<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, 1996
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
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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
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PAGE 3
IDS LIFE ACCOUNT RE
of
IDS LIFE INSURANCE COMPANY
BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
(unaudited)
<S> <C> <C>
Assets:
Cash $ 8,649,002 $ 586,729
Receivable from IDS Life for contracts sold -- 300,000
Investments in unconsolidated joint ventures,
at fair value (cost of $36,135,146 and
$35,858,482 at September 30, 1996
and December 31, 1995, respectively) 23,919,625 24,150,472
Participation in mortgage loan, at fair
value (cost of $0 at September 30, 1996
and December 31, 1995) 2,818,599 2,966,207
Accrued interest on participation in mortgage loan 544 (5,401)
Investment in wholly-owned real estate
property:
Building, at fair value (cost of $0
and $14,174,329 at September 30, 1996 and
December 31, 1995, respectively) -- 12,380,339
Land, at fair value (cost of $0
at September 30, 1996 and December 31, 1995) -- 3,915,263
Deferred borrowing costs, net of accumulated
amortization of $0 and $157,577 at
September 30, 1996 and December 31, 1995, respectively -- 23,879
Other assets 0 43,135
Total assets $35,387,770 $ 44,360,623
Liabilities:
Payable to IDS Life for:
Operating expenses $ 43,660 $ 76,619
Contract terminations -- 271,318
Accrued mortality and expense risk fee 39,015 40,420
Accrued asset management fee 48,769 50,525
Liabilities related to wholly-owned
real estate property:
Accounts payable and other liabilities 179,076 244,937
Accrued real estate taxes -- --
Mortgage payable -- 7,770,339
Total liabilities 310,520 8,454,158
Contract Owners' Equity:
Net assets applicable to Variable Annuity
contracts in accumulation period $35,077,250 $ 35,906,465
Accumulation units outstanding 35,475,694 36,353,929
Net asset value per accumulation unit $ 0.99 $ 0.99
See accompanying notes to financial statements.
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PAGE 4
IDS LIFE ACCOUNT RE
of
IDS LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS
(unaudited)
For the nine months ended
Sep 30, Sep 30,
1996 1995
Income:
Interest income $ 211,934 $ 198,966
Account's equity in earnings of
unconsolidated joint ventures 1,583,737 1,453,176
Rental income 1,877,789 1,794,031
Unrealized (depreciation) of participation
in mortgage loan (147,608) (27,817)
Unrealized appreciation of investment in wholly-owned
real estate property -- 138,764
Unrealized appreciation (depreciation) of
investments in unconsolidated joint ventures (507,511) 63,824
Realized depreciation in wholly-owned
real estate property (806,698) --
Total income 2,211,643 3,620,944
Expenses:
Asset management fee 442,298 445,113
Mortality and expense risk fee 353,838 356,091
Amortization of deferred organizational
and borrowing costs 19,602 19,389
Revolving loan interest -- 100,736
Other operating expenses 53,849 56,734
Operating expenses related to wholly-owned
real estate property:
Interest 551,315 557,096
Utilities 107,363 121,731
Repairs and maintenance 147,556 172,432
Property and other taxes 153,790 141,352
Salaries 146,578 125,871
Management fees 84,854 88,786
Other 98,450 117,413
Total expenses 2,159,493 2,302,744
Net income $ 52,150 $ 1,318,200
See accompanying notes to financial statements.
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PAGE 5
IDS LIFE ACCOUNT RE
of
IDS LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS
(unaudited)
For the three months ended
Sep 30, Sep 30,
1996 1995
Income:
Interest income $ 78,584 $ 66,323
Account's equity in earnings of
unconsolidated joint ventures 579,475 488,715
Rental income 636,645 596,535
Unrealized appreciation (depreciation) of participation
in mortgage loan -- (22,586)
Change in unrealized appreciation (depreciation) of
investments in unconsolidated joint ventures (19,763) 93,875
Realized depreciation in wholly-owned
real estate property (806,698) --
Total income 468,243 1,222,862
Expenses:
Asset management fee 149,557 157,266
Mortality and expense risk fee 119,645 125,814
Amortization of deferred organizational
and borrowing costs 6,676 6,462
Revolving loan interest -- --
Other operating expenses 17,780 24,793
Operating expenses related to wholly-owned
real estate property:
Interest 183,315 185,214
Utilities 21,872 17,556
Repairs and maintenance 52,150 67,210
Property and other taxes 48,392 44,692
Salaries 52,442 45,653
Management fees 27,874 30,347
Other 28,234 34,413
Total expenses 707,937 739,420
Net income (loss) $ (239,694) $ 483,442
See accompanying notes to financial statements.
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PAGE 6
IDS LIFE ACCOUNT RE
of
IDS LIFE INSURANCE COMPANY
STATEMENTS OF CASH FLOWS
(unaudited)
For the nine months ended
Sep 30, Sep 30,
1996 1995
Cash flows from operating activities:
Net Income $ 52,150 $ 1,318,200
Adjustments to reconcile net income to net cash
used in operating activities:
Account's equity in earnings of unconsolidated
joint ventures (1,583,737) (1,453,176)
Change in accrued interest on participation
in mortgage loan (5,945) 3,965
Amortization of organizational and borrowing cost 23,879 19,388
Change in unrealized depreciation of investments
in unconsolidated joint ventures 507,511 (63,824)
Change in unrealized depreciation (appreciation) of
participation in mortgage loan 147,608 27,817
Change in unrealized appreciation of investment
in wholly-owned real estate property -- (138,764)
Change in realized depreciation in wholly-owned
real estate property 806,698 --
Change in other assets 43,135 (10,485)
Change in payable to IDS Life for operating expenses (32,959) 1,834
Change in accrued mortality and expense risk fee (1,405) 6
Change in accrued asset management fee (1,756) 7
Change in payables and other liabilities related
to wholly-owned real estate property (65,861) 34,588
Total adjustments to net income (162,832) (1,578,644)
Net cash used in operating activities (110,682) (260,444)
Cash flows from investing activities:
Capital improvements to wholly-owned real estate property -- (117,748)
Distributions received from joint ventures 1,307,073 1,143,190
Sale of wholly owned property 15,488,904 --
Net cash provided by investing activities 16,795,977 1,025,442
Cash flows from financing activities:
Proceeds from sales of accumulation units 2,341,959 19,501,099
Payments for contract terminations (3,194,642) (17,061,230)
Decrease in mortgage payable (7,770,339) (60,723)
Change in payable to IDS Life for revolving loan -- (2,100,000)
Contribution for Monmouth -- (685,151)
renovation loan (joint venture)
Net cash used in financing activities (8,623,022) (406,005)
Net increase in cash 8,062,273 358,993
Balance of cash at beginning of year 586,729 204,859
Balance of cash at end of period $ 8,649,002 $ 563,852
Supplemental cash flow disclosure:
Cash paid for mortgage interest & revolving loan $ 551,315 $ 657,832
See accompanying notes to financial statements.
</TABLE>
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PAGE 7
IDS LIFE ACCOUNT RE
of
IDS LIFE INSURANCE COMPANY
September 30, 1996
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, 1996
and December 31, 1995; statements of operations for the three
and nine months ended September 30, 1996 and 1995; and the
statements of cash flows for the nine months ended September
30, 1996 and 1995. 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, 1995 and
the notes thereto contained in the Account's prospectus dated
April 30, 1996. The results of operations for the nine
months ended September 30, 1996 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 nine months ended
September 30, 1996 and 1995 is as follows:
For the nine months ended
September 30
1996 1995
Account's share of net
investment income from
unconsolidated joint ventures $ 1,583,737 $ 1,453,176
Total net investment income of
unconsolidated joint ventures $19,697,394 $18,284,571
Total income of unconsolidated
joint ventures $35,526,000 $34,014,000
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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, 1996 Compared to the Nine
Months Ended September 30, 1995 -
Net assets decreased from $35,906,465 at December 31, 1995 to
$35,387,770 at September 30, 1996. During this same time period,
the accumulation unit value remained constant at $.99. The Account
experienced net terminations amounting to $852,683 for the nine
months ended September 30, 1996 compared to net sales
of $2,439,870 for the nine months ended September 30, 1995. The
net terminations for the nine months ended September 30, 1996
include approximately $2,000,000 for accumulation units purchased
by IDS Life, which has been used to pay for contract surrenders, as
discussed more fully below.
Recorded net income for the nine months ended September 30, 1996
was $52,150 compared to $1,318,200 for the nine months ended
September 30, 1995.
Interest income for the nine months ended September 30, 1996
primarily represents income earned on the Account's investment in
the participation in a mortgage loan (Riverpoint Shopping Center).
Income generated from participation in the mortgage loan remained
relatively unchanged compared to the corresponding period in 1995.
The Silo Electronic store (12,100 sq. ft.) at Riverpoint Shopping
Center vacated its space in the third quarter 1995, and
subsequently filed for bankruptcy. The borrower is pursuing its
legal remedies regarding the remaining amounts due. The borrowers
leased the space to Old Navy Clothing Co.
for five years and rent commenced in July 1, 1996. The borrower
had notified the lenders that it was experiencing financial
difficulties and had approached the lenders regarding a loan
modification. During the third quarter of 1996, the lenders and
borrower finalized a loan modification whereby they reached an
agreement to defer payment of a portion of the scheduled debt
service payments from September 15, 1995 to July 15, 1996. In
conjunction with the modification agreement, the scheduled maturity
date of the loan has been accelerated to December 31, 1997.
Finally, the lenders have agreed to accept, at certain dates
through June 30, 1997, repayment of the loan at specified amounts.
The repayment of the loan per such agreement would yield the
Lenders, when paid, an amount less than the current carrying amount
of the loan. However, there can be no assurance that the loan will
be repaid prior to its revised maturity date of December 1997
pursuant to such agreement.
During the third quarter, the borrower notified the Lenders that a
tenant which operates a dry cleaning plant at the site has leaked a
chemical associated with the dry cleaning process that can cause
environmental problems if not handled properly. The lenders have
been advised that the tenant and borrower are currently remediating
the problem. The lenders do not currently expect that the value of
the borrower's property has been materially impaired.
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PAGE 9
For the nine months ended September 30, 1996, the Account
recognized net unrealized depreciation of participation in mortgage
loan of $19,763 as a result of lower effective rents achieved from
the mortgage property upon releasing, as discussed above.
For the nine months ended September 30, 1996, the Account
recognized net unrealized depreciation of investments in
unconsolidated joint ventures of approximately $507,511, primarily
due to a decrease in current assets at Monmouth Associates.
A portion of the decrease was a result of a $4,000,000 cash
distribution in which the Accounts share was $278,800.
Distributions from unconsolidated joint ventures increased for the
nine months ended September 30, 1996 compared to September 30, 1995
primarily due to the Accounts share of Monmouth Associates
distributions of $278,800. The increase was partially offset by
decreased distributions from N/S Associates.
In addition, the Account recorded rental income of $1,877,879 for
the nine months ended September 30, 1996 from its wholly-owned real
estate investment, West Springfield Terrace Apartments, compared to
$1,794,031 for the nine months ended September 30, 1995, primarily
due to modest increases in effective rental rates over the course
of 1995. Expenses related to the wholly-owned real estate
investment totaled $1,289,906 for the nine months ended September
30, 1996 compared to $1,324,681 for the corresponding period in
1995.
On September 30, 1996 the Account sold land and related
improvements known as the West Springfield Terrace Apartments.
The purchaser was not affiliated with the Account and the sale
price was determined by arm's-length negotiations. The sale price
for the land and improvements was $16,100,000 (before deducting
selling costs) and was paid in cash at closing. A portion of the
net sale proceeds was utilized to retire the first mortgage debt
with an outstanding balance of $7,703,649.
For the nine months ended September 30, 1996, the Account's
recorded equity in earnings of its unconsolidated joint ventures
(N/S Associates, Monmouth Associates and 1225 Connecticut) was
$1,583,737 compared to $1,453,176 for the nine months ended
September 30, 1995. However, after eliminating the effect of the
recognition in the first quarter of 1995 of income attributable to
certain lease termination fees received by N/S Associates, the
equity in earnings of unconsolidated joint ventures showed a
increase for the nine months of 1996 of approximately 12.9 percent
compared to the recorded equity in earnings for the nine months of
1995. The increase is due primarily to (i) an increase in interest
earned which is now currently being paid from Monmouth Associates,
(ii) an increase in rental income at 1225 Connecticut due to the
property being 100 percent leased, and (iii) lower interest expense
from N/S Associates in 1996 as a result of prepayment charges
incurred in the first quarter of 1995 in connection with the
repayment and refinancing of the mortgage loans on Northridge and
Southridge Malls. The increase in earnings was partially offset by
lower rental income achieved at Southridge and Northridge Malls due
to lower occupancy.
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PAGE 10
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 a three-year period.
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, 1994 and 1995. As of September 30, 1996, occupancy of the
mall shops was approximately 79%, including temporary tenants
under short term leases.
To counter the negative perception of 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. Certain recent positive sales trends appear to
indicate a modest improvement; 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 through
leasing incentives, as well as continuing to cooperate with
existing tenants who need short-term rent reductions in order to
retain occupancy of their space. Part of the leasing strategy
includes targeting certain well-recognized retailers as a group
that would become tenants at the shopping center. It is expected
that the draw of this group of tenants would help the shopping
center gain leasing momentum and aid in future leasing efforts.
Kohl's Department Store, a successful tenant occupying
approximately 66,000 square feet of space at Southridge Mall,
approached N/S Associates regarding an expansion of its tenant
space and a reduction in its overall leasing costs. During the
third quarter of 1995, N/S Associates and Kohl's entered into an
amendment of its lease. Pursuant to the lease amendment, the term
of Kohl's lease has been extended from 2001 until 2015 and the
tenant space has been increased by approximately 19,000 square feet
to approximately 85,000 square feet, exclusive of storage space.
Kohl's is required to pay annual base rent of $9.25 per square
foot, as well as one-half of its pro rata share for real estate
taxes and a fixed amount for common area maintenance expense.
Kohl's is also obligated to pay as additional rent a percentage of
its gross receipts in excess of a minimum amount of annual sales to
be determined after the tenant has occupancy of the entire leased
space. N/S Associates is responsible for paying the costs of
asbestos removal for the tenant space, which is estimated to be
approximately $1,250,000. Kohl's is obligated to pay other costs
associated with the leased space, including tenant improvements and
lease buy-out and relocation costs, if any, of other tenants (one
of whose lease continues until 2001) that currently occupy a
portion of the expansion space. The lease amendment also contains
an operating covenant pursuant to which Kohl's is obligated to
operate its retail store at Southridge Mall until 2005, subject to
earlier termination under certain circumstances. Although the
lease amendment reduces Kohl's overall rent, the expansion of its
space and the extension of its lease term is expected to help
stabilize the shopping center on a long-term basis by ensuring
Kohl's continued occupancy and contribution to customer traffic.<PAGE>
PAGE 11
As of September 30, 1996, occupancy of the portion of Southridge
Mall owned by N/S Associates was approximately 91%, including
temporary tenants under short-term leases.
The Account paid asset management and mortality expense risk fees
of $796,136 and $801,204 for the nine months ended September 30,
1996 and 1995, respectively.
For the Three Months Ended September 30, 1996 Compared to the Three
Months Ended September 30, 1995 -
Recorded net income (loss) for the nine months ended September 30,
1996 was $52,150 compared to $483,442 for the nine months ended
September 30, 1995.
During the three months ended September 30, 1996, $579,475 of
income was attributable to the Account's recorded equity in
earnings of its unconsolidated joint ventures (N/S Associates,
Monmouth Associates, and 1225 Connecticut) compared to $488,715 for
the corresponding three months in 1995. The increase in income is
primarily due to (i) lease concession burn off at 1225 Connecticut
which is 100% leased and (ii) lower real estate taxes at Northridge
and Southridge. The increase was partially offset by lower rental
income achieved at Southridge and Northridge due to lower
occupancy.
The Account recorded rental income of $636,645 for the three months
ended September 30, 1996 from its wholly-owned real estate
investment, West Springfield Terrace Apartments, compared to
$596,535 for the three months ended September 30, 1995. The
increase in rental income for the three month period is a result of
increased rental rates over 1995. Expenses related to the wholly-
owned real estate investment totaled $414,279 for the three months
ended September 30, 1996 compared to $425,085 for the corresponding
period in 1995.
The Account paid total asset management and mortality expense risk
fees for the three months ended September 30, 1996 of $269,202
compared to $283,080 for the corresponding period in 1995.
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PAGE 12
Liquidity and Capital Resources
For the Nine Months Ended September 30, 1996 Compared to the Nine
Months Ended September 30, 1995 -
At September 30, 1996, the Account had cash of approximately
$8,003,325 as compared to approximately $587,000 at December 31,
1995. The increase in cash for the nine months ended September
30, 1996 as compared to December 31, 1995 is due primarily
to net proceeds received from the sale of the West Springfield
Terrace Apartments. The Account financed a portion of the contract
terminations during the quarter through additional investments made
by IDS Life Insurance Company (IDS Life). The Account had
experienced net contract terminations in 14 consecutive quarters
with net sales (including accumulation units purchased by IDS Life)
in three of the last five quarters.
The liquidity requirements of the Account have generally been 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,
borrowings under the line of credit from IDS Life and purchases of
accumulation units by 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 and
payments for contract terminations.
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. In June 1995, the revolving
credit loan balance of $9,500,000 and accrued interest were repaid
as discussed below.
Effective May 1, 1995, new contract sales of the Account were
discontinued. Additional purchase payments continue to be accepted
for existing contracts in amounts specified in the Account's
prospectus, whether by means of the previously established bank
authorizations or otherwise. Existing contracts also continue to
be serviced and surrender requests will be honored.
IDS Life continues to purchase accumulation units in order to
maintain the Account and its liquidity. IDS Life makes these
payments so that no contract holder is disadvantaged because sales
of new contracts have been discontinued. The initial payments for
accumulation units that IDS Life made into the Account were used to
pay off the amount that the Account had borrowed under its
revolving line of credit. IDS Life expects to continue to make
additional payments into the Account for accumulation units as
needed in order to fund all of the Account's obligations under the
contracts such as paying death benefits and contract terminations.
As of September 30, 1996, IDS Life had purchased approximately
24,767,643 accumulation units.
By purchasing accumulation units, IDS Life has an ownership
interest in the Account. Since IDS Life does not purchase a
contract, it is not subject to surrender charges. However, IDS
Life, as holder of accumulation units, participates in the increase
or decrease in the value of the Account's investments just as other
owners of accumulation units do. IDS Life may realize a gain or
loss on its accumulation units when redeemed.
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PAGE 12
IDS Life currently expects to hold the accumulation units it
purchases until the surrender of all outstanding contracts or until
the Account's liquidity improves (through, for example, one or more
sales of real estate related investments) thereby permitting the
Account to satisfy its anticipated contract obligations. Because
IDS Life may purchase a significant amount of accumulation units,
IDS Life may be subject to certain conflicts of interest it would
not otherwise have if it had not purchased such accumulation units,
including, among other things, a conflict in approving periodic
valuations of real estate investments made by the Investment
Adviser.
The Account does not intend to acquire additional real estate
related investments and intends to liquidate the real estate
related investments that it currently holds when it becomes
advantageous or necessary to do so. To the extent funds of the
Account are not used to pay obligations of the Account, including
those under existing contracts, or the redemption of accumulation
units purchased by IDS Life, such funds will be invested in short-
term debt instruments and possibly intermediate-term bonds with
maturities of up to five years.
Through September 30, 1996, Monmouth Associates had funded
approximately $25,125,000 of the renovation loan for Monmouth Mall.
Fundings of principal on the loan have been made from cash reserves
held by Monmouth Associates, cash flow from interest and ground
rent payments received from the borrower/lessee and capital
contributions made to Monmouth Associates by its partners pro rata
based upon their respective interests. The aggregate amount of
capital contributions to finance the loan is approximately
$9,830,000. The Account's share of these capital contributions is
approximately $685,000. The aggregate amount of the renovation
loan, including accrued and deferred interest of approximately
$1,300,000, is currently expected to be approximately $27,800,000.
Remaining fundings for the renovation loan are expected to be made
from cash flow and funds currently held by Monmouth Associates.
Monmouth Associates may also be required to make certain additional
loans to pay a portion of the costs of certain tenant improvements
or other ordinary capital expenditures. In addition, Monmouth
Associates may provide additional financing to the borrower/lessee
in order to pay costs to be incurred in connection with the
replacement or expansion of a department store tenant at Monmouth
Mall. However, it is not currently expected that this would occur
during 1996.
The renovation is nearing completion with tenant improvement work
for one of the larger tenants and retainage work remaining. This
large tenant opened in late July. The occupancy of mall shops and
outparcel space at the shopping center as of September 30, 1996 was
approximately 72 percent. However, the mall shops and outparcel
space are approximately 85 percent leased, including a lease for a
tenant whose term will commence after renovation of its tenant
space permits occupancy. Leasing and occupancy at the shopping
center have been adversely affected by tenant bankruptcies
occurring in 1995.
<PAGE>
PAGE 13
In February 1995, N/S Associates obtained a new mortgage loan
secured by Southridge Mall in the principal amount of $35,000,000.
The new mortgage loan has a term of seven years, bears interest at
8.35 percent per annum and requires monthly payments of interest
only prior to maturity. A portion of the proceeds from the new
mortgage loan was used to repay the two mortgage loans secured by
Northridge Mall as well as the mortgage loan previously secured by
Southridge Mall. Remaining net proceeds from the refinancing have
been and will be used to pay tenant improvement and other capital
costs at Northridge and Southridge Malls.
N/S Associates currently expects that it will incur approximately
$2,141,000 in 1996 for tenant improvement, asbestos removal and
other capital items at Northridge and Southridge Malls. The
decrease from last quarter is due primarily to unmet leasing which
resulted in lower tenant improvement costs. Actual amounts expended
in 1996 may vary depending on a number of factors, including actual
leasing activity, results of property operations, liquidity
considerations and market conditions over the course of the year.
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 tenant improvements, asbestos removal and other capital items
generally will be provided out of cash flows from the properties.
In this regard, N/S Associates reduced the amount of distributions
to its partners in order to retain funds to pay capital items
expected to be incurred in 1996. N/S Associates expended
approximately $1,967,000 for tenant improvements, asbestos removal
and other capital projects in 1995.
At September 30, 1996, real property investments (through two
unconsolidated joint ventures, N/S Associates and 1225
Connecticut,) 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 56 percent, 33 percent and 11 percent
of total assets, respectively. At September 30, 1995, real
property investments, mortgage loan and land sale-leaseback
investments and short-term investments represented 71 percent, 28
percent and 1 percent of total assets, respectively.<PAGE>
PAGE 14
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 15
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.
10.8 Copy of Purchase Agreement for the sale of the
West Springfield Terrace Apartments is filed
herewith.
27.1 Financial Data Schedule of the Account for the
period ended September 30, 1996 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 three months ended September 30,
1996.
PAGE 16
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 14, 1996 /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.
[CAPTION]
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM THE REGISTRANT'S FORM 10-Q FOR THE
THREE MONTHS ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS INCLUDED IN
SUCH REPORT.
<RESTATED>
<CIK>
<NAME>
<MULTIPLIER>
<CURRENCY>
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<PERIOD-TYPE> 9-MOS
<EXCHANGE-RATE>
<CASH> 8649002
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 8649002
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 35387770
<CURRENT-LIABILITIES> 310520
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 35077250
<TOTAL-LIABILITY-AND-EQUITY> 35387770
<SALES> 0
<TOTAL-REVENUES> 2211643
<CGS> 0
<TOTAL-COSTS> 1254340
<OTHER-EXPENSES> 353838
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 551315
<INCOME-PRETAX> 52150
<INCOME-TAX> 52150
<INCOME-CONTINUING> 52150
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 52150
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
