<PAGE>
PAGE 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
COMMISSION FILE NUMBER 33-13375
IDS LIFE ACCOUNT RE
OF
IDS LIFE INSURANCE COMPANY
(Exact name of registrant as specified in its charter)
MINNESOTA 41-0823832
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
IDS TOWER 10, MINNEAPOLIS, MINNESOTA 55440-0010
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (612) 671-3309
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
<PAGE>
PAGE 2
The Registrant is a separate account of IDS Life Insurance Company
(IDS Life) established pursuant to the insurance laws of the State
of Minnesota for the purposes of funding real estate variable
annuity contracts. Unless otherwise specifically noted, the
information set forth herein only relates to the operations of the
Registrant (the "Account") and not to the operations of IDS Life.
PART 1 - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
<PAGE>
PAGE 3
IDS LIFE ACCOUNT RE
of
IDS LIFE INSURANCE COMPANY
BALANCE SHEET
<TABLE>
<CAPTION>
September 30, December 31,
1994 1993
(unaudited)
<S> <C> <C>
Assets:
Cash $ 193,745 $ 171,242
Investments in short-term securities,
at amortized cost -- 2,493,649
Receivable from IDS Life for contracts sold 465 600
Investments in unconsolidated joint ventures,
at fair value (cost of $34,469,465 and
$34,115,612 at Sept. 30, 1994 and
December 31, 1993 respectively) 28,624,939 28,769,085
Participation in mortgage loan, at fair
value (cost of $3,047,188 at Sept. 30, 1994
and December 31, 1993) 2,994,752 2,995,600
Investment in wholly-owned real estate
property:
Building, at fair value (cost of $13,951,145
and $13,899,674 at Sept. 30, 1994 and
December 31, 1993, respectively) 12,018,391 11,966,920
Land, at fair value (cost of $3,915,263
at Sept. 30, 1994 and December 31, 1993) 3,915,263 3,915,263
Deferred borrowing costs, net of accumulated
amortization of $125,263 and $105,874 at
Sept. 30, 1994 and December 31, 1993, respectively 56,193 75,582
Other assets 9,612 36,012
Total assets $47,813,360 $50,423,953
Liabilities:
Payable to IDS Life for:
Operating expenses $ 42,194 $ 62,289
Contract terminations 23,388 47,077
Revolving loan-principal 1,100,000 0
Revolving loan-interest 2,986 0
Accrued mortality and expense risk fee 40,795 44,667
Accrued asset management fee 50,994 55,834
Liabilities related to wholly-owned
real estate property (Note 5):
Accounts payable and other liabilities 126,611 162,617
Accrued real estate taxes 46,538 --
Mortgage payable 7,871,581 7,926,821
Total liabilities 9,305,087 8,299,305
Contract Owners' Equity:
Net assets applicable to Variable Annuity
contracts in accumulation period $38,508,273 $42,124,648
Accumulation units outstanding 35,277,205 39,000,431
Net asset value per accumulation unit $ 1.09 $ 1.08
See accompanying notes to financial statements.
/TABLE
<PAGE>
PAGE 4
IDS LIFE ACCOUNT RE
of
IDS LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
For the nine months ended
September 30, September 30,
1994 1993
<S> <C> <C>
Income:
Interest income $ 219,335 $ 336,812
Account's equity in earnings of
unconsolidated joint ventures 1,472,882 1,610,385
Rental income 1,724,954 1,690,111
Unrealized (depreciation) appreciation of
participation in mortgage loan (848) 172,969
Unrealized (depreciation) of investments
in unconsolidated joint ventures (497,997) (165,994)
Unrealized appreciation of investment in
wholly-owned real estate property -- 308,240
Total income 2,918,326 3,952,523
Expenses:
Asset management fee 612,652 606,669
Mortality and expense risk fee 380,282 415,505
Amortization of deferred organizational
and borrowing costs 19,388 19,389
Revolving loan interest 4,190 --
Other operating expenses 63,815 75,252
Operating expenses related to wholly-owned
real estate property:
Interest 562,623 567,649
Utilities 137,156 116,408
Repairs and maintenance 138,915 148,674
Property and other taxes 150,775 152,241
Salaries 159,068 172,967
Management fees 85,356 84,054
Other 153,454 109,849
Total expenses 2,467,674 2,468,657
Net income $ 450,652 $ 1,483,866
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 5
IDS LIFE ACCOUNT RE
of
IDS LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
For the three months ended
September 30, September 30,
1994 1993
<S> <C> <C>
Income:
Interest income $ 67,268 $ 98,443
Account's equity in earnings of
unconsolidated joint ventures 519,374 491,683
Rental income 610,243 570,527
Unrealized (depreciation) appreciation of
participation in mortgage loan (1,740) 44,073
Unrealized (depreciation) of investments
in unconsolidated joint ventures -- (172,979)
Unrealized appreciation of investment in
wholly-owned real estate property -- 308,240
Total income 1,195,145 1,339,987
Expenses:
Asset management fee 295,119 257,482
Mortality and expense risk fee 126,255 136,155
Amortization of deferred organizational
and borrowing costs 6,533 6,534
Revolving loan interest 4,190 --
Other operating expenses 11,526 22,367
Operating expenses related to wholly-owned
real estate property:
Interest 187,101 188,815
Utilities 32,002 24,469
Repairs and maintenance 47,279 58,208
Property and other taxes 49,455 50,252
Salaries 61,773 62,596
Management fees 29,084 28,413
Other 59,212 39,787
Total expenses 909,529 875,078
Net income $ 285,616 $ 464,909
See accompanying notes to financial statements.
</TABLE> <PAGE>
PAGE 6
IDS LIFE ACCOUNT RE
of
IDS LIFE INSURANCE COMPANY
STATEMENT OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
For the nine months ended
September 30, September 30,
1994 1993
<S> <C> <C>
Cash flows from operating activities:
Net Income $ 450,652 $ 1,483,866
Adjustments to reconcile net income to net cash
used in operating activities:
Account's equity in earnings of unconsolidated
joint ventures (1,472,882) (1,610,385)
Change in accrued interest on participation
in mortgage loan -- 22,572
Amortization of organizational and borrowing costs 19,389 19,389
Change in unrealized depreciation of investments
in unconsolidated joint ventures 497,997 165,994
Change in unrealized depreciation (appreciation) of
participation in mortgage loan 848 (172,969)
Change in unrealized appreciation of investment
in wholly-owned real estate property -- (308,240)
Change in other assets 26,400 52,145
Change in payable to IDS Life for operating expenses (20,095) 5,681
Change in accrued mortality and expense risk fee (3,872) (6,350)
Change in accrued asset management fee (4,840) (7,938)
Change in payables and other liabilities related
to wholly-owned real estate property 10,532 78,970
Total adjustments to net income (946,523) (1,761,131)
Net cash provided by (used in) operating activities (495,871) (277,265)
Cash flows from investing activities:
Net sales of short-term securities 2,493,649 4,704,640
Capital improvements to wholly-owned real estate property (51,471) (16,991)
Distributions received from joint ventures 1,119,030 981,630
Net cash provided by investing activities 3,561,208 5,669,279
Cash flows from financing activities:
Proceeds from sales of contracts 1,177,291 1,283,950
Payments for contract terminations (5,267,871) (6,383,122)
Decrease in mortgage payable (55,240) (50,253)
Change in payable to IDS Life for revolving loan 1,100,000 --
Change in payable to IDS Life for revolving loan interest 2,986 --
Net cash used in financing activities (3,042,834) (5,149,425)
Net increase in cash 22,503 242,589
Balance of cash at beginning of year 171,242 321,420
Balance of cash at end of period $ 193,745 $ 564,009
Supplemental cash flow disclosure:
Cash paid for mortgage interest $ 562,623 $ 567,649
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 7
IDS LIFE ACCOUNT RE
of
IDS LIFE INSURANCE COMPANY
September 30, 1994
NOTES TO FINANCIAL STATEMENTS
(unaudited)
1. GENERAL
In the opinion of the management of IDS Life, the
accompanying unaudited financial statements for IDS Life
Account RE (the "Account") contain all adjustments
(consisting of only normal recurring adjustments) necessary
to present fairly its balance sheets as of September 30, 1994
and December 31, 1993; statements of operations for the three
and nine months ended September 30, 1994 and 1993; and the
statement of cash flows for the nine months ended
September 30, 1994 and 1993. These statements are condensed
and therefore do not include all of the information and
footnotes required by generally accepted accounting
principles for complete financial statement disclosure. The
statements should be read in conjunction with the Account's
financial statements as of and for the year ended December
31, 1993 and the notes thereto contained in the Account's
prospectus dated April 30, 1994. The results of operations
for the nine months ended September 30, 1994 are not
necessarily indicative of the results expected for the full
year.
2. INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES
Unconsolidated Joint Ventures - Summary Information
Summary information for the Account of its investments in
unconsolidated joint ventures for the the nine months ended
September 30, 1994 and 1993 is as follows:
For the nine months ended
September 30
1994 1993
Account's share of net
investment income from
unconsolidated joint ventures $ 1,472,882 $ 1,610,385
Total net investment income of
unconsolidated joint ventures $18,358,035 $20,360,316
Total income of unconsolidated
joint ventures $34,936,162 $35,049,425
<PAGE>
PAGE 8
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Financial Condition and Results of Operations
For the Nine Months Ended September 30, 1994 Compared to Nine
Months Ended September 30, 1993 -
Net assets decreased from $42,124,648 at December 31, 1993 to
$38,508,273 at September 30, 1994. During this same time period,
the accumulation unit value increased to $1.09. The Account
experienced net terminations amounting to $4,090,580 for the nine
months ended September 30, 1994 compared to $5,099,172 for the nine
months ended September 30, 1993.
Net income for the nine months ended September 30, 1994 was
$450,652 compared to $1,483,866 for the nine months ended
September 30, 1993. The difference was primarily due to the
Account's recognition of a greater amount of unrealized
depreciation on its investments in unconsolidated joint ventures
during the nine months of 1994 than during the same period of 1993,
as well as the recognition during the same period of 1993 of
approximately $481,000 of unrealized appreciation on its
participation in the mortgage loan and wholly-owned real estate
investment.
Interest income represents income earned on the Account's
investment in short-term securities and the participation in a
mortgage loan. Interest generated from short-term investments
decreased to $20,847 from $137,252 for the nine months ended
September 30, 1994 and 1993, respectively. This decrease is due
primarily to a lower average amount invested in short-term
securities. Income generated from participation in the mortgage
loan remained relatively unchanged compared to the corresponding
period in 1993.
For the nine months ended September 30, 1994, the Account's equity
in earnings of its unconsolidated joint ventures (N/S Associates,
Monmouth Associates, and 1225 Connecticut) was $1,472,882 which
represents a decrease from $1,610,385 for the nine months ended
September 30, 1994. The decrease is primarily due to an adjustment
to the recording of the reimbursements from tenants for real estate
taxes and common area costs related to N/S Associates.
In 1993, the Account recognized net unrealized depreciation of
investments in unconsolidated joint ventures of approximately
$165,994 for the nine months ended September 30, 1993. This net
depreciation was primarily due to the recognition in the first
quarter of 1993 of unrealized appreciation of $327,000 related to a
slight adjustment of the capitalization rate used in valuing the
1225 Connecticut office building, offset by the recognition of
unrealized depreciation of the investment in N/S Associates during
the second quarter of 1993 in the amount of approximately $320,000,
which was related to a write down in the estimated value of
Northridge Mall, and by the recognition of unrealized depreciation
in the amount of approximately $173,000 relating to the 1225
Connecticut office building. This latter adjustment to 1225
Connecticut's estimated value was consistent with a valuation
performed by an independent appraiser. In 1994, the Account <PAGE>
PAGE 9
recognized net unrealized depreciation of investments in
unconsolidated joint ventures of approximately $498,000 for the
nine months ended September 30, 1994. This net depreciation was
primarily due to a write down in the estimated value of Northridge
Mall, partially offset by an increase in the estimated value of
Southridge Mall in the second quarter of 1994.
Northridge Mall continues to be adversely affected by the
perception that it is an unsafe place to shop. This perception has
resulted in declining sales and occupancy over the past three
years. Compounding the problem of declining sales are the high
operating costs for tenants at the mall due to high real estate
taxes. Occupancy has also been affected by tenant bankruptcies
during 1993 and 1994. As of September 30, 1994, occupancy of the
mall shops was approximately 79%, including temporary tenants under
short term leases. Same store sales per square foot for mall
tenants decreased approximately 6 percent for the nine months of
1994 as compared to the same period in 1993. As a result of these
factors, it is expected that the Account will recognize further
unrealized depreciation in the fourth quarter of 1994 on its
investment in Northridge Mall through N/S Associates.
To counter the negative perception for Northridge Mall, N/S
Associates has implemented certain capital improvements and
operational programs to improve the shopping center's safety and
appearance, as well as instituted certain marketing efforts to
enhance its image. However, elimination of the negative perception
is expected to take some time. In addition, N/S Associates is
seeking to increase occupancy at the shopping center by
aggressively marketing space for new and renewal tenants, as well
as continuing to cooperate with existing tenants who need rent
reductions in order to retain occupancy of their space.
Same store sales per square foot for mall tenants at Southridge
Mall increased approximately 1 percent for the first nine months of
1994 as compared to the same period in 1993. Occupancy of the mall
shops at the shopping center decreased from approximately 92
percent at the beginning of the year to approximately 89 percent as
of September 30, 1994, including temporary tenants with short term
leases. High operating costs for tenants attributable to high real
estate taxes for the shopping center somewhat limits the ability of
N/S Associates to increase rents there.
The Account paid asset management fees of $612,652 and $606,669 for
the nine months ended September 30, 1994 and 1993, respectively.
The Account also paid a mortality and expense risk fee of $380,282
for the nine months ended September 30, 1994 compared to $415,505
for the corresponding period in 1993. The increase in asset
management fees is due to an increase in the incentive asset
management fee for 1993 payable to the Investment Adviser in 1994
as compared to that for 1992 payable in 1993. The increase was
partially offset by a decrease in the monthly asset management fee
in 1994 due to a decrease in the Account's assets. The decrease in
mortality and expense risk fee was also due to a decrease in the
Account's assets.
<PAGE>
PAGE 10
For the Three Months Ended September 30, 1994 Compared to the Three
Months Ended September 30, 1993 -
Net income for the three months ended September 30, 1994 was
$285,616 compared to $464,909 for the three months ended
September 30, 1993. The difference was primarily due to the
Account's recognition of unrealized appreciation on its
participation in mortgage loan and investment in wholly-owned real
estate property, which was partially offset by unrealized
depreciation on investments in unconsolidated joint ventures in
1993, compared to unrealized depreciation of $1,740 on its
participation in mortgage loan in 1994.
During the three months ended September 30, 1994, $519,374 of
income was derived from the Account's equity in earnings of its
unconsolidated joint ventures (N/S Associates, Monmouth Associates,
and 1225 Connecticut) compared to $491,683 for the corresponding
three months in 1993.
In addition, the Account generated rental income of $610,243 for
the three months ended September 30, 1994 from its wholly-owned
real estate investment, West Springfield Terrace Apartments,
compared to $570,527 for the three months ended September 30, 1993,
with the increase primarily attributable to increased average rents
and an increase in occupancy at the property. Expenses related to
the wholly-owned real estate investment totaled $465,906 for the
three months ended September 30, 1994 compared to $452,540 for the
corresponding period in 1993.
The Account paid total asset management and mortality and expense
risk fees for the three months ended September 30, 1994 of $421,374
compared to $393,637 for the corresponding period in 1993. The
increase in asset management fees is due to the increase in the
incentive asset management payable in 1994, as discussed on Page 9.
The decrease in mortality and expense risk fee reflects a decrease
in total assets of the Account.
Liquidity and Capital Resources
For the Nine Months Ended September 30, 1994 -
At September 30, 1994, the Account had cash and investments in
short-term securities of approximately $193,745 as compared to
$2,665,000 at December 31, 1993. The decrease is primarily
attributable to net contract terminations during the nine months
ended September 30, 1994. The Account has experienced net contract
terminations in each of the last 12 quarters.
The liquidity requirements of the Account are generally met by
funds provided from the Account's short-term investments, cash
distributions from unconsolidated joint ventures, operating cash
flow, interest income, proceeds from sales of contracts, and
borrowings under the line of credit from IDS Life discussed below.
The primary uses of funds currently are expected to be for property
operating expenses, asset management and mortality and expense risk
fees, payments for contract terminations and contributions to pay
the Account's share of the financing of the Monmouth Mall
renovation discussed below.<PAGE>
PAGE 11
In March 1994, the Account obtained a revolving line of credit for
up to $10 million from IDS Life to pay for contract surrenders and
other obligations under the contracts. The line of credit is for a
one-year term and is automatically renewed at each anniversary for
an additional one-year term subject to termination by one party
giving 30 days' prior written notice of termination to the other
party. Borrowings under the line of credit must be made in
increments (or multiples) of $100,000. Outstanding borrowings
under the line of credit bear interest at a floating rate equal to
the 30-day London Interbank Offered Rate (LIBOR), adjusted on a
monthly basis. The line of credit requires monthly payments of
interest only until the earlier of maturity or termination of the
line of credit, when the entire outstanding principal plus any
accrued and unpaid interest on the line of credit will be due and
payable. Outstanding principal may be repaid in whole or in part
in increments (or multiples) of $100,000, together with any accrued
and unpaid interest thereon, at any time without premium or
penalty. Borrowings under the line of credit are generally
unsecured, although IDS Life will have a right to set off against
any deposits or credits of the Account held by IDS Life for
outstanding borrowings. As of November 10, 1994, $1,700,000 were
outstanding under the line of credit. The proceeds of these
borrowings were used to pay contract terminations.
If borrowings under the line of credit do not provide sufficient
liquidity, the Account expects to consider additional options,
which could include among other things, the sale of real estate
related investment(s). In such event, a sale or sales of real
estate related assets may be required under circumstances that
could result in a realization of less than the full value of the
asset or assets sold. The Account does not expect to acquire
additional real estate related investments until contract purchase
proceeds exceed contract termination payments.
Distributions received from joint ventures increased by $137,400
for the nine months ended September 30, 1994 as compared to the
same period in 1993. The increase was primarily due to a
resumption in late 1993 of quarterly distributions from 1225
Investment Corporation, which deferred distributions during part of
1993 pending a refinancing of its mortgage loan. The increase in
distributions received from unconsolidated joint ventures was
partially offset by the elimination of distributions from Monmouth
Associates, which has used its cash reserves and cash flow to
provide funds for the initial draw downs under its renovation loan,
as discussed below. It is expected that Monmouth Associates will
continue to use its cash flow, to the extent available, to fund
amounts which will be drawn down under the renovation loan, which
closed in May 1994.
The renovation loan for Monmouth Mall is in the maximum principal
amount of $29.1 million and bears interest on the outstanding
principal amount at a rate of 10.5% per annum. Prior to completion
of the renovation (and subject to funding of the maximum amount of
the renovation loan), monthly interest on the loan may be accrued
and added to principal, and after completion of the renovation, the
loan requires monthly payments of interest only until maturity of
the loan when the entire principal balance and any accrued and
unpaid interest will be due. As additional consideration for
making the renovation loan, Monmouth Associates' participation in <PAGE>
PAGE 12
certain levels of proceeds from a joint sale or refinancing of the
fee and leasehold interests in the property will be increased until
it has received aggregate payments equal to an internal rate of
return of 11 percent per annum on its investments in the first
leasehold mortgage loan and the land subject to the ground lease.
The renovation loan will mature contemporaneously with the first
leasehold mortgage loan in October 2003, subject to (i)
acceleration in the event of default or certain other events,
including a joint sale of the entire fee and leasehold interests in
Monmouth Mall, or (ii) extension of the loan maturity by Monmouth
Associates under certain circumstances for up to 20 years on the
same loan terms prior to the extension (other than the maturity
date). The renovation loan is secured by a leasehold mortgage
subordinated to the leasehold mortgages securing the first
leasehold mortgage loan and the loans previously made for certain
tenant improvements or other ordinary capital expenditures, and is
cross-defaulted with those loans as well as the ground lease. The
renovation loan is generally non-recourse to the borrower/lessee,
and payment of principal and accrued interest of the renovation
loan out of proceeds from a joint sale or refinancing of the fee
and leasehold interests in the property is subordinated to the
payment of certain other amounts payable to Monmouth Associates in
connection with the ground lease and the first leasehold mortgage
loan.
The estimated cost of the renovation is $28,500,000. As of the
date of this report, Monmouth Associates has funded approximately
$5.8 million and these fundings were made from cash reserves held
by Monmouth Associates and its cash flow from interest and ground
rent payments received from the borrower/lessee. It is currently
anticipated that additional draw downs under the renovation loan
commencing in December of this year will be funded by capital
contributions made to Monmouth Associates by its joint venture
partners pro rata based upon their respective interests. Based
upon its 6.97% interest in Monmouth Associates, the Account's share
of the additional capital contributions would be approximately
$1,134,000. In addition to financing the renovation, Monmouth
Associates may be required to make certain additional loans to pay
a portion of costs of certain tenant improvements or other ordinary
capital expenditures.
Until the Monmouth renovation is finished, currently anticipated to
be in the fourth quarter of 1995, it is expected that there will be
lower than normal leasing and occupancy at the shopping center,
primarily as a result of the need to hold some tenant spaces vacant
and to have certain tenants occupy spaces on a temporary basis.
The occupancy of mall space at the shopping center as of
September 30, 1994 was approximately 50 percent, which represents a
decrease from 76 percent from the previous quarter due to the
continuing renovation. However, the shopping center is
approximately 81 percent leased, including leases whose terms will
commence after renovation of tenant space permits occupancy.
Monmouth Associates is also considering issues related to the
proposed merger of R.H. Macy and Company and Federated Department
Stores as it may affect the Macy's and Abraham & Straus department
stores at Monmouth Mall. Abraham & Straus is owned by Federated
Department Stores.
<PAGE>
PAGE 13
The Account has a loan outstanding in the principal amount of
approximately $7,870,000 as of September 30, 1994, secured by its
wholly-owned real estate investment. The loan has an original term
of seven years and bears interest at a rate of 9.5 percent per
annum. The loan requires monthly payments of principal and
interest aggregating $824,000 per annum until August of 1996 when
the remaining principal balance of approximately $7,690,000 and any
accrued and unpaid interest will be due and payable.
In January 1994, 1225 Investment Corporation refinanced its
mortgage loan, which had an outstanding principal balance of
approximately $1,667,000, with a new first mortgage loan in the
principal amount of $7,000,000 that bears interest at 6.98 percent
per annum. The new loan requires monthly payments of interest only
aggregating approximately $489,000 per annum until maturity in
February 2001 when the entire principal amount together with
accrued and unpaid interest will be due and payable. 1225
Investment Corporation intends to use the approximately $5,250,000
of excess proceeds from the refinancing to pay for lobby and other
common area renovation costs, a sprinkler system and certain tenant
improvement costs related to the Ernst & Young lease extension, as
well as a reserve for additional tenant improvement costs and
leasing commissions anticipated to be incurred upon the expiration
of certain existing leases. To date, approximately $3.9 million
has been spent for the renovation and other capital costs and
leasing commissions. In addition, leases have been, or are in the
process of being, obtained to make the office and retail space 100
percent leased.
N/S Associates undertakes asbestos removal from time to time at
portions of the Northridge and Southridge Malls as tenant spaces
are vacated and prior to occupancy by new tenants. The cost of
such asbestos removal generally will be provided out of cash flows
from the properties.
Amounts expended by N/S Associates for capital items through the
nine months of 1994 were approximately $1,445,000, including
amounts for replacement of an escalator at Southridge Mall and
improvement of interior lighting and partial roof replacement at
Northridge Mall. It is currently anticipated that amounts incurred
for capital items for all of 1994 will be approximately $1.5
million. This represents a decrease of approximately $1.1 million
from the originally budgeted amount that is attributable primarily
to a reduction in actual leasing compared to anticipated leasing,
and a resulting decrease in tenant improvement and asbestos removal
costs, at both Northridge and Southridge Malls during the current
year. N/S Associates currently expects that capital improvements
previously budgeted but not incurred in 1994 will be incurred in
1995.
N/S Associates has executed a commitment with an institutional
lender for a loan in the principal amount of $35 million to
refinance the existing mortgage loan secured by Southridge Mall.
Proceeds from the new loan would also be used to repay the two
existing mortgage loans secured by Northridge Mall and to pay
approximately $2.9 million of the capital improvements currently
expected to be incurred for Northridge and Southridge Malls during
1995. Under the terms of the commitment, the new loan is to have a
term of seven years, bear interest at 8.35 percent per annum and <PAGE>
PAGE 14
require monthly payments of interest only prior to maturity. The
new loan is expected to result in a cash flow savings since the
current constants on the existing mortgage loans average
approximately 12 percent. The closing of the refinancing is
expected to occur in early 1995, although there is no assurance
that the refinancing will be completed.
Affiliates of the Investment Adviser have entered into a contract
to sell their assets to an unaffiliated third party that acts as
adviser to institutional investors with respect to real estate
investments. In addition, substantially all of the management
personnel of these affiliates will also become management personnel
of the purchaser or its affiliates if the sale is completed. These
affiliates of the Investment Adviser include JMB Properties
Company, which acts as property manager for the 1225 Connecticut
office building and West Springfield Terrace Apartments properties,
and certain other entities that act as advisers to the
institutional investors who constitute all or some of the other
partners or shareholders of N/S Associates, Monmouth Associates,
and 1225 Investment Corporation. In the event that the sale is
completed, it is expected that the successor to JMB Properties
Company's assets would act as property manager of the 1225
Connecticut office building and West Springfield Terrace Apartments
after the sale on the same terms that existed prior to the sale and
that the sale would not otherwise have a significant effect on the
Account's real estate related investments. However, under the
terms of the partnership agreements for N/S Associates and Monmouth
Associates, and under the terms of a shareholders' agreement for
1225 Investment Corporation, major decisions concerning the joint
venture partnerships and their real estate investments are to be
made by the vote or approval of the partner or partners holding a
majority of the percent interests, and certain major decisions
concerning 1225 Investment Corporation and its real estate
investment are to made by shareholders owning at least 96 percent
of the corporation's outstanding stock. In the event that the sale
is completed, the other partners in N/S Associates and Monmouth
Associates and certain of the other shareholders of 1225 Investment
Corporation would not be advised or managed by entities affiliated
with the Investment Adviser.
At September 30, 1994, real property investments (through two
unconsolidated joint ventures, N/S Associates and 1225 Connecticut
and a wholly-owned property, West Springfield Terrace Apartments),
mortgage loan and land sale-leaseback investments (through an
unconsolidated joint venture, Monmouth Associates, and a
participation in the loan for Riverpoint Center) and short-term
investments represented 72 percent, 27.5 percent and .5 percent of
total assets, respectively. The Account currently intends to
maintain an asset mix of 50 percent to 70 percent in real property
investments, 15 percent to 40 percent in mortgage loans or sale-
leaseback investments, and the remaining portion in short-term or
intermediate-term liquid debt securities.<PAGE>
PAGE 15
PART II. OTHER INFORMATION
---------------------------
Item 1. LEGAL PROCEEDINGS
There are no material current or pending legal proceedings
which the Registrant is a party to, or to which the
Registrant's assets are subject.
Item 2. CHANGES IN SECURITIES
Not applicable
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits
4.1 Form of Deferred Variable Annuity Contract is
hereby incorporated herein by reference to Exhibit
4 to the Account's Form S-1 (as amended), File
Number 33-13375, filed July 17, 1987.
4.2 Copy of mortgage loan documents relating to West
Springfield Terrace Apartments is hereby
incorporated herein by reference to Exhibit 4.2 to
the Account's Form S-1 (as amended), File Number
33-13375, filed April 12, 1990.
4.3 Copy of the line of credit agreement, dated
March 30, 1994 between IDS Life and the Account
(including a copy of the executed promissory note,
dated March 30, 1994) is hereby incorporated by
reference to Exhibit 4.3 to the Account's Form 10-K
Report for the year ended December 31, 1993, File
Number 33-13375, filed April 5, 1994.
10.1 Copy of Investment Advisory Agreement between IDS
Life and JMB Annuity Advisors is hereby
incorporated herein by reference to Exhibit 10.1 to
the Account's Form S-1 (as amended), File Number
33-13375, filed April 29, 1988.
10.2 Copy of N/S Associates Joint Venture Agreement
together with certain documents relating to the
purchase of an interest in Northridge Mall is
hereby incorporated herein by reference to Exhibit
10.2 to the Account's Form S-1 (as amended), File
Number 33-13375, filed April 29, 1988.
<PAGE>
PAGE 16
10.2.1 Copy of Second Amended and Restated Articles of
Partnership of N/S Associates hereby incorporated
herein by reference to Exhibit 10.2.1 to the
Account's Form S-1 (as amended), File Number
33-13375, filed April 20, 1989.
10.3 Copy of N/S Associates Joint Venture Agreement
together with certain documents relating to the
purchase of an interest in Southridge Mall is
hereby incorporated herein by reference to
Exhibit 10.3 to Form S-1 (as amended), File
Number 33-13375, filed April 29, 1988.
10.4 Copy of Commitment Letter relating to the funding
of a participating mortgage loan secured by
Riverpoint Center is hereby incorporated herein by
reference to Exhibit 10.4 to Form S-1 (as amended),
File Number 33-13375, filed October 11, 1988.
10.5 Copy of Amended and Restated Articles of
Partnership of Monmouth Associates are hereby
incorporated herein by reference to Exhibit 10.5 to
the Account's Form S-1 (as amended), File Number
33-13375, filed April 12, 1990.
10.6 Copy of Agreement together with certain other
documents relating to the purchase of West
Springfield Terrace Apartments is hereby
incorporated herein by reference to Exhibit 10.6 to
Form S-1 (as amended), File Number 33-13375, filed
October 16, 1989.
10.7 Copy of Agreement together with certain documents
relating to the purchase of an interest in 1225
Connecticut Avenue is hereby incorporated herein by
reference to the Account's Form S-1 (as amended),
File Number 33-13375, filed June 29, 1990.
27.1 Financial Data Schedule of the Account for the
period ended September 30, 1994 is filed herewith.
(B) Report on Form 8-K
No reports on Form 8-K were required to be filed by the
Registrant for the nine months ended September 30,
1994.
<PAGE>
PAGE 17
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
IDS LIFE ACCOUNT RE
of
IDS LIFE INSURANCE COMPANY
(Registrant)
Date: November 15, 1994 /S/ Melinda Urion
Melinda S. Urion
Executive Vice President
and Controller
<PAGE>
<PAGE>
PAGE 1
IDS Life Account RE
File No. 33-13375
EXHIBIT INDEX
Exhibit 27.1: Financial Data Schedule.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<PERIOD-START>
<PERIOD-END> SEP-30-1994
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