<PAGE>
PAGE 1
IDS CERTIFICATE COMPANY
SEMIANNUAL REPORT
TO SHAREHOLDER
JUNE 30, 1995
Report Number C-100
IDSC Reports
September 1, 1995
<PAGE>
PAGE 2
IDS CERTIFICATE COMPANY
SEMIANNUAL REPORT TO SHAREHOLDER
JUNE 30, 1995
TABLE OF CONTENTS
Page
Balance Sheet.......................................... 3-4
Statement of Operations................................ 5-6
Statement of Stockholder's Equity...................... 7
Statement of Cash Flows................................ 8
Notes to Financial Statements.......................... 9-18
Investment Securities Owned............................ 19-29
<PAGE>
PAGE 3
<TABLE>
<CAPTION>
IDS CERTIFICATE COMPANY
BALANCE SHEET Unaudited
June 30, 1995
($ thousands)
ASSETS
Qualified Assets (note 2)
-----------------------------------------------------------------------------------
<S> <C>
Investments in unaffiliated issuers (note 3):
Cash and cash equivalents...................................... $313,197
Held-to-maturity securities.................................... 1,266,330
Available-for-sale securities.................................. 1,911,164
First mortgage loans on real estate............................ 247,549
Certificate loans - secured by certificate reserves............ 54,711
Investments in and advances to affiliates........................ 5,503
-----------------------------------------------------------------------------------
Total investments................................................ 3,798,454
Receivables:
Dividends and interest......................................... 48,940
Investment securities sold..................................... 61
-----------------------------------------------------------------------------------
Total receivables................................................ 49,001
-----------------------------------------------------------------------------------
Other (note 8)................................................... 36,877
-----------------------------------------------------------------------------------
Total qualified assets........................................... 3,884,332
-----------------------------------------------------------------------------------
Other Assets
-----------------------------------------------------------------------------------
Deferred distribution fees....................................... 29,736
Other............................................................ 1,804
-----------------------------------------------------------------------------------
Total other assets............................................... 31,540
-----------------------------------------------------------------------------------
Total assets..................................................... $3,915,872
-----------------------------------------------------------------------------------
See notes to financial statements.
</TABLE>
<PAGE>
PAGE 4
<TABLE>
<CAPTION>
IDS CERTIFICATE COMPANY
BALANCE SHEET Unaudited
June 30, 1995
($ thousands)
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities
-----------------------------------------------------------------------------------
<S> <C>
Certificate Reserves (note 4):
Installment certificates:
Reserves to mature.......................................... $326,874
Additional credits and accrued interest..................... 20,719
Advance payments and accrued interest....................... 1,469
Other....................................................... 55
Fully paid certificates:
Reserves to mature.......................................... 2,952,435
Additional credits and accrued interest..................... 149,841
Due to unlocated certificate holders.......................... 401
-----------------------------------------------------------------------------------
Total certificate reserves.................................... 3,451,794
-----------------------------------------------------------------------------------
Accounts Payable and Accrued Liabilities:
Due to Parent (note 6A)..................................... 1,343
Due to affiliates (notes 6B and 6C)......................... 1,202
Payable for investment securities purchased................. 112,872
Accounts payable, accrued expenses and other (note 8)....... 123,148
-----------------------------------------------------------------------------------
Total accounts payable and accrued liabilities................ 238,565
-----------------------------------------------------------------------------------
Deferred federal income taxes................................. 7,345
-----------------------------------------------------------------------------------
Total liabilities............................................. 3,697,704
-----------------------------------------------------------------------------------
Stockholder's Equity (notes 4B, 4C, and 5):
-----------------------------------------------------------------------------------
Common stock, $10 par - authorized and
issued 150,000 shares....................................... 1,500
Additional paid-in capital.................................... 168,844
Retained earnings:
Appropriated for predeclared additional
credits/interest.......................................... 22,654
Appropriated for additional interest on
advance payments.......................................... 50
Unappropriated.............................................. 15,959
Unrealized holding gains (losses) on investment
securities - net (note 3A).................................. 9,161
-----------------------------------------------------------------------------------
Total stockholder's equity.................................... 218,168
-----------------------------------------------------------------------------------
Total liabilities and stockholder's equity.................... $3,915,872
-----------------------------------------------------------------------------------
See notes to financial statements.
</TABLE>
<PAGE>
PAGE 5
<TABLE>
<CAPTION>
IDS CERTIFICATE COMPANY
STATEMENT OF OPERATIONS Unaudited
Six Months Ended June 30, 1995
($ thousands)
-----------------------------------------------------------------------------------
<S> <C>
Investment Income:
Interest income from investments:
Bonds and notes:
Unaffiliated issuers........................................ $81,163
Mortgage loans on real estate:
Unaffiliated................................................ 11,343
Affiliated.................................................. 29
Certificate loans............................................. 1,524
Dividends....................................................... 24,329
Other........................................................... 293
-----------------------------------------------------------------------------------
Total investment income......................................... 118,681
-----------------------------------------------------------------------------------
Investment Expenses:
Parent and affiliated company fees (note 6):
Distribution.................................................. 16,299
Investment advisory and services.............................. 7,449
Depositary.................................................... 113
Interest rate caps (note 8)..................................... 2,644
Options (note 8)................................................ 4,106
Other........................................................... 226
-----------------------------------------------------------------------------------
Total investment expenses....................................... 30,837
-----------------------------------------------------------------------------------
Net investment income before provisions
for certificate reserves and income taxes..................... $87,844
-----------------------------------------------------------------------------------
See notes to financial statements.
</TABLE>
<PAGE>
PAGE 6
<TABLE>
<CAPTION>
IDS CERTIFICATE COMPANY
STATEMENT OF OPERATIONS (Continued) Unaudited
Six Months Ended June 30, 1995
($ thousands)
-----------------------------------------------------------------------------------
<S> <C>
Provision for Certificate Reserves (notes 4 and 8):
According to the terms of the certificates:
Provision for certificate reserves............................ $5,135
Interest on additional credits................................ 1,313
Interest on advance payments.................................. 37
Additional credits/interest authorized by IDSC:
On fully paid certificates.................................... 66,835
On installment certificates................................... 3,603
-----------------------------------------------------------------------------------
Total provision before reserve recoveries....................... 76,923
Reserve recoveries from terminations prior to maturitiy......... (609)
-----------------------------------------------------------------------------------
Net provision for certificate reserves.......................... 76,314
-----------------------------------------------------------------------------------
Net investment income before income taxes....................... 11,530
Income tax benefit (note 7)..................................... 3,699
-----------------------------------------------------------------------------------
Net investment income........................................... 15,229
-----------------------------------------------------------------------------------
Realized gain (loss) on investments - net:
Securities of unaffiliated issuers............................ 164
Income tax expense (note 7)..................................... 57
-----------------------------------------------------------------------------------
Net realized loss on investments................................ 107
-----------------------------------------------------------------------------------
Net income - wholly owned subsidiary............................ 161
-----------------------------------------------------------------------------------
Net income ..................................................... $15,497
-----------------------------------------------------------------------------------
See notes to financial statements.
</TABLE>
<PAGE>
PAGE 7
<TABLE>
<CAPTION>
IDS CERTIFICATE COMPANY
STATEMENT OF STOCKHOLDER'S EQUITY Unaudited
Six Months Ended June 30, 1995
($ thousands)
-----------------------------------------------------------------------------------
<S> <C>
Common Stock:
Balance at beginning and end of period.......................... $1,500
-----------------------------------------------------------------------------------
Additional Paid-in-capital:
Balance at beginning of period.................................. $140,344
Contribution from Parent........................................ 28,500
-----------------------------------------------------------------------------------
Balance at end of period........................................ $168,844
-----------------------------------------------------------------------------------
Retained Earnings:
Appropriated for predeclared additional
credits/interest (note 4B):
Balance at beginning of period.................................. $18,398
Transferred from unappropriated retained earnings............... 4,256
-----------------------------------------------------------------------------------
Balance at end of period........................................ $22,654
-----------------------------------------------------------------------------------
Appropriated for additional interest on advance payments (note 4C):
Balance at beginning and end of period.......................... $50
-----------------------------------------------------------------------------------
Unappropriated (note 5):
Balance at beginning of period.................................. $4,718
Net income ..................................................... 15,497
Transferred to appropriated retained earnings................... (4,256)
-----------------------------------------------------------------------------------
Balance at end of period........................................ $15,959
-----------------------------------------------------------------------------------
Unrealized holding gains (losses) on investment
securities - net (note 3A):
Balance at beginning of period.................................. ($23,158)
Decrease during period.......................................... 32,319
-----------------------------------------------------------------------------------
Balance at end of period........................................ $9,161
-----------------------------------------------------------------------------------
See notes to financial statements.
</TABLE>
<PAGE>
PAGE 8
<TABLE>
<CAPTION>
IDS CERTIFICATE COMPANY
STATEMENT OF CASH FLOWS Unaudited
Six Months Ended June 30, 1995
($ thousands)
-----------------------------------------------------------------------------------
<S> <C>
Cash flows from operating activities:
Net income...................................................... $15,497
Adjustments to reconcile net income to net
cash provided by operating activities:
Net income of wholly owned subsidiary........................... (161)
Certificate reserves............................................ 76,314
Interest income added to certificate loans...................... (1,001)
Amortization of premium/discount-net............................ 10,649
Deferred federal income taxes................................... (1,686)
Deferred distribution fees...................................... (2,594)
Net gain on investments......................................... (164)
Increase in dividends and interest receivable................... (6,679)
Increase in other assets........................................ (1,371)
Decrease in other liabilities................................... (1,533)
-----------------------------------------------------------------------------------
Net cash provided by operating activities....................... 87,271
-----------------------------------------------------------------------------------
Cash flows from investing activities:
Maturity and redemption of investments:
Held-to-maturity securities................................... 86,653
Available-for-sale securities................................. 77,699
Other investments............................................. 22,637
Sale of investments:
Held-to-maturity securities................................... 8,714
Available-for-sale securities................................. 37,268
Other investments............................................. -
Certificate loan payments....................................... 3,005
Purchase of investments:
Held-to-maturity securities................................... (115,931)
Available-for-sale securities................................. (630,405)
Other investments............................................. (12,924)
Certificate loan fundings....................................... (4,038)
-----------------------------------------------------------------------------------
Net cash used in investing activities........................... (527,322)
-----------------------------------------------------------------------------------
Cash flows from financing activities:
Reserve payments by certificate holders......................... 1,083,025
Unapplied reserve payments by certificate holders............... 110,262
Capital contribution from Parent................................ 28,500
Certificate maturities and cash surrenders...................... (608,667)
-----------------------------------------------------------------------------------
Net cash used by financing activities........................... 613,120
-----------------------------------------------------------------------------------
Net increase in cash and cash equivalents....................... 173,069
Cash and cash equivalents beginning of period................... 140,128
-----------------------------------------------------------------------------------
Cash and cash equivalents end of period......................... $313,197
-----------------------------------------------------------------------------------
Supplemental disclosures including non-cash transactions:
Cash received for income taxes.................................. $619
Certificate maturities and surrenders through loan reductions... 5,526
See notes to financial statements.
</TABLE>
<PAGE>
PAGE 9
IDS CERTIFICATE COMPANY
Notes to Financial Statements ($ in thousands unless indicated
otherwise) (Unaudited)
-------------------------------------------------------------------
1. Summary of Significant Accounting Policies
IDS Certificate Company (IDSC) is a wholly owned subsidiary of
American Express Financial Corporation (Parent), which is a wholly
owned subsidiary of American Express Company.
IDSC is in the business of issuing face-amount investment
certificates.
Described below are certain accounting policies that are important
to an understanding of the accompanying financial statements.
Basis of Financial Statement Presentation
The accompanying financial statements are presented in accordance
with generally accepted accounting principles, except only the
accounts of IDSC are included. IDSC uses the equity method of
accounting for its wholly owned unconsolidated subsidiary, which is
the method prescribed by the Securities and Exchange Commission
(SEC) for issuers of face-amount certificates.
Preferred Stock Dividend Income
IDSC recognizes dividend income from cumulative redeemable
preferred stocks with fixed maturity amounts on an accrual basis
similar to that used for recognizing interest income on debt
securities.
Securities
Cash equivalents are carried at amortized cost, which approximates
fair value. IDSC has defined cash and cash equivalents as cash in
banks and highly liquid investments with a maturity of three months
or less at acquisition and are not interest rate sensitive.
Debt securities that IDSC has both the positive intent and ability
to hold to maturity are carried at amortized cost. Debt securities
IDSC does not have the positive intent to hold to maturity, as well
as all marketable equity securities, are classified as available
for sale and carried at fair value. Unrealized holding gains and
losses on securities classified as available for sale are carried,
net of deferred income taxes, as a separate component of
Stockholder's Equity.
The basis for determining cost in computing realized gains and
losses on securities is specific identification. When there is a
decline in value that is other than temporary, the securities are
carried at estimated realizable value with the amount of adjustment
included in income.
First Mortgage Loans on Real Estate
As of Jan. 1, 1995, IDSC adopted SFAS No. 114, "Accounting by
Creditors for Impairment of a Loan", as amended by SFAS No. 118,
"Accounting by Creditors for Impairment of a Loan - Income
Recognition and Disclosures". The adoption of SFAS No. 114 did not
have a material impact on IDSC's results of operations or financial
condition.
Under the new rules, IDSC classifies a mortgage loan impaired if it
is probably that the contractual principal and interest payments
will not be received. Previously, IDSC considered a mortgage loan
impaired if the ultimate collectibility of contractual principal
payments was doubtful. IDSC generally considers mortgage loans
with principal or interest payments 90 days or more past due
impaired.
<PAGE>
PAGE 10
Notes to Financial Statements (continued)
-------------------------------------------------------------------
Impairment is measured as the excess of the mortgage loan's
recorded investment over its present value of expected principal
and interest payments discounted at the mortgage loan's effective
interest rate, or the fair value of collateral. Prior to 1995,
impaired mortgage loans were carried at their net realizable value,
or the fair value of collateral. The amount of impairment is
recorded in the reserve for losses.
IDSC recognizes interest income on impaired mortgage loans on a
cash basis. Based on management's judgment as to the ultimate
collectibility of principal, interest payments received are either
recognized as income or applied to the recorded investment in the
mortgage loan until it has been recovered. Once the investment has
been recovered, payments would be recognized as interest income.
Mortgage loans are carried at amortized cost, less reserve for
losses, which is the basis for determining any realized gains or
losses.
Certificates
Investment certificates may be purchased either with a lump-sum
payment or by installment payments. Certificate holders are
entitled to receive at maturity a definite sum of money. Payments
from certificate holders are credited to investment certificate
reserves. Investment certificate reserves accumulate at specified
percentage rates. Reserves also are maintained for advance
payments made by certificate holders, accrued interest thereon, and
for additional credits and accrued interest thereon. On
certificates allowing for the deduction of a surrender charge, the
cash surrender values may be less than accumulated investment
certificate reserves prior to maturity dates. Cash surrender
values on certificates allowing for no surrender charge are equal
to certificate reserves. The payment distribution, reserve
accumulation rates, cash surrender values, reserve values and other
matters are governed by the Investment Company Act of 1940 ("the
1940 Act").
Deferred Distribution Fee Expense
On certain series of certificates, distribution fees are deferred
and amortized over the estimated lives of the related certificates,
which is approximately 10 years. Upon surrender, unamortized
deferred distribution fees are charged against income.
Federal Income Taxes
IDSC's taxable income or loss is included in the consolidated
federal income tax return of American Express Company. IDSC
provides for income taxes on a separate return basis, except that,
under an agreement between Parent and American Express Company, tax
benefits are recognized for losses to the extent they can be used
in the consolidated return. It is the policy of Parent and its
subsidiaries that Parent will reimburse a subsidiary for any tax
benefits recorded.
2. Deposit of Assets and Maintenance of Qualified Assets
A) Under the provisions of its certificates and the 1940 Act,
IDSC was required to have qualified assets (as that term is
defined in Section 28(b) of the 1940 Act) in the amount of
$3,451,401 at June 30, 1995. IDSC had qualified assets of
$3,757,365 at June 30, 1995, excluding net unrealized
appreciation on available-for-sale securities of $14,095 and
payable for securities purchased of $112,872.
<PAGE>
PAGE 11
Notes to Financial Statements (continued)
-------------------------------------------------------------------
Qualified assets are valued in accordance with such provisions of
the Code of the District of Columbia as are applicable to life
insurance companies. Qualified assets for which no provision for
valuation is made in such Code are valued in accordance with rules,
regulations or orders prescribed by the SEC. These values are the
same as financial statement carrying values, except for debt
securities classified as available for sale and all marketable
equity securities, which are carried at fair value in the financial
statements but are valued at cost for qualified asset and deposit
maintenance purposes.
B) Pursuant to provisions of the certificates, the 1940 Act, the
central depositary agreement and to requirements of various
states, qualified assets of IDSC at June 30, 1995 were
deposited as follows:
<TABLE>
<CAPTION>
Required
Deposits deposits Excess
----------------------------------------------------------------------------------
<S> <C> <C> <C>
Deposits to
meet certificate
liability
requirements:
States............. $ 414 $ 386 $ 28
Central Depositary. 3,577,544 3,373,186 204,358
----------------------------------------------------------------------------------
Total.............. $3,577,958 $3,373,572 $204,386
----------------------------------------------------------------------------------
</TABLE>
The assets on deposit consisted of securities having a deposit
value of $3,310,761, mortgage loans of $248,029 and other assets of
$19,168. Mortgage loans on deposit include an affiliated mortgage
loan.
American Express Trust Company (formerly IDS Trust Company) is the
central depositary for IDSC. See note 6C.
3. Investments
A) Fair values of investments in securities represent market
prices and estimated fair values when quoted prices are not
available. Estimated fair values are determined by IDSC
using established procedures involving review of market
indexes, price levels of current offerings and comparable
issues, price estimates and market data from independent
brokers and financial files. The procedures are reviewed
annually. IDSC's vice president - investments reports to the
board of directors on an annual basis regarding such pricing
sources and procedures to provide assurance that fair value
is being achieved.
<PAGE>
PAGE 12
Notes to Financial Statements (continued)
-------------------------------------------------------------------
The following is a summary of securities held to maturity and
securities available for sale at June 30, 1995
<TABLE>
<CAPTION>
Securities Held to Maturity
-----------------------------------------------------
Gross Gross
Amortized Fair unrealized unrealized
Cost value gains losses
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Government and
agencies obligations..... $ 414 $ 424 $ 10 $ -
Mortgage-backed
securities............... 51,943 53,686 1,744 1
State and municipal
obligations.............. 131,412 137,442 6,033 3
Corporate debt
securities............... 400,213 414,432 14,399 180
Foreign government
bonds and obligations.... 29,451 30,597 1,146 -
Stated maturity
preferred stock.......... 652,897 676,899 26,145 2,143
----------------------------------------------------------------------------------
Total $1,266,330 $1,313,480 $49,477 $2,327
----------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Securities Available for Sale
-----------------------------------------------------
Gross Gross
Amortized Fair unrealized unrealized
Cost value gains losses
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mortgage-backed
securities............... $1,189,468 $1,196,665 $12,103 $4,906
Corporate debt
securities............... 667,660 674,317 9,443 2,786
Foreign government
bonds and obligations.... 10,791 10,966 1,080 905
Stated maturity
preferred stock.......... 28,390 28,587 221 24
Common stock............... 760 629 - 131
----------------------------------------------------------------------------------
Total $1,897,069 $1,911,164 $22,847 $8,752
----------------------------------------------------------------------------------
</TABLE>
At June 30, 1995, there were no securities classified as trading
securities.
During the six months ended June 30, 1995, debt securities
classified as available for sale were sold with proceeds of $30,061
and gross realized gains on such sales of $nil and gross realized
losses on such sales of $61.
During the six months ended June 30, 1995, hold-to-maturity
securities were sold with an amortized cost of $8,739. A loss of
$25 was realized on the sales. The securities were sold due to
deterioration in the issuers' creditworthiness.
There were no transfers from securities classified as held to
maturity during the six months ended June 30, 1995.
<PAGE>
PAGE 13
Notes to Financial Statements (continued)
-------------------------------------------------------------------
B) At June 30, 1995, investments in securities with fixed
maturities comprised 83% of IDSC's total invested assets.
Securities are rated by Moody's and Standard & Poor's (S&P), or by
IDS internal analysts, using criteria similar to Moody's and S&P,
when a public rating does not exist. A summary of investments in
securities with fixed maturities by rating of investment is as
follows:
Rating
---------------------------------
Aaa/AAA...................... 42%
Aa/AA........................ 4
Aa/A......................... 2
A/A.......................... 23
A/BBB........................ 6
Baa/BBB...................... 20
Below investment grade....... 3
---------------------------------
100%
---------------------------------
Of the securities rated Aaa/AAA, 92% are U.S. Government Agency
mortgage-backed securities that are not rated by a public rating
agency. Approximately 12% of other securities with fixed
maturities are rated by IDS Internal analysts. No investment in
any one issuer is greater than 1% of IDSC's total investment in
securities with fixed maturities.
At June 30, 1995, approximately 7% of IDSC's invested assets were
first mortgage loans on real estate. A summary of first mortgage
loans by type of real estate is as follows:
Region Property Type
--------------------------------- -------------------------------
East North Central........... 24% Apartments................. 42%
South Atlantic............... 23 Shopping centers........... 30
West North Central........... 18 Industrial buildings....... 12
Middle Atlantic.............. 16 Office buildings........... 7
Mountain..................... 8 Other...................... 9
West South Central........... 5
Pacific...................... 3
New England.................. 3
East South Central........... -
--------------------------------- -------------------------------
100% 100%
--------------------------------- -------------------------------
At June 30, 1995, there were no commitments for fundings of first
mortgage loans outstanding. If there were any commitments, IDSC
employs policies and procedures to ensure the creditworthiness of
the borrowers and that funds will be available on the funding date.
IDSC's first mortgage loan fundings are restricted to 75% or less
of the market value of the real estate at the time of the loan
funding.
C) IDSC reserves freedom of action with respect to its
acquisition of restricted securities that offer advantageous and
desirable investment opportunities. In a private negotiation, IDSC
may purchase for its portfolio all or part of an issue of
restricted securities. Since IDSC would intend to purchase such
securities for investment and not for distribution, it would not be
acting as a distributor if such securities are resold by IDSC at a
later date.
<PAGE>
PAGE 14
Notes to Financial Statements (continued)
-------------------------------------------------------------------
The fair values of restricted securities are determined by the
board of directors using the procedures and factors described in
paragraph A of note 3.
In the event IDSC were to be deemed to be a distributor of the
restricted securities, it is possible that IDSC would be required
to bear the costs of registering those securities under the
Securities Act of 1933, although in most cases such costs would be
borne by the issuer of the restricted securities.
4. Certificate Reserves
Reserves maintained on outstanding certificates have been computed
in accordance with the provisions of the certificates and Section
28 of the 1940 Act. The average rates of accumulation on
certificate reserves at June 30, 1995 were:
<TABLE>
<CAPTION>
Average Average
Reserve gross additional
balance accumulation credit
at June 30, rate rate
----------------------------------------------------------------------------------
<S> <C> <C> <C>
Installment certificates:
Reserves to mature:
With guaranteed rates..................... $ 44,625 3.50% 1.50%
Without guaranteed rates (A).............. 282,249 - 3.23
Additional credits and accrued interest... 20,719 3.12 -
Advance payments and accrued interest (C). 1,469 3.11 1.89
Other..................................... 55 - -
Fully paid certificates:
Reserves to mature:
With guaranteed rates..................... 217,182 3.24 1.76
Without guaranteed rates (A).............. 2,735,253 - 5.80
Additional credits and accrued interest... 149,841 3.32 -
Due to unlocated certificate holders...... 401 - -
----------------------------------------------------------------------------------
$3,451,794
----------------------------------------------------------------------------------
</TABLE>
A) There is no minimum rate of accrual on these reserves.
Interest is declared periodically, quarterly or annually, in
accordance with the terms of the separate series of certificates.
B) On certain series of single payment certificates, additional
interest is predeclared for periods greater than one year. At June
30, 1995, $22,654 of retained earnings had been appropriated for
the predeclared additional interest, which represents the
difference between certificate reserves on these series, calculated
on a statutory basis, and the reserves maintained per books.
C) Certain series of installment certificates guarantee accrual of
interest on advance payments at an average of 3.11%. IDSC has
increased the rate of accrual to 5.00% through April 30, 1996. An
appropriation of retained earnings amounting to $50 has been made,
which represents the estimated additional accrual that will result
from the increase granted by IDSC.
D) IDS Stock Market Certificate enables the certificate holder to
participate in any relative rise in a major stock market index
without risking loss of principal. Generally the certificate has a
term of 12 months and may continue for up to 14 successive terms.
The reserve balance at June 30, 1995 was $209,656.
<PAGE>
PAGE 15
Notes to Financial Statements (continued)
-------------------------------------------------------------------
5. Dividend Restriction
Certain series of installment certificates outstanding provide that
cash dividends may be paid by IDSC only in calendar years for which
additional credits of at least one-half of 1% on such series of
certificates have been authorized by IDSC. This restriction has
been removed for 1995 and 1996 by action of IDSC on additional
credits in excess of this requirement.
6. Fees Paid to IDS and Affiliated Companies ($ not in thousands)
A) The basis of computing fees paid or payable to Parent for
investment advisory and services is:
The investment advisory and services agreement with Parent provides
for a graduated scale of fees equal on an annual basis to 0.75% on
the first $250 million of total book value of assets of IDSC, 0.65%
on the next $250 million, 0.55% on the next $250 million, 0.50% on
the next $250 million and 0.45% on the amount in excess of $1
billion. The fee is payable monthly in an amount equal to
one-twelfth of each of the percentages set forth above. Excluded
from assets for purposes of this computation are first-mortgage
loans, real estate and any other asset on which IDSC pays a service
fee.
B) The basis of computing fees paid or payable to American Express
Financial Advisors Inc. (formerly IDS Financial Services Inc.)
(an affiliate) for distribution services is:
Fees payable to American Express Financial Advisors Inc. on sales
of IDSC's certificates are based upon terms of agreements giving
American Express Financial Advisors Inc. the exclusive right to
distribute the certificates covered under the agreements. The
agreements provide for payment of fees over a period of time. The
aggregate fees payable under the agreements per $1,000 face amount
of installment certificates and $1,000 purchase price of single
payments, and a summary of the periods over which the fees are
payable, shown by series are:
<TABLE>
<CAPTION>
Number of
certificate
years over
Aggregate Fees Payable which
-------------------------- subsequent
First Subsequent years' fees
Total year years are payable
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Installment certificates(a) $30.00 $ 6.00 $24.00 4
Single-payment certificates 60.00 60.00 - -
Future Value certificates.. 50.00 50.00 - -
----------------------------------------------------------------------------------
</TABLE>
Fees on Cash Reserve and Flexible Savings (formerly Variable Term)
certificates are paid at a rate of 0.25% of the purchase price at
time of issuance and 0.25% of the reserves maintained for these
certificates at the beginning of the second and subsequent quarters
from issue date.
Fees on the Investors Certificate are paid at an annualized rate of
1% of the reserves maintained for the certificates. Fees are paid
at the end of each term on certificates with a one, two or
three-month term. Fees are paid each quarter from date of issuance
on certificates with a six, 12, 24 or 36-month term.
<PAGE>
PAGE 16
Notes to Financial Statements (continued)
-------------------------------------------------------------------
Fees on the Stock Market Certificate are paid at a rate of 1.25%
of the purchase price on the first day of the certificate's term
and 1.25% of the reserves maintained for these certificates at the
beginning of each subsequent term.
(a) At the end of the sixth through the 10th year, an additional
fee is payable of 0.5% of the daily average balance of the
certificate reserve maintained during the sixth through the 10th
year, respectively.
C) The basis of computing depositary fees paid or payable to
American Express Trust Company (formerly IDS Trust Company) (an
affiliate) is:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
<S> <C>
Maintenance charge per account..... 5 cents per $1,000 of
assets on deposit
Transaction charge................. $20 per transaction
Security loan activity:
Depositary Trust Company
receive/deliver................ $20 per transaction
Physical receive/deliver......... $25 per transaction
Exchange collateral.............. $15 per transaction
----------------------------------------------------------------------------------
</TABLE>
A transaction consists of the receipt or withdrawal of securities
and commercial paper and/or a change in the security position. The
charges are payable quarterly except for maintenance, which is an
annual fee.
D) The basis for computing fees paid or payable to American
Express Bank Ltd. (an affiliate) for the distribution of the IDS
Special Deposits certificate on an annualized basis is 0.80% of the
reserves maintained for the certificates on an amount from $250,000
to $499,000, 0.65% on an amount from $500,000 to $999,000 and 0.50%
on an amount $1,000,000 or more. Fees are paid at the end of each
term on certificates with a one, two or three-month term. Fees are
paid at the end of each quarter from date of issuance on
certificates with a six, 12, 24 or 36-month term.
7. Federal Income Taxes
The federal income tax rate applicable to income of IDSC for the
six months ended June 30, 1995 was based on the effective tax rate
expected to be applicable for the full fiscal year ending Dec. 31,
1995.
A reconciliation of the statutory federal income tax rate and the
expected federal income tax rate at Dec. 31, 1995 is:
<TABLE>
<CAPTION>
Rate
----------------------------------------------------------------------------------
<S> <C>
Statutory federal income tax rate....................... 35.0%
Tax-exempt interest..................................... (15.4)
Dividend exclusion...................................... (51.0)
----------------------------------------------------------------------------------
Expected federal income tax rate........................ (31.4)
----------------------------------------------------------------------------------
</TABLE>
<PAGE>
PAGE 17
Notes to Financial Statements (continued)
-------------------------------------------------------------------
8. Derivative Financial Instruments
IDSC enters into transactions involving derivative financial
instruments as an end user (nontrading). IDSC uses these
instruments to manage its exposure to interest rate risk, including
hedging specific transactions. IDSC manages risks associated with
these instruments as described below.
Market risk is the possibility that the value of the derivative
financial instrument will change due to fluctuations in a factor
from which the instrument derives its value, primarily an interest
rate or a major market index. IDSC is not impacted by market risk
related to derivatives held because derivatives are largely used to
manage risk and, therefore, the cash flows and income effects are
inverse to the effects of the underlying hedged transactions.
Credit exposure is the possibility that the counterparty will not
fulfill the terms of the contract. IDSC monitors credit exposure
related to derivative financial instruments through established
procedures, including setting concentrating limits by counterparty,
reviewing credit ratings and requiring collateral where
appropriate. The majority of IDSC's counterparties to the interest
rate caps are rated A or better by nationally recognized rating
agencies. The counterparties to the call options are five major
broker/dealers.
The notional or contract amount of a derivative financial
instrument is generally used to calculate the cash flows that are
received or paid over the life of the agreement. Notional amounts
do not represent market risk or credit exposure.
Credit exposure related to derivative financial instruments is
measured by the carrying amount, if higher, or the replacement cost
of those contracts in a gain position at the balance sheet date.
The replacement cost represents the fair value of the instrument,
and is determined by market values, dealer quotes or pricing
models.
IDSC's holdings of derivative financial instruments were as follows
at June 30, 1995.
<TABLE>
<CAPTION>
Notional Total
or contract Carrying Fair credit
amount value value exposure
----------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS:
Interest rate caps.......... $ 970,000 $ 7,983 $ 6,182 $ 7,983
Purchased call options...... 154,948 26,516 24,833 26,516
----------------------------------------------------------------------------------
Total $1,124,948 $34,499 $31,015 $34,499
----------------------------------------------------------------------------------
LIABILITIES:
Written call options........ $ 158,405 $ 8,918 $11,055 $ -
----------------------------------------------------------------------------------
</TABLE>
The fair values of derivative financial instruments are based on
market values, dealer quotes or pricing models. The interest rate
caps expire on various dates from 1995 to 1997. The options expire
in 1995 and 1996.
Interest rate caps and options are used to manage IDSC's exposure
to rising interest rates. These instruments are used primarily to
protect the margin between the interest rate earned on investments
and the interest accrued to related investment certificate holders.
<PAGE>
PAGE 18
Notes to Financial Statements (continued)
-------------------------------------------------------------------
The interest rate caps are quarterly reset caps and IDSC earns
interest on the notional amount to the extent the London Interbank
Offering Rate exceeds the reference rates specified in the cap
agreements. These reference rates range from 4% to 9%. The cost
of these caps of $7,983 at June 30, 1995, is being amortized over
the terms of the agreements (three to seven years) on a straight
line basis and is included in other qualified assets. The
amortization, net of any interest earned, is included in investment
expenses.
IDSC offers a series of certificates which pay interest based upon
the relative change in a major stock market index between the
beginning and end of the certificates' term. The certificate
holders have the option of participating in the full amount of
increase in the index during the term (subject to a specified
maximum) or a lesser percentage of the increase plus a guaranteed
minimum rate of interest. As a means of hedging its obligations
under the provisions of these certificates, IDSC purchases and
writes call options on the major market index. The options are cash
settlement options, that is, there is no underlying security to
deliver at the time the contract is closed out.
The option contracts are less than one year in term. The premiums
paid or received on these index options are reported in other
qualified assets or liabilities, as appropriate, and are amortized
into investment expenses over the life of the option. The
intrinsic value of these index options is also reported in other
qualified assets or other liabilities, as appropriate. The
unrealized gains and losses related to the changes in the intrinsic
value of these options are recognized currently in provision for
certificate reserves.
Following is a summary of open option contracts at June 30, 1995.
<TABLE>
<CAPTION>
Face Average Index at
amount strike price June 30, 1995
-------------------------------------------------------------------------
<S> <C> <C> <C>
Purchased call options... $154,948 480 545
Written call options..... 158,405 530 545
-------------------------------------------------------------------------
</TABLE>
<PAGE>
PAGE 19
<TABLE>
<CAPTION>
IDS CERTIFICATE COMPANY Schedule 1
Investments in Securities of Unaffiliated Issuers
June 30, 1995
($ in thousands)
Bal. held
at 6-30-95
Principal
Amount of Cost Value at
Bonds (Notes 6-30-95
Name of Issuer and Titles of Issue and Notes a and c) (Note a)
---------------------------------- ----------- ---------- ----------
<S> <C> <C> <C>
BONDS AND NOTES
United States Government -
Direct Obligations
U.S. TREASURY NOTE 7.625%, 1996 $ 250 $ 250 $ 253
U.S. TREASURY NOTE 6.875%, 2000 165 164 171
----------- ---------- ----------
Total U.S. Government - Direct Obligations 415 414 424
----------- ---------- ----------
Other Bonds and Notes
United States Government Agencies
FED HOME LOAN BK 6.660%, 1996 20,000 20,000 19,978 (f)
FED HOME LOAN BK 7.270%, 1997 20,000 19,834 20,034 (f)
FED HOME LOAN BK 7.250%, 1996 15,000 15,000 15,047 (f)
FHLMC GLD 15YR6.5% 6.500%, 2010 25,000 24,867 24,617 (f)
FHLMC GLD 15YR7% 7.000%, 2010 25,000 24,957 25,039 (f)
FHLMC 5 YR #G50152 7.000%, 1999 9,928 9,742 10,034 (f)
FHLMC 5YR #G50252 7.500%, 2000 38,893 39,137 39,634 (f)
FHLMC 15YR #G10336 7.500%, 2010 9,704 9,547 9,871 (f)
FHLMC 15YR #10342 7.000%, 2010 28,957 28,166 29,048 (f)
FHLMC 15YR #G10344 7.500%, 2010 24,406 24,293 24,825 (f)
FHLMC 15YR #G10364 7.000%, 2010 24,500 24,362 24,577 (f)
FHLMC 15YR #G10369 6.500%, 2010 49,500 48,835 48,819 (f)
FHLMC ARM #845154 7.508%, 2022 10,318 10,685 10,602 (f)
FHLMC ARM #845523 6.719%, 2023 11,501 11,853 11,695 (f)
FHLMC ARM #845654 5.921%, 2024 33,539 34,073 33,748 (f)
FHLMC ARM #845730 6.997%, 2024 51,985 53,796 53,003 (f)
FHLMC ARM #845733 6.640%, 2024 48,401 49,323 49,202 (f)
FHLMC ARM #845973 6.937%, 2024 15,541 15,533 15,836 (f)
FHLMC ARM #845999 7.270%, 2027 33,889 34,211 34,615 (f)
FHLMC 30YR #846072 7.257%, 2022 9,872 10,135 10,092 (f)
FHLMC ARM #846107 6.228%, 2025 17,497 17,929 17,719 (f)
FHLMC 1268 E CMO 7.400%, 2016 10,000 10,041 10,076 (f)
FHLMC ARM #350190 7.500%, 2022 11,751 12,180 12,169 (f)
FHLMC 1379 C CMO 5.600%, 2011 15,000 14,862 14,908 (f)
FHLMC GOLD E00151 7.500%, 2017 11,387 11,705 11,583 (f)
FHLMC 1717B PAC CMO 5.250%, 2008 16,376 15,977 16,169 (f)
FHLMC GNMA 40 D CMO 6.500%, 2011 20,458 19,810 20,411 (f)
FHLMC 188537 (2) 5.750%, 1998 5 5 5 (f)
FHLMC 4C CMO 8.000%, 2017 8,384 8,427 8,475 (f)
FHLMC CTF SER B-76 8.375%, 2006 265 265 260 (f)
FHLMC CTF SER A-77 8.050%, 2007 63 63 62 (f)
FHLMC CTF SER B-77 8.125%, 2007 260 259 255 (f)
FHLMC 15YR #380025 9.500%, 2003 1,288 1,280 1,341
FHLMC 15 YR #200017 11.000%, 2000 867 886 924
FHLMC 15 YR #200018 11.000%, 2000 558 570 595
FHLMC 15 YR #200020 11.000%, 2000 857 876 914
FHLMC 15 YR #200022 10.500%, 2000 172 175 183
</TABLE>
<PAGE>
PAGE 20
<TABLE>
<CAPTION>
Bal. held
at 6-30-95
Principal
Amount of Cost Value at
Bonds (Notes 6-30-95
Name of Issuer and Titles of Issue and Notes a and c) (Note a)
---------------------------------- ----------- ---------- ----------
<S> <C> <C> <C>
FHLMC 15 YR #200035 9.000%, 2001 629 620 653
FHLMC 15 YR #200048 9.000%, 2001 1,364 1,339 1,416
FHLMC 15 YR #200064 8.000%, 2002 788 759 803
FHLMC 5YRTBA GLD BALOON 6.500%, 2000 25,000 25,168 25,031 (f)
FHLMC 15 YR #212119 9.500%, 2001 256 258 266
FHLMC 15 YR #218648 9.500%, 2002 116 118 121
FHLMC 15 YR #219392 11.000%, 2001 300 309 320
FHLMC 15 YR #219679 9.500%, 2003 1,060 1,052 1,104
FHLMC 15 YR #219757 11.000%, 2003 3,571 3,711 3,807
FHLMC 15 YR #240001 9.500%, 1997 3,828 3,816 3,941
FHLMC 10 YR #490009 9.000%, 1997 2,955 2,955 3,082
FHLMC 10 YR #490011 10.000%, 1997 479 483 499
FHLMC 15 YR #500155 11.000%, 2001 724 741 772
FHLMC 15 YR #500294 11.000%, 2003 310 319 331
FHLMC 15 YR #500456 11.000%, 2002 439 451 469
FHLMC 15 YR #502175 10.500%, 2004 492 501 521
FHLMC ARM #605041 7.350%, 2019 967 967 988 (f)
FHLMC ARM #605048 7.394%, 2018 1,812 1,812 1,852 (f)
FHLMC ARM #605050 7.517%, 2018 781 781 800 (f)
FHLMC ARM #605079 WAC 7.603%, 2018 1,842 1,842 1,887 (f)
FHLMC ARM #605175 WAC 7.704%, 2019 4,158 4,158 4,266 (f)
FHLMC ARM #605352 7.371%, 2018 3,883 3,883 3,965 (f)
FHLMC ARM #401587 7.250%, 2018 2,618 2,618 2,668 (f)
FHLMC ARM #630048 7.750%, 2018 315 316 322 (f)
FHLMC ARM #630074 7.375%, 2018 765 765 775 (f)
FHLMC ARM #840031 WAC 7.109%, 2019 776 776 790 (f)
FHLMC ARM #840035 7.573%, 2019 1,809 1,809 1,855 (f)
FHLMC ARM #840036 7.404%, 2019 2,720 2,720 2,783 (f)
FHLMC ARM #840045 7.555%, 2019 4,772 4,772 4,889 (f)
FHLMC ARM #840072 7.754%, 2019 3,327 3,327 3,417 (f)
FHLMC ARM #405014 7.455%, 2019 1,256 1,256 1,287 (f)
FHLMC ARM #405092 7.415%, 2019 1,951 1,951 1,996 (f)
FHLMC ARM #405185 7.464%, 2018 3,211 3,211 3,288 (f)
FHLMC ARM #405243 7.620%, 2019 1,724 1,724 1,771 (f)
FHLMC ARM #405249 7.806%, 2018 4,127 4,127 4,242 (f)
FHLMC ARM #405360 7.584%, 2019 1,090 1,090 1,118 (f)
FHLMC ARM #405437 7.519%, 2019 420 420 431 (f)
FHLMC ARM #405455 7.468%, 2019 1,933 1,933 1,980 (f)
FHLMC ARM #405517 7.640%, 2019 651 651 668 (f)
FHLMC ARM #405615 7.494%, 2019 1,110 1,110 1,138 (f)
FHLMC ARM #405675 7.510%, 2020 2,793 2,794 2,868 (f)
FHLMC ARM #405692 7.172%, 2020 3,713 3,713 3,786 (f)
FHLMC ARM #405744 7.472%, 2020 2,565 2,565 2,631 (f)
FHLMC ARM #605432 7.262%, 2017 1,016 1,016 1,035 (f)
FHLMC ARM #605433 7.657%, 2017 2,336 2,336 2,394 (f)
FHLMC ARM #605454 6.819%, 2017 6,160 6,160 6,251 (f)
FHLMC ARM #605853 WAC 7.647%, 2019 5,085 5,085 5,215 (f)
FHLMC ARM #605854 7.643%, 2019 4,501 4,501 4,619 (f)
FHLMC ARM #606024 7.117%, 2019 1,975 1,975 2,011 (f)
FHLMC ARM #606025 7.027%, 2019 7,265 7,265 7,390 (f)
FHLMC ARM #606151 7.648%, 2019 5,712 5,712 5,861 (f)
FHLMC ARM #635054 7.277%, 2020 425 425 436 (f)
FHLMC ARM #785363 7.000%, 2025 18,564 18,820 18,802 (f)
FHLMC ARM #865008 7.981%, 2018 9,090 9,090 9,249 (f)
FHLMC LOANS #885005 9.500%, 2002 2,297 2,280 2,392 (f)
</TABLE>
<PAGE>
PAGE 21
<TABLE>
<CAPTION>
Bal. held
at 6-30-95
Principal
Amount of Cost Value at
Bonds (Notes 6-30-95
Name of Issuer and Titles of Issue and Notes a and c) (Note a)
---------------------------------- ----------- ---------- ----------
<S> <C> <C> <C>
FHLMC LOANS #885008 10.000%, 2003 3,664 3,687 3,843 (f)
FHLMC 15 YR #885009 9.500%, 2003 5,693 5,655 5,927
FHLMC ARM #606301 7.945%, 2020 7,649 7,649 7,893 (f)
FHLMC 15 YR #E40290 8.500%, 2007 6,480 6,891 6,715 (f)
FNMA 1991 48 G 7.800%, 2004 5,180 5,172 5,200
FNMA 1991 50 G 7.750%, 2004 2,600 2,595 2,605 (f)
FNMA 1991 132 CL E 8.000%, 2010 6,361 6,350 6,365
FNMA 92 12 H 6.625%, 2019 17,395 17,395 17,365 (f)
FNMA 1992-5 C 7.000%, 1998 6,000 5,957 6,011 (f)
FNMA 92-21D VANILLA 6.650%, 2018 4,161 4,084 4,155 (f)
FNMA 92-185A CMO PAC 5.600%, 2010 11,764 11,732 11,688 (f)
FNMA 92 203 E CMO 6.250%, 2005 10,000 9,638 9,891 (f)
FNMA 93-62 B CMO 6.500%, 2001 9,778 9,352 9,714 (f)
FNMA 93-163 PB CMO 4.750%, 2008 17,915 17,734 17,703 (f)
FNMA 94 34 PE CMO 5.750%, 2006 9,785 9,763 9,470 (f)
FNMA 95 2 T CMO 8.500%, 2021 10,000 9,985 10,319 (f)
FNMA 15 YR #2469 11.000%, 2000 45 45 48
FNMA 15 YR #13157 11.000%, 2000 57 58 60
FNMA 15 YR #13548 11.000%, 2000 104 107 111
FNMA 15 YR #13705 11.000%, 2000 115 117 122
FNMA 15 YR #18275 11.000%, 2000 12 13 13
FNMA 15 YR #18745 11.000%, 2000 20 21 21
FNMA 15 YR #18986 11.000%, 2000 13 14 14
FNMA 15 YR #19070 11.000%, 2000 18 18 19
FNMA 15 YR #19261 11.000%, 2000 65 67 70
FNMA 7YR TBA BALLOON 6.500%, 2000 29,000 29,045 28,910 (f)
FNMA 15 YR #22271 11.000%, 2000 62 63 66
FNMA 15 YR #22405 11.000%, 2000 143 147 153
FNMA 15 YR #22569 11.000%, 2000 178 182 190
FNMA 15 YR #22674 11.000%, 2000 55 56 58
FNMA 15 YR #25899 11.000%, 2001 41 42 44
FNMA 30 YR #27880 9.000%, 2016 161 165 168
FNMA 15 YR #34543 9.250%, 2001 631 630 660
FNMA 30 YR #36225 9.000%, 2016 320 326 334
FNMA 30 YR #040877 9.000%, 2017 308 315 321
FNMA 15 YR #50682 7.000%, 2008 14,511 14,910 14,547 (f)
FNMA 15 YR #50730 6.500%, 2008 20,693 20,919 20,408 (f)
FNMA 30 YR #51617 10.000%, 2017 391 394 425
FNMA 30 YR #52185 10.000%, 2017 256 258 278
FNMA 30 YR #52596 10.000%, 2017 19 19 21
FNMA 15 YR #58405 11.000%, 2003 36 37 38
FNMA 15 YR #64520 11.000%, 2001 119 122 127
FNMA 15 YR #64523 11.000%, 2000 208 212 222
FNMA 15 YR #66458 10.000%, 2004 5,679 5,741 5,991
FNMA ARM #70007 MEGA 7.213%, 2017 3,212 3,212 3,285 (f)
FNMA ARM #70009 MEGA 7.301%, 2018 5,122 5,122 5,240 (f)
FNMA ARM #70117 7.413%, 2017 1,094 1,094 1,119 (f)
FNMA ARM #70202 7.835%, 2019 3,537 3,537 3,648 (f)
FNMA 15 YR #70299 10.750%, 2001 576 592 613
FNMA 15 YR #70694 MEG 9.500%, 2005 3,746 3,771 3,931
FNMA ARM #79384 7.665%, 2019 1,219 1,219 1,255 (f)
FNMA ARM #88879 8.845%, 2019 5,097 5,097 5,288 (f)
FNMA ARM #89125 7.125%, 2019 10,052 10,303 10,121 (f)
FNMA ARM #92069 FLEX 7.348%, 2018 4,776 4,776 4,891 (f)
FNMA ARM #93787 7.582%, 2019 4,476 4,476 4,608 (f)
</TABLE>
<PAGE>
PAGE 22
<TABLE>
<CAPTION>
Bal. held
at 6-30-95
Principal
Amount of Cost Value at
Bonds (Notes 6-30-95
Name of Issuer and Titles of Issue and Notes a and c) (Note a)
---------------------------------- ----------- ---------- ----------
<S> <C> <C> <C>
FNMA ARM #97822 7.805%, 2020 848 848 873 (f)
FNMA ARM #105989 8.151%, 2020 2,735 2,735 2,829 (f)
FHLMC ARM #606903 7.383%, 2022 3,497 3,530 3,605 (f)
FNMA 15YR #124848 8.000%, 2008 21,981 21,918 22,606 (f)
FNMA 15 YR #125136 8.000%, 2007 15,926 16,916 16,379 (f)
FNMA ARM #190726 7.802%, 2033 21,047 21,521 21,692 (f)
FNMA 7YR 190778 BALLOON 6.000%, 2001 50,031 49,405 49,265 (f)
FNMA ARM #249907 5.896%, 2024 25,710 26,099 26,095 (f)
FNMA 10YR #303115 6.500%, 2004 23,192 21,770 23,242 (f)
FNMA ARM #303259 7.530%, 2025 11,646 11,995 11,924 (f)
GNMA ARM 1 YR #8157 6.500%, 2023 8,740 8,895 8,825 (f)
GNMA ARM #8206 6.750%, 2017 1,884 1,884 1,897 (f)
GNMA ARM #8240 7.000%, 2017 1,392 1,369 1,409 (f)
GNMA ARM #8251 7.125%, 2017 114 114 115 (f)
GNMA ARM #8274 6.750%, 2017 3,723 3,715 3,750 (f)
GNMA ARM #8283 6.750%, 2017 477 474 480 (f)
GNMA ARM #8293 6.750%, 2017 856 853 862 (f)
GNMA ARM #8341 6.750%, 2018 213 212 215 (f)
GNMA ARM #8353 6.750%, 2018 1,645 1,634 1,659 (f)
GNMA ARM #8365 6.750%, 2018 3,019 3,018 3,043 (f)
GNMA ARM #8377 7.125%, 2018 1,320 1,314 1,338 (f)
GNMA ARM #8428 6.750%, 2018 543 543 547 (f)
GNMA ARM #8440 6.750%, 2018 1,369 1,369 1,380 (f)
GNMA PL #2480 5.250%, 1997 16 15 14
CMO TR14-A1 FLOATER 6.700%, 2009 291 290 291 (f)
CMO TR14-A2 FLOATER 12.000%, 2009 97 79 97 (f)
----------- ---------- ----------
Total United States Government Agencies 1,237,852 1,241,411 1,250,351
----------- ---------- ----------
Municipal Bonds
Alabama
AL CORRECTIONS INST 7.300%, 1999 1,500 1,498 1,576 (b)
AL CORRECTIONS INST 7.400%, 2000 1,500 1,497 1,577 (b)
Alaska
ANCHORAGE AK WTR RV 7.100%, 2000 785 783 818 (b)
California
SOUTHERN CA PUB PWR 6.900%, 1999 1,000 991 1,046 (b)
SOUTHERN CA PUB PWR 7.000%, 2000 1,215 1,202 1,270 (b)
Colorado
CHERRY CREEK CO SCH 7.900%, 1997 1,000 1,000 1,019 (b)
CHERRY CREEK CO SCH 8.000%, 1998 3,375 3,375 3,442 (b)
CHERRY CREEK CO SCH 8.100%, 1999 1,700 1,700 1,734 (b)
Delaware
NEW CASTLE CNTY DE 8.100%, 1999 2,000 2,000 2,065 (b)
Florida
FLORIDA MUNI POWER 7.200%, 2000 3,450 3,428 3,655 (b)
JACKSONVILLE FL ELEC 8.000%, 1996 300 300 309 (b)
JACKSONVILLE FL ELEC 8.100%, 1997 1,000 1,000 1,031 (b)
JACKSONVILLE FL ELEC 8.250%, 1998 1,700 1,700 1,753 (b)
</TABLE>
<PAGE>
PAGE 23
<TABLE>
<CAPTION>
Bal. held
at 6-30-95
Principal
Amount of Cost Value at
Bonds (Notes 6-30-95
Name of Issuer and Titles of Issue and Notes a and c) (Note a)
---------------------------------- ----------- ---------- ----------
<S> <C> <C> <C>
Georgia
ATLANTA GA REC AUTH 8.000%, 1997 1,000 999 1,024 (b)
MUNI ELEC AUTH GA SER 86A 7.500%, 1999 1,000 1,000 1,038 (b)
MUNI ELEC AUTH GA SER 86A 7.600%, 2000 1,000 1,000 1,039 (b)
MUNI ELEC AUTH GA SER 86A 7.700%, 2001 1,330 1,325 1,382 (b)
MET ATLANTA GA RTA 8.000%, 1996 2,000 1,999 2,043 (b)
MET ATLANTA GA RTA 8.200%, 1997 2,800 2,797 2,856 (b)
MET ATLANTA GA RTA 8.375%, 1998 2,000 1,997 2,040 (b)
Illinois
CHICAGO IL SAN DISTRICT 9.250%, 2000 1,000 1,086 1,185 (b)
CHICAGO IL GAS SPY SER C 7.500%, 2015 4,500 4,500 4,930 (b)
CHICAGO IL BLDG REV 8.000%, 1997 3,000 2,994 3,171 (b)
CHICAGO IL BLDG COMM 8.000%, 1998 1,800 1,791 1,961 (b)
ROSEMOUNT IL GO BNDS 8.300%, 1997 1,520 1,518 1,583 (b)
ROSEMOUNT IL GO BNDS 8.400%, 1998 1,000 998 1,042 (b)
Indiana
INDIANAPOLIS IN AIRPORT 7.900%, 1995 635 635 635 (b)
INDIANAPOLIS IN AIRPORT 8.100%, 1996 375 375 390 (b)
INDIANAPOLIS IN AIRPORT 8.300%, 1997 1,100 1,100 1,164 (b)
INDIANAPOLIS IN AIRPORT 8.500%, 1998 750 750 793 (b)
INDIANAPOLIS IN REV 7.600%, 1999 1,000 998 1,057 (b)
INDIANAPOLIS IN REV 7.700%, 2000 1,000 997 1,066 (b)
Louisiana
LAFAYETTE LA PUB 1MP 7.300%, 1999 975 975 1,022 (b)
LOUISIANA GO BNDS SER 86A 7.375%, 2000 4,900 4,887 5,140 (b)
LOUISIANA CORRECTN FAC 7.300%, 1999 925 927 965 (b)
LOUISIANA CORRECTN FAC 7.400%, 2000 500 501 522 (b)
Minnesota
WEST MN MUNI POWER 10.250%, 2015 3,120 3,425 3,692 (b)
New Jersey
OCEAN COUNTY NJ UTIL 8.150%, 1997 400 400 424 (b)
OCEAN COUNTY NJ UTIL 8.250%, 1998 500 499 521 (b)
OCEAN COUNTY NJ UTIL 8.300%, 1999 4,000 3,992 4,170 (b)
New York
N Y MUNI ASSIST CORP 7.000%, 2000 2,100 2,065 2,196 (b)
NEW YORK CITY GO 9.750%, 1996 8,000 7,992 8,280 (b)
NEW YORK CITY NT GO 7.750%, 2000 1,700 1,700 1,769 (b)
NEW YORK PWR AUTH 9.500%, 2001 445 471 494 (b)
North Carolina
NC EAST MUNI POWER 7.500%, 2000 3,245 3,209 3,391 (b)
NC MUNI POWER 8.300%, 1996 900 900 919 (b)
NC MUNI POWER 8.400%, 1997 2,000 2,000 2,080 (b)
NC MUNI POWER 8.500%, 1998 2,000 2,000 2,088 (b)
Pennsylvania
WY VALLEY PA SWR 5.125%, 2007 150 150 147 (b)
</TABLE>
<PAGE>
PAGE 24
<TABLE>
<CAPTION>
Bal. held
at 6-30-95
Principal
Amount of Cost Value at
Bonds (Notes 6-30-95
Name of Issuer and Titles of Issue and Notes a and c) (Note a)
---------------------------------- ----------- ---------- ----------
<S> <C> <C> <C>
Tennessee
KNOXVL TN GO SER 0 7.150%, 2000 3,490 3,482 3,645 (b)
NASHVL CTY TN SE 85B 7.800%, 1996 835 835 852 (b)
NASHVL CTY TN SE 85B 7.900%, 1997 710 710 739 (b)
NASHVL CTY TN SE 85B 8.000%, 1998 1,000 1,000 1,041 (b)
Texas
AUSTIN TX UTILITY 10.750%, 2015 3,735 4,280 4,711 (b)
DALLAS TX CIVIC CENT 10.900%, 1996 850 861 878 (b)
DALLAS TX CIVIC CENT 8.100%, 1997 925 924 943 (b)
DALLAS TX CIVIC CENT 8.200%, 1998 1,025 1,024 1,046 (b)
EANES TX ISD TAX REF 9.000%, 1999 3,000 3,001 3,014 (b)
HARRIS CNTY TX TOLL 10.375%, 2014 5,300 5,656 6,087 (b)
HARRIS COUNTY TX GO 9.100%, 1999 3,500 3,508 3,548 (b)
WACO TX WTR & SEWER 8.300%, 1995 1,000 1,000 1,008 (b)
District of Columbia
DIST OF COLUMBIA GO 7.600%, 1997 4,900 4,893 5,100 (b)
DIST OF COLUMBIA GO 7.600%, 1997 1,950 1,992 2,041 (b)
DIST OF COL GO 86B 7.750%, 2000 1,000 1,002 1,054 (b)
Washington
KENT SCH DIST 415 WA 7.100%, 1997 1,320 1,318 1,377 (b)
KENT SCH DIST 415 WA 7.200%, 1998 1,620 1,617 1,692 (b)
PIERCE CTY WA SE REV 8.000%, 1996 3,035 3,035 3,110 (b)
PORT OF SEATTLE WA 8.250%, 1998 2,000 1,997 2,077 (b)
PORT OF SEATTLE WA 8.250%, 1999 2,000 1,996 2,077 (b)
REDMOND WA GO BDS 86 7.300%, 1999 1,210 1,207 1,228 (b)
REDMOND WA GO BDS 86 7.400%, 2000 650 648 660 (b)
----------- ---------- ----------
Total Municipal Bonds 130,250 131,412 137,442
----------- ---------- ----------
Public Utility
BAROID CORP 8.000%, 2003 5,000 4,984 5,300
BELL ATLANTIC FINL 5.300%, 1998 5,000 4,643 4,859 (f)
BOSTON EDISON 8.875%, 1995 10,000 9,996 10,138
CHEVRON-HOWARD BELL 7.700%, 1997 288 286 289 (b)(d)
GTE CORP 8.850%, 1998 3,000 3,081 3,170 (f)
HANNA M A 9.000%, 1998 5,000 5,101 5,289
INTL SPECIALTY PROD 9.000%, 1999 15,000 15,365 15,287
KANSAS CITY P&L 7.340%, 1999 10,000 10,000 10,293
ORYX ENERGY 8.650%, 1999 15,000 15,000 15,319
PDV AMERICA 7.250%, 1998 3,000 2,992 2,856 (f)
PDV AMERICA 7.750%, 2000 7,000 7,020 6,563 (f)
PAC GAS TRANS 6.640%, 2000 5,000 5,000 5,021 (f)
PENNSYLVANIA P & L 8.000%, 1996 231 230 233 (b)(d)
PENN POWER CO 9.000%, 1996 5,000 4,995 5,197
PRAXAIR INC 6.750%, 2003 5,000 4,706 4,970 (f)
PUBLIC SERVICE E & G 7.100%, 1997 5,000 5,002 5,069 (f)
SHELL OIL CO 7.700%, 1996 9,600 9,689 9,685 (f)
SW BELL CAPITAL CORP 7.900%, 1996 9,000 8,992 9,202
PETRO MEXICANOS 144A 11.430%, 1995 10,000 10,000 10,227 (d)
----------- ---------- ----------
Total Public Utility 127,119 127,082 128,967
----------- ---------- ----------
</TABLE>
<PAGE>
PAGE 25
<TABLE>
<CAPTION>
Bal. held
at 6-30-95
Principal
Amount of Cost Value at
Bonds (Notes 6-30-95
Name of Issuer and Titles of Issue and Notes a and c) (Note a)
---------------------------------- ----------- ---------- ----------
<S> <C> <C> <C>
Finance
AT&T CAPITAL CORP 6.990%, 1996 7,000 6,983 7,080 (f)
ALCO CAPITAL RES 7.330%, 1998 10,000 10,000 10,220 (f)
AMERICAN GEN FINANCE 9.600%, 1995 10,000 9,998 10,132
AMERICAN GEN FINANCE 7.850%, 1997 2,000 2,003 2,070 (f)
ARISTAR FINL 7.875%, 1999 3,000 2,995 3,124 (f)
AVCO FIN 2YR CMT MTN 6.440%, 1999 7,000 6,943 6,849 (f)
BANK OF AMERICA 9.750%, 2000 10,000 10,496 11,283
BENEFICIAL CORP 9.250%, 1996 5,000 5,119 5,186 (f)
BENEFICIAL CORP 6.450%, 2000 10,000 10,062 9,983 (f)
CIT GROUP HOLDINGS 4.750%, 1996 10,650 10,494 10,558 (f)
CIT GROUP HOLDINGS 7.000%, 1997 5,000 4,966 5,082 (f)
CENTRAL FIDELITY 4.785%, 1996 5,000 4,953 4,945 (f)
COMDISCO INC 7.250%, 1998 10,000 9,978 10,197
COMMERCIAL CREDIT 8.250%, 2001 9,000 8,890 9,713 (f)
COUNTRYWIDE FUNDING 8.420%, 1999 19,700 19,671 20,939
DART KRAFT FIN 7.750%, 1998 1,000 1,034 1,040 (f)
FIDELITY ACCEPTANCE 6.670%, 1997 15,000 15,000 14,944 (b)(d)(f)
FIRST SEC BANK UTAH 6.880%, 1996 10,000 9,975 10,110 (f)
FIRST UNION CORP 5.950%, 1995 6,150 6,150 6,150 (f)
FLEET FINANCIAL CORP 9.800%, 1995 15,000 15,000 15,166 (b)(d)
FLEET NORTHSTAR FINL 10.150%, 1995 15,000 15,000 15,139
GE CAPITAL CORP 8.125%, 1999 12,000 12,313 12,674 (f)
GREENTREE FIN94-1 A1 5.600%, 2019 13,314 13,057 13,139 (f)
GREENTREE FIN94-4 A1 6.550%, 2019 13,138 13,098 13,195 (f)
GREENTREE FIN94-5 A1 6.600%, 1998 15,818 15,816 15,881 (f)
GREENTREE FIN94-6 A1 6.350%, 2019 2,609 2,607 2,611 (f)
GREENTREE FIN94-7 A1 6.700%, 2020 3,438 3,436 3,449 (f)
GREYHOUND FIN 2YRMTN 5.590%, 1998 15,000 14,905 14,770 (f)
HELLER FINANCIAL 8.000%, 1998 15,000 14,973 15,713
HERTZ CORP 9.770%, 1996 10,000 10,000 10,194
HERTZ CORP 9.750%, 1996 5,000 5,000 5,096
HOUSEHOLD FINANCE 9.910%, 1996 5,000 5,000 5,095
HOUSEHOLD FINANCE 9.000%, 1995 7,000 6,993 7,036
HOUSEHOLD FINANCE 6.375%, 2000 3,000 3,001 2,977 (f)
HUNTINGTON NATL BANK 4.480%, 1996 12,000 11,591 11,791 (f)
INTL LEASE FINANCE 7.950%, 1999 12,000 11,984 12,563 (f)
INTL LEASE FINANCE 6.375%, 1996 6,000 5,974 6,023 (f)
KEYCORP SENIOR 7.430%, 2000 4,000 3,993 4,155 (f)
MBNA 7.540%, 2001 10,000 9,991 10,478
MARGARETTEN FIN'L 6.750%, 2000 11,250 11,355 11,281 (f)
NCB CAPITAL SER A 8.180%, 1997 8,000 8,000 8,210 (b)(d)
NATIONSBANK CORP 5.375%, 1995 6,500 6,483 6,498 (f)
NATIONSBANK CORP 7.500%, 1997 5,000 4,996 5,114 (f)
NAVISTAR FINL CORP 9.750%, 1995 8,500 8,498 8,574
NORTHERN TRUST 4.950%, 1995 4,850 4,846 4,849 (f)
NORWEST FINANCIAL 7.250%, 2000 4,500 4,491 4,638
ORIX CREDIT ALLIANCE 8.040%, 1997 10,000 10,000 10,205 (b)(d)
ORIX CREDIT ALLIANCE 7.560%, 1997 5,000 5,000 5,074 (b)(d)(f)
PROVIDENT BANK 5.000%, 1996 7,000 6,895 6,949 (f)
PRU HOME 90-09 A1 9.500%, 1997 1,352 1,347 1,355
SBMS VII 91-1 B1 9.700%, 2006 2,189 2,189 2,124 (f)
SALOMON INC INDEX AM 7.070%, 2000 25,000 25,000 24,764 (f)
SAXON 95-1 A2 ARM 6.718%, 2025 4,951 5,022 5,060 (f)
</TABLE>
<PAGE>
PAGE 26
<TABLE>
<CAPTION>
Bal. held
at 6-30-95
Principal
Amount of Cost Value at
Bonds (Notes 6-30-95
Name of Issuer and Titles of Issue and Notes a and c) (Note a)
---------------------------------- ----------- ---------- ----------
<S> <C> <C> <C>
SOCIETY NAT'L CLEV 6.875%, 1996 9,700 9,655 9,787 (f)
TRANSAMERICA FINANCE 9.260%, 1998 5,000 4,992 5,349
UCFC 95 BA-2 ASSET B 6.600%, 2009 10,000 10,047 9,972 (f)
USL CAPITAL 9.400%, 1996 15,000 14,998 15,267
WACHOVIA BANK NTS 6.600%, 1997 15,000 14,930 15,146 (f)
FIRST BANK SYS FRN 6.313%, 1996 15,000 14,324 14,963
----------- ---------- ----------
Total Finance 523,609 522,510 531,929
----------- ---------- ----------
Industrial
BAUSCH & LOMB 6.800%, 1996 3,500 3,484 3,519 (f)
BROWN GROUP 8.600%, 1999 5,000 5,000 5,260
CSX 9.230%, 1998 13,500 13,500 14,423
CATERPILLAR FINANCE 6.960%, 1998 5,000 4,925 5,081 (f)
CATERPILLAR FINANCE 4.640%, 1996 5,000 4,855 4,916 (f)
CAT FIN 2YR CMT MTN 6.510%, 1999 10,350 10,262 10,108 (f)
CENTEX CORP 9.050%, 1996 10,000 10,000 10,231
CHAMPION INT'L 9.650%, 1995 10,000 10,000 10,081
CHAMPION INT'L 9.800%, 1998 10,000 9,994 10,759
CHRYSLER FINANCE 7.700%, 1998 10,000 9,888 10,308 (f)
CHRYSLER FINANCE 7.590%, 2000 5,000 5,001 5,176 (f)
COCA-COLA CO 7.750%, 1996 3,700 3,737 3,738 (f)
COOPER INDUSTRIES 7.750%, 1996 10,000 10,122 10,183 (f)
COX COMMUNICATION 6.375%, 2000 10,000 9,973 9,902 (f)
DARLING DELAWARE 11.000%, 2000 3,308 3,348 3,300 (b)(f)
DELTA AIRLINES 9.875%, 1998 8,100 8,100 8,647
DURR FILLAUER 7.000%, 2006 20,000 20,074 19,450 (f)
ENTERPRIS RENT-A-CAR 8.750%, 1999 5,000 4,997 5,364
ENTERPRIS RENT-A-CAR 7.875%, 1998 5,000 4,998 5,139 (f)
FIGGIE INT'L 9.875%, 1999 6,500 7,074 6,362 (f)
FLEMING CO 9.450%, 1995 7,000 7,000 7,070
FOUNDATION HLTH CORP 7.750%, 2003 4,500 4,484 4,610 (f)
GMAC 7.650%, 1997 10,000 9,987 10,232 (f)
GMAC 7.750%, 1999 20,000 19,857 20,748 (f)
HEALTHTRUST INC 8.750%, 2005 2,000 1,913 2,220
ITT CORP 11.000%, 1995 9,950 9,981 10,096
ILLINOIS CENTRAL 6.270%, 1998 5,000 5,005 4,987 (f)
INTEGON CORP 9.500%, 2001 2,000 1,976 2,143
INTERNATIONAL PAPER 9.625%, 1995 9,000 9,090 9,088 (f)
KAUFMAN & BROAD HOME 10.375%, 1999 1,000 995 1,019
LOCKHEED CORP 4.875%, 1996 10,000 9,891 9,933 (f)
LONE STAR INDUSTRIES 10.000%, 2003 657 634 624 (b)(f)
MARK IV IND INC 8.750%, 2003 2,000 1,809 2,050
MATTEL INC 6.875%, 1997 15,000 14,951 15,167 (f)
MISSOURI PACIFIC RR 15.000%, 1995 232 231 232 (b)(d)
NEWS AMER HLDGS 7.500%, 2000 10,000 9,952 10,225 (f)
PACCAR FIN SER 3 7.940%, 1997 8,250 8,235 8,584 (f)
QUAKER OATS 6.470%, 2000 10,000 10,052 9,995 (f)
REYNOLDS METALS 9.750%, 1996 10,000 9,993 10,399
ROSEBUD HOLDINGS INC 10.000%, 1997 692 659 612 (b)(f)
RYDER SYSTEM 5.530%, 1997 7,500 7,205 7,419 (f)
RYDER SYSTEM 7.910%, 2000 5,000 5,046 5,261 (f)
SEALY CORP 9.500%, 2003 4,275 4,318 4,216
SEARS 7.620%, 1997 5,000 4,973 5,151 (f)
</TABLE>
<PAGE>
PAGE 27
<TABLE>
<CAPTION>
Bal. held
at 6-30-95
Principal
Amount of Cost Value at
Bonds (Notes 6-30-95
Name of Issuer and Titles of Issue and Notes a and c) (Note a)
---------------------------------- ----------- ---------- ----------
<S> <C> <C> <C>
SEARS 7.420%, 1998 10,000 10,012 10,248 (f)
SEARS ROEBUK ACC 6.500%, 2000 5,000 5,024 4,969 (f)
SERVICE MERCHANDISE 8.375%, 2001 1,000 843 901
SHOWBOAT INC 9.250%, 2008 1,000 831 915
SOUTHWEST AIR PS THR 6.130%, 1995 7,131 7,131 7,124 (f)
SUN AMERICA 9.000%, 1999 20,000 20,000 21,432
SUPER VALU INC 5.875%, 1995 8,000 7,993 8,001 (f)
SUPERVALU INC 7.250%, 1999 8,000 7,938 8,209 (f)
TRANSAMERICA CORP 9.470%, 1995 15,000 14,999 15,223
UNITED AIR 1991A-1 9.200%, 2008 4,741 4,358 5,138
US WEST CAP FDG INC 8.000%, 1996 16,785 17,052 17,176 (f)
WAXMAN IND LIBOR 9.455%, 1998 7,500 7,430 7,031 (b)(d)(f)
WHITMAN CORP 8.110%, 1997 12,500 12,496 12,860 (f)
XEROX 2 YR FLTR CMT 6.150%, 1999 10,000 9,929 9,788 (f)
BROWNING FERRIS CVT 6.750%, 2005 7,345 6,247 7,327 (f)
FIBERGLASS CAD INC 9.800%, 1998 5,000 5,127 5,407 (d)
TIPHOOK FINANCE 7.125%, 1998 4,570 4,544 3,639 (f)
----------- ---------- ----------
Total Industrial 461,586 459,523 469,416
----------- ---------- ----------
Total Other Bonds and Notes 2,480,416 2,481,938 2,518,105
----------- ---------- ----------
Total Bonds and Notes 2,480,831 2,482,352 2,518,529
----------- ---------- ----------
Bal. Held
at 6-30-95 Cost Value at
Number of (Notes 6-30-95
Shares a and c) (Note a)
----------- ---------- ----------
Preferred Stock
Finance
HOUSEHLD FIN $100 92A 7.250%, 1997 55,500 5,618 5,911
Public Utility
ALLTEL 7.75 $100 PAR 7.750%, 2005 7,730 778 781 (d)
AMERICAN WTRWRKS $25 8.500%, 2000 800,000 20,000 20,880 (b)(d)
APPALACHIAN PWR $100 6.850%, 2004 30,000 3,005 3,118
APPALACHIAN PWR $100 5.920%, 2008 11,000 1,088 1,032
ARIZONA PUB SVC $100 10.00%, 2001 50,000 5,000 5,570
ARKANSAS P & L $25 9.920%, 2002 181,079 4,756 4,708
ATLANTIC CITY EL 100 7.800%, 2006 90,000 8,986 9,841
ATLANTIC CITY EL 100 8.200%, 2000 82,500 8,240 8,917
ATLANTIC CITY ELEC 8.500%, 1998 60,960 6,094 6,280
BALTIMORE G&E $100 8.625%, 2000 97,500 9,750 10,537
BALTIMORE G&E $100 8.250%, 1999 66,300 6,629 7,054
BALTIMORE G & E $100 6.950%, 1995 70,000 6,994 7,022
BOSTON EDISON $100 8.000%, 2001 90,000 9,000 8,932
CBI INDUSTRIES 100 7.480%, 2000 50,000 5,000 4,975
CENTRAL ILL LT $100 5.850%, 2008 50,000 5,000 4,963
CINCINNATI G&E $100 7.875%, 2004 200,000 20,000 22,100
COMMWLTH ED $100 PVT 8.200%, 2002 84,092 8,198 8,661 (d)
COMMONWEALTH EDISON 8.850%, 2003 87,750 8,968 9,038 (d)
CONN LT & PWR $50 5.300%, 2003 115,300 5,663 5,448
</TABLE>
<PAGE>
PAGE 28
<TABLE>
<CAPTION>
Bal. Held
at 6-30-95 Cost Value at
Number of (Notes 6-30-95
Name of Issuer and Titles of Issue Shares a and c) (Note a)
---------------------------------- ----------- ---------- ----------
<S> <C> <C> <C>
CON EDISON $100 SR J 6.125%, 2002 150,000 15,051 15,225
CON EDISON 7.2 SER I 7.200%, 2007 20,000 1,976 2,124
DUKE POWER $100 SR V 6.400%, 2002 30,000 3,000 3,180
DUKE POWER $100 SR U 6.300%, 2001 30,000 3,000 3,180
DUKE POWER $100 SR T 6.200%, 2000 30,000 3,000 3,180
DUKE POWER 1992D $25 6.200%, 2001 200,000 5,007 5,250
DUKE POWER 1992C $25 6.100%, 2000 250,000 6,279 6,563
EASTERN EDISON $100 6.625%, 2008 210,000 20,921 21,289
FLORIDA POWER $100 7.080%, 2010 26,612 2,639 2,734
GTE $50 PFD 7.750%, 2008 124,087 6,217 6,372 (b)(d)
GTE CORP $50 PFD 7.850%, 2007 131,556 6,480 6,737 (b)(d)
GREEN MTN PWR CL-D/3 8.625%, 2000 70,000 7,000 7,335 (b)(d)
HAWAII ELEC $100 8.500%, 2005 20,000 1,993 2,132 (b)(d)
MAUI ELEC $100 8.500%, 2005 25,000 2,491 2,665 (b)(d)
HOUSTON LT PWR $100 9.375%, 1999 93,000 9,338 9,579 (d)
INDIANA MICH POWER 6.300%, 2009 52,250 5,222 5,251
INDIANA MICHIGAN PWR 5.900%, 2009 32,500 3,098 2,926
IOWA ILLINOIS EL $100 7.800%, 2006 73,300 7,623 8,015
JERSEY CENTRAL P&L 8.650%, 2005 75,000 7,500 8,273
JERSEY CENTRAL P & L 8.480%, 2000 85,000 8,526 9,077
LONG ISL LGT SER AA 7.950%, 2000 770,800 19,498 18,788
LONG ISLAND LIGHTING 8.500%, 1997 6,132 602 613 (b)(d)
LOUISIANA P&L $100 7.000%, 1999 80,000 8,009 8,200
LOUISIANA P & L $100 8.000%, 2001 70,000 7,000 7,508
MAINE YANKEE $100 7.480%, 2001 40,730 3,940 4,154
MN P & L 144A $100 7.125%, 2002 50,000 4,968 4,940 (b)(d)
MN P&L 144A 6.70 6.700%, 2002 100,000 10,000 10,050 (b)(d)
MISS P&L $100 9.760%, 1997 26,347 2,633 2,742
MISS P & L $100 9.000%, 1995 15,474 1,547 1,581
NIPSCO IND $100 8.750%, 1996 250,000 25,158 25,473 (b)(d)
NJ NATL GAS 100 144A 7.720%, 2001 200,000 20,000 21,800 (d)
NIAGARA MOHAWK $25 8.375%, 1998 47,250 1,167 1,192 (b)(d)
NIAGARA MOHAWK $25 9.750%, 1996 19,063 479 479 (b)(d)
NO IND PUB SERV $100 8.850%, 2003 42,000 4,236 4,297 (b)(d)
NORTHWEST NAT GA 100 6.950%, 2002 150,000 15,000 16,088
OHIO POWER CO $100 5.900%, 2009 36,000 3,521 3,470
OHIO PWR CO $100 6.020%, 2008 10,000 989 975
OHIO PWR CO $100 6.350%, 2008 5,000 510 500
ORANGE ROCKLAND $100 8.125%, 1997 19,634 1,972 1,994 (d)
OTTER TAIL PWR $100 6.350%, 2007 180,000 18,000 18,090
PECO ENERGY 6.120%, 2003 80,300 7,886 7,970
PACIFIC GAS & ELEC 6.570%, 2007 560,000 13,958 14,140
PACIFICORP $100 PAR 7.700%, 2001 150,000 15,000 16,781
PENN P&L PFD $100 6.150%, 2003 25,000 2,341 2,538 (b)
PENN P&L $100 PAR 6.125%, 2008 60,000 5,951 5,653
PENN PWR & LT $100 6.330%, 2008 83,000 8,078 7,946
POTOMAC ELEC PWR $50 6.800%, 2007 160,800 7,933 8,243
POTOMAC ELECTRIC 7.780%, 2006 160,000 8,008 8,310
PUB SERV COLO $100 7.500%, 2009 173,368 16,695 17,647 (b)(d)
PUGET SOUND P&L $100 8.000%, 2004 4,932 493 505
ROCHESTER G & E $100 6.600%, 2009 20,000 1,896 1,970
ROCHESTER G & E $100 7.650%, 1999 20,000 2,000 2,112
ROCHESTER G & E $100 7.550%, 1998 67,000 6,708 7,071
ROCHESTER G & E $100 7.450%, 1997 52,500 5,250 5,539
SIERRA PAC PWR SER G 8.240%, 1998 81,910 4,095 4,218
SO CA EDISON $100 6.450%, 2002 157,250 15,773 16,315
SOUTHWEST GAS 9.500%, 1999 2,730 275 273 (b)(d)
</TABLE>
<PAGE>
PAGE 29
<TABLE>
<CAPTION>
Bal. Held
at 6-30-95 Cost Value at
Number of (Notes 6-30-95
Name of Issuer and Titles of Issue Shares a and c) (Note a)
---------------------------------- ----------- ---------- ----------
<S> <C> <C> <C>
SO INDIANA G&E 100 6.500%, 2002 75,000 7,500 7,222 (d)
TENNECO SRS B $100 7.400%, 1998 56,904 5,577 5,818
TEXAS UTILITY $100 6.980%, 2008 50,000 5,000 5,100
TEXAS UTILITY $100 9.640%, 1998 86,100 8,653 8,920 (b)(d)
UNITED TELECOM $100 7.750%, 2008 37,472 3,583 3,855 (b)(d)
UNITED TEL FL $10 5.250%, 2000 9,900 94 94 (b)(d)
VIRGINIA ELEC & PWR 6.350%, 2000 178,700 17,848 18,495
WASHINGTON WATER 8.625%, 2000 80,000 8,013 8,405
WASHINGTON WTR POWER 6.950%, 2007 57,500 5,768 6,030
WESTERN RESOURCES 7.580%, 2007 23,000 2,412 2,421
----------- ---------- ----------
Total Public Utility 8,584,312 605,527 627,469
----------- ---------- ----------
Industrial
BOWATER $50 VAR RATE VAR %, 1998 251,800 12,117 12,338 (f)
COMBUSTION ENG $100 9.125%, 1999 200,000 20,000 21,054 (b)(d)
HARTFD FIRE S2 $50 VAR %, 1995 326,600 16,273 16,249 (f)
WHIRLPOOL FIN $100 B 6.550%, 2008 180,000 18,156 18,675
XEROX CORP $50 PAR 7.375%, 1998 72,702 3,596 3,790
----------- ---------- ----------
Total Industrial 1,031,102 70,142 72,106
----------- ---------- ----------
Total Preferred Stock 9,670,914 681,287 705,486
----------- ---------- ----------
Other
Building Materials
LONE STAR INDUSTRIES 229 5 5 (f)
Industrial
MRS FIELDS 20,176,717 605 605 (f)
WAXMAN IND WARRANTS 150,000 150 19 (f)
----------- ---------- ----------
Total Industrial 20,326,717 755 624
----------- ---------- ----------
Total Other 20,326,946 760 629
----------- ---------- ----------
Total Investments in Securities
of Unaffiliated Issuers 3,164,399 3,224,644
Total Reserve for Possible Losses
on Corporate Issues 1,000
---------- ----------
$3,164,384 $3,224,630
========== ==========
NOTES:
(a) See notes 1 and 3 to financial statements regarding determination of cost and
fair values.
(b) Securities valued by IDS Certificate Company at fair value in the absence of
market quotations.
(c) The aggregate cost of investments in securities of unaffiliated issuers for
federal income tax purposes was $3,158,890.
(d) Securities acquired in private negotiation which may require registration under
federal securities laws if they were to be publicly sold. Also see note 3B to
financial statements.
(e) Non-income producing securities.
(f) Securities classified as available for sale and carried at fair value in the
balance sheet. Also see notes 1 and 3A to financial statements.
</TABLE>
