<PAGE>
PAGE 1
IDS CERTIFICATE COMPANY
SEMIANNUAL REPORT
TO SHAREHOLDER
JUNE 30, 1997
Report Number C-100
IDSC Reports
August 29, 1997
<PAGE>
PAGE 2
IDS CERTIFICATE COMPANY
SEMIANNUAL REPORT TO SHAREHOLDER
JUNE 30, 1997
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................................9-19
Investment Securities Owned..................................20-30
<PAGE>
PAGE 3
<TABLE><CAPTION>
IDS CERTIFICATE COMPANY
BALANCE SHEET Unaudited
June 30, 1997
($ thousands)
ASSETS
Qualified Assets (note 2)
-----------------------------------------------------------------------------------
<S> <C>
Investments in unaffiliated issuers (notes 3 and 4):
Cash and cash equivalents...................................... $110,756
Held-to-maturity securities.................................... 803,573
Available-for-sale securities.................................. 2,458,940
First mortgage loans on real estate............................ 216,338
Certificate loans - secured by certificate reserves............ 40,382
Investments in and advances to affiliates........................ 6,593
-----------------------------------------------------------------------------------
Total investments................................................ 3,636,582
-----------------------------------------------------------------------------------
Dividends and interest receivable................................ 43,369
-----------------------------------------------------------------------------------
Other (note 9)................................................... 65,158
-----------------------------------------------------------------------------------
Total qualified assets........................................... 3,745,109
-----------------------------------------------------------------------------------
Other Assets
-----------------------------------------------------------------------------------
Deferred distribution fees....................................... 24,093
Other............................................................ 4
-----------------------------------------------------------------------------------
Total other assets............................................... 24,097
-----------------------------------------------------------------------------------
Total assets..................................................... $3,769,206
-----------------------------------------------------------------------------------
See notes to financial statements.
</TABLE>
<PAGE>
PAGE 4
<TABLE><CAPTION>
IDS CERTIFICATE COMPANY
BALANCE SHEET Unaudited
June 30, 1997
($ thousands)
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities
-----------------------------------------------------------------------------------
<S> <C>
Certificate Reserves (note 5):
Installment certificates:
Reserves to mature.......................................... $348,702
Additional credits and accrued interest..................... 21,316
Advance payments and accrued interest....................... 1,089
Other....................................................... 56
Fully paid certificates:
Reserves to mature.......................................... 2,828,238
Additional credits and accrued interest..................... 178,850
Due to unlocated certificate holders.......................... 313
-----------------------------------------------------------------------------------
Total certificate reserves.................................... 3,378,564
-----------------------------------------------------------------------------------
Accounts Payable and Accrued Liabilities:
Due to Parent (note 7A)..................................... 1,404
Due to Parent for federal income taxes...................... 426
Due to affiliates (notes 7B, 7C and 7D)..................... 373
Payable for investment securities purchased................. 19,987
Payable under reverse repurchase agreements................. 120,000
Accounts payable, accrued expenses and other (note 9)....... 34,186
-----------------------------------------------------------------------------------
Total accounts payable and accrued liabilities................ 176,376
-----------------------------------------------------------------------------------
Deferred federal income taxes................................. 5,427
-----------------------------------------------------------------------------------
Total liabilities............................................. 3,560,367
-----------------------------------------------------------------------------------
Commitments (note 4)..........................................
Stockholder's Equity (notes 5B, 5C, and 6):
-----------------------------------------------------------------------------------
Common stock, $10 par - authorized and
issued 150,000 shares....................................... 1,500
Additional paid-in capital.................................... 143,844
Retained earnings:
Appropriated for predeclared additional credits/interest.... 9,020
Appropriated for additional interest on advance payments.... 50
Unappropriated.............................................. 39,805
Unrealized holding gains on investment
securities - net (note 3A).................................. 14,620
-----------------------------------------------------------------------------------
Total stockholder's equity.................................... 208,839
-----------------------------------------------------------------------------------
Total liabilities and stockholder's equity.................... $3,769,206
-----------------------------------------------------------------------------------
See notes to financial statements.
</TABLE>
<PAGE>
PAGE 5
<TABLE><CAPTION>
IDS CERTIFICATE COMPANY
STATEMENT OF OPERATIONS Unaudited
Six Months Ended June 30, 1997
($ thousands)
-----------------------------------------------------------------------------------
<S> <C>
Investment Income:
Interest income from investments:
Bonds and notes:
Unaffiliated issuers........................................ $91,139
Mortgage loans on real estate:
Unaffiliated................................................ 9,021
Certificate loans............................................. 1,139
Dividends....................................................... 22,648
Other........................................................... 523
-----------------------------------------------------------------------------------
Total investment income......................................... 124,470
-----------------------------------------------------------------------------------
Investment Expenses:
Parent and affiliated company fees (note 7):
Distribution.................................................. 16,375
Investment advisory and services.............................. 8,328
Depositary.................................................... 114
Options (note 9)................................................ 6,753
Other (note 9).................................................. 752
-----------------------------------------------------------------------------------
Total investment expenses....................................... 32,322
-----------------------------------------------------------------------------------
Net investment income before provision
for certificate reserves and income tax benefit............... $92,148
-----------------------------------------------------------------------------------
See notes to financial statements.
</TABLE>
<PAGE>
PAGE 6
<TABLE><CAPTION>
IDS CERTIFICATE COMPANY
STATEMENT OF OPERATIONS (Continued) Unaudited
Six Months Ended June 30, 1997
($ thousands)
-----------------------------------------------------------------------------------
<S> <C>
Provision for Certificate Reserves (notes 5 and 9):
According to the terms of the certificates:
Provision for certificate reserves............................ $5,023
Interest on additional credits................................ 653
Interest on advance payments.................................. 27
Additional credits/interest authorized by IDSC:
On fully paid certificates.................................... 72,214
On installment certificates................................... 2,520
-----------------------------------------------------------------------------------
Total provision before reserve recoveries....................... 80,437
Reserve recoveries from terminations prior to maturitiy......... (525)
-----------------------------------------------------------------------------------
Net provision for certificate reserves.......................... 79,912
-----------------------------------------------------------------------------------
Net investment income before income tax benefit................. 12,236
Income tax benefit (note 8)..................................... 1,722
-----------------------------------------------------------------------------------
Net investment income........................................... 13,958
-----------------------------------------------------------------------------------
Realized gain on investments - net:
Securities of unaffiliated issuers............................ 2
Income tax expense (note 8)..................................... 1
-----------------------------------------------------------------------------------
Net realized gain on investments................................ 1
-----------------------------------------------------------------------------------
Net income - wholly owned subsidiary............................ 149
-----------------------------------------------------------------------------------
Net income ..................................................... $14,108
-----------------------------------------------------------------------------------
See notes to financial statements.
</TABLE>
<PAGE>
PAGE 7
<TABLE><CAPTION>
IDS CERTIFICATE COMPANY
STATEMENT OF STOCKHOLDER'S EQUITY Unaudited
Six Months Ended June 30, 1997
($ thousands)
-----------------------------------------------------------------------------------
<S> <C>
Common Stock:
Balance at beginning and end of period.......................... $1,500
-----------------------------------------------------------------------------------
Additional Paid-in-capital:
Balance at beginning and end of period.......................... $143,844
-----------------------------------------------------------------------------------
Retained Earnings:
Appropriated for predeclared additional credits/interest (note 5B):
Balance at beginning of period.................................. $11,989
Transferred to unappropriated retained earnings................. (2,969)
-----------------------------------------------------------------------------------
Balance at end of period........................................ $9,020
-----------------------------------------------------------------------------------
Appropriated for additional interest on advance payments (note 5C):
Balance at beginning and end of period.......................... $50
-----------------------------------------------------------------------------------
Unappropriated (note 6):
Balance at beginning of period.................................. $22,728
Net income ..................................................... 14,108
Transferred from appropriated retained earnings................. 2,969
-----------------------------------------------------------------------------------
Balance at end of period........................................ $39,805
-----------------------------------------------------------------------------------
Unrealized holding gains on investment securities - net (note 3A):
Balance at beginning of period.................................. $14,439
Change during period............................................ 181
-----------------------------------------------------------------------------------
Balance at end of period........................................ $14,620
-----------------------------------------------------------------------------------
See notes to financial statements.
</TABLE>
<PAGE>
PAGE 8
<TABLE><CAPTION>
IDS CERTIFICATE COMPANY
STATEMENT OF CASH FLOWS Unaudited
Six Months Ended June 30, 1997
($ thousands)
-----------------------------------------------------------------------------------
<S> <C>
Cash flows from operating activities:
Net income...................................................... $14,108
Adjustments to reconcile net income to net cash provided by operating
activities:
Net income of wholly owned subsidiary......................... (149)
Provision for certificate reserves............................ 79,912
Interest income added to certificate loans.................... (724)
Amortization of premium/discount-net.......................... 7,165
Net gain on investments....................................... (2)
Decrease in dividends and interest receivable................. 644
Decrease in deferred distribution fees........................ 1,432
Decrease in deferred federal income taxes..................... (2,670)
Decrease in other liabilities................................. (582)
-----------------------------------------------------------------------------------
Net cash provided by operating activities....................... 99,134
-----------------------------------------------------------------------------------
Cash flows from investing activities: Maturity and redemption of investments:
Held-to-maturity securities................................... 35,826
Available-for-sale securities................................. 188,817
Other investments............................................. 35,534
Sale of investments:
Held-to-maturity securities................................... 29,391
Available-for-sale securities................................. 150,097
Certificate loan payments....................................... 2,503
Purchase of investments:
Held-to-maturity securities................................... (4,565)
Available-for-sale securities................................. (626,659)
Other investments............................................. (28,176)
Certificate loan fundings....................................... (2,720)
-----------------------------------------------------------------------------------
Net cash used in investing activities........................... (219,952)
-----------------------------------------------------------------------------------
Cash flows from financing activities:
Payments from certificate owners................................ 644,307
Proceeds from reverse repurchase agreements..................... 269,500
Certificate maturities and cash surrenders...................... (644,064)
Payments under reverse repurchase ageements..................... (149,500)
-----------------------------------------------------------------------------------
Net cash provided by financing activities....................... 120,243
-----------------------------------------------------------------------------------
Net decrease in cash and cash equivalents....................... (575)
Cash and cash equivalents beginning of period................... 111,331
-----------------------------------------------------------------------------------
Cash and cash equivalents end of period......................... $110,756
-----------------------------------------------------------------------------------
Supplemental disclosures including non-cash transactions:
Cash received for income taxes.................................. $2,328
Certificate maturities and surrenders through loan reductions... 4,068
See notes to financial statements.
</TABLE>
<PAGE>
PAGE 9
IDS CERTIFICATE COMPANY
Notes to Financial Statements ($ in thousands unless indicated
otherwise) (Unaudited)
- -------------------------------------------------------------------
1. Nature of Business and 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 registered as an investment company under the
Investment Company Act of 1940 ("the 1940 Act") and is in the business of
issuing face-amount investment certificates. The certificates issued by IDSC are
not insured by any government agency. IDSC's certificates are sold primarily by
American Express Financial Advisors Inc.'s (an affiliate) field force operating
in 50 states, the District of Columbia and Puerto Rico. IDSC's Parent acts as
investment advisor for IDSC.
IDSC currently offers eight types of certificates with specified maturities
ranging from four to twenty years. Within their specified maturity, most
certificates have interest rate terms of one to thirty-six months. In addition,
one type of certificate has interest tied, in whole or in part, to any upward
movement in a broad-based stock market index. Except for two types of
certificates, all of the certificates are available as qualified investments for
Individual Retirement Accounts or 401(k) plans and other qualified retirement
plans.
IDSC's gross income is derived primarily from interest and dividends generated
by its investments. IDSC's net income is determined by deducting from such gross
income its provision for certificate reserves, and other expenses, including
taxes, the fee paid to Parent for investment advisory and other services, and
the distribution fees paid to American Express Financial Advisors Inc.
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. 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.
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 and the reported amounts of income and
expenses during the six months then ended. Actual results could differ from
those estimates.
<PAGE>
PAGE 10
Notes to Financial Statements (continued)
- -------------------------------------------------------------------
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. Dividend income from perpetual preferred
stock is recognized on an ex-dividend basis.
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
Mortgage loans are carried at amortized cost, less reserve for losses, which is
the basis for determining any realized gains or losses.
Impairment is measured as the excess of the loan's recorded investment over its
present value of expected principal and interest payments discounted at the
loan's effective interest rate, or the fair value of collateral. The amount of
the impairment is recorded in a reserve for mortgage loan losses.
The reserve for mortgage loan losses is maintained at a level that management
believes is adequate to absorb estimated losses in the portfolio. The level of
the reserve account is determined based on several factors, including historical
experience, expected future principal and interest payments, estimated
collateral values, and current and anticipated economic and political
conditions. Management regularly evaluates the adequacy of the reserve for
mortgage loan losses.
<PAGE>
PAGE 11
Notes to Financial Statements (continued)
- -------------------------------------------------------------------
IDSC generally stops accruing interest on mortgage loans for which interest
payments are delinquent more than three months. Based on management's judgement
as to the ultimate collectibility of principal, interest payments received are
either recognized as income or applied to the recorded investment in the loan.
Certificates
Investment certificates may be purchased either with a lump-sum payment or by
installment payments. Certificate owners are entitled to receive at maturity a
definite sum of money. Payments from certificate owners are credited to
investment certificate reserves. Investment certificate reserves accumulate at
specified percentage rates as declared by IDSC. Reserves also are maintained for
advance payments made by certificate owners, accrued interst thereon, and for
additional credits in excess of minimum guaranteed rates 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 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 apprximately 10
years. Upon surrender, unamortized deferred distribution fees and any related
surrender charges are recognized in 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 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 $3,345,321 at June 30, 1997. IDSC had qualified assets of
$3,702,630 at June 30, 1997, excluding net unrealized appreciation on
available-for-sale securities of $22,492 and payable for securities purchased of
$19,987.
<PAGE>
PAGE 12
Qualified assets are valued in accordance with such provisions of Minnesota
Statutes as are applicable to investments of life insurance companies. Qualified
assets for which no provision for valuation is made in such statutes 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 amortized 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, 1997 were deposited as follows:
<TABLE><CAPTION>
Required
Deposits deposits Excess
----------------------------------------------------------------------------------
<S> <C> <C> <C>
Deposits to meet certificate liability requirements:
States............. $ 363 $ 329 $ 34
Central Depositary. 3,469,902 3,295,263 174,639
----------------------------------------------------------------------------------
Total.............. $3,470,265 $3,295,592 $174,673
----------------------------------------------------------------------------------
</TABLE>
The assets on deposit consisted of securities having a deposit value of
$3,229,197, mortgage loans of $216,338 and other assets of $24,730.
<PAGE>
PAGE 13
Notes to Financial Statements (continued)
-----------------------------------------------------------------------------
American Express Trust Company is the central depositary for IDSC. See note
7C.
3. Investments in Securities
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.
The following is a summary of securities held to maturity and securities
available for sale at June 30, 1997.
<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..... $ 363 $ 364 $ 3 $ 2
Mortgage-backed
securities............... 32,942 33,324 593 211
Corporate debt
securities............... 257,455 263,668 6,940 727
Stated maturity
preferred stock.......... 512,813 527,604 15,608 817
----------------------------------------------------------------------------------
Total $ 803,573 $ 824,960 $23,144 $1,757
----------------------------------------------------------------------------------
Securities Available for Sale
-----------------------------------------------------
Gross Gross
Amortized Fair unrealized unrealized
Cost value gains losses
----------------------------------------------------------------------------------
Mortgage-backed
securities............... $1,261,707 $1,275,053 $16,009 $2,663
State and municipal
obligations.............. 41,424 42,702 1,278 -
Corporate debt
securities............... 1,000,860 1,008,633 11,018 3,245
Stated maturity
preferred stock.......... 47,603 47,448 125 280
Perpetual preferred
stock.................... 84,249 84,499 401 151
Common stock............... 605 605 - -
----------------------------------------------------------------------------------
Total $2,436,448 $2,458,940 $28,831 $ 6,339
----------------------------------------------------------------------------------
</TABLE>
<PAGE>
PAGE 14
Notes to Financial Statements (continued)
- -------------------------------------------------------------------
At June 30, 1997, there were no securities classified as trading securities.
During the six months ended June 30, 1997, debt securities classified as
available for sale were sold with proceeds of $149,444 and gross realized gains
on such sales of $826 and gross realized losses on such sales of $1,637.
During the six months ended June 30, 1997, held-to-maturity securities were sold
with an amortized cost of $28,662. Gross gains of $1,409 and gross losses of
$680 were realized on the sales. The securities were sold due to significant
deterioration in the issuers' creditworthiness.
There were no transfers from securities classified as held to maturity during
the six months ended June 30, 1997.
B) At June 30, 1997, investments in securities with fixed maturities comprised
85% of IDSC's total invested assets. Securities are rated by Moody's and
Standard & Poor's (S&P), or by Parent's 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:
<TABLE><CAPTION>
Rating
---------------------------------
<S> <C>
Aaa/AAA...................... 46%
Aa/AA........................ 1
Aa/A......................... 2
A/A.......................... 15
A/BBB........................ 5
Baa/BBB...................... 24
Below investment grade....... 7
---------------------------------
100%
---------------------------------
</TABLE>
Of the securities rated Aaa/AAA, 89% are U.S. Government Agency mortgage-backed
securities that are not rated by a public rating agency. Approximately 10% of
other securities with fixed maturities are rated by Parent's Internal analysts.
No investment in any one issuer is greater than 1% of IDSC's total investment in
securities with fixed maturities.
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 15
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 note 3A.
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. Investments in First Mortgage Loans on Real Estate
At June 30, 1997, IDSC's recorded investment in impaired mortgage loans was $770
and the reserve for loss on that amount was $611. During the first six months of
1997, the average recorded investment in impaired mortgage loans was $810.
IDSC recognized $38 of interest income related to impaired mortgage loans for
the six months ended June 30, 1997.
There were no changes in the reserve for loss on mortgage loans during the six
months ended June 30, 1997.
At June 30, 1997, commitments for fundings of first mortgage loans, at market
interest rates, aggregated $20,350. IDSC employs policies and procedures to
ensure the creditworthiness of the borrowers and that funds will be available on
the funding date. IDSC's loan fundings are restricted to 80% or less of the
market value of the real estate at the time of the loan funding.
At June 30, 1997, approximately 6% 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:
<TABLE><CAPTION>
Region Property Type
--------------------------------- -------------------------------
<S> <C> <S> <C>
South Atlantic............... 24% Shopping centers........... 36%
East North Central........... 20 Apartments................. 30
West North Central........... 18 Industrial buildings....... 15
Middle Atlantic.............. 14 Office buildings........... 10
Mountain..................... 12 Other...................... 9
West South Central........... 5
New England.................. 5
Pacific...................... 2
East South Central........... -
--------------------------------- -------------------------------
100% 100%
--------------------------------- -------------------------------
</TABLE>
<PAGE>
PAGE 16
Notes to Financial Statements (continued)
- -------------------------------------------------------------------
5. 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, 1997 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..................... $ 28,558 3.50% 1.35%
Without guaranteed rates (A).............. 320,144 - 2.96
Additional credits and accrued interest... 21,316 3.15 -
Advance payments and accrued interest (C). 1,089 3.16 1.69
Other..................................... 56 - -
Fully paid certificates:
Reserves to mature:
With guaranteed rates..................... 175,537 3.22 1.85
Without guaranteed rates (A) and (D)...... 2,652,701 - 4.96
Additional credits and accrued interest... 178,850 3.22 -
Due to unlocated certificate holders...... 313 - -
----------------------------------------------------------------------------------
$3,378,564
----------------------------------------------------------------------------------
</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, 1997, $9,020 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 3.16%. IDSC has increased the rate of accrual
to 4.85% through April 30, 1998. 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, 1997 was
$361,196.
<PAGE>
PAGE 17
Notes to Financial Statements (continued)
- -------------------------------------------------------------------
6. Dividend Restriction
Certain series of installment certificates outstanding provide that cash
dividends may be paid by IDSC only in calendar years for which additional
credits of at least one-half of 1% on such series of certificates have been
authorized by IDSC. This restriction has been removed for 1997 and 1998 by
action of IDSC on additional credits in excess of this requirement.
7. Fees Paid to IDS and Affiliated Companies ($ not in
thousands)
A) The basis of computing fees paid or payable to Parent for
investment advisory and other general and administrative 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 an outside service fee.
B) The basis of computing fees paid or payable to American
Express Financial Advisors 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 a summary of the periods over which the fees are
payable 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>
On sales effective
April 30, 1997........... $25.00 $ 2.50 $22.50 9
On sales prior to
April 30, 1997(a)........ 30.00 6.00 24.00 4
----------------------------------------------------------------------------------
</TABLE>
<PAGE>
PAGE 18
Notes to Financial Statements (continued)
- -------------------------------------------------------------------
(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.
Effective April 30, 1997, fees on Cash Reserve and Flexible Savings certificates
are paid at a rate of 0.20% of the purchase price at the time of issuance and
0.20% of the reserves maintained for these certificates at the beginning of the
second and subsequent quarters from issue date. For certificates sold prior to
April 30, 1997, fees were paid at a rate of 0.25% of the purchase price at the
time of issuance and are paid at a rate of 0.25% of the reserves maintained for
these certificates at the beginning of the second and subsequent quarters from
issue date.
Fees on the Future Value Certificate were paid at the rate of 5% of the purchase
price at time of issuance. Effective May 1, 1997, the Future Value Certificate
is no longer being offered for sale.
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.
Fees on the Preferred Investors Certificate are paid at an annualized rate of
0.66% 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.
Effective April 30, 1997, fees on the Stock Market Certificate are paid at a
rate of 0.70% of the purchase price on the first day of the certificate's term
and 0.70% of the reserves maintained for these certificates at the beginning of
each subsequent term. For certificates sold prior to April 30, 1997, fees were
paid at a rate of 1.25% of the purchase price on the first day of the
certificate's term and are paid at a rate of 1.25% of the reserves maintained
for these certificates at the beginning of each subsequent term.
C) The basis of computing depositary fees paid or payable to
American Express 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>
<PAGE>
PAGE 19
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:
1.25% of the reserves maintained for the certificates on an amount from $100,000
to $249,000, 0.80% 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
<PAGE>
PAGE 20
Notes to Financial Statements (continued)
- -------------------------------------------------------------------
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.
8. Federal Income Taxes
The federal income tax rate applicable to income of IDSC for the six months
ended June 30, 1997 was based on the effective tax rate expected to be
applicable for the full fiscal year ending Dec. 31, 1997.
A reconciliation of the statutory federal income tax rate and the
expected federal income tax rate at Dec. 31, 1997 is:
<TABLE><CAPTION>
Rate
----------------------------------------------------------------------------------
<S> <C>
Statutory federal income tax rate....................... 35.0%
Tax-exempt interest..................................... ( 3.4)
Dividend exclusion...................................... (45.9)
----------------------------------------------------------------------------------
Expected federal income tax rate........................ (14.3)
----------------------------------------------------------------------------------
</TABLE>
9. 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 of
the derivatives 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 approval procedures, including setting
concentration limits by counterparty, reviewing credit ratings and requiring
collateral where appropriate. The majority of IDSC's counterparties to the
interest rate swaps are rated A or better by nationally recognized rating
agencies. The counterparties to the call options are six major broker/dealers.
<PAGE>
PAGE 21
Notes to Financial Statements (continued)
- -------------------------------------------------------------------
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 and are not recorded on the balance sheet.
Credit exposure related to derivative financial instruments is measured by the
replacement cost of those contracts 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,
1997.
<TABLE><CAPTION>
Notional Total
or contract Carrying Fair credit
amount value value exposure
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS:
Purchased call options...... $284,177 $65,158 $60,378 $60,378
----------------------------------------------------------------------------------
LIABILITIES:
Written call options........ $265,252 $31,014 $36,982 $ -
Interest rate swaps......... 500,000 66 1,284 -
----------------------------------------------------------------------------------
Total $765,252 $31,080 $38,266 $ -
----------------------------------------------------------------------------------
</TABLE>
The fair values of derivative financial instruments are based on market values,
dealer quotes or pricing models. The interest rate swaps expire in May of 1998.
The options expire in 1997 and 1998.
Interest rate swaps 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 owners.
Under the interest-rate swap agreements, IDSC pays a fixed rate of interest
ranging from 6.69% to 6.72% and receives a floating rate based on the 5 year
Constant Maturity Treasury rate. Interest is accrued on a monthly basis and
reported net, in dividends and interest receivable or other liabilities, as
appropriate, and other investment income or other investment expenses, as
appropriate.
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 owners 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
<PAGE>
PAGE 22
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.
<PAGE>
PAGE 23
<TABLE><CAPTION>
IDS CERTIFICATE COMPANY Schedule I
Investments in Securities of Unaffiliated Issuers
June 30, 1997
($ in thousands)
Bal. held
at 6-30-97
Principal
Amount of Cost Value at
Bonds (Notes 6-30-97
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
US TREASURY BOND 6.875%, 2000 165 165 168
US TREASURY BOND 5.625%, 2000 200 198 196
----------- ---------- ----------
Total U.S. Government - Direct Obligations 365 363 364
----------- ---------- ----------
Other Bonds and Notes
United States Government Agencies
FHLMC 5 YR #G50152 7.000%, 1999 4,503 4,482 4,515 (f)
FHLMC 5 YR #G50252 7.500%, 2000 24,415 24,519 24,857 (f)
FHLMC 15YR #G10336 7.500%, 2010 7,052 6,942 7,164 (f)
FHLMC 15YR #10342 7.000%, 2010 21,972 21,415 21,965 (f)
FHLMC 15YR #G10344 G 7.500%, 2010 16,407 16,330 16,668 (f)
FHLMC 15YR #G10350 GLD 6.500%, 2010 22,197 22,147 21,788 (f)
FHLMC 15YR #G10364 7.000%, 2010 18,897 18,799 18,891 (f)
FHLM 15YR #G10369 6.500%, 2010 39,769 39,291 39,323 (f)
FHLMC 15YR GOLD 6.500%, 2010 20,188 20,091 19,815 (f)
FH15YR #G10439 GOLD 6.500%, 2011 4,854 4,738 4,778 (f)
<PAGE>
PAGE 24
FHLMC 15YR G10627 6.500%, 2011 31,115 30,668 30,632 (f)
FHLMC 15YR G10665 GD 7.000%, 2012 83,908 83,716 83,882 (f)
FHLMC ARM #845154 7.812%, 2022 4,557 4,698 4,780 (f)
FHLMC ARM #845523 7.914%, 2023 6,628 6,820 6,929 (f)
FHLMC ARM #845654 8.142%, 2024 15,306 15,530 16,020 (f)
FHLMC ARM #845730 7.843%, 2024 26,881 27,756 28,123 (f)
FHLMC ARM #845733 7.870%, 2024 26,094 26,556 27,277 (f)
FHLMC ARM #845973 8.071%, 2024 8,486 8,486 8,879 (f)
FHLMC ARM #845999 7.689%, 2027 22,259 22,453 23,268 (f)
FHLMC 30YR #846072 7.765%, 2022 5,693 5,834 5,906 (f)
FHLMC ARM #846107 7.874%, 2025 8,356 8,547 8,733 (f)
FH GD 7YR BLN N97208 7.000%, 2003 14,531 14,694 14,612 (f)
FHLMC 1268 E CMO 7.400%, 2016 1,522 1,522 1,520 (f)
FHLMC ARM #350190 8.000%, 2022 6,073 6,255 6,353 (f)
FHLMC GOLD E00151 7.500%, 2017 7,829 8,045 7,954 (f)
FHLMC 15YR #E00383 7.000%, 2010 19,583 19,553 19,577 (f)
FHLMC 15YR E00388GOLD 7.000%, 2010 12,890 12,717 12,886 (f)
FH GD 15YR #E00426 6.500%, 2011 9,146 9,061 9,004 (f)
FHLMC GOLD #E00476 6.500%, 2012 17,780 17,352 17,452 (f)
FHLMC GOLD E00484 6.500%, 2012 7,441 7,262 7,304 (f)
FHLMC-GNMA 40 D CMO 6.500%, 2011 20,458 20,146 20,466 (f)
FHLMC 4C CMO 8.000%, 2017 1,987 1,990 1,989 (f)
FHLMC CTF SER B-76 8.375%, 2006 40 40 40 (f)
FHLMC CTF SER B-77 8.125%, 2007 143 143 138 (f)
FHLMC 15YR #380025 9.500%, 2003 710 706 748
<PAGE>
PAGE 25
Bal. held
at 6-30-97
Principal
Amount of Cost Value at
Bonds (Notes 6-30-97
Name of Issuer and Titles of Issue and Notes a and c) (Note a)
---------------------------------- ----------- ---------- ----------
FHLMC 15 YR #200017 11.000%, 2000 397 404 419 (f)
FHLMC 15 YR #200018 11.000%, 2000 260 264 274 (f)
FHLMC 15 YR #200020 11.000%, 2000 387 393 408 (f)
FHLMC 15 YR #200022 10.500%, 2000 81 82 85 (f)
FHLMC 15 YR #200035 9.000%, 2001 309 306 320 (f)
FHLMC 15 YR #200048 9.000%, 2001 699 690 723
FHLMC 15 YR #200064 8.000%, 2002 410 399 418 (f)
FHLMC 15 YR #212119 9.500%, 2001 123 124 130 (f)
FHLMC 15 YR #218648 9.500%, 2002 47 48 50 (f)
FHLMC 15 YR #219392 11.000%, 2001 121 124 128 (f)
FHLMC 15 YR #219679 9.500%, 2003 581 578 613 (f)
FHLMC 15 YR #219757 11.000%, 2003 1,628 1,690 1,719
FHLMC 15 YR #240001 9.500%, 1997 371 371 379
FHLMC 10 YR #490011 10.000%, 1997 241 241 253 (f)
FHLMC 15 YR #500155 11.000%, 2001 394 402 416 (f)
FHLMC 15 YR #500294 11.000%, 2003 183 188 194 (f)
FHLMC 15 YR #500456 11.000%, 2002 192 196 204 (f)
FHLMC 15 YR #502175 10.500%, 2004 177 179 186 (f)
FHLMC ARM #605041 7.972%, 2019 267 267 280 (f)
FHLMC ARM #605048 7.650%, 2018 1,280 1,280 1,339 (f)
FHLMC ARM #605050 7.928%, 2018 420 420 439 (f)
FHLMC ARM 605079 WAC 7.824%, 2018 1,449 1,449 1,516 (f)
FHLMC ARM 605175 WAC 7.841%, 2019 3,594 3,594 3,761 (f)
FHLMC ARM #605352 7.668%, 2018 2,627 2,627 2,748 (f)
FHLMC ARM #401587 7.625%, 2018 2,087 2,087 2,181 (f)
FHLMC ARM #630048 8.000%, 2018 23 23 24 (f)
FHLMC ARM #630074 7.500%, 2018 575 575 585 (f)
FHLMC ARM 840031 WAC 7.591%, 2019 349 349 365 (f)
FHLMC ARM #840035 7.824%, 2019 1,290 1,290 1,334 (f)
FHLMC ARM #840036 7.930%, 2019 1,476 1,476 1,544 (f)
FHLMC ARM #840045 7.740%, 2019 3,693 3,693 3,864 (f)
FHLMC ARM #840072 7.672%, 2019 1,573 1,573 1,640 (f)
FHLMC ARM #405014 7.835%, 2019 958 958 1,003 (f)
FHLMC ARM #405092 7.712%, 2019 1,637 1,637 1,711 (f)
FHLMC ARM #405185 7.578%, 2018 2,280 2,280 2,383 (f)
FHLMC ARM #405243 7.714%, 2019 889 889 930 (f)
FHLMC ARM #405249 7.802%, 2018 3,108 3,108 3,251 (f)
FHLMC ARM #405360 7.861%, 2019 881 881 921 (f)
FHLMC ARM #405437 7.969%, 2019 287 287 300 (f)
FHLMC ARM #405455 7.804%, 2019 1,327 1,327 1,388 (f)
FHLMC ARM #405517 8.094%, 2019 466 466 488 (f)
FHLMC ARM #405615 7.759%, 2019 977 977 1,021 (f)
FHLMC ARM #405675 7.908%, 2020 1,848 1,848 1,933 (f)
FHLMC ARM #405692 7.888%, 2020 2,476 2,476 2,591 (f)
FHLMC ARM #405744 7.930%, 2020 1,401 1,401 1,466 (f)
FHLMC ARM #605432 7.744%, 2017 659 659 689 (f)
FHLMC ARM #605433 7.578%, 2017 1,682 1,682 1,759 (f)
FHLMC ARM #605454 7.433%, 2017 4,730 4,730 4,943 (f)
FHLMC ARM 605853 WAC 7.777%, 2019 3,315 3,315 3,468 (f)
FHLMC ARM #605854 7.750%, 2019 3,169 3,169 3,314 (f)
FHLMC ARM #606024 7.288%, 2019 1,539 1,539 1,604 (f)
FHLMC ARM #606025 7.371%, 2019 5,171 5,171 5,397 (f)
FHLMC ARM #606151 7.911%, 2019 3,884 3,884 4,065 (f)
FHLMC ARM #635054 7.994%, 2020 250 250 259 (f)
<PAGE>
PAGE 26
Bal. held
at 6-30-97
Principal
Amount of Cost Value at
Bonds (Notes 6-30-97
Name of Issuer and Titles of Issue and Notes a and c) (Note a)
---------------------------------- ----------- ---------- ----------
FHLMC ARM #785363 6.968%, 2025 10,562 10,702 10,987 (f)
FHLMC ARM #785601 6.484%, 2026 13,218 13,331 13,343 (f)
FHLMC ARM #785615 6.687%, 2026 15,224 15,138 15,376 (f)
FH 3X1 ARM #785619 6.679%, 2026 7,779 7,821 7,861 (f)
FHLMC ARM 3X1 6.820%, 2026 18,414 18,476 18,736 (f)
FHLMC ARM 785672 6.746%, 2026 9,366 9,409 9,523 (f)
FHLMC ARM #865008 8.452%, 2018 6,988 6,988 7,254 (f)
FHLMC LOANS #885005 9.500%, 2002 1,348 1,340 1,421 (f)
FHLMC LOANS #885008 10.000%, 2003 2,325 2,337 2,453 (f)
FHLMC 15 YR #885009 9.500%, 2003 3,210 3,192 3,383
FHLMC ARM #606301 8.154%, 2020 6,476 6,476 6,784 (f)
FHLMC ARM #606903 7.328%, 2022 1,781 1,796 1,808 (f)
FULB 97-C1 A-1 MBS 7.150%, 2004 3,980 4,009 4,031 (f)
FNMA 92 12 H 6.625%, 2019 4,294 4,294 4,285 (f)
FNMA 1992-5 C 7.000%, 2016 1,436 1,433 1,435 (f)
FNMA 92-21D VANILLA 6.650%, 2018 1,080 1,072 1,079 (f)
FNMA 92 203 E CMO 6.250%, 2005 10,000 9,852 9,985 (f)
FNMA 93-62 B CMO 6.500%, 2017 5,612 5,444 5,595 (f)
FNMA 95 2 T CMO 8.500%, 2021 7,337 7,330 7,489 (f)
FNMA 95-T2 A3 CMO 6.610%, 2018 10,000 9,996 9,850 (f)
FNMA 96-10 C CMO SEQ 6.500%, 2023 8,919 8,617 8,697 (f)
FNMA 97-2C CMO 7.000%, 2020 37,626 37,648 37,445 (f)
FN 97 11 K SEQ CM0 7.125%, 2023 19,673 19,748 19,573 (f)
FNMA 97-17 CMO 7.000%, 2022 50,000 49,600 49,531 (f)
FNMA 15 YR #2469 11.000%, 2000 22 22 23 (f)
FNMA 15 YR #13157 11.000%, 2000 15 15 16 (f)
FNMA 15 YR #13548 11.000%, 2000 48 49 51 (f)
FNMA 15 YR #13705 11.000%, 2000 47 48 50 (f)
FNMA 15 YR #18275 11.000%, 2000 8 8 9 (f)
FNMA 15 YR #18745 11.000%, 2000 11 11 11 (f)
FNMA 15 YR #18986 11.000%, 2000 9 9 10 (f)
FNMA 15 YR #19070 11.000%, 2000 8 8 8 (f)
FNMA 15 YR #19261 11.000%, 2000 18 18 19 (f)
FNMA 15 YR #22271 11.000%, 2000 37 38 39 (f)
FNMA 15 YR #22405 11.000%, 2000 55 56 59 (f)
FNMA 15 YR #22569 11.000%, 2000 65 67 69 (f)
FNMA 15 YR #22674 11.000%, 2000 27 27 28 (f)
FNMA 15 YR #25899 11.000%, 2001 18 19 19 (f)
FNMA 30 YR #27880 9.000%, 2016 105 108 111 (f)
FNMA 15 YR #34543 9.250%, 2001 256 255 272 (f)
FNMA 30 YR #36225 9.000%, 2016 306 312 323 (f)
FNMA 30 YR #040877 9.000%, 2017 189 194 199 (f)
FNMA 15 6.0 #50973 6.000%, 2009 40,318 39,429 39,184 (f)
FNMA 30 YR #51617 10.000%, 2017 163 164 178 (f)
FNMA 30 YR #52185 10.000%, 2017 72 73 79 (f)
FNMA 30 YR #52596 10.000%, 2017 9 9 9 (f)
FNMA 15 YR #58405 11.000%, 2003 29 30 31 (f)
FNMA 15 YR #64520 11.000%, 2001 56 58 60 (f)
FNMA 15 YR #64523 11.000%, 2000 81 83 86 (f)
FNMA 15 YR #66458 10.000%, 2004 3,899 3,928 4,127
FNMA ARM #70007 MEGA 7.384%, 2017 2,223 2,224 2,320 (f)
FNMA ARM #70009 MEGA 7.427%, 2018 3,414 3,414 3,562 (f)
FNMA ARM #70117 7.432%, 2017 774 774 808 (f)
FNMA ARM #70202 7.792%, 2019 2,503 2,503 2,631 (f)
<PAGE>
PAGE 27
Bal. held
at 6-30-97
Principal
Amount of Cost Value at
Bonds (Notes 6-30-97
Name of Issuer and Titles of Issue and Notes a and c) (Note a)
---------------------------------- ----------- ---------- ----------
FNMA 15 YR #70299 10.750%, 2001 207 211 219 (f)
FNMA 15 YR 70694 MEG 9.500%, 2005 2,060 2,076 2,167
FNMA #73227 MULT-FAM 6.700%, 2005 2,811 2,842 2,717 (f)
FNMA ARM #79384 8.040%, 2019 1,050 1,050 1,105 (f)
FNMA ARM #88879 8.770%, 2019 2,433 2,433 2,515 (f)
FNMA ARM #89125 6.999%, 2019 6,580 6,722 6,774 (f)
FNMA ARM #92069 FLEX 7.876%, 2018 3,443 3,443 3,621 (f)
FNMA ARM #93787 7.821%, 2019 2,937 2,937 3,088 (f)
FNMA ARM #97822 7.743%, 2020 604 604 635 (f)
FNMA ARM #105989 8.472%, 2020 2,227 2,227 2,312 (f)
FNMA 15YR #124848 8.000%, 2008 14,141 14,100 14,557 (f)
FNMA 15YR 190534 6.000%, 2018 20,610 20,289 20,078
FNMA ARM #190726 7.726%, 2033 14,345 14,634 14,919 (f)
FNMA 7YR 190778 BALN 6.000%, 2001 50,138 49,668 49,234 (f)
FNMA ARM #249907 8.000%, 2024 14,969 15,193 15,750 (f)
FNMA 15YR #250671 7.500%, 2011 24,685 24,749 25,055 (f)
FNMA 15 YR #A250857 7.000%, 2012 19,837 19,793 19,812 (f)
FNMA 10YR #303115 6.500%, 2004 15,800 14,923 15,732 (f)
FNMA ARM #303259 7.827%, 2025 7,495 7,701 7,793 (f)
FNMA 15YR #303445 5.500%, 2009 20,600 19,747 19,454 (f)
FNMA 7YR #303448 BLN 6.500%, 2002 22,908 22,933 23,016 (f)
FNMA 15YR #313042 7.000%, 2011 15,374 15,438 15,383 (f)
FNMA 15 YR #313561 8.000%, 2012 24,467 24,937 25,097 (f)
FNMA 15YR #367005 7.000%, 2012 14,713 14,633 14,688 (f)
FNMA ARM #368121 5X1 6.751%, 2025 28,395 28,808 28,927 (f)
GNMA ARM 1 YR #8157 7.000%, 2023 6,616 6,733 6,791 (f)
GNMA ARM #8206 7.000%, 2017 1,458 1,458 1,498 (f)
GNMA ARM #8240 7.125%, 2017 1,011 998 1,042 (f)
GNMA ARM #8251 7.125%, 2017 85 85 88 (f)
GNMA ARM #8274 6.875%, 2017 2,898 2,895 2,976 (f)
GNMA ARM #8283 6.875%, 2017 368 367 378 (f)
GNMA ARM #8293 6.875%, 2017 661 661 679 (f)
GNMA ARM #8341 7.125%, 2018 143 142 147 (f)
GNMA ARM #8353 7.125%, 2018 1,269 1,262 1,308 (f)
GNMA ARM #8365 7.125%, 2018 2,239 2,239 2,307 (f)
GNMA ARM #8377 7.125%, 2018 975 973 1,005 (f)
GNMA ARM #8428 6.875%, 2018 422 422 434 (f)
GNMA ARM #8440 6.875%, 2018 1,056 1,056 1,085 (f)
GNMA ARM #8638 7.000%, 2025 23,452 23,645 24,017 (f)
----------- ---------- ----------
Total United States Government Agencies 1,296,823 1,294,649 1,308,377
----------- ---------- ----------
Municipal Bonds
California
CAL HSG 95-O TAX MUN 7.740%, 2016 10,645 10,645 10,769 (f)
CAL HSG FIN 1996-M 7.890%, 2016 8,925 8,925 9,029 (f)
Illinois
CHICAGO IL GAS SPY SRC 7.500%, 2015 4,500 4,500 4,865 (f)
CHICAGO IL SAN DIST 9.250%, 2000 1,000 1,051 1,116 (f)
CHICAGO IL BLDG COMM 8.000%, 1998 1,800 1,798 1,838 (f)
<PAGE>
PAGE 28
Bal. held
at 6-30-97
Principal
Amount of Cost Value at
Bonds (Notes 6-30-97
Name of Issuer and Titles of Issue and Notes a and c) (Note a)
---------------------------------- ----------- ---------- ----------
Minnesota
WEST MN MUNI POWER 10.250%, 2015 3,120 3,260 3,396 (f)
New York
NEW YORK CITY NT GO 7.750%, 2000 335 335 342 (f)
NEW YORK PWR AUTH 9.500%, 2001 270 286 291 (f)
Pennsylvania
WY VALLEY PA SWR 5.125%, 2007 135 135 136 (f)
Texas
AUSTIN TX UTILITY 10.750%, 2015 3,735 4,078 4,375 (f)
DALLAS TX CIVIC CENT 8.200%, 1998 1,025 1,025 1,046 (f)
HARRIS CNTY TX TOLL 10.375%, 2014 5,300 5,386 5,499 (f)
----------- ---------- ----------
Total Municipal Bonds 40,790 41,424 42,702
----------- ---------- ----------
Public Utility
BAROID CORP 8.000%, 2003 5,000 4,987 5,200
BARRETT RESOURCES 7.550%, 2007 3,000 3,004 2,974 (f)
BELL ATLANTIC FINL 5.300%, 1998 5,000 4,879 4,956 (f)
CAL ENERGY CO INC 9.500%, 2006 4,000 4,033 4,290 (f)
DETROIT EDISON 6.280%, 2000 7,000 6,958 6,951 (f)
EL PASO ELEC CO 7.250%, 1999 2,000 2,000 2,005 (f)
GTE CORP 8.850%, 1998 3,000 3,022 3,053 (f)
HANNA M A 9.000%, 1998 5,000 5,041 5,136
INTL SPECIALTY PROD 9.000%, 1999 15,000 15,179 15,172
JERSEY CENTRAL P&L 6.040%, 2000 5,000 5,001 4,929
KANSAS CITY P&L 7.340%, 1999 10,000 10,000 10,170
MCN INV`T CORP MTN 6.890%, 2002 9,000 9,044 9,031 (f)
NORAM ENERGY CORP 7.500%, 2000 5,000 4,983 5,081 (f)
OCCIDENTAL PETROLEUM 6.410%, 2000 5,000 4,964 4,966 (f)
ORYX ENERGY 8.650%, 1999 15,000 15,000 15,405
PDV AMERICA 7.250%, 1998 3,000 2,997 3,021 (f)
PACIFIC GAS TRANS 6.640%, 2000 5,000 5,000 4,984 (f)
PAGING NETWORK 10.000%, 2008 2,000 2,000 1,930 (f)
PRAXAIR INC 6.750%, 2003 5,000 4,767 4,960 (f)
SALTON SEA CL A 6.690%, 2000 5,566 5,566 5,574 (f)
SMITH INT`L INC 7.240%, 2001 10,000 10,000 9,898 (b)(d)(f)
TELEPORT COMM 9.875%, 2006 4,000 4,074 4,260 (f)
TEXAS UTILITIES 6.370%, 2000 10,000 10,000 9,910 (f)
TOSCO CORP 7.000%, 2000 5,000 4,995 5,051 (f)
CSW INVESTMENTS 144A 6.950%, 2001 10,000 9,989 10,002 (b)(d)(f)
NORCEN ENERGY RES 6.800%, 2002 10,000 9,981 9,992 (f)
NOVACOR CHEMICALS 6.500%, 2000 10,000 9,974 9,916 (f)
----------- ---------- ----------
Total Public Utility 177,566 177,438 178,817
----------- ---------- ----------
Finance
AT&T CAPITAL CORP 6.900%, 2002 15,000 14,879 15,004 (f)
ALCO CAPITAL RES 7.330%, 1998 10,000 10,000 10,100 (f)
AMERICAN GEN FINANCE 7.850%, 1997 2,000 2,000 2,012 (f)
ARISTAR FINL 7.875%, 1999 3,000 2,998 3,077 (f)
BANK OF AMERICA 9.750%, 2000 10,000 10,298 10,863
<PAGE>
PAGE 29
Bal. held
at 6-30-97
Principal
Amount of Cost Value at
Bonds (Notes 6-30-97
Name of Issuer and Titles of Issue and Notes a and c) (Note a)
---------------------------------- ----------- ---------- ----------
CIT GROUP HOLDINGS 7.000%, 1997 5,000 4,996 5,018 (f)
CAPITAL ONE BANK 7.350%, 2000 5,000 4,997 5,046 (f)
CATERPILLAR FINANCE 6.960%, 1998 5,000 4,978 5,049 (f)
COMDISCO INC 7.250%, 1998 10,000 9,993 10,099
COMMERCIAL CREDIT 8.250%, 2001 9,000 8,919 9,491 (f)
CONTI FINANCIAL CORP 8.375%, 2003 5,000 4,987 5,122 (f)
CONTI MTG HEL TRTA-6 6.690%, 2016 10,000 9,999 9,662 (f)
COUNTRYWIDE FUNDING 8.420%, 1999 19,700 19,687 20,362
FDIC 96-1C CLASS 1A 6.750%, 2026 8,954 8,950 8,893 (f)
FIDELITY ACCEPTANCE 6.670%, 1997 15,000 15,000 15,040 (b)(d)(f)
FIRST NATIONWIDE 9.125%, 2003 4,000 3,873 4,150 (f)
FIRST USA DEP NT 6.375%, 2000 5,000 4,989 4,962 (f)
FIRSTAR CORP 7.150%, 2000 12,000 12,000 12,070 (f)
GATX CAP CORP MTN 6.360%, 2002 5,000 4,928 4,808 (f)
GMAC 96-C1 COMM MBS 6.790%, 2003 4,938 4,959 4,947 (f)
GE CAPITAL CORP 8.125%, 1999 12,000 12,126 12,356 (f)
GREAT WESTERN FINL 6.375%, 2000 3,000 2,993 2,975 (f)
HELLER FINANCIAL 8.000%, 1998 15,000 14,988 15,397
HELLER FINANCIAL 6.500%, 2000 8,000 8,001 7,987 (f)
HOMESIDE LENDING 6.875%, 2002 10,000 9,997 9,998 (f)
HOUSEHOLD FIN MTN 7.100%, 2002 10,000 9,993 10,089 (f)
INTL LEASE FINANCE 7.950%, 1999 12,000 11,993 12,320 (f)
IROQUOIS TRST 97-1 A 7.000%, 2006 10,000 10,006 10,005 (f)
KEYCORP SENIOR 7.430%, 2000 4,000 3,996 4,081 (f)
LONG ISL SAV BK 7.000%, 2002 5,000 4,989 5,000 (f)
MBNA 7.540%, 2001 10,000 9,993 10,255
MBNA CORP 6.500%, 2000 5,000 4,999 4,965 (f)
MARGARETTEN FIN'L 6.750%, 2000 15,250 15,367 15,253 (f)
MELLON FINANCIAL 6.300%, 2000 10,000 9,967 9,929 (f)
MERIDIAN BANCORP 6.625%, 2000 5,000 5,039 5,011 (f)
MONEYSTORE 97-A 7.210%, 2021 4,000 4,000 4,031 (f)
JPMS 96-C2 CL A 6.470%, 2027 4,618 4,645 4,517 (f)
MS CAP 1996-WFI MBS 7.220%, 2028 10,000 10,144 9,991 (f)
MCF 96-MC2 CLS A1 6.758%, 2004 9,812 9,900 9,786 (f)
NORWEST FINANCIAL 7.250%, 2000 4,500 4,495 4,579
ORIX CREDIT ALLIANCE 8.040%, 1997 10,000 10,000 10,092 (b)(d)
ORIX CREDIT ALLIANCE 7.560%, 1997 5,000 5,000 5,018 (b)(d)(f)
PENSKE TRUCK LEASING 7.750%, 1999 3,000 3,042 3,076 (f)
PROVIDENT BANK 6.125%, 2000 5,000 4,991 4,908
PHMS 1993-39 A8 SUPP 6.500%, 2008 10,056 9,611 9,783 (f)
SBMS VII 91-1 B1 9.700%, 2006 961 961 961 (f)
SALOMON INC INDEX AM 7.070%, 2000 25,000 25,000 25,192 (f)
SANWA BUS CREDIT MTN 7.250%, 2001 10,000 9,992 10,163 (b)(d)(f)
SAXON 95-1 A2 ARM 7.877%, 2025 2,628 2,664 2,693 (f)
SEARS ROEBUK ACC 6.500%, 2000 5,000 5,015 4,989 (f)
SASCO96-CL1 AIC 5.944%, 2028 9,800 9,800 9,573 (f)
TRANS OCEAN CRP 144A 6.670%, 2007 11,030 10,973 10,864 (b)(d)(f)
TRANSAMERICA FINANCE 9.260%, 1998 5,000 4,998 5,099
UCFC 95 BA-2 ASSET B 6.600%, 2009 7,099 7,113 7,129 (f)
UCFC 95 CA2 ASSET BK 6.575%, 2011 9,776 9,789 9,814 (f)
UCFC 97-B CL A-4 ABS 6.940%, 2023 7,000 6,991 6,963 (f)
<PAGE>
PAGE 30
Bal. held
at 6-30-97
Principal
Amount of Cost Value at
Bonds (Notes 6-30-97
Name of Issuer and Titles of Issue and Notes a and c) (Note a)
---------------------------------- ----------- ---------- ----------
WELLSFORD RESID PROP 7.250%, 2000 5,000 4,979 5,057 (f)
XEROX CREDIT 6.840%, 2000 5,000 5,008 5,009 (f)
----------- ---------- ----------
Total Finance 467,122 466,988 470,683
----------- ---------- ----------
Industrial
AAF MCQUAY 8.875%, 2003 10,000 10,145 10,050 (f)
ADT OPERATIONS INC 8.250%, 2000 5,000 5,046 5,237 (f)
AGCO CORP 8.500%, 2006 5,000 4,965 5,144 (f)
AMERICAN STANDARD 10.875%, 1999 1,000 1,050 1,071 (f)
APPLIED MATERIALS 6.650%, 2000 5,000 5,000 4,994 (f)
BELL & HOWELL OPER 9.250%, 2000 4,425 4,511 4,569 (f)
A.H. BELO 6.875%, 2002 5,500 5,489 5,498 (f)
BLACK & DECKER 7.500%, 2003 10,000 10,386 10,279 (f)
BOYD GAMING CORP 9.250%, 2003 5,000 4,981 5,025 (f)
BROWN GROUP 8.600%, 1999 5,000 5,000 5,005
BURLINGTON NORTHERN 6.375%, 2005 5,000 4,998 4,751
CSX TRANS 144A 7.050%, 2002 10,000 9,994 10,011 (b)(d)(f)
CSX 9.230%, 1998 13,500 13,500 13,745
CHAMPION INTL # 9.800%, 1998 10,000 9,999 10,208
CHIQUITA BRANDS INTL 10.250%, 2006 3,000 2,983 3,202 (f)
CHRYSLER FINANCE 7.700%, 1998 10,000 9,959 10,191 (f)
CHRYSLER FINANCE 7.590%, 2000 5,000 5,001 5,128 (f)
CINCINNATI MILACRON 7.875%, 2000 5,000 5,076 5,045 (f)
COLUMBIA/HCA HLTHCRE 6.410%, 2000 10,000 10,019 9,960 (f)
COMCAST CORP 144A LQ 8.125%, 2004 10,000 9,991 10,474 (b)(d)(f)
CONTAINER CORP AMER 9.750%, 2003 4,000 3,978 4,220 (f)
CONT'L CABLEVISION 8.300%, 2006 4,000 3,988 4,262 (b)(d)
COX COMMUNICATIONS 6.375%, 2000 25,000 24,920 24,804 (f)
DARLING DELAWARE 11.000%, 2000 3,308 3,308 3,300 (f)
DAYTON HUDSON 6.400%, 2003 10,000 9,974 9,711 (f)
DAYTON HUDSON CO 6.800%, 2001 5,000 5,000 4,983 (f)
DELTA AIRLINES # 9.875%, 1998 8,100 8,100 8,245
BERGEN BRUNSWIG(DUR) 7.000%, 2006 20,000 20,051 19,662 (f)
ENTERPRIS RENT-A-CAR 8.750%, 1999 5,000 4,998 5,229 (b)(d)
ENTERPRIS RENT-A-CAR 7.875%, 1998 5,000 5,000 5,062 (b)(d)(f)
ENTERP RENT-A-CARMTN 6.350%, 2001 10,000 9,998 9,814 (b)(d)(f)
EXIDE CORP 10.750%, 2002 5,000 5,325 5,262 (f)
FEDERAL MOGUL 144A-L 8.800%, 2007 4,000 3,988 4,169 (b)(d)(f)
FORD MOTOR CREDIT 6.375%, 2000 10,000 10,089 9,945
FORD MOTOR CR MTN 7.060%, 2001 5,000 4,985 5,059 (f)
FOUNDATION HLTH CORP 7.750%, 2003 4,500 4,487 4,621 (f)
GS-96PROTECT LIFE A1 7.020%, 2027 4,453 4,515 4,467 (f)
GATC 6.320%, 2000 10,000 9,986 9,842 (f)
GMAC 7.750%, 1999 20,000 19,933 20,449 (f)
GENESIS HEALTHCARE 9.250%, 2006 5,000 5,000 5,175 (f)
HAYES WHEELS 144A 9.125%, 2007 3,000 3,008 3,004 (b)(d)(f)
HERITAGE MEDIA 8.750%, 2006 4,500 4,567 4,680 (f)
HOWMET INC* 10.000%, 2003 3,000 3,164 3,240 (f)
ITT CORP 6.250%, 2000 5,000 4,880 4,896 (f)
INTEGON CORP 9.500%, 2001 2,000 1,982 2,048
JOHNS MANVILLE INTL 10.875%, 2004 5,000 5,366 5,575 (f)
KIII COMM PUT/96 8.500%, 2006 5,000 4,981 5,050 (f)
KAUFMAN & BROAD HOME 10.375%, 1999 1,000 997 1,015
<PAGE>
PAGE 31
Bal. held
at 6-30-97
Principal
Amount of Cost Value at
Bonds (Notes 6-30-97
Name of Issuer and Titles of Issue and Notes a and c) (Note a)
---------------------------------- ----------- ---------- ----------
KROGER CO 8.150%, 2006 4,000 4,005 4,190 (f)
LA QUINTA MOTOR 9.250%, 2003 2,000 2,087 2,077 (f)
LGETT&PLATT MTN SERD 7.185%, 2002 10,000 9,955 10,103 (b)(d)(f)
LIFE STYLE FURN 10.875%, 2006 3,000 3,030 3,289 (f)
MARK IV IND INC 8.750%, 2003 2,000 1,845 2,042
MATTEL INC 6.875%, 1997 15,000 14,998 15,010 (f)
MAXXIM MEDICAL 10.500%, 2006 4,000 4,034 4,340 (f)
NEWS AMER HLDGS 7.500%, 2000 10,000 9,970 10,215 (f)
NORFOLK SOUTHERN 6.950%, 2002 5,000 4,993 5,036 (f)
OUTDOOR SYSTEMS INC 9.375%, 2006 5,000 5,000 5,050 (f)
PARACELSUS HEALTH 10.000%, 2006 5,000 5,059 5,125 (f)
PARAMOUNT COMMUN 5.875%, 2000 5,350 5,238 5,191 (f)
PENNEY J.C. & CO 7.250%, 2002 10,000 9,996 10,178 (f)
PRINTPACK INC 9.875%, 2004 2,500 2,500 2,641 (f)
QUAKER OATS 6.940%, 2003 1,500 1,504 1,481 (f)
QUAKER OATS 6.470%, 2000 10,000 10,032 9,902 (f)
QUALITY FOOD CENTERS 8.700%, 2007 5,000 5,000 5,000 (b)(d)(f)
RITE AID CORP 6.700%, 2001 5,000 4,999 4,979 (f)
ROLLINS TRUCK 6.875%, 2001 5,000 4,999 5,004 (f)
RYDER SYSTEM 7.910%, 2000 5,000 5,028 5,157 (f)
RYERSON TULL 8.500%, 2001 5,000 5,000 5,150 (f)
SEALY CORP 10.250%, 2003 4,275 4,309 4,462
SEARS 7.620%, 1997 5,000 4,997 5,029 (f)
SEARS 7.420%, 1998 10,000 10,001 10,091 (f)
SERVICE CORP INTL 6.375%, 2000 10,500 10,494 10,425 (f)
SHOP VAC CORP 10.625%, 2003 2,000,000 2,000 2,130 (f)
SHOWBOAT INC 9.250%, 2008 4,000 3,786 4,110
SUNAMERICA 9.000%, 1999 20,000 20,000 20,786
SUPERVALU INC 6.500%, 2000 5,000 4,996 4,976 (f)
SUPERVALU INC 7.250%, 1999 8,000 7,967 8,132 (f)
TENET HEALTHCARE CO 8.625%, 2003 7,000 6,980 7,289 (f)
TITAN WHEEL INT`L IN 8.750%, 2007 4,100 4,080 4,182 (f)
TYSON FOODS 6.410%, 2000 10,000 10,007 9,938 (f)
UNIFRAX INVESTMENT 10.500%, 2003 5,000,000 5,039 5,194 (f)
UNITED AIR 1991A-1 9.200%, 2008 4,466 4,167 4,799
US WEST CAP 6.850%, 2002 15,500 15,492 15,535 (f)
UNIVERSAL OUTDOOR 9.750%, 2006 5,000 4,970 5,187 (f)
VIACOM INC 6.750%, 2003 5,000 4,996 4,821
WHITMAN CORP 6.250%, 2000 5,000 4,952 4,956 (f)
COTT CORPORATION 8.500%, 2007 2,500 2,519 2,500 (f)
FIBERGLASS CAD INC 9.800%, 1998 5,000 5,050 5,179 (b)(d)
ISPMEX 144A LIQUID 10.125%, 2003 5,000 5,000 5,337 (b)(d)(f)
REPAP NEW BRUNSWICK 9.875%, 2000 7,000 7,112 7,070 (f)
STENA AB 10.500%, 2005 3,000 3,000 3,285
TARKETT 9.00 9.000%, 2002 3,650 3,725 3,750 (f)
TEEKAY SHIPPING CORP 8.320%, 2008 3,000 3,032 3,037 (f)
TELEWEST PLC 9.625%, 2006 2,000 2,000 2,065
----------- ---------- ----------
Total Industrial 7,606,627 614,604 622,801
----------- ---------- ----------
Total Other Bonds and Notes 9,588,928 2,595,103 2,623,380
----------- ---------- ----------
Total Bonds and Notes 9,589,293 2,595,466 2,623,744
----------- ---------- ----------
<PAGE>
PAGE 32
Bal. Held
at 6-30-97 Cost Value at
Number of (Notes 6-30-97
Name of Issuer and Titles of Issue Shares a and c) (Note a)
---------------------------------- ----------- ---------- ----------
Preferred Stock
Public Utility
ALLTEL 7.75 $100 PAR 7.750%, 2005 21,234 2,141 2,145 (b)(d)
AMERICAN WTRWRKS $25 8.500%, 2000 800,000 20,000 20,936 (b)(d)
AMERITECH NZ A $100 7.040%, 2001 40,000 4,178 4,170 (b)(d)(f)
APPALACHIAN PWR $100 6.850%, 2004 30,000 3,004 3,139
APPALACHIAN PWR $100 5.900%, 2008 10,000 997 996 (f)
APPALACHIAN PWR $100 5.920%, 2008 11,000 1,089 1,080
ARIZONA PUB SVC $100 10.000%, 2001 91,034 9,550 9,780
ATLANTIC CITY EL 100 7.800%, 2006 90,000 8,988 9,416
ATLANTIC CITY EL 100 8.200%, 2000 49,500 4,946 5,160
BALTIMORE G&E $100 8.625%, 2000 57,984 5,798 5,990
BALTIMORE G&E $100 8.250%, 1999 13,388 1,339 1,355
BELL ATLANTIC NZ144A 7.080%, 2001 25,000 2,644 2,638 (b)(d)(f)
BELL ATL NZ$100 144A 5.800%, 2004 100,000 10,000 10,050 (b)(d)
BOSTON EDISON $100 8.000%, 2001 90,000 9,000 9,692
CENTRAL ILL LT $100 5.850%, 2008 65,000 6,510 6,589
COMMWLTH ED $100 PVT 8.200%, 2002 63,068 6,182 6,496 (b)(d)
COMMONWEALTH EDISON 8.850%, 2003 68,250 6,922 7,030 (b)(d)
CON EDISON $100 SR J 6.125%, 2002 150,000 15,039 14,916
CON EDISON 7.2 SER I 7.200%, 2007 32,550 3,278 3,399
DUKE POWER $100 SR V 6.400%, 2002 30,000 3,000 3,163
DUKE POWER $100 SR U 6.300%, 2001 30,000 3,000 3,135
DUKE POWER $100 SR T 6.200%, 2000 30,000 3,000 3,103
DUKE POWER 1992D $25 6.200%, 2001 200,000 5,005 5,025
DUKE POWER 1992C $25 6.100%, 2000 250,000 6,266 6,453
DUKE POWER 1992B $25 5.950%, 1999 15,000 378 384 (f)
DUKE ENERGY CO SER R 7.500%, 2017 13,000 1,365 1,379 (f)
EASTERN EDISON $100 6.625%, 2008 210,000 20,925 21,368
ENTERGY ARKANSAS $25 9.920%, 2002 77,285 2,004 2,048
ENTERGY LA INC PFD 8.000%, 2001 70,000 7,000 7,298
ENTERGY LA $100 7.000%, 1999 80,000 8,003 8,175
GREEN MTN PWR CL-D/3 8.625%, 2000 56,000 5,600 5,761 (b)(d)
HAWAII ELEC $100 8.500%, 2005 50,000 5,133 5,238 (b)(d)
MAUI ELEC $100 8.500%, 2005 50,000 5,108 5,238 (b)(d)
INDIANA MICH POWER 6.300%, 2009 52,250 5,222 5,153
IND MICH POWER $100 6.250%, 2009 20,000 2,007 1,965 (f)
INDIANA MICHIGAN PWR 5.900%, 2009 32,500 3,114 3,102
JERSEY CENTRAL P&L 8.650%, 2005 110,400 11,286 12,096
JERSEY CENTRAL P & L 8.480%, 2000 17,000 1,703 1,754
LONG ISL LGT SER AA 7.940%, 2000 273,600 6,890 7,148
LOUISVILLE G&E PFD 5.875%, 2008 12,000 1,197 1,142 (f)
MAINE YANKEE $100 7.480%, 2001 29,103 2,838 2,772
MIDAMERICAN ENERGY 7.800%, 2006 73,300 7,579 8,049
MN P & L 144A $100 7.125%, 2002 50,000 4,976 5,009
MN P&L 144A 6.70 6.700%, 2002 100,000 10,000 10,175 (b)(d)
NJ NATL GAS 100 144A 7.720%, 2001 200,000 20,000 20,425 (b)(d)
NO IND PUB SERV $100 8.850%, 2003 31,500 3,166 3,196 (b)(d)
NO IND PUB SERV $100 6.500%, 2002 101,250 10,545 10,492 (f)
NORTHWEST NAT GA 100 6.950%, 2002 170,000 17,116 17,903
OHIO POWER CO $100 5.900%, 2009 36,000 3,529 3,530
OHI PWR CO $100 6.020%, 2008 10,000 990 991
OHIO PWR CO $100 6.350%, 2008 5,000 508 509
OTTER TAIL PWR $100 6.300%, 2007 180,000 18,000 17,797
PECO ENERGY 6.120%, 2003 150,300 14,960 15,368
PACIFIC GAS & ELEC 6.300%, 2009 112,200 2,749 2,805 (f)
PACIFIC GAS & ELEC 6.570%, 2007 717,500 18,082 19,014 (f)
<PAGE>
PAGE 33
Bal. Held
at 6-30-97 Cost Value at
Number of (Notes 6-30-97
Name of Issuer and Titles of Issue Shares a and c) (Note a)
---------------------------------- ----------- ---------- ----------
PACIFICORP $100 PAR 7.700%, 2001 150,000 15,000 15,881
POTOMAC ELEC PWR $50 6.800%, 2007 160,800 7,945 8,512
POTOMAC ELECTRIC 7.780%, 2006 160,000 8,007 8,320
PRAXAIR INC 7.480%, 2000 70,000 7,077 6,930
PUB SERV COLO $100 7.500%, 2009 173,368 16,749 17,640 (b)(d)
PUGET SOUND P&L $100 8.000%, 2004 1,666 166 173
ROCHESTER G&E $100 6.600%, 2009 52,500 5,181 5,303
ROCHESTER G & E $100 7.650%, 1999 20,000 2,000 2,058
ROCHESTER G & E $100 7.550%, 1998 67,000 6,703 6,876
ROCHESTER G & E $100 7.450%, 1997 52,500 5,250 5,322
SAN DIEGO G&E $25 1.762%, 2008 59,500 1,591 1,584 (f)
SO CA EDISON $100 6.050%, 2008 45,000 4,502 4,466 (f)
SO CA EDISON $100 6.450%, 2002 202,250 20,388 20,908
SO INDIANA G&E 100 6.500%, 2002 75,000 7,500 7,312 (b)(d)
TEXAS UTILITIES 6.375%, 2008 54,000 5,433 5,609
TEXAS UTIL $100 PAR 6.980%, 2008 50,000 5,000 5,460
VIRGINIA ELEC & PWR 5.580%, 2000 17,500 1,768 1,765 (f)
VIRGINIA ELEC & PWR 6.350%, 2000 201,200 20,164 20,698
WASHINGTON WATER 8.625%, 2000 16,232 1,625 1,663
WASHINGTON WTR POWER 6.950%, 2007 57,500 5,766 6,084
WESTERN RESOURCES 7.580%, 2007 76,000 7,879 7,947
----------- ---------- ----------
Total Public Utility 7,215,212 519,543 533,651
----------- ---------- ----------
Finance
ABN AMRO NA FRAP 5.94%, PAR 15,000 15,000 15,049 (b)(d)(f)
COMERICA FRAP 6.84% 150,000 7,797 7,801 (f)
EURO AMER BANK FRAP 5.84% 10,000 10,000 10,010 (f)
FLEET FIN 6.59% FRAP $50 PAR 100,000 5,079 5,168 (f)
HOUSEHLD FIN$100 92A 7.250%, 1997 90,500 9,062 9,163
MORGAN STANLEY GROUP 5.91%, AR 100,000 5,000 5,079 (f)
PNC BK FRAP SERF PFD 6.05% 440,000 22,160 22,330 (f)
WELLS FRGO FRAP SERH $50 PAR 377,000 19,213 19,062 (f)
----------- ---------- ----------
Total Finance 1,282,500 93,311 93,662
----------- ---------- ----------
Industrial
NORTHBROOK HLDG 1000 6.600%, 001 10,000 10,000 10,050 (b)(d)(f)
WHIRLPOOL FIN $100 B 6.550%, 2008 180,000 18,129 18,576 (b)(d)
WHIRLPL FINL PFD144A 6.090%, PAR 37,000 3,682 3,612 (b)(d)(f)
----------- ---------- ----------
Total Industrial 227,000 31,811 32,238
----------- ---------- ----------
Total Preferred Stock 8,724,712 644,665 659,551
----------- ---------- ----------
Other
Industrial
MRS FIELDS 20,176,717 605 605 (f)
---------- ----------
Total Investments in Securities
of Unaffiliated Issuers 3,240,736 3,283,900
Total Reserve for Possible Losses
on Corporate Issues 715
---------- ----------
$3,240,021 $3,283,900
========== ==========
<PAGE>
PAGE 34
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 $3,239,693.
(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>
<PAGE>
PAGE 1
August 29, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Attn: Document Control - EDGAR
Washington, D.C. 20549-1004
RE: IDS Certificate Company
1997 Semi-Annual Report
Ladies and Gentlemen:
On behalf of the above-referenced registrant, I am filing electronically the
1997 Semiannual Report for the six-month period ended June 30, 1997.
This report is being filed with the Commission pursuant to the requirements of
Section 30(d) of the Investment Company Act of 1940 and Rule 30b2-1.
If you have any questions, please contact me at (612) 671-3453.
Thank you.
Sincerely,
Theresa H. Ambord
Paralegal
TA/lal
