PAGE
IDS
Extra
Income
Fund
1996 semiannual report
(Picture of icon: 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.
Distributed by
American Express
Financial Advisors Inc.
<PAGE>
PAGE
(Picture of icon: 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 IDS Extra Income Fund invests in. 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.
Contents
From the president 3
From the portfolio manager 3
Ten largest holdings 5
Financial statements 6
Notes to financial statements 9
Investments in securities 23
Board members and officers 36
IDS mutual funds 37
<PAGE>
PAGE
To our shareholders
(Picture of William R. Pearce)
William R. Pearce
President of the Fund
(Picture of Jack Utter)
Jack Utter
Portfolio manager
From the president
If you're an experienced investor, you know that 1995 was an unusually
strong year for the U.S. financial markets. Perhaps just as important,
you also know that history shows that bull markets don't last forever.
Though they're often unpredictable, declines - whether they're brief or
long-lasting, moderate or substantial -- are always a possibility.
That fact reinforces the need for investors to review periodically their
long-term goals and assess whether their investment program remains on
track to achieving them. Your quarterly investment statements are one part
of that monitoring process. The other is a meeting with your American
Express financial advisor. That becomes even more important if there's a
major change in your financial situation or in the financial markets.
William R. Pearce
From the portfolio manager
A largely positive environment for high-yield bonds continued during the
past six months, as the favorable forces of moderate economic growth, a
low rate of inflation and overall declining interst rates dominated the
period. Taking good advantage of the condition, IDS Extra Income Fund
provided investors with a total return of 8.8% (Class A shares) from
September 1995 through February 1996, the first half of the Fund's current
fiscal year.
Shaking off occasional concerns about recession, the economy continued to
move slowly forward during the period, while inflation remained low. Those
factors bolstered the spirits of fixed-income investors, who became
increasingly attracted to the relatively generous real (minus inflation)
returns offered by high-yield bonds. The trend was reflected by strong cash
flows into high-yield mutual funds throughout the period. As is always the
case, the increased buying drove up bond prices and, consequently, the net
asset valued of mutual funds such as this one.
The Fed lends a hand
Also working in the bond market's favor, particularly last fall, was the
possibility of agreement between Congress and the Clinton administration
to balance the federal budget. In addition, the market found further
support in the form of two reductions in short-term interest rates by the
Federal Reserve, which were taken by investors as an indication that
inflation was remaining well under control.
In that environment, we made only one noteworthy change to the portfolio.
After enjoying strong performance from bonds of paper/packaging companies,
we reduced our holdings in that sector because of weakening business
conditions in that industry. More important to Fund performance, we
maintained our substantial exposure to bonds of gaming, telecommunications
and media companies, which continued to perform very well. On the other hand,
we continued to hold relatively few bonds in the retailing and industrial
cyclical (steel and chemicals, for example) sectors. This also proved to be
an appropritate strategy, as thos issues were relatively poor performers
during the period.
Outlook OK, but repeat not likely
Looking to the rest of this fiscal year, we're reasonably optimistic about
prospects for the bond market and high-yield securities, but we don't
expect anything like the spectacular market performance of 1995. While
important fundamentals such as economic growth and the inflation outlook
remain favorable, the fact is that a repeat of the major decline in
long-term interest rates that ultimately propelled the market last year
would be unprecedented. Moreover, because of potential uncertainty
surrounding the presidential election, the market may have another reason
to become unsettled at times. Still, barring any major negative events, we
think positive results are achievable as the year progresses.
Jack Utter<PAGE>
PAGE
Class A
6-month performance
(All figures per share)
Net asset value (NAV)
_______________________________
Feb. 29, 1996 $4.32
_______________________________
Aug. 31, 1995 $4.15
_______________________________
Increase $0.17
_______________________________
Distributions
Sept. 1, 1995 - Feb. 29, 1996
______________________________
From income $0.19
______________________________
From capital gains $ --
______________________________
Total distributions $0.19
______________________________
Total return* +8.8%**
______________________________
Class B
6-month performance
(All figures per share)
Net asset value (NAV)
________________________________
Feb. 29, 1996 $4.32
________________________________
Aug. 31, 1995 $4.15
________________________________
Increase $0.17
________________________________
Distributions
Sept. 1, 1995 - Feb. 29, 1996
_______________________________
From income $0.17
_______________________________
From capital gains $ --
_______________________________
Total distributions $0.17
_______________________________
Total return* +8.4%**
_______________________________<PAGE>
Class Y
6-month performance.
(All figures per share)
Net asset value (NAV)
________________________________
Feb. 29, 1996 $4.32
________________________________
Aug. 31, 1995 $4.15
________________________________
Increase $0.17
________________________________
Distributions
Sept. 1, 1995 - Feb. 29, 1996
_______________________________
From income $0.19
_______________________________
From capital gains $ --
_______________________________
Total distributions $0.19
_______________________________
Total return* +8.9%**
_______________________________
*The prospectus discusses the
effect of sales charges, if
any, on the various classes.
**The total return is a hypothetical
investment in the Fund with all
distributions reinvested.
<PAGE>
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<TABLE>
<CAPTION>
The Fund's ten largest holdings
IDS Extra Income Fund, Inc.
The ten holdings here make up 12.57% of the Fund's total net assets.
_____________________________________________________________________________________
Percent Value
(of Fund's net assets) (as of Feb. 29, 1996)
_____________________________________________________________________________________
<S> <C> <C>
Comcast Cellular 1.68% $37,625,000
Zero Coupon 2000
Trump Taj Mahal Funding 1.38 31,022,704
Pay-in-Kind 1999
Cablevision Systems 1.31 29,355,000
Pay-in-Kind
Gaylord Container 1.30 29,050,000
Zero Coupon Sr Sub Disc Deb 1996
Adelphia Communications 1.28 28,791,271
Pay-in-Kind 2004
Plitt Theatres 1.28 28,615,875
10.875% 2004
Intermedia Communications of Florida 1.18 26,390,000
13.50% Sr Nts 2005
G-I Holdings 1.17 26,159,753
10% Sr Nts 2006
Penn Traffic 1.00 22,295,000
9.625% Sr Sub Nts 2005
Tenet Healthcare 0.99 22,200,000
10.125% Sr Sub Nts 2005
</TABLE>
<PAGE>
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<TABLE>
<CAPTION>
Financial statements
Statement of assets and liabilities
IDS Extra Income Fund, Inc.
Feb. 29, 1996
_____________________________________________________________________________________________________________
Assets
_____________________________________________________________________________________________________________
(Unaudited)
<S> <C>
Investments in securities, at value (Note 1):
Investments in securities of unaffiliated issuers
(identified cost $2,080,169,909) $2,199,020,863
Investments in securities of affiliated issuers
(identified cost $30,962,601) 20,583,219
Cash in bank on demand deposit 2,162,586
Dividends and accrued interest receivable 42,181,868
Receivable for investment securities sold 26,952,899
U.S. government securities held as collateral (Note 4) 981,880
_____________________________________________________________________________________________________________
Total assets 2,291,883,315
_____________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________
Dividends payable to shareholders 5,996,565
Payable for investment securities purchased 44,199,339
Payable upon return of securities loaned (Note 4) 981,880
Accrued investment management services fee 69,819
Accrued distribution fee 7,829
Accrued service fee 19,964
Accrued transfer agency fee 11,511
Accrued administrative services fee 5,688
Other accrued expenses 321,600
_____________________________________________________________________________________________________________
Total liabilities 51,614,195
_____________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $2,240,269,120
_____________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________
Capital stock -- authorized 10,000,000,000 shares of $.01 par value $ 5,187,761
Additional paid-in capital 2,416,659,334
Undistributed net investment income 4,986,106
Accumulated net realized loss (Notes 1 and 7) (295,035,653)
Unrealized appreciation of investments and on translation of
assets and liabilities in foreign securities 108,471,572
_____________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding capital stock $2,240,269,120
_____________________________________________________________________________________________________________
Net assets applicable to outstanding shares: Class A $2,045,569,748
Class B $ 194,692,782
Class Y $ 6,590
Net asset value per share of outstanding capital stock: Class A shares 473,686,005 $ 4.32
Class B shares 45,088,520 $ 4.32
Class Y shares 1,526 $ 4.32
See accompanying notes to financial statements.
<PAGE>
PAGE
Financial statements
Statement of operations
IDS Extra Income Fund, Inc.
Six months ended Feb. 29, 1996
_____________________________________________________________________________________________________________
Investment income
_____________________________________________________________________________________________________________
(Unaudited)
Income:
Interest $91,511,849
Dividends 4,230,366
_____________________________________________________________________________________________________________
Total income 95,742,215
_____________________________________________________________________________________________________________
Expenses (Note 2):
Investment management services fee 5,852,748
Distribution fee -- Class B 478,259
Transfer agency fee 992,614
Incremental transfer agency fee -- Class B 4,600
Service fee
Class A 1,652,031
Class B 111,572
Administrative services fee 480,225
Compensation of board members 16,342
Compensation of officers 9,512
Custodian fees 66,424
Postage 128,436
Registration fees 140,747
Reports to shareholders 39,856
Audit fees 18,250
Administrative 4,260
Other 27,401
_____________________________________________________________________________________________________________
Total expenses 10,023,277
Earnings credits on cash balances (Note 2) (11,969)
_____________________________________________________________________________________________________________
Total net expenses 10,011,308
_____________________________________________________________________________________________________________
Investment income -- net 85,730,907
_____________________________________________________________________________________________________________
Realized and unrealized gain (loss) -- net
_____________________________________________________________________________________________________________
Net realized loss on security and foreign currency transactions (Note 3) (10,671,435)
Net change in unrealized appreciation or depreciation 94,902,440
_____________________________________________________________________________________________________________
Net gain on investments and foreign currency 84,231,005
_____________________________________________________________________________________________________________
Net increase in net assets resulting from operations $169,961,912
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
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Financial statements
Statements of changes in net assets
IDS Extra Income Fund, Inc.
_____________________________________________________________________________________________________________
Operations and distributions Feb. 29, 1996 Aug. 31, 1995
_____________________________________________________________________________________________________________
Six months ended Year ended
(Unaudited)
Investment income -- net $ 85,730,907 $ 164,956,308
Net realized loss on investments and foreign currency (10,671,435) (94,618,530)
Net change in unrealized appreciation or depreciation of investments
and on translation of assets and liabilities in foreign currencies 94,902,440 154,638,498
_____________________________________________________________________________________________________________
Net increase in net assets resulting from operations 169,961,912 224,976,276
_____________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income
Class A (83,168,205) (163,086,676)
Class B (5,096,508) (1,285,639)
Class Y (34,942) (64,716)
_____________________________________________________________________________________________________________
Total distributions (88,299,655) (164,437,031)
_____________________________________________________________________________________________________________
Capital share transactions (Note 5)
_____________________________________________________________________________________________________________
Proceeds from sales
Class A shares (Note 2) 245,953,099 386,116,539
Class B shares 122,917,587 76,560,620
Class Y shares 279,068 2,243,811
Reinvestment of distributions at net asset value
Class A shares 56,318,346 105,087,318
Class B shares 4,288,625 977,944
Class Y shares 26,712 60,615
Payments for redemptions
Class A shares (154,465,347) (354,557,559)
Class B shares (Note 2) (14,287,521) (2,378,996)
Class Y shares (1,890,774) (807,210)
_____________________________________________________________________________________________________________
Increase in net assets from capital share transactions 259,139,795 213,303,082
_____________________________________________________________________________________________________________
Total increase in net assets 340,802,052 273,842,327
Net assets at beginning of period 1,899,467,068 1,625,624,741
_____________________________________________________________________________________________________________
Net assets at end of period
(including undistributed net investment income of
$4,986,106 and $7,554,854) $2,240,269,120 $
_____________________________________________________________________________________________________________
See accompanying notes to financial statements
/TABLE
<PAGE>
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Notes to financial statements
IDS Extra Income Fund, Inc.
(Unaudited as to Feb. 29, 1996)
______________________________________________________________________________
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. The Fund invests
primarily, and may invest all of its assets, in long-term corporate bonds in
the lower-rating categories, commonly known as junk bonds. The Fund offers
Class A, Class B and Class Y shares. Class A shares are sold with a front-end
sales charge. Class B shares, which the Fund began offering on March 20, 1995,
may be subject to a contingent deferred sales charge. Class B shares
automatically convert to Class A after eight years. Class Y shares, which the
Fund also began offering on March 20, 1995, have no sales charge and are
offered only to qualifying institutional investors.
All classes of shares have identical voting, dividend, liquidation and other
rights, and the same terms and conditions, except that the level of
distribution fee, transfer agency fee and service fee (class specific
expenses) differs among classes. Income, expenses (other than class specific
expenses) and realized and unrealized gains or losses on investments are
allocated to each class of shares based upon its relative net assets.
Significant accounting policies followed by the Fund are summarized below:
Use of estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of increase and decrease in net assets from operations
during the period. Actual results could differ from those estimates.
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. 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.
Option 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.
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.
Futures transactions
In order to gain exposure to or protect itself from changes in the market, the
Fund may buy and sell interest rate futures contracts traded on any U.S. or
foreign exchange. The Fund also may buy or write put and call options on these
futures contracts. Risks of entering into futures contracts and related
options include the possibility that there may be an illiquid market and that
a change in the value of the contract or option may not correlate with changes
in the value of the underlying securities.
Upon entering into a futures contract, the Fund is required to deposit either
cash or securities in an amount (initial margin) equal to a certain percentage
of the contract value. Subsequent payments (variation margin) are made or
received by the Fund each day. The variation margin payments are equal to the
daily changes in the contract value and are recorded as unrealized gains and
losses. The Fund recognizes a realized gain or loss when the contract is
closed or expires.
Foreign currency translations and
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 securities transactions, and other translation gains
or losses on dividends, interest income and foreign withholding taxes.
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.
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. For U.S.
dollar denominated bonds, interest income includes level-yield amortization of
premium and discount. For foreign bonds, except for original issue discount,
the Fund does not amortize premium and discount. Interest income, including
level-yield amortization of premium and discount, is accrued daily.
______________________________________________________________________________
2. Expenses and sales charges
Effective March 20, 1995, when the Fund began offering multiple classes of
shares, the Fund entered into agreements with American Express Financial
Corporation (AEFC) for managing its portfolio, providing administrative
services and serving as transfer agent as follows: Under its Investment
Management Services Agreement, AEFC determines which securities will be
purchased, held or sold. The management fee is a percentage of the Fund's
average daily net assets in reducing percentages from 0.59% to 0.465%
annually.
Under an Administrative Services Agreement, the Fund pays AEFC for
administration and accounting services at a percentage of the Fund's average
daily net assets in reducing percentages from 0.05% to 0.025% annually.
Under a separate Transfer Agency Agreement, AEFC maintains shareholder
accounts and records. The Fund pays AEFC an annual fee per shareholder account
for this service as follows:
o Class A $15.50
o Class B $16.50
o Class Y $15.50
Also effective March 20, 1995, the Fund entered into agreements with American
Express Financial Advisors Inc. for distribution and shareholder servicing-
related services as follows: Under a Plan and Agreement of Distribution, the
Fund pays a distribution fee at an annual rate of 0.75% of the Fund's average
daily net assets attributable to Class B shares for distribution-related
services.
Under a Shareholder Service Agreement, the Fund pays a fee for service
provided to shareholders by financial advisors and other servicing agents. The
fee is calculated at a rate of 0.175% of the Fund's average daily net assets
attributable to Class A and Class B shares.
AEFC will assume and pay any expenses (except taxes and brokerage commissions)
that exceed the most restrictive applicable state expense limitation.
Sales charges received by American Express Financial Advisors Inc. for
distributing Fund shares were $5,267,411 for Class A and $41,000 for Class B
for the six months ended Feb. 29, 1996.
During the six months ended Feb. 29, 1996, the Fund's custodian and transfer
agency fees were reduced by $11,969 as a result of earnings credits from
overnight-cash balances.
The Fund has a retirement plan for its independent board members. Upon
retirement, board members receive monthly payments equal to one-half of the
retainer fee for as many months as they served as board members 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 board members serve on the
board. The retirement plan expense amounted to $5,055 for the six months Feb.
29, 1996.
______________________________________________________________________________
3. Securities transactions
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $949,919,202 and $729,716,890, respectively, for the
the six months ended Feb. 29, 1996. Realized gains and losses are determined
on an identified cost basis.
______________________________________________________________________________
4. Lending of portfolio securities
At Feb. 29, 1996, securities valued at $920,000 were on loan to brokers. For
collateral, the Fund received U.S. government securities valued at $981,880.
Income from securities lending amounted to $118,104 for the six months ended
Feb. 29, 1996. 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.
<PAGE>
5. Capital share transactions
Transactions in shares of capital stock for the periods indicated are as
follows:
<TABLE>
<CAPTION>
Six months ended Feb. 29, 1996
Class A Class B Class Y
_____________________________________________________________________
<S> <C> <C> <C>
Sold 58,253,200 29,106,908 66,726
Issued for reinvested 13,353,374 1,014,151 6,401
distributions
Redeemed (36,621,448) (3,378,156) (453,087)
_____________________________________________________________________
Net increase(decrease) 34,985,126 26,742,903 (379,960)
______________________________________________________________________
Year ended Aug. 31, 1995
Class A Class B* Class Y*
_____________________________________________________________________
Sold 97,298,897 18,688,995 565,786
Issued for reinvested 26,443,241 236,714 14,823
distributions
Redeemed (89,533,246) (580,092) (199,123)
_____________________________________________________________________
Net increase 34,208,892 18,345,617 381,486
_____________________________________________________________________
*Inception date was March 20, 1995.
/TABLE
<PAGE>
6. Illiquid securities
At Feb. 29, 1996, 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 Feb. 29, 1996 was $35,580,342, representing 1.6% of net assets.
Pursuant to guidelines adopted by the Fund's board, certain unregistered
securities are determined to be liquid and are not included within the 10%
limitation specified above.
______________________________________________________________________________
7. Capital loss carryover
For federal income tax purposes, the Fund had a capital loss carryover of
approximately $299,808,000 at Feb. 29, 1996, that will expire in 2002 through
2004 if not offset by subsequent capital gains. It is unlikely the board will
authorize a distribution of any net realized capital gains until the available
capital loss carryover has been offset or expires.
<PAGE>
8. Financial highlights
<TABLE>
<CAPTION>
The tables below show certain important financial
information for evaluating the Fund's results.
Fiscal period ended Aug. 31,
Per share income and capital changes*
Class A
1996** 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
Net asset value, $4.15 $4.02 $4.44 $4.2433 $3.72 $3.47
beginning of period
Income from investment operations:
Net investment income .18 .39 .43 .47 .44 .42
Net gains (losses) .18 .13 (.42) .16 .52 .24
(both realized
and unrealized)
Total from investment .36 .52 .01 .63 .96 .66
operations
Less distributions:
Dividends from net (.19)(.39) (.43) (.43) (.44) (.41)
investment income
Net asset value, $4.32$4.15 $4.02$4.44 $4.24 $3.72
end of period
Ratios/supplemental data
Class A
1996** 1995 1994 1993 1992 1991
Net assets, end of period $2,046 $1,822 $1,626 $1,547 $1,304 $990
(in millions)
Ratio of expenses to .94%+ .87% .79% .81% .83% .88%
average daily net assets
Ratio of net income 8.48%+ 9.93% 9.85% 10.03% 11.13% 12.45%
to average daily net assets
Portfolio turnover rate 37% 70% 74% 70% 89% 88%
(excluding short-term
securities)
Total return++ 8.8%14.2% (0.2%) 15.8%26.9% 21.2%
*For a share outstanding throughout the period. Rounded to the nearest cent.
**Six months ended Feb. 29, 1996 (Unaudited).
+Adjusted to an annual basis.
++Total return does not reflect payment of a sales charge.
</TABLE> <PAGE>
Financial highlights
Fiscal period ended Aug. 31,
Per share income and capital changes*
<TABLE>
<CAPTION>
Class B Class Y
1996*** 1995** 1996*** 1995**
<S> <C> <C> <C> <C>
Net asset value, $4.15 $3.93 $4.15 $3.93
beginning of period
Income from investment operations:
Net investment income .15 .18 .19 .20
Net gains .19 .21 .17 .21
(both realized
and unrealized)
Total from investment .34 .39 .36 .41
operations
Less distributions:
Dividends from net (.17) (.17) (.19)(.19)
investment income
Net asset value, $4.32 $4.15 $4.32$4.15
end of period
Ratios/supplemental data
Class B Class Y
1996*** 1995** 1996*** 1995**
Net assets, end of period $195 $76 $ -- $2
(in millions)
Ratio of expenses to 1.70%+ 1.72%+ .76%+ .78%+
average daily net assets
Ratio of net income 7.84%+ 9.51%+ 8.24%+ 10.19%+
to average daily net assets
Portfolio turnover rate 37% 70% 37% 70%
(excluding short-term
securities)
Total return++ 8.4% 9.9% 8.9% 10.4%
*For a share outstanding throughout the period. Rounded to the nearest cent.
**Inception date was March 20, 1995 for Class B and Class Y.
***Six months ended Feb. 29, 1996 (Unaudited).
+Adjusted to an annual basis.
++Total return does not reflect payment of a sales charge.
/TABLE
<PAGE>
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<TABLE>
<CAPTION>
Investments in securities (Percentages represent value of
IDS Extra Income Fund, Inc. investments compared to net assets)
Feb. 29, 1996 (Unaudited)
Investments in securities of unaffiliated issuers
_____________________________________________________________________________________________________________________________
Bonds (85.9%)
_____________________________________________________________________________________________________________________________
Issuer Coupon Maturity Principal Value(a)
rate year amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Mortgage-backed securities (1.3%)
Federal Home Loan Mtge Corp 6.875% 2017 $ 7,092 (b) $ 7,240
Inverse Floater 6.81 2023 3,243,056 (k) 2,905,908
7.26 2024 9,865,946 (k) 8,636,452
8.98 2023 4,407,829 (k) 3,672,163
Merrill Lynch Mtge Investors 8.29 2021 9,931,181 (c) 8,981,512
Resolution Trust 8.00 2026 6,655,363 5,465,717
______________
Total 29,668,992
_____________________________________________________________________________________________________________________________
Financial (2.4%)
Financial services (0.8%)
Malan Realty Investors REIT
Cv Sub Deb 9.50 2004 2,750,000 2,337,500
Olympic Financial
Sr Nts 13.00 2000 14,500,000 15,714,375
______________
Total 18,051,875
_____________________________________________________________________________________________________________________________
Insurance (1.6%)
Americo Life
Sr Sub Nts 9.25 2005 15,000,000 14,812,500
Life Partners
Sr Sub Nts 12.75 2002 10,000,000 10,850,000
Reliance Group Holdings
Sr Sub Deb 9.75 2003 10,000,000 10,425,000
_____________
Total 36,087,500
_____________________________________________________________________________________________________________________________
Industrial (66.5%)
Aerospace & defense (1.9%)
Alliant Techsystems
Sr Sub Nts 11.75 2003 8,000,000 (c) 8,930,000
Sequa 9.625 1999 3,000,000 3,067,500
Sr Sub Nts 9.375 2003 20,750,000 20,542,500
TransDigm
Sr Secured Nts 13.00 2000 11,170,000 (e) 10,220,550
______________
Total 42,760,550
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.<PAGE>
Automotive & related (0.5%)
Penda
Sr Nts 10.75 2004 12,000,000 9,945,000
_____________________________________________________________________________________________________________________________
Beverages & tobacco (0.6%)
Liggett Group 11.50 1999 15,000,000 12,581,250
_____________________________________________________________________________________________________________________________
Building materials (1.9%)
Amer Standard
Zero Coupon Sr Sub Disc Deb 10.39 1998 15,000,000 (f) 13,012,500
Peters (JM)
Sr Nts 12.75 2002 10,500,000 10,053,750
Schuller Intl Group
Sr Nts 10.875 2004 12,000,000 13,410,000
Southdown
Sr Sub Nts 14.00 2001 5,000,000 5,512,500
______________
Total 41,988,750
_____________________________________________________________________________________________________________________________
Chemicals (0.5%)
Harris Chemical North America
Sr Sub Nts 10.75 2003 6,000,000 5,985,000
Lanesborough
Sr Nts 10.00 2000 7,700,000 6,227,375
______________
Total 12,212,375
_____________________________________________________________________________________________________________________________
Communications equipment (3.8%)
Amer Communication Services 13.00 2005 15,000,000 (c,i) 9,750,000
Brooks Fiber Properties
Sr Disc Nts 10.875 2006 12,000,000 (c,i) 7,140,000
Celcaribe
Zero Coupon 5.37 2004 9,650,000 (c,f) 7,977,000
Cencall Communications
Zero Coupon Sr Nts 13.04 1999 28,000,000 (f) 17,080,000
GST Telecommunications 13.88 2005 2,320,000 (c,i) 13,572,000
Pagemart Nationwide
Zero Coupon Sr Nts 15.79 2000 23,000,000 (c,f) 15,812,500
Pegasus Media & Communications
Cl B 12.50 2005 7,500,000 (c) 7,696,875
Peoples Telephone
Sr Nts 12.25 2002 7,000,000 6,510,000
______________
Total 85,538,375
_____________________________________________________________________________________________________________________________
Computers & office equipment (1.4%)
Dictaphone
Sr Sub Nts 11.75 2005 14,500,000 14,608,750
Softkey
Cv Sr Nts 5.50 2000 2,500,000 (c) 2,087,500
Unisys 13.50 1997 15,000,000 (i) 15,712,500
______________
Total 32,408,750
_____________________________________________________________________________________________________________________________
Energy (0.8%)
Chesapeake Energy 12.00 2001 7,000,000 7,603,750
<PAGE>
Harcor Energy
Sr Nts 14.875 2002 5,000,000 (c) 5,050,000
Mesa Capital 12.75 1998 4,000,000 (i) 3,925,000
United Meridian
Sr Sub Nts 10.375 2005 5,800,000 6,191,500
______________
Total 22,770,250
_____________________________________________________________________________________________________________________________
Food (1.2%)
Chiquita Brands Intl
Sr Nts 9.625 2004 8,500,000 8,712,500
Specialty Foods 11.25 2003 11,000,000 (c) 9,212,500
Zero Coupon 13.00 1999 17,000,000 (c,f) 7,968,750
______________
Total 25,893,750
_____________________________________________________________________________________________________________________________
Health care (2.6%)
Amerisource Distribution
Pay-in-Kind -- 2005 8,101,539 (m) 8,962,328
Magellan Health Services
Sr Sub Nts Cl A 11.25 2004 12,500,000 (c) 14,000,000
Merit Behavioral 11.50 2005 5,500,000 (c) 5,878,125
Tenet Healthcare
Sr Sub Nts 10.125 2005 20,000,000 22,200,000
Total Renal Care 12.00 2004 7,475,000 7,437,625
______________
Total 58,478,078
_____________________________________________________________________________________________________________________________
Household products (0.4%)
Darling-Delaware
Sr Sub Nts 11.00 2000 9,932,000 9,944,415
_____________________________________________________________________________________________________________________________
Industrial equipment & services (3.0%)
ACF Inds 11.60 2000 3,802,000 3,844,772
Borg-Warner Security
Sr Sub Nts 9.125 2003 10,000,000 9,425,000
Fairchild Inds
Sr Secured Nts 12.25 1999 15,000,000 16,293,750
Sr Sub Nts 12.25 1996 5,400,000 5,413,500
IMO (Delaval) Inds
Sr Sub Deb 12.00 2001 11,000,000 11,275,000
Specialty Equipment
Sr Sub Nts 11.375 2003 20,500,000 21,499,375
______________
Total 67,751,397
_____________________________________________________________________________________________________________________________
Leisure time & entertainment (10.2%)
Alliance Entertainment
Sr Sub Nts 11.25 2005 21,500,000 (c) 21,688,125
Bally's Health & Tennis
Sr Sub Nts 13.00 2003 5,000,000 4,425,000
Bally's Park Place Funding
1st Mtge Nts 9.25 2004 15,000,000 15,412,500
Cinemark (USA)
Sr Sub Nts 12.00 2002 7,500,000 8,240,625
Coast Hotels & Casino
1st Mtge 13.00 2002 19,800,000 (c) 20,097,000
Hollywood Casino
Sr Nts 12.75 2003 22,800,000 21,774,000
IHF Holdings
Zero Coupon Sr Disc Nts 5.16 2004 15,000,000 (f) 9,543,750
Marvel Holdings
Zero Coupon 13.57 1998 15,150,000 (f) 11,476,125
MGM Grand Hotel Finance 11.75 1999 10,000,000 10,762,500
12.00 2002 14,000,000 15,435,000
Mohegan Tribal Gaming
Sr Nts 13.50 2002 13,400,000 (c) 16,113,500
Trump Castle Funding
Mtge Nts 11.75 2003 14,711,250 14,012,466
Trump Holdings
Sr Nts 15.50 2005 10,000,000 11,125,000
Trump Taj Mahal Funding
Pay-in-Kind -- 1999 30,082,622 (m) 31,022,704
United Artists 11.50 2002 6,000,000 (c) 6,465,000
United Artists Theatre Center
Pass Thru Certs 9.30 2015 10,000,000 (c) 9,975,000
______________
Total 227,568,295
_____________________________________________________________________________________________________________________________
Media (12.9%)
Ackerley Communications
Sr Secured Nts 10.75 2003 10,000,000 (c) 10,762,500
Adelphia Communications
Pay-in-Kind -- 2004 33,093,415 (m) 28,791,271
Sr Deb 11.875 2004 5,000,000 5,087,500
American Telecasting
Sr Disc Nts 12.14 2005 6,500,000 (i) 4,290,000
Zero Coupon 11.92 2004 9,606,320 (f) 7,108,677
Big Flower Press
Sr Sub Nts 10.75 2003 4,673,000 (c) 4,988,427
CAI Wireless Systems
Sr Nts 12.25 2002 11,250,000 12,234,375
Chancellor Broadcasting
Sr Sub Nts 9.375 2004 3,200,000 3,168,000
Comcast Cellular
Zero Coupon 11.73 2000 50,000,000 (f) 37,625,000
Continental Cablevision
Sr Nts 8.30 2006 10,000,000 (c) 10,775,000
Sr Sub Deb 11.00 2007 6,800,000 7,956,000
Echostar Communications
Zero Coupon Sr Disc Nts 10.91 2004 22,000,000 (f,i) 16,060,000
Heritage Media Services
Sr Sub Nts 8.75 2006 5,000,000 4,962,500
NWCG Holding
Zero Coupon Sr Disc Nts 10.72 1999 12,000,000 (c,f) 8,610,000
Outdoor Systems
Sr Nts 10.75 2003 11,000,000 11,110,000
Paramount Communications
Sub Deb 7.00 2003 15,000,000 14,394,000
People's Choice TV
Zero Coupon 7.21 2004 23,500,000 (f) 15,275,000
Plitt Theatres 10.875 2004 27,850,000 28,615,875
Scandinavian Broadcasting
Cv Sub Deb 7.25 2005 4,000,000 4,160,000
United Intl Holdings
Zero Coupon Disc Nts 11.99 1999 7,500,000 (f) 4,875,000
U.S. Banknote
Sr Nts 11.625 2002 13,000,000 5,833,750
Universal Outdoor
Sr Nts 11.00 2003 13,000,000 13,097,500
Viacom
Sub Deb 8.00 2006 20,000,000 19,800,000
Wireless One
Units 13.00 2003 7,750,000 8,370,000
______________
Total 287,950,375
_____________________________________________________________________________________________________________________________
Metals (2.3%)
Carbide/Graphite Group
Sr Nts 11.50 2003 9,091,000 9,977,372
EnviroSource
Sr Nts 9.75 2003 14,250,000 13,038,750
Haynes Intl
Sr Sub Deb 13.50 1999 4,000,000 3,540,000
Kaiser Aluminum & Chemical
Sr Nts 9.875 2002 6,500,000 6,678,750
NS Group 13.50 2003 14,000,000 (l) 12,880,000
Republic Engineered Steel
1st Mtge 9.875 2011 6,000,000 5,655,000
_____________
Total 51,769,872
_____________________________________________________________________________________________________________________________
Multi-industry conglomerates (4.2%)
Communications & Power Inds
Sr Sub Nts 12.00 2005 10,000,000 (c) 10,375,000
G-I Holdings
Sr Nts 10.00 2006 25,214,220 (c) 26,159,753
Zero Coupon Sr Nts 8.90 1998 26,484,000 (c,f) 21,352,725
Saul (BF) REIT
Sr Nts 11.625 2002 9,300,000 (c) 9,532,500
Talley Inds
Zero Coupon Sr Disc Deb 12.25 1998 24,000,000 (f) 18,900,000
Talley Mfg & Technology
Sr Nts 10.75 2003 8,500,000 8,755,000
_____________
Total 95,074,978
_____________________________________________________________________________________________________________________________
Paper & packaging (4.8%)
Gaylord Container
Zero Coupon Sr Sub Disc Deb 12.75 1996 28,000,000 (f) 29,050,000
Plastic Container
Sr Secured Nts 10.75 2001 14,200,000 14,608,250
Silgan
Zero Coupon 13.19 1995 20,000,000 (f) 19,800,000
Stone Container
Sr Nts 12.625 1998 4,500,000 4,843,125
Sr Sub Nts 11.00 1999 6,500,000 6,426,875
Sweetheart Cup
Sr Sub Nts 10.50 2003 13,500,000 14,006,250
Warren (SD)
Sr Nts 12.00 2004 16,500,000 (c) 18,026,250
______________
Total 106,760,750
<PAGE>
Restaurants & lodging (1.8%)
Flagstar
Sr Nts 10.875 2002 10,000,000 9,025,000
Sr Sub Deb 11.25 2004 10,000,000 6,837,500
Hammons (John Q) Hotels
1st Mtge 8.875 2004 12,000,000 12,090,000
Trump Plaza Funding
1st Mtge 10.875 2001 12,000,000 13,320,000
______________
Total 41,272,500
_____________________________________________________________________________________________________________________________
Retail (6.7%)
Apparel Retail
Zero Coupon 12.75 2005 11,500,000 (c,f) 7,245,000
Bruno's
Sr Sub Nts 10.50 2005 8,000,000 7,800,000
Dairy Mart Convenience Stores
Sr Sub Nts 10.25 2004 20,700,000 18,423,000
Di Giorgio
Sr Nts 12.00 2003 16,000,000 12,800,000
Kash n' Karry Food Stores
Pay-in-kind -- 2003 17,501,297 (m) 17,457,544
Musicland Group
Sr Sub Nts 9.00 2003 20,375,000 11,613,750
Pathmark Stores
Zero Coupon Jr Sub Nts 15.79 1999 13,500,000 (f) 8,235,000
Penn Traffic
Sr Sub Nts 9.625 2005 26,000,000 22,295,000
Pueblo Xtra Intl
Sr Nts 9.50 2003 19,140,000 17,776,275
Ralphs Grocery
Sr Nts 10.45 2004 10,000,000 9,825,000
Specialty Retailers 10.00 2000 2,000,000 1,980,000
Stater Brothers Holdings
Sr Nts 11.00 2001 14,500,000 14,898,750
______________
Total 150,349,319
_____________________________________________________________________________________________________________________________
Soaps & cosmetics (1.5%)
Coty
Sr Sub Nts 10.25 2005 7,000,000 7,542,500
Revlon Consumer Products
Sr Nts 9.375 2001 2,500,000 2,562,500
Sr Nts 9.50 1999 10,000,000 10,350,000
Revlon Worldwide
Zero Coupon Sr Disc Nts 10.90 1998 15,000,000 (f) 12,075,000
______________
Total 32,530,000
_____________________________________________________________________________________________________________________________
Textiles & apparel (1.4%)
Dominion Textiles
Sr Nts 8.875 2003 5,000,000 4,987,500
Hat Brand Holdings 12.625 2002 5,000,000 (e) 5,000,000
Hosiery Corp of America 13.75 2002 10,000,000 10,725,000
US Leather
Sr Nts 10.25 2003 13,550,000 9,620,500
___________
Total 30,333,000
_____________________________________________________________________________________________________________________________
Miscellaneous (2.1%)
ECM Funding LP 11.92 2002 2,749,366 (e,i) 3,024,302
KinderCare Learning Centers
Sr Nts 10.375 2001 6,000,000 6,352,500
Jitney-Jungle Stores
Sr Nts 12.00 2006 10,500,000 10,500,000
Norcal Waste Systems
Sr Nts 12.50 2005 20,300,000 (c,i) 21,264,250
S C Intl
Sr Sub Nts 13.00 2005 6,000,000 6,540,000
______________
Total 47,681,052
_____________________________________________________________________________________________________________________________
Transportation (1.3%)
Braniff
Sr Reset Nts -- 1999 5,000,000 (d,e,g,i) --
GPA Delaware -- 1998 20,000,000 (d) 19,900,000
Trans Ocean Container 12.26 2004 8,750,000 9,034,375
______________
Total 28,934,375
_____________________________________________________________________________________________________________________________
Utilities (5.6%)
Electric (2.2%)
California Energy
Sr Secured Nts 9.875 2003 7,000,000 7,472,500
First Palo Verde Funding 10.15 2016 6,150,000 6,038,992
Midland Funding II 11.75 2005 5,000,000 5,362,500
13.25 2006 12,500,000 14,031,250
Niagara Mohawk Power
1st Mtge 9.75 2005 9,000,000 9,202,320
Texas-New Mexico Power
Secured Deb 10.75 2003 7,000,000 7,647,500
______________
Total 49,755,062
_____________________________________________________________________________________________________________________________
Gas (0.7%)
TransTexas Gas
Sr Secured Nts 11.50 2002 15,000,000 15,262,500
_____________________________________________________________________________________________________________________________
Telephone (2.7%)
Geotek Communications
Zero Coupon 9.07 2005 28,750,000 (c,f) 16,243,750
Intermedia Communications of Florida
Sr Nts 13.50 2005 22,750,000 (c) 26,390,000
Winstar Communications
Zero Coupon Units 14.00 2005 1,000,000 (c,f) 16,850,000
______________
Total 59,483,750
_____________________________________________________________________________________________________________________________
Foreign (8.8%)
Asian Pulp & Paper
(U.S. Dollar) 11.75 2005 6,600,000 6,550,500
Banco Nacional de Comercio Exterior
(U.S. Dollar) 7.25 2004 10,500,000 8,505,000
Cable Systems
(U.S. Dollar) 10.75 1999 2,716,120 2,617,661
Caguas Humacas
(U.S. Dollar) 10.50 1998 10,562,302 (e) 10,179,419
Clearnet Communications
(U.S. Dollar) 9.22 2005 150,000 (i) 8,850,000
Dom's Telecable
(U.S. Dollar) 10.50 1996 1,721,578 (e) 1,659,171
Doman Inds
(U.S. Dollar) 8.75 2004 16,500,000 15,736,875
Empresas La Moderna
(U.S. Dollar) 11.375 1999 3,000,000 (c) 2,977,500
Fresh Delmonte
(U.S. Dollar) 10.00 2003 15,000,000 14,100,000
Govt of Poland Euro
(U.S. Dollar) 6.81 2024 8,300,000 (i) 7,143,187
Govt of Poland PDI Euro
(U.S. Dollar) 3.75 2014 6,400,000 (i) 4,772,000
Gulf Canada Resources
(U.S. Dollar) 9.25 2004 13,500,000 14,073,750
Intl Cabletel
(U.S. Dollar) Sr Nts 11.50 2006 16,000,000 (c,f,i) 9,620,000
Repap New Brunswick
(U.S. Dollar) Sr Nts 10.625 2005 6,000,000 5,835,000
Republic of Brazil
(U.S. Dollar) 4.25 2024 3,500,000 1,780,625
(U.S. Dollar) 6.875 2012 6,500,000 (i) 3,912,188
(U.S. Dollar) Series C 4.00 2014 15,918,150 9,610,583
Rogers Cablesystems
(U.S. Dollar) Sr Secured Nts 9.625 2002 5,000,000 5,387,500
Rogers Cantel
(U.S. Dollar) Sr Sub Nts 11.125 2002 10,000,000 10,775,000
Sherritt
(U.S. Dollar) 10.50 2014 10,000,000 11,300,000
Sherritt Gordon
(U.S. Dollar) 9.75 2003 3,500,000 3,718,750
Tarkett Intl
(U.S. Dollar) 9.00 2002 10,000,000 (c) 10,725,000
Telewest
(U.S. Dollar) Zero Coupon 11.00 2007 20,000,000 (f,i) 12,150,000
Tjiwi Kimia
(U.S. Dollar) 13.25 2001 10,000,000 11,087,500
United Mexican States
(U.S. Dollar) 6.25 2019 6,000,000 3,693,750
______________
Total 196,760,959
_____________________________________________________________________________________________________________________________
Total bonds
(Cost: $1,820,794,284) $1,927,568,094
_____________________________________________________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Stocks and other (9.2%)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C>
Amer Telecasting
Warrants 85,225 596,575
Berg Electronics
Common 370,400 (c,d) 1,944,600
Pay-in-kind 432,280 (c,m) 12,536,110
Cablevision Systems
Pay-in-kind 285,000 (c,m) 29,355,000
11.75% Preferred 100,000 (c) 10,750,000
Celcaribe
Common 951,210 (c,d) 1,093,892
Cherokee
Warrants 44,107 3,867
Chevy Chase Savings
13% Preferred 180,000 5,625,000
Communications & Power Inds
14% Preferred 50,000 (d) 5,116,200
Warrants 3,500 (c) 365,750
Crown Cork & Seal
Cv Preferred 50,000 2,418,750
Crown Packaging
Warrants 10,000 80,000
Dairy Mart Convenience Stores
Warrants 311,333 (e) 414,073
Dial Page
Warrants 18,902 189
Dr. Pepper Bottling Holdings
Common 100,000 (d) 500,000
EchoStar Communications
Common 100,000 (d) 3,600,000
El Paso Electric
Pay-in-kind 30,000 (m) 3,150,000
EnviroSource
7.25% Cv Preferred 142,000 19,525,000
First Nationwide Bank
11.50% Preferred 166,500 18,897,750
Foodmaker
Warrants 7,000 141,750
Gaylord Container
Common 437,500 (d) 4,593,750
Warrants 562,500 5,484,375
Geotek Communications
Warrants 772,500 3,476,250
Hemmeter Enterprises
Warrants 36,000 (c) 54,000
Harcor Energy
Warrants 110,000 (c) 99,000
Harvard Inds
Pay-in-Kind 438,224 (m) 11,667,714
Hat Brand Holdings
Warrants 90,346 (e) 90,346
Hosiery Corp of Amer
Warrants 10,000 (c) 50,000
Houlihan's Restaurant
Warrants 5,886 29,430
IFINT Diversified Holdings
Common 42,418 (e) 1,018,032
Intermedia Communications
Warrants 22,750 (d) 455,000
K-III Communications
10% Preferred 75,000 (c) 7,425,000
Pay-in-Kind Sr Exchangeable 112,428 (m) 11,636,320
Lanesborough
Common 10,571 (d) 106
Natl Health Investors
8.50% Cv Preferred 60,000 1,777,500
Pagemart
Common 50,750 (c,d) 474,513
Panamsat
Common 150,000 (d) 4,481,250
Pay-in-kind 10,964 (m) 13,211,620
Pantry Pride
14.875% Preferred 100,000 10,000,000
Pegasus Media Communications
Common 750 (d) 225,000
Pullman
Common 273,141 (d,e) 2,321,698
Reliance Group Holdings
Warrants 277,791 590,306
Riggs Natl
Series B Preferred 72,825 2,057,306
Southdown
Warrants 50,000 (e) 212,500
Specialty Foods Acquisition
Common 300,000 (d) 225,000
Supermarket General
Pay-in-Kind Cv 275,000 (m) 7,150,000
TransDigm
Warrants 8,910 (e) 891,036
Triangle Wire & Cable
Common 548,889 (d,e) 548,889
Webcraft Technology
Common 32,502 (d,e) 325
Wireless One
Common 25,000 (d) 368,750
_____________________________________________________________________________________________________________________________
Total stocks and other
Cost: $194,652,378) $ 206,729,522
_____________________________________________________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Short-term securities (2.9%)
_____________________________________________________________________________________________________________________________
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
_____________________________________________________________________________________________________________________________
<S> <S> <C>
U.S. government agency (0.4%)
Federal Natl Mtge Assn Disc Nts
03-22-96 5.15% $2,900,000 2,891,322
03-26-96 5.18 6,000,000 5,978,500
______________
Total 8,869,822
_____________________________________________________________________________________________________________________________
Commercial paper (2.5%)
Ameritech Capital Funding
03-28-96 5.24 2,900,000 (h) 2,888,668
Beneficial
03-04-96 5.27 6,500,000 6,497,156
Fleet Funding
03-21-96 5.25 6,600,000 (h) 6,580,860
Kredietbank
03-14-96 5.25 5,000,000 4,990,557
Merrill Lynch
04-08-96 5.26 2,500,000 2,486,199
Morgan Stanley
03-21-96 5.25 6,200,000 6,182,020
Reed Elsevier
03-13-96 5.23 3,600,000 (h) 3,593,760
03-15-96 5.23 6,000,000 (h) 5,987,843
03-20-96 5.23 1,500,000 (h) 1,495,884
04-01-96 5.23 3,200,000 (h) 3,185,671
Siemens
03-19-96 5.23 6,000,000 5,984,400
03-25-96 5.23 5,500,000 5,480,933
Transamerica Finance
03-08-96 5.45 500,000 499,474
______________
Total 55,853,425
_____________________________________________________________________________________________________________________________
Total short-term securities
(Cost: $64,723,247) $ 64,723,247
_____________________________________________________________________________________________________________________________
Total investments in securities of unaffiliated issuers
(Cost: $2,080,169,909) $2,199,020,863
_____________________________________________________________________________________________________________________________
Investments in securities of affiliated issuers (j)
_____________________________________________________________________________________________________________________________
Common stocks (0.9%)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
Envirodyne Inds 727,116 (d) $ 2,181,348
Kash n' Karry Food Stores 822,430 18,401,871
_____________________________________________________________________________________________________________________________
Total investments in securities of affiliated issuers
(Cost: $30,962,601) $ 20,583,219
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $2,111,132,510)(n) $2,219,604,082
_____________________________________________________________________________________________________________________________<PAGE>
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; rate shown is the effective rate
on Feb. 29, 1996.
(c) 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.
(d) Presently non-income producing. For long-term debt securities, item identified is in default as to payment of
interest and/or principal.
(e) Identifies issues considered to be illiquid (see Note 6 to the financial statements). Information concerning such
security holdings at Feb. 29, 1996 is as follows:
Security Acquisition Cost
dates
_____________________________________________________________________________________________
Braniff
Sr Reset Nts 04-03-89 $ 4,550,000
Caguas Humacas
(U.S. Dollar) Bank Deb 02-05-96 10,174,349
Dairy Mart Convenience Stores
Warrants 11-28-95 1,760,600
Dom's Telecable
(U.S. Dollar) 10% 1996 02-05-96 1,658,344
ECM Funding LP
11.92% 2002 04-13-92 2,749,366
Hat Brand Holdings
Zero Coupon 2002 09-03-92 5,000,000
Warrants 09-03-92 --
IFINT Diversified Holdings
Common 08-18-94 105,247
Pullman
Common 06-27-86 thru 02-03-87 7,460,000
Southdown
Warrants 10-30-91 150,000
TransDigm
Sr Decured Nts 09-30-93 10,088,042
Warrants 09-29-93 thru 07-25-95 798,951
Triangle Wire & Cable
Common 01-13-92 13,000,117
Webcraft Technology
Common 12-22-86 16,874
(f) For zero coupon bonds, the interest rate disclosed represents the annualized effective yield on the date of acquisition.
(g) Presently negligible market value.
(h) 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.
(i) Interest rate varies to reflect current market conditions; rate shown is the effective rate on Feb. 29, 1996.
(j) Investments representing 5% or more of the outstanding voting securities of the issuer.
(k) Inverse floaters represent securities that pay interest at a rate that increases (decreases) in the same magnitude as, or
in a multiple of, a decline (increase) in the LIBOR (London InterBank Offered Rate) Index. Interest rate disclosed is the
rate in effect on Feb. 29, 1996. Inverse floaters in the aggregate represent 0.7% of the Fund's net assets as of Feb. 29,
1996.
(l) Security is partially or fully on loan. See note 4 to the financial statements.
(m) Pay-in-kind securities are securities in which the issuer has the option to make interest payments in cash or in additional
securities. The securities issued as interest usually have the same terms, including maturity date, as the pay-in-kind
securities.
<PAGE>
(n) At Feb. 29, 1996, the cost of securities for federal income tax purposes was $2,100,283,945 and the
aggregate gross unrealized appreciation and depreciation based on that cost was:
Unrealized appreciation $179,396,081
Unrealized depreciation (63,997,344)
___________________________________________________________________________________________
Net unrealized appreciation $115,398,737
___________________________________________________________________________________________
/TABLE
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Board members and officers
Board members and officers of the Fund
_____________________________________________________________________
President and interested board member
William R. Pearce
President of all funds in the IDS MUTUAL FUND GROUP.
_____________________________________________________________________
Independent board members
Lynne V. Cheney
Distinguished fellow, American Enterprise Institute for
Public Policy Research.
Robert F. Froehlke
Former president of all funds in the IDS MUTUAL FUND GROUP.
Heinz F. Hutter
Former president and chief operating officer, Cargill, Inc.
Anne P. Jones
Attorney and telecommunications consultant.
Donald M. Kendall
Former chairman and chief executive officer, PepsiCo, Inc.
Melvin R. Laird
Senior counsellor for national and international affairs,
The Reader's Digest Association, Inc.
Lewis W. Lehr
Former chairman and chief executive officer,
Minnesota Mining and Manufacturing Company (3M).
Edson W. Spencer
Former chairman and chief executive officer, Honeywell, Inc.
Wheelock Whitney
Chairman, Whitney Management Company.
C. Angus Wurtele
Chairman of the board and chief executive officer, The Valspar Corporation.
_____________________________________________________________________
Interested board members who are officers and/or employees of AEFC
William H. Dudley
Exective vice president, AEFC.
David R. Hubers
President and chief executive officer, AEFC.
John R. Thomas
Senior vice president, AEFC.
_____________________________________________________________________
Officers who are officers and/or employees of AEFC
Peter J. Anderson
Vice President of all funds in the IDS MUTUAL FUND GROUP.
Melinda S. Urion
Treasurer of all funds in the IDS MUTUAL FUND GROUP.
___________________________________________________________________
Other officer
Leslie L. Ogg
Vice president general Counsel and secretary of all funds in
the IDS MUTUAL FUND GROUP.<PAGE>
PAGE
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 deposit (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
seek 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 seek
high current income. Secondary objective is capital growth.
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PAGE
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
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
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.
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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
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 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
<PAGE>
PAGE
IDS Equity Select 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
IDS Blue Chip Advantage Fund
Invests in selected stocks from a major market index. Securities
purchased are those recommended by our 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 stocks of companies representing many
sectors of the economy. Seeks current income and growth of capital.
(icon of) building with columns
IDS Equity Value Fund
Invests primarily in undervalued common stocks that offer potential
for growth of capital and income.
(icon of) three growing flowers
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.
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PAGE
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.
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 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
<PAGE>
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Specialty growth investment
This fund aggressively seeks capital growth as a hedge against inflation.
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 American Express Shareholder Service, P.O. Box 534,
Minneapolis, MN 55440-0534. Read it carefully before
you invest or send money.
<PAGE>
PAGE
Quick telephone reference
American Express 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
American Express Shareholder Service
Fund performance, objectives and account inquiries
612-671-3733
TTY Service
For the hearing impaired
800-846-4852
American Express Infoline
Automated account information (TouchTone 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
AMERICAN EXPRESS FINANCIAL ADVISORS
IDS Extra Income Fund
IDS Tower 10
Minneapolis, MN 55440-0010
