products........... 320,000(b) 11,040,000
Total 41,712,900
Energy (2.0%)
Anadarko Petroleum.................. 250,000 15,171,875
Energy equipment & services (2.1%)..
Halliburton......................... 300,000 15,581,250
Financial services (11.1%)
Associates First Capital Cl A....... 200,000 14,225,000
Franklin Resources.................. 200,000 17,387,500
Merrill Lynch & Co.................. 320,000 23,340,000
Providian Financial................. 102,700(b) 4,640,756
Travelers Group..................... 450,000 24,243,750
Total 83,837,006
Health care (14.8%)
Boston Scientific................... 200,000(b) 9,175,000
Guidant............................. 400,000 24,900,000
Johnson & Johnson................... 170,000 11,198,750
Medtronic........................... 600,000 31,387,500
Pfizer.............................. 480,000 35,789,999
Total 112,451,249
Health care services (7.4%)
HealthCare COMPARE.................. 300,000(b) 15,337,500
HEALTHSOUTH Rehabilitation.......... 1,074,800(b) 29,825,700
Service Corp Intl................... 290,000 10,711,875
Total 55,875,075
Industrial equipment & services (5.9%)
Caterpillar......................... 360,000 17,482,500
Deere & Co.......................... 294,000 17,143,875
ServiceMaster....................... 341,700 9,994,725
Total 44,621,100
Insurance (0.5%)
Risk Capital Holdings............... 172,600(b) 3,840,350
Leisure time & entertainment (2.2%)
Mattel.............................. 450,000 16,762,500
Metals (0.4%)
Nucor............................... 65,000 3,140,313
Textiles & apparel (1.0%)
Nike Cl B........................... 200,000 7,850,000
Utilities -- telephone (2.8%)
WorldCom............................ 700,000(b) 21,175,000
Foreign (5.1%)(c)
Ericsson (LM) ADR................... 400,000 14,925,000
Schlumberger........................ 300,000 24,150,000
Total 39,075,000
Total common stocks
(Cost: $381,415,145) $735,084,256
Short-term securities (3.0%)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
U.S. government agencies (1.1%)
Federal Home Loan Mtge Corp Disc Nt
01-15-98 5.74% $ 700,000 $ 698,443
Federal Natl Mtge Assn Disc Nts
01-14-98 5.73 5,000,000 4,989,690
01-27-98 5.62 2,800,000 2,788,676
Total 8,476,809
Commercial paper (0.9%)
Natl Australia Funding (Delaware)
01-07-98 5.83 1,900,000 1,898,160
Novartis Finance
01-29-98 5.93 1,200,000(d) 1,194,493
Xerox Credit
01-06-98 5.84 3,800,000 3,796,934
Total 6,889,587
Letters of credit (1.0%)
Bank of America-
AES Hawaii
01-23-98 5.94 2,900,000 2,889,526
Student Loan Marketing Assn-
Nebraska Higher Education
01-27-98 5.97 4,700,000 4,679,803
Total 7,569,329
Total short-term securities
(Cost: $22,935,725) $22,935,725
Total investments in securities
(Cost: $404,350,870)(e) $758,019,981
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars.
(d) Commercial paper 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. (e) At Dec. 31, 1997, the cost of securities for
federal income tax purposes was $404,350,870 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $363,249,460
Unrealized depreciation (9,580,349)
----------
Net unrealized appreciation $353,669,111
See accompanying notes to investments in securities.
<PAGE>
IDS Life Variable Annuity Fund B
Managers and Officers
Board of Managers
Richard W. Kling
president, IDSLife Insurance Company
Edward Landes
retired, former development consultant
Carl N. Platou
president emeritus, Fairview Hospital
and Healthcare Services
Gordon H. Ritz
president, Con Rad Broadcasting Corp.
Principal Officers
Richard W. Kling
chairman of the board and president
Lorraine R. Hart
vice president, investments
Jeffrey S. Horton
vice president and controller
Timothy S. Meehan
secretary
William A. Stoltzmann
general counsel and assistant secretary
Additional Information
The investment objective of IDSLife Variable Annuity Fund B is to invest in
securities that 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 IDSLife 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.
Issuer and Investment Manager:
IDS Life Insurance Company,
Minneapolis, Minn.
Custodian:
American Express Trust Company
Minneapolis, Minn.
Sub-Custodian:
First Bank National Association
St. Paul, Minn.
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IDS Life
Variable
Annuity
Fund B
1997 ANNUAL REPORT
BULK RATE
U.S. POSTAGE
PAID
PERMIT NO. 85
SPENCER, IA
AMERICAN EXPRESS Financial Advisors
IDS Life Insurance Company
IDS Tower 10
Minneapolis, MN 55440-0010
S-6444 M (2/98)
