<PAGE>
PAGE 1
FINANCIAL PLANNING
IDS Extra Income Fund
1994 annual report
(prospectus enclosed)
(Icon of) cornucopia
The primary goal of IDS Extra Income Fund, Inc. is to provide high
current income. Capital growth is a secondary goal. The fund
invests primarily in long-term, high-yielding, corporate bonds in
the lower rating categories.
(This annual report includes a prospectus that describes in detail
the fund's objective, investment policies, risks, sales charges,
fees and other matters of interest. Please read the prospectus
carefully before you invest or send money.)
IDS
An American Express company
AMERICAN
EXPRESS
Distributed by
IDS Financial Services Inc.<PAGE>
PAGE 2
(Icon of) cornucopia
Bonds with something extra
Bonds aren't necessarily conservative securities strictly for
people willing to settle for modest returns. High-yield corporate
bonds, for example, are actually quite aggressive investments,
offering high potential returns to investors willing to take more
risk.
These are the bonds that Extra Income Fund invests in. They're
sometimes called "junk bonds," but that term can be misleading.
High-yield bonds are issued by a wide range of companies--from
well-established ones that might be experiencing financial
difficulty to new, rapidly growing ones that have yet to build a
credit history.
Importantly, the fund spreads its investments among many bonds
representing many types of businesses. This helps to reduce the
investment risk for shareholders.<PAGE>
PAGE 3
Contents
(Icon of) One open book inside of another.
The purpose of this annual report is to tell investors how the fund
performed.
The prospectus, which is bound into the middle of this annual
report, describes the fund in detail.
1994 annual report
From the president 4
From the portfolio manager 4
Ten largest holdings 6
Making the most of your fund 7
Long-term performance 8
Independent auditors' report 9
Financial statements 10
Notes to financial statements 13
Investments in securities 20
IDS mutual funds 32
Federal income tax information 35
1994 prospectus
The fund in brief
Goal 3p
Types of fund investments 3p
Manager and distributor 3p
Portfolio manager 3p
Sales charge and fund expenses
Sales charge 4p
Operating expenses 4p
Performance
Financial highlights 5p
Total returns 6p
Yield 7p
Key terms 8p
Investment policies and risks
Facts about investments and their risks 9p
Valuing assets 13p
How to buy, exchange or sell shares
How to buy shares 14p
How to exchange shares 16p
How to sell shares 17p
Reductions of the sales charge 21p
Waivers of the sales charge 22p
Special shareholder services
Services 23p
Quick telephone reference 23p
<PAGE>
PAGE 4
Distributions and taxes
Dividend and capital gain distributions 24p
Reinvestments 25p
Taxes 26p
How the fund is organized
Shares 29p
Voting rights 29p
Shareholder meetings 29p
Directors and officers 29p
Investment manager and transfer agent 31p
Distributor 32p
About IDS
General information 33p
Appendix
Description of corporate bond ratings 34p
<PAGE>
PAGE 5
To our shareholders
(Photo of) William R. Pearce, President of the fund
(Photo of) Jack Utter, Portfolio manager
From the president
Your fund, like all the funds in the IDS MUTUAL FUND GROUP, is
preparing for an important meeting of the shareholders on Nov. 9,
1994. By the time you receive this annual report and prospectus,
you should have received the proxy statement.
The proxy statement presents the agenda for the shareholder meeting
as briefly and simply as possible, and in compliance with all the
applicable requirements. While it is long, and sometimes complex,
the issues it presents are important--as is your response. Unless
the holders of at least 50% of the outstanding shares vote their
shares promptly, we cannot consider all the issues. If enough
votes are not returned, we will have to make an effort to obtain
additional votes, which will be costly for the fund. So, we
encourage you to study the proxy statement carefully and vote the
shares you own promptly.
By way of an update, the new design of this report has received
favorable reviews and some constructive recommendations. We will
continue to try different ways to present information so you will
have what you need to understand your investment.
William R. Pearce
From the portfolio manager
Low-grade bonds went through two distinct phases during the past
fiscal year. For the first severla months, a favorable investment
environment allowed low-grade bonds to generate a satisfactory
return. The following months, however, were characterized by
mostly negative conditions, which erased the previous gain. The
result was that, on a total-return basis (a combination of change
in net asset value plus dividends), the fund finished almost
exactly where it started the year.
Early in the fiscal year, falling interest rates provided positive
price momentum for the broad bond market, which already had been on
an uptrend for a couple of years. As rates continued to decline,
investors remained attracted to high-yielding securities such as
low-grade bonds as they sought to increase their investment return.
Rates begin to rise
The fourth quarter of 1993 proved to be a turning point for the
bond market overall, as rising interest rates began to reverse some
of the price appreciation many bonds had experiences. (Higher
rates depress most bonds' values, while lower rates boost them.)
However, as is normally the case, low-grade bonds were far less
affected by the change in interest rates. In fact, when interest
rates begin to rise, low-grade bonds often outperform higher-
quality bonds because the rate increases usually are a reflection
of a growing economy. A stronger economy tends to improve credit<PAGE>
PAGE 6
conditions for low-grade bond issuers, and that supports the value
of their bonds.
The generally good conditions continued through the winter, and the
fund continued to prosper during those months. Keys to the fund's
performance included keeping the portfolio virtually fully invested
(about 95% of assets were concentrated in low-grade bonds) and
emphasizing "cyclical" low-grades--bonds of companies whose
performance tends to improve in a recovering economy. Examples
included auto, steel, aluminum, paper and chemical companies. In
addition, the fund benefited from strong cash flow into low-grade
bonds. This created a positive supply/demand situation (heavy
demand for bonds accompanies by only a moderate supply), which
supported low-grade-bond prices.
Environment changes
The spring and summer told a different story, however. A number of
factors were at work: a greater supply of low-grade bonds helped
push prices down; demand slacked off, putting further pressure on
prices; and concern that the ongoing increase in interest-rates
might soon send the economy back into a recession, making it
difficult for some bond-issuers to make their payments to
investors.
Naturally, as the low-grade-bond market declined, so did the fund.
The fund was particulary affected by the price decline among bonds
issued by casino and cable-TV companies, which comprised a
significant portion of the portfolio.
The only portfolio change of note during the year was a gradual
upgrading of the overall credit quality. This esentially consisted
of selling some low-grade bonds that appeared to be more vulnerable
in a rising-interest-rate environment and adding some of higher
quality. This strategy is designed to reduce the volatility of the
fund's net asset value without sacrificing a substantial amount of
income.
Central to the low-grade-bond market's performance in the current
year will be whether interest rates remain relatively stable while
the economy continues to advance at a reasonably good pace. If
that proves out, low-grade-bonds should pick up, setting the stage
for improvement in the fund's net asset value. If not, we are
still encouraged that some of the market's difficulties are at
least partly behind us at this point.
Jack Utter
<PAGE>
PAGE 7
12-month performance
(All figures per share)
Net asset value (NAV)
Aug. 31, 1994 $ 4.02
Aug. 31, 1993 $ 4.44
Decrease $(0.42)
Distributions
Sept. 1, 1993 - Aug. 31, 1994
From income $ 0.43
From capital gains $ --
Total distributions $0.43
Total return* (0.2%)
*If you purchased shares in the fund during this period, your
return also would have been affected by the sales charge, as
described in the prospectus.<PAGE>
PAGE 8
<TABLE>
IDS Extra Income Fund, Inc.
Your fund's ten largest holdings
<CAPTION>
Percent Value
(of fund's net assets) (as of Aug. 31, 1994)
<S> <C> <C>
Gaylord Container 1.43% $23,240,000
Zero Coupon Sr Sub Disc Deb 1996
G-I Holdings 1.26 20,406,750
Zero Coupon Sr Nts 1998
PT Indah Kiat Pulp and Paper 1.24 20,150,000
11.875% 2002
Robin Media Group 1.19 19,375,000
11.125% 1997
Trump Taj Mahal Funding 1.16 18,856,251
Pay-in-Kind 1999
Fort Howard 1.12 18,217,500
9% Sr Sub Nts 2006
MGM Grand Hotel Finance 1.08 17,500,000
12% 2002
Bally's Grand 1.06 17,300,000
10.375% 1st Mortgage 2003
Silgan .99 16,025,000
Zero Coupon Deb 1995
Huntsman .96 15,637,500
11% 2004
(picture of pie chart)
The ten holdings listed here make up 11.49% of
the fund's net assets
</TABLE>
<PAGE>
PAGE 9
Making the most of your fund
Average annual total return
(as of Aug. 31, 1994)
1 year 5 years 10 years
- -5.20% +8.12% +10.11%
Your investment and return values fluctuate so that your shares,
when redeemed, may be worth more or less than the original cost.
Figures reflect the deduction of the maximum 5% sales charge. This
was a period of widely fluctuating security prices. Past
performance is no guarantee of future results.
Build your assets systematically
To keep your assets growing steadily, one of the best ways to
invest in the fund is by dollar-cost averaging -- a time-tested
strategy that can make market fluctuations work for you. To
dollar-cost average, simply invest a fixed amount of money
regularly. You'll automatically buy more shares when the fund's
share price is low, fewer shares when it is high.
This does not ensure a profit or avoid a loss if the market
declines. But, if you can continue to invest regularly through
changing market conditions, it can be an effective way to
accumulate shares to meet your long-term goals.
How dollar-cost averaging works
Month Amount Per-share Number of shares purchased
invested market price
Jan $100 $20 5.00
Feb 100 18 5.56
Mar 100 17 5.88
Apr 100 15 6.67
May 100 16 6.25
June 100 18 5.56
July 100 17 5.88
Aug 100 19 5.26
Sept 100 21 4.76
Oct 100 20 5.00
(footnotes to table) By investing an equal number of dollars each
month...
(arrow in table pointing to April) you automatically buy more
shares when the per share market price is low
(arrow in table pointing to September) and fewer shares when the
per share market price is high.
You have paid an average price of only $17.91 per share over the 10
months, while the average market price actually was $18.10.
<PAGE>
PAGE 10
Three ways to benefit from a mutual fund:
o your shares increase in value when the fund's investments do
well
o you receive capital gains when the gains on investments sold
by the fund exceed losses
o you receive income when the fund's stock dividends, interest
and short-term gains exceed its expenses.
All three make up your total return. And you potentially can
increase your investment if, like most investors, you reinvest your
dividends and capital gain distributions to buy additional shares
of the fund or another fund.
How your $10,000 has grown in IDS Extra Income Fund
Average annual total return
(as of Aug. 31, 1994)
1 year 5 years 10 years
- -5.20% +8.12% +10.11%
$26,208
Extra Income Fund
Lehman Aggregate
Bond Index
$9,500
'84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94
Assumes: Holding period from 8/31/84 to 8/31/94. Returns do not
reflect taxes payable on distributions. Also see "Performance" in
the fund's current prospectus. Reinvestment of all income and
capital gain distributions for the fund, with a value of $18,070.
The Lehman Aggregate Bond Index is made up of a representative lost
of government and corporate bonds as well as asset-backed
securities and mortgage-backed securities. The index is frequently
used as a general measure of bond market performance. However, the
securities used to create the index may not be representative of
the bonds held in Extra Income Fund.
On the chart above you can see how the fund's total return compared
to a widely cited performance measure, the Lehman Aggregate Bond
Index. In comparing Extra Income Fund with this index, you should
take into account the fact that the fund's performance reflects the
maximum sales charge of 5%, while such charges are not reflected in
the performance of the index. If you were actually to buy either
individual bonds or bond mutual funds, any sales charges that you
pay would reduce your total return as well.
<PAGE>
PAGE 11
Your investment and return values fluctuate so that your shares,
when redeemed, may be worth more or less than the original cost.
Average annual total return figures reflect the deduction of the
maximum 5% sales charge. This was a period of widely fluctuating
security prices. Past performance is no guarantee of future
results.<PAGE>
PAGE 12
Independent auditors' report
The board of directors and shareholders
IDS Extra Income Fund, Inc.:
We have audited the accompanying statement
of assets and liabilities, including the
schedule of investments in securities, of
IDS Extra Income Fund, Inc. as of
August 31, 1994, and the related statement
of operations for the year then ended and
the statements of changes in net assets for
each of the years in the two-year period
ended August 31, 1994, and the financial
highlights for each of the years in the
ten-year period ended August 31, 1994.
These financial statements and the
financial highlights are the responsibility
of fund management. Our responsibility is
to express an opinion on these financial
statements and the financial highlights
based on our audits.
We conducted our audits in accordance with
generally accepted auditing standards.
Those standards require that we plan and
perform the audit to obtain reasonable
assurance about whether the financial
statements and the financial highlights are
free of material misstatement. An audit
includes examining, on a test basis,
evidence supporting the amounts and
disclosures in the financial statements.
Investment securities held in custody are
confirmed to us by the custodian. As to
securities purchased and sold but not
received or delivered and securities on
loan, we request confirmations from
brokers, and where replies are not
received, we carry out other appropriate
auditing procedures. An audit also includes
assessing the accounting principles used
and significant estimates made by
management, as well as evaluating the
overall financial statement presentation.
We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements
referred to above present fairly, in all
material respects, the financial position
of IDS Extra Income Fund, Inc. at
August 31, 1994, and the results of its
operations for the year then ended and the
changes in its net assets for each of the
years in the two-year period ended
August 31, 1994, and the financial<PAGE>
PAGE 13
highlights for the periods stated in the
first paragraph above, in conformity with
generally accepted accounting principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
October 7, 1994<PAGE>
PAGE 14
<TABLE>
Financial statements
Statement of assets and liabilities
IDS Extra Income Fund, Inc.
Aug. 31, 1994
<CAPTION>
_____________________________________________________________________________________________________________
Assets
______________________________________________________________________________________________________________
<S> <C>
Investments in securities, at value (Note 1):
Investments in securities of unaffiliated issuers (identified cost $1,704,587,801) $1,575,302,693
Investments in securities of affiliated issuers (identified cost $22,904,653) 11,120,395
_____________________________________________________________________________________________________________
Total investments in securities (identified cost $1,727,492,454) 1,586,423,088
Dividends and accrued interest receivable 38,180,412
Receivable for investment securities sold 25,946,709
_____________________________________________________________________________________________________________
Total assets 1,650,550,209
_____________________________________________________________________________________________________________
Liabilities
____________________________________________________________________________________________________________
Disbursements in excess of cash on demand deposit 3,829,029
Dividends payable to shareholders 2,154,803
Payable for investment securities purchased 13,724,635
Payable upon return of securities loaned (Note 5) 3,700,460
Accrued investment management and services fee 898,765
Accrued distribution fee 63,045
Accrued transfer agency fee 162,267
Other accrued expenses 392,464
_____________________________________________________________________________________________________________
Total liabilities 24,925,468
_____________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $1,625,624,741
_____________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________
Capital stock -- authorized 10,000,000,000 shares of $.01 par value;
outstanding 404,491,987 shares $ 4,044,920
Additional paid-in capital 1,945,359,298
Undistributed net investment income 7,035,992
Accumulated net realized loss (Notes 1 and 6) (189,746,103)
Unrealized depreciation (141,069,366)
_____________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding capital stock $1,625,624,741
_____________________________________________________________________________________________________________
Net asset value per share of outstanding capital stock $ 4.02
_____________________________________________________________________________________________________________
See accompanying notes to financial statements. <PAGE>
PAGE 15
Statement of operations
IDS Extra Income Fund, Inc.
Year ended Aug. 31, 1994
_____________________________________________________________________________________________________________
Investment income
_____________________________________________________________________________________________________________
<S> <C>
Income:
Interest $165,311,773
Dividends (net of foreign taxes withheld of $14,726) 11,550,613
_____________________________________________________________________________________________________________
Total income 176,862,386
_____________________________________________________________________________________________________________
Expenses (Note 2):
Investment management and services fee 10,075,839
Distribution fee 653,735
Transfer agency fee 1,670,276
Compensation of directors 23,220
Compensation of officers 10,713
Custodian fees 107,882
Postage 288,828
Registration fees 186,395
Reports to shareholders 58,039
Audit fees 33,000
Administrative 23,900
Other 33,306
_____________________________________________________________________________________________________________
Total expenses 13,165,133
_____________________________________________________________________________________________________________
Investment income -- net 163,697,253
_____________________________________________________________________________________________________________
Realized and unrealized gain (loss) -- net
_____________________________________________________________________________________________________________
Net realized gain on security and foreign currency transactions (including loss of $531
from foreign currency transactions) (Note 3) 31,955,638
Net change in unrealized appreciation or depreciation (206,694,603)
_____________________________________________________________________________________________________________
Net loss on investments and foreign currency (174,738,965)
_____________________________________________________________________________________________________________
Net decrease in net assets resulting from operations $(11,041,712)
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.<PAGE>
PAGE 16
Financial statements
Statements of changes in net assets
IDS Extra Income Fund, Inc.
Year ended Aug. 31,
<CAPTION>
_____________________________________________________________________________________________________________
Operations and distributions
1994 1993
_____________________________________________________________________________________________________________
<S> <C> <C>
Investment income -- net $ 163,697,253 $ 137,735,499
Net realized gain on investments and foreign currency 31,955,638 59,460,534
Net change in unrealized appreciation or depreciation (206,694,603) 6,572,270
_____________________________________________________________________________________________________________
Net increase (decrease) in net assets resulting from operations (11,041,712) 203,768,303
_____________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (161,824,143) (139,601,427)
_____________________________________________________________________________________________________________
Capital share transactions
_____________________________________________________________________________________________________________
Proceeds from sales of
126,616,129 and 90,619,745 shares (Note 2) 557,279,130 391,025,555
Net asset value of 23,746,710 and 19,625,754 shares
issued in reinvestment of distributions 103,446,970 84,307,910
Payments for redemptions of
94,149,106 and 69,444,351 shares (409,030,424) (296,682,899)
_____________________________________________________________________________________________________________
Increase in net assets from capital share transactions
representing net addition of
56,213,733 and 40,801,148 shares 251,695,676 178,650,566
_____________________________________________________________________________________________________________
Total increase in net assets 78,829,821 242,817,442
Net assets at beginning of year 1,546,794,920 1,303,977,478
_____________________________________________________________________________________________________________
Net assets at end of year
(including undistributed net investment income of
$7,035,992 and $4,097,297) $1,625,624,741 $1,546,794,920
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 17
Notes to financial statements
IDS Extra Income Fund, Inc.
__________________________________________________________________
1. Summary of significant accounting policies
The fund is registered under the Investment
Company Act of 1940 (as amended) as a
diversified, open-end management investment
company. Significant accounting policies followed
by the fund are summarized below:
Valuation of securities
All securities are valued at the close of each
business day. Securities traded on national
securities exchanges or included in national
market systems are valued at the last quoted
sales price; securities for which market
quotations are not readily available, including
illiquid securities, are valued at fair value
according to methods selected in good faith by
the board of directors. Determination of fair
value involves, among other things, reference to
market indexes, matrixes and data from
independent brokers. Short-term securities
maturing in more than 60 days from the valuation
date are valued at the market price or
approximate market value based on current
interest rates; those maturing in 60 days or less
are valued at amortized cost.
Options transactions
In order to produce incremental earnings, protect
gains, and facilitate buying and selling of
securities for investment purposes, the fund may
buy or write options traded on any U.S. or
foreign exchange or in the over-the-counter
market where the completion of the obligation is
dependent upon the credit standing of the other
party. The fund also may buy and sell put and
call options and write covered call options on
portfolio securities and may write cash-secured
put options. The risk in writing a call option is
that the fund gives up the opportunity of profit
if the market price of the security increases.
The risk in writing a put option is that the fund
may incur a loss if the market price of the
security decreases and the option is exercised.
The risk in buying an option is that the fund
pays a premium whether or not the option is
exercised. The fund also has the additional risk
of not being able to enter into a closing
transaction if a liquid secondary market does not
exist.
<PAGE>
PAGE 18
Notes to financial statements
IDS Extra Income Fund, Inc.
___________________________________________________________________
Option contracts are valued daily at the closing
prices on their primary exchanges and unrealized
appreciation or depreciation is recorded. The
fund will realize a gain or loss upon expiration
or closing of the option transaction. When
options on debt securities or futures are
exercised, the fund will realize a gain or loss.
When other options are exercised, the proceeds on
sales for a written call option, the purchase
cost for a written put option or the cost of a
security for a purchased put or call option is
adjusted by the amount of premium received or
paid.
Foreign currency translations and
foreign currency contracts
Securities and other assets and liabilities
denominated in foreign currencies are translated
daily into U.S. dollars at the closing rate of
exchange. Foreign currency amounts related to the
purchase or sale of securities and income and
expenses are translated at the exchange rate on
the transaction date. The effect of changes in
foreign exchange rates on realized and unrealized
security gains or losses is reflected as a
component of such gains or losses. In the
statement of operations, net realized gains or
losses from foreign currency transactions may
arise from sales of foreign currency, closed
forward contracts, exchange gains or losses
realized between the trade date and settlement
dates on securites transactions, and other
translation gains or losses on dividends,
interest income and foreign withholding taxes.
<PAGE>
PAGE 19
Notes to financial statements
IDS Extra Income Fund, Inc.
___________________________________________________________________
The fund may enter into forward foreign currency
exchange contracts for operational purposes and
to protect against adverse exchange rate
fluctuation. The net U.S. dollar value of
foreign currency underlying all contractual
commitments held by the fund and the resulting
unrealized appreciation or depreciation are
determined using foreign currency exchange rates
from an independent pricing service. The fund is
subject to the credit risk that the other party
will not complete the obligations of the
contract.
Federal taxes
Since the fund's policy is to comply with all
sections of the Internal Revenue Code applicable
to regulated investment companies and to
distribute all of its taxable income to
shareholders, no provision for income or excise
taxes is required.
Net investment income (loss) and net realized
gains (losses) may differ for financial statement
and tax purposes primarily because of the
deferral of losses on certain futures contracts,
the recognition of certain foreign currency gains
(losses) as ordinary income (loss) for tax
purposes, and losses deferred due to "wash sale"
transactions. The character of distributions made
during the year from net investment income or net
realized gains may differ from their ultimate
characterization for federal income tax purposes.
Also, due to the timing of dividend
distributions, the fiscal year in which amounts
are distributed may differ from the year that the
income or realized gains (losses) were recorded
by the fund.
On the statement of assets and liabilities, as a
result of permanent book-to-tax differences,
undistributed net investment income has been
increased by $1,065,585 and accumulated net
realized loss has been increased by $1,065,585.
<PAGE>
PAGE 20
Notes to financial statements
IDS Extra Income Fund, Inc.
___________________________________________________________________
Dividends to shareholders
Dividends from net investment income, declared
daily and payable monthly, are reinvested in
additional shares of the fund at net asset value
or payable in cash. Capital gains, when
available, are distributed along with the last
income dividend of the calendar year.
Other
Security transactions are accounted for on the
date securities are purchased or sold. Dividend
income is recognized on the ex-dividend date and
interest income, including level-yield
amortization of premium and discount, is accrued
daily.
___________________________________________________________________
2. Expenses and sales charges
Under terms of an agreement dated Nov. 14, 1991,
the fund pays IDS Financial Corporation (IDS) a
fee for managing its investments, record-keeping
and other specified services. The fee is a
percentage of the fund's average daily net assets
consisting of a group asset charge in reducing
percentages from 0.46% to 0.32% annually on the
combined net assets of all non-money market funds
in the IDS MUTUAL FUND GROUP and an individual
annual asset charge of 0.21% of average daily net
assets.
The fund also pays IDS a distribution fee at an
annual rate of $6 per shareholder account and a
transfer agency fee at an annual rate of $15.50
per shareholder account. The transfer agency fee
is reduced by earnings on monies pending
shareholder redemptions.
<PAGE>
PAGE 21
Notes to financial statements
IDS Extra Income Fund, Inc.
___________________________________________________________________
IDS will assume and pay any expenses (except
taxes and brokerage commissions) that exceed the
most restrictive applicable state expense
limitation.
Sales charges by IDS Financial Services Inc. for
distributing fund shares were $14,976,206 for the
year ened Aug. 31, 1994.
The fund has a retirement plan for its
independent directors. Upon retirement, directors
receive monthly payments equal to one-half of the
retainer fee for as many months as they served as
directors up to 120 months. There are no death
benefits. The plan is not funded but the fund
recognizes the cost of payments during the time
the directors serve on the board. The retirement
plan expense amounted to $12,546 for the year
ended Aug. 31, 1994.
___________________________________________________________________
3. Securities transactions
Cost of purchases and proceeds from sales of
securities (other than short-term obligations)
aggregated $1,408,212,936 and $1,179,213,279,
respectively, for the year ended Aug. 31, 1994.
Realized gains and losses are determined on an
identified cost basis.
<PAGE>
PAGE 22
Notes to financial statements
IDS Extra Income Fund, Inc.
___________________________________________________________________
4. Illiquid securities
At Aug. 31, 1994, investments in securities
included issues that are illiquid. The fund
currently limits investments in illiquid
securities to 10% of the net assets, at market
value, at the time of purchase. The aggregate
value of such securities at Aug. 31, 1994 was
$51,542,351 which represents 3.2% of net assets.
Pursuant to guidelines adopted by the fund's
board of directors, certain unregistered
securities are determined to be liquid and are
not included within the 10% limitation specified
above.
___________________________________________________________________
5. Lending of portfolio securities
At Aug. 31, 1994, securities valued at $3,612,187
were on loan to brokers. For collateral, the
fund received $3,700,460 in cash. Income from
securities lending amounted to $138,436 for the
year ended Aug. 31, 1994. The risks to the fund
of securities lending are that the borrower may
not provide additional collateral when required
or return the securities when due.
___________________________________________________________________
6. Capital loss carryover
For federal income tax purposes, the fund had a
capital loss carryover of $192,237,230 at
Aug. 31, 1994, that will expire in 1999 and 2000
if not offset by subsequent capital gains. It is
unlikely the board of directors will authorize a
distribution of any net realized capital gains
until the available capital loss carryover has
been offset or expires.
___________________________________________________________________
7. Financial highlights
"Financial highlights" showing per share data and
selected ratio information is presented on page 5
of the prospectus.
<PAGE>
PAGE 23
<TABLE>
Investments in securities (Percentages represent value of
IDS Extra Income Fund, Inc. investments compared to net assets)
Aug. 31, 1994
<CAPTION>
Investments in securities of unaffiliated issuers
_____________________________________________________________________________________________________________________________
Bonds (88.3%)
_____________________________________________________________________________________________________________________________
Issuer Coupon Maturity Principal Value(a)
rate year amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Mortgage-backed securities (0.3%)
Federal Home Loan Mtge Corp 5.375% 1994-17 $ 8,998 (b) $ 9,091
Inverse Floater 5.176 2023 12,000,000 (l) 4,762,500
______________
Total 4,771,591
_____________________________________________________________________________________________________________________________
Financial (2.1%)
Financial services (0.6%)
KHE Finance
Sub Nts 11.25 2002 8,000,000 7,770,000
Malan REIT
Cv Sub Deb 9.50 2004 2,750,000 2,640,000
_____________
Total 10,410,000
_____________________________________________________________________________________________________________________________
Insurance (1.5%)
Americo Life
Sr Sub Nts 9.25 2005 13,000,000 11,488,750
Life Partners
Sr Sub Nts 12.75 2002 10,000,000 11,275,000
USLICO
Cv 8.50 2014 600,000 616,500
______________
Total 23,380,250
_____________________________________________________________________________________________________________________________
Industrial (75.2%)
Aerospace & defense (1.0%)
Fairchild
Sub Deb 12.00 2001 10,000,000 9,375,000
Sequa
Sr Sub Nts 9.375 2003 7,000,000 6,413,750
______________
Total 15,788,750
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.<PAGE>
PAGE 24
Investments in securities (Percentages represent value of
IDS Extra Income Fund, Inc. investments compared to net assets)
Aug. 31, 1994
Investments in securities of unaffiliated issuers
_____________________________________________________________________________________________________________________________
Bonds (continued)
_____________________________________________________________________________________________________________________________
Issuer Coupon Maturity Principal Value(a)
rate year amount
_____________________________________________________________________________________________________________________________
Automotive & related (0.6%)
Penda
Sr Nt 10.75 % 2004 $ 9,000,000 $ 8,988,750
_____________________________________________________________________________________________________________________________
Beverages & tobacco (0.5%)
Seven-Up/RC Bottling
Sr Sub Nts 11.50 1999 7,500,000 7,518,750
_____________________________________________________________________________________________________________________________
Building materials (6.5%)
Amer Standard
Zero Coupon Sr Sub Disc Deb 10.46 1998 21,500,000 (g) 14,190,000
Associated Materials
Sr Sub Nts 11.50 2003 14,000,000 14,297,500
Baldwin 10.375 2003 15,000,000 13,050,000
Building Materials
Zero Coupon Sr Nt 11.70 1999 25,000,000 (d,g) 13,218,750
Color Tile
Sr Nts 10.75 2001 13,000,000 12,382,500
Greystone Homes
Sr Nts 10.75 2004 10,000,000 9,250,000
NVR
Sr Nts 11.00 2003 10,000,000 9,550,000
Southdown
Sr Sub Nts 14.00 2001 5,000,000 5,662,500
Southwest Forest Inds
Sub Deb 12.125 2001 4,000,000 4,030,000
USG 10.25 2002 10,000,000 10,187,500
______________
Total 105,818,750
_____________________________________________________________________________________________________________________________
Chemicals (2.8%)
Envirodyne Inds
Sr Nts 10.25 2001 12,170,000 9,614,300
Huntsman 11.00 2004 15,000,000 15,637,500
Rexene
Sr Reset Nts 12.00 1995 13,500,000 (k) 13,432,500
Uniroyal Chemical
Sr Sub Nts 11.00 2003 6,000,000 6,180,000
______________
Total 44,864,300
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.<PAGE>
PAGE 25
Investments in securities (Percentages represent value of
IDS Extra Income Fund, Inc. investments compared to net assets)
Aug. 31, 1994
Investments in securities of unaffiliated issuers
_____________________________________________________________________________________________________________________________
Bonds (continued)
_____________________________________________________________________________________________________________________________
Issuer Coupon Maturity Principal Value(a)
rate year amount
_____________________________________________________________________________________________________________________________
Communications equipment (2.0%)
Cencall Communications
Zero Coupon Sr Nts 10.09 % 1999 $ 5,000,000 (g) $ 2,750,000
Dial Call Communications
Zero Coupon Sr Nts 10.21 1998 7,250,000 (g) 3,788,125
Zero Coupon 12.25 2004 5,000,000 (g) 3,075,000
Nextel Communications
Zero Coupon Sr Nts 9.75 1999 17,100,000 (g) 9,148,500
Panamsat
Zero Coupon 12.63 1998 22,000,000 (g) 14,217,500
______________
Total 32,979,125
_____________________________________________________________________________________________________________________________
Computers & office equipment (1.0%)
Anacomp 12.25 1997 3,555,000 (f) 3,590,550
Computervision
Sr Sub Nts 11.375 1999 15,000,000 12,918,750
______________
Total 16,509,300
_____________________________________________________________________________________________________________________________
Energy (2.0%)
Chesapeake Energy 12.00 2001 7,000,000 7,000,000
Clark R&M Holdings
Zero Coupon 11.00 2000 15,000,000 (g) 8,250,000
Triton Energy
Zero Coupon Sr Nts 9.68 1996 15,000,000 (g) 11,343,750
Wainoco Oil
Sr Sub Nts 12.00 2002 6,000,000 6,322,500
______________
Total 32,916,250
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.<PAGE>
PAGE 26
Investments in securities (Percentages represent value of
IDS Extra Income Fund, Inc. investments compared to net assets)
Aug. 31, 1994
Investments in securities of unaffiliated issuers
_____________________________________________________________________________________________________________________________
Bonds (continued)
_____________________________________________________________________________________________________________________________
Issuer Coupon Maturity Principal Value(a)
rate year amount
_____________________________________________________________________________________________________________________________
Energy equipment & services (0.7%)
Global Marine
Sr Sub Nt 12.75% 1999 $10,000,000 $ 10,937,500
_____________________________________________________________________________________________________________________________
Food (2.0%)
Di Giorgio
Sr Nts 12.00 2003 10,000,000 10,125,000
Specialty Foods 11.25 2003 11,000,000 (d) 9,240,000
Zero Coupon 12.96 1999 20,000,000 (d,g) 7,200,000
White Rose Foods
Zero Coupon Sr Nts 12.75 1998 10,000,000 (g) 5,637,500
______________
Total 32,202,500
_____________________________________________________________________________________________________________________________
Furniture & appliances (0.7%)
Levitz
Sr Sub Nts 9.625 2003 13,000,000 11,911,250
_____________________________________________________________________________________________________________________________
Health care (0.5%)
Total Renal Care 12.00 2004 11,500,000 8,165,000
_____________________________________________________________________________________________________________________________
Health care services (2.5%)
Alco Health
Pay-in-Kind -- 1998 15,340,150 15,531,902
Amer Medical Intl
Sr Sub Nts 9.50 2006 6,500,000 6,305,000
Charter Medical
Sr Sub Nts 11.25 2004 10,000,000 (d) 10,350,000
Surgical Health
Sr Sub Nts 11.50 2004 8,000,000 8,050,000
_____________
Total 40,236,902
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.<PAGE>
PAGE 27
Investments in securities (Percentages represent value of
IDS Extra Income Fund, Inc. investments compared to net assets)
Aug. 31, 1994
Investments in securities of unaffiliated issuers
_____________________________________________________________________________________________________________________________
Bonds (continued)
_____________________________________________________________________________________________________________________________
Issuer Coupon Maturity Principal Value(a)
rate year amount
_____________________________________________________________________________________________________________________________
Industrial equipment & services (0.6%)
Fairchild Inds
Sr Secured Nts 12.25 % 1999 $10,000,000 $ 9,712,500
_____________________________________________________________________________________________________________________________
Leisure time & entertainment (10.5%)
Bally's Grand
1st Mtge 10.375 2003 20,000,000 17,300,000
Bally's Health & Tennis
Sr Sub Nts 13.00 2003 13,000,000 10,270,000
Bally's Park Place Funding
1st Mtge Nts 9.25 2004 10,000,000 8,400,000
Cinemark (USA)
Sr Sub Nts 12.00 2002 7,500,000 8,128,125
Elsinore 12.50 2000 4,200,000 2,604,000
GB Property Funding
1st Mtge 10.875 2004 16,900,000 13,097,500
GNF Bally 10.625 2003 20,000,000 12,700,000
Hemmetter Enterprises 12.00 2000 290,000 (d) 188,500
Pay-in-Kind -- 2000 3,000,000 2,100,000
Hollywood Casino-Tunica 13.50 1998 10,000,000 (d,f) 9,700,000
Kloster Cruise
Sr Secured Nts 13.00 2003 15,000,000 15,225,000
Lady Luck Gaming
1st Mtge 10.50 2001 10,000,000 5,600,000
Marvel (Parent) Holdings
Zero Coupon Sr Secured Disc Nts 12.25 1998 15,000,000 (g) 9,112,500
MGM Grand Hotel Finance 12.00 2002 16,000,000 17,500,000
PRT Funding
Sr Nt 11.625 2004 3,700,000 2,613,125
Showboat
1st Mtge 9.25 2008 10,000,000 8,500,000
Treasure Bay Gaming
1st Mtge 12.25 2000 7,500,000 (d,e) 2,625,000
Trump Castle Funding
Mtge Nts 11.75 2003 11,011,250 6,716,863
Trump Taj Mahal Funding
Pay-in-Kind -- 1999 26,558,100 18,856,251
______________
Total 171,236,864
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.<PAGE>
PAGE 28
Investments in securities (Percentages represent value of
IDS Extra Income Fund, Inc. investments compared to net assets)
Aug. 31, 1994
Investments in securities of unaffiliated issuers
_____________________________________________________________________________________________________________________________
Bonds (continued)
_____________________________________________________________________________________________________________________________
Issuer Coupon Maturity Principal Value(a)
rate year amount
_____________________________________________________________________________________________________________________________
Media (11.1%)
Ackerley Communications
Sr Secured Nts 10.75 % 2003 $ 7,000,000 (d) $ 6,720,000
Adelphia Communications
Pay-in-Kind -- 2004 10,461,100 8,486,568
Sr Deb 11.875 2004 5,000,000 4,925,000
Sr Nts 12.50 2002 10,000,000 9,987,500
Amer Telecasting
Zero Coupon 12.50 2004 18,250,000 (g) 8,714,375
Cablevision Inds 9.25 2008 15,000,000 13,162,500
Sr Nts 10.75 2002 5,000,000 4,937,500
Cablevision Systems
Sr Sub Deb 9.875 2013 8,000,000 7,600,000
Sr Sub Deb 10.75 2004 11,500,000 11,773,125
Comcast
Sr Sub Deb 9.50 2008 6,000,000 5,557,500
Comcast Cellular
Zero Coupon 11.73 2000 22,500,000 (g) 13,696,875
Continental Cablevision
Sr Sub Deb 11.00 2007 9,800,000 10,032,750
Dimac Direct 12.00 2003 5,000,000 5,250,000
Insight Communications
Sr Sub Nts 8.25 2000 12,500,000 11,640,625
Marcus Cable
Zero Coupon Sr Disc Nt 13.44 1999 14,500,000 (g) 7,666,875
New City Communications
Sr Sub Nts 11.375 2003 7,000,000 7,148,750
Outdoor Systems
Sr Nts 10.75 2003 3,000,000 2,835,000
Robin Media Group 11.125 1997 20,000,000 19,375,000
11.625 1999 5,000,000 5,106,250
Rogers Communications
Sr Deb 10.875 2004 5,000,000 5,187,500
Universal Outdoor 11.00 2003 10,000,000 10,075,000
______________
Total 179,878,693
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.<PAGE>
PAGE 29
Investments in securities (Percentages represent value of
IDS Extra Income Fund, Inc. investments compared to net assets)
Aug. 31, 1994
Investments in securities of unaffiliated issuers
_____________________________________________________________________________________________________________________________
Bonds (continued)
_____________________________________________________________________________________________________________________________
Issuer Coupon Maturity Principal Value(a)
rate year amount
_____________________________________________________________________________________________________________________________
Metals (1.5%)
A.K. Steel
Sr Nt 10.75 % 2004 4,000,000 $ 4,090,000
Bethlehem Steel
Sr Nt 10.375 2003 9,700,000 9,894,000
Kaiser Aluminum & Chemical
Sr Nts 9.875 2002 5,000,000 4,662,500
Republic Engineered Steels
1st Mtge 9.875 2001 6,000,000 5,850,000
_____________
Total 24,496,500
_____________________________________________________________________________________________________________________________
Multi-industry conglomerates (1.8%)
G-I Holdings
Zero Coupon Sr Nts 11.37 1998 33,800,000 (g) 20,406,750
Saul (BF)
Sr Nt 11.625 2002 9,300,000 8,742,000
_____________
Total 29,148,750
_____________________________________________________________________________________________________________________________
Paper & packaging (7.2%)
Container Corp Amer
Sr Nts 11.25 2004 6,500,000 6,808,750
Sub Deb 14.00 2001 10,000,000 11,025,000
Crown Packaging Holdings
Zero Coupon Sr Sub Nts 12.25 2000 15,000,000 (g) 7,462,500
Fort Howard
Sr Sub Nts 9.00 2006 21,000,000 18,217,500
Gaylord Container
Zero Coupon Sr Sub Disc Deb 12.66 1996 28,000,000 (g) 23,240,000
Malette
Sr Nt 12.25 2004 9,500,000 9,630,625
Plastic Containers
Sr Secured Nts 10.75 2001 5,000,000 5,031,250
Silgan
Zero Coupon 13.19 1995 20,000,000 (g) 16,025,000
Stone Container
Sr Sub Nts 11.00 1999 5,000,000 4,862,500
Sr Nts 12.625 1998 4,500,000 4,713,750
Sweetheart Cup
Sr Sub Nts 10.50 2003 10,000,000 9,650,000
______________
Total 116,666,875
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.<PAGE>
PAGE 30
Investments in securities (Percentages represent value of
IDS Extra Income Fund, Inc. investments compared to net assets)
Aug. 31, 1994
Investments in securities of unaffiliated issuers
_____________________________________________________________________________________________________________________________
Bonds (continued)
_____________________________________________________________________________________________________________________________
Issuer Coupon Maturity Principal Value(a)
rate year amount
_____________________________________________________________________________________________________________________________
Restaurants & lodging (1.0%)
Flagstar
Sr Sub Deb 11.25 % 2004 $ 6,000,000 $ 5,205,000
Hammons (John Q.) Hotels
1st Mtge 8.875 2004 12,000,000 10,665,000
______________
Total 15,870,000
_____________________________________________________________________________________________________________________________
Retail (12.2%)
Aparel Re
Zero Coupon 12.67 2005 18,000,000 (g) 10,935,000
Big V Supermarkets
Sr Sub Nts 11.00 2004 13,500,000 11,880,000
Dairy Mart Convenience Store
Sr Sub Nts 10.25 2004 12,000,000 10,080,000
Farm Fresh
Sr Nts 12.25 2000 14,500,000 13,920,000
Food 4 Less Supermarkets
Zero Coupon 15.25 1997 9,000,000 (g) 6,468,750
See accompanying notes to investments in securities.<PAGE>
PAGE 31
Investments in securities (Percentages represent value of
IDS Extra Income Fund, Inc. investments compared to net assets)
Aug. 31, 1994
Investments in securities of unaffiliated issuers
_____________________________________________________________________________________________________________________________
Bonds (continued)
_____________________________________________________________________________________________________________________________
Issuer Coupon Maturity Principal Value(a)
rate year amount
_____________________________________________________________________________________________________________________________
Retail (cont'd)
General Host
Sr Nts 11.50 % 2002 $ 4,150,000 $ 3,843,938
GND Holdings
Zero Coupon 12.00 1999 579,120 (f,g) 405,384
Zero Coupon Jr Sub Nt 6.18 1999 3,370,437 (f,g) 2,359,306
Grand Union
Sr Sub Nts 12.25 2002 13,000,000 (c) 10,432,500
Zero Coupon 14.21 1999 10,000,000 (g) 2,000,000
Kash n' Karry Food Stores
Sub Deb 14.00 2001 22,000,000 (e) 6,600,000
Mary Kay Inds
Sr Nts 12.75 2000 8,000,000 8,660,000
Mayfair Super Markets
Sr Sub Nts 11.75 2003 6,000,000 5,347,500
Pathmark Stores
Sr Sub Nts 9.625 2003 15,000,000 13,500,000
Zero Coupon Jr Sub Nts 11.71 1999 26,000,000 (g) 12,447,500
Penn Traffic
Sr Nts 8.625 2003 10,000,000 9,200,000
Sr Sub Nts 9.625 2005 5,000,000 4,625,000
Ralph's Grocery
Sr Sub Nts 10.25 2002 5,000,000 4,981,250
Revlon Consumer Products 10.50 2003 10,000,000 8,225,000
Revlon Worldwide
Zero Coupon Sr Secured Disc Nts 12.00 1998 7,000,000 (g) 2,801,651
Specialty Retailers 10.00 2000 4,150,000 4,098,125
Stater Brothers Holdings
Sr Nt 11.00 2001 11,500,000 11,385,000
Super Rite Foods
Sr Sub Nts 10.625 2002 14,000,000 13,965,000
Synthetic Inds
Sr Sub Deb 12.75 2002 9,300,000 10,055,625
Waban
Sr Sub Nts 11.00 2004 10,000,000 10,012,500
______________
Total 198,229,029
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.<PAGE>
PAGE 32
Investments in securities (Percentages represent value of
IDS Extra Income Fund, Inc. investments compared to net assets)
Aug. 31, 1994
Investments in securities of unaffiliated issuers
_____________________________________________________________________________________________________________________________
Bonds (continued)
_____________________________________________________________________________________________________________________________
Issuer Coupon Maturity Principal Value(a)
rate year amount
_____________________________________________________________________________________________________________________________
Textiles & apparel (2.2%)
Bibb
Sr Sub Nts 14.00 % 1999 $ 9,000,000 $ 6,075,000
Cherokee Group
Pay-in-Kind -- 1999 1,111 801
Dominion Textiles
Sr Nts 8.875 2003 5,000,000 4,637,500
Hat Brand 12.625 2002 5,000,000 5,306,250
JPS Textile Group
SF Deb 9.25 1999 10,056,000 (c) 8,847,807
WestPoint Stevens
Sr Sub Deb 9.375 2005 13,000,000 11,716,250
___________
Total 36,583,608
_____________________________________________________________________________________________________________________________
Miscellaneous (4.3%)
Clevite Inds
Sub Deb 12.375 2001 7,500,000 (e) 4,500,000
Darling-Delaware
Sr Sub Nts 13.75 2000 9,932,000 10,043,735
ECM Funding LP 11.918 2002 4,265,210 (f) 4,691,731
EnviroSource
Sr Nts 9.75 2003 8,000,000 7,260,000
KinderCare Learning Centers
Sr Nts 10.375 2001 6,000,000 6,015,000
Macy's Swiss Bank -- -- 5,000,000 (f,n) 4,700,000
Talley Inds
Zero Coupon 12.20 1998 20,000,000 (g) 10,825,000
Talley Mfg & Technology
Sr Nts 10.75 2003 8,500,000 7,958,125
TransDigm
Sr Secured Nts 13.00 2000 6,000,000 (f) 5,490,000
U.S. Banknote
Sr Nt 11.625 2002 10,000,000 (d) 9,000,000
______________
Total 70,483,591
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.<PAGE>
PAGE 33
Investments in securities (Percentages represent value of
IDS Extra Income Fund, Inc. investments compared to net assets)
Aug. 31, 1994
Investments in securities of unaffiliated issuers
_____________________________________________________________________________________________________________________________
Bonds (continued)
_____________________________________________________________________________________________________________________________
Issuer Coupon Maturity Principal Value(a)
rate year amount
_____________________________________________________________________________________________________________________________
Transportation (1.2%)
Braniff
Sr Reset Nts 15.00% 1999 $ 5,000,000 (e,i,k) $ --
GPA Delaware 8.75 1998 15,000,000 12,450,005
Trans Ocean Container 12.25 2004 7,250,000 7,313,438
______________
Total 19,763,443
_____________________________________________________________________________________________________________________________
Utilities (1.6%)
Electric
EUA Power
Pay-in-Kind -- 1992-93 7,766,300 (e) 776,630
First Palo Verde Funding 10.15 2016 6,150,000 5,973,187
Midland Funding II 13.25 2006 12,500,000 12,765,625
Texas-New Mexico Power
Secured Deb 10.75 2003 7,000,000 7,043,750
______________
Total 26,559,192
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.<PAGE>
PAGE 34
Investments in securities (Percentages represent value of
IDS Extra Income Fund, Inc. investments compared to net assets)
Aug. 31, 1994
Investments in securities of unaffiliated issuers
_____________________________________________________________________________________________________________________________
Bonds (continued)
_____________________________________________________________________________________________________________________________
Issuer Coupon Maturity Principal Value(a)
rate year amount
_____________________________________________________________________________________________________________________________
Foreign (7.9%)(h)
Argentina Republic Euro
(U.S. Dollar) 4.25 % 2023 5,000,000 $ 2,625,000
(U.S. Dollar) 5.00 2005 10,000,000 7,575,000
Avenor
(U.S. Dollar) 9.375 2004 7,000,000 6,623,750
Doman Inds
(U.S. Dollar) 8.75 2004 16,500,000 14,602,500
Gentra-Royal
(Canadian Dollar) 11.30 1998 12,000,000 8,140,340
Gulf Canada Resources
(U.S. Dollar) 9.25 2004 5,000,000 4,681,250
Methanex
(U.S. Dollar) 8.875 2001 12,500,000 12,328,125
Mexican/United States Govts Euro
(U.S. Dollar) 5.813 2019 8,500,000 7,363,125
(U.S. Dollar) 6.25 2019 6,000,000 4,020,000
PT Indah Kiat Pulp & Paper
(U.S. Dollar) 11.875 2002 20,000,000 20,150,000
Republic of Brazil
(U.S. Dollar) 4.00 2014 2,000,000 1,075,000
(U.S. Dollar) 4.313 2001 2,940,000 2,348,325
Republic of Venezuela
(U.S. Dollar) 6.75 2020 7,000,000 3,412,500
Rogers Cablesystems
(U.S. Dollar) Sr Secured Nts 9.625 2002 5,000,000 4,912,500
Sherritt
(U.S. Dollar) 10.50 2014 10,000,000 9,987,500
Tarkett Intl
(U.S. Dollar) 9.00 2002 10,000,000 9,250,000
Tjiwi Kimia
(U.S. Dollar) 13.25 2001 9,500,000 9,951,250
______________
Total 129,046,165
_____________________________________________________________________________________________________________________________
Total bonds
(Cost: $1,549,289,596) $1,435,074,178
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.<PAGE>
PAGE 35
Investments in securities (Percentages represent value of
IDS Extra Income Fund, Inc. investments compared to net assets)
Aug. 31, 1994
Investments in securities of unaffiliated issuers
_____________________________________________________________________________________________________________________________
<CAPTION>
Preferred stocks and other (7.7%)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C>
Algoma Finance
5.50% 195,021 (h) $ 2,987,293
Anacomp
$8.25 50,000 (f) 1,850,000
Warrants 166,931 271,262
Berg Electronics
Common 770,400 (e) 1,926,000
Pay-in-kind 354,864 (d) 9,403,896
Capital Gaming Intl
Warrants 95,000 81,875
Celcaribe
13.50% 41,500 (d,o) 3,454,875
Cherokee
Warrants 44,107 3,867
Chesapeake Energy
Warrants 51,250 845,625
Color Tile
13% 200,000 5,150,000
Crown Packaging
Warrants 10,000 350,000
Dial Page
Warrants 18,902 189
Elsinore
Warrants 223,835 76,959
EnviroSource
7.25% Cv 112,000 (e) 12,768,000
EUA Power
Contingent Interest Certificates 5,000 (e,i) --
Federated Dept Stores
Warrants 72,890 182,225
First Chicago
2.875% Cv 50,000 2,625,000
First Madison Bank
11.50% 106,500 11,036,063
Foodmaker
Warrants 7,000 120,750
Gaylord Container
Common 125,162 (e) 813,553
Warrants 883,477 4,748,689
Gilbert Robinson Holdings
Warrants 5,886 29,430
GND Holdings
12% Series A 46,550 (e) 3,258,500
12% Series B 48,256 (e) 1,930,240
See accompanying notes to investments in securities.<PAGE>
PAGE 36
Investments in securities (Percentages represent value of
IDS Extra Income Fund, Inc. investments compared to net assets)
Aug. 31, 1994
Investments in securities of unaffiliated issuers
_____________________________________________________________________________________________________________________________
Preferred stocks and other (continued)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
Harvard Inds
Pay-in-Kind 485,419 $ 12,620,894
Hat Brands
Warrants 90,346 (f) 1,038,975
Homestead Savings
Warrants 42,500 42
IFINT Diversified Holdings
Common 42,418 (f) 2,332,990
INTERCO
Warrants 51,933 129,832
K-III Communications
Pay-in-Kind Sr Exchangeable 94,674 (f) 9,278,019
Kash n' Karry Food Stores
Common 4,875 (e) 65,000
Maryland Cable
Common 378,000 (e) 3,780
Merry Land & Investment
1.75% Cm Cv 42,500 1,120,938
Natl Health Investors
8.50% Cv 60,000 1,507,500
Natl Intergroup
Pay-in-Kind 105,318 3,686,130
NVR
Common 100,000 (e) 587,500
Occidental Petroleum
3.875% Cm Cv 33,000 (d) 1,782,000
Pantry Pride
14.875% 100,000 9,750,000
Reliance Group Holdings
Warrants 277,791 833,373
See accompanying notes to investments in securities.<PAGE>
PAGE 37
Investments in securities (Percentages represent value of
IDS Extra Income Fund, Inc. investments compared to net assets)
Aug. 31, 1994
Investments in securities of unaffiliated issuers
_____________________________________________________________________________________________________________________________
Preferred stocks and other (continued)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
Southdown
Warrants 50,000 (f) $ 275,000
Specialty Foods Acquisition
Common 300,000 (e) 225,000
Supermarket General
Pay-in-Kind Cv 175,000 4,375,000
Tele-Communications
6% 100,000 6,500,000
TransDigm
Warrants 4,787 (f) 478,728
Triangle Wire & Cable
Common 548,889 (e,f) 5,351,668
Webcraft Technology
Common 32,502 (e) 334
WestFed Holdings
Non-Voting Common 21,699 (e,i) --
Pay-in-Kind Cm Sr 71,264 (e,f,i) --
_____________________________________________________________________________________________________________________________
Total preferred stocks and other
Cost: $140,926,684) $125,856,994
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.<PAGE>
PAGE 38
Investments in securities (Percentages represent value of
IDS Extra Income Fund, Inc. investments compared to net assets)
Aug. 31, 1994
Investments in securities of unaffiliated issuers
_____________________________________________________________________________________________________________________________
<CAPTION>
Short-term securities (0.9)
_____________________________________________________________________________________________________________________________
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agency (--%)
Federal Natl Mtge Assoc Disc Note
09-19-94 4.50% $ 200,000 $ 199,552
_____________________________________________________________________________________________________________________________
Commercial paper (0.9%)
Aon
09-22-94 4.76 700,000 698,064
May Dept Stores
09-23-94 4.64 5,500,000 5,484,471
Mobil Australia Finance (Delaware)
09-13-94 4.77 1,000,000 (j) 998,417
Paribas Finance
09-01-94 4.39 3,500,000 3,500,000
Penney (JC) Funding
09-21-94 4.64 3,500,000 3,491,017
______________
Total 14,371,521
_____________________________________________________________________________________________________________________________
Total short-term securities
(Cost: $14,371,521) 14,400,000 $ 14,371,521
_____________________________________________________________________________________________________________________________
Total investments in securities of unaffiliated issuers
(Cost: $1,704,587,801) 0 $1,575,302,693
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.<PAGE>
PAGE 39
Investments in securities (Percentages represent value of
IDS Extra Income Fund, Inc. investments compared to net assets)
Aug. 31, 1994
Investments in securities of affiliated issuers (m)
_____________________________________________________________________________________________________________________________
<CAPTION>
Common stocks (0.7%)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C>
Envirodyne Inds 727,116 (e) $ 3,635,580
Leaseway Transportation 721,428 (e) 7,484,815
_____________________________________________________________________________________________________________________________
Total investments in securities of affiliated issuers
(Cost: $22,904,653) $ 11,120,395
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $1,727,492,454)(p) $1,586,423,088
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.<PAGE>
PAGE 40
Investments in securities
IDS Extra Income Fund, Inc.
Aug. 31, 1994
_____________________________________________________________________________________________________________________________
Notes to investments in securities
_____________________________________________________________________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Adjustable rate mortgage; interest rate varies to reflect current market conditions; shown is the effective rate
on Aug. 31, 1994.
(c) Security is partially or fully on loan. See Note 5 to the financial statements.
(d) Represents a security sold under Rule 144A, which is exempt from registration under the Securities Act of 1933, as
amended. Unless otherwise noted, this security has been determined to be liquid under guidelines established by the board
of directors.
(e) Presently non-income producing. For long-term debt securities, item identified is in default as to payment of
interest and/or principal.
(f) Identifies issues considered to be illiquid (see Note 4 to the financial statements). Information concerning such
security holdings at Aug. 31, 1994, is as follows:
Security Acquisition Cost
date
_____________________________________________________________________________________________
<S> <C> <C>
Anacomp
$8.25 08-20-92 $ 1,737,500
12.25% 1997 08-25-92 3,737,194
ECM Funding LP
11.918% 2002 04-13-92 4,265,210
GND Holdings
Zero Coupon 12% 1999 11-03-93 492,252
Zero Coupon Jr Sub Nt 6.18% 1999 04-14-92 2,224,487
Hat Brands
Warrants 09-03-92 --
Hollywood Casino-Tunica
13.50% 1998 05-27-94 10,000,000
IFINT Diversified Holdings
Common 08-18-94 1,266,842
K-III Communications
Pay-in-Kind Sr Exchangeable 02-05-93 7,999,990
Pay-in-Kind Sr Exchangeable 04-14-93 203,060
Pay-in-Kind Sr Exchangeable 07-14-93 238,431
Pay-in-Kind Sr Exchangeable 10-15-93 245,360
Pay-in-Kind Sr Exchangeable 01-12-94 253,662
Pay-in-Kind Sr Exchangeable 04-11-94 259,825
Pay-in-Kind Sr Exchangeable 07-15-94 264,627
Macy's Swiss Bank 08-03-94 4,662,500
Southdown
Warrants 10-30-91 150,000
TransDigm
13% Sr Secured Nts 2000 09-29-93 3,680,000
13% Sr Secured Nts 2000 02-16-94 1,920,000
Warrants 09-29-93 320,000
Warrants 02-16-94 160,006
Triangle Wire & Cable
Common 01-13-92 13,000,117
<PAGE>
PAGE 41
Investments in securities
IDS Extra Income Fund, Inc.
Aug. 31, 1994
_____________________________________________________________________________________________________________________________
Notes to investments in securities (continued)
_____________________________________________________________________________________________________________________________
Security Acquisition Cost
date
___________________________________________________________________________________________
WestFed Holdings
Pay-in-Kind Cm Sr 09-18-91 $ 34,530
Pay-in-Kind Cm Sr 12-18-91 17,595
Pay-in-Kind Cm Sr 03-20-92 17,925
Pay-in-Kind Cm Sr 06-19-92 18,255
Pay-in-Kind Cm Sr 09-15-92 12,400
Pay-in-Kind Cm Sr 12-18-92 12,630
Pay-in-Kind Cm Sr 03-08-93 12,860
Pay-in-Kind Cm Sr 06-11-93 3,933
(g) For zero coupon bonds, the interest rate disclosed represents the annualized effective yield on the date of
acquisition.
(h) Foreign security values are stated in U.S. dollars. For debt securities, principal amounts are denominated
in the currency indicated.
(i) Presently negligible market value.
(j) Commercial paper sold within terms of a private placement memorandum, exempt from registration under Section 4(2) of
the Securities Act of 1933, as amended, and may be sold only to dealers in that program or other "accredited
investors." This security has been determined to be liquid under guidelines established by the board of directors.
(k) Interest rate varies based on current market indexes, rate shown is the effective rate on Aug. 31, 1994.
(l) Inverse floaters represent securities that pay interest at a rate that increases (decreases) with a decline (increase) in
the LIBOR (London InterBank Offering Rate) Index. Sudden increases or decreases in market value may occur because of
interest rate changes. Interest rate disclosed is the rate in effect on Aug. 31, 1994.
(m) Investments representing 5% or more of the outstanding voting securities of the issuer.
(n) Macy's Swiss Bank is a Bank Loan Participation. This participating interest is non-performing (not paying interest), until
the bankruptcy and reorganization is completed.
(o) Each Celcaribe unit represents note trust certificates and common stock certificates. On or before Dec. 31, 1994, the
units will be split into a separately valued bond and common stock.
(p) At Aug. 31, 1994, the cost of securities for federal income tax purposes was $1,723,935,179 and the
aggregate gross unrealized appreciation and depreciation based on that cost was:
<CAPTION>
<S> <C>
Unrealized appreciation $ 38,867,395
Unrealized depreciation (176,379,486)
___________________________________________________________________________________________
Net unrealized depreciation $(137,512,091)
___________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 42
IDS mutual funds
Cash equivalent investments
These money market funds have three main goals: conservation of
capital, constant liquidity and the highest possible current income
consistent with these objectives. Very limited risk.
IDS Cash Management Fund
Invests in such money market securities as high quality commercial
paper, bankers' acceptances, certificates of deposits (CDs) and
other bank securities.
(icon of) piggy bank
IDS Tax-Free Money Fund
Invests primarily in short-term bonds and notes issued by state and
local governments to seek high current income exempt from federal
income taxes.
(icon of) shield with piggy bank enclosed
Income investments
The funds in this group invest their assets primarily in corporate
bonds or government securities to seek interest income. Secondary
objective is capital growth. Risk varies by bond quality.
IDS Global Bond Fund
Invests primarily in debt securities of U.S. and foreign issuers to
achieve high total return through income and growth of capital.
(icon of) globe
IDS Extra Income Fund
Invests mainly in long-term, high-yielding corporate fixed-income
securities in the lower rated, higher risk bond categories to
provide high current income. Secondary objective is capital
growth.
(icon of) cornucopia
IDS Bond Fund
Invests mainly in corporate bonds, at least 50% in the higher
rated, lower risk bond categories, or the equivalent, and in
government bonds.
(icon of) greek column
<PAGE>
PAGE 43
IDS Strategy, Income Fund
Invests primarily in corporate and government bonds to seek high
current income while conserving capital. Also may seek capital
appreciation when consistent with its primary goals.
(icon of) chess piece
IDS Selective Fund
Invests in high-quality corporate bonds and other highly rated debt
instruments including government securities and short-term
investments. Seeks current income and preservation of capital.
(icon of) skyline
IDS Federal Income Fund
Invests primarily in securities issued or guaranteed as to the
timely payment of principal and interest by the U.S. government,
its agencies and instrumentalities. Seeks a high level of current
income and safety of principal consistent with its type of
investments.
(icon of) federal building
IDS Strategy, Short-Term Income Fund
Invests primarily in short-term and intermediate-term bonds and
notes to seek a high level of current income.
(icon of) chess piece
Tax-exempt income investments
These funds provide tax-free income by investing in municipal
bonds. The income is generally free from federal income tax. Risk
varies by bond quality.
IDS High Yield Tax-Exempt Fund
Invests primarily in medium- and lower-quality municipal bonds and
notes. Lower-quality securities generally involve greater risk of
principal and income.
(icon of) shield with basket of apples enclosed
IDS State Tax-Exempt Funds
(CA, MA, MI, MN, NY, OH)
Invests primarily in high- and medium-grade municipal securities to
provide income to residents of each respective state that is exempt
from federal, state and local income taxes. (New York is the only
state that is exempt at the local level.)
(icon of) shield with U.S. enclosed
<PAGE>
PAGE 44
IDS Tax-Exempt Bond Fund
Invests mainly in bonds and notes of state or local government
units, with at least 75% in the four highest rated, lowest risk
bond categories.
(icon of) shield with Greek column
IDS Insured Tax-Exempt Fund
Invests primarily in municipal securities that are insured as to
the timely payment of principal and interest. The insurance
feature minimizes credit risk of the fund but does not guarantee
the market value of the fund's shares.
(icon of) shield with eagle head
Growth and income investments
These funds focus on securities of medium to large, well-
established companies that offer long-term growth of capital and
reasonable income from dividends and interest. Moderate risk.
IDS International Fund
Invests primarily in common stocks of foreign companies that offer
potential for superior growth. The fund may invest up to 20% of
its assets in the U.S. market.
(icon of) three flags
IDS Strategy, Worldwide Growth Fund
Invests primarily in common stocks of companies throughout the
world that offer potential for superior growth. Holdings may range
from small- to large-capitalization stocks, including those of
companies involved in areas of rapid economic growth.
(icon of) chess piece
IDS Managed Retirement Fund
Invests in a combination of common stocks, fixed-income investments
and money market securities to seek a maximum total return through
a combination of growth of capital and current income.
(icon of) bird in a nest
IDS Equity Plus Fund
Invests primarily in a combination of moderate growth stocks,
higher-yielding equities and bonds. Seeks growth of capital and
income.
(icon of) three apple trees
<PAGE>
PAGE 45
IDS Blue Chip Advantage Fund
Invests in selected stocks from a major market index. Securities
purchased are those recommended by IDS research analysts as the
best from each industry represented on the index. Offers potential
for long-term growth as well as dividend income.
(icon of) ribbon
IDS Stock Fund
Invests in common stock of companies representing many sectors of
the economy. Seeks current income and growth of capital.
(icon of) building with columns
IDS Strategy, Equity Fund
Invests primarily in undervalued common stocks that offer potential
for growth of capital and income.
(icon of) chess piece
IDS Utilities Income Fund
Invests primarily in the stocks of public utility companies to seek
high current income and growth of income and capital with reduced
volatility.
(icon of) electrical cord
IDS Diversified Equity Income Fund
Invests primarily in high-yielding common stocks to seek high
current income and, secondarily, to benefit from the growth
potential offered by stock investments.
(icon of) four puzzle pieces
IDS Mutual
Invests in a balance between common stocks and senior securities
(preferred stocks and bonds). Seeks a balance of growth of capital
and current income.
(icon of) scale
Growth investments
Funds in this group seek capital growth, primarily from common
stocks. They are high risk mutual funds with a potential for high
reward.
<PAGE>
PAGE 46
IDS Discovery Fund
Invests in small- and medium-size, growth-oriented companies
emphasizing technological innovation and productivity enhancement.
Buys and holds larger growth-oriented stocks.
(icon of) ship
IDS Strategy, Aggressive Equity Fund
Invests primarily in common stocks of companies that are selected
for their potential for above-average growth. Above-average means
that their growth potential is better, in the opinion of the
portfolio's investment manager, than the Standard & Poor's
Corporation (S&P) 500 Stock Index.
(icon of) chess piece
IDS Growth Fund
Invests primarily in companies that have above-average potential
for long-term growth as a result of new management, marketing
opportunities or technological superiority.
(icon of) flower
IDS Global Growth Fund
Invests in stocks of companies throughout the world that are
positioned to meet market needs in a changing world economy. These
companies offer above-average potential for long-term growth.
(icon of) world
IDS New Dimensions Fund
Invests primarily in companies with significant growth potential
due to superiority in technology, marketing or management. The
Fund frequently changes its industry mix.
(icon of) dimension
IDS Progressive Fund
Invests primarily in undervalued common stocks. The fund holds
stocks for the long term with the goal of capital growth.
(icon of) shooting star
Specialty growth investment
This fund aggressively seeks capital growth as a hedge against
inflation.
<PAGE>
PAGE 47
IDS Precious Metals Fund
Invests primarily in the securities of foreign or domestic
companies that explore for, mine and process or distribute gold and
other precious metals. This is the most aggressive and most
speculative IDS mutual fund.
(icon of) cart of precious gems
For more complete information about any of these funds, including
charges and expenses, you can obtain a prospectus by contacting
your financial planner or writing to IDS Shareholder Service, P.O.
Box 534, Minneapolis, MN 55440-0534. Read it carefully before you
invest or send money.
<PAGE>
PAGE 48
Federal income tax information
IDS Extra Income Fund, Inc.
The fund is required by the Internal Revenue Code of
1986 to tell its shareholders about the tax treatment
of the dividends it pays during its fiscal year.
Some of the dividends listed below were reported to
you on a Form 1099-DIV, Dividends and Distributions,
last January. Dividends paid to you since the end of
last year will be reported to you on a tax statement
sent next January. Shareholders should consult a tax
adviser on how to report distributions for state and
local purposes.
<TABLE>
IDS Extra Income Fund, Inc.
Fiscal year ended Aug. 31, 1994
Income distributions
taxable as dividend income 7.01% qualifying for deduction by corporations.
<CAPTION>
Payable date
Per share
<S> <C>
Sept. 24, 1993 $0.0346
Oct. 25, 1993 0.0335
Nov. 24, 1993 0.0430
Dec. 29, 1993 0.0429
Jan. 27, 1994 0.0379
Feb. 25, 1994 0.0380
March 28, 1994 0.0314
April 28, 1994 0.0329
May 26, 1994 0.0340
June 28, 1994 0.0339
July 27, 1994 0.0339
Aug. 29, 1994 0.0339
Total distributions $0.4299
/TABLE
<PAGE>
PAGE 49
Quick telephone reference
IDS Telephone Transaction Service
Redemptions and exchanges, dividend payments or reinvestments and
automatic payment arrangements
National/Minnesota: 800-437-3133
Mpls./St. Paul area: 671-3800
IDS Shareholder Service
Fund performance, objectives and account inquiries
612-671-3733
TTY Service
For the hearing impaired
800-846-4852
IDS Infoline
Automated account information (TouchToneR phones only), including
current fund prices and performance, account values and recent
account transactions
National/Minnesota: 800-272-4445
Mpls./St. Paul area: 671-1630
Your IDS financial planner:
IDS Extra Income Fund
IDS Tower 10
Minneapolis, MN 55440-0010
<PAGE>
PAGE 50
STATEMENT OF DIFFERENCES
Difference Description
1) The layout is different 1) Some of the layout in the
throughout the annual report. annual report to
shareholders is in two
columns.
2) Headings. 2) The headings in the
annual report and
prospectus are placed
in blue strip at the top
of the page.
3) There are pictures, icons 3) Each picture, icon and
and graphs throughout the graph is described in
annual report and prospectus. parentheses.
4) Footnotes for charts and 4) The footnotes for each
graphs are described at chart or graph are typed
the left margin. below the description of
the chart or graph.
