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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 30(a) OF THE INVESTMENT COMPANY ACT
OF 1940 AND SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
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 2-23772.
IDS Certificate Company
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(Exact name of registrant as specified in its charter)
Delaware 41-6009975
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
IDS Tower 10, Minneapolis, Minnesota 55440
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (612) 671-3131
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: None Name of each exchange on which registered: None
Securities registered pursuant to Section 12(g) of the Act:
Title of class: None
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 such 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 _____
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
Aggregate market value of the voting stock held by non-affiliates of the
registrant. None
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
150,000 Common shares
CERTAIN DOCUMENTS INCORPORATED BY REFERENCE.
None
The registrant meets the conditions set forth in General Instructions I(1)(a)
and (b) of Form 10-K and is therefore filing this Form with the reduced
disclosure format.
The Exhibit Index is located on sequential pages 16-19.
Item 1. Business
IDS Certificate Company (IDSC) is incorporated under the laws of Delaware. Its
principal executive offices are located in the IDS Tower, Minneapolis,
Minnesota, and its telephone number is (612) 671-3131. American Express
Financial Corporation , a Delaware corporation, IDS Tower 10, Minneapolis,
Minnesota 55440-0010, owns 100% of the outstanding voting securities of IDSC. As
of January 1, 1995 IDS Financial Corporation changed its name to American
Express Financial Corporation. American Express Financial Corporation is a
wholly owned subsidiary of American Express Company (American Express), a New
York Corporation, with headquarters at American Express Tower, World Financial
Center, New York, New York.
IDSC has filed a Certificate of Amendment of its Certificate of
Incorporation with the Delaware Secretary of State to change the Company's name
to American Express Certificate Company effective April 26, 2000.
IDSC is a face-amount certificate investment company, registered under
the Investment Company Act of 1940 (1940 Act). IDSC is in the business of
issuing face-amount certificates. Face-amount certificates issued by IDSC
entitle the certificate owner to receive, at maturity, a stated amount of money
and interest or credits declared from time to time by IDSC, in its discretion.
IDSC is continuously engaged in new product development. IDSC currently offers
nine certificates to the public: "IDS Cash Reserve Certificate," "IDS Flexible
Savings Certificate" (formerly "IDS Variable Term Certificate"), "IDS
Installment Certificate," "IDS Preferred Investors Certificate," "IDS Stock
Market Certificate" (marketed in some channels as "American Express Stock Market
Certificate"), "IDS Market Strategy Certificate," "American Express Investors
Certificate" (including a form of American Express Investors Certificate offered
to select investors who, among other things, invest at least $50 million in the
certificate), and "American Express Special Deposits." The American Express
Special Deposits is only marketed through offices of American Express Bank Ltd.
(AEB) in England and Hong Kong and is not registered for sale in the United
States. All certificates are currently sold without a sales charge. The IDS
Installment Certificate, the IDS Flexible Savings Certificate, the IDS Stock
Market Certificate (including the American Express Stock Market Certificate),
the IDS Preferred Investors Certificate, the IDS Market Strategy Certificate,
the American Express Investors Certificate and the American Express Special
Deposits currently bear surrender charges for premature surrenders. All of the
above described certificates, except the American Express Special Deposits, are
distributed pursuant to a Distribution Agreement with American Express Financial
Advisors Inc. , an affiliate of IDSC. With respect to the American Express
Investors Certificate and the American Express Stock Market Certificate,
American Express Financial Advisors Inc., in turn, has Selling Agent Agreements
with American Express Bank International (AEBI), a subsidiary of American
Express, and Coutts & Co. (USA) International (Coutts), a subsidiary of National
Westminster Bank PLC, for selling the certificates. With respect to the American
Express Special Deposits, IDSC has a Marketing Agreement with AEB, an indirect
subsidiary of American
Express, for marketing the certificate. IDSC has a Distribution Agreement with
American Express Service Corporation (AESC) under which AESC can distribute the
IDS Stock Market Certificate and potentially other certificates. As of December
31, 1999, no certificates have been distributed through AESC. With respect to
IDS Stock Market Certificate, American Express Financial Advisors Inc. has a
Selling Agent Agreement effective March 1999 with Securities America Inc., an
affiliate of IDSC. There is no assurance that IDS certificates will be
distributed by AESC or sold by Securities America Inc.
AEBI and Coutts are Edge Act corporations organized under the
provisions of Section 25(a) of the Federal Reserve Act. American Express
Financial Advisors Inc. has entered into a consulting agreement with AEBI under
which AEBI provides consulting services related to any selling agent agreements
between American Express Financial Advisors Inc. and other Edge Act
corporations.
IDSC also offers one certificate in connection with certain employee
benefit plans available to eligible American Express Financial Corporation
employees, financial advisors, retirees, and eligible employees of the American
Express funds, and to IRAs of persons retired as employees or financial advisors
with American Express Financial Corporation. This certificate is called the
Series D-1 Investment Certificate.
Except for the American Express Investors Certificate and the American
Express Special Deposits, all of the certificates are available as qualified
investments for Individual Retirement Accounts (IRAs), or 401(k) plans and other
qualified retirement plans.
The specified maturities of the certificates range from ten to twenty
years. Within that maturity period, most certificates have terms ranging from
three to thirty-six months. Interest rates change and certificate owners can
surrender their certificates without penalty at term end.
The IDS Cash Reserve Certificate is a single pay certificate that
permits additional investments and on which IDSC guarantees interest in advance
for a three-month term.
The IDS Flexible Savings Certificate is a single payment certificate
that permits a limited amount of additional payments and on which IDSC
guarantees interest in advance for a term of 6, 12, 18, 24, 30, or 36 months,
and potentially other terms, at the buyer's option.
The IDS Installment Certificate is an installment payment certificate
that declares interest in advance for a three-month period and offers bonuses in
the second through ninth years for regular investments.
The IDS Stock Market Certificate is a single payment certificate that
offers the certificate owner the opportunity to have all or part of his/her
interest tied to 52- week stock market performance, as measured by a broad stock
market index, with return of principal guaranteed by IDSC. The owner can also
choose to earn a fixed rate of interest. This certificate is sold to clients of
American Express Financial Advisors Inc., and is available through Securities
America Inc. under a Selling Agent Agreement effective March 1999 with American
Express Financial Advisors Inc., and may be available from time to time through
American Express Service Corporation under its Distribution Agreement with IDSC.
This certificate is marketed as the American Express Stock Market Certificate by
AEBI and Coutts, under Selling Agent Agreements with American Express Financial
Advisors Inc., to AEBI's clients and certain of Coutts' clients, respectively,
who are neither citizens nor residents of the United States. IDSC is developing
a certificate that pays equity-indexed interest for 52-week terms for sale
through broker-dealers that are not affiliated with IDSC.
The IDS Market Strategy Certificate is a single payment certificate
that pays interest at a fixed rate or that offers the owner the opportunity to
have all or part of his/her interest tied to 52-week stock market performance as
measured by a broad stock market index, for a series of 52- week terms starting
every month or at intervals the owner selects.
The American Express Investors Certificate is a single payment
certificate that generally permits additional payments within 15 days of term
renewal. Interest rates are guaranteed in advance by IDSC for a term of 1, 2, 3,
6, 12, 24, or 36 months, at the buyer's option. This certificate is currently
sold by AEBI and Coutts, under Selling Agent Agreements with American Express
Financial Advisors Inc., only to AEBI's clients and certain of Coutts' clients,
respectively, who are neither citizens nor residents of the United States.
The IDS Preferred Investors Certificate is a single payment certificate
that combines a fixed rate of return with IDSC's guarantee of principal for
investments of $250,000 to $5,000,000. Interest rates are guaranteed in advance
by IDSC for a term of 1, 2, 3, 6, 12, 24 or 36 months, at the buyer's option.
The American Express Special Deposits is a single payment certificate
that generally permits additional payments within 15 days of term renewal.
Interest rates are guaranteed in advance by IDSC for a term of 1, 2, 3, 6, 12,
24, or 36 months (by the date of term renewal in the case of 1- month terms), at
the buyer's option. This certificate is currently marketed by AEB through its
London and Hong Kong offices, under a Marketing Agreement with IDSC, only to
AEB's clients who are neither citizens nor residents of the United States. This
certificate is not registered for sale in the United States.
IDSC has filed registration statement amendments with the Securities
and Exchange Commission under which "IDS" in the names of certificates would
change to "American Express" on April 26, 2000.
To IDSC's knowledge, IDSC is by far the largest issuer of face-amount
certificates in the United States. However, such certificates compete with many
other investments offered by banks, savings and loan associations, mutual funds,
broker-dealers and others, which may be viewed by potential clients as offering
a comparable or superior combination of safety and return on investment. In
particular, some of IDSC's products are designed to be competitive with the
types of investment offered by banks and thrifts. Since IDSC's face-amount
certificates are securities, their offer and sale are subject to regulation
under federal and state securities laws. IDSC's certificates are backed by its
qualified assets on deposit and are not insured by any governmental agency or
other entity.
For all the certificates, except for the American Express Investors
Certificate, IDS Preferred Investors Certificate, and the American Express
Special Deposits, IDSC's current policy is to re-evaluate the certificate rates
weekly to respond to marketplace changes. For the American Express Investors
Certificate, IDS Preferred Investors Certificate, and the American Express
Special Deposits, IDSC's current policy is to re-evaluate the rates on a daily
basis. For each product, IDSC refers to an independent index to set the rates
for new sales. Except for American Express Special Deposits, IDSC must set the
rates for an initial purchase of the certificate within a specified range of the
rate from such index. For renewals, IDSC uses such rates as an indication of the
competitors' rates, but is not required to set rates within a specified range.
For the IDS Flexible Savings Certificate, IDS Cash Reserve Certificate
and the IDS Series D-1 Investment Certificate, the published rates of the BANK
RATE MONITOR Top 25 Market Average(R) for various length bank certificates of
deposit are used as the guide in setting rates. For the IDS Installment
Certificate, the average interest rate for money market deposit accounts, as
published by the BANK RATE MONITOR Top 25 Market Average(R) (the BRM Average),
is used as a guide in setting rates. For the American Express Investors
Certificate, IDS Preferred Investors Certificate, and American Express Special
Deposits, the published average rates for comparable length dollar deposits
available on an interbank basis, referred to as the London Interbank Offered
Rates (LIBOR), are used as a guide in setting rates.
To compete with popular short-term investment vehicles such as
certificates of deposit, money market certificates and money market mutual funds
that offer comparable yields, liquidity and safety of principal, IDSC offers the
IDS Cash Reserve Certificate and the IDS Flexible Savings Certificate. The
yields and features on these products are designed to be competitive with such
short-term products. The American Express Investors Certificate, IDS Preferred
Investors Certificate and American Express Special Deposits also compete with
short-term products but use LIBOR rates. The IDS Installment Certificate is
intended to help clients save systematically and may compete with passbook
savings and NOW accounts. The IDS Stock Market Certificate, American Express
Stock Market Certificate and IDS Market Strategy Certificate are designed to
offer interest tied to a major stock market index and principal guaranteed by
IDSC. Certain banks offer certificates of deposit that have features similar to
the Stock Market Certificate and Market Strategy Certificate.
IDSC's gross income is derived principally from interest and dividends
generated by its investments. IDSC's net income is determined by deducting from
such gross income its provision for certificate reserves, and other expenses,
including taxes, the fee paid to American Express Financial Corporation for
advisory and other services, the distribution fees paid to American Express
Financial Advisors Inc., and marketing fees paid to AEB.
IDSC may make forward-looking statements in documents such as this 10-K
Annual Report. In addition, from to time to time, IDSC through its management
may make oral forward-looking statements. Forward-looking statements are subject
to uncertainties that could cause actual results to differ materially from such
statements. Readers are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date on which they are made. IDSC
undertakes no obligation to update publicly or revise any forward-looking
statements.
In regard to the equity-indexed certificate under development, there is
the possibility that the project will not come to fruition, that sufficient
third parties will not be interested in marketing it, that market
disintermediation could affect the effectiveness of related hedging
transactions, and that sales may not be large enough to have a material impact
on IDSC's business, results of operations or financial position.
The following table shows IDSC's certificate payments received and certificate
surrenders for the three years ended December 31, 1999:
1999 1998 1997
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($ in Millions)
Single Payment Certificates
Non-Qualified
Payments through:
American Express Financial Advisors Inc. $950.2 $685.3 $860.2
AEBI, AEB, and Coutts 387.7 303.0 483.5
Surrenders through:
American Express Financial Advisors Inc. 854.3 922.9 733.3
AEBI, AEB, and Coutts 358.4 370.6 287.5
Qualified
Payments through:
American Express Financial Advisors Inc. 194.7 122.4 135.4
Surrenders through:
American Express Financial Advisors Inc. 160.7 164.7 141.0
Installment Payment Certificates
Through American Express Financial Advisors Inc.
Non-Qualified
Payments 62.9 80.4 99.5
Surrenders 114.5 118.5 103.2
Qualified
Payments .6 1.0 1.4
Surrenders 1.8 2.5 2.6
In 1999, approximately 25% of single payment certificate payments were
through AEBI, AEB, and Coutts, and approximately 13% of single payment
certificate payments and 1% of installment certificate payments were of
tax-qualified certificates for use in IRAs, 401(k) plans and other qualified
retirement plans.
The certificates offered by American Express Financial Advisors Inc.
are sold pursuant to a distribution agreement which is terminable on 60 days
notice and is subject to annual approval by IDSC's Board of Directors, including
a majority of the directors who are not "interested persons" of American Express
Financial Advisors Inc. or IDSC as that term is defined in the 1940 Act. The
agreement provides for the payment of distribution fees to American Express
Financial Advisors Inc. for services provided thereunder. American Express
Financial Advisors Inc. is a wholly owned subsidiary of American Express
Financial Corporation. For the sale of the American Express Investors
Certificate and the American Express Stock Market Certificate, American Express
Financial Advisors Inc., in turn, has Selling Agent Agreements with AEBI and
Coutts. For the sale of IDS Stock Market Certificate, American Express Financial
Advisors Inc. has a Selling Agent Agreement with Securities America Inc.
effective March 1999. For the distribution of the IDS Stock Market Certificate,
IDSC has a distribution agreement with American Express Service Corporation. For
marketing American Express Special Deposits, IDSC has a Marketing Agreement with
AEB. These agreements are terminable upon 60 days notice and subject to annual
review by directors who are not "interested persons" of American Express
Financial Advisors Inc. or IDSC except that such annual review is not required
for selling agent agreements.
IDSC receives advice, statistical data and recommendations with respect
to the acquisition and disposition of securities for its portfolio from American
Express Financial Corporation, under an investment management agreement which is
subject to annual review by IDSC's Board of Directors, including a majority of
the directors who are not "interested persons" of American Express Financial
Corporation or IDSC.
IDSC is required to maintain cash and "qualified investments" meeting
the standards of Section 28(b) of the 1940 Act, as modified by an order of the
Securities and Exchange Commission (the SEC). The amortized cost of said
investments must be at least equal to IDSC's net liabilities on all outstanding
face-amount certificates plus $250,000. So long as IDSC wishes to rely on the
SEC order, as a condition to the order, IDSC has agreed to maintain an amount of
unappropriated retained earnings and capital equal to at least 5% of net
certificate reserves. For these purposes, net certificate reserves means
certificate reserves less outstanding certificate loans. In determining
compliance with this condition, qualified investments are valued in accordance
with the provisions of Minnesota Statutes where such provisions are applicable.
IDSC's qualified assets consist of cash and cash equivalents, first mortgage
loans on real estate, U.S. government and government agency securities,
municipal bonds, corporate bonds, preferred stocks and other securities meeting
specified standards. IDSC has also entered into a written informal understanding
with the State of Minnesota, Department of Commerce, that IDSC will maintain
capital equal to 5% of the assets of IDSC (less any loans on outstanding
certificates). When computing its capital for these purposes, IDSC values its
assets on the basis of statutory accounting for insurance companies rather than
generally accepted accounting principles. IDSC is subject to annual examination
and supervision by the State of Minnesota, Department of Commerce (Banking
Division).
Distribution fees on sales of certain certificates are deferred and
amortized over the estimated lives of the related certificates, which is
approximately 10 years. Upon surrender, unamortized deferred distribution fees
and any related surrender charges are recognized in income. Thus, these
certificates must remain in effect for a period of time to permit IDSC to
recover such costs.
Item 2. Properties
None.
Item 3. Legal Proceedings
Registrant has no material pending legal proceedings other than
ordinary routine litigation incidental to its business.
Item 4. Submission of Matters to a Vote of Security Holders
Item omitted pursuant to General Instructions I(2)(c) of Form 10-K.
PART II
Item 5. Market for the Registrant's Common Stock and Related Stockholder
Matters
There is no market for the Registrant's common stock since it is a
wholly owned subsidiary of American Express Financial Corporation and,
indirectly, of American Express. Frequency and amount of cash dividends declared
during the past two years are as follows:
Dividend Payable Date For the year ended December 31, 1999:
January 15, 1999 $13,000,000
June 4, 1999 12,000,000
November 29, 1999 15,000,000
--------------
$40,000,000
Dividend Payable Date For the year ended December 31, 1998:
April 8, 1998 $ 4,500,000
November 17, 1998 25,000,000
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$29,500,000
Restriction on the Registrant's present or future ability to pay
dividends:
Certain series of installment certificates outstanding provide that
cash dividends may be paid by IDSC only in calendar years for which additional
credits of at least 1/2 of 1% on such series of certificates have been
authorized by IDSC. This restriction has been removed for 2000 and 2001 by
IDSC's declaration of additional credits in excess of this requirement.
Appropriated retained earnings resulting from the predeclaration of
additional credits to IDSC's certificate owners are not available for the
payment of dividends by IDSC. In addition, IDSC will discontinue issuance of
certificates subject to the predeclaration of additional credits and will make
no further predeclaration as to outstanding certificates if at any time the
capital and unappropriated retained earnings of IDSC should be less than 5% of
net certificate reserves (certificate reserves less certificate loans). At
December 31, 1999, the capital and unappropriated retained earnings amounted to
5.83% of net certificate reserves.
Item 6. Selected Financial Data
Summary of selected financial information
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The following selected financial information has been derived from the audited
financial statements and should be read in conjunction with those statements and
the related notes to financial statements. Also see "Management's discussion and
analysis of financial condition and results of operations" for additional
comments.
Year Ended Dec. 31, 1999 1998 1997 1996 1995
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($ thousands)
Statement of Operations Data:
Investment income $254,344 $273,135 $258,232 $251,481 $256,913
Investment expenses 77,235 76,811 70,137 62,851 62,817
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Net investment income before provision for
certificate reserves and income tax (expense) benefit 177,109 196,324 188,095 188,630 194,096
Net provision for certificate reserves 138,555 167,108 165,136 171,968 176,407
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Net investment income before income
tax (expense) benefit 38,554 29,216 22,959 16,662 17,689
Income tax (expense) benefit (4,615) 265 3,682 6,537 9,097
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Net investment income 33,939 29,481 26,641 23,199 26,786
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Net realized gain (loss) on investments:
Securities of unaffiliated issuers 1,250 5,143 980 (444) 452
Other - unaffiliated - - - 101 (120)
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Net realized gain (loss) on investments
before income taxes 1,250 5,143 980 (343) 332
Income tax (expense) benefit (437) (1,800) (343) 120 (117)
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Net realized gain (loss) on investments 813 3,343 637 (223) 215
Net income - wholly owned subsidiary 4 1,646 328 1,251 373
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Net income $34,756 $34,470 $27,606 $24,227 $27,374
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Cash Dividends Declared $40,000 $29,500 $- $65,000 $-
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Balance Sheet Data:
Total assets $3,761,068 $3,834,244 $4,053,648 $3,563,234 $3,912,131
Certificate loans 28,895 32,343 37,098 43,509 51,147
Certificate reserves 3,536,659 3,404,883 3,724,978 3,283,191 3,628,574
Stockholder's equity 141,702 222,033 239,510 194,550 250,307
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IDS Certificate Company (IDSC) is 100% owned by American Express Financial
Corporation (Parent).
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of operations:
IDS Certificate Company's (IDSC) earnings are derived primarily from the
after-tax yield on invested assets less investment expenses and interest
credited on certificate reserve liabilities. Changes in earnings' trends occur
largely due to changes in the rates of return on investments and the rates of
interest credited to certificate owner accounts, and also due to changes in the
mix of fully taxable and tax-advantaged investments in the IDSC portfolio.
During 1999, total assets decreased $73 million whereas certificate reserves
increased $132 million. The decreases in total assets and accounts payable and
accrued liabilities resulted primarily from net repayments under reverse
repurchase agreements of $116 million. The decrease in total assets reflects
also, a decrease in net unrealized appreciation on investment securities
classified as available for sale of $115 million. The increase in certificate
reserves resulted primarily from interest accruals of $203 million offset by
certificate maturities and surrenders exceeding certificate sales by $71
million.
During 1998, total assets and certificate reserves decreased $219 million and
$320 million, respectively. The decreases in total assets and certificate
reserves resulted primarily from certificate maturities and surrenders exceeding
certificate sales. The excess of certificate maturities and surrenders over
certificate sales resulted primarily from lower accrual rates declared by IDSC
during 1998. The decrease in total assets in 1998 reflects also, a decrease in
net unrealized appreciation on investment securities classified as available for
sale of $35 million.
1999 Compared to 1998:
Gross investment income decreased 6.9% due primarily to a lower average balance
of invested assets.
Investment expenses increased slightly in 1999. The slight increase resulted
primarily from the net of higher amortization of premiums paid for index options
of $10.1 million and lower interest expense on reverse repurchase and interest
rate swap agreements of $6.5 million, lower distribution fees of $2.3 million
and lower investment advisory and services and transfer agent fees of $.8
million.
Net provision for certificate reserves decreased 17.1% due primarily to lower
accrual rates during 1999.
The decrease in income tax benefit resulted primarily from less tax-advantaged
investment income.
1998 Compared to 1997:
Gross investment income increased 5.8% due primarily to a higher average balance
of invested assets, partially offset by slightly lower yields.
Investment expenses increased 9.5% in 1998. The increase resulted primarily from
higher amortization of premiums paid for index options of $6.4 million, higher
interest expense on reverse repurchase and interest rate swap agreements of $5.2
million, and $3.9 million of fees paid under a transfer agent agreement with
American Express Client Service Corporation effective Jan. 1, 1998. Prior to
Jan. 1, 1998, transfer agent services were provided by AEFC under the investment
advisory and services fee agreement. These higher expenses were partially offset
by lower investment advisory and services fees of $8.1 million and lower
distribution fees of $.7 million.
Net provision for certificate reserves increased 1.2% due primarily to the net
of a higher average balance of certificate reserves and lower accrual rates
during 1998.
The decrease in income tax benefit resulted primarily from less tax-advantaged
investment income.
Liquidity and cash flow:
IDSC's principal sources of cash are payments from sales of face-amount
certificates and cash flows from investments. In turn, IDSC's principal uses of
cash are payments to certificate owners for matured and surrendered
certificates, purchase of investments and payments of dividends to its Parent.
Certificate sales remained strong in 1999 reflecting clients' ongoing desire for
safety of principal. Sales of certificates totaled $1.5 billion in 1999 compared
to $1.1 billion in 1998 and $1.5 billion in 1997. The higher certificate sales
in 1999 over 1998 resulted primarily from special promotions of the seven- and
13-month term IDS Flexible Savings Certificate which produced sales of $295
million. Certificate sales in 1999 benefited also, from higher sales of the IDS
Market Strategy Certificate and American Express Investors Certificate of $95
million and $118 million, respectively.
A special promotion of the seven-month term IDS Flexible Savings Certificate was
offered from March 10, 1999 to June 8, 1999, and applied only to sales of new
certificate accounts during the promotion period. Certificates sold during the
promotion period received a special interest rate, determined on a weekly basis,
of 100 basis points (1.00%) above the Bank Rate Monitor Top 25 Market AverageTM
of comparable length certificates of deposit. Certificate sales during the
promotion period totaled $168 million.
In August of 1999, IDSC introduced special seven- and 13-month term IDS Flexible
Savings Certificates that offer interest rates competitive with those of
certificates of deposit offered online by an affiliated company of IDSC. This
special offer applies to both new and existing certificate accounts and will end
April 26, 2000. Sales of the seven- and 13-month term IDS Flexible Savings
Certificate receive a special interest rate of 70 basis points (.70%) and 80
basis points (.80%), respectively, over the rate in effect at the time of sale
for the six- and 12-month term IDS Flexible Savings Certificate, respectively.
Certificate sales since introduction in August of 1999 totaled $127 million.
Certificate maturities and surrenders totaled $1.7 billion during both 1999 and
1998 compared to $1.3 billion in 1997. The higher certificate maturities and
surrenders in 1998 compared to 1997, resulted primarily from $242 million of
surrenders of the seven- and 13-month term IDS Flexible Savings Certificate
which were sold from Sept. 10, 1997 to Nov. 25, 1997. These surrenders resulted
primarily from lower accrual rates declared by IDSC at term renewal, reflecting
interest rates available in the marketplace.
IDSC, as an issuer of face-amount certificates, is affected whenever there is a
significant change in interest rates. In view of the uncertainty in the
investment markets and due to the short-term repricing nature of certificate
reserve liabilities, IDSC continues to invest in securities that provide for
more immediate, periodic interest/principal payments, resulting in improved
liquidity. To accomplish this, IDSC continues to invest much of its cash flow in
intermediate-term bonds and mortgage-backed securities.
IDSC's investment program is designed to maintain an investment portfolio that
will produce the highest possible after-tax yield within acceptable risk
standards with additional emphasis on liquidity. The program considers
investment securities as investments acquired to meet anticipated certificate
owner obligations.
Under Statement of Financial Accounting Standards (SFAS) No. 115, "Accounting
for Certain Investments in Debt and Equity Securities", debt securities that
IDSC has both the positive intent and ability to hold to maturity are carried at
amortized cost. Debt securities IDSC does not have the positive intent to hold
to maturity, as well as all marketable equity securities, are classified as
available for sale and carried at fair value. The available-for-sale
classification does not mean that IDSC expects to sell these securities, but
that under SFAS No. 115 positive intent criteria, these securities are available
to meet possible liquidity needs should there be significant changes in market
interest rates or certificate owner demand. See notes 1 and 3 to the financial
statements for additional information relating to SFAS No. 115.
At Dec. 31, 1999, securities classified as held to maturity and carried at
amortized cost were $.5 billion. Securities classified as available for sale and
carried at fair value were $2.6 billion. These securities, which comprise 84% of
IDSC's total invested assets, are well diversified. Of these securities,
approximately 97% have fixed maturities of which 89% are of investment grade.
Other than U.S. Government Agency mortgage-backed securities, no one issuer
represents more than 1% of total securities. See note 3 to financial statements
for additional information on ratings and diversification.
During the year ended Dec. 31, 1999, securities classified as available for sale
were sold with an amortized cost and fair value of $102 million and $105
million, respectively. The securities were sold in general management of the
investment portfolio. There were no sales of held-to-maturity securities during
the year ended Dec. 31, 1999.
There were no transfers of available-for-sale or held-to-maturity securities
during the years ended Dec. 31, 1999 and 1998.
Market risk and derivative financial instruments:
The sensitivity analysis of two different tests of market risk discussed below
estimate the effects of hypothetical sudden and sustained changes in the
applicable market conditions on the ensuing year's earnings based on year-end
positions. The market changes, assumed to occur as of year-end, are a 100 basis
point increase in market interest rates and a 10% decline in a major stock
market index. Computation of the prospective effects of hypothetical interest
rate and major stock market index changes are based on numerous assumptions,
including relative levels of market interest rates and the major stock market
index level, as well as the levels of assets and liabilities. The hypothetical
changes and assumptions will be different than what actually occurs in the
future. Furthermore, the computations do not anticipate actions that may be
taken by management if the hypothetical market changes actually occurred over
time. As a result, actual earnings effects in the future will differ from those
quantified below.
IDSC primarily invests in intermediate-term and long-term fixed income
securities to provide its certificate owners with a competitive rate of return
on their certificates while managing risk. These investment securities provide
IDSC with a historically dependable and targeted margin between the interest
rate earned on investments and the interest rate credited to certificate owners'
accounts. IDSC does not invest in securities to generate trading profits for its
own account.
IDSC's Investment Committee, which comprises senior business managers, meets
regularly to review models projecting different interest rate scenarios and
their impact on IDSC's profitability. The committee's objective is to structure
IDSC's portfolio of investment securities based upon the type and behavior of
the certificates in the certificate reserve liabilities, to achieve targeted
levels of profitability and meet certificate contractual obligations.
Rates credited to certificate owners' accounts are generally reset at shorter
intervals than the maturity of underlying investments. Therefore, IDSC's margins
may be negatively impacted by increases in the general level of interest rates.
Part of the committee's strategies include the purchase of derivatives, such as
interest rate caps, corridors, floors and swaps, for hedging purposes. On two
series of certificates, interest is credited to the certificate owners' accounts
based upon the relative change in a major stock market index between the
beginning and end of the certificates' terms. As a means of hedging its
obligations under the provisions of these certificates, the committee purchases
and writes call options on the major stock market index. See note 9 to the
financial statements for additional information regarding derivative financial
instruments.
The negative impact on IDSC's pretax earnings of the 100 basis point increase in
interest rates, which assumes repricings and customer behavior based on the
application of proprietary models to the book of business at Dec. 31, 1999 and
1998, would be approximately $8.2 million and $7.5 million for 1999 and 1998,
respectively. The 10% decrease in a major stock market index level would have a
minimal impact on IDSC's pretax earnings as of Dec. 31, 1999 and 1998, because
the income effect is a decrease in option income and a corresponding decrease in
interest credited to the IDS and American Express Stock Market Certificate
owners' accounts.
Year 2000:
IDSC is a wholly owned subsidiary of American Express Financial Corporation
(AEFC), which is a wholly owned subsidiary of American Express Company (American
Express). All of the major systems used by IDSC are maintained by AEFC and are
utilized by multiple subsidiaries and affiliates of AEFC. American Express
coordinated the Year 2000 (Y2K) efforts on behalf of all of its businesses and
subsidiaries. Representatives of AEFC participated in these efforts.
IDSC, to date, has not experienced any material systems failures related to the
Y2K rollover. American Express' and AEFC's remediation plan for the Y2K issue is
discussed in detail in IDSC's 1998 10-K report and 1999 10-Q reports. American
Express and AEFC will continue their Y2K monitoring and address any issues that
may arise from internal systems or those of third parties. American Express' and
AEFC's cumulative costs since inception of the Y2K initiative were $505 million
and $68 million, respectively, through Dec. 31, 1999, and are expected to be
approximately $10 million and $0.8 million, respectively, in 2000. The majority
of these costs are managed by and included in American Express' Corporate and
Other segment, as most remediation efforts are related to systems that are
maintained by the American Express Technologies organization. Costs related to
Y2K have not had a material adverse effect on IDSC's results of operations or
financial condition.
Ratios:
The ratio of stockholder's equity, excluding accumulated other comprehensive
(loss) income net of tax, to total assets less certificate loans and net
unrealized holding gains/losses on investment securities (capital to asset
ratio) at Dec. 31, 1999 and 1998 was 5.5% and 5.6%, respectively. Under an
informal agreement established with the Commissioner of Commerce for the State
of Minnesota, IDSC has agreed to maintain at all times a minimum capital to
asset ratio of 5.0%.
Item 7A. Ouantitative and Qualitative Disclosures About Market Risk
See Item 7.
Item 8. Financial Statements and Supplementary Data
1. Financial Statements and Schedules Required under Regulation S-X
Index to Financial Statements and Schedules
Page
Financial Statements:
Responsibility for Preparation of Financial Statements 22
Report of Independent Auditors 23
Balance Sheets, Dec. 31, 1999 and 1998 24 - 25
Statements of Operations, year ended Dec. 31, 1999, 1998 and 1997 26 - 27
Statements of Comprehensive Income, year ended Dec. 31, 1999,
1998 and 1997 28
Statements of Stockholder's Equity, year ended Dec. 31, 1999,
1998 and 1997 29
Statements of Cash Flows, year ended Dec. 31, 1999, 1998 and 1997 30 - 31
Notes to Financial Statements 32 - 49
Schedules:
I -Investments in Securities of Unaffiliated Issuers, Dec. 31, 1999
II -Investments in and Advances to Affiliates and Income Thereon,
Dec. 31, 1999, 1998 and 1997
III -Mortgage Loans on Real Estate and Interest earned on
Mortgages, year ended Dec. 31, 1999
V - Qualified Assets on Deposit, Dec. 31, 1999
VI - Certificate Reserves, year ended Dec. 31, 1999
VII - Valuation and Qualifying Accounts, year ended Dec. 31, 1999, 1998
and 1997
Schedules I, III and VI for the year ended Dec. 31, 1998, and Schedule
VI for the year ended Dec. 31, 1997, are included in Registrant's Annual Reports
on Form 10-K for the fiscal years ended Dec. 31, 1998 and Dec. 31, 1997,
respectively, Commission file 2-23772, and are incorporated herein by reference.
All other Schedules required by Article 6 of the Regulation S-X are not
required under the related instructions or are inapplicable and therefore have
been omitted.
2. Supplementary Data
None
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
None
PART III
Items omitted pursuant to General Instructions I(2)(c) of Form 10-K.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) List the following documents filed as a part of the report:
1. All financial statements. See Item 8.
2. Financial statement schedules. See Item 8.
3. Exhibits.
1. None or not applicable.
2. None or not applicable.
3(a). Certificate of Incorporation, dated December 31, 1977,
filed electronically as Exhibit 3(a) to Post-Effective
Amendment No. 10 to Registration Statement No.
2-89507, is incorporated herein by reference.
3(b). Certificate of Amendment, dated April 2, 1984 filed
electronically as Exhibit 3(b) to Post-Effective Amendment
No. 10 to Registration Statement No. 2-89507, is
incorporated herein by reference.
3(c). Certificate of Amendment, dated September 12, 1995, filed
electronically as Exhibit 3(c) to Post-Effective Amendment
No. 44 to Registration Statement No.
2-55252, is incorporated herein by reference.
3(d). Certificate of Amendment, dated April 30, 1999, filed
electronically as Exhibit 3(a) to Registrant's March 31,
1999 Quarterly Report on Form 10-Q is incorporated herein
by reference.
3(e). Certificate of Amendment, dated January 28, 2000, filed
electronically as exhibit 3(e) to Post-Effective Amendment
No. 47 to Registration Statement No. 2-55252, is
incorporated herein by reference.
3(f). Current By-Laws, filed electronically as Exhibit 3(e) to
Post-Effective Amendment No. 19 to Registration Statement
No. 33-26844, are incorporated herein by reference.
4-9. None or not applicable.
10(a). Investment Advisory and Services Agreement between
Registrant and IDS/American Express Inc. dated January
12, 1984, filed electronically as Exhibit 10(b) to
Registrant's Post-Effective Amendment No. 3 to
Registration Statement No. 2-89507, is incorporated herein
by reference.
10(b). Distribution Agreement dated November 18, 1988, between
Registrant and IDS Financial Services Inc., filed
electronically as Exhibit 1(a) to the Registration
Statement No. 33-26844, for the American Express
International Investment Certificate (now called, the IDS
Investors Certificate) is incorporated herein by
reference.
10(c). Depositary and Custodial Agreement dated September 30,
1985 between IDS Certificate Company and IDS Trust
Company, filed electronically as Exhibit 10(b) to
Registrant's Post-Effective Amendment No. 3 to
Registration Statement No.
2-89507, is incorporated herein by reference.
10(d). Foreign Deposit Agreement dated November 21, 1990, between
IDS Certificate Company and IDS Bank & Trust, filed
electronically as Exhibit 10(h) to Post-Effective
Amendment No. 5 to Registration Statement No. 33-26844, is
incorporated herein by reference.
10(e). Selling Agent Agreement dated June 1, 1990, between
American Express Bank International and IDS Financial
Services Inc. for the American Express Investors and
American Express Stock Market Certificates, filed
electronically as Exhibit 1(c) to the Post-Effective
Amendment No. 5 to Registration Statement No. 33-26844,
is incorporated herein by reference.
10(f). Second amendment to Selling Agent Agreement between
American Express Financial Advisors Inc. and American
Express Bank International dated as of May 2, 1995, filed
electronically as Exhibit (1) to Registrant's June 30,
1995, Quarterly Report on Form 10-Q, is incorporated
herein by reference.
10(g). Marketing Agreement dated October 10, 1991, between
Registrant and American Express Bank Ltd., filed
electronically as Exhibit 1(d) to Post-Effective Amendment
No. 31 to Registration Statement 2-55252, is incorporated
herein by reference.
10(h). Amendment to the Selling Agent Agreement dated December
12, 1994, between IDS Financial Services Inc. and American
Express Bank International, filed electronically as
Exhibit 1(d) to Post-Effective Amendment No. 13 to
Registration Statement No. 2-95577, is incorporated herein
by reference.
10(i). Selling Agent Agreement dated December 12, 1994, between
IDS Financial Services Inc. and Coutts & Co. (USA)
International, filed electronically as Exhibit 1(e) to
Post-Effective Amendment No. 13 to Registration Statement
No. 2-95577, is incorporated herein by reference.
10(j). Consulting Agreement dated December 12, 1994, between IDS
Financial Services Inc. and American Express Bank
International, filed electronically as Exhibit 16(f) to
Post-Effective Amendment No. 13 to Registration Statement
No. 2-95577 is incorporated herein by reference.
10(k). Letter amendment dated January 9, 1997 to the Marketing
Agreement dated October 10, 1991, between Registrant and
American Express Bank Ltd. filed electronically as Exhibit
10(j) to Post-Effective Amendment No. 40 to Registration
Statement No. 2-55252, is incorporated herein by
reference.
10(l). Form of Letter amendment dated April 7, 1997 to the
Selling Agent Agreement dated June 1, 1990 between
American Express Financial Advisors Inc. and American
Express Bank International, filed electronically as
Exhibit 10 (j) to Post-Effective Amendment No. 14 to
Registration Statement 33-26844, is incorporated herein by
reference.
10(m). Letter Agreement dated July 28, 1999 amending the Selling
Agent Agreement dated June 1, 1990, or a schedule thereto,
as amended, between American Express Financial Advisors
Inc. (formerly IDS Financial Services Inc.) and American
Express Bank International, filed electronically to
Registrant's June 30, 1999 Quarterly Report on Form 10-Q,
is incorporated herein by reference.
10(n). Letter Agreement dated July 28, 1999, amending the
Marketing Agreement dated October 10, 1991, or a schedule
thereto, as amended, between IDS Certificate Company and
American Express Bank Ltd., filed electronically to
Registrant's June 30, 1999 Quarterly Report on Form 10-Q,
is incorporated herein by reference.
10(o) Selling Agent Agreement, dated March 10, 1999 between
American Express Financial Advisors Inc. and Securities
America, Inc., filed electronically as Exhibit 10 (l) to
Post-Effective Amendment No. 18 to Registration Statement
33-26844, is incorporated herein by reference.
11-23. None or not applicable.
24(a). Officers' Power of Attorney, dated January 28, 2000, filed
electronically as exhibit 24(a) to Post-Effective
Amendment No. 47 to Registration Statement No.
2-55252, is incorporated herein by reference.
24(b). Directors' Power of Attorney, dated January 28, 2000,
filed electronically as exhibit 24(b) to Post-Effective
Amendment No. 47 to Registration Statement No.
2-55252, is incorporated herein by reference.
25-99. None or not applicable.
(b) Reports on Form 8-K filed during the last quarter of the period
covered by this report. None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
REGISTRANT IDS Certificate Company
BY /s/ Paula R. Meyer *
NAME AND TITLE Paula R. Meyer, President
DATE March 28, 2000
Pursuant to the requirements of the Securities and Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.
BY /s/ Paula R. Meyer, * * *
NAME AND TITLE Paula R. Meyer, President and Director
(Principal Executive Officer)
DATE March 28, 2000
BY /s/ Jeffrey S. Horton *
NAME AND TITLE Jeffrey S. Horton, Vice President and Treasurer
(Principal Financial Officer)
DATE March 28, 2000
BY /s/ Philip C. Wentzel *
NAME AND TITLE Philip C. Wentzel, Vice President and Controller
(Principal Accounting Officer)
DATE March 28, 2000
BY /s/ Rodney P. Burwell * *
NAME AND TITLE Rodney P. Burwell, Director
DATE March 28, 2000
BY /s/ Charles W. Johnson * *
NAME AND TITLE Charles W. Johnson, Director
DATE March 28, 2000
BY /s/ Jean B. Keffeler * *
NAME AND TITLE Jean B. Keffeler, Director
DATE March 28, 2000
BY /s/ Richard W. Kling * *
NAME AND TITLE Richard W. Kling, Chairman of the Board
of Directors and Director
DATE March 28, 2000
BY /s/ Thomas R. McBurney * *
NAME AND TITLE Thomas R. McBurney, Director
DATE March 28, 2000
BY /s/ Pamela J. Moret * *
NAME AND TITLE Pamela J. Moret, Director
DATE March 28, 2000
* Signed pursuant to Officers' Power of Attorney dated January 28, 2000, filed
electronically as Exhibit 24(a) to Post-Effective Amendment No. 47 to
Registration Statement No. 2-55252, is incorporated herein by reference.
/s/Bruce A. Kohn
Bruce A. Kohn
* * Signed pursuant to Directors' Power of Attorney dated January 28, 2000,
filed electronically as Exhibit 24(b) to Post-Effective Amendment No. 47 to
Registration Statement No. 2-55252, is incorporated herein by reference.
/s/Bruce A. Kohn
Bruce A. Kohn
IDS Certificate Company
Responsibility for Preparation of Financial Statements
The management of IDS Certificate Company (IDSC) is responsible for the
preparation and fair presentation of its financial statements. The financial
statements have been prepared in conformity with accounting principles generally
accepted in the United States which are appropriate in the circumstances, and
include amounts based on the best judgment of management. IDSC's management is
also responsible for the accuracy and consistency of other financial information
included in this Form 10-K.
In recognition of its responsibility for the integrity and objectivity of data
in the financial statements, IDSC maintains a system of internal control over
financial reporting. The system is designed to provide reasonable, but not
absolute, assurance with respect to the reliability of IDSC's financial
statements. The concept of reasonable assurance is based on the notion that the
cost of the internal control system should not exceed the benefits derived.
The internal control system is founded on an ethical climate and includes an
organizational structure with clearly defined lines of responsibility, policies
and procedures, and the careful selection and training of employees. Internal
auditors monitor and assess the effectiveness of the internal control system and
report their findings to management throughout the year. IDSC's independent
auditors are engaged to express an opinion on the year-end financial statements
and, with the coordinated support of the internal auditors, review the financial
records and related data and test the internal control system over financial
reporting.
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Security Holders
IDS Certificate Company:
We have audited the accompanying balance sheets of IDS Certificate Company, a
wholly owned subsidiary of American Express Financial Corporation, as of
December 31, 1999 and 1998, and the related statements of operations,
comprehensive income, stockholder's equity, and cash flows for each of the three
years in the period ended December 31, 1999. Our audits also included the
financial statement schedules listed in the index at Item 8. These financial
statements and schedules are the responsibility of the management of IDS
Certificate Company. Our responsibility is to express an opinion on these
financial statements and schedules based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
schedules are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and schedules. Our procedures included confirmation of investments
owned as of December 31, 1999 and 1998, by correspondence with custodians and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of IDS Certificate Company at
December 31, 1999 and 1998, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1999, in conformity
with accounting principles generally accepted in the United States. Also, in our
opinion, the related financial statement schedules, when considered in relation
to the basic financial statements taken as a whole, present fairly in all
material respects the information set forth therein.
/s/ERNST & YOUNG LLP
ERNST & YOUNG LLP
Minneapolis, Minnesota
February 3, 2000
Balance Sheets, Dec. 31,
- ------------------------------------------------------------------------------------------------------------------------------------
Assets
Qualified Assets (note 2) 1999 1998
- ----------------------------------------------------------------------------------------------------------------------------------
($ thousands)
Investments in unaffiliated issuers (notes 3, 4 and 10):
Cash and cash equivalents $47,086 $-
Held-to-maturity securities 464,648 592,815
Available-for-sale securities 2,620,747 2,710,545
First mortgage loans on real estate 378,047 334,280
Certificate loans - secured by certificate reserves 28,895 32,343
Investments in and advances to affiliates 422 418
- ----------------------------------------------------------------------------------------------------------------------------------
Total investments 3,539,845 3,670,401
- ----------------------------------------------------------------------------------------------------------------------------------
Receivables:
Dividends and interest 41,584 46,579
Investment securities sold 953 3,085
- ----------------------------------------------------------------------------------------------------------------------------------
Total receivables 42,537 49,664
- ----------------------------------------------------------------------------------------------------------------------------------
Other (note 9) 123,845 96,213
- ----------------------------------------------------------------------------------------------------------------------------------
Total qualified assets 3,706,227 3,816,278
- ----------------------------------------------------------------------------------------------------------------------------------
Other Assets
- ------------------------------------------------------------------------------------------------------------------------------------
Deferred federal income taxes (note 8) 42,590 1,095
Due from affiliate - 1,082
Deferred distribution fees and other 12,251 15,789
- ----------------------------------------------------------------------------------------------------------------------------------
Total other assets 54,841 17,966
- ----------------------------------------------------------------------------------------------------------------------------------
Total assets $3,761,068 $3,834,244
- ----------------------------------------------------------------------------------------------------------------------------------
Balance Sheets, Dec. 31, (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities and Stockholder's Equity
Liabilities 1999 1998
- ----------------------------------------------------------------------------------------------------------------------------------
($ thousands)
Certificate Reserves (note 5):
Installment certificates:
Reserves to mature $263,204 $309,110
Additional credits and accrued interest 10,932 15,062
Advance payments and accrued interest 838 894
Other 56 55
Fully paid certificates:
Reserves to mature 3,120,351 2,909,891
Additional credits and accrued interest 140,988 169,514
Due to unlocated certificate holders 290 357
- ----------------------------------------------------------------------------------------------------------------------------------
Total certificate reserves 3,536,659 3,404,883
- ----------------------------------------------------------------------------------------------------------------------------------
Accounts Payable and Accrued Liabilities:
Due to Parent (note 7A) 733 771
Due to Parent for federal income taxes 4,126 7,381
Due to other affiliates (notes 7B through 7E) 515 426
Reverse repurchase agreements 25,000 141,000
Payable for investment securities purchased 1,734 2,211
Other (notes 9 and 10) 50,599 55,539
- ----------------------------------------------------------------------------------------------------------------------------------
Total accounts payable and accrued liabilities 82,707 207,328
- ----------------------------------------------------------------------------------------------------------------------------------
Total liabilities 3,619,366 3,612,211
- ----------------------------------------------------------------------------------------------------------------------------------
Commitments (note 4)
- ----------------------------------------------------------------------------------------------------------------------------------
Stockholder's Equity (notes 5B, 5C, and 6)
- ----------------------------------------------------------------------------------------------------------------------------------
Common stock, $10 par - authorized and issued 150,000 shares 1,500 1,500
Additional paid-in capital 143,844 143,844
Retained earnings:
Appropriated for predeclared additional credits/interest 2,879 3,710
Appropriated for additional interest on advance payments 10 10
Unappropriated 59,210 63,623
Accumulated other comprehensive (loss) income - net of tax (note 1) (65,741) 9,346
- ----------------------------------------------------------------------------------------------------------------------------------
Total stockholder's equity 141,702 222,033
- ----------------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholder's equity $3,761,068 $3,834,244
- ----------------------------------------------------------------------------------------------------------------------------------
See notes to financial statements.
Statements of Operations
- ----------------------------------------------------------------------------------------------------------------------------------
Year ended Dec. 31, 1999 1998 1997
- ----------------------------------------------------------------------------------------------------------------------------------
($ thousands)
Investment Income
Interest income from unaffiliated investments:
Bonds and notes $188,062 $209,408 $191,190
Mortgage loans on real estate 27,294 18,173 18,053
Certificate loans 1,662 1,896 2,200
Dividends 35,228 40,856 44,543
Other 2,098 2,802 2,246
- ----------------------------------------------------------------------------------------------------------------------------------
Total investment income 254,344 273,135 258,232
- ----------------------------------------------------------------------------------------------------------------------------------
Investment Expenses
Parent and affiliated company fees (note 7):
Distribution 31,484 33,783 34,507
Investment advisory and services 8,692 9,084 17,233
Transfer agent 3,572 3,932 -
Depository 238 250 238
Options (note 9) 31,095 21,012 14,597
Interest rate caps, corridors and floors (note 9) - - 35
Reverse repurchase agreements 677 3,689 1,217
Interest rate swap agreements (note 9) 1,146 4,676 1,956
Other 331 385 354
- ----------------------------------------------------------------------------------------------------------------------------------
Total investment expenses 77,235 76,811 70,137
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income before provision for certificate
reserves and income tax (expense) benefit $177,109 $196,324 $188,095
- ----------------------------------------------------------------------------------------------------------------------------------
Statements of Operations (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
Year ended Dec. 31, 1999 1998 1997
- ----------------------------------------------------------------------------------------------------------------------------------
($ thousands)
Provision for Certificate Reserves (notes 5 and 9)
According to the terms of the certificates:
Provision for certificate reserves $11,493 $9,623 $9,796
Interest on additional credits 874 1,032 1,244
Interest on advance payments 33 44 50
Additional credits/interest authorized by IDSC:
On fully paid certificates 118,371 146,434 141,515
On installment certificates 8,676 11,001 13,560
- ----------------------------------------------------------------------------------------------------------------------------------
Total provision for certificate reserves before reserve recoveries 139,447 168,134 166,165
Reserve recoveries from terminations prior to maturity (892) (1,026) (1,029)
- ----------------------------------------------------------------------------------------------------------------------------------
Net provision for certificate reserves 138,555 167,108 165,136
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income before income tax (expense) benefit 38,554 29,216 22,959
Income tax (expense) benefit (note 8) (4,615) 265 3,682
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income 33,939 29,481 26,641
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized gain on investments
Securities of unaffiliated issuers before income tax expense 1,250 5,143 980
- ----------------------------------------------------------------------------------------------------------------------------------
Income tax (expense) benefit (note 8):
Current (1,151) (1,800) (304)
Deferred 714 - (39)
- ----------------------------------------------------------------------------------------------------------------------------------
Total income tax expense (437) (1,800) (343)
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized gain on investments 813 3,343 637
- ----------------------------------------------------------------------------------------------------------------------------------
Net income - wholly owned subsidiary 4 1,646 328
- ----------------------------------------------------------------------------------------------------------------------------------
Net income $34,756 $34,470 $27,606
- ----------------------------------------------------------------------------------------------------------------------------------
See notes to financial statements.
Statements of Comprehensive Income
- ----------------------------------------------------------------------------------------------------------------------------------
Year ended Dec. 31, 1999 1998 1997
- ----------------------------------------------------------------------------------------------------------------------------------
($ thousands)
Net income $34,756 $34,470 $27,606
- ----------------------------------------------------------------------------------------------------------------------------------
Other comprehensive (loss) income (note 1)
Unrealized (losses) gains on available-for-sale
securities:
Unrealized holding (losses) gains arising during year (112,460) (32,020) 26,639
Income tax benefit (expense) 39,361 11,207 (9,324)
- ----------------------------------------------------------------------------------------------------------------------------------
Net unrealized holding (losses) gains arising during period (73,099) (20,813) 17,315
- ----------------------------------------------------------------------------------------------------------------------------------
Reclassification adjustment for (gains) losses included in net income (3,058) (2,514) 59
Income tax expense (benefit) 1,070 880 (20)
- ----------------------------------------------------------------------------------------------------------------------------------
Net reclassification adjustment for (gains) losses included in net income (1,988) (1,634) 39
- ----------------------------------------------------------------------------------------------------------------------------------
Net other comprehensive (loss) income (75,087) (22,447) 17,354
- ----------------------------------------------------------------------------------------------------------------------------------
Total comprehensive (loss) income ($40,331) $12,023 $44,960
- ----------------------------------------------------------------------------------------------------------------------------------
See notes to financial statements.
Statements of Stockholder's Equity
- ------------------------------------------------------------------------------------------------------------------------------------
Year ended Dec. 31, 1999 1998 1997
- ----------------------------------------------------------------------------------------------------------------------------------
($ thousands)
Common Stock
Balance at beginning and end of year $1,500 $1,500 $1,500
- ----------------------------------------------------------------------------------------------------------------------------------
Additional Paid-in Capital
Balance at beginning and end of year $143,844 $143,844 $143,844
- ----------------------------------------------------------------------------------------------------------------------------------
Retained Earnings
Appropriated for predeclared additional credits/interest (note 5B)
Balance at beginning of year $3,710 $6,375 $11,989
Transferred to unappropriated retained earnings (831) (2,665) (5,614)
- ----------------------------------------------------------------------------------------------------------------------------------
Balance at end of year $2,879 $3,710 $6,375
- ----------------------------------------------------------------------------------------------------------------------------------
Appropriated for additional interest on advance payments (note 5C)
Balance at beginning of year $10 $50 $50
Transferred to unappropriated retained earnings - (40) -
- ----------------------------------------------------------------------------------------------------------------------------------
Balance at end of year $10 $10 $50
- ----------------------------------------------------------------------------------------------------------------------------------
Unappropriated (note 6)
Balance at beginning of year $63,623 $55,948 $22,728
Net income 34,756 34,470 27,606
Transferred from appropriated retained earnings 831 2,705 5,614
Cash dividends declared (40,000) (29,500) -
- ----------------------------------------------------------------------------------------------------------------------------------
Balance at end of year $59,210 $63,623 $55,948
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulated other comprehensive (loss) income -
net of tax (note 1)
Balance at beginning of year $9,346 $31,793 $14,439
Net other comprehensive (loss) income (75,087) (22,447) 17,354
- ----------------------------------------------------------------------------------------------------------------------------------
Balance at end of year ($65,741) $9,346 $31,793
- ----------------------------------------------------------------------------------------------------------------------------------
Total stockholder's equity $141,702 $222,033 $239,510
- ----------------------------------------------------------------------------------------------------------------------------------
See notes to financial statements.
Statements of Cash Flows
- -----------------------------------------------------------------------------------------------------------------------------------
Year ended Dec. 31, 1999 1998 1997
- ----------------------------------------------------------------------------------------------------------------------------------
($ thousands)
Cash Flows from Operating Activities
Net income $34,756 $34,470 $27,606
Adjustments to reconcile net income to net
cash provided by operating activities:
Net income of wholly owned subsidiary (4) (1,646) (328)
Net provision for certificate reserves 138,555 167,108 165,136
Interest income added to certificate loans (1,037) (1,180) (1,414)
Amortization of premiums/discounts-net 29,030 22,620 15,484
Provision for deferred federal income taxes (1,063) (3,088) (2,266)
Net realized gain on investments before income taxes (1,250) (5,143) (980)
Decrease (increase) in dividends and interest receivable 4,995 2,238 (4,804)
Decrease in deferred distribution fees 3,533 5,310 4,434
Decrease (increase) in other assets 1,082 (1,082) -
(Decrease) increase in other liabilities (18,390) 16,814 443
- ----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 190,207 236,421 203,311
- ----------------------------------------------------------------------------------------------------------------------------------
Cash Flows from Investing Activities
Maturity and redemption of investments:
Held-to-maturity securities 134,907 161,649 76,678
Available-for-sale securities 426,257 468,218 408,019
Other investments 73,387 76,894 79,929
Sale of investments:
Held-to-maturity securities - 6,245 33,910
Available-for-sale securities 107,244 344,901 160,207
Certificate loan payments 4,162 4,006 4,814
Purchase of investments:
Held-to-maturity securities (6,785) (1,034) (4,565)
Available-for-sale securities (554,270) (663,347) (1,283,620)
Other investments (102,183) (189,905) (62,831)
Certificate loan fundings (3,680) (3,703) (5,021)
- ----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) investing activities $79,039 $203,924 ($592,480)
- ----------------------------------------------------------------------------------------------------------------------------------
Statements of Cash Flows (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
Year ended Dec. 31, 1999 1998 1997
- ----------------------------------------------------------------------------------------------------------------------------------
($ thousands)
Cash Flows from Financing Activities
Payments from certificate owners $1,596,079 $1,192,026 $1,580,013
Proceeds from reverse repurchase agreements 123,500 919,500 433,000
Dividend from wholly owned subsidiary - 8,000 -
Certificate maturities and cash surrenders (1,662,239) (1,729,871) (1,324,175)
Payments under reverse repurchase agreements (239,500) (800,500) (411,000)
Dividends paid (40,000) (29,500) -
- ----------------------------------------------------------------------------------------------------------------------------------
Net cash (used in) provided by financing activities (222,160) (440,345) 277,838
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents 47,086 - (111,331)
Cash and cash equivalents beginning of year - - 111,331
- ----------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents end of year $47,086 $- $-
- ----------------------------------------------------------------------------------------------------------------------------------
Supplemental Disclosures Including Non-cash Transactions:
Cash paid (received) for income taxes $9,233 ($1,217) $104
Certificate maturities and surrenders through
loan reductions 4,003 5,632 8,032
See notes to financial statements.
Notes to Financial Statements ($ in thousands unless indicated otherwise)
- --------------------------------------------------------------------------------
1. Nature of business and summary of significant accounting policies
Nature of business
IDS Certificate Company (IDSC) is a wholly owned subsidiary of American Express
Financial Corporation (Parent), which is a wholly owned subsidiary of American
Express Company. IDSC is registered as an investment company under the
Investment Company Act of 1940 ("the 1940 Act") and is in the business of
issuing face-amount investment certificates. The certificates issued by IDSC are
not insured by any government agency. IDSC's certificates are sold primarily by
American Express Financial Advisors Inc.'s (an affiliate) field force operating
in 50 states, the District of Columbia and Puerto Rico. IDSC's Parent acts as
investment advisor for IDSC.
On Jan. 28, 2000 the IDSC Board of Directors approved the name change of IDS
Certificate Company to American Express Certificate Company to become effective
April 26, 2000.
IDSC currently offers nine types of certificates with specified maturities
ranging from 10 to 20 years. Within their specified maturity, most certificates
have interest rate terms of one- to 36-months. In addition, two types of
certificates have interest tied, in whole or in part, to any upward movement in
a broad-based stock market index. Except for two types of certificates, all of
the certificates are available as qualified investments for Individual
Retirement Accounts or 401(k) plans and other qualified retirement plans.
IDSC's gross income is derived primarily from interest and dividends generated
by its investments. IDSC's net income is determined by deducting from such gross
income its provision for certificate reserves, and other expenses, including
taxes, the fee paid to Parent for investment advisory and other services, and
the distribution fees paid to American Express Financial Advisors, Inc.
Described below are certain accounting policies that are important to an
understanding of the accompanying financial statements.
Basis of financial statement presentation
The accompanying financial statements are presented in accordance with
accounting principles generally accepted in the United States. IDSC uses the
equity method of accounting for its wholly owned unconsolidated subsidiary,
which is the method prescribed by the Securities and Exchange Commission (SEC)
for non-investment company subsidiaries of issuers of face-amount certificates.
Certain amounts from prior years have been reclassified to conform to the
current year presentation.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities and the reported amounts of
income and expenses during the year then ended. Actual results could differ from
those estimates.
Fair values of financial instruments
The fair values of financial instruments disclosed in the notes to financial
statements are estimates based upon current market conditions and perceived
risks, and require varying degrees of management judgment.
Notes to Financial Statements ($ in thousands unless indicated otherwise)
- --------------------------------------------------------------------------------
Preferred stock dividend income
IDSC recognizes dividend income from cumulative redeemable preferred stocks with
fixed maturity amounts on an accrual basis similar to that used for recognizing
interest income on debt securities. Dividend income from perpetual preferred
stock is recognized on an ex-dividend basis.
Investment securities
Cash equivalents are carried at amortized cost, which approximates fair value.
IDSC has defined cash and cash equivalents as cash in banks and highly liquid
investments with a maturity of three months or less at acquisition and are not
interest rate sensitive.
Debt securities that IDSC has both the positive intent and ability to hold to
maturity are carried at amortized cost. Debt securities IDSC does not have the
positive intent to hold to maturity, as well as all marketable equity
securities, are classified as available for sale and carried at fair value.
Unrealized holding gains and losses on securities classified as available for
sale are carried, net of deferred income taxes, as accumulated other
comprehensive income (loss) in stockholder's equity.
The basis for determining cost in computing realized gains and losses on
securities is specific identification. When there is a decline in value that is
other than temporary, the securities are carried at estimated realizable value
with the amount of adjustment included in income.
First mortgage loans on real estate
Mortgage loans are carried at amortized cost, less reserves for losses, which is
the basis for determining any realized gains or losses. The estimated fair value
of the mortgage loans is determined by a discounted cash flow analysis using
mortgage interest rates currently offered for mortgages of similar maturities.
Impairment is measured as the excess of the loan's recorded investment over its
present value of expected principal and interest payments discounted at the
loan's effective interest rate, or the fair value of collateral. The amount of
the impairment is recorded in a reserve for mortgage loan losses.
The reserve for mortgage loan losses is maintained at a level that management
believes is adequate to absorb estimated losses in the portfolio. The level of
the reserve account is determined based on several factors, including historical
experience, expected future principal and interest payments, estimated
collateral values, and current and anticipated economic and political
conditions. Management regularly evaluates the adequacy of the reserve for
mortgage loan losses.
IDSC generally stops accruing interest on mortgage loans for which interest
payments are delinquent more than three months. Based on management's judgment
as to the ultimate collectibility of principal, interest payments received are
either recognized as income or applied to the recorded investment in the loan.
Notes to Financial Statements ($ in thousands unless indicated otherwise)
- --------------------------------------------------------------------------------
Certificates
Investment certificates may be purchased either with a lump-sum payment or by
installment payments. Certificate owners are entitled to receive at maturity a
definite sum of money. Payments from certificate owners are credited to
investment certificate reserves. Investment certificate reserves accumulate at
specified percentage rates as declared by IDSC. Reserves also are maintained for
advance payments made by certificate owners, accrued interest thereon, and for
additional credits in excess of minimum guaranteed rates and accrued interest
thereon. On certificates allowing for the deduction of a surrender charge, the
cash surrender values may be less than accumulated investment certificate
reserves prior to maturity dates. Cash surrender values on certificates allowing
for no surrender charge are equal to certificate reserves. The payment
distribution, reserve accumulation rates, cash surrender values, reserve values
and other matters are governed by the 1940 Act.
Deferred distribution fee expense
On certain series of certificates, distribution fees are deferred and amortized
over the estimated lives of the related certificates, which is approximately 10
years. Upon surrender prior to maturity, unamortized deferred distribution fees
are recognized in expense and any related surrender charges are recognized as a
reduction in provision for certificate reserves.
Federal income taxes
IDSC's taxable income or loss is included in the consolidated federal income tax
return of American Express Company. IDSC provides for income taxes on a separate
return basis, except that, under an agreement between Parent and American
Express Company, tax benefits are recognized for losses to the extent they can
be used in the consolidated return. It is the policy of Parent and it
subsidiaries that Parent will reimburse a subsidiary for any tax benefits
recorded.
Accounting developments
In March 1998, the American Institute of Certified Public Accountants issued
Statement of Position (SOP) 98-1, "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use." This SOP, which was effective Jan. 1,
1999, requires the capitalization of certain costs incurred to develop or obtain
software for internal use. Software utilized by IDSC is owned by Parent and is
capitalized on Parent's financial statements. As a result, the new rule did not
have a material impact on IDSC's results of operations or financial condition.
In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities," which is
effective Jan. 1, 2001. SFAS No. 133 establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities. It requires that an
entity recognize all derivatives as either assets or liabilities on the balance
sheet and measure those instruments at fair value. The accounting for changes in
the fair value of a derivative depends on the intended use of the derivative and
the resulting designation. The ultimate financial impact of adoption of the new
rule will depend on the derivatives in place at adoption and cannot be estimated
at this time.
Notes to Financial Statements ($ in thousands unless indicated otherwise)
- -------------------------------------------------------------------------------
2. Deposit of assets and maintenance of qualified assets
A) Under the provisions of its certificates and the 1940 Act, IDSC was required
to have qualified assets (as that term is defined in Section 28(b) of the 1940
Act) in the amount of $3,476,365 and $3,353,920 at Dec. 31, 1999 and 1998,
respectively. IDSC had qualified assets of $3,805,634 at Dec. 31, 1999 and
$3,799,689 at Dec. 31, 1998, excluding net unrealized depreciation on available-
for-sale securities of $101,141 at Dec. 31, 1999 and unrealized appreciation of
$14,378 at Dec. 31, 1998 and payable for securities purchased of $1,734 and
$2,211 at Dec. 31, 1999 and 1998, respectively.
Qualified assets are valued in accordance with such provisions of Minnesota
Statutes as are applicable to investments of life insurance companies. Qualified
assets for which no provision for valuation is made in such statutes are valued
in accordance with rules, regulations or orders prescribed by the SEC. These
values are the same as financial statement carrying values, except for debt
securities classified as available for sale and all marketable equity
securities, which are carried at fair value in the financial statements but are
valued at amortized cost for qualified asset and deposit maintenance purposes.
B) Pursuant to provisions of the certificates, the 1940 Act, the central
depository agreement and to requirements of various states, qualified assets of
IDSC were deposited as follows:
Dec. 31, 1999
- -----------------------------------------------------------------------------------------------------
Required
Deposits deposits Excess
- -----------------------------------------------------------------------------------------------------
Deposits to meet certificate
liability requirements:
States $364 $325 $39
Central Depository 3,682,847 3,444,056 238,791
- -----------------------------------------------------------------------------------------------------
Total $3,683,211 $3,444,381 $238,830
- -----------------------------------------------------------------------------------------------------
Dec. 31, 1998
- -----------------------------------------------------------------------------------------------------
Required
Deposits deposits Excess
- -----------------------------------------------------------------------------------------------------
Deposits to meet certificate
liability requirements:
States $364 $327 $37
Central Depository 3,543,964 3,317,295 226,669
- -----------------------------------------------------------------------------------------------------
Total $3,544,328 $3,317,622 $226,706
- -----------------------------------------------------------------------------------------------------
Notes to Financial Statements ($ in thousands unless indicated otherwise)
- --------------------------------------------------------------------------------
The assets on deposit at Dec. 31, 1999 and 1998 consisted of securities having a
deposit value of $3,217,101 and $3,153,038, respectively; mortgage loans of
$378,047 and $334,280, respectively; and other assets of $88,063 and $57,010,
respectively.
American Express Trust Company is the central depository for IDSC. See note 7C.
3. Investments in securities
A) Fair values of investments in securities represent market prices or estimated
fair values when quoted prices are not available. Estimated fair values are
determined by using established procedures, involving review of market indexes,
price levels of current offerings and comparable issues, price estimates and
market data from independent brokers and financial files. The procedures are
reviewed annually. IDSC's vice president, investments, reports to the board of
directors on an annual basis regarding such pricing sources and procedures to
provide assurance that fair value is being achieved.
The following is a summary of securities held to maturity and securities
available for sale at Dec. 31, 1999 and 1998:
Dec. 31, 1999
--------------------------------------------------------------
Gross Gross
Amortized Fair unrealized unrealized
cost value gains losses
- --------------------------------------------------------------------------------------------------------------------
Held to maturity:
U.S. Government and
agencies obligations $364 $365 $1 $-
Mortgage-backed securities 16,662 16,596 178 244
Corporate debt securities 78,267 78,970 1,402 699
Stated maturity preferred stock 369,355 375,052 6,398 701
- --------------------------------------------------------------------------------------------------------------------
Total $464,648 $470,983 $7,979 $1,644
- --------------------------------------------------------------------------------------------------------------------
Available for sale:
Mortgage-backed securities $773,120 $763,195 $2,339 $12,264
State and municipal obligations 33,430 33,615 265 80
Corporate debt securities 1,743,621 1,653,271 1,944 92,294
Stated maturity preferred stock 62,708 62,370 292 630
Perpetual preferred stock 109,009 108,296 574 1,287
- --------------------------------------------------------------------------------------------------------------------
Total $2,721,888 $2,620,747 $5,414 $106,555
- --------------------------------------------------------------------------------------------------------------------
Notes to Financial Statements ($ in thousands unless indicated otherwise)
- --------------------------------------------------------------------------------
Dec. 31, 1998
--------------------------------------------------------------
Gross Gross
Amortized Fair unrealized unrealized
cost value gains losses
- --------------------------------------------------------------------------------------------------------------------
Held to maturity:
U.S. Government and
agencies obligations $363 $373 $10 $-
Mortgage-backed securities 22,366 22,986 620 -
Corporate debt securities 168,191 172,941 4,750 -
Stated maturity preferred stock 401,895 428,689 26,802 8
- --------------------------------------------------------------------------------------------------------------------
Total $592,815 $624,989 $32,182 $8
- --------------------------------------------------------------------------------------------------------------------
Available for sale:
Mortgage-backed securities $831,677 $846,864 $15,787 $600
State and municipal obligations 32,075 33,437 1,362 -
Corporate debt securities 1,674,932 1,667,264 29,197 36,865
Stated maturity preferred stock 63,257 65,822 2,637 72
Perpetual preferred stock 94,226 97,158 2,947 15
- --------------------------------------------------------------------------------------------------------------------
Total $2,696,167 $2,710,545 $51,930 $37,552
- --------------------------------------------------------------------------------------------------------------------
The amortized cost and fair value of securities held to maturity and available
for sale, by contractual maturity, at Dec. 31, 1999, are shown below. Cash flows
will differ from contractual maturities because issuers may have the right to
call or prepay obligations.
Amortized Fair
cost value
- --------------------------------------------------------------------------------------------------------------------
Held to maturity:
Due within 1 year $99,538 $100,436
Due after 1 year through 5 years 170,978 173,460
Due after 5 years through 10 years 177,470 180,491
- --------------------------------------------------------------------------------------------------------------------
447,986 454,387
Mortgage-backed securities 16,662 16,596
- --------------------------------------------------------------------------------------------------------------------
Total $464,648 $470,983
- --------------------------------------------------------------------------------------------------------------------
Available for sale:
Due within 1 year $194,126 $193,874
Due after 1 year through 5 years 865,161 843,409
Due after 5 years through 10 years 424,966 389,598
Due after 10 years 355,506 322,375
- --------------------------------------------------------------------------------------------------------------------
1,839,759 1,749,256
Mortgage-backed securities 773,120 763,195
Perpetual preferred stock 109,009 108,296
- --------------------------------------------------------------------------------------------------------------------
Total $2,721,888 $2,620,747
- --------------------------------------------------------------------------------------------------------------------
Notes to Financial Statements ($ in thousands unless indicated otherwise)
- --------------------------------------------------------------------------------
During the years ended Dec. 31, 1999 and 1998, there were no securities
classified as trading securities.
The proceeds from sales of available-for-sale securities and the gross realized
gains and gross realized losses on those sales during the years ended Dec. 31,
1999, 1998 and 1997, were as follows:
1999 1998 1997
- --------------------------------------------------------------------------------------------------------------------
Proceeds $105,112 $346,353 $161,188
Gross realized gains 3,270 4,487 1,292
Gross realized losses 195 1,461 1,637
- --------------------------------------------------------------------------------------------------------------------
There were no sales of held-to-maturity securities during the year ended Dec.
31, 1999. Sales of held-to- maturity securities resulting from acceptance of a
tender offer during the year ended Dec. 31, 1998 and significant credit
deterioration during the year ended Dec. 31, 1997, were as follows:
1999 1998 1997
- ----------------------------------------------------------------------------------------------------------------------------------
Amortized cost $- $6,182 $32,969
Gross realized gains - 63 1,621
Gross realized losses - - 680
- --------------------------------------------------------------------------------------------------------------------
During the years ended Dec. 31, 1999 and 1998, no securities were reclassified
from held to maturity to available for sale.
B) Investments in securities with fixed maturities comprised 84% and 85% of
IDSC's total invested assets at Dec. 31, 1999 and 1998, respectively. Securities
are rated by Moody's and Standard & Poors (S&P), or by Parent's internal
analysts, using criteria similar to Moody's and S&P, when a public rating does
not exist. A summary of investments in securities with fixed maturities by
rating of investment is as follows:
Rating 1999 1998
- -----------------------------------------------------------------------------------------------------
Aaa/AAA 36% 37%
Aa/AA 2 1
Aa/A 2 1
A/A 15 13
A/BBB 3 5
Baa/BBB 31 33
Below investment grade 11 10
- -----------------------------------------------------------------------------------------------------
100% 100%
- -----------------------------------------------------------------------------------------------------
Of the securities rated Aaa/AAA, 72% and 84% at Dec. 31, 1999 and 1998,
respectively, are U.S. Government Agency mortgage-backed securities that are not
rated by a public rating
Notes to Financial Statements ($ in thousands unless indicated otherwise)
- --------------------------------------------------------------------------------
agency. Approximately 13% and 11% at Dec. 31, 1999 and 1998, respectively, of
securities with fixed maturities, other than U.S. Government Agency
mortgage-backed securities, are rated by Parent's internal analysts. At Dec. 31,
1999 and 1998 no one issuer, other than U.S. Government Agency mortgage-backed
securities, is greater than 1% of IDSC's total investment in securities with
fixed maturities.
C) IDSC reserves freedom of action with respect to its acquisition of restricted
securities that offer advantageous and desirable investment opportunities. In a
private negotiation, IDSC may purchase for its portfolio all or part of an issue
of restricted securities. Since IDSC would intend to purchase such securities
for investment and not for distribution, it would not be "acting as a
distributor" if such securities are resold by IDSC at a later date.
The fair values of restricted securities are determined by the board of
directors using the procedures and factors described in note 3A.
In the event IDSC were to be deemed to be a distributor of the restricted
securities, it is possible that IDSC would be required to bear the costs of
registering those securities under the Securities Act of 1933, although in most
cases such costs would be incurred by the issuer of the restricted securities.
4. Investments in first mortgage loans on real estate
At Dec. 31, 1999 and 1998, IDSC's recorded investment in impaired mortgage loans
was $233 and $296, respectively, and the reserve for loss on those amounts was
$161 and $261, respectively. During 1999, 1998 and 1997, the average recorded
investment in impaired mortgage loans was $267, $331 and $743, respectively.
IDSC recognized $25, $31 and $37 of interest income related to impaired mortgage
loans for the years ended Dec. 31, 1999, 1998 and 1997, respectively.
During the year ended Dec. 31, 1999, the reserve for loss on mortgage loans
decreased $100 from $611 at Dec. 31, 1998, to $511 at Dec. 31, 1999. During the
years ended Dec. 31, 1998 and 1997, there were no changes in the reserve for
loss on mortgage loans of $611.
Notes to Financial Statements ($ in thousands unless indicated otherwise)
- --------------------------------------------------------------------------------
At Dec. 31, 1999 and 1998, approximately 10% and 9%, respectively, of IDSC's
invested assets were first mortgage loans on real estate. A summary of first
mortgage loans by region and type of real estate is as follows:
Region 1999 1998
- ----------------------------------------------------------------------
South Atlantic 20% 18%
West North Central 19 21
East North Central 16 17
Mountain 16 14
West South Central 12 12
Pacific 7 7
New England 5 6
Middle Atlantic 5 5
- ----------------------------------------------------------------------
Total 100% 100%
- ----------------------------------------------------------------------
Property Type 1999 1998
- ----------------------------------------------------------------------
Office buildings 29% 25%
Retail/shopping centers 26 28
Apartments 17 19
Industrial buildings 15 12
Other 13 16
- ----------------------------------------------------------------------
Total 100% 100%
- ----------------------------------------------------------------------
The carrying amounts and fair values of first mortgage loans on real estate are
as follows at Dec.31. The fair values are estimated using discounted cash flow
analysis, using market interest rates currently being offered for loans with
similar maturities.
Dec. 31, 1999 Dec. 31, 1998
--------------------------------------------------------------
Carrying Fair Carrying Fair
amount value amount value
- --------------------------------------------------------------------------------------------------------------------
First mortgage loans on real estate $378,558 $359,018 $334,891 $343,406
Reserve for losses (511) - (611) -
- --------------------------------------------------------------------------------------------------------------------
Net first mortgage loans on
real estate $378,047 $359,018 $334,280 $343,406
- --------------------------------------------------------------------------------------------------------------------
At Dec. 31, 1999 and 1998, commitments for fundings of first mortgage loans, at
market interest rates, aggregated $800 and $60,828, respectively. IDSC employs
policies and procedures to ensure the creditworthiness of the borrowers and that
funds will be available on the funding date. IDSC's loan fundings are restricted
to 80% or less of the market value of the real estate at the time of the loan
funding. Management believes there is no fair value for these commitments.
Notes to Financial Statements ($ in thousands unless indicated otherwise)
- -------------------------------------------------------------------------------
5. Certificate reserves
Reserves maintained on outstanding certificates have been computed in accordance
with the provisions of the certificates and Section 28 of the 1940 Act. The
average rates of accumulation on certificate reserves at Dec. 31, 1999 and 1998
were:
1999
--------------------------------------------
Average Average
gross additional
Reserve accumulation credit
balance rate rate
- --------------------------------------------------------------------------------------------------------------------
Installment certificates
Reserves to mature:
With guaranteed rates $18,817 3.50% .50%
Without guaranteed rates (A) 244,387 - 3.14
Additional credits and accrued interest 10,932 3.16 -
Advance payments and accrued interest (C) 838 3.20 1.30
Other 56 - -
Fully paid certificates
Reserves to mature:
With guaranteed rates 129,019 3.20 .95
Without guaranteed rates (A) and (D) 2,991,332 - 4.13
Additional credits and accrued interest 140,988 3.15 -
Due to unlocated certificate holders 290 - -
- ----------------------------------------------------------------------------------------------------------------------------------
Total $3,536,659
- --------------------------------------------------------------------------------------------------------------------
1998
-----------------------------------------------
Average Average
gross additional
Reserve accumulation credit
balance rate rate
- --------------------------------------------------------------------------------------------------------------------
Installment certificates
Reserves to mature:
With guaranteed rates $21,018 3.50% .50%
Without guaranteed rates (A) 288,092 - 2.92
Additional credits and accrued interest 15,061 3.16 -
Advance payments and accrued interest (C) 894 3.18 .82
Other 55 - -
Fully paid certificates
Reserves to mature:
With guaranteed rates 146,437 3.20 1.47
Without guaranteed rates (A) and (D) 2,763,454 - 4.29
Additional credits and accrued interest 169,515 3.18 -
Due to unlocated certificate holders 357 - -
- ----------------------------------------------------------------------------------------------------------------------------------
Total $3,404,883
- --------------------------------------------------------------------------------------------------------------------
Notes to Financial Statements ($ in thousands unless indicated otherwise)
- -------------------------------------------------------------------------------
A) There is no minimum rate of accrual on these reserves. Interest is declared
periodically, quarterly or annually, in accordance with the terms of the
separate series of certificates.
B) On certain series of single payment certificates, additional interest is
predeclared for periods greater than one year. At Dec. 31, 1999, $2,879 of
retained earnings had been appropriated for the predeclared additional interest,
which represents the difference between certificate reserves on these series,
calculated on a statutory basis, and the reserves maintained per books.
C) Certain series of installment certificates guarantee accrual of interest on
advance payments at an average of 3.20%. IDSC has increased the rate of accrual
to 4.50% through April 30, 2001. An appropriation of retained earnings amounting
to $10 has been made, which represents the estimated additional accrual that
will result from the increase granted by IDSC.
D) IDS Stock Market Certificate, American Express Stock Market Certificate and
IDS Market Strategy Certificate enable the certificate owner to participate in
any relative rise in a major stock market index without risking loss of
principal. Generally the certificates have a term of 12 months and may continue
for up to 20 successive terms. The reserve balance on these certificates at Dec.
31, 1999 and 1998 was $886,240 and $622,409, respectively.
E) Fair values of certificate reserves with interest rate terms of one year or
less approximated the carrying values less any applicable surrender charges.
Fair values for other certificate reserves are determined by a discounted cash
flow analysis using interest rates currently offered for certificates with
similar remaining terms, less any applicable surrender charges.
The carrying amounts and fair values of certificate reserves consisted of the
following at Dec. 31, 1999 and 1998:
1999 1998
-------------------------------------------------------------
Carrying Fair Carrying Fair
amount value amount value
- ----------------------------------------------------------------------------------------------------------------------------------
Reserves with terms of one year or less $3,246,098 $3,244,495 $3,070,001 $3,068,463
Other 290,561 294,899 334,882 350,509
- ----------------------------------------------------------------------------------------------------------------------------------
Total certificate reserves 3,536,659 3,539,394 3,404,883 3,418,972
Unapplied certificate transactions 756 756 853 853
Certificate loans and accrued interest (29,219) (29,219) (32,703) (32,703)
- ----------------------------------------------------------------------------------------------------------------------------------
Total $3,508,196 $3,510,931 $3,373,033 $3,387,122
- ----------------------------------------------------------------------------------------------------------------------------------
6. Dividend restriction
Certain series of installment certificates outstanding provide that cash
dividends may be paid by IDSC only in calendar years for which additional
credits of at least one-half of 1% on such series of certificates have been
authorized by IDSC. This restriction has been removed for 2000 and 2001 by
IDSC's declaration of additional credits in excess of this requirement.
Notes to Financial Statements ($ in thousands unless indicated otherwise)
- -------------------------------------------------------------------------------
7. Fees paid to Parent and affiliated companies ($ not in thousands)
A) The basis of computing fees paid or payable to Parent for investment
advisory, joint facilities, technology support and treasury services is:
The investment advisory and services agreement with Parent provides for a
graduated scale of fees equal on an annual basis to 0.750% on the first $250
million of total book value of assets of IDSC, 0.650% on the next $250 million,
0.550% on the next $250 million, 0.500% on the next $250 million and 0.107% on
the amount in excess of $1 billion. Effective Jan. 1, 1998, the fee on the
amount in excess of $1 billion was changed from 0.450% to 0.107%. The fee is
payable monthly in an amount equal to one-twelfth of each of the percentages set
forth above. Excluded from assets for purposes of this computation are first
mortgage loans, real estate and any other asset on which IDSC pays an outside
service fee.
B) The basis of computing fees paid or payable to American Express Financial
Advisors Inc. (an affiliate) for distribution services is:
Fees payable to American Express Financial Advisors Inc. on sales of IDSC's
certificates are based upon terms of agreements giving American Express
Financial Advisors Inc. the exclusive right to distribute the certificates
covered under the agreements. The agreements provide for payment of fees over a
period of time.
From time to time, IDSC may sponsor or participate in sales promotions involving
one or more of the certificates and their respective terms. These promotions may
offer a special interest rate to attract new clients or retain existing clients.
To cover the cost of these promotions, distribution fees paid to American
Express Financial Advisors Inc. may be lowered. For the promotions of the seven-
and 13-month term IDS Flexible Savings Certificate which occurred Sept. 10, 1997
to Nov. 25, 1997, the seven-month term IDS Flexible Savings Certificate which
occurred March 10, 1999 to June 8, 1999, and the on-going promotion of the
seven- and 13-month term IDS Flexible Savings Certificate which commenced August
4, 1999, the distribution fee was lowered to 0.067%.
The aggregate fees payable under the agreements per $1,000 face amount of
installment certificates and a summary of the periods over which the fees are
payable are:
Number of
certificate
years over
Aggregate fees payable which
------------------------------------------- subsequent
First Subsequent years' fees
Total year years are payable
- -------------------------------------------------------------------------------------------------------------------
On sales effective April 30, 1997 $25.00 $ 2.50 $22.50 9
On sales prior to April 30, 1997(a) 30.00 6.00 24.00 4
- --------------------------------------------------------------------------------------------------------------------
(a) At the end of the sixth through the 10th year, an additional fee of 0.5% is
payable on the daily average balance of the certificate reserve maintained
during the sixth through the 10th year, respectively.
Notes to Financial Statements ($ in thousands unless indicated otherwise)
- --------------------------------------------------------------------------------
Effective April 30, 1997, fees on the IDS Cash Reserve and IDS Flexible Savings
Certificates are paid at a rate of 0.20% of the purchase price at the time of
issuance and 0.20% of the reserves maintained for these certificates at the
beginning of the second and subsequent quarters from issue date For certificates
sold prior to April 30, 1997, fees were paid at a rate of 0.25% of the purchase
price at the time of issuance and 0.25% of the reserves maintained for these
certificates at the beginning of the second and subsequent quarters from issue
date.
Fees on the IDS Future Value Certificate were paid at the rate of 5% of the
purchase price at time of issuance. Effective May 1, 1997, the IDS Future Value
Certificate is no longer being offered for sale.
Fees on the American Express Investors Certificate are paid at an annualized
rate of 1% of the reserves maintained for the certificates. Fees are paid at the
end of each term on certificates with a one-, two- or three-month term. Fees are
paid each quarter from date of issuance on certificates with a six-,12-, 24- or
36-month term.
Effective Jan. 1, 1997, fees on the IDS Preferred Investors Certificate are paid
at the rate of 0.165% of the initial payment on issue date of the certificate
and 0.165% of the certificate's reserve at the beginning of the second and
subsequent quarters from issue date. For certificates sold prior to Jan 1, 1997,
fees were paid at an annualized rate of 0.66% of the reserves maintained for the
certificates. Fees were paid at the end of each term on certificates with a
one-, two- or three-month term and each quarter from date of issuance on
certificates with a six-, 12-, 24- or 36-month term.
Effective April 28, 1999, fees on the IDS Stock Market and IDS Market Strategy
Certificates are paid at a rate of 0.90% and fees on the American Express Stock
Market Certificates are paid at a rate of 1.00%. For certificates sold from
April 30, 1997 to April 27, 1999, fees were paid at the rate of 0.70%. For
certificates sold prior to April 30, 1997, fees were paid at a rate of 1.25%.
Fees are paid on the purchase price on the first day of the certificate's term
and on the reserves maintained for these certificates at the beginning of each
subsequent term.
C) The basis of computing depository fees paid or payable to American Express
Trust Company (an affiliate) is:
- --------------------------------------------------------------------------------
Maintenance charge per account 5 cents per $1,000 of assets on deposit
Transaction charge $20 per transaction
Security loan activity:
Depositary Trust Company
receive/deliver $20 per transaction
Physical receive/deliver $25 per transaction
Exchange collateral $15 per transaction
- --------------------------------------------------------------------------------
A transaction consists of the receipt or withdrawal of securities and commercial
paper and/or a change in the security position. The charges are payable
quarterly except for maintenance, which is an annual fee.
Notes to Financial Statements ($ in thousands unless indicated otherwise)
- --------------------------------------------------------------------------------
D) The basis for computing fees paid or payable to American Express Bank Ltd.
(an affiliate) for the distribution of the American Express Special Deposits
Certificate on an annualized basis is:
1.25% of the reserves maintained for the certificates on an amount from $100,000
to $249,999, 0.80% on an amount from $250,000 to $499,999, 0.65% on an amount
from $500,000 to $999,999 and 0.50% on an amount $1,000,000 or more. Fees are
paid at the end of each term on certificates with a one-, two- or three-month
term. Fees are paid at the end of each quarter from date of issuance on
certificates with a six-, 12-, 24- or 36-month term.
E) The basis of computing transfer agent fees paid or payable to American
Express Client Service Corporation (AECSC) (an affiliate) is:
Under a Transfer Agency Agreement effective Jan. 1, 1998, AECSC maintains
certificate owner accounts and records. IDSC pays AECSC a monthly fee of
one-twelfth of $10.353 per certificate owner account for this service. Prior to
Jan. 1, 1998, AEFC provided this service to IDSC under the investment advisory
and services agreement.
8. Income taxes
Income tax (expense) benefit as shown in the statement of operations for the
three years ended Dec. 31, consists of:
1999 1998 1997
- ----------------------------------------------------------------------------
Federal
Current ($5,978) ($5,668) $1,138
Deferred 1,063 4,183 2,266
- ----------------------------------------------------------------------------
(4,915) (1,485) 3,404
State (137) (50) (65)
- ----------------------------------------------------------------------------
Total income tax (expense) benefit ($5,052) ($1,535) $3,339
- ----------------------------------------------------------------------------
Income tax (expense) benefit differs from that computed by using the U.S.
Statutory rate of 35%. The principal causes of the difference in each year are
shown below:
1999 1998 1997
- ------------------------------------------------------------------------------
Federal tax expense at U.S. statutory rate ($13,932) ($12,026) ($8,378)
Tax-exempt interest 264 394 724
Dividend exclusion 8,730 10,121 11,044
Other, net 23 26 14
- ------------------------------------------------------------------------------
Federal tax (expense) benefit ($4,915) ($1,485) $3,404
- ------------------------------------------------------------------------------
Deferred income taxes result from the net tax effects of temporary differences.
Temporary differences are differences between the tax bases of assets and
liabilities and their reported amounts in the financial statements that will
result in differences between income for tax purposes and income for financial
statement
Notes to Financial Statements ($ in thousands unless indicated otherwise)
- --------------------------------------------------------------------------------
purposes in future years. Principal components of IDSC's deferred tax assets and
liabilities as of Dec. 31, are as follows.
Deferred tax assets 1999 1998
- -------------------------------------------------------------------------
Certificate reserves $21,741 $19,423
Investment reserves 1,005 502
Investment unrealized losses 35,399 -
Other, net 19 18
- -------------------------------------------------------------------------
Total deferred tax assets $58,164 $19,943
- -------------------------------------------------------------------------
Deferred tax liabilities 1999 1998
- -------------------------------------------------------------------------
Deferred distribution fees $4,286 $5,523
Investment unrealized gains - 5,032
Purchased/written call options 10,494 7,417
Dividends receivable 490 553
Investments 261 280
Return of capital dividends 43 43
- -------------------------------------------------------------------------
Total deferred tax liabilities 15,574 18,848
- -------------------------------------------------------------------------
Net deferred tax assets $42,590 $1,095
- -------------------------------------------------------------------------
IDSC is required to establish a valuation allowance for any portion of the
deferred tax assets that management believes will not be realized. In the
opinion of management, it is more likely than not that IDSC will realize the
benefit of the deferred tax assets and, therefore, no such valuation allowance
has been established.
9. Derivative financial instruments
IDSC enters into transactions involving derivative financial instruments as an
end user (nontrading). IDSC uses these instruments to manage its exposure to
interest rate risk and equity price risk, including hedging specific
transactions. IDSC manages risks associated with these instruments as described
below.
Market risk is the possibility that the value of the derivative financial
instrument will change due to fluctuations in a factor from which the instrument
derives its value, primarily an interest rate or a major market index. IDSC is
not impacted by market risk related to derivatives held because derivatives are
largely used to manage risk and, therefore, the cash flows and income effects of
the derivatives are inverse to the effects of the underlying hedged
transactions.
Credit risk is the possibility that the counterparty will not fulfill the terms
of the contract. IDSC monitors credit risk related to derivative financial
instruments through established approval procedures, including setting
concentration limits by counterparty, reviewing credit ratings and requiring
collateral where appropriate. At Dec. 31, 1999, IDSC's counterparties to the
purchased call options are five major broker/dealers that are rated AA by
nationally recognized rating agencies.
Notes to Financial Statements ($ in thousands unless indicated otherwise)
- --------------------------------------------------------------------------------
The notional or contract amount of a derivative financial instrument is
generally used to calculate the cash flows that are received or paid over the
life of the agreement. Notional amounts do not represent market or credit risk
and are not recorded on the balance sheet.
Credit risk related to derivative financial instruments is measured by the
replacement cost of those contracts at the balance sheet date. The replacement
cost represents the fair value of the instrument, and is determined by market
values, dealer quotes or pricing models.
IDSC's holdings of derivative financial instruments were as follows at Dec. 31,
1999 and 1998.
1999
--------------------------------------------------------------
Notional Total
or contract Carrying Fair credit
amount value value risk
- --------------------------------------------------------------------------------------------------------------------
Assets
Purchased call options $532 $123,845 $112,176 $112,176
- --------------------------------------------------------------------------------------------------------------------
Liabilities
Written call options $532 $47,911 $65,625 $-
- --------------------------------------------------------------------------------------------------------------------
1998
--------------------------------------------------------------
Notional Total
or contract Carrying Fair credit
amount value value risk
- --------------------------------------------------------------------------------------------------------------------
Assets
Interest rate floors $500,000 $37 $348 $348
Purchased call options 448 96,176 92,357 92,357
- --------------------------------------------------------------------------------------------------------------------
Total $500,448 $96,213 $92,705 $92,705
- --------------------------------------------------------------------------------------------------------------------
Liabilities
Interest rate swaps $500,000 $- $1,488 $-
Written call options 448 38,071 54,181 -
- --------------------------------------------------------------------------------------------------------------------
Total $500,448 $38,071 $55,669 $-
- --------------------------------------------------------------------------------------------------------------------
The fair values of derivative financial instruments are based on market values,
dealer quotes or pricing models. The purchased and written call options held at
Dec. 31, 1999, expire throughout 2000.
Notes to Financial Statements ($ in thousands unless indicated otherwise)
- --------------------------------------------------------------------------------
Interest rate caps, corridors, floors and swaps, and options may be used to
manage IDSC's exposure to changing interest rates. These instruments are used
primarily to protect the margin between the interest earned on investments and
the interest rate credited to related investment certificate owners.
The interest rate floors were reset monthly and IDSC earned interest on the
notional amount to the extent the U.S. Treasury securities at "constant
maturity" for a period of one year was below the reference rates specified in
the floor agreements. These reference rates ranged from 4.6% to 4.7% during the
period they were held. The cost of interest rate floors is amortized over the
terms of the agreements on a straight line basis and is included in other
qualified assets. The amortization, net of any interest earned, is included in
investment expenses or other investment income, as appropriate.
The interest rate caps and corridors were reset quarterly and IDSC earned
interest on the notional amount to the extent the London Interbank Offering Rate
exceeded the reference rates specified in the cap and corridor agreements. These
reference rates ranged from 4% to 9% during the period they were held. The cost
of interest rate caps and corridors is amortized over the terms of the
agreements on a straight line basis and is included in other qualified assets.
The amortization, net of any interest earned, is included in investment expenses
or other investment income, as appropriate.
The interest rate swaps were reset monthly. IDSC paid a fixed rate on the
notional amount ranging from 5.46% to 5.66% and received a floating rate on the
notional amount tied to the U.S. Treasury securities at "constant maturity" for
a period of one year. There is no cost carried on the balance sheet. Interest
earned and interest expensed under the agreements is shown net in investment
expenses or other investment income, as appropriate.
IDSC offers a series of certificates which pays interest based upon the relative
change in a major stock market index between the beginning and end of the
certificates' term. The certificate owners have the option of participating in
the full amount of increase in the index during the term (subject to a specified
maximum) or a lesser percentage of the increase plus a guaranteed minimum rate
of interest. As a means of hedging its obligations under the provisions of these
certificates, IDSC purchases and writes call options on the major market index.
The options are cash settlement options, that is, there is no underlying
security to deliver at the time the contract is closed out.
Each purchased (written) call option contract confers upon the holder the right
(obligation) to receive (pay) an amount equal to one hundred dollars times the
difference between the level of the major stock market index on the date the
call option is exercised and the strike price of the option.
The option contracts are less than one year in term. The premiums paid or
received on these index options are reported in other qualified assets or other
liabilities, as appropriate, and are amortized into investment expense over the
life of the option. The intrinsic value of these index options is also reported
in other qualified assets or other liabilities, as appropriate. Changes in the
intrinsic value of these options are recognized currently in provision for
certificate reserves.
Notes to Financial Statements ($ in thousands unless indicated otherwise)
- --------------------------------------------------------------------------------
Following is a summary of open option contracts at Dec. 31, 1999 and 1998.
1999
--------------------------------------------------
Contract Average Index at
amount strike price Dec. 31,1999
- --------------------------------------------------------------------------------------------------------
Purchased call options $532 1,326 1,469
Written call options 532 1,453 1,469
- --------------------------------------------------------------------------------------------------------
1998
--------------------------------------------------
Contract Average Index at
amount strike price Dec. 31,1998
- --------------------------------------------------------------------------------------------------------
Purchased call options $448 1,088 1,229
Written call options 448 1,206 1,229
- --------------------------------------------------------------------------------------------------------
10. Fair values of financial instruments
IDSC discloses fair value information for most on- and off-balance sheet
financial instruments for which it is practicable to estimate that value. The
fair value of the financial instruments presented may not be indicative of their
future fair values. The estimated fair value of certain financial instruments
such as cash and cash equivalents, receivables for dividends and interest,
investment securities sold and other trade receivables, accounts payable due to
Parent and affiliates, payable for investment securities purchased and other
accounts payable and accrued expenses are approximated to be the carrying
amounts disclosed in the balance sheets. Non-financial instruments, such as
deferred distribution fees, are excluded from required disclosure. IDSC's
off-balance sheet intangible assets, such as IDSC's name and future earnings of
the core business are also excluded. IDSC's management believes the value of
these excluded assets is significant. The fair value of IDSC, therefore, cannot
be estimated by aggregating the amounts presented.
A summary of fair values of financial instruments as of Dec. 31, is as follows:
1999 1998
-------------------------------------------------------------
Carrying Fair Carrying Fair
value value value value
- ----------------------------------------------------------------------------------------------------------------------------------
Financial assets
Assets for which carrying values
approximate fair values $89,206 $89,206 $50,288 $50,288
Investment securities (note 3) 3,085,395 3,091,730 3,303,360 3,335,534
First mortgage loans on real estate (note 4) 378,047 359,018 334,280 343,406
Derivative financial instruments (note 9) 123,845 112,176 96,213 92,705
Financial liabilities
Liabilities for which carrying values
approximate fair values 33,944 33,944 154,964 154,964
Certificate reserves (note 5) 3,508,196 3,510,931 3,373,033 3,387,122
Derivative financial instruments (note 9) 47,911 65,625 38,071 55,669
- ----------------------------------------------------------------------------------------------------------------------------------
IDS CERTIFICATE COMPANY
Investments in Securities of Unaffiliated Issuers Schedule I
($ in thousands)
Bal Held at
12/31/1999
Principal Amt
of Bonds & Notes Cost Value at
or (Notes 12/31/1999
Issuer Name and Issue Title # of Shares a & c) (Note a)
BONDS AND NOTES
United States Government-
Direct Obligations
US TREASURY BOND 6.875% 2000 165 165 166
US TREASURY BOND 5.625% 2000 200 199 199
--------------- ------------ ---------------
Total U.S. Government - Direct Obligations 365 364 365
--------------- ------------ ---------------
Other Bonds and Notes
United States Government Agencies
GNMA ARM #8377 6.750% 2018 559 558 564 (f)
GNMA ARM #8251 6.750% 2017 50 50 51 (f)
GNMA ARM #8365 6.375% 2018 1,281 1,281 1,291 (f)
GNMA ARM #8274 6.125% 2017 1,703 1,702 1,719 (f)
GNMA ARM #8293 6.125% 2017 401 400 405 (f)
GNMA ARM #8283 6.125% 2017 230 229 232 (f)
GNMA ARM #8353 6.375% 2018 722 718 728 (f)
GNMA ARM #8341 6.375% 2018 107 107 108 (f)
GNMA ARM #8240 6.750% 2017 569 562 574 (f)
GNMA ARM #8440 6.125% 2018 660 660 667 (f)
GNMA ARM #8206 6.375% 2017 873 873 881 (f)
GNMA ARM #8428 6.125% 2018 232 232 234 (f)
GNMA ARM #8157 6.375% 2023 3,563 3,625 3,597 (f)
GNMA ARM #8638 6.375% 2025 5,174 5,217 5,204 (f)
FNMA 30 YR #27880 9.000% 2016 27 27 28 (f)
FNMA 15 YR #34543 9.250% 2001 10 10 10 (f)
FNMA 30 YR #36225 9.000% 2016 93 95 97 (f)
FNMA 30 YR #040877 9.000% 2017 40 41 42 (f)
FNMA 30 YR #51617 10.000% 2017 50 50 53 (f)
FNMA 30 YR #52185 10.000% 2017 55 55 59 (f)
FNMA 15 YR #13705 11.000% 2000 7 7 8 (f)
FNMA 15 YR #18275 11.000% 2000 2 2 2 (f)
FNMA 15 YR #18745 11.000% 2000 1 1 1 (f)
FNMA 15 YR #2469 11.000% 2000 3 3 3 (f)
FNMA 15 YR #13157 11.000% 2000 2 2 2 (f)
FNMA 15 YR #13548 11.000% 2000 8 8 9 (f)
FNMA 15 YR #64520 11.000% 2001 11 11 11 (f)
FNMA 15 YR #64523 11.000% 2000 10 10 10 (f)
FNMA 15 YR #19070 11.000% 2000 1 1 1 (f)
FNMA 15 YR #19261 11.000% 2000 1 1 1 (f)
FNMA 15 YR #22569 11.000% 2000 3 3 3 (f)
FNMA 15 YR #22271 11.000% 2000 11 11 12 (f)
FNMA 15 YR #22674 11.000% 2000 7 7 8 (f)
FNMA 15 YR #25899 11.000% 2001 3 3 3 (f)
FNMA 15 YR #70299 10.750% 2001 34 34 36 (f)
FNMA 15 YR #66458 10.000% 2004 1,664 1,667 1,725
Bal Held at
12/31/1999
Principal Amt
of Bonds & Notes Cost Value at
or (Notes 12/31/1999
Issuer Name and Issue Title # of Shares a & c) (Note a)
FNMA 15 YR 70694 MEG 9.500% 2005 788 794 828
FNMA 15 6.0 #50973 6.000% 2009 24,585 24,106 23,726 (f)
FNMA 10YR #303115 6.500% 2004 7,104 6,842 6,900 (f)
FNMA 15YR #124848 8.000% 2008 5,634 5,618 5,746 (f)
FNMA 15YR #303445 5.500% 2009 13,635 13,157 12,664 (f)
FNMA #73227 MULT-FAM 6.700% 2005 2,149 2,166 2,138 (f)
FNMA 15YR 190534 6.000% 2018 12,611 12,415 12,170
FNMA 15 YR #A250857 7.000% 2012 11,100 11,076 10,986 (f)
FNMA 15YR #250671 7.500% 2011 10,734 10,761 10,804 (f)
FNMA 15 YR #313561 8.000% 2012 10,419 10,617 10,643 (f)
FNMA 15YR #509806 6.500% 2014 9,813 9,715 9,527 (f)
FNMA 15YR #252381 5.500% 2014 23,833 23,190 22,122 (f)
FNMA 15YR 5.5 252344 5.500% 2014 25,601 24,956 23,777 (f)
FNMA 15YR 6% #323290 6.000% 2013 26,041 25,852 24,746 (f)
FNMA 15YR #252259 5.500% 2014 28,989 28,459 26,920 (f)
FNMA 15YR #303779 6.000% 2011 24,557 24,134 23,489 (f)
FNMA 7.0 15YR 250670 7.000% 2011 3,617 3,643 3,580 (f)
FNMA 15YR #313522 7.000% 2012 21,882 22,006 21,684 (f)
FNMA 15YR #367005 7.000% 2012 7,805 7,763 7,732 (f)
FNMA 15YR #313042 7.000% 2011 8,320 8,354 8,234 (f)
FNMA 92 203 E CMO 6.250% 2005 131 131 131 (f)
FNMA 95-T2 A3 6.610% 2018 3,649 3,649 3,633 (f)
FNMA 97-2C CMO 7.000% 2020 22,803 22,811 22,701 (f)
FNMA 1999-51 LJ CMO 6.500% 2021 10,343 10,159 10,053 (f)
FNMA 97-54 CLASS B 6.500% 2022 14,458 14,215 13,877 (f)
FN 98 50 CLASS PA 6.000% 2012 15,000 15,028 14,816 (f)
FNMA 98-8 A SEQ CMO 6.500% 2024 6,476 6,478 6,307 (f)
FNMA 97-74 G SEQ CMO 6.500% 2024 6,055 6,031 5,899 (f)
FNMA 96-10 C CMO SEQ 6.500% 2023 5,346 5,164 5,194 (f)
FNMA 97-17 CMO 7.000% 2022 21,890 21,778 21,766 (f)
FN 97 11 K SEQ CM0 7.125% 2023 1,751 1,754 1,752 (f)
FNMA ARM #70007 6.681% 2017 1,174 1,174 1,194 (f)
FNMA ARM #70009 6.648% 2018 1,817 1,817 1,849 (f)
FNMA ARM #70117 6.499% 2017 320 320 326 (f)
FNMA ARM #79384 7.165% 2019 636 636 661 (f)
FNMA ARM #70202 6.854% 2019 1,443 1,443 1,484 (f)
FNMA ARM #92069 7.066% 2018 1,628 1,628 1,665 (f)
FNMA ARM #93787 7.066% 2019 1,339 1,339 1,371 (f)
FNMA ARM #97822 6.712% 2020 40 40 41 (f)
FNMA ARM#88879 3X3 7.760% 2019 1,369 1,369 1,415 (f)
FNMA ARM#105989 3X3 7.494% 2020 1,027 1,027 1,058 (f)
FNMA ARM #249907 7.000% 2024 5,509 5,589 5,732 (f)
FNMA ARM#89125 SEMI 6.751% 2019 3,976 4,057 4,066 (f)
FNMA ARM #303259 6.884% 2025 3,562 3,657 3,679 (f)
FNMA ARM#190726 SEMI 7.197% 2033 6,703 6,837 6,871 (f)
FHLMC CTF SER B-77 8.125% 2007 39 39 39 (f)
FHLMC 15 YR #200035 9.000% 2001 63 62 65 (f)
FHLMC 15 YR #200064 8.000% 2002 111 109 112 (f)
FHLMC 15 YR #212119 9.500% 2001 39 39 41 (f)
FHLMC 15 YR #218648 9.500% 2002 10 10 10 (f)
FHLMC 15 YR #200048 9.000% 2001 167 167 173
FHLMC 15YR #380025 9.500% 2003 251 250 263
Bal Held at
12/31/1999
Principal Amt
of Bonds & Notes Cost Value at
or (Notes 12/31/1999
Issuer Name and Issue Title # of Shares a & c) (Note a)
FHLMC 15 YR #219679 9.500% 2003 173 172 182 (f)
FHLMC 15 YR #200022 10.500% 2000 13 13 14 (f)
FHLMC 15 YR #219757 11.000% 2003 258 263 272
FHLMC 15 YR #502175 10.500% 2004 32 33 34 (f)
FHLMC LOANS #885005 9.500% 2002 452 451 474 (f)
FHLMC 15 YR #885009 9.500% 2003 1,110 1,106 1,165
FHLMC LOANS #885008 10.000% 2003 877 879 922 (f)
FHLMC GOLD E00151 7.500% 2017 3,312 3,403 3,339 (f)
FHLMC 15YR #G10344 G 7.500% 2010 6,660 6,630 6,714 (f)
FHLMC 5YR BLN #G5025 7.500% 2000 904 905 907 (f)
FHLMC 15YR G10364 7.000% 2010 9,605 9,557 9,506 (f)
FHLM 15 6.5 #G10369 6.500% 2010 23,876 23,613 23,362 (f)
FHLMC 15 #G10350 GLD 6.500% 2010 13,629 13,602 13,233 (f)
FHLMC 15YR #E00383 7.000% 2010 9,371 9,356 9,274 (f)
FHLMC 15YR GOLD 6.500% 2010 11,584 11,533 11,248 (f)
FH GD 15YR #E00426 6.500% 2011 5,517 5,467 5,375 (f)
FH15YR #G10439 GOLD 6.500% 2011 2,842 2,776 2,776 (f)
FHLMC 15YR G10627 6.500% 2011 18,469 18,205 17,978 (f)
FHLMC 15YR G10665 GD 7.000% 2012 44,778 44,675 44,316 (f)
FHLMC 15YR #G10949 6.500% 2014 14,617 14,417 14,183 (f)
FHLMC T-009 A2 HEL 6.430% 2013 6,187 6,187 6,146 (f)
FHLMC 15YR 11.000% 2003 287 292 302 (f)
FHLMC GOLD E00484 6.500% 2012 5,104 4,991 4,956 (f)
FHLMC GOLD #E00476 6.500% 2012 11,834 11,567 11,505 (f)
FHLMC15YR E00388GOLD 7.000% 2010 6,070 5,989 6,025 (f)
FHLMC 2184 CL TA CMO 6.500% 2026 9,740 9,577 9,473 (f)
FHLMC 2185 CL A CMO 6.000% 2024 19,816 19,129 18,469 (f)
FHLMC 2019 CLASS C 6.500% 2019 11,653 11,333 11,088 (f)
FHLMC 2149 CLASS DK 6.000% 2026 18,788 18,341 17,719 (f)
FHLMC ARM #840035 7.097% 2019 441 441 450 (f)
FHLMC ARM #840045 6.357% 2019 2,312 2,312 2,371 (f)
FHLMC ARM #605050 7.047% 2018 241 241 247 (f)
FHLMC ARM #605041 7.229% 2019 220 220 225 (f)
FHLMC ARM #605048 6.750% 2018 844 844 858 (f)
FHLMC ARM #605079 6.938% 2018 899 899 920 (f)
FHLMC ARM #605175 6.823% 2019 2,278 2,278 2,335 (f)
FHLMC ARM #605352 6.779% 2018 1,457 1,457 1,481 (f)
FHLMC ARM #605433 6.586% 2017 903 903 922 (f)
FHLMC ARM #605432 7.065% 2017 396 396 403 (f)
FHLMC ARM #405185 6.447% 2018 815 815 826 (f)
FHLMC ARM #405249 6.834% 2018 798 798 812 (f)
FHLMC ARM #630074 6.625% 2018 327 327 328 (f)
FHLMC ARM #605854 6.511% 2019 1,320 1,320 1,357 (f)
FHLMC ARM #630048 7.375% 2018 11 11 11 (f)
FHLMC ARM #405092 6.800% 2019 634 634 643 (f)
FHLMC ARM #840072 6.605% 2019 977 977 996 (f)
FHLMC ARM #605454 6.455% 2017 2,511 2,511 2,532 (f)
FHLMC ARM #405437 7.171% 2019 213 213 217 (f)
FHLMC ARM #405455 6.833% 2019 529 529 538 (f)
FHLMC ARM #405243 6.678% 2019 515 515 524 (f)
FHLMC ARM #606025 6.415% 2019 3,217 3,217 3,213 (f)
FHLMC ARM #606024 6.291% 2019 968 968 967 (f)
Bal Held at
12/31/1999
Principal Amt
of Bonds & Notes Cost Value at
or (Notes 12/31/1999
Issuer Name and Issue Title # of Shares a & c) (Note a)
FHLMC ARM #405517 7.500% 2019 60 60 61 (f)
FHLMC ARM#605853 6.807% 2019 1,757 1,757 1,797 (f)
FHLMC ARM #405014 7.007% 2019 476 476 483 (f)
FHLMC ARM #401587 6.750% 2018 1,322 1,322 1,338 (f)
FHLMC ARM 840031 6.670% 2019 193 193 196 (f)
FHLMC ARM #840036 7.217% 2019 580 580 590 (f)
FHLMC ARM #405615 6.902% 2019 553 553 559 (f)
FHLMC ARM #405360 6.911% 2019 541 541 551 (f)
FHLMC ARM #606151 6.808% 2019 2,598 2,598 2,668 (f)
FHLMC ARM #635054 7.141% 2020 143 144 146 (f)
FHLMC ARM #405675 6.916% 2020 400 400 408 (f)
FHLMC ARM #405692 6.890% 2020 1,238 1,238 1,262 (f)
FHLMC ARM #606301 7.107% 2020 2,686 2,686 2,781 (f)
FHLMC ARM #405744 7.002% 2020 731 731 746 (f)
FHLMC ARM#865008 3X3 7.956% 2018 3,852 3,852 3,900 (f)
FHLMC ARM #845154 6.836% 2022 1,518 1,564 1,564 (f)
FHLMC ARM #845654 7.274% 2024 4,736 4,803 4,830 (f)
FHLMC ARM #350190 7.000% 2022 2,068 2,126 2,124 (f)
FHLMC ARM #845523 7.066% 2023 2,166 2,226 2,224 (f)
FHLMC ARM #845733 6.941% 2024 8,649 8,792 8,868 (f)
FHLMC ARM #845730 7.035% 2024 9,593 9,888 9,864 (f)
FHLMC ARM #845973 7.437% 2024 2,963 2,963 3,018 (f)
FHLMC ARM #845999 6.745% 2027 10,225 10,310 10,455 (f)
FHLMC ARM #846072 6.847% 2022 2,754 2,820 2,806 (f)
FHLMC ARM#846107LIB 7.488% 2025 2,716 2,776 2,783 (f)
FHLMC ARM#785363 3X1 6.884% 2025 2,040 2,066 2,085 (f)
FHLMC ARM #606903 6.250% 2022 214 216 216 (f)
FHLMC ARM#785615 3X1 6.855% 2026 4,274 4,250 4,314 (f)
FHLMC ARM#785634 3X1 7.393% 2026 4,028 4,042 4,099 (f)
FHLMC ARM#785619 3X1 7.168% 2026 1,857 1,867 1,889 (f)
FHLMC ARM#785672 3X1 7.597% 2026 1,951 1,960 1,994 (f)
--------------- ------------ ---------------
Total United States Government Agencies 795,775 789,782 779,791
--------------- ------------ ---------------
Municipal Bonds
California
CAL HSG 95-O TAX MUN 7.740% 2016 9,615 9,615 9,682 (b) (f)
CAL HSG FIN 1996-M 7.890% 2016 6,505 6,505 6,548 (b) (f)
Colorado
CO HLTH-POUDRE TAXAB 6.950% 2003 7,500 7,495 7,416 (b) (f)
Illinois
CHICAGO IL SAN DIST 9.250% 2000 1,000 1,000 1,000 (b) (f)
*CHIC IL GAS SPY SRC 7.500% 2015 4,500 4,500 4,610 (b) (f)
New York
NEW YORK CITY NT GO 7.750% 2000 335 335 337 (b) (f)
NEW YORK PWR AUTH 9.500% 2001 95 97 96 (b) (f)
Pennsylvania
WY VALLEY PA SWR 5.125% 2007 100 100 100 (b) (f)
Bal Held at
12/31/1999
Principal Amt
of Bonds & Notes Cost Value at
or (Notes 12/31/1999
Issuer Name and Issue Title # of Shares a & c) (Note a)
Texas
AUSTIN TX UTILITY 10.750% 2015 3,735 3,783 3,826 (b) (f)
--------------- ------------ ---------------
Total Municipal Bonds 33,385 33,430 33,615
--------------- ------------ ---------------
Public Utility
AES CORP SNR SUB NTS 8.375% 2007 5,000 4,981 4,637 (b) (d) (f)
ALLIED WASTE 7.375% 2004 2,800 2,719 2,590 (f)
AVON ENERGY 6.730% 2002 4,750 4,750 4,706 (b) (d) (f)
BAROID CORP 8.000% 2003 5,000 4,992 5,124
BARRETT RESOURCES 7.550% 2007 3,000 3,003 2,823 (f)
CMS ENERGY 7.375% 2000 4,700 4,699 4,666 (f)
CSW INVESTMENTS 144A 6.950% 2001 10,000 9,995 9,915 (d) (f)
SPPC 99-1A ABS 6.400% 2011 7,441 7,438 7,062 (f)
CALPINE CORP 7.750% 2009 3,500 3,498 3,290 (f)
CINERGY CORP 6.125% 2004 4,000 3,995 3,740 (f)
CONOCO INC GLOBAL 5.900% 2004 7,500 7,491 7,161 (f)
CROSS TIMBERS OIL CO 8.750% 2009 3,000 3,000 2,865 (f)
CYTEC INDUSTRIES INC 6.500% 2003 10,500 10,493 9,731 (f)
DETROIT EDISON 6.280% 2000 7,000 6,997 7,001 (f)
DYNEGY CORP 6.875% 2002 3,000 2,997 2,949 (f)
ENRON CORP 6.625% 2003 5,000 5,022 4,861 (f)
ENRON CORP 6.450% 2001 10,000 10,000 9,904 (f)
INTERMEDIA COMM 9.500% 2009 3,000 2,987 2,902 (f)
JERSEY CENTRAL P&L 6.040% 2000 5,000 5,000 4,999
KN ENERGY INC 6.450% 2003 8,000 7,990 7,760 (f)
MCN INV`T CORP MTN 6.890% 2002 9,000 9,019 8,898 (f)
NEW PARK RESOURCES 8.625% 2007 2,500 2,525 2,366 (f)
NIAGARA MHWK PWR 7.375% 2003 3,000 3,078 2,980 (f)
NORAM ENERGY CORP 7.500% 2000 5,000 4,996 5,015 (f)
NORCEN ENERGY RES 6.800% 2002 10,000 9,990 9,802 (f)
NOVACOR CHEMICALS 6.500% 2000 10,000 9,994 9,916 (f)
OCCIDENTAL PETROLEUM 6.410% 2000 5,000 4,993 4,975 (f)
PUBLIC SERV E&G CAP 6.800% 2002 10,000 10,018 9,832 (d) (f)
PUB SERVICE ELEC GAS 6.740% 2001 12,000 12,000 11,901 (d) (f)
PACIFIC GAS TRANS 6.640% 2000 5,000 5,000 4,997 (f)
PAGING NETWORK 0.000% 2008 2,000 2,000 630 (e) (f)
PRAXAIR INC 6.750% 2003 5,000 4,858 4,870 (f)
QWEST COMMUNICATION 7.250% 2008 3,000 3,000 2,891 (f)
REPUBLIC SERVICES 6.625% 2004 5,000 4,976 4,586 (f)
ROHM & HAAS 6.950% 2004 10,000 9,997 9,863 (f)
SALTON SEA CL A 6.690% 2000 796 796 795 (f)
SANTA FE SNYDER 8.050% 2004 2,000 1,977 1,941 (f)
SMITH INT`L INC 7.240% 2001 10,000 10,000 10,005 (b) (d) (f)
TELEPORT COMM 9.875% 2006 4,000 4,071 4,530 (f)
TEXAS UTILITIES 6.370% 2000 10,000 10,000 9,967 (f)
TOSCO CORP 7.000% 2000 5,000 4,999 5,004 (f)
USX CORP 7.200% 2004 13,000 13,271 12,733 (f)
USA WASTE SERVICES 6.500% 2002 10,000 9,998 9,273 (f)
US WEST CAP FDG 144A 6.875% 2001 10,000 9,990 9,961 (d) (f)
WILLIAMS COMM 10.875% 2009 1,000 993 1,050 (f)
WILLIAMS CO INC 6.500% 2002 12,000 11,994 11,686 (f)
--------------- ------------ ---------------
Total Public Utility 286,487 286,580 279,153
--------------- ------------ ---------------
Bal Held at
12/31/1999
Principal Amt
of Bonds & Notes Cost Value at
or (Notes 12/31/1999
Issuer Name and Issue Title # of Shares a & c) (Note a)
Finance
AG CAP SR NT FLT A 7.021% 2004 20,000 19,985 18,800 (b) (d) (f)
AT&T CAPITAL CORP 6.900% 2002 15,000 14,948 14,888 (f)
ADVANTA MTG 98-1 A2 6.250% 2014 3,470 3,470 3,451 (f)
AERCO LDT S-1A CL C1 7.813% 2023 13,439 13,304 12,767 (f)
O`N`E` LOAN TRUST 97 6.450% 2007 25,000 27,164 27,164 (b) (d) (f)
ALLIANCE INV CBO FLT 6.909% 2006 19,000 19,000 18,050 (b) (d) (f)
ATHENA CBO FLT AAA 6.118% 2010 10,000 9,968 10,025 (d) (f)
BANK OF AMERICA GBL 6.625% 2004 5,000 4,991 4,883 (f)
BANKAMERICA CORP 9.750% 2000 10,000 10,019 10,156
BANPONCE FIN CORP 6.580% 2003 5,000 4,989 4,861 (f)
BISTRO TRST 1997-100 6.580% 2002 7,000 6,989 6,912 (d) (f)
BISTRO TRT 98-1000 6.580% 2001 14,000 14,000 13,589 (d) (f)
CAITHNESS COSO FUND 6.800% 2001 2,000 2,000 1,980 (f)
CA IN BK SDG 97-1 A2 6.040% 2002 306 306 306 (f)
CAPITAL ONE BANK 7.350% 2000 5,000 4,999 5,016 (f)
CAPITAL ONE BANK 6.375% 2003 5,500 5,489 5,306 (f)
CARAVELLE INV B FLTG 6.864% 2005 17,500 17,500 14,700 (f)
CARCO AUTO 97-1 6.689% 2004 7,576 7,576 7,568 (f)
CATERPILLER FINANCE 6.875% 2004 5,000 4,982 4,906 (f)
CCMSC 1997-2 CLSS A1 6.450% 2004 4,149 4,150 4,048 (f)
CHASE 1999-AS2A H1 6.500% 2029 9,624 9,647 9,279 (f)
CHASE 99-S13 A1 CMO 6.500% 2014 9,875 9,546 9,490 (b) (f)
COMMERCIAL CREDIT 8.250% 2001 9,000 8,962 9,183 (f)
CONTI FINANCIAL CORP 8.375% 2003 5,000 4,991 550 (e) (f)
CONTI MTG HEL TRTA-6 6.690% 2016 10,000 9,998 9,899 (f)
CONTI 98-1 CLASS A5 6.430% 2016 10,000 9,999 9,823 (f)
DLJ CMC 99-CG3 A1-A 7.120% 2008 9,914 9,964 9,834 (f)
DUKE REALTY 7.300% 2003 7,500 7,494 7,377 (f)
ECH FUNDING 98-1 A-2 7.334% 2010 19,000 19,000 16,459 (d) (f)
EQUICREDIT 97-3 A6 6.610% 2021 5,000 5,007 4,934 (f)
ELAN PHARMACEUTICAL 8.430% 2002 10,000 10,000 9,938 (b) (d) (f)
FDIC 96-1C CLASS 1A 6.750% 2026 2,733 2,732 2,689 (f)
FMAC LLC 98-D CL A-1 6.111% 2019 4,368 4,384 4,277 (d) (f)
FINOVA CAP C MTN 6.190% 2000 3,000 3,010 2,983 (f)
FBMS 93-2 CL B1 CMO 7.500% 2033 5,906 6,042 5,751 (f)
FIRST DOMINION CBO 1 6.804% 2013 19,000 19,000 17,376 (d) (f)
FIRST UNION CORP 6.625% 2004 3,000 2,991 2,911 (f)
FULB 97-C1 A-1 MBS 7.150% 2004 8,105 8,202 8,051 (f)
FULB 97-C2 CLASS A1 6.479% 2004 6,763 6,786 6,657 (f)
FIRST USA DEP NT 6.375% 2000 5,000 4,997 4,996 (f)
FIRSTPLUS 98-A-A NIM 6.359% 2023 5,884 5,884 5,550 (b) (f)
GATX CAPITAL CORP 6.500% 2000 5,000 5,000 4,982 (f)
GATX CAP CORP MTN 6.360% 2002 5,000 4,959 4,824 (f)
GMAC 96-C1 COMM MBS 6.790% 2003 3,701 3,710 3,673 (f)
GMAC 97-C2 A CMBS 6.451% 2004 4,519 4,533 4,339 (f)
GS-96PROTECT LIFE A1 7.020% 2027 4,593 4,667 4,499 (f)
GREAT WESTERN FINL 6.375% 2000 3,000 2,999 2,998 (f)
GREENTREE EQ 96-B 7.700% 2018 7,424 7,523 7,123 (f)
GREENPOINT BANK 6.700% 2002 9,250 9,275 9,031 (f)
HELLER FINANCIAL 6.500% 2000 8,000 8,000 8,002 (f)
HELLER FINANCIAL 6.440% 2002 5,000 4,987 4,897 (f)
HOMESIDE LENDING 6.875% 2002 10,000 9,998 9,914 (f)
Bal Held at
12/31/1999
Principal Amt
of Bonds & Notes Cost Value at
or (Notes 12/31/1999
Issuer Name and Issue Title # of Shares a & c) (Note a)
HOUSEHOLD FIN MTN 7.100% 2002 10,000 9,996 9,986 (f)
INDOSUEZ CAP B-2 CLO 7.483% 2010 16,500 16,500 15,097 (d) (f)
IROQUOIS TRUST 97-1A 7.000% 2006 3,094 3,095 3,067 (d) (f)
IROQUOIS TRUST 97-2A 6.752% 2007 10,359 10,351 10,283 (d) (f)
KEYCORP SENIOR 7.430% 2000 4,000 4,000 4,013 (f)
LBCMT 98-C1 A-1 CMBS 6.330% 2004 3,399 3,412 3,319 (f)
LBCMT 98-C4 A1A CMBS 5.870% 2006 4,702 4,721 4,469 (f)
LONG ISL SAV BK 7.000% 2002 5,000 4,994 4,935 (f)
MBNA AMER BANK NA 7.540% 2001 10,000 9,998 10,036
MBNA CORP 6.500% 2000 5,000 5,000 4,991 (f)
ML CBO14 98-E&P-1 FL 7.284% 2010 11,000 11,000 6,575 (d) (f)
MARGARETTEN FIN'L 6.750% 2000 15,250 15,269 15,256 (f)
ML CLO 98 PILG-3 7.014% 2010 7,500 7,451 6,955 (f)
ML CBO 98 AIG-2 B-1 7.184% 2010 6,500 6,476 4,703 (f)
ML CBO 98 SER 1 B1 6.734% 2009 10,500 10,478 9,165 (f)
MONEYSTORE 97-A A6 7.210% 2021 4,000 4,000 3,995 (f)
JPMS 96-C2 CL A 6.470% 2027 2,775 2,788 2,696 (f)
JPM 98-C6 A1 CMBS 6.373% 2030 3,235 3,246 3,164 (f)
JPMC 99-C7 A1 CMBS 6.180% 2035 9,679 9,724 9,198 (f)
MS CAP 1996-WFI MBS 7.220% 2006 10,000 10,096 10,030 (f)
MS CAP 1 1997-XL A-1 6.590% 2030 14,044 14,093 13,708 (f)
MS CAP 98-WF1 CMBS 6.250% 2007 2,287 2,295 2,215 (f)
MCF 96-MC2 CLS A1 6.758% 2004 8,315 8,354 8,219 (f)
NORWEST FINANCIAL 7.250% 2000 4,500 4,500 4,508
ORIX CR ALL 144A MTN 6.640% 2002 16,000 16,000 15,569 (d) (f)
OSPREY TRUST 144A 8.310% 2003 5,000 5,000 4,953 (b) (d) (f)
PAMCOIII CLO 98-1 B2 7.555% 2010 19,000 19,000 15,580 (d) (f)
BANK POPULAR N.A. 6.625% 2002 12,000 11,994 11,701 (f)
PROVIDENT BANK 6.125% 2000 5,000 4,997 4,960
PROVIDIAN 97-4-A CRD 6.250% 2007 10,500 10,489 10,337 (f)
PROVIDIAN BANK 6.700% 2003 13,000 12,993 12,463 (f)
PHMS 1993-39 A8 SUPP 6.500% 2008 6,977 6,842 6,847 (f)
RFMSI 1998-S23 CL A1 6.000% 2028 12,868 12,931 12,642 (f)
RFMSI 98-S13 CL A23 6.750% 2028 4,534 4,490 4,441 (f)
RASC 99-KS1 AI4 ABS 6.390% 2027 5,000 4,983 4,761 (f)
SASCO 98-C3 CLASS B 6.340% 2001 4,934 4,917 4,916 (d) (f)
SL CMBS 97-C1 CLS A 6.875% 2004 11,988 12,067 11,857 (d) (f)
SBMS VII 91-1 B1 9.700% 2006 166 166 167 (f)
SANWA BUS CREDIT MTN 7.250% 2001 10,000 9,997 10,011 (b) (d) (f)
SAXON 98-1 AF3 HEL 6.450% 2024 1,932 1,931 1,921 (f)
SAXON 95-1 BA2 ARM 6.828% 2025 1,081 1,097 1,094 (f)
STRATG HOTEL99-C1 C 7.970% 2004 5,000 5,000 5,000 (b) (f)
SIMSBURY IV FLTR CLO 8.391% 2011 4,500 4,500 4,224 (b) (f)
SOMERS CBO FLT 6.195% 2012 11,000 10,932 11,014 (d) (f)
SOVEREIGN BANCORP 10.250% 2004 1,000 1,000 1,010 (f)
GMPT 99-C1 D CMBS 6.442% 2004 3,000 3,000 3,020 (d) (f)
TCW GEM II 144A FLT 7.318% 2012 25,000 23,855 12,750 (d) (f)
TRANS OCEAN CRP 144A 6.670% 2007 9,211 9,174 9,074 (d) (f)
UCFC 97-B CL A-4 ABS 6.940% 2023 7,000 6,996 6,963 (f)
UNIFRAX INVESTMENT 10.500% 2003 5,000 5,023 4,906 (f)
VAN KAMPEN CLOII LMT 6.811% 2008 5,000 5,000 4,506 (d) (f)
VANDERBILT 98-A A2 6.140% 2006 2,810 2,810 2,789 (f)
WASHINGTON MUTUAL 7.500% 2006 1,400 1,391 1,392 (f)
Bal Held at
12/31/1999
Principal Amt
of Bonds & Notes Cost Value at
or (Notes 12/31/1999
Issuer Name and Issue Title # of Shares a & c) (Note a)
WAYLAND FUND 7.790% 2004 5,000 5,000 5,000 (b) (d) (f)
WELLSFORD RESID PROP 7.250% 2000 5,000 4,996 5,015 (f)
ICI INVESTMENTS EMTN 6.750% 2002 10,000 10,051 9,787 (f)
--------------- ------------ ---------------
Total Finance 849,639 850,575 802,918
--------------- ------------ ---------------
Industrial
AAF MCQUAY 8.875% 2003 10,000 10,089 8,500 (f)
AGCO CORP 8.500% 2006 5,000 4,972 4,669 (f)
AK STEEL CORP 9.125% 2006 3,000 3,056 3,075 (f)
ADELPHIA COMM CORP 7.875% 2009 1,600 1,600 1,444 (f)
ADVANCED LIGHTING 8.000% 2008 1,000 1,007 880 (b) (d) (f)
AMER AIRLINES LESSEE 6.400% 2008 2,375 2,375 2,375 (b) (d) (f)
AMER AIRLINES LESSEE 6.400% 2008 2,122 2,122 2,122 (b) (d) (f)
AMER AIRLINES LESSEE 6.400% 2008 2,289 2,289 2,289 (b) (d) (f)
AMER AIRLINES LESSEE 6.400% 2008 2,555 2,555 2,555 (b) (d) (f)
AMER AIRLINES LESSEE 6.400% 2008 719 719 719 (b) (d) (f)
AMER AIRLINES LESSEE 6.400% 2008 718 718 718 (b) (d) (f)
AMER AXLE & MFG INC 9.750% 2009 2,000 1,985 2,020 (f)
AMERICAN STANDARD 7.375% 2008 2,000 1,898 1,835 (f)
AMERICAN STANDARD 7.375% 2005 1,000 982 947 (f)
AMERISERVE FOOD SER 10.125% 2007 4,000 4,103 1,360 (f)
ANTENNA TV SA 9.000% 2007 5,000 4,918 4,444 (f)
AON CORP 6.900% 2004 3,000 2,996 2,946 (f)
APPLIED MATERIALS 6.650% 2000 5,000 5,000 4,992 (f)
ARGO-TECH CORP 8.625% 2007 2,000 2,000 1,780 (f)
AVIATION SALES 8.125% 2008 2,000 1,996 1,730 (f)
BALL CORPORATION 7.750% 2006 2,000 1,999 1,960 (f)
BECKMAN INSTRUMENTS 7.100% 2003 5,000 5,000 4,870 (f)
A.H. BELO 6.875% 2002 17,885 18,162 17,618 (f)
BLACK & DECKER 7.500% 2003 10,000 10,236 10,012 (f)
BURLINGTON NORTHERN 6.375% 2005 5,000 4,998 4,716
CSX CORP 7.050% 2002 10,000 9,997 9,965 (f)
CABLE & WIRELESS COM 6.375% 2003 6,000 5,981 5,938 (f)
REYNOLDS METALS CAN 6.625% 2002 11,700 11,753 11,536 (f)
CANANDAIGUA BRANDS 8.500% 2009 1,000 1,000 955 (f)
CAPSTAR HOTEL 8.750% 2007 3,000 2,997 2,760 (f)
CHARTER COMM HLDGS 8.250% 2007 2,000 1,995 1,850 (f)
CHIQUITA BRANDS INTL 10.250% 2006 3,000 2,986 2,220 (f)
CHRYSLER FINANCE 7.590% 2000 5,000 5,000 5,010 (f)
CINCINNATI MILACRON 7.875% 2000 5,000 5,011 5,004 (f)
CINEMARK USA INC 8.500% 2008 2,000 1,996 1,725 (f)
COLTEC INDUSTRIES 7.500% 2008 2,000 1,997 1,920 (f)
COMCAST CABLE 8.125% 2004 10,000 9,994 10,273 (f)
COMDISCO CORP 5.950% 2002 10,000 9,999 9,642 (f)
CONTAINER CORP AMER 9.750% 2003 4,000 3,986 4,110 (f)
CONT'L CABLEVISION 8.300% 2006 4,000 3,991 4,106 (d)
COX ENTERPRISES 144A 6.625% 2002 25,000 24,951 24,595 (b) (d) (f)
CROWN CORK & SEAL 6.750% 2003 14,950 14,993 14,522 (f)
DR HORTON 8.000% 2009 2,000 1,990 1,840 (f)
DAYTON HUDSON 6.400% 2003 10,000 9,985 9,771 (f)
DAYTON HUDSON CO 6.800% 2001 5,000 5,000 4,973 (f)
DIAGEO CAPITAL PLC 6.625% 2004 6,000 5,994 5,871 (f)
Bal Held at
12/31/1999
Principal Amt
of Bonds & Notes Cost Value at
or (Notes 12/31/1999
Issuer Name and Issue Title # of Shares a & c) (Note a)
DOMAN INDUSTRIES LTD 9.250% 2007 3,000 3,012 2,400 (f)
DOMINO`S INC 10.375% 2009 2,000 2,014 1,925 (f)
DURA OPERATING CO 9.000% 2009 3,000 3,042 2,827 (f)
BERGEN BRUNSWIG(DUR) 7.000% 2006 20,000 20,018 17,444 (f)
ERAC USA 144A 6.950% 2004 9,000 9,093 8,735 (d) (f)
EMMIS COMM CORP 8.125% 2009 2,000 2,018 1,935 (f)
EXIDE CORP 10.000% 2005 3,000 3,024 2,895 (f)
EXTENDICARE HLTH SER 9.350% 2007 1,000 1,000 670 (f)
EYE CARE CENTERS 10.114% 2008 2,000 2,000 1,400 (f)
FEDDERS N. AMERICA 9.375% 2007 3,000 3,014 2,940 (f)
FEDERAL-MOGUL 8.800% 2007 4,000 3,990 3,955 (f)
FORD MOTOR CREDIT 6.375% 2000 10,000 10,022 9,971
FORD MTR CRED-GLOBAL 6.700% 2004 5,000 4,992 4,897 (f)
GATC 6.320% 2000 10,000 9,998 9,948 (f)
GENESIS HEALTHCARE 9.250% 2006 5,000 5,000 2,050 (f)
GIANT INDUSTRIES 9.000% 2007 5,000 5,000 4,612 (f)
GRAHAM PACKAGING FLT 9.224% 2008 1,500 1,500 1,395 (f)
HAYES WHEELS INT'L 9.125% 2007 3,000 3,006 2,940 (f)
HAYES WHEELS INT`L 9.125% 2007 1,000 1,000 980 (f)
HERITAGE MEDIA 8.750% 2006 4,500 4,567 4,596 (f)
ITT CORP 6.250% 2000 5,000 4,966 4,924 (f)
ISPMEX 144A LIQUID 10.125% 2003 3,753 3,753 3,621 (d) (f)
INTEGON CORP 9.500% 2001 2,000 1,991 2,077
INT`L GAME TECH 7.875% 2004 2,000 1,983 1,950 (f)
INT`L SHIPHOLDING 7.750% 2007 2,000 1,991 1,798 (f)
INTERPOOL INC 6.625% 2003 12,500 12,489 11,392 (f)
JONES APPAREL 7.500% 2004 3,000 2,993 2,902 (f)
JONES APPAREL 7.875% 2006 2,000 1,994 1,936 (f)
K-III COMM PUT/96 8.500% 2006 5,000 4,985 4,906 (f)
KAUFMAN & BROAD HOME 7.750% 2004 3,000 2,982 2,839 (f)
KROGER CO 8.150% 2006 4,000 4,004 4,026 (f)
LTV CORPORATION 8.200% 2007 5,000 4,974 4,500 (d) (f)
LAMAR MEDIA CORP 8.625% 2007 5,000 5,006 4,963 (f)
LGETT&PLATT MTN SERD 7.185% 2002 10,000 9,973 10,029 (d) (f)
MJD COMMUNICATIONS 10.321% 2008 3,000 3,000 2,808 (f)
MARK IV 7.500% 2007 3,000 2,987 2,711 (f)
MEDIAONE GROUP INC 6.850% 2002 15,500 15,496 15,396 (f)
FRED MEYERS INC 7.150% 2003 5,000 4,994 4,930 (f)
MULTICARE CO 9.000% 2007 4,000 4,011 800 (f)
MURRIN-MURRIN 144A 9.125% 2005 1,600 1,600 1,456 (b) (d) (f)
MURRIN-MURRIN 144A 9.125% 2005 2,400 2,400 2,184 (b) (d) (f)
NCI BUILDING SYSTEMS 9.250% 2009 2,000 2,028 1,900 (f)
NEWS AMER HLDGS 7.500% 2000 10,000 9,998 10,019 (f)
NORFOLK SOUTHERN 6.950% 2002 15,000 15,117 14,884 (f)
NORTEK INC 9.125% 2007 2,500 2,519 2,425 (f)
OFFSHORE LOGISTICS 7.875% 2008 2,000 2,004 1,890 (f)
ORANGE PLC 8.000% 2008 1,000 1,041 1,009 (f)
OUTDOOR SYSTEMS INC 9.375% 2006 5,000 5,000 5,250 (f)
PACKAGING CORP 9.625% 2009 1,000 1,010 1,021 (f)
PARACELSUS HEALTH 10.000% 2006 5,000 5,045 2,900 (f)
PARAMOUNT COMMUN 5.875% 2000 5,350 5,328 5,327 (f)
PARK-OHIO INDUSTRIES 9.250% 2007 1,000 1,004 962 (f)
PARK PLACE ENTERTAIN 7.875% 2005 1,000 951 957 (f)
Bal Held at
12/31/1999
Principal Amt
of Bonds & Notes Cost Value at
or (Notes 12/31/1999
Issuer Name and Issue Title # of Shares a & c) (Note a)
PENNEY J.C. & CO 7.250% 2002 10,000 9,998 9,786 (f)
PILLOWTEX CORP 9.000% 2007 4,000 4,052 1,720 (f)
PRINTPACK INC 9.875% 2004 2,500 2,500 2,500 (f)
QUAKER OATS 6.940% 2003 1,500 1,502 1,480 (f)
QUAKER OATS 6.470% 2000 10,000 10,000 9,990 (f)
RITE AID CORP 6.700% 2001 5,000 5,000 4,200 (f)
ROLLINS TRUCK 6.875% 2001 5,000 5,000 4,956 (f)
RYDER SYSTEM 7.910% 2000 5,000 5,001 5,011 (f)
RYERSON TULL INC 8.500% 2001 5,000 5,000 4,985 (f)
S C INTERNATIONAL 9.250% 2007 5,000 5,021 4,519 (f)
SAKS INC 7.000% 2004 5,000 4,978 4,727 (f)
SCOTTS COMPANY 144A 8.625% 2009 2,000 1,929 1,950 (d) (f)
SEA CONTAINERS LTD 7.875% 2008 2,000 2,000 1,740 (f)
SEQUA CORP 9.000% 2009 2,000 1,987 1,948 (f)
SHOWBOAT INC 9.250% 2008 4,000 3,816 4,110
SMITHFIELD FOODS INC 7.625% 2008 2,000 1,994 1,800 (f)
STENA AB 10.500% 2005 3,000 3,000 2,767
SUN MICROSYSTEMS INC 7.000% 2002 4,000 3,999 3,984 (f)
SUPERVALU INC 144A 7.625% 2004 5,000 4,994 4,900 (d) (f)
SUPERVALU INC 6.500% 2000 5,000 4,999 4,990 (f)
TTX COMPANY 144A 7.020% 2001 10,000 10,000 9,942 (d) (f)
TEEKAY SHIPPING CORP 8.320% 2008 3,000 3,025 2,700 (f)
TELEWEST PLC 9.625% 2006 2,000 2,000 2,045
TEMBEC INC 8.625% 2009 1,500 1,504 1,504 (f)
TENET HEALTHCARE CO 8.625% 2003 3,000 2,994 2,940 (f)
TEXTRON INC 6.375% 2004 3,000 2,985 2,879 (f)
TITAN WHEEL INT`L IN 8.750% 2007 4,100 4,083 3,367 (f)
TRICO MARINE SERVICE 8.500% 2005 3,000 2,988 2,820 (f)
TYCO INT`L P/C 6.250% 2003 10,000 9,966 9,597 (f)
TYSON FOODS 6.410% 2000 10,000 10,001 9,977 (f)
US INDUSTRIES 7.125% 2003 6,000 5,985 5,838 (f)
UNION TANK CAR 6.500% 2008 5,307 5,300 5,136 (f)
UNITED AIR 1991A-1 9.200% 2008 4,137 3,945 4,491
US HOME CORP 7.750% 2005 1,500 1,497 1,395 (f)
UNITED STATIONERS 8.375% 2008 1,000 1,000 918 (f)
VIACOM INC 6.750% 2003 5,000 4,998 4,904
WCI STEEL INC 10.000% 2004 2,000 2,009 2,030 (f)
WESTINGHOUSE AIR 9.375% 2005 2,250 2,305 2,239 (f)
WESTPOINT STEVENS 7.875% 2005 4,000 4,091 3,660 (f)
WHITMAN CORP 6.250% 2000 5,000 4,994 4,997 (f)
AMER AIRLINES LESSE 6.400% 2008 1,187 1,187 1,187 (b) (d) (f)
AMER AIRLINES LESSE 6.400% 2008 1,187 1,187 1,187 (b) (d) (f)
AMER AIRLINES LESSE 6.400% 2008 1,187 1,187 1,187 (b) (d) (f)
AMER AIRLINES LESSE 6.400% 2008 743 743 743 (b) (d) (f)
AMER AIRLINES LESSE 6.400% 2008 745 745 745 (b) (d) (f)
AMER AIRLINES LESSE 6.400% 2008 862 862 862 (b) (d) (f)
AMER AIRLINES LESSE 6.400% 2008 862 862 862 (b) (d) (f)
AMER AIRLINES LESSE 6.400% 2008 863 863 863 (b) (d) (f)
WORLD COLOR PRESS 8.375% 2008 3,000 3,000 2,951 (f)
ASTRON CBO FLT BAA3 7.390% 2010 17,500 17,500 15,772 (d) (f)
--------------- ------------ ---------------
Total Industrial 686,446 686,874 650,170
--------------- ------------ ---------------
Total Other Bonds and Notes 2,651,732 2,647,241 2,545,647
--------------- ------------ ---------------
TOTAL BONDS AND NOTES 2,652,097 2,647,605 2,546,012
--------------- ------------ ---------------
Bal Held at
12/31/1999
Principal Amt
of Bonds & Notes Cost Value at
or (Notes 12/31/1999
Issuer Name and Issue Title # of Shares a & c) (Note a)
PREFERRED STOCK
Public Utility
ALLTEL 7.75 $100 PAR 7.750% 2005 15 1,551 1,558 (d)
AMERICAN WTRWRKS $25 8.500% 2000 800 20,000 20,464 (b) (d)
AMERITECH NZ A $100 7.040% 2001 40 4,067 4,130 (d) (f)
APPALACHIAN PWR $100 6.850% 2004 30 3,003 3,071
APPALACHIAN PWR $100 5.900% 2008 10 997 984 (f)
APPALACHIAN PWR $100 5.920% 2008 11 1,091 1,108
ATLANTIC CITY EL 100 7.800% 2006 90 8,991 9,259
AVISTA CORP PFD 6.95 6.950% 2007 57 5,763 5,887
BELL ATLANTIC NZ144A 7.080% 2001 25 2,588 2,619 (d) (f)
BELL ATL NZ$100 144A 5.800% 2004 100 10,000 10,087 (d)
BOSTON EDISON $100 8.000% 2001 90 9,000 9,405
CENTRAL ILL LT $100 5.850% 2008 65 6,506 6,337
CON EDISON $100 SR J 6.125% 2002 150 15,021 15,197
DUKE ENERGY $100 V 6.400% 2002 30 3,000 2,959
DUKE ENRGY $100 SR U 6.300% 2001 30 3,000 2,976
DUKE ENRGY $100 SR T 6.200% 2000 30 3,000 3,002
DUKE ENRGY 1992D $25 6.200% 2001 200 5,001 4,962
DUKE ENRGY 1992C $25 6.100% 2000 250 6,250 6,188
EASTERN EDISON $100 6.625% 2008 210 20,926 21,394
ENTERGY LA INC PFD 8.000% 2001 70 7,000 7,092
GREEN MTN PWR CL-D/3 8.625% 2000 14 1,400 1,413 (b) (d)
INDIANA MICH POWER 6.300% 2009 52 5,223 5,225
IND MICH POWER $100 6.250% 2009 20 2,004 1,996 (f)
INDIANA MICHIGAN PWR 5.900% 2009 32 3,135 3,205
JERSEY CENTRAL P&L 8.650% 2005 110 11,224 11,544
KEYSPAN CORP PFD 7.950% 2000 274 6,848 6,960
LOUISVILLE G&E PFD 5.875% 2008 12 1,198 1,238 (f)
MAINE YANKEE $100 7.480% 2001 17 1,724 1,686
MIDAMERICAN ENERGY 7.800% 2006 73 7,544 7,724
MN P & L 144A $100 7.125% 2002 50 4,988 5,020 (b) (d)
MN P&L 144A 6.70 6.700% 2002 100 10,000 10,075 (b) (d)
NIAGARA MOHAWK $50 6.905% 2004 100 5,000 5,137 (f)
NO IND PUB SERV $100 8.850% 2003 21 2,101 2,115 (b) (d)
NO IND PUB SERV $100 6.500% 2002 115 11,764 11,547 (f)
NORTHWEST NAT GA 100 6.950% 2002 170 17,068 17,637
OHIO POWER CO $100 5.900% 2009 36 3,540 3,501
OHI PWR CO $100 6.020% 2008 10 992 981
OHIO PWR CO $100 6.350% 2008 5 505 502
OTTER TAIL PWR $100 6.300% 2007 180 18,000 18,495
PECO ENERGY 6.120% 2003 96 9,605 9,570
PACIFIC GAS & ELEC 6.300% 2009 120 2,965 3,043 (f)
PACIFIC GAS & ELEC 6.57P% 2007 718 18,003 18,341
PACIFICORP $100 PAR 7.700% 2001 150 15,000 15,572
POTOMAC ELEC PWR $50 6.800% 2007 161 7,963 8,281
PRAXAIR INC 7.480% 2000 70 7,007 7,079
PUBLIC SER ELEC & GA 5.97% 2008 6 611 534 (f)
ROCHESTER G&E $100 6.60 % 2009 100 10,106 10,206
SAN DIEGO G&E $25 1.7625% 2008 60 1,572 1,547 (f)
SO CA EDISON $100 6.050% 2008 45 4,500 4,522 (f)
SO CA EDISON $100 6.450% 2002 220 22,141 22,483
Bal Held at
12/31/1999
Principal Amt
of Bonds & Notes Cost Value at
or (Notes 12/31/1999
Issuer Name and Issue Title # of Shares a & c) (Note a)
SO INDIANA G&E 100 6.500% 2002 75 7,500 7,577 (b) (d)
TXU ELECTRIC CO 6.375% 2008 54 5,422 5,400
TXU ELECTRIC CO 6.980% 2008 50 5,000 5,097
UBS PRIVATE SER H 5.04% 2002 15 15,000 14,715 (b) (d) (f)
VIRGINIA ELEC & PWR 5.580% 2000 18 1,751 1,762 (f)
VIRGINIA ELEC & PWR 6.350% 2000 201 20,130 20,372
--------------- ------------ ---------------
Total Public Utility 5,853 405,289 410,781
--------------- ------------ ---------------
Finance
ABN AMRO NA FRAP 5.94% 15 15,000 15,157 (d) (f)
CHASE MANHAT FRAP 4.96% 150 7,500 7,209 (f)
CITIGROUP FRAP 5.86% 5.68% 150 7,782 7,560 (f)
COMERICA FRAP 6.84% 150 7,797 7,538 (f)
EURO AMER BANK FRAP 5.84% 10 10,000 10,006 (f)
FLEET FIN 6.59% FRAP 6.59% 130 6,662 6,573 (f)
MORGAN STANLEY GROUP 5.91% 100 5,000 5,000 (f)
PNC BK FRAP SERF 6.05% 440 22,160 22,138 (f)
WELLS FRGO FRAP SERH 6.59% 432 22,108 21,978 (f)
--------------- ------------ ---------------
Total Finance 1,577 104,009 103,159
--------------- ------------ ---------------
Industrial
NORTHBROOK HLDG 1000 6.600% 2001 10 10,000 10,014 (b) (d) (f)
WHIRLPOOL FIN $100 B 6.550% 2008 180 18,083 18,045 (d)
WHIRLPOOL FINL PFD 6.09% 2002 37 3,691 3,719 (b) (d) (f)
--------------- ------------ ---------------
Total Industrial 227 31,774 31,778
--------------- ------------ ---------------
TOTAL PREFERRED STOCK 7,657 541,072 545,718
--------------- ------------ ---------------
TOTAL Investments in Securities of Unaffiliated Issuers 3,188,677 3,091,730
TOTAL Reserve for Possible Losses on Corporate Issues 2,141
------------ ---------------
3,186,536 3,091,730
============ ===============
NOTES:
a) See Notes 1 and 3 to the financial statements regarding determination of cost and fair values.
b) In the absence of market quotations, securities are valued by IDS Certificate Company at fair value.
c) Aggregate cost of investment in securities of unaffiliated issuers for federal income tax purposes
was $3,185,669.
d) Securities acquired in private negotiation which may require registration under federal securities
law if they were to be publicly sold. Also see Note 3b to financial statements.
e) Non-income producing securities
f) Securities classified as available for sale and carried at fair value on the balance sheet. Also
see Notes 1 and 3A to financial statements
IDS CERTIFICATE COMPANY SCHEDULE II
Investments in and Advances to Affiliates and Income Thereon
December 31, 1999, 1998 and 1997
($ in thousands)
Balance December 31, 1999
--------------------------------------------
Interest
Dividends
Principal Carrying Credited
Amount or Cost Value to Income
Name of Issuer and Title of Issue No. of Shares (a) (b) (c)
--------------- ---------- ------------- --------------
Wholly Owned Subsidiary (b):
Real Estate Investment Company:
Investors Syndicate Development
Corporation:
Capital Stock........................... 100 $418 $422 $0
===============
Other Controlled Companies: $0 0 0 0
===============
Other Affiliates (as defined in Sec. 2(a)(3)
of the
Investment Company Act of $0 0 0 0
1940)........................................ =============== ---------- ------------- --------------
Total affiliates......................... $418 $422 $0
========== ============= ==============
Balance December 31, 1998
--------------------------------------------
Interest
Dividends
Principal Carrying Credited
Amount or Cost Value to Income
Name of Issuer and Title of Issue No. of Shares (a) (b) (c)
--------------- ---------- ------------- --------------
Wholly Owned Subsidiary (b):
Real Estate Investment Company:
Investors Syndicate Development
Corporation:
Capital Stock.......................... 100 $2,998 $418 $0
===============
Other Controlled Companies: $0 0 0 0
===============
Other Affiliates (as defined in Sec. 2(a)(3)
of the
Investment Company Act of $0 0 0 0
1940)........................................ =============== ---------- ------------- --------------
Total affiliates......................... $2,998 $418 $0
========== ============= ==============
Balance December 31, 1997
--------------------------------------------
Interest
Dividends
Principal Carrying Credited
Amount or Cost Value to Income
Name of Issuer and Title of Issue No. of Shares (a) (b) (c)
--------------- ---------- ------------- --------------
Wholly Owned Subsidiary (b):
Real Estate Investment Company:
Investors Syndicate Development
Corporation:
Capital Stock.......................... 100 $2,998 $6,772 $0
===============
Other Controlled Companies: $0 0 0 0
===============
Other Affiliates (as defined in Sec. 2(a)(3)
of the
Investment Company Act of $0 0 0 0
1940)........................................ =============== ---------- ------------- --------------
Total affiliates......................... $2,998 $6,772 $0
========== ============= ==============
IDS CERTIFICATE COMPANY SCHEDULE II
Investments in and Advances to Affiliates and
Income Thereon
December 31, 1999, 1998 and 1997
($ in thousands)
NOTES:
(a) The aggregate cost for federal income tax purposes at December 31, 1999,
1998 and 1997 was $422, $438 and $6,776 respectively, subject to possible
adjustment in certain circumstances under consolidated income tax return
regulations.
(b) Investments in stocks of wholly owned subsidiaries are carried at cost
adjusted for equity in undistributed net income since organization or
acquisition of the subsidiaries.
(c) There were no dividends or interest earned which were not credited to
income.
IDS CERTIFICATE COMPANY SCHEDULE III
Mortgage Loans on Real Estate and Interest
Earned on Mortgages
Year Ended December 31, 1999
($ in thousands)
Part 1 - Mortgage loans on real estate at end of period
-------- ---------------------------------------------------
Amount of principal
unpaid at end of period
------------------------------------
Subject Amount
Carrying to of
Number Prior amount of delinquent mortgages
of liens mortgages (c), interest being
Description (a) loans (b) (g),(h) and (i) Total (d) forclosed
- ------------------------------------------------- -------- ------- ----------------- --------- --------- ----------
First mortgages:
Insured by Federal Housing Administration -
liens on:
Residential - under $100 0 $0 $0 $0 $0
Apartment and business - under $100 0 0 0 0 0
--- -------- -------- -------- -------
Total 0 0 0 0 0
--- -------- -------- -------- -------
Partially guaranteed under Serviceman's
Readjustment Act of 1944, as amended -
liens on:
Residential - under $100 0 0 0 0 0
Apartment and business - under $100 0 0 0 0 0
--- -------- -------- -------- -------
Total 0 0 0 0 0
--- -------- -------- -------- -------
Other - liens on:
Residential 0 0 0 0 0
--- -------- --------- --------- -------
Apartment and business:
Under $100 2 139 139 0 0
$100 to $150 0 0 0 0 0
$150 to $200 0 0 0 0 0
$200 to $250 1 71 232 0 0
$250 to $300 0 0 0 0 0
$300 to $350 1 322 322 0 0
$350 to $400 0 0 0 0 0
$400 to $450 0 0 0 0 0
$450 to $500 1 476 476 0 0
Over $500:
Loan No. Mortgagor Property Location
20-00002 CCH-Space Center Houston, TX 1 1,867 1,867 0 0
21-47110 Village North Brooklyn Park, MN 1 1,767 1,767 0 0
21-47128 Century Income Properties Fund Brookfield, WI 1 1,539 1,539 0 0
21-47139 Treasure's Island Inc. Eagan, MN 1 1,401 1,401 0 0
21-47140 Harbour Run LTD Mentor-On-The-Lake,OH 1 3,886 3,886 0 0
21-47142 34th Street Properties Partnership Gainsville, FL 1 9,665 9,665 0 0
21-47147 T & R Hilliard, OH 1 7,293 7,293 0 0
21-47150 Bircain Apartment Company LP Gladstone, MO 1 2,325 2,325 0 0
21-47152 Richard D. Fownes Trustee Boston, MA 1 3,146 3,146 0 0
21-47154 GML Trust Randolp, MA 1 2,997 2,997 0 0
21-47157 John A. Belanich Tampa, FL 1 3,395 3,395 0 0
21-47160 James Esshaki DBA Taylor, MI 1 5,688 5,688 0 0
21-47164 K & M Hamilton Development Co. Halmilton, OH 1 5,521 5,521 0 0
21-47165 Bowling Freen Partnership Sussex, WI 1 2,529 2,529 0 0
21-47167 Wilder Corp of Delaware Ruskin, FL 1 4,999 4,999 0 0
21-47168 Wilder Corp of Delaware Riverview, FL 1 2,759 2,759 0 0
21-47172 Dial Reit Inc. Fremont, NE 1 2,812 2,812 0 0
21-47173 Cinram Associates Fairfield, NJ 1 3,870 3,870 0 0
21-47181 Westlake #1 Limited Partnership Charlotte, NC 1 2,109 2,109 0 0
Part 1 - Mortgage loans on real estate at end of period
-------- -------------------------------------------------
Amount of principal
unpaid at end of period
--------------------------------------
Subject Amount
Carrying to of
Number Prior amount of delinquent mortgages
of liens mortgages(c), interest being
Description (a) loans (b) (g),(h)and(i) Total (d) forclosed
- ----------------------------------------------------------- -------- ------- -------- ------- --------- ---------
21-47184 Mcnab Commerce Center Association Pompano Beach, FL 1 2,045 2,045 0 0
21-47186 Mack Edison Company Edison, NJ 1 6,112 6,112 0 0
21-47187 Industrial Development Association Mebane, NC 1 2,896 2,896 0 0
21-47190 Dial Reit Inc. Davenport, IA 1 3,842 3,842 0 0
21-47191 SSC Associates Ltd Ptnshp St. Clair Shores, MI 1 5,769 5,769 0 0
21-47195 Tipotex Inc. Pharr, TX 1 1,680 1,680 0 0
21-47196 Tropic Star Pharr, TX 1 3,644 3,644 0 0
21-47197 Winter Ranch Alamo, TX 1 861 861 0 0
21-47204 Fort Walton Mary Esther, FL 1 2,922 2,922 0 0
21-47205 Kavanagh Tucson, AZ 1 3,633 3,633 0 0
21-47206 Artrisco Albuquerque, NM 1 5,351 5,351 0 0
21-47207 Newport VII Albuquerque, NM 1 2,404 2,404 0 0
21-47208 Newport VI Albuquerque, NM 1 943 943 0 0
21-47209 Fountain Lake Brandeton, FL 1 5,521 5,521 0 0
21-47210 Orion West Haven, CT 1 4,227 4,227 0 0
21-47211 Plaza 7000 Greenwood Village, CO 1 2,398 2,398 0 0
21-47212 Howard Lake-Maple Plain Howard Lake, MN 1 1,319 1,319 0 0
21-47213 Crec-Plymouth Plymouth, MN 1 942 942 0 0
21-47214 West Health Inc. Plymouth, MN 1 10,526 10,526 0 0
21-47215 Invespro Urbandale, IA 1 3,370 3,370 0 0
21-47216 Invespro Urbandale, IA 1 2,653 2,653 0 0
21-47217 Airport Tempe, AZ 1 6,871 6,871 0 0
21-47218 D&R Northpoin Sterling, VA 1 1,898 1,898 0 0
21-47219 NewPort IX Albuquerque, NM 1 2,596 2,596 0 0
21-47221 300 First LLC Minneapolis, MN 1 2,829 2,829 0 0
21-47222 Transwestern Houston, TX 1 2,046 2,046 0 0
21-47223 Westwood Plaza Houston, TX 1 3,742 3,742 0 0
21-47224 Custer Office Plano, TX 1 1,913 1,913 0 0
21-47225 Valley Mining Eagan, MN 1 1,764 1,764 0 0
21-47226 Jake's LP Austin, TX 1 2,726 2,726 0 0
21-47227 PW Holdings Falls Township, PA 1 4,575 4,575 0 0
21-47228 Lafayette Square Bridgeport, CT 1 4,374 4,374 0 0
21-47230 Wilcrest Gree Houston, TX 1 2,125 2,125 0 0
21-47231 Midtown Mall Hastings, MN 1 2,058 2,058 0 0
21-47232 DHIR Group LLC Milwaukee, WI 1 4,778 4,778 0 0
21-47233 Capital Plaza Jefferson City, MO 1 2,135 2,135 0 0
21-47234 Southwest Medical Littleton, CO 1 3,234 3,234 0 0
21-47235 2507 & 2473 Assc Southport, CT 1 2,706 2,706 0 0
21-47237 Abmar Valley Roanoke, VA 1 1,801 1,801 0 0
21-47238 Cicero Place Cicero, IN 1 3,403 3,403 0 0
21-47240 Crystal Plaza Baltimore, MD 1 3,934 3,934 0 0
21-47241 Pal, Inc Sioux Falls, SD 1 1,237 1,237 0 0
21-47242 Northpoint AT San Antonio, TX 1 5,322 5,322 0 0
21-47243 Pam-Joy Realty Chesapeake. VA 1 3,011 3,011 0 0
21-47245 Tide Mill Southport, CT 1 2,458 2,458 0 0
21-47246 JLC, IX PF LTD Dallas, TX 1 1,011 1,011 0 0
21-47247 Airport Land Tempe, AZ 1 4,838 4,838 0 0
21-47248 HMJ Moorehead, MN 1 5,929 5,929 0 0
21-47249 MIDEB Ventura, CA 1 5,256 5,256 0 0
21-47250 Thomas Ribis Alexandria, VA 1 2,745 2,745 0 0
21-47251 Arcadia Villa Phoenix, AZ 1 2,809 2,809 0 0
21-47252 Broken Arrow Broken Arrow, OK 1 3,346 3,346 0 0
21-47253 Palo Verde Plaxa Phoenix, AZ 1 1,676 1,676 0 0
21-47254 Village S. Tulsa, OK 1 3,494 3,494 0 0
21-47255 Gaughan Forest Lake/Stillwater, MN 1 5,985 5,985 0 0
21-47256 Fremont Apts Rapid City, SD 1 1,191 1,191 0 0
21-47257 American Bank Plaza Corpus Christi, TX 1 7,128 7,128 0 0
21-47259 Anza Plaza Santa Clarita, CA 1 1,929 1,929 0 0
21-47260 Eisenhower 3 Ann Arbor, MI 1 3,020 3,020 0 0
Part 1 - Mortgage loans on real estate at end of period
-------- -------------------------------------------------
Amount of principal
unpaid at end of period
--------------------------------------
Subject Amount
Carrying to of
Number Prior amount of delinquent mortgages
of liens mortgages (c), interest being
Description (a) loans (b) (g),(h) and (i) Total (d) forclosed
- ---------------------------------------- -------- ------- ----------- --------- ------------ ------------
21-47261 KKMP Properties Bloomington, MN 1 1,167 1,167 0 0
21-47262 312 Third Street Fargo, ND 1 5,792 5,792 0 0
21-47263 G.O.L.D Columbus, OH 1 2,192 2,192 0 0
21-47264 Esnet Properties Orem, UT 1 1,964 1,964 0 0
21-47265 Eaglecreek A Lakewood, CO 1 2,260 2,260 0 0
21-47266 Independence Clarkston, MI 1 4,358 4,358 0 0
21-47267 Blairhill LLC Charlotte, NC 1 1,461 1,461 0 0
21-47268 Lemans Limited Seebring, FL 1 5,618 5,618 0 0
21-47269 Hampton Inn Spokane, WA 1 4,631 4,631 0 0
21-47270 Brookhollow-2 Houston, TX 1 2,805 2,805 0 0
21-47271 Wilsonville Wilsonville, OR 1 1,956 1,956 0 0
21-47272 Southeast Com Aurora, CO 1 1,978 1,978 0 0
21-47273 Sears Bldg Rapid City, SD 1 964 964 0 0
21-47274 Edison Towson, MD 1 1,181 1,181 0 0
21-47275 Colorado & SA Colorado Springs, CO 1 1,984 1,984 0 0
21-47277 Alvernon Place Tucson, AZ 1 2,258 2,258 0 0
21-47278 Financial PAC Kennewick, WA 1 6,692 6,692 0 0
21-47279 Daniel G Chetek, WI 1 2,069 2,069 0 0
21-47281 Cleveland Shakers Heights, OH 1 2,500 2,500 0 0
21-47282 Cary Bldg LP Springfield, VA 1 2,218 2,218 0 0
21-47283 Paragon DTC P Englewood, CO 1 7,256 7,256 0 0
21-47284 Tarran Batavia, IL 1 3,702 3,702 0 0
21-47285 Equity One In Fort Meyers, FL 1 4,835 4,835 0 0
21-47286 Sandhill SQ Las Vegas, NV 1 2,587 2,587 0 0
21-47287 ML LTD Moen Rogers, MN 1 6,411 6,411 0 0
21-47288 Hilde Plymouth, MN 1 1,974 1,974 0 0
21-47289 Camp Morrison Newport News, VA 1 2,912 2,912 0 0
21-47290 Oakcliff Doraville, GA 1 2,757 2,757 0 0
21-47291 Truway Liverpool, NY 1 3,199 3,199 0 0
21-47292 Desert Inn Las Vegas, NV 1 5,458 5,458 0 0
21-47293 Julantru Corvallis, OR 1 4,447 4,447 0 0
21-47294 Carolace Emb. Hope Mills, NC 1 1,748 1,748 0 0
21-47295 Mastercraft Concord, OH 1 1,364 1,364 0 0
21-47296 Vivani Painesville, OH 1 1,089 1,089 0 0
21-47297 Vivani Concord, OH 1 1,831 1,831 0 0
21-47298 Shiland Hills Rock Hill, SC 1 975 975 0 0
21-47299 Crest Escondido, CA 1 2,277 2,277 0 0
-------- ------------- ----------- ----------- --------
120 378,397 378,558 0 0
-------- ------------- ----------- ---------- --------
Total Other 120 378,397 378,558 0 0
-------- ------------- ----------- ---------- --------
Unallocated Reserve for Losses 350
----------
Total First Mortgage Loans on Real Estate 120 $378,047 $378,558 $0 $0
======== ============= ============ ======== =========
Part 2 - Interest earned
on mortgages
------------------------------------------
Average
Interest gross rate
due and of interest
accrued on mortgages
at end of held at end
period of period
Description (a) (e) (f)
- ---------------------------------------------------------------- ------------------ ---------------------
First mortgages:
Insured by Federal Housing Administration -
liens on:
Residential - under $100 0.000%
Apartment and business - under $100 0.000%
---------------------
Total 0.000%
---------------------
Partially guaranteed under Serviceman's
Readjustment Act of 1944, as amended -
liens on:
Residential - under $100 0.000%
Apartment and business - under $100 0.000%
---------------------
Total 0.000%
---------------------
Other - liens on:
Residential 0.000%
---------------------
Apartment and business:
Under $100 9.315%
$100 to $150 0.000%
$150 to $200 0.000%
$200 to $250 9.500%
$250 to $300 0.000%
$300 to $350 8.500%
$350 to $400 0.000%
$400 to $450 0.000%
$450 to $500 8.750%
Over $500:
Loan No. Mortgagor Property Location
20-00002 CCH-Space Center Houston, TX 8.000%
21-47110 Lloyd Engelsma Brooklyn Park, MN 8.750%
21-47128 Century Income Properties Fund Brookfield, WI 8.250%
21-47139 Treasure's Island Inc. Eagan, MN 7.480%
21-47140 Harbour Run LTD Mentor-On-The-Lake, OH 6.910%
21-47142 34th Street Properties Partnership Gainsville, FL 7.050%
21-47147 T & R Hilliard, OH 7.500%
21-47150 Bircain Apartment Company LP Gladstone, MO 7.250%
21-47152 Richard D. Fownes Trustee Boston, MA 8.000%
21-47154 GML Trust Randolp, MA 8.250%
21-47157 John A. Belanich Tampa, FL 7.650%
21-47160 James Esshaki DBA Taylor, MI 8.500%
21-47164 K & M Hamilton Development Co. Halmilton, OH 8.125%
21-47165 Bowling Freen Partnership Sussex, WI 7.200%
21-47167 Wilder Corp of Delaware Ruskin, FL 7.500%
21-47168 Wilder Corp of Delaware Riverview, FL 7.500%
21-47172 Dial Reit Inc. Fremont, NE 7.090%
21-47173 Cinram Associates Fairfield, NJ 7.260%
21-47181 Westlake #1 Limited Partnership Charlotte, NC 7.212%
Part 2 - Interest earned
on mortgages
------------------------------------------
Average
Interest gross rate
due and of interest
accrued on mortgages
at end of held at end
period of period
Description (a) (e) (f)
- -------------------------------------------------------------------------------- ------------------ ---------------------
21-47184 Mcnab Commerce Center Association Pompano Beach, FL 8.250%
21-47186 Mack Edison Company Edison, NJ 6.850%
21-47187 Industrial Development Association Mebane, NC 7.220%
21-47190 Dial Reit Inc. Davenport, IA 7.875%
21-47191 SSC Associates Ltd Ptnshp St. Clair Shores, MI 7.000%
21-47195 Tipotex Inc. Pharr, TX 7.400%
21-47196 Tropic Star Pharr, TX 7.400%
21-47197 Winter Ranch Alamo, TX 7.400%
21-47204 Fort Walton Mary Esther, FL 8.125%
21-47205 Kavanagh Tucson, AZ 8.000%
21-47206 Artrisco Albuquerque, NM 8.250%
21-47207 Newport VII Albuquerque, NM 8.125%
21-47208 Newport VI Albuquerque, NM 8.125%
21-47209 Fountain Lake Brandeton, FL 8.320%
21-47210 Orion West Haven, CT 7.875%
21-47211 Plaza 7000 Greenwood Village, CO 7.625%
21-47212 Howard Lake-Maple Plain Howard Lake, MN 7.750%
21-47213 Crec-Plymouth Plymouth, MN 7.750%
21-47214 West Health Inc. Plymouth, MN 7.450%
21-47215 Invespro Urbandale, IA 8.375%
21-47216 Invespro Urbandale, IA 8.375%
21-47217 Airport Tempe, AZ 8.375%
21-47218 D&R Northpoin Sterling, VA 8.500%
21-47219 NewPort IX Albuquerque, NM 7.850%
21-47221 300 First LLC Minneapolis, MN 7.440%
21-47222 Transwestern Houston, TX 7.370%
21-47223 Westwood Plaza Houston, TX 7.500%
21-47224 Custer Office Plano, TX 7.320%
21-47225 Valley Mining Eagan, MN 7.210%
21-47226 Jake's LP Austin, TX 6.950%
21-47227 PW Holdings Falls Township, PA 6.650%
21-47228 Lafayette Square Bridgeport, CT 7.140%
21-47230 Wilcrest Gree Houston, TX 7.080%
21-47231 Midtown Mall Hastings, MN 7.140%
21-47232 DHIR Group LLC Milwaukee, WI 7.400%
21-47233 Capital Plaza Jefferson City, MO 7.150%
21-47234 Southwest Medical Littleton, CO 7.180%
21-47235 2507 & 2473 Assc Southport, CT 7.020%
21-47237 Abmar Valley Roanoke, VA 7.100%
21-47238 Cicero Place Cicero, IN 7.000%
21-47240 Crystal Plaza Baltimore, MD 7.020%
21-47241 Pal, Inc Sioux Falls, SD 7.050%
21-47242 Northpoint AT San Antonio, TX 7.330%
21-47243 Pam-Joy Realty Chesapeake. VA 6.960%
21-47245 Tide Mill Southport, CT 6.980%
21-47246 JLC, IX PF LTD Dallas, TX 7.010%
21-47247 Airport Land Tempe, AZ 6.890%
21-47248 HMJ Moorehead, MN 6.960%
21-47249 MIDEB Ventura, CA 6.750%
21-47250 Thomas Ribis Alexandria, VA 6.900%
21-47251 Arcadia Villa Phoenix, AZ 6.800%
21-47252 Broken Arrow Broken Arrow, OK 6.800%
21-47253 Palo Verde Plaxa Phoenix, AZ 6.800%
21-47254 Village S. Tulsa, OK 6.800%
21-47255 Gaughan Forest Lake/Stillwater, MN 6.830%
21-47256 Fremont Apts Rapid City, SD 6.750%
21-47257 American Bank Plaza Corpus Christi, TX 6.900%
21-47259 Anza Plaza Santa Clarita, CA 6.950%
21-47260 Eisenhower 3 Ann Arbor, MI 6.980%
Part 2 - Interest earned
on mortgages
------------------------------------------
Average
Interest gross rate
due and of interest
accrued on mortgages
at end of held at end
period of period
Description (a) (e) (f)
- ---------------------------------------------------------------------------------- ------------------ ---------------------
21-47261 KKMP Properties Bloomington, MN 7.060%
21-47262 312 Third Street Fargo, ND 6.900%
21-47263 G.O.L.D Columbus, OH 6.950%
21-47264 Esnet Properties Orem, UT 6.810%
21-47265 Eaglecreek A Lakewood, CO 6.770%
21-47266 Independence Clarkston, MI 6.890%
21-47267 Blairhill LLC Charlotte, NC 6.910%
21-47268 Lemans Limited Seebring, FL 6.850%
21-47269 Hampton Inn Spokane, WA 7.150%
21-47270 Brookhollow-2 Houston, TX 6.800%
21-47271 Wilsonville Wilsonville, OR 6.850%
21-47272 Southeast Com Aurora, CO 6.440%
21-47273 Sears Bldg Rapid City, SD 6.850%
21-47274 Edison Towson, MD 6.850%
21-47275 Colorado & SA Colorado Springs, CO 6.550%
21-47277 Alvernon Place Tucson, AZ 7.000%
21-47278 Financial PAC Kennewick, WA 6.750%
21-47279 Daniel G Chetek, WI 7.250%
21-47281 Cleveland Shakers Heights, OH 7.000%
21-47282 Cary Bldg LP Springfield, VA 6.850%
21-47283 Paragon DTC P Englewood, CO 6.800%
21-47284 Tarran Batavia, IL 7.000%
21-47285 Equity One In Fort Meyers, FL 6.750%
21-47286 Sandhill SQ Las Vegas, NV 7.000%
21-47287 ML LTD Moen Rogers, MN 7.300%
21-47288 Hilde Plymouth, MN 6.850%
21-47289 Camp Morrison Newport News, VA 6.900%
21-47290 Oakcliff Doraville, GA 7.000%
21-47291 Truway Liverpool, NY 7.000%
21-47292 Desert Inn Las Vegas, NV 6.900%
21-47293 Julantru Corvallis, OR 6.750%
21-47294 Carolace Emb. Hope Mills, NC 7.000%
21-47295 Mastercraft Concord, OH 7.000%
21-47296 Vivani Painesville, OH 7.000%
21-47297 Vivani Concord, OH 7.000%
21-47298 Shiland Hills Rock Hill, SC 7.250%
21-47299 Crest Escondido, CA 7.000%
---------------------
Total Other 7.274%
---------------------
Total First Mortgage Loans on Real Estate 7.247%
=====================
Part 3 - Location of mortgaged properties
($ in thousands)
Amount of principal
unpaid at end of period
----------------------------------
Carrying Subject
amount of to Amount of
State in Number Prior mortgages delinquent mortgages
which mortgaged of liens (c), (g), interest being
property is located loans (b) (h) and (i) Total (d) foreclosed
- -------------------------------- ----------- ------- -------------- --------------- -------------- --------------
Arizona 6 22,084 22,084 0 0
California 3 9,463 9,463 0 0
Colorado 6 19,110 19,110 0 0
Connecticut 4 13,766 13,766 0 0
Florida 9 41,760 41,760 0 0
Georgia 1 2,757 2,757 0 0
Illinois 1 3,702 3,702 0 0
Indiana 1 3,403 3,403 0 0
Iowa 3 9,865 9,865 0 0
Massachusetts 2 6,143 6,143 0 0
Maryland 2 5,115 5,115 0 0
Michigan 4 18,834 18,834 0 0
Minnesota 15 44,614 44,614 0 0
Missouri 2 4,460 4,460 0 0
Nebraska 1 2,812 2,812 0 0
Nevada 2 8,045 8,045 0 0
New Jersey 2 9,982 9,982 0 0
New Mexico 4 11,293 11,293 0 0
New York 1 3,199 3,199 0 0
North Carolina 5 9,578 9,578 0 0
North Dakota 1 5,792 5,792 0 0
Ohio 7 24,311 24,311 0 0
Oklahoma 2 6,840 6,840 0 0
Oregon 2 6,403 6,403 0 0
Pennsylvania 1 4,575 4,575 0 0
South Carolina 1 975 975 0 0
South Dakota 4 3,714 3,714 0 0
Texas 15 37,015 37,176 0 0
Utah 1 1,964 1,964 0 0
Virginia 6 14,585 14,585 0 0
Washington 2 11,323 11,323 0 0
Wisconsin 4 10,915 10,915 0 0
----------- -------------- --------------- -------------- --------------
120 378,397 378,558 0 0
----------- -------------- --------------- -------------- --------------
Unallocated Reserve
for Losses 350
--------------
Total 120 $378,047 $378,558 $0 $0
=========== ============== =============== ============== ==============
NOTES:
(a) The classification "residential" includes single dwellings only. Residential
multiple dwellings are included in "apartment and business".
(b) Real estate taxes and easements, which in the opinion of the Company are not
undue burden on the properties, have been excluded from the determination of
"prior liens".
(c) In this schedule III, carrying amount of mortgage loans represents unpaid
principal balances plus unamortized premiums less unamortized discounts and
reserve for loss.
(d) Interest in arrears for less than three months has been disregarded in
computing the total amount of principal subject to delinquent interest. The
amounts of mortgage loans being forclosed are also included in amounts subject
to delinquent interest.
(e) Information as to interest due and accrued for the various classes within
the types of mortgage loans is not readily available and the obtaining thereof
would involve unreasonable effort and expense.
The Company does not accrue interest on loans which are over three months
delinquent.
(f) Information as to interest income by type and class of loan has been omitted
because it is not readily available and the obtaining thereof would involve
unreasonable effort and expense. In lieu thereof, the average gross interest
rates (exclusive of amortization of discounts and premiums) on mortgage loans
held at December 31, 1999 are shown by type and class of loan.
The average gross interest rates on mortgage loans held at December 31, 1999,
1998 and 1997 are summarized as follows:
1999 1998 1997
------------------- ------------------ -------------------
First mortgages:
Insured by Federal Housing Administration 0.000% 0.000% 0.000%
Partially guaranteed under Servicemen's
Readjustment Act of 1944, as amended 0.000 0.000 0.000
Other 7.274 7.394 8.212
------------------- ------------------ -------------------
Combined average 7.274% 7.394% 8.212%
=================== ================== ===================
(g) Following is a reconciliation of the carrying amount of mortgage loans for
the years ended December 31, 1999, 1998 and 1997.
1999 1998 1997
------------------- ------------------ -------------------
Balance at beginning of period $334,280 $212,433 $218,697
Additions during period:
New loans acquired:
Nonaffiliated companies 66,068 163,398 45,200
Reserve for loss reversal 100 0 0
------------------- ------------------ -------------------
Total additions 66,168 163,398 45,200
------------------- ------------------ -------------------
400,448 375,831 263,897
------------------- ------------------ -------------------
Deductions during period:
Collections of principal 22,401 41,551 51,464
------------------- ------------------ -------------------
Balance at end of period $378,047 $334,280 $212,433
=================== ================== ===================
(h) The aggregate cost of mortgage loans for federal income tax purposes at
December 31, 1999 was $378,558.
(i) At December 31, 1999, a reserve for loss of $511 is recorded which
represents $161 on impaired mortgage loans and $350 of unallocated reserves.
IDS CERTIFICATE COMPANY SCHEDULE V
Qualified Assets on Deposit
December 31, 1999
($ thousands)
Investment Securities
-------------------------------------------
Bonds and Mortgage
Notes Stocks Loans Other
Name of Depositary (a) (b) (c) (d) Total
- --------------------------------------------- -------------- ---------- ----------- ---------------- -----------------
Deposits with states or their depositories to
meet requirements of statutes and
agreements:
Illinois - Secretary of
State of Illinois $50 $0 $0 $0 $50
New Jersey - Commissioner
of Banking and Insurance
of New Jersey 50 0 0 0 50
Pennsylvania - Treasurer
of the State of
Pennsylvania 149 0 0 0 149
Texas - Treasurer of the
State of Texas 115 0 0 0 115
-------- ------- ----------- --------- ---------
Total deposits with states or their
depositories to meet requirements of
statues and agreements 364 0 0 0 364
Central depository - American
Express Trust Company 2,675,665 541,072 378,047 88,063 3,682,847
----------- --------- ----------- ---------- ------------
Total $2,676,029 $541,072 $378,047 $88,063 $3,683,211
=========== =========== ========= ========== ============
Notes:
(a) Represents amortized cost of bonds and notes.
(b) Represents average cost of individual issues of stocks.
(c) Represents unpaid principal balance of mortgage loans less unamortized
discounts and reserve for losses.
(d) Represents amortized cost of purchased call options.
PAGE 1
IDS CERTIFICATE COMPANY SCHEDULE VI
Certificate Reserves
Part 1 - Summary of Changes
Year ended December 31, 1999
($ in thousands)
Balance at beginning of period
-----------------------------------------
Number
of
Yield accounts Amount
to maturity with of Amount
on an annual security maturity of
Description payment basis holders value reserves
------------------- ---------- ------------- ------------
Installment certificates:
Reserves to mature:
Series 15, includes extended maturities 2.40 Inst/2.50 Ext. 0 0 0
" 20, " " " 2.52 Inst/2.50 Ext. 5 59 55
" 15A, " " " 2.66 Inst/3.04 Ext. 3 28 26
" 22A, " " " 3.09 841 18,616 13,983
" I-76, " " " 3.35 568 13,074 6,954
" Reserve Plus Flexible Payment (note a) 236 2,167 1,127
" IC-Q-Installment (note a) 88 1,000 408
" IC-Q-Ins (note a) 4,498 53,344 23,768
" IC-Q-Ins Emp (note a) 24 245 133
" IC-I (note a) 44,058 765,696 248,341
" IC-I-Emp (note a) 266 3,763 1,530
" Inst (note a) 6,090 66,052 7,189
" Inst-Emp (note a) 27 255 31
" RP-Q-Installment (note a) 157 2,185 1,422
" RP-Q-Flexible Payment (note a) 16 205 90
" RP-Q-Ins (note a) 118 2,659 824
" RP-Q-Ins Emp (note a) 2 24 15
" RP-I (note a) 299 9,199 2,846
" RP-I-Emp (note a) 0 0 0
" Inst-R (note a) 43 4,788 52
" Inst-R-Emp (note a) 3 28 1
------------ ------------- ------------
Total 57,342 943,387 308,795
------------ ------------- ------------
Payments made in advance of certificate
year requirements and accrued interest
thereon:
Series 15, includes extended maturities 2 Not Not 0
" 20, " " " 2 Readily Applicable 4
" 15A, " " " 3 Available 3
" 22A, " " " 3 554
" I-76, " " " 3.5 333
------------
Total 894
------------
PAGE 2
Additions
-----------------------------------------
Charged
Yield Charged Reserve to other
to maturity to profit payments by accounts
on an annual and loss certificate (per
payment basis or income holders part 2)
------------------- ------------ ------------- ------------
Installment certificates:
Reserves to mature:
Series 15, includes extended maturities 2.40 Inst/2.50 Ext. 0 0 0
" 20, " " " 2.52 Inst/2.50 Ext. 1 0 1
" 15A, " " " 2.66 Inst/3.04 Ext. 1 0 1
" 22A, " " " 3.09 395 175 468
" I-76, " " " 3.35 221 211 22
" Reserve Plus Flexible Payment (note a) 0 156 26
" IC-Q-Installment (note a) 0 54 9
" IC-Q-Ins (note a) 0 2,239 435
" IC-Q-Ins Emp (note a) 0 15 4
" IC-I (note a) 0 55,591 6,575
" IC-I-Emp (note a) 0 322 49
" Inst (note a) 0 8,608 257
" Inst-Emp (note a) 0 31 1
" RP-Q-Installment (note a) 0 17 35
" RP-Q-Flexible Payment (note a) 0 1 2
" RP-Q-Ins (note a) 0 29 14
" RP-Q-Ins Emp (note a) 0 1 0
" RP-I (note a) 0 468 73
" RP-I-Emp (note a) 0 0 0
" Inst-R (note a) 0 67 2
" Inst-R-Emp (note a) 0 3 0
------------ ------------- ------------
Total 618 67,988 7,974
------------ ------------- ------------
Payments made in advance of certificate
year requirements and accrued interest
thereon:
Series 15, includes extended maturities 2 0 0 0
" 20, " " " 2 0 0 0
" 15A, " " " 3 0 0 0
" 22A, " " " 3 20 127 26
" I-76, " " " 3.5 13 32 1
------------ ------------- ------------
Total 33 159 27
------------ ------------- ------------
PAGE 3
Deductions
-----------------------------------------
Credited
Yield Cash to other
to maturity surrenders accounts
on an annual prior to (per
payment basis Maturities maturity part 2)
------------------- ------------ ------------- ------------
Installment certificates:
Reserves to mature:
Series 15, includes extended maturities 2.40 Inst/2.50 Ext. 0 0 0
" 20, " " " 2.52 Inst/2.50 Ext. 14 9 11
" 15A, " " " 2.66 Inst/3.04 Ext. 0 0 10
" 22A, " " " 3.09 345 719 1,398
" I-76, " " " 3.35 0 1,038 151
" Reserve Plus Flexible Payment (note a) 19 513 0
" IC-Q-Installment (note a) 30 140 0
" IC-Q-Ins (note a) 4,417 8,913 12
" IC-Q-Ins Emp (note a) 5 42 0
" IC-I (note a) 0 99,307 0
" IC-I-Emp (note a) 0 662 0
" Inst (note a) 0 2,633 0
" Inst-Emp (note a) 0 14 0
" RP-Q-Installment (note a) 8 345 0
" RP-Q-Flexible Payment (note a) 4 16 0
" RP-Q-Ins (note a) 253 213 0
" RP-Q-Ins Emp (note a) 0 9 0
" RP-I (note a) 0 1,208 0
" RP-I-Emp (note a) 0 0 0
" Inst-R (note a) 0 8 0
" Inst-R-Emp (note a) 0 1 0
------------ ------------- ------------
Total 5,095 115,790 1,582
------------ ------------- ------------
Payments made in advance of certificate
year requirements and accrued interest
thereon:
Series 15, includes extended maturities 2 0 0 0
" 20, " " " 2 0 0 4
" 15A, " " " 3 0 0 0
" 22A, " " " 3 18 26 189
" I-76, " " " 3.5 0 23 15
------------ ------------- ------------
Total 18 49 208
------------ ------------- ------------
PAGE 4
Balance at close of period
-----------------------------------------
Number
of
Yield accounts Amount
to maturity with of Amount
on an annual security maturity of
payment basis holders value reserves
------------------- ------------ ------------- ------------
Installment certificates:
Reserves to mature:
Series 15, includes extended maturities 2.40 Inst/2.50 Ext. 0 0 0
" 20, " " " 2.52 Inst/2.50 Ext. 2 28 22
" 15A, " " " 2.66 Inst/3.04 Ext. 2 17 17
" 22A, " " " 3.09 718 16,120 12,559
" I-76, " " " 3.35 474 10,847 6,220
" Reserve Plus Flexible Payment (note a) 181 1,666 778
" IC-Q-Installment (note a) 69 770 301
" IC-Q-Ins (note a) 2,502 29,257 13,100
" IC-Q-Ins Emp (note a) 14 146 105
" IC-I (note a) 33,476 569,104 211,200
" IC-I-Emp (note a) 190 2,659 1,239
" Inst (note a) 7,494 0 13,421
" Inst-Emp (note a) 35 0 49
" RP-Q-Installment (note a) 118 1,621 1,121
" RP-Q-Flexible Payment (note a) 12 154 73
" RP-Q-Ins (note a) 55 931 401
" RP-Q-Ins Emp (note a) 1 6 7
" RP-I (note a) 205 6,269 2,179
" RP-I-Emp (note a) 0 0 0
" Inst-R (note a) 59 0 113
" Inst-R-Emp (note a) 3 0 3
------------ ------------- ------------
Total 45,610 639,595 262,908
------------ ------------- ------------
Payments made in advance of certificate
year requirements and accrued interest
thereon:
Series 15, includes extended maturities 2 Not Not 0
" 20, " " " 2 Readily Applicable 0
" 15A, " " " 3 Available 3
" 22A, " " " 3 494
" I-76, " " " 3.5 341
------------
Total 838
------------
PAGE 5
Balance at beginning of period
-----------------------------------------
Number
of
Yield accounts Amount
to maturity with of Amount
on an annual security maturity of
payment basis holders value reserves
------------------- ------------ ------------- ------------
Additional credits and accrued interest
thereon:
Series 15, includes extended maturities 2.5 Not Not 0
" 20, " " " 2.5 Readily Applicable 12
" 15A, " " " 3 Available 3
" 22A, " " " 3 3,250
" I-76, " " " 3.5 1,610
" Reserve Plus Flexible Payment (note a) 0
" IC-Q-Installment (note a) 0
" IC-Q-Ins (note a) 0
" IC-Q-Ins Emp (note a) 0
" IC-I (note a) 301
" IC-I-Emp (note a) 2
" Inst (note a) 8
" Inst-Emp (note a) 0
" RP-Q-Installment (note a) 0
" RP-Q-Flexible Payment (note a) 0
" RP-Q-Ins (note a) 0
" RP-Q-Ins Emp (note a) 0
" RP-I (note a) 4
" RP-I-Emp (note a) 0
" Inst-R (note a) 0
" Inst-R-Emp (note a) 0
------------
Total 5,190
------------
Reserve for accrued extra contribution 3rd year 10,058
Reserve for accrued extra contribution 6th year 0
Accrued interest on reserves in default I-76 3.5 2
Reserve for additional credits to be allowed
Installment Certificates-Special Additional Not Not
Credits I-76 Readily Applicable 0
Accrued for additional credits to be allowed at Available
next anniversary 129
Reserve for death and disability refund options 0
Reserve for reconversion of paid-up certificates 53
------------
Total installment certificates 325,121
------------
PAGE 6
Additions
-----------------------------------------
Charged
Yield Charged Reserve to other
to maturity to profit payments by accounts
on an annual and loss certificate (per
payment basis or income holders part 2)
------------------- ------------ ------------- ------------
Additional credits and accrued interest
thereon:
Series 15, includes extended maturities 2.5 0 Not 0
" 20, " " " 2.5 0 Applicable 1
" 15A, " " " 3 0 0
" 22A, " " " 3 89 238
" I-76, " " " 3.5 51 68
" Reserve Plus Flexible Payment (note a) 26 0
" IC-Q-Installment (note a) 9 0
" IC-Q-Ins (note a) 436 0
" IC-Q-Ins Emp (note a) 4 0
" IC-I (note a) 6,554 0
" IC-I-Emp (note a) 50 0
" Inst (note a) 264 0
" Inst-Emp (note a) 1 0
" RP-Q-Installment (note a) 35 0
" RP-Q-Flexible Payment (note a) 2 0
" RP-Q-Ins (note a) 14 0
" RP-Q-Ins Emp (note a) 0 0
" RP-I (note a) 73 0
" RP-I-Emp (note a) 0 0
" Inst-R (note a) 2 0
" Inst-R-Emp (note a) 0 0
------------ ------------
Total 7,610 307
------------ ------------
Reserve for accrued extra contribution 3rd year 1,049 (4,673) 0
Reserve for accrued extra contribution 6th year 0 0 0
Accrued interest on reserves in default I-76 3.5 5 0 0
Reserve for additional credits to be allowed
Installment Certificates-Special Additional
Credits I-76 0 0 0
Accrued for additional credits to be allowed at
next anniversary 157 0 0
Reserve for death and disability refund options 0 0 0
Reserve for reconversion of paid-up certificates 0 0 1
------------ ------------- ------------
Total installment certificates 9,472 63,474 8,309
------------ ------------- ------------
PAGE 7
Deductions
-----------------------------------------
Credited
Yield Cash to other
to maturity surrenders accounts
on an annual prior to (per
payment basis Maturities maturity part 2)
------------------- ------------ ------------- ------------
Additional credits and accrued interest
thereon:
Series 15, includes extended maturities 2.5 0 0 0
" 20, " " " 2.5 3 2 3
" 15A, " " " 3 0 0 1
" 22A, " " " 3 90 166 317
" I-76, " " " 3.5 0 254 31
" Reserve Plus Flexible Payment (note a) 0 0 26
" IC-Q-Installment (note a) 0 0 9
" IC-Q-Ins (note a) 0 0 436
" IC-Q-Ins Emp (note a) 0 0 4
" IC-I (note a) 0 0 6,580
" IC-I-Emp (note a) 0 0 50
" Inst (note a) 0 0 257
" Inst-Emp (note a) 0 0 1
" RP-Q-Installment (note a) 0 0 35
" RP-Q-Flexible Payment (note a) 0 0 2
" RP-Q-Ins (note a) 0 0 14
" RP-Q-Ins Emp (note a) 0 0 0
" RP-I (note a) 0 0 74
" RP-I-Emp (note a) 0 0 0
" Inst-R (note a) 0 0 2
" Inst-R-Emp (note a) 0 0 0
-------------- ------------- ------------
Total 93 422 7,842
-------------- ------------- ------------
Reserve for accrued extra contribution 3rd year 0 0 0
Reserve for accrued extra contribution 6th year 0 0 0
Accrued interest on reserves in default I-76 3.5 0 1 4
Reserve for additional credits to be allowed
Installment Certificates-Special Additional
Credits I-76 0 0 0
Accrued for additional credits to be allowed at
next anniversary 0 0 242
Reserve for death and disability refund options 0 0 0
Reserve for reconversion of paid-up certificates 0 0 0
-------------- ------------- -----------
Total installment certificates 5,206 116,262 9,878
-------------- ------------- -----------
PAGE 8
Balance at close of period
------------------------------------------
Number
of
Yield accounts Amount
to maturity with of Amount
on an annual security maturity of
payment basis holders value reserves
----------------- ------------- -------------- -------------
Additional credits and accrued interest
thereon:
Series 15, includes extended maturities 2.5 Not Not 0
" 20, " " " 2.5 Readily Applicable 5
" 15A, " " " 3 Available 2
" 22A, " " " 3 3,004
" I-76, " " " 3.5 1,444
" Reserve Plus Flexible Payment (note a) 0
" IC-Q-Installment (note a) 0
" IC-Q-Ins (note a) 0
" IC-Q-Ins Emp (note a) 0
" IC-I (note a) 275
" IC-I-Emp (note a) 2
" Inst (note a) 15
" Inst-Emp (note a) 0
" RP-Q-Installment (note a) 0
" RP-Q-Flexible Payment (note a) 0
" RP-Q-Ins (note a) 0
" RP-Q-Ins Emp (note a) 0
" RP-I (note a) 3
" RP-I-Emp (note a) 0
" Inst-R (note a) 0
" Inst-R-Emp (note a) 0
--------------
Total 4,750
--------------
Reserve for accrued extra contribution 3rd year 6,434
Reserve for accrued extra contribution 6th year 0
Accrued interest on reserves in default I-76 3.5 2
Reserve for additional credits to be allowed
Installment Certificates-Special Additional Not Not
Credits I-76 Readily Applicable 0
Accrued for additional credits to be allowed at Available
next anniversary 44
Reserve for death and disability refund options 0
Reserve for reconversion of paid-up certificates 54
--------------
Total installment certificates 275,030
--------------
PAGE 9
Balance at beginning of period
---------------------------------------
Number
of
Yield accounts Amount
to maturity with of Amount
on an annual security maturity of
payment basis holders value reserves
----------------- ------------- -------------- -----------
Fully paid certificates:
Single-Payment certificates:
SP 74 3.5 0 0 0
SP 75 3.5 0 0 0
SP 76 3.5 0 0 0
SP 77 3.5 0 0 0
SP 78 3.5 61 723 393
SP 79 3.5 388 2,838 2,776
SP 80 3.5 356 2,999 2,826
SP 81A 3.5 297 1,770 1,608
SP 82A 3.5 259 2,466 2,170
SP 82B 3.5 452 4,041 3,515
SP 83A 3.5 83 595 510
SP 83B 3.5 189 1,833 1,546
IC-2-84 3.5 686 6,783 5,535
IC-2-85 3.5 360 3,877 4,066
IC-2-86 3.5 188 2,152 2,073
IC-2-87 3.5 239 3,190 2,851
IC-2-88 3.5 486 7,301 5,939
Reserve Plus Single Payment (note a) 820 308,978 6,683
Cash Reserve Single Payment (note b) 32 176 175
IC-Flexible Savings (formally Variable Term) (note d) 76,191 438,276 502,533
IC-Flexible Savings Emp (formally Variable Term) (note d) 1,247 13,712 16,536
IC-Preferred Investors (note d) 67 76,339 77,371
IC-Investors (note d) 549 687,325 750,121
IC-Special Deposits (note d) 115 157,232 167,647
IC-1-84 (note c) 51 354 329
Cash Reserve Variable Payment (note b) 443 2,330 3,073
Cash Reserve Variable Payment-3mo. (note e) 44,122 175,219 185,896
IC-Future Value (note f) 11,209 120,321 120,321
IC-Future Value Emp (note f) 219 2,429 2,429
IC-Stock Market (note g) 110,202 391,171 440,315
IC-Market Strategy (note g) 5,134 69,753 70,372
IC-AEBI Stock Market (note g) 33 6,428 6,740
-------------- ------------- ------------
Total 254,478 2,490,611 2,386,349
-------------- ------------- ------------
PAGE 10
Additions
------------------------------------------
Charged
Yield Charged Reserve to other
to maturity to profit payments by accounts
on an annual and loss certificate (per
payment basis or income holders part 2)
------------------- ------------ -------------- ------------
Fully paid certificates:
Single-Payment certificates:
SP 78 3.5 1 0 0
SP 79 3.5 59 0 0
SP 80 3.5 92 0 0
SP 81A 3.5 53 0 0
SP 82A 3.5 72 0 0
SP 82B 3.5 114 0 0
SP 83A 3.5 17 0 0
SP 83B 3.5 50 0 0
IC-2-84 3.5 176 0 0
IC-2-85 3.5 0 0 183
IC-2-86 3.5 0 0 93
IC-2-87 3.5 0 0 127
IC-2-88 3.5 0 0 255
Reserve Plus Single Payment (note a) 0 1 227
Cash Reserve Single Payment (note b) 0 0 6
IC-Flexible Savings (formally Variable Term) (note d) 0 295,095 23,986
IC-Flexible Savings Emp (formally Variable Term) (note d) 0 2,153 773
IC-Preferred Investors (note d) 0 205,529 4,679
IC-Investors (note d) 0 324,809 38,432
IC-Special Deposits (note d) 0 50,133 8,335
IC-1-84 (note c) 0 0 13
Cash Reserve Variable Payment (note b) 0 293 99
Cash Reserve Variable Payment-3mo. (note e) 0 154,650 6,369
IC-Future Value (note f) 0 0 0
IC-Future Value Emp (note f) 0 0 0
IC-Stock Market (note g) 0 147,836 39,726
IC-Market Strategy (note g) 0 144,658 5,158
IC-AEBI Stock Market (note g) 0 12,766 532
-------------- ------------- ------------
Total 634 1,337,923 128,993
-------------- ------------- ------------
PAGE 11
Deductions
-----------------------------------------
Credited
Yield Cash to other
to maturity surrenders accounts
on an annual prior to (per
payment basis Maturities maturity part 2)
------------------- ------------ ------------- ------------
Fully paid certificates:
Single-Payment certificates:
SP 78 3.5 323 31 41
SP 79 3.5 1,939 278 338
SP 80 3.5 0 568 0
SP 81A 3.5 0 201 0
SP 82A 3.5 0 298 0
SP 82B 3.5 0 488 0
SP 83A 3.5 0 63 0
SP 83B 3.5 0 228 0
IC-2-84 3.5 0 1,105 0
IC-2-85 3.5 0 652 0
IC-2-86 3.5 0 377 0
IC-2-87 3.5 0 292 0
IC-2-88 3.5 0 1,432 0
Reserve Plus Single Payment (note a) 0 1,323 39
Cash Reserve Single Payment (note b) 0 20 0
IC-Flexible Savings (formally Variable Term) (note d) 0 309,853 0
IC-Flexible Savings Emp (formally Variable Term) (note d) 0 4,169 0
IC-Preferred Investors (note d) 0 183,678 0
IC-Investors (note d) 0 275,318 0
IC-Special Deposits (note d) 0 77,859 0
IC-1-84 (note c) 0 55 0
Cash Reserve Variable Payment (note b) 0 901 0
Cash Reserve Variable Payment-3mo. (note e) 0 179,139 0
IC-Future Value (note f) 61,877 8,989 0
IC-Future Value Emp (note f) 1,429 277 0
IC-Stock Market (note g) 0 124,064 0
IC-Market Strategy (note g) 0 15,967 0
IC-AEBI Stock Market (note g) 0 1,621 0
-------------- ------------- ------------
Total 65,568 1,189,246 418
-------------- ------------- ------------
PAGE 12
Balance at close of period
------------------------------------------
Number
of
Yield accounts Amount
to maturity with of Amount
on an annual security maturity of
payment basis holders value reserves
----------------- ------------- -------------- -------------
Fully paid certificates:
Single-Payment certificates:
SP 78 3.5 0 0 0
SP 79 3.5 34 281 280
SP 80 3.5 302 2,407 2,350
SP 81A 3.5 258 1,552 1,460
SP 82A 3.5 228 2,133 1,944
SP 82B 3.5 388 3,489 3,141
SP 83A 3.5 69 523 464
SP 83B 3.5 161 1,568 1,368
IC-2-84 3.5 558 5,457 4,606
IC-2-85 3.5 304 3,177 3,597
IC-2-86 3.5 156 1,787 1,789
IC-2-87 3.5 209 2,876 2,686
IC-2-88 3.5 390 5,611 4,762
Reserve Plus Single Payment (note a) 665 3,310 5,549
Cash Reserve Single Payment (note b) 27 165 161
IC-Flexible Savings (formally Variable Term) (note d) 67,254 450,978 511,761
IC-Flexible Savings Emp (formally Variable Term) (note d) 1,039 12,398 15,293
IC-Preferred Investors (note d) 115 102 103,901
IC-Investors (note d) 573 783,371 838,044
IC-Special Deposits (note d) 115 136,183 148,255
IC-1-84 (note c) 44 308 287
Cash Reserve Variable Payment (note b) 374 1,964 2,564
Cash Reserve Variable Payment-3mo. (note e) 41,035 157,871 167,776
IC-Future Value (note f) 4,564 49,454 49,455
IC-Future Value Emp (note f) 90 724 723
IC-Stock Market (note g) 109,177 434,918 503,813
IC-Market Strategy (note g) 13,602 199,544 204,221
IC-AEBI Stock Market (note g) 83 17,772 18,417
-------------- ------------- ------------
Total 241,814 2,279,923 2,598,667
-------------- ------------- ------------
PAGE 13
Balance at beginning of period
------------------------------------------
Number
of
Yield accounts Amount
to maturity with of Amount
on an annual security maturity of
payment basis holders value reserves
----------------- ------------- -------------- -------------
Additional credits and accrued interest thereon:
SP 78 3.5 Not Not 404
SP 79 3.5 Applicable Applicable 2,661
SP 80 3.5 2,500
SP 81A 3.5 1,162
SP 82A 3.5 1,505
SP 82B 3.5 2,347
SP 83A 3.5 275
SP 83B 3.5 766
IC-2-84 3.5 2,824
IC-2-85 3.5 72
IC-2-86 3.5 33
IC-2-87 3.5 51
IC-2-88 3.5 106
Reserve Plus Single Payment (note a) 0
Cash Reserve Single Payment (note b) 0
IC-Flexible Savings (formally Variable Term) (note d) 992
IC-Flexible Savings Emp (formally Variable Term) (note d) 164
IC-Preferred Investors (note d) 37
IC-Investors (note d) 1,680
IC-Special Deposits (note d) 352
IC-1-84 (note c) 7
Cash Reserve Variable Payment (note b) 0
Cash Reserve Variable Payment-3mo. (note e) 290
IC-Future Value (note f) 44,252
IC-Future Value Emp (note f) 990
IC-Stock Market (note g) 1,468
IC-Market Strategy (note g) 91
IC-AEBI Stock Market (note g) 44
--------------
Total 65,073
--------------
PAGE 14
Additions
------------------------------------------
Charged
Yield Charged Reserve to other
to maturity to profit payments by accounts
on an annual and loss certificate (per
payment basis or income holders part 2)
------------------- ------------ -------------- ------------
Additional credits and accrued interest thereon:
SP 78 3.5 1 0 10
SP 79 3.5 57 0 64
SP 80 3.5 83 0 59
SP 81A 3.5 38 0 31
SP 82A 3.5 50 0 41
SP 82B 3.5 77 0 65
SP 83A 3.5 9 0 10
SP 83B 3.5 25 0 23
IC-2-84 3.5 91 0 88
IC-2-85 3.5 132 0 0
IC-2-86 3.5 68 0 0
IC-2-87 3.5 97 0 0
IC-2-88 3.5 188 0 0
Reserve Plus Single Payment (note a) 228 0 0
Cash Reserve Single Payment (note b) 7 0 0
IC-Flexible Savings (formally Variable Term) (note d) 26,886 0 0
IC-Flexible Savings Emp (formally Variable Term) (note d) 4,971 0 0
IC-Preferred Investors (note d) 900 0 0
IC-Investors (note d) 42,144 0 0
IC-Special Deposits (note d) 8,514 0 0
IC-1-84 (note c) 14 0 0
Cash Reserve Variable Payment (note b) 106 0 0
Cash Reserve Variable Payment-3mo. (note e) 6,450 0 0
IC-Future Value (note f) 8,233 0 0
IC-Future Value Emp (note f) 167 0 0
IC-Stock Market (note g) 2,561 0 0
IC-Market Strategy (note g) 2,582 0 0
IC-AEBI Stock Market (note g) 165 0 0
-------------- ------------- ------------
Total 104,844 0 391
-------------- ------------- ------------
PAGE 15
Deductions
-----------------------------------------
Credited
Yield Cash to other
to maturity surrenders accounts
on an annual prior to (per
payment basis Maturities maturity part 2)
------------------- ------------ ------------- ------------
Additional credits and accrued interest thereon:
SP 78 3.5 340 33 43
SP 79 3.5 1,903 277 324
SP 80 3.5 0 404 0
SP 81A 3.5 0 156 0
SP 82A 3.5 0 170 0
SP 82B 3.5 0 349 0
SP 83A 3.5 0 35 0
SP 83B 3.5 0 105 0
IC-2-84 3.5 0 607 0
IC-2-85 3.5 0 7 136
IC-2-86 3.5 0 3 70
IC-2-87 3.5 0 4 96
IC-2-88 3.5 0 13 194
Reserve Plus Single Payment (note a) 0 0 228
Cash Reserve Single Payment (note b) 0 0 6
IC-Flexible Savings (formally Variable Term) (note d) 0 2,889 24,003
IC-Flexible Savings Emp (formally Variable Term) (note d) 0 193 4,679
IC-Preferred Investors (note d) 0 131 773
IC-Investors (note d) 0 3,367 38,432
IC-Special Deposits (note d) 0 199 8,335
IC-1-84 (note c) 0 2 15
Cash Reserve Variable Payment (note b) 0 6 100
Cash Reserve Variable Payment-3mo. (note e) 0 106 6,375
IC-Future Value (note f) 25,386 3,371 0
IC-Future Value Emp (note f) 634 123 0
IC-Stock Market (note g) 0 127 2,318
IC-Market Strategy (note g) 0 1 2,427
IC-AEBI Stock Market (note g) 0 2 135
-------------- ------------- ------------
Total 28,263 12,680 88,689
-------------- ------------- ------------
PAGE 16
Balance at close of period
------------------------------------------
Number
of
Yield accounts Amount
to maturity with of Amount
on an annual security maturity of
payment basis holders value reserves
----------------- ------------- -------------- -------------
Additional credits and accrued interest thereon:
SP 78 3.5 Not Not 0
SP 79 3.5 Applicable Applicable 278
SP 80 3.5 2,238
SP 81A 3.5 1,075
SP 82A 3.5 1,426
SP 82B 3.5 2,140
SP 83A 3.5 259
SP 83B 3.5 709
IC-2-84 3.5 2,396
IC-2-85 3.5 61
IC-2-86 3.5 28
IC-2-87 3.5 48
IC-2-88 3.5 87
Reserve Plus Single Payment (note a) 0
Cash Reserve Single Payment (note b) 0
IC-Flexible Savings (formally Variable Term) (note d) 986
IC-Flexible Savings Emp (formally Variable Term) (note d) 263
IC-Preferred Investors (note d) 33
IC-Investors (note d) 2,025
IC-Special Deposits (note d) 332
IC-1-84 (note c) 5
Cash Reserve Variable Payment (note b) 0
Cash Reserve Variable Payment-3mo. (note e) 259
IC-Future Value (note f) 23,728
IC-Future Value Emp (note f) 400
IC-Stock Market (note g) 1,584
IC-Market Strategy (note g) 244
IC-AEBI Stock Market (note g) 72
------------
Total 40,676
------------
PAGE 17
Balance at beginning of period
-----------------------------------------
Number
of
accounts Amount
with of Amount
security maturity of
holders value reserves
------------ ------------ ---------
Accrued for additional credits to be allowed
at next anniversaries:
SP 78 Not Not 9
SP 79 Applicable Applicable 34
SP 80 31
SP 81A 18
SP 82A 14
SP 82B 45
SP 83A 6
SP 83B 14
IC-2-84 50
IC-2-85 26
IC-2-86 12
IC-2-87 18
IC-2-88 35
IC-Stock Market 33,758
IC-Market Strategy 2,179
IC-AEBI Stock Market 244
------------
Total 36,493
------------
PAGE 18
Additions
-----------------------------------------
Charged
Charged Reserve to other
to profit payments by accounts
and loss certificate (per
or income holders part 2)
------------ ------------ ------------
Accrued for additional credits to be allowed
at next anniversaries:
SP 78 1 0 0
SP 79 33 0 0
SP 80 43 0 0
SP 81A 20 0 0
SP 82A 36 0 0
SP 82B 38 0 0
SP 83A 7 0 0
SP 83B 16 0 0
IC-2-84 61 0 0
IC-2-85 32 0 0
IC-2-86 17 0 0
IC-2-87 22 0 0
IC-2-88 40 0 0
IC-Stock Market 40,183 0 0
IC-Market Strategy 10,957 0 0
IC-AEBI Stock Market 1,104 0 0
------------ ------------ ------------
Total 52,610 0 0
------------ ------------ ------------
PAGE 19
Deductions
-----------------------------------------
Credited
Cash to other
surrenders accounts
prior to (per
Maturities maturity part 2)
------------ ------------ ------------
Accrued for additional credits to be allowed
at next anniversaries:
SP 78 0 0 10
SP 79 0 0 64
SP 80 0 0 59
SP 81A 0 0 30
SP 82A 0 0 41
SP 82B 0 0 65
SP 83A 0 0 10
SP 83B 0 0 23
IC-2-84 0 0 88
IC-2-85 0 0 46
IC-2-86 0 0 23
IC-2-87 0 0 31
IC-2-88 0 0 61
IC-Stock Market 0 1,374 37,423
IC-Market Strategy 0 101 2,732
IC-AEBI Stock Market 0 0 397
------------ ------------ ------------
Total 0 1,475 41,103
------------ ------------ ------------
PAGE 20
Balance at close of period
-----------------------------------------
Number
of
accounts Amount
with of Amount
security maturity of
holders value reserves
------------ ------------ ------------
Accrued for additional credits to be allowed
at next anniversaries:
SP 78 Not Not 0
SP 79 Applicable Applicable 3
SP 80 15
SP 81A 8
SP 82A 9
SP 82B 18
SP 83A 3
SP 83B 7
IC-2-84 23
IC-2-85 12
IC-2-86 6
IC-2-87 9
IC-2-88 14
IC-Stock Market 35,144
IC-Market Strategy 10,303
IC-AEBI Stock Market 951
-------
Total 46,525
-------
PAGE 21
Balance at beginning of period
-----------------------------------------
Number
Yield of
to maturity accounts Amount
on an with of Amount
annual security maturity of
payment basis holders value reserves
------------- ----------- ---------- -----------
R Series Single-Payment certificates:
R-76 3.5 8 72 64
R-77 3.5 30 338 297
R-78 3.5 56 523 419
R-79 3.5 87 984 772
R-80 3.5 87 916 672
R-81 3.5 44 481 310
R-82A 3.5 192 1,491 861
RP-Q (note a) 477 814 1,950
R-II 3.5 136 1,350 598
RP-2-84 3.5 410 4,741 1,984
RP-2-85 3.5 122 509 537
RP-2-86 3.5 33 159 154
RP-2-87 3.5 86 482 426
RP-2-88 3.5 105 627 508
Cash Reserve RP (note b) 8 18 35
IC-Flexible Savings RP (note d) 12,026 105,502 121,784
RP-Preferred Investors (note d) 5 2,255 2,333
Cash Reserve RP-3 mo. (note e) 2,492 21,903 23,067
IC-Flexible Savings RP Emp (note d) 334 4,342 5,306
RP-Future Value (note f) 7,645 118,817 118,817
RP-Future Value Emp (note f) 193 3,676 3,676
RP-Stock Market (note g) 11,994 79,218 89,362
RP-Market Strategy (note g) 601 15,487 15,619
D-1 (note a) 199 23,613 29,156
------------ ------------ ------------
Total 37,370 388,318 418,707
------------ ------------ ------------
PAGE 22
Additions
-----------------------------------------
Yield Charged
to maturity Charged Reserve to other
on an to profit payments by accounts
annual and loss certificate (per
payment basis or income holders part 2)
------------- ----------- ---------- -----------
R Series Single-Payment certificates:
R-76 3.5 0 0 3
R-77 3.5 0 0 13
R-78 3.5 0 0 19
R-79 3.5 0 0 35
R-80 3.5 0 0 29
R-81 3.5 0 0 14
R-82A 3.5 0 0 42
RP-Q (note a) 0 0 64
R-II 3.5 0 0 28
RP-2-84 3.5 0 0 87
RP-2-85 3.5 0 0 23
RP-2-86 3.5 0 0 7
RP-2-87 3.5 0 0 20
RP-2-88 3.5 0 0 24
Cash Reserve RP (note b) 0 0 1
IC-Flexible Savings RP (note d) 0 61,298 5,549
RP-Preferred Investors (note d) 0 4,362 146
Cash Reserve RP-3 mo. (note e) 0 48,247 964
IC-Flexible Savings RP Emp (note d) 0 2,107 318
RP-Future Value (note f) 0 0 0
RP-Future Value Emp (note f) 0 0 0
RP-Stock Market (note g) 0 37,888 8,132
RP-Market Strategy (note g) 0 40,481 1,275
D-1 (note a) 0 299 1,290
------------ ------------ ------------
Total 0 194,682 18,083
------------ ------------ ------------
PAGE 23
Deductions
-----------------------------------------
Yield Credited
to maturity Cash to other
on an surrenders accounts
annual prior to (per
payment basis Maturities maturity part 2)
------------- ----------- ---------- -----------
R Series Single-Payment certificates:
R-76 3.5 0 16 0
R-77 3.5 0 93 0
R-78 3.5 0 46 0
R-79 3.5 0 127 0
R-80 3.5 0 266 0
R-81 3.5 0 73 0
R-82A 3.5 0 213 0
RP-Q (note a) 0 483 0
R-II 3.5 0 140 0
RP-2-84 3.5 0 488 0
RP-2-85 3.5 0 121 0
RP-2-86 3.5 0 40 0
RP-2-87 3.5 0 119 0
RP-2-88 3.5 0 139 0
Cash Reserve RP (note b) 0 6 0
IC-Flexible Savings RP (note d) 0 56,707 0
RP-Preferred Investors (note d) 0 2,078 0
Cash Reserve RP-3 mo. (note e) 0 47,439 0
IC-Flexible Savings RP Emp (note d) 0 1,077 0
RP-Future Value (note f) 47,869 8,283 0
RP-Future Value Emp (note f) 1,872 85 0
RP-Stock Market (note g) 0 30,150 0
RP-Market Strategy (note g) 0 2,820 0
D-1 (note a) 9 5,009 0
------------ ------------ ------------
Total 49,750 156,018 0
------------ ------------ ------------
PAGE 24
Balance at close of period
-----------------------------------------
Number
Yield of
to maturity accounts Amount
on an with of Amount
annual security maturity of
payment basis holders value reserves
------------- ----------- ---------- -----------
R Series Single-Payment certificates:
R-76 3.5 5 54 51
R-77 3.5 24 237 217
R-78 3.5 50 467 392
R-79 3.5 72 828 680
R-80 3.5 66 572 435
R-81 3.5 30 370 251
R-82A 3.5 156 1,144 690
RP-Q (note a) 383 618 1,531
R-II 3.5 112 1,047 486
RP-2-84 3.5 313 3,620 1,583
RP-2-85 3.5 102 397 439
RP-2-86 3.5 27 120 121
RP-2-87 3.5 61 351 327
RP-2-88 3.5 83 466 393
Cash Reserve RP (note b) 5 15 30
IC-Flexible Savings RP (note d) 11,090 116,822 131,924
RP-Preferred Investors (note d) 7 4,626 4,763
Cash Reserve RP-3 mo. (note e) 2,199 23,612 24,839
IC-Flexible Savings RP Emp (note d) 323 5,639 6,654
RP-Future Value (note f) 3,824 62,665 62,665
RP-Future Value Emp (note f) 106 1,719 1,719
RP-Stock Market (note g) 12,149 91,886 105,232
RP-Market Strategy (note g) 1,870 53,356 54,555
D-1 (note a) 178 20,438 25,727
------------ ------------ ------------
Total 33,235 391,069 425,704
------------ ------------ ------------
PAGE 25
Balance at beginning of period
-----------------------------------------
Number
Yield of
to maturity accounts Amount
on an with of Amount
annual security maturity of
payment basis holders value reserves
------------- ----------- ---------- -----------
Additional Interest on R-Series Single
Payment Reserves:
R-76 3.5 Not Not 2
R-77 3.5 Applicable Applicable 5
R-78 3.5 12
R-79 3.5 19
R-80 3.5 21
R-81 3.5 7
R-82A 3.5 36
RP-Q (note a) 0
R-II 3.5 19
RP-2-84 3.5 55
RP-2-85 3.5 16
RP-2-86 3.5 4
RP-2-87 3.5 13
RP-2-88 3.5 13
Cash Reserve RP (note b) 0
IC-Flexible Savings RP (note d) 249
RP-Preferred Investors (note d) 2
Cash Reserve RP-3 mo. (note e) 34
IC-Flexible Savings RP Emp (note d) 10
IC-Future Value (note f) 46,444
IC-Future Value Emp (note f) 1,715
RP-Stock Market (note g) 274
RP-Market Strategy (note g) 19
D-1 (note a) 0
-------
Total 48,969
-------
Accrued for additional credits to be allowed
at next anniversaries:
RP-Stock Market 6,932
RP-Market Strategy 446
---------
Total single payment 2,962,969
---------
Paid-up certificates:
Series 15 and 20 3.25 10 110 98
" 15A and 22A 3.5 358 6,307 5,464
" I-76 3.5 613 3,131 2,139
------------ ------------ ------------
Total 981 9,548 7,701
------------ ------------ ------------
PAGE 26
Additions
-----------------------------------------
Yield Charged
to maturity Charged Reserve to other
on an to profit payments by accounts
annual and loss certificate (per
payment basis or income holders part 2)
------------- ----------- ---------- -----------
Additional Interest on R-Series Single
Payment Reserves:
R-76 3.5 2 0 0
R-77 3.5 11 0 0
R-78 3.5 18 0 0
R-79 3.5 31 0 0
R-80 3.5 24 0 0
R-81 3.5 13 0 0
R-82A 3.5 33 0 0
RP-Q (note a) 64 0 0
R-II 3.5 23 0 0
RP-2-84 3.5 75 0 0
RP-2-85 3.5 21 0 0
RP-2-86 3.5 6 0 0
RP-2-87 3.5 17 0 0
RP-2-88 3.5 20 0 0
Cash Reserve RP (note b) 1 0 0
IC-Flexible Savings RP (note d) 6,249 0 0
RP-Preferred Investors (note d) 161 0 0
Cash Reserve RP-3 mo. (note e) 969 0 0
IC-Flexible Savings RP Emp (note d) 342 0 0
IC-Future Value (note f) 8,557 0 0
IC-Future Value Emp (note f) 309 0 0
RP-Stock Market (note g) 481 0 0
RP-Market Strategy (note g) 753 0 0
D-1 (note a) 1,383 0 0
------------ ------------ ------------
Total 19,563 0 0
------------ ------------ ------------
Accrued for additional credits to be allowed
at next anniversaries:
RP-Stock Market 8,469 0 0
RP-Market Strategy 2,663 0 0
------------ ------------ ------------
Total single payment 188,783 1,532,605 147,467
------------ ------------ ------------
Paid-up certificates:
Series 15 and 20 3.25 3 0 0
" 15A and 22A 3.5 186 0 794
" I-76 3.5 71 0 185
------------ ------------ ------------
Total 260 0 979
------------ ------------ ------------
PAGE 27
Deductions
-----------------------------------------
Yield Credited
to maturity Cash to other
on an surrenders accounts
annual prior to (per
payment basis Maturities maturity part 2)
------------- ----------- ---------- -----------
Additional Interest on R-Series Single
Payment Reserves:
R-76 3.5 0 0 3
R-77 3.5 0 1 13
R-78 3.5 0 1 19
R-79 3.5 0 2 35
R-80 3.5 0 2 29
R-81 3.5 0 1 14
R-82A 3.5 0 3 42
RP-Q (note a) 0 0 64
R-II 3.5 0 1 28
RP-2-84 3.5 0 5 87
RP-2-85 3.5 0 2 23
RP-2-86 3.5 0 1 7
RP-2-87 3.5 0 1 20
RP-2-88 3.5 0 1 24
Cash Reserve RP (note b) 0 0 1
IC-Flexible Savings RP (note d) 0 687 5,549
RP-Preferred Investors (note d) 0 1 146
Cash Reserve RP-3 mo. (note e) 0 3 964
IC-Flexible Savings RP Emp (note d) 0 22 318
IC-Future Value (note f) 20,525 3,469 0
IC-Future Value Emp (note f) 927 40 0
RP-Stock Market (note g) 0 42 421
RP-Market Strategy (note g) 0 0 713
D-1 (note a) 0 93 1,290
------------ ------------ ------------
Total 21,452 4,378 9,810
------------ ------------ ------------
Accrued for additional credits to be allowed
at next anniversaries:
RP-Stock Market 0 213 7,711
RP-Market Strategy 0 28 562
------------ ------------ ------------
Total single payment 165,033 1,364,038 148,293
------------ ------------ ------------
Paid-up certificates:
Series 15 and 20 3.25 10 0 0
" 15A and 22A 3.5 414 351 472
" I-76 3.5 0 333 9
------------ ------------ ------------
Total 424 684 481
------------ ------------ ------------
PAGE 28
Balance at close of period
-----------------------------------------
Number
Yield of
to maturity accounts Amount
on an with of Amount
annual security maturity of
payment basis holders value reserves
------------- ----------- ---------- -----------
Additional Interest on R-Series Single
Payment Reserves:
R-76 3.5 Not Not 1
R-77 3.5 Applicable Applicable 3
R-78 3.5 10
R-79 3.5 13
R-80 3.5 13
R-81 3.5 5
R-82A 3.5 24
RP-Q (note a) 0
R-II 3.5 13
RP-2-84 3.5 38
RP-2-85 3.5 12
RP-2-86 3.5 2
RP-2-87 3.5 9
RP-2-88 3.5 8
Cash Reserve RP (note b) 0
IC-Flexible Savings RP (note d) 262
RP-Preferred Investors (note d) 16
Cash Reserve RP-3 mo. (note e) 36
IC-Flexible Savings RP Emp (note d) 12
IC-Future Value (note f) 31,007
IC-Future Value Emp (note f) 1,057
RP-Stock Market (note g) 292
RP-Market Strategy (note g) 59
D-1 (note a) 0
-------
Total 32,892
-------
Accrued for additional credits to be allowed
at next anniversaries:
RP-Stock Market 7,477
RP-Market Strategy 2,519
-------
Total single payment 3,154,460
-------
Paid-up certificates:
Series 15 and 20 3.25 9 101 91
" 15A and 22A 3.5 298 5,992 5,207
" I-76 3.5 569 2,910 2,053
------------ ------------ ------------
Total 876 9,003 7,351
------------ ------------ ------------
PAGE 29
Balance at beginning of period
-----------------------------------------
Number
Yield of
to maturity accounts Amount
on an with of Amount
annual security maturity of
payment basis holders value reserves
------------- ----------- ---------- -----------
Additional credits and accrued interest thereon:
Series 15 and 20 2.5 Not Not 3
" 15A and 22A 3 Applicable Applicable 151
" I-76 3.5 172
Total 326
Accrued for additional credits to be allowed
at next anniversaries 34
------------ ------------ ------------
Total paid-up 981 9,548 8,061
------------ ------------ ------------
Optional settlement certificates:
Series 1, IST&G 3 12 5
Other series and conversions from Single
Payment certificates 2.5-3-3-3.5 7,454 94,579
Series R-76 thru R-82A 3 32 131
Series R-II & RP-2-84 thru 88 3.5 19 388
Reserve Plus Single-Payment (note a) 124 1,219
Reserve Plus Flex-Pay & IC-Q-Inst (note a) 22 97
Series R-Installment (note a) 47 256
Series R-Single-Payment (note a) 31 38
Add'l credits and accrued int.thereon 2.5-3 Not Not 10,858
Add'l credits and accrued int.thereon-IST&G 2.5-3 Applicable Applicable 0
Accrued for additional credits to be
allowed at next anniversaries 801
Accrued for additional credits to be allowed
at next anniversaries-R-76 thru R-82A & R-II 3
Accrued for additional credits to be allowed
at next anniversaries-IST&G 0
------------ ------------ ------------
Total optional settlement 7,741 108,375
------------ ------------ ------------
Not
Due to unlocated certificate holders Applicable 357
---------
Total certificate reserves 3,404,883
---------
PAGE 30
Additions
-----------------------------------------
Yield Charged
to maturity Charged Reserve to other
on an to profit payments by accounts
annual and loss certificate (per
payment basis or income holders part 2)
------------- ----------- ---------- -----------
Additional credits and accrued interest thereon:
Series 15 and 20 2.5 0 0 1
" 15A and 22A 3 4 0 37
" I-76 3.5 6 0 19
------------ ------------ ------------
Total 10 0 57
------------ ------------ ------------
Accrued for additional credits to be allowed
at next anniversaries 36 0 0
------------ ------------ ------------
Total paid-up 306 0 1,036
------------ ------------ ------------
Optional settlement certificates:
Series 1, IST&G 3 0 0 0
Other series and conversions from Single
Payment certificates 2.5-3-3-3.5 2,714 0 2,198
Series R-76 thru R-82A 3 2 0 1
Series R-II & RP-2-84 thru 88 3.5 12 0 4
Reserve Plus Single-Payment (note a) 42 0 39
Reserve Plus Flex-Pay & IC-Q-Inst (note a) 1 0 12
Series R-Installment (note a) 8 0 0
Series R-Single-Payment (note a) 1 0 0
Add'l credits and accrued int. thereon 2.5-3 290 0 1,578
Add'l credits and accrued int. thereon-IST&G 2.5-3 0 0 0
Accrued for additional credits to be allowed
at next anniversaries 1,196 0 0
Accrued for additional credits to be allowed
at next anniversaries-R-76 thru R-82A & R-II 4 0 0
Accrued for additional credits to be allowed
at next anniversaries-IST&G 0 0 0
------------ ------------ ------------
Total optional settlement 4,270 0 3,832
------------ ------------ ------------
Not
Due to unlocated certificate holders 0 Applicable 61
------------ ------------ ------------
Total certificate reserves 202,831 1,596,079 160,705
------------ ------------ ------------
Provision for certificate reserves and additional
credits, per Statement of Operations 139,447
Provision for reconversion applied against reserve recoveries from
terminations prior to maturity in Statement of Operations 0
Income (loss) from purchased and written call options included
in provision for certificate reserves in Statement of Operations 63,384
------------
202,831
============
PAGE 31
Deductions
-----------------------------------------
Yield Credited
to maturity Cash to other
on an surrenders accounts
annual prior to (per
payment basis Maturities maturity part 2)
------------- ----------- ---------- -----------
Additional credits and accrued interest thereon:
Series 15 and 20 2.5 0 0 0
" 15A and 22A 3 33 7 11
" I-76 3.5 0 15 0
------------ ------------ ------------
Total 33 22 11
------------ ------------ ------------
Accrued for additional credits to be allowed
at next anniversaries 0 0 57
------------ ------------ ------------
Total paid-up 457 706 549
------------ ------------ ------------
Optional settlement certificates:
Series 1, IST&G 3 1 0 0
Other series and conversions from Single
Payment certificates 2.5-3-3-3.5 5,496 7,449 0
Series R-76 thru R-82A 3 28 30 0
Series R-II & RP-2-84 thru 88 3.5 65 43 0
Reserve Plus Single-Payment (note a) 48 203 0
Reserve Plus Flex-Pay & IC-Q-Inst (note a) 18 18 0
Series R-Installment (note a) 44 11 0
Series R-Single-Payment (note a) 14 2 0
Add'l credits and accrued int. thereon 2.5-3 988 841 390
Add'l credits and accrued int. 2.5-3 0 0 0
thereon-IST&G
Accrued for additional credits to be allowed
at next anniversaries 11 0 1,583
Accrued for additional credits to be allowed
at next anniversaries-R-76 thru R-82A & R-II 1 0 5
Accrued for additional credits to be allowed
at next anniversaries-IST&G 0 0 0
------------ ------------ ------------
Total optional settlement 6,714 8,597 1,978
------------ ------------ ------------
Not
Due to unlocated certificate holders Applicable 1 127
------------ ------------ ------------
Total certificate reserves 177,410 1,489,604 160,825
------------ ------------ ------------
PAGE 32
Balance at close of period
-----------------------------------------
Number
Yield of
to maturity accounts Amount
on an with of Amount
annual security maturity of
payment basis holders value reserves
------------- ----------- ---------- -----------
Additional credits and accrued interest thereon:
Series 15 and 20 2.5 Not Not 4
" 15A and 22A 3 Applicable Applicable 141
" I-76 3.5 182
---------
Total 327
---------
Accrued for additional credits to be allowed
at next anniversaries 13
------------ ------------ ------------
Total paid-up 876 9,003 7,691
------------ ------------ ------------
Optional settlement certificates:
Series 1, IST&G 3 12 4
Other series and conversions from Single
Payment certificates 2.5-3-3-3.5 6,574 86,546
Series R-76 thru R-82A 3 19 76
Series R-II & RP-2-84 thru 88 3.5 13 296
Reserve Plus Single-Payment (note a) 102 1,049
Reserve Plus Flex-Pay & IC-Q-Inst (note a) 19 74
Series R-Installment (note a) 38 209
Series R-Single-Payment (note a) 22 23
Add'l credits and accrued int. thereon 2.5-3 Not Not 10,507
Add'l credits and accrued int. 2.5-3 Applicable Applicable 0
thereon-IST&G
Accrued for additional credits to be allowed
at next anniversaries 403
Accrued for additional credits to be allowed
at next anniversaries-R-76 thru R-82A & R-II 1
Accrued for additional credits to be allowed
at next anniversaries-IST&G 0
------------ ------------ ------------
Total optional settlement 6,799 99,188
------------ ------------ ------------
Not
Due to unlocated certificate holders Applicable 290
---------
Total certificate reserves 3,536,659
---------
PAGE 33
Notes:
(a) On these series of certificates, there is no minimum rate of accrual of
interest. Interest is declared for a quarter or quarters by IDSC and
credited to the reserves maintained at the end of each calendar quarter.
(b) On these series of certificates, there is no minimum rate of accrual of
interest. Interest is declared for a quarter or quarters by IDSC and
credited to the reserves maintained or paid in cash at the end of each
calendar month.
(c) On these series of certificates, there is no minimum rate of accrual of
interest. Interest is declared by IDSC for the first four certificate
quarters, then annually thereafter, and credited to the reserves
maintained at the end of each certificate year.
(d) On this series of certificates, there is no minimum rate of accrual of
interest. Interest is declared for the term selected and credited to the
reserves maintained or paid in cash at the end of each certificate month.
(e) On this series of certificates, there is no minimum rate of accrual of
interest. Interest is declared by IDSC for a three-month term and credited
to the reserves maintained or paid in cash at the end of each certificate
month.
(f) On this series of certificates, there is no minimum rate of accrual of
interest. Interest is declared by IDSC for a four, five, six, seven, eight,
nine or ten year maturity and credited to the reserves maintained at
maturity.
(g) On this series of certificates, the certificate holder may elect to receive
minimum interest only or minimum interest plus participation interest.
Minimum interest is declared by IDSC for a twelve-month term and is
credited to the the reserves maintained at the end of each certificate
term. Participation interest is determined at the end of each certificate
term by multiplying the market participation rate in effect at the
beginning of the certificate term for each certificate times any total
percentage appreciation in a broad stock market indicator subject to
specified maximums. Participation interest is credited to the reserves
maintained at the end of each certificate term.
PAGE 34
Part 2 - Description of Additions to Reserves Charged to Other
Accounts and Deductions from Reserves Credited to Other Accounts
Year ended December 31, 1999
($ in thousands)
Additions to reserves charged to other accounts
------------------------------------------------------------------
Transfers of
maturities to
Reconversions extended
of paid-up maturities-
certificate charged to
charged Charged reserves to
to paid-up to mature, addi-
reserves and advance tional credits/
reserve for payments interest and
reconversions reserve advance payments Total
---------------- ------------ ----------------- ---------------
Reserves to mature installment certificates:
Series 15, including extended
maturities 0 0 0 0
Series 20, including extended
maturities 0 1 0 1
Series 15A, including extended
maturities 0 1 0 1
Series 22A, including extended
maturities 58 138 272 468
Series I-76 7 15 0 22
Series Reserve Plus Flexible Payment 0 0 26 26
Series IC-Q-Installment 0 0 9 9
Series IC-Q-Ins 0 0 435 435
Series IC-Q-Ins Emp 0 0 4 4
Series IC-I 0 0 6,575 6,575
Series IC-I-Emp 0 0 49 49
Series Inst 0 0 257 257
Series Inst-Emp 0 0 1 1
Series RP-Q-Installment 0 0 35 35
Series RP-Q-Flexible Payment 0 0 2 2
Series RP-Q-Ins 0 0 14 14
Series RP-Q-Ins Emp 0 0 0 0
Series RP-I 0 0 73 73
Series RP-I Emp 0 0 2 2
---------------- ------------ ----------------- ---------------
Total 65 155 7,754 7,974
---------------- ------------ ----------------- ---------------
PAGE 35
Part 2 - Description of Additions to Reserves Charged to Other
Accounts and Deductions from Reserves Credited to Other Accounts
Year ended December 31, 1999
($ in thousands)
Deductions from reserves credited to other accounts
------------------------------------------------------------------
Conversions
to optional Maturities
settlement transferred
Conversions certificates- to extended
to paid-up credited maturities-
certificates- to optional credited to
credited settlement reserves to
to paid-up reserves mature-
and
surrender surrender extended
income income maturities Total
---------------- ------------ ----------------- ---------------
Reserves to mature installment certificates:
Series 15, including extended
maturities 0 0 0 0
Series 20, including extended
maturities 0 11 0 11
Series 15A, including extended
maturities 10 0 0 10
Series 22A, including extended
maturities 650 476 272 1,398
Series I-76 151 0 0 151
Series Reserve Plus Flexible Payment 0 0 0 0
Series IC-Q-Installment 0 0 0 0
Series IC-Q-Ins 0 12 0 12
Series IC-Q-Ins Emp 0 0 0 0
Series IC-I 0 0 0 0
Series IC-I-Emp 0 0 0 0
Series Inst 0 0 0 0
Series Inst-Emp 0 0 0 0
Series RP-Q-Installment 0 0 0 0
Series RP-Q-Flexible Payment 0 0 0 0
Series RP-Q-Ins 0 0 0 0
Series RP-Q-Ins Emp 0 0 0 0
Series RP-I 0 0 0 0
Series RP-I Emp 0 0 0 0
---------------- ------------ ----------------- ---------------
Total 811 499 272 1,582
---------------- ------------ ----------------- ---------------
PAGE 36
Part 2 - Description of Additions to Reserves Charged to Other
Accounts and Deductions from Reserves Credited to Other Accounts
Year ended December 31, 1999
($ in thousands)
Additions to reserves charged to other accounts
------------------------------------------------------------------
Additions Additions to
to advance reserves to
Reconversions payments- mature-extended
of paid-up charged to maturities
Payments made in advance certificates- default charged to
of current certificate charged to interest reserves to
year requirements and paid-up on late mature from
accrued interest thereon: reserves payments maturity Total
---------------- ------------ ----------------- ---------------
Series 15, including extended
maturities 0 0 0 0
Series 20, including extended
maturities 0 0 0 0
Series 15A, including extended
maturities 0 0 0 0
Series 22A, including extended
maturities 0 0 26 26
Series I-76 0 1 0 1
Series Reserve Plus Flexible Payment 0 0 0 0
Series IC-Q Installment 0 0 0 0
Series IC-Q Ins 0 0 0 0
Series IC-Q Ins Emp 0 0 0 0
Series IC-I 0 0 0 0
Series IC-I Emp 0 0 0 0
Series RP-Q Installment 0 0 0 0
Series RP-Q Flexible Payment 0 0 0 0
Series RP-Q Ins 0 0 0 0
Series RP-Q Ins Emp 0 0 0 0
Series RP-I 0 0 0 0
Series RP-I Emp 0 0 0 0
---------------- ------------ ----------------- ---------------
Total 0 1 26 27
---------------- ------------ ----------------- ---------------
PAGE 37
Part 2 - Description of Additions to Reserves Charged to Other
Accounts and Deductions from Reserves Credited to Other Accounts
Year ended December 31, 1999
($ in thousands)
Deductions from reserves credited to other accounts
-----------------------------------------------------------------------
Maturities
Conversions transferred
Applied to to optional to extended
certificates- settlement maturities- Conversions
credited to certificates- credited to to paid-up
reserves to credited reserves certificates-
mature, to optional to mature- credited to
loading settlement extended paid-up
and insurance reserves maturities reserves Total
---------------- ------------ ----------------- ------------- -----
Series 15, including extended
maturities 0 0 0 0 0
Series 20, including extended
maturities 1 3 0 0 4
Series 15A, including extended
maturities 0 0 0 0 0
Series 22A, including extended
maturities 138 25 25 1 189
Series I-76 15 0 0 0 15
Series Reserve Plus Flexible Payment 0 0 0 0 0
Series IC-Q Installment 0 0 0 0 0
Series IC-Q Ins 0 0 0 0 0
Series IC-Q Ins Emp 0 0 0 0 0
Series IC-I 0 0 0 0 0
Series IC-I Emp 0 0 0 0 0
Series RP-Q Installment 0 0 0 0 0
Series RP-Q Flexible Payment 0 0 0 0 0
Series RP-Q Ins 0 0 0 0 0
Series RP-Q Ins Emp 0 0 0 0 0
Series RP-I 0 0 0 0 0
Series RP-I Emp 0 0 0 0 0
---------------- ------------ ----------------- ------------- -----
Total 154 28 25 1 208
---------------- ------------ ----------------- ------------- -----
PAGE 38
Certificate Reserves
($ in thousands)
Part 2 - Descriptions of Additions to Reserves Charged to Other
Accounts and Deductions from Reserves Credited to Other Accounts
Additional credits on installment certificates and accrued interest thereon:
Other additions represent:
Transfers from accruals for additional credits to be allowed at next $ 243
anniversaries
Reconversions of paid-up certificates-charged to paid-up reserves 12
Transfers from maturities to extended maturities 52
---------
$ 307
=========
Other deductions represent:
Transfers to reserves on a quarterly basis for Reserve Plus Flexible-
Payment, IC-Q-Installment and R-Flexible-Payment $ 7,489
Conversions to optional settlement certificates-credited to optional
settlement reserves 135
Conversions to paid-up certificates-credited to paid-up reserves 165
Transfers to extended maturities at maturity 53
---------
$ 7,842
=========
Accrual for additional credits to be allowed on installment certificates at next
anniversaries:
Other deductions represent:
Transfers to reserves for additional credits on installment certificates $ 242
=========
Reserve for death and disability refund options: Other deductions represent:
Payments, in excess of installment reserves, made to certificate holders
who exercised the death and disability refund options. $ 0
=========
Reserve for reconversions of paid-up certificates:
The amount shown as charged to profit and loss has been deducted from
reserve recoveries in the accompanying Statement of Operations $ 0
=========
Other deductions represent:
Amounts credited to installment certificate reserves to mature, on
reconversions of paid-up certificates. $ 0
=========
Paid-up certificates:
Other additions represent:
Conversions from installment certificates (charged to installment reserves
less surrender charges) $ 979
Transfers from accrual for additional credits to be allowed at next
anniversaries 57
---------
$ 1,036
=========
Other deductions represent:
Transfers credited to installment reserves on reconversions to installment
certificates $ 78
Transfers for accrual for additional credits and accrued interest thereon 57
Transfers to settlement options 414
---------
$ 549
=========
PAGE 39
Certificate Reserves
($ in thousands)
Part 2 - Descriptions of Additions to Reserves Charged to Other
Accounts and Deductions from Reserves Credited to Other Accounts
Default interest on installment certificates:
Other additions represent:
Reconversions of paid-up certificates charged to paid-up reserves $ 0
=========
Other deductions represent:
Conversions to paid-up certificates - credited to paid-up reserves $ 3
Transfers to advance payments as late payments are credited to
certificates 1
---------
$ 4
=========
Optional settlement certificates:
Other additions represent:
Transfers from installment certificate reserves (less surrender charges),
single-payment and Series D certificate reserves upon election of
optional settlement privileges $ 1,840
Transfers from paid-up certificate reserves 414
Transfers from accruals for additional credits to be allowed at next
anniversaries 1,578
---------
$ 3,832
=========
Other deductions represent:
Transfers to reserve for additional credits and accrued interest thereon $ 1,583
Transfers to optional settlement reserves 395
---------
$ 1,978
=========
Single-Payment certificates:
Other additions represent:
Transfers from accruals for additional credits to be allowed at next
anniversaries $ 391
Transfers from accruals on a quarterly basis on:
Reserve Plus Single-Payment 227
Cash Reserve Single-Payment 6
Flexible Savings 23,986
Flexible Savings-Emp 773
Preferred Investors 4,679
Investors 38,432
Special Deposits 8,335
Cash Reserve 99
Cash Reserve-3mo 6,369
Future Value 0
Stock Market 39,726
Market Strategy 5,158
AEBI Stock Market 532
R82-B 64
Cash Reserve-RP 1
Cash Reserve-RP-3mo 964
Flexible Saving-RP 5,549
Flexible Savings-RP-Emp 318
Preferred Investors-RP 146
Stock Market-RP 8,132
Market Strategy-RP 1,275
Transfers from accruals at anniversaries maintained in a separate
reserve account. 2,305
---------
$ 147,467
=========
PAGE 40
Certificate Reserves
($ in thousands)
Part 2 - Descriptions of Additions to Reserves Charged to Other
Accounts and Deductions from Reserves Credited to Other Accounts
Single-Payment certificates continued:
Other deductions represent:
Transfers to optional settlement reserves:
Single-Payment $ 7,214
R Single-Payment 0
Transfers to reserves for additional credits and accrued interest thereon 2,305
Transfers to a separate reserve account from the accrual account 390
Transfers to reserves on a quarterly basis:
Reserve Plus Single-Payment 227
Cash Reserve Single-Payment 6
Flexible Savings 23,986
Flexible Savings-Emp 773
Preferred Investors 4,679
Investors 38,432
Special Deposits 8,335
Cash Reserve 99
Cash Reserve-3mo 6,369
Stock Market 39,726
AEBI Stock Market 532
R82-B 64
Cash Reserve-RP 1
Cash Reserve-RP-3mo 964
Flexible Saving-RP 5,549
Flexible Savings-RP-Emp 318
Preferred Investors-RP 146
Stock Market-RP 8,132
Transfers to Federal tax withholding 46
-----------
$ 148,293
===========
Due to unlocated certificate holders:
Other additions represent:
Amounts equivalent to payments due certificate holders who could
not be located $ 61
===========
Other deductions represent:
Payments to certificate holders credited to cash $ 127
===========
PAGE 41
Part 3 - Information Regarding Installment Certificates
Classified by Age Groupings
($ in thousands)
Year ended December 31, 1999
Deductions from Reserves
------------------------
Number of Cash
Accounts with Amount of Amount of Surrenders
Months Certificate Holders Maturity Value Reserves Prior to
Certificate Series Paid December 31, December 31, December 31, Maturity Other
- ------------------ ------- ------------------- --------------- -------------- ---------- -----
1998 1999 1998 1999 1998 1999
------- --------- ------ ------ ------ -----
20, including 169-180 0 0 0 0 0 0 0 0
extended maturities
181-192 0 0 0 0 0 0 0 0
193-204 0 0 0 0 0 0 0 0
205-216 0 0 0 0 0 0 0 0
217-228 0 0 0 0 0 0 0 0
229-240 (a) 0 0 0 0 0 0 0 0
241-252 1 0 13 0 8 0 0 0
253-264 0 1 0 14 0 8 0 0
265-276 0 0 0 0 0 0 0 0
277-288 0 0 0 0 0 0 0 0
289-300 0 0 0 0 0 0 0 0
301-312 0 0 0 0 0 0 0 0
313-324 0 0 0 0 0 0 0 0
325-336 0 0 0 0 0 0 0 0
337-348 2 0 25 0 26 0 0 0
349-360 (a) 2 1 21 14 21 14 9 11
------ ------ ------- ------- ------- ------- ------ -----
Total 5 2 59 28 55 22 9 11
------ ------ ------- ------- ------- ------- ------ -----
15A, including 97-108 0 0 0 0 0 0 0 0
extended maturities
109-120 0 0 0 0 0 0 0 0
121-132 0 0 0 0 10 0 0 10
133-144 1 0 0 0 0 0 0 0
145-156 0 0 0 0 0 0 0 0
157-168 0 0 0 0 0 0 0 0
169-180 (a) 0 0 0 0 0 0 0 0
181-192 0 0 0 0 0 0 0 0
193-204 0 0 0 0 0 0 0 0
205-216 0 0 0 0 0 0 0 0
217-228 1 0 11 0 6 0 0 0
229-240 1 1 17 7 10 6 0 0
241-252 0 1 0 10 0 11 0 0
------ ------ ------- ------- ------- ------- ------ -----
Total 3 2 28 17 26 17 0 10
------ ------ ------- ------- ------- ------- ------ -----
PAGE 42
Part 3 - Information Regarding Installment Certificates
Classified by Age Groupings
($ in thousands)
Year ended December 31, 1999
Deductions from Reserves
------------------------
Number of Cash
Accounts with Amount of Amount of Surrenders
Months Certificate Holders Maturity Value Reserves Prior to
Certificate Series Paid December 31, December 31, December 31, Maturity Other
- ------------------ ------- ------------------- --------------- -------------- ---------- -----
1998 1999 1998 1999 1998 1999
------- --------- ------ ------ ------ -----
22A, including 61-72 0 0 0 0 0 0 0 0
extended maturities
73-84 1 1 19 19 4 4 0 0
85-96 0 0 0 0 0 0 0 0
97-108 1 0 13 0 4 0 0 0
109-120 0 1 0 13 0 5 0 0
121-132 1 0 15 0 6 0 0 0
133-144 3 3 75 53 31 22 0 0
145-156 1 2 19 56 8 27 0 8
157-168 4 0 94 0 50 0 10 0
169-180 0 3 0 75 0 44 0 0
181-192 1 1 19 19 11 12 0 0
193-204 3 0 103 0 71 0 0 58
205-216 5 2 148 56 109 41 6 27
217-228 11 4 304 113 240 90 3 38
229-240 13 8 263 257 223 219 42 24
241-252 14 9 253 171 232 156 0 0
253-264 (a) 16 16 594 353 581 346 22 327
265-276 21 2 685 390 415 235 0 93
277-288 104 18 3,008 581 1,907 373 85 120
289-300 101 90 2,533 2,442 1,706 1,642 202 102
301-312 115 94 2,807 2,347 2,015 1,674 72 64
313-324 96 106 2,049 2,605 1,546 1,978 22 95
325-336 95 85 1,773 1,848 1,412 1,472 104 34
337-348 76 85 1,494 1,627 1,253 1,364 41 38
349-360 69 71 1,000 1,400 884 1,237 23 23
361-372 62 62 932 864 868 804 49 117
373-384 28 55 416 831 408 814 38 214
------ ------ ------- ------- ------- ------- ------ -----
Total 841 718 18,616 16,120 13,984 12,559 719 1,382
------ ------ ------- ------- ------- ------- ------ -----
PAGE 43
Part 3 - Information Regarding Installment Certificates
Classified by Age Groupings
($ in thousands)
Year ended December 31, 1999
Deductions from Reserves
------------------------
Number of Cash
Accounts with Amount of Amount of Surrenders
Months Certificate Holders Maturity Value Reserves Prior to
Certificate Series Paid December 31, December 31, December 31, Maturity Other
- ------------------ ------- ------------------- --------------- -------------- ---------- -----
1998 1999 1998 1999 1998 1999
------- --------- ------ ------ ------ -----
I-76 61-72 1 0 62 0 7 0 0 0
73-84 0 0 0 0 0 0 7 0
85-96 0 0 0 0 0 0 0 0
97-108 0 0 0 0 0 0 0 0
109-120 1 0 12 0 3 0 0 3
121-132 0 0 0 0 0 0 0 0
133-144 1 0 37 0 10 0 0 0
145-156 1 1 31 37 9 11 0 0
157-168 3 0 52 0 17 0 14 0
169-180 1 2 25 40 9 14 0 0
181-192 2 1 43 25 16 9 0 11
193-204 23 1 624 12 267 5 18 0
205-216 72 18 1,790 501 812 232 115 81
217-228 88 58 2,233 1,381 1,092 675 98 0
229-240 97 81 2,153 2,155 1,129 1,136 130 10
241-252 117 79 2,328 1,704 1,308 960 191 31
253-264 101 99 2,334 1,901 1,414 1,144 184 15
265-276 60 85 1,350 2,024 861 1,309 254 0
277-288 0 49 0 1,067 0 725 27 0
------ ------ ------- ------- ------- ------- ------ -----
Total 568 474 13,074 10,847 6,954 6,220 1,038 151
------ ------ ------- ------- ------- ------- ------ -----
Reserve Plus 169-180 41 0 429 0 187 0 0 0
Flexible Payment
181-192 110 31 932 294 544 141 60 0
193-204 85 79 806 687 396 339 284 0
205-216 0 71 0 685 0 298 169 0
------ ------ ------- ------- ------- ------- ------ -----
Total 236 181 2,167 1,666 1,127 778 513 0
------ ------ ------- ------- ------- ------- ------ -----
IC-Q-Installment 133-144 12 0 120 0 67 0 0 0
145-156 42 8 534 84 177 27 45 0
157-168 34 34 346 454 164 140 61 0
181-192 0 27 0 232 0 134 34 0
------ ------ ------- ------- ------- ------- ------ -----
Total 88 69 1,000 770 408 301 140 0
------ ------ ------- ------- ------- ------- ------ -----
PAGE 44
Part 3 - Information Regarding Installment Certificates
Classified by Age Groupings
($ in thousands)
Year ended December 31, 1999
Deductions from Reserves
------------------------
Number of Cash
Accounts with Amount of Amount of Surrenders
Months Certificate Holders Maturity Value Reserves Prior to
Certificate Series Paid December 31, December 31, December 31, Maturity Other
- ------------------ ------- ------------------- --------------- -------------- ---------- -----
1998 1999 1998 1999 1998 1999
------- --------- ------ ------ ------ -----
IC-Q-Ins 61-72 1 0 12 0 7 0 0 0
73-84 751 1 9,366 12 4,132 9 0 0
85-96 1,487 495 17,909 5,989 7,794 2,698 1,946 0
97-108 1,104 1,060 12,973 12,651 5,870 5,507 3,259 0
109-120 1,003 772 11,317 8,516 5,189 4,000 2,219 1
121-132 98 54 1,240 730 588 305 1,188 0
133-144 40 75 408 916 130 424 181 0
145-156 14 32 119 330 58 117 37 0
157-168 0 13 0 113 0 40 31 0
------ ------ ------- ------- ------- ------- ------ -----
Total 4,498 2,502 53,344 29,257 23,768 13,100 8,861 1
------ ------ ------- ------- ------- ------- ------ -----
IC-Q-Ins Emp 73-84 4 0 30 0 19 0 0 0
85-96 7 4 78 30 48 20 3 0
97-108 6 5 57 54 44 42 13 0
109-120 5 4 45 45 14 33 13 0
121-132 2 0 35 0 7 0 13 0
133-144 0 1 0 17 0 10 0 0
------ ------ ------- ------- ------- ------- ------ -----
Total 24 14 245 146 132 105 42 0
------ ------ ------- ------- ------- ------- ------ -----
IC-I 1-12 5 9 99 88 9 16 1 0
13-24 3,898 4 71,494 92 11,472 19 0 0
25-36 9,013 3,235 159,367 57,339 35,951 13,678 2,014 0
37-48 10,741 7,423 185,076 127,483 57,299 38,241 6,520 0
49-60 9,633 8,936 172,242 151,686 63,221 58,425 8,825 0
61-72 7,823 7,878 131,773 139,335 59,111 59,239 10,319 0
73-84 2,945 4,166 45,645 65,883 21,278 28,834 31,804 0
85-96 0 1,825 0 27,198 0 12,748 8,893 0
------ ------ ------- ------- ------- ------- ------ -----
Total 44,058 33,476 765,696 569,104 248,341 211,200 68,376 0
------ ------ ------- ------- ------- ------- ------ -----
IC-I-Emp 13-24 26 0 295 0 60 0 0 0
25-36 55 17 997 177 248 61 18 0
37-48 64 45 709 806 278 277 27 0
49-60 58 49 802 529 397 244 55 0
61-72 44 52 675 688 359 377 59 0
73-84 19 17 285 246 188 105 227 0
85-96 0 10 0 213 0 175 39 0
------ ------ ------- ------- ------- ------- ------ -----
Total 266 190 3,763 2,659 1,530 1,239 425 0
------ ------ ------- ------- ------- ------- ------ -----
PAGE 45
Part 3 - Information Regarding Installment Certificates
Classified by Age Groupings
($ in thousands)
Year ended December 31, 1999
Deductions from Reserves
------------------------
Number of Cash
Accounts with Amount of Amount of Surrenders
Months Certificate Holders Maturity Value Reserves Prior to
Certificate Series Paid December 31, December 31, December 31, Maturity Other
- ------------------ ------- ------------------- --------------- -------------- ---------- -----
1998 1999 1998 1999 1998 1999
------- --------- ------ ------ ------ -----
Inst 1-12 3,774 2,742 66,052 0 3,012 2,241 143 0
13-24 2,316 2,893 0 0 4,177 5,767 647 0
25-36 0 1,859 0 0 0 5,413 946 0
------ ------ ------- ------- ------- ------- ------ -----
6,090 7,494 66,052 0 7,189 13,421 1,736 0
------ ------ ------- ------- ------- ------- ------ -----
Inst-Emp 1-12 20 17 255 0 21 7 0 0
13-24 7 13 0 0 10 31 4 0
25-36 0 5 0 0 0 11 3 0
------ ------ ------- ------- ------- ------- ------ -----
27 35 255 0 31 49 7 0
------ ------ ------- ------- ------- ------- ------ -----
R Flexible Payment 157-168 39 0 593 0 365 0 0 0
169-180 15 36 253 564 105 372 1 0
181-192 51 9 735 152 435 39 61 0
193-204 52 36 604 501 517 283 150 0
205-216 0 37 0 404 0 427 91 0
------ ------ ------- ------- ------- ------- ------ -----
Total 157 118 2,185 1,621 1,422 1,121 303 0
------ ------ ------- ------- ------- ------- ------ -----
RP-Q-Installment 145-156 9 0 126 0 52 0 0 0
157-168 7 7 79 90 38 47 7 0
169-180 0 5 0 64 0 26 9 0
------ ------ ------- ------- ------- ------- ------ -----
Total 16 12 205 154 90 73 16 0
------ ------ ------- ------- ------- ------- ------ -----
RP-Q-Ins 73-84 13 0 131 0 95 0 0 0
85-96 29 9 613 94 184 80 21 0
97-108 39 15 1,068 241 250 90 104 0
109-120 35 28 829 566 290 220 0 0
121-132 0 2 0 18 0 5 38 0
133-144 2 0 18 0 5 0 0 0
145-156 0 1 0 12 0 6 1 0
------ ------ ------- ------- ------- ------- ------ -----
Total 118 55 2,659 931 824 401 164 0
------ ------ ------- ------- ------- ------- ------ -----
RP-Q-Ins Emp 73-84 1 0 18 0 10 0 0 0
85-96 1 0 6 0 5 0 9 0
97-108 0 1 0 6 0 7 0 0
------ ------ ------- ------- ------- ------- ------ -----
Total 2 1 24 6 15 7 9 0
------ ------ ------- ------- ------- ------- ------ -----
PAGE 46
Part 3 - Information Regarding Installment Certificates
Classified by Age Groupings
($ in thousands)
Year ended December 31, 1999
Deductions from Reserves
------------------------
Number of Cash
Accounts with Amount of Amount of Surrenders
Months Certificate Holders Maturity Value Reserves Prior to
Certificate Series Paid December 31, December 31, December 31, Maturity Other
- ------------------ ------- ------------------- --------------- -------------- ---------- -----
1998 1999 1998 1999 1998 1999
------- --------- ------ ------ ------ -----
RP-I 13-24 32 0 1,652 0 218 0 0 0
25-36 46 27 1,479 1,463 387 192 46 0
37-48 63 35 1,806 996 546 331 100 0
49-60 58 49 1,574 1,540 441 625 53 0
61-72 60 39 1,709 1,024 923 364 145 0
73-84 40 29 979 811 331 472 514 0
85-96 0 26 0 435 0 195 151 0
------ ------ ------- ------- ------- ------- ------ -----
Total 299 205 9,199 6,269 2,846 2,179 1,009 0
------ ------ ------- ------- ------- ------- ------ -----
Inst-R 1-12 34 30 4,021 0 42 89 0 0
13-24 9 24 767 0 11 24 0 0
25-36 0 5 0 0 0 0 0 0
------ ------ ------- ------- ------- ------- ------ -----
Total 43 59 4,788 0 53 113 0 0
------ ------ ------- ------- ------- ------- ------ -----
Inst-R-E 1-12 3 0 28 0 1 0 0 0
13-24 0 3 0 0 0 3 0 0
------ ------ ------- ------- ------- ------- ------ -----
Total 3 3 28 0 1 3 0 0
------ ------ ------- ------- ------- ------- ------ -----
Total All Series 57,342 45,610 943,387 639,595 308,795 262,908 83,367 1,555
====== ====== ======= ======= ======= ======= ====== =====
(a) Includes accounts on which all payments necessary to mature have been made,
but additional time must elapse before the certificate maturity year is
completed. Also includes accounts for which maturity election has been
made, but no further payments have been received.
PAGE 47
Part 4 - Amounts Periodically Credited to Certificate Holders' Accounts to
Accumulate the Maturity Amount of Installment Certificates.
Information as to (1) amounts periodically credited to each class of security
holders' accounts from installment payments and (2) such other amounts
periodically credited to accumulate the maturity amount of the certificate (on a
$1,000 face-amount certificate basis for the term of the certificate), is filed
in Part 4 of Schedule IX as part of Post-effective Amendment No. 9 to
Registration Statement No. 2-17681, Post-effective Amendment No. 1 to
Registration Statement No. 2-23772 and Post-effective Amendment No. 1 to
Registration Statement No. 2-258081 and is incorporated herein by reference.
IDS CERTIFICATE COMPANY SCHEDULE VII
Valuation and Qualifying Accounts
Years ended December 31, 1999, 1998 and 1997
($ thousands)
Year ended December 31, 1999
- ---------------------------------------------------------------------------------------------------------------------------
------------------------------
Additions
------------------------------
Reserves Balance Charged Balance
deducted from at to costs Deductions at
assets to beginning and from end
which they apply of period expenses Other reserves of period
- ------------------------------------------------------------------------ ---------------------------------------------
Allowance for losses:
Securities $0 $2,141 $0 $0 $2,141
Conventional first
mortgage loans 611 0 0 100 (a) 511
Year ended December 31, 1998
- ---------------------------------------------------------------------------------------------------------------------------
------------------------------
Additions
------------------------------
Reserves Balance Charged Balance
deducted from at to costs Deductions at
assets to beginning and from end
which they apply of period expenses Other reserves of period
- ------------------------------------------------------------------------ ---------------------------------------------
Allowance for losses:
Securities $605 $0 $0 $605 (b) $0
Conventional first
mortgage loans 611 0 0 0 611
Year ended December 31, 1997
- ---------------------------------------------------------------------------------------------------------------------------
------------------------------
Additions
------------------------------
Reserves Balance Charged Balance
deducted from at to costs Deductions at
assets to beginning and from end
which they apply of period expenses Other reserves of period
- ------------------------------------------------------------------------ ---------------------------------------------
Allowance for losses:
Securities $715 $0 $0 $110 (b) $605
Conventional first
mortgage loans 611 0 0 0 611
a) Applicable to adjustment of the adequacy of the reserve for mortgage loan losses.
b) Applicable to reversal on securities sold.