-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TITXRlBCc0poj7JXrFnO6OdlESyw4g5DghwTpO/NmJDccjwjJG7iEJcO+YnUJarv gnodb7tzmY3Xy5QS2lyK7w== 0000950137-07-013365.txt : 20070830 0000950137-07-013365.hdr.sgml : 20070830 20070830142031 ACCESSION NUMBER: 0000950137-07-013365 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20070630 FILED AS OF DATE: 20070830 DATE AS OF CHANGE: 20070830 EFFECTIVENESS DATE: 20070830 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RIVERSOURCE VARIABLE PORTFOLIO INVESTMENT SERIES, INC. CENTRAL INDEX KEY: 0000353968 IRS NUMBER: 411409539 STATE OF INCORPORATION: MN FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-03218 FILM NUMBER: 071090762 BUSINESS ADDRESS: STREET 1: 50606 AMERIPRISE FINANCIAL CENTER STREET 2: H27/5228 CITY: MINNEAPOLIS STATE: MN ZIP: 55474 BUSINESS PHONE: 6126714321 MAIL ADDRESS: STREET 1: 50606 AMERIPRISE FINANCIAL CENTER STREET 2: H27/5228 CITY: MINNEAPOLIS STATE: MN ZIP: 55474 FORMER COMPANY: FORMER CONFORMED NAME: AXP VARIABLE PORTFOLIO INVESTMENT SERIES INC DATE OF NAME CHANGE: 19991126 FORMER COMPANY: FORMER CONFORMED NAME: IDS LIFE INVESTMENT SERIES INC DATE OF NAME CHANGE: 19981102 FORMER COMPANY: FORMER CONFORMED NAME: IDS LIFE CAPITAL RESOURCE FUND INC DATE OF NAME CHANGE: 19920703 0000353968 S000003376 RiverSource Variable Portfolio Emerging Markets Fund C000009297 RiverSource VP Emerging Markets Fund 0000353968 S000003377 RiverSource Variable Portfolio Small Cap Advantage Fund C000009298 RiverSource VP Small Cap Advantage Fund 0000353968 S000003379 RiverSource Variable Portfolio Growth Fund C000009300 RiverSource VP Growth Fund 0000353968 S000003380 RiverSource Variable Portfolio International Opportunity Fund C000009301 RiverSource Variable Portfolio International Opportunity Fund 0000353968 S000003381 RiverSource Variable Portfolio Large Cap Equity Fund C000009302 RiverSource VP Large Cap Equity Fund 0000353968 S000003382 RiverSource Variable Portfolio Large Cap Value Fund C000009303 RiverSource VP Large Cap Value Fund 0000353968 S000003383 RiverSource Variable Portfolio Mid Cap Growth Fund C000009304 RiverSource VP Mid Cap Growth Fund 0000353968 S000003384 RiverSource Variable Portfolio Mid Cap Value Fund C000009305 RiverSource VP Mid Cap Value Fund 0000353968 S000003386 RiverSource Variable Portfolio S&P 500 Index Fund C000009307 RiverSource VP S&P 500 Index Fund N-CSRS 1 c18227nvcsrs.txt N-CSRS UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act File Number 811-3218 RIVERSOURCE VARIABLE PORTFOLIO INVESTMENT SERIES, INC. (Exact name of registrant as specified in charter) 50606 Ameriprise Financial Center, Minneapolis, Minnesota 55474 (Address of principal executive offices) (Zip code) Scott R. Plummer - 5228 Ameriprise Financial Center, Minneapolis, MN 55474 (Name and address of agent for service) Registrant's telephone number, including area code: (612) 671-1947 Date of fiscal year end: 12/31 Date of reporting period: 6/30 Semiannual Report (RIVERSOURCE INVESTMENTS LOGO) RIVERSOURCE(R) VARIABLE PORTFOLIO FUNDS SEMIANNUAL REPORT FOR THE PERIOD ENDED JUNE 30, 2007 References to "Fund" throughout this semiannual report refer to the following individual funds, singularly or collectively as the context requires: RiverSource Variable Portfolio - Balanced Fund RiverSource Variable Portfolio - Cash Management Fund RiverSource Variable Portfolio - Core Bond Fund RiverSource Variable Portfolio - Diversified Bond Fund RiverSource Variable Portfolio - Diversified Equity Income Fund RiverSource Variable Portfolio - Emerging Markets Fund RiverSource Variable Portfolio - Fundamental Value Fund RiverSource Variable Portfolio - Global Bond Fund RiverSource Variable Portfolio - Global Inflation Protected Securities Fund RiverSource Variable Portfolio - Growth Fund RiverSource Variable Portfolio - High Yield Bond Fund RiverSource Variable Portfolio - Income Opportunities Fund RiverSource Variable Portfolio - International Opportunity Fund RiverSource Variable Portfolio - Large Cap Equity Fund RiverSource Variable Portfolio - Large Cap Value Fund RiverSource Variable Portfolio - Mid Cap Growth Fund RiverSource Variable Portfolio - Mid Cap Value Fund RiverSource Variable Portfolio - S&P 500 Index Fund RiverSource Variable Portfolio - Select Value Fund RiverSource Variable Portfolio - Short Duration U.S. Government Fund RiverSource Variable Portfolio - Small Cap Advantage Fund RiverSource Variable Portfolio - Small Cap Value Fund Please remember that you may not buy (nor will you own) shares of the Fund directly. You invest by buying a variable annuity contract or life insurance policy and allocating your purchase payments to the variable subaccount or variable account (the subaccounts) that invests in the Fund. This semiannual report may contain information on funds not available under your variable annuity contract or life insurance policy. Please refer to your variable annuity contract or life insurance policy prospectus for information regarding the investment options available to you. The RiverSource(R) Variable Portfolio Funds provide several alternatives to consider for investment through your variable annuity contract or life insurance policy. TABLE OF CONTENTS 2007 SEMIANNUAL REPORT The purpose of this semiannual report is to tell investors how the Fund performed. RIVERSOURCE VP - BALANCED FUND Portfolio Management Q&A....................... 2 Top Ten Holdings............................... 4 RIVERSOURCE VP - CASH MANAGEMENT FUND Portfolio Management Q&A....................... 5 RIVERSOURCE VP - CORE BOND FUND Portfolio Management Q&A....................... 7 Top Ten Corporate Bond Holdings................ 8 RIVERSOURCE VP - DIVERSIFIED BOND FUND Portfolio Management Q&A....................... 9 Top Ten Corporate Bond Holdings................ 11 RIVERSOURCE VP - DIVERSIFIED EQUITY INCOME FUND Portfolio Management Q&A....................... 12 Top Ten Holdings............................... 13 RIVERSOURCE VP - EMERGING MARKETS FUND Portfolio Management Q&A....................... 14 Top Ten Holdings............................... 15 RIVERSOURCE VP - FUNDAMENTAL VALUE FUND Portfolio Management Q&A....................... 16 Top Ten Holdings............................... 17 RIVERSOURCE VP - GLOBAL BOND FUND Portfolio Management Q&A....................... 18 Top Ten Holdings............................... 20 RIVERSOURCE VP - GLOBAL INFLATION PROTECTED SECURITIES FUND Portfolio Management Q&A....................... 21 RIVERSOURCE VP - GROWTH FUND Portfolio Management Q&A....................... 23 Top Ten Holdings............................... 25 RIVERSOURCE VP - HIGH YIELD BOND FUND Portfolio Management Q&A....................... 26 Top Ten Corporate Bond Holdings................ 27 RIVERSOURCE VP - INCOME OPPORTUNITIES FUND Portfolio Management Q&A....................... 28 Top Ten Corporate Bond Holdings................ 30 RIVERSOURCE VP - INTERNATIONAL OPPORTUNITY FUND Portfolio Management Q&A....................... 31 Top Ten Holdings............................... 32 RIVERSOURCE VP - LARGE CAP EQUITY FUND Portfolio Management Q&A....................... 33 Top Ten Holdings............................... 35 RIVERSOURCE VP - LARGE CAP VALUE FUND Portfolio Management Q&A....................... 36 Top Ten Holdings............................... 38 RIVERSOURCE VP - MID CAP GROWTH FUND Portfolio Management Q&A....................... 39 Top Ten Holdings............................... 41 RIVERSOURCE VP - MID CAP VALUE FUND Portfolio Management Q&A....................... 42 Top Ten Holdings............................... 43 RIVERSOURCE VP - S&P 500 INDEX FUND Portfolio Management Q&A....................... 44 Top Ten Holdings............................... 46 RIVERSOURCE VP - SELECT VALUE FUND Portfolio Management Q&A....................... 47 Top Ten Holdings............................... 49 RIVERSOURCE VP - SHORT DURATION U.S. GOVERNMENT FUND Portfolio Management Q&A....................... 50 RIVERSOURCE VP - SMALL CAP ADVANTAGE FUND Portfolio Management Q&A....................... 52 Top Ten Holdings............................... 54 RIVERSOURCE VP - SMALL CAP VALUE FUND Portfolio Management Q&A....................... 55 Top Ten Holdings............................... 58 FUND EXPENSES EXAMPLES......................... 59 FINANCIAL STATEMENTS........................... 64 NOTES TO FINANCIAL STATEMENTS.................. 105 INVESTMENTS IN SECURITIES...................... 144 APPROVAL OF INVESTMENT MANAGEMENT SERVICES AGREEMENT 248 PROXY VOTING................................... 249
- -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 1 Any specific securities mentioned are for illustrative purposes only and are not a complete list of securities that have increased or decreased in value. The views expressed in this statement reflect those of the portfolio manager(s) only through the end of the period of the report as stated on the cover and do not necessarily represent the views of RiverSource Investments, LLC (RiverSource) or any subadviser(s) to the Fund or to any other person in the RiverSource or subadviser organization(s). Any such views are subject to change at any time based upon market or other conditions and RiverSource disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a RiverSource Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any RiverSource Fund. The performance information shown represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. The total returns shown do not reflect expenses that apply to the subaccount or the annuity or life insurance contract. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by contacting your financial institution. PORTFOLIO MANAGEMENT Q&A RiverSource Variable Portfolio (VP) - Balanced Fund PERFORMANCE COMPARISON For the six-month period ended June 30, 2007 (BAR CHART) RiverSource VP - Balanced Fund +4.30% Russell 1000(R) Value Index (unmanaged) +6.23% Lehman Brothers Aggregate Bond Index (unmanaged) +0.98% Blended Index (unmanaged) +4.15% Lipper Balanced Funds Index +5.73%
The indices do not reflect the effects of expenses (excluding Lipper). It is not possible to invest directly in an index. The Russell 1000(R) Value Index, an unmanaged index, measures the performance of those stocks in the Russell 1000 Index with lower price-to-book ratios and lower forecasted growth values. The index reflects reinvestment of all distributions and changes in market prices. The Lehman Brothers Aggregate Bond Index, an unmanaged index, is made up of a representative list of government, corporate, asset-backed and mortgage-backed securities. The index is frequently used as a general measure of bond market performance. The index reflects reinvestment of all distributions and changes in market prices. The Blended Index consists of 60% Russell 1000 Value Index and 40% Lehman Brothers Aggregate Bond Index. The Lipper Balanced Funds Index includes the 30 largest balanced funds tracked by Lipper Inc. The index's returns include net reinvested dividends. The Fund's performance is currently measured against this index for purposes of determining the performance incentive adjustment. There are risks associated with fixed income investments, including credit risk, interest rate risk, and prepayment and extension risk. In general, bond prices rise when interest rates fall and vice versa. This effect is usually more pronounced for longer-term securities. Below, the portfolio management team for RiverSource VP - Balanced Fund discusses the Fund's results and positioning for the six-month period ended June 30, 2007. Q: How did RiverSource VP - Balanced Fund perform for the semiannual period? A: RiverSource VP - Balanced Fund, which invests in a mix of stocks and bonds, advanced 4.30% for the six months ended June 30, 2007. The Russell 1000(R) Value Index (Russell Index) returned 6.23%, while the Lehman Brothers Aggregate Bond Index (Lehman Index) gained 0.98% over the same period. The Fund underperformed its peer group, represented by the Lipper Balanced Funds Index, which returned 5.73%. The Blended Index (made up of 60% Russell Index and 40% Lehman Index) returned 4.15% for the semiannual period. The Fund's portfolio was approximately two-thirds equities and one- third fixed income securities, an allocation that was relatively unchanged during the period. Q: What factors had a significant effect on equity performance? A: The stock market delivered strong gains for the first six months of the Fund's fiscal year. However, the market did not favor our key investment themes. Within the portfolio, we emphasized the larger stocks in our universe, while the market generally preferred mid- and small-cap stocks. We preferred higher quality stocks over lower quality stocks, but large blue chip stocks tended to lag the average stock during the six months. Investors have come to accept that there is more longevity to this economic cycle than previously thought, which worked against these themes. We also favored stocks traditionally considered to have growth characteristics, but which have been priced more like value stocks. This slight bias toward growth was modestly advantageous. The Fund's sector allocations had a favorable effect on return relative to the Russell Index, but this was offset by stock selection. Having a smaller financials position than - -------------------------------------------------------------------------------- 2 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Balanced Fund the Russell Index, a larger industrials position and a larger technology position were all advantageous. Smaller weightings in energy and materials than the Russell Index were disadvantageous. Stock selection in the consumer discretionary and consumer staples sectors hampered the Fund's performance. A number of individual detractors had exposure to consumer spending and the weakening housing industry. Countrywide Financial suffered from declining mortgage applications, price competition and rising concerns about subprime lending, a mortgage segment where Countrywide has only modest exposure. Hovnanian Enterprises appealed to us for its attractive valuation at the start of the period, but fundamentals failed to stabilize and homebuilding stocks were disappointing overall. Another detractor, Spectrum Brands, which makes consumer products such as batteries and fertilizer, faced discouraging fundamental trends, debt issues and a corporate restructuring designed to cut costs. Though we had significantly reduced the Fund's holdings of Spectrum Brands before the start of this fiscal year, its decline was large enough to impact six-month performance. Stock selection in the industrials and financials sectors contributed positively to performance. Within the industrials sector, Honeywell Intl and Caterpillar were key contributors. Within the financials sector, the Fund benefited from strong performance from brokerage firms. The Fund's de-emphasis of household products company Procter and Gamble, which declined slightly during the period, helped the Fund's performance relative to the Russell Index. The Russell Index's Procter and Gamble allocation is substantial. The Fund's holdings were significantly smaller because we don't consider it prudent to have such a large individual position and because we believe the stock's high valuation leaves little room for any disappointments from the company. Q: What factors significantly affected the Fund's fixed income segment? A: Although the economy's growth rate has slowed in a delayed response to the Federal Reserve's string of short-term interest rate increases, expectations for the U.S. economy remain healthy. Continued resilience in the economy, job market and consumer spending has finally caused bond market investors to give up expectations of a Fed interest rate cut later this year, and bond yields moved materially higher during the six-month period. The Fund's fixed income portfolio had less sensitivity to interest rate changes (i.e. shorter duration) than the Lehman Index, which proved advantageous as interest rates rose materially across the yield curve. Security selection among mortgage-backed securities, collateralized mortgage-backed securities, asset-backed securities, agency issues and corporate bonds all added to return. An allocation to high yield bonds was also effective as that segment outperformed the broader bond market. The fixed income portion had larger allocations to mortgage-backed securities and collateralized mortgage-backed securities than the Lehman Index, which hurt relative performance as these sectors lagged. Q: What changes did you make to the equity segment during the period? A: We increased the Fund's energy exposure. Though valuations on refiners and exploration and production companies already reflected recent strong performance, we found valuations attractive in other energy areas, such as offshore drilling and integrated oil and gas companies. We also added to the Fund's health care position, particularly pharmaceutical companies, based on attractive valuations. We reduced the Fund's consumer discretionary position, primarily decreasing exposure to stocks that are directly or indirectly affected by the housing market or how consumers feel about their finances, such as homebuilders, retailers and restaurants. However, the Fund's consumer discretionary position remains larger than that of the Russell Index. We also decreased the telecommunications services allocation, taking profits in several regional telephone operating companies that have performed very well. Q: What changes did you make to the fixed income segment during the period? A: In response to the meaningful rise in interest rates, we adjusted the portfolio's duration, moving from a position that was more conservative than the Lehman Index to a neutral position. We increased the portfolio's overweights in mortgage-backed securities, investment grade corporate bonds and agency issues during the last three months of the semiannual period. We reduced the portfolio's position in high yield bonds due to valuation concerns. In some cases, we used the proceeds to add exposure to high yield bank loans. Q: How do you plan to manage the Fund in the coming months? A: Regarding the outlook for the equity segment, we expect economic growth to be stable at relatively modest growth rates. We are in the late stages of this economic cycle and, in our view, valuations of economically sensitive companies are high by historical standards. This scenario supports continued implementation of our current themes: preferring larger companies over smaller companies, - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 3 RiverSource VP - Balanced Fund capitalizing on opportunities to invest in companies with traditional growth characteristics that are trading at attractive valuations and focusing on higher quality companies. Executing these themes in the equity segment has led to technology and consumer discretionary positions that are larger than those of the Russell Index, and financials and consumer staples positions that are smaller. We remain firmly committed to our value strategy. Looking to the bond market, we believe recent volatility will subside, but we expect credit spreads to widen modestly during the remainder of 2007. We think interest rates will move to higher levels in response to the Federal Reserve keeping short-term interest rates steady rather than lowering them. We believe pockets of value, including specific corporate bonds, high yield bank loans, collateralized mortgage-backed securities and agency issues, offer continued opportunity for us to add value through effective security selection. We believe valuations of mortgage-backed securities are fair and yields offer adequate compensation for prepayment risks. Within the mortgage segment, we favor higher coupon issues, which we believe will outperform as interest rates rise. ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
TOTAL 0.84%
AVERAGE ANNUAL TOTAL RETURNS at June 30, 2007 6 months* +4.30% 1 year +16.23% 3 years +10.09% 5 years +9.05% 10 years +5.99% Since inception (4/30/86) +9.21%
* Not annualized. ASSET ALLOCATION & SECTOR BREAKDOWN* Percentage of portfolio assets at June 30, 2007 (PIE CHART) Stocks(1) 61.0% Bonds(2) 34.2% Senior Loans(4) 0.8% Cash & Cash Equivalents(5) 4.0%
(1) Includes Financials 17.7%, Energy 7.7%, Industrials 6.2%, Consumer Discretionary 6.1%, Information Technology 5.7%, Health Care 5.1%, Telecommunication Services 4.1%, Consumer Staples 3.5%, Utilities 2.8% and Materials 2.1%. (2) Includes Mortgage-Backed 16.3%, Corporate Bonds(3) 7.6%, U.S. Government Obligations & Agencies 5.7%, Commercial Mortgage-Backed 3.5% and Asset- Backed 1.1%. (3) Includes Financials 2.5%, Telecommunication 1.8%, Utilities 1.4%, Consumer Staples 0.7%, Consumer Discretionary 0.6%, Energy 0.3%, Health Care 0.2% and Industrials 0.1%. (4) Includes Health Care 0.3%, Consumer Discretionary 0.2%, Consumer Staples 0.1%, Materials 0.1% and Telecommunication 0.1%. (5) Of the 4.0%, 1.2% is due to security lending activity and 2.8% is the Fund's cash equivalent position. * Sectors can be comprised of several industries. Please refer to the section entitled "Investments in Securities" for a complete listing. No single industry exceeds 25% of portfolio assets. The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. TOP TEN HOLDINGS
PERCENT VALUE (OF PORTFOLIO ASSETS) (AT JUNE 30, 2007) Exxon Mobil 2.9% $59,780,604 Citigroup 2.2 45,404,729 Bank of America 2.1 43,432,458 AT&T 1.5 31,575,814 Chevron 1.4 29,480,967 Pfizer 1.4 28,353,653 General Electric 1.3 26,363,551 American Intl Group 1.2 24,954,279 JPMorgan Chase & Co 1.2 24,160,658 Verizon Communications 1.2 24,036,405
For further detail about these holdings, please refer to the section entitled "Investments in Securities." The 10 holdings listed here make PIE CHART up 16.4% of portfolio assets
- -------------------------------------------------------------------------------- 4 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT PORTFOLIO MANAGEMENT Q&A RiverSource VP - Cash Management Fund Below, is the discussion of RiverSource VP - Cash Management Fund's results and strategy for the six months ended June 30, 2007. Q: How did RiverSource VP - Cash Management Fund perform for the semiannual period? A: RiverSource VP - Cash Management Fund returned 2.40% for the semiannual period. The Fund's annualized simple yield was 4.77% and its annualized compound yield was 4.88% for the seven-day period ended June 30, 2007.* The Fund serves as a conservative, shorter-term investment choice for individuals seeking current income. Q: What factors most significantly affected the Fund's performance? A: Changing expectations of future Federal Reserve Board (the Fed) policy and of the relative strength or weakness of economic growth had the greatest effect on the Fund's results. While the Fed held interest rates steady through the semiannual period, language from the Fed introduced the possibility of an interest rate cut in the future. However, the deteriorating economic picture many had painted based on data indicating a slowdown in the housing market, production cutbacks at automakers, persistent inflation pressures and moderating economic growth did not materialize. This, in turn, finally led most economists by the end of the period to expect the Fed to be on hold indefinitely. * The 7-day yields shown reflect more closely the earnings of the Fund than the total return. Short-term yields may be higher or lower than the figures shown. PERFORMANCE COMPARISON For the six-month period ended June 30, 2007 (BAR CHART) RiverSource VP - Cash Management Fund +2.40%
An investment in money market funds is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to maintain the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. As expectations of Fed easing were priced into the market at the start of the period, the money market yield curve began the new year inverted, meaning yields at the short-term end of the curve were higher than those at the longer-term end of the curve. Then, as the Fed easing was priced out of the market with changing economic data, the money market yield curve became positively sloped, with longer-term yields higher than shorter-term yields. Throughout the six months, we were of the view that the Fed was on hold for an extended period of time and positioned the Fund accordingly. Q: What changes did you make to the Fund during the period? A: Given our view that the Fed was firmly on hold during the period, we sought to take advantage of mispricings to benefit our shareholders. For example, as indicated, the money market yield curve began the period inverted, as 50 basis points (0.50%) of easing by the end of 2007 was priced into the market at the start of the new year. As yields consequently increased, we extended the Fund's average weighted maturity from 54 days on December 31, 2006, to approximately 70 days by the end of January. During February and March, the market continued to price in easing, and we allowed the Fund's average weighted maturity to roll down to 45 days. Once economic data supported our view that the Fed was on hold for the foreseeable future and the market repriced the 50 basis points of easing out, the yield curve became positively sloped, and we opportunistically lengthened the Fund's average weighted maturity once again to 70 days to lock in the higher yields then available. We carried out this strategy by replacing some floating rate issues, which are reset in line with changes in market interest rates, with more longer-dated fixed-rate securities. Overall, these changes made to the Fund's weighted average maturity as market conditions shifted helped the Fund's relative results. As of June 30, 2007, the average weighed maturity of the Fund was 70 days. As always, we attempted to maximize the Fund's yield without taking unnecessary risks. We continued to invest in high quality securities. Q: What is the Fund's tactical view and strategy for the months ahead? A: We continue to believe there is a high probability of the Fed keeping the targeted federal funds rate at its current 5.25% for an extended period of time. Given the Fed's stated concerns about the rekindling of inflation pressures, it is unlikely that the Fed will be in a rush to cut rates anytime soon. Rather, most market participants have now assigned a higher probability of an interest rate hike next year, especially if Fed chairman Bernanke's concern is - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 5 RiverSource VP - Cash Management Fund realized and inflation does start to edge higher again later this year or into 2008. Given this view, we intend to continue to opportunistically lengthen the Fund's weighted average maturity through fixed-rate securities as we seek to lock in higher yields. We will continue to closely monitor economic data, Fed policy and any shifts in the money market yield curve, striving to strategically adjust our portfolio positioning accordingly. We intend to continue to focus on high quality investments with minimal credit risk while seeking competitive yields. SECTOR BREAKDOWN Percentage of portfolio assets at June 30, 2007 (PIE CHART) Commercial Paper 71.8% Floating Rate Notes 20.3% Certificates of Deposit 7.9%
ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
TOTAL 0.60%
AVERAGE ANNUAL TOTAL RETURNS at June 30, 2007 6 months* +2.40% 1 year +4.82% 3 years +3.34% 5 years +2.25% 10 years +3.39% Since inception (10/13/81) +5.47%
* Not annualized. - -------------------------------------------------------------------------------- 6 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT PORTFOLIO MANAGEMENT Q&A RiverSource VP - Core Bond Fund Below, the portfolio management team for RiverSource VP - Core Bond Fund discusses the Fund's results and positioning for the six months ended June 30, 2007. Q: How did RiverSource VP - Core Bond Fund perform for the semiannual period? A: RiverSource VP - Core Bond Fund returned 0.85% for the six months ended June 30, 2007. The Fund underperformed its benchmark, the unmanaged Lehman Brothers Aggregate Bond Index (Lehman Index), which gained 0.98%. However, the Fund outperformed its peer group, as represented by the Lipper Intermediate Investment Grade Index, which returned 0.71% during the same period. PERFORMANCE COMPARISON For the six-month period ended June 30, 2007 (BAR CHART) RiverSource VP - Core Bond Fund +0.85% Lehman Brothers Aggregate Bond Index (unmanaged) +0.98% Lipper Intermediate Investment Grade Index +0.71%
The indices do not reflect the effects of expenses (excluding Lipper). It is not possible to invest directly in an index. The Lehman Brothers Aggregate Bond Index, an unmanaged index, is made up of a representative list of government, corporate, asset-backed and mortgage-backed securities. The index is frequently used as a general measure of bond market performance. The index reflects reinvestment of all distributions and changes in market prices. The Lipper Intermediate Investment Grade Debt Funds Index includes the 30 largest investment grade funds tracked by Lipper Inc. The index's returns include net reinvested dividends. There are risks associated with an investment in a bond fund, including credit risk, interest rate risk, and prepayment and extension risk. In general, bond prices rise when interest rates fall and vice versa. This effect is usually more pronounced for longer-term securities. Q: What factors most significantly affected the Fund's performance? A: Rising interest rates and generally poor returns from the high quality spread sectors, or non-Treasury sectors, of the fixed income market had the greatest impact on the Fund. The Federal Reserve Board (the Fed) maintained its targeted federal funds rate at 5.25% throughout the period, while keeping a bias toward inflation risk. The U.S. economy slowed in response to earlier policy tightening by the Fed, but still, economic growth, employment rates and consumer spending remained resilient. As a result, the fixed income market finally dropped its expectations of Fed easing later this year, and market participants pushed rates materially higher. Long-term interest rates rose more than short-term interest rates. Given that interest rates rose materially across the yield curve, or spectrum of maturities, the Fund's shorter-than-Lehman Index duration positioning contributed positively to its performance. Duration is a measure of the Fund's sensitivity to changes in interest rates. Effective issue selection within mortgage-backed securities, commercial mortgage-backed securities, asset-backed securities, agency securities and investment grade corporate bonds also helped Fund performance for the period. Conversely, significant allocations to mortgage-backed securities and commercial mortgage-backed securities detracted from performance, as these two sectors lagged the Lehman Index for the six months. Q: What changes did you make to the Fund's portfolio during the period? A: In response to materially higher interest rates, we lengthened the Fund's duration from a shorter-than-Lehman Index position to a more neutral position relative to the Lehman Index toward the end of the period. We also increased the Fund's allocations to mortgage-backed securities, investment grade corporate bonds and agency securities during the period, seeking to take advantage of what we believe to be a temporary weakness in these sectors of the fixed income market. The Fund's portfolio turnover rate for the semiannual period was 173%.* * A significant portion of the turnover was the result of "roll" transactions in the liquid derivatives and Treasury securities. In the derivative transactions, positions in expiring contracts are liquidated and simultaneously replaced with positions in new contracts with equivalent characteristics. In the Treasury transactions, existing holdings are sold to purchase newly issued securities with slightly longer maturity dates. Although these transactions affect the turnover rate of the portfolio, they do not change the risk exposure or result in material transactions costs. The remaining turnover resulted from strategic reallocations and relative value trading. After transaction costs, we expect this activity to enhance the returns on the overall Fund. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 7 RiverSource VP - Core Bond Fund Q: What is the Fund's tactical view and strategy for the months ahead? A: June was a particularly volatile month for the fixed income market due to several factors. First, Bear Stearns and several other hedge funds announced significant losses from securities backed by subprime mortgage loans. This renewed fears of even wider losses and raised fears of a financial crisis. Second, the high yield corporate bond and bank loan markets stumbled on the latest major wave of higher-risk new issue supply, much of which was related to leveraged buyout transactions. (It is important to note that RiverSource VP Core Bond Fund does not, by mandate of its prospectus, invest in the high yield corporate bond or bank loan sectors of the fixed income market.) While we expect recent volatility to subside during the months ahead, we also anticipate that credit spreads, or the difference in yield between non-Treasury sectors and equivalent-duration Treasuries, may widen modestly over the balance of the year. We believe interest rates will continue to migrate higher through 2007, supported by the Fed staying on hold. Given this view, we intend to maintain a disciplined focus on individual security selection, as we believe there remain pockets of opportunities to add value through investment in specific investment grade corporate bonds, commercial mortgage-backed securities and agency securities. We believe mortgage-backed securities are fairly valued overall and currently offer adequate compensation for prepayment risks. We intend to continue to favor mortgage-backed securities with premium coupons, as we expect these securities to outperform in a rising interest rate environment. ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
TOTAL NET EXPENSES(A) 0.93% 0.83%
(a) The investment manager and its affiliates have contractually agreed to waive certain fees and to absorb certain expenses until Dec. 31, 2007, unless sooner terminated at the discretion of the Fund's Board. Any amounts waived will not be reimbursed by the Fund. Under this agreement, net fund expenses (excluding fees and expenses of acquired funds) will not exceed 0.83%. AVERAGE ANNUAL TOTAL RETURNS at June 30, 2007 6 months* +0.85% 1 year +5.43% 3 years +3.47% Since inception (2/4/04) +2.77%
* Not annualized. SECTOR BREAKDOWN Percentage of portfolio assets at June 30, 2007 (PIE CHART)
U.S. GOVERNMENT OBLIGATIONS & CORPORATE COMMERCIAL CASH & CASH MORTGAGE-BACKED AGENCIES BONDS(1) MORTGAGE-BACKED EQUIVALENTS ASSET-BACKED - --------------- --------------- --------- --------------- ----------- ------------ 41.3% 26.70% 15.80% 8.10% 6.00% 2.10%
(1) Includes Financials 5.5%, Telecommunication 4.0%, Utilities 2.4%, Consumer Staples 1.7%, Consumer Discretionary 1.2%, Energy 0.5%, Health Care 0.4% and Industrials 0.1%. TOP TEN CORPORATE BOND HOLDINGS
PERCENT VALUE (OF PORTFOLIO ASSETS) (AT JUNE 30, 2007) TELUS 8.00% 2011 1.2% $1,090,736 Countrywide Alternative Loan Trust 5.50% 2033 1.2 1,084,141 Bank of America 5.30% 2017 1.0 892,817 Citigroup 5.50% 2017 0.8 721,548 Popular North America 3.88% 2008 0.7 681,211 Cadbury Schweppes US Finance LLC 3.88% 2008 0.7 675,532 Morgan Stanley 5.55% 2017 0.7 635,009 Verizon New York 6.88% 2012 0.6 589,074 Merrill Lynch & Co 5.70% 2017 0.6 510,485 Lehman XS Trust 6.50% 2037 0.5 486,600
Excludes U.S. Treasury and government agency holdings. For further detail about these holdings, please refer to the section entitled "Investments in Securities." The 10 holdings listed here make PIE CHART up 8.0% of portfolio assets
- -------------------------------------------------------------------------------- 8 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT PORTFOLIO MANAGEMENT Q&A RiverSource VP - Diversified Bond Fund Below, the portfolio management team for RiverSource VP - Diversified Bond Fund discusses the Fund's results and positioning for the six months ended June 30, 2007. Q: How did RiverSource VP - Diversified Bond Fund perform for the semiannual period? A: RiverSource VP - Diversified Bond Fund returned 1.04% for the six months ended June 30, 2007. The Fund outperformed its benchmark, the unmanaged Lehman Brothers Aggregate Bond Index (Lehman Index), which gained 0.98%. The Fund also outperformed its peer group, as represented by the Lipper Intermediate Investment Grade Index, which returned 0.71% during the same period. Q: What factors most significantly affected the Fund's performance? A: Rising interest rates and generally poor returns from the high quality spread sectors, or non-Treasury sectors, of the fixed income market had the greatest impact on the Fund. The Federal Reserve Board (the Fed) maintained its targeted federal funds rate at 5.25% throughout the period, while keeping a bias toward inflation risk. The U.S. PERFORMANCE COMPARISON For the six-month period ended June 30, 2007 (BAR CHART) River Source VP - Diversified Bond Fund +1.04% Lehman Brothers Aggregate Bond Index (unmanaged) +0.98% Lipper Intermediate Investment Grade Index +0.71%
The indices do not reflect the effects of expenses (excluding Lipper). It is not possible to invest directly in an index. The Lehman Brothers Aggregate Bond Index, an unmanaged index, is made up of a representative list of government, corporate, asset-backed and mortgage-backed securities. The index is frequently used as a general measure of bond market performance. The index reflects reinvestment of all distributions and changes in market prices. The Lipper Intermediate Investment Grade Index includes the 30 largest investment grade funds tracked by Lipper Inc. The index's returns include net reinvested dividends. There are risks associated with an investment in a bond fund, including credit risk, interest rate risk, and prepayment and extension risk. See the Fund's prospectus for information on these and other risks associated with the Fund. In general, bond prices rise when interest rates fall and vice versa. This effect is usually more pronounced for longer-term securities. Non-investment grade securities, commonly called "high-yield" or "junk" bonds, generally have more volatile prices and carry more risk to principal and income than investment grade securities. economy slowed in response to earlier policy tightening by the Fed, but still, economic growth, employment rates and consumer spending remained resilient. As a result, the fixed income market finally dropped its expectations of Fed easing later this year, and market participants pushed rates materially higher. Long-term interest rates rose more than short-term interest rates. Given that interest rates rose materially across the yield curve, or spectrum of maturities, the Fund's shorter-than-Lehman Index duration positioning contributed positively to its performance. Duration is a measure of the Fund's sensitivity to changes in interest rates. Effective issue selection within mortgage-backed securities, commercial mortgage-backed securities, asset-backed securities, agency securities and investment grade corporate bonds also helped Fund performance for the period. The Fund's exposure to high yield corporate bonds contributed positively to the Fund's results as well, posting solid performance and outpacing the Lehman Index. Conversely, significant allocations to mortgage-backed securities and commercial mortgage-backed securities detracted from performance, as these two sectors trailed the Lehman Index for the six months. Q: What changes did you make to the Fund's portfolio during the period? A: In response to materially higher interest rates, we lengthened the Fund's duration from a shorter-than-Lehman Index position to a more neutral position relative to the Lehman Index toward the end of the period. We also increased the Fund's already sizable allocations to mortgage-backed securities, investment-grade corporate bonds and agency securities during the period, seeking to take advantage of what we believe to be a temporary weakness in these sectors of the fixed income market. We reduced the Fund's position in high yield corporate bonds, as credit spreads, or the difference in yields between non-Treasury sectors and equivalent-duration U.S. Treasuries, reached all-time tight levels. We used a portion of the proceeds from these sales to add exposure to high yield bank loans. Bank loans historically tend to be more senior in the capital structure, meaning that they have precedence over other securities in the event of a default or bankruptcy. Bank loans are also floating rate securities, which were attractively valued relative to fixed rate securities during this rising interest rate environment. Floating rate issues are reset in line with changes in market rates, and indeed, these floating securities enabled the Fund to capture higher rates through the frequent resets of these securities' yields when rates moved higher during the period. The Fund's portfolio turnover rate for the semiannual period was 173%.* - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 9 RiverSource VP - Diversified Bond Fund Q: What is the Fund's tactical view and strategy for the months ahead? A: The six-month period was punctuated by the particularly volatile month of June. The fixed income market as a whole saw increased volatility during the month due to several factors. First, woes in the subprime mortgage market continued to trouble the credit markets, leading to a broad reassessment of risk levels and sparking caution among lenders and investors. The concern is that these problems in the subprime lending market will ultimately blossom into a widespread credit crunch, in which even qualified borrowers are deprived of funding and a subsequent lack of liquidity would impair the smooth functioning of debt markets. Second, the high yield corporate bond and bank loan markets stumbled on the latest major wave of higher risk new issue supply, much of which was related to several larger leveraged buyout transactions entering the market. With investors and lenders wary of supporting increasing levels of leverage on the balance sheets of corporations, the supply/demand imbalance forced bonds to rapidly drop in value at the tail end of the period. While we expect the current turmoil in the debt market to subside during the months ahead, we also anticipate that credit spreads may widen modestly over the balance of the year. We believe interest rates will continue to migrate higher through 2007, supported by the Fed staying on hold. Given this view, we intend to maintain a disciplined focus on individual security selection, as we believe there remain pockets of opportunities to add value through investment in specific investment grade corporate bonds, high yield bank loans, commercial mortgage-backed securities and agency securities. We believe mortgage-backed securities are fairly valued overall and currently offer adequate compensation for prepayment risks. We intend to continue to favor mortgage-backed securities with premium coupons, as we expect these securities to outperform in a rising rate environment. * A significant portion of the turnover was the result of "roll" transactions in the liquid derivatives and Treasury securities. In the derivative transactions, positions in expiring contracts are liquidated and simultaneously replaced with positions in new contracts with equivalent characteristics. In the Treasury transactions, existing holdings are sold to purchase newly issued securities with slightly longer maturity dates. Although these transactions affect the turnover rate of the portfolio, they do not change the risk exposure or result in material transactions costs. The remaining turnover resulted from strategic reallocations and relative value trading. After transaction costs, we expect this activity to enhance the returns on the overall Fund. - -------------------------------------------------------------------------------- 10 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Diversified Bond Fund ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
TOTAL 0.74%
AVERAGE ANNUAL TOTAL RETURNS at June 30, 2007 6 months* +1.04% 1 year +6.02% 3 years +3.97% 5 years +4.20% 10 years +4.31% Since inception (10/13/81) +8.85%
* Not annualized. SECTOR BREAKDOWN Percentage of portfolio assets at June 30, 2007 (PIE CHART) Mortgage-Backed 42.3% Corporate Bonds(1) 19.9% U.S. Government Obligations & Agencies 18.1% Cash & Cash Equivalents(2) 10.0% Commercial Mortgage-Backed 7.7% Asset-Backed 2.0%
(1) Includes Financials 6.1%, Telecommunication 4.6%, Utilities 3.0%, Consumer Discretionary 2.0%, Consumer Staples 1.8%, Health Care 1.1%, Energy 0.8%, Materials 0.3% and Industrials 0.2%. (2) Of the 10.0%, 1.7% is due to security lending activity and 8.3% is the Fund's cash equivalent position. TOP TEN CORPORATE BOND HOLDINGS
PERCENT VALUE (OF PORTFOLIO ASSETS) (AT JUNE 30, 2007) TELUS 8.00% 2011 1.1% $44,469,988 Bank of America 5.30% 2017 1.1 41,523,174 Lehman XS Trust 6.50% 2037 0.8 30,997,380 Citigroup 5.50% 2017 0.8 30,653,690 Morgan Stanley 5.55% 2017 0.7 29,439,567 Cadbury Schweppes US Finance LLC 3.88% 2008 0.7 29,184,944 Popular North America 3.88% 2008 0.7 28,605,970 Banc of America Alternative Loan Trust 6.00% 2037 0.7 27,503,180 Verizon New York 6.88% 2012 0.6 25,377,079 Merrill Lynch & Co 5.70% 2017 0.6 23,838,705
Excludes U.S. Treasury and government agency holdings. For further detail about these holdings, please refer to the section entitled "Investments in Securities." The 10 holdings listed here make PIE CHART up 7.8% of portfolio assets
- -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 11 PORTFOLIO MANAGEMENT Q&A RiverSource VP - Diversified Equity Income Fund Below, portfolio managers Warren Spitz, Steve Schroll, Laton Spahr and Paul Stocking discuss RiverSource VP - Diversified Equity Income Fund's results and positioning for the semiannual period ended June 30, 2007. Q: How did RiverSource VP - Diversified Equity Income Fund perform for the semiannual period? A: RiverSource VP - Diversified Equity Income Fund returned 11.75% for the six months ended June 30, 2007. The Fund outperformed its benchmark, the Russell 1000(R) Value Index (Russell Index), which advanced 6.23% for the period. The Fund also outperformed the Lipper Equity Income Funds Index, representing its peer group, which rose 7.47% over the same time frame. PERFORMANCE COMPARISON For the six-month period ended June 30, 2007 (BAR CHART) RiverSource VP -- Diversified Equity Income Fund +11.75% Russell 1000(R) Value Index (unmanaged) +6.23% Lipper Equity Income Funds Index +7.47%
The indices do not reflect the effects of expenses (excluding Lipper). It is not possible to invest directly in an index. The Russell 1000(R) Value Index, an unmanaged index, measures the performance of those stocks in the Russell 1000 Index with lower price-to-book ratios and lower forecasted growth values. The index reflects reinvestment of all distributions and changes in market prices. The Lipper Equity Income Funds Index includes the 30 largest equity income funds tracked by Lipper Inc. The index's returns include net reinvested dividends. The Fund's performance is currently measured against this index for purposes of determining the performance incentive adjustment. Q: What factors most significantly affected the Fund's performance? A: The Fund posted impressive gains during the period, especially during the second quarter. Sector allocation, industry selection and individual stock picking across a wide variety of sectors helped the Fund's results. For example, having only a modest allocation to financials, the worst performing sector in the Russell Index during the period, benefited the Fund's six-month performance. Industry allocation within the financials sector -- specifically, an emphasis on insurance companies and minimal exposure to banks -- further boosted relative results. XL Capital was a strong individual performer within the sector. Significant allocations to the energy sector and producer durables industry also contributed to the Fund's performance. Within energy, oil services firms McDermott Intl and Schlumberger were standout individual performers. Within producer durables, specialty electronics giant Ingersoll-Rand and farm and construction machinery leaders Caterpillar and Deere & Co. performed especially well. In other sectors, utilities companies AT&T and Telefonos de Mexico (Telmex) and consumer staples company Loews-Carolina Group were strong individual performers. Detracting modestly from the Fund's results was industry selection within the information technology sector. The Fund had a focus on technology services companies, which underperformed the Russell Index overall. A sizable position in computer software behemoth Microsoft also detracted during the period. In the autos and transportation industry, significant positions in airline companies U.S. Air and Continental Airlines hurt the Fund's performance. Among integrated oil companies held in the Fund's portfolio, having only modest exposure to the strongly performing Exxon Mobil and Valero Energy detracted modestly from results. Q: What changes did you make to the Fund's portfolio during the period? A: Toward the end of February, we saw an opportunity to return the Fund's emphasis toward cyclical sectors, having reduced its exposure to these sectors in favor of the more defensive segments of the equity market during the prior fiscal year. Specifically, during the semiannual period, we further reduced the Fund's already moderate positions in financials and health care. We increased the Fund's allocations to producer durables and information technology. - -------------------------------------------------------------------------------- 12 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Diversified Equity Income Fund Q: What is the Fund's tactical view and strategy for the months ahead? A: We currently intend to take larger positions in sectors, industries or individual stocks that have the potential to move the share values higher. Generally, we are comfortable with the Fund's current positioning, and we have a balanced outlook for the near term. The prospects for stronger economic growth both in the U.S. and abroad, and the positive implications for corporate profit growth, have thus offset any ongoing concerns about accelerating inflation or higher long-term interest rates. During the remainder of 2007, however, slowing productivity growth, higher unit labor costs, and higher interest rates may prove challenging for corporate managements to keep profit growth from slowing. Thus, we intend to continue monitoring economic data and shifts in market conditions as we seek stock-specific and industry-level opportunities to add value for our shareholders. As always, we will continue to emphasize stocks that we believe have attractive valuations and will invest in equities across the market capitalizations sectors with an emphasis on large-cap stocks. ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
TOTAL 0.91%
AVERAGE ANNUAL TOTAL RETURNS at June 30, 2007 6 months* +11.75% 1 year +23.16% 3 years +19.79% 5 years +16.98% Since inception (9/15/99) +10.51%
* Not annualized. SECTOR BREAKDOWN* Percentage of portfolio assets at June 30, 2007 (PIE CHART) Financials 25.4% Industrials 18.7% Energy 14.5% Telecommunication Services 8.8% Consumer Discretionary 6.6% Health Care 5.8% Other(1) 20.2%
(1) Includes Materials 5.7%, Information Technology 4.7%, Consumer Staples 4.4%, Utilities 3.3% and Cash & Cash Equivalents(2) 2.1%. (2) Of the 2.1%, 0.7% is due to security lending activity and 1.4% is the Fund's cash equivalent position. * Sectors can be comprised of several industries. Please refer to the section entitled "Investments in Securities" for a complete listing. No single industry exceeds 25% of portfolio assets. The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. TOP TEN HOLDINGS
PERCENT VALUE (OF PORTFOLIO ASSETS) (AT JUNE 30, 2007) AT&T 3.8% $157,849,940 General Electric 3.2 130,422,755 Citigroup 2.9 121,175,805 Caterpillar 2.8 113,417,941 Bank of America 2.5 101,629,110 McDermott Intl 2.3 93,012,776 XL Capital Cl A 2.1 86,334,284 Travelers Companies 2.0 80,647,184 ACE 1.9 79,683,178 Loews-Carolina Group 1.9 77,003,805
For further detail about these holdings, please refer to the section entitled "Investments in Securities." The 10 holdings listed here make PIE CHART up 25.4% of portfolio assets
- -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 13 PORTFOLIO MANAGEMENT Q&A RiverSource VP - Emerging Markets Fund Below, RiverSource VP - Emerging Markets Fund portfolio managers Julian Thompson and Jules Mort of Threadneedle International Limited (Threadneedle) discuss the Fund's results and positioning for the six months ended June 30, 2007. Threadneedle, an indirect wholly-owned subsidiary of Ameriprise Financial, Inc., acts as the subadviser to the Fund. Q: How did RiverSource VP - Emerging Markets Fund perform for the semiannual period? A: RiverSource VP - Emerging Markets Fund increased 14.94% for the six months ended June 30, 2007. The Fund underperformed its benchmark, the Morgan Stanley Capital International Emerging Markets Index (MSCI Index), which increased 17.75%. It also underperformed its peer group, the Lipper Emerging Markets Funds Index, which increased 16.90% during the period. PERFORMANCE COMPARISON For the six-month period ended June 30, 2007 (BAR CHART) RiverSource VP - Emerging Markets Fund +14.94% MSCI Emerging Markets Index (unmanaged) +17.75% Lipper Emerging Markets Funds Index +16.90%
The indices do not reflect the effects of expenses (excluding Lipper). It is not possible to invest directly in an index. The Morgan Stanley Capital International (MSCI) Emerging Markets Index, an unmanaged market capitalization-weighted index, is designed to measure equity market performance in the global emerging markets. The index reflects reinvestment of all distributions and changes in market prices. The Lipper Emerging Markets Funds Index includes the 30 largest emerging markets funds tracked by Lipper Inc. The index's returns include net reinvested dividends. The Fund's performance is currently measured against this index for purposes of determining the performance incentive adjustment. International investing involves increased risk and volatility due to potential political and economic instability, currency fluctuations, and differences in financial reporting and accounting standards and oversight. Risks are particularly significant in emerging markets due to the dramatic pace of economic, social and political change. Q: What factors most significantly affected performance? A: The Fund benefited from a greater-than-MSCI Index position in Latin America, which was the best performing region during the period. Brazil and Mexico were particularly strong performers. The Russian market performed very well in June, having underperformed significantly during the first five months of the year. After underperforming for several months, Taiwan revived during the period, performing well. Taiwan is one of the largest weights in the MSCI Index and the Fund's underweight in the country detracted from performance relative to the Index. Some of the best performing stocks in the portfolio for this period included South Korean shipbuilder Hyundai Heavy Inds, mobile phone firm China Mobile, Chinese oil company CNOOC, Indian wind turbine company Suzlon Energy and Taiwanese manufacturer Hon Hai Precision Industry, which assembles the iPhone. In addition, the Fund's holding in Malaysian mobile telecommunications operator Maxis added to performance after the company received a takeover bid at a large premium. Weak performers during the period included Singapore-listed Golden Agri-Resources, Hong Kong shoemaker Prime Success Intl Group and Samsung Electronics. Energy and technology were the worst performing sectors this period, while the industrials, materials and telecommunications sectors performed best. Q: What changes did you make to the Fund? A: We added three Russian stocks to the Fund's portfolio during the period: Sberbank, one of the country's banks that we believe may benefit from the huge potential for financial services growth in the country; Novolipetsk Steel, one of the world's largest steel producers; and energy giant Gazprom. As a result, the Fund has an overweight in Russia. In addition, the Fund invested in United Bank in Pakistan. The country has a very low penetration rate in terms of banking services, and we believe the bank has huge potential to expand its business. Overall, we have reduced the Fund's exposure to technology stocks, due primarily to the sale of the Fund's holdings in Samsung. We sold Samsung after disappointing first quarter results and concerns about the outlook for the information technology sector overall. Q: How are you positioning the Fund in the coming months? A: We remain optimistic about the outlook for emerging markets for the remainder of this year and into 2008. In our view, rising interest rates in the U.S. have a limited impact on emerging market economies and their stock - -------------------------------------------------------------------------------- 14 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Emerging Markets Fund markets, except for a few countries that have high external debt. Most of the countries in which the Fund invests are supported by strong economic fundamentals and robust external finances, while earnings growth remains very strong. The Fund remains heavily overweight in Latin America and underweight in Asian markets such as India, South Koran and Taiwan. In terms of sectors, the Fund is overweight in consumer-related sectors, such as financials and telecommunication services, and underweight in information technology and energy. ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
TOTAL 1.51%
AVERAGE ANNUAL TOTAL RETURNS at June 30, 2007 6 months* +14.94% 1 year +44.17% 3 years +36.24% 5 years +27.32% Since inception (5/1/00) +13.37%
* Not annualized. COUNTRY BREAKDOWN Percentage of portfolio assets at June 30, 2007 (PIE CHART) Brazil 18.1% Russia 12.8% Mexico 9.2% South Korea 8.5% South Africa 8.1% Hong Kong 6.7% Other(1) 36.6%
(1) Includes Taiwan 6.5%, India 4.4%, Israel 3.5%, Indonesia 3.4%, Singapore 2.1%, China 1.8%, Chile 1.4%, Hungary 1.4%, Malaysia 1.3%, Argentina 1.1%, Bahamas 1.0%, Egypt 1.0%, Poland 1.0%, Peru 0.9%, Philippine Islands 0.9%, Canada 0.8%, Pakistan 0.8%, Czech Republic 0.6%, Norway 0.6% and Cash & Cash Equivalents 2.1%. TOP TEN HOLDINGS
PERCENT VALUE (OF PORTFOLIO ASSETS) (AT JUNE 30, 2007) Gazprom ADR (Russia) 4.0% $27,149,482 America Movil ADR Series L (Mexico) 3.9 26,257,330 China Mobile (Hong Kong) 3.8 25,966,630 Petroleo Brasileiro ADR (Brazil) 3.2 21,772,573 Companhia Vale do Rio Doce ADR (Brazil) 3.1 20,929,011 Kookmin Bank (South Korea) 2.6 17,443,530 Naspers Series N (South Africa) 2.3 15,991,512 Sberbank (Russia) 2.3 15,397,200 Impala Platinum Holdings (South Africa) 2.2 14,799,904 GOL Linhas Aereas Inteligentes ADR (Brazil) 2.0 13,805,655
Note: Certain foreign investment risks include: changes in currency exchange rates, adverse political or economic events, and lack of similar regulatory requirements followed by U.S. companies. For further detail about these holdings, please refer to the section entitled "Investments in Securities." The 10 holdings listed here make PIE CHART up 29.4% of portfolio assets
- -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 15 PORTFOLIO MANAGEMENT Q&A RiverSource VP - Fundamental Value Fund RiverSource VP - Fundamental Value Fund increased 6.26% for the six months ended June 30, 2007. The Fund outperformed its benchmark, the Russell 1000(R) Value Index (Russell Index), which increased 6.23%, during the same period. The Fund underperformed the S&P 500 Index, which returned 6.96%, and the Lipper Large-Cap Value Funds Index, which increased 7.27%. Davis Selected Advisers, L.P. (Davis), an independent money management firm, manages the Fund's portfolio. Q: What factors most significantly affected the Fund's performance for the semiannual period? A: The energy sector was the top performing sector of the S&P 500 Index and the largest contributor to the Fund's results during the six-month period. The Fund's energy holdings outperformed those within the Index, and the Fund benefited from an energy allocation that was larger than that of the Index. Energy stocks ConocoPhillips, Occidental Petroleum, Devon Energy and EOG Resources were among the Fund's leading contributors to performance. PERFORMANCE COMPARISON For the six-month period ended June 30, 2007 (BAR CHART) RiverSource VP - Fundamental Value Fund +6.26% S&P 500 Index (unmanaged) +6.96% Russell 1000(R) Value Index (unmanaged) +6.23% Lipper Large Cap Value Funds Index +7.27%
The indices do not reflect the effects of expenses (excluding Lipper). It is not possible to invest directly in an index. The Standard & Poor's 500 Index (S&P 500 Index), an unmanaged index of common stocks, is frequently used as a general measure of market performance. The index reflects reinvestment of all distributions and changes in market prices. The Russell 1000(R) Value Index, an unmanaged index, measures the performance of those stocks in the Russell 1000 Index with lower price-to-book ratios and lower forecasted growth values. The index reflects reinvestment of all distributions and changes in market prices. The Lipper Large-Cap Value Funds Index includes the 30 largest large-cap value funds tracked by Lipper Inc. The index's returns include net reinvested dividends. The Fund's performance is currently measured against this index for purposes of determining the performance incentive adjustment. The Fund had a significant weighting in the consumer staples sector, the second largest contributor to performance. The Fund's consumer staples holdings performed well during the period. In particular, tobacco stock Altria Group and discount retailer Costco Wholesale were among the largest contributors to performance, while Procter & Gamble was a key detractor. The banking industry was among the worst performing industries during the period. Wachovia was among the top detractors for the six-month period. The Fund's significant holdings of diversified financial services firms and insurance companies detracted from performance relative to the Russell Index. Leading detractors included two diversified financial companies, Citigroup and Moody's, and two insurance companies, American Intl Group and Berkshire Hathaway. Individual companies contributing to performance included Tyco Intl, Amazon.com, and materials company Martin Marietta Materials. Individual detractors from performance included Harley-Davidson, materials company Sealed Air and Iron Mountain. We have identified a number of investment opportunities in foreign companies. At the end of the period, approximately 11% of the Fund's assets were invested in foreign companies. As a group, the foreign companies owned by the Fund performed strongly during the period. Q: What changes did you make to the Fund during the period? A: Our long-term focus usually results in low portfolio turnover. We do not overreact to past short-term performance from individual holdings on either the upside or the downside. We focus deliberately on the future, considering each company's long-term business fundamentals. During the past six months there were no changes to the companies making up the Fund's top ten holdings, which represented approximately 37% of total net assets as of June 30, 2007. Q: How are you positioning the Fund going forward? A: Our investment strategy is to perform extensive research to buy companies with durable earnings at prices below our estimates of their intrinsic value and hold them for the long term. We are strong supporters of long-term, buy-and-hold investing. - -------------------------------------------------------------------------------- 16 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Fundamental Value Fund ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
TOTAL 1.02%
TOTAL RETURN at June 30, 2007 6 months* +6.26% 1 year +16.37% Since inception (5/1/06) +13.67%
* Not annualized. SECTOR BREAKDOWN* Percentage of portfolio assets at June 30, 2007 (PIE CHART) Financials 36.4% Consumer Staples 13.5% Energy 12.9% Consumer Discretionary 12.5% Industrials 6.4% Information Technology 5.9% Other(1) 12.4%
(1) Includes Materials 4.4%, Health Care 2.2%, Telecommunication Services 1.6% and Cash & Cash Equivalents 4.2%. * Sectors can be comprised of several industries. Please refer to the section entitled "Investments in Securities" for a complete listing. No single industry exceeds 25% of portfolio assets. The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. TOP TEN HOLDINGS
PERCENT VALUE (OF PORTFOLIO ASSETS) (AT JUNE 30, 2007) ConocoPhillips 4.5% $29,110,939 American Express 4.5 29,096,596 Tyco Intl 4.3 27,802,750 American Intl Group 4.2 26,576,384 Costco Wholesale 3.8 24,530,999 JPMorgan Chase & Co 3.8 24,321,900 Altria Group 3.3 21,213,843 Berkshire Hathaway Cl B 3.2 20,227,655 Comcast Special Cl A 3.0 19,293,714 HSBC Holdings ADR 2.6 16,351,211
For further detail about these holdings, please refer to the section entitled "Investments in Securities." The 10 holdings listed here make PIE CHART up 37.2% of portfolio assets
- -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 17 PORTFOLIO MANAGEMENT Q&A RiverSource VP - Global Bond Fund Below, Nic Pifer, portfolio manager for RiverSource VP - Global Bond Fund discusses the Fund's results and positioning for the semiannual period ended June 30, 2007. Q: How did RiverSource VP - Global Bond Fund perform for the semiannual period? A: RiverSource VP - Global Bond Fund returned 0.70% for the six months ended June 30, 2007. The Fund outperformed its benchmark, the Lehman Brothers Global Aggregate Index (Lehman Global Index), which gained 0.40%. The Fund's peer group, as represented by the Lipper Global Income Funds Index, returned 0.85% during the same period. PERFORMANCE COMPARISON For the six-month period ended June 30, 2007 (BAR CHART) RiverSource VP - Global Bond Fund +0.70% Lehman Brothers Global Aggregate Index (unmanaged) +0.40% Lipper Global Income Funds Index +0.85%
The indices do not reflect the effects of expenses (excluding Lipper). It is not possible to invest directly in an index. The Lehman Brothers Global Aggregate Index, an unmanaged market capitalization weighted benchmark, tracks the performance of investment grade fixed income securities denominated in 13 currencies. The index reflects reinvestment of all distributions and changes in market prices. The Lipper Global Income Funds Index includes the 30 largest global income funds tracked by Lipper Inc. The index's returns include net reinvested dividends. Q: What factors most significantly affected the Fund's performance? A: Currency markets had the most positive impact on the Fund's semiannual performance, as the U.S. dollar fell 2.2% on a trade-weighted basis for the six months ended June 30, 2007. As the value of the U.S. dollar decreases, the dollar value of foreign investments typically increases and vice versa. During the six months ended June 30, 2007, the yield on 10-year U.S. Treasuries rose by approximately 34 basis points (0.34%), core European 10-year bond yields rose 63 basis points (0.63%), the U.K. 10-year bond yield rose 72 basis points (0.72%), the Japanese 10-year bond yield rose approximately 19 basis points (0.19%), and the Canadian 10-year bond yield climbed 47 basis points (0.47%). Most of these increases in yield came in the months of May and June when the global bond markets sold off. Remember, there is an inverse relationship between bond prices and interest rate movements, so that bond prices decline when interest rates rise and increase when interest rates fall. Global bonds produced modestly negative returns in local currency terms for the semiannual period overall. Relative to the Lehman Global Index, the Fund benefited most from effective currency positioning. Exposure to the Australian and New Zealand dollars, British pound, Mexican peso, Norwegian krone and Polish zloty also assisted Fund performance, as the U.S. dollar weakened vs. each of these currencies. In addition, the Fund was helped by its modest exposure to the yen, as the U.S. dollar strengthened vs. the Japanese currency. The Fund's positioning in the Canadian dollar, the U.S. dollar and the euro detracted somewhat. We maintained the Fund's duration, a principal measure of interest rate risk, shorter than that of the Lehman Global Index for much of the semiannual period, based on our valuation analysis. As global bond yields generally moved up over the semiannual period, most sharply in May and June, the Fund's short duration positioning had a positive effect on results relative to the Lehman Global Index. Detracting modestly from the Fund's results relative to the Lehman Global Index was its sector allocation as a whole. The Fund benefited from its exposure to high yield corporate bonds, where the Fund had an emphasis on comparatively high quality issues and bank loans. The Fund also benefited from its allocation to and issue selection within mortgage-backed securities and agency securities. We were underweight investment grade corporate bonds vs. the Lehman Global Index. This - -------------------------------------------------------------------------------- 18 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Global Bond Fund helped us vs. the Index when corporate spreads widened amid the sell-off in global equities. However, these positives were slightly more than offset by the Fund's allocation to commercial mortgage-backed securities (CMBS) and U.S. Treasury Inflation Protected Securities (TIPS), which hurt the Fund's results. Of course, the majority of the Fund's holdings remained in the government bond sector. The Fund underperformed its Lipper group due primarily to the Fund's more conservative risk profile in comparison to many of its peers during the period. For example, the Fund had just a small exposure to emerging market bonds, which performed quite well for the period. Q: What changes did you make to the Fund's portfolio during the period? A: We used the May/June global bond sell-off as an opportunity to move the Fund's comparatively short duration closer to a neutral position vs. the Lehman Global Index. The Fund began the period with a duration 0.81 years shorter than the Lehman Global Index and ended the period 0.21 years shorter. In our view, the May/ June sell-off finally brought global bond yields back to our estimates of fair value. Q: What is the Fund's tactical view and strategy for the months ahead? A: The six months ended June 30, 2007, were characterized most by a cyclical divergence between the U.S. and the other major developed nations, with U.S. economic growth slowing, European economies growing rather robustly, and the Japanese economy growing at a near-trend rate. As a result, the U.S. Federal Reserve Board (the Fed) was on hold during the period, maintaining its targeted federal funds rate at 5.25%. The Canadian and Australian central banks were also on hold during the period. The European Central Bank as well as the U.K., Swedish and New Zealand central banks each raised its respective interest rates twice more during the period. Norway's central bank raised its interest rates three times during the period. The Bank of Japan raised its interest rates only one time during the period. Going forward, we believe that the global economy as a whole is moving toward near-trend growth rates, with the U.S. economy anticipated to bounce back during the second half of the year once the impact of the housing slowdown dissipates and the European economy expected to moderate once interest rate hikes there take effect. In turn, we believe that the interest rate tightening cycle of central banks overall is approaching an end. We expect the Fed to remain on hold for an extended period of time, the European Central Bank to finish its tightening by late 2007, and the Bank of Japan to perhaps raise rates twice more before ending its tightening cycle in early 2008. Given this rather static environment for bonds, we expect bond yields to make largely range-bound moves around their June 2007 levels. Given our benign view for the major central banks, we feel comfortable with the Fund's current positioning. We intend to maintain the Fund's generally conservative profile, a stance that we believe will continue to benefit the Fund during the coming months. As always, we constantly monitor the market for changing conditions and regularly re-evaluate the Fund's duration, sector, country, yield curve, and currency positioning in an effort to seek an attractive trade-off between risk and potential return. Our sector teams remain focused on careful individual security selection, as we continue to seek opportunities to capitalize on attractively valued bonds. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 19 RiverSource VP - Global Bond Fund ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
TOTAL 1.00%
AVERAGE ANNUAL TOTAL RETURNS at June 30, 2007 6 months* +0.70% 1 year +5.05% 3 years +4.30% 5 years +6.48% 10 years +4.99% Since inception (5/1/96) +5.24%
* Not annualized. COUNTRY BREAKDOWN Percentage of portfolio assets at June 30, 2007 (PIE CHART) United States 35.1% Japan 10.10% Germany 9.80% France 7.00% United Kingdom 5.10% Italy 3.70% Other(1) 29.20%
(1) Includes Netherlands 3.5%, Spain 3.2%, Canada 3.1%, Belgium 2.1%, Ireland 1.7%, Australia 1.7%, Poland 1.5%, Norway 1.2%, Austria 1.1%, Greece 1.1%, New Zealand 1.0%, Supra-National 1.0%, Sweden 1.0%, Mexico 0.8%, Denmark 0.6%, Czech Republic 0.3%, South Africa 0.3%, Brazil 0.2%, Indonesia 0.2%, Jersey 0.2%, Malaysia 0.2%, South Korea 0.1% and Cash & Cash Equivalents 3.1%. TOP TEN HOLDINGS
PERCENT VALUE (OF PORTFOLIO ASSETS) (AT JUNE 30, 2007) Bundesrepublik Deutschland (Germany) 3.75% 2013 2.7% $25,184,295 Govt of Spain 5.15% 2009 2.6 24,693,604 United Kingdom Treasury 5.00% 2012 2.4 22,639,844 Bundesrepublik Deutschland (Germany) 6.50% 2027 2.2 20,551,209 Govt of France 4.00% 2013 2.1 20,216,518 Kingdom of Belgium 3.00% 2010 2.1 19,925,274 Govt of Netherlands 2.50% 2008 2.1 19,760,593 Buoni Poliennali Del Tesoro (Italy) 6.00% 2007 2.1 19,712,798 Govt of France 5.00% 2012 2.1 19,545,501 United Kingdom Treasury 5.00% 2014 2.0 18,722,186
Note: Certain foreign investment risks include: changes in currency exchange rates, adverse political or economic events, and lack of similar regulatory requirements followed by U.S. companies. For further detail about these holdings, please refer to the section entitled "Investments in Securities." The 10 holdings listed here make PIE CHART up 22.4% of portfolio assets
- -------------------------------------------------------------------------------- 20 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT PORTFOLIO MANAGEMENT Q&A RiverSource VP - Global Inflation Protected Securities Fund Below, portfolio managers Jamie Jackson and Nic Pifer discuss RiverSource VP -- Global Inflation Protected Securities Fund's results and positioning for the six months ended June 30, 2007. Q: How did RiverSource VP - Global Inflation Protected Securities Fund perform for the semiannual period? A: RiverSource VP - Global Inflation Protected Securities Fund fell 0.16% for the six months ended June 30, 2007. The Fund outperformed its benchmark, the Lehman Brothers Global Inflation Linked Index, which fell 1.57%. The Fund underperformed the Blended Index (made up of 50% Lehman Brothers Global Inflation Linked Index (excluding U.S., fully hedged to the U.S. dollar) and 50% Lehman Brothers U.S. Treasury Inflation Protected Securities Index), which rose 0.07%. The Lehman Brothers U.S. Treasury Inflation Protected Securities Index (Lehman Index) advanced 1.73% for the same time frame. PERFORMANCE COMPARISON For the six-month period ended June 30, 2007 (BAR CHART) RiverSource VP - Global Inflation Protected Securities Fund -0.16% Lehman Brothers Global Inflation Linked ex U.S. Hedged Index (unmanaged) -1.57% Lehman Brothers U.S. Treasury Inflation Protected Securities Index (unmanaged) +1.73% Blended Index (unmanaged) +0.07%
The indices do not reflect the effects of expenses. It is not possible to invest directly in an index. The Lehman Brothers Global Inflation Linked Index is an unmanaged index that measures the performance of the inflation protected securities issued in countries around the world, including the United States, the United Kingdom, Canada, Sweden, and France. The index reflects reinvestment of all distributions and changes in market prices. The Lehman Brothers U.S. Treasury Inflation Protected Securities Index is an unmanaged index that measures the performance of the inflation protected obligations of U.S. Treasury. The index reflects reinvestment of all distributions and changes in market prices. The Blended Index consists of 50% Lehman Brothers Global Inflation Linked Index (excluding U.S., fully hedged to the U.S. dollar) and 50% Lehman Brothers U.S. Treasury Inflation Protected Securities Index. Q: What factors most significantly affected the Fund's performance? A: The Fund's significant exposure to Treasury Inflation Protected Securities (TIPS), whose interest payments are automatically adjusted to help offset inflation, challenged the Fund during this six-month period. Yields of TIPS generally moved higher during the period, as anticipation of Federal Reserve Board (the Fed) policy easing did not come to pass, even with inflation levels notably above expectations. This muted Fund returns, as bond yields and prices typically move in opposite directions. Overall U.S. inflation that accrued to the Fund during the semiannual period had an annualized rate of 4.9% compared to just 1.31% for the prior annual period. Overall inflation was particularly high from February through May due to the gradual but persistent increase in food and energy prices. When reviewing the performance of TIPS, it is critical to distinguish between overall inflation and core inflation. Overall inflation takes into consideration food and energy as a component of the cost of living. It is the overall inflation rate to which the principal and interest on TIPS are tied. Actual inflation came in higher than expected for the semiannual period, and that higher inflation got passed through the assets in the Fund. In contrast, core inflation, a measure closely monitored by the Fed, which excludes food and energy, often changes significantly on a monthly basis. Core inflation was below 2.3% for the period, a rate just within the upper end of the Fed's "comfort zone" and modestly lower than generally expected. The Fund's position in non-U.S. dollar inflation-linked bonds also detracted from the Fund's results during the period. Non-U.S. dollar bonds are bonds denominated in foreign currencies. Non-U.S. dollar inflation-linked bonds underperformed U.S. inflation-linked bonds substantially for the six months, reflecting a more pronounced rise in real yields outside the U.S., in general, and in Europe, in particular. A modest Fund position in short-term maturity U.S. government agency bonds further detracted from the Fund's results. The Fund benefited during the period from its defensive positioning in the form of a duration, a measure of the Fund's sensitivity to interest rates, that was shorter than the Lehman Index for most of the period. We had the Fund positioned for higher rates, and, as mentioned above, TIPS yields did rise during the period. Q: What changes did you make to the Fund's portfolio during the period? A: We adjusted the Fund's duration somewhat toward the end of the period. Having maintained a shorter-than-Lehman - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 21 RiverSource VP - Global Inflation Protected Securities Fund Index duration for most of the semiannual period, we extended the Fund's duration toward a neutral position relative to the Lehman Index in June when rates increased to levels consistent with our fair value estimates. During the semiannual period, as the inverted TIPS yield curve started to ease, we focused more of the Fund's positions in securities at the intermediate-term part of the yield curve. Finally, we increased the Fund's allocation to non-U.S. dollar bonds in the Eurozone, including French, German and Italian securities. The Fund's allocations to non-U.S. dollar bonds of the U.K., Japan, Canada and Sweden did not materially shift. Q: What is the Fund's tactical view and strategy for the months ahead? A: Most economists now agree that inflation will not likely slow as much as the Fed would like or as much as investors seem to expect, and thus, the Fed is now expected to be on hold indefinitely. In our view, cyclical inflation pressures, such as stubbornly high energy prices and slowed labor productivity gains, are in place, and we expect inflation to increase gradually over time. We expect core inflation to increase modestly. More importantly from the Fund's perspective, we believe that overall inflation will remain materially above core inflation. That said, we do not expect inflation to be high enough in the next year and a half or so to threaten the economic expansion. Given this view, we intend to maintain the Fund's current neutral duration positioning, or interest rate risk, for the near term. We also intend to maintain the Fund's emphasis on TIPS over nominal Treasuries. We will, of course, continue to closely monitor inflation figures, real rates, security prices, economic data and Fed policy shifts and adjust the portfolio's holdings and duration stance if necessary. COUNTRY BREAKDOWN Percentage of portfolio assets at June 30, 2007 (PIE CHART) United States 51.1% United Kingdom 16.7% France 9.7% Italy 6.9% Germany 4.5% Japan 3.4% Other(1) 7.7%
(1) Includes Canada 2.8%, Sweden 1.9% and Cash & Cash Equivalents 3.0%. ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
TOTAL 0.72%
AVERAGE ANNUAL TOTAL RETURNS at June 30, 2007 6 months* -0.16% 1 year +2.83% Since inception (9/13/04) +2.39%
* Not annualized. - -------------------------------------------------------------------------------- 22 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT PORTFOLIO MANAGEMENT Q&A RiverSource VP - Growth Fund Below, Portfolio Manager Nick Thakore discusses RiverSource VP - Growth Fund's results and positioning for the six months ended June 30, 2007. Q: How did RiverSource VP - Growth Fund perform for the semiannual period? A: RiverSource VP - Growth Fund returned 5.78% for the semiannual period ended June 30, 2007. The Fund underperformed its benchmark, the Russell 1000(R) Growth Index (Russell Index), which returned 8.13% for the period. The Fund also underperformed its peer group, represented by the Lipper Large-Cap Growth Funds Index, which advanced 7.66% for the same period. Q: What factors influenced the Fund's performance during the period? A: Growth stocks led the U.S. equity markets to sharp gains in the first half of 2007. However, during the period, the market was biased in favor of mid-cap stocks, an area where the Fund had less exposure than the overall Russell Index. Though the Fund advanced during the six months, it lagged the Russell Index, partly because it had smaller positions in a number of strong performing stocks. PERFORMANCE COMPARISON For the six-month period ended June 30, 2007 (BAR CHART) RiverSource VP - Growth Fund +5.78% Russell 1000(R) Growth Index (unmanaged) +8.13% Lipper Large-Cap Growth Funds Index +7.66%
The indices do not reflect the effects of expenses (excluding Lipper). It is not possible to invest directly in an index. The Russell 1000(R) Growth Index, an unmanaged index, measures the performance of those stocks in the Russell 1000 Index with higher price-to-book ratios and higher forecasted growth values. The index reflects reinvestment of all distributions and changes in market prices. The Lipper Large-Cap Growth Funds Index includes the 30 largest large-cap growth funds tracked by Lipper Inc. The index's returns include net reinvested dividends. The Fund's performance is currently measured against this index for purposes of determining the performance incentive adjustment. The Fund benefited from its positioning in the telecommunication services and information technology sectors. Telecommunication services was among the stronger performing sectors of the Russell Index, and the Fund's allocation was substantial. In addition, stock selection in the sector was favorable. In information technology, our choice of individual stocks was advantageous. Conversely, positioning in the materials, health care and industrials sectors detracted from performance. Materials and industrials were strong sectors for the Russell Index and the Fund had smaller allocations than the Index in both sectors. The Fund had a larger weighting than the Russell Index in the poor performing health care sector and the Fund's health care holdings lagged the sector. Among the largest individual detractors were Virgin Media, XM Satellite Radio Holdings and Genentech, positions that were larger than the respective weightings in the Russell Index. Virgin Media struggled as fundamentals weakened and the company disappointed investors with first quarter 2007 earnings. The stock appeals to us based on the underlying value of its assets, a strong economic model for delivering cable, broadband and telephone services, and avenues for continued growth. We owned XM Satellite Radio Holdings before the announcement of its planned merger with Sirius Satellite Radio, with the expectation that a union of the two companies would be a significant positive. Though the companies remain in active merger talks, XM Satellite Radio's stock has languished because the market doubts the deal will close. We think there is a good chance the merger will succeed and even if it does not, we consider the stock's risk/reward profile reasonable based on its current valuation. Biotechnology firm Genentech has suffered from concerns about decelerating growth, competition from new entrants into its markets and a trend toward lower doses on a leading product, which would reduce revenue. Despite some deceleration, the stock has remained a great growth opportunity and recent earnings have exceeded expectations. This stock illustrates a key theme in the Fund -- great growth stocks reaching valuations attractive enough that we want to own them. Leading contributors to performance included Vodafone Group, QUALCOMM and Google. The Fund's position in each of these stocks was larger than the respective Russell Index weighting. Vodafone Group, a European telecommunications company with a large wireless presence, began the period at a relatively inexpensive valuation. A combination of improving fundamentals and expectations that were initially quite low led to strong performance. QUALCOMM, a semiconductor company - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 23 RiverSource VP - Growth Fund that makes chips for handheld wireless devices, is entering a major product cycle in which the company has a virtual monopoly. Going forward, as many as 90% of all cell phones are expected to have QUALCOMM's 3G technology, potentially earning the company significant royalties. Internet search engine Google continues to perform well, growing rapidly and decelerating slower than the market expected. During the past six months the market's valuation of Google finally began to catch up with the company's solid, steady execution of its business strategy. Q: What changes did you make to the Fund during the period? A: We made only minor changes to the portfolio's sector allocations. We added to technology, where performance had been pretty poor, when we began to find interesting opportunities at attractive valuations. We still have confidence in the growth potential of the telecommunications services sector and during the quarter, we added to several European telecommunication stocks, while selling some U.S. telecommunication stocks. We also identified several consumer discretionary stocks that were attractive, which led to a larger weighting in that sector. We modestly reduced the health care and consumer staples weightings and sold some energy stocks. Q: How do you plan to manage the Fund in the coming months? A: A major theme within the portfolio is our interest in "mega-cap" companies, that is, the very largest companies within the Fund's equity universe. These stocks are more attractively valued than ever before compared to the rest of the stock market. In addition, they have faster growth rates and better earnings revision trends than the overall market. We have also been focusing more on stocks generating high free cash flow. Free cash flow has always been among the criteria in our selection process, but our interest in this factor has become more pronounced. In a decelerating economy, aggregate free cash flow is likely to decline, making companies that can maintain it even more attractive. This characteristic can also make companies more appealing for acquisitions and private equity buyouts, which have been drivers behind recent market performance. Another significant theme is the preference for stable growth companies over cyclical companies. With a resilient but decelerating economy, the door is open to either a strong equity market or a weak one. In the past, stable growth companies have performed well amid such uncertainty. Compared to cyclical stocks, stable growth companies are delivering better earnings growth than they have in a long time. In addition, we now find valuations of these companies much more attractive. - -------------------------------------------------------------------------------- 24 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Growth Fund ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
TOTAL 1.01%
AVERAGE ANNUAL TOTAL RETURNS at June 30, 2007 6 months* +5.78% 1 year +18.63% 3 years +10.81% 5 years +8.69% Since inception (9/15/99) -2.33%
* Not annualized. SECTOR BREAKDOWN* Percentage of portfolio assets at June 30, 2007 (PIE CHART) Information Technology 23.8% Health Care 19.4% Consumer Discretionary 16.2% Telecommunication Services 13.9% Consumer Staples 8.6% Industrials 4.9% Other(1) 13.2%
(1) Includes Financials 4.7%, Materials 3.1%, Energy 2.7%, Options Purchased 0.3% and Cash & Cash Equivalents(2) 2.4%. (2) Of the 2.4%, 0.4% is due to security lending activity, 0.1% is due to open options contracts and 1.9% is the Fund's cash equivalent position. * Sectors can be comprised of several industries. Please refer to the section entitled "Investments in Securities" for a complete listing. No single industry exceeds 25% of portfolio assets. The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. TOP TEN HOLDINGS
PERCENT VALUE (OF PORTFOLIO ASSETS) (AT JUNE 30, 2007) Virgin Media 7.5% $49,311,402 Vodafone Group 4.3 28,408,195 QUALCOMM 4.2 27,453,417 Harman Intl Inds 4.0 26,280,234 Cisco Systems 2.5 16,499,927 Google Cl A 2.3 15,057,119 Genentech 2.2 14,415,348 Telefonaktiebolaget LM Ericsson ADR 2.2 14,388,602 Merck & Co 2.1 13,925,424 Altria Group 1.9 12,485,692
For further detail about these holdings, please refer to the section entitled "Investments in Securities." The 10 holdings listed here make PIE CHART up 33.2% of portfolio assets
- -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 25 PORTFOLIO MANAGEMENT Q&A RiverSource VP - High Yield Bond Fund Below, portfolio manager Scott Schroepfer discusses RiverSource VP - High Yield Bond Fund's results and positioning for the semiannual period ended June 30, 2007. Q: How did RiverSource VP - High Yield Bond Fund perform for the semiannual period? A: RiverSource VP - High Yield Bond Fund rose 3.29% for the semiannual period ended June 30, 2007, underperforming its benchmark, the JP Morgan Global High Yield Index (JP Morgan Index), which advanced 3.63% during the period. The Fund also underperformed its peer group, the Lipper High Current Yield Bond Funds Index, which returned 3.31% during the same time frame. Q: What factors most significantly affected performance for the period? A: The six-month period was punctuated by the particularly volatile month of June. The fixed income market saw increased volatility during the month due to several factors. First, woes in the subprime mortgage market continued to trouble the credit markets, leading to a broad reassessment of risk levels and sparking caution among lenders and investors. Second, the high yield corporate bond and bank loan markets stumbled on the latest major wave of higher risk new issue supply, much of which was related to several larger leveraged buyout transactions entering the market. Despite the turmoil, the Fund turned in positive results PERFORMANCE COMPARISON For the six-month period ended June 30, 2007 (BAR CHART) RiverSource VP - High Yield Bond Fund +3.29% JP Morgan Global High Yield Index (unmanaged) +3.63% Lipper High Current Yield Bond Funds Index +3.31%
The indices do not reflect the effects of expenses (excluding Lipper). It is not possible to invest directly in an index. The JP Morgan Global High Yield Index is an unmanaged index used to mirror the investable universe of the U.S. dollar global high yield corporate debt market of both developed and emerging markets. The index reflects reinvestment of all distributions and changes in market prices. The Lipper High Current Yield Bond Funds Index includes the 30 largest high yield bond funds tracked by Lipper Inc. The index's returns include net reinvested dividends. that performed in line with the Fund's peer group, the Lipper High Current Yield Bond Funds Index. The Fund's overweight positioning in the health care sector contributed positively to performance during the period, as did security selection within the sector. The Fund had large exposures to several companies that were bought out or filed initial public offerings during the period and the Fund's holdings benefited from these positive events. Positions in hospital owner HCA and long-term acute care hospital Select Medical contributed positively to performance. In addition, Triad Hospitals and Community Health Systems benefited during the period when the companies agreed to merge and redeem their existing bonds at a premium earlier than expected. The Fund also benefited from its more modest exposure to auto-related companies, such as GMAC and Ford Motor Credit, which lagged during the period. Individual positions that helped Fund performance included retailer Toys "R" Us and West Corp., a provider of outsourced communication solutions. Detracting from performance during the period was the Fund's position in retail holding Claire's Stores. The accessories retailer suffered during the period and detracted from the Fund's results. Lastly, Realogy, a real estate franchisor for the Century 21 and Coldwell Banker brands, underperformed in June. The firm was one of the last leveraged buyouts completed; however, the current turmoil in the debt market combined with the housing downturn caused the bonds to rapidly drop in value at the tail end of the period. Q: What changes did you make to the portfolio and how is it currently positioned? A: We added exposure to floating rate bank loans and other floating rate securities during the period. This strategy reflected our belief that floating rate issues, which are reset in line with changes in market rates, were attractively valued relative to fixed rate securities in a rising interest rate environment. In addition, in many cases, adding bank loan exposure positioned the Fund in a more senior part of a company's capital structure, providing attractive risk-adjusted returns. We lowered the Fund's exposure to the media industry (broadcast, television and radio), which has traditionally been an overweight in the Fund's portfolio relative to the JP Morgan Index due primarily to relative valuation levels. The Fund continues to have larger exposure than the JP Morgan Index in the health care and energy sectors as well as in the wireline telecommunications and cable industries. Underweights in the Fund's portfolio relative to the JP Morgan Index include the industrials and information technology sectors. - -------------------------------------------------------------------------------- 26 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - High Yield Bond Fund Q: What is the Fund's tactical view and strategy for the months ahead? A: Going forward, we continue to believe that the key to potential outperformance will be leveraging our strength in credit research. We strive to select the right bonds while maintaining a diligent review of potential credit risks at individual companies. We sell bonds when we believe that risks outweigh a bond's total return potential. We have a bottom-up approach when selecting credits. One of our competitive advantages is that our team of nine analysts performs in-depth research to acquire deep knowledge and insight of the industries it covers. We believe that good security selection based on quality and in-depth security research will be key to performance in the near term. We believe that the U.S. may well be in the later stages of the current economic recovery when economic growth may be expected to slow. We further expect corporate earnings growth to slow, which along with slower productivity gains, rising energy and commodity costs and higher labor costs, will likely put pressure on profit growth. Finally, while company fundamentals generally remain solid, we anticipate that the default rate within the high yield bond market, while not spiking dramatically, is poised to move higher over the next twelve months. There has been more aggressive issuance within the high yield bond market of late and a greater percentage of bonds rated CCC coming into the market. Given this view, taking incremental risk when valuations do not justify it does not seem prudent. We intend to continue upgrading credit quality in the Fund's portfolio. We further intend, of course, to continue to seek opportunities to capitalize on attractively valued bonds that have the potential for positive returns. ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
TOTAL 0.88%
AVERAGE ANNUAL TOTAL RETURNS at June 30, 2007 6 months* +3.29% 1 year +11.16% 3 years +9.35% 5 years +11.42% 10 years +4.80% Since inception (5/1/96) +5.39%
* Not annualized. SECTOR BREAKDOWN* Percentage of portfolio assets at June 30, 2007 (PIE CHART) Consumer Discretionary 18.9% Telecommunication 18.9% Materials 12.5% Health Care 12.0% Consumer Staples 8.4% Industrials 7.4% Other(1) 21.9%
(1) Includes Energy 7.0%, Utilities 5.8%, Financials 3.6% and Cash & Cash Equivalents(2) 5.5%. (2) Of the 5.5%, 0.4% is due to security lending activity and 5.1% is the Fund's cash equivalent position. * Sectors can be comprised of several industries. Please refer to the section entitled "Investments in Securities" for a complete listing. No single industry exceeds 25% of portfolio assets. TOP TEN CORPORATE BOND HOLDINGS
PERCENT VALUE (OF PORTFOLIO ASSETS) (AT JUNE 30, 2007) Williams Companies 7.63% 2019 1.3% $15,545,425 Community Health Systems 8.88% 2015 1.1 13,300,399 Windstream 8.63% 2016 1.1 12,960,719 INVISTA 9.25% 2012 1.0 12,641,364 Select Medical 11.08% 2015 1.0 12,569,167 Realogy 12.38% 2015 0.9 11,082,313 Cott Beverages USA 8.00% 2011 0.9 11,055,459 ASG Consolidated LLC/Finance 12.01% 2011 0.9 11,020,500 MedCath Holdings 9.88% 2012 0.9 10,760,392 Georgia-Pacific 7.13% 2017 0.9 10,468,800
For further detail about these holdings, please refer to the section entitled "Investments in Securities." The 10 holdings listed here make PIE CHART up 10.0% of portfolio assets
- -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 27 PORTFOLIO MANAGEMENT Q&A RiverSource VP - Income Opportunities Fund Below, Brian Lavin, portfolio manager for RiverSource VP - Income Opportunities Fund discusses the Fund's results and positioning for the semiannual period ended June 30, 2007. Q: How did RiverSource VP - Income Opportunities Fund perform for the semiannual period? A: RiverSource VP - Income Opportunities Fund returned 2.49% for the six months ended June 30, 2007. The Fund underperformed its benchmark, the unmanaged Merrill Lynch U.S. High Yield Cash Pay BB-B Rated Constrained Index (Merrill Lynch Index), which gained 2.57%. The Fund's peer group, as represented by the Lipper High Current Yield Bond Funds Index, returned 3.31% during the same period. Q: What factors most significantly affected the Fund's performance? A: The Fund benefited most from its greater allocation to bonds rated B and B- and to split-rated bonds, wherein two or more major rating agencies give the same security different ratings than the Merrill Lynch Index. As riskier areas of the high yield bond market significantly outperformed higher quality bonds during the semiannual period, such positioning gave the Fund a notable yield advantage over the Merrill Lynch Index for the six months ended June 30, 2007. PERFORMANCE COMPARISON For the six-month period ended June 30, 2007 (BAR CHART) RiverSource VP - Income Opportunities Fund +2.49% Merrill Lynch U.S. High Yield Cash Pay BB-B Rated Constrained Index (unmanaged) +2.57% Lipper High Current Yield Bond Funds Index +3.31%
The indices do not reflect the effects of expenses (excluding Lipper). It is not possible to invest directly in an index. The Merrill Lynch U.S. High Yield Cash Pay BB-B Rated Constrained Index is an unmanaged index of high yield bonds. The index is subject to a 2% cap on allocation to any one issuer. The 2% cap is intended to provide broad diversification and better reflect the overall character of the high yield market. The index reflects reinvestment of all distributions and changes in market prices. The Lipper High Current Yield Bond Funds Index includes the 30 largest high yield bond funds tracked by Lipper Inc. The index's returns include net reinvested dividends. The Fund also benefited during the period from its significant allocations to the health care and media industries, which generally performed well, and from its more modest exposure to auto loan companies, such as GMAC and Ford Motor Credit, which lagged. Security selection within the health care industry also boosted the Fund's results. Long-term acute care hospital company Select Medical rebounded from poor performance in 2006 primarily due to an ease of concern over its reimbursement framework. Positions in hospital owners HCA and Triad Hospitals also performed well. In other sectors, NewPage, a coated white paper manufacturer, PQ, a chemical company, and Alion Science and Technology, a defense company, were particularly strong performers. Conversely, modest allocations to the metals and mining and the capital goods industries, which outpaced the Merrill Lynch Index, detracted from the Fund's results. In the paper and forest products industry, newsprint paper company Abitibi-Consolidated disappointed. Abitibi-Consolidated faced challenging fundamentals, as there was too much supply and too little demand for newsprint paper during the period. There were also several positions in the Fund that were hurt by sharply rising interest rates over the six months. Finally, as mentioned, the riskiest areas of the high yield bond market significantly outperformed higher quality bonds during the semiannual period. Because the Fund maintained a greater emphasis on bonds rated BB than its Lipper peer group, the Fund's performance relative to the Lipper Index lagged. Q: What changes did you make to the Fund's portfolio during the period? A: For most of the semiannual period, the Fund maintained a somewhat more aggressive stance than the Merrill Lynch Index. Then, beginning in May, as interest rates rose sharply and yield spreads between high yield corporate bonds and equivalent-duration U.S. Treasuries narrowed, we reduced the Fund's positions in lower rated bond holdings. In doing so, the Fund ended the period with a ratings profile closer to that of the Merrill Lynch Index, although still slightly more biased toward bonds rated B on a comparative basis. We increased the Fund's positions in high yield bank loans during the period. Bank loans historically tend to be more senior in the capital structure, meaning that they have precedence over other securities in the event of a default or bankruptcy. Bank loans are also floating rate securities, which were attractively valued relative to fixed rate securities in a rising interest rate environment. Floating rate issues are reset in line with changes in - -------------------------------------------------------------------------------- 28 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Income Opportunities Fund market rates, and indeed, these floating securities enabled the Fund to capture higher rates through the frequent resets of these securities' yields when rates moved higher during these months. We made no significant changes in industry allocations. Any shifts over the period were as the direct result of our focus on bottom-up security selection and opportunistic trades. At the end of the semiannual period, the Fund had sizable allocations compared to the Merrill Lynch Index in health care, media, gaming, energy, paper and forest products, and defense. The Fund had more modest exposure than the Merrill Lynch Index to the autos, retail, homebuilders, metals and mining, technology and integrated utilities industries at the end of June 2007. Q: What is the Fund's tactical view and strategy for the months ahead? A: Going forward, we continue to believe that the key to potential outperformance will be leveraging our strength in credit research. We strive to select the right bonds while maintaining a diligent review of potential credit risks at individual companies. We sell bonds when risks outweigh a bond's total return potential. We have a bottom-up approach when selecting credits. One of our competitive advantages is that our team of nine analysts performs in-depth research to acquire deep knowledge and insight of the industries they cover. We believe that good security selection based on quality and in-depth security research will be key to performance in the near term. On the macro front, we believe that there is a high probability of the Federal Reserve Board keeping the targeted federal funds rate at its current 5.25% for an extended period of time. The prospects for stronger economic growth both in the U.S. and abroad, and the positive implications for corporate profit growth, have thus offset any ongoing concerns about accelerating inflation or higher long-term interest rates. During the remainder of 2007, however, slowing productivity growth, higher unit labor costs and higher interest rates may prove challenging for corporate managements to keep profit growth from slowing. It is also important to note that while the fallout from the subprime mortgage turmoil needs to be monitored, we do not believe it will be a linchpin to a more widespread economic recession. Finally, while company fundamentals generally remain solid, we anticipate that the default rate within the high yield bond market, while not spiking dramatically, may increase somewhat after next year, as there has been more aggressive issuance within the high yield bond market of late and a greater percentage of bonds rated CCC coming into the market. In fact, issuance for leveraged buyout (LBO) financing over the first half of 2007 has already surpassed issuance for LBO financing during the entirety of 2006. Given our view for the more near term, however, we intend to more closely align the Fund's portfolio with the Merrill Lynch Index from a ratings perspective. We further intend, of course, to continue to seek opportunities to capitalize on attractively valued bonds that have the potential for positive returns. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 29 RiverSource VP - Income Opportunities Fund ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
TOTAL 0.90%
AVERAGE ANNUAL TOTAL RETURNS at June 30, 2007 6 months* +2.49% 1 year +9.36% 3 years +7.52% Since inception (6/1/04) +7.82%
* Not annualized. SECTOR BREAKDOWN* Percentage of portfolio assets at June 30, 2007 (PIE CHART) Consumer Discretionary 18.2% Telecommunication 16.3% Materials 11.5% Utilities 9.4% Industrials 8.7% Energy 8.6% Other(1) 27.3%
(1) Includes Consumer Staples 7.8%, Health Care 7.7%, Financials 7.3% and Cash & Cash Equivalents 4.5%. * Sectors can be comprised of several industries. Please refer to the section entitled "Investments in Securities" for a complete listing. No single industry exceeds 25% of portfolio assets. TOP TEN CORPORATE BOND HOLDINGS
PERCENT VALUE (OF PORTFOLIO ASSETS) (AT JUNE 30, 2007) Dow Jones CDX North America High Yield 7.63% 2012 3.8% $23,639,999 Williams Companies 7.88% 2021 1.3 8,035,624 Smurfit-Stone Container Enterprises 8.00% 2017 1.2 7,129,500 Windstream 8.63% 2016 1.1 6,863,173 GMAC 7.70% 2016 1.1 6,714,600 Salem Communications Holding 7.75% 2010 1.1 6,634,689 Cott Beverages USA 8.00% 2011 1.1 6,524,600 Community Health Systems 8.88% 2015 1.0 6,366,349 Seagate Technology HDD Holdings 6.80% 2016 1.0 6,336,000 EchoStar DBS 7.13% 2016 1.0 6,016,512
For further detail about these holdings, please refer to the section entitled "Investments in Securities." The 10 holdings listed here make PIE CHART up 13.7% of portfolio assets
- -------------------------------------------------------------------------------- 30 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT PORTFOLIO MANAGEMENT Q&A RiverSource VP - International Opportunity Fund RiverSource VP - International Opportunity Fund portfolio managers Alex Lyle and Dominic Rossi of Threadneedle International Limited (Threadneedle) discuss the Fund's results and positioning for the six months ended June 30, 2007. Threadneedle, an indirect wholly-owned subsidiary of Ameriprise Financial, Inc., acts as the subadviser to the Fund. Q: How did RiverSource VP - International Opportunity Fund perform for the semiannual period? A: RiverSource VP - International Opportunity Fund gained 9.95% for the six months ended June 30, 2007. The Fund underperformed its benchmark index, the Morgan Stanley Capital International EAFE Index (MSCI Index), which returned 11.09%. The Fund also underperformed the Lipper International Large-Cap Core Funds Index, representing the Fund's peer group, which gained 10.76% for the same time frame. PERFORMANCE COMPARISON For the six-month period ended June 30, 2007 (BAR CHART) RiverSource VP - International Opportunity Fund +9.95% MSCI EAFE Index (unmanaged) +11.09% Lipper International Large-Cap Core Funds Index +10.76%
The indices do not reflect the effects of expenses (excluding Lipper). It is not possible to invest directly in an index. The Morgan Stanley Capital International (MSCI) EAFE Index, an unmanaged index, is compiled from a composite of securities markets of Europe, Australia and the Far East. The index is widely recognized by investors in foreign markets as the measurement index for portfolios of non-North American securities. The index reflects reinvestment of all distributions and changes in market prices. The Lipper International Large-Cap Core Funds Index includes the 30 largest international large-cap core funds tracked by Lipper Inc. The index's returns include net reinvested dividends. The Fund's performance is currently measured against this index for purposes of determining the performance incentive adjustment. Q: What factors most significantly affected the Fund's performance? A: The Japanese market underperformed during the period. In addition, the Fund's sector selection, favoring domestic cyclical areas in this market, proved unhelpful. The Fund's investments in China, such as China Overseas Land & Investment and China Mobile, contributed positively to performance. In addition, China Merchants Bank, a leader in the rapidly growing Chinese consumer lending sector, announced strong results during the period. European stocks that performed well included the UK-based international building materials supplier Hanson; London-based bank Standard Chartered; the world's largest steel firm, Arcelor Mittal; and Anglo American, a global leader in mining and natural resources. Conversely, stocks that detracted from performance included: British retailer Tesco, which unveiled a disappointing trading statement; Belgian food retailer Colruyt, which released disappointing figures; and UK insurer Admiral Group suffered from negative sentiment towards the motor insurance cycle. Q: What changes did you make to the Fund during the period? A: We reduced the Fund's overall position in Japan. Holdings in Pacific Metal and real estate companies, TOC and Mitsui Fudosan, were sold. We added to the Fund's holding in life insurer T&D Holdings. New additions to the portfolio included trading company Sumitomo Corporation and Kobe Steel. In Europe, the Fund's exposure to the banking sector was decreased by selling the Fund's investment in Switzerland's UBS. Investment in the retail sector was also reduced due to concerns about the impact of rising borrowing costs on consumption. The Fund's holding in Resolution, the UK-based life insurance company, was sold after talks about an acquisition ended. In addition, the Fund's holding in Assa Abloy, a Scandinavian lock and security systems supplier, was reduced. The Fund added to its holdings in ALSTOM, the French power generation and transportation manufacturer, and Swiss consumer goods firm Nestle. We believe China Mobile has excellent growth potential, and therefore, the Fund's holding in the company was increased. Q: How do you intend to manage the Fund going forward? A: We continue to view the outlook for the market in a favorable light and we believe the background for international equities remains positive. Valuations are attractive, corporate results have been encouraging, and - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 31 RiverSource VP - International Opportunity Fund we expect merger and acquisition activity to continue. However, recent volatility in global bond and equity markets, triggered by concerns over the U.S. subprime mortgage market, may continue to impact international equity markets in the immediate future. The Fund is overweight in the UK, where valuations are low. We have a small underweight in Japan relative to the MSCI Index, but we still see strength in Japan's economy. The Fund remains overweight in the Far East, particularly in Hong Kong and China, and in Australian mining stocks. Materials and mining stocks remain a focus for the Fund due to strong demand in those industries combined with limited new supply. Health care is another overweight for the Fund given the aging population and increasing wealth to spend money on health care. Lastly, the Fund is underweight in telecommunications stocks. In our view, the telecommunications industry is suffering from intense competition and overcapacity. We are also underweight in utilities, where valuations appear unattractive. ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
TOTAL 1.08%
AVERAGE ANNUAL TOTAL RETURNS at June 30, 2007 6 months* +9.95% 1 year +23.58% 3 years +21.11% 5 years +14.20% 10 years +5.01% Since inception (1/13/92) +6.82%
* Not annualized. COUNTRY BREAKDOWN Percentage of portfolio assets at June 30, 2007 (PIE CHART) United Kingdom 22.9% Japan 18.4% France 11.1% Germany 9.4% Switzerland 6.5% Hong Kong 3.4% Other(1) 28.3%
(1) Includes Australia 2.8%, Belgium 2.3%, Netherlands 2.0%, Spain 1.9%, Italy 1.8%, Singapore 1.8%, Canada 1.4%, Greece 1.4%, South Africa 1.1%, Sweden 0.9%, China 0.8%, Ireland 0.8%, Austria 0.7%, South Korea 0.7%, Chile 0.6%, Finland 0.6%, Portugal 0.6%, Brazil 0.5%, Denmark 0.5%, Russia 0.5%, Taiwan 0.5%, Indonesia 0.4% and Cash & Cash Equivalents(2) 3.7%. (2) Of the 3.7%, 3.1% is due to security lending activity and 0.6% is the Fund's cash equivalent position. TOP TEN HOLDINGS
PERCENT VALUE (OF PORTFOLIO ASSETS) (AT JUNE 30, 2007) BG Group (United Kingdom) 2.2% $29,073,004 Tesco (United Kingdom) 2.1 28,727,526 Total (France) 2.1 28,114,102 Allianz (Germany) 1.8 23,473,227 Anglo American (United Kingdom) 1.6 21,924,677 Vodafone Group (United Kingdom) 1.6 20,994,929 Roche Holding (Switzerland) 1.5 19,730,039 Toyota Motor (Japan) 1.3 17,619,565 Standard Chartered (United Kingdom) 1.2 16,201,280 Pernod Ricard (France) 1.1 14,660,930
Note: Certain foreign investment risks include: changes in currency exchange rates, adverse political or economic events, and lack of similar regulatory requirements followed by U.S. companies. For further detail about these holdings, please refer to the section entitled "Investments in Securities." The 10 holdings listed here make PIE CHART up 16.5% of portfolio assets
- -------------------------------------------------------------------------------- 32 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT PORTFOLIO MANAGEMENT Q&A RiverSource VP - Large Cap Equity Fund Below, Portfolio Managers Bob Ewing and Nick Thakore discuss RiverSource VP - Large Cap Equity Fund's results and positioning for the six-months ended June 30, 2007. Q: How did RiverSource VP - Large Cap Equity Fund perform for the semiannual period? A: RiverSource VP - Large Cap Equity Fund advanced 6.29% for the six months ended June 30, 2007. The Fund underperformed its benchmarks, the Russell 1000(R) Index (Russell Index), which advanced 7.18%, and the Standard & Poor's 500 Index (S&P 500 Index), which advanced 6.96% during the period. The Fund also underperformed its peer group, the Lipper Large-Cap Core Funds Index, which gained 7.33%. PERFORMANCE COMPARISON For the six-month period ended June 30, 2007 (BAR CHART) RiverSource VP - Large Cap Equity Fund +6.29% Russell 1000(R) Index (unmanaged) +7.18% S&P 500 Index (unmanaged) +6.96% Lipper Large-Cap Core Funds Index +7.33%
The indices do not reflect the effects of expenses (excluding Lipper). It is not possible to invest directly in an index. The Russell 1000(R) Index, an unmanaged index, measures the performance of the 1,000 largest companies in the Russell 3000(R) Index, which represents approximately 90% of the total market capitalization of the Russell 3000 Index. The index reflects reinvestment of all distributions and changes in market prices. The Standard & Poor's 500 Index (S&P 500 Index), an unmanaged index of common stocks, is frequently used as a general measure of market performance. The index reflects reinvestment of all distributions and changes in market prices. The Lipper Large-Cap Core Funds Index includes the 30 largest large-cap core funds tracked by Lipper Inc. The index's returns include net reinvested dividends. The Fund's performance is currently measured against this index for purposes of determining the performance incentive adjustment. Q: What factors had a significant impact on performance? A: Though U.S. equities advanced strongly during the period, the Fund did not keep pace with the Russell Index as the market did not reward the primary investment themes within the portfolio. Specifically, the Fund emphasized large-cap stocks within the Russell Index, while the market preferred mid-cap and small-cap stocks. Another key theme was the focus on stable growth stocks, rather than more economically dependent cyclical stocks. Though large-cap growth did outperform large-cap value during the period, this positioning was only modestly effective for the Fund. Stock selection, particularly in the consumer discretionary, materials and consumer staples sectors, was responsible for the Fund's underperformance of the Russell Index. Conversely, selection in the information technology, industrials and telecommunication services sectors added value during the period. The Fund had a larger telecommunication services position than the Russell Index and a smaller financials position, both of which added to performance. This was offset by an energy weighting that was smaller than the Russell Index. Individual contributors to performance included Vodafone Group, QUALCOMM and Nokia. The Fund's holdings in each of these stocks were larger than the respective Russell Index weightings. Vodafone Group, a European wireless telecommunications company, began the period at a relatively inexpensive valuation. A combination of improving fundamentals and expectations that were initially quite low led to strong performance. QUALCOMM, a semiconductor company that makes chips for handheld wireless devices, is entering a major product cycle in which they have a virtual monopoly on technology for the next generation of cell phone handsets. Going forward, as many as 90% of all cell phones are expected to have QUALCOMM's 3G technology, potentially earning the company significant royalties. We believe sales of this next generation of cell phones will accelerate faster than many people expect. Cell phone manufacturer Nokia benefited from a favorable market for wireless handsets, particularly lower cost products in the emerging markets, an area where Nokia has a strong presence. Individual detractors included Virgin Media and XM Satellite Radio Holdings, positions that were larger than the respective weightings in the Russell Index, and Schlumberger, where the Fund had a smaller-than-Russell Index weighting. Virgin Media struggled as fundamentals weakened and the company disappointed investors with its - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 33 RiverSource VP - Large Cap Equity Fund first quarter 2007 earnings. Still, the stock appealed to us based on the underlying value of its assets, a strong economic model for delivering cable, broadband and telephone services, and the potential for continued growth. XM Satellite Radio Holdings remains in active merger talks with Sirius Satellite Radio. We owned the stock before the merger announcement, with the expectation that a union between the two companies would be a significant positive. XM Satellite Radio's stock has languished since the merger announcement because the market doubts the deal will close. Though we think there is a good chance the merger will succeed, even if it does not, we think the stock's risk/reward profile is reasonable based on its current valuation. The Fund was underexposed to Schlumberger, an international oil services company. This underweight reflected both our sector strategy with its reduced emphasis on energy, as well as our belief that Schlumberger was relatively expensive at the start of the fiscal year. Nevertheless, the stock advanced strongly during the period, hampering our performance relative to the Russell Index. Q: What changes did you make to the Fund during the period? A: We increased the Fund's weightings in the information technology and industrials sectors. Within information technology, we added to the semiconductor group, where we see fewer competitive pressures and more attractive valuations. In the industrials sector, segments such as industrial conglomerates became relatively inexpensive, providing an opportunity for us to increase exposure. We reduced the Fund's telecommunications holdings, taking profits in several regional telephone operating companies that performed very well. The telecommunications position remains significantly larger than that of the Russell Index. We also reduced exposure to financials as the unfavorable environment for this sector has lasted longer than anticipated. Q: How do you plan to manage the Fund in the coming months? A: With an economy that has been resilient, but is in the late stages of its cycle, the door is open to either a strong or weak equity market. In the past, stable growth companies have performed well amid such uncertainty and a focus on these companies remains a key investment theme within this Fund. Compared to cyclical stocks, stable growth companies are delivering better earnings growth than they have in a long time. In addition, we now find valuations of these companies much more attractive. The other major portfolio theme is a preference for larger companies within our universe. Larger companies are delivering attractive growth rates and still appear inexpensive relative to mid- and small-cap stocks based on the historical relationships between these groups. Executing these themes has resulted in telecommunication services, consumer discretionary and information technology positions that are larger than the respective Russell Index sectors. Within consumer discretionary, media stocks and homebuilders appear very attractive to us. The Fund's financials, industrials and energy positions are smaller than those of the Russell Index. - -------------------------------------------------------------------------------- 34 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Large Cap Equity Fund ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
TOTAL 0.83%
AVERAGE ANNUAL TOTAL RETURNS at June 30, 2007 6 months* +6.29% 1 year +20.64% 3 years +10.65% 5 years +10.00% 10 years +4.71% Since inception (10/13/81) +10.79%
* Not annualized. SECTOR COMPOSITION* Percentage of portfolio assets at June 30, 2007 (PIE CHART) Financials 17.3% Information Technology 16.6% Health Care 12.6% Consumer Discretionary 12.4% Industrials 8.5% Energy 8.1% Other(1) 24.5%
(1) Includes Telecommunication Services 7.5%, Consumer Staples 7.4%, Materials 3.1%, Utilities 2.5% and Cash & Cash Equivalents(2) 4.0%. (2) Of the 4.0%, 0.7% is due to security lending activity, 0.04% is due to open options contracts and 3.3% is the Fund's cash equivalent position. * Sectors can be comprised of several industries. Please refer to the section entitled "Investments in Securities" for a complete listing. No single industry exceeds 25% of portfolio assets. The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. TOP TEN HOLDINGS
PERCENT VALUE (OF PORTFOLIO ASSETS) (AT JUNE 30, 2007) Exxon Mobil 3.3% $117,706,119 Virgin Media 2.9 103,019,592 General Electric 2.0 68,652,462 Pfizer 1.8 64,802,843 QUALCOMM 1.8 62,375,859 Citigroup 1.7 61,111,059 Bank of America 1.6 57,243,248 American Intl Group 1.6 55,910,552 Vodafone Group 1.6 54,563,434 Altria Group 1.4 50,771,540
For further detail about these holdings, please refer to the section entitled "Investments in Securities." The 10 holdings listed here make PIE CHART up 19.7% of portfolio assets
- -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 35 PORTFOLIO MANAGEMENT Q&A RiverSource VP - Large Cap Value Fund Below, Portfolio Manager Bob Ewing discusses RiverSource VP - Large Cap Value Fund's results and positioning for the six-month period ended June 30, 2007. Q: How did RiverSource VP - Large Cap Value Fund perform for the semiannual period? A: RiverSource VP - Large Cap Value Fund advanced 5.92% for the six months ended June 30, 2007. The Fund underperformed its benchmark, the Russell 1000(R) Value Index (Russell Index), which increased 6.23% during the period. The Fund also underperformed its peer group, the Lipper Large-Cap Value Funds Index, which gained 7.27% during the same time frame. Q: What factors significantly affected performance? A: The stock market delivered strong gains for the first six months of the Fund's fiscal year. However, the market did not favor our key investment themes. Within the portfolio, we emphasized the larger stocks in our universe, while the market generally preferred mid- and small-cap stocks. We preferred higher quality stocks over lower quality stocks, but large blue chip stocks tended to lag the average stock PERFORMANCE COMPARISON For the six-month period ended June 30, 2007 (BAR CHART) RiverSource VP - Large Cap Value Fund +5.92% Russell 1000(R) Value Index (unmanaged) +6.23% Lipper Large-Cap Value Funds Index +7.27%
The indices do not reflect the effects of expenses (excluding Lipper). It is not possible to invest directly in an index. The Russell 1000(R) Value Index, an unmanaged index, measures the performance of those stocks in the Russell 1000 Index with lower price-to-book ratios and lower forecasted growth values. The index reflects reinvestment of all distributions and changes in market prices. The Lipper Large-Cap Value Funds Index includes the 30 largest large-cap value funds tracked by Lipper Inc. The index's returns include net reinvested dividends. The Fund's performance is currently measured against this index for purposes of determining the performance incentive adjustment. during the six months. Investors have come to accept that there is more longevity to this economic cycle than previously thought, which worked against these themes. We also favored stocks traditionally considered to have growth characteristics, but which have been priced more like value stocks. This slight bias toward growth was modestly advantageous. The Fund's sector allocations had a favorable effect on return relative to the Russell Index, but this was offset by stock selection. Having a smaller financials position than the Russell Index, a larger industrials position and a larger information technology position were all advantageous. Smaller weightings in energy and materials than the Russell Index were disadvantageous. Stock selection in the consumer discretionary and consumer staples sectors hampered the Fund's performance. A number of individual detractors had exposure to consumer spending and the weakening housing industry, including Countrywide Financial and Hovnanian Enterprises. Countrywide Financial suffered from declining mortgage applications, price competition and rising concerns about subprime lending, a mortgage segment where Countrywide has only modest exposure. Hovnanian Enterprises appealed to us for its attractive valuation at the start of the period, but fundamentals failed to stabilize and homebuilding stocks were disappointing overall. Another detractor, Spectrum Brands, which makes consumer products such as batteries and fertilizer, faced discouraging fundamental trends, debt issues and a corporate restructuring designed to cut costs. In addition, the deal for the sale of a division fell through. Though we had significantly reduced the Fund's holdings of Spectrum Brands before the start of this fiscal year, its decline was large enough to impact six-month performance. Stock selection in the industrials and financials sectors contributed positively to performance. Within the industrials sector, Honeywell Intl and Caterpillar were key contributors. In addition to its industrial exposure, Honeywell Intl operates in aerospace and defense, an area that has been particularly strong. Heavy machinery manufacturer Caterpillar benefited from strength in the farming industry where high corn and grain prices have driven increased activity. In addition, new emissions standards for heavy duty engines turned out to be less problematic for the company than previously anticipated. Within the financials sector, the Fund benefited from strong performance from brokerage firms. The Fund's de-emphasis of household products company Procter and Gamble, which declined slightly during the period, helped the Fund's performance relative to the - -------------------------------------------------------------------------------- 36 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Large Cap Value Fund Russell Index. The Russell Index's Procter and Gamble allocation is substantial. The Fund's holdings were significantly smaller because we don't consider it prudent to have such a large individual position and because we believe the stock's high valuation leaves little room for any disappointments from the company. Q: What changes did you make during the period? A: We increased the Fund's energy exposure. Though valuations of refiners and exploration and production companies already reflected recent strong performance, we found valuations attractive in other energy areas, such as offshore drilling and integrated oil and gas companies. We also added to the Fund's health care position, particularly pharmaceutical companies, based on attractive valuations. We reduced the Fund's consumer discretionary position, primarily decreasing exposure to stocks that are directly or indirectly affected by the housing market or how consumers feel about their finances, such as homebuilders, retailers and restaurants. However, the Fund's consumer discretionary position remains larger than that of the Russell Index. We also decreased the telecommunication services allocation, taking profits in several regional telephone operating companies that have performed very well. Q: How do you plan to manage the Fund in the coming months? A: At this point, we expect economic growth to be stable at relatively modest growth rates. We are in the late stages of this economic cycle and, in our view, valuations on economically sensitive companies are high by historical standards. This scenario supports continued implementation of our current themes: preferring larger companies over smaller companies that are trading at attractive valuations and focusing on higher quality companies. Executing these themes has led to information technology and consumer discretionary positions that are larger than those of the Russell Index and financials and consumer staples positions that are smaller. We remain firmly committed to our value strategy. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 37 RiverSource VP - Large Cap Value Fund ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
TOTAL NET EXPENSES(A) 1.23% 1.05%
(a) The investment manager and its affiliates have contractually agreed to waive certain fees and to absorb certain expenses until Dec. 31, 2007, unless sooner terminated at the discretion of the Fund's Board. Any amounts waived will not be reimbursed by the Fund. Under this agreement, net fund expenses (excluding fees and expenses of acquired funds) will not exceed 1.05%. AVERAGE ANNUAL TOTAL RETURNS at June 30, 2007 6 months* +5.92% 1 year +21.05% 3 years +12.81% Since inception (2/4/04) +11.71%
* Not annualized. SECTOR BREAKDOWN* Percentage of portfolio assets at June 30, 2007 (PIE CHART) Financials 28.0% Energy 12.2% Industrials 9.9% Consumer Discretionary 9.8% Information Technology 9.0% Health Care 7.9% Other(1) 23.2%
(1) Includes Telecommunication Services 6.5%, Consumer Staples 5.5%, Utilities 4.4%, Materials 3.2% and Cash & Cash Equivalents 3.6%. * Sectors can be comprised of several industries. Please refer to the section entitled "Investments in Securities" for a complete listing. No single industry exceeds 25% of portfolio assets. The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. TOP TEN HOLDINGS
PERCENT VALUE (OF PORTFOLIO ASSETS) (AT JUNE 30, 2007) Exxon Mobil 4.6% $1,257,361 Citigroup 3.5 955,020 Bank of America 3.4 913,559 AT&T 2.4 662,382 Chevron 2.3 617,900 Pfizer 2.2 594,247 General Electric 2.0 552,572 American Intl Group 1.9 525,155 JPMorgan Chase & Co 1.9 506,399 Verizon Communications 1.9 505,568
For further detail about these holdings, please refer to the section entitled "Investments in Securities." The 10 holdings listed here make PIE CHART up 26.1% of portfolio assets
- -------------------------------------------------------------------------------- 38 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT PORTFOLIO MANAGEMENT Q&A RiverSource VP - Mid Cap Growth Fund Below, portfolio manager John Schonberg and associate portfolio managers Mike Marzolf and Sam Murphy discuss RiverSource VP - Mid Cap Growth Fund's results and positioning for the ended June 30, 2007. Q: How did RiverSource VP - Mid Cap Growth Fund perform for the semiannual period? A: RiverSource VP - Mid Cap Growth Fund advanced 11.55% for the six months ended June 30, 2007, outperforming its benchmark, the Russell Midcap(R) Growth Index (Russell Index), which advanced 10.97% for the period. The Fund's peer group, represented by the Lipper Mid-Cap Growth Funds Index, was up 14.70% for the same time frame. PERFORMANCE COMPARISON For the six-month period ended June 30, 2007 (BAR CHART) RiverSource VP - Mid Cap Growth Fund +11.55% Russell Midcap(R) Growth Index (unmanaged) +10.97% Lipper Mid-Cap Growth Funds Index +14.70%
The indices do not reflect the effects of expenses (excluding Lipper). It is not possible to invest directly in an index. The Russell Midcap(R) Growth Index, an unmanaged index, measures the performance of those stocks in the Russell Midcap Index with higher price-to-book ratios and higher forecasted growth values. The stocks in the index are also members of the Russell 1000(R) Growth Index. The index reflects reinvestment of all distributions and changes in market prices. The Lipper Mid-Cap Growth Funds Index includes the 30 largest mid-cap growth funds tracked by Lipper Inc. The index's returns include net reinvested dividends. The Fund's performance is currently measured against this index for purposes of determining the performance incentive adjustment. Investments in mid-capitalization companies often involve greater risks and potential volatility than investments in larger, more established companies. Q: What factors most significantly affected performance for the period? A: Stocks performed quite well during the past six months, surprising many investors with the strength of the upside advance. The mid-cap growth universe also rose sharply, with cyclical areas such as basic materials and energy performing very well and mid-size stocks benefiting from both increased merger and acquisition activity and more publicly traded companies being taken private. The Fund's outperformance of the Russell Index during the six-month period stemmed mainly from favorable results in the financials, health care and consumer discretionary sectors. In financials, the Fund had a smaller weighting than the Russell Index, which was beneficial as the financials sector was the second weakest Russell Index segment. Overall, the Fund's financial holdings outperformed their peers in the Russell Index. Online brokerage firm TD Ameritrade Holding was a key contributor. Given an unfavorable outlook for banks and attractive historical valuations for online brokers, we saw companies such as TD Ameritrade Holding as potential recipients of new assets. During the period, takeover speculation raised TD Ameritrade's stock price. Stock selection in the health care sector added to return. Examples of strong performers included Dendrite, a pharmaceutical sales support company that was acquired, and pharmacy benefits manager Express Scripts. In our view, Express Scripts was a quality company with a strong market position and a healthy long-term growth rate. Results during the past six months validated our view. The Fund had a smaller consumer discretionary position than the Russell Index, which was advantageous. Stock selection in the sector was also beneficial. The Fund's energy allocation was similar to that of the Russell Index, but within the sector, the Fund did not own some of the more aggressive companies that performed particularly well during the past six months. As a result, energy stock selection detracted from performance relative to the Russell Index. Q: What changes did you make during the period? A: Early in the period, we judiciously repositioned the portfolio, increasing the number of holdings, adjusting sector positions and improving the underlying risk profile. These moves resulted in more consistent performance, less exposure to any individual company and better positioning on a risk-adjusted basis. During the past six months, we continued to reduce the Fund's allocation to consumer discretionary stocks, while - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 39 RiverSource VP - Mid Cap Growth Fund also slightly reducing the health care weighting. We remain concerned that higher interest rates and lower housing prices could hamper consumers' desire and ability to maintain spending. In the health care sector, we continue to favor companies that offer very clear financial benefits to hospitals due to the increased cost pressures facing the industry. We increased the Fund's financials position, which had been smaller than the weighting in the Russell Index. Because we believe we may be approaching the end of an unfavorable interest rate environment, we established a financials weighting similar to that of the benchmark. Q: What is your tactical view and how will you position the Fund for the months ahead? A: In managing the Fund, we currently look at how stocks fit into three thematic "buckets." The first bucket includes stocks we think can appreciate significantly over the next one to three years due to participation in a dominant trend, for example the shift toward conducting more business over the Internet. The second bucket includes stocks with a cyclical theme and a 12- to 18-month time horizon, which may be benefiting from a new or upgraded product or a macroeconomic event such as interest rate changes. The opportunistic bucket, which is smaller than the others, includes stocks expected to deliver results within six months due to factors such as positive earnings surprises, anticipated regulatory rulings or acquisitions. This thematic approach enables us to diversify the time horizon of the Fund's holdings. In our view, it is important to hold stocks that may outperform over different periods in order to deliver solid risk-adjusted returns in the near term, with potential outperformance over the long term. We anticipate continued strong market results through 2007 and we think the mid-cap universe may continue to benefit from the merger and acquisition activity that has recently driven equity markets. Mid-cap companies are desirable acquisitions for large-cap companies and for private equity investors because they offer faster growth than larger companies, but have more proven growth rates than small-cap companies. - -------------------------------------------------------------------------------- 40 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Mid Cap Growth Fund ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
TOTAL 0.88%
AVERAGE ANNUAL TOTAL RETURNS at June 30, 2007 6 months* +11.55% 1 year +14.68% 3 years +8.98% 5 years +9.06% Since inception (5/1/01) +5.62%
* Not annualized. SECTOR BREAKDOWN* Percentage of portfolio assets at June 30, 2007 (PIE CHART) Information Technology 29.7% Health Care 14.9% Consumer Discretionary 11.6% Industrials 11.4% Financials 8.7% Energy 8.5% Other(1) 15.2%
(1) Includes Telecommunication Services 4.0%, Consumer Staples 3.1%, Materials 1.9%, Utilities 1.6% and Cash & Cash Equivalents(2) 4.6%. (2) Of the 4.6%, 1.5% is due to security lending activity and 3.1% is the Fund's cash equivalent position. * Sectors can be comprised of several industries. Please refer to the section entitled "Investments in Securities" for a complete listing. No single industry exceeds 25% of portfolio assets. The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. TOP TEN HOLDINGS
PERCENT VALUE (OF PORTFOLIO ASSETS) (AT JUNE 30, 2007) Maxim Integrated Products 2.2% $14,597,964 T Rowe Price Group 2.0 13,525,128 Advent Software 2.0 13,493,049 St. Jude Medical 2.0 13,481,511 TD Ameritrade Holding 1.9 12,517,900 Electronic Arts 1.6 10,417,593 Endo Pharmaceuticals Holdings 1.5 10,216,182 Sirius Satellite Radio 1.3 8,937,179 Newfield Exploration 1.3 8,591,731 ENSCO Intl 1.3 8,518,094
For further detail about these holdings, please refer to the section entitled "Investments in Securities." The 10 holdings listed here make PIE CHART up 17.1% of portfolio assets
- -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 41 PORTFOLIO MANAGEMENT Q&A RiverSource VP - Mid Cap Value Fund Below, portfolio managers Warren Spitz, Steve Schroll, Laton Spahr and Paul Stocking discuss RiverSource VP - Mid Cap Value Fund's results and positioning for the semiannual period ended June 30, 2007. Q: How did RiverSource VP - Mid Cap Value Fund perform for the semiannual period? A: RiverSource VP - Mid Cap Value Fund returned 15.41% for the six months ended June 30, 2007. The Fund outperformed its benchmark, the Russell Midcap(R) Value Index (Russell Index), which advanced 8.69% for the period. The Fund also outperformed the Lipper Mid-Cap Value Funds Index, representing its peer group, which rose 11.34% over the same time frame. PERFORMANCE COMPARISON For the six-month period ended June 30, 2007 (BAR CHART) RiverSource VP - Mid Cap Value Fund +15.41% Russell Midcap(R) Value Index (unmanaged) +8.69% Lipper Mid-Cap Value Funds Index +11.34%
The indices do not reflect the effects of expenses (excluding Lipper). It is not possible to invest directly in an index. The Russell Midcap(R) Value Index, an unmanaged index, measures the performance of those stocks in the Russell Midcap Index with lower price-to-book ratios and lower forecasted growth values. The stocks in the index are also members of the Russell 1000(R) Value Index. The index reflects reinvestment of all distributions and changes in market prices. The Lipper Mid-Cap Value Funds Index includes the 30 largest mid-cap value funds tracked by Lipper Inc. The index's returns include net reinvested dividends. The Fund's performance is currently measured against this index for purposes of determining the performance incentive adjustment. Q: What factors most significantly affected the Fund's performance? A: The Fund posted impressive gains during the period, especially during the second quarter. Sector allocation, industry selection and individual stock picking across a wide variety of sectors helped the Fund's results. For example, having only a modest allocation to financials, the worst performing sector in the Russell Index during the period, benefited the Fund's six-month performance. Industry allocation within the financials sector -- specifically, an emphasis on insurance companies and minimal exposure to banks -- further boosted relative results. XL Capital was a strong individual performer within the sector. Significant allocations to the producer durables and basic materials industries, as well as the energy sector also contributed to the Fund's performance. In particular, farm machinery manufacturer AGCO, specialty electronics giant Ingersoll-Rand, building products conglomerate American Standard, diverse energy services company McDermott Intl, and fertilizer company Mosaic were standout individual performers. The Fund's stock selection within the health care sector detracted from results. In particular, a significant position in pharmaceutical company Mylan Laboratories hurt. In other sectors, airline company U.S. Air and utility company Pinnacle West disappointed. Q: What changes did you make to the Fund's portfolio during the period? A: Toward the end of February, we saw an opportunity to return the Fund's emphasis toward cyclical sectors, having reduced its exposure to these sectors in favor of the more defensive segments of the equity market during the prior fiscal year. Specifically, during the semiannual period, we reduced the Fund's position in utilities. We increased the Fund's allocations to autos and transportation, basic materials and producer durables. For example, we added to the Fund's positions in Ford Motor, Mosaic and Ingersoll-Rand. Q: What is the Fund's tactical view and strategy for the months ahead? A: We take larger positions in sectors, industries or individual stocks when we believe we have identified factors that other investors have either missed or ignored or strongly disagree with, and that have the potential to move the share values higher. Generally, we are comfortable with the Fund's current positioning, and we have a balanced outlook for the near term. The prospects for stronger economic growth both in the U.S. and abroad, and the positive implications for - -------------------------------------------------------------------------------- 42 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Mid Cap Value Fund corporate profit growth, have thus offset any ongoing concerns about accelerating inflation or higher long-term interest rates. During the remainder of 2007, however, slowing productivity growth, higher unit labor costs, and higher interest rates may prove challenging for corporate managements to keep profit growth from slowing. Thus, we intend to continue monitoring economic data and shifts in market conditions as we seek stock-specific and industry-level opportunities to add value for our shareholders. As always, we will continue to emphasize stocks with attractive valuations, with a focus on mid-sized company stocks. ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
TOTAL 1.07%
AVERAGE ANNUAL TOTAL RETURNS at June 30, 2007 6 months* +15.41% 1 year +23.10% Since inception (5/2/05) +23.32%
* Not annualized. SECTOR BREAKDOWN* Percentage of portfolio assets at June 30, 2007 (PIE CHART) Financials 20.9% Industrials 19.0% Consumer Discretionary 14.4% Energy 10.4% Information Technology 7.8% Materials 7.3% Other(1) 20.2%
(1) Includes Utilities 6.9%, Consumer Staples 4.3%, Health Care 4.3%, Telecommunication Services 2.7%, Telecommunication 0.2% and Cash & Cash Equivalents 1.8%. * Sectors can be comprised of several industries. Please refer to the section entitled "Investments in Securities" for a complete listing. No single industry exceeds 25% of portfolio assets. The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. TOP TEN HOLDINGS
PERCENT VALUE (OF PORTFOLIO ASSETS) (AT JUNE 30, 2007) XL Capital Cl A 3.1% $17,545,637 Everest Re Group 2.6 14,590,025 Ford Motor 2.3 13,268,108 Aon 2.2 12,728,416 Eaton 2.0 11,212,731 McDermott Intl 1.9 10,984,474 ACE 1.9 10,694,734 Loews-Carolina Group 1.9 10,690,227 American Standard Companies 1.8 10,473,550 Ingersoll-Rand Cl A 1.7 9,643,660
For further detail about these holdings, please refer to the section entitled "Investments in Securities." The 10 holdings listed here make PIE CHART up 21.4% of portfolio assets
- -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 43 PORTFOLIO MANAGEMENT Q&A RiverSource VP - S&P 500 Index Fund Below, portfolio manager David Factor discusses RiverSource VP - S&P 500 Index Fund's results and positioning for the semiannual period ended June 30, 2007. Q: How did RiverSource VP - S&P 500 Index Fund perform for the semiannual period? A: RiverSource VP - S&P 500 Index Fund rose 6.72% for the six months ended June 30, 2007, underperforming the 6.96% advance of the Fund's benchmark, the unmanaged Standard & Poor's 500 Index (S&P 500 Index or the Index). The Lipper S&P 500 Objective Funds Index, representing the Fund's peer group, returned 6.82% during the same time frame. Mutual funds, unlike unmanaged indexes, incur operating expenses. The Fund had an expense ratio of 0.50% for the reporting period. This ratio included fee waivers explained in the Financial Highlights section of this report. (See page 140.) PERFORMANCE COMPARISON For the six-month period ended June 30, 2007 (BAR CHART) RiverSource VP - S&P 500 Index Fund +6.72% S&P 500 Index (unmanaged) +6.96% Lipper S&P 500 Objective Funds Index +6.82%
The indices do not reflect the effects of expenses (excluding Lipper). It is not possible to invest directly in an index. The Standard & Poor's 500 Index (S&P 500 Index), an unmanaged index of common stocks, is frequently used as a general measure of market performance. The index reflects reinvestment of all distributions and changes in market prices. The Lipper S&P 500 Objective Funds Index includes the 30 largest S&P 500 funds tracked by Lipper Inc. The index's returns include net reinvested dividends. "Standard & Poor's(R)," "S&P," "S&P 500(R)" and "Standard & Poor's 500(R)" are trademarks of the McGraw-Hill Companies, Inc. These trademarks and service marks have been licensed for use by Ameriprise Financial, Inc. The Funds are not sponsored, endorsed, sold or promoted by Standard & Poor's or any of their subsidiaries or affiliates (the "Licensors") and the Licensors make no representation regarding the advisability of investing in the Funds. Q: What market factors most significantly affected Fund performance? A: The U.S. equity market began 2007 by extending the 2006 rally, but a late February pullback in China's red-hot stock market triggered a sell-off. The correction lasted into early March, as China's woes combined with increasing concerns about the subprime mortgage market and rising energy prices. Calming words from the Federal Reserve Board (the Fed) in the aftermath of the decline, followed by a perceived favorable shift in Fed policy on interest rates, coaxed U.S. investors back into stocks late in March, resulting in a small gain for the first quarter. Interest rate volatility dominated the second quarter. Ten-year Treasury yields traded above 5% for the better part of a month before circling back, as investors grew jittery that faster economic growth and a pickup in inflation would push up interest rates worldwide. Another factor impacting equities during the quarter was heightened concerns regarding potential fallout from the subprime mortgage turmoil, especially given the near collapse of two hedge funds sponsored by investment banking giant Bear Stearns that speculated in securities built on the performance of mortgages. A still-faltering housing market, wherein existing home sales fell to the lowest level in four years, and crude oil prices passing the $70 per barrel milestone for the first time since August of 2006, further affected the equity market during the second quarter. With all that, the second quarter was strong, as better-than-expected corporate earnings, increased company share buybacks and a solid economic backdrop buoyed investor sentiment for stocks. Indeed, some U.S. equity indexes finished the second quarter with their best gains since the fourth quarter of 2003. Q: Which equity sectors and securities affected the S&P 500 Index' performance most during the six months? A: All but one of the sectors in the S&P 500 Index produced solid positive returns for the semiannual period. Energy and information technology were the best performing sectors in the S&P 500 Index. The top performing industries for the period were oil, gas and consumable fuels; computers and peripherals; diversified telecommunication services; energy equipment and services; and pharmaceuticals. On the other hand, financials and consumer discretionary were the two weakest sectors, with financials, the largest sector by weighting in the Index and in the Fund, posting negative returns and detracting most from the Fund's semiannual performance. Indeed, four of the five weakest performing industries were part of the financials sector, namely diversified financial services, commercial banks, - -------------------------------------------------------------------------------- 44 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - S&P 500 Index Fund real estate investment trusts, and thrifts and mortgage finance. Among individual stocks in the S&P 500 Index, AT&T, Exxon Mobil, Apple, Tyco Intl and Schlumberger contributed the most to returns during the six-month period. The biggest underperformers were Citigroup, Amgen, Bank of America, Johnson & Johnson and Wachovia. As always, each sector and stock in the S&P 500 Index was represented in the Fund with approximately the same weighting as in the Index, and therefore had a similar effect. Q: What changes were made to the Fund during the period? A: Because the Fund strives to stay fully invested in the stocks that make up the S&P 500 Index and to replicate the performance of the Index, we align the Fund's portfolio with the rebalancings undertaken by Standard & Poor's on a quarterly basis. We also add stocks to and delete stocks from the portfolio to mirror those changes to the Index. Deletions typically result from mergers and acquisitions or financial reversals. Stocks added to the Index often have increased their capitalization beyond that of the S&P MidCap 400 Index, an unmanaged benchmark of medium-sized company stocks. During the semiannual period, there were 20 additions and 20 deletions to the Index and the Fund's portfolio. Stocks added to the Index and Fund included financial companies Discover Financial Services, Assurant and Hudson City Bancorp; real estate companies General Growth Properties, Developers Diversified Realty and AvalonBay Communities; high-end retailers Abercrombie & Fitch and Polo Ralph Lauren; and such other well-known names in various sectors as Precision Castparts, Kraft Foods and Tyco Electronics. Deletions included several "household names," including Mellon Bank, MedImmune, Kinder Morgan, Univision Communications, Caremark Rx, Phelps Dodge, Equity Office Properties, Comverse Technology and BellSouth. Q: What is the Fund's tactical view and strategy for the months ahead? A: We do not anticipate any changes in the portfolio beyond the customary quarterly rebalancings and stock substitutions we make to align the Fund with the S&P 500 Index. The consensus is cautiously optimistic for the equity market going forward. While merger and acquisition activity has been strong, there appears to be a slowdown in the number of deals being announced and closed. The prospects for stronger economic growth both in the U.S. and abroad, and the positive implications for corporate profit growth, have thus offset any ongoing concerns about accelerating inflation or higher long-term interest rates. On the other hand, over the remainder of 2007, slowing productivity growth, higher unit labor costs, and higher interest rates may prove challenging for corporate managements to keep profit growth from slowing. Additionally, geopolitical worries, the increased volatility in global markets, and the potential ripple effects of the housing market slowdown remain risks to the equity markets going forward. The turmoil in the subprime mortgage & credit markets have heightened concerns that the broader economy may be affected over near-term. In short, we believe that investors can expect positive, yet moderate, levels of total return from equities during the next several months. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 45 RiverSource VP - S&P 500 Index Fund ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
TOTAL NET EXPENSES(A) 0.51% 0.50%
(a) The investment manager and its affiliates have contractually agreed to waive certain fees and to absorb certain expenses until Dec. 31, 2007, unless sooner terminated at the discretion of the Fund's Board. Any amounts waived will not be reimbursed by the Fund. Under this agreement, net fund expenses (excluding fees and expenses of acquired funds) will not exceed .495%. AVERAGE ANNUAL TOTAL RETURNS at June 30, 2007 6 months* +6.72% 1 year +20.05% 3 years +11.14% 5 years +10.18% Since inception (5/1/00) +1.46%
* Not annualized. SECTOR BREAKDOWN* Percentage of portfolio assets at June 30, 2007 (PIE CHART) Financials 20.6% Information Technology 15.2% Health Care 11.5% Industrials 11.3% Energy 10.6% Consumer Discretionary 10.1% Other(1) 20.7%
(1) Includes Consumer Staples 9.2%, Telecommunication Services 3.7%, Utilities 3.4%, Materials 3.1% and Cash & Cash Equivalents 1.3%. * Sectors can be comprised of several industries. Please refer to the section entitled "Investments in Securities" for a complete listing. No single industry exceeds 25% of portfolio assets. The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. TOP TEN HOLDINGS
PERCENT VALUE (OF PORTFOLIO ASSETS) (AT JUNE 30, 2007) Exxon Mobil 3.5% $14,179,745 General Electric 2.9 11,818,222 AT&T 1.9 7,678,040 Citigroup 1.9 7,613,025 Microsoft 1.8 7,445,124 Bank of America 1.6 6,510,681 Procter & Gamble 1.4 5,782,026 American Intl Group 1.3 5,451,485 Chevron 1.3 5,432,974 Pfizer 1.3 5,385,246
For further detail about these holdings, please refer to the section entitled "Investments in Securities." The 10 holdings listed here make PIE CHART up 18.9% of portfolio assets
- -------------------------------------------------------------------------------- 46 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT PORTFOLIO MANAGEMENT Q&A RiverSource VP - Select Value Fund RiverSource VP - Select Value Fund rose 11.19% for the semiannual period ended June 30, 2007, outperforming the 6.01% return of the Russell 3000(R) Value Index (Russell Index). The Fund also outperformed its peer group, as represented by the Lipper Multi-Cap Value Funds Index, which advanced 7.03% for the period. RiverSource VP - Select Value Fund is managed by Systematic Financial Management, L.P. (Systematic), and WEDGE Capital Management L.L.P. (WEDGE). Each subadviser manages approximately 50% of the Fund's portfolio. PERFORMANCE COMPARISON For the six-month period ended June 30, 2007 (BAR CHART) RiverSource VP - Select Value Fund +11.19% Russell 3000(R) Value Index (unmanaged) +6.01% Lipper Multi-Cap Value Funds Index +7.03%
The indices do not reflect the effects of expenses (excluding Lipper). It is not possible to invest directly in an index. The Russell 3000(R) Value Index, an unmanaged index, measures the performance of those Russell 3000 Index companies with lower price-to-book ratios and lower forecasted growth values. The index reflects reinvestment of all distributions and changes in market prices. The Lipper Multi-Cap Value Funds Index includes the 30 largest multi-cap value funds tracked by Lipper Inc. The index's returns include net reinvested dividends. The Fund's performance is currently measured against this index for purposes of determining the performance incentive adjustment. Investments in small- and mid-capitalization companies often involve greater risks and potential volatility than investments in larger, more established companies. Q: What factors most significantly affected performance for your portion of the Fund during the period? SYSTEMATIC: The primary reason for the Fund's outperformance was strong stock selection, especially in the materials, telecommunication services, consumer discretionary and energy sectors. Our portion of the Fund's portfolio had a smaller financials position and a larger industrials position than the Russell Index, which added to performance. Frontier Oil is an example of a security beneficial to the portfolio during this period. This U.S. refiner operates in the mid-continent region, trades at a discount to other refiners and enjoys a number of company-specific advantages over its competition. In addition to a healthy refining market that has experienced increased demand and margin expansion, Frontier benefits from a lower cost structure that is a direct result of its business location and overall ability to process cheaper crude feedstock. Another contributor, Rogers Communications, is a Canadian wireless telephone and cable TV company benefiting from continued strong subscriber growth and improved pricing. Some of its success can be directly attributed to increased bundling of services (television, Internet and phone). In addition, the company has completed much of its capital spending program, which has led to significant free cash flow growth. Management has used excess free cash flow to triple the stock's dividend and improve its balance sheet. Another positive is the company's position as Canada's sole distributor of Apple's iPhone. Given these factors, and the stock's substantial valuation discount to its peers, Rogers Communications remains attractive to us. Detracting from return was discount retailer Big Lots. In the latter half of the semiannual period, Big Lots beat earnings expectations and raised earnings guidance. However, many investors hoped they would beat expectations by a larger margin. This, coupled with the fact that Big Lots faces tougher earnings comparisons in the coming quarters, caused investors to sell the stock. We still hold the stock due to stronger earnings quality and management's focus on margin improvement. WEDGE: Favorable performance in our portion of the Fund stemmed primarily from a financials weighting that was smaller than the Russell Index, as well as security selection in the financials sector. Among the portfolio's financials holdings, Compass Bancshares benefited from takeover speculation and was subsequently acquired. A technology weighting that was larger than the Russell Index and stock selection in the sector also benefited results. Within information technology, Hyperion, a - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 47 RiverSource VP - Select Value Fund provider of business intelligence and performance management software that was acquired by Oracle, added to return. A larger-than-Russell Index position and stock selection in the industrials sector added to performance as well. Holdings of printing services company RR Donnelly & Sons contributed to results during the period, as the company beat consensus earnings estimates and has been the focus of speculation about a potential leveraged buyout. Our portion of the Fund had smaller positions in the energy and telecommunication services sectors than the Russell Index, which detracted from our return. In addition, stock selection in the utilities sector was disadvantageous. Idacorp, a hydroelectric utility, was negatively affected by low water flows related to disappointing snowfall levels, and Pinnacle West Capital received an adverse ruling on a rate increase request. Q: What changes did you make to your portion of the Fund during the period? SYSTEMATIC: Over the course of the past six months, we decreased Fund weightings in the materials, information technology, financials and health care sectors, while concurrently increasing exposure in the industrials, consumer discretionary and consumer staples sectors. The industrials sector weighting was increased primarily through additions of Goodrich and Cooper Inds. Goodrich, a worldwide supplier of components, systems and services to the commercial and general aviation airplane markets, as well as to the defense and space markets, has been a direct beneficiary of the improved outlook for the commercial aerospace market. New aircraft orders remain strong, driven by demand from China and India, a desire for fuel-efficient models in the face of higher oil prices, and U.S. replacement of older fleets. We are beginning to see a change of direction in Goodrich's earnings quality and cash flows. Cooper Inds manufactures and sells electrical products and tools in the U.S. and internationally. The company has recently been demonstrating strong earnings quality, driven primarily by higher revenues and improving margins. The combination of positive working capital and strong free cash flow generation offers good reason to believe future earnings per share surprises are likely. WEDGE: Within the banking industry, we purchased Comerica and sold Compass Bancshares. Comerica trades at significant valuation discounts to its peers, despite dramatic risk-reducing shifts in its geographic and business mix. We believe it also offers attractive downside protection with its share buyback program, dividend and takeover prospects. We sold Compass, taking advantage of higher prices associated with its business model and takeover speculation. We added discount retailer Family Dollar Stores to the Fund. The stock was attractively valued and management has placed renewed emphasis on bolstering earnings and return on invested capital by slowing growth and focusing instead on the basics of running the business. In the information technology sector, we tendered shares of Hyperion in conjunction with Oracle's purchase of the company, and sold shares of Avocet, which makes connectivity devices and switches, due to reduced earnings guidance. We sold the portfolio's holdings of Hormel, a producer of branded meats, due to cost pressure from higher corn prices. Within the consumer staples sector, we replaced Hormel with International Flavors & Fragrances, Sara Lee and JM Smucker. International Flavors & Fragrances, in our view, offers revenue growth and margin expansion potential, as well as strong free cash flow. For Sara Lee, we anticipate margin improvement, share repurchases and debt reduction, and JM Smucker is delivering market share gains, which lead to improved earnings potential. Lastly, in the energy sector, we added natural gas producer Energen to the portfolio due to its long-lived reserves and successful drilling record, as well as the favorable regulatory environment. Q: How are you positioning your portion of the Fund going forward? SYSTEMATIC: As of June 30, 2007, our portion of the Fund had larger positions in the telecommunications services, energy, industrials, information technology and health care sectors than the Russell Index. The portfolio's positions in the materials, financials and utilities sectors were smaller than the Russell Index. WEDGE: We believe continued economic growth is likely, although at a slower pace. However, uncertainty continues to increase, as low unemployment levels, healthy job growth and rising incomes are helping to offset sluggishness in housing, manufacturing and business spending. Profit margins may be under some pressure and earnings growth will probably slow, possibly significantly in 2007, which we believe should lead to improved performance from higher quality companies. Consistent with our economic outlook and relative valuations, our portfolio segment has smaller-than-Russell Index positions in the financials, utilities and consumer cyclicals sectors. Weightings in information technology and health care are larger than those of the Russell Index. We believe the information technology sector should - -------------------------------------------------------------------------------- 48 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Select Value Fund benefit from attractive valuations as companies look for new ways to increase productivity in a slower growth economy. Similarly, health care should also become increasingly attractive as the earnings growth rate slows for the market as a whole. While maintaining the Fund's emphasis on high quality companies with sustainable earnings growth, we will seek to increase the portfolio's weighted average capitalization in anticipation of the market's rotation to larger capitalization companies. We also intend to increase the Fund's allocation to financial companies as the yield curve moves to a more normalized shape looking to increase the portfolio's dividend yield. ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
TOTAL NET EXPENSES(A) 1.22% 0.94%
(a) The investment manager and its affiliates have contractually agreed to waive certain fees and to absorb certain expenses until Dec. 31, 2007, unless sooner terminated at the discretion of the Fund's Board. Any amounts waived will not be reimbursed by the Fund. Under this agreement, net fund expenses (excluding fees and expenses of acquired funds), before giving effect to any performance incentive adjustment (that decreased the management fee by 0.06%), will not exceed 1.00%. AVERAGE ANNUAL TOTAL RETURNS at June 30, 2007 6 months* +11.19% 1 year +20.13% 3 years +12.85% Since inception (2/4/04) +11.94%
* Not annualized. SECTOR BREAKDOWN* Percentage of portfolio assets at June 30, 2007 (PIE CHART) Financials 23.2% Industrials 14.0% Consumer Discretionary 12.6% Information Technology 11.2% Utilities 11.0% Materials 7.4% Other(1) 20.6%
(1) Includes Health Care 6.0%, Consumer Staples 5.6%, Energy 4.4%, Telecommunication Services 1.7% and Cash & Cash Equivalents 2.9%. * Sectors can be comprised of several industries. Please refer to the section entitled "Investments in Securities" for a complete listing. No single industry exceeds 25% of portfolio assets. The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. TOP TEN HOLDINGS
PERCENT VALUE (OF PORTFOLIO ASSETS) (AT JUNE 30, 2007) Lincoln Natl 2.6% $858,495 Cadence Design Systems 2.5 836,676 Darden Restaurants 2.0 664,249 Safeco 2.0 659,956 Old Republic Intl 2.0 650,556 RR Donnelley & Sons 1.9 639,597 Sonoco Products 1.9 637,869 AptarGroup 1.9 632,968 Computer Sciences 1.9 632,905 VF 1.9 631,902
For further detail about these holdings, please refer to the section entitled "Investments in Securities." The 10 holdings listed here make PIE CHART up 20.6% of portfolio assets
- -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 49 PORTFOLIO MANAGEMENT Q&A RiverSource VP - Short Duration U.S. Government Fund Below, portfolio managers Scott Kirby and Jamie Jackson discuss RiverSource VP - Short Duration U.S. Government Fund's results and positioning for the semiannual period ended June 30, 2007. Q: How did RiverSource VP - Short Duration U.S. Government Fund perform for the semiannual period? A: RiverSource VP - Short Duration U.S. Government Fund rose 1.71% for the six months ended June 30, 2007. The Fund underperformed its benchmark, the Lehman Brothers 1-3 Year Government Index (Lehman Index), which gained 2.14%. The Fund also underperformed the Lipper Short U.S. Government Funds Index, representing the Fund's peer group, which advanced 1.79% during the same time frame. PERFORMANCE COMPARISON For the six-month period ended June 30, 2007 (BAR CHART) RiverSource VP - Short Duration U.S. Government Fund +1.71% Lehman Brothers 1-3 Year Government Index (unmanaged) +2.14% Lipper Short U.S. Government Funds Index +1.79%
The indices do not reflect the effects of expenses (excluding Lipper). It is not possible to invest directly in an index. The Lehman Brothers 1-3 Year Government Index, an unmanaged index, is made up of all publicly issued, non-convertible domestic debt of the U.S. government, or agency thereof, or any quasi-federal corporation. The index also includes corporate debt guaranteed by the U.S. government. Only notes and bonds with a minimum maturity of one year up to a maximum maturity of 2.9 years are included. The index reflects reinvestment of all distributions and changes in market prices. The Lipper Short U.S. Government Funds Index includes the 30 largest short U.S. government funds tracked by Lipper Inc. The index's returns include net reinvested dividends. Shares of the RiverSource VP - Short Duration U.S. Government Fund are not insured or guaranteed by the U.S. government. Q: What factors most significantly affected Fund performance during the semiannual period? A: Returns for the Fund and its Lehman Index were modest but positive. For the semiannual period overall, bond performance was weighed down by rising interest rates and generally poor returns from the high quality spread sectors, or non-Treasury sectors, of the fixed income market, including mortgage-backed securities, commercial mortgage-backed securities, investment grade corporate bonds and agency securities. The Federal Reserve Board (the Fed) maintained its targeted federal funds rate at 5.25% throughout the period, while keeping a bias toward inflation risk. U.S. economic growth slowed in response to earlier policy tightening by the Fed, but economic growth, employment rates and consumer spending still remained resilient. As a result, the fixed income market finally dropped its expectations of Fed easing later this year, and market participants pushed rates materially higher. Long-term interest rates rose more than short-term interest rates. The primary contributor to the Fund's performance was its issue selection within mortgage-backed securities. Its emphasis on premium coupon securities particularly helped, as higher coupon mortgage-backed securities outperformed lower coupon mortgage-backed securities for the period. It is well worth noting that while mortgage-backed securities as a whole underperformed U.S. Treasuries for the six months ended June 30, 2007, the Fund's holdings within the sector modestly outpaced U.S. Treasuries for the period. Conversely, the Fund's comparatively longer duration positioning than the Lehman Index detracted from the Fund's results for the semiannual period, as rates moved materially higher. Duration is a measure of the Fund's sensitivity to changes in interest rates. The Fund's yield curve positioning also hurt the Fund's performance. The yield curve steepened during the period, meaning that long-term yields moved higher than short-term yields. The Fund had some exposure beyond that of the Lehman Index, i.e. bonds with maturities longer than three years, and these longer-dated securities underperformed those with one to three year maturities as the yield curve became more positively sloped. Q: What changes did you make to the Fund and how is it currently positioned? A: In May and June, we became a bit less defensive, shifting from the conservative posture held through much of the period to a somewhat more aggressive strategy. We lengthened duration, primarily by increasing exposure to the longer end of the one to three year portion of the yield - -------------------------------------------------------------------------------- 50 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Short Duration U.S. Government Fund curve. Yields moved sharply higher in the last months of the period and, as mentioned, the yield curve became more positively sloped. We also added Treasury Inflation Protected Securities, or TIPS, back into the Fund's portfolio, based on attractive inflation rates. Q: What is the Fund's tactical view and strategy for the months ahead? A: By the end of May, valuations rose close to what we would view as fair value. Interest rates, as indicated above, rose steadily through the month, and the yield curve had steepened slightly. These trends continued through June. Given this backdrop, we believe that we may see relatively stable to only moderately rising interest rates during the next several months. We expect the Fed to keep short-term interest rates on hold through the remainder of the year. Based on this view, we intend to maintain the Fund's exposure to mortgage-backed securities, but within the sector, to become a bit more aggressive. For example, we may seek opportunities to add to the Fund's position in lower coupon and pass-through mortgage-backed securities. We also expect to continue adjusting duration tactically during the months ahead, lengthening and shortening the Fund's duration at opportune times. As always, our strategy is to provide added portfolio value with a moderate amount of risk. Quality issues and security selection remain a priority as we continue to seek attractive buying opportunities. SECTOR BREAKDOWN Percentage of portfolio assets at June 30, 2007 (PIE CHART) Mortgage-Backed* 48.3% U.S. Government Obligations & Agencies 33.6% Cash & Cash Equivalents 11.7% Asset-Backed 2.8% Foreign Agencies 2.0% Commercial Mortgage-Backed 1.6%
* Of the 48.3%, 9.1% is due to forward commitment mortgage-backed securities activity. Short-term securities are held as collateral for these commitments. ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
TOTAL 0.77%
AVERAGE ANNUAL TOTAL RETURNS at June 30, 2007 6 months* +1.71% 1 year +5.12% 3 years +2.75% 5 years +2.56% Since inception (9/15/99) +3.90%
* Not annualized. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 51 PORTFOLIO MANAGEMENT Q&A RiverSource VP - Small Cap Advantage Fund RiverSource VP - Small Cap Advantage Fund portfolio managers Jake Hurwitz and Kent Kelley of Kenwood Capital Management (Kenwood) discuss the Fund's results and positioning for the six months ended June 30, 2007. Q: How did RiverSource VP - Small Cap Advantage Fund perform for the semiannual period? A: RiverSource VP - Small Cap Advantage Fund advanced 6.51% for the six months ended June 30, 2007, outperforming its benchmark, the Russell 2000(R) Index (Russell Index), which rose 6.45% for the same period. The Fund's peer group, represented by the Lipper Small-Cap Core Funds Index, advanced 9.54% for the period. Q: What factors significantly affected Fund performance? A: U.S. equities made broad-based gains in the period, with several major stock indexes hitting all-time highs in early June. However, rising bond yields, further deterioration in the U.S. housing market and fears of greater problems in the subprime mortgage market drove stock prices lower in the closing weeks of the semiannual period. PERFORMANCE COMPARISON For the six-month period ended June 30, 2007 (BAR CHART) RiverSource VP - Small Cap Advantage Fund +6.51% Russell 2000(R) Index (unmanaged) +6.45% Lipper Small-Cap Core Funds Index +9.54%
The indices do not reflect the effects of expenses (excluding Lipper). It is not possible to invest directly in an index. The Russell 2000(R) Index, an unmanaged index, measures the performance of the 2,000 smallest companies in the Russell 3000(R) Index. The index reflects reinvestment of all distributions and changes in market prices. The Lipper Small-Cap Core Funds Index includes the 30 largest small-cap core funds tracked by Lipper Inc. The index's returns include net reinvested dividends. The Fund's performance is currently measured against this index for purposes of determining the performance incentive adjustment. Investments in small capitalization companies often involve greater risks and potential volatility than investments in larger, more established companies. Performance of small-cap and large-cap stocks was comparable in the six-month period, while mid-cap stocks led the equity markets. Growth stocks outperformed value stocks across all capitalization segments, with the most significant differential in the small-cap sector. Consistent with our "bottom-up" focus, stock selection was the most important factor affecting the Fund's results. Our small-cap investment strategy produced mixed results for the period, with a slightly positive contribution from stock selection. The Fund's best performance came from the consumer discretionary sector where our stock selection model was particularly effective. In terms of individual contributors, holdings of online advertiser aQuantive added to performance. The company's stock surged on news it was being acquired by Microsoft. Among the Fund's holdings in the consumer products group, Universal Electronics benefited from strong demand and a successful product introduction that pushed its earnings and share price higher. Stock selection was also favorable in the industrials sector. Among the Fund's holdings in the engineering and construction group, shares of Perini moved sharply higher as the company's earnings prospects improved due to strong infrastructure spending. Solid earnings reports helped a number of the Fund's holdings in both the manufacturing and aerospace groups, including Columbus McKinnon, GrafTech Intl and Middleby. In the energy sector, the combination of strong earnings and significant reserve additions boosted shares of Gulfport Energy, one of the Fund's holdings in the oil and gas exploration and production group. Shares of Atlas America rose after a subsidiary made two advantageous acquisitions. Stock selection in the health care sector hampered the Fund's performance relative to the Russell Index. Shares of biotechnology company Adolor plummeted when a Phase III study indicated safety concerns for its drug Entereg. Positions in ZOLL Medical, Sirona Dental Systems and Palomar Medical Technologies in the medical device group also underperformed. In addition, stock selection in technology, real estate investment trusts (REITs) and telecommunication services had a negative impact on performance compared to the Russell Index. Q: How would you describe your current investment strategy? A: Our strategy employs a quantitative approach. We use computer models to seek to identify the most attractive stocks in each economic sector based on a balanced set of valuation, earnings and price-related variables. Our - -------------------------------------------------------------------------------- 52 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Small Cap Advantage Fund approach seeks to identify quality companies -- differentiated by superior cash flow generation and attractive relative valuations -- from both the growth and value sides of the small-cap universe. We believe the objectivity of our approach is an advantage because investors often let emotions stand in the way of sound investment decisions. We invest in all sectors of the small- cap market at roughly the same weightings as the Russell Index. Our objective is to own a portfolio of stocks that represents the best opportunities in each sector. Q: What is the Fund's tactical view and strategy for the months ahead? A: We continue to select stocks one at a time, while seeking to provide balanced exposure to growth and value small-cap stocks and keeping sector weightings similar to the Russell Index. Solid equity returns in the first half of 2007 reflected optimism that the economy would reaccelerate after stalling in the first quarter, although June's steep rise in bond yields tested investors' confidence. U.S. manufacturing remains robust, supported by strong overseas demand for industrial products. Consumer spending has been surprisingly resilient; however, there are still concerns that persistent weakness of the residential housing market may yet lead to a pullback in consumer spending. Merger activity continued at a record-setting pace during the first half of 2007. However, at the end of June there were signs the record issuance of high yield debt used to finance the buyout boom had finally exceeded demand, with several large leveraged buyouts being postponed because financing could not be obtained. Volatility is increasing in both equity and fixed income markets, and it appears that investors have become marginally more risk-averse. Since the end of 2006, we have seen earnings of smaller companies grow more slowly than the earnings posted by large-cap companies, as larger multinational firms benefit from greater exposure to higher earnings growth rates overseas and the currency exchange effect of the weaker U.S. dollar. If earnings from domestic sources remain sluggish -- especially in interest rate sensitive sectors -- small-cap stocks may lag the broader equity market in the second half of 2007, unless inflation concerns abate and the Federal Reserve loosens monetary policy. Our outlook assumes that equity market volatility will continue to increase as late cycle pressures on the economy and credit markets mount. Valuation based on free cash flow yield is a selection factor that is given significant weight in our appraisal discipline. As investors become more risk-averse, we believe they will favor stocks that rank highly on free cash flow yield. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 53 RiverSource VP - Small Cap Advantage Fund ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
TOTAL 1.08%
AVERAGE ANNUAL TOTAL RETURNS at June 30, 2007 6 months* +6.51% 1 year +11.98% 3 years +11.65% 5 years +13.22% Since inception (9/15/99) +9.31%
* Not annualized. SECTOR BREAKDOWN* Percentage of portfolio assets at June 30, 2007 (PIE CHART) Financials 20.7% Information Technology 19.5% Consumer Discretionary 16.0% Industrials 13.3% Health Care 11.9% Energy 5.6% Other(1) 13.0%
(1) Includes Materials 4.7%, Consumer Staples 2.5%, Utilities 2.4%, Telecommunication Services 1.8% and Cash & Cash Equivalents(2) 1.6%. (2) Of the 1.6%, 0.4% is due to security lending activity and 1.2% is the Fund's cash equivalent position. * Sectors can be comprised of several industries. Please refer to the section entitled "Investments in Securities" for a complete listing. No single industry exceeds 25% of portfolio assets. The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. TOP TEN HOLDINGS
PERCENT VALUE (OF PORTFOLIO ASSETS) (AT JUNE 30, 2007) Hologic 0.6% $1,343,259 Delphi Financial Group Cl A 0.5 1,105,094 Genlyte Group 0.5 1,091,706 FLIR Systems 0.5 989,750 ARRIS Group 0.5 967,449 Sotherby's 0.5 966,420 Magellan Health Services 0.5 952,635 Acuity Brands 0.4 940,368 Argonaut Group 0.4 936,300 Anixter Intl 0.4 932,604
For further detail about these holdings, please refer to the section entitled "Investments in Securities." The 10 holdings listed here make PIE CHART up 4.8% of portfolio assets
- -------------------------------------------------------------------------------- 54 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT PORTFOLIO MANAGEMENT Q&A RiverSource VP - Small Cap Value Fund RiverSource VP - Small Cap Value Fund rose 6.76% for the six months ended June 30, 2007, outperforming the 3.80% return of its benchmark, the Russell 2000(R) Value Index (Russell Index). The Fund underperformed its peer group, as represented by the Lipper Small-Cap Value Funds Index, which advanced 8.60% for the period. RiverSource VP - Small Cap Value Fund's portfolio is managed by four independent money management firms that each invest a portion of Fund assets in small company value stocks. As of June 30, 2007, Barrow, Hanley, Mewhinney & Strauss, Inc. (Barrow, Hanley) managed approximately 26%, Donald Smith & Co., Inc. (Donald Smith) managed approximately 23%, Franklin Portfolio Associates LLC (Franklin Portfolio) managed approximately 23%, and River Road Asset Management, LLC (River Road) managed approximately 28% of the Fund's assets. Effective July 16, 2007, Denver Investment Advisors LLC was added as a subadviser to the Fund. PERFORMANCE COMPARISON For the six-month period ended June 30, 2007 (BAR CHART) RiverSource VP - Small Cap Value Fund +6.76% Russell 2000(R) Value Index (unmanaged) +3.80% Lipper Small-Cap Value Funds Index +8.60%
The indices do not reflect the effects of expenses (excluding Lipper). It is not possible to invest directly in an index. The Russell 2000(R) Value Index, an unmanaged index, measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. The index reflects reinvestment of all distributions and changes in market prices. The Lipper Small-Cap Value Funds Index includes the 30 largest small-cap value funds tracked by Lipper Inc. The index's returns include net reinvested dividends. The Fund's performance is currently measured against this index for purposes of determining the performance incentive adjustment. Q: What factors most significantly affected results for your portion of the Fund for the period? BARROW, HANLEY: Performance in the consumer discretionary sector and sector weighting decisions in the financials and industrials sectors were primarily responsible for the positive results. In the consumer discretionary sector, the portfolio particularly benefited from its holdings of autos parts manufacturer American Axle & Mfg Holdings, clothing retailer Men's Wearhouse and discount retailer Dollar General. Also aiding performance was the portfolio's small exposure to the poorly performing financials sector. The portfolio had considerably more exposure to the industrial sectors than the Russell Index, which had a positive impact on results. Other leading performers for the period included industrials stocks Flowserve and Harsco and information technology stock MAXIMUS. Stock selection in the materials and energy sectors detracted from performance. Underperformers for the period included Mentor Graphics and Mercury Computer Systems in the information technology sector, and Insituform Technologies, Regal-Beloit and Brady in the industrials sector. Brady, which makes industrial identification products, was sold during the period. DONALD SMITH: A number of portfolio holdings performed well for the fund, including: Air France, life insurer American Natl Insurance, paper producer Domtar, health care services provider Genesis HealthCare and uranium enrichment company USEC. During the period, Genesis HealthCare, one of the largest holdings in the portfolio, agreed to be acquired at about a 40% premium. The transaction was completed after the end of the semiannual period. Weak performers included Alaska Air Group, whose management announced that earnings results would fall short of expectations due to increased competition, and Spansion and Hutchinson Technology, two technology companies that had disappointing earnings. FRANKLIN PORTFOLIO: Our stock ranking process, which emphasizes both value and growth/momentum metrics, was not rewarded for its value factors. To some extent, our growth/momentum-based factors offset this value impact, as stocks with good earnings momentum and long-term earnings growth prospects outperformed. Holdings that detracted from performance came from a range of industries. Within financial services, real estate lender Fremont General was negatively impacted by subprime home loan difficulties in the first quarter of 2007. Fremont General subsequently sold its subprime - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 55 RiverSource VP - Small Cap Value Fund loan portfolio to focus on other business operations. Within technology, digital media company RealNetworks declined after releasing a first quarter outlook that forecast earnings below the consensus of analyst expectations. The negative guidance prompted at least three analyst downgrades. Laser and photonics manufacturer Newport fell due to weaker-than-expected quarterly earnings. Positive performers included CF Inds Holdings, a producer and distributor of fertilizer products, which posted strong first quarter earnings results as net sales rose due to increased planting activity by U.S. corn farmers. Independent oil refiner Western Refining posted strong revenue and earnings growth as expansion projects from last year positioned the company to capitalize on this year's favorable refining environment. During the period, several holdings either announced or completed acquisitions by other firms at significant premiums, including medical products company Molecular Devices, broadband internet service provider CT Communications and insurance company Ohio Casualty. RIVER ROAD: The two sectors contributing most significantly to the portfolio's return were consumer discretionary and financials. In addition, financials had the largest positive impact on performance relative to the Russell Index. The portfolio's consumer discretionary position was larger than that of the Russell Index, while the financial services weighting was smaller. Compared to the Russell Index, the portfolio's materials and processing stocks underperformed. Within the materials sector, the portfolio was under-represented in producers of basic commodities, a group that performed exceptionally well during the period. Leading individual performers during the period included financials provider Oppenheimer Holdings, dispensing systems manufacturer AptarGroup and Nevada-based Pico Holdings, which principally operates as a water rights and storage company. Oppenheimer continues to benefit from strong operating results and merger activity. Aptar benefited from excellent operating results and beneficial exchange rate trends on non-U.S. sales. Strong interest in water rights and the acquisition of additional rights boosted Pico shares. We sold the shares when we believed they reached their value. The three holdings with the lowest return during the period were: regional Coke bottler, Coca-Cola Bottling Company Consolidated, hotel owner and operator Interstate Hotels & Resorts and diversified holding company BFC Financial. In our view, the Coca-Cola Bottling Company's fundamentals remain attractive and weakness during the period was largely a result of rising raw material prices. The portfolio's position in Interstate Hotels & Resorts was significantly reduced, as the company appears to face increasing challenges with its transition from hotel operator to owner and operator. BFC Financial was eliminated from the portfolio based on continuing weakness in the firm's BankAtlantic unit and our unfavorable view of management's attempted buyout of homebuilder Leavitt Corp. Q: What changes did you make to your portion of the Fund? BARROW, HANLEY: Given our methodology, portfolio change significantly depends on finding companies with the potential for high fundamental improvement in our view. Alterations to the portfolio are, thus, evolutionary in nature. During the last six months the following holdings were eliminated: personal auto insurance provider 21st Century Insurance, industrial products maker Idex, trucking company Swift Transportation, Chesapeake Energy and Brady. Additions to the portfolio included: semiconductor company Brooks Automation, recreational boat dealer MarineMax and footwear maker Wolverine World Wide. DONALD SMITH: We eliminated positions in AK Steel and Reliant Energy and reduced the portfolio's holdings of Domtar, after achieving substantial gains. The small position in transport company Sea Containers was sold at a loss. We added to holdings that have underperformed, including airline Alaska Air Group, independent oil and gas producer Stone Energy, computer distributor Tech Data and auto parts supplier Visteon. We initiated positions in Axcelis Technologies, a semiconductor equipment company, and Avista, a Pacific Northwest utility. FRANKLIN PORTFOLIO: We added a number of holdings during the period, including some of the largest positive contributors, such as CF Inds Holdings, which rose shortly after it was added to the portfolio. We sold some underperforming stocks, such as Fremont General, where the fundamentals had changed since the initial buy decision, and held others if their rankings within our valuation models remained favorable. We made no significant changes to our stock selection model or the weightings of the underlying factors, which remain equally weighted among growth/momentum and valuation metrics. While we continue to refine and improve the individual ranking models, these changes are gradual. RIVER ROAD: Among the larger new holdings in the portfolio are Tween Brands and Portland General Electric. Tween, a specialty retailer focused on young girls, - -------------------------------------------------------------------------------- 56 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Small Cap Value Fund operates more than 750 stores under the Limited Too and Justice brands. Tween is the market leader in its retail niche and, in our view, has a pristine balance sheet. We steadily increased the portfolio's holdings of Tween as both company fundamentals and management continued to exceed our initial expectations. Portland General Electric is one of the few traditional utilities held in the portfolio. Providing power delivery to the state of Oregon for more than a century, Portland General combines an attractive valuation with a growing customer base and access to low cost hydro power. We further believe the shortage of generation capacity in its region will lead to a mounting rate base and escalating cash flow and dividends. Q: How will you manage your portion of the Fund in the coming months? BARROW, HANLEY: Almost regardless of the economic or stock market outlook, we manage our portion of the portfolio the same way -- stock by stock, seeking the highest returns and lowest risk with no preconceived sector or industry preferences. Usually these company-specific opportunities come our way because we are willing to look beyond temporary difficulties and toward the long-term value of businesses. Our portion of the Fund currently reflects the cumulative total of these individual opportunities during the last three or four years and, as such, is heavily weighted by beneficiaries of the expanding economy. We expect continued economic improvement and, for the individual companies, further progress toward the attainment of improved fundamentals and market values that reflect company prospects. New selections will generally be even more influenced by company-specific factors and progressively less by the general level of economic activity. The current, past and future construction of the portfolio remains grounded in the discovery and exploitation of individual stock values, more or less independent of sector or industry conditions. Those conditions may, as they have in the case of the Fund's industrials holdings, add to our portion of the Fund's performance -- or subtract from it -- over time. The primary value added should continue to come from securities analysis one stock at a time. DONALD SMITH: The information technology sector is the portfolio's largest weighting. We have continued to avoid companies that would likely be hurt by declining housing prices (e.g. homebuilders, subprime brokers, investment bankers), though we have recently been increasing our research on homebuilders, many of which sell at about book value. FRANKLIN PORTFOLIO: Our underlying philosophy remains consistent -- we focus on stock selection and strive to control risk by keeping sector weights, market capitalization and other size and style factors similar to the benchmark. Although the stock characteristics that we emphasize did not outperform the market over the past six months, we remain confident that in the long run, these characteristics do add value to the portfolio. RIVER ROAD: Our strategy is to largely ignore market and index-based trends and instead focus on investing in companies that demonstrate our five bottom-up, fundamental characteristics. For some time, however, we have viewed market risk as increasing. Rising interest rates, energy prices and equity valuations, combined with intense weakness in the housing market, heightened that sense during the past six months. Thus, we have paid particular attention to avoiding, or quickly cutting, companies found to face excess risk from factors such as declining business fundamentals and balance sheet leverage. We are also keeping the number of portfolio holdings at the high end of our historical range. The result of these actions is that the portfolio remains modestly defensive in its overall positioning. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 57 RiverSource VP - Small Cap Value Fund ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
TOTAL NET EXPENSES(A) 1.32% 1.25%
(a) The investment manager and its affiliates have contractually agreed to waive certain fees and to absorb certain expenses until Dec. 31, 2007, unless sooner terminated at the discretion of the Fund's Board. Any amounts waived will not be reimbursed by the Fund. Under this agreement, net fund expenses (excluding fees and expenses of acquired funds), before giving effect to any performance incentive adjustment (that increased the management fee by 0.05%), will not exceed 1.20%. AVERAGE ANNUAL TOTAL RETURNS at June 30, 2007 6 months* +6.76% 1 year +16.77% 3 years +14.98% 5 years +13.81% Since inception (8/14/01) +13.57%
* Not annualized. - --------------------------------------------------------------- SECTOR BREAKDOWN* Percentage of portfolio assets at June 30, 2007 (PIE CHART) Consumer Discretionary 21.0% Industrials 14.8% Information Technology 14.0% Cash & Cash Equivalents(2) 13.6% Financials 12.7% Materials 6.3% Other(1) 17.6%
(1) Includes Consumer Staples 5.8%, Energy 4.9%, Utilities 3.2%, Health Care 3.1% and Telecommunication Services 0.6%. (2) Of the 13.6%, 2.0% is due to security lending activity and 11.6% is the Fund's cash equivalent position. * Sectors can be comprised of several industries. Please refer to the section entitled "Investments in Securities" for a complete listing. No single industry exceeds 25% of portfolio assets. The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. TOP TEN HOLDINGS
PERCENT VALUE (OF PORTFOLIO ASSETS) (AT JUNE 30, 2007) Terex 1.3% $9,316,981 Genesis HealthCare 1.2 9,168,280 American Axle & Mfg Holdings 1.2 8,986,708 Avista 1.2 8,816,105 Kaydon 1.1 8,370,472 Lear 1.1 8,186,739 Plexus 1.1 7,894,766 Stone Energy 1.0 7,691,370 Men's Wearhouse 1.0 7,591,555 Wolverine World Wide 1.0 7,503,868
For further detail about these holdings, please refer to the section entitled "Investments in Securities." The 10 holdings listed here make PIE CHART up 11.2% of portfolio assets
- -------------------------------------------------------------------------------- 58 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT FUND EXPENSES EXAMPLES (UNAUDITED) You may not buy (nor will you own) shares of the Fund directly. You invest by buying an annuity contract or life insurance policy and allocating your purchase payments to the subaccount that invests in the Fund. Your purchase price will be the next NAV calculated after your request is received by the Fund or an authorized insurance company. As a contract/policy owner investing in the Fund, you incur ongoing costs, which may include management fees and other expenses; distribution and service (12b-1) fees; and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in each Fund and to compare these costs with the ongoing costs of investing in other mutual funds that underlie various annuity contracts and/or life insurance policies. In addition to the ongoing expense which the Fund bears directly, the Fund's shareholders indirectly bear the expense of the funds in which it invests (also referred to as "acquired funds"), including affiliated an non-affiliated pooled investment vehicles (including mutual funds and exchange traded funds). The Funds indirect expense from investing in the acquired funds is based on the Fund's pro rata portion of the cumulative expenses charged by the acquired funds using the acquired funds expense ratio as of the most recent shareholder report. These examples are based on an investment of $1,000 invested at the beginning of the period and held for the six months ended June 30, 2007. ACTUAL EXPENSES The first line of each table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading titled "Expenses paid during the period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of each table provides information about hypothetical account values and hypothetical expenses based on each Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare each 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other similar funds. Please note that the expenses shown in each table are meant to highlight your ongoing costs only and do not reflect expenses that apply to the subaccount or the contract. Therefore, the second line of each table is useful in comparing ongoing costs of the Fund only, and will not help you determine the relative total costs of owning different funds underlying various annuity contracts and/or life insurance policies. In addition, if the expenses that apply to the subaccount or the contract were included, your costs would have been higher. RiverSource VP - Balanced Fund
BEGINNING ENDING EXPENSES ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED JAN. 1, 2007 JUNE 30, 2007 THE PERIOD(A) EXPENSE RATIO Actual(b) $1,000 $1,043.00 $4.28 .84% Hypothetical (5% return before expenses) $1,000 $1,020.74 $4.23 .84%
(a) Expenses are equal to the Fund's annualized expense ratio as indicated above, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). (b) Based on the actual return of +4.30% for the six months ended June 30, 2007. RiverSource VP - Cash Management Fund
BEGINNING ENDING EXPENSES ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED JAN. 1, 2007 JUNE 30, 2007 THE PERIOD(A) EXPENSE RATIO Actual(b) $1,000 $1,024.00 $3.03 .60% Hypothetical (5% return before expenses) $1,000 $1,021.94 $3.02 .60%
(a) Expenses are equal to the Fund's annualized expense ratio as indicated above, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). (b) Based on the actual return of +2.40% for the six months ended June 30, 2007. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 59 RiverSource VP - Core Bond Fund
BEGINNING ENDING EXPENSES ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED JAN. 1, 2007 JUNE 30, 2007 THE PERIOD(A) EXPENSE RATIO Actual(b) $1,000 $1,008.50 $4.16 .83% Hypothetical (5% return before expenses) $1,000 $1,020.79 $4.18 .83%
(a) Expenses are equal to the Fund's annualized expense ratio as indicated above, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). (b) Based on the actual return of +0.85% for the six months ended June 30, 2007. RiverSource VP - Diversified Bond Fund
BEGINNING ENDING EXPENSES ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED JAN. 1, 2007 JUNE 30, 2007 THE PERIOD(A) EXPENSE RATIO Actual(b) $1,000 $1,010.40 $3.66 .73% Hypothetical (5% return before expenses) $1,000 $1,021.29 $3.68 .73%
(a) Expenses are equal to the Fund's annualized expense ratio as indicated above, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). (b) Based on the actual return of +1.04% for the six months ended June 30, 2007. RiverSource VP - Diversified Equity Income Fund
BEGINNING ENDING EXPENSES ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED JAN. 1, 2007 JUNE 30, 2007 THE PERIOD(A) EXPENSE RATIO Actual(b) $1,000 $1,117.50 $4.17 .79% Hypothetical (5% return before expenses) $1,000 $1,020.99 $3.98 .79%
(a) Expenses are equal to the Fund's annualized expense ratio as indicated above, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). (b) Based on the actual return of +11.75% for the six months ended June 30, 2007. RiverSource VP - Emerging Markets Fund
BEGINNING ENDING EXPENSES ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED JAN. 1, 2007 JUNE 30, 2007 THE PERIOD(A) EXPENSE RATIO Actual(b) $1,000 $1,149.40 $8.20 1.53% Hypothetical (5% return before expenses) $1,000 $1,017.30 $7.70 1.53%
(a) Expenses are equal to the Fund's annualized expense ratio as indicated above, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). (b) Based on the actual return of +14.94% for the six months ended June 30, 2007. RiverSource VP - Fundamental Value Fund
BEGINNING ENDING EXPENSES ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED JAN. 1, 2007 JUNE 30, 2007 THE PERIOD(A) EXPENSE RATIO Actual(b) $1,000 $1,062.60 $5.09 .99% Hypothetical (5% return before expenses) $1,000 $1,020.00 $4.99 .99%
(a) Expenses are equal to the Fund's annualized expense ratio as indicated above, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). (b) Based on the actual return of +6.26% for the six months ended June 30, 2007. - -------------------------------------------------------------------------------- 60 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Global Bond Fund
BEGINNING ENDING EXPENSES ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED JAN. 1, 2007 JUNE 30, 2007 THE PERIOD(A) EXPENSE RATIO Actual(b) $1,000 $1,007.00 $5.10 1.02% Hypothetical (5% return before expenses) $1,000 $1,019.85 $5.14 1.02%
(a) Expenses are equal to the Fund's annualized expense ratio as indicated above, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). (b) Based on the actual return of +0.70% for the six months ended June 30, 2007. RiverSource VP - Global Inflation Protected Securities Fund
BEGINNING ENDING EXPENSES ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED JAN. 1, 2007 JUNE 30, 2007 THE PERIOD(A) EXPENSE RATIO Actual(b) $1,000 $ 998.40 $3.59 .72% Hypothetical (5% return before expenses) $1,000 $1,021.34 $3.63 .72%
(a) Expenses are equal to the Fund's annualized expense ratio as indicated above, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). (b) Based on the actual return of -0.16% for the six months ended June 30, 2007. RiverSource VP - Growth Fund
BEGINNING ENDING EXPENSES ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED JAN. 1, 2007 JUNE 30, 2007 THE PERIOD(A) EXPENSE RATIO Actual(b) $1,000 $1,057.80 $4.93 .96% Hypothetical (5% return before expenses) $1,000 $1,020.14 $4.84 .96%
(a) Expenses are equal to the Fund's annualized expense ratio as indicated above, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). (b) Based on the actual return of +5.78% for the six months ended June 30, 2007. RiverSource VP - High Yield Bond Fund
BEGINNING ENDING EXPENSES ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED JAN. 1, 2007 JUNE 30, 2007 THE PERIOD(A) EXPENSE RATIO Actual(b) $1,000 $1,032.90 $4.41 .87% Hypothetical (5% return before expenses) $1,000 $1,020.59 $4.38 .87%
(a) Expenses are equal to the Fund's annualized expense ratio as indicated above, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). (b) Based on the actual return of +3.29% for the six months ended June 30, 2007. RiverSource VP - Income Opportunities Fund
BEGINNING ENDING EXPENSES ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED JAN. 1, 2007 JUNE 30, 2007 THE PERIOD(A) EXPENSE RATIO Actual(b) $1,000 $1,024.90 $4.59 .91% Hypothetical (5% return before expenses) $1,000 $1,020.39 $4.58 .91%
(a) Expenses are equal to the Fund's annualized expense ratio as indicated above, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). (b) Based on the actual return of +2.49% for the six months ended June 30, 2007. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 61 RiverSource VP - International Opportunity Fund
BEGINNING ENDING EXPENSES ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED JAN. 1, 2007 JUNE 30, 2007 THE PERIOD(A) EXPENSE RATIO Actual(b) $1,000 $1,099.50 $5.34 1.02% Hypothetical (5% return before expenses) $1,000 $1,019.85 $5.14 1.02%
(a) Expenses are equal to the Fund's annualized expense ratio as indicated above, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). (b) Based on the actual return of +9.95% for the six months ended June 30, 2007. RiverSource VP - Large Cap Equity Fund
BEGINNING ENDING EXPENSES ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED JAN. 1, 2007 JUNE 30, 2007 THE PERIOD(A) EXPENSE RATIO Actual(b) $1,000 $1,062.90 $4.47 .87% Hypothetical (5% return before expenses) $1,000 $1,020.59 $4.38 .87%
(a) Expenses are equal to the Fund's annualized expense ratio as indicated above, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). (b) Based on the actual return of +6.29% for the six months ended June 30, 2007. RiverSource VP - Large Cap Value Fund
BEGINNING ENDING EXPENSES ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED JAN. 1, 2007 JUNE 30, 2007 THE PERIOD(A) EXPENSE RATIO Actual(b) $1,000 $1,059.20 $5.39 1.05% Hypothetical (5% return before expenses) $1,000 $1,019.70 $5.29 1.05%
(a) Expenses are equal to the Fund's annualized expense ratio as indicated above, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). (b) Based on the actual return of +5.92% for the six months ended June 30, 2007. RiverSource VP - Mid Cap Growth Fund
BEGINNING ENDING EXPENSES ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED JAN. 1, 2007 JUNE 30, 2007 THE PERIOD(A) EXPENSE RATIO Actual(b) $1,000 $1,115.50 $4.43 .84% Hypothetical (5% return before expenses) $1,000 $1,020.74 $4.23 .84%
(a) Expenses are equal to the Fund's annualized expense ratio as indicated above, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). (b) Based on the actual return of +11.55% for the six months ended June 30, 2007. RiverSource VP - Mid Cap Value Fund
BEGINNING ENDING EXPENSES ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED JAN. 1, 2007 JUNE 30, 2007 THE PERIOD(A) EXPENSE RATIO Actual(b) $1,000 $1,154.10 $5.26 .98% Hypothetical (5% return before expenses) $1,000 $1,020.04 $4.94 .98%
(a) Expenses are equal to the Fund's annualized expense ratio as indicated above, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). (b) Based on the actual return of +15.41% for the six months ended June 30, 2007. - -------------------------------------------------------------------------------- 62 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - S&P 500 Index Fund
BEGINNING ENDING EXPENSES ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED JAN. 1, 2007 JUNE 30, 2007 THE PERIOD(A) EXPENSE RATIO Actual(b) $1,000 $1,067.20 $2.58 .50% Hypothetical (5% return before expenses) $1,000 $1,022.44 $2.52 .50%
(a) Expenses are equal to the Fund's annualized expense ratio as indicated above, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). (b) Based on the actual return of +6.72% for the six months ended June 30, 2007. RiverSource VP - Select Value Fund
BEGINNING ENDING EXPENSES ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED JAN. 1, 2007 JUNE 30, 2007 THE PERIOD(A) EXPENSE RATIO Actual(b) $1,000 $1,111.90 $5.37 1.02% Hypothetical (5% return before expenses) $1,000 $1,019.85 $5.14 1.02%
(a) Expenses are equal to the Fund's annualized expense ratio as indicated above, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). (b) Based on the actual return of +11.19% for the six months ended June 30, 2007. RiverSource VP - Short Duration U.S. Government Fund
BEGINNING ENDING EXPENSES ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED JAN. 1, 2007 JUNE 30, 2007 THE PERIOD(A) EXPENSE RATIO Actual(b) $1,000 $1,017.10 $3.92 .78% Hypothetical (5% return before expenses) $1,000 $1,021.04 $3.93 .78%
(a) Expenses are equal to the Fund's annualized expense ratio as indicated above, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). (b) Based on the actual return of +1.71% for the six months ended June 30, 2007. RiverSource VP - Small Cap Advantage
BEGINNING ENDING EXPENSES ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED JAN. 1, 2007 JUNE 30, 2007 THE PERIOD(A) EXPENSE RATIO Actual(b) $1,000 $1,065.10 $5.20 1.01% Hypothetical (5% return before expenses) $1,000 $1,019.90 $5.09 1.01%
(a) Expenses are equal to the Fund's annualized expense ratio as indicated above, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). (b) Based on the actual return of +6.51% for the six months ended June 30, 2007. RiverSource VP - Small Cap Value Fund
BEGINNING ENDING EXPENSES ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED JAN. 1, 2007 JUNE 30, 2007 THE PERIOD(A) EXPENSE RATIO Actual(b) $1,000 $1,067.60 $6.55 1.27% Hypothetical (5% return before expenses) $1,000 $1,018.60 $6.39 1.27%
(a) Expenses are equal to the Fund's annualized expense ratio as indicated above, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). (b) Based on the actual return of +6.76% for the six months ended June 30, 2007. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 63 FINANCIAL STATEMENTS STATEMENTS OF ASSETS AND LIABILITIES RiverSource Variable Portfolio Funds
RIVERSOURCE VP - RIVERSOURCE VP - RIVERSOURCE VP - CASH CORE BALANCED MANAGEMENT BOND JUNE 30, 2007 (UNAUDITED) FUND FUND FUND ASSETS Investments in securities, at value (Note 1) Unaffiliated issuers* (identified cost $1,696,018,840, $1,186,187,474 and $88,203,825) $1,964,045,759 $1,186,187,474 $87,184,115 Affiliated money market fund (identified cost $82,368,607, $-- and $5,584,710) (Note 10) 82,368,607 -- 5,584,710 - --------------------------------------------------------------------------------------------------------------------------------- Total investments in securities (identified cost $1,778,387,447, $1,186,187,474 and $93,788,535) 2,046,414,366 1,186,187,474 92,768,825 Foreign currency holdings for RiverSource VP - Balanced Fund (identified cost $4,775) (Note 1) 4,821 -- -- Receivable for investment securities sold 74,733,314 -- 9,231,976 Dividends and accrued interest receivable 7,224,972 2,495,849 707,932 - --------------------------------------------------------------------------------------------------------------------------------- Total assets 2,128,377,473 1,188,683,323 102,708,733 - --------------------------------------------------------------------------------------------------------------------------------- LIABILITIES Disbursements in excess of cash on demand deposit 144,308 10,091 24 Dividends payable to shareholders (Note 1) -- 154,051 10,439 Payable for investment securities purchased 62,619,489 -- 7,656,062 Payable for securities purchased on a forward-commitment basis (Note 1) 77,946,683 -- 15,759,552 Payable upon return of securities loaned (Note 6) 23,858,000 -- -- Unrealized depreciation on swap transactions, at value (Note 9) 195,779 -- 19,194 Accrued investment management services fee 815,846 306,651 29,743 Accrued distribution fee 197,045 117,072 7,746 Accrued transfer agency fee 94,578 56,193 3,718 Accrued administrative services fee 84,776 52,786 4,337 Other accrued expenses 213,353 71,247 23,110 Forward sale commitments, at value (proceeds receivable $4,907,812 for RiverSource VP - Balanced Fund) (Note 1) 4,925,000 -- -- - --------------------------------------------------------------------------------------------------------------------------------- Total liabilities 171,094,857 768,091 23,513,925 - --------------------------------------------------------------------------------------------------------------------------------- Net assets applicable to outstanding capital stock $1,957,282,616 $1,187,915,232 $79,194,808 ================================================================================================================================= REPRESENTED BY Capital stock -- $.01 par value ($.001 for RiverSource VP - Balanced Fund) (Note 1) $ 124,677 $ 11,883,404 $ 81,797 Additional paid-in capital 1,665,137,560 1,176,034,133 81,184,238 Undistributed net investment income 208,190 -- 5,242 Accumulated net realized gain (loss) (Note 13) 24,155,655 (2,305) (1,032,000) Unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (Notes 7 and 9) 267,656,534 -- (1,044,469) - --------------------------------------------------------------------------------------------------------------------------------- Total -- representing net assets applicable to outstanding capital stock $1,957,282,616 $1,187,915,232 $79,194,808 ================================================================================================================================= Shares outstanding 124,676,783 1,188,340,358 8,179,682 - --------------------------------------------------------------------------------------------------------------------------------- Net asset value per share of outstanding capital stock $ 15.70 $ 1.00 $ 9.68 - --------------------------------------------------------------------------------------------------------------------------------- *Including securities on loan, at value (Note 6) $ 22,938,325 $ -- $ -- - ---------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 64 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - RIVERSOURCE VP - RIVERSOURCE VP - DIVERSIFIED DIVERSIFIED EMERGING BOND EQUITY INCOME MARKETS JUNE 30, 2007 (UNAUDITED) FUND FUND FUND ASSETS Investments in securities, at value (Note 1) Unaffiliated issuers* (identified cost $3,576,395,783, $3,232,647,519 and $547,408,831) $3,535,267,318 $4,027,124,563 $667,131,980 Affiliated money market fund (identified cost $394,236,648, $85,867,620 and $13,952,010) (Note 10) 394,236,648 85,867,620 13,952,010 - --------------------------------------------------------------------------------------------------------------------------------- Total investments in securities (identified cost $3,970,632,431, $3,318,515,139 and $561,360,841) 3,929,503,966 4,112,992,183 681,083,990 Cash in bank on demand deposit -- -- 147,873 Foreign currency holdings (identified cost $1,470, $-- and $7,120,277) (Note 1) 1,476 -- 7,123,008 Receivable for investment securities sold 504,131,299 1,231,312 -- Dividends and accrued interest receivable 29,142,965 5,394,953 1,084,083 - --------------------------------------------------------------------------------------------------------------------------------- Total assets 4,462,779,706 4,119,618,448 689,438,954 - --------------------------------------------------------------------------------------------------------------------------------- LIABILITIES Disbursements in excess of cash on demand deposit 621 -- -- Dividends payable to shareholders (Note 1) 477,411 -- -- Payable for investment securities purchased 458,634,409 -- 3,411,641 Payable for securities purchased on a forward-commitment basis (Note 1) 506,077,493 -- -- Payable upon return of securities loaned (Note 6) 67,476,250 29,775,900 -- Unrealized depreciation on swap transactions, at value (Note 9) 877,105 -- -- Accrued investment management services fee 1,194,538 1,818,811 574,389 Accrued distribution fee 331,905 404,679 66,330 Accrued transfer agency fee 159,309 194,239 31,837 Accrued administrative services fee 162,553 159,291 41,784 Other accrued expenses 262,683 197,254 99,100 - --------------------------------------------------------------------------------------------------------------------------------- Total liabilities 1,035,654,277 32,550,174 4,225,081 - --------------------------------------------------------------------------------------------------------------------------------- Net assets applicable to outstanding capital stock $3,427,125,429 $4,087,068,274 $685,213,873 ================================================================================================================================= REPRESENTED BY Capital stock -- $.01 par value (Note 1) $ 3,318,730 $ 2,409,272 $ 365,251 Additional paid-in capital 3,620,956,439 3,149,005,097 513,593,009 Undistributed (excess of distributions over) net investment income 265,389 (80,093) 642,399 Accumulated net realized gain (loss) (Note 13) (156,541,645) 141,256,954 50,877,162 Unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (Notes 7 and 9) (40,873,484) 794,477,044 119,736,052 - --------------------------------------------------------------------------------------------------------------------------------- Total -- representing net assets applicable to outstanding capital stock $3,427,125,429 $4,087,068,274 $685,213,873 ================================================================================================================================= Shares outstanding 331,872,965 240,927,204 36,525,063 - --------------------------------------------------------------------------------------------------------------------------------- Net asset value per share of outstanding capital stock $ 10.33 $ 16.96 $ 18.76 - --------------------------------------------------------------------------------------------------------------------------------- *Including securities on loan, at value (Note 6) $ 65,893,210 $ 28,270,645 $ -- - ---------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 65 STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - RIVERSOURCE VP - RIVERSOURCE VP - FUNDAMENTAL GLOBAL GLOBAL INFLATION VALUE BOND PROTECTED SECURITIES JUNE 30, 2007 (UNAUDITED) FUND FUND FUND ASSETS Investments in securities, at value (Note 1) Unaffiliated issuers (identified cost $555,054,161, $898,980,295 and $819,772,917) $613,025,710 $911,546,536 $815,393,116 Affiliated money market fund (identified cost $26,844,201, $29,634,098 and $25,185,071) (Note 10) 26,844,201 29,634,098 25,185,071 - --------------------------------------------------------------------------------------------------------------------------------- Total investments in securities (identified cost $581,898,362, $928,614,393 and $844,957,988) 639,869,911 941,180,634 840,578,187 Cash in bank on demand deposit -- 525,406 -- Foreign currency holdings (identified cost $189,849, $364,603 and $35,739) (Note 1) 190,177 364,608 36,333 Receivable for investment securities sold 1,024,852 1,085,512 -- Dividends and accrued interest receivable 658,890 13,734,132 8,074,728 Unrealized appreciation on foreign currency contracts held, at value (Note 5) -- 99,812 590,133 - --------------------------------------------------------------------------------------------------------------------------------- Total assets 641,743,830 956,990,104 849,279,381 - --------------------------------------------------------------------------------------------------------------------------------- LIABILITIES Disbursements in excess of cash on demand deposit -- -- 50,515 Payable for investment securities purchased 1,332,147 3,257,679 10,042,134 Payable for securities purchased on a forward-commitment basis (Note 1) -- 8,842,562 -- Unrealized depreciation on foreign currency contracts held, at value (Note 5) -- 308,724 1,739,403 Unrealized depreciation on swap transactions, at value (Note 9) -- 221,394 -- Accrued investment management services fee 359,399 501,299 285,273 Accrued distribution fee 61,963 91,378 81,044 Accrued transfer agency fee 29,741 43,860 38,900 Accrued administrative services fee 29,249 56,813 44,128 Other accrued expenses 47,268 135,512 49,686 - --------------------------------------------------------------------------------------------------------------------------------- Total liabilities 1,859,767 13,459,221 12,331,083 - --------------------------------------------------------------------------------------------------------------------------------- Net assets applicable to outstanding capital stock $639,884,063 $943,530,883 $836,948,298 ================================================================================================================================= REPRESENTED BY Capital stock -- $.01 par value (Note 1) $ 554,507 $ 873,583 $ 865,716 Additional paid-in capital 579,559,083 933,383,625 854,675,328 Undistributed (excess of distributions over) net investment income 4,745 (352,325) (5,246,549) Accumulated net realized gain (loss) (Note 13) 1,793,745 (2,379,905) (7,911,432) Unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (Notes 5, 7 and 9) 57,971,983 12,005,905 (5,434,765) - --------------------------------------------------------------------------------------------------------------------------------- Total -- representing net assets applicable to outstanding capital stock $639,884,063 $943,530,883 $836,948,298 ================================================================================================================================= Shares outstanding 55,450,676 87,358,315 86,571,577 - --------------------------------------------------------------------------------------------------------------------------------- Net asset value per share of outstanding capital stock $ 11.54 $ 10.80 $ 9.67 - ---------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 66 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - RIVERSOURCE VP - RIVERSOURCE VP - HIGH YIELD INCOME GROWTH BOND OPPORTUNITIES JUNE 30, 2007 (UNAUDITED) FUND FUND FUND ASSETS Investments in securities, at value (Note 1) Unaffiliated issuers* (identified cost $596,201,198, $1,156,410,291 and $596,173,541) $644,747,980 $1,154,909,990 $591,118,546 Affiliated money market fund (identified cost $15,582,203, $67,045,789 and $27,576,760) (Note 10) 15,582,203 67,045,789 27,576,760 - --------------------------------------------------------------------------------------------------------------------------------- Total investments in securities (identified cost $611,783,401, $1,223,456,080 and $623,750,301) 660,330,183 1,221,955,779 618,695,306 Cash in bank on demand deposit -- 2,318,213 3,144,055 Foreign currency holdings for RiverSource VP - Growth Fund (identified cost $2,376,620) (Note 1) 2,377,526 -- -- Receivable for investment securities sold 11,571,859 14,954,069 10,925,993 Dividends and accrued interest receivable 1,439,964 20,514,033 9,643,549 Other receivable -- 91,484 -- Unrealized appreciation on foreign currency contracts held, at value (Note 5) 1,473 -- -- - --------------------------------------------------------------------------------------------------------------------------------- Total assets 675,721,005 1,259,833,578 642,408,903 - --------------------------------------------------------------------------------------------------------------------------------- LIABILITIES Disbursements in excess of cash on demand deposit 27,421 -- -- Dividends payable to shareholders (Note 1) -- 236,112 125,783 Payable for investment securities purchased 4,768,170 4,406,871 3,087,438 Payable for securities purchased on a forward-commitment basis (Note 1) -- 34,884,165 12,539,904 Payable upon return of securities loaned (Note 6) 2,425,000 4,360,000 -- Payable for cash collateral held on open options contracts (Note 1) 562,231 -- -- Unrealized depreciation on swap transactions, at value (Note 9) -- 45,949 21,960 Unrealized depreciation on foreign currency contracts held, at value (Note 5) 14,217 -- -- Accrued investment management services fee 318,582 572,871 297,077 Accrued distribution fee 66,372 122,348 60,877 Accrued transfer agency fee 31,857 58,725 29,220 Accrued administrative services fee 31,189 64,685 33,642 Other accrued expenses 62,403 381,074 45,659 Options contracts written, at value for RiverSource VP - Growth Fund (premium received, $1,522,525) (Note 8) 1,140,518 -- -- - --------------------------------------------------------------------------------------------------------------------------------- Total liabilities 9,447,960 45,132,800 16,241,560 - --------------------------------------------------------------------------------------------------------------------------------- Net assets applicable to outstanding capital stock $666,273,045 $1,214,700,778 $626,167,343 ================================================================================================================================= REPRESENTED BY Capital stock -- $.01 par value (Note 1) $ 847,315 $ 1,776,542 $ 613,471 Additional paid-in capital 671,176,288 1,411,804,526 627,327,569 Undistributed net investment income 6,968 1,724,611 46,727 Accumulated net realized gain (loss) (Note 13) (54,696,614) (199,150,135) 3,256,531 Unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (Notes 5 and 9) 48,939,088 (1,454,766) (5,076,955) - --------------------------------------------------------------------------------------------------------------------------------- Total -- representing net assets applicable to outstanding capital stock $666,273,045 $1,214,700,778 $626,167,343 ================================================================================================================================= Shares outstanding 84,731,459 177,654,159 61,347,089 - --------------------------------------------------------------------------------------------------------------------------------- Net asset value per share of outstanding capital stock $ 7.86 $ 6.84 $ 10.21 - --------------------------------------------------------------------------------------------------------------------------------- *Including securities on loan, at value (Note 6) $ 2,296,700 $ 4,180,000 $ -- - ---------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 67 STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - RIVERSOURCE VP - RIVERSOURCE VP - INTERNATIONAL LARGE CAP LARGE CAP OPPORTUNITY EQUITY VALUE JUNE 30, 2007 (UNAUDITED) FUND FUND FUND ASSETS Investments in securities, at value (Note 1) Unaffiliated issuers* (identified cost $999,291,712, $2,939,046,104 and $22,661,236) $1,289,036,629 $3,378,274,399 $26,165,913 Affiliated money market fund (identified cost $48,791,748, $138,971,842, and $978,811) (Note 10) 48,791,748 138,971,842 978,811 - --------------------------------------------------------------------------------------------------------------------------------- Total investments in securities (identified cost $1,048,083,460, $3,078,017,946, and $23,640,047) 1,337,828,377 3,517,246,241 27,144,724 Cash in bank on demand deposit 180,356 20,873 -- Foreign currency holdings (identified cost $3,541,992, $5,653,373 and $--) (Note 1) 3,545,075 5,663,634 -- Receivable for investment securities sold 10,966,614 32,408,956 50,794 Dividends and accrued interest receivable 3,537,949 5,199,626 30,759 Unrealized appreciation on foreign currency contracts held, at value (Note 5) -- 2,676 -- Unrealized appreciation on swap transactions, at value (Note 9) -- 117,788 -- - --------------------------------------------------------------------------------------------------------------------------------- Total assets 1,356,058,371 3,560,659,794 27,226,277 - --------------------------------------------------------------------------------------------------------------------------------- LIABILITIES Disbursements in excess of cash on demand deposit -- -- 182 Payable for investment securities purchased 11,043,116 21,919,155 27,278 Payable upon return of securities loaned (Note 6) 40,991,250 26,110,000 -- Payable for cash collateral held on open options contracts (Note 1) -- 1,461,480 -- Unrealized depreciation on foreign currency contracts held, at value (Note 5) -- 32,469 -- Accrued investment management services fee 776,050 1,606,303 13,171 Accrued distribution fee 129,715 354,081 2,744 Accrued administrative services fee 78,598 143,100 1,317 Accrued transfer agency fee 62,261 169,953 1,317 Other accrued expenses 274,536 219,302 17,269 Options contracts written, at value for RiverSource VP - Large Cap Equity Fund (premiums received, $3,300,206) (Note 8) -- 2,487,738 -- - --------------------------------------------------------------------------------------------------------------------------------- Total liabilities 53,355,526 54,503,581 63,278 - --------------------------------------------------------------------------------------------------------------------------------- Net assets applicable to outstanding capital stock $1,302,702,845 $3,506,156,213 $27,162,999 ================================================================================================================================= REPRESENTED BY Capital stock -- $.01 par value (Note 1) $ 905,591 $ 1,328,501 $ 21,192 Additional paid-in capital 1,336,217,831 3,070,957,290 22,783,401 Undistributed (excess of distributions over) net investment income (3,240,049) 248,636 (85) Accumulated net realized gain (loss) (Note 13) (321,079,007) (6,397,219) 853,814 Unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (Notes 5, 7 and 9) 289,898,479 440,019,005 3,504,677 - --------------------------------------------------------------------------------------------------------------------------------- Total -- representing net assets applicable to outstanding capital stock $1,302,702,845 $3,506,156,213 $27,162,999 ================================================================================================================================= Shares outstanding 90,559,073 132,850,090 2,119,167 - --------------------------------------------------------------------------------------------------------------------------------- Net asset value per share of outstanding capital stock $ 14.39 $ 26.39 $ 12.82 - --------------------------------------------------------------------------------------------------------------------------------- *Including securities on loan, at value (Note 6) $ 39,616,450 $ 25,065,300 $ -- - ---------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 68 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - RIVERSOURCE VP - RIVERSOURCE VP - MID CAP MID CAP S&P 500 GROWTH VALUE INDEX JUNE 30, 2007 (UNAUDITED) FUND FUND FUND ASSETS Investments in securities, at value (Note 1) Unaffiliated issuers* (identified cost $590,555,380, $480,211,153 and $295,266,010) $ 633,551,286 $562,044,820 $401,020,286 Affiliated money market fund (identified cost $30,598,126, $10,067,351 and $5,272,124) (Note 10) 30,598,126 10,067,351 5,272,124 - --------------------------------------------------------------------------------------------------------------------------------- Total investments in securities (identified cost $621,153,506, $490,278,504 and $300,538,134) 664,149,412 572,112,171 406,292,410 Receivable for investment securities sold 7,308,917 1,895,434 253,339 Dividends and accrued interest receivable 266,241 791,738 435,003 - --------------------------------------------------------------------------------------------------------------------------------- Total assets 671,724,570 574,799,343 406,980,752 - --------------------------------------------------------------------------------------------------------------------------------- LIABILITIES Disbursements in excess of cash on demand deposit -- 333 -- Payable for investment securities purchased 8,147,870 1,941,887 587,080 Payable upon return of securities loaned (Note 6) 10,020,000 -- -- Accrued investment management services fee 369,738 313,822 71,808 Accrued distribution fee 66,025 56,040 40,800 Accrued transfer agency fee 31,691 26,898 19,584 Accrued administrative services fee 31,036 26,643 19,584 Other accrued expenses 46,950 80,688 54,055 - --------------------------------------------------------------------------------------------------------------------------------- Total liabilities 18,713,310 2,446,311 792,911 - --------------------------------------------------------------------------------------------------------------------------------- Net assets applicable to outstanding capital stock $ 653,011,260 $572,353,032 $406,187,841 ================================================================================================================================= REPRESENTED BY Capital stock -- $.01 par value (Note 1) $ 518,116 $ 369,391 $ 403,330 Additional paid-in capital 1,685,788,516 481,070,212 299,564,586 Undistributed net investment income 1,050,144 1,562,104 89,981 Accumulated net realized gain (loss) (Note 13) (1,077,341,422) 7,517,658 400,002 Unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (Note 7) 42,995,906 81,833,667 105,729,942 - --------------------------------------------------------------------------------------------------------------------------------- Total -- representing net assets applicable to outstanding capital stock $ 653,011,260 $572,353,032 $406,187,841 ================================================================================================================================= Shares outstanding 51,811,560 36,939,058 40,333,033 - --------------------------------------------------------------------------------------------------------------------------------- Net asset value per share of outstanding capital stock $ 12.60 $ 15.49 $ 10.07 - --------------------------------------------------------------------------------------------------------------------------------- *Including securities on loan, at value (Note 6) $ 9,095,280 $ -- $ -- - ---------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 69 STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - RIVERSOURCE VP - RIVERSOURCE VP - SELECT SHORT DURATION SMALL CAP VALUE U.S. GOVERNMENT ADVANTAGE JUNE 30, 2007 (UNAUDITED) FUND FUND FUND ASSETS Investments in securities, at value (Note 1) Unaffiliated issuers* (identified cost $28,899,308, $494,351,928 and $189,711,022) $31,940,133 $490,331,877 $205,775,823 Affiliated money market fund (identified cost $935,945, $8,310,341 and $3,395,053) (Note 10) 935,945 8,310,341 3,395,053 - --------------------------------------------------------------------------------------------------------------------------------- Total investments in securities (identified cost $29,835,253, $502,662,269 and $193,106,075) 32,876,078 498,642,218 209,170,876 Foreign currency holdings for RiverSource VP - Select Value Fund (identified cost $1,366) (Note 1) 1,411 -- -- Receivable for investment securities sold 381,059 39,087,032 4,644,277 Dividends and accrued interest receivable 29,705 3,113,438 265,531 - --------------------------------------------------------------------------------------------------------------------------------- Total assets 33,288,253 540,842,688 214,080,684 - --------------------------------------------------------------------------------------------------------------------------------- LIABILITIES Disbursements in excess of cash on demand deposit 22 46,318 -- Dividends payable to shareholders (Note 1) -- 59,477 -- Payable for investment securities purchased 236,984 35,661,072 5,200,924 Payable for securities purchased on a forward-commitment basis (Note 1) -- 52,614,151 -- Payable upon return of securities loaned (Note 6) -- -- 917,000 Accrued investment management services fee 20,759 172,214 132,760 Accrued distribution fee 3,327 44,848 21,007 Accrued transfer agency fee 1,597 21,526 10,083 Accrued administrative services fee 1,597 25,114 13,444 Other accrued expenses 18,170 68,354 39,648 - --------------------------------------------------------------------------------------------------------------------------------- Total liabilities 282,456 88,713,074 6,334,866 - --------------------------------------------------------------------------------------------------------------------------------- Net assets applicable to outstanding capital stock $33,005,797 $452,129,614 $207,745,818 ================================================================================================================================= REPRESENTED BY Capital stock -- $.01 par value (Note 1) $ 26,472 $ 448,078 $ 156,882 Additional paid-in capital 28,542,885 467,586,508 176,527,944 Undistributed (excess of distributions over) net investment income (19,642) (90,176) 127,550 Accumulated net realized gain (loss) (Note 13) 1,415,211 (11,815,084) 14,868,641 Unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (Note 7) 3,040,871 (3,999,712) 16,064,801 - --------------------------------------------------------------------------------------------------------------------------------- Total -- representing net assets applicable to outstanding capital stock $33,005,797 $452,129,614 $207,745,818 ================================================================================================================================= Shares outstanding 2,647,178 44,807,755 15,688,200 - --------------------------------------------------------------------------------------------------------------------------------- Net asset value per share of outstanding capital stock $ 12.47 $ 10.09 $ 13.24 - --------------------------------------------------------------------------------------------------------------------------------- *Including securities on loan, at value (Note 6) $ -- $ -- $ 874,620 - ---------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 70 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - SMALL CAP VALUE JUNE 30, 2007 (UNAUDITED) FUND ASSETS Investments in securities, at value (Note 1) Unaffiliated issuers* (identified cost $568,124,804) $643,078,851 Affiliated money market fund (identified cost $101,423,554) (Note 10) 101,423,554 - -------------------------------------------------------------------------------- Total investments in securities (identified cost $669,548,358) 744,502,405 Receivable for investment securities sold 909,504 Dividends and accrued interest receivable 621,848 - -------------------------------------------------------------------------------- Total assets 746,033,757 - -------------------------------------------------------------------------------- LIABILITIES Payable for investment securities purchased 1,299,699 Payable upon return of securities loaned (Note 6) 15,170,700 Accrued investment management services fee 542,288 Accrued distribution fee 71,657 Accrued transfer agency fee 34,394 Accrued administrative services fee 44,980 Other accrued expenses 31,298 - -------------------------------------------------------------------------------- Total liabilities 17,195,016 - -------------------------------------------------------------------------------- Net assets applicable to outstanding capital stock $728,838,741 ================================================================================ REPRESENTED BY Capital stock -- $.01 par value (Note 1) $ 472,985 Additional paid-in capital 622,494,466 Excess of distributions over net investment income (534,317) Accumulated net realized gain (loss) (Note 13) 31,451,560 Unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 74,954,047 - -------------------------------------------------------------------------------- Total -- representing net assets applicable to outstanding capital stock $728,838,741 ================================================================================ Shares outstanding 47,298,521 - -------------------------------------------------------------------------------- Net asset value per share of outstanding capital stock $ 15.41 - -------------------------------------------------------------------------------- *Including securities on loan, at value (Note 6) $ 14,461,586 - --------------------------------------------------------------------------------
See accompanying notes to financial statements. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 71 STATEMENTS OF OPERATIONS RiverSource Variable Portfolio Funds
RIVERSOURCE VP - BALANCED FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) INVESTMENT INCOME Income: Dividends $13,853,886 $ 9,206,939 $ 36,616,054 Interest 18,009,995 11,850,745 39,923,037 Income distributions from affiliated money market fund (Note 10) 1,926,498 1,160,067 -- Fee income from securities lending (Note 6) 112,064 24,438 191,300 Less foreign taxes withheld (117,936) (95,790) (84,794) - --------------------------------------------------------------------------------------------------------------------------------- Total income 33,784,507 22,146,399 76,645,597 - --------------------------------------------------------------------------------------------------------------------------------- Expenses (Note 2): Investment management services fee 5,785,425 3,770,059 11,773,679 Distribution fee 1,255,569 847,080 2,821,196 Transfer agency fee 602,653 406,585 652,017 Administrative services fees and expenses 539,618 363,485 1,246,324 Custodian fees 106,900 109,647 229,150 Compensation of board members 16,030 10,981 20,913 Printing and postage 34,200 157,800 577,375 Professional fees 29,241 21,224 27,000 Other 19,405 21,093 40,506 - --------------------------------------------------------------------------------------------------------------------------------- Total expenses 8,389,041 5,707,954 17,388,160 Earnings and bank fee credits on cash balances (Note 2) -- (1,594) (2,918) - --------------------------------------------------------------------------------------------------------------------------------- Total net expenses 8,389,041 5,706,360 17,385,242 - --------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) - net 25,395,466 16,440,039 59,260,355 - --------------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) - NET Net realized gain (loss) on: Security transactions (Note 3) 68,391,349 50,059,770 134,095,911 Foreign currency transactions (19,256) (2,771) (124,615) Futures contracts 185,390 617,131 1,604,234 Swap transactions (425,198) 238,151 (944) - --------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments 68,132,285 50,912,281 135,574,586 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (8,352,743) 86,221,470 (29,065,213) - --------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments and foreign currencies 59,779,542 137,133,751 106,509,373 - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $85,175,008 $153,573,790 $165,769,728 =================================================================================================================================
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 72 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT STATEMENTS OF OPERATIONS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - CASH MANAGEMENT FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) INVESTMENT INCOME Income: Interest $29,635,094 $17,825,567 $35,217,690 - --------------------------------------------------------------------------------------------------------------------------------- Expenses (Note 2): Investment management services fee 1,812,474 1,115,733 3,099,857 Distribution fee 689,987 423,265 940,713 Transfer agency fee 331,183 203,160 246,070 Administrative services fees and expenses 313,382 193,956 447,159 Custodian fees 38,550 28,600 63,635 Compensation of board members 8,857 6,791 11,730 Printing and postage 83,580 44,000 194,040 Professional fees 20,032 16,200 21,500 Other 12,580 7,828 14,364 - --------------------------------------------------------------------------------------------------------------------------------- Total expenses 3,310,625 2,039,533 5,039,068 Earnings and bank fee credits on cash balances (Note 2) (851) (1,156) (3,315) - --------------------------------------------------------------------------------------------------------------------------------- Total net expenses 3,309,774 2,038,377 5,035,753 - --------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 26,325,320 15,787,190 30,181,937 - --------------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) -- NET Net realized gain (loss) on security transactions (Note 3) (1,337) 1,627 (798) - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $26,323,983 $15,788,817 $30,181,139 =================================================================================================================================
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 73 STATEMENTS OF OPERATIONS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - CORE BOND FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) INVESTMENT INCOME Income: Interest $ 1,755,298 $1,002,492 $ 2,907,966 Income distributions from affiliated money market fund (Note 10) 159,257 67,945 -- - --------------------------------------------------------------------------------------------------------------------------------- Total income 1,914,555 1,070,437 2,907,966 - --------------------------------------------------------------------------------------------------------------------------------- Expenses (Note 2): Investment management services fee 174,764 100,468 333,535 Distribution fee 45,512 26,164 75,382 Transfer agency fee 21,845 12,558 18,540 Administrative services fees and expenses 25,486 14,651 41,986 Custodian fees 30,066 17,598 60,092 Compensation of board members 582 3,829 8,597 Printing and postage 10,249 4,185 10,158 Professional fees 10,622 13,995 20,000 Other 5,538 342 8,993 - --------------------------------------------------------------------------------------------------------------------------------- Total expenses 324,664 193,790 577,283 Expenses waived/reimbursed by the Investment Manager and its affiliates (Note 2) (22,452) (19,971) (59,290) - --------------------------------------------------------------------------------------------------------------------------------- 302,212 173,819 517,993 Earnings and bank fee credits on cash balances (Note 2) -- (573) (2,769) - --------------------------------------------------------------------------------------------------------------------------------- Total net expenses 302,212 173,246 515,224 - --------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 1,612,343 897,191 2,392,742 - --------------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) -- NET Net realized gain (loss) on: Security transactions (Note 3) (360,301) 317,144 (1,059,999) Foreign currency transactions 3,074 -- (4,827) Futures contracts (8,152) 54,109 116,511 Swap transactions (39,215) 15,987 (524) - --------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments (404,594) 387,240 (948,839) Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (680,461) (139,404) (522,771) - --------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments and foreign currencies (1,085,055) 247,836 (1,471,610) - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 527,288 $1,145,027 $ 921,132 =================================================================================================================================
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 74 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT STATEMENTS OF OPERATIONS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - DIVERSIFIED BOND FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) INVESTMENT INCOME Income: Interest $ 72,689,369 $38,415,672 $ 96,130,706 Income distributions from affiliated money market fund (Note 10) 10,659,190 5,653,065 -- Fee income from securities lending (Note 6) 250,616 103,452 530,882 - --------------------------------------------------------------------------------------------------------------------------------- Total income 83,599,175 44,172,189 96,661,588 - --------------------------------------------------------------------------------------------------------------------------------- Expenses (Note 2): Investment management services fee 6,938,987 3,821,877 10,386,439 Distribution fee 1,912,902 1,039,343 2,445,873 Transfer agency fee 918,162 498,868 620,106 Administrative services fees and expenses 949,446 523,528 1,289,984 Custodian fees 142,200 55,200 207,670 Compensation of board members 24,548 11,059 17,496 Printing and postage 233,870 154,200 521,210 Professional fees 39,687 21,383 27,000 Other 51,241 35,663 38,858 - --------------------------------------------------------------------------------------------------------------------------------- Total expenses 11,211,043 6,161,121 15,554,636 Earnings and bank fee credits on cash balances (Note 2) -- (1,620) (7,722) - --------------------------------------------------------------------------------------------------------------------------------- Total net expenses 11,211,043 6,159,501 15,546,914 - --------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 72,388,132 38,012,688 81,114,674 - --------------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) -- NET Net realized gain (loss) on: Security transactions (Note 3) (9,496,260) 21,369,534 (32,643,150) Foreign currency transactions 103,470 -- (152,633) Futures contracts (3,652,574) 2,169,354 5,423,762 Swap transactions (1,753,664) 743,098 21,956 - --------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments (14,799,028) 24,281,986 (27,350,065) Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (31,878,197) (4,617,556) (15,056,707) - --------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments and foreign currencies (46,677,225) 19,664,430 (42,406,772) - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 25,710,907 $57,677,118 $ 38,707,902 =================================================================================================================================
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 75 STATEMENTS OF OPERATIONS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - DIVERSIFIED EQUITY INCOME FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) INVESTMENT INCOME Income: Dividends $ 42,604,733 $ 22,943,644 $ 55,141,757 Interest 417,148 66,283 2,450,193 Income distributions from affiliated money market fund (Note 10) 870,862 898,637 -- Fee income from securities lending (Note 6) 222,012 64,983 217,630 Less foreign taxes withheld (410,705) (73,113) (410,141) - --------------------------------------------------------------------------------------------------------------------------------- Total income 43,704,050 23,900,434 57,399,439 - --------------------------------------------------------------------------------------------------------------------------------- Expenses (Note 2): Investment management services fee 9,800,639 6,677,888 14,825,523 Distribution fee 2,320,176 1,300,920 2,845,725 Transfer agency fees 1,113,646 624,420 789,012 Administrative services fees and expenses 929,440 538,977 1,252,553 Custodian fees 136,300 114,000 352,750 Compensation of board members 29,668 13,092 17,513 Printing and postage 245,400 156,000 559,350 Professional fees 45,844 23,982 30,000 Other 56,229 40,163 23,679 - --------------------------------------------------------------------------------------------------------------------------------- Total expenses 14,677,342 9,489,442 20,696,105 Earnings and bank fee credits on cash balances (Note 2) -- (524) (1,987) - --------------------------------------------------------------------------------------------------------------------------------- Total net expenses 14,677,342 9,488,918 20,694,118 - --------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 29,026,708 14,411,516 36,705,321 - --------------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) -- NET Net realized gain (loss) on: Security transactions (Note 3) 145,744,884 26,724,517 208,875,344 Foreign currency transactions (2,870) (10,328) 35,615 - --------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments 145,742,014 26,714,189 208,910,959 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 249,416,272 242,752,342 53,554,454 - --------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments and foreign currencies 395,158,286 269,466,531 262,465,413 - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $424,184,994 $283,878,047 $299,170,734 =================================================================================================================================
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 76 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT STATEMENTS OF OPERATIONS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - EMERGING MARKETS FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) INVESTMENT INCOME Income: Dividends $ 7,854,789 $ 1,676,670 $ 7,670,211 Interest 30,467 54,799 562,009 Income distributions from affiliated money market fund (Note 10) 411,248 217,449 -- Less foreign taxes withheld (880,219) (153,135) (660,717) - --------------------------------------------------------------------------------------------------------------------------------- Total income 7,416,285 1,795,783 7,571,503 - --------------------------------------------------------------------------------------------------------------------------------- Expenses (Note 2): Investment management services fee 3,311,244 1,766,834 3,834,039 Distribution fee 370,290 194,711 425,597 Transfer agency fees 177,733 93,458 123,328 Administrative services fees and expenses 234,639 124,511 284,260 Custodian fees 338,980 131,148 303,261 Compensation of board members 4,725 4,923 9,264 Printing and postage 66,580 7,782 73,362 Professional fees 15,207 14,797 20,500 Other 11,974 14,081 178,175 - --------------------------------------------------------------------------------------------------------------------------------- Total expenses 4,531,372 2,352,245 5,251,786 Earnings and bank fee credits on cash balances (Note 2) -- (856) (2,136) - --------------------------------------------------------------------------------------------------------------------------------- Total net expenses 4,531,372 2,351,389 5,249,650 - --------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 2,884,913 (555,606) 2,321,853 - --------------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) -- NET Net realized gain (loss) on: Security transactions (Note 3) 52,803,728 34,881,200 56,915,477 Foreign currency transactions (679,473) (358,824) (858,475) - --------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments 52,124,255 34,522,376 56,057,002 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 30,961,805 55,618,639 15,075,906 - --------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments and foreign currencies 83,086,060 90,141,015 71,132,908 - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $85,970,973 $89,585,409 $73,454,761 =================================================================================================================================
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 77 STATEMENTS OF OPERATIONS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - FUNDAMENTAL VALUE FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006(B) (UNAUDITED) INVESTMENT INCOME Income: Dividends $ 4,620,755 $ 1,575,933 $ 433,738 Interest 79,663 59,897 234,568 Income distributions from affiliated money market fund (Note 10) 668,427 279,083 -- Less foreign taxes withheld (51,002) (12,806) (7,391) - --------------------------------------------------------------------------------------------------------------------------------- Total income 5,317,843 1,902,107 660,915 - --------------------------------------------------------------------------------------------------------------------------------- Expenses (Note 2): Investment management services fee 1,747,902 737,998 206,566 Distribution fee 315,801 128,343 35,371 Transfer agency fee 151,579 61,603 16,978 Administrative services fees and expenses 150,643 61,603 16,978 Custodian fees 39,070 26,348 27,090 Compensation of board members 4,053 2,609 -- Printing and postage 59,410 15,908 3,242 Professional fees 14,519 14,159 20,000 Other 13,883 3,698 164 - --------------------------------------------------------------------------------------------------------------------------------- Total expenses 2,496,860 1,052,269 326,389 Expenses waived/reimbursed by the Investment Manager and its affiliates (Note 2) -- -- (23,585) - --------------------------------------------------------------------------------------------------------------------------------- 2,496,860 1,052,269 302,804 Earnings and bank fee credits on cash balances (Note 2) -- -- (548) - --------------------------------------------------------------------------------------------------------------------------------- Total net expenses 2,496,860 1,052,269 302,256 - --------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 2,820,983 849,838 358,659 - --------------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) -- NET Net realized gain (loss) on: Security transactions (Note 3) 1,813,067 378,167 115,654 Foreign currency transactions (19,322) (6,706) (61,127) - --------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments 1,793,745 371,461 54,527 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 27,497,823 26,525,481 3,938,541 - --------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments and foreign currencies 29,291,568 26,896,942 3,993,068 - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $32,112,551 $27,746,780 $4,351,727 =================================================================================================================================
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. (b) For the period from May 1, 2006 (date the Fund became available) to Aug. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 78 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT STATEMENTS OF OPERATIONS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - GLOBAL BOND FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) INVESTMENT INCOME Income: Interest $17,205,243 $ 9,743,817 $23,851,829 Income distributions from affiliated money market fund (Note 10) 1,090,321 430,350 -- Fee income from securities lending (Note 6) 20,929 11,727 9,274 Less foreign taxes withheld (136,215) (3,690) (27,307) - --------------------------------------------------------------------------------------------------------------------------------- Total income 18,180,278 10,182,204 23,833,796 - --------------------------------------------------------------------------------------------------------------------------------- Expenses (Note 2): Investment management services fee 2,934,514 1,676,013 4,640,640 Distribution fee 532,473 301,306 762,389 Transfer agency fee 255,578 144,622 192,817 Administrative services fees and expenses 331,948 189,002 489,934 Custodian fees 122,400 67,000 158,750 Compensation of board members 6,857 5,645 10,696 Printing and postage 123,800 8,000 177,050 Professional fees 19,267 17,293 24,000 Other 20,056 457 13,130 - --------------------------------------------------------------------------------------------------------------------------------- Total expenses 4,346,893 2,409,338 6,469,406 Earnings and bank fee credits on cash balances (Note 2) -- (1,120) (1,806) - --------------------------------------------------------------------------------------------------------------------------------- Total net expenses 4,346,893 2,408,218 6,467,600 - --------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 13,833,385 7,773,986 17,366,196 - --------------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) -- NET Net realized gain (loss) on: Security transactions (Note 3) (494,929) 2,380,893 (1,642,404) Foreign currency transactions (1,112,202) (976,401) (487,909) Futures contracts 235,525 165,230 972,433 Swap transactions (445,742) 171,015 (10,629) - --------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments (1,817,348) 1,740,737 (1,168,509) Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (6,306,436) 6,466,660 (5,952,008) - --------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments and foreign currencies (8,123,784) 8,207,397 (7,120,517) - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 5,709,601 $15,981,383 $10,245,679 =================================================================================================================================
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 79 STATEMENTS OF OPERATIONS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - GLOBAL INFLATION PROTECTED SECURITIES FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) INVESTMENT INCOME Income: Interest $ 20,302,521 $ 2,486,887 $12,599,540 Income distributions from affiliated money market fund (Note 10) 1,059,888 425,320 -- Less foreign taxes withheld (6,035) -- (2,674) - --------------------------------------------------------------------------------------------------------------------------------- Total income 21,356,374 2,912,207 12,596,866 - --------------------------------------------------------------------------------------------------------------------------------- Expenses (Note 2): Investment management services fee 1,573,144 707,400 1,164,368 Distribution fee 446,921 200,968 318,273 Transfer agency fee 214,515 96,462 99,902 Administrative services fees and expenses 244,860 112,213 176,325 Custodian fees 52,441 14,400 45,645 Compensation of board members 5,732 3,808 8,597 Printing and postage 59,375 15,500 92,286 Professional fees 16,256 13,976 20,000 Other 13,445 47 23,353 - --------------------------------------------------------------------------------------------------------------------------------- Total expenses 2,626,689 1,164,774 1,948,749 Expenses waived/reimbursed by the Investment Manager and its affiliates (Note 2) (51,962) (7,228) (114,683) - --------------------------------------------------------------------------------------------------------------------------------- 2,574,727 1,157,546 1,834,066 Earnings and bank fee credits on cash balances (Note 2) -- (780) (2,594) - --------------------------------------------------------------------------------------------------------------------------------- Total net expenses 2,574,727 1,156,766 1,831,472 - --------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 18,781,647 1,755,441 10,765,394 - --------------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) -- NET Net realized gain (loss) on: Security transactions (Note 3) (1,958,615) -- (2,708,631) Foreign currency transactions (3,322,252) (6,575,653) (5,949,866) Futures contracts 288,348 -- -- - --------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments (4,992,519) (6,575,653) (8,658,497) Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (16,067,143) 1,783,356 7,996,039 - --------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments and foreign currencies (21,059,662) (4,792,297) (662,458) - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (2,278,015) $(3,036,856) $10,102,936 =================================================================================================================================
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 80 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT STATEMENTS OF OPERATIONS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - GROWTH FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) INVESTMENT INCOME Income: Dividends $ 7,624,706 $ 2,837,034 $ 10,276,586 Interest 10,141 119,184 1,466,282 Income distributions from affiliated money market fund (Note 10) 663,120 385,954 -- Fee income from securities lending (Note 6) 30,164 -- 48,444 Less foreign taxes withheld (236,732) (60,682) (194,117) - --------------------------------------------------------------------------------------------------------------------------------- Total income 8,091,399 3,281,490 11,597,195 - --------------------------------------------------------------------------------------------------------------------------------- Expenses (Note 2): Investment management services fee 2,224,165 1,449,964 3,751,065 Distribution fee 407,294 256,433 746,056 Transfer agency fee 195,494 123,084 207,746 Administrative services fees and expenses 191,668 121,045 366,683 Custodian fees 21,200 48,000 151,100 Compensation of board members 5,204 5,611 10,380 Printing and postage 37,200 42,000 152,200 Professional fees 15,780 15,415 21,000 Other 16,941 5,870 12,356 - --------------------------------------------------------------------------------------------------------------------------------- Total expenses 3,114,946 2,067,422 5,418,586 Earnings and bank fee credits on cash balances (Note 2) -- (600) (1,518) - --------------------------------------------------------------------------------------------------------------------------------- Total net expenses 3,114,946 2,066,822 5,417,068 - --------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 4,976,453 1,214,668 6,180,127 - --------------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) -- NET Net realized gain (loss) on: Security transactions (Note 3) 38,411,780 (5,753,825) 33,312,570 Foreign currency transactions (14,518) 10,914 24,873 Futures contracts -- -- (1,049,226) Options contracts written (Note 8) 438,052 (1,014,976) 1,282,736 - --------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments 38,835,314 (6,757,887) 33,570,953 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (7,049,369) 55,051,567 (20,509,288) - --------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments and foreign currencies 31,785,945 48,293,680 13,061,665 - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $36,762,398 $49,508,348 $ 19,241,792 =================================================================================================================================
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 81 STATEMENTS OF OPERATIONS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - HIGH YIELD BOND FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) INVESTMENT INCOME Income: Interest $ 46,837,500 $31,610,736 $ 97,299,978 Income distributions from affiliated money market fund (Note 10) 1,668,462 909,607 -- Fee income from securities lending (Note 6) 1,057 2,827 -- Less foreign taxes withheld (19,342) -- -- - --------------------------------------------------------------------------------------------------------------------------------- Total income 48,487,677 32,523,170 97,299,978 - --------------------------------------------------------------------------------------------------------------------------------- Expenses (Note 2): Investment management services fee 3,607,848 2,316,669 7,413,897 Distribution fee 770,626 494,359 1,541,872 Transfer agency fee 369,888 237,284 373,691 Administrative services fees and expenses 407,289 261,944 840,455 Custodian fees 41,540 23,760 95,043 Compensation of board members 9,829 7,618 14,280 Printing and postage 108,840 101,350 354,210 Professional fees 23,458 19,902 27,000 Other 10,356 13,064 18,363 - --------------------------------------------------------------------------------------------------------------------------------- Total expenses 5,349,674 3,475,950 10,678,811 Earnings and bank fee credits on cash balances (Note 2) -- (1,672) (4,108) - --------------------------------------------------------------------------------------------------------------------------------- Total net expenses 5,349,674 3,474,278 10,674,703 - --------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 43,138,003 29,048,892 86,625,275 - --------------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) -- NET Net realized gain (loss) on: Security transactions (Note 3) 17,544,611 4,636,729 1,041,488 Swap transactions 14,832 -- -- - --------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments 17,559,443 4,636,729 1,041,488 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (20,557,107) 30,113,325 (19,241,545) - --------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments and foreign currencies (2,997,664) 34,750,054 (18,200,057) - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 40,140,339 $63,798,946 $ 68,425,218 =================================================================================================================================
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 82 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT STATEMENTS OF OPERATIONS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - INCOME OPPORTUNITIES FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) INVESTMENT INCOME Income: Interest $ 18,874,958 $ 7,903,691 $ 7,750,350 Income distributions from affiliated money market fund (Note 10) 771,857 417,364 -- Less foreign taxes withheld (15,402) -- -- - --------------------------------------------------------------------------------------------------------------------------------- Total income 19,631,413 8,321,055 7,750,350 - --------------------------------------------------------------------------------------------------------------------------------- Expenses (Note 2): Investment management services fee 1,583,063 665,749 653,044 Distribution fee 324,403 136,426 131,976 Transfer agency fee 155,708 65,482 45,332 Administrative services fees and expenses 180,669 76,397 76,233 Custodian fees 22,287 12,325 34,820 Compensation of board members 4,146 4,081 8,597 Printing and postage 63,745 9,242 33,485 Professional fees 14,590 14,213 20,000 Other 10,337 1,805 9,308 - --------------------------------------------------------------------------------------------------------------------------------- Total expenses 2,358,948 985,720 1,012,795 Earnings and bank fee credits on cash balances (Note 2) -- (750) (3,680) - --------------------------------------------------------------------------------------------------------------------------------- Total net expenses 2,358,948 984,970 1,009,115 - --------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 17,272,465 7,336,085 6,741,235 - --------------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) -- NET Net realized gain (loss) on: Security transactions (Note 3) 3,372,165 1,457,589 (259,128) Swap transactions (10,487) -- -- - --------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments 3,361,678 1,457,589 (259,128) Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (10,857,816) 6,365,184 (1,116,480) - --------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments and foreign currencies (7,496,138) 7,822,773 (1,375,608) - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 9,776,327 $15,158,858 $ 5,365,627 =================================================================================================================================
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 83 STATEMENTS OF OPERATIONS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - INTERNATIONAL OPPORTUNITY FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) INVESTMENT INCOME Income: Dividends $ 18,304,552 $ 7,252,055 $ 28,910,841 Interest 83,043 68,026 477,054 Income distributions from affiliated money market fund (Note 10) 113,501 138,218 -- Fee income from securities lending (Note 6) 449,559 103,960 854,518 Less foreign taxes withheld (2,191,325) (736,272) (2,953,973) - --------------------------------------------------------------------------------------------------------------------------------- Total income 16,759,330 6,825,987 27,288,440 - --------------------------------------------------------------------------------------------------------------------------------- Expenses (Note 2): Investment management services fee 4,494,860 3,169,722 10,469,388 Distribution fee 815,045 521,812 1,580,636 Transfer agency fee 391,208 250,461 391,479 Administrative services fees and expenses 493,819 316,870 976,719 Custodian fees 265,700 137,000 406,430 Compensation of board members 10,440 7,950 14,164 Printing and postage 126,550 66,000 305,050 Professional fees 23,802 19,664 26,500 Other 12,426 23,909 23,460 - --------------------------------------------------------------------------------------------------------------------------------- Total expenses 6,633,850 4,513,388 14,193,826 Earnings and bank fee credits on cash balances (Note 2) -- (880) (2,074) - --------------------------------------------------------------------------------------------------------------------------------- Total net expenses 6,633,850 4,512,508 14,191,752 - --------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 10,125,480 2,313,479 13,096,688 - --------------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) -- NET Net realized gain (loss) on: Security transactions (Note 3) 114,100,948 63,329,169 197,090,703 Foreign currency transactions 5,898 30,726 258,532 - --------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments 114,106,846 63,359,895 197,349,235 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (464,517) 41,009,369 57,942,017 - --------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments and foreign currencies 113,642,329 104,369,264 255,291,252 - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $123,767,809 $106,682,743 $268,387,940 =================================================================================================================================
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 84 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT STATEMENTS OF OPERATIONS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - LARGE CAP EQUITY FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) INVESTMENT INCOME Income: Dividends $ 38,038,014 $ 21,486,802 $ 64,447,141 Interest 108,193 548,131 3,523,830 Income distributions from affiliated money market fund (Note 10) 3,904,815 2,645,626 -- Fee income from securities lending (Note 6) 281,288 33,932 411,482 Less foreign taxes withheld (669,661) (219,488) (536,985) - --------------------------------------------------------------------------------------------------------------------------------- Total income 41,662,649 24,495,003 67,845,468 - --------------------------------------------------------------------------------------------------------------------------------- Expenses (Note 2): Investment management services fee 10,822,402 7,050,915 18,214,495 Distribution fee 2,254,448 1,538,178 3,994,421 Transfer agency fee 1,082,098 738,300 1,168,235 Administrative services fees and expenses 908,408 615,503 1,726,620 Custodian fees 227,148 148,170 431,400 Compensation of board members 28,826 16,991 25,530 Printing and postage 270,930 68,500 644,700 Professional fees 46,485 29,181 36,000 Other 47,983 44,948 45,973 - --------------------------------------------------------------------------------------------------------------------------------- Total expenses 15,688,728 10,250,686 26,287,374 Earnings and bank fee credits on cash balances (Note 2) -- (1,510) (3,638) - --------------------------------------------------------------------------------------------------------------------------------- Total net expenses 15,688,728 10,249,176 26,283,736 - --------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 25,973,921 14,245,827 41,561,732 - --------------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) -- NET Net realized gain (loss) on: Security transactions (Note 3) 202,117,089 68,815,824 221,874,381 Foreign currency transactions (38,296) 17,043 (15,410) Futures contracts 2,573,549 4,124,788 (872,886) Swap transactions 817,825 244,830 (793,303) Options contracts written (Note 8) 1,117,959 (2,159,477) 1,991,238 - --------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments 206,588,126 71,043,008 222,184,020 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (12,352,349) 257,357,774 (90,675,460) - --------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments and foreign currencies 194,235,777 328,400,782 131,508,560 - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $220,209,698 $342,646,609 $173,070,292 =================================================================================================================================
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 85 STATEMENTS OF OPERATIONS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - LARGE CAP VALUE FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) INVESTMENT INCOME Income: Dividends $ 279,518 $ 154,582 $ 428,966 Interest -- 3,780 13,246 Income distributions from affiliated money market fund (Note 10) 34,635 21,872 -- Less foreign taxes withheld (2,512) (1,383) (911) - --------------------------------------------------------------------------------------------------------------------------------- Total income 311,641 178,851 441,301 - --------------------------------------------------------------------------------------------------------------------------------- Expenses (Note 2): Investment management services fee 80,328 45,636 102,616 Distribution fee 16,715 9,508 22,190 Transfer agency fee 8,023 4,563 5,785 Administrative services fees and expenses 8,023 4,563 10,525 Custodian fees 18,167 14,980 45,710 Compensation of board members 213 -- -- Printing and postage 2,826 120 6,902 Professional fees 9,968 13,600 19,500 Other 557 616 462 - --------------------------------------------------------------------------------------------------------------------------------- Total expenses 144,820 93,586 213,690 Expenses waived/reimbursed by the Investment Manager and its affiliates (Note 2) (4,319) (13,724) (33,151) - --------------------------------------------------------------------------------------------------------------------------------- 140,501 79,862 180,539 Earnings and bank fee credits on cash balances (Note 2) -- (2,308) (14,675) - --------------------------------------------------------------------------------------------------------------------------------- Total net expenses 140,501 77,554 165,864 - --------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 171,140 101,297 275,437 - --------------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) -- NET Net realized gain (loss) on: Security transactions (Note 3) 989,094 313,050 907,987 Foreign currency transactions (245) (74) (13) - --------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments 988,849 312,976 907,974 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 388,240 1,816,288 652,685 - --------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments and foreign currencies 1,377,089 2,129,264 1,560,659 - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $1,548,229 $2,230,561 $1,836,096 =================================================================================================================================
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 86 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT STATEMENTS OF OPERATIONS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - MID CAP GROWTH FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) INVESTMENT INCOME Income: Dividends $ 3,242,024 $ 3,040,998 $ 3,608,016 Interest 30,933 198,553 298,963 Income distributions from affiliated money market fund (Note 10) 813,787 420,840 -- Fee income from securities lending (Note 6) 130,442 21,831 59,715 - --------------------------------------------------------------------------------------------------------------------------------- Total income 4,217,186 3,682,222 3,966,694 - --------------------------------------------------------------------------------------------------------------------------------- Expenses (Note 2): Investment management services fee 1,933,547 1,403,857 3,286,046 Distribution fee 420,873 290,864 636,199 Transfer agency fee 202,012 139,610 228,311 Administrative services fees and expenses 197,643 136,195 315,127 Custodian fees 15,370 20,533 25,155 Compensation of board members 5,357 6,092 10,464 Printing and postage 31,600 38,600 132,220 Professional fees 17,302 17,406 24,000 Other 11,014 1,557 7,132 - --------------------------------------------------------------------------------------------------------------------------------- Total expenses 2,834,718 2,054,714 4,664,654 Earnings and bank fee credits on cash balances (Note 2) -- (878) (2,103) - --------------------------------------------------------------------------------------------------------------------------------- Total net expenses 2,834,718 2,053,836 4,662,551 - --------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 1,382,468 1,628,386 (695,857) - --------------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) -- NET Net realized gain (loss) on security transactions (Note 3) 42,895,573 19,889,194 57,781,721 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 29,686,467 36,768,984 (134,694,999) - --------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments and foreign currencies 72,582,040 56,658,178 (76,913,278) - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $73,964,508 $58,286,564 $ (77,609,135) =================================================================================================================================
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 87 STATEMENTS OF OPERATIONS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - MID CAP VALUE FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) INVESTMENT INCOME Income: Dividends $ 5,633,160 $ 2,118,170 $ 892,633 Interest 13,895 18,258 193,240 Income distributions from affiliated money market fund (Note 10) 294,826 135,804 -- Less foreign taxes withheld (16,125) (4,533) (2,487) - --------------------------------------------------------------------------------------------------------------------------------- Total income 5,925,756 2,267,699 1,083,386 - --------------------------------------------------------------------------------------------------------------------------------- Expenses (Note 2): Investment management services fee 1,600,911 706,423 376,310 Distribution fee 295,641 123,158 64,217 Transfer agency fee 141,903 59,114 26,287 Administrative services fees and expenses 141,472 59,114 30,695 Custodian fees 53,200 66,275 192,302 Compensation of board members 3,767 4,028 3,846 Printing and postage 72,094 9,644 13,332 Licensing fees -- -- -- Professional fees 14,427 14,460 20,500 Other 766 10,202 11,321 - --------------------------------------------------------------------------------------------------------------------------------- Total expenses 2,324,181 1,052,418 738,810 Expenses waived/reimbursed by the Investment Manager and its affiliates (Note 2) -- -- (169,570) - --------------------------------------------------------------------------------------------------------------------------------- 2,324,181 1,052,418 569,240 Earnings and bank fee credits on cash balances (Note 2) -- -- (10,858) - --------------------------------------------------------------------------------------------------------------------------------- Total net expenses 2,324,181 1,052,418 558,382 - --------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 3,601,575 1,215,281 525,004 - --------------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) -- NET Net realized gain (loss) on: Security transactions (Note 3) 8,920,172 216,882 1,871,650 Foreign currency transactions 1,477 (190) 3 - --------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments 8,921,649 216,692 1,871,653 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 56,486,179 21,273,477 3,607,327 - --------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments and foreign currencies 65,407,828 21,490,169 5,478,980 - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $69,009,403 $22,705,450 $6,003,984 =================================================================================================================================
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 88 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT STATEMENTS OF OPERATIONS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - S&P 500 INDEX FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) INVESTMENT INCOME Income: Dividends $ 3,718,301 $ 2,335,998 $ 7,106,205 Interest -- 15,609 184,893 Income distributions from affiliated money market fund (Note 10) 147,907 71,076 -- - --------------------------------------------------------------------------------------------------------------------------------- Total income 3,866,208 2,422,683 7,291,098 - --------------------------------------------------------------------------------------------------------------------------------- Expenses (Note 2): Investment management services fee 438,142 275,378 952,722 Distribution fee 248,947 156,467 467,272 Transfer agency fee 119,491 75,102 112,578 Administrative services fees and expenses 119,491 75,101 241,657 Custodian fees 21,390 17,400 49,910 Compensation of board members 3,176 4,598 9,580 Printing and postage 36,750 7,765 86,625 Licensing fees 14,560 9,600 37,620 Professional fees 13,450 14,748 20,500 Other 10,419 3,946 10,600 - --------------------------------------------------------------------------------------------------------------------------------- Total expenses 1,025,816 640,105 1,989,064 Expenses waived/reimbursed by the Investment Manager and its affiliates (Note 2) (39,982) (20,495) (138,671) - --------------------------------------------------------------------------------------------------------------------------------- 985,834 619,610 1,850,393 Earnings and bank fee credits on cash balances (Note 2) -- (1,282) (1,725) - --------------------------------------------------------------------------------------------------------------------------------- Total net expenses 985,834 618,328 1,848,668 - --------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 2,880,374 1,804,355 5,442,430 - --------------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) -- NET Net realized gain (loss) on: Security transactions (Note 3) 3,446,302 2,430,585 503,641 Futures contracts 326,217 388,567 98,928 Reimbursement from affiliate (Note 2) -- -- 216,040 - --------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments 3,772,519 2,819,152 818,609 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 19,186,010 28,958,806 24,008,898 - --------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments and foreign currencies 22,958,529 31,777,958 24,827,507 - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $25,838,903 $33,582,313 $30,269,937 =================================================================================================================================
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 89 STATEMENTS OF OPERATIONS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - SELECT VALUE FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) INVESTMENT INCOME Income: Dividends $ 260,965 $ 162,816 $ 755,963 Interest -- 4,265 110,040 Income distributions from affiliated money market fund (Note 10) 29,514 19,090 -- Less foreign taxes withheld (266) (327) (24,447) - --------------------------------------------------------------------------------------------------------------------------------- Total income 290,213 185,844 841,556 - --------------------------------------------------------------------------------------------------------------------------------- Expenses (Note 2): Investment management services fee 123,652 65,150 186,844 Distribution fee 19,380 11,278 32,221 Transfer agency fee 9,302 5,413 8,047 Administrative services fees and expenses 9,302 5,413 15,197 Custodian fees 77,405 3,043 20,130 Compensation of board members 247 3,768 7,430 Printing and postage 2,579 1,552 7,867 Professional fees 10,005 13,639 19,500 Other 4,492 647 8,648 - --------------------------------------------------------------------------------------------------------------------------------- Total expenses 256,364 109,903 305,884 Expenses waived/reimbursed by the Investment Manager and its affiliates (Note 2) (98,602) (10,426) (27,598) - --------------------------------------------------------------------------------------------------------------------------------- Total net expenses 157,762 99,477 278,286 - --------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 132,451 86,367 563,270 - --------------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) -- NET Net realized gain (loss) on: Security transactions (Note 3) 1,428,646 2,509,809 464,367 Foreign currency transactions (39) 28 146 - --------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments 1,428,607 2,509,837 464,513 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 1,656,603 (691,997) 588,316 - --------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments and foreign currencies 3,085,210 1,817,840 1,052,829 - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $3,217,661 $1,904,207 $1,616,099 =================================================================================================================================
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 90 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT STATEMENTS OF OPERATIONS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - SHORT DURATION U.S. GOVERNMENT FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) INVESTMENT INCOME Income: Interest $11,156,062 $7,115,828 $21,167,809 Income distributions from affiliated money market fund (Note 10) 155,915 66,423 -- - --------------------------------------------------------------------------------------------------------------------------------- Total income 11,311,977 7,182,251 21,167,809 - --------------------------------------------------------------------------------------------------------------------------------- Expenses (Note 2): Investment management services fee 1,086,707 726,456 2,635,745 Distribution fee 283,000 189,183 605,679 Transfer agency fee 135,835 90,805 147,668 Administrative services fees and expenses 158,477 105,941 347,525 Custodian fees 35,850 21,000 75,700 Compensation of board members 3,626 5,040 10,163 Printing and postage 41,025 12,375 130,065 Professional fees 14,684 15,801 22,000 Other 2,468 2,874 10,116 - --------------------------------------------------------------------------------------------------------------------------------- Total expenses 1,761,672 1,169,475 3,984,661 Earnings and bank fee credits on cash balances (Note 2) -- (600) (3,400) - --------------------------------------------------------------------------------------------------------------------------------- Total net expenses 1,761,672 1,168,875 3,981,261 - --------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 9,550,305 6,013,376 17,186,548 - --------------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) -- NET Net realized gain (loss) on: Security transactions (Note 3) (549,430) 731,036 (4,443,647) Futures contracts 849,224 (545,229) (175,211) - --------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments 299,794 185,807 (4,618,858) Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (2,140,578) 925,784 (292,799) - --------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments and foreign currencies (1,840,784) 1,111,591 (4,911,657) - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 7,709,521 $7,124,967 $12,274,891 =================================================================================================================================
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 91 STATEMENTS OF OPERATIONS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - SMALL CAP ADVANTAGE FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) INVESTMENT INCOME Income: Dividends $ 1,364,437 $ 892,516 $ 2,266,698 Interest 15,650 15,120 125,725 Income distributions from affiliated money market fund (Note 10) 39,621 27,411 -- Fee income from securities lending (Note 6) 17,398 12,686 37,231 Less foreign taxes withheld (441) (882) (1,616) - --------------------------------------------------------------------------------------------------------------------------------- Total income 1,436,665 946,851 2,428,038 - --------------------------------------------------------------------------------------------------------------------------------- Expenses (Note 2): Investment management services fee 745,531 518,341 1,726,941 Distribution fee 133,647 90,523 292,753 Transfer agency fee 64,148 43,450 70,635 Administrative services fees and expenses 85,534 57,935 190,322 Custodian fees 28,405 38,700 93,869 Compensation of board members 1,698 4,359 9,130 Printing and postage 8,380 13,311 53,150 Professional fees 11,659 14,231 20,000 Other 3,019 3,447 15,541 - --------------------------------------------------------------------------------------------------------------------------------- Total expenses 1,082,021 784,297 2,472,341 Earnings and bank fee credits on cash balances (Note 2) -- -- (350) - --------------------------------------------------------------------------------------------------------------------------------- Total net expenses 1,082,021 784,297 2,471,991 - --------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 354,644 162,554 (43,953) - --------------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) -- NET Net realized gain (loss) on: Security transactions (Note 3) 15,370,682 9,593,410 27,954,706 Futures contracts -- 20,096 (21,863) - --------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments 15,370,682 9,613,506 27,932,843 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (2,147,024) 7,437,971 (17,484,891) - --------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments and foreign currencies 13,223,658 17,051,477 10,447,952 - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $13,578,302 $17,214,031 $ 10,403,999 =================================================================================================================================
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 92 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT STATEMENTS OF OPERATIONS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - SMALL CAP VALUE FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) INVESTMENT INCOME Income: Dividends $ 3,921,340 $ 2,282,918 $ 5,518,622 Interest 23,669 49,516 2,879,398 Income distributions from affiliated money market fund (Note 10) 1,759,960 931,993 -- Fee income from securities lending (Note 6) 224,656 72,824 41,806 Less foreign taxes withheld (11,388) (8,436) (19,685) - --------------------------------------------------------------------------------------------------------------------------------- Total income 5,918,237 3,328,815 8,420,141 - --------------------------------------------------------------------------------------------------------------------------------- Expenses (Note 2): Investment management services fee 3,373,036 1,916,016 4,896,261 Distribution fee 414,931 239,741 635,371 Transfer agency fee 199,160 115,072 167,723 Administrative services fees and expenses 261,423 152,063 419,119 Custodian fees 19,500 72,000 232,090 Compensation of board members 5,287 5,417 10,246 Printing and postage 68,170 9,890 117,620 Professional fees 15,761 14,996 20,500 Other 13,136 14,032 10,090 - --------------------------------------------------------------------------------------------------------------------------------- Total expenses 4,370,404 2,539,227 6,509,020 Expenses waived/reimbursed by the Investment Manager and its affiliates (Note 2) (161,252) (128,641) (188,431) - --------------------------------------------------------------------------------------------------------------------------------- Total net expenses 4,209,152 2,410,586 6,320,589 - --------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 1,709,085 918,229 2,099,552 - --------------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) -- NET Net realized gain (loss) on: Security transactions (Note 3) 32,127,529 17,563,027 61,012,764 Foreign currency transactions -- 12,896 (1) - --------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments 32,127,529 17,575,923 61,012,763 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 8,599,209 37,232,926 (7,054,058) - --------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments and foreign currencies 40,726,738 54,808,849 53,958,705 - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $42,435,823 $55,727,078 $56,058,257 =================================================================================================================================
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 93 STATEMENTS OF CHANGES IN NET ASSETS RiverSource Variable Portfolio Funds
RIVERSOURCE VP - BALANCED FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) OPERATIONS AND DISTRIBUTIONS Investment income (loss) -- net $ 25,395,466 $ 16,440,039 $ 59,260,355 Net realized gain (loss) on investments 68,132,285 50,912,281 135,574,586 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (8,352,743) 86,221,470 (29,065,213) - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 85,175,008 153,573,790 165,769,728 - --------------------------------------------------------------------------------------------------------------------------------- Distributions to shareholders from: Net investment income (28,739,284) (12,783,193) (58,821,263) Net realized gain (42,964,037) (114,232,567) (70,774,753) - --------------------------------------------------------------------------------------------------------------------------------- Total distributions (71,703,321) (127,015,760) (129,596,016) - --------------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (NOTE 4) Proceeds from sales 20,412,004 11,786,573 24,249,895 Reinvestment of distributions at net asset value 71,703,321 140,084,455 131,268,246 Payments for redemptions (219,100,265) (154,122,329) (582,529,038) - --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from capital share transactions (126,984,940) (2,251,301) (427,010,897) - --------------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets (113,513,253) 24,306,729 (390,837,185) Net assets at beginning of period 2,070,795,869 2,046,489,140 2,437,326,325 - --------------------------------------------------------------------------------------------------------------------------------- Net assets at end of period $1,957,282,616 $2,070,795,869 $2,046,489,140 ================================================================================================================================= Undistributed (excess of distributions over) net investment income $ 208,190 $ 3,552,008 $ (236,516) - ---------------------------------------------------------------------------------------------------------------------------------
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - CASH MANAGEMENT FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) OPERATIONS AND DISTRIBUTIONS Investment income (loss) -- net $ 26,325,320 $ 15,787,190 $ 30,181,937 Net realized gain (loss) on investments (1,337) 1,627 (798) - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 26,323,983 15,788,817 30,181,139 - --------------------------------------------------------------------------------------------------------------------------------- Distributions to shareholders from: Net investment income (26,325,320) (15,787,190) (30,181,937) - --------------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (NOTE 4) Proceeds from sales 294,514,527 167,038,584 546,130,014 Reinvestment of distributions at net asset value 29,943,445 15,952,725 28,008,968 Payments for redemptions (191,808,461) (126,563,119) (262,906,070) - --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from capital share transactions 132,649,511 56,428,190 311,232,912 - --------------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets 132,648,174 56,429,817 311,232,114 Net assets at beginning of period 1,055,267,058 998,837,241 687,605,127 - --------------------------------------------------------------------------------------------------------------------------------- Net assets at end of period $1,187,915,232 $1,055,267,058 $ 998,837,241 =================================================================================================================================
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 94 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - CORE BOND FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) OPERATIONS AND DISTRIBUTIONS Investment income (loss) -- net $ 1,612,343 $ 897,191 $ 2,392,742 Net realized gain (loss) on investments (404,594) 387,240 (948,839) Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (680,461) (139,404) (522,771) - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 527,288 1,145,027 921,132 - --------------------------------------------------------------------------------------------------------------------------------- Distributions to shareholders from: Net investment income (1,615,737) (904,887) (2,410,884) Net realized gain -- -- (122,686) - --------------------------------------------------------------------------------------------------------------------------------- Total distributions (1,615,737) (904,887) (2,533,570) - --------------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (NOTE 4) Proceeds from sales 17,178,487 9,253,741 27,670,096 Reinvestment of distributions at net asset value 1,816,005 919,732 2,463,965 Payments for redemptions (4,754,179) (7,068,430) (23,763,653) - --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from capital share transactions 14,240,313 3,105,043 6,370,408 - --------------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets 13,151,864 3,345,183 4,757,970 Net assets at beginning of period 66,042,944 62,697,761 57,939,791 - --------------------------------------------------------------------------------------------------------------------------------- Net assets at end of period $79,194,808 $66,042,944 $ 62,697,761 ================================================================================================================================= Undistributed net investment income $ 5,242 $ 8,636 $ 345 - ---------------------------------------------------------------------------------------------------------------------------------
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - DIVERSIFIED BOND FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) OPERATIONS AND DISTRIBUTIONS Investment income (loss) -- net $ 72,388,132 $ 38,012,688 $ 81,114,674 Net realized gain (loss) on investments (14,799,028) 24,281,986 (27,350,065) Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (31,878,197) (4,617,556) (15,056,707) - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 25,710,907 57,677,118 38,707,902 - --------------------------------------------------------------------------------------------------------------------------------- Distributions to shareholders from: Net investment income (72,472,362) (38,353,400) (81,269,698) - --------------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (NOTE 4) Proceeds from sales 749,731,131 431,618,712 683,564,631 Reinvestment of distributions at net asset value 81,907,990 37,071,891 78,244,071 Payments for redemptions (102,571,201) (68,416,103) (218,296,083) - --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from capital share transactions 729,067,920 400,274,500 543,512,619 - --------------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets 682,306,465 419,598,218 500,950,823 Net assets at beginning of period 2,744,818,964 2,325,220,746 1,824,269,923 - --------------------------------------------------------------------------------------------------------------------------------- Net assets at end of period $3,427,125,429 $2,744,818,964 $2,325,220,746 ================================================================================================================================= Undistributed (excess of distributions over) net investment income $ 265,389 $ 349,619 $ (52,767) - ---------------------------------------------------------------------------------------------------------------------------------
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 95 STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - DIVERSIFIED EQUITY INCOME FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) OPERATIONS AND DISTRIBUTIONS Investment income (loss) -- net $ 29,026,708 $ 14,411,516 $ 36,705,321 Net realized gain (loss) on investments 145,742,014 26,714,189 208,910,959 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 249,416,272 242,752,342 53,554,454 - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 424,184,994 283,878,047 299,170,734 - --------------------------------------------------------------------------------------------------------------------------------- Distributions to shareholders from: Net investment income (32,648,977) (10,731,641) (36,257,011) Net realized gain (38,982,993) (196,331,636) (72,944,061) - --------------------------------------------------------------------------------------------------------------------------------- Total distributions (71,631,970) (207,063,277) (109,201,072) - --------------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (NOTE 4) Proceeds from sales 380,855,899 321,817,764 979,162,771 Reinvestment of distributions at net asset value 71,631,970 217,051,599 105,737,678 Payments for redemptions (164,059,652) (46,282,984) (77,265,424) - --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from capital share transactions 288,428,217 492,586,379 1,007,635,025 - --------------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets 640,981,241 569,401,149 1,197,604,687 Net assets at beginning of period 3,446,087,033 2,876,685,884 1,679,081,197 - --------------------------------------------------------------------------------------------------------------------------------- Net assets at end of period $4,087,068,274 $3,446,087,033 $2,876,685,884 ================================================================================================================================= Undistributed (excess of distributions over) net investment income $ (80,093) $ 3,542,176 $ (153,938) - ---------------------------------------------------------------------------------------------------------------------------------
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - EMERGING MARKETS FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) OPERATIONS AND DISTRIBUTIONS Investment income (loss) -- net $ 2,884,913 $ (555,606) $ 2,321,853 Net realized gain (loss) on investments 52,124,255 34,522,376 56,057,002 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 30,961,805 55,618,639 15,075,906 - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 85,970,973 89,585,409 73,454,761 - --------------------------------------------------------------------------------------------------------------------------------- Distributions to shareholders from: Net investment income (2,105,377) -- (1,549,963) Net realized gain (32,874,601) (59,114,993) (12,706,732) - --------------------------------------------------------------------------------------------------------------------------------- Total distributions (34,979,978) (59,114,993) (14,256,695) - --------------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (NOTE 4) Proceeds from sales 95,063,536 48,109,995 219,084,079 Reinvestment of distributions at net asset value 34,979,978 59,836,290 13,767,635 Payments for redemptions (43,458,246) (17,855,029) (56,934,726) - --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from capital share transactions 86,585,268 90,091,256 175,916,988 - --------------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets 137,576,263 120,561,672 235,115,054 Net assets at beginning of period 547,637,610 427,075,938 191,960,884 - --------------------------------------------------------------------------------------------------------------------------------- Net assets at end of period $685,213,873 $547,637,610 $427,075,938 ================================================================================================================================= Undistributed (excess of distributions over) net investment income $ 642,399 $ (137,137) $ (104) - ---------------------------------------------------------------------------------------------------------------------------------
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 96 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - FUNDAMENTAL VALUE FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006(B) (UNAUDITED) OPERATIONS AND DISTRIBUTIONS Investment income (loss) -- net $ 2,820,983 $ 849,838 $ 358,659 Net realized gain (loss) on investments 1,793,745 371,461 54,527 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 27,497,823 26,525,481 3,938,541 - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 32,112,551 27,746,780 4,351,727 - --------------------------------------------------------------------------------------------------------------------------------- Distributions to shareholders from: Net investment income (2,816,238) (851,138) (298,866) Net realized gain -- (493,817) -- Tax return of capital -- (169,045) -- - --------------------------------------------------------------------------------------------------------------------------------- Total distributions (2,816,238) (1,514,000) (298,866) - --------------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (NOTE 4) Proceeds from sales 217,669,308 138,433,669 228,064,714 Reinvestment of distributions at net asset value 2,816,238 1,793,853 19,013 Payments for redemptions (6,767,982) (1,297,466) (2,440,614) - --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from capital share transactions 213,717,564 138,930,056 225,643,113 - --------------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets 243,013,877 165,162,836 229,695,974 Net assets at beginning of period (Note 1) 396,870,186 231,707,350 2,011,376(c) - --------------------------------------------------------------------------------------------------------------------------------- Net assets at end of period $639,884,063 $396,870,186 $231,707,350 ================================================================================================================================= Undistributed net investment income $ 4,745 $ -- $ 8,006 - ---------------------------------------------------------------------------------------------------------------------------------
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. (b) For the period from May 1, 2006 (date the Fund became available) to Aug. 31, 2006. (c) Initial capital of $1,999,909 was contributed on April 25, 2006. The Fund had an increase in net assets resulting from operations of $11,467 during the period from April 25, 2006 to May 1, 2006 (date the Fund became available). STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - GLOBAL BOND FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) OPERATIONS AND DISTRIBUTIONS Investment income (loss) -- net $ 13,833,385 $ 7,773,986 $ 17,366,196 Net realized gain (loss) on investments (1,817,348) 1,740,737 (1,168,509) Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (6,306,436) 6,466,660 (5,952,008) - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 5,709,601 15,981,383 10,245,679 - --------------------------------------------------------------------------------------------------------------------------------- Distributions to shareholders from: Net investment income (13,768,275) (7,832,430) (18,091,431) Net realized gain -- -- (2,563,332) - --------------------------------------------------------------------------------------------------------------------------------- Total distributions (13,768,275) (7,832,430) (20,654,763) - --------------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (NOTE 4) Proceeds from sales 185,962,062 95,843,642 173,048,742 Reinvestment of distributions at net asset value 15,074,305 7,860,471 20,444,404 Payments for redemptions (31,269,200) (22,468,463) (65,938,591) - --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from capital share transactions 169,767,167 81,235,650 127,554,555 - --------------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets 161,708,493 89,384,603 117,145,471 Net assets at beginning of period 781,822,390 692,437,787 575,292,316 - --------------------------------------------------------------------------------------------------------------------------------- Net assets at end of period $943,530,883 $781,822,390 $692,437,787 =================================================================================================================================
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 97 STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - GLOBAL INFLATION PROTECTED SECURITIES FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) OPERATIONS AND DISTRIBUTIONS Investment income (loss) -- net $ 18,781,647 $ 1,755,441 $ 10,765,394 Net realized gain (loss) on investments (4,992,519) (6,575,653) (8,658,497) Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (16,067,143) 1,783,356 7,996,039 - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (2,278,015) (3,036,856) 10,102,936 - --------------------------------------------------------------------------------------------------------------------------------- Distributions to shareholders from: Net investment income (5,500,000) (12,794,329) (5,620,360) Net realized gain -- (20,316) (300,000) - --------------------------------------------------------------------------------------------------------------------------------- Total distributions (5,500,000) (12,814,645) (5,920,360) - --------------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (NOTE 4) Proceeds from sales 269,725,374 186,134,405 344,618,188 Reinvestment of distributions at net asset value 5,500,000 12,814,645 6,150,441 Payments for redemptions (12,190,533) (4,556,010) (68,198,235) - --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from capital share transactions 263,034,841 194,393,040 282,570,394 - --------------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets 255,256,826 178,541,539 286,752,970 Net assets at beginning of period 581,691,472 403,149,933 116,396,963 - --------------------------------------------------------------------------------------------------------------------------------- Net assets at end of period $836,948,298 $581,691,472 $403,149,933 =================================================================================================================================
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - GROWTH FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) OPERATIONS AND DISTRIBUTIONS Investment income (loss) -- net $ 4,976,453 $ 1,214,668 $ 6,180,127 Net realized gain (loss) on investments 38,835,314 (6,757,887) 33,570,953 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (7,049,369) 55,051,567 (20,509,288) - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 36,762,398 49,508,348 19,241,792 - --------------------------------------------------------------------------------------------------------------------------------- Distributions to shareholders from: Net investment income (5,761,764) (433,302) (6,205,001) - --------------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (NOTE 4) Proceeds from sales 30,402,557 12,990,391 340,599,317 Reinvestment of distributions at net asset value 5,761,763 1,698,705 5,106,809 Payments for redemptions (40,622,198) (35,554,412) (139,123,483) - --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from capital share transactions (4,457,878) (20,865,316) 206,582,643 - --------------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets 26,542,756 28,209,730 219,619,434 Net assets at beginning of period 639,730,289 611,520,559 391,901,125 - --------------------------------------------------------------------------------------------------------------------------------- Net assets at end of period $666,273,045 $639,730,289 $ 611,520,559 ================================================================================================================================= Undistributed (excess of distributions over) net investment income $ 6,968 $ 792,279 $ (1) - ---------------------------------------------------------------------------------------------------------------------------------
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 98 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - HIGH YIELD BOND FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) OPERATIONS AND DISTRIBUTIONS Investment income (loss) -- net $ 43,138,003 $ 29,048,892 $ 86,625,275 Net realized gain (loss) on investments 17,559,443 4,636,729 1,041,488 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (20,557,107) 30,113,325 (19,241,545) - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 40,140,339 63,798,946 68,425,218 - --------------------------------------------------------------------------------------------------------------------------------- Distributions to shareholders from: Net investment income (43,072,343) (32,472,664) (84,302,446) - --------------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (NOTE 4) Proceeds from sales 57,533,977 31,504,551 108,481,722 Reinvestment of distributions at net asset value 50,596,933 31,619,562 84,408,337 Payments for redemptions (106,172,996) (70,361,695) (231,902,028) - --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from capital share transactions 1,957,914 (7,237,582) (39,011,969) - --------------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets (974,090) 24,088,700 (54,889,197) Net assets at beginning of period 1,215,674,868 1,191,586,168 1,246,475,365 - --------------------------------------------------------------------------------------------------------------------------------- Net assets at end of period $1,214,700,778 $1,215,674,868 $1,191,586,168 ================================================================================================================================= Undistributed net investment income $ 1,724,611 $ 1,658,951 $ 6,391,280 - ---------------------------------------------------------------------------------------------------------------------------------
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - INCOME OPPORTUNITIES FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) OPERATIONS AND DISTRIBUTIONS Investment income (loss) -- net $ 17,272,465 $ 7,336,085 $ 6,741,235 Net realized gain (loss) on investments 3,361,678 1,457,589 (259,128) Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (10,857,816) 6,365,184 (1,116,480) - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 9,776,327 15,158,858 5,365,627 - --------------------------------------------------------------------------------------------------------------------------------- Distributions to shareholders from: Net investment income (17,225,738) (7,335,970) (6,749,350) Net realized gain (1,242,475) (31,000) (260,728) - --------------------------------------------------------------------------------------------------------------------------------- Total distributions (18,468,213) (7,366,970) (7,010,078) - --------------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (NOTE 4) Proceeds from sales 211,010,893 139,352,580 219,849,955 Reinvestment of distributions at net asset value 20,555,705 6,430,587 5,943,278 Payments for redemptions (6,167,715) (2,747,604) (10,078,764) - --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from capital share transactions 225,398,883 143,035,563 215,714,469 - --------------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets 216,706,997 150,827,451 214,070,018 Net assets at beginning of period 409,460,346 258,632,895 44,562,877 - --------------------------------------------------------------------------------------------------------------------------------- Net assets at end of period $626,167,343 $409,460,346 $258,632,895 ================================================================================================================================= Undistributed (excess of distributions over) net investment income $ 46,727 $ -- $ (115) - ---------------------------------------------------------------------------------------------------------------------------------
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 99 STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - INTERNATIONAL OPPORTUNITY FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) OPERATIONS AND DISTRIBUTIONS Investment income (loss) -- net $ 10,125,480 $ 2,313,479 $ 13,096,688 Net realized gain (loss) on investments 114,106,846 63,359,895 197,349,235 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (464,517) 41,009,369 57,942,017 - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 123,767,809 106,682,743 268,387,940 - --------------------------------------------------------------------------------------------------------------------------------- Distributions to shareholders from: Net investment income (10,152,928) (10,550,737) (18,190,610) Tax return of capital -- (550,893) -- - --------------------------------------------------------------------------------------------------------------------------------- Total distributions (10,152,928) (11,101,630) (18,190,610) - --------------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (NOTE 4) Proceeds from sales 13,981,796 12,823,084 36,872,876 Reinvestment of distributions at net asset value 10,152,928 13,036,623 19,471,353 Payments for redemptions (145,775,799) (76,952,544) (224,639,217) - --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from capital share transactions (121,641,075) (51,092,837) (168,294,988) - --------------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets (8,026,194) 44,488,276 81,902,342 Net assets at beginning of period 1,310,729,039 1,266,240,763 1,184,338,421 - --------------------------------------------------------------------------------------------------------------------------------- Net assets at end of period $1,302,702,845 $1,310,729,039 $1,266,240,763 ================================================================================================================================= Undistributed (excess of distributions over) net investment income $ (3,240,049) $ (3,212,601) $ 3,023,480 - ---------------------------------------------------------------------------------------------------------------------------------
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - LARGE CAP EQUITY FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) OPERATIONS AND DISTRIBUTIONS Investment income (loss) -- net $ 25,973,921 $ 14,245,827 $ 41,561,732 Net realized gain (loss) on investments 206,588,126 71,043,008 222,184,020 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (12,352,349) 257,357,774 (90,675,460) - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 220,209,698 342,646,609 173,070,292 - --------------------------------------------------------------------------------------------------------------------------------- Distributions to shareholders from: Net investment income (29,773,441) (9,238,610) (41,430,783) - --------------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (NOTE 4) Proceeds from sales 10,217,293 4,467,676 142,011,461 Fund merger (Note 12) N/A N/A 1,796,173,392 Reinvestment of distributions at net asset value 29,773,440 20,150,261 36,474,860 Payments for redemptions (461,650,205) (353,589,722) (883,733,698) - --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from capital share transactions (421,659,472) (328,971,785) 1,090,926,015 - --------------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets (231,223,215) 4,436,214 1,222,565,524 Net assets at beginning of period 3,737,379,428 3,732,943,214 2,510,377,690 - --------------------------------------------------------------------------------------------------------------------------------- Net assets at end of period $3,506,156,213 $3,737,379,428 $3,732,943,214 ================================================================================================================================= Undistributed (excess of distributions over) net investment income $ 248,636 $ 4,048,156 $ (1,037,776) - ---------------------------------------------------------------------------------------------------------------------------------
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 100 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - LARGE CAP VALUE FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) OPERATIONS AND DISTRIBUTIONS Investment income (loss) -- net $ 171,140 $ 101,297 $ 275,437 Net realized gain (loss) on investments 988,849 312,976 907,974 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 388,240 1,816,288 652,685 - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 1,548,229 2,230,561 1,836,096 - --------------------------------------------------------------------------------------------------------------------------------- Distributions to shareholders from: Net investment income (174,936) (93,000) (272,854) Net realized gain (99,408) (1,171,000) (384,490) - --------------------------------------------------------------------------------------------------------------------------------- Total distributions (274,344) (1,264,000) (657,344) - --------------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (NOTE 4) Proceeds from sales 4,151,974 3,146,898 6,343,011 Reinvestment of distributions at net asset value 274,344 1,330,100 640,197 Payments for redemptions (3,898,303) (794,645) (2,270,395) - --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from capital share transactions 528,015 3,682,353 4,712,813 - --------------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets 1,801,900 4,648,914 5,891,565 Net assets at beginning of period 25,361,099 20,712,185 14,820,620 - --------------------------------------------------------------------------------------------------------------------------------- Net assets at end of period $27,162,999 $25,361,099 $20,712,185 ================================================================================================================================= Undistributed (excess of distributions over) net investment income $ (85) $ 3,711 $ (2,762) - ---------------------------------------------------------------------------------------------------------------------------------
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - MID CAP GROWTH FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) OPERATIONS AND DISTRIBUTIONS Investment income (loss) -- net $ 1,382,468 $ 1,628,386 $ (695,857) Net realized gain (loss) on investments 42,895,573 19,889,194 57,781,721 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 29,686,467 36,768,984 (134,694,999) - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 73,964,508 58,286,564 (77,609,135) - --------------------------------------------------------------------------------------------------------------------------------- Distributions to shareholders from: Net investment income (364,145) (1,596,565) -- Net realized gain (6,582,833) (26,857,455) (20,773,397) - --------------------------------------------------------------------------------------------------------------------------------- Total distributions (6,946,978) (28,454,020) (20,773,397) - --------------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (NOTE 4) Proceeds from sales 3,256,758 2,340,116 23,445,984 Fund merger (Note 12) N/A N/A 636,833,949 Reinvestment of distributions at net asset value 6,946,978 28,454,020 20,773,397 Payments for redemptions (114,000,129) (79,739,127) (128,972,794) - --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from capital share transactions (103,796,393) (48,944,991) 552,080,536 - --------------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets (36,778,863) (19,112,447) 453,698,004 Net assets at beginning of period 689,790,123 708,902,570 255,204,566 - --------------------------------------------------------------------------------------------------------------------------------- Net assets at end of period $ 653,011,260 $689,790,123 $ 708,902,570 ================================================================================================================================= Undistributed net investment income $ 1,050,144 $ 31,821 $ -- - ---------------------------------------------------------------------------------------------------------------------------------
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 101 STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - MID CAP VALUE FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) OPERATIONS AND DISTRIBUTIONS Investment income (loss) -- net $ 3,601,575 $ 1,215,281 $ 525,004 Net realized gain (loss) on investments 8,921,649 216,692 1,871,653 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 56,486,179 21,273,477 3,607,327 - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 69,009,403 22,705,450 6,003,984 - --------------------------------------------------------------------------------------------------------------------------------- Distributions to shareholders from: Net investment income (1,950,178) (1,154,000) (525,371) Net realized gain (224,059) (3,412,000) (42,000) - --------------------------------------------------------------------------------------------------------------------------------- Total distributions (2,174,237) (4,566,000) (567,371) - --------------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (NOTE 4) Proceeds from sales 149,413,708 122,106,187 218,979,676 Reinvestment of distributions at net asset value 2,174,237 4,912,322 228,962 Payments for redemptions (16,542,854) (3,096,371) (3,349,899) - --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from capital share transactions 135,045,091 123,922,138 215,858,739 - --------------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets 201,880,257 142,061,588 221,295,352 Net assets at beginning of period 370,472,775 228,411,187 7,115,835 - --------------------------------------------------------------------------------------------------------------------------------- Net assets at end of period $572,353,032 $370,472,775 $228,411,187 ================================================================================================================================= Undistributed (excess of distributions over) net investment income $ 1,562,104 $ (89,293) $ (33,276) - ---------------------------------------------------------------------------------------------------------------------------------
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - S&P 500 INDEX FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) OPERATIONS AND DISTRIBUTIONS Investment income (loss) -- net $ 2,880,374 $ 1,804,355 $ 5,442,430 Net realized gain (loss) on investments 3,772,519 2,819,152 818,609 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 19,186,010 28,958,806 24,008,898 - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 25,838,903 33,582,313 30,269,937 - --------------------------------------------------------------------------------------------------------------------------------- Distributions to shareholders from: Net investment income (3,338,958) (1,326,916) (5,486,997) Net realized gain (2,963,014) (1,706,881) (924,016) - --------------------------------------------------------------------------------------------------------------------------------- Total distributions (6,301,972) (3,033,797) (6,411,013) - --------------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (NOTE 4) Proceeds from sales 14,247,176 6,705,610 26,099,085 Reinvestment of distributions at net asset value 6,301,972 4,459,508 6,325,687 Payments for redemptions (25,748,491) (16,647,916) (56,849,784) - --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from capital share transactions (5,199,343) (5,482,798) (24,425,012) - --------------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets 14,337,588 25,065,718 (566,088) Net assets at beginning of period 391,850,253 366,784,535 367,350,623 - --------------------------------------------------------------------------------------------------------------------------------- Net assets at end of period $406,187,841 $391,850,253 $366,784,535 ================================================================================================================================= Undistributed net investment income $ 89,981 $ 548,565 $ 106,305 - ---------------------------------------------------------------------------------------------------------------------------------
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 102 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - SELECT VALUE FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) OPERATIONS AND DISTRIBUTIONS Investment income (loss) -- net $ 132,451 $ 86,367 $ 563,270 Net realized gain (loss) on investments 1,428,607 2,509,837 464,513 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 1,656,603 (691,997) 588,316 - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 3,217,661 1,904,207 1,616,099 - --------------------------------------------------------------------------------------------------------------------------------- Distributions to shareholders from: Net investment income (165,883) (73,000) (560,309) Net realized gain (274,426) (2,629,000) (381,000) - --------------------------------------------------------------------------------------------------------------------------------- Total distributions (440,309) (2,702,000) (941,309) - --------------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (NOTE 4) Proceeds from sales 4,862,854 1,566,722 5,315,492 Reinvestment of distributions at net asset value 440,309 2,743,998 915,187 Payments for redemptions (3,553,842) (1,615,639) (3,796,870) - --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from capital share transactions 1,749,321 2,695,081 2,433,809 - --------------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets 4,526,673 1,897,288 3,108,599 Net assets at beginning of period 28,479,124 26,581,836 23,473,237 - --------------------------------------------------------------------------------------------------------------------------------- Net assets at end of period $33,005,797 $28,479,124 $26,581,836 ================================================================================================================================= Undistributed (excess of distributions over) net investment income $ (19,642) $ 13,790 $ 395 - ---------------------------------------------------------------------------------------------------------------------------------
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - SHORT DURATION U.S. GOVERNMENT FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) OPERATIONS AND DISTRIBUTIONS Investment income (loss) -- net $ 9,550,305 $ 6,013,376 $ 17,186,548 Net realized gain (loss) on investments 299,794 185,807 (4,618,858) Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (2,140,578) 925,784 (292,799) - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 7,709,521 7,124,967 12,274,891 - --------------------------------------------------------------------------------------------------------------------------------- Distributions to shareholders from: Net investment income (9,556,602) (6,034,508) (17,299,564) - --------------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (NOTE 4) Proceeds from sales 27,539,051 15,800,741 68,741,323 Reinvestment of distributions at net asset value 10,899,859 6,230,452 16,861,634 Payments for redemptions (41,475,846) (29,031,356) (102,138,539) - --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from capital share transactions (3,036,936) (7,000,163) (16,535,582) - --------------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets (4,884,017) (5,909,704) (21,560,255) Net assets at beginning of period 457,013,631 462,923,335 484,483,590 - --------------------------------------------------------------------------------------------------------------------------------- Net assets at end of period $452,129,614 $457,013,631 $ 462,923,335 =================================================================================================================================
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 103 STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - SMALL CAP ADVANTAGE FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) OPERATIONS AND DISTRIBUTIONS Investment income (loss) -- net $ 354,644 $ 162,554 $ (43,953) Net realized gain (loss) on investments 15,370,682 9,613,506 27,932,843 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (2,147,024) 7,437,971 (17,484,891) - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 13,578,302 17,214,031 10,403,999 - --------------------------------------------------------------------------------------------------------------------------------- Distributions to shareholders from: Net investment income (229,434) (88,124) -- Net realized gain (9,383,721) (28,180,273) (29,405,160) - --------------------------------------------------------------------------------------------------------------------------------- Total distributions (9,613,155) (28,268,397) (29,405,160) - --------------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (NOTE 4) Proceeds from sales 2,755,329 2,034,365 8,328,492 Reinvestment of distributions at net asset value 9,613,155 28,268,396 29,405,160 Payments for redemptions (28,386,485) (17,479,186) (36,148,584) - --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from capital share transactions (16,018,001) 12,823,575 1,585,068 - --------------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets (12,052,854) 1,769,209 (17,416,093) Net assets at beginning of period 219,798,672 218,029,463 235,445,556 - --------------------------------------------------------------------------------------------------------------------------------- Net assets at end of period $207,745,818 $219,798,672 $218,029,463 ================================================================================================================================= Undistributed net investment income $ 127,550 $ 2,340 $ 41,443 - ---------------------------------------------------------------------------------------------------------------------------------
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) RiverSource Variable Portfolio Funds
RIVERSOURCE VP - SMALL CAP VALUE FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 (UNAUDITED) OPERATIONS AND DISTRIBUTIONS Investment income (loss) -- net $ 1,709,085 $ 918,229 $ 2,099,552 Net realized gain (loss) on investments 32,127,529 17,575,923 61,012,763 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 8,599,209 37,232,926 (7,054,058) - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 42,435,823 55,727,078 56,058,257 - --------------------------------------------------------------------------------------------------------------------------------- Distributions to shareholders from: Net investment income (2,580,963) (780,445) (2,249,308) Net realized gain (17,620,861) (60,479,614) (31,668,050) - --------------------------------------------------------------------------------------------------------------------------------- Total distributions (20,201,824) (61,260,059) (33,917,358) - --------------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (NOTE 4) Proceeds from sales 103,213,183 43,367,594 140,632,418 Reinvestment of distributions at net asset value 20,201,824 61,717,079 33,460,338 Payments for redemptions (35,438,960) (29,686,872) (59,579,246) - --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from capital share transactions 87,976,047 75,397,801 114,513,510 - --------------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets 110,210,046 69,864,820 136,654,409 Net assets at beginning of period 618,628,695 548,763,875 412,109,466 - --------------------------------------------------------------------------------------------------------------------------------- Net assets at end of period $728,838,741 $618,628,695 $548,763,875 ================================================================================================================================= Undistributed (excess of distributions over) net investment income $ (534,317) $ 337,561 $ 183,446 - ---------------------------------------------------------------------------------------------------------------------------------
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 104 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT NOTES TO FINANCIAL STATEMENTS RiverSource Variable Portfolio Funds (Unaudited as to June 30, 2007) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Each Fund is registered under the Investment Company Act of 1940 (as amended) (the 1940 Act) as a diversified, (non-diversified for RiverSource VP - Global Bond Fund and RiverSource VP - Global Inflation Protected Securities Fund) open- end management investment company. Each Fund has 10 billion authorized shares of capital stock. RiverSource VP - Fundamental Value Fund became available on May 1, 2006. On April 25, 2006, Ameriprise Financial, Inc. (Ameriprise Financial) purchased 199,991 shares of capital stock at $10 per share, which represented the initial capital in the Fund. The primary investments of each Fund are as follows: RiverSource VP - Balanced Fund invests primarily in a combination of common and preferred stocks, bonds and other debt securities. RiverSource VP - Cash Management Fund invests primarily in money market instruments, such as marketable debt obligations issued by corporations or the U.S. government or its agencies, bank certificates of deposit, bankers' acceptances, letters of credit and commercial paper, including asset-backed commercial paper. RiverSource VP - Core Bond Fund invests primarily in securities like those included in the Lehman Brothers Aggregate Bond Index (the "Index"), which are investment grade and denominated in U.S. dollars. The Index includes securities issued by the U.S. government, corporate bonds and mortgage- and asset-backed securities. RiverSource VP - Diversified Bond Fund invests primarily in bonds and other debt securities issued by the U.S. government, corporate bonds and mortgage- and asset-backed securities. RiverSource VP - Diversified Equity Income Fund invests primarily in dividend-paying common and preferred stocks. RiverSource VP - Emerging Markets Fund invests primarily in equity securities of companies in emerging market countries. RiverSource VP - Fundamental Value Fund invests primarily in equity securities of U.S. companies. RiverSource VP - Global Bond Fund invests primarily in debt obligations securities of U.S. and foreign issuers. RiverSource VP - Global Inflation Protected Securities Fund invests primarily in inflation-protected debt securities. These securities include inflation-indexed bonds of varying maturities issued by U.S. and foreign governments, their agencies or instrumentalities, and corporations. RiverSource VP - Growth Fund invests primarily in common stocks and securities convertible into common stocks that appear to offer growth opportunities. RiverSource VP - High Yield Bond Fund invests primarily in high-yielding, high risk corporate bonds (junk bonds) issued by U.S. and foreign companies and governments. RiverSource VP - Income Opportunities Fund invests primarily in income-producing debt securities, with an emphasis on the higher rated segment of the high-yield (junk bond) market. RiverSource VP - International Opportunity Fund invests primarily in equity securities of foreign issuers that are believed to offer strong growth potential. RiverSource VP - Large Cap Equity Fund invests primarily in equity securities of companies with a market capitalization greater than $5 billion at the time of purchase. RiverSource VP - Large Cap Value Fund invests primarily in equity securities of companies with a market capitalization greater than $5 billion. RiverSource VP - Mid Cap Growth Fund invests primarily in common stocks of mid-capitalization companies.
- -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 105 RiverSource VP - Mid Cap Value Fund invests primarily in equity securities of mid-capitalization companies. RiverSource VP - S&P 500 Index Fund invests primarily in common stocks included in the Standard & Poor 500 Composite Stock Price Index (S&P 500). RiverSource VP - Select Value Fund invests primarily in equity securities of mid cap companies as well as companies with larger and smaller market capitalizations. RiverSource VP - Short Duration U.S. Government Fund invests primarily in debt securities issued or guaranteed as to principal and interest by the U.S. government, or its agencies or instrumentalities. RiverSource VP - Small Cap Advantage Fund invests primarily in equity securities of small capitalization companies. RiverSource VP - Small Cap Value Fund invests primarily in equity securities of small capitalization companies.
You may not buy (nor will you own) shares of each Fund directly. You invest by buying a variable annuity contract or life insurance policy and allocating your purchase payments to the variable subaccount or variable account (the subaccounts) that invests in each Fund. Each Fund's significant accounting policies are summarized as follows: USE OF ESTIMATES Preparing financial statements that conform to U.S. generally accepted accounting principles requires management to make estimates (e.g., on assets, liabilities and contingent assets and liabilities) that could differ from actual results. VALUATION OF SECURITIES All securities are valued at the close of each business day. Securities traded on national securities exchanges or included in national market systems are valued at the last quoted sales price. Debt securities are generally traded in the over-the-counter market and are valued at a price that reflects fair value as quoted by dealers in these securities or by an independent pricing service. Foreign securities are valued based on quotations from the principal market in which such securities are normally traded. The procedures adopted by the Board of Directors of the funds generally contemplate the use of fair valuation in the event that price quotations or valuations are not readily available, price quotations or valuations from other sources are not reflective of market value and thus deemed unreliable, or a significant event has occurred in relation to a security or class of securities (such as foreign equities) that is not reflected in price quotations or valuations from other sources. A fair value price is a good faith estimate of the value of a security at a given point in time. Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange and therefore the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but before the close of the New York Stock Exchange, including significant movements in the U.S. market after foreign exchanges have closed. Accordingly, in those situations, Ameriprise Financial will fair value foreign equity securities pursuant to procedures adopted by the Board of Directors of the funds, including utilizing a third party pricing service to determine these fair values. These procedures take into account multiple factors, including movements in the U.S. securities markets, to determine a good faith estimate that reasonably reflects the current market conditions as of the close of the New York Stock Exchange. Short-term securities in all Funds, except RiverSource VP - Cash Management Fund, maturing in more than 60 days from the valuation date are valued at the market price or approximate market value based on the current interest rates; those maturing in 60 days or less are valued at amortized cost. Pursuant to Rule 2a-7 of the 1940 Act, all securities in RiverSource VP - Cash Management Fund are valued daily at amortized cost, which approximates market value in order to maintain a constant net asset value of $1 per share. ILLIQUID SECURITIES At June 30, 2007, investments in securities for RiverSource VP - Balanced Fund, RiverSource VP - Diversified Bond Fund, RiverSource VP - Emerging Markets Fund, RiverSource VP - Growth Fund, RiverSource VP - High Yield Bond Fund, RiverSource VP - Income Opportunities Fund, RiverSource VP - International Opportunity Fund, RiverSource VP - Large Cap Equity Fund, RiverSource VP - Large Cap Value Fund and RiverSource VP - Small Cap Value Fund included issues that are illiquid which as of June 30, 2007, the Funds limited to 10% of net assets, at market value, at the time of purchase. Effective July 12, 2007, no more than 15% of the Fund's net assets will be held in securities and other instruments that are illiquid. The aggregate value of such securities at June 30, 2007, was $5,182,600, $2,290,874, $7,023,279, $7,949,140, $9,245,176, $2,131,500, $764,724, $17,687,245, $78,868 and $690,615 representing 0.26%, 0.07%, 1.02%, 1.19%, 0.76%, 0.34%, 0.06%, 0.50%, 0.29% and 0.09% of net assets for RiverSource VP - Balanced Fund, RiverSource VP - Diversified Bond Fund, RiverSource VP - Emerging Markets Fund, RiverSource VP - Growth Fund, RiverSource VP - High Yield Bond Fund, RiverSource VP - Income Opportunities Fund, RiverSource VP - International Opportunity Fund, RiverSource VP - Large Cap Equity Fund, RiverSource VP - Large Cap Value Fund and RiverSource VP - Small Cap Value Fund, respectively. These securities may be valued at fair value according to procedures approved, in good faith, by the Board. According to board - -------------------------------------------------------------------------------- 106 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT guidelines, certain unregistered securities are determined to be liquid and are not included within the 10% limitation specified above. Assets are liquid if they can be sold or disposed of in the ordinary course of business within seven days at approximately the value at which the asset is valued by the Fund. SECURITIES PURCHASED ON A FORWARD-COMMITMENT BASIS AND UNFUNDED LOAN COMMITMENTS Delivery and payment for securities that have been purchased by the Funds on a forward-commitment basis, including when-issued securities and other forward-commitments, can take place one month or more after the transaction date. During this period, such securities are subject to market fluctuations, and they may affect each Fund's net assets the same as owned securities. The Funds designate cash or liquid securities at least equal to the amount of its forward-commitments. At June 30, 2007, the outstanding forward-commitments for the Funds are as follows:
WHEN-ISSUED OTHER FUND SECURITIES FORWARD-COMMITMENTS - ----------------------------------------------------------------------------------------------------------- RiverSource VP - Balanced Fund $ 74,829,618 $ 3,117,065 RiverSource VP - Core Bond Fund 13,921,705 1,837,847 RiverSource VP - Diversified Bond Fund 463,035,907 43,041,586 RiverSource VP - Global Bond Fund 4,567,414 4,275,148 RiverSource VP - High Yield Bond Fund 30,194,515 4,689,650 RiverSource VP - Income Opportunities Fund 12,539,904 -- RiverSource VP - Short Duration U.S. Government Fund 50,596,483 2,017,668 - -----------------------------------------------------------------------------------------------------------
The Funds may enter into certain credit agreements all or a portion of which may be unfunded. The Funds are obligated to fund these loan commitments at the borrower's discretion. These commitments are disclosed in the accompanying "Investments in securities." At June 30, 2007, RiverSource VP - Balanced Fund, RiverSource VP - Diversified Bond Fund, RiverSource VP - Global Bond Fund, RiverSource VP - High Yield Bond Fund and RiverSource VP - Income Opportunities Fund have entered into unfunded loan commitments of $438,716, $2,000,619, $515,792, $2,589,593 and $1,170,068, respectively. Certain Funds may also enter into transactions to sell purchase commitments to third parties at current market values and concurrently acquire other purchase commitments for similar securities at later dates. As an inducement for these Funds to "roll over" their purchase commitments, these Funds receive negotiated amounts in the form of reductions of the purchase price of the commitment. OPTION TRANSACTIONS To produce incremental earnings, protect gains and facilitate buying and selling of securities for investments, the Funds, except RiverSource VP - Cash Management Fund, may buy and write options traded on any U.S. or foreign exchange or in the over-the-counter market where completing the obligation depends upon the credit standing of the other party. Cash collateral may be collected by the Funds to secure certain over-the-counter options trades. Cash collateral held by the Funds for such option trades must be returned to the counterparty upon closure, exercise or expiration of the contract. The Funds also may buy and sell put and call options and write covered call options on portfolio securities as well as write cash-secured put options. The risk in writing a call option is that the Funds give up the opportunity for profit if the market price of the security increases. The risk in writing a put option is that the Funds may incur a loss if the market price of the security decreases and the option is exercised. The risk in buying an option is that the Funds pay a premium whether or not the option is exercised. The Funds also have the additional risk of being unable to enter into a closing transaction if a liquid secondary market does not exist. Option contracts are valued daily at the closing prices on their primary exchanges and unrealized appreciation or depreciation is recorded. The Funds will realize a gain or loss when the option transaction expires or closes. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option or the cost of a security for a purchased put or call option is adjusted by the amount of premium received or paid. FUTURES TRANSACTIONS To gain exposure to or protect itself from market changes, the Funds, except RiverSource VP - Cash Management Fund, may buy and sell financial futures contracts traded on any U.S. or foreign exchange. The Funds also may buy or write put and call options on these futures contracts. Risks of entering into futures contracts and related options include the possibility of an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities. Upon entering into a futures contract, the Funds are required to deposit either cash or securities in an amount (initial margin) equal to a certain percentage of the contract value. Subsequent payments (variation margin) are made or received by the Funds each day. The variation margin payments are equal to the daily changes in the contract value and recorded as unrealized gains and losses. The Funds recognize a realized gain or loss when the contract is closed or expires. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 107 FOREIGN CURRENCY TRANSLATIONS AND FOREIGN CURRENCY CONTRACTS Securities and other assets and liabilities denominated in foreign currencies are translated daily into U.S. dollars. Foreign currency amounts related to the purchase or sale of securities and income and expenses are translated at the exchange rate on the transaction date. In the statement of operations, net realized gains or losses from foreign currency transactions, if any, may arise from sales of foreign currency, closed forward contracts, exchange gains or losses realized between the trade date and settlement date on securities transactions, and other translation gains or losses on dividends, interest income and foreign withholding taxes. At June 30, 2007, foreign currency holdings for RiverSource VP - Balanced Fund were entirely comprised of European monetary units, foreign currency holdings for RiverSource VP - Diversified Bond Fund consisted of European monetary units and British pounds, foreign currency holdings for RiverSource VP - Emerging Markets Fund, RiverSource VP - Fundamental Value Fund and RiverSource VP - Global Bond Fund consisted of multiple denominations, foreign currency holdings for RiverSource VP - Global Inflation Protected Securities Fund were entirely comprised of British pounds, foreign currency holdings for RiverSource VP - Growth Fund consisted of multiple denominations, primarily Hong Kong dollars, foreign currency holdings for RiverSource VP - International Opportunity Fund consisted of multiple denominations, primarily British pounds and Japanese yen, foreign currency holdings for RiverSource VP - Large Cap Equity Fund consisted of multiple denominations, primarily Hong Kong dollars and European monetary units and foreign currency holdings for RiverSource VP - Select Value Fund were entirely comprised of British pounds. The Funds, except RiverSource VP - Cash Management Fund, may enter into forward foreign currency exchange contracts for operational purposes and to protect against adverse exchange rate fluctuation. The net U.S. dollar value of foreign currency underlying all contractual commitments held by the Funds and the resulting unrealized appreciation or depreciation are determined using foreign currency exchange rates from an independent pricing service. The Funds are subject to the credit risk that the other party will not complete its contract obligations. FORWARD SALE COMMITMENTS Certain Funds may enter into forward sale commitments to hedge its portfolio positions or to sell mortgage-backed securities it owns under delayed delivery arrangements. Proceeds of forward sale commitments are not received until the contractual settlement date. During the time a forward sale commitment is outstanding, equivalent deliverable securities, or an offsetting forward purchase commitment deliverable on or before the sale commitment date, are used to satisfy the commitment. Unsettled forward sale commitments are valued at the current market value of the underlying securities, generally according to the procedures described under "Valuation of securities" above. The forward sale commitment is "marked-to-market" daily and the change in market value is recorded by the Fund as an unrealized gain or loss. If the forward sale commitment is closed through the acquisition of an offsetting purchase commitment, the Fund realizes a gain or loss. If the Fund delivers securities under the commitment, the Fund realizes a gain or a loss from the sale of the securities based upon the market price established at the date the commitment was entered into. Forward sale commitments outstanding at period end are listed in the "Notes to investments in securities." TOTAL RETURN EQUITY SWAP TRANSACTIONS Certain Funds may enter into swap agreements to earn the total return on a specified security, basket of securities or security indexes during the specified period, in return for periodic payments based on a fixed or variable interest rate of the total return from other underlying assets. Total return swap agreements may be used to obtain exposure to a security or market without owning or taking physical custody of such security or market. Under the terms of a total return equity swap agreement, payments made by the Fund or the counterparty are based on the total return of a particular reference asset or assets (such as an equity security, a combination of such securities, or an index). That is, one party agrees to pay another party the return on a stock, basket of stocks, or stock index in return for a specified interest rate. The notional amounts of swap contracts are not recorded in the financial statements. Swap contracts are valued daily, and the change in value is recorded as unrealized appreciation (depreciation) until the termination of the swap, at which time realized gain (loss) is recorded. Payments received or made are recorded as realized gains (losses). Swap agreements may be subject to liquidity risk, which exists when a particular swap is difficult to purchase or sell. It may not be possible for the Fund to initiate a transaction or liquidate a position at an advantageous time or price, which may result in significant losses. Total return swaps are subject to the risk associated with the investment in the underlying securities and also the risk of the counterparty not fulfilling its obligations under the agreement. CMBS TOTAL RETURN SWAP TRANSACTIONS Certain Funds may enter into swap agreements to earn the total return on a specified security or index of fixed income securities. CMBS total return swaps are bilateral financial contracts designed to replicate synthetically the total returns of collateralized mortgage-backed securities. Under the terms of the swaps, the Fund either receives or pays the total return on a - -------------------------------------------------------------------------------- 108 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT reference security or index applied to a notional principal amount. In return, the Fund agrees to pay or receive from the counterparty a floating rate, which is reset periodically based on short-term interest rates, applied to the same notional amount. The notional amounts of swap contracts are not recorded in the financial statements. Swaps are valued daily, and the change in value is recorded as unrealized appreciation (depreciation) until the termination of the swap, at which time realized gain (loss) is recorded. Payments received or made are recorded as realized gains (losses). Swap agreements may be subject to liquidity risk, which exists when a particular swap is difficult to purchase or sell. It may not be possible for the Fund to initiate a transaction or liquidate a position at an advantageous time or price, which may result in significant losses. Total return swaps are subject to the risk that the counterparty will default on its obligation to pay net amounts due to the Funds. GUARANTEES AND INDEMNIFICATIONS Under each Fund's organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to each Fund. In addition, certain of each Fund's contracts with its service providers contain general indemnification clauses. Each Fund's maximum exposure under these arrangements is unknown since the amount of any future claims that may be made against each Fund cannot be determined and each Fund has no historical basis for predicting the likelihood of any such claims. FEDERAL TAXES Each Fund's policy is to comply with Subchapter M of the Internal Revenue Code that applies to regulated investment companies and to distribute substantially all of its taxable income to the subaccounts. No provision for income or excise taxes is thus required. Each Fund is treated as a separate entity for federal income tax purposes. Net investment income (loss) and net realized gains (losses) may differ for financial statement and tax purposes primarily because of deferred losses on certain futures contracts, the recognition of certain foreign currency gains (losses) as ordinary income (loss) for tax purposes, the timing and amount of market discount recognized as ordinary income, foreign tax credits and losses deferred due to "wash sale" transactions. The character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. The effect on dividend distributions of certain book-to-tax differences is presented as "excess distributions" in the statement of changes in net assets. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gains (losses) are recorded by the Funds. RECENT ACCOUNTING PRONOUNCEMENTS On Sept. 20, 2006, the Financial Accounting Standards Board (FASB) released Statement of Financial Accounting Standards No. 157 "Fair Value Measurements" (SFAS 157). SFAS 157 establishes an authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair-value measurements. The application of SFAS 157 is required for fiscal years beginning after Nov. 15, 2007 and interim periods within those fiscal years. The impact of SFAS 157 on the Fund's financial statements is being evaluated. In June 2006, the FASB issued FASB Interpretation 48 (FIN 48), "Accounting for Uncertainty in Income Taxes." FIN 48 clarifies the accounting for uncertainty in income taxes recognized in accordance with FASB Statement 109, "Accounting for Income Taxes." FIN 48 prescribes a two-step process to recognize and measure a tax position taken or expected to be taken in a tax return. The first step is to determine whether a tax position has met the more-likely-than-not recognition threshold and the second step is to measure a tax position that meets the threshold to determine the amount of benefit to recognize. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 has been adopted by the Funds and there is no material impact on the Funds. DIVIDENDS Distributions to the subaccounts are recorded at the close of business on the record date and are payable on the first business day following the record date. Dividends from net investment income are declared daily and distributed monthly, when available, for RiverSource VP - Cash Management Fund, RiverSource VP - Core Bond Fund, RiverSource VP - Diversified Bond Fund, RiverSource VP - Global Bond Fund, RiverSource VP - Global Inflation Protected Securities Fund, RiverSource VP - High Yield Bond Fund, RiverSource VP - Income Opportunities Fund and RiverSource VP - Short Duration U.S. Government Fund. Dividends from net investment income are declared and distributed quarterly, when available, for RiverSource VP - Balanced Fund, RiverSource VP - Diversified Equity Income Fund, RiverSource VP - Emerging Markets Fund, RiverSource VP - Fundamental Value Fund, RiverSource VP - Growth Fund, RiverSource VP - International Opportunity Fund, RiverSource VP - Large Cap Equity Fund, RiverSource VP - Large Cap Value Fund, RiverSource VP - Mid Cap Growth Fund, RiverSource VP - Mid Cap Value Fund, RiverSource VP - S&P 500 Index Fund, RiverSource VP - Select Value Fund, RiverSource VP - Small Cap Advantage Fund and RiverSource VP - Small Cap Value Fund. Capital gain - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 109 distributions, when available, will be made annually. However, an additional capital gain distribution may be made during the fiscal year in order to comply with the Internal Revenue Code, as applicable to regulated investment companies. On March 16, 2006, an additional dividend was paid before the merger (see Note 12) to ensure that current shareholders of RiverSource VP - Large Cap Equity Fund and RiverSource VP - Mid Cap Growth Fund would not experience a dilution in their shares of the Fund's income or capital gains. OTHER Security transactions are accounted for on the date securities are purchased or sold. Dividend income is recognized on the ex-dividend date or upon receipt of ex-dividend notification in the case of certain foreign securities. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the security received. Interest income, including amortization of premium, market discount and original issue discount using the effective interest method, is accrued daily. 2. EXPENSES The Funds have an Investment Management Services Agreement with RiverSource Investments, LLC (the Investment Manager) for managing investments, record keeping and other services that are based solely on the assets of each Fund. The management fee is a percentage of each Fund's average daily net assets that declines annually as each Fund's net assets increase. The annual percentage range for each Fund is as follows:
CURRENT PERCENTAGE RANGE FUND PERCENTAGE RANGE PRIOR TO MARCH 1, 2006 - -------------------------------------------------------------------------------------------------------------------------- RiverSource VP - Balanced Fund 0.530% to 0.350% 0.630% to 0.550% RiverSource VP - Cash Management Fund 0.330% to 0.150% 0.510% to 0.440% RiverSource VP - Core Bond Fund 0.480% to 0.290% 0.630% to 0.555% RiverSource VP - Diversified Bond Fund 0.480% to 0.290% 0.610% to 0.535% RiverSource VP - Diversified Equity Income Fund 0.600% to 0.375% 0.560% to 0.470% RiverSource VP - Emerging Markets Fund 1.100% to 0.900% 1.170% to 1.095% RiverSource VP - Fundamental Value Fund 0.730% to 0.600% N/A RiverSource VP - Global Bond Fund 0.720% to 0.520% 0.840% to 0.780% RiverSource VP - Global Inflation Protected Securities Fund 0.440% to 0.250% 0.490% to 0.415% RiverSource VP - Growth Fund 0.600% to 0.375% 0.630% to 0.570% RiverSource VP - High Yield Bond Fund 0.590% to 0.360% 0.620% to 0.545% RiverSource VP - Income Opportunities Fund 0.610% to 0.380% 0.640% to 0.565% RiverSource VP - International Opportunity Fund 0.800% to 0.570% 0.870% to 0.795% RiverSource VP - Large Cap Equity Fund 0.600% to 0.375% 0.630% to 0.570% RiverSource VP - Large Cap Value Fund 0.600% to 0.375% 0.630% to 0.570% RiverSource VP - Mid Cap Growth Fund 0.700% to 0.475% 0.650% to 0.560% RiverSource VP - Mid Cap Value Fund 0.700% to 0.475% 0.730% to 0.610% RiverSource VP - S&P 500 Index Fund 0.220% to 0.120% 0.290% to 0.260% RiverSource VP - Select Value Fund 0.780% to 0.650% 0.810% to 0.720% RiverSource VP - Short Duration U.S. Government Fund 0.480% to 0.250% 0.610% to 0.535% RiverSource VP - Small Cap Advantage Fund 0.790% to 0.665% 0.790% to 0.650% RiverSource VP - Small Cap Value Fund 0.970% to 0.870% 1.020% to 0.920% - --------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- 110 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT For the following Funds the fee may be adjusted upward or downward by a performance incentive adjustment with a maximum adjustment of 0.08% for RiverSource VP - Balanced Fund and 0.12% for each remaining Fund. The adjustment is based on a comparison of the performance of each Fund to the stated index up to a maximum percentage of each Fund's average daily net assets after deducting 0.50% from the performance difference. In certain circumstances, the Board may approve a change in the index. If the performance difference is less than 0.50%, the adjustment will be zero. The index name and the amount the fee was increased (decreased) for each Fund is as follows:
SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006* AUG. 31, 2006 FUND INDEX NAME INCREASE (DECREASE) INCREASE (DECREASE) INCREASE (DECREASE) - --------------------------------------------------------------------------------------------------------------------------------- RiverSource VP - Balanced Lipper Balanced Funds Index Fund $ 591,165 $ 270,785 $ (926,803) RiverSource Lipper Equity Income Funds Index VP - Diversified Equity Income Fund (691,933) 722,447 2,011,544 RiverSource VP - Emerging Lipper Emerging Markets Funds Index Markets Fund 96,428 68,528 12,891 RiverSource Lipper Large-Cap Value Funds Index VP - Fundamental Value Fund (91,672) (11,517) -- RiverSource VP - Growth Lipper Large-Cap Growth Funds Index Fund 269,174 219,098 94,840 RiverSource Lipper International Large-Cap Core VP - International Funds Index Opportunity Fund (380,981) 42,132 443,628 RiverSource VP - Large Cap Lipper Large-Cap Core Funds Index Equity Fund 605,883 97,489 (472,064) RiverSource VP - Large Cap Lipper Large-Cap Value Funds Index Value Fund 99 -- (6,328) RiverSource VP - Mid Cap Lipper Mid-Cap Growth Funds Index Growth Fund (423,313) (224,965) (211,720) RiverSource VP - Mid Cap Lipper Mid-Cap Value Funds Index Value Fund (54,657) 16,744 14,432 RiverSource VP - Select Lipper Multi-Cap Value Funds Index Value Fund 2,725 (5,226) (17,927) RiverSource VP - Small Cap Lipper Small-Cap Core Funds Index Advantage Fund (99,106) (53,757) (123,175) RiverSource VP - Small Cap Lipper Small-Cap Value Funds Index Value Fund 225,692 89,900 (82,048) - ---------------------------------------------------------------------------------------------------------------------------------
* For the period from Sept. 1, 2006 to Dec. 31, 2006. In addition to paying its own management fee, brokerage commissions, taxes and costs of certain legal services, each Fund will reimburse the Investment Manager an amount equal to the cost of certain expenses incurred and paid by the Investment Manager in connection with each Fund's operations. The Investment Manager has a Subadvisory Agreement with Threadneedle International Limited, an indirect wholly-owned subsidiary of Ameriprise Financial, to subadvise the assets of RiverSource VP - Emerging Markets Fund and RiverSource VP - International Opportunity Fund. The Investment Manager has a Subadvisory Agreement with Kenwood Capital Management LLC, an indirect partially owned subsidiary of Ameriprise Financial, to subadvise the assets of RiverSource VP - Small Cap Advantage Fund. The Investment Manager has Subadvisory Agreements with Systematic Financial Management, L.P. (Systematic) and WEDGE Capital Management L.L.P. (WEDGE), each of which subadvises a portion of the assets of RiverSource VP - Select Value Fund. Effective Sept. 29, 2006, Systematic and WEDGE replaced GAMCO Asset Management Inc. as subadvisers to the Fund. New investments in the Fund, net of any redemptions, are allocated in accordance with the Investment Manager's determination of the allocation that is in the best interests of the Fund's shareholders. Each subadviser's proportionate share of investments in the Fund will vary due to market fluctuations. The Investment Manager has Subadvisory Agreements with Barrow, Hanley, Mewhinney & Strauss, Inc., Donald Smith & Co., Inc., Franklin Portfolio Associates LLC, and River Road Asset Management, LLC (River Road), each of which subadvises a portion of the assets of RiverSource VP - Small Cap Value Fund. Effective April 24, 2006, River Road replaced Goldman Sachs Asset Management, L.P. and Royce & Associates, LLC as subadviser to the Fund. Effective July 16, 2007, Denver Investment Advisors LLC was added as a subadviser to the Fund. New investments in the Fund, net of any redemptions, are allocated in accordance with the Investment Manager's determination of the allocation that is in the best interests of the Fund's shareholders. Each subadviser's proportionate share of investments in the Fund will vary due to market fluctuations. The Investment Manager has a Subadvisory Agreement with Davis Selected Advisers, L.P. to subadvise the assets of RiverSource VP - Fundamental Value Fund. Effective March 1, 2006, the Funds entered into a Transfer Agency and Servicing Agreement with RiverSource Service Corporation. The fee under this agreement is uniform for all RiverSource Variable Portfolio Funds at an annual rate of 0.06% of each Fund's average daily net assets. The impact of moving transfer agent fees from the Investment Management Services Agreement fee schedules varies by each Fund and decreases the rate between 0.03% and 0.15% of each Fund's average daily net assets. Effective Jan. 1, 2007, the Funds have an agreement with RiverSource Distributors, Inc. for distribution services. Under a Plan and Agreement of Distribution pursuant to Rule 12b-1, each Fund pays RiverSource Distributors, Inc. a fee at an annual rate of - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 111 up to 0.125% of each Fund's average daily net assets. Prior to Jan. 1, 2007, the Funds had an agreement with IDS Life Insurance Company for distribution services, and under a Plan and Agreement of Distribution pursuant to Rule 12b-1, each Fund paid IDS Life Insurance Company a fee at an annual rate of up to 0.125% of each Fund's average daily net assets. The Funds have an Administrative Services Agreement with Ameriprise Financial. Under the current agreement, each Fund pays Ameriprise Financial a fee for administration and accounting services at a percentage of each Fund's average daily net assets that declines annually as each Fund's net assets increase. The percentage range for each Fund is as follows:
CURRENT PERCENTAGE RANGE FUND PERCENTAGE RANGE PRIOR TO OCT. 1, 2005 - ----------------------------------------------------------------------------------------------------------------- RiverSource VP - Balanced Fund 0.060% to 0.030% 0.040% to 0.020% RiverSource VP - Cash Management Fund 0.060% to 0.030% 0.030% to 0.020% RiverSource VP - Core Bond Fund 0.070% to 0.040% 0.050% to 0.025% RiverSource VP - Diversified Bond Fund 0.070% to 0.040% 0.050% to 0.025% RiverSource VP - Diversified Equity Income Fund 0.060% to 0.030% 0.040% to 0.020% RiverSource VP - Emerging Markets Fund 0.080% to 0.050% 0.100% to 0.050% RiverSource VP - Fundamental Value Fund 0.060% to 0.030% N/A RiverSource VP - Global Bond Fund 0.080% to 0.050% 0.060% to 0.040% RiverSource VP - Global Inflation Protected Securities Fund 0.070% to 0.040% 0.050% to 0.025% RiverSource VP - Growth Fund 0.060% to 0.030% 0.050% to 0.030% RiverSource VP - High Yield Bond Fund 0.070% to 0.040% 0.050% to 0.025% RiverSource VP - Income Opportunities Fund 0.070% to 0.040% 0.050% to 0.025% RiverSource VP - International Opportunity Fund 0.080% to 0.050% 0.060% to 0.035% RiverSource VP - Large Cap Equity Fund 0.060% to 0.030% 0.050% to 0.030% RiverSource VP - Large Cap Value Fund 0.060% to 0.030% 0.050% to 0.030% RiverSource VP - Mid Cap Growth Fund 0.060% to 0.030% 0.060% to 0.030% RiverSource VP - Mid Cap Value Fund 0.060% to 0.030% 0.050% to 0.020% RiverSource VP - S&P 500 Index Fund 0.060% to 0.030% 0.080% to 0.065% RiverSource VP - Select Value Fund 0.060% to 0.030% 0.060% to 0.035% RiverSource VP - Short Duration U.S. Government Fund 0.070% to 0.040% 0.050% to 0.025% RiverSource VP - Small Cap Advantage Fund 0.080% to 0.050% 0.060% to 0.035% RiverSource VP - Small Cap Value Fund 0.080% to 0.050% 0.080% to 0.055% - -----------------------------------------------------------------------------------------------------------------
Other expenses are for, among other things, certain expenses of the Fund or the Board including: Fund boardroom and office expense, employee compensation, employee health and retirement benefits, and certain other expenses. Payment of these Fund and Board expenses is facilitated by a company providing limited administrative services to the Fund and the Board. Other expenses for the periods indicated are as follows:
SIX MONTHS ENDED PERIOD ENDED FUND JUNE 30, 2007 DEC. 31, 2006* - ---------------------------------------------------------------------------------------------------------- RiverSource VP - Balanced Fund $ -- $19,841 RiverSource VP - Cash Management Fund -- 9,574 RiverSource VP - Core Bond Fund -- 184 RiverSource VP - Diversified Bond Fund 5,989 22,179 RiverSource VP - Diversified Equity Income Fund 9,209 27,044 RiverSource VP - Emerging Markets Fund 626 3,385 RiverSource VP - Fundamental Value Fund 3,361 1,339 RiverSource VP - Global Bond Fund -- 6,314 RiverSource VP - Global Inflation Protected Securities Fund 6,268 43 RiverSource VP - Growth Fund -- 5,236 RiverSource VP - High Yield Bond Fund -- 11,362 RiverSource VP - Income Opportunities Fund 1,763 1,956 RiverSource VP - International Opportunity Fund -- 11,496 RiverSource VP - Large Cap Equity Fund -- 35,831 RiverSource VP - Large Cap Value Fund -- 616 RiverSource VP - Mid Cap Growth Fund -- 6,437 RiverSource VP - Mid Cap Value Fund 1,691 1,719 RiverSource VP - S&P 500 Index Fund -- 3,152 RiverSource VP - Select Value Fund -- -- RiverSource VP - Short Duration U.S. Government Fund -- 4,081 RiverSource VP - Small Cap Advantage Fund -- 1,655 RiverSource VP - Small Cap Value Fund -- 4,702 - ----------------------------------------------------------------------------------------------------------
* For the period from Sept. 1, 2006 to Dec. 31, 2006. Compensation of Board members includes, for the former Board Chair, compensation as well as retirement benefits. Certain other aspects of the former Board Chair's compensation, including health benefits and payment of certain other expenses, are included under other expenses. - -------------------------------------------------------------------------------- 112 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT Under a Deferred Compensation Plan (the Plan), non-interested board members may defer receipt of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of each Fund or other RiverSource funds. Each Fund's liability for these amounts is adjusted for market value changes and remains in each Fund until distributed in accordance with the Plan. Professional fees include fees paid by each Fund for legal services and independent registered public accounting firm services. In addition to the fees and expenses which each Fund bears directly, each Fund indirectly bears a pro rata share of the fees and expenses of the funds in which it invests (also referred to as "acquired funds"), including affiliated and non-affiliated pooled investment vehicles (including mutual funds and exchange traded funds). Because the acquired funds have varied expense and fee levels and each Fund may own different proportions of acquired funds at different times, the amount of fees and expenses incurred indirectly by each Fund will vary. For the six months ended June 30, 2007, the Investment Manager and its affiliates waived certain fees and expenses to 0.83% for RiverSource VP - Core Bond Fund, 0.72% for RiverSource VP - Global Inflation Protected Securities Fund, 1.05% for RiverSource VP - Large Cap Value Fund, 0.50% for RiverSource VP - S&P 500 Index Fund, 1.02% for RiverSource VP - Select Value Fund and 1.27% for RiverSource VP - Small Cap Value Fund. In addition, the Investment Manager and its affiliates have agreed to waive certain fees and expenses until Dec. 31, 2007, unless sooner terminated by the discretion of the Board (excluding certain expenses such as indirect operating expenses of acquired funds in which each Fund invests), such that net expenses, before giving effect to any applicable performance incentive adjustment, will not exceed the following percentage of each Fund's average daily net assets:
FUND PERCENTAGE - -------------------------------------------------------------------------- RiverSource VP - Core Bond Fund 0.830% RiverSource VP - Fundamental Value Fund 1.070% RiverSource VP - Global Inflation Protected Securities Fund 0.720% RiverSource VP - Income Opportunities Fund 0.990% RiverSource VP - Large Cap Value Fund 1.050% RiverSource VP - Mid Cap Growth Fund 1.000% RiverSource VP - Mid Cap Value Fund 1.080% RiverSource VP - S&P 500 Index Fund 0.495% - --------------------------------------------------------------------------
Effective Jan. 1, 2007, the Investment Manager and its affiliates have agreed to waive certain fees and expenses until Dec. 31, 2007, unless sooner terminated by the discretion of the Board (excluding certain expenses such as indirect operating expenses of acquired funds in which each Fund invests), such that net expenses, before giving effect to any performance incentive adjustment, will not exceed the following percentage of each Fund's average daily net assets:
FUND PERCENTAGE - -------------------------------------------------------------------------- RiverSource VP - Select Value Fund 1.000%* RiverSource VP - Small Cap Value Fund 1.200%* - --------------------------------------------------------------------------
* Percentage for the period from Sept. 1, 2006 to Dec. 31, 2006 was 1.150% and 1.210% for RiverSource VP - Select Value Fund and RiverSource VP - Small Cap Value Fund, respectively. For the period ended Dec. 31, 2006, the Investment Manager and its affiliates waived certain fees and expenses to 0.83% for RiverSource VP - Core Bond Fund, 0.72% for RiverSource VP - Global Inflation Protected Securities Fund, 1.05% for RiverSource VP - Large Cap Value Fund, 0.50% for RiverSource VP - S&P 500 Index Fund, 1.09% for RiverSource VP - Select Value Fund and 1.26% for RiverSource VP - Small Cap Value Fund. For the year ended Aug. 31, 2006, the Investment Manager and its affiliates waived certain fees and expenses to 0.86% for RiverSource VP - Core Bond Fund, 1.07% for RiverSource VP - Fundamental Value Fund, 0.72% for RiverSource VP - Global Inflation Protected Securities Fund, 1.02% for RiverSource VP - Large Cap Value Fund, 1.11% for RiverSource VP - Mid Cap Value Fund, 0.50% for RiverSource VP - S&P 500 Index Fund, 1.08% for RiverSource VP - Select Value Fund and 1.24% for RiverSource VP - Small Cap Value Fund. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 113 In addition, the Investment Manager and its affiliates agreed to waive certain fees and expenses until Aug. 31, 2006, such that net expenses, before giving effect to any applicable performance incentive adjustment, would not exceed the following percentage of each Fund's average daily net assets:
FUND PERCENTAGE - -------------------------------------------------------------------------- RiverSource VP - Core Bond Fund 0.830%* RiverSource VP - Emerging Markets Fund 1.750% RiverSource VP - Global Inflation Protected Securities Fund 0.720%* RiverSource VP - Income Opportunities Fund 0.990% RiverSource VP - Large Cap Value Fund 1.050% RiverSource VP - Mid Cap Growth Fund 1.000%** RiverSource VP - Mid Cap Value Fund 1.080% RiverSource VP - S&P 500 Index Fund 0.495% RiverSource VP - Select Value Fund 1.150% RiverSource VP - Small Cap Value Fund 1.250%* - --------------------------------------------------------------------------
* Prior to Dec. 1, 2005 the percentage was 0.95%, 0.75% and 1.300% for RiverSource VP - Core Bond Fund, RiverSource VP - Global Inflation Protected Securities Fund and RiverSource VP - Small Cap Value Fund, respectively. ** Prior to March 18, 2006 the percentage was 1.10%. Effective April 25, 2006, the Investment Manager and its affiliates have agreed to waive certain fees and expenses for RiverSource VP - Fundamental Value Fund until Aug. 31, 2006, such that net expenses, before giving effect to any performance incentive adjustment, would not exceed 1.07% of the Fund's average daily net assets. The Fund's custodian fees were reduced as a result of earnings and bank fee credits from overnight cash balances. For the periods indicated these amounts are as follows:
SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006* AUG. 31, 2006 FUND REDUCTION REDUCTION REDUCTION - ------------------------------------------------------------------------------------------------------------------- RiverSource VP - Balanced Fund $ -- $1,594 $2,918 RiverSource VP - Cash Management Fund 851 1,156 3,315 RiverSource VP - Core Bond Fund -- 573 2,769 RiverSource VP - Diversified Bond Fund -- 1,620 7,722 RiverSource VP - Diversified Equity Income Fund -- 524 1,987 RiverSource VP - Emerging Markets Fund -- 856 2,136 RiverSource VP - Fundamental Value Fund -- -- 548** RiverSource VP - Global Bond Fund -- 1,120 1,806 RiverSource VP - Global Inflation Protected Securities Fund -- 780 2,594 RiverSource VP - Growth Fund -- 600 1,518 RiverSource VP - High Yield Bond Fund -- 1,672 4,108 RiverSource VP - Income Opportunities Fund -- 750 3,680 RiverSource VP - International Opportunity Fund -- 880 2,074 RiverSource VP - Large Cap Equity Fund -- 1,510 3,638 RiverSource VP - Large Cap Value Fund -- 2,308 14,675 RiverSource VP - Mid Cap Growth Fund -- 878 2,103 RiverSource VP - Mid Cap Value Fund -- -- 10,858 RiverSource VP - S&P 500 Index Fund -- 1,282 1,725 RiverSource VP - Short Duration U.S. Government Fund -- 600 3,400 RiverSource VP - Small Cap Advantage Fund -- -- 350 - -------------------------------------------------------------------------------------------------------------------
* For the period from Sept. 1, 2006 to Dec. 31, 2006. ** For the period from May 1, 2006 (date the Fund became available) to Aug. 31, 2006. The Funds also pay custodian fees to Ameriprise Trust Company, an affiliate of Ameriprise Financial. In addition, for the year ended Aug. 31, 2006, RiverSource VP - S&P 500 Index Fund received a one time transaction fee reimbursement of $216,040 by Ameriprise Trust Company. See "Financial Highlights" for additional information. - -------------------------------------------------------------------------------- 114 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 3. SECURITIES TRANSACTIONS For the six months ended June 30, 2007, cost of purchases and proceeds from sales of securities aggregated $2,860,216,278 and $2,730,588,913, respectively, for RiverSource VP - Cash Management Fund. Cost of purchases and proceeds from sales of securities (other than short-term obligations) aggregated for each Fund are as follows:
FUND PURCHASES PROCEEDS - -------------------------------------------------------------------------------------------------------- RiverSource VP - Balanced Fund $1,219,768,295 $1,353,255,530 RiverSource VP - Core Bond Fund 145,704,816 127,893,762 RiverSource VP - Diversified Bond Fund 5,774,456,346 4,975,012,456 RiverSource VP - Diversified Equity Income Fund 806,540,860 588,587,978 RiverSource VP - Emerging Markets Fund 398,481,919 334,313,970 RiverSource VP - Fundamental Value Fund 210,644,848 9,151,287 RiverSource VP - Global Bond Fund 457,513,848 290,669,651 RiverSource VP - Global Inflation Protected Securities Fund 519,022,326 228,392,187 RiverSource VP - Growth Fund 359,102,156 361,515,023 RiverSource VP - High Yield Bond Fund 608,560,282 620,862,215 RiverSource VP - Income Opportunities Fund 436,794,929 222,752,750 RiverSource VP - International Opportunity Fund 602,510,650 725,754,812 RiverSource VP - Large Cap Equity Fund 1,194,851,613 1,560,557,685 RiverSource VP - Large Cap Value Fund 6,887,206 5,755,274 RiverSource VP - Mid Cap Growth Fund 237,601,779 328,822,384 RiverSource VP - Mid Cap Value Fund 210,646,808 77,751,137 RiverSource VP - S&P 500 Index Fund 7,903,709 14,842,393 RiverSource VP - Select Value Fund 14,663,554 13,573,412 RiverSource VP - Short Duration U.S. Government Fund 348,686,199 387,086,816 RiverSource VP - Small Cap Advantage Fund 155,738,784 179,682,622 RiverSource VP - Small Cap Value Fund 221,709,395 192,598,914 - --------------------------------------------------------------------------------------------------------
Net realized gains and losses on investment sales are determined on an identified cost basis. 4. CAPITAL SHARE TRANSACTIONS Transactions in shares of capital stock for the periods indicated are as follows:
RIVERSOURCE VP - BALANCED FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 - ----------------------------------------------------------------------------------------------------------------- Sold 1,299,515 745,197 1,604,644 Issued for reinvested distributions 4,684,439 9,132,978 8,844,384 Redeemed (13,941,592) (9,766,916) (38,530,123) - ----------------------------------------------------------------------------------------------------------------- Net increase (decrease) (7,957,638) 111,259 (28,081,095) - -----------------------------------------------------------------------------------------------------------------
RIVERSOURCE VP - CASH MANAGEMENT FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 - ----------------------------------------------------------------------------------------------------------------- Sold 294,619,772 167,098,286 546,325,418 Issued for reinvested distributions 29,954,141 15,958,427 28,018,991 Redeemed (191,876,981) (126,608,351) (263,000,076) - ----------------------------------------------------------------------------------------------------------------- Net increase (decrease) 132,696,932 56,448,362 311,344,333 - -----------------------------------------------------------------------------------------------------------------
RIVERSOURCE VP - CORE BOND FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 - ----------------------------------------------------------------------------------------------------------------- Sold 1,750,148 942,086 2,832,609 Issued for reinvested distributions 185,488 93,532 252,233 Redeemed (485,683) (721,222) (2,432,878) - ----------------------------------------------------------------------------------------------------------------- Net increase (decrease) 1,449,953 314,396 651,964 - -----------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 115
RIVERSOURCE VP - DIVERSIFIED BOND FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 - ----------------------------------------------------------------------------------------------------------------- Sold 71,719,266 41,333,529 66,150,597 Issued for reinvested distributions 7,841,637 3,545,702 7,539,299 Redeemed (9,804,341) (6,549,782) (21,056,382) - ----------------------------------------------------------------------------------------------------------------- Net increase (decrease) 69,756,562 38,329,449 52,633,514 - -----------------------------------------------------------------------------------------------------------------
RIVERSOURCE VP - DIVERSIFIED EQUITY INCOME FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 - ----------------------------------------------------------------------------------------------------------------- Sold 23,902,997 20,716,476 66,872,272 Issued for reinvested distributions 4,562,203 14,243,085 7,606,498 Redeemed (10,197,391) (2,974,137) (5,235,880) - ----------------------------------------------------------------------------------------------------------------- Net increase (decrease) 18,267,809 31,985,424 69,242,890 - -----------------------------------------------------------------------------------------------------------------
RIVERSOURCE VP - EMERGING MARKETS FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 - ----------------------------------------------------------------------------------------------------------------- Sold 5,375,051 2,830,869 14,243,920 Issued for reinvested distributions 2,072,296 3,607,990 999,615 Redeemed (2,485,124) (1,049,305) (3,674,525) - ----------------------------------------------------------------------------------------------------------------- Net increase (decrease) 4,962,223 5,389,554 11,569,010 - -----------------------------------------------------------------------------------------------------------------
RIVERSOURCE VP - FUNDAMENTAL VALUE FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006(B) - -------------------------------------------------------------------------------------------------------------------- Sold 19,454,755 13,209,495 23,142,255 Issued for reinvested distributions 253,027 169,453 1,909 Redeemed (612,450) (124,558) (243,201) - -------------------------------------------------------------------------------------------------------------------- Net increase (decrease) 19,095,332 13,254,390 22,900,963 - --------------------------------------------------------------------------------------------------------------------
RIVERSOURCE VP - GLOBAL BOND FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 - ----------------------------------------------------------------------------------------------------------------- Sold 17,145,159 8,876,320 16,252,656 Issued for reinvested distributions 1,387,062 725,298 1,923,444 Redeemed (2,881,232) (2,079,563) (6,199,573) - ----------------------------------------------------------------------------------------------------------------- Net increase (decrease) 15,650,989 7,522,055 11,976,527 - -----------------------------------------------------------------------------------------------------------------
RIVERSOURCE VP - GLOBAL INFLATION PROTECTED SECURITIES FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 - ----------------------------------------------------------------------------------------------------------------- Sold 27,646,429 18,635,892 35,080,485 Issued for reinvested distributions 561,964 1,289,058 624,006 Redeemed (1,250,128) (454,877) (6,979,442) - ----------------------------------------------------------------------------------------------------------------- Net increase (decrease) 26,958,265 19,470,073 28,725,049 - -----------------------------------------------------------------------------------------------------------------
RIVERSOURCE VP - GROWTH FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 - ----------------------------------------------------------------------------------------------------------------- Sold 3,955,542 1,795,840 49,500,097 Issued for reinvested distributions 742,266 241,573 747,698 Redeemed (5,276,728) (4,955,872) (21,266,893) - ----------------------------------------------------------------------------------------------------------------- Net increase (decrease) (578,920) (2,918,459) 28,980,902 - -----------------------------------------------------------------------------------------------------------------
RIVERSOURCE VP - HIGH YIELD BOND FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 - ----------------------------------------------------------------------------------------------------------------- Sold 8,275,085 4,649,214 16,227,622 Issued for reinvested distributions 7,299,029 4,684,842 12,636,235 Redeemed (15,280,344) (10,403,935) (34,818,886) - ----------------------------------------------------------------------------------------------------------------- Net increase (decrease) 293,770 (1,069,879) (5,955,029) - -----------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- 116 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT
RIVERSOURCE VP - INCOME OPPORTUNITIES FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 - ----------------------------------------------------------------------------------------------------------------- Sold 20,273,269 13,653,726 21,779,525 Issued for reinvested distributions 1,980,019 631,708 586,469 Redeemed (593,103) (268,671) (984,015) - ----------------------------------------------------------------------------------------------------------------- Net increase (decrease) 21,660,185 14,016,763 21,381,979 - -----------------------------------------------------------------------------------------------------------------
RIVERSOURCE VP - INTERNATIONAL OPPORTUNITY FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 - ----------------------------------------------------------------------------------------------------------------- Sold 1,020,211 1,023,262 3,290,061 Issued for reinvested distributions 721,369 1,024,536 1,754,001 Redeemed (10,577,391) (6,138,650) (19,700,173) - ----------------------------------------------------------------------------------------------------------------- Net increase (decrease) (8,835,811) (4,090,852) (14,656,111) - -----------------------------------------------------------------------------------------------------------------
RIVERSOURCE VP - LARGE CAP EQUITY FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 - ----------------------------------------------------------------------------------------------------------------- Sold 395,536 185,194 6,446,961 Fund Merger N/A N/A 77,634,189 Issued for reinvested distributions 1,155,428 853,308 1,647,637 Redeemed (17,953,285) (14,753,800) (39,632,021) - ----------------------------------------------------------------------------------------------------------------- Net increase (decrease) (16,402,321) (13,715,298) 46,096,766 - -----------------------------------------------------------------------------------------------------------------
RIVERSOURCE VP - LARGE CAP VALUE FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 - ----------------------------------------------------------------------------------------------------------------- Sold 333,439 259,377 563,345 Issued for reinvested distributions 22,206 111,695 58,492 Redeemed (310,742) (65,500) (201,307) - ----------------------------------------------------------------------------------------------------------------- Net increase (decrease) 44,903 305,572 420,530 - -----------------------------------------------------------------------------------------------------------------
RIVERSOURCE VP - MID CAP GROWTH FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 - ----------------------------------------------------------------------------------------------------------------- Sold 268,589 204,961 1,916,243 Fund merger N/A N/A 51,642,855 Issued for reinvested distributions 591,884 2,478,097 1,683,389 Redeemed (9,456,729) (6,966,156) (11,079,161) - ----------------------------------------------------------------------------------------------------------------- Net increase (decrease) (8,596,256) (4,283,098) 44,163,326 - -----------------------------------------------------------------------------------------------------------------
RIVERSOURCE VP - MID CAP VALUE FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 - ----------------------------------------------------------------------------------------------------------------- Sold 10,452,733 9,283,567 17,680,414 Issued for reinvested distributions 151,317 365,184 18,726 Redeemed (1,136,967) (235,125) (263,812) - ----------------------------------------------------------------------------------------------------------------- Net increase (decrease) 9,467,083 9,413,626 17,435,328 - -----------------------------------------------------------------------------------------------------------------
RIVERSOURCE VP - S&P 500 INDEX FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 - ----------------------------------------------------------------------------------------------------------------- Sold 1,452,071 719,158 3,049,759 Issued for reinvested distributions 653,891 481,856 742,959 Redeemed (2,620,060) (1,803,618) (6,584,030) - ----------------------------------------------------------------------------------------------------------------- Net increase (decrease) (514,098) (602,604) (2,791,312) - -----------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 117
RIVERSOURCE VP - SELECT VALUE FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 - ----------------------------------------------------------------------------------------------------------------- Sold 396,869 130,952 465,908 Issued for reinvested distributions 36,742 241,551 80,918 Redeemed (290,322) (135,982) (330,201) - ----------------------------------------------------------------------------------------------------------------- Net increase (decrease) 143,289 236,521 216,625 - -----------------------------------------------------------------------------------------------------------------
RIVERSOURCE VP - SHORT DURATION U.S. GOVERNMENT FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 - ----------------------------------------------------------------------------------------------------------------- Sold 2,716,815 1,559,918 6,812,654 Issued for reinvested distributions 1,075,480 615,472 1,670,663 Redeemed (4,093,008) (2,866,142) (10,142,070) - ----------------------------------------------------------------------------------------------------------------- Net increase (decrease) (300,713) (690,752) (1,658,753) - -----------------------------------------------------------------------------------------------------------------
RIVERSOURCE VP - SMALL CAP ADVANTAGE FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 - ----------------------------------------------------------------------------------------------------------------- Sold 209,754 144,790 580,024 Issued for reinvested distributions 761,620 2,176,662 2,188,623 Redeemed (2,157,410) (1,248,454) (2,551,105) - ----------------------------------------------------------------------------------------------------------------- Net increase (decrease) (1,186,036) 1,072,998 217,542 - -----------------------------------------------------------------------------------------------------------------
RIVERSOURCE VP - SMALL CAP VALUE FUND SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006(A) AUG. 31, 2006 - ----------------------------------------------------------------------------------------------------------------- Sold 6,724,253 2,823,228 9,622,399 Issued for reinvested distributions 1,348,524 4,206,725 2,433,216 Redeemed (2,327,881) (1,923,250) (4,112,520) - ----------------------------------------------------------------------------------------------------------------- Net increase (decrease) 5,744,896 5,106,703 7,943,095 - -----------------------------------------------------------------------------------------------------------------
(a) For the period from Sept. 1, 2006 to Dec. 31, 2006. (b) For the period from May 1, 2006 (date the Fund became available) to Aug. 31, 2006. 5. FORWARD FOREIGN CURRENCY CONTRACTS At June 30, 2007, RiverSource VP - Global Bond Fund, RiverSource VP - Global Inflation Protected Securities Fund, RiverSource VP - Growth Fund and RiverSource VP - Large Cap Equity Fund have entered into forward foreign currency exchange contracts that obligate the Funds to deliver currencies at specified future dates. The unrealized appreciation and/or depreciation on these contracts is included in the accompanying financial statements. See "Summary of significant accounting policies." The terms of the open contracts are as follows: RiverSource VP - Global Bond Fund
CURRENCY TO CURRENCY TO UNREALIZED UNREALIZED EXCHANGE DATE BE DELIVERED BE RECEIVED APPRECIATION DEPRECIATION - --------------------------------------------------------------------------------------------------------------------------------- July 11, 2007 11,900,000 11,258,278 $82,315 $ -- Canadian Dollar U.S. Dollar July 11, 2007 290,000 271,205 -- 1,150 Canadian Dollar U.S. Dollar July 12, 2007 25,870,000 3,747,641 -- 37,269 Swedish Krona U.S. Dollar July 12, 2007 5,500,000 800,081 -- 4,596 Swedish Krona U.S. Dollar July 16, 2007 39,265,000 52,910,373 -- 255,953 European Monetary Unit U.S. Dollar July 16, 2007 1,170,000 1,574,469 -- 9,756 European Monetary Unit U.S. Dollar July 19, 2007 8,659,626 1,066,000,000 17,497 -- U.S. Dollar Japanese Yen - --------------------------------------------------------------------------------------------------------------------------------- Total $99,812 $308,724 - ---------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- 118 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Global Inflation Protected Securities Fund
CURRENCY TO CURRENCY TO UNREALIZED UNREALIZED EXCHANGE DATE BE DELIVERED BE RECEIVED APPRECIATION DEPRECIATION - --------------------------------------------------------------------------------------------------------------------------------- July 2, 2007 2,942,723 1,474,310 $ 17,840 $ -- U.S. Dollar British Pound July 2, 2007 4,401,876 3,276,912 33,096 -- U.S. Dollar European Monetary Unit July 3, 2007 769,182 94,140,166 -- 4,511 U.S. Dollar Japanese Yen July 11, 2007 25,104,570 23,750,776 173,655 -- Canadian Dollar U.S. Dollar July 12, 2007 105,013,000 859,023 5,019 -- Japanese Yen U.S. Dollar July 12, 2007 107,530,000 15,577,263 -- 154,912 Swedish Krona U.S. Dollar July 12, 2007 4,572,000 661,239 -- 7,667 Swedish Krona U.S. Dollar July 16, 2007 110,565,000 148,988,549 -- 720,728 European Monetary Unit U.S. Dollar July 16, 2007 16,360,000 21,770,743 -- 381,329 European Monetary Unit U.S. Dollar July 16, 2007 2,782,000 3,738,813 -- 28,122 European Monetary Unit U.S. Dollar July 20, 2007 3,210,000,000 26,477,502 345,005 -- Japanese Yen U.S. Dollar July 20, 2007 238,600,000 1,957,952 15,518 -- Japanese Yen U.S. Dollar Aug. 2, 2007 70,441,700 140,974,974 -- 442,134 U.S. Dollar British Pound - --------------------------------------------------------------------------------------------------------------------------------- Total $590,133 $1,739,403 - ---------------------------------------------------------------------------------------------------------------------------------
RiverSource VP - Growth Fund
CURRENCY TO CURRENCY TO UNREALIZED UNREALIZED EXCHANGE DATE BE DELIVERED BE RECEIVED APPRECIATION DEPRECIATION - --------------------------------------------------------------------------------------------------------------------------------- July 2, 2007 488,603 656,508 $ -- $ 4,768 European Monetary Unit U.S. Dollar July 3, 2007 1,180,853 2,362,976 -- 8,296 British Pound U.S. Dollar July 3, 2007 1,521,269 1,796,110 1,473 -- U.S. Dollar Australian Dollar July 5, 2007 453,731 533,826 -- 1,153 U.S. Dollar Australian Dollar - --------------------------------------------------------------------------------------------------------------------------------- Total $ 1,473 $ 14,217 - ---------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 119 RiverSource VP - Large Cap Equity Fund
CURRENCY TO CURRENCY TO UNREALIZED UNREALIZED EXCHANGE DATE BE DELIVERED BE RECEIVED APPRECIATION DEPRECIATION - --------------------------------------------------------------------------------------------------------------------------------- July 2, 2007 827,502 1,111,867 $ -- $ 8,075 European Monetary Unit U.S. Dollar July 3, 2007 964,672 1,930,381 -- 6,777 British Pound U.S. Dollar July 3, 2007 2,209,286 4,420,947 -- 15,522 British Pound U.S. Dollar July 3, 2007 2,763,348 3,262,590 2,676 -- U.S. Dollar Australian Dollar July 5, 2007 824,192 969,682 -- 2,095 U.S. Dollar Australian Dollar - --------------------------------------------------------------------------------------------------------------------------------- Total $2,676 $32,469 - ---------------------------------------------------------------------------------------------------------------------------------
6. LENDING OF PORTFOLIO SECURITIES In order to generate additional income, each Fund may lend securities representing up to one-third of the value of its total assets (which includes collateral for securities on loan) to broker-dealers, banks, or other institutional borrowers of securities. Each Fund receives collateral in the form of cash and U.S. government securities, equal to at least 100% of the value of securities loaned, which is marked to the market value of the loaned securities daily until the securities are returned, e.g., if the value of the securities on loan increases, additional cash collateral is provided by the borrower. The Investment Manager serves as securities lending agent for the Funds under the investment management services agreement pursuant to which each Fund has agreed to reimburse the Investment Manager for expenses incurred by it in connection with the lending program, and pursuant to guidelines adopted by and under the oversight of the Board. Presented below is information regarding securities on loan at June 30, 2007.
RIVERSOURCE VP - RIVERSOURCE VP - RIVERSOURCE VP - DIVERSIFIED DIVERSIFIED RIVERSOURCE VP - BALANCED BOND EQUITY INCOME GROWTH FUND FUND FUND FUND - --------------------------------------------------------------------------------------------------------------------------------- Value of securities on loan to brokers $22,938,325 $65,893,210 $28,270,645 $2,296,700 - --------------------------------------------------------------------------------------------------------------------------------- Collateral received for securities loaned: Cash $23,858,000 $67,476,250 $29,775,900 $2,425,000 U.S. government securities, at value -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Total collateral received for securities loaned $23,858,000 $67,476,250 $29,775,900 $2,425,000 - ---------------------------------------------------------------------------------------------------------------------------------
RIVERSOURCE VP - RIVERSOURCE VP - RIVERSOURCE VP - RIVERSOURCE VP - HIGH YIELD INTERNATIONAL LARGE CAP MID CAP BOND OPPORTUNITY EQUITY GROWTH FUND FUND FUND FUND - --------------------------------------------------------------------------------------------------------------------------------- Value of securities on loan to brokers $4,180,000 $39,616,450 $25,065,300 $ 9,095,280 - --------------------------------------------------------------------------------------------------------------------------------- Collateral received for securities loaned: Cash $4,360,000 $40,991,250 $26,110,000 $10,020,000 U.S. government securities, at value -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Total collateral received for securities loaned $4,360,000 $40,991,250 $26,110,000 $10,020,000 - ---------------------------------------------------------------------------------------------------------------------------------
RIVERSOURCE VP - RIVERSOURCE VP - SMALL CAP SMALL CAP ADVANTAGE VALUE FUND FUND - -------------------------------------------------------------------------------------------------------------- Value of securities on loan to brokers $874,620 $14,461,586 - -------------------------------------------------------------------------------------------------------------- Collateral received for securities loaned: Cash 917,000 $15,170,700 U.S. government securities, at value -- -- - -------------------------------------------------------------------------------------------------------------- Total collateral received for securities loaned $917,000 $15,170,700 - --------------------------------------------------------------------------------------------------------------
Cash collateral received is invested in an affiliated money market fund and short-term securities, including U.S. government securities or other high-grade debt obligations, which are included in the "Investments in securities." - -------------------------------------------------------------------------------- 120 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT Income from securities lending for the periods indicated is as follows:
SIX MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, 2007 DEC. 31, 2006* AUG. 31, 2006 FUND AMOUNT AMOUNT AMOUNT - -------------------------------------------------------------------------------------------------------------------------------- RiverSource VP - Balanced Fund $112,064 $ 24,438 $191,300 RiverSource VP - Diversified Bond Fund 250,616 103,452 530,882 RiverSource VP - Diversified Equity Income Fund 222,012 64,983 217,630 RiverSource VP - Global Bond Fund 20,929 11,727 9,274 RiverSource VP - Growth Fund 30,164 -- 48,444 RiverSource VP - High Yield Bond Fund 1,057 2,827 -- RiverSource VP - International Opportunity Fund 449,559 103,960 854,518 RiverSource VP - Large Cap Equity Fund 281,288 33,932 411,482 RiverSource VP - Mid Cap Growth Fund 130,442 21,831 59,715 RiverSource VP - Small Cap Advantage Fund 17,398 12,686 37,231 RiverSource VP - Small Cap Value Fund 224,656 72,824 41,806 - --------------------------------------------------------------------------------------------------------------------------------
* For the period from Sept. 1, 2006 to Dec. 31, 2006. The risks to each Fund of securities lending are that the borrower may not provide additional collateral when required or return the securities when due. 7. FUTURES CONTRACTS At June 30, 2007, RiverSource VP - Balanced Fund's investments in securities included securities valued at $219,996 that were pledged as collateral to cover initial margin deposits on 218 open purchase interest rate futures contracts and 379 open sale interest rate futures contracts. The notional market value of the open purchase interest rate futures contracts at June 30, 2007 was $23,297,094 with a net unrealized gain of $20,549. The notional market value of the open sale interest rate futures contracts at June 30, 2007 was $47,720,970 with a net unrealized loss of $178,013. See "Summary of significant accounting policies" and "Notes to investments in securities." At June 30, 2007, RiverSource VP - Core Bond Fund's investments in securities included securities valued at $41,470 that were pledged as collateral to cover initial margin deposits on 28 open purchase interest rate futures contracts and 43 open sale interest rate futures contracts. The notional market value of the open purchase interest rate futures contracts at June 30, 2007 was $2,980,156 with a net unrealized gain of $19,799. The notional market value of the open sale interest rate futures contracts at June 30, 2007 was $4,973,875 with a net unrealized loss of $25,364. See "Summary of significant accounting policies" and "Notes to investments in securities." At June 30, 2007, RiverSource VP - Diversified Bond Fund's investments in securities included securities valued at $1,517,596 that were pledged as collateral to cover initial margin deposits on 1,295 open purchase interest rate futures contracts and 83 open sale interest rate futures contracts. The notional market value of the open purchase interest rate futures contracts at June 30, 2007 was $136,890,896 with a net unrealized gain of $1,118,252. The notional market value of the open sale interest rate futures contracts at June 30, 2007 was $16,913,844 with a net unrealized gain of $13,828. See "Summary of significant accounting policies" and "Notes to investments in securities." At June 30, 2007, RiverSource VP - Global Bond Fund's investments in securities included securities valued at $764,054 that were pledged as collateral to cover initial margin deposits on open purchase and open sale interest rate futures contracts. See "Summary of significant accounting policies" and "Notes to investments in securities." The terms of the open purchase and sale contracts are as follows:
NUMBER OF NOTIONAL UNREALIZED PURCHASE CONTRACTS CONTRACTS MARKET VALUE GAIN (LOSS) - -------------------------------------------------------------------------------------------------------------------------------- Euro-Bobl, Sept. 2007, 5-year (European Monetary Unit) 30 $ 4,306,653 $ (25,772) Euro-Bund, Sept. 2007, 10-year (European Monetary Unit) 160 23,982,243 (309,038) Japanese Govt Bond, Sept. 2007, 10-year (Japanese Yen) 10 10,722,757 (53,082) U.S. Treasury Note, Sept. 2007, 2-year (U.S. Dollar) 116 23,638,625 79,401 U.S. Long Bond, Sept. 2007, 20-year (U.S. Dollar) 220 23,705,000 42,527 - -------------------------------------------------------------------------------------------------------------------------------- Total 536 $86,355,278 $(265,964) - --------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 121
NUMBER OF NOTIONAL UNREALIZED SALE CONTRACTS CONTRACTS MARKET VALUE GAIN (LOSS) - -------------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Note, Sept. 2007, 5-year (U.S. Dollar) 106 $11,032,282 $ (83,131) U.S. Treasury Note, Sept. 2007, 10-year (U.S. Dollar) 33 3,488,203 (42,380) - -------------------------------------------------------------------------------------------------------------------------------- Total 139 $14,520,485 $(125,511) - --------------------------------------------------------------------------------------------------------------------------------
At June 30, 2007, RiverSource VP - Global Inflation Protected Securities Fund's investments in securities included securities valued at $101,816 that were pledged as collateral to cover initial margin deposits on 157 open sale interest rate futures contracts. The notional market value of the open sale interest rate futures contracts at June 30, 2007 was $16,340,266 with a net unrealized gain of $55,950. See "Summary of significant accounting policies" and "Notes to investments in securities." At June 30, 2007, RiverSource VP - Large Cap Equity Fund's investments in securities included securities valued at $5,555,241 that were pledged as collateral to cover initial margin deposits on 94 open purchase stock index futures contracts. The notional market value of the open purchase stock index futures contracts at June 30, 2007 was $35,611,900 with a net unrealized loss of $170,751. See "Summary of significant accounting policies" and "Notes to investments in securities." At June 30, 2007, RiverSource VP - S&P 500 Index Fund's investments in securities included securities valued at $637,400 that were pledged as collateral to cover initial margin deposits on 68 open purchase stock index futures contracts. The notional market value of the open purchase stock index futures contracts at June 30, 2007 was $5,152,360 with a net unrealized loss of $24,334. See "Summary of significant accounting policies" and "Notes to investments in securities." At June 30, 2007, RiverSource VP - Short Duration U.S. Government Fund's investments in securities included securities valued at $270,803 that were pledged as collateral to cover initial margin deposits on 441 open purchase interest rate futures contracts and 217 open sale interest rate futures contracts. The notional market value of the open purchase interest rate futures contracts at June 30, 2007 was $85,546,125 with a net unrealized gain of $98,396. The notional market value of the open sale interest rate futures contracts at June 30, 2007 was $22,749,079 with a net unrealized loss of $78,057. See "Summary of significant accounting policies" and "Notes to investments in securities." 8. OPTIONS CONTRACTS WRITTEN Contracts and premiums associated with options contracts written by RiverSource VP - Growth Fund during the six months ended June 30, 2007 are as follows:
CALLS PUTS - --------------------------------------------------------------------------------------------------------------------------------- CONTRACTS PREMIUMS CONTRACTS PREMIUMS - --------------------------------------------------------------------------------------------------------------------------------- Balance Dec. 31, 2006 7,980 $ 710,816 -- $ -- Opened 8,728 1,174,152 7,720 980,440 Closed (4,096) (493,248) (3,088) (392,176) Expired (5,985) (457,459) -- -- - --------------------------------------------------------------------------------------------------------------------------------- Balance June 30, 2007 6,627 $ 934,261 4,632 $ 588,264 - ---------------------------------------------------------------------------------------------------------------------------------
See "Summary of significant accounting policies." Contracts and premiums associated with options contracts written by RiverSource VP - Large Cap Equity Fund during the six months ended June 30, 2007 are as follows:
CALLS PUTS - --------------------------------------------------------------------------------------------------------------------------------- CONTRACTS PREMIUMS CONTRACTS PREMIUMS - --------------------------------------------------------------------------------------------------------------------------------- Balance Dec. 31, 2006 15,268 $ 1,360,071 -- $ -- Opened 19,502 2,659,218 17,580 2,232,660 Closed (9,453) (1,166,742) (7,274) (923,798) Expired (11,260) (861,203) -- -- - --------------------------------------------------------------------------------------------------------------------------------- Balance June 30, 2007 14,057 $ 1,991,344 10,306 $1,308,862 - ---------------------------------------------------------------------------------------------------------------------------------
See "Summary of significant accounting policies." - -------------------------------------------------------------------------------- 122 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 9. SWAP CONTRACTS At June 30, 2007, the following Funds had open CBMS total return swap contracts: RiverSource VP - Balanced Fund
UNREALIZED TERMINATION NOTIONAL APPRECIATION DATE AMOUNT (DEPRECIATION) - --------------------------------------------------------------------------------------------------------------------------------- Receive total return on Lehman Brothers Aaa 8.5+ Commercial Mortgage-Backed Securities Index and pay a floating rate based on 1-month LIBOR less 0.25%. Counterparty: Wachovia Oct. 1, 2007 $8,950,000 $(120,127) Receive total return on Lehman Brothers Baa 8.5+ Commercial Mortgage-Backed Securities Index and pay a floating rate based on 1-month LIBOR less 1.20%. Counterparty: Citigroup Nov. 1, 2007 1,850,000 (19,413) Receive total return on Lehman Brothers Baa 8.5+ Commercial Mortgage-Backed Securities Index and pay a floating rate based on 1-month LIBOR less 1.05%. Counterparty: Wachovia Dec. 1, 2007 1,650,000 (17,318) Receive total return on Lehman Brothers Baa 8.5+ Commercial Mortgage-Backed Securities Index and pay a floating rate based on 1-month LIBOR less 1.10%. Counterparty: Citigroup Dec. 1, 2007 1,875,000 (19,827) Receive spread on Lehman Brothers Baa 8.5+ Commercial Mortgage-Backed Securities Index plus 1.00% times notional amount plus spread return amount, if such amount is positive, and pay the absolute value of the spread return amount, if such amount is negative. Counterparty: Citigroup Jan. 1, 2008 600,000 251 Receive total return on Lehman Brothers Baa 8.5+ Commercial Mortgage-Backed Securities Index and pay a floating rate based on 1-month LIBOR plus 1.10%. Counterparty: Wachovia Jan. 1, 2008 1,850,000 (19,345) - --------------------------------------------------------------------------------------------------------------------------------- Total $(195,779) - ---------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 123 RiverSource VP - Core Bond Fund
UNREALIZED TERMINATION NOTIONAL APPRECIATION DATE AMOUNT (DEPRECIATION) - --------------------------------------------------------------------------------------------------------------------------------- Receive total return on Lehman Brothers Aaa 8.5+ Commercial Mortgage-Backed Securities Index and pay a floating rate based on 1-month LIBOR less 0.25%. Counterparty: Wachovia Oct. 1, 2007 $ 825,000 $(11,073) Receive total return on Lehman Brothers Baa 8.5+ Commercial Mortgage-Backed Securities Index and pay a floating rate based on 1-month LIBOR less 1.20%. Counterparty: Citigroup Nov. 1, 2007 200,000 (2,099) Receive total return on Lehman Brothers Baa 8.5+ Commercial Mortgage-Backed Securities Index and pay a floating rate based on 1-month LIBOR less 1.05%. Counterparty: Wachovia Dec. 1, 2007 175,000 (1,837) Receive total return on Lehman Brothers Baa 8.5+ Commercial Mortgage-Backed Securities Index and pay a floating rate based on 1-month LIBOR less 1.10%. Counterparty: Citigroup Dec. 1, 2007 200,000 (2,115) Receive spread on Lehman Brothers Baa 8.5+ Commercial Mortgage-Backed Securities Index plus 1.00% times notional amount plus spread return amount, if such amount is positive, and pay the absolute value of the spread return amount, if such amount is negative. Counterparty: Citigroup Jan. 1, 2008 50,000 21 Receive total return on Lehman Brothers Baa 8.5+ Commercial Mortgage-Backed Securities Index and pay a floating rate based on 1-month LIBOR plus 1.10%. Counterparty: Wachovia Jan. 1, 2008 200,000 (2,091) - --------------------------------------------------------------------------------------------------------------------------------- Total $(19,194) - ---------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- 124 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Diversified Bond Fund
UNREALIZED TERMINATION NOTIONAL APPRECIATION DATE AMOUNT (DEPRECIATION) - --------------------------------------------------------------------------------------------------------------------------------- Receive total return on Lehman Brothers Aaa 8.5+ Commercial Mortgage-Backed Securities Index and pay a floating rate based on 1-month LIBOR less 0.25%. Counterparty: Wachovia Oct. 1, 2007 $39,000,000 $(523,458) Receive total return on Lehman Brothers Baa 8.5+ Commercial Mortgage-Backed Securities Index and pay a floating rate based on 1-month LIBOR less 1.20%. Counterparty: Citigroup Nov. 1, 2007 8,700,000 (91,295) Receive total return on Lehman Brothers Baa 8.5+ Commercial Mortgage-Backed Securities Index and pay a floating rate based on 1-month LIBOR less 1.05%. Counterparty: Wachovia Dec. 1, 2007 7,800,000 (81,868) Receive total return on Lehman Brothers Baa 8.5+ Commercial Mortgage-Backed Securities Index and pay a floating rate based on 1-month LIBOR less 1.10%. Counterparty: Citigroup Dec. 1, 2007 8,625,000 (91,202) Receive spread on Lehman Brothers Baa 8.5+ Commercial Mortgage-Backed Securities Index plus 1.00% times notional amount plus spread return amount, if such amount is positive, and pay the absolute value of the spread return amount, if such amount is negative. Counterparty: Citigroup Jan. 1, 2008 2,800,000 1,171 Receive total return on Lehman Brothers Baa 8.5+ Commercial Mortgage-Backed Securities Index and pay a floating rate based on 1-month LIBOR plus 1.10%. Counterparty: Wachovia Jan. 1, 2008 8,650,000 (90,453) - --------------------------------------------------------------------------------------------------------------------------------- Total $(877,105) - ---------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 125 RiverSource VP - Global Bond Fund
UNREALIZED TERMINATION NOTIONAL APPRECIATION DATE AMOUNT (DEPRECIATION) - --------------------------------------------------------------------------------------------------------------------------------- Receive total return on Lehman Brothers Aaa 8.5+ Commercial Mortgage-Backed Securities Index and pay a floating rate based on 1-month LIBOR less 0.25%. Counterparty: Wachovia Oct. 1, 2007 $9,200,000 $(123,482) Receive total return on Lehman Brothers Baa 8.5+ Commercial Mortgage-Backed Securities Index and pay a floating rate based on 1-month LIBOR less 1.20%. Counterparty: Citigroup Nov. 1, 2007 2,400,000 (25,185) Receive total return on Lehman Brothers Baa 8.5+ Commercial Mortgage-Backed Securities Index and pay a floating rate based on 1-month LIBOR less 1.05%. Counterparty: Wachovia Dec. 1, 2007 2,150,000 (22,566) Receive total return on Lehman Brothers Baa 8.5+ Commercial Mortgage-Backed Securities Index and pay a floating rate based on 1-month LIBOR less 1.10%. Counterparty: Citigroup Dec. 1, 2007 2,400,000 (25,378) Receive spread on Lehman Brothers Baa 8.5+ Commercial Mortgage-Backed Securities Index plus 1.00% times notional amount plus spread return amount, if such amount is positive, and pay the absolute value of the spread return amount, if such amount is negative. Counterparty: Citigroup Jan. 1, 2008 750,000 314 Receive total return on Lehman Brothers Baa 8.5+ Commercial Mortgage-Backed Securities Index and pay a floating rate based on 1-month LIBOR plus 1.10%. Counterparty: Wachovia Jan. 1, 2008 2,400,000 (25,097) - --------------------------------------------------------------------------------------------------------------------------------- Total $(221,394) - ---------------------------------------------------------------------------------------------------------------------------------
RiverSource VP - High Yield Bond Fund
UNREALIZED TERMINATION NOTIONAL APPRECIATION DATE AMOUNT (DEPRECIATION) - --------------------------------------------------------------------------------------------------------------------------------- Receive spread on Lehman Brothers Baa 8.5+ Commercial Mortgage-Backed Securities Index plus 1.00% times notional amount plus spread return amount, if such amount is positive, and pay the absolute value of the spread return amount, if such amount is negative. Counterparty: Citigroup Jan. 1, 2008 $3,900,000 $ 1,630 Receive total return on Lehman Brothers Baa 8.5+ Commercial Mortgage-Backed Securities Index and pay a floating rate based on 1-month LIBOR plus 1.10%. Counterparty: Wachovia Jan. 1, 2008 4,550,000 (47,579) - --------------------------------------------------------------------------------------------------------------------------------- Total $ (45,949) - ---------------------------------------------------------------------------------------------------------------------------------
RiverSource VP - Income Opportunities Fund
UNREALIZED TERMINATION NOTIONAL APPRECIATION DATE AMOUNT (DEPRECIATION) - --------------------------------------------------------------------------------------------------------------------------------- Receive total return on Lehman Brothers Baa 8.5+ Commercial Mortgage-Backed Securities Index and pay a floating rate based on 1-month LIBOR plus 1.10%. Counterparty: Wachovia Jan. 1, 2008 $2,100,000 $ (21,960) - ---------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- 126 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT At June 30, 2007, the following Fund had open total return equity swap contracts: RiverSource VP - Large Cap Equity Fund
UNREALIZED TERMINATION NOTIONAL APPRECIATION DATE AMOUNT (DEPRECIATION) - --------------------------------------------------------------------------------------------------------------------------------- Receive total return on a basket of large cap industrial securities and pay a floating rate based on 1-month LIBOR plus 0.20%. Counterparty: Citigroup May 7, 2008 $5,960,000 $ 230,762 Receive total return on a basket of large cap health care securities and pay a floating rate based on 1-month LIBOR plus 0.20%. Counterparty: Merrill Lynch Oct. 17, 2007 6,970,000 (112,974) - --------------------------------------------------------------------------------------------------------------------------------- Total $ 117,788 - ---------------------------------------------------------------------------------------------------------------------------------
10. AFFILIATED MONEY MARKET FUND Each Fund may invest its daily cash balance in RiverSource Short-Term Cash Fund, a money market fund established for the exclusive use of the RiverSource funds and other institutional clients of RiverSource Investments. 11. BANK BORROWINGS Each Fund has a revolving credit agreement with a syndicate of banks headed by JPMorgan Chase Bank, N.A. (JPMCB), whereby each Fund may borrow for the temporary funding of shareholder redemptions or for other temporary or emergency purposes. Each Fund must maintain asset coverage for borrowings of at least 300%. The agreement, which enables each Fund to participate with other RiverSource funds, permits borrowings up to $500 million, collectively. Interest is charged to each Fund based on its borrowings at a rate equal to either the higher of the Federal Funds Effective Rate plus 0.40% or the JPMCB Prime Commercial Lending Rate. Borrowings are payable within 60 days after such loan is executed. Each Fund also pays a commitment fee equal to its pro rata share of the amount of the credit facility at a rate of 0.06% per annum. Each Fund had no borrowings under the facility outstanding during the six months ended June 30, 2007. 12. FUND MERGERS RiverSource VP - Large Cap Equity Fund At the close of business on March 17, 2006, RiverSource VP - Large Cap Equity Fund acquired the assets and assumed the identified liabilities of RiverSource VP - New Dimensions Fund. This reorganization was completed after shareholders approved the plan on Feb. 15, 2006. The aggregate net assets of RiverSource VP - Large Cap Equity Fund immediately before the acquisition were $2,554,119,500 and the combined net assets immediately after the acquisition were $4,350,292,892. The merger was accomplished by a tax-free exchange of 108,210,452 shares of RiverSource VP - New Dimensions Fund valued at $1,796,173,392. In exchange for the RiverSource VP - New Dimensions Fund shares and net assets, RiverSource VP - Large Cap Equity Fund issued 77,634,189 shares. RiverSource VP - New Dimensions Fund's net assets after adjustments for any permanent book-to-tax differences at the merger date were $1,796,173,392, which includes $1,758,785,888 of capital stock, $135,799,449 of unrealized appreciation, ($98,521,967) of accumulated net realized loss and $110,022 of undistributed net investment income. RiverSource VP - Mid Cap Growth Fund At the close of business on March 17, 2006, RiverSource VP - Mid Cap Growth Fund acquired the assets and assumed the identified liabilities of RiverSource VP - Strategy Aggressive Fund. This reorganization was completed after shareholders approved the plan on Feb. 15, 2006. The aggregate net assets of RiverSource VP - Mid Cap Growth Fund immediately before the acquisition were $263,887,643 and the combined net assets immediately after the acquisition were $900,721,592. The merger was accomplished by a tax-free exchange of 70,072,924 shares of RiverSource VP - Strategy Aggressive Fund valued at $636,833,949. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 127 In exchange for the RiverSource VP - Strategy Aggressive Fund shares and net assets, RiverSource VP - Mid Cap Growth Fund issued 51,642,855 shares. RiverSource VP - Strategy Aggressive Fund's net assets after adjustments for any permanent book-to-tax differences at the merger date were $636,833,949, which includes $1,733,718,560 of capital stock, $59,822,571 of unrealized appreciation, ($1,156,578,196) of accumulated net realized loss and ($128,986) of temporary book-to-tax differences. 13. CAPITAL LOSS CARRY-OVER For federal income tax purposes, capital loss carry-overs at Dec. 31, 2006 were as follows:
FUND CARRY-OVER - ------------------------------------------------------------------------------ RiverSource VP - Balanced Fund $ 35,624,602 RiverSource VP - Cash Management Fund 968 RiverSource VP - Core Bond Fund 636,372 RiverSource VP - Diversified Bond Fund(a) 140,432,283 RiverSource VP - Global Bond Fund 527,778 RiverSource VP - Global Inflation Protected Securities Fund 1,165,851 RiverSource VP - Growth Fund 80,007,343 RiverSource VP - High Yield Bond Fund 217,387,619 RiverSource VP - International Opportunity Fund(a) 434,867,848 RiverSource VP - Large Cap Equity Fund(a) 145,318,120 RiverSource VP - Mid Cap Growth Fund 1,117,336,399 RiverSource VP - Short Duration U.S. Government Fund(a) 11,387,600 - ------------------------------------------------------------------------------
(a) As a result of a merger on July 9, 2004, the Fund acquired capital loss carry-overs, which are limited by the Internal Revenue Code Section 382, and unrealized capital gains. At the end of the most recent fiscal year, if the capital loss carry-overs are not offset by subsequent capital gains, they will expire as follows:
FUND 2007 2008 2009 2010 - --------------------------------------------------------------------------------------------------------------------------------- RiverSource VP - Balanced Fund $ -- $25,624,602 $ -- $ -- RiverSource VP - Cash Management Fund 818 -- -- -- RiverSource VP - Core Bond Fund -- -- -- -- RiverSource VP - Diversified Bond Fund 53,324,465 47,894,894 9,863,475 15,651,826 RiverSource VP - Global Bond Fund -- -- -- -- RiverSource VP - Global Inflation Protected Securities Fund -- -- -- -- RiverSource VP - Growth Fund -- -- -- 75,486,831 RiverSource VP - High Yield Bond Fund -- 9,616,792 100,694,093 106,316,241 RiverSource VP - International Opportunity Fund -- 17,527,276 304,876,014 90,583,080 RiverSource VP - Large Cap Equity Fund 27,959,838 34,622,634 7,516,387 75,219,261 RiverSource VP - Mid Cap Growth Fund -- 767,257,789 310,534,170 39,544,440 RiverSource VP - Short Duration U.S. Government Fund -- -- -- 68,450 - ---------------------------------------------------------------------------------------------------------------------------------
FUND 2011 2012 2013 2014 2015 - --------------------------------------------------------------------------------------------------------------------------------- RiverSource VP - Balanced Fund $ -- $ -- $ -- $ -- $ -- RiverSource VP - Cash Management Fund -- -- 150 -- -- RiverSource VP - Core Bond Fund -- -- 171,449 394,277 70,646 RiverSource VP - Diversified Bond Fund 4,231,263 -- 7,546,166 -- 1,920,194 RiverSource VP - Global Bond Fund -- -- 122,441 185,503 219,834 RiverSource VP - Global Inflation Protected Securities Fund -- -- -- 1,165,851 -- RiverSource VP - Growth Fund -- -- -- 3,482,953 1,037,559 RiverSource VP - High Yield Bond Fund -- -- 760,493 -- -- RiverSource VP - International Opportunity Fund 21,881,478 -- -- -- -- RiverSource VP - Large Cap Equity Fund -- -- -- -- -- RiverSource VP - Mid Cap Growth Fund -- -- -- -- -- RiverSource VP - Short Duration U.S. Government Fund -- 4,186,493 3,894,750 3,130,115 107,792 - ---------------------------------------------------------------------------------------------------------------------------------
The Funds, in connection with the mergers as described in Note 12, acquired the following capital loss carry-overs, which are limited by the Internal Revenue Code Section 382, and unrealized capital gains:
FUND CARRY-OVER - ------------------------------------------------------------------------------ RiverSource VP - Large Cap Equity Fund $ 252,134,353 RiverSource VP - Mid Cap Growth Fund 1,130,500,468 - ------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- 128 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT In addition to the acquired capital loss carry-overs, the Funds also acquired unrealized capital gains as a result of the mergers. The yearly utilization of the acquired capital losses as well as the utilization of the acquired unrealized losses is limited by the Internal Revenue Code. It is unlikely the Board will authorize a distribution of any net realized capital gains until the available capital loss carry-overs have been offset or expire. 14. INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS In June 2004, an action captioned John E. Gallus et al. v. American Express Financial Corp. and American Express Financial Advisors Inc., was filed in the United States District Court for the District of Arizona. The plaintiffs allege that they are investors in several American Express Company mutual funds and they purport to bring the action derivatively on behalf of those funds under the Investment Company Act of 1940. The plaintiffs allege that fees allegedly paid to the defendants by the funds for investment advisory and administrative services are excessive. The plaintiffs seek remedies including restitution and rescission of investment advisory and distribution agreements. The plaintiffs voluntarily agreed to transfer this case to the United States District Court for the District of Minnesota. In response to defendants' motion to dismiss the complaint, the Court dismissed one of plaintiffs' four claims and granted plaintiffs limited discovery. Defendants moved for summary judgment in April 2007. Summary judgment was granted in the defendants' favor on July 9, 2007. The plaintiffs may file a notice of appeal with the Eighth Circuit Court of Appeals within 30 days from the date of judgment. In December 2005, without admitting or denying the allegations, American Express Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc. (Ameriprise Financial)), the parent company of RiverSource Investments, LLC (RiverSource Investments), entered into settlement agreements with the Securities and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC) related to market timing activities. In connection with these matters, the SEC and MDOC issued orders (the Orders) alleging that AEFC violated certain provisions of the federal and Minnesota securities laws by failing to adequately disclose market timing activities by allowing certain identified market timers to continue to market time contrary to disclosures in mutual fund and variable annuity product prospectuses. The Orders also alleged that AEFC failed to implement procedures to detect and prevent market timing in 401(k) plans for employees of AEFC and related companies and failed to adequately disclose that there were no such procedures. Pursuant to the MDOC Order, the MDOC also alleged that AEFC allowed inappropriate market timing to occur by failing to have written policies and procedures and failing to properly supervise its employees. As a result of the Orders, AEFC was censured and ordered to cease and desist from committing or causing any violations of certain provisions of the Investment Advisers Act of 1940, the Investment Company Act of 1940, and various Minnesota laws. Pursuant to the terms of the Orders, AEFC agreed to pay disgorgement of $10 million and civil money penalties of $7 million. AEFC also agreed to make presentations at least annually to its board of directors and the relevant mutual funds' board that include an overview of policies and procedures to prevent market timing, material changes to these policies and procedures and whether disclosures related to market timing are consistent with the SEC order and federal securities laws. AEFC also agreed to retain an independent distribution consultant to assist in developing a plan for distribution of all disgorgement and civil penalties ordered by the SEC in accordance with various undertakings detailed at http://www.sec.gov/litigation/admin/ia-2451.pdf. In addition, AEFC agreed to complete and submit to the MDOC a compliance review of its procedures regarding market timing within one year of the MDOC Order, including a summary of actions taken to ensure compliance with applicable laws and regulations and certification by a senior officer regarding compliance and supervisory procedures. Ameriprise Financial and its affiliates have cooperated with the SEC and the MDOC in these legal proceedings, and have made regular reports to the RiverSource Funds' Boards of Directors/Trustees. Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions, and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Funds are not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates are the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Funds or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Funds. Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the Securities and Exchange Commission on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov. There can be no assurance that these matters, or the adverse publicity associated with them, will not result in increased fund redemptions, reduced sale of fund shares or other adverse consequences to the Funds. Further, although we believe proceedings are not likely to have a material adverse effect on the Funds or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Funds, these proceedings are subject to uncertainties and, as such, we are unable to estimate the - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 129 possible loss or range of loss that may result. An adverse outcome in one or more of these proceedings could result in adverse judgments, settlements, fines, penalties or other relief that could have a material adverse effect on the consolidated financial condition or results of operations of Ameriprise Financial. 15. CHANGE OF FUND'S FISCAL YEAR The By-Laws of RiverSource Variable Portfolio - Income Series, Inc., RiverSource Variable Portfolio - Investment Series, Inc., RiverSource Variable Portfolio - Managed Series, Inc., RiverSource Variable Portfolio - Managers Series, Inc., and RiverSource Variable Portfolio - Money Market Series, Inc. were amended on April 13, 2006, changing their fiscal year end from Aug. 31 to Dec. 31, effective Dec. 31, 2006. 16. FINANCIAL HIGHLIGHTS The following tables show certain important financial information for evaluating each Fund's results. RiverSource VP - Balanced Fund
PER SHARE INCOME AND CAPITAL CHANGES(a) SIX MONTHS ENDED JUNE 30, 2007 PERIOD ENDED DEC. 31, (UNAUDITED) 2006(B) Net asset value, beginning of period $15.61 $15.44 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .20 .13 Net gains (losses) (both realized and unrealized) .46 1.04 - ------------------------------------------------------------------------------- Total from investment operations .66 1.17 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.23) (.10) Distributions from realized gains (.34) (.90) - ------------------------------------------------------------------------------- Total distributions (.57) (1.00) - ------------------------------------------------------------------------------- Net asset value, end of period $15.70 $15.61 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $1,957 $2,071 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(c),(d) .84%(e) .84%(e) - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 2.53%(e) 2.43%(e) - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 62% 38% - ------------------------------------------------------------------------------- Total return(f) 4.30%(g) 7.73%(g) - ------------------------------------------------------------------------------- PER SHARE INCOME AND CAPITAL CHANGE PER SHARE INCOME AND CAPITAL CHANGES(a) YEAR ENDED AUG. 31, 2006 2005 2004 2003 Net asset value, beginning of period $15.18 $14.17 $13.00 $12.32 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .41 .35 .31 .31 Net gains (losses) (both realized and unrealized) .72 1.02 1.17 .82 - ------------------------------------------------------------------------------- Total from investment operations 1.13 1.37 1.48 1.13 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.41) (.36) (.31) (.31) Distributions from realized gains (.46) -- -- (.14) - ------------------------------------------------------------------------------- Total distributions (.87) (.36) (.31) (.45) - ------------------------------------------------------------------------------- Net asset value, end of period $15.44 $15.18 $14.17 $13.00 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $2,046 $2,437 $2,664 $2,416 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(c),(d) .77% .82% .78% .80% - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 2.63% 2.34% 2.16% 2.48% - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 130% 131% 133% 119% - ------------------------------------------------------------------------------- Total return(f) 7.76% 9.68% 11.39% 9.40% - -------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) For the period from Sept. 1, 2006 to Dec. 31, 2006. (c) Expense ratio is based on total expenses of the Fund before reduction of earnings and bank fee credits on cash balances. Includes the impact of a performance incentive adjustment fee, if any. (d) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. (e) Adjusted to an annual basis. (f) Total return does not reflect payment of the expenses that apply to the variable accounts or any contract charges. (g) Not annualized. - -------------------------------------------------------------------------------- 130 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Cash Management Fund
PER SHARE INCOME AND CAPITAL CHANGES(a) SIX MONTHS ENDED JUNE 30, 2007 PERIOD ENDED DEC. 31, (UNAUDITED) 2006(B) Net asset value, beginning of period $1.00 $1.00 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .02 .02 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.02) (.02) - ------------------------------------------------------------------------------- Net asset value, end of period $1.00 $1.00 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $1,188 $1,055 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(c) .60%(d) .60%(d) - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 4.77%(d) 4.66%(d) - ------------------------------------------------------------------------------- Total return(e) 2.40%(f) 1.54%(f) - ------------------------------------------------------------------------------- PER SHARE INCOME AND CAPITAL CHANGE PER SHARE INCOME AND CAPITAL CHANGES(a) YEAR ENDED AUG. 31, 2006 2005 2004 2003 Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .04 .02 -- .01 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.04) (.02) -- (.01) - ------------------------------------------------------------------------------- Net asset value, end of period $1.00 $1.00 $1.00 $1.00 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $999 $688 $773 $868 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(c) .67% .70% .69% .70% - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 4.01% 1.88% .47% .72% - ------------------------------------------------------------------------------- Total return(e) 4.01% 1.92% .48% .72% - -------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) For the period from Sept. 1, 2006 to Dec. 31, 2006. (c) Expense ratio is based on total expenses of the Fund before reduction of earnings and bank fee credits on cash balances. (d) Adjusted to an annual basis. (e) Total return does not reflect payment of the expenses that apply to the variable accounts or any contract charges. (f) Not annualized. RiverSource VP - Core Bond Fund
PER SHARE INCOME AND CAPITAL CHANGES(a) SIX MONTHS ENDED JUNE 30, 2007 PERIOD ENDED DEC. 31, (UNAUDITED) 2006(B) Net asset value, beginning of period $9.81 $9.77 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .21 .14 Net gains (losses) (both realized and unrealized) (.13) .04 - ------------------------------------------------------------------------------- Total from investment operations .08 .18 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.21) (.14) Distributions from realized gains -- -- - ------------------------------------------------------------------------------- Total distributions (.21) (.14) - ------------------------------------------------------------------------------- Net asset value, end of period $9.68 $9.81 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $79 $66 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(d),(e),(f) .83%(g) .83%(g) - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 4.43%(g) 4.28%(g) - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 173% 106% - ------------------------------------------------------------------------------- Total return(h) .85%(i) 1.85%(i) - ------------------------------------------------------------------------------- PER SHARE INCOME AND CAPITAL CHANGE PER SHARE INCOME AND CAPITAL CHANGES(a) YEAR ENDED AUG. 31, 2006 2005 2004(C) Net asset value, beginning of period $10.05 $10.01 $9.98 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .39 .31 .14 Net gains (losses) (both realized and unrealized) (.26) .04 .03 - ------------------------------------------------------------------------------- Total from investment operations .13 .35 .17 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.39) (.31) (.14) Distributions from realized gains (.02) -- -- - ------------------------------------------------------------------------------- Total distributions (.41) (.31) (.14) - ------------------------------------------------------------------------------- Net asset value, end of period $9.77 $10.05 $10.01 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $63 $58 $36 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(d),(e),(f) .86% .95% .95%(g) - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 3.97% 3.10% 2.33%(g) - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 319% 339% 221% - ------------------------------------------------------------------------------- Total return(h) 1.38% 3.64% 1.67%(i) - -------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) For the period from Sept. 1, 2006 to Dec. 31, 2006. (c) For the period from Feb. 4, 2004 (date the Fund became available) to Aug. 31, 2004. (d) Expense ratio is based on total expenses of the Fund before reduction of earnings and bank fee credits on cash balances. (e) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. (f) The Investment Manager and its affiliates waived/reimbursed the Fund for certain expenses. Had they not done so, the annual ratios of expenses would have been 0.89% for the six months ended June 30, 2007, 0.93% for the period ended Dec. 31, 2006 and 0.96%, 1.01% and 1.13% for the periods ended Aug. 31, 2006, 2005 and 2004, respectively. (g) Adjusted to an annual basis. (h) Total return does not reflect payment of the expenses that apply to the variable accounts or any contract charges. (i) Not annualized. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 131 RiverSource VP - Diversified Bond Fund
PER SHARE INCOME AND CAPITAL CHANGES(a) SIX MONTHS ENDED JUNE 30, 2007 PERIOD ENDED DEC. 31, (UNAUDITED) 2006(B) Net asset value, beginning of period $10.47 $10.39 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .24 .16 Net gains (losses) (both realized and unrealized) (.14) .08 - ------------------------------------------------------------------------------- Total from investment operations .10 .24 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.24) (.16) - ------------------------------------------------------------------------------- Net asset value, end of period $10.33 $10.47 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $3,427 $2,745 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(c),(d) .73%(e) .74%(e) - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 4.73%(e) 4.57%(e) - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 167% 109% - ------------------------------------------------------------------------------- Total return(f) 1.04%(g) 2.32%(g) - ------------------------------------------------------------------------------- PER SHARE INCOME AND CAPITAL CHANGE PER SHARE INCOME AND CAPITAL CHANGES(a) YEAR ENDED AUG. 31, 2006 2005 2004 2003 Net asset value, beginning of period $10.66 $10.62 $10.40 $10.38 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .43 .39 .38 .44 Net gains (losses) (both realized and unrealized) (.27) .06 .22 .02 - ------------------------------------------------------------------------------- Total from investment operations .16 .45 .60 .46 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.43) (.41) (.38) (.44) - ------------------------------------------------------------------------------- Net asset value, end of period $10.39 $10.66 $10.62 $10.40 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $2,325 $1,824 $1,696 $1,765 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(c),(d) .80% .82% .81% .81% - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 4.15% 3.65% 3.60% 4.23% - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 292% 293% 295% 251% - ------------------------------------------------------------------------------- Total return(f) 1.58% 4.27% 5.84% 4.50% - -------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) For the period from Sept. 1, 2006 to Dec. 31, 2006. (c) Expense ratio is based on total expenses of the Fund before reduction of earnings and bank fee credits on cash balances. (d) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. (e) Adjusted to an annual basis. (f) Total return does not reflect payment of the expenses that apply to the variable accounts or any contract charges. (g) Not annualized. RiverSource VP - Diversified Equity Income Fund
PER SHARE INCOME AND CAPITAL CHANGES(a) SIX MONTHS ENDED JUNE 30, 2007 PERIOD ENDED DEC. 31, (UNAUDITED) 2006(B) Net asset value, beginning of period $15.48 $15.09 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .12 .07 Net gains (losses) (both realized and unrealized) 1.67 1.33 - ------------------------------------------------------------------------------- Total from investment operations 1.79 1.40 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.14) (.05) Distributions from realized gains (.17) (.96) - ------------------------------------------------------------------------------- Total distributions (.31) (1.01) - ------------------------------------------------------------------------------- Net asset value, end of period $16.96 $15.48 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $4,087 $3,446 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(c),(d) .79%(e) .91%(e) - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 1.56%(e) 1.39%(e) - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 16% 5% - ------------------------------------------------------------------------------- Total return(f) 11.75%(g) 9.37%(g) - ------------------------------------------------------------------------------- PER SHARE INCOME AND CAPITAL CHANGE PER SHARE INCOME AND CAPITAL CHANGES(a) YEAR ENDED AUG. 31, 2006 2005 2004 2003 Net asset value, beginning of period $13.83 $11.17 $9.65 $8.41 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .23 .20 .17 .17 Net gains (losses) (both realized and unrealized) 1.80 2.65 1.51 1.24 - ------------------------------------------------------------------------------- Total from investment operations 2.03 2.85 1.68 1.41 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.22) (.19) (.16) (.17) Distributions from realized gains (.55) -- -- -- - ------------------------------------------------------------------------------- Total distributions (.77) (.19) (.16) (.17) - ------------------------------------------------------------------------------- Net asset value, end of period $15.09 $13.83 $11.17 $9.65 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $2,877 $1,679 $843 $370 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(c),(d) .91% .84% .86% .76% - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 1.61% 1.66% 1.77% 2.13% - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 27% 25% 19% 39% - ------------------------------------------------------------------------------- Total return(f) 15.19% 25.59% 17.53% 17.00% - -------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) For the period from Sept. 1, 2006 to Dec. 31, 2006. (c) Expense ratio is based on total expenses of the Fund before reduction of earnings and bank fee credits on cash balances. Includes the impact of a performance incentive adjustment fee, if any. (d) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. (e) Adjusted to an annual basis. (f) Total return does not reflect payment of the expenses that apply to the variable accounts or any contract charges. (g) Not annualized. - -------------------------------------------------------------------------------- 132 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Emerging Markets Fund
PER SHARE INCOME AND CAPITAL CHANGES(a) SIX MONTHS ENDED JUNE 30, 2007 PERIOD ENDED DEC. 31, (UNAUDITED) 2006(B) Net asset value, beginning of period $17.35 $16.32 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .08 (.02) Net gains (losses) (both realized and unrealized) 2.39 3.21 - ------------------------------------------------------------------------------- Total from investment operations 2.47 3.19 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.06) -- Distributions from realized gains (1.00) (2.16) - ------------------------------------------------------------------------------- Total distributions (1.06) (2.16) - ------------------------------------------------------------------------------- Net asset value, end of period $18.76 $17.35 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $685 $548 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(c),(d) 1.53%(e) 1.51%(e) - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets .97%(e) (.36%)(e) - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 58% 46% - ------------------------------------------------------------------------------- Total return(g) 14.94%(h) 20.17%(h) - ------------------------------------------------------------------------------- PER SHARE INCOME AND CAPITAL CHANGE PER SHARE INCOME AND CAPITAL CHANGES(a) YEAR ENDED AUG. 31, 2006 2005 2004 2003 Net asset value, beginning of period $13.14 $9.80 $8.44 $7.04 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .09 .06 .09 .04 Net gains (losses) (both realized and unrealized) 3.85 3.72 1.39 1.38 - ------------------------------------------------------------------------------- Total from investment operations 3.94 3.78 1.48 1.42 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.06) (.06) (.12) (.02) Distributions from realized gains (.70) (.38) -- -- - ------------------------------------------------------------------------------- Total distributions (.76) (.44) (.12) (.02) - ------------------------------------------------------------------------------- Net asset value, end of period $16.32 $13.14 $9.80 $8.44 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $427 $192 $46 $16 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(c),(d) 1.54% 1.55% 1.61%(f) 1.75%(f) - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets .68% .58% .65% .67% - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 146% 120% 117% 191% - ------------------------------------------------------------------------------- Total return(g) 30.97% 39.60% 17.63% 20.25% - -------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) For the period from Sept. 1, 2006 to Dec. 31, 2006. (c) Expense ratio is based on total expenses of the Fund before reduction of earnings and bank fee credits on cash balances. Includes the impact of a performance incentive adjustment fee, if any. (d) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. (e) Adjusted to an annual basis. (f) The Investment Manager and its affiliates waived/reimbursed the Fund for certain expenses. Had they not done so, the annual ratios of expenses would have been 1.67% and 2.04% for the years ended Aug. 31, 2004 and 2003, respectively. (g) Total return does not reflect payment of the expenses that apply to the variable accounts or any contract charges. (h) Not annualized. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 133 RiverSource VP - Fundamental Value Fund
PER SHARE INCOME AND CAPITAL CHANGES(a) SIX MONTHS ENDED JUNE 30, 2007 PERIOD ENDED DEC. 31, (UNAUDITED) 2006(B) Net asset value, beginning of period $10.92 $10.03 - ----------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .09 .03 Net gains (losses) (both realized and unrealized) .62 .91 - ----------------------------------------------------------------------------------------------- Total from investment operations .71 .94 - ----------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.09) (.02) Distributions from realized gains -- (.02) Tax return of capital -- (.01) - ----------------------------------------------------------------------------------------------- Total distributions (.09) (.05) - ----------------------------------------------------------------------------------------------- Net asset value, end of period $11.54 $10.92 - ----------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $640 $397 - ----------------------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(d),(e) .99%(f) 1.02%(f) - ----------------------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 1.12%(f) .83%(f) - ----------------------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 2% 3% - ----------------------------------------------------------------------------------------------- Total return(h) 6.26%(i) 9.30%(i) - ----------------------------------------------------------------------------------------------- PER SHARE INCOME AND CAPITAL CHANGES(a) YEAR ENDED AUG. 31, 2006(C) Net asset value, beginning of period $10.06 - ----------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .02 Net gains (losses) (both realized and unrealized) (.03) - ----------------------------------------------------------------------------------------------- Total from investment operations (.01) - ----------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.02) Distributions from realized gains -- Tax return of capital -- - ----------------------------------------------------------------------------------------------- Total distributions (.02) - ----------------------------------------------------------------------------------------------- Net asset value, end of period $10.03 - ----------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $232 - ----------------------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(d),(e) 1.07%(f),(g) - ----------------------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 1.27%(f) - ----------------------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 3% - ----------------------------------------------------------------------------------------------- Total return(h) (.05%)(i) - -----------------------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) For the period from Sept. 1, 2006 to Dec. 31, 2006. (c) For the period from May 1, 2006 (date the Fund became available) to Aug. 31, 2006. (d) Expense ratio is based on total expenses of the Fund before reduction of earnings and bank fee credits on cash balances. Includes the impact of a performance incentive adjustment fee, if any. (e) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. (f) Adjusted to an annual basis. (g) The Investment Manager and its affiliates waived/reimbursed the Fund for certain expenses. Had they not done so, the annual ratio of expenses would have been 1.15% for the period ended Aug. 31, 2006. (h) Total return does not reflect payment of the expenses that apply to the variable accounts or any contract charges. (i) Not annualized. RiverSource VP - Global Bond Fund
PER SHARE INCOME AND CAPITAL CHANGES(a) SIX MONTHS ENDED JUNE 30, 2007 PERIOD ENDED DEC. 31, (UNAUDITED) 2006(B) Net asset value, beginning of period $10.90 $10.79 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .18 .12 Net gains (losses) (both realized and unrealized) (.10) .11 - ------------------------------------------------------------------------------- Total from investment operations .08 .23 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.18) (.12) Distributions from realized gains -- -- - ------------------------------------------------------------------------------- Total distributions (.18) (.12) - ------------------------------------------------------------------------------- Net asset value, end of period $10.80 $10.90 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $944 $782 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(c),(d) 1.02%(e) 1.00%(e) - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 3.25%(e) 3.22%(e) - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 35% 20% - ------------------------------------------------------------------------------- Total return(f) .70%(g) 2.15%(g) - ------------------------------------------------------------------------------- PER SHARE INCOME AND CAPITAL CHANGE PER SHARE INCOME AND CAPITAL CHANGES(a) YEAR ENDED AUG. 31, 2006 2005 2004 2003 Net asset value, beginning of period $11.02 $10.82 $10.40 $10.02 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .30 .34 .35 .34 Net gains (losses) (both realized and unrealized) (.17) .39 .73 .61 - ------------------------------------------------------------------------------- Total from investment operations .13 .73 1.08 .95 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.31) (.53) (.66) (.57) Distributions from realized gains (.05) -- -- -- - ------------------------------------------------------------------------------- Total distributions (.36) (.53) (.66) (.57) - ------------------------------------------------------------------------------- Net asset value, end of period $10.79 $11.02 $10.82 $10.40 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $692 $575 $409 $312 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(c),(d) 1.06% 1.08% 1.08% 1.09% - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 2.85% 2.63% 2.76% 3.08% - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 65% 79% 105% 102% - ------------------------------------------------------------------------------- Total return(f) 1.27% 6.75% 10.57% 9.56% - -------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) For the period from Sept. 1, 2006 to Dec. 31, 2006. (c) Expense ratio is based on total expenses of the Fund before reduction of earnings and bank fee credits on cash balances. (d) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. (e) Adjusted to an annual basis. (f) Total return does not reflect payment of the expenses that apply to the variable accounts or any contract charges. (g) Not annualized. - -------------------------------------------------------------------------------- 134 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Global Inflation Protected Securities Fund
PER SHARE INCOME AND CAPITAL CHANGES(a) SIX MONTHS ENDED JUNE 30, 2007 PERIOD ENDED DEC. 31, (UNAUDITED) 2006(B) Net asset value, beginning of period $9.76 $10.04 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .33 .06 Net gains (losses) (both realized and unrealized) (.34) (.10) - ------------------------------------------------------------------------------- Total from investment operations (.01) (.04) - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.08) (.24) Distributions from realized gains -- -- - ------------------------------------------------------------------------------- Total distributions (.08) (.24) - ------------------------------------------------------------------------------- Net asset value, end of period $9.67 $9.76 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $837 $582 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(d),(e) .72%(f),(g) .72%(f) - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 5.25%(f) 1.09%(f) - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 34% --% - ------------------------------------------------------------------------------- Total return(h) (.16%)(i) (.49%)(i) - ------------------------------------------------------------------------------- PER SHARE INCOME AND CAPITAL CHANGE PER SHARE INCOME AND CAPITAL CHANGES(a) YEAR ENDED AUG. 31, 2006 2005(C) Net asset value, beginning of period $10.19 $10.00 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .47 .32 Net gains (losses) (both realized and unrealized) (.26) .19 - ------------------------------------------------------------------------------- Total from investment operations .21 .51 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.34) (.32) Distributions from realized gains (.02) -- - ------------------------------------------------------------------------------- Total distributions (.36) (.32) - ------------------------------------------------------------------------------- Net asset value, end of period $10.04 $10.19 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $403 $116 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(d),(e) .72%(g) .75%(f),(g) - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 4.23% 3.42%(f) - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 75% 29% - ------------------------------------------------------------------------------- Total return(h) 2.18% 5.22%(i) - -------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) For the period from Sept. 1, 2006 to Dec. 31, 2006. (c) For the period from Sept. 13, 2004 (date the Fund became available) to Aug. 31, 2005. (d) Expense ratio is based on total expenses of the Fund before reduction of earnings and bank fee credits on cash balances. (e) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. (f) Adjusted to an annual basis. (g) The Investment Manager and its affiliates waived/reimbursed the Fund for certain expenses. Had they not done so, the annual ratios of expenses would have been 0.74% for the six months ended June 30, 2007 and 0.77% and 0.87% for the periods ended Aug. 31, 2006 and 2005, respectively. (h) Total return does not reflect payment of the expenses that apply to the variable accounts or any contract charges. (i) Not annualized. RiverSource VP - Growth Fund
PER SHARE INCOME AND CAPITAL CHANGES(a) SIX MONTHS ENDED JUNE 30, 2007 PERIOD ENDED DEC. 31, (UNAUDITED) 2006(B) Net asset value, beginning of period $7.50 $6.93 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .06 .01 Net gains (losses) (both realized and unrealized) .37 .57 - ------------------------------------------------------------------------------- Total from investment operations .43 .58 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.07) (.01) - ------------------------------------------------------------------------------- Net asset value, end of period $7.86 $7.50 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $666 $640 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(c),(d) .96%(e) 1.01%(e) - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 1.53%(e) .59%(e) - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 58% 30% - ------------------------------------------------------------------------------- Total return(f) 5.78%(g) 8.27%(g) - ------------------------------------------------------------------------------- PER SHARE INCOME AND CAPITAL CHANGE PER SHARE INCOME AND CAPITAL CHANGES(a) YEAR ENDED AUG. 31, 2006 2005 2004 2003 Net asset value, beginning of period $6.61 $5.69 $5.45 $5.00 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .06 .03 .02 .01 Net gains (losses) (both realized and unrealized) .33 .91 .24 .45 - ------------------------------------------------------------------------------- Total from investment operations .39 .94 .26 .46 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.07) (.02) (.02) (.01) - ------------------------------------------------------------------------------- Net asset value, end of period $6.93 $6.61 $5.69 $5.45 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $612 $392 $261 $223 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(c),(d) .91% .92% .85% .99% - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 1.04% .42% .27% .20% - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 156% 154% 192% 199% - ------------------------------------------------------------------------------- Total return(f) 5.79% 16.74% 4.64% 9.29% - -------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) For the period from Sept. 1, 2006 to Dec. 31, 2006. (c) Expense ratio is based on total expenses of the Fund before reduction of earnings and bank fee credits on cash balances. Includes the impact of a performance incentive adjustment fee, if any. (d) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. (e) Adjusted to an annual basis. (f) Total return does not reflect payment of the expenses that apply to the variable accounts or any contract charges. (g) Not annualized. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 135 RiverSource VP - High Yield Bond Fund
PER SHARE INCOME AND CAPITAL CHANGES(a) SIX MONTHS ENDED JUNE 30, 2007 PERIOD ENDED DEC. 31, (UNAUDITED) 2006(B) Net asset value, beginning of period $6.85 $6.68 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .24 .16 Net gains (losses) (both realized and unrealized) (.01) .19 - ------------------------------------------------------------------------------- Total from investment operations .23 .35 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.24) (.18) - ------------------------------------------------------------------------------- Net asset value, end of period $6.84 $6.85 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $1,215 $1,216 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(c),(d) .87%(e) .88%(e) - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 7.00%(e) 7.35%(e) - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 52% 29% - ------------------------------------------------------------------------------- Total return(f) 3.29%(g) 5.43%(g) - ------------------------------------------------------------------------------- PER SHARE INCOME AND CAPITAL CHANGE PER SHARE INCOME AND CAPITAL CHANGES(a) YEAR ENDED AUG. 31, 2006 2005 2004 2003 Net asset value, beginning of period $6.76 $6.60 $6.22 $5.66 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .47 .44 .47 .48 Net gains (losses) (both realized and unrealized) (.09) .16 .38 .54 - ------------------------------------------------------------------------------- Total from investment operations .38 .60 .85 1.02 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.46) (.44) (.47) (.46) - ------------------------------------------------------------------------------- Net asset value, end of period $6.68 $6.76 $6.60 $6.22 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $1,192 $1,246 $1,130 $843 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(c),(d) .87% .83% .82% .83% - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 7.02% 6.58% 7.30% 8.31% - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 106% 106% 139% 141% - ------------------------------------------------------------------------------- Total return(f) 5.76% 9.31% 14.03% 18.81% - -------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) For the period from Sept. 1, 2006 to Dec. 31, 2006. (c) Expense ratio is based on total expenses of the Fund before reduction of earnings and bank fee credits on cash balances. (d) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. (e) Adjusted to an annual basis. (f) Total return does not reflect payment of the expenses that apply to the variable accounts or any contract charges. (g) Not annualized. RiverSource VP - Income Opportunities Fund
PER SHARE INCOME AND CAPITAL CHANGES(a) SIX MONTHS ENDED JUNE 30, 2007 PERIOD ENDED DEC. 31, (UNAUDITED) 2006(B) Net asset value, beginning of period $10.32 $10.08 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .34 .22 Net gains (losses) (both realized and unrealized) (.08) .24 - ------------------------------------------------------------------------------- Total from investment operations .26 .46 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.34) (.22) Distributions from realized gains (.03) -- - ------------------------------------------------------------------------------- Total distributions (.37) (.22) - ------------------------------------------------------------------------------- Net asset value, end of period $10.21 $10.32 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $626 $409 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(d),(e) .91%(f) .90%(f) - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 6.66%(f) 6.72%(f) - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 45% 29% - ------------------------------------------------------------------------------- Total return(h) 2.49%(i) 4.66%(i) - ------------------------------------------------------------------------------- PER SHARE INCOME AND CAPITAL CHANGE PER SHARE INCOME AND CAPITAL CHANGES(a) YEAR ENDED AUG. 31, 2006 2005 2004(C) Net asset value, beginning of period $10.39 $10.29 $9.93 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .64 .59 .15 Net gains (losses) (both realized and unrealized) (.26) .18 .36 - ------------------------------------------------------------------------------- Total from investment operations .38 .77 .51 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.64) (.59) (.15) Distributions from realized gains (.05) (.08) -- - ------------------------------------------------------------------------------- Total distributions (.69) (.67) (.15) - ------------------------------------------------------------------------------- Net asset value, end of period $10.08 $10.39 $10.29 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $259 $45 $16 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(d),(e) .96% .99%(g) .99%(f),(g) - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 6.39% 5.69% 6.03%(f) - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 87% 93% 36% - ------------------------------------------------------------------------------- Total return(h) 3.76% 7.73% 5.17%(i) - -------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) For the period from Sept. 1, 2006 to Dec. 31, 2006. (c) For the period from June 1, 2004 (date the Fund became available) to Aug. 31, 2004. (d) Expense ratio is based on total expenses of the Fund before reduction of earnings and bank fee credits on cash balances. (e) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. (f) Adjusted to an annual basis. (g) The Investment Manager and its affiliates waived/reimbursed the Fund for certain expenses. Had they not done so, the annual ratios of expenses would have been 1.03% and 1.55% for the periods ended Aug. 31, 2005 and 2004, respectively. (h) Total return does not reflect payment of the expenses that apply to the variable accounts or any contract charges. (i) Not annualized. - -------------------------------------------------------------------------------- 136 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - International Opportunity Fund
PER SHARE INCOME AND CAPITAL CHANGES(a) SIX MONTHS ENDED JUNE 30, 2007 PERIOD ENDED DEC. 31, (UNAUDITED) 2006(B) Net asset value, beginning of period $13.19 $12.24 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .11 .02 Net gains (losses) (both realized and unrealized) 1.20 1.04 - ------------------------------------------------------------------------------- Total from investment operations 1.31 1.06 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.11) (.10) Tax return of capital -- (.01) - ------------------------------------------------------------------------------- Total distributions (.11) (.11) - ------------------------------------------------------------------------------- Net asset value, end of period $14.39 $13.19 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $1,303 $1,311 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(c),(d) 1.02%(e) 1.08%(e) - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 1.55%(e) .55%(e) - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 47% 20% - ------------------------------------------------------------------------------- Total return(f) 9.95%(g) 8.72%(g) - ------------------------------------------------------------------------------- PER SHARE INCOME AND CAPITAL CHANGE PER SHARE INCOME AND CAPITAL CHANGES(a) YEAR ENDED AUG. 31, 2006 2005 2004 2003 Net asset value, beginning of period $10.02 $8.23 $7.19 $7.00 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .12 .11 .08 .08 Net gains (losses) (both realized and unrealized) 2.27 1.80 1.05 .16 - ------------------------------------------------------------------------------- Total from investment operations 2.39 1.91 1.13 .24 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.17) (.12) (.09) (.05) Tax return of capital -- -- -- -- - ------------------------------------------------------------------------------- Total distributions (.17) (.12) (.09) (.05) - ------------------------------------------------------------------------------- Net asset value, end of period $12.24 $10.02 $8.23 $7.19 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $1,266 $1,184 $974 $738 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(c),(d) 1.12% 1.04% .98% 1.06% - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 1.04% 1.19% .99% 1.19% - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 74% 90% 142% 102% - ------------------------------------------------------------------------------- Total return(f) 23.82% 23.29% 15.77% 3.48% - -------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) For the period from Sept. 1, 2006 to Dec. 31, 2006. (c) Expense ratio is based on total expenses of the Fund before reduction of earnings and bank fee credits on cash balances. Includes the impact of a performance incentive adjustment fee, if any. (d) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. (e) Adjusted to an annual basis. (f) Total return does not reflect payment of the expenses that apply to the variable accounts or any contract charges. (g) Not annualized. RiverSource VP - Large Cap Equity Fund
PER SHARE INCOME AND CAPITAL CHANGES(a) SIX MONTHS ENDED JUNE 30, 2007 PERIOD ENDED DEC. 31, (UNAUDITED) 2006(B) Net asset value, beginning of period $25.04 $22.91 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .19 .09 Net gains (losses) (both realized and unrealized) 1.38 2.10 - ------------------------------------------------------------------------------- Total from investment operations 1.57 2.19 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.22) (.06) - ------------------------------------------------------------------------------- Net asset value, end of period $26.39 $25.04 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $3,506 $3,737 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(c),(d) .87%(e) .83%(e) - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 1.44%(e) 1.16%(e) - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 35% 21% - ------------------------------------------------------------------------------- Total return(f) 6.29%(g) 9.59%(g) - ------------------------------------------------------------------------------- PER SHARE INCOME AND CAPITAL CHANGE PER SHARE INCOME AND CAPITAL CHANGES(a) YEAR ENDED AUG. 31, 2006 2005 2004 2003 Net asset value, beginning of period $21.48 $19.32 $18.04 $16.48 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .29 .24 .14 .10 Net gains (losses) (both realized and unrealized) 1.43 2.15 1.28 1.56 - ------------------------------------------------------------------------------- Total from investment operations 1.72 2.39 1.42 1.66 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.29) (.23) (.14) (.10) - ------------------------------------------------------------------------------- Net asset value, end of period $22.91 $21.48 $19.32 $18.04 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $3,733 $2,510 $2,535 $1,982 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(c),(d) .82% .80% .85% .85% - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 1.30% 1.13% .72% .62% - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 85% 132% 114% 115% - ------------------------------------------------------------------------------- Total return(f) 8.02% 12.42% 7.87% 10.16% - -------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) For the period from Sept. 1, 2006 to Dec. 31, 2006. (c) Expense ratio is based on total expenses of the Fund before reduction of earnings and bank fee credits on cash balances. Includes the impact of a performance incentive adjustment fee, if any. (d) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds which it invests. Such indirect expenses are not included in the above reported expense ratios. (e) Adjusted to an annual basis. (f) Total return does not reflect payment of the expenses that apply to the variable accounts or any contract charges. (g) Not annualized. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 137 RiverSource VP - Large Cap Value Fund
PER SHARE INCOME AND CAPITAL CHANGES(a) SIX MONTHS ENDED JUNE 30, 2007 PERIOD ENDED DEC. 31, (UNAUDITED) 2006(B) Net asset value, beginning of period $12.23 $11.71 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .08 .05 Net gains (losses) (both realized and unrealized) .64 1.13 - ------------------------------------------------------------------------------- Total from investment operations .72 1.18 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.08) (.05) Distributions from realized gains (.05) (.61) - ------------------------------------------------------------------------------- Total distributions (.13) (.66) - ------------------------------------------------------------------------------- Net asset value, end of period $12.82 $12.23 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $27 $25 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(d),(e),(f) 1.05%(g) 1.05%(g) - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 1.28%(g) 1.33%(g) - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 23% 13% - ------------------------------------------------------------------------------- Total return(h) 5.92%(i) 10.15%(i) - ------------------------------------------------------------------------------- PER SHARE INCOME AND CAPITAL CHANGE PER SHARE INCOME AND CAPITAL CHANGES(a) YEAR ENDED AUG. 31, 2006 2005 2004(C) Net asset value, beginning of period $10.99 $10.00 $9.99 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .17 .14 .05 Net gains (losses) (both realized and unrealized) .98 1.06 .02 - ------------------------------------------------------------------------------- Total from investment operations 1.15 1.20 .07 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.17) (.14) (.06) Distributions from realized gains (.26) (.07) -- - ------------------------------------------------------------------------------- Total distributions (.43) (.21) (.06) - ------------------------------------------------------------------------------- Net asset value, end of period $11.71 $10.99 $10.00 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $21 $15 $7 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(d),(e),(f) 1.02% 1.05% 1.05%(g) - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 1.55% 1.37% 1.03%(g) - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 49% 52% 24% - ------------------------------------------------------------------------------- Total return(h) 10.75% 12.04% .69%(i) - -------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) For the period from Sept. 1, 2006 to Dec. 31, 2006. (c) For the period from Feb. 4, 2004 (date the Fund became available) to Aug. 31, 2004. (d) Expense ratio is based on total expenses of the Fund before reduction of earnings and bank fee credits on cash balances. Includes the impact of a performance incentive adjustment fee, if any. (e) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. (f) The Investment Manager and its affiliates waived/reimbursed the Fund for certain expenses. Had they not done so, the annual ratios of expenses would have been 1.08% for the period ended June 30, 2007, 1.23% for the period ended Dec. 31, 2006 and 1.20%, 2.55% and 2.85% for the periods ended Aug. 31, 2006, 2005 and 2004, respectively. (g) Adjusted to an annual basis. (h) Total return does not reflect payment of the expenses that apply to the variable accounts or any contract charges. (i) Not annualized. RiverSource VP - Mid Cap Growth Fund
PER SHARE INCOME AND CAPITAL CHANGES(a) SIX MONTHS ENDED JUNE 30, 2007 PERIOD ENDED DEC. 31, (UNAUDITED) 2006(B) Net asset value, beginning of period $11.42 $10.96 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .03 .03 Net gains (losses) (both realized and unrealized) 1.28 .91 - ------------------------------------------------------------------------------- Total from investment operations 1.31 .94 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.01) (.03) Distributions from realized gains (.12) (.45) - ------------------------------------------------------------------------------- Total distributions (.13) (.48) - ------------------------------------------------------------------------------- Net asset value, end of period $12.60 $11.42 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $653 $690 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(c),(d) .84%(e) .88%(e) - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets .41%(e) .70%(e) - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 37% 24% - ------------------------------------------------------------------------------- Total return(f) 11.55%(g) 8.54%(g) - ------------------------------------------------------------------------------- PER SHARE INCOME AND CAPITAL CHANGE PER SHARE INCOME AND CAPITAL CHANGES(a) YEAR ENDED AUG. 31, 2006 2005 2004 2003 Net asset value, beginning of period $12.43 $10.11 $10.09 $8.54 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (.01) (.04) (.05) (.05) Net gains (losses) (both realized and unrealized) (.44) 2.36 .07 1.60 - ------------------------------------------------------------------------------- Total from investment operations (.45) 2.32 .02 1.55 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income -- -- -- -- Distributions from realized gains (1.02) -- -- -- - ------------------------------------------------------------------------------- Total distributions (1.02) -- -- -- - ------------------------------------------------------------------------------- Net asset value, end of period $10.96 $12.43 $10.11 $10.09 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $709 $255 $225 $170 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(c),(d) .92% .82% .85% 1.06% - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets (.14%) (.32%) (.49%) (.71%) - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 43% 34% 25% 19% - ------------------------------------------------------------------------------- Total return(f) (4.43%) 23.03% .13% 18.20% - -------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) For the period from Sept. 1, 2006 to Dec. 31, 2006. (c) Expense ratio is based on total expenses of the Fund before reduction of earnings and bank fee credits on cash balances. Includes the impact of a performance incentive adjustment fee, if any. (d) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. (e) Adjusted to an annual basis. (f) Total return does not reflect payment of the expenses that apply to the variable accounts or any contract charges. (g) Not annualized. - -------------------------------------------------------------------------------- 138 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Mid Cap Value Fund
PER SHARE INCOME AND CAPITAL CHANGES(a) SIX MONTHS ENDED JUNE 30, 2007 PERIOD ENDED DEC. 31, (UNAUDITED) 2006(B) Net asset value, beginning of period $13.49 $12.65 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .10 .05 Net gains (losses) (both realized and unrealized) 1.96 .98 - ------------------------------------------------------------------------------- Total from investment operations 2.06 1.03 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.05) (.05) Distributions from realized gain (.01) (.14) - ------------------------------------------------------------------------------- Total distributions (.06) (.19) - ------------------------------------------------------------------------------- Net asset value, end of period $15.49 $13.49 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $572 $370 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(d),(e) .98%(f) 1.07%(f) - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 1.52%(f) 1.23%(f) - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 17% 4% - ------------------------------------------------------------------------------- Total return(h) 15.41%(i) 8.07%(i) - ------------------------------------------------------------------------------- PER SHARE INCOME AND CAPITAL CHANGE PER SHARE INCOME AND CAPITAL CHANGES(a) YEAR ENDED AUG. 31, 2006 2005(C) Net asset value, beginning of period $11.42 $10.15 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .09 .01 Net gains (losses) (both realized and unrealized) 1.27 1.28 - ------------------------------------------------------------------------------- Total from investment operations 1.36 1.29 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.09) (.02) Distributions from realized gain (.04) -- - ------------------------------------------------------------------------------- Total distributions (.13) (.02) - ------------------------------------------------------------------------------- Net asset value, end of period $12.65 $11.42 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $228 $7 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(d),(e) 1.11%(g) 1.08%(f),(g) - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 1.02% .62%(f) - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 60% 7% - ------------------------------------------------------------------------------- Total return(h) 11.93% 12.70%(i) - -------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) For the period from Sept. 1, 2006 to Dec. 31, 2006. (c) For the period from May 2, 2005 (date the Fund became available) to Aug. 31, 2005. (d) Expense ratio is based on total expenses of the Fund before reduction of earnings and bank fee credits on cash balances. Includes the impact of a performance incentive adjustment fee, if any. (e) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. (f) Adjusted to an annual basis. (g) The Investment Manager and its affiliates waived/reimbursed the Fund for certain expenses. Had they not done so, the annual ratios of expenses would have been 1.44% and 2.97% for the periods ended Aug. 31, 2006 and 2005, respectively. (h) Total return does not reflect payment of the expenses that apply to the variable accounts or any contract charges. (i) Not annualized. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 139 RiverSource VP - S&P 500 Index Fund
PER SHARE INCOME AND CAPITAL CHANGES(a) SIX MONTHS ENDED JUNE 30, 2007 PERIOD ENDED DEC. 31, (UNAUDITED) 2006(B) Net asset value, beginning of period $9.59 $8.85 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .07 .04 Net gains (losses) (both realized and unrealized) .57 .77 - ------------------------------------------------------------------------------- Total from investment operations .64 .81 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.09) (.03) Distributions from realized gains (.07) (.04) - ------------------------------------------------------------------------------- Total distributions (.16) (.07) - ------------------------------------------------------------------------------- Net asset value, end of period $10.07 $9.59 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $406 $392 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(c),(d),(e) .50%(f) .50%(f) - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 1.45%(f) 1.44%(f) - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 2% 2% - ------------------------------------------------------------------------------- Total return(g) 6.72%(h) 9.27%(h) - ------------------------------------------------------------------------------- PER SHARE INCOME AND CAPITAL CHANGE PER SHARE INCOME AND CAPITAL CHANGES(a) YEAR ENDED AUG. 31, 2006 2005 2004 2003 Net asset value, beginning of period $8.30 $7.54 $6.88 $6.24 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .13 .13 .09 .08 Net gains (losses) (both realized and unrealized) .57 .76 .66 .64 - ------------------------------------------------------------------------------- Total from investment operations .70 .89 .75 .72 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.13) (.13) (.09) (.08) Distributions from realized gains (.02) -- -- -- - ------------------------------------------------------------------------------- Total distributions (.15) (.13) (.09) (.08) - ------------------------------------------------------------------------------- Net asset value, end of period $8.85 $8.30 $7.54 $6.88 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $367 $367 $283 $171 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(c),(d),(e) .50% .50% .49% .50% - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 1.46% 1.65% 1.21% 1.31% - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 6% 5% --% 5% - ------------------------------------------------------------------------------- Total return(g) 8.38%(i) 11.98% 10.84% 11.51% - -------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) For the period from Sept. 1, 2006 to Dec. 31, 2006. (c) Expense ratio is based on total expenses of the Fund before reduction of earnings and bank fee credits on cash balances. (d) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. (e) The Investment Manager and its affiliates waived/reimbursed the Fund for certain expenses. Had they not done so, the annual ratios of expenses would have been 0.52% for the six months ended June 30, 2007, 0.51% for the period ended Dec. 31, 2006 and 0.53%, 0.56%, 0.57%, and 0.64% for the years ended Aug. 31, 2006, 2005, 2004 and 2003, respectively. (f) Adjusted to an annual basis. (g) Total return does not reflect payment of the expenses that apply to the variable accounts or any contract charges. (h) Not annualized. (i) The Fund received a one time transaction fee reimbursement by Ameriprise Trust Company. Had the Fund not received this reimbursement, the total return would have been lower by 0.06%. - -------------------------------------------------------------------------------- 140 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Select Value Fund
PER SHARE INCOME AND CAPITAL CHANGES(a) SIX MONTHS ENDED JUNE 30, 2007 PERIOD ENDED DEC. 31, (UNAUDITED) 2006(B) Net asset value, beginning of period $11.37 $11.72 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .05 .04 Net gains (losses) (both realized and unrealized) 1.22 .79 - ------------------------------------------------------------------------------- Total from investment operations 1.27 .83 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.06) (.03) Distributions from realized gains (.11) (1.15) - ------------------------------------------------------------------------------- Total distributions (.17) (1.18) - ------------------------------------------------------------------------------- Net asset value, end of period $12.47 $11.37 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $33 $28 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(d),(e),(f) 1.02%(g) 1.09%(g) - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets .85%(g) .95%(g) - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 45% 112% - ------------------------------------------------------------------------------- Total return(h) 11.19%(i) 7.13%(i) - ------------------------------------------------------------------------------- PER SHARE INCOME AND CAPITAL CHANGE PER SHARE INCOME AND CAPITAL CHANGES(a) YEAR ENDED AUG. 31, 2006 2005 2004(C) Net asset value, beginning of period $11.45 $9.95 $9.98 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .25 .05 .02 Net gains (losses) (both realized and unrealized) .44 1.55 (.03) - ------------------------------------------------------------------------------- Total from investment operations .69 1.60 (.01) - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.25) (.05) (.02) Distributions from realized gains (.17) (.05) -- - ------------------------------------------------------------------------------- Total distributions (.42) (.10) (.02) - ------------------------------------------------------------------------------- Net asset value, end of period $11.72 $11.45 $9.95 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $27 $23 $9 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(d),(e),(f) 1.08% 1.15% 1.15%(g) - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 2.19% .45% .50%(g) - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 35% 31% 13% - ------------------------------------------------------------------------------- Total return(h) 6.17% 16.18% (.11%)(i) - -------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) For the period from Sept. 1, 2006 to Dec. 31, 2006. (c) For the period from Feb. 4, 2004 (date the Fund became available) to Aug. 31, 2004. (d) Expense ratio is based on total expenses of the Fund before reduction of earnings and bank fee credits on cash balances. Includes the impact of a performance incentive adjustment fee, if any. (e) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. (f) The Investment Manager and its affiliates waived/reimbursed the Fund for certain expenses. Had they not done so, the annual ratios of expenses would have been 1.65% for the six months ended June 30, 2007, 1.22% for the period ended Dec. 31, 2006 and 1.19%, 1.17% and 1.97% for the periods ended Aug. 31, 2006, 2005 and 2004, respectively. (g) Adjusted to an annual basis. (h) Total return does not reflect payment of the expenses that apply to the variable accounts or any contract charges. (i) Not annualized. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 141 RiverSource VP - Short Duration U.S. Government Fund
PER SHARE INCOME AND CAPITAL CHANGES(a) SIX MONTHS ENDED JUNE 30, 2007 PERIOD ENDED DEC. 31, (UNAUDITED) 2006(B) Net asset value, beginning of period $10.13 $10.11 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .21 .13 Net gains (losses) (both realized and unrealized) (.04) .02 - ------------------------------------------------------------------------------- Total from investment operations .17 .15 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.21) (.13) Distributions from realized gains -- -- - ------------------------------------------------------------------------------- Total distributions (.21) (.13) - ------------------------------------------------------------------------------- Net asset value, end of period $10.09 $10.13 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $452 $457 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(c),(d) .78%(e) .77%(e) - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 4.22%(e) 3.97%(e) - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 80% 58% - ------------------------------------------------------------------------------- Total return(f) 1.71%(g) 1.55%(g) - ------------------------------------------------------------------------------- PER SHARE INCOME AND CAPITAL CHANGE PER SHARE INCOME AND CAPITAL CHANGES(a) YEAR ENDED AUG. 31, 2006 2005 2004 2003 Net asset value, beginning of period $10.21 $10.34 $10.46 $10.55 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .36 .27 .25 .27 Net gains (losses) (both realized and unrealized) (.10) (.13) (.07) (.05) - ------------------------------------------------------------------------------- Total from investment operations .26 .14 .18 .22 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.36) (.27) (.25) (.27) Distributions from realized gains -- -- (.05) (.04) - ------------------------------------------------------------------------------- Total distributions (.36) (.27) (.30) (.31) - ------------------------------------------------------------------------------- Net asset value, end of period $10.11 $10.21 $10.34 $10.46 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $463 $484 $506 $479 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(c),(d) .82% .83% .82% .82% - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets 3.55% 2.67% 2.36% 2.47% - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 236% 171% 135% 179% - ------------------------------------------------------------------------------- Total return(f) 2.61% 1.43% 1.70% 2.06% - -------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) For the period from Sept. 1, 2006 to Dec. 31, 2006. (c) Expense ratio is based on total expenses of the Fund before reduction of earnings and bank fee credits on cash balances. (d) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. (e) Adjusted to an annual basis. (f) Total return does not reflect payment of the expenses that apply to the variable accounts or any contract charges. (g) Not annualized. RiverSource VP - Small Cap Advantage Fund
PER SHARE INCOME AND CAPITAL CHANGES(a) SIX MONTHS ENDED JUNE 30, 2007 PERIOD ENDED DEC. 31, (UNAUDITED) 2006(B) Net asset value, beginning of period $13.03 $13.80 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .02 .01 Net gains (losses) (both realized and unrealized) .79 1.11 - ------------------------------------------------------------------------------- Total from investment operations .81 1.12 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.01) (.01) Distributions from realized gains (.59) (1.88) - ------------------------------------------------------------------------------- Total distributions (.60) (1.89) - ------------------------------------------------------------------------------- Net asset value, end of period $13.24 $13.03 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $208 $220 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(c),(d) 1.01%(e) 1.08%(e) - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets .33%(e) .22%(e) - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 73% 74% - ------------------------------------------------------------------------------- Total return(f) 6.51%(g) 8.14%(g) - ------------------------------------------------------------------------------- PER SHARE INCOME AND CAPITAL CHANGE PER SHARE INCOME AND CAPITAL CHANGES(a) YEAR ENDED AUG. 31, 2006 2005 2004 2003 Net asset value, beginning of period $15.11 $12.64 $11.25 $8.79 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) -- (.04) (.05) (.02) Net gains (losses) (both realized and unrealized) .61 3.14 1.44 2.48 - ------------------------------------------------------------------------------- Total from investment operations .61 3.10 1.39 2.46 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income -- -- -- -- Distributions from realized gains (1.92) (.63) -- -- - ------------------------------------------------------------------------------- Total distributions (1.92) (.63) -- -- - ------------------------------------------------------------------------------- Net asset value, end of period $13.80 $15.11 $12.64 $11.25 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $218 $235 $184 $102 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(c),(d) 1.06% 1.07% 1.10% 1.19% - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets (.02%) (.28%) (.42%) (.20%) - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 132% 112% 104% 124% - ------------------------------------------------------------------------------- Total return(f) 4.40% 24.88% 12.40% 27.96% - -------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) For the period from Sept. 1, 2006 to Dec. 31, 2006. (c) Expense ratio is based on total expenses of the Fund before reduction of earnings and bank fee credits on cash balances. Includes the impact of a performance incentive adjustment fee, if any. (d) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it may invests. Such indirect expenses are not included in the above reported expense ratios. (e) Adjusted to an annual basis. (f) Total return does not reflect payment of the expenses that apply to the variable accounts or any contract charges. (g) Not annualized. - -------------------------------------------------------------------------------- 142 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP -- Small Cap Value Fund
PER SHARE INCOME AND CAPITAL CHANGES(a) SIX MONTHS ENDED JUNE 30, 2007 PERIOD ENDED DEC. 31, (UNAUDITED) 2006(B) Net asset value, beginning of period $14.89 $15.06 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .04 .02 Net gains (losses) (both realized and unrealized) .95 1.46 - ------------------------------------------------------------------------------- Total from investment operations .99 1.48 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.06) (.02) Distributions from realized gains (.41) (1.63) - ------------------------------------------------------------------------------- Total distributions (.47) (1.65) - ------------------------------------------------------------------------------- Net asset value, end of period $15.41 $14.89 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $729 $619 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(c),(d) 1.27%(e),(f) 1.26%(e),(f) - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets .52%(e) .48%(e) - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 32% 23% - ------------------------------------------------------------------------------- Total return(g) 6.76%(h) 9.99%(h) - ------------------------------------------------------------------------------- PER SHARE INCOME AND CAPITAL CHANGE PER SHARE INCOME AND CAPITAL CHANGES(a) YEAR ENDED AUG. 31, 2006 2005 2004 2003 Net asset value, beginning of period $14.46 $13.10 $11.39 $9.52 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .06 .02 (.02) (.03) Net gains (losses) (both realized and unrealized) 1.61 2.53 1.92 1.95 - ------------------------------------------------------------------------------- Total from investment operations 1.67 2.55 1.90 1.92 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.06) (.01) -- (.01) Distributions from realized gains (1.01) (1.18) (.19) (.04) - ------------------------------------------------------------------------------- Total distributions (1.07) (1.19) (.19) (.05) - ------------------------------------------------------------------------------- Net asset value, end of period $15.06 $14.46 $13.10 $11.39 - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $549 $412 $229 $134 - ------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(c),(d) 1.24%(f) 1.28% 1.27% 1.55% - ------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets .41% .12% (.20%) (.43%) - ------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 102% 65% 84% 87% - ------------------------------------------------------------------------------- Total return(g) 12.28% 20.02% 16.78% 20.24% - -------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) For the period from Sept. 1, 2006 to Dec. 31, 2006. (c) Expense ratio is based on total expenses of the Fund before reduction of earnings and bank fee credits on cash balances. Includes the impact of a performance incentive adjustment fee, if any. (d) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. (e) Adjusted to an annual basis. (f) The Investment Manager and its affiliates waived/reimbursed the Fund for certain expenses. Had they not done so, the annual ratios of expenses would have 1.32% for the six months ended June 30, 2007, 1.32% for the period ended Dec. 31, 2006 and 1.28% for the year ended Aug. 31, 2006. (g) Total return does not reflect payment of the expenses that apply to the variable accounts or any contract charges. (h) Not annualized. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 143 INVESTMENTS IN SECURITIES RiverSource VP - Balanced Fund JUNE 30, 2007 (UNAUDITED) (Percentages represent value of investments compared to net assets)
COMMON STOCKS (63.8%) ISSUER SHARES VALUE(A) AEROSPACE & DEFENSE (2.7%) Boeing 82,273 $7,911,372 DRS Technologies 35,486 2,032,283 General Dynamics 32,974 2,579,226 Goodrich 122,359 7,287,702 Honeywell Intl 224,748 12,648,818 L-3 Communications Holdings 38,858 3,784,381 Lockheed Martin 76,101 7,163,387 Northrop Grumman 59,830 4,658,962 United Technologies 71,056 5,040,002 --------------- Total 53,106,133 - ----------------------------------------------------------------------------------- BEVERAGES (0.6%) Coca-Cola 84,895 4,440,857 Constellation Brands Cl A 59,094(b) 1,434,802 PepsiCo 81,481 5,284,044 --------------- Total 11,159,703 - ----------------------------------------------------------------------------------- BIOTECHNOLOGY (0.2%) Amgen 23,505(b) 1,299,591 Biogen Idec 39,712(b) 2,124,592 --------------- Total 3,424,183 - ----------------------------------------------------------------------------------- BUILDING PRODUCTS (0.2%) Masco 128,928 3,670,580 - ----------------------------------------------------------------------------------- CAPITAL MARKETS (3.3%) Bank of New York Mellon 154,954 6,421,294 Blackstone Group LP 39,751(b,q) 1,163,512 Franklin Resources 9,853 1,305,227 Goldman Sachs Group 18,627 4,037,402 KKR Private Equity Investors LP Unit 87,970(k) 1,979,325 Lehman Brothers Holdings 199,566 14,871,658 Merrill Lynch & Co 154,188 12,887,033 Morgan Stanley 181,814 15,250,558 Oaktree Capital Group LLC Cl A Unit 48,000(b,d,k) 1,968,000 State Street 28,677 1,961,507 T Rowe Price Group 39,068 2,027,239 --------------- Total 63,872,755 - ----------------------------------------------------------------------------------- CHEMICALS (0.9%) Ashland 19,481 1,245,810 Dow Chemical 211,372 9,346,870 Eastman Chemical 53,175 3,420,748 EI du Pont de Nemours & Co 65,825 3,346,543 --------------- Total 17,359,971 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) COMMERCIAL BANKS (2.1%) Fifth Third Bancorp 33,266 $1,322,989 PNC Financial Services Group 61,868 4,428,511 US Bancorp 259,604 8,553,952 Wachovia 255,325 13,085,407 Wells Fargo & Co 363,525 12,785,174 --------------- Total 40,176,033 - ----------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES (0.1%) Avery Dennison 19,384(p) 1,288,648 - ----------------------------------------------------------------------------------- COMMUNICATIONS EQUIPMENT (1.2%) Alcatel-Lucent 24,906(c) 349,887 Alcatel-Lucent ADR 212,838(c) 2,979,732 Avaya 93,845(b) 1,580,350 Cisco Systems 174,897(b) 4,870,881 Motorola 216,431 3,830,829 Nokia ADR 110,977(c) 3,119,563 QUALCOMM 46,800 2,030,652 Telefonaktiebolaget LM Ericsson ADR 135,108(c) 5,389,458 --------------- Total 24,151,352 - ----------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS (1.7%) Dell 53,630(b) 1,531,137 Hewlett-Packard 262,512 11,713,285 Intl Business Machines 152,793 16,081,463 SanDisk 73,532(b) 3,598,656 --------------- Total 32,924,541 - ----------------------------------------------------------------------------------- CONSTRUCTION & ENGINEERING (0.1%) Fluor 13,352 1,487,013 KBR 54,910(b,p) 1,440,289 --------------- Total 2,927,302 - ----------------------------------------------------------------------------------- CONSUMER FINANCE (1.0%) American Express 93,479 5,719,045 Capital One Financial 179,527 14,082,098 --------------- Total 19,801,143 - ----------------------------------------------------------------------------------- CONTAINERS & PACKAGING (0.2%) Temple-Inland 61,993 3,814,429 - ----------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES (5.8%) Bank of America 888,371 43,432,458 Citigroup 885,255 45,404,729 JPMorgan Chase & Co 498,672 24,160,658 --------------- Total 112,997,845 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) DIVERSIFIED TELECOMMUNICATION SERVICES (3.2%) AT&T 760,863 $31,575,814 Citizens Communications 112,599 1,719,387 Deutsche Telekom 74,434(c) 1,379,116 Embarq 31,354 1,986,903 Verizon Communications 583,833 24,036,405 Windstream 109,761 1,620,072 --------------- Total 62,317,697 - ----------------------------------------------------------------------------------- ELECTRIC UTILITIES (2.0%) Entergy 75,603 8,115,982 Exelon 156,288 11,346,510 FPL Group 40,822 2,316,240 Hawaiian Electric Inds 74,673 1,769,003 Pinnacle West Capital 26,360 1,050,446 PPL 89,984 4,210,351 Progress Energy 25,443 1,159,946 Southern 254,305 8,720,119 --------------- Total 38,688,597 - ----------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT (0.2%) Emerson Electric 94,466 4,421,009 - ----------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES (0.8%) Baker Hughes 19,114 1,608,061 Cameron Intl 29,521(b) 2,109,866 Halliburton 73,862 2,548,239 Natl Oilwell Varco 20,816(b) 2,169,860 Pride Intl 48,778(b) 1,827,224 Transocean 18,202(b) 1,929,048 Weatherford Intl 68,776(b) 3,799,186 --------------- Total 15,991,484 - ----------------------------------------------------------------------------------- FOOD & STAPLES RETAILING (0.6%) CVS Caremark 136,023 4,958,038 Safeway 19,074 649,088 Wal-Mart Stores 138,265 6,651,930 --------------- Total 12,259,056 - ----------------------------------------------------------------------------------- FOOD PRODUCTS (0.8%) Campbell Soup 69,731 2,706,260 General Mills 47,808 2,792,943 Kellogg 107,389 5,561,676 Kraft Foods Cl A 138,850 4,894,463 --------------- Total 15,955,342 - ----------------------------------------------------------------------------------- GAS UTILITIES (0.2%) ONEOK 91,575 4,616,296 - ----------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES (0.4%) Bausch & Lomb 28,193 1,957,722 Boston Scientific 333,813(b) 5,120,691 --------------- Total 7,078,413 - -----------------------------------------------------------------------------------
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 144 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Balanced Fund
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) HEALTH CARE PROVIDERS & SERVICES (0.9%) Aetna 129,037 $6,374,428 Cardinal Health 45,446 3,210,305 CIGNA 68,400 3,571,848 McKesson 27,634 1,648,092 UnitedHealth Group 45,903 2,347,479 --------------- Total 17,152,152 - ----------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE (0.7%) Carnival Unit 16,968 827,529 Intl Game Technology 16,352 649,174 Marriott Intl Cl A 109,212 4,722,327 McDonald's 114,227 5,798,163 Pinnacle Entertainment 66,532(b) 1,872,876 --------------- Total 13,870,069 - ----------------------------------------------------------------------------------- HOUSEHOLD DURABLES (0.5%) DR Horton 180,192 3,591,227 Hovnanian Enterprises Cl A 130,534(b,q) 2,157,727 Lennar Cl A 41,784 1,527,623 Standard-Pacific 92,002 1,612,795 --------------- Total 8,889,372 - ----------------------------------------------------------------------------------- HOUSEHOLD PRODUCTS (0.7%) Colgate-Palmolive 81,037 5,255,250 Procter & Gamble 80,492 4,925,305 Spectrum Brands 383,067(b,q) 2,593,364 --------------- Total 12,773,919 - ----------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES (1.8%) 3M 22,838 1,982,110 General Electric 688,703 26,363,551 Tyco Intl 198,542 6,708,734 --------------- Total 35,054,395 - ----------------------------------------------------------------------------------- INSURANCE (4.5%) ACE 168,634(c) 10,542,998 AFLAC 126,558 6,505,081 American Intl Group 356,337 24,954,279 Aon 33,465 1,425,944 Arch Capital Group 22,739(b,c) 1,649,487 Chubb 74,573 4,037,382 Endurance Specialty Holdings 38,244(c) 1,531,290 Hartford Financial Services Group 176,966 17,432,921 MetLife 61,044 3,936,117 Prudential Financial 126,513 12,300,859 XL Capital Cl A 41,596(c) 3,506,127 --------------- Total 87,822,485 - ----------------------------------------------------------------------------------- INTERNET & CATALOG RETAIL (0.2%) Liberty Media -- Interactive Cl A 175,221(b,j) 3,912,685 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) IT SERVICES (0.8%) Affiliated Computer Services Cl A 86,881(b) $4,927,891 Automatic Data Processing 65,106 3,155,688 Electronic Data Systems 67,833 1,881,009 First Data 98,658 3,223,157 HCL Technologies 86,000(c) 726,774 Paychex 35,254 1,379,136 --------------- Total 15,293,655 - ----------------------------------------------------------------------------------- LIFE SCIENCES TOOLS & SERVICES (--%) PerkinElmer 30,731 800,850 - ----------------------------------------------------------------------------------- MACHINERY (1.4%) Caterpillar 95,899 7,508,892 Deere & Co 45,251 5,463,606 Flowserve 49,432 3,539,331 Illinois Tool Works 31,276 1,694,846 Ingersoll-Rand Cl A 36,518(c) 2,001,917 ITT 37,685 2,573,132 Parker Hannifin 48,263 4,725,430 --------------- Total 27,507,154 - ----------------------------------------------------------------------------------- MEDIA (3.5%) Citadel Broadcasting 15,399 99,323 Comcast Cl A 268,907(b) 7,561,665 Comcast Special Cl A 173,478(b) 4,850,445 EchoStar Communications Cl A 49,344(b) 2,140,049 Liberty Media -- Capital Series A 81(b,j) 9,532 News Corp Cl A 513,768 10,897,019 Time Warner 593,116 12,479,161 Viacom Cl B 95,175(b) 3,962,135 Virgin Media 487,288 11,875,209 Vivendi 170,537(c) 7,364,979 Walt Disney 199,609 6,814,651 --------------- Total 68,054,168 - ----------------------------------------------------------------------------------- METALS & MINING (0.3%) Alcan 21,840(c) 1,775,592 Alcoa 114,161 4,626,945 --------------- Total 6,402,537 - ----------------------------------------------------------------------------------- MULTILINE RETAIL (0.6%) JC Penney 33,224 2,404,753 Macy's 48,924 1,946,197 Target 123,142 7,831,831 --------------- Total 12,182,781 - ----------------------------------------------------------------------------------- MULTI-UTILITIES (0.7%) Dominion Resources 126,205 10,892,753 Xcel Energy 142,989 2,926,985 --------------- Total 13,819,738 - ----------------------------------------------------------------------------------- OIL, GAS & CONSUMABLE FUELS (7.3%) Anadarko Petroleum 24,428 1,270,012 BP ADR 91,980(c) 6,635,437 Chesapeake Energy 36,235 1,253,731
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) OIL, GAS & CONSUMABLE FUELS (CONT.) Chevron 349,964 $29,480,967 ConocoPhillips 281,409 22,090,607 Devon Energy 59,152 4,631,010 Exxon Mobil 712,692 59,780,604 Royal Dutch Shell ADR 30,937(c) 2,512,084 Total 132,477(c) 10,804,277 Valero Energy 30,539 2,255,611 XTO Energy 21,232 1,276,043 --------------- Total 141,990,383 - ----------------------------------------------------------------------------------- PAPER & FOREST PRODUCTS (0.8%) Bowater 122,750(q) 3,062,613 Crown Paper Escrow 1,000,000(b) 1 Intl Paper 128,069 5,001,094 Weyerhaeuser 89,264 7,045,607 --------------- Total 15,109,315 - ----------------------------------------------------------------------------------- PERSONAL PRODUCTS (--%) Herbalife 16,740(c) 663,741 - ----------------------------------------------------------------------------------- PHARMACEUTICALS (3.8%) Bristol-Myers Squibb 367,803 11,607,863 Eli Lilly & Co 78,752 4,400,662 Johnson & Johnson 63,687 3,924,393 Merck & Co 269,705 13,431,309 Novartis ADR 44,307(c) 2,484,293 Pfizer 1,108,864 28,353,653 Schering-Plough 222,955 6,786,750 Wyeth 74,322 4,261,623 --------------- Total 75,250,546 - ----------------------------------------------------------------------------------- REAL ESTATE INVESTMENT TRUSTS (REITS) (0.1%) Apartment Investment & Management Cl A 47,975 2,418,899 HomeBanc 55,922 71,021 --------------- Total 2,489,920 - ----------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (1.3%) Atmel 582,975(b) 3,241,341 Cypress Semiconductor 218,765(b) 5,095,037 Intel 358,815 8,525,445 LSI 255,661(b) 1,920,014 Spansion Cl A 466,054(b) 5,173,199 Texas Instruments 22,910 862,103 United Microelectronics ADR 85,786(c) 293,388 --------------- Total 25,110,527 - ----------------------------------------------------------------------------------- SOFTWARE (1.0%) BEA Systems 110,345(b) 1,510,623 Cadence Design Systems 57,048(b) 1,252,774 Compuware 99,794(b) 1,183,557 Microsoft 247,314 7,288,344 Oracle 117,279(b) 2,311,569 Quest Software 41,799(b) 676,726 Symantec 184,530(b) 3,727,506
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 145 RiverSource VP - Balanced Fund
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) SOFTWARE (CONT.) TIBCO Software 46,866(b) $424,137 Transaction Systems Architects 20,877(b) 702,720 --------------- Total 19,077,956 - ----------------------------------------------------------------------------------- SPECIALTY RETAIL (0.9%) Best Buy 28,037 1,308,487 Gap 69,496 1,327,374 Home Depot 120,607 4,745,885 Limited Brands 100,554 2,760,207 Lowe's Companies 167,258 5,133,148 TJX Companies 117,445 3,229,738 --------------- Total 18,504,839 - ----------------------------------------------------------------------------------- THRIFTS & MORTGAGE FINANCE (1.8%) Countrywide Financial 410,359 14,916,550 Fannie Mae 166,011 10,845,499 Freddie Mac 158,359 9,612,391 --------------- Total 35,374,440 - ----------------------------------------------------------------------------------- TOBACCO (0.9%) Altria Group 265,042 18,590,046 - ----------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES (1.1%) ALLTEL 92,390 6,240,945 Sprint Nextel 473,090 9,797,694 Vodafone Group ADR 156,199(c) 5,252,972 --------------- Total 21,291,611 - ----------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $970,559,186) $1,248,991,796 - -----------------------------------------------------------------------------------
PREFERRED STOCKS & OTHER (--%) ISSUER SHARES VALUE(A) Ion Media Networks 14.25% Pay-in-kind --(l) $1,535 United Mexican States Series E Rights 2,000,000(b,c) 14,400 - ----------------------------------------------------------------------------------- TOTAL PREFERRED STOCKS & OTHER (Cost: $413) $15,935 - -----------------------------------------------------------------------------------
BONDS (35.5%) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) U.S. GOVERNMENT OBLIGATIONS & AGENCIES (5.9%) Federal Farm Credit Bank 10-10-08 4.25% $3,480,000 $3,438,424 Federal Home Loan Bank 02-08-08 4.63 745,000 741,674 02-13-08 5.25 5,645,000 5,640,298 Federal Home Loan Mtge Corp 06-15-08 3.88 4,460,000 4,400,548 03-15-09 5.75 2,700,000 2,722,583 07-15-09 4.25 800,000 785,618 04-16-37 6.00 10,455,000 10,088,009
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) U.S. GOVERNMENT OBLIGATIONS & AGENCIES (CONT.) Federal Natl Mtge Assn 02-16-12 5.00% $12,935,000 $12,777,930 05-18-12 4.88 9,510,000 9,334,065 11-15-30 6.63 3,500,000 3,944,329 U.S. Treasury 02-15-09 4.50 2,600,000 2,581,922 06-30-09 4.88 4,315,000(e) 4,314,663 02-15-10 4.75 19,215,000(q) 19,144,442 05-31-12 4.75 2,430,000 2,411,017 05-15-17 4.50 450,000 431,438 02-15-26 6.00 17,655,000(p) 19,271,526 U.S. Treasury Inflation-Indexed Bond 04-15-12 2.00 14,508,068(h) 14,083,804 --------------- Total 116,112,290 - ----------------------------------------------------------------------------------- ASSET-BACKED (1.2%) Capital Auto Receivables Asset Trust Series 2004-1 Cl CTFS 09-15-10 2.84 1,000,000 997,256 Capital Auto Receivables Asset Trust Series 2006-SN1A Cl A4B 03-20-10 5.43 2,325,000(d,i) 2,325,329 Capital Auto Receivables Asset Trust Series 2006-SN1A Cl D 04-20-11 6.15 625,000(d) 628,692 Citibank Credit Card Issuance Trust Series 2003-A3 Cl A3 03-10-10 3.10 2,450,000 2,412,400 College Loan Trust Collateralized Mtge Obligation Interest Only Series 2006-1 Cl AIO 07-25-08 5.62 3,925,000(m) 399,246 Countrywide Asset-backed Ctfs Series 2005-10 Cl AF6 02-25-36 4.92 1,365,000 1,294,622 Countrywide Asset-backed Ctfs Series 2006-4 Cl 1A1M 07-25-36 5.58 649,652(i) 649,999 Countrywide Asset-backed Ctfs Series 2007-7 Cl 2A2 10-25-37 5.48 2,000,000(i) 1,999,688 Drive Auto Receivables Trust Series 2006-2 Cl A2 (MBIA) 07-15-11 5.30 1,675,000(d,o) 1,674,514 Dunkin Securitization Series 2006-1 Cl A2 (AMBAC) 06-20-31 5.78 2,375,000(d,o) 2,380,788 Hertz Vehicle Financing LLC Series 2004-1A Cl A3 (MBIA) 05-25-09 2.85 600,000(d,o) 591,324 Natl Collegiate Student Loan Trust Collateralized Mtge Obligation Interest Only Series 2006-2 Cl AIO 08-25-11 5.89 2,325,000(m) 496,229
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) ASSET-BACKED (CONT.) Natl Collegiate Student Loan Trust Collateralized Mtge Obligation Interest Only Series 2006-3 Cl AIO 01-25-12 5.88% $3,400,000(m) $914,124 Natl Collegiate Student Loan Trust Collateralized Mtge Obligation Interest Only Series 2007-2 Cl AIO 07-25-12 5.90 1,450,000(m) 417,271 Popular ABS Mtge Pass-Through Trust Series 2005-A Cl AF2 06-25-35 4.49 334,971 333,146 Renaissance Home Equity Loan Trust Series 2005-4 Cl A3 02-25-36 5.57 1,220,000 1,215,071 Renaissance Home Equity Loan Trust Series 2007-2 Cl M4 06-25-37 6.31 340,000 331,925 Renaissance Home Equity Loan Trust Series 2007-2 Cl M5 06-25-37 6.66 225,000 219,727 Renaissance Home Equity Loan Trust Series 2007-2 Cl M6 06-25-37 7.01 325,000 317,484 Residential Asset Securities Series 2006-KS1 Cl A2 02-25-36 5.46 2,595,000(i) 2,595,000 SBA CMBS Trust Series 2006-1A Cl B 11-15-36 5.45 1,050,000(d) 1,028,388 --------------- Total 23,222,223 - ----------------------------------------------------------------------------------- COMMERCIAL MORTGAGE-BACKED (3.7%)(f) Banc of America Commercial Mtge Series 2005-1 Cl A4 11-10-42 4.87 1,250,000 1,224,881 Banc of America Commercial Mtge Series 2005-4 Cl ASB 07-10-45 4.87 1,000,000 960,282 Banc of America Commercial Mtge Series 2007-1 Cl A3 01-15-49 5.45 1,525,000 1,492,370 Banc of America Large Loan Series 2006-LAQ Cl E 02-09-21 5.70 900,000(d,i) 902,320 Banc of America Large Loan Series 2006-LAQ Cl F 02-09-21 5.76 1,000,000(d,i) 1,002,206 Banc of America Large Loan Series 2006-LAQ Cl G 02-09-21 5.85 700,000(d,i) 702,145 Bear Stearns Commercial Mtge Securities Series 2003-T10 Cl A1 03-13-40 4.00 2,161,132 2,079,679
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 146 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Balanced Fund
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) COMMERCIAL MORTGAGE-BACKED (CONT.) Bear Stearns Commercial Mtge Securities Series 2007-T26 Cl A4 01-12-45 5.47% $1,525,000 $1,481,156 CDC Commercial Mtge Trust Series 2002-FX1 Cl A2 11-15-30 5.68 3,025,000 3,037,977 Citigroup Commercial Mtge Trust Series 2005-EMG Cl A1 09-20-51 4.15 1,254,539(d) 1,236,993 Citigroup/Deutsche Bank Commercial Mtge Trust Series 2005-CD1 Cl ASB 07-15-44 5.23 775,000 759,047 Commercial Mtge Acceptance Series 1999-C1 Cl A2 06-15-31 7.03 2,305,729 2,354,177 Commercial Mtge Pass-Through Ctfs Series 2006-CN2A Cl BFL 02-05-19 5.63 600,000(d,i) 604,172 Commercial Mtge Pass-Through Ctfs Series 2007-FL14 Cl MKL1 06-15-22 6.12 2,475,000(d,i) 2,475,000 Credit Suisse Mtge Capital Ctfs Series 2006-C2 Cl A3 03-15-39 5.66 1,350,000 1,337,371 CS First Boston Mtge Securities Series 2001-CP4 Cl A4 12-15-35 6.18 1,950,000 1,982,666 CS First Boston Mtge Securities Series 2003-CPN1 Cl A2 03-15-35 4.60 850,000 806,008 Federal Natl Mtge Assn Collateralized Mtge Obligation Series 2002-M2 Cl C 08-25-12 4.72 296,241 286,226 General Electric Capital Assurance Series 2003-1 Cl A3 05-12-35 4.77 2,650,000(d) 2,610,265 Greenwich Capital Commercial Funding Series 2004-GG1 Cl A5 06-10-36 4.88 775,000 757,893 GS Mtge Securities II Series 2004-GG2 Cl A4 08-10-38 4.96 1,500,000 1,470,992 GS Mtge Securities II Series 2007-EOP Cl J 03-06-20 6.17 1,400,000(d,i) 1,400,438 GS Mtge Securities II Series 2007-GG10 Cl F 08-10-45 5.99 1,050,000(e) 1,016,936 JPMorgan Chase Commercial Mtge Securities Series 2003-CB6 Cl A2 07-12-37 5.26 2,825,000 2,759,294 JPMorgan Chase Commercial Mtge Securities Series 2003-LN1 Cl A1 10-15-37 4.13 1,441,008 1,389,560
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) COMMERCIAL MORTGAGE-BACKED (CONT.) JPMorgan Chase Commercial Mtge Securities Series 2003-ML1A Cl A1 03-12-39 3.97% $958,676 $931,905 JPMorgan Chase Commercial Mtge Securities Series 2003-ML1A Cl A2 03-12-39 4.77 1,675,000 1,599,943 JPMorgan Chase Commercial Mtge Securities Series 2004-CBX Cl A3 01-12-37 4.18 1,000,000 972,028 JPMorgan Chase Commercial Mtge Securities Series 2004-LN2 Cl A1 07-15-41 4.48 2,263,610 2,190,398 JPMorgan Chase Commercial Mtge Securities Series 2006-LDP6 Cl A4 04-15-43 5.48 1,150,000 1,120,003 JPMorgan Chase Commercial Mtge Securities Series 2006-LDP6 Cl ASB 04-15-43 5.49 1,800,000 1,776,355 LB-UBS Commercial Mtge Trust Series 2002-C4 Cl A5 09-15-31 4.85 1,000,000 963,824 LB-UBS Commercial Mtge Trust Series 2004-C2 Cl A3 03-15-29 3.97 1,250,000 1,175,688 LB-UBS Commercial Mtge Trust Series 2005-C5 Cl AAB 09-15-30 4.93 1,975,000 1,907,890 LB-UBS Commercial Mtge Trust Series 2006-C4 Cl AAB 06-15-32 5.86 1,075,000 1,085,529 LB-UBS Commercial Mtge Trust Series 2007-C1 Cl A4 02-15-40 5.42 1,250,000 1,208,432 Morgan Stanley Capital I Series 2003-T11 Cl A2 06-13-41 4.34 1,175,000 1,151,959 Morgan Stanley Capital I Series 2004-HQ4 Cl A5 04-14-40 4.59 1,250,000 1,199,713 Morgan Stanley Capital I Series 2005-T19 Cl AAB 06-12-47 4.85 2,425,000 2,328,351 Morgan Stanley Capital I Series 2006-T23 Cl AAB 08-12-41 5.80 850,000 855,975 Morgan Stanley Capital I Series 2006-XLF Cl A2 07-15-19 5.45 1,575,276(d,i) 1,575,492 Morgan Stanley Dean Witter Capital I Series 2002-TOP7 Cl A2 01-15-39 5.98 3,225,000 3,265,959 Nomura Asset Securities Series 1998-D6 Cl A3 03-15-30 7.00 1,750,000 1,882,465 Wachovia Bank Commercial Mtge Trust Series 2003-C7 Cl A2 10-15-35 5.08 3,700,000(d) 3,571,313
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) COMMERCIAL MORTGAGE-BACKED (CONT.) Wachovia Bank Commercial Mtge Trust Series 2005-C18 Cl A4 04-15-42 4.94% $1,100,000 $1,040,178 Wachovia Bank Commercial Mtge Trust Series 2005-C20 Cl A5 07-15-42 5.09 1,250,000 1,221,018 Wachovia Bank Commercial Mtge Trust Series 2006-C27 Cl A3 07-15-45 5.77 725,000 718,709 Wachovia Bank Commercial Mtge Trust Series 2006-C27 Cl APB 07-15-45 5.73 1,250,000 1,241,726 Wachovia Bank Commercial Mtge Trust Series 2007-C31 Cl A4 04-15-47 5.51 1,025,000 994,306 --------------- Total 72,109,213 - ----------------------------------------------------------------------------------- MORTGAGE-BACKED (17.2%)(f,g) Adjustable Rate Mtge Trust Collateralized Mtge Obligation Series 2005-12 Cl 2A1 03-25-36 5.69 2,085,012(n) 2,084,917 Adjustable Rate Mtge Trust Collateralized Mtge Obligation Series 2006-1 Cl 2A1 03-25-36 5.94 2,358,566(n) 2,350,947 Adjustable Rate Mtge Trust Collateralized Mtge Obligation Series 2007-1 Cl 3A21 03-25-37 6.20 1,880,000(n) 1,880,395 Banc of America Alternative Loan Trust Collateralized Mtge Obligation Series 2003-11 Cl 1A1 01-25-34 6.00 1,414,453 1,391,285 Banc of America Alternative Loan Trust Collateralized Mtge Obligation Series 2003-11 Cl 4A1 01-25-19 4.75 1,001,067 951,639 Banc of America Alternative Loan Trust Collateralized Mtge Obligation Series 2006-9 Cl 1CB1 01-25-37 6.00 4,693,735 4,606,898 Banc of America Funding Collateralized Mtge Obligation Series 2006-2 Cl N1 11-25-46 7.25 246,556(d) 242,626 Banc of America Funding Collateralized Mtge Obligation Series 2006-A Cl 3A2 02-20-36 5.90 1,662,831(n) 1,659,422 Bear Stearns Adjustable Rate Mtge Trust Collateralized Mtge Obligation Series 2005-8 Cl A4 08-25-35 5.10 1,575,000(d,n) 1,508,312
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 147 RiverSource VP - Balanced Fund
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) ChaseFlex Trust Collateralized Mtge Obligation Series 2005-2 Cl 2A2 06-25-35 6.50% $2,105,731 $2,117,904 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Interest Only Series 2007-8CB Cl A13 05-25-37 7.73 1,500,376(m) 258,335 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2003-11T1 Cl A1 07-25-18 4.75 971,376 923,414 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2005-54CB Cl 2A3 11-25-35 5.50 1,555,682 1,542,047 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2005-54CB Cl 3A7 11-25-35 5.50 1,571,552 1,557,804 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2005-64CB Cl 1A1 12-25-35 5.50 2,695,823 2,688,388 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2005-6CB Cl 1A1 04-25-35 7.50 1,423,698 1,467,061 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2005-85CB Cl 2A2 02-25-36 5.50 996,473 990,861 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2006-22R Cl 1A2 05-25-36 6.00 2,459,163 2,475,737 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2006-2CB Cl A11 03-25-36 6.00 2,577,018 2,562,788 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2006-31CB Cl A16 11-25-36 6.00 1,700,000 1,704,335 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2006-43CB Cl 1A4 02-25-37 6.00 3,261,739 3,255,019 Countrywide Home Loans Collateralized Mtge Obligation Series 2005-R2 Cl 2A1 06-25-35 7.00 1,748,052(d) 1,808,675 Countrywide Home Loans Collateralized Mtge Obligation Series 2006-HYB1 Cl 1A1 03-20-36 5.36 1,672,986(n) 1,663,835
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Downey Savings & Loan Assn Mtge Loan Trust Collateralized Mtge Obligation Interest Only Series 2005-AR5 Cl X1 08-19-45 0.00% $12,072,200(m) $124,495 Federal Home Loan Mtge Corp 07-01-37 6.00 4,500,000(e) 4,457,813 07-01-37 6.50 7,500,000(e) 7,577,339 08-01-37 6.50 10,500,000(e) 10,595,150 Federal Home Loan Mtge Corp #1G2496 09-01-36 6.20 2,046,362(n) 2,061,526 Federal Home Loan Mtge Corp #1J1536 03-01-37 5.51 949,206(n) 942,343 Federal Home Loan Mtge Corp #A27373 10-01-34 6.50 507,206 514,971 Federal Home Loan Mtge Corp #A28602 11-01-34 6.50 1,063,741 1,080,027 Federal Home Loan Mtge Corp #B11835 01-01-19 5.50 497,457 491,621 Federal Home Loan Mtge Corp #C53878 12-01-30 5.50 2,267,577 2,198,179 Federal Home Loan Mtge Corp #C65869 04-01-32 6.00 1,326,972 1,323,834 Federal Home Loan Mtge Corp #C66871 05-01-32 6.50 3,302,725 3,374,892 Federal Home Loan Mtge Corp #C71514 07-01-32 6.50 142,357 144,985 Federal Home Loan Mtge Corp #C77689 03-01-33 6.50 357,409 364,976 Federal Home Loan Mtge Corp #C90598 10-01-22 6.50 366,813 375,142 Federal Home Loan Mtge Corp #C90767 12-01-23 6.00 2,236,173 2,245,211 Federal Home Loan Mtge Corp #D32310 11-01-22 8.00 17,239 18,059 Federal Home Loan Mtge Corp #D55755 08-01-24 8.00 65,726 69,563 Federal Home Loan Mtge Corp #D96300 10-01-23 5.50 328,825 321,574 Federal Home Loan Mtge Corp #D96348 10-01-23 5.50 5,076,878 4,964,923 Federal Home Loan Mtge Corp #E01127 02-01-17 6.50 283,602 289,755 Federal Home Loan Mtge Corp #E01419 05-01-18 5.50 1,364,607 1,348,902 Federal Home Loan Mtge Corp #E81009 07-01-15 7.50 129,057 133,725 Federal Home Loan Mtge Corp #E89496 04-01-17 6.00 2,821,817 2,837,435 Federal Home Loan Mtge Corp #E97591 06-01-18 5.50 328,908 325,295 Federal Home Loan Mtge Corp #E98725 08-01-18 5.00 3,204,946 3,109,455 Federal Home Loan Mtge Corp #E99684 10-01-18 5.00 1,607,819 1,559,945 Federal Home Loan Mtge Corp #G01410 04-01-32 7.00 489,552 504,595
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Federal Home Loan Mtge Corp #G01535 04-01-33 6.00% $2,057,898 $2,058,634 Federal Home Loan Mtge Corp #G02757 06-01-36 5.00 6,435,556 6,048,215 Federal Home Loan Mtge Corp #G30216 04-01-22 6.50 3,880,294 3,974,502 Federal Home Loan Mtge Corp Collateralized Mtge Obligation Interest Only Series 237 Cl IO 05-15-36 9.81 1,143,792(m) 314,091 Federal Home Loan Mtge Corp Collateralized Mtge Obligation Interest Only Series 2590 Cl BI 02-15-14 20.00 279,939(m) 8,583 Federal Home Loan Mtge Corp Collateralized Mtge Obligation Interest Only Series 2718 Cl IA 10-15-22 20.00 1,247,304(m) 32,992 Federal Home Loan Mtge Corp Collateralized Mtge Obligation Interest Only Series 2795 Cl IY 07-15-17 12.40 1,757,027(m) 176,881 Federal Home Loan Mtge Corp Collateralized Mtge Obligation Interest Only Series 2817 Cl SA 06-15-32 19.76 1,665,453(m) 82,297 Federal Home Loan Mtge Corp Collateralized Mtge Obligation Series 2576 Cl KJ 02-15-33 5.50 1,885,019 1,886,797 Federal Home Loan Mtge Corp Collateralized Mtge Obligation Series 2641 Cl KC 01-15-18 6.50 968,381 989,380 Federal Natl Mtge Assn 07-01-37 5.50 7,650,000(e) 7,377,468 07-01-37 7.00 6,500,000(e) 6,672,652 08-01-37 5.00 2,000,000(e) 1,873,124 08-01-37 5.50 5,000,000(e) 4,992,188 08-01-37 6.00 20,250,000(e) 20,015,869 08-01-37 6.50 3,000,000(e) 3,025,314 Federal Natl Mtge Assn #190899 04-01-23 8.50 166,371 175,333 Federal Natl Mtge Assn #190944 05-01-24 6.00 768,345 763,942 Federal Natl Mtge Assn #190988 06-01-24 9.00 103,635 110,351 Federal Natl Mtge Assn #250322 08-01-25 7.50 15,088 15,799 Federal Natl Mtge Assn #250384 11-01-25 7.50 180,502 189,008
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 148 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Balanced Fund
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Federal Natl Mtge Assn #250495 03-01-26 7.00% $246,058 $254,975 Federal Natl Mtge Assn #252381 04-01-14 5.50 3,401,943 3,374,554 Federal Natl Mtge Assn #254259 04-01-17 5.50 584,532 578,017 Federal Natl Mtge Assn #254494 08-01-22 7.00 226,735 235,748 Federal Natl Mtge Assn #254675 01-01-23 6.50 360,576 368,494 Federal Natl Mtge Assn #254708 02-01-23 7.00 119,369 124,114 Federal Natl Mtge Assn #254916 09-01-23 5.50 2,260,722 2,210,360 Federal Natl Mtge Assn #304279 02-01-25 8.50 109,051 116,915 Federal Natl Mtge Assn #309341 05-01-25 8.50 26,990 28,936 Federal Natl Mtge Assn #313049 08-01-11 8.50 178,743 185,416 Federal Natl Mtge Assn #323606 03-01-29 6.50 51,613 52,678 Federal Natl Mtge Assn #433310 08-01-28 6.50 559,755 571,304 Federal Natl Mtge Assn #440730 12-01-28 6.00 198,593 198,612 Federal Natl Mtge Assn #505122 07-01-29 7.00 783,170 812,102 Federal Natl Mtge Assn #50553 04-01-22 8.00 90,232 95,113 Federal Natl Mtge Assn #510587 08-01-29 7.00 227,270 235,666 Federal Natl Mtge Assn #540041 02-01-29 7.00 595,951 617,549 Federal Natl Mtge Assn #545489 03-01-32 6.50 203,098 207,047 Federal Natl Mtge Assn #545684 05-01-32 7.50 150,005 156,674 Federal Natl Mtge Assn #545885 08-01-32 6.50 284,167 293,221 Federal Natl Mtge Assn #555375 04-01-33 6.00 3,857,240 3,851,423 Federal Natl Mtge Assn #555376 04-01-18 4.50 873,700 832,491 Federal Natl Mtge Assn #555458 05-01-33 5.50 1,568,862 1,516,901 Federal Natl Mtge Assn #555528 04-01-33 6.00 4,813,569 4,791,256 Federal Natl Mtge Assn #555734 07-01-23 5.00 1,602,292 1,529,750 Federal Natl Mtge Assn #555740 08-01-18 4.50 2,377,019 2,265,132 Federal Natl Mtge Assn #615135 11-01-16 6.00 148,338 149,222 Federal Natl Mtge Assn #642346 05-01-32 7.00 945,484 979,362
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Federal Natl Mtge Assn #643381 06-01-17 6.00% $156,652 $157,576 Federal Natl Mtge Assn #645277 05-01-32 7.00 77,371 80,143 Federal Natl Mtge Assn #645569 06-01-32 7.00 662,385 686,119 Federal Natl Mtge Assn #646446 06-01-17 6.50 162,533 165,958 Federal Natl Mtge Assn #650105 08-01-17 6.50 680,113 694,446 Federal Natl Mtge Assn #662197 09-01-32 6.50 351,552 357,778 Federal Natl Mtge Assn #667604 10-01-32 5.50 384,410 372,533 Federal Natl Mtge Assn #670387 08-01-32 7.00 245,482 254,595 Federal Natl Mtge Assn #670711 10-01-32 7.00 143,117 148,245 Federal Natl Mtge Assn #673179 02-01-18 6.00 365,180 367,333 Federal Natl Mtge Assn #676511 12-01-32 7.00 140,411 145,442 Federal Natl Mtge Assn #678397 12-01-32 7.00 1,051,336 1,089,007 Federal Natl Mtge Assn #684601 03-01-33 6.00 3,081,775 3,078,700 Federal Natl Mtge Assn #687736 02-01-33 5.50 1,183,247 1,146,439 Federal Natl Mtge Assn #687887 03-01-33 5.50 1,621,640 1,572,967 Federal Natl Mtge Assn #688002 03-01-33 5.50 1,673,811 1,623,202 Federal Natl Mtge Assn #688034 03-01-33 5.50 1,574,224 1,526,972 Federal Natl Mtge Assn #689093 07-01-28 5.50 827,677 802,819 Federal Natl Mtge Assn #694546 03-01-33 5.50 737,096 714,167 Federal Natl Mtge Assn #694795 04-01-33 5.50 3,294,851 3,195,974 Federal Natl Mtge Assn #701937 04-01-33 6.00 1,742,466 1,732,249 Federal Natl Mtge Assn #703726 02-01-33 5.00 2,710,973 2,554,352 Federal Natl Mtge Assn #703818 05-01-33 6.00 1,725,613 1,718,859 Federal Natl Mtge Assn #710823 05-01-33 5.50 1,812,239 1,757,788 Federal Natl Mtge Assn #720070 07-01-23 5.50 2,314,170 2,262,618 Federal Natl Mtge Assn #720378 06-01-18 4.50 2,289,235 2,181,262 Federal Natl Mtge Assn #725232 03-01-34 5.00 6,143,775 5,787,221 Federal Natl Mtge Assn #725284 11-01-18 7.00 151,826 156,573
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Federal Natl Mtge Assn #725425 04-01-34 5.50% $6,273,415 $6,078,804 Federal Natl Mtge Assn #725431 08-01-15 5.50 113,456 112,692 Federal Natl Mtge Assn #725684 05-01-18 6.00 2,689,502 2,706,837 Federal Natl Mtge Assn #725737 08-01-34 4.54 4,919,823(n) 4,898,569 Federal Natl Mtge Assn #725773 09-01-34 5.50 6,992,675 6,770,203 Federal Natl Mtge Assn #726940 08-01-23 5.50 275,618 268,643 Federal Natl Mtge Assn #730231 08-01-23 5.50 2,059,404 2,013,527 Federal Natl Mtge Assn #735212 12-01-34 5.00 6,375,200 5,998,629 Federal Natl Mtge Assn #735841 11-01-19 4.50 3,173,890(e) 3,019,707 Federal Natl Mtge Assn #737330 09-01-18 5.50 1,383,740 1,368,535 Federal Natl Mtge Assn #737374 09-01-18 5.50 2,086,394 2,064,091 Federal Natl Mtge Assn #747642 11-01-28 5.50 357,708 346,965 Federal Natl Mtge Assn #753074 12-01-28 5.50 1,638,161 1,588,961 Federal Natl Mtge Assn #753206 01-01-34 6.00 1,382,829 1,374,721 Federal Natl Mtge Assn #755056 12-01-23 5.50 1,804,318 1,764,123 Federal Natl Mtge Assn #755598 11-01-28 5.00 581,437 547,846 Federal Natl Mtge Assn #761031 01-01-34 5.00 443,181 417,132 Federal Natl Mtge Assn #765760 02-01-19 5.00 3,479,451 3,375,449 Federal Natl Mtge Assn #766641 03-01-34 5.00 1,986,377 1,869,046 Federal Natl Mtge Assn #768117 08-01-34 5.43 877,456(n) 869,022 Federal Natl Mtge Assn #779676 06-01-34 5.00 2,868,283 2,698,859 Federal Natl Mtge Assn #815264 05-01-35 5.23 3,004,193(n) 2,967,277 Federal Natl Mtge Assn #872916 06-01-36 6.50 3,665,003 3,726,625 Federal Natl Mtge Assn #886054 07-01-36 7.00 2,404,356 2,490,507 Federal Natl Mtge Assn #886461 08-01-36 6.18 1,903,292(n) 1,917,472 Federal Natl Mtge Assn #886464 08-01-36 6.50 2,801,490 2,828,737 Federal Natl Mtge Assn #900197 10-01-36 5.94 2,432,070(n) 2,454,008 Federal Natl Mtge Assn #901922 10-01-36 5.79 2,403,239(n) 2,410,838
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 149 RiverSource VP - Balanced Fund
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Federal Natl Mtge Assn #909471 02-01-37 5.55% $2,679,888(n) $2,671,072 Federal Natl Mtge Assn Collateralized Mtge Obligation Interest Only Series 2003-24 Cl PI 12-25-12 20.00 119,889(m) 1,106 Federal Natl Mtge Assn Collateralized Mtge Obligation Interest Only Series 2003-63 Cl IP 07-25-33 12.39 3,686,029(m) 896,065 Federal Natl Mtge Assn Collateralized Mtge Obligation Interest Only Series 2003-71 Cl IM 12-25-31 12.80 1,566,879(m) 285,869 Federal Natl Mtge Assn Collateralized Mtge Obligation Interest Only Series 2004-84 Cl GI 12-25-22 11.02 765,736(m) 110,705 Federal Natl Mtge Assn Collateralized Mtge Obligation Interest Only Series 2005-92 CL SC 10-25-35 17.34 6,203,937(m) 310,817 Federal Natl Mtge Assn Collateralized Mtge Obligation Interest Only Series 367 Cl 2 01-01-36 9.52 4,013,042(m) 1,097,246 Federal Natl Mtge Assn Collateralized Mtge Obligation Series 2003-133 Cl GB 12-25-26 8.00 688,001 725,320 Govt Natl Mtge Assn #604708 10-15-33 5.50 1,648,676 1,603,362 Govt Natl Mtge Assn #619592 09-15-33 5.00 2,061,067 1,954,068 Govt Natl Mtge Assn #780394 12-15-08 7.00 263,917 265,918 Govt Natl Mtge Assn Collateralized Mtge Obligation Interest Only Series 2002-80 Cl CI 01-20-32 9.22 105,895(m) 12,074 Harborview Mtge Loan Trust Collateralized Mtge Obligation Series 2005-16 Cl 3A1B 01-19-36 5.66 1,659,399(n) 1,659,390 Harborview Nim Collateralized Mtge Obligation Series 2006-10 Cl N1 11-19-36 6.41 219,123(d) 218,918
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Harborview Nim Collateralized Mtge Obligation Series 2006-8A Cl N1 07-21-36 6.41% $52,170(d) $51,713 IndyMac Index Mtge Loan Trust Collateralized Mtge Obligation Interest Only Series 2005-AR8 Cl AX1 04-25-35 4.50 28,308,173(m) 207,888 IndyMac Index Nim Collateralized Mtge Obligation Series 2006-AR6 Cl N1 06-25-46 6.65 248,942(d) 248,009 Lehman XS Net Interest Margin Nts Collateralized Mtge Obligation Series 2006-2N Cl A1 02-27-46 7.00 223,254(d) 223,324 Lehman XS Net Interest Margin Nts Collateralized Mtge Obligation Series 2006-GPM6 Cl A1 10-28-46 6.25 425,121(d) 423,677 Lehman XS Net Interest Margin Nts Series 2006-AR8 Cl A1 10-28-46 6.25 177,391(d) 176,892 Lehman XS Trust Collateralized Mtge Obligation Series 2007-5H Cl 1A1 05-25-37 6.50 6,282,341 6,325,797 Master Alternative Loans Trust Collateralized Mtge Obligation Series 2004-2 Cl 4A1 02-25-19 5.00 1,603,973 1,539,317 Master Alternative Loans Trust Collateralized Mtge Obligation Series 2004-4 Cl 2A1 05-25-34 6.00 1,796,700 1,775,499 Master Alternative Loans Trust Collateralized Mtge Obligation Series 2004-7 Cl 8A1 08-25-19 5.00 3,408,884 3,282,722 Master Alternative Loans Trust Collateralized Mtge Obligation Series 2004-8 Cl 7A1 09-25-19 5.00 1,669,113 1,604,202 Rali NIM Collateralized Mtge Obligation Series 2006-QO4 Cl N1 04-25-46 6.05 225,892(d) 224,622 Residential Accredit Loans Collateralized Mtge Obligation Series 2006-QS3 Cl 1A10 03-25-36 6.00 1,649,127 1,652,751 Structured Asset Securities Collateralized Mtge Obligation Series 2003-33H Cl 1A1 10-25-33 5.50 3,268,939 3,131,499
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Washington Mutual Alternative Mtge Loan Trust Pass-Through Ctfs Collateralized Mtge Obligation Interest Only Series 2005-AR1 Cl X2 12-25-35 7.10% $10,686,405(m) $78,896 Washington Mutual Mtge Pass-Through Ctfs Collateralized Mtge Obligation Series 2004-CB2 Cl 6A 07-25-19 4.50 175,521 166,071 Washington Mutual Mtge Pass-Through Ctfs Collateralized Mtge Obligation Series 2005-AR14 Cl 2A1 12-25-35 5.29 1,289,215(n) 1,270,201 Washington Mutual Mtge Pass-Through Ctfs Collateralized Mtge Obligation Series 2006-AR10 Cl 1A1 09-25-36 5.95 1,372,027(n) 1,374,401 Wells Fargo Mtge Backed Securities Trust Collateralized Mtge Obligation Series 2005-10 Cl A1 10-25-35 5.00 3,745,083 3,546,482 Wells Fargo Mtge Backed Securities Trust Collateralized Mtge Obligation Series 2005-5 Cl 2A1 05-25-35 5.50 3,203,772 3,071,117 Wells Fargo Mtge Backed Securities Trust Collateralized Mtge Obligation Series 2006-AR12 Cl 1A1 09-25-36 6.03 1,316,957(n) 1,319,988 Wells Fargo Mtge Backed Securities Trust Collateralized Mtge Obligation Series 2006-AR6 Cl 5A1 03-25-36 5.11 2,790,205(n) 2,743,956 --------------- Total 333,994,942 - ----------------------------------------------------------------------------------- AEROSPACE & DEFENSE (--%) DRS Technologies 11-01-13 6.88 220,000 213,400 L-3 Communications Series B 10-15-15 6.38 235,000 222,075 --------------- Total 435,475 - ----------------------------------------------------------------------------------- BANKING (1.5%) Bank of America Sub Nts 03-15-17 5.30 8,795,000 8,398,214 Citigroup Sub Nts 02-15-17 5.50 6,370,000 6,169,479 JPMorgan Chase & Co Sub Nts 06-27-17 6.13 2,850,000 2,872,159 Manufacturers & Traders Trust Sub Nts 12-01-21 5.63 3,530,000 3,381,723
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 150 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Balanced Fund
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) BANKING (CONT.) Popular North America Sr Nts 10-01-08 3.88% $7,365,000 $7,218,878 Regions Bank Sub Nts 06-26-37 6.45 1,730,000 1,736,539 Wachovia Bank Sub Nts 02-01-37 5.85 425,000 402,183 --------------- Total 30,179,175 - ----------------------------------------------------------------------------------- BROKERAGE (0.6%) Discover Financial Services 06-12-17 6.45 810,000(d) 805,577 LaBranche & Co Sr Nts 05-15-12 11.00 173,000 183,380 Merrill Lynch & Co Sub Nts 05-02-17 5.70 4,900,000 4,719,582 Morgan Stanley 01-09-17 5.45 405,000 383,471 04-27-17 5.55 5,905,000 5,638,685 --------------- Total 11,730,695 - ----------------------------------------------------------------------------------- CHEMICALS (--%) NewMarket 12-15-16 7.13 215,000 208,013 - ----------------------------------------------------------------------------------- ELECTRIC (1.0%) Cleveland Electric Illuminating Sr Unsecured 04-01-17 5.70 1,495,000 1,442,382 12-15-36 5.95 670,000 617,550 Consumers Energy 1st Mtge Series F 05-15-10 4.00 350,000 335,694 Consumers Energy 1st Mtge Series H 02-17-09 4.80 2,855,000 2,820,423 Edison Mission Energy Sr Nts 05-15-17 7.00 365,000(d) 344,013 Entergy Gulf States 1st Mtge 06-01-08 3.60 1,435,000 1,409,395 Exelon 06-15-10 4.45 2,985,000 2,885,616 Indiana Michigan Power Sr Nts 03-15-37 6.05 895,000 855,434 IPALCO Enterprises Secured 11-14-08 8.38 375,000 382,500 11-14-11 8.63 595,000 636,650 Metropolitan Edison Sr Nts 03-15-10 4.45 470,000 456,016
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) ELECTRIC (CONT.) Midwest Generation LLC Pass-Through Ctfs Series B 01-02-16 8.56% $45,079 $48,066 Northern States Power Sr Nts 08-01-09 6.88 1,455,000 1,492,453 NRG Energy 02-01-14 7.25 245,000 245,613 01-15-17 7.38 210,000 210,788 Oncor Electric Delivery Secured 01-15-15 6.38 895,000 907,773 Portland General Electric 03-15-10 7.88 765,000 808,914 Potomac Electric Power Secured 06-01-35 5.40 785,000 684,994 Public Service Company of Colorado Sr Nts Series A 07-15-09 6.88 565,000 578,941 Sierra Pacific Power Series M 05-15-16 6.00 945,000 926,825 Sierra Pacific Power Series P 07-01-37 6.75 635,000 639,763 Xcel Energy Sr Nts 07-01-08 3.40 855,000 837,319 --------------- Total 19,567,122 - ----------------------------------------------------------------------------------- ENTERTAINMENT (0.1%) United Artists Theatre Circuit Pass-Through Ctfs 07-01-15 9.30 1,187,765(k) 1,235,275 - ----------------------------------------------------------------------------------- ENVIRONMENTAL (--%) Allied Waste North America 06-01-17 6.88 205,000 197,569 - ----------------------------------------------------------------------------------- FOOD AND BEVERAGE (0.5%) Cadbury Schweppes US Finance LLC 10-01-08 3.88 5,945,000(d) 5,820,346 Cott Beverages USA 12-15-11 8.00 460,000 464,600 HJ Heinz 12-01-08 6.43 1,305,000(d) 1,318,024 Molson Coors Capital Finance 09-22-10 4.85 2,910,000(c) 2,841,926 --------------- Total 10,444,896 - -----------------------------------------------------------------------------------
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) GAMING (--%) Mohegan Tribal Gaming Authority Sr Sub Nts 04-01-12 8.00% $310,000 $320,075 Wynn Las Vegas LLC/Capital 1st Mtge 12-01-14 6.63 180,000 173,475 --------------- Total 493,550 - ----------------------------------------------------------------------------------- GAS DISTRIBUTORS (0.1%) Atmos Energy Sr Unsub 10-15-09 4.00 1,055,000 1,019,514 - ----------------------------------------------------------------------------------- GAS PIPELINES (0.4%) CenterPoint Energy Resources 02-15-11 7.75 955,000 1,018,639 Colorado Interstate Gas Sr Nts 11-15-15 6.80 2,020,000 2,077,399 Colorado Interstate Gas Sr Unsecured 03-15-15 5.95 560,000 545,308 Northwest Pipeline Sr Nts 04-15-17 5.95 400,000(d) 389,000 Southern Natural Gas 04-01-17 5.90 1,360,000(d) 1,315,416 Southern Star Central Sr Nts 03-01-16 6.75 380,000 374,300 Transcontinental Gas Pipe Line Series B 08-15-11 7.00 400,000 414,000 Transcontinental Gas Pipe Line Sr Unsecured 04-15-16 6.40 397,000 397,993 Williams Companies Sr Nts 07-15-19 7.63 638,000 673,090 --------------- Total 7,205,145 - ----------------------------------------------------------------------------------- HEALTH CARE (0.2%) Community Health Systems Sr Nts 07-15-15 8.88 340,000(d,e) 344,675 Community Health Systems Sr Unsecured 12-15-12 6.50 220,000 229,618 Omnicare 12-15-13 6.75 680,000 649,400 12-15-15 6.88 95,000 90,250 Triad Hospitals Sr Nts 05-15-12 7.00 225,000 235,124 Triad Hospitals Sr Sub Nts 11-15-13 7.00 250,000 262,800
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 151 RiverSource VP - Balanced Fund
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) HEALTH CARE (CONT.) UnitedHealth Group 06-15-37 6.50% $1,360,000(d) $1,370,513 --------------- Total 3,182,380 - ----------------------------------------------------------------------------------- HEALTH CARE INSURANCE (0.1%) WellPoint Sr Unsub 01-15-36 5.85 1,420,000 1,295,740 06-15-37 6.38 645,000 636,776 --------------- Total 1,932,516 - ----------------------------------------------------------------------------------- HOME CONSTRUCTION (0.1%) Centex Sr Unsecured 05-01-16 6.50 400,000 384,664 DR Horton Sr Unsub 04-15-16 6.50 1,100,000 1,052,442 --------------- Total 1,437,106 - ----------------------------------------------------------------------------------- INDEPENDENT ENERGY (0.3%) Anadarko Petroleum Sr Unsecured 09-15-16 5.95 1,750,000 1,708,740 09-15-36 6.45 580,000 557,860 Canadian Natural Resources 03-15-38 6.25 1,815,000(c) 1,717,323 Chesapeake Energy 01-15-16 6.63 987,000 949,988 01-15-18 6.25 245,000 228,769 Denbury Resources 04-01-13 7.50 65,000 65,000 Denbury Resources Sr Sub Nts 12-15-15 7.50 55,000 55,000 Forest Oil Sr Nts 06-15-19 7.25 65,000(d) 63,050 Range Resources 03-15-15 6.38 110,000 104,225 05-15-16 7.50 50,000 50,625 --------------- Total 5,500,580 - ----------------------------------------------------------------------------------- MEDIA CABLE (0.1%) Comcast 03-15-37 6.45 1,390,000 1,339,576 Comcast MO of Delaware LLC 09-01-08 9.00 1,000,000 1,037,860 EchoStar DBS 10-01-14 6.63 99,000 94,545 Videotron Ltee 01-15-14 6.88 340,000(c) 333,200 --------------- Total 2,805,181 - ----------------------------------------------------------------------------------- MEDIA NON CABLE (0.5%) British Sky Broadcasting Group 02-23-09 6.88 2,790,000(c) 2,847,150
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MEDIA NON CABLE (CONT.) Dex Media East LLC/Finance 11-15-09 9.88% $75,000 $77,719 Dex Media West LLC/Finance Sr Unsecured Series B 08-15-10 8.50 145,000 150,256 Idearc 11-15-16 8.00 365,000 368,650 News America 12-15-35 6.40 2,360,000 2,247,456 RH Donnelley Sr Disc Nts Series A-2 01-15-13 6.88 365,000 345,838 RR Donnelley & Sons Sr Unsecured 01-15-17 6.13 4,210,000 4,099,041 Sinclair Broadcast Group 03-15-12 8.00 175,000 180,250 --------------- Total 10,316,360 - ----------------------------------------------------------------------------------- METALS (--%) Freeport-McMoRan Copper & Gold Sr Unsecured 04-01-15 8.25 190,000 200,450 - ----------------------------------------------------------------------------------- NON CAPTIVE CONSUMER (--%) SLM 01-15-13 5.38 525,000 463,626 10-01-13 5.00 570,000 488,741 --------------- Total 952,367 - ----------------------------------------------------------------------------------- OTHER FINANCIAL INSTITUTIONS (0.2%) Residential Capital LLC 06-30-10 6.38 3,690,000 3,642,369 - ----------------------------------------------------------------------------------- PACKAGING (--%) Crown Americas LLC/Capital 11-15-15 7.75 365,000 366,825 Owens-Brockway Glass Container 05-15-13 8.25 85,000 87,975 --------------- Total 454,800 - ----------------------------------------------------------------------------------- PAPER (--%) Smurfit-Stone Container Enterprises Sr Unsecured 03-15-17 8.00 350,000 339,500 - ----------------------------------------------------------------------------------- PROPERTY & CASUALTY (0.1%) Travelers Companies Sr Unsecured 06-15-37 6.25 1,425,000 1,387,010 - ----------------------------------------------------------------------------------- RAILROADS (--%) Canadian Pacific Railway 05-15-37 5.95 690,000(c) 648,553 - -----------------------------------------------------------------------------------
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) REITS (0.1%) Brandywine Operating Partnership LP 05-01-17 5.70% $700,000 $678,727 ERP Operating LP 06-15-17 5.75 1,690,000 1,656,623 --------------- Total 2,335,350 - ----------------------------------------------------------------------------------- RETAILERS (0.3%) Home Depot Sr Unsecured 12-16-36 5.88 3,510,000 3,127,414 Macys Retail Holdings 07-15-09 4.80 3,205,000 3,143,800 --------------- Total 6,271,214 - ----------------------------------------------------------------------------------- WIRELESS (--%) American Tower Sr Nts 10-15-12 7.13 65,000 66,463 - ----------------------------------------------------------------------------------- WIRELINES (1.3%) AT&T Sr Nts 05-15-36 6.80 1,785,000 1,848,717 Qwest 03-15-12 8.88 330,000 355,575 Qwest Sr Nts 06-15-15 7.63 800,000 826,000 Qwest Sr Unsecured 10-01-14 7.50 235,000 240,875 Sprint Capital 03-15-32 8.75 150,000 168,470 Telecom Italia Capital 11-15-33 6.38 1,640,000(c) 1,544,796 Telefonica Europe 09-15-10 7.75 3,170,000(c) 3,360,463 TELUS 06-01-11 8.00 8,917,500(c) 9,535,928 Verizon New York Series A 04-01-12 6.88 4,975,000 5,186,975 Verizon Pennsylvania Series A 11-15-11 5.65 2,265,000 2,260,493 Windstream 08-01-16 8.63 365,000 385,988 --------------- Total 25,714,280 - ----------------------------------------------------------------------------------- TOTAL BONDS (Cost: $705,580,513) $695,341,576 - -----------------------------------------------------------------------------------
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 152 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Balanced Fund
MUNICIPAL BONDS (0.2%) NAME OF ISSUER AND TITLE OF COUPON PRINCIPAL ISSUE RATE AMOUNT VALUE(A) TOBACCO Tobacco Settlement Financing Corporation Revenue Bonds Series 2007A-1 06-01-46 6.71% $3,470,000 $3,329,639 - ---------------------------------------------------------------------------------- TOTAL MUNICIPAL BONDS (Cost: $3,469,653) $3,329,639 - ----------------------------------------------------------------------------------
SENIOR LOANS (0.8%)(s) COUPON PRINCIPAL BORROWER RATE AMOUNT VALUE(A) CHEMICALS (--%) Celanese Tranche B Term Loan 04-06-11 7.10% $90,000(c,e) $90,070 04-06-11 7.10 525,000(c) 525,410 --------------- Total 615,480 - ---------------------------------------------------------------------------------- FOOD AND BEVERAGE (0.1%) Aramark Letter of Credit 01-26-14 5.20 36,871 36,941 Aramark Tranche B Term Loan 01-26-14 7.48 515,922 516,824 Pinnacle Foods Finance Tranche B Term Loan 04-02-14 8.10 675,000 676,208 --------------- Total 1,229,973 - ---------------------------------------------------------------------------------- GAMING (--%) Fontainebleau Las Vegas Delayed Draw Term Loan 06-05-14 2.00 240,000(e,t) 239,700 Fontainebleau Las Vegas Term Loan 06-05-14 8.61 480,000(e) 481,402 --------------- Total 721,102 - ----------------------------------------------------------------------------------
SENIOR LOANS (CONTINUED) COUPON PRINCIPAL BORROWER RATE AMOUNT VALUE(A) HEALTH CARE (0.4%) Community Health Term Loan 06-28-14 7.57% $1,627,653(e) $1,630,029 Community Health Delayed Draw Term Loan 06-28-14 0.50 107,347(e,t) 107,504 HCA Tranche B Term Loan 01-21-13 7.60-7.61 3,328,275 3,346,747 --------------- Total 5,084,280 - ---------------------------------------------------------------------------------- MEDIA CABLE (0.2%) Charter Communications Tranche B Term Loan 03-06-14 7.35 1,605,000 1,590,459 Univision Communications Delayed Draw Term Loan 09-23-14 1.00 91,812(e,t) 90,263 Univision Communications Tranche B Term Loan 09-29-14 7.61 1,428,188 1,396,953 --------------- Total 3,077,675 - ---------------------------------------------------------------------------------- MEDIA NON CABLE (0.1%) VNU Tranche B Term Loan 08-09-13 7.61 1,423,823(c) 1,430,201 - ---------------------------------------------------------------------------------- METALS (--%) Freeport-McMoRan Copper & Gold Tranche B Term Loan 03-19-14 9.00 577,451 577,312 - ---------------------------------------------------------------------------------- OIL FIELD SERVICES (--%) Dresser 1st Lien Term Loan 05-04-14 7.86 805,000 806,674 - ----------------------------------------------------------------------------------
SENIOR LOANS (CONTINUED) COUPON PRINCIPAL BORROWER RATE AMOUNT VALUE(A) PAPER (--%) Domtar Tranche B Term Loan 03-07-14 6.74% $406,125(c) $402,827 - ---------------------------------------------------------------------------------- RETAILERS (--%) Michaels Stores Term Loan 10-31-13 7.63 390,000 386,100 Neiman Marcus Group Tranche B Term Loan 04-27-13 7.32-7.36 450,000 451,647 --------------- Total 837,747 - ---------------------------------------------------------------------------------- TECHNOLOGY (--%) West Corp Tranche B Term Loan 10-24-13 7.73-7.76 706,454 707,719 - ---------------------------------------------------------------------------------- WIRELINES (--%) Level 3 Communications Tranche B Term Loan 03-13-14 7.61 875,000 875,823 - ---------------------------------------------------------------------------------- TOTAL SENIOR LOANS (Cost: $16,409,075) $16,366,813 - ----------------------------------------------------------------------------------
MONEY MARKET FUND (4.2%)(r) SHARES VALUE(A) RiverSource Short-Term Cash Fund 82,368,607(u) $82,368,607 - ----------------------------------------------------------------------------------- TOTAL MONEY MARKET FUND (Cost: $82,368,607) $82,368,607 - ----------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES (Cost: $1,778,387,447)(v) $2,046,414,366 ===================================================================================
NOTES TO INVESTMENTS IN SECURITIES (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Non-income producing. (c) Foreign security values are stated in U.S. dollars. For debt securities, principal amounts are denominated in U.S. dollar currency unless otherwise noted. At June 30, 2007, the value of foreign securities represented 4.9% of net assets. (d) Represents a security sold under Rule 144A, which is exempt from registration under the Securities Act of 1933, as amended. This security has been determined to be liquid under guidelines established by the Fund's Board of Directors. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2007, the value of these securities amounted to $43,574,761 or 2.2% of net assets. (e) At June 30, 2007, the cost of securities purchased, including interest purchased, on a when-issued and/or other forward-commitment basis was $77,946,683. (f) Mortgage-backed securities represent direct or indirect participations in, or are secured by and payable from, mortgage loans secured by real property, and include single- and multi-class pass-through securities and collateralized mortgage obligations. These securities may be issued or guaranteed by U.S. government agencies or instrumentalities, or by private issuers, generally originators and investors in mortgage loans, including savings associations, mortgage bankers, commercial banks, investment bankers and special purpose entities. The maturity dates shown represent the original maturity of the underlying obligation. Actual maturity may vary based upon prepayment activity on these obligations. Unless otherwise noted, the coupon rates presented are fixed rates. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 153 RiverSource VP - Balanced Fund NOTES TO INVESTMENTS IN SECURITIES (CONTINUED) (g) Comparable securities are held to satisfy future delivery requirements of the following open forward sale commitments at June 30, 2007:
PRINCIPAL SETTLEMENT PROCEEDS SECURITY AMOUNT DATE RECEIVABLE VALUE - ------------------------------------------------------------------------------------------------------------------------------- Federal Natl Mtge Assn 07-01-22 5.50% $5,000,000 07-17-07 $4,907,812 $4,925,000
(h) Inflation-indexed bonds are securities in which the principal amount is adjusted for inflation and the semiannual interest payments equal a fixed percentage of the inflation-adjusted principal amount. (i) Interest rate varies either based on a predetermined schedule or to reflect current market conditions; rate shown is the effective rate on June 30, 2007. (j) Shareholders of tracking stocks have a financial interest only in a unit or division of the company. Unlike the common stock of the company itself, a tracking stock usually has limited or no voting rights. In the event of a company's liquidation, tracking stock shareholders typically do not have a legal claim on the company's assets. (k) Identifies issues considered to be illiquid as to their marketability (see Note 1 to the financial statements). These securities may be valued at fair value according to procedures approved, in good faith, by the Fund's Board of Directors. Information concerning such security holdings at June 30, 2007, is as follows:
ACQUISITION SECURITY DATES COST - --------------------------------------------------------------------------------------------------------- KKR Private Equity Investors LP Unit 05-01-06 thru 06-18-07 $2,179,674 Oaktree Capital Group LLC Cl A Unit* 05-21-07 2,112,000 United Artists Theatre Circuit 9.30% Pass-Through Ctfs 2015 12-08-95 thru 08-12-96 1,165,220
* Represents a security sold under Rule 144A, which is exempt from registration under the Securities Act of 1933, as amended. (l) Pay-in-kind securities are securities in which the issuer makes interest or dividend payments in cash or in additional securities. The securities usually have the same terms as the original holdings. (m) Interest only represents securities that entitle holders to receive only interest payments on the underlying mortgages. The yield to maturity of an interest only is extremely sensitive to the rate of principal payments on the underlying mortgage assets. A rapid (slow) rate of principal repayments may have an adverse (positive) effect on yield to maturity. The principal amount shown is the notional amount of the underlying mortgages. Interest rate disclosed represents yield based upon the estimated timing and amount of future cash flows at June 30, 2007. (n) Adjustable rate mortgage; interest rate varies to reflect current market conditions; rate shown is the effective rate on June 30, 2007. (o) The following abbreviations are used in the portfolio security descriptions to identify the insurer of the issue: AMBAC -- Ambac Assurance Corporation MBIA -- MBIA Insurance Corporation
(p) Partially pledged as initial deposit on the following open interest rate futures contracts (see Note 7 to the financial statements):
TYPE OF SECURITY NOTIONAL AMOUNT - ------------------------------------------------------------------------------------ PURCHASE CONTRACTS U.S. Long Bond, Sept. 2007, 20-year $12,400,000 U.S. Treasury Note, Sept. 2007, 10-year 9,400,000 SALE CONTRACTS U.S. Treasury Note, Sept. 2007, 2-year 16,600,000 U.S. Treasury Note, Sept. 2007, 5-year 29,600,000
(q) At June 30, 2007, security was partially or fully on loan. See Note 6 to the financial statements. (r) Cash collateral received from security lending activity is invested in an affiliated money market fund and represents 1.2% of net assets. See Note 6 to the financial statements. 3.0% of net assets is the Fund's cash equivalent position. (s) Senior loans have rates of interest that float periodically based primarily on the London Interbank Offered Rate ("LIBOR") and other short-term rates. Remaining maturities of senior loans may be less than the stated maturities shown as a result of contractual or optional prepayments by the borrower. Such prepayments cannot be predicted with certainty. (t) At June 30, 2007, the Fund had unfunded senior loan commitments pursuant to the term of the loan agreement. The Fund receives a stated coupon rate until the borrower draws on the loan commitment, at which time the rate will become the stated rate in the loan agreement.
UNFUNDED BORROWER COMMITMENT - ------------------------------------------------------------------------------- Community Health $107,504 Fontainebleau Las Vegas 239,400 Univision Communications 91,812 - ------------------------------------------------------------------------------- Total $438,716 - -------------------------------------------------------------------------------
(u) Affiliated Money Market Fund -- See Note 10 to the financial statements. - -------------------------------------------------------------------------------- 154 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Balanced Fund NOTES TO INVESTMENTS IN SECURITIES (CONTINUED) (v) At June 30, 2007, the cost of securities for federal income tax purposes was approximately $1,778,387,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $290,749,000 Unrealized depreciation (22,722,000) - --------------------------------------------------------------------------------- Net unrealized appreciation $268,027,000 - ---------------------------------------------------------------------------------
The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS (i) The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (Commission) for the first and third quarters of each fiscal year on Form N-Q; (ii) The Fund's Forms N-Q are available on the Commission's website at http://www.sec.gov; (iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC (information on the operations of the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iv) The Fund's complete schedule of portfolio holdings, as disclosed in its annual and semiannual shareholder reports and in its filings on Form N-Q, can be found at riversource.com. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 155 INVESTMENTS IN SECURITIES RiverSource VP - Cash Management Fund JUNE 30, 2007 (UNAUDITED) (Percentages represent value of investments compared to net assets)
CERTIFICATES OF DEPOSIT (7.9%) AMOUNT EFFECTIVE PAYABLE AT ISSUER YIELD MATURITY VALUE(A) Barclays Bank 03-17-08 5.28% $3,000,000(b) $2,999,709 05-30-08 5.31 10,000,000 10,000,000 Credit Suisse NY 01-14-08 5.17 6,000,000 6,000,000 02-26-08 5.33 17,000,000(b) 17,000,000 06-16-08 5.44 8,000,000 8,000,000 Deutsche Bank 10-10-07 5.25 10,000,000 10,000,000 04-14-08 5.29 10,000,000 10,000,000 Deutsche Bank NY 05-22-08 5.34 10,000,000 10,000,000 Natixis 03-31-08 5.40 10,000,000(b) 10,000,000 04-02-08 5.40 10,000,000(b) 9,998,542 - ----------------------------------------------------------------------------------- TOTAL CERTIFICATES OF DEPOSIT (Cost: $93,998,251) $93,998,251 - -----------------------------------------------------------------------------------
FLOATING RATE NOTES (20.2%)(b) AMOUNT EFFECTIVE PAYABLE AT ISSUER YIELD MATURITY VALUE(A) Bank of New York 07-12-08 5.29% $10,000,000 $10,000,000 Bear Stearns Companies 10-05-07 5.33 10,000,000 10,000,000 07-14-08 5.36 5,000,000 5,000,000 07-25-08 5.38 5,000,000 5,000,000 Cullinan Finance 03-28-08 5.32 13,000,000 12,998,543 04-28-08 5.32 4,000,000 3,999,505 DEPFA Bank 06-13-08 5.42 10,000,000 10,000,000 General Electric Capital 06-23-08 5.28 10,000,000 10,000,000 Goldman Sachs Group 07-14-08 5.37 5,000,000 5,000,000 HSBC Finance 06-23-08 5.37 5,000,000 5,000,000 Irish Life & Permanent 07-18-08 5.36 5,000,000 4,999,730 Lehman Brothers 06-27-08 5.35 10,000,000 10,000,000 Lloyds TSB Group 06-06-08 5.32 10,000,000 10,000,000 Merrill Lynch & Co 07-27-07 5.29 15,000,000 15,000,000 06-17-08 5.30 10,000,000 10,000,000 07-14-08 5.33 5,000,000 5,000,000 MetLife Global Funding I 07-21-08 5.31 5,000,000 5,000,000
FLOATING RATE NOTES (CONTINUED) AMOUNT EFFECTIVE PAYABLE AT ISSUER YIELD MATURITY VALUE(A) Natexis Banques Populaires US Finance LLC 07-14-08 5.33% $3,000,000 $3,000,000 08-07-08 5.35 5,000,000 5,000,000 Northern Rock 05-02-08 5.38 5,000,000 5,000,000 07-08-08 5.45 10,700,000 10,700,000 Sedna Finance 09-20-07 5.33 22,000,000 21,999,753 01-18-08 5.32 8,000,000 7,999,557 Skandinaviska Enskilda Banken 07-08-08 5.32 5,000,000 5,000,000 07-17-08 5.32 10,000,000 10,000,000 07-22-08 5.33 7,000,000 7,000,000 Wells Fargo & Co 07-03-08 5.31 5,000,000 5,000,000 Westpac Banking 07-10-08 5.42 10,700,000 10,700,000 White Pine Finance LLC 02-25-08 5.35 2,000,000 2,000,212 03-20-08 5.28 10,000,000 9,998,557 - ----------------------------------------------------------------------------------- TOTAL FLOATING RATE NOTES (Cost: $240,395,857) $240,395,857 - -----------------------------------------------------------------------------------
COMMERCIAL PAPER (71.7%) AMOUNT EFFECTIVE PAYABLE AT ISSUER YIELD MATURITY VALUE(A) ASSET-BACKED (68.6%) Amsterdam Funding 07-19-07 5.00% $5,000,000(c) $4,986,146 Axon Financial Funding LLC 07-26-07 5.15 5,200,000 5,179,983 BA Credit Card Trust 08-01-07 5.10 3,000,000(c) 2,986,027 08-02-07 5.11 10,000,000(c) 9,951,967 08-07-07 5.13 8,000,000(c) 7,955,751 08-08-07 5.20 10,000,000(c) 9,942,583 09-19-07 5.27 3,690,000(c) 3,646,204 Bryant Park Funding LLC 07-11-07 4.82 4,050,000(c) 4,043,503 07-23-07 5.03 3,000,000(c) 2,989,966 CAFCO LLC 08-23-07 5.23 10,300,000(c) 10,218,424 Chariot Funding LLC 09-18-07 5.26 9,700,000(c) 9,586,618 CHARTA LLC 07-05-07 4.39 9,000,000(c) 8,993,425 07-10-07 4.78 15,000,000(c) 14,978,125 09-13-07 5.24 5,000,000(c) 4,945,313
COMMERCIAL PAPER (CONTINUED) AMOUNT EFFECTIVE PAYABLE AT ISSUER YIELD MATURITY VALUE(A) ASSET-BACKED (CONT.) Chesham Finance LLC 09-04-07 5.24% $15,200,000 $15,053,278 10-11-07 5.22 10,000,000 9,851,508 10-19-07 5.21 7,000,000 6,888,414 Cheyne Finance LLC 07-12-07 4.85 14,000,000 13,975,500 07-19-07 5.00 5,000,000 4,986,146 07-23-07 5.05 3,000,000 2,989,938 08-03-07 5.13 5,000,000 4,975,208 09-13-07 5.25 3,000,000 2,967,125 09-19-07 5.27 5,000,000 4,940,713 10-18-07 5.22 2,000,000 1,968,344 Citibank Credit Card Issue Trust (Dakota Nts) 07-10-07 4.78 15,000,000(c) 14,978,146 07-12-07 4.85 15,000,000(c) 14,973,750 08-21-07 5.18 9,000,000(c) 8,931,880 09-21-07 5.28 7,000,000(c) 6,914,787 Citigroup Funding 07-13-07 4.88 20,000,000 19,962,119 08-17-07 5.17 15,000,000 14,895,200 09-17-07 5.25 10,000,000 9,884,572 CRC Funding LLC 08-01-07 5.13 8,000,000(c) 7,962,524 08-15-07 5.18 10,000,000(c) 9,932,853 08-21-07 5.24 5,000,000(c) 4,961,722 Cullinan Finance 04-25-08 5.35 10,000,000 10,000,000 Deer Valley Funding LLC 07-11-07 4.82 8,000,000 7,987,167 07-16-07 5.01 6,000,000 5,985,840 08-20-07 5.20 15,900,000 15,781,519 09-11-07 5.25 11,968,000 11,840,105 10-12-07 5.31 5,000,000 4,923,733 Dorada Finance 07-13-07 4.87 4,000,000 3,992,431 09-12-07 5.22 3,000,000 2,967,718 Ebury Finance LLC 07-02-07 3.63 900,000 899,728 07-09-07 4.75 15,000,000 14,980,238 08-01-07 5.10 7,000,000 6,967,458 09-05-07 5.24 3,000,000 2,970,576 09-14-07 5.31 5,000,000 4,943,844 Fairway Finance LLC 07-26-07 5.13 11,700,000(c) 11,655,131 08-06-07 5.19 8,311,000(c) 8,265,728 Five Finance 07-17-07 4.97 10,000,000 9,975,208 08-30-07 5.21 5,000,000 4,955,521 09-07-07 5.23 4,000,000 3,959,750
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 156 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Cash Management Fund
COMMERCIAL PAPER (CONTINUED) AMOUNT EFFECTIVE PAYABLE AT ISSUER YIELD MATURITY VALUE(A) ASSET-BACKED (CONT.) Galaxy Funding 07-24-07 5.05% $5,000,000(c) $4,982,533 08-10-07 5.14 10,000,000(c) 9,940,379 08-16-07 5.17 23,000,000(c) 22,842,653 Gemini Securitization 07-05-07 4.36 3,200,000(c) 3,197,676 07-06-07 4.51 2,000,000(c) 1,998,248 07-27-07 5.06 1,000,000(c) 996,078 08-28-07 5.21 19,000,000(c) 18,836,521 09-06-07 5.23 7,700,000(c) 7,623,642 09-07-07 5.23 5,000,000(c) 4,949,688 09-10-07 5.23 7,000,000(c) 6,926,500 Grampian Funding LLC 11-16-07 5.25 5,000,000(c) 4,899,997 Jupiter Securitization LLC 08-07-07 5.19 10,104,000(c) 10,047,474 08-13-07 5.22 3,446,000(c) 3,423,678 K2 (USA) LLC 04-21-08 5.29 15,000,000 15,000,000 Kitty Hawk Funding 09-17-07 5.25 14,000,000(c) 13,838,555 Nelnet Student Asset Funding LLC 07-02-07 3.51 10,052,000 10,049,057 07-25-07 5.08 13,600,000 13,550,322 07-30-07 5.12 18,000,000 17,920,950 08-23-07 5.26 6,000,000 5,952,210 Nieuw Amsterdam Receivables 07-23-07 5.10 5,100,000(c) 5,082,731 Park Avenue Receivables 07-24-07 5.11 3,000,000 2,989,400 08-22-07 5.19 5,000,000 4,961,354
COMMERCIAL PAPER (CONTINUED) AMOUNT EFFECTIVE PAYABLE AT ISSUER YIELD MATURITY VALUE(A) ASSET-BACKED (CONT.) Park Granada LLC 07-03-07 3.95% $18,000,000(c) $17,992,095 Park Sienna LLC 07-20-07 5.05 13,000,000(c) 12,961,794 07-26-07 5.11 4,250,000(c) 4,233,763 07-31-07 5.15 4,800,000(c) 4,778,135 Ranger Funding LLC 07-11-07 4.82 4,150,000(c) 4,143,343 07-12-07 4.85 12,700,000(c) 12,677,796 07-25-07 5.07 8,000,000(c) 7,970,833 08-21-07 5.21 10,000,000(c) 9,923,950 09-18-07 5.25 10,000,000(c) 9,883,222 Scaldis Capital LLC 07-02-07 3.49 14,200,000(c) 14,195,866 09-11-07 5.23 6,000,000(c) 5,936,125 09-28-07 5.27 2,312,000(c) 2,281,597 Sigma Finance 04-18-08 5.29 15,000,000 15,000,000 04-23-08 5.33 15,000,000 15,000,000 06-06-08 5.36 10,000,000 9,999,533 Solitaire Funding LLC 09-04-07 5.22 10,000,000(c) 9,903,842 11-28-07 5.27 6,500,000(c) 6,358,500 Thames Asset Global Securities #1 08-28-07 5.19 8,150,000(c) 8,080,143 09-20-07 5.27 4,370,000(c) 4,317,543 Variable Funding Capital 09-05-07 5.22 2,000,000(c) 1,980,458
COMMERCIAL PAPER (CONTINUED) AMOUNT EFFECTIVE PAYABLE AT ISSUER YIELD MATURITY VALUE(A) ASSET-BACKED (CONT.) Whistlejacket Capital LLC 11-29-07 5.28% $2,098,000 $2,051,937 White Pine Finance LLC 07-09-07 4.74 8,000,000 7,989,480 09-12-07 5.27 5,154,000 5,098,062 10-22-07 5.22 17,000,000 16,721,143 --------------- Total 814,938,263 - ----------------------------------------------------------------------------------- BANKING (1.8%) Bank of America 08-10-07 5.13 9,500,000 9,443,468 10-25-07 5.24 3,800,000 3,735,842 UBS Stamford 11-28-07 5.23 8,000,000 8,000,000 --------------- Total 21,179,310 - ----------------------------------------------------------------------------------- BROKERAGE (0.1%) Lehman Brothers Holdings 07-18-07 4.97 1,000,000 997,385 - ----------------------------------------------------------------------------------- NON CAPTIVE DIVERSIFIED (1.2%) General Electric Capital 11-26-07 5.26 15,000,000 14,678,408 - ----------------------------------------------------------------------------------- TOTAL COMMERCIAL PAPER (Cost: $851,793,366) $851,793,366 - ----------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES (Cost: $1,186,187,474)(d) $1,186,187,474 ===================================================================================
NOTES TO INVESTMENTS IN SECURITIES (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Interest rate varies either based on a predetermined schedule or to reflect current market conditions; rate shown is the effective rate on June 30, 2007. The maturity date disclosed represents the final maturity. For purposes of Rule 2a-7, maturity is the later of the next put or interest rate reset date. (c) Commercial paper sold within terms of a private placement memorandum, exempt from registration under Section 4(2) of the Securities Act of 1933, as amended, and may be sold only to dealers in that program or other "accredited investors." This security has been determined to be liquid under guidelines established by the Fund's Board of Directors. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2007, the value of these securities amounted to $441,005,931 or 37.1% of net assets. (d) Also represents the cost of securities for federal income tax purposes at June 30, 2007. HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS (i) The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (Commission) for the first and third quarters of each fiscal year on Form N-Q; (ii) The Fund's Forms N-Q are available on the Commission's website at http://www.sec.gov; (iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC (information on the operations of the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iv) The Fund's complete schedule of portfolio holdings, as disclosed in its annual and semiannual shareholder reports and in its filings on Form N-Q, can be found at riversource.com. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 157 INVESTMENTS IN SECURITIES RiverSource VP - Core Bond Fund JUNE 30, 2007 (UNAUDITED) (Percentages represent value of investments compared to net assets)
BONDS (109.6%) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) U.S. GOVERNMENT OBLIGATIONS & AGENCIES (31.3%) Federal Home Loan Bank 01-18-08 4.63% $580,000 $577,935 02-13-08 5.25 375,000 374,688 Federal Home Loan Mtge Corp 08-17-07 4.00 220,000 219,629 03-15-09 5.75 120,000 121,004 07-12-10 4.13 197,000 191,135 04-16-37 6.00 1,130,000 1,090,335 Federal Natl Mtge Assn 09-15-07 4.25 675,000 673,542 01-15-08 4.63 1,200,000 1,195,608 06-15-08 5.25 5,000 4,996 02-16-12 5.00 2,105,000 2,079,439 05-18-12 4.88 1,220,000 1,197,430 11-15-30 6.63 400,000 450,780 U.S. Treasury 09-30-07 4.00 1,215,000(j) 1,212,342 11-30-07 4.25 810,000 807,849 01-31-09 4.88 2,185,000 2,182,098 02-15-09 4.50 2,475,000 2,457,792 06-30-09 4.88 1,090,000(b) 1,089,915 02-15-10 4.75 1,135,000 1,130,832 05-31-12 4.75 1,335,000 1,324,571 06-30-12 4.88 1,890,000(b) 1,884,980 05-15-17 4.50 715,000 685,506 02-15-26 6.00 2,163,000 2,361,049 U.S. Treasury Inflation-Indexed Bond 04-15-12 2.00 1,547,527(k) 1,502,272 --------------- Total 24,815,727 - ----------------------------------------------------------------------------------- ASSET-BACKED (2.5%) Capital Auto Receivables Asset Trust Series 2004-1 Cl CTFS 09-15-10 2.84 50,000 49,863 Capital Auto Receivables Asset Trust Series 2006-SN1A Cl A4B 03-20-10 5.43 200,000(d,i) 200,028 Countrywide Asset-backed Ctfs Series 2005-10 Cl AF6 02-25-36 4.92 30,000 28,453 Countrywide Asset-backed Ctfs Series 2006-4 Cl 1A1M 07-25-36 5.58 49,341(i) 49,367 Countrywide Asset-backed Ctfs Series 2007-7 Cl 2A2 10-25-37 5.48 250,000(i) 249,961 Drive Auto Receivables Trust Series 2006-2 Cl A2 (MBIA) 07-15-11 5.30 150,000(d,e) 149,957 Dunkin Securitization Series 2006-1 Cl A2 (AMBAC) 06-20-31 5.78 225,000(d,e) 225,548
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) ASSET-BACKED (CONT.) Franklin Auto Trust Series 2004-1 Cl A3 (MBIA) 03-15-12 4.15% $22,167(e) $22,001 Natl Collegiate Student Loan Trust Collateralized Mtge Obligation Interest Only Series 2006-2 Cl AIO 08-25-11 5.89 200,000(g) 42,686 Natl Collegiate Student Loan Trust Collateralized Mtge Obligation Interest Only Series 2006-3 Cl AIO 01-25-12 5.88 300,000(g) 80,658 Natl Collegiate Student Loan Trust Collateralized Mtge Obligation Interest Only Series 2007-2 Cl AIO 07-25-12 5.90 150,000(g) 43,166 Popular ABS Mtge Pass-Through Trust Series 2005-A Cl AF2 06-25-35 4.49 19,917 19,809 Renaissance Home Equity Loan Trust Series 2005-4 Cl A3 02-25-36 5.57 90,000 89,636 Renaissance Home Equity Loan Trust Series 2007-2 Cl M4 06-25-37 6.31 40,000 39,050 Renaissance Home Equity Loan Trust Series 2007-2 Cl M5 06-25-37 6.66 25,000 24,414 Renaissance Home Equity Loan Trust Series 2007-2 Cl M6 06-25-37 7.01 35,000 34,191 Residential Asset Securities Series 2006-KS1 Cl A2 02-25-36 5.46 190,000(i) 190,000 Residential Asset Securities Series 2007-KS3 Cl AI2 04-25-37 5.50 350,000(i) 350,525 SBA CMBS Trust Series 2006-1A Cl B 11-15-36 5.45 100,000(d) 97,942 WFS Financial Owner Trust Series 2004-1 Cl D 08-22-11 3.17 6,677 6,664 --------------- Total 1,993,919 - ----------------------------------------------------------------------------------- COMMERCIAL MORTGAGE-BACKED (9.4%)(f) Banc of America Commercial Mtge Series 2005-1 Cl A4 11-10-42 4.87 75,000 73,493
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) COMMERCIAL MORTGAGE-BACKED (CONT.) Banc of America Commercial Mtge Series 2005-4 Cl ASB 07-10-45 4.87% $100,000 $96,028 Banc of America Commercial Mtge Series 2007-1 Cl A3 01-15-49 5.45 150,000 146,791 Banc of America Large Loan Series 2006-LAQ Cl E 02-09-21 5.70 75,000(d,i) 75,193 Banc of America Large Loan Series 2006-LAQ Cl F 02-09-21 5.76 75,000(d,i) 75,165 Banc of America Large Loan Series 2006-LAQ Cl G 02-09-21 5.85 50,000(d,i) 50,153 Bear Stearns Commercial Mtge Securities Series 2004-PWR5 Cl A3 07-11-42 4.57 100,000 96,287 Bear Stearns Commercial Mtge Securities Series 2007-T26 Cl A4 01-12-45 5.47 150,000 145,688 CDC Commercial Mtge Trust Series 2002-FX1 Cl A1 05-15-19 5.25 128,055 127,674 CDC Commercial Mtge Trust Series 2002-FX1 Cl A2 11-15-30 5.68 225,000 225,965 Citigroup Commercial Mtge Trust Series 2005-EMG Cl A1 09-20-51 4.15 55,757(d) 54,978 Citigroup/Deutsche Bank Commercial Mtge Trust Series 2005-CD1 Cl ASB 07-15-44 5.23 50,000 48,971 Commercial Mtge Acceptance Series 1999-C1 Cl A2 06-15-31 7.03 193,940 198,015 Commercial Mtge Pass-Through Ctfs Series 2006-CN2A Cl BFL 02-05-19 5.63 50,000(d,i) 50,348 Commercial Mtge Pass-Through Ctfs Series 2007-FL14 Cl MKL1 06-15-22 6.12 250,000(d,i) 250,000 Credit Suisse Mtge Capital Ctfs Series 2006-C2 Cl A3 03-15-39 5.66 100,000 99,065 Credit Suisse Mtge Capital Ctfs Series 2006-C4 Cl A3 09-15-39 5.47 200,000 194,131 CS First Boston Mtge Securities Series 2001-CP4 Cl A4 12-15-35 6.18 175,000 177,932
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 158 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Core Bond Fund
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) COMMERCIAL MORTGAGE-BACKED (CONT.) CS First Boston Mtge Securities Series 2003-CPN1 Cl A2 03-15-35 4.60% $75,000 $71,118 Federal Natl Mtge Assn #386768 01-01-11 4.23 94,920 91,134 Federal Natl Mtge Assn #387486 07-01-15 4.70 661,486 638,590 Federal Natl Mtge Assn #555806 10-01-13 5.08 163,367 159,897 Federal Natl Mtge Assn #735029 09-01-13 5.28 143,974 142,203 Federal Natl Mtge Assn Collateralized Mtge Obligation Series 2002-M2 Cl C 08-25-12 4.72 92,575 89,446 GE Capital Commercial Mtge Series 2005-C1 Cl A5 06-10-48 4.77 100,000 93,860 General Electric Capital Assurance Series 2003-1 Cl A3 05-12-35 4.77 175,000(d) 172,376 Greenwich Capital Commercial Funding Series 2004-GG1 Cl A5 06-10-36 4.88 50,000 48,896 GS Mtge Securities II Series 2004-GG2 Cl A4 08-10-38 4.96 75,000 73,550 GS Mtge Securities II Series 2006-GG6 Cl A4 04-10-38 5.55 125,000 122,632 GS Mtge Securities II Series 2007-EOP Cl J 03-06-20 6.17 150,000(d,i) 150,047 GS Mtge Securities II Series 2007-GG10 Cl F 08-10-45 5.99 125,000(b) 121,064 JPMorgan Chase Commercial Mtge Securities Series 2003-CB6 Cl A2 07-12-37 5.26 150,000 146,511 JPMorgan Chase Commercial Mtge Securities Series 2003-LN1 Cl A1 10-15-37 4.13 90,063 86,848 JPMorgan Chase Commercial Mtge Securities Series 2003-ML1A Cl A1 03-12-39 3.97 39,945 38,829 JPMorgan Chase Commercial Mtge Securities Series 2003-ML1A Cl A2 03-12-39 4.77 150,000 143,278 JPMorgan Chase Commercial Mtge Securities Series 2004-C2 Cl A2 05-15-41 5.09 100,000 98,308 JPMorgan Chase Commercial Mtge Securities Series 2004-CBX Cl A3 01-12-37 4.18 50,000 48,601 JPMorgan Chase Commercial Mtge Securities Series 2004-LN2 Cl A1 07-15-41 4.48 219,768 212,660
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) COMMERCIAL MORTGAGE-BACKED (CONT.) JPMorgan Chase Commercial Mtge Securities Series 2006-LDP6 Cl A4 04-15-43 5.48% $100,000 $97,392 JPMorgan Chase Commercial Mtge Securities Series 2006-LDP6 Cl ASB 04-15-43 5.49 125,000 123,358 LB-UBS Commercial Mtge Trust Series 2002-C4 Cl A4 09-15-26 4.56 60,000 58,371 LB-UBS Commercial Mtge Trust Series 2004-C2 Cl A3 03-15-29 3.97 50,000 47,028 LB-UBS Commercial Mtge Trust Series 2005-C5 Cl AAB 09-15-30 4.93 175,000 169,054 LB-UBS Commercial Mtge Trust Series 2006-C4 Cl AAB 06-15-32 5.86 200,000 201,959 LB-UBS Commercial Mtge Trust Series 2007-C1 Cl A4 02-15-40 5.42 125,000 120,843 Morgan Stanley Capital I Series 2003-T11 Cl A2 06-13-41 4.34 75,000 73,529 Morgan Stanley Capital I Series 2004-HQ4 Cl A5 04-14-40 4.59 75,000 71,983 Morgan Stanley Capital I Series 2005-T19 Cl AAB 06-12-47 4.85 175,000 168,025 Morgan Stanley Capital I Series 2006-T23 Cl AAB 08-12-41 5.80 75,000 75,527 Morgan Stanley Capital I Series 2006-XLF Cl A2 07-15-19 5.45 147,682(d,i) 147,702 Morgan Stanley Dean Witter Capital I Series 2002-TOP7 Cl A2 01-15-39 5.98 225,000 227,858 Nomura Asset Securities Series 1998-D6 Cl A3 03-15-30 7.00 150,000 161,354 Wachovia Bank Commercial Mtge Trust Series 2003-C7 Cl A2 10-15-35 5.08 325,000(d) 313,696 Wachovia Bank Commercial Mtge Trust Series 2005-C18 Cl A4 04-15-42 4.94 100,000 94,562 Wachovia Bank Commercial Mtge Trust Series 2005-C20 Cl A5 07-15-42 5.09 100,000 97,681 Wachovia Bank Commercial Mtge Trust Series 2006-C27 Cl A3 07-15-45 5.77 75,000 74,349 Wachovia Bank Commercial Mtge Trust Series 2006-C27 Cl APB 07-15-45 5.73 100,000 99,338
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) COMMERCIAL MORTGAGE-BACKED (CONT.) Wachovia Bank Commercial Mtge Trust Series 2007-C31 Cl A4 04-15-47 5.51% $125,000 $121,257 --------------- Total 7,480,591 - ----------------------------------------------------------------------------------- MORTGAGE-BACKED (48.3%)(f) Adjustable Rate Mtge Trust Collateralized Mtge Obligation Series 2005-12 Cl 2A1 03-25-36 5.69 143,794(h) 143,787 Adjustable Rate Mtge Trust Collateralized Mtge Obligation Series 2006-1 Cl 2A1 03-25-36 5.94 169,817(h) 169,268 Adjustable Rate Mtge Trust Collateralized Mtge Obligation Series 2007-1 Cl 3A21 03-25-37 6.20 188,000(h) 188,039 American Home Mtge Assets Collateralized Mtge Obligation Series 2007-2 Cl A2A 03-25-47 5.49 290,363(h) 290,048 American Home Mtge Investment Trust Collateralized Mtge Obligation Series 2007-1 Cl GA1C 05-25-47 5.51 393,839(h) 393,664 Banc of America Alternative Loan Trust Collateralized Mtge Obligation Series 2003-11 Cl 4A1 01-25-19 4.75 60,671 57,675 Banc of America Alternative Loan Trust Collateralized Mtge Obligation Series 2006-9 Cl 1CB1 01-25-37 6.00 469,374 460,690 Banc of America Funding Collateralized Mtge Obligation Series 2006-A Cl 3A2 02-20-36 5.90 151,166(h) 150,857 Bear Stearns Adjustable Rate Mtge Trust Collateralized Mtge Obligation Series 2005-8 Cl A4 08-25-35 5.10 150,000(d,h) 143,649 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Interest Only Series 2007-8CB Cl A13 05-25-37 7.73 145,198(g) 25,000 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2003-11T1 Cl A1 07-25-18 4.75 32,379 30,781 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2003-20CB Cl 1A1 10-25-33 5.50 1,131,922(b) 1,084,141
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 159 RiverSource VP - Core Bond Fund
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2005-54CB Cl 2A3 11-25-35 5.50% $105,536 $104,611 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2005-54CB Cl 3A7 11-25-35 5.50 109,190 108,235 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2005-64CB Cl 1A1 12-25-35 5.50 211,815 211,231 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2005-6CB Cl 1A1 04-25-35 7.50 78,225 80,608 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2005-85CB Cl 2A2 02-25-36 5.50 75,732 75,305 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2006-22R Cl 1A2 05-25-36 6.00 186,896 188,156 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2006-2CB Cl A11 03-25-36 6.00 198,232 197,138 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2006-31CB Cl A16 11-25-36 6.00 350,000 350,893 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2006-43CB Cl 1A4 02-25-37 6.00 326,174 325,502 Countrywide Home Loans Collateralized Mtge Obligation Series 2005-HYB1 Cl 6A1 03-25-35 5.16 268,736(h) 263,941 Countrywide Home Loans Collateralized Mtge Obligation Series 2005-R2 Cl 2A1 06-25-35 7.00 107,797(d) 111,535 Countrywide Home Loans Collateralized Mtge Obligation Series 2006-HYB1 Cl 1A1 03-20-36 5.36 334,597(h) 332,767 Downey Savings & Loan Assn Mtge Loan Trust Collateralized Mtge Obligation Interest Only Series 2005-AR5 Cl X1 08-19-45 0.00 831,201(g) 8,572 Federal Home Loan Mtge Corp 07-01-37 6.00 600,000(b) 594,375 07-01-37 6.50 500,000(b) 505,156 08-01-37 6.50 1,500,000(b) 1,513,593
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Federal Home Loan Mtge Corp #1G2496 09-01-36 6.20% $177,945(h) $179,263 Federal Home Loan Mtge Corp #1J0283 02-01-37 5.83 247,885(h) 247,602 Federal Home Loan Mtge Corp #1J1445 01-01-37 5.91 396,949(h) 397,593 Federal Home Loan Mtge Corp #A59310 04-01-37 6.00 998,026 988,898 Federal Home Loan Mtge Corp #B11452 12-01-18 6.00 135,998 136,703 Federal Home Loan Mtge Corp #B11835 01-01-19 5.50 110,546 109,249 Federal Home Loan Mtge Corp #B12280 02-01-19 5.50 131,467 129,925 Federal Home Loan Mtge Corp #C46101 08-01-29 6.50 263,475 269,163 Federal Home Loan Mtge Corp #C90613 01-01-23 5.00 50,091 47,936 Federal Home Loan Mtge Corp #C90683 06-01-23 5.00 98,024 93,809 Federal Home Loan Mtge Corp #C90767 12-01-23 6.00 43,847 44,024 Federal Home Loan Mtge Corp #D96348 10-01-23 5.50 169,060 165,332 Federal Home Loan Mtge Corp #G01410 04-01-32 7.00 75,316 77,630 Federal Home Loan Mtge Corp #G02757 06-01-36 5.00 536,296 504,018 Federal Home Loan Mtge Corp Collateralized Mtge Obligation Interest Only Series 237 Cl IO 05-15-36 9.81 114,379(g) 31,409 Federal Home Loan Mtge Corp Collateralized Mtge Obligation Interest Only Series 2795 Cl IY 07-15-17 12.40 189,949(g) 19,122 Federal Home Loan Mtge Corp Collateralized Mtge Obligation Interest Only/Inverse Floater Series 2817 Cl SA 06-15-32 19.76 195,170(g,m) 9,644 Federal Home Loan Mtge Corp Collateralized Mtge Obligation Series 2641 Cl KC 01-15-18 6.50 49,661 50,738 Federal Natl Mtge Assn 07-01-22 5.00 550,000(b) 531,438 07-01-22 5.50 1,140,000(b) 1,122,900 07-01-37 5.50 1,675,000(b) 1,615,328 07-01-37 7.00 750,000(b) 769,922 08-01-37 5.00 1,000,000(b) 936,562 08-01-37 6.00 3,250,000(b) 3,212,425 Federal Natl Mtge Assn #252440 05-01-29 7.00 128,985 133,750
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Federal Natl Mtge Assn #254560 11-01-32 5.00% $19,958 $18,793 Federal Natl Mtge Assn #255364 09-01-34 6.00 499,568 495,904 Federal Natl Mtge Assn #255788 06-01-15 5.50 292,113 291,093 Federal Natl Mtge Assn #323715 05-01-29 6.00 70,535 70,308 Federal Natl Mtge Assn #545869 07-01-32 6.50 63,418 64,713 Federal Natl Mtge Assn #545874 08-01-32 6.50 123,440 125,982 Federal Natl Mtge Assn #555340 04-01-33 5.50 136,925 132,816 Federal Natl Mtge Assn #555528 04-01-33 6.00 414,634 412,712 Federal Natl Mtge Assn #615135 11-01-16 6.00 160,699 161,657 Federal Natl Mtge Assn #645569 06-01-32 7.00 333,309 345,252 Federal Natl Mtge Assn #650009 09-01-31 7.50 16,435 17,200 Federal Natl Mtge Assn #667604 10-01-32 5.50 174,732 169,333 Federal Natl Mtge Assn #677089 01-01-33 5.50 157,331 152,470 Federal Natl Mtge Assn #677695 02-01-33 6.50 298,473 305,692 Federal Natl Mtge Assn #683116 02-01-33 6.00 272,223 270,962 Federal Natl Mtge Assn #704610 06-01-33 5.50 162,135 157,091 Federal Natl Mtge Assn #720378 06-01-18 4.50 57,231 54,532 Federal Natl Mtge Assn #724867 06-01-18 5.00 94,129 91,304 Federal Natl Mtge Assn #725232 03-01-34 5.00 383,986 361,701 Federal Natl Mtge Assn #725284 11-01-18 7.00 27,112 27,960 Federal Natl Mtge Assn #725424 04-01-34 5.50 1,983,962 1,922,245 Federal Natl Mtge Assn #725425 04-01-34 5.50 412,725 399,921 Federal Natl Mtge Assn #725431 08-01-15 5.50 78,246 77,719 Federal Natl Mtge Assn #725719 07-01-33 4.85 72,824(h) 71,547 Federal Natl Mtge Assn #725737 08-01-34 4.54 77,478(h) 77,143 Federal Natl Mtge Assn #725773 09-01-34 5.50 524,076 507,403 Federal Natl Mtge Assn #735212 12-01-34 5.00 528,231 497,029 Federal Natl Mtge Assn #735841 11-01-19 4.50 793,472(b) 754,927
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 160 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Core Bond Fund
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Federal Natl Mtge Assn #743455 10-01-18 5.50% $175,622 $173,683 Federal Natl Mtge Assn #743579 11-01-33 5.50 95,052 92,095 Federal Natl Mtge Assn #753074 12-01-28 5.50 127,981 124,138 Federal Natl Mtge Assn #759330 01-01-19 6.50 118,692 121,106 Federal Natl Mtge Assn #759342 01-01-34 6.50 92,953 94,925 Federal Natl Mtge Assn #761031 01-01-34 5.00 168,791 158,870 Federal Natl Mtge Assn #763754 02-01-29 5.50 139,584 135,301 Federal Natl Mtge Assn #763798 03-01-34 5.50 229,094 222,051 Federal Natl Mtge Assn #765760 02-01-19 5.00 142,556 138,295 Federal Natl Mtge Assn #785506 06-01-34 5.00 670,689 631,072 Federal Natl Mtge Assn #791447 10-01-34 6.00 311,395 309,111 Federal Natl Mtge Assn #815264 05-01-35 5.23 286,114(h) 282,598 Federal Natl Mtge Assn #829227 08-01-35 6.00 479,053 474,751 Federal Natl Mtge Assn #831870 11-01-36 6.50 692,011 698,741 Federal Natl Mtge Assn #872916 06-01-36 6.50 270,043 274,583 Federal Natl Mtge Assn #878661 02-01-36 5.50 380,521 365,278 Federal Natl Mtge Assn #881629 02-01-36 5.50 371,621 356,733 Federal Natl Mtge Assn #886291 07-01-36 7.00 176,938 182,880 Federal Natl Mtge Assn #886461 08-01-36 6.18 181,266(h) 182,616 Federal Natl Mtge Assn #888414 11-01-35 5.00 479,215 450,244 Federal Natl Mtge Assn #900197 10-01-36 5.94 212,511(h) 214,428 Federal Natl Mtge Assn #901922 10-01-36 5.79 220,706(h) 221,404 Federal Natl Mtge Assn #909471 02-01-37 5.55 316,714(h) 315,672 Federal Natl Mtge Assn Collateralized Mtge Obligation Interest Only Series 2003-63 Cl IP 07-25-33 12.39 425,907(g) 103,537 Federal Natl Mtge Assn Collateralized Mtge Obligation Interest Only/Inverse Floater Series 2005-92 CL SC 10-25-35 17.34 727,622(g,m) 36,454
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Federal Natl Mtge Assn Collateralized Mtge Obligation Interest Only Series 367 Cl 2 01-01-36 9.52% $480,223(g) $131,303 Harborview Mtge Loan Trust Collateralized Mtge Obligation Series 2005-16 Cl 3A1B 01-19-36 5.66 119,477(h) 119,476 Harborview Mtge Loan Trust Collateralized Mtge Obligation Series 2006-8 Cl 2A1B 08-21-36 5.57 331,382(h) 331,918 Harborview Nim Collateralized Mtge Obligation Series 2006-10 Cl N1 11-19-36 6.41 34,598(d) 34,566 IndyMac Index Mtge Loan Trust Collateralized Mtge Obligation Series 2007-AR5 Cl 1A1 05-25-37 6.37 322,181(h) 325,287 IndyMac Index Nim Collateralized Mtge Obligation Series 2006-AR6 Cl N1 06-25-46 6.65 25,573(d) 25,477 Lehman XS Trust Collateralized Mtge Obligation Series 2007-5H Cl 1A1 05-25-37 6.50 483,257 486,600 Master Alternative Loans Trust Collateralized Mtge Obligation Series 2004-2 Cl 4A1 02-25-19 5.00 95,236 91,397 Master Alternative Loans Trust Collateralized Mtge Obligation Series 2004-4 Cl 2A1 05-25-34 6.00 72,839 71,980 Master Alternative Loans Trust Collateralized Mtge Obligation Series 2004-7 Cl 8A1 08-25-19 5.00 41,378 39,846 Master Alternative Loans Trust Collateralized Mtge Obligation Series 2004-8 Cl 7A1 09-25-19 5.00 64,820 62,299 Master Alternative Loans Trust Collateralized Mtge Obligation Series 2005-3 Cl 1A2 04-25-35 5.50 300,000 279,684 Merrill Lynch Alternative Note Asset Collateralized Mtge Obligation Series 2007-OAR2 Cl A1 04-25-37 5.50 333,962(i) 333,532 Residential Accredit Loans Collateralized Mtge Obligation Series 2006-QS3 Cl 1A10 03-25-36 6.00 144,299 144,616
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Structured Asset Securities Collateralized Mtge Obligation Series 2003-33H Cl 1A1 10-25-33 5.50% $212,269 $203,344 Washington Mutual Mtge Pass-Through Ctfs Collateralized Mtge Obligation Series 2004-CB2 Cl 6A 07-25-19 4.50 198,703 188,004 Washington Mutual Mtge Pass-Through Ctfs Collateralized Mtge Obligation Series 2005-AR14 Cl 2A1 12-25-35 5.29 105,673(h) 104,115 Washington Mutual Mtge Pass-Through Ctfs Collateralized Mtge Obligation Series 2005-AR8 Cl 2AB1 07-25-45 5.57 49,193(h) 49,212 Washington Mutual Mtge Pass-Through Ctfs Collateralized Mtge Obligation Series 2006-AR10 Cl 1A1 09-25-36 5.95 119,307(h) 119,513 Wells Fargo Mtge Backed Securities Trust Collateralized Mtge Obligation Series 2005-10 Cl A1 10-25-35 5.00 280,881 265,986 Wells Fargo Mtge Backed Securities Trust Collateralized Mtge Obligation Series 2005-5 Cl 2A1 05-25-35 5.50 180,212 172,750 Wells Fargo Mtge Backed Securities Trust Collateralized Mtge Obligation Series 2006-AR12 Cl 1A1 09-25-36 6.03 114,518(h) 114,782 Wells Fargo Mtge Backed Securities Trust Collateralized Mtge Obligation Series 2006-AR6 Cl 5A1 03-25-36 5.11 247,518(h) 243,415 --------------- Total 38,268,677 - ----------------------------------------------------------------------------------- BANKING (3.6%) Bank of America Sub Nts 03-15-17 5.30 935,000 892,817 Citigroup Sub Nts 02-15-17 5.50 745,000 721,548 JPMorgan Chase & Co Sub Nts 06-27-17 6.13 335,000 337,605 Manufacturers & Traders Trust Sub Nts 12-01-21 5.63 260,000 249,079 Popular North America Sr Nts 10-01-08 3.88 695,000 681,211 --------------- Total 2,882,260 - -----------------------------------------------------------------------------------
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 161 RiverSource VP - Core Bond Fund
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) BROKERAGE (1.6%) Discover Financial Services 06-12-17 6.45% $90,000(d) $89,509 Merrill Lynch & Co Sub Nts 05-02-17 5.70 530,000 510,485 Morgan Stanley 04-27-17 5.55 665,000 635,009 --------------- Total 1,235,003 - ----------------------------------------------------------------------------------- ELECTRIC (2.0%) Cleveland Electric Illuminating Sr Unsecured 04-01-17 5.70 185,000 178,489 12-15-36 5.95 70,000 64,520 Consumers Energy 1st Mtge Series F 05-15-10 4.00 40,000 38,365 Consumers Energy 1st Mtge Series H 02-17-09 4.80 300,000 296,368 Entergy Gulf States 1st Mtge 06-01-08 3.60 130,000(j) 127,680 Exelon 06-15-10 4.45 240,000 232,009 Indiana Michigan Power Sr Nts 03-15-37 6.05 105,000 100,358 Metropolitan Edison Sr Nts 03-15-10 4.45 40,000 38,810 Northern States Power Sr Nts 08-01-09 6.88 120,000 123,089 Oncor Electric Delivery Secured 01-15-15 6.38 105,000 106,499 Portland General Electric 03-15-10 7.88 70,000 74,018 Potomac Electric Power Secured 06-01-35 5.40 75,000 65,445 Public Service Company of Colorado Sr Nts Series A 07-15-09 6.88 70,000 71,727 Xcel Energy Sr Nts 07-01-08 3.40 90,000 88,139 --------------- Total 1,605,516 - ----------------------------------------------------------------------------------- FOOD AND BEVERAGE (1.5%) Cadbury Schweppes US Finance LLC 10-01-08 3.88 690,000(d) 675,532 HJ Heinz 12-01-08 6.43 150,000(d) 151,497
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) FOOD AND BEVERAGE (CONT.) Molson Coors Capital Finance 09-22-10 4.85% $330,000(c) $322,280 --------------- Total 1,149,309 - ----------------------------------------------------------------------------------- GAS DISTRIBUTORS (0.1%) Atmos Energy Sr Unsub 10-15-09 4.00 95,000 91,805 - ----------------------------------------------------------------------------------- GAS PIPELINES (0.7%) CenterPoint Energy Resources 02-15-11 7.75 90,000 95,997 Colorado Interstate Gas Sr Nts 11-15-15 6.80 155,000 159,404 Colorado Interstate Gas Sr Unsecured 03-15-15 5.95 25,000 24,344 Southern Natural Gas 04-01-17 5.90 265,000(d) 256,314 --------------- Total 536,059 - ----------------------------------------------------------------------------------- HEALTH CARE (0.2%) UnitedHealth Group 06-15-37 6.50 155,000(d) 156,198 - ----------------------------------------------------------------------------------- HEALTH CARE INSURANCE (0.3%) WellPoint Sr Unsub 01-15-36 5.85 155,000 141,437 06-15-37 6.38 85,000 83,916 --------------- Total 225,353 - ----------------------------------------------------------------------------------- HOME CONSTRUCTION (0.2%) Centex Sr Unsecured 05-01-16 6.50 45,000 43,275 DR Horton Sr Unsub 04-15-16 6.50 130,000 124,379 --------------- Total 167,654 - ----------------------------------------------------------------------------------- INDEPENDENT ENERGY (0.6%) Anadarko Petroleum Sr Unsecured 09-15-16 5.95 230,000 224,577 09-15-36 6.45 55,000 52,900 Canadian Natural Resources 03-15-38 6.25 215,000(c) 203,430 --------------- Total 480,907 - ----------------------------------------------------------------------------------- MEDIA CABLE (0.3%) Comcast 03-15-37 6.45 165,000 159,014 Comcast MO of Delaware LLC 09-01-08 9.00 100,000 103,786 --------------- Total 262,800 - -----------------------------------------------------------------------------------
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MEDIA NON CABLE (1.3%) British Sky Broadcasting Group 02-23-09 6.88% $275,000(c) $280,633 News America 12-15-35 6.40 270,000 257,124 RR Donnelley & Sons Sr Unsecured 01-15-17 6.13 470,000 457,613 --------------- Total 995,370 - ----------------------------------------------------------------------------------- NON CAPTIVE CONSUMER (0.1%) SLM 01-15-13 5.38 60,000 52,986 10-01-13 5.00 60,000 51,446 --------------- Total 104,432 - ----------------------------------------------------------------------------------- OTHER FINANCIAL INSTITUTIONS (0.5%) Residential Capital LLC 06-30-10 6.38 435,000 429,385 - ----------------------------------------------------------------------------------- PROPERTY & CASUALTY (0.2%) Travelers Companies Sr Unsecured 06-15-37 6.25 160,000 155,734 - ----------------------------------------------------------------------------------- RAILROADS (0.1%) Canadian Pacific Railway 05-15-37 5.95 80,000(c) 75,195 - ----------------------------------------------------------------------------------- REITS (0.3%) Brandywine Operating Partnership LP 05-01-17 5.70 70,000 67,873 ERP Operating LP 06-15-17 5.75 190,000 186,247 --------------- Total 254,120 - ----------------------------------------------------------------------------------- RETAILERS (0.9%) Home Depot Sr Unsecured 12-16-36 5.88 405,000 360,855 Macys Retail Holdings 07-15-09 4.80 370,000 362,935 --------------- Total 723,790 - ----------------------------------------------------------------------------------- WIRELINES (3.5%) AT&T Sr Nts 05-15-36 6.80 200,000 207,139 Sprint Capital 03-15-32 8.75 15,000 16,847 Telecom Italia Capital 11-15-33 6.38 190,000(c) 178,970 Telefonica Europe 09-15-10 7.75 370,000(c) 392,231 TELUS 06-01-11 8.00 1,020,000(c) 1,090,736 Verizon New York Series A 04-01-12 6.88 565,000 589,074
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 162 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Core Bond Fund
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) WIRELINES (CONT.) Verizon Pennsylvania Series A 11-15-11 5.65% $260,000 $259,483 --------------- Total 2,734,480 - ----------------------------------------------------------------------------------- TOTAL BONDS (Cost: $87,828,862) $86,824,284 - -----------------------------------------------------------------------------------
MUNICIPAL BONDS (0.5%) NAME OF ISSUER AND TITLE OF COUPON PRINCIPAL ISSUE RATE AMOUNT VALUE(A) TOBACCO Tobacco Settlement Financing Corporation Revenue Bonds Series 2007A-1 06-01-46 6.71% $375,000 $359,831 - ----------------------------------------------------------------------------------- TOTAL MUNICIPAL BONDS (Cost: $374,963) $359,831 - -----------------------------------------------------------------------------------
MONEY MARKET FUND (7.1%) SHARES VALUE(A) RiverSource Short-Term Cash Fund 5,584,710(l) $5,584,710 - ----------------------------------------------------------------------------------- TOTAL MONEY MARKET FUND (Cost: $5,584,710) $5,584,710 - ----------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES (Cost: $93,788,535)(n) $92,768,825 ===================================================================================
NOTES TO INVESTMENTS IN SECURITIES (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) At June 30, 2007, the cost of securities purchased, including interest purchased, on a when-issued and/or other forward-commitment basis was $15,759,552. (c) Foreign security values are stated in U.S. dollars. For debt securities, principal amounts are denominated in U.S. dollar currency unless otherwise noted. At June 30, 2007, the value of foreign securities represented 3.2% of net assets. (d) Represents a security sold under Rule 144A, which is exempt from registration under the Securities Act of 1933, as amended. This security has been determined to be liquid under guidelines established by the Fund's Board of Directors. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2007, the value of these securities amounted to $3,657,410 or 4.6% of net assets. (e) The following abbreviations are used in the portfolio security descriptions to identify the insurer of the issue: AMBAC -- Ambac Assurance Corporation MBIA -- MBIA Insurance Corporation
(f) Mortgage-backed securities represent direct or indirect participations in, or are secured by and payable from, mortgage loans secured by real property, and include single- and multi-class pass-through securities and collateralized mortgage obligations. These securities may be issued or guaranteed by U.S. government agencies or instrumentalities, or by private issuers, generally originators and investors in mortgage loans, including savings associations, mortgage bankers, commercial banks, investment bankers and special purpose entities. The maturity dates shown represent the original maturity of the underlying obligation. Actual maturity may vary based upon prepayment activity on these obligations. Unless otherwise noted, the coupon rates presented are fixed rates. (g) Interest only represents securities that entitle holders to receive only interest payments on the underlying mortgages. The yield to maturity of an interest only is extremely sensitive to the rate of principal payments on the underlying mortgage assets. A rapid (slow) rate of principal repayments may have an adverse (positive) effect on yield to maturity. The principal amount shown is the notional amount of the underlying mortgages. Interest rate disclosed represents yield based upon the estimated timing and amount of future cash flows at June 30, 2007. (h) Adjustable rate mortgage; interest rate varies to reflect current market conditions; rate shown is the effective rate on June 30, 2007. (i) Interest rate varies either based on a predetermined schedule or to reflect current market conditions; rate shown is the effective rate on June 30, 2007. (j) Partially pledged as initial deposit on the following open interest rate futures contracts (see Note 7 to the financial statements):
TYPE OF SECURITY NOTIONAL AMOUNT - ------------------------------------------------------------------------------------ PURCHASE CONTRACTS U.S. Long Bond, Sept. 2007, 20-year $1,000,000 U.S. Treasury Note, Sept. 2007, 10-year 1,800,000 SALE CONTRACTS U.S. Treasury Note, Sept. 2007, 2-year 1,000,000 U.S. Treasury Note, Sept. 2007, 5-year 3,800,000
(k) Inflation-indexed bonds are securities in which the principal amount is adjusted for inflation and the semiannual interest payments equal a fixed percentage of the inflation-adjusted principal amount. (l) Affiliated Money Market Fund -- See Note 10 to the financial statements. (m) Inverse floaters represent securities that pay interest at a rate that increases (decreases) in the same magnitude as, or in a multiple of, a decline (increase) in the LIBOR (London InterBank Offering Rate) Index. Interest rate disclosed is the rate in effect on June 30, 2007. At June 30, 2007, the value of inverse floaters represented 0.1% of net assets. (n) At June 30, 2007, the cost of securities for federal income tax purposes was approximately $93,789,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $86,000 Unrealized depreciation (1,106,000) - -------------------------------------------------------------------------------- Net unrealized depreciation $(1,020,000) - --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 163 RiverSource VP - Core Bond Fund HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS (i) The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (Commission) for the first and third quarters of each fiscal year on Form N-Q; (ii) The Fund's Forms N-Q are available on the Commission's website at http://www.sec.gov; (iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC (information on the operations of the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iv) The Fund's complete schedule of portfolio holdings, as disclosed in its annual and semiannual shareholder reports and in its filings on Form N-Q, can be found at riversource.com. - -------------------------------------------------------------------------------- 164 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT INVESTMENTS IN SECURITIES RiverSource VP - Diversified Bond Fund JUNE 30, 2007 (UNAUDITED) (Percentages represent value of investments compared to net assets)
BONDS (100.7%) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) U.S. GOVERNMENT OBLIGATIONS & AGENCIES (20.7%) Federal Farm Credit Bank 10-10-08 4.25% $7,115,000 $7,029,997 Federal Home Loan Bank 01-18-08 4.63 17,110,000 17,049,088 02-08-08 4.63 16,985,000 16,909,162 02-13-08 5.25 22,300,000 22,281,424 Federal Home Loan Mtge Corp 08-17-07 4.00 1,340,000 1,337,743 03-15-09 5.75 4,940,000 4,981,318 07-12-10 4.13 2,480,000 2,406,160 04-16-37 6.00 48,570,000 46,865,096 Federal Natl Mtge Assn 09-15-07 4.25 21,845,000 21,797,815 01-15-08 4.63 36,450,000 36,316,593 09-15-08 5.00 43,000,000 42,861,669 02-16-12 5.00 52,900,000 52,257,635 05-18-12 4.88 30,760,000 30,190,940 11-15-30 6.63 17,760,000 20,014,650 U.S. Treasury 06-30-07 3.63 7,900,000 7,899,717 11-30-07 4.25 3,645,000(k) 3,635,319 01-31-09 4.88 21,955,000(g) 21,925,844 02-15-09 4.50 84,260,000 83,674,140 06-30-09 4.88 45,130,000(e) 45,126,480 02-15-10 4.75 13,360,000(g) 13,310,942 05-31-12 4.75 9,875,000(g) 9,797,857 05-15-17 4.50 5,362,000 5,140,818 02-15-26 6.00 123,000,000 134,262,126 U.S. Treasury Inflation-Indexed Bond 04-15-12 2.00 65,159,040(o) 63,253,576 --------------- Total 710,326,109 - ----------------------------------------------------------------------------------- ASSET-BACKED (2.4%) Capital Auto Receivables Asset Trust Series 2004-1 Cl CTFS 09-15-10 2.84 2,000,000 1,994,512 Capital Auto Receivables Asset Trust Series 2006-SN1A Cl A4B 03-20-10 5.43 7,475,000(b,d) 7,476,058 Capital Auto Receivables Asset Trust Series 2006-SN1A Cl D 04-20-11 6.15 1,975,000(d) 1,986,666 Citibank Credit Card Issuance Trust Series 2003-A3 Cl A3 03-10-10 3.10 300,000 295,396 College Loan Trust Collateralized Mtge Obligation Interest Only Series 2006-1 Cl AIO 07-25-08 5.62 9,725,000(l) 989,215 Countrywide Asset-backed Ctfs Series 2007-7 Cl 2A2 10-25-37 5.48 10,000,000(b) 9,998,439
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) ASSET-BACKED (CONT.) Countrywide Asset-backed Ctfs Series 2005-10 Cl AF6 02-25-36 4.92% $1,020,000 $967,410 Countrywide Asset-backed Ctfs Series 2006-4 Cl 1A1M 07-25-36 5.58 1,556,972(b) 1,557,804 Drive Auto Receivables Trust Series 2006-2 Cl A2 (MBIA) 07-15-11 5.30 5,725,000(d,n) 5,723,340 Dunkin Securitization Series 2006-1 Cl A2 (AMBAC) 06-20-31 5.78 6,775,000(d,n) 6,791,511 Hertz Vehicle Financing LLC Series 2004-1A Cl A3 (MBIA) 05-25-09 2.85 1,800,000(d,n) 1,773,971 Natl Collegiate Student Loan Trust Collateralized Mtge Obligation Interest Only Series 2006-2 Cl AIO 08-25-11 5.89 6,200,000(l) 1,323,278 Natl Collegiate Student Loan Trust Collateralized Mtge Obligation Interest Only Series 2006-3 Cl AIO 01-25-12 5.88 11,400,000(l) 3,065,004 Natl Collegiate Student Loan Trust Collateralized Mtge Obligation Interest Only Series 2006-4 Cl AIO 02-27-12 5.88 11,633,000(l) 2,929,850 Natl Collegiate Student Loan Trust Collateralized Mtge Obligation Interest Only Series 2007-2 Cl AIO 07-25-12 5.90 7,263,000(l) 2,090,098 Popular ABS Mtge Pass-Through Trust Series 2005-A Cl AF2 06-25-35 4.49 657,267 653,686 Renaissance Home Equity Loan Trust Series 2005-4 Cl A3 02-25-36 5.57 2,755,000 2,743,870 Renaissance Home Equity Loan Trust Series 2007-2 Cl M4 06-25-37 6.31 1,605,000 1,566,881 Renaissance Home Equity Loan Trust Series 2007-2 Cl M5 06-25-37 6.66 1,040,000 1,015,625 Renaissance Home Equity Loan Trust Series 2007-2 Cl M6 06-25-37 7.01 1,530,000 1,494,619 Residential Asset Securities Series 2006-KS1 Cl A2 02-25-36 5.46 5,955,000(b) 5,955,000
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) ASSET-BACKED (CONT.) Residential Asset Securities Series 2007-KS3 Cl AI2 04-25-37 5.50% $14,600,000(b) $14,621,899 SBA CMBS Trust Series 2006-1A Cl B 11-15-36 5.45 3,750,000(d) 3,672,813 --------------- Total 80,686,945 - ----------------------------------------------------------------------------------- COMMERCIAL MORTGAGE-BACKED (8.8%)(f) Banc of America Commercial Mtge Series 2005-1 Cl A4 11-10-42 4.87 2,250,000 2,204,786 Banc of America Commercial Mtge Series 2005-4 Cl ASB 07-10-45 4.87 3,225,000 3,096,908 Banc of America Commercial Mtge Series 2007-1 Cl A3 01-15-49 5.45 6,175,000 6,042,875 Banc of America Large Loan Series 2006-LAQ Cl E 02-09-21 5.70 2,175,000(b,d) 2,180,606 Banc of America Large Loan Series 2006-LAQ Cl F 02-09-21 5.76 2,425,000(b,d) 2,430,348 Banc of America Large Loan Series 2006-LAQ Cl G 02-09-21 5.85 1,700,000(b,d) 1,705,209 Bear Stearns Commercial Mtge Securities Series 2003-T10 Cl A1 03-13-40 4.00 243,759 234,572 Bear Stearns Commercial Mtge Securities Series 2004-PWR5 Cl A3 07-11-42 4.57 1,790,000 1,723,541 Bear Stearns Commercial Mtge Securities Series 2007-T26 Cl A2 01-12-45 5.33 10,000,000 9,873,400 Bear Stearns Commercial Mtge Securities Series 2007-T26 Cl A4 01-12-45 5.47 6,700,000 6,507,375 CDC Commercial Mtge Trust Series 2002-FX1 Cl A2 11-15-30 5.68 17,400,000 17,474,647 Citigroup Commercial Mtge Trust Series 2005-EMG Cl A1 09-20-51 4.15 2,230,292(d) 2,199,098 Citigroup/Deutsche Bank Commercial Mtge Trust Series 2005-CD1 Cl ASB 07-15-44 5.23 1,750,000 1,713,978 Commercial Mtge Acceptance Series 1999-C1 Cl A2 06-15-31 7.03 8,102,376 8,272,622
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 165 RiverSource VP - Diversified Bond Fund
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) COMMERCIAL MORTGAGE-BACKED (CONT.) Commercial Mtge Pass-Through Ctfs Series 2006-CN2A Cl BFL 02-05-19 5.63% $1,425,000(b,d) $1,434,909 Commercial Mtge Pass-Through Ctfs Series 2007-FL14 Cl MKL1 06-15-22 6.12 11,250,000(b,d) 11,250,000 Credit Suisse Mtge Capital Ctfs Series 2006-C2 Cl A3 03-15-39 5.66 6,700,000 6,637,324 Credit Suisse Mtge Capital Ctfs Series 2006-C4 Cl A3 09-15-39 5.47 10,000,000 9,706,533 CS First Boston Mtge Securities Series 2001-CP4 Cl A4 12-15-35 6.18 11,825,000 12,023,089 CS First Boston Mtge Securities Series 2003-CPN1 Cl A2 03-15-35 4.60 2,825,000 2,678,792 Federal Natl Mtge Assn #385683 02-01-13 4.83 3,043,633 2,954,983 Federal Natl Mtge Assn #387486 07-01-15 4.70 8,754,965 8,451,938 Federal Natl Mtge Assn #555806 10-01-13 5.08 859,826 841,563 Federal Natl Mtge Assn #735390 03-01-16 4.81 4,025,168 3,933,072 GE Capital Commercial Mtge Series 2005-C1 Cl A5 06-10-48 4.77 2,200,000 2,064,918 General Electric Capital Assurance Series 2003-1 Cl A3 05-12-35 4.77 5,625,000(d) 5,540,657 Greenwich Capital Commercial Funding Series 2004-GG1 Cl A5 06-10-36 4.88 1,625,000 1,589,130 GS Mtge Securities II Series 2004-GG2 Cl A4 08-10-38 4.96 3,000,000 2,941,984 GS Mtge Securities II Series 2006-GG6 Cl A4 04-10-38 5.55 5,000,000 4,905,291 GS Mtge Securities II Series 2007-EOP Cl J 03-06-20 6.17 6,600,000(b,d) 6,602,063 GS Mtge Securities II Series 2007-GG10 Cl F 08-10-45 5.99 5,350,000(e) 5,181,529 JPMorgan Chase Commercial Mtge Securities Series 2003-CB6 Cl A1 07-12-37 4.39 2,882,394 2,781,280 JPMorgan Chase Commercial Mtge Securities Series 2003-CB6 Cl A2 07-12-37 5.26 5,975,000 5,836,032 JPMorgan Chase Commercial Mtge Securities Series 2003-LN1 Cl A1 10-15-37 4.13 2,561,391 2,469,942
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) COMMERCIAL MORTGAGE-BACKED (CONT.) JPMorgan Chase Commercial Mtge Securities Series 2003-ML1A Cl A1 03-12-39 3.97% $1,677,683 $1,630,834 JPMorgan Chase Commercial Mtge Securities Series 2003-ML1A Cl A2 03-12-39 4.77 5,425,000 5,181,905 JPMorgan Chase Commercial Mtge Securities Series 2004-C2 Cl A2 05-15-41 5.09 1,000,000 983,078 JPMorgan Chase Commercial Mtge Securities Series 2004-CBX Cl A3 01-12-37 4.18 1,950,000 1,895,454 JPMorgan Chase Commercial Mtge Securities Series 2004-LN2 Cl A1 07-15-41 4.48 9,318,162 9,016,784 JPMorgan Chase Commercial Mtge Securities Series 2006-LDP6 Cl A4 04-15-43 5.48 5,675,000 5,526,973 JPMorgan Chase Commercial Mtge Securities Series 2006-LDP6 Cl ASB 04-15-43 5.49 4,425,000 4,366,874 LB-UBS Commercial Mtge Trust Series 2002-C4 Cl A5 09-15-31 4.85 3,000,000 2,891,471 LB-UBS Commercial Mtge Trust Series 2004-C2 Cl A3 03-15-29 3.97 2,200,000 2,069,210 LB-UBS Commercial Mtge Trust Series 2005-C5 Cl AAB 09-15-30 4.93 5,775,000 5,578,766 LB-UBS Commercial Mtge Trust Series 2006-C4 Cl AAB 06-15-32 5.86 6,725,000 6,790,868 LB-UBS Commercial Mtge Trust Series 2007-C1 Cl A4 02-15-40 5.42 5,075,000 4,906,233 Morgan Stanley Capital I Series 2003-T11 Cl A2 06-13-41 4.34 2,625,000 2,573,526 Morgan Stanley Capital I Series 2004-HQ4 Cl A5 04-14-40 4.59 2,400,000 2,303,448 Morgan Stanley Capital I Series 2005-T19 Cl AAB 06-12-47 4.85 6,025,000 5,784,871 Morgan Stanley Capital I Series 2006-T23 Cl AAB 08-12-41 5.80 5,500,000 5,538,661 Morgan Stanley Capital I Series 2006-XLF Cl A2 07-15-19 5.45 4,922,736(b,d) 4,923,412 Morgan Stanley Dean Witter Capital I Series 2002-TOP7 Cl A2 01-15-39 5.98 10,810,000 10,947,295 Nomura Asset Securities Series 1998-D6 Cl A3 03-15-30 7.00 16,965,000 18,249,155
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) COMMERCIAL MORTGAGE-BACKED (CONT.) Wachovia Bank Commercial Mtge Trust Series 2003-C7 Cl A2 10-15-35 5.08% $12,800,000(d) $12,354,815 Wachovia Bank Commercial Mtge Trust Series 2005-C18 Cl A4 04-15-42 4.94 2,900,000 2,742,288 Wachovia Bank Commercial Mtge Trust Series 2005-C20 Cl A5 07-15-42 5.09 2,975,000 2,906,022 Wachovia Bank Commercial Mtge Trust Series 2006-C27 Cl A3 07-15-45 5.77 4,300,000 4,262,687 Wachovia Bank Commercial Mtge Trust Series 2006-C27 Cl APB 07-15-45 5.73 6,000,000 5,960,287 Wachovia Bank Commercial Mtge Trust Series 2006-C29 Cl A4 11-15-48 5.31 1,350,000 1,292,854 Wachovia Bank Commercial Mtge Trust Series 2007-C31 Cl A4 04-15-47 5.51 4,850,000 4,704,766 --------------- Total 300,867,531 - ----------------------------------------------------------------------------------- MORTGAGE-BACKED (48.6%)(f) Adjustable Rate Mtge Trust Collateralized Mtge Obligation Series 2005-12 Cl 2A1 03-25-36 5.69 4,745,200(m) 4,744,982 Adjustable Rate Mtge Trust Collateralized Mtge Obligation Series 2006-1 Cl 2A1 03-25-36 5.94 5,603,952(m) 5,585,851 Adjustable Rate Mtge Trust Collateralized Mtge Obligation Series 2007-1 Cl 3A21 03-25-37 6.20 7,637,500(m) 7,639,104 American Home Mtge Assets Collateralized Mtge Obligation Series 2007-2 Cl A2A 03-25-47 5.49 12,642,413(m) 12,628,706 American Home Mtge Investment Trust Collateralized Mtge Obligation Series 2007-1 Cl GA1C 05-25-47 5.51 16,615,070(m) 16,607,709 Banc of America Alternative Loan Trust Collateralized Mtge Obligation Series 2003-11 Cl 1A1 01-25-34 6.00 2,566,971 2,524,924 Banc of America Alternative Loan Trust Collateralized Mtge Obligation Series 2003-11 Cl 4A1 01-25-19 4.75 1,895,959 1,802,346 Banc of America Alternative Loan Trust Collateralized Mtge Obligation Series 2004-3 Cl 1A1 04-25-34 6.00 4,677,050 4,597,395
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 166 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Diversified Bond Fund
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Banc of America Alternative Loan Trust Collateralized Mtge Obligation Series 2006-9 Cl 1CB1 01-25-37 6.00% $28,021,597 $27,503,180 Banc of America Funding Collateralized Mtge Obligation Series 2006-2 Cl N1 11-25-46 7.25 986,223(d) 970,506 Banc of America Funding Collateralized Mtge Obligation Series 2006-A Cl 3A2 02-20-36 5.90 6,307,418(m) 6,294,488 Bear Stearns Adjustable Rate Mtge Trust Collateralized Mtge Obligation Series 2005-8 Cl A4 08-25-35 5.10 5,650,000(d,m) 5,410,771 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Interest Only Series 2007-8CB Cl A13 05-25-37 7.73 7,308,285(l) 1,258,341 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2003-11T1 Cl A1 07-25-18 4.75 1,756,571 1,669,841 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2003-20CB Cl 1A1 10-25-33 5.50 19,921,829(e) 19,080,881 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2005-14 Cl 2A2 05-25-35 5.57 6,388,500(b) 6,394,598 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2005-54CB Cl 2A3 11-25-35 5.50 3,334,163 3,304,940 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2005-54CB Cl 3A7 11-25-35 5.50 3,400,479 3,370,733 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2005-64CB Cl 1A1 12-25-35 5.50 6,469,974 6,452,130 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2005-6CB Cl 1A1 04-25-35 7.50 2,719,107 2,801,924 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2005-85CB Cl 2A2 02-25-36 5.50 2,379,578 2,366,176 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2006-22R Cl 1A2 05-25-36 6.00 6,885,658 6,932,063
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2006-2CB Cl A11 03-25-36 6.00% $5,946,964 $5,914,126 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2006-31CB Cl A16 11-25-36 6.00 13,075,000 13,108,341 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2006-43CB Cl 1A4 02-25-37 6.00 17,566,792 17,530,604 Countrywide Home Loans Collateralized Mtge Obligation Series 2005-R2 Cl 2A1 06-25-35 7.00 3,496,105(d) 3,617,350 Countrywide Home Loans Collateralized Mtge Obligation Series 2006-HYB1 Cl 1A1 03-20-36 5.36 3,253,029(m) 3,235,235 Countrywide Home Loans Collateralized Mtge Obligation Series 2006-HYB5 Cl 2A2 09-20-36 5.90 8,999,488(m) 9,000,388 CS First Boston Mtge Securities Collateralized Mtge Obligation Series 2003-29 Cl 8A1 11-25-18 6.00 1,911,055 1,904,863 CS First Boston Mtge Securities Collateralized Mtge Obligation Series 2004-8 Cl 7A1 12-25-34 6.00 16,952,115 16,664,458 Deutsche Bank Alternate Mtge Loan Trust Collateralized Mtge Obligation Series 2006-AR6 Cl A3 02-25-37 5.41 6,145,937(b) 6,147,720 Deutsche Bank Alternate Mtge Loan Trust Collateralized Mtge Obligation Series 2007-AR3 Cl 2A1 05-25-37 5.43 6,405,753(m) 6,409,349 Downey Savings & Loan Assn Mtge Loan Trust Collateralized Mtge Obligation Interest Only Series 2005-AR5 Cl X1 08-19-45 0.00 26,083,868(l) 268,990 Federal Home Loan Mtge Corp 07-01-37 6.00 20,400,000(e) 20,208,750 07-01-37 6.50 56,500,000(e) 57,082,627 08-01-37 6.50 60,500,000(e) 61,048,250 Federal Home Loan Mtge Corp #1G2496 09-01-36 6.20 6,739,649(m) 6,789,590 Federal Home Loan Mtge Corp #1J0283 02-01-37 5.83 10,428,355(m) 10,416,456 Federal Home Loan Mtge Corp #1J1445 01-01-37 5.91 20,073,233(m) 20,105,798
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Federal Home Loan Mtge Corp #1J1536 03-01-37 5.51% $4,007,191(m) $3,978,220 Federal Home Loan Mtge Corp #A27373 10-01-34 6.50 632,273 641,953 Federal Home Loan Mtge Corp #A59027 04-01-37 6.00 29,449,821 29,180,478 Federal Home Loan Mtge Corp #B11452 12-01-18 6.00 1,335,362 1,342,282 Federal Home Loan Mtge Corp #C00356 08-01-24 8.00 100,558 106,428 Federal Home Loan Mtge Corp #C14412 09-01-28 6.00 1,274,348 1,272,269 Federal Home Loan Mtge Corp #C53878 12-01-30 5.50 985,316 955,161 Federal Home Loan Mtge Corp #C59161 10-01-31 6.00 2,750,376 2,743,872 Federal Home Loan Mtge Corp #C79930 06-01-33 5.50 2,568,457 2,489,083 Federal Home Loan Mtge Corp #C80198 08-01-24 8.00 58,279 61,681 Federal Home Loan Mtge Corp #C80253 01-01-25 9.00 55,588 60,088 Federal Home Loan Mtge Corp #C90767 12-01-23 6.00 3,902,341 3,918,114 Federal Home Loan Mtge Corp #D95319 03-01-22 6.00 429,576 431,821 Federal Home Loan Mtge Corp #D96300 10-01-23 5.50 328,825 321,574 Federal Home Loan Mtge Corp #E01127 02-01-17 6.50 2,495,697 2,549,846 Federal Home Loan Mtge Corp #E01419 05-01-18 5.50 1,408,509 1,392,298 Federal Home Loan Mtge Corp #E97591 06-01-18 5.50 328,134 324,530 Federal Home Loan Mtge Corp #E98725 08-01-18 5.00 4,373,628 4,243,317 Federal Home Loan Mtge Corp #E99684 10-01-18 5.00 3,617,593 3,509,875 Federal Home Loan Mtge Corp #G01108 04-01-30 7.00 2,038,081 2,107,160 Federal Home Loan Mtge Corp #G01427 12-01-31 6.50 624,977 637,652 Federal Home Loan Mtge Corp #G01535 04-01-33 6.00 514,474 514,658 Federal Home Loan Mtge Corp #G02757 06-01-36 5.00 32,177,779 30,241,079 Federal Home Loan Mtge Corp #G02776 03-01-37 6.00 25,093,472 24,863,972 Federal Home Loan Mtge Corp #G30225 02-01-23 6.00 5,078,256 5,104,794 Federal Home Loan Mtge Corp Collateralized Mtge Obligation Interest Only Series 237 Cl IO 05-15-36 9.81 5,192,816(l) 1,425,972
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 167 RiverSource VP - Diversified Bond Fund
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Federal Home Loan Mtge Corp Collateralized Mtge Obligation Interest Only Series 2590 Cl BI 02-15-14 20.00% $629,862(l) $19,313 Federal Home Loan Mtge Corp Collateralized Mtge Obligation Interest Only Series 2718 Cl IA 10-15-22 20.00 2,078,839(l) 54,987 Federal Home Loan Mtge Corp Collateralized Mtge Obligation Interest Only Series 2817 Cl SA 06-15-32 19.76 8,444,368(l) 417,273 Federal Home Loan Mtge Corp Collateralized Mtge Obligation Series 1241 Cl K 03-15-22 7.00 653,896 652,037 Federal Home Loan Mtge Corp Collateralized Mtge Obligation Series 2576 Cl KJ 02-15-33 5.50 4,846,899 4,851,468 Federal Home Loan Mtge Corp Collateralized Mtge Obligation Series 2641 Cl KC 01-15-18 6.50 1,812,610 1,851,917 Federal Natl Mtge Assn 07-01-22 5.50 8,000,000(e) 7,880,000 07-01-22 6.00 11,000,000(e) 11,048,125 07-01-37 5.50 4,200,000(e) 4,050,375 07-01-37 7.00 33,000,000(e) 33,876,545 08-01-37 5.00 7,025,000(e) 6,579,348 08-01-37 5.50 17,000,000(e) 16,973,438 08-01-37 6.00 155,950,000(e) 154,146,905 08-01-37 6.50 25,000,000(e) 25,210,950 Federal Natl Mtge Assn #125032 11-01-21 8.00 22,745 23,954 Federal Natl Mtge Assn #125474 02-01-27 7.50 603,400 631,658 Federal Natl Mtge Assn #190353 08-01-34 5.00 11,595,117 10,910,216 Federal Natl Mtge Assn #190764 09-01-07 8.50 22 22 Federal Natl Mtge Assn #190899 04-01-23 8.50 237,665 250,468 Federal Natl Mtge Assn #190988 06-01-24 9.00 256,603 273,232 Federal Natl Mtge Assn #253883 08-01-16 6.00 583,862 587,344 Federal Natl Mtge Assn #254224 02-01-17 7.00 851,758 877,440 Federal Natl Mtge Assn #254560 11-01-32 5.00 2,933,882 2,762,655 Federal Natl Mtge Assn #254675 01-01-23 6.50 155,571 158,987
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Federal Natl Mtge Assn #254916 09-01-23 5.50% $3,980,836 $3,892,156 Federal Natl Mtge Assn #255788 06-01-15 5.50 4,586,082 4,570,061 Federal Natl Mtge Assn #256171 03-01-26 6.00 21,859,068 21,821,048 Federal Natl Mtge Assn #256339 07-01-36 5.50 20,604,109 19,778,709 Federal Natl Mtge Assn #303727 02-01-11 6.00 68,930 69,389 Federal Natl Mtge Assn #442411 11-01-28 6.50 1,095,191 1,117,787 Federal Natl Mtge Assn #445254 12-01-13 5.50 1,669,250 1,658,011 Federal Natl Mtge Assn #446964 10-01-28 6.00 3,437,200 3,426,126 Federal Natl Mtge Assn #450370 01-01-29 6.50 1,636,253 1,670,013 Federal Natl Mtge Assn #484820 04-01-14 5.50 9,384 9,321 Federal Natl Mtge Assn #50553 04-01-22 8.00 83,183 87,683 Federal Natl Mtge Assn #510587 08-01-29 7.00 113,635 117,833 Federal Natl Mtge Assn #545339 11-01-31 6.50 91,750 94,038 Federal Natl Mtge Assn #545342 04-01-13 7.00 658,182 662,792 Federal Natl Mtge Assn #545869 07-01-32 6.50 1,352,918 1,380,531 Federal Natl Mtge Assn #545885 08-01-32 6.50 2,841,672 2,932,208 Federal Natl Mtge Assn #545910 08-01-17 6.00 1,528,652 1,540,050 Federal Natl Mtge Assn #555375 04-01-33 6.00 8,593,074 8,580,114 Federal Natl Mtge Assn #555376 04-01-18 4.50 190,464 181,481 Federal Natl Mtge Assn #555458 05-01-33 5.50 10,645,848 10,293,258 Federal Natl Mtge Assn #555528 04-01-33 6.00 23,405,579 23,297,083 Federal Natl Mtge Assn #555734 07-01-23 5.00 3,172,539 3,028,904 Federal Natl Mtge Assn #555740 08-01-18 4.50 1,754,466 1,671,883 Federal Natl Mtge Assn #576603 03-01-15 6.00 2,714,683 2,731,297 Federal Natl Mtge Assn #606882 10-01-31 7.00 460,907 477,705 Federal Natl Mtge Assn #609621 11-01-31 7.00 2,361,583 2,447,651 Federal Natl Mtge Assn #617746 08-01-32 6.50 188,287 191,622 Federal Natl Mtge Assn #626720 01-01-17 6.00 151,903 152,809
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Federal Natl Mtge Assn #630599 05-01-32 7.00% $3,058,566 $3,168,159 Federal Natl Mtge Assn #634367 03-01-17 6.50 862,462 878,042 Federal Natl Mtge Assn #646938 06-01-32 7.00 1,409,166 1,459,659 Federal Natl Mtge Assn #647549 08-01-17 6.00 1,358,769 1,366,782 Federal Natl Mtge Assn #650159 10-01-32 6.50 2,283,999 2,343,445 Federal Natl Mtge Assn #652600 02-01-18 5.50 5,842,858 5,777,739 Federal Natl Mtge Assn #667604 10-01-32 5.50 5,674,632 5,499,306 Federal Natl Mtge Assn #667721 03-01-33 6.00 1,802,965 1,796,583 Federal Natl Mtge Assn #667787 02-01-18 5.50 705,632 697,648 Federal Natl Mtge Assn #669925 09-01-17 6.50 2,175,120 2,227,879 Federal Natl Mtge Assn #670382 09-01-32 6.00 5,495,020 5,469,548 Federal Natl Mtge Assn #670387 08-01-32 7.00 722,861 749,695 Federal Natl Mtge Assn #672289 12-01-17 5.50 445,979 441,284 Federal Natl Mtge Assn #678028 09-01-17 6.00 490,257 493,148 Federal Natl Mtge Assn #683116 02-01-33 6.00 272,223 270,961 Federal Natl Mtge Assn #684585 02-01-33 5.50 515,258 499,467 Federal Natl Mtge Assn #684586 03-01-33 6.00 1,549,552 1,543,671 Federal Natl Mtge Assn #684601 03-01-33 6.00 1,128,301 1,127,175 Federal Natl Mtge Assn #687051 01-01-33 6.00 5,378,464 5,315,828 Federal Natl Mtge Assn #687736 02-01-33 5.50 2,630,553 2,548,722 Federal Natl Mtge Assn #688691 03-01-33 5.50 530,207 513,713 Federal Natl Mtge Assn #689093 07-01-28 5.50 1,448,435 1,404,934 Federal Natl Mtge Assn #694316 03-01-18 5.50 1,592,747 1,575,389 Federal Natl Mtge Assn #694546 03-01-33 5.50 1,655,050 1,603,565 Federal Natl Mtge Assn #694628 04-01-33 5.50 2,174,512 2,108,737 Federal Natl Mtge Assn #694795 04-01-33 5.50 2,800,624 2,716,578 Federal Natl Mtge Assn #694988 03-01-33 5.50 5,530,169 5,360,914 Federal Natl Mtge Assn #695202 03-01-33 6.50 1,998,891 2,031,082
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 168 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Diversified Bond Fund
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Federal Natl Mtge Assn #705096 06-01-18 5.00% $416,939 $404,474 Federal Natl Mtge Assn #709901 06-01-18 5.00 2,638,804 2,560,004 Federal Natl Mtge Assn #711501 05-01-33 5.50 1,334,374 1,293,051 Federal Natl Mtge Assn #720378 06-01-18 4.50 3,335,510 3,178,190 Federal Natl Mtge Assn #723687 08-01-28 5.50 2,143,648 2,079,268 Federal Natl Mtge Assn #725232 03-01-34 5.00 11,903,565 11,212,741 Federal Natl Mtge Assn #725284 11-01-18 7.00 86,758 89,471 Federal Natl Mtge Assn #725424 04-01-34 5.50 45,086,217 43,683,671 Federal Natl Mtge Assn #725425 04-01-34 5.50 14,032,639 13,597,327 Federal Natl Mtge Assn #725684 05-01-18 6.00 4,719,812 4,750,233 Federal Natl Mtge Assn #725719 07-01-33 4.85 3,095,031(m) 3,040,744 Federal Natl Mtge Assn #725737 08-01-34 4.54 2,905,407(m) 2,892,856 Federal Natl Mtge Assn #725773 09-01-34 5.50 17,369,385 16,816,780 Federal Natl Mtge Assn #725813 12-01-33 6.50 6,811,836 6,921,535 Federal Natl Mtge Assn #726940 08-01-23 5.50 55,124 53,729 Federal Natl Mtge Assn #730153 08-01-33 5.50 540,323 523,515 Federal Natl Mtge Assn #730231 08-01-23 5.50 6,064,557 5,929,458 Federal Natl Mtge Assn #731075 07-01-18 5.50 131,858 130,449 Federal Natl Mtge Assn #731417 09-01-18 5.50 1,490,186 1,474,357 Federal Natl Mtge Assn #732094 08-01-18 5.50 106,008 104,862 Federal Natl Mtge Assn #735212 12-01-34 5.00 24,818,109 23,352,152 Federal Natl Mtge Assn #735841 11-01-19 4.50 8,463,706(e) 8,052,553 Federal Natl Mtge Assn #737330 09-01-18 5.50 1,154,194 1,141,512 Federal Natl Mtge Assn #742840 10-01-18 5.50 1,127,824 1,115,443 Federal Natl Mtge Assn #743262 10-01-18 5.00 2,601,220 2,523,676 Federal Natl Mtge Assn #743455 10-01-18 5.50 4,231,338 4,184,626 Federal Natl Mtge Assn #745275 02-01-36 5.00 30,995,742 29,121,883 Federal Natl Mtge Assn #745278 06-01-19 4.50 16,091,775 15,332,802
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Federal Natl Mtge Assn #745563 08-01-34 5.50% $14,683,079 $14,226,317 Federal Natl Mtge Assn #747584 11-01-28 5.50 3,832,514 3,717,411 Federal Natl Mtge Assn #753919 12-01-33 4.95 3,193,779(m) 3,109,087 Federal Natl Mtge Assn #756844 02-01-19 5.00 2,036,054 1,972,681 Federal Natl Mtge Assn #759342 01-01-34 6.50 725,030 740,414 Federal Natl Mtge Assn #761031 01-01-34 5.00 450,110 423,654 Federal Natl Mtge Assn #763703 04-01-34 5.50 25,024,268 24,228,123 Federal Natl Mtge Assn #765758 02-01-19 5.00 2,500,384 2,425,647 Federal Natl Mtge Assn #765760 02-01-19 5.00 247,924 240,513 Federal Natl Mtge Assn #776962 04-01-29 5.00 8,500,986 8,001,319 Federal Natl Mtge Assn #776987 04-01-29 5.00 272,668 256,641 Federal Natl Mtge Assn #779676 06-01-34 5.00 23,897,336 22,485,767 Federal Natl Mtge Assn #785738 11-01-19 5.00 9,022,264 8,741,442 Federal Natl Mtge Assn #797232 09-01-34 5.50 16,218,172 15,702,192 Federal Natl Mtge Assn #811114 02-01-35 5.50 19,695,552 19,044,256 Federal Natl Mtge Assn #833731 07-01-20 5.00 16,112,324(e) 15,582,316 Federal Natl Mtge Assn #837258 09-01-35 4.92 2,066,052(m) 2,040,784 Federal Natl Mtge Assn #878661 02-01-36 5.50 14,586,648 14,002,306 Federal Natl Mtge Assn #881629 02-01-36 5.50 10,707,613 10,278,666 Federal Natl Mtge Assn #883201 07-01-36 6.50 3,681,254 3,736,833 Federal Natl Mtge Assn #885871 06-01-36 7.00 5,261,470 5,449,977 Federal Natl Mtge Assn #886404 08-01-36 6.50 10,717,934 10,822,175 Federal Natl Mtge Assn #886461 08-01-36 6.18 5,437,977(m) 5,478,490 Federal Natl Mtge Assn #886464 08-01-36 6.50 5,487,084 5,540,450 Federal Natl Mtge Assn #887096 07-01-36 5.81 11,875,726(m) 11,839,319 Federal Natl Mtge Assn #887589 07-01-36 6.50 7,488,766 7,589,140 Federal Natl Mtge Assn #888414 11-01-35 5.00 7,630,980 7,169,646 Federal Natl Mtge Assn #900197 10-01-36 5.94 9,043,523(m) 9,125,096
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Federal Natl Mtge Assn #901922 10-01-36 5.79% $10,590,880(m) $10,624,368 Federal Natl Mtge Assn #909471 02-01-37 5.55 8,794,578(m) 8,765,646 Federal Natl Mtge Assn Collateralized Mtge Obligation Interest Only Series 2003-24 Cl PI 12-25-12 20.00 269,751(l) 2,488 Federal Natl Mtge Assn Collateralized Mtge Obligation Interest Only Series 2003-63 Cl IP 07-25-33 12.39 18,412,558(l) 4,476,049 Federal Natl Mtge Assn Collateralized Mtge Obligation Interest Only Series 2003-71 Cl IM 12-25-31 12.80 1,625,694(l) 296,599 Federal Natl Mtge Assn Collateralized Mtge Obligation Interest Only Series 2004-84 Cl GI 12-25-22 11.02 1,531,473(l) 221,411 Federal Natl Mtge Assn Collateralized Mtge Obligation Interest Only Series 2005-92 CL SC 10-25-35 17.34 30,828,206(l) 1,544,493 Federal Natl Mtge Assn Collateralized Mtge Obligation Interest Only Series 367 Cl 2 01-01-36 9.52 12,398,483(l) 3,389,992 Federal Natl Mtge Assn Collateralized Mtge Obligation Series 2003-133 Cl GB 12-25-26 8.00 1,412,213 1,488,815 Govt Natl Mtge Assn #604708 10-15-33 5.50 3,563,266 3,465,330 Govt Natl Mtge Assn Collateralized Mtge Obligation Interest Only Series 2002-70 Cl IC 08-20-32 9.72 2,844,411(l) 575,327 Govt Natl Mtge Assn Collateralized Mtge Obligation Interest Only Series 2002-80 Cl CI 01-20-32 9.22 555,951(l) 63,386 Harborview Mtge Loan Trust Collateralized Mtge Obligation Series 2005-16 Cl 3A1B 01-19-36 5.66 3,717,054(m) 3,717,034
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 169 RiverSource VP - Diversified Bond Fund
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Harborview Mtge Loan Trust Collateralized Mtge Obligation Series 2006-12 Cl 2A11 01-19-38 5.41% $12,237,541(m) $12,246,756 Harborview Mtge Loan Trust Collateralized Mtge Obligation Series 2006-8 Cl 2A1B 08-21-36 5.57 11,508,685(m) 11,527,315 Harborview Nim Collateralized Mtge Obligation Series 2006-10 Cl N1 11-19-36 6.41 1,310,896(d) 1,309,667 Harborview Nim Collateralized Mtge Obligation Series 2006-7A Cl N1 09-19-36 6.41 335,742(d) 334,852 Harborview Nim Collateralized Mtge Obligation Series 2006-8A Cl N1 07-21-36 6.41 187,198(d) 185,560 IndyMac Index Mtge Loan Trust Collateralized Mtge Obligation Interest Only Series 2005-AR8 Cl AX1 04-25-35 4.50 55,235,858(l) 405,638 IndyMac Index Mtge Loan Trust Collateralized Mtge Obligation Series 2005-AR25 Cl 1A21 12-25-35 5.85 4,740,017(m) 4,702,430 IndyMac Index Mtge Loan Trust Collateralized Mtge Obligation Series 2006-AR35 Cl 2A2 01-25-37 5.42 7,789,892(m) 7,792,618 IndyMac Index Mtge Loan Trust Collateralized Mtge Obligation Series 2007-AR5 Cl 1A1 05-25-37 6.37 14,002,496(m) 14,137,480 IndyMac Index Nim Collateralized Mtge Obligation Series 2006-AR6 Cl N1 06-25-46 6.65 748,021(d) 745,216 Lehman XS Net Interest Margin Nts Collateralized Mtge Obligation Series 2006-2N Cl A1 02-27-46 7.00 486,974(d) 487,126 Lehman XS Net Interest Margin Nts Collateralized Mtge Obligation Series 2006-GPM6 Cl A1 10-28-46 6.25 1,710,650(d) 1,704,837 Lehman XS Net Interest Margin Nts Series 2006-AR8 Cl A1 10-28-46 6.25 486,064(d) 484,697 Lehman XS Trust Collateralized Mtge Obligation Series 2007-5H Cl 1A1 05-25-37 6.50 30,784,439 30,997,380
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Master Alternative Loans Trust Collateralized Mtge Obligation Series 2004-2 Cl 4A1 02-25-19 5.00% $3,207,946 $3,078,634 Master Alternative Loans Trust Collateralized Mtge Obligation Series 2004-7 Cl 8A1 08-25-19 5.00 2,129,359 2,050,552 Master Alternative Loans Trust Collateralized Mtge Obligation Series 2004-8 Cl 7A1 09-25-19 5.00 2,981,717 2,865,758 Merrill Lynch Alternative Note Asset Collateralized Mtge Obligation Series 2007-OAR2 Cl A1 04-25-37 5.50 13,716,312(b) 13,698,631 Rali NIM Collateralized Mtge Obligation Series 2006-QO4 Cl N1 04-25-46 6.05 576,167(d) 572,926 Residential Accredit Loans Collateralized Mtge Obligation Series 2006-QS3 Cl 1A10 03-25-36 6.00 4,081,588 4,090,559 Structured Adjustable Rate Mtge Loan Trust Collateralized Mtge Obligation Series 2006-5 Cl 4A1 06-25-36 5.95 7,123,486(m) 7,075,904 Structured Asset Securities Collateralized Mtge Obligation Series 2003-33H Cl 1A1 10-25-33 5.50 10,460,604 10,020,797 Washington Mutual Alternative Mtge Loan Trust Pass-Through Ctfs Collateralized Mtge Obligation Interest Only Series 2005-AR1 Cl X2 12-25-35 7.10 23,847,002(l) 176,058 Washington Mutual Mtge Pass-Through Ctfs Collateralized Mtge Obligation Series 2004-CB2 Cl 6A 07-25-19 4.50 2,119,494 2,005,381 Washington Mutual Mtge Pass-Through Ctfs Collateralized Mtge Obligation Series 2005-AR14 Cl 2A1 12-25-35 5.29 7,206,920(m) 7,100,632 Washington Mutual Mtge Pass-Through Ctfs Collateralized Mtge Obligation Series 2005-AR8 Cl 2AB1 07-25-45 5.57 1,438,068(m) 1,438,624 Washington Mutual Mtge Pass-Through Ctfs Collateralized Mtge Obligation Series 2006-AR10 Cl 1A1 09-25-36 5.95 5,249,494(m) 5,258,576
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Washington Mutual Mtge Pass-Through Ctfs Collateralized Mtge Obligation Series 2006-AR3 Cl A1A 02-25-46 6.03% $10,369,773(m) $10,383,150 Wells Fargo Mtge Backed Securities Trust Collateralized Mtge Obligation Series 2005-10 Cl A1 10-25-35 5.00 8,952,532 8,477,780 Wells Fargo Mtge Backed Securities Trust Collateralized Mtge Obligation Series 2005-5 Cl 2A1 05-25-35 5.50 7,076,332 6,783,330 Wells Fargo Mtge Backed Securities Trust Collateralized Mtge Obligation Series 2006-AR12 Cl 1A1 09-25-36 6.03 5,038,793(m) 5,050,388 Wells Fargo Mtge Backed Securities Trust Collateralized Mtge Obligation Series 2006-AR6 Cl 5A1 03-25-36 5.11 9,068,165(m) 8,917,857 --------------- Total 1,661,042,605 - ----------------------------------------------------------------------------------- AEROSPACE & DEFENSE (0.1%) DRS Technologies 11-01-13 6.88 1,100,000 1,067,000 L-3 Communications Series B 10-15-15 6.38 1,140,000 1,077,300 --------------- Total 2,144,300 - ----------------------------------------------------------------------------------- BANKING (4.1%) Bank of America Sub Nts 03-15-17 5.30 43,485,000 41,523,174 Citigroup Sub Nts 02-15-17 5.50 31,650,000 30,653,690 JPMorgan Chase & Co Sub Nts 06-27-17 6.13 14,495,000 14,607,699 Manufacturers & Traders Trust Sub Nts 12-01-21 5.63 15,600,000 14,944,725 Popular North America Sr Nts 10-01-08 3.88 29,185,000 28,605,970 Regions Bank Sub Nts 06-26-37 6.45 8,680,000 8,712,810 Wachovia Bank Sub Nts 02-01-37 5.85 2,150,000 2,034,573 --------------- Total 141,082,641 - ----------------------------------------------------------------------------------- BROKERAGE (1.7%) Discover Financial Services 06-12-17 6.45 3,965,000(d) 3,943,351
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 170 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Diversified Bond Fund
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) BROKERAGE (CONT.) LaBranche & Co Sr Nts 05-15-12 11.00% $716,000 $758,960 Merrill Lynch & Co Sub Nts 05-02-17 5.70 24,750,000 23,838,705 Morgan Stanley 01-09-17 5.45 1,310,000 1,240,362 04-27-17 5.55 30,830,000 29,439,567 --------------- Total 59,220,945 - ----------------------------------------------------------------------------------- CHEMICALS (--%) NewMarket 12-15-16 7.13 820,000 793,350 - ----------------------------------------------------------------------------------- ELECTRIC (2.3%) Cleveland Electric Illuminating Sr Unsecured 04-01-17 5.70 8,060,000 7,776,320 12-15-36 5.95 3,020,000 2,783,585 Consumers Energy 1st Mtge Series F 05-15-10 4.00 2,085,000 1,999,776 Consumers Energy 1st Mtge Series H 02-17-09 4.80 10,810,000 10,679,080 Edison Mission Energy Sr Nts 05-15-17 7.00 1,835,000(d) 1,729,488 Entergy Gulf States 1st Mtge 06-01-08 3.60 5,755,000 5,652,314 Exelon 06-15-10 4.45 9,060,000 8,758,356 Indiana Michigan Power Sr Nts 03-15-37 6.05 4,630,000 4,425,317 IPALCO Enterprises Secured 11-14-08 8.38 265,000 270,300 11-14-11 8.63 1,765,000 1,888,550 Metropolitan Edison Sr Nts 03-15-10 4.45 1,915,000 1,858,023 Midwest Generation LLC Pass-Through Ctfs Series B 01-02-16 8.56 107,689 114,824 Northern States Power Sr Nts 08-01-09 6.88 5,240,000 5,374,883 NRG Energy 02-01-14 7.25 575,000 576,438 01-15-17 7.38 1,035,000 1,038,881 Oncor Electric Delivery Secured 01-15-15 6.38 4,455,000 4,518,582 Portland General Electric 03-15-10 7.88 3,100,000 3,277,952
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) ELECTRIC (CONT.) Potomac Electric Power Secured 06-01-35 5.40% $3,310,000 $2,888,319 Public Service Company of Colorado Sr Nts Series A 07-15-09 6.88 4,295,000 4,400,979 Sierra Pacific Power Series M 05-15-16 6.00 4,070,000(k) 3,991,722 Sierra Pacific Power Series P 07-01-37 6.75 3,600,000 3,627,000 Xcel Energy Sr Nts 07-01-08 3.40 1,395,000 1,366,151 --------------- Total 78,996,840 - ----------------------------------------------------------------------------------- ENTERTAINMENT (0.1%) United Artists Theatre Circuit Pass-Through Ctfs 07-01-15 9.30 2,202,764(j) 2,290,874 - ----------------------------------------------------------------------------------- ENVIRONMENTAL (--%) Allied Waste North America 06-01-17 6.88 1,030,000 992,663 - ----------------------------------------------------------------------------------- FOOD AND BEVERAGE (1.5%) Cadbury Schweppes US Finance LLC 10-01-08 3.88 29,810,000(d) 29,184,944 Cott Beverages USA 12-15-11 8.00 2,005,000 2,025,050 HJ Heinz 12-01-08 6.43 6,550,000(d) 6,615,369 Molson Coors Capital Finance 09-22-10 4.85 14,585,000(c) 14,243,813 --------------- Total 52,069,176 - ----------------------------------------------------------------------------------- GAMING (--%) Mohegan Tribal Gaming Authority Sr Sub Nts 04-01-12 8.00 380,000 392,350 Wynn Las Vegas LLC/Capital 1st Mtge 12-01-14 6.63 680,000 655,350 --------------- Total 1,047,700 - ----------------------------------------------------------------------------------- GAS DISTRIBUTORS (0.1%) Atmos Energy Sr Unsub 10-15-09 4.00 4,130,000 3,991,083 - ----------------------------------------------------------------------------------- GAS PIPELINES (1.0%) CenterPoint Energy Resources 02-15-11 7.75 3,990,000 4,255,886 Colorado Interstate Gas Sr Nts 11-15-15 6.80 10,085,000 10,371,564
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) GAS PIPELINES (CONT.) Colorado Interstate Gas Sr Unsecured 03-15-15 5.95% $2,240,000 $2,181,234 Northwest Pipeline Sr Nts 04-15-17 5.95 1,800,000(d) 1,750,500 Southern Natural Gas 04-01-17 5.90 7,485,000(d) 7,239,627 Southern Star Central Sr Nts 03-01-16 6.75 1,490,000 1,467,650 Transcontinental Gas Pipe Line Series B 08-15-11 7.00 910,000 941,850 Transcontinental Gas Pipe Line Sr Unsecured 04-15-16 6.40 3,776,000(k) 3,785,440 Williams Companies Sr Nts 07-15-19 7.63 2,199,000(k) 2,319,945 --------------- Total 34,313,696 - ----------------------------------------------------------------------------------- HEALTH CARE (0.4%) Community Health Systems Sr Nts 07-15-15 8.88 1,685,000(d,e) 1,708,169 Community Health Systems Sr Unsecured 12-15-12 6.50 860,000 897,598 Omnicare 12-15-13 6.75 2,180,000 2,081,900 12-15-15 6.88 375,000 356,250 Triad Hospitals Sr Nts 05-15-12 7.00 435,000 454,574 Triad Hospitals Sr Sub Nts 11-15-13 7.00 550,000 578,159 UnitedHealth Group 06-15-37 6.50 6,825,000(d) 6,877,757 --------------- Total 12,954,407 - ----------------------------------------------------------------------------------- HEALTH CARE INSURANCE (0.3%) WellPoint Sr Unsub 01-15-36 5.85 6,620,000 6,040,704 06-15-37 6.38 3,745,000 3,697,251 --------------- Total 9,737,955 - ----------------------------------------------------------------------------------- HOME CONSTRUCTION (0.2%) Centex Sr Unsecured 05-01-16 6.50 1,985,000 1,908,895 DR Horton Sr Unsub 04-15-16 6.50 5,660,000 5,415,290 --------------- Total 7,324,185 - -----------------------------------------------------------------------------------
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 171 RiverSource VP - Diversified Bond Fund
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) INDEPENDENT ENERGY (0.8%) Anadarko Petroleum Sr Unsecured 09-15-16 5.95% $10,700,000 $10,447,725 09-15-36 6.45 1,880,000 1,808,235 Canadian Natural Resources 03-15-38 6.25 9,215,000(c) 8,719,085 Chesapeake Energy 01-15-16 6.63 4,429,000 4,262,913 08-15-17 6.50 620,000 587,450 01-15-18 6.25 970,000 905,738 Denbury Resources 04-01-13 7.50 265,000 265,000 Denbury Resources Sr Sub Nts 12-15-15 7.50 165,000 165,000 Forest Oil Sr Nts 06-15-19 7.25 305,000(d) 295,850 Range Resources 03-15-15 6.38 795,000 753,263 05-15-16 7.50 160,000 162,000 --------------- Total 28,372,259 - ----------------------------------------------------------------------------------- MEDIA CABLE (0.4%) Comcast 03-15-37 6.45 6,975,000 6,721,975 Comcast MO of Delaware LLC 09-01-08 9.00 5,100,000 5,293,086 EchoStar DBS 10-01-14 6.63 820,000 783,100 Videotron Ltee 01-15-14 6.88 1,355,000(c) 1,327,900 --------------- Total 14,126,061 - ----------------------------------------------------------------------------------- MEDIA NON CABLE (1.4%) British Sky Broadcasting Group 02-23-09 6.88 11,635,000(c) 11,873,331 Dex Media West LLC/Finance Sr Unsecured Series B 08-15-10 8.50 335,000 347,144 Idearc 11-15-16 8.00 1,835,000 1,853,350 News America 12-15-35 6.40 11,665,000 11,108,719 RH Donnelley Sr Disc Nts Series A-2 01-15-13 6.88 1,835,000 1,738,663 RR Donnelley & Sons Sr Unsecured 01-15-17 6.13 19,850,000 19,326,833 Sinclair Broadcast Group 03-15-12 8.00 54,000 55,620 --------------- Total 46,303,660 - -----------------------------------------------------------------------------------
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) METALS (--%) Freeport-McMoRan Copper & Gold Sr Unsecured 04-01-15 8.25% $905,000 $954,775 - ----------------------------------------------------------------------------------- NON CAPTIVE CONSUMER (0.1%) SLM 01-15-13 5.38 2,430,000 2,145,928 10-01-13 5.00 3,049,000 2,614,335 --------------- Total 4,760,263 - ----------------------------------------------------------------------------------- OTHER FINANCIAL INSTITUTIONS (0.6%) Residential Capital LLC 06-30-10 6.38 18,780,000 18,537,588 - ----------------------------------------------------------------------------------- PACKAGING (0.1%) Crown Americas LLC/Capital 11-15-15 7.75 1,835,000 1,844,175 Owens-Brockway Glass Container 05-15-13 8.25 620,000 641,700 --------------- Total 2,485,875 - ----------------------------------------------------------------------------------- PAPER (--%) Smurfit-Stone Container Enterprises Sr Unsecured 03-15-17 8.00 1,600,000 1,552,000 - ----------------------------------------------------------------------------------- PROPERTY & CASUALTY (0.2%) Travelers Companies Sr Unsecured 06-15-37 6.25 6,810,000 6,628,445 - ----------------------------------------------------------------------------------- RAILROADS (0.1%) Canadian Pacific Railway 05-15-37 5.95 3,475,000(c) 3,266,264 - ----------------------------------------------------------------------------------- REITS (0.3%) Brandywine Operating Partnership LP 05-01-17 5.70 3,195,000 3,097,904 ERP Operating LP 06-15-17 5.75 8,165,000 8,003,741 --------------- Total 11,101,645 - ----------------------------------------------------------------------------------- RETAILERS (0.9%) Home Depot Sr Unsecured 12-16-36 5.88 17,665,000 15,739,533 Macys Retail Holdings 07-15-09 4.80 16,581,000 16,264,385 --------------- Total 32,003,918 - ----------------------------------------------------------------------------------- WIRELESS (--%) American Tower Sr Nts 10-15-12 7.13 160,000 163,600 - ----------------------------------------------------------------------------------- WIRELINES (3.6%) AT&T Sr Nts 05-15-36 6.80 8,405,000 8,705,025 Qwest 03-15-12 8.88 695,000 748,863
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) WIRELINES (CONT.) Qwest Sr Nts 06-15-15 7.63% $3,200,000 $3,304,000 Qwest Sr Unsecured 10-01-14 7.50 1,730,000(k) 1,773,250 Sprint Capital 03-15-32 8.75 740,000 831,116 Telecom Italia Capital 11-15-33 6.38 8,180,000(c) 7,705,143 Telefonica Europe 09-15-10 7.75 16,120,000(c) 17,088,538 TELUS 06-01-11 8.00 41,586,000(c) 44,469,988 Verizon New York Series A 04-01-12 6.88 24,340,000 25,377,079 Verizon Pennsylvania Series A 11-15-11 5.65 10,323,000 10,302,457 Windstream 08-01-16 8.63 1,835,000 1,940,513 --------------- Total 122,245,972 - ----------------------------------------------------------------------------------- TOTAL BONDS (Cost: $3,492,691,921) $3,452,385,330 - -----------------------------------------------------------------------------------
MUNICIPAL BONDS (0.4%) NAME OF ISSUER AND TITLE OF COUPON PRINCIPAL ISSUE RATE AMOUNT VALUE(A) TOBACCO Tobacco Settlement Financing Corporation Revenue Bonds Series 2007A-1 06-01-46 6.71% $15,820,000 $15,180,081 - ----------------------------------------------------------------------------------- TOTAL MUNICIPAL BONDS (Cost: $15,818,418) $15,180,081 - -----------------------------------------------------------------------------------
SENIOR LOANS (2.0%)(p) COUPON PRINCIPAL BORROWER RATE AMOUNT VALUE(A) CHEMICALS (0.1%) Celanese Tranche B Term Loan 04-06-11 7.10% $2,115,000(c) $2,116,650 04-06-11 7.10 355,000(c,e) 355,277 --------------- Total 2,471,927 - ----------------------------------------------------------------------------------- FOOD AND BEVERAGE (0.1%) Aramark Letter of Credit 01-26-14 5.20 142,876 143,145
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 172 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Diversified Bond Fund
SENIOR LOANS (CONTINUED) COUPON PRINCIPAL BORROWER RATE AMOUNT VALUE(A) FOOD AND BEVERAGE (CONT.) Aramark Tranche B Term Loan 01-26-14 7.48% $1,999,196 $2,002,695 Pinnacle Foods Finance Tranche B Term Loan 04-02-14 8.10 2,695,000 2,699,823 --------------- Total 4,845,663 - ----------------------------------------------------------------------------------- GAMING (0.1%) Fontainebleau Las Vegas Delayed Draw Term Loan 06-05-14 2.00 1,098,000(e,r) 1,096,628 Fontainebleau Las Vegas Term Loan 06-05-14 8.61 2,196,000(e) 2,202,412 --------------- Total 3,299,040 - ----------------------------------------------------------------------------------- HEALTH CARE (0.6%) Community Health Term Loan 06-28-14 7.57 8,133,573(e) 8,145,449 Community Health Delayed Draw Term Loan 06-28-14 0.50 536,427(e,r) 537,210 HCA Tranche B Term Loan 01-21-13 7.60-7.61 12,830,525 12,901,735 --------------- Total 21,584,394 - ----------------------------------------------------------------------------------- MEDIA CABLE (0.4%) Charter Communications Tranche B Term Loan 03-06-14 7.35 7,430,000 7,362,683 Univision Communications Delayed Draw Term Loan 09-23-14 1.00 368,154(e,r) 361,944
SENIOR LOANS (CONTINUED) COUPON PRINCIPAL BORROWER RATE AMOUNT VALUE(A) MEDIA CABLE (CONT.) Univision Communications Tranche B Term Loan 09-29-14 7.61% $5,726,846 $5,601,600 --------------- Total 13,326,227 - ----------------------------------------------------------------------------------- MEDIA NON CABLE (0.2%) VNU Tranche B Term Loan 08-09-13 7.61 5,721,225(c) 5,746,856 - ----------------------------------------------------------------------------------- METALS (0.1%) Freeport-McMoRan Copper & Gold Tranche B Term Loan 03-19-14 7.07 2,318,421 2,317,865 - ----------------------------------------------------------------------------------- OIL FIELD SERVICES (0.1%) Dresser 1st Lien Term Loan 05-04-14 7.86 3,240,000 3,246,739 - ----------------------------------------------------------------------------------- PAPER (--%) Domtar Tranche B Term Loan 03-07-14 6.74 1,619,988(c) 1,606,833 - ----------------------------------------------------------------------------------- RETAILERS (0.1%) Michaels Stores Term Loan 10-31-13 7.63 1,525,000 1,509,750 Neiman Marcus Group Tranche B Term Loan 04-27-13 7.32-7.36 1,740,000 1,746,368 --------------- Total 3,256,118 - -----------------------------------------------------------------------------------
SENIOR LOANS (CONTINUED) COUPON PRINCIPAL BORROWER RATE AMOUNT VALUE(A) TECHNOLOGY (0.1%) West Corp Tranche B Term Loan 10-24-13 7.73-7.76% $2,492,491 $2,496,952 - ----------------------------------------------------------------------------------- WIRELINES (0.1%) Level 3 Communications Tranche B Term Loan 03-13-14 7.61 3,500,000 3,503,290 - ----------------------------------------------------------------------------------- TOTAL SENIOR LOANS (Cost: $67,885,444) $67,701,904 - -----------------------------------------------------------------------------------
COMMON STOCKS (--%) ISSUER SHARES VALUE(A) PAPER & FOREST PRODUCTS Crown Paper Escrow 3,450,000(q) $3 - ----------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $--) $3 - -----------------------------------------------------------------------------------
MONEY MARKET FUND (11.5%)(h) SHARES VALUE(A) RiverSource Short-Term Cash Fund 394,236,648(i) $394,236,648 - ----------------------------------------------------------------------------------- TOTAL MONEY MARKET FUND (Cost: $394,236,648) $394,236,648 - ----------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES (Cost: $3,970,632,431)(s) $3,929,503,966 ===================================================================================
NOTES TO INVESTMENTS IN SECURITIES (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Interest rate varies either based on a predetermined schedule or to reflect current market conditions; rate shown is the effective rate on June 30, 2007. (c) Foreign security values are stated in U.S. dollars. For debt securities, principal amounts are denominated in U.S. dollar currency unless otherwise noted. At June 30, 2007, the value of foreign securities represented 3.5% of net assets. (d) Represents a security sold under Rule 144A, which is exempt from registration under the Securities Act of 1933, as amended. This security has been determined to be liquid under guidelines established by the Fund's Board of Directors. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2007, the value of these securities amounted to $153,214,039 or 4.5% of net assets. (e) At June 30, 2007, the cost of securities purchased, including interest purchased, on a when-issued and/or other forward-commitment basis was $506,077,493. (f) Mortgage-backed securities represent direct or indirect participations in, or are secured by and payable from, mortgage loans secured by real property, and include single- and multi-class pass-through securities and collateralized mortgage obligations. These securities may be issued or guaranteed by U.S. government agencies or instrumentalities, or by private issuers, generally originators and investors in mortgage loans, including savings associations, mortgage bankers, commercial banks, investment bankers and special purpose entities. The maturity dates shown represent the original maturity of the underlying obligation. Actual maturity may vary based upon prepayment activity on these obligations. Unless otherwise noted, the coupon rates presented are fixed rates. (g) At June 30, 2007, security was partially or fully on loan. See Note 6 to the financial statements. (h) Cash collateral received from security lending activity is invested in an affiliated money market fund and represents 2.0% of net assets. See Note 6 to the financial statements. 9.5% of net assets is the Fund's cash equivalent position. (i) Affiliated Money Market Fund -- See Note 10 to the financial statements. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 173 RiverSource VP - Diversified Bond Fund NOTES TO INVESTMENTS IN SECURITIES (CONTINUED) (j) Identifies issues considered to be illiquid as to their marketability (see Note 1 to the financial statements). These securities may be valued at fair value according to procedures approved, in good faith, by the Fund's Board of Directors. Information concerning such security holdings at June 30, 2007, is as follows:
ACQUISITION SECURITY DATES COST - ---------------------------------------------------------------------------------------------- United Artists Theatre Circuit 9.30% Pass-Through Ctfs 2015 12-08-95 $2,202,764
(k) Partially pledged as initial deposit on the following open interest rate futures contracts (see Note 7 to the financial statements):
TYPE OF SECURITY NOTIONAL AMOUNT - ------------------------------------------------------------------------------------ PURCHASE CONTRACTS U.S. Long Bond, Sept. 2007, 20-year $29,000,000 U.S. Treasury Note, Sept. 2007, 5-year 36,200,000 U.S. Treasury Note, Sept. 2007, 10-year 64,300,000 SALE CONTRACTS U.S. Treasury Note, Sept. 2007, 2-year 16,600,000
(l) Interest only represents securities that entitle holders to receive only interest payments on the underlying mortgages. The yield to maturity of an interest only is extremely sensitive to the rate of principal payments on the underlying mortgage assets. A rapid (slow) rate of principal repayments may have an adverse (positive) effect on yield to maturity. The principal amount shown is the notional amount of the underlying mortgages. Interest rate disclosed represents yield based upon the estimated timing and amount of future cash flows at June 30, 2007. (m) Adjustable rate mortgage; interest rate varies to reflect current market conditions; rate shown is the effective rate on June 30, 2007. (n) The following abbreviations are used in the portfolio security descriptions to identify the insurer of the issue: AMBAC -- Ambac Assurance Corporation MBIA -- MBIA Insurance Corporation
(o) Inflation-indexed bonds are securities in which the principal amount is adjusted for inflation and the semiannual interest payments equal a fixed percentage of the inflation-adjusted principal amount. (p) Senior loans have rates of interest that float periodically based primarily on the London Interbank Offered Rate ("LIBOR") and other short-term rates. Remaining maturities of senior loans may be less than the stated maturities shown as a result of contractual or optional prepayments by the borrower. Such prepayments cannot be predicted with certainty. (q) Non-income producing. (r) At June 30, 2007, the Fund had unfunded senior loan commitments pursuant to the term of the loan agreement. The Fund receives a stated coupon rate until the borrower draws on the loan commitment, at which time the rate will become the stated rate in the loan agreement.
UNFUNDED BORROWER COMMITMENT - ------------------------------------------------------------------------------- Community Health $537,210 Fontainebleau Las Vegas 1,095,255 Univision Communications 368,154 - ------------------------------------------------------------------------------- Total $2,000,619 - -------------------------------------------------------------------------------
(s) At June 30, 2007, the cost of securities for federal income tax purposes was approximately $3,970,632,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $4,319,000 Unrealized depreciation (45,447,000) - --------------------------------------------------------------------------------- Net unrealized depreciation $(41,128,000) - ---------------------------------------------------------------------------------
The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS (i) The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (Commission) for the first and third quarters of each fiscal year on Form N-Q; (ii) The Fund's Forms N-Q are available on the Commission's website at http://www.sec.gov; (iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC (information on the operations of the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iv) The Fund's complete schedule of portfolio holdings, as disclosed in its annual and semiannual shareholder reports and in its filings on Form N-Q, can be found at riversource.com. - -------------------------------------------------------------------------------- 174 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT INVESTMENTS IN SECURITIES RiverSource VP - Diversified Equity Income Fund JUNE 30, 2007 (UNAUDITED) (Percentages represent value of investments compared to net assets)
COMMON STOCKS (97.9%) ISSUER SHARES VALUE(A) AEROSPACE & DEFENSE (1.0%) Goodrich 282,219 $16,808,964 Honeywell Intl 452,522 25,467,938 --------------- Total 42,276,902 - ----------------------------------------------------------------------------------- AIRLINES (0.6%) AMR 367,064(b) 9,672,137 Continental Airlines Cl B 168,805(b) 5,717,425 UAL 59,822(b) 2,428,175 US Airways Group 199,579(b) 6,041,256 --------------- Total 23,858,993 - ----------------------------------------------------------------------------------- AUTOMOBILES (2.0%) Ford Motor 5,038,720(d) 47,464,742 General Motors 856,536 32,377,061 --------------- Total 79,841,803 - ----------------------------------------------------------------------------------- CAPITAL MARKETS (1.4%) Bank of New York Mellon 571,543 23,684,742 Merrill Lynch & Co 242,078 20,232,879 Morgan Stanley 136,269 11,430,244 --------------- Total 55,347,865 - ----------------------------------------------------------------------------------- CHEMICALS (3.1%) Air Products & Chemicals 148,504 11,935,266 Dow Chemical 1,180,735 52,212,102 EI du Pont de Nemours & Co 1,223,073 62,181,032 --------------- Total 126,328,400 - ----------------------------------------------------------------------------------- COMMERCIAL BANKS (1.1%) US Bancorp 403,398 13,291,964 Wachovia 377,756 19,359,995 Wells Fargo & Co 340,868 11,988,328 --------------- Total 44,640,287 - ----------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES (0.4%) Waste Management 425,279 16,607,145 - ----------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS (1.3%) Hewlett-Packard 1,000,991 44,664,218 Intl Business Machines 98,276 10,343,549 --------------- Total 55,007,767 - ----------------------------------------------------------------------------------- CONSTRUCTION & ENGINEERING (0.5%) Fluor 166,731 18,568,831 Insituform Technologies Cl A 146,270(b) 3,190,149 --------------- Total 21,758,980 - ----------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES (5.5%) Bank of America 2,078,730 101,629,110 Citigroup 2,362,562 121,175,805 --------------- Total 222,804,915 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) DIVERSIFIED TELECOMMUNICATION SERVICES (7.0%) AT&T 3,803,613 $157,849,940 BT Group 4,412,780(c) 29,463,844 Deutsche Telekom ADR 670,004(c) 12,334,774 Telefonos de Mexico ADR Series L 1,125,082(c) 42,629,357 Verizon Communications 1,015,467 41,806,776 --------------- Total 284,084,691 - ----------------------------------------------------------------------------------- ELECTRIC UTILITIES (2.7%) Duke Energy 480,435 8,791,961 Edison Intl 195,071 10,947,385 Exelon 278,959 20,252,423 FirstEnergy 296,150 19,169,790 FPL Group 568,061 32,231,780 Southern 498,929 17,108,275 --------------- Total 108,501,614 - ----------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT (0.9%) ABB ADR 1,292,468(c) 29,209,777 Hubbell Cl B 117,000 6,343,740 --------------- Total 35,553,517 - ----------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES (4.5%) Baker Hughes 518,428 43,615,348 GlobalSantaFe 635,530 45,917,042 Halliburton 1,527,127 52,685,881 Schlumberger 490,791 41,687,788 --------------- Total 183,906,059 - ----------------------------------------------------------------------------------- FOOD & STAPLES RETAILING (0.5%) Wal-Mart Stores 424,427 20,419,183 - ----------------------------------------------------------------------------------- FOOD PRODUCTS (0.5%) Kraft Foods Cl A 602,807 21,248,947 - ----------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES (1.0%) CIGNA 296,444 15,480,306 Health Net 225,752(b) 11,919,706 Humana 238,674(b) 14,537,633 --------------- Total 41,937,645 - ----------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE (0.4%) Royal Caribbean Cruises 418,943 18,006,170 - ----------------------------------------------------------------------------------- HOUSEHOLD DURABLES (0.6%) Whirlpool 231,198 25,709,218 - ----------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES (6.4%) 3M 440,538 38,234,293 General Electric 3,407,073 130,422,755 McDermott Intl 1,119,018(b) 93,012,776 --------------- Total 261,669,824 - ----------------------------------------------------------------------------------- INSURANCE (16.0%) ACE 1,274,523(c) 79,683,178 Allstate 626,402 38,529,987 American Intl Group 560,569 39,256,647
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) INSURANCE (CONT.) Aon 789,128 $33,624,744 Axis Capital Holdings 583,148(c) 23,704,966 Endurance Specialty Holdings 632,034(c) 25,306,641 Everest Re Group 92,050(c) 10,000,312 Lincoln Natl 442,765 31,414,177 Loews 1,325,341 67,565,884 Marsh & McLennan Companies 1,681,633 51,928,827 Montpelier Re Holdings 958,814(c) 17,776,412 PartnerRe 171,869(c) 13,319,848 RenaissanceRe Holdings 358,717(c) 22,236,867 Safeco 318,240 19,813,622 Torchmark 261,542 17,523,314 Travelers Companies 1,507,424 80,647,184 XL Capital Cl A 1,024,253(c) 86,334,284 --------------- Total 658,666,894 - ----------------------------------------------------------------------------------- IT SERVICES (0.7%) Computer Sciences 177,234(b) 10,483,391 Electronic Data Systems 688,705 19,097,790 --------------- Total 29,581,181 - ----------------------------------------------------------------------------------- LEISURE EQUIPMENT & PRODUCTS (0.5%) Eastman Kodak 693,164(d) 19,290,754 - ----------------------------------------------------------------------------------- MACHINERY (8.0%) Caterpillar 1,448,505 113,417,941 Deere & Co 436,187 52,665,218 Eaton 493,914 45,934,002 Illinois Tool Works 558,593 30,270,155 Ingersoll-Rand Cl A 1,058,052(c) 58,002,411 Parker Hannifin 334,953 32,795,248 --------------- Total 333,084,975 - ----------------------------------------------------------------------------------- MEDIA (2.3%) Comcast Cl A 1,303,420(b) 36,652,170 Idearc 133,729 4,724,646 RH Donnelley 185,416(b) 14,050,824 Time Warner 1,750,124 36,822,609 --------------- Total 92,250,249 - ----------------------------------------------------------------------------------- METALS & MINING (0.9%) Alcoa 898,571 36,419,083 - ----------------------------------------------------------------------------------- MULTILINE RETAIL (0.3%) Macy's 304,432 12,110,305 - ----------------------------------------------------------------------------------- MULTI-UTILITIES (0.7%) Dominion Resources 184,700 15,941,457 NiSource 601,887 12,465,080 --------------- Total 28,406,537 - ----------------------------------------------------------------------------------- OIL, GAS & CONSUMABLE FUELS (10.0%) Anadarko Petroleum 246,139 12,796,767 Apache 185,172 15,108,183 BP ADR 615,734(c) 44,419,051
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS - 2007 SEMIANNUAL REPORT 175 RiverSource VP - Diversified Equity Income Fund
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) OIL, GAS & CONSUMABLE FUELS (CONT.) Chevron 861,874 $72,604,249 ConocoPhillips 827,481 64,957,259 Devon Energy 82,590 6,465,971 EnCana 187,179(c) 11,502,150 Exxon Mobil 528,989 44,371,597 Marathon Oil 1,065,113 63,864,175 Petroleo Brasileiro ADR 266,119(c) 32,272,251 Pioneer Natural Resources 255,964 12,468,006 Spectra Energy 283,482 7,359,193 Total ADR 289,054(c) 23,407,593 --------------- Total 411,596,445 - ----------------------------------------------------------------------------------- PAPER & FOREST PRODUCTS (1.8%) Intl Paper 1,167,514 45,591,422 Weyerhaeuser 331,399 26,157,323 --------------- Total 71,748,745 - ----------------------------------------------------------------------------------- PHARMACEUTICALS (4.7%) Abbott Laboratories 388,636 20,811,458 Bristol-Myers Squibb 579,837 18,299,656 Eli Lilly & Co 303,817 16,977,294 Merck & Co 573,901 28,580,270 Pfizer 2,610,393 66,747,748 Schering-Plough 388,156 11,815,469 Wyeth 501,539 28,758,246 --------------- Total 191,990,141 - ----------------------------------------------------------------------------------- ROAD & RAIL (0.9%) Burlington Northern Santa Fe 201,718 17,174,271 Union Pacific 162,517 18,713,832 --------------- Total 35,888,103 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (1.7%) Intel 1,188,351 $28,235,219 STMicroelectronics 907,179(c) 17,408,765 Taiwan Semiconductor Mfg ADR 2,064,858(c) 22,981,870 --------------- Total 68,625,854 - ----------------------------------------------------------------------------------- SOFTWARE (1.0%) Microsoft 1,329,858 39,190,915 - ----------------------------------------------------------------------------------- SPECIALTY RETAIL (0.6%) Home Depot 664,162 26,134,775 - ----------------------------------------------------------------------------------- THRIFTS & MORTGAGE FINANCE (1.5%) Fannie Mae 943,588 61,644,604 - ----------------------------------------------------------------------------------- TOBACCO (3.4%) Altria Group 871,081 61,097,621 Loews-Carolina Group 996,555(f) 77,003,805 --------------- Total 138,101,426 - ----------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES (1.4%) Sprint Nextel 2,761,123 57,182,857 - ----------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $3,216,880,917) $4,001,423,768 - -----------------------------------------------------------------------------------
PREFERRED STOCKS (0.2%) ISSUER SHARES VALUE(A) Schering-Plough 6.00% Cv 90,800 $6,258,572 - ----------------------------------------------------------------------------------- TOTAL PREFERRED STOCKS (Cost: $4,618,602) $6,258,572 - -----------------------------------------------------------------------------------
BONDS (0.5%) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) Qwest Communications Intl Sr Unsecured 11-15-25 3.50% $11,148,000 $19,442,223 - ----------------------------------------------------------------------------------- TOTAL BONDS (Cost: $11,148,000) $19,442,223 - -----------------------------------------------------------------------------------
MONEY MARKET FUND (2.1%)(e) SHARES VALUE(A) RiverSource Short-Term Cash Fund 85,867,620(g) $85,867,620 - ----------------------------------------------------------------------------------- TOTAL MONEY MARKET FUND (Cost: $85,867,620) $85,867,620 - ----------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES (Cost: $3,318,515,139)(h) $4,112,992,183 ===================================================================================
NOTES TO INVESTMENTS IN SECURITIES (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Non-income producing. (c) Foreign security values are stated in U.S. dollars. At June 30, 2007, the value of foreign securities represented 14.7% of net assets. (d) At June 30, 2007, security was partially or fully on loan. See Note 6 to the financial statements. (e) Cash collateral received from security lending activity is invested in an affiliated money market fund and represents 0.7% of net assets. See Note 6 to the financial statements. 1.4% of net assets is the Fund's cash equivalent position. (f) Shareholders of tracking stocks have a financial interest only in a unit or division of the company. Unlike the common stock of the company itself, a tracking stock usually has limited or no voting rights. In the event of a company's liquidation, tracking stock shareholders typically do not have a legal claim on the company's assets. (g) Affiliated Money Market Fund - See Note 10 to the financial statements. (h) At June 30, 2007, the cost of securities for federal income tax purposes was approximately $3,318,515,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $807,522,000 Unrealized depreciation (13,045,000) - --------------------------------------------------------------------------------- Net unrealized appreciation $794,477,000 - ---------------------------------------------------------------------------------
The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. - -------------------------------------------------------------------------------- 176 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Diversified Equity Income Fund HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS (i) The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (Commission) for the first and third quarters of each fiscal year on Form N-Q; (ii) The Fund's Forms N-Q are available on the Commission's website at http://www.sec.gov; (iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC (information on the operations of the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iv) The Fund's complete schedule of portfolio holdings, as disclosed in its annual and semiannual shareholder reports and in its filings on Form N-Q, can be found at riversource.com. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 177 INVESTMENTS IN SECURITIES RiverSource VP - Emerging Markets Fund JUNE 30, 2007 (UNAUDITED) (Percentages represent value of investments compared to net assets)
COMMON STOCKS (94.8%)(c) ISSUER SHARES VALUE(A) ARGENTINA (1.1%) DIVERSIFIED TELECOMMUNICATION SERVICES (--%) Telecom Argentina ADR 14(b) $349 - ----------------------------------------------------------------------------------- REAL ESTATE MANAGEMENT & DEVELOPMENT (1.1%) IRSA Inversiones y Representaciones GDR 406,271(b) 7,516,014 - ----------------------------------------------------------------------------------- BAHAMAS (1.0%) MARINE Ultrapetrol Bahamas 290,553(b) 6,886,106 - ----------------------------------------------------------------------------------- BRAZIL (15.5%) AIRLINES (2.0%) GOL Linhas Aereas Inteligentes ADR 418,480 13,805,655 - ----------------------------------------------------------------------------------- CAPITAL MARKETS (0.5%) Banco Daycoval 346,900(b) 3,103,747 - ----------------------------------------------------------------------------------- CHEMICALS (1.1%) Braskem Series A 800,000 7,219,917 - ----------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES (1.0%) Bradespar 174,400 6,629,552 - ----------------------------------------------------------------------------------- HOUSEHOLD DURABLES (1.5%) Cyrela Brazil Realty 538,100 6,681,594 Rossi Residencial 184,600 3,916,048 --------------- Total 10,597,642 - ----------------------------------------------------------------------------------- MEDIA (0.5%) NET Servicos de Comunicaco 194,624(b) 3,215,132 - ----------------------------------------------------------------------------------- METALS & MINING (3.1%) Companhia Vale do Rio Doce ADR 469,787 20,929,011 - ----------------------------------------------------------------------------------- OIL, GAS & CONSUMABLE FUELS (3.2%) Petroleo Brasileiro ADR 179,538 21,772,573 - ----------------------------------------------------------------------------------- PAPER & FOREST PRODUCTS (1.6%) Aracruz Celulose ADR 167,939 11,124,279 - ----------------------------------------------------------------------------------- REAL ESTATE MANAGEMENT & DEVELOPMENT (0.3%) Even Construtora e Incorporadora 224,500(b) 1,985,335 - ----------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES (0.7%) Tim Participacoes 377,974,000 2,099,638 Tim Participacoes ADR 84,825 2,923,917 --------------- Total 5,023,555 - ----------------------------------------------------------------------------------- CANADA (0.8%) METALS & MINING Aur Resources 192,800 5,738,742 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) CHILE (1.4%) COMMERCIAL BANKS Banco Santander Chile ADR 191,730 $9,498,304 - ----------------------------------------------------------------------------------- CHINA (1.8%) MACHINERY (--%) China High Speed Transmission Equipment Group 38,000(b) 34,408 - ----------------------------------------------------------------------------------- OIL, GAS & CONSUMABLE FUELS (1.8%) China Shenhua Energy Series H 1,291,000 4,507,520 CNOOC 6,924,000 7,845,842 --------------- Total 12,353,362 - ----------------------------------------------------------------------------------- REAL ESTATE (--%) KWG Property Holding 155,500(b) 144,781 - ----------------------------------------------------------------------------------- CZECH REPUBLIC (0.6%) PHARMACEUTICALS Zentiva 61,091 4,151,033 - ----------------------------------------------------------------------------------- EGYPT (0.9%) DIVERSIFIED TELECOMMUNICATION SERVICES Telecom Egypt 2,128,026 6,490,760 - ----------------------------------------------------------------------------------- HONG KONG (6.7%) COMMERCIAL BANKS (1.0%) Bank of East Asia 1,190,000 6,696,509 - ----------------------------------------------------------------------------------- REAL ESTATE MANAGEMENT & DEVELOPMENT (1.3%) China Overseas Land & Investment 5,750,000 8,971,735 - ----------------------------------------------------------------------------------- TEXTILES, APPAREL & LUXURY GOODS (0.6%) Prime Success Intl Group 4,801,066 3,991,166 - ----------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES (3.8%) China Mobile 2,418,500 25,966,630 - ----------------------------------------------------------------------------------- HUNGARY (1.4%) OIL, GAS & CONSUMABLE FUELS MOL Magyar Olaj-es Gazipari 63,965 9,716,647 - ----------------------------------------------------------------------------------- INDIA (4.3%) ELECTRICAL EQUIPMENT (1.5%) Bharat Heavy Electricals 116,344 4,396,059 Suzlon Energy 164,543 6,045,035 --------------- Total 10,441,094 - ----------------------------------------------------------------------------------- IT SERVICES (1.9%) Satyam Computer Services 794,402 9,136,599 Tata Consultancy Services 144,436 4,078,809 --------------- Total 13,215,408 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) INDIA (CONT.) OIL, GAS & CONSUMABLE FUELS (0.9%) Reliance Inds 145,931 $6,097,370 - ----------------------------------------------------------------------------------- INDONESIA (3.4%) AUTOMOBILES (1.2%) PT Astra Intl 4,041,500 7,576,412 - ----------------------------------------------------------------------------------- GAS UTILITIES (1.0%) Perusahaan Gas Negara 6,747,500 7,073,087 - ----------------------------------------------------------------------------------- MARINE (0.7%) Berlian Laju Tanker 21,794,000(b) 4,770,018 - ----------------------------------------------------------------------------------- METALS & MINING (0.5%) Intl Nickel Indonesia 579,000 3,564,559 - ----------------------------------------------------------------------------------- ISRAEL (3.5%) CHEMICALS (1.2%) Israel Chemicals 1,089,956 8,673,790 - ----------------------------------------------------------------------------------- PHARMACEUTICALS (1.2%) Teva Pharmaceutical Inds ADR 195,469 8,063,096 - ----------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES (1.1%) Partner Communications 457,317 7,274,709 - ----------------------------------------------------------------------------------- MALAYSIA (1.3%) COMMERCIAL BANKS (0.5%) Bumiputra-Commerce Holdings 957,600 3,247,513 - ----------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE (0.8%) Genting Group 2,470,800 5,908,435 - ----------------------------------------------------------------------------------- MEXICO (9.2%) COMMERCIAL BANKS (1.5%) Grupo Financiero Banorte Series O 2,252,300 10,316,005 - ----------------------------------------------------------------------------------- HOUSEHOLD DURABLES (1.5%) Consorcio ARA 2,796,800 4,504,704 Corporacion GEO Series B 1,102,200(b) 6,055,315 --------------- Total 10,560,019 - ----------------------------------------------------------------------------------- MEDIA (0.9%) Grupo Televisa ADR 211,339 5,835,070 - ----------------------------------------------------------------------------------- METALS & MINING (1.2%) Grupo Mexico Series B 1,293,900 7,952,880 - ----------------------------------------------------------------------------------- MULTILINE RETAIL (0.3%) Grupo Famsa Series A 362,100(b) 2,111,663 - ----------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES (3.8%) America Movil ADR Series L 423,984 26,257,330 - -----------------------------------------------------------------------------------
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 178 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Emerging Markets Fund
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) NORWAY (0.5%) FOOD PRODUCTS Copeinca 315,200(b) $3,742,262 - ----------------------------------------------------------------------------------- PAKISTAN (0.8%) COMMERCIAL BANKS United Bank GDR 404,200(b) 5,602,212 - ----------------------------------------------------------------------------------- PERU (0.9%) METALS & MINING Hochschild Mining 905,071 6,015,838 - ----------------------------------------------------------------------------------- PHILIPPINE ISLANDS (0.9%) REAL ESTATE MANAGEMENT & DEVELOPMENT Filinvest Land 129,117,000(b) 6,040,561 - ----------------------------------------------------------------------------------- POLAND (1.0%) DIVERSIFIED TELECOMMUNICATION SERVICES Telekomunikacja Polska 774,133 6,782,107 - ----------------------------------------------------------------------------------- RUSSIA (12.8%) COMMERCIAL BANKS (2.2%) Sberbank 3,948 15,397,200 - ----------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES (--%) TMK Series S 3 27 - ----------------------------------------------------------------------------------- METALS & MINING (2.1%) Mechel ADR 208,988 7,634,332 Novolipetsk Steel GDR 239,294(d,e) 7,023,279 --------------- Total 14,657,611 - ----------------------------------------------------------------------------------- OIL, GAS & CONSUMABLE FUELS (4.1%) Gazprom ADR 647,959 27,149,482 - ----------------------------------------------------------------------------------- PHARMACEUTICALS (1.1%) Pharmstandard 112,951(b) 7,581,271 - ----------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES (3.3%) Mobile Telesystems ADR 197,625 11,970,146 Vimpel-Communications ADR 101,706 10,715,744 --------------- Total 22,685,890 - ----------------------------------------------------------------------------------- SINGAPORE (2.1%) FOOD PRODUCTS (1.1%) China Fishery Group 2,382,000 3,984,005 Golden Agri-Resources 1,962,259 3,333,251 --------------- Total 7,317,256 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) SINGAPORE (CONT.) REAL ESTATE MANAGEMENT & DEVELOPMENT (1.0%) Keppel Land 1,217,000 $6,957,239 - ----------------------------------------------------------------------------------- SOUTH AFRICA (8.0%) DIVERSIFIED FINANCIAL SERVICES (0.9%) FirstRand 2,029,987 6,500,376 - ----------------------------------------------------------------------------------- FOOD & STAPLES RETAILING (1.2%) Massmart Holdings 683,465 8,357,259 - ----------------------------------------------------------------------------------- MEDIA (2.3%) Naspers Series N 620,128 15,991,512 - ----------------------------------------------------------------------------------- METALS & MINING (3.6%) Anglo Platinum 56,773 9,363,438 Impala Platinum Holdings 483,580 14,799,904 --------------- Total 24,163,342 - ----------------------------------------------------------------------------------- SOUTH KOREA (8.4%) COMMERCIAL BANKS (3.5%) Kookmin Bank 198,482 17,443,530 Shinhan Financial Group 108,210 6,590,163 --------------- Total 24,033,693 - ----------------------------------------------------------------------------------- MACHINERY (2.8%) Doosan Infracore 255,020 8,566,992 Hyundai Heavy Inds 28,241 10,558,241 --------------- Total 19,125,233 - ----------------------------------------------------------------------------------- PHARMACEUTICALS (1.1%) Yuhan 40,081 7,514,102 - ----------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (1.0%) Hynix Semiconductor 197,243(b) 7,128,364 - ----------------------------------------------------------------------------------- TAIWAN (6.5%) COMPUTERS & PERIPHERALS (0.4%) Asustek Computer 1,062,000 2,924,301 - ----------------------------------------------------------------------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS (3.2%) Delta Electronics 1,685,000 6,646,588 Hon Hai Precision Industry 1,412,728 12,220,980 Tripod Technology 582,000 2,969,388 --------------- Total 21,836,956 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) TAIWAN (CONT.) HOUSEHOLD DURABLES (0.4%) Chong Hong Construction 1,128,223 $2,429,649 - ----------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (2.5%) MediaTek 480,900 7,499,872 Taiwan Semiconductor Mfg 4,449,358 9,608,878 --------------- Total 17,108,750 - ----------------------------------------------------------------------------------- TURKEY (--%) COMMERCIAL BANKS Akbank 1 6 - ----------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $529,895,782) $649,543,901 - -----------------------------------------------------------------------------------
PREFERRED STOCKS (2.6%)(c) ISSUER SHARES VALUE(A) BRAZIL Banco Bradesco 292,700 $7,063,968 Banco Itau Holding Financeira 236,900 10,524,111 --------------- Total 17,588,079 - ----------------------------------------------------------------------------------- TOTAL PREFERRED STOCKS (Cost: $17,513,049) $17,588,079 - -----------------------------------------------------------------------------------
MONEY MARKET FUND (2.0%) SHARES VALUE(A) RiverSource Short-Term Cash Fund 13,952,010(f) $13,952,010 - ----------------------------------------------------------------------------------- TOTAL MONEY MARKET FUND (Cost: $13,952,010) $13,952,010 - ----------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES (Cost: $561,360,841)(g) $681,083,990 ===================================================================================
NOTES TO INVESTMENTS IN SECURITIES (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Non-income producing. (c) Foreign security values are stated in U.S. dollars. (d) Represents a security sold under Rule 144A, which is exempt from registration under the Securities Act of 1933, as amended. This security has been determined to be liquid under guidelines established by the Fund's Board of Directors. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2007, the value of these securities amounted to $7,023,279 or 1.0% of net assets. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 179 RiverSource VP - Emerging Markets Fund NOTES TO INVESTMENTS IN SECURITIES (CONTINUED) (e) Identifies issues considered to be illiquid as to their marketability (see Note 1 to the financial statements). These securities may be valued at fair value according to procedures approved, in good faith, by the Fund's Board of Directors. Information concerning such security holdings at June 30, 2007, is as follows:
ACQUISITION SECURITY DATES COST - --------------------------------------------------------------------------------------------------------- Novolipetsk Steel GDR* 06-06-07 thru 06-07-07 $6,517,320
* Represents a security sold under Rule 144A, which is exempt from registration under the Securities Act of 1933, as amended. (f) Affiliated Money Market Fund - See Note 10 to the financial statements. (g) At June 30, 2007, the cost of securities for federal income tax purposes was approximately $561,361,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $123,672,000 Unrealized depreciation (3,949,000) - --------------------------------------------------------------------------------- Net unrealized appreciation $119,723,000 - ---------------------------------------------------------------------------------
The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS (i) The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (Commission) for the first and third quarters of each fiscal year on Form N-Q; (ii) The Fund's Forms N-Q are available on the Commission's website at http://www.sec.gov; (iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC (information on the operations of the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iv) The Fund's complete schedule of portfolio holdings, as disclosed in its annual and semiannual shareholder reports and in its filings on Form N-Q, can be found at riversource.com. - -------------------------------------------------------------------------------- 180 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT INVESTMENTS IN SECURITIES RiverSource VP - Fundamental Value Fund JUNE 30, 2007 (UNAUDITED) (Percentages represent value of investments compared to net assets)
COMMON STOCKS (95.8%) ISSUER SHARES VALUE(A) AIR FREIGHT & LOGISTICS (0.6%) Toll Holdings 88,700(c) $1,089,646 United Parcel Service Cl B 35,850 2,617,050 --------------- Total 3,706,696 - ----------------------------------------------------------------------------------- AUTOMOBILES (1.6%) Harley-Davidson 166,920 9,950,101 - ----------------------------------------------------------------------------------- BEVERAGES (1.8%) Diageo ADR 92,930(c) 7,741,998 Heineken Holding 68,866(c) 3,574,344 --------------- Total 11,316,342 - ----------------------------------------------------------------------------------- CAPITAL MARKETS (2.1%) Bank of New York Mellon 167,600 7,374,400 E*TRADE Financial 35,200(b) 777,568 Morgan Stanley 51,400 4,311,432 State Street 16,330 1,116,972 --------------- Total 13,580,372 - ----------------------------------------------------------------------------------- COMMERCIAL BANKS (7.3%) Commerce Bancorp 98,810 3,654,982 HSBC Holdings ADR 178,176(c) 16,351,211 Wachovia 240,678 12,334,748 Wells Fargo & Co 409,510 14,402,467 --------------- Total 46,743,408 - ----------------------------------------------------------------------------------- COMMUNICATIONS EQUIPMENT (0.3%) Nokia ADR 65,610(c) 1,844,297 - ----------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS (1.8%) Dell 259,880(b) 7,419,574 Hewlett-Packard 93,970 4,192,941 --------------- Total 11,612,515 - ----------------------------------------------------------------------------------- CONSTRUCTION MATERIALS (1.9%) Martin Marietta Materials 42,960 6,960,379 Vulcan Materials 46,380 5,312,365 --------------- Total 12,272,744 - ----------------------------------------------------------------------------------- CONSUMER FINANCE (4.5%) American Express 475,590 29,096,596 - ----------------------------------------------------------------------------------- CONTAINERS & PACKAGING (1.9%) Sealed Air 401,660 12,459,493 - ----------------------------------------------------------------------------------- DIVERSIFIED CONSUMER SERVICES (1.2%) Apollo Group Cl A 19,700(b) 1,151,071 H&R Block 266,380 6,225,301 --------------- Total 7,376,372 - ----------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES (6.8%) Citigroup 237,060 12,158,807 JPMorgan Chase & Co 502,000 24,321,900 Moody's 115,030 7,154,866 --------------- Total 43,635,573 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) ELECTRONIC EQUIPMENT & INSTRUMENTS (0.5%) Agilent Technologies 83,200(b) $3,198,208 - ----------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES (1.0%) Transocean 60,320(b) 6,392,714 - ----------------------------------------------------------------------------------- FOOD & STAPLES RETAILING (6.6%) Costco Wholesale 419,190 24,530,999 CVS Caremark 225,055 8,203,255 Wal-Mart Stores 193,830 9,325,161 --------------- Total 42,059,415 - ----------------------------------------------------------------------------------- FOOD PRODUCTS (0.5%) Hershey 64,260 3,252,841 - ----------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES (2.3%) Cardinal Health 79,520 5,617,293 Express Scripts 58,600(b) 2,930,586 UnitedHealth Group 114,500 5,855,530 --------------- Total 14,403,409 - ----------------------------------------------------------------------------------- HOUSEHOLD DURABLES (0.2%) Hunter Douglas 13,370(c) 1,267,009 - ----------------------------------------------------------------------------------- HOUSEHOLD PRODUCTS (0.9%) Procter & Gamble 97,600 5,972,144 - ----------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES (4.3%) Tyco Intl 822,810 27,802,750 - ----------------------------------------------------------------------------------- INSURANCE (15.5%) Ambac Financial Group 27,200 2,371,568 American Intl Group 379,500 26,576,384 Aon 102,490 4,367,099 Berkshire Hathaway Cl B 5,611(b) 20,227,655 Chubb 27,510 1,489,391 Loews 299,170 15,251,687 Markel 1,035(b) 501,520 Millea Holdings 151,000(c) 6,206,219 NIPPONKOA Insurance 96,300(c) 868,258 Principal Financial Group 32,390 1,888,013 Progressive 518,140 12,399,090 Sun Life Financial 19,230(c) 918,233 Transatlantic Holdings 85,720 6,097,264 --------------- Total 99,162,381 - ----------------------------------------------------------------------------------- INTERNET & CATALOG RETAIL (1.4%) Amazon.com 67,800(b) 4,638,197 Expedia 34,540(b) 1,011,677 IAC/InterActiveCorp 36,390(b) 1,259,458 Liberty Media - Interactive Cl A 85,050(b,d) 1,899,167 --------------- Total 8,808,499 - ----------------------------------------------------------------------------------- INTERNET SOFTWARE & SERVICES (0.2%) Google Cl A 2,300(b) 1,203,774 - ----------------------------------------------------------------------------------- IT SERVICES (1.1%) Iron Mountain 269,660(b) 7,046,216 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) MARINE (0.3%) Kuehne & Nagel Intl 23,600(c) $2,179,799 - ----------------------------------------------------------------------------------- MEDIA (6.6%) Comcast Special Cl A 690,047(b) 19,293,714 Gannett 23,760 1,305,612 Lagardere 57,950(c) 5,054,782 Liberty Media - Capital Series A 17,450(b,d) 2,053,516 News Corp Cl A 477,700 10,132,017 Virgin Media 110,320 2,688,498 WPP Group ADR 21,150(c) 1,580,963 --------------- Total 42,109,102 - ----------------------------------------------------------------------------------- METALS & MINING (0.5%) BHP Billiton 56,370(c) 1,573,433 Rio Tinto 20,190(c) 1,551,602 --------------- Total 3,125,035 - ----------------------------------------------------------------------------------- MULTILINE RETAIL (0.2%) Sears Holdings 8,100(b) 1,372,950 - ----------------------------------------------------------------------------------- OIL, GAS & CONSUMABLE FUELS (11.9%) Canadian Natural Resources 43,800(c) 2,906,130 China Coal Energy Series H 2,001,900(b,c) 3,000,674 ConocoPhillips 370,840 29,110,939 Devon Energy 188,390 14,749,053 EOG Resources 160,480 11,724,669 Occidental Petroleum 256,420 14,841,590 --------------- Total 76,333,055 - ----------------------------------------------------------------------------------- PERSONAL PRODUCTS (0.4%) Avon Products 68,100 2,502,675 - ----------------------------------------------------------------------------------- REAL ESTATE MANAGEMENT & DEVELOPMENT (0.1%) Hang Lung Group 176,000(c) 794,577 - ----------------------------------------------------------------------------------- ROAD & RAIL (0.1%) Asciano Group 61,400(b,c) 527,317 - ----------------------------------------------------------------------------------- SOFTWARE (2.0%) Microsoft 425,570 12,541,548 - ----------------------------------------------------------------------------------- SPECIALTY RETAIL (1.5%) Bed Bath & Beyond 97,000(b) 3,491,030 CarMax 121,300(b) 3,093,150 Lowe's Companies 91,870 2,819,490 --------------- Total 9,403,670 - ----------------------------------------------------------------------------------- TOBACCO (3.3%) Altria Group 302,450 21,213,843 - ----------------------------------------------------------------------------------- TRANSPORTATION INFRASTRUCTURE (1.0%) China Merchants Holdings Intl 981,186(c) 4,749,699 COSCO Pacific 668,760(c) 1,753,367 --------------- Total 6,503,066 - -----------------------------------------------------------------------------------
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS - 2007 SEMIANNUAL REPORT 181 RiverSource VP - Fundamental Value Fund
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) WIRELESS TELECOMMUNICATION SERVICES (1.6%) SK Telecom ADR 117,870(c) $3,223,745 Sprint Nextel 339,520 7,031,459 --------------- Total 10,255,204 - ----------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $555,054,161) $613,025,710 - -----------------------------------------------------------------------------------
MONEY MARKET FUND (4.2%) SHARES VALUE(A) MONEY MARKET FUND RiverSource Short-Term Cash Fund 26,844,201(e) $26,844,201 - ----------------------------------------------------------------------------------- TOTAL MONEY MARKET FUND (Cost: $26,844,201) $26,844,201 - ----------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES (Cost: $581,898,362)(f) $639,869,911 ===================================================================================
NOTES TO INVESTMENTS IN SECURITIES (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Non-income producing. (c) Foreign security values are stated in U.S. dollars. At June 30, 2007, the value of foreign securities represented 10.7% of net assets. (d) Shareholders of tracking stocks have a financial interest only in a unit or division of the company. Unlike the common stock of the company itself, a tracking stock usually has limited or no voting rights. In the event of a company's liquidation, tracking stock shareholders typically do not have a legal claim on the company's assets. (e) Affiliated Money Market Fund - See Note 10 to the financial statements. (f) At June 30, 2007, the cost of securities for federal income tax purposes was approximately $581,898,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $60,151,000 Unrealized depreciation (2,179,000) - -------------------------------------------------------------------------------- Net unrealized appreciation $57,972,000 - --------------------------------------------------------------------------------
The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS (i) The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (Commission) for the first and third quarters of each fiscal year on Form N-Q; (ii) The Fund's Forms N-Q are available on the Commission's website at http://www.sec.gov; (iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC (information on the operations of the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iv) The Fund's complete schedule of portfolio holdings, as disclosed in its annual and semiannual shareholder reports and in its filings on Form N-Q, can be found at riversource.com. - -------------------------------------------------------------------------------- 182 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT INVESTMENTS IN SECURITIES RiverSource VP - Global Bond Fund JUNE 30, 2007 (UNAUDITED) (Percentages represent value of investments compared to net assets)
BONDS (94.7%)(c) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) AUSTRALIA (1.6%) Commonwealth Bank of Australia (European Monetary Unit) Sr Unsub 11-12-09 3.38% 1,105,000 $1,450,112 New South Wales Treasury (Australian Dollar) 12-01-10 7.00 10,380,000 8,882,934 Queensland Treasury (Australian Dollar) 05-14-10 5.50 4,980,000 4,096,533 Telstra 04-01-12 6.38 1,050,000 1,076,769 --------------- Total 15,506,348 - ----------------------------------------------------------------------------------- AUSTRIA (1.1%) Republic of Austria (European Monetary Unit) 01-15-10 5.50 7,625,000 10,555,581 - ----------------------------------------------------------------------------------- BELGIUM (2.1%) Kingdom of Belgium (European Monetary Unit) 03-28-10 3.00 15,315,000 19,925,274 - ----------------------------------------------------------------------------------- BRAZIL (0.2%) Federative Republic of Brazil 01-15-18 8.00 1,655,000 1,818,845 - ----------------------------------------------------------------------------------- CANADA (3.0%) Canadian Natural Resources 03-15-38 6.25 1,300,000 1,230,039 Canadian Pacific Railway 05-15-37 5.95 260,000 244,382 Canadian Pacific Railway (Canadian Dollar) 06-15-10 4.90 395,000(d) 370,050 Molson Coors Capital Finance 09-22-10 4.85 1,850,000 1,806,723 Province of British Columbia (Canadian Dollar) 08-23-10 6.38 9,420,000 9,264,946 Province of Ontario (Canadian Dollar) 03-08-14 5.00 11,525,000 10,958,273 TELUS 06-01-11 8.00 4,275,000 4,571,471 Videotron Ltee 01-15-14 6.88 315,000 308,700 --------------- Total 28,754,584 - ----------------------------------------------------------------------------------- CZECH REPUBLIC (0.3%) Czech Republic (Czech Koruna) 06-16-13 3.70 57,700,000 2,620,418 - -----------------------------------------------------------------------------------
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) DENMARK (0.6%) Danske Bank (European Monetary Unit) Sr Nts 03-16-10 4.20% 1,250,000(h) $1,690,335 Nykredit (Danish Krone) 10-01-28 5.00 24,000,000 4,226,551 --------------- Total 5,916,886 - ----------------------------------------------------------------------------------- FRANCE (7.0%) BNP Paribas (European Monetary Unit) Sr Unsub 10-20-08 3.98 1,250,000(h) 1,691,161 Compagnie de Financement Foncier (European Monetary Unit) 01-29-09 2.38 3,100,000 4,059,104 Dexia Municipal Agency (European Monetary Unit) 09-03-07 4.25 800,000 1,082,382 Govt of France (European Monetary Unit) 04-25-12 5.00 14,170,000 19,545,501 04-25-13 4.00 15,375,000 20,216,518 10-25-16 5.00 12,505,000 17,406,267 Societe Generale (European Monetary Unit) Sr Unsecured 11-28-08 4.12 1,250,000(h) 1,691,278 --------------- Total 65,692,211 - ----------------------------------------------------------------------------------- GERMANY (9.7%) Allgemeine Hypothekenbank Rheinboden (European Monetary Unit) Series 501 09-02-09 5.00 2,590,000(d) 3,520,904 Bayerische Landesbank (Japanese Yen) Sr Nts 04-22-13 1.40 505,000,000 4,045,205 Bundesrepublik Deutschland (European Monetary Unit) 07-04-13 3.75 19,410,000 25,184,295 07-04-27 6.50 12,385,000 20,551,209 07-04-28 4.75 5,280,000 7,164,816 07-04-34 4.75 10,775,000 14,658,130 DEPFA Deutsche Pfandbriefbank (European Monetary Unit) Series G6 01-15-10 5.50 2,940,000 4,058,325 Deutsche Bank (European Monetary Unit) Sr Unsub 07-28-09 4.25 990,000 1,331,049 Kreditanstalt fuer Wiederaufbau (British Pound) 12-07-15 5.50 3,460,000 6,759,799
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) GERMANY (CONT.) Rheinische Hypothekenbank (European Monetary Unit) Series 803 07-05-10 5.75% 3,000,000(d) $4,181,503 --------------- Total 91,455,235 - ----------------------------------------------------------------------------------- GREECE (1.1%) Hellenic Republic (European Monetary Unit) 10-22-22 5.90 6,820,000 10,164,004 - ----------------------------------------------------------------------------------- INDONESIA (0.2%) Republic of Indonesia (Indonesian Rupiah) 07-15-22 10.25 15,017,000,000 1,753,784 - ----------------------------------------------------------------------------------- IRELAND (1.7%) Irish Govt (European Monetary Unit) 10-18-07 4.25 11,865,000 16,056,322 - ----------------------------------------------------------------------------------- ITALY (3.7%) Buoni Poliennali Del Tesoro (European Monetary Unit) 11-01-07 6.00 14,485,000 19,712,798 02-01-19 4.25 3,590,000 4,624,515 11-01-26 7.25 5,530,191 9,620,502 Telecom Italia Capital 11-15-33 6.38 1,310,000 1,233,953 --------------- Total 35,191,768 - ----------------------------------------------------------------------------------- JAPAN (10.1%) Development Bank of Japan (Japanese Yen) 06-20-12 1.40 1,043,000,000 8,450,052 Govt of Japan (Japanese Yen) 12-21-09 1.70 2,213,000,000 18,242,510 09-20-10 0.80 1,651,800,000 13,237,866 06-20-12 1.40 1,199,600,000 9,718,454 12-20-12 1.00 2,347,500,000 18,551,927 12-20-14 1.30 675,000,000 5,322,276 12-20-26 2.10 2,205,000,000 17,522,417 12-20-34 2.40 477,000,000 3,852,765 --------------- Total 94,898,267 - ----------------------------------------------------------------------------------- JERSEY (0.2%) ASIF III Jersey 11-25-08 4.24 1,500,000(h) 2,028,984 - ----------------------------------------------------------------------------------- MALAYSIA (0.2%) Petronas Capital 05-22-12 7.00 315,000 332,639 05-22-12 7.00 1,895,000(d) 2,005,944 --------------- Total 2,338,583 - -----------------------------------------------------------------------------------
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS - 2007 SEMIANNUAL REPORT 183 RiverSource VP - Global Bond Fund
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MEXICO (0.8%) Mexican Fixed Rate Bonds (Mexican Peso) 12-20-12 9.00% 52,580,000 $5,148,488 Mexican Fixed Rate (Mexican Peso) 12-24-09 9.00 25,150,000 2,403,952 United Mexican States 09-27-34 6.75 315,000 335,948 --------------- Total 7,888,388 - ----------------------------------------------------------------------------------- NETHERLANDS (3.3%) Bank Nederlandse Gemeenten (British Pound) Sr Unsub 08-06-07 7.38 1,855,000 3,728,857 Govt of Netherlands (European Monetary Unit) 01-15-08 2.50 14,740,000 19,760,593 07-15-12 5.00 4,610,000 6,358,466 Telefonica Europe 09-15-10 7.75 1,250,000 1,325,104 --------------- Total 31,173,020 - ----------------------------------------------------------------------------------- NEW ZEALAND (1.0%) Govt of New Zealand (New Zealand Dollar) 07-15-09 7.00 12,600,000 9,649,042 - ----------------------------------------------------------------------------------- NORWAY (1.2%) Govt of Norway (Norwegian Krone) 05-16-11 6.00 67,440,000 11,718,391 - ----------------------------------------------------------------------------------- POLAND (1.5%) Republic of Poland (Polish Zloty) 03-24-10 5.75 37,800,000 13,714,556 - ----------------------------------------------------------------------------------- SOUTH AFRICA (0.3%) Republic of South Africa (South African Rand) 08-31-10 13.00 20,000,000 3,127,648 - ----------------------------------------------------------------------------------- SOUTH KOREA (0.1%) Korea Development Bank (Japanese Yen) Series 21RG 06-25-08 0.98 65,000,000 526,450 - ----------------------------------------------------------------------------------- SPAIN (3.2%) Caja de Ahorros y Monte de Piedad de Madrid (European Monetary Unit) 03-25-11 3.50 3,900,000 5,057,496 Govt of Spain (European Monetary Unit) 07-30-09 5.15 18,020,000 24,693,604 --------------- Total 29,751,100 - ----------------------------------------------------------------------------------- SUPRA-NATIONAL (1.0%) European Investment Bank (British Pound) 12-07-11 5.50 4,625,000 9,081,145 - -----------------------------------------------------------------------------------
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) SWEDEN (1.0%) Govt of Sweden (Swedish Krona) 01-28-09 5.00% 30,850,000 $4,564,021 03-15-11 5.25 31,940,000 4,790,673 --------------- Total 9,354,694 - ----------------------------------------------------------------------------------- UNITED KINGDOM (5.1%) Abbey Natl Treasury Services (European Monetary Unit) 05-27-09 4.22 1,250,000(h) 1,691,680 BT Group Sr Unsecured 12-15-10 8.63 930,000 1,016,275 HBOS Treasury Services (European Monetary Unit) 02-12-09 3.50 3,000,000(f) 3,993,787 United Kingdom Treasury (British Pound) 03-07-12 5.00 11,605,000 22,639,844 09-07-14 5.00 9,670,000 18,722,186 --------------- Total 48,063,772 - ----------------------------------------------------------------------------------- UNITED STATES (33.4%) Allied Waste North America 06-01-17 6.88 210,000 202,388 Anadarko Petroleum Sr Unsecured 09-15-16 5.95 655,000 639,557 09-15-36 6.45 675,000 649,233 AT&T Sr Nts 05-15-36 6.80 745,000(j) 771,594 Banc of America Commercial Mtge Series 2005-1 Cl A4 11-10-42 4.87 650,000(f) 636,938 Banc of America Commercial Mtge Series 2005-4 Cl ASB 07-10-45 4.87 975,000(f) 936,274 Banc of America Commercial Mtge Series 2007-1 Cl A3 01-15-49 5.45 1,725,000(f) 1,688,091 Banc of America Large Loan Series 2006-LAQ Cl E 02-09-21 5.70 675,000(d,f,h) 676,740 Banc of America Large Loan Series 2006-LAQ Cl F 02-09-21 5.76 750,000(d,f,h) 751,654 Banc of America Large Loan Series 2006-LAQ Cl G 02-09-21 5.85 525,000(d,f,h) 526,609 Bank of America Sub Nts 03-15-17 5.30 5,185,000 4,951,078 Bayerische Landesbank Sub Nts 12-01-08 5.88 800,000 805,858
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) UNITED STATES (CONT.) Bear Stearns Commercial Mtge Securities Series 2003-T10 Cl A1 03-13-40 4.00% $237,814(f) $228,851 Bear Stearns Commercial Mtge Securities Series 2007-T26 Cl A4 01-12-45 5.47 1,850,000(f) 1,796,813 Brandywine Operating Partnership LP 05-01-17 5.70 360,000 349,060 Cadbury Schweppes US Finance LLC 10-01-08 3.88 5,265,000(d) 5,154,603 California State Teachers' Retirement System Trust Series 2002-C6 Cl A3 11-20-14 4.46 1,821,520(d,f) 1,783,713 Capital Auto Receivables Asset Trust Series 2004-1 Cl CTFS 09-15-10 2.84 700,000 698,079 CDC Commercial Mtge Trust Series 2002-FX1 Cl A2 11-15-30 5.68 2,275,000(f) 2,284,760 CenterPoint Energy Resources 02-15-11 7.75 415,000 442,655 Centex Sr Unsecured 05-01-16 6.50 180,000 173,099 Chesapeake Energy 01-15-16 6.63 1,055,000 1,015,437 01-15-18 6.25 270,000 252,113 Citigroup Commercial Mtge Trust Series 2005-C3 Cl A1 05-15-43 4.39 669,574(f) 658,039 Citigroup Commercial Mtge Trust Series 2005-EMG Cl A1 09-20-51 4.15 669,088(d,f) 659,729 Citigroup (European Monetary Unit) Sr Nts 05-21-10 3.88 3,220,000 4,257,060 Citigroup/Deutsche Bank Commercial Mtge Trust Series 2005-CD1 Cl ASB 07-15-44 5.23 1,075,000(f) 1,052,872 Cleveland Electric Illuminating Sr Unsecured 04-01-17 5.70 1,350,000 1,302,485 Colorado Interstate Gas Sr Nts 11-15-15 6.80 2,450,000 2,519,617 Comcast 03-15-37 6.45 890,000 857,714 Commercial Mtge Pass-Through Ctfs Series 2006-CN2A Cl BFL 02-05-19 5.63 450,000(d,f,h) 453,129 Commercial Mtge Pass-Through Ctfs Series 2007-FL14 Cl MKL1 06-15-22 6.12 3,125,000(d,f,h) 3,125,000 Community Health Systems Sr Nts 07-15-15 8.88 345,000(b,d) 349,744
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 184 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Global Bond Fund
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) UNITED STATES (CONT.) Community Health Systems Sr Unsecured 12-15-12 6.50% $240,000 $250,493 Cott Beverages USA 12-15-11 8.00 435,000 439,350 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2005-64CB Cl 1A1 12-25-35 5.50 1,964,099(f) 1,958,683 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2005-6CB Cl 1A1 04-25-35 7.50 819,800(f) 844,769 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2006-22R Cl 1A2 05-25-36 6.00 2,262,430(f) 2,277,678 Credit Suisse Mtge Capital Ctfs Series 2006-C2 Cl A3 03-15-39 5.66 1,125,000(f) 1,114,476 Crown Americas LLC/Capital 11-15-15 7.75 375,000 376,875 CS First Boston Mtge Securities Series 2002-CKS4 Cl A1 11-15-36 4.49 1,533,265(f) 1,496,399 CS First Boston Mtge Securities Series 2003-CPN1 Cl A2 03-15-35 4.60 825,000(f) 782,302 CS First Boston Mtge Securities Series 2005-C4 Cl A1 08-15-38 4.77 1,649,545(f) 1,630,651 Dex Media West LLC/Finance Sr Unsecured Series B 08-15-10 8.50 55,000 56,994 Discover Financial Services 06-12-17 6.45 500,000(d) 497,270 DR Horton Sr Unsub 04-15-16 6.50 185,000 177,001 Drive Auto Receivables Trust Series 2006-2 Cl A2 (MBIA) 07-15-11 5.30 1,650,000(d,i) 1,649,522 DRS Technologies 11-01-13 6.88 225,000 218,250 Dunkin Securitization Series 2006-1 Cl A2 (AMBAC) 06-20-31 5.78 2,125,000(d,i) 2,130,178 EchoStar DBS 10-01-14 6.63 56,000 53,480 Edison Mission Energy Sr Nts 05-15-17 7.00 375,000(d) 353,438 ERP Operating LP 06-15-17 5.75 990,000 970,447 Exelon 06-15-10 4.45 1,525,000 1,474,226
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) UNITED STATES (CONT.) Federal Home Loan Mtge Corp 11-16-07 4.38% $325,000 $323,796 07-12-10 4.13 10,200,000 9,896,305 Federal Home Loan Mtge Corp #1J1621 05-01-37 5.89 6,899,654(f,m) 6,912,148 Federal Home Loan Mtge Corp #A11799 08-01-33 6.50 116,918(f) 118,900 Federal Home Loan Mtge Corp #A15881 11-01-33 5.00 795,834(f) 750,020 Federal Home Loan Mtge Corp #C02873 05-01-37 6.50 4,126,991(b,f) 4,170,023 Federal Home Loan Mtge Corp #E01377 05-01-18 4.50 541,895(f) 516,551 Federal Home Loan Mtge Corp #E91326 09-01-17 6.50 162,150(f) 165,498 Federal Home Loan Mtge Corp #E99967 10-01-18 5.00 559,032(f) 542,392 Federal Home Loan Mtge Corp #G01535 04-01-33 6.00 812,870(f) 813,161 Federal Natl Mtge Assn 11-15-07 3.25 2,500,000 2,480,685 Federal Natl Mtge Assn #254632 02-01-18 5.50 1,470,509(f) 1,454,120 Federal Natl Mtge Assn #254686 04-01-18 5.50 1,641,793(f) 1,623,215 Federal Natl Mtge Assn #254722 05-01-18 5.50 858,621(f) 848,906 Federal Natl Mtge Assn #255377 08-01-34 7.00 512,360(f) 528,389 Federal Natl Mtge Assn #357705 02-01-35 5.50 7,273,433(f) 7,042,031 Federal Natl Mtge Assn #360800 01-01-09 5.74 613,761(f) 614,136 Federal Natl Mtge Assn #440730 12-01-28 6.00 661,975(f) 662,041 Federal Natl Mtge Assn #555417 05-01-33 6.00 1,104,129(f) 1,099,734 Federal Natl Mtge Assn #555528 04-01-33 6.00 1,906,364(f) 1,897,527 Federal Natl Mtge Assn #555531 06-01-33 5.50 2,564,470(f) 2,484,694 Federal Natl Mtge Assn #555734 07-01-23 5.00 544,779(f) 520,115 Federal Natl Mtge Assn #555740 08-01-18 4.50 282,978(f) 269,659 Federal Natl Mtge Assn #555851 01-01-33 6.50 4,251,022(f) 4,333,686 Federal Natl Mtge Assn #575487 04-01-17 6.50 348,838(f) 357,324 Federal Natl Mtge Assn #621581 12-01-31 6.50 331,410(f) 340,211 Federal Natl Mtge Assn #631315 02-01-17 5.50 184,124(f) 182,232 Federal Natl Mtge Assn #639965 08-01-17 6.00 594,118(f) 597,718 Federal Natl Mtge Assn #640996 05-01-32 7.50 246,504(f) 256,801
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) UNITED STATES (CONT.) Federal Natl Mtge Assn #646147 06-01-32 7.00% $182,385(f) $190,684 Federal Natl Mtge Assn #652284 08-01-32 6.50 177,826(f) 180,975 Federal Natl Mtge Assn #653145 07-01-17 6.00 120,300(f) 121,196 Federal Natl Mtge Assn #654121 09-01-17 6.00 474,011(f) 477,521 Federal Natl Mtge Assn #655589 08-01-32 6.50 863,042(f) 885,780 Federal Natl Mtge Assn #666424 08-01-32 6.50 166,995(f) 169,952 Federal Natl Mtge Assn #670461 11-01-32 7.50 161,760(f) 168,517 Federal Natl Mtge Assn #684595 03-01-33 6.00 790,152(f) 786,490 Federal Natl Mtge Assn #687583 04-01-33 6.00 1,701,727(f) 1,696,075 Federal Natl Mtge Assn #688034 03-01-33 5.50 262,371(f) 254,495 Federal Natl Mtge Assn #688691 03-01-33 5.50 441,839(f) 428,094 Federal Natl Mtge Assn #720786 09-01-33 5.50 1,003,761(f) 972,536 Federal Natl Mtge Assn #725162 02-01-34 6.00 1,948,315(f) 1,936,891 Federal Natl Mtge Assn #725232 03-01-34 5.00 831,970(f) 783,686 Federal Natl Mtge Assn #725424 04-01-34 5.50 5,041,144(f) 4,884,323 Federal Natl Mtge Assn #735029 09-01-13 5.28 671,880(f) 663,615 Federal Natl Mtge Assn #735883 03-01-33 6.00 5,540,952(f) 5,536,467 Federal Natl Mtge Assn #739474 10-01-33 5.50 546,392(f) 529,919 Federal Natl Mtge Assn #741850 09-01-33 5.50 1,512,835(f) 1,465,774 Federal Natl Mtge Assn #745257 01-01-36 6.00 2,082,478(f) 2,063,776 Federal Natl Mtge Assn #748110 10-01-33 6.50 1,534,227(f) 1,558,934 Federal Natl Mtge Assn #753507 12-01-18 5.00 1,830,452(f) 1,775,946 Federal Natl Mtge Assn #755498 11-01-18 5.50 1,202,755(f) 1,189,585 Federal Natl Mtge Assn #756236 01-01-34 6.00 6,775,941(f) 6,760,748 Federal Natl Mtge Assn #756799 11-01-33 6.50 578,394(f) 588,625 Federal Natl Mtge Assn #756844 02-01-19 5.00 440,321(f) 426,615 Federal Natl Mtge Assn #757299 09-01-19 4.50 2,947,836(f) 2,804,635 Federal Natl Mtge Assn #759336 01-01-34 6.00 3,990,563(f) 3,974,489
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS - 2007 SEMIANNUAL REPORT 185 RiverSource VP - Global Bond Fund
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) UNITED STATES (CONT.) Federal Natl Mtge Assn #783646 06-01-34 5.50% $694,595(f) $672,496 Federal Natl Mtge Assn #791393 10-01-19 5.50 2,051,123(f) 2,025,469 Federal Natl Mtge Assn #794298 09-01-19 5.50 1,897,660(f) 1,873,925 Federal Natl Mtge Assn #886292 07-01-36 7.00 4,489,569(f) 4,621,350 Federal Natl Mtge Assn #765946 02-01-34 5.50 7,994,782(f) 7,746,081 Forest Oil Sr Nts 06-15-19 7.25 85,000(d) 82,450 Franklin Auto Trust Series 2004-1 Cl A3 (MBIA) 03-15-12 4.15 709,350(i) 704,035 Freeport-McMoRan Copper & Gold Sr Unsecured 04-01-15 8.25 140,000 147,700 GE Capital Commercial Mtge Series 2005-C1 Cl A5 06-10-48 4.77 500,000(f) 469,300 General Electric Capital Assurance Series 2003-1 Cl A3 05-12-35 4.77 1,775,000(d,f) 1,748,385 General Electric Capital (New Zealand Dollar) 02-04-10 6.63 5,365,000 3,977,278 Genworth Financial (Japanese Yen) 06-20-11 1.60 198,000,000 1,590,801 Govt Natl Mtge Assn #604708 10-15-33 5.50 638,197(f) 620,656 Govt Natl Mtge Assn Collateralized Mtge Obligation Interest Only Series 2002-80 Cl CI 01-20-32 9.22 397,108(e,f) 45,276 Greenwich Capital Commercial Funding Series 2004-GG1 Cl A5 06-10-36 4.88 500,000(f) 488,963 GS Mtge Securities II Series 2004-GG2 Cl A4 08-10-38 4.96 900,000(f) 882,595 GS Mtge Securities II Series 2006-GG6 Cl A4 04-10-38 5.55 4,000,000(f) 3,924,232 GS Mtge Securities II Series 2007-EOP Cl J 03-06-20 6.17 1,850,000(d,f,h) 1,850,578 GS Mtge Securities II Series 2007-GG10 Cl A4 08-10-45 5.99 1,475,000(b,f) 1,428,552 Hertz Vehicle Financing LLC Series 2004-1A Cl A3 (MBIA) 05-25-09 2.85 600,000(d,i) 591,324
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) UNITED STATES (CONT.) HJ Heinz 12-01-08 6.43% $520,000(d) $525,190 Home Depot Sr Unsecured 12-16-36 5.88 2,290,000 2,040,392 Idearc 11-15-16 8.00 375,000 378,750 IPALCO Enterprises Secured 11-14-08 8.38 140,000 142,800 JPMorgan Chase & Co Sub Nts 06-27-17 6.13 1,380,000 1,390,730 JPMorgan Chase Commercial Mtge Securities Series 2003-CB6 Cl A2 07-12-37 5.26 1,075,000(f) 1,049,997 JPMorgan Chase Commercial Mtge Securities Series 2003-LN1 Cl A1 10-15-37 4.13 4,611,225(f) 4,446,591 JPMorgan Chase Commercial Mtge Securities Series 2003-ML1A Cl A1 03-12-39 3.97 359,506(f) 349,467 JPMorgan Chase Commercial Mtge Securities Series 2003-ML1A Cl A2 03-12-39 4.77 1,625,000(f) 1,552,183 JPMorgan Chase Commercial Mtge Securities Series 2004-LN2 Cl A1 07-15-41 4.48 5,401,897(f) 5,227,184 JPMorgan Chase Commercial Mtge Securities Series 2006-LDP6 Cl A4 04-15-43 5.48 1,100,000(f) 1,071,308 JPMorgan Chase Commercial Mtge Securities Series 2006-LDP6 Cl ASB 04-15-43 5.49 1,375,000(f) 1,356,938 JPMorgan Chase Commercial Mtge Securities Series 2006-LDP7 Cl ASB 04-15-45 5.88 2,800,000(f) 2,821,377 L-3 Communications Series B 10-15-15 6.38 100,000 94,500 LB-UBS Commercial Mtge Trust Series 2004-C2 Cl A3 03-15-29 3.97 650,000(f) 611,358 LB-UBS Commercial Mtge Trust Series 2004-C6 Cl A1 08-15-29 3.88 905,228(f) 885,986 LB-UBS Commercial Mtge Trust Series 2005-C5 Cl AAB 09-15-30 4.93 1,800,000(f) 1,738,836 LB-UBS Commercial Mtge Trust Series 2006-C4 Cl AAB 06-15-32 5.86 925,000(f) 934,060 LB-UBS Commercial Mtge Trust Series 2007-C1 Cl A4 02-15-40 5.42 1,425,000(f) 1,377,612
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) UNITED STATES (CONT.) Lehman XS Net Interest Margin Nts Collateralized Mtge Obligation Series 2006-GPM6 Cl A1 10-28-46 6.25% $682,589(d,f) $680,270 Manufacturers & Traders Trust Sub Nts 12-01-21 5.63 650,000 622,697 Macys Retail Holdings 07-15-09 4.80 1,350,000 1,324,222 Merrill Lynch & Co 05-02-17 5.70 3,135,000 3,019,569 Mohegan Tribal Gaming Authority Sr Sub Nts 04-01-12 8.00 50,000 51,625 Morgan Stanley 04-27-17 5.55 3,340,000 3,189,366 Morgan Stanley Capital I Series 2003-T11 Cl A2 06-13-41 4.34 825,000(f) 808,822 Morgan Stanley Capital I Series 2004-HQ4 Cl A5 04-14-40 4.59 690,000(f) 662,241 Morgan Stanley Capital I Series 2005-T19 Cl AAB 06-12-47 4.85 1,900,000(f) 1,824,275 Morgan Stanley Capital I Series 2006-T23 Cl AAB 08-12-41 5.80 775,000(f) 780,448 Morgan Stanley Capital I Series 2006-XLF Cl A2 07-15-19 5.45 1,476,821(d,f,h) 1,477,024 Morgan Stanley Dean Witter Capital I Series 2002-TOP7 Cl A2 01-15-39 5.98 2,425,000(f) 2,455,799 Natl Collegiate Student Loan Trust Collateralized Mtge Obligation Interest Only Series 2006-3 Cl AIO 01-25-12 5.88 3,400,000(e) 914,124 Natl Collegiate Student Loan Trust Collateralized Mtge Obligation Interest Only Series 2007-2 Cl AIO 07-25-12 5.90 2,000,000(e) 575,547 News America 12-15-35 6.40 1,115,000(j) 1,061,828 Nomura Asset Securities Series 1998-D6 Cl A3 03-15-30 7.00 3,725,000(f) 4,006,962 Northwest Pipeline Sr Nts 04-15-17 5.95 230,000(d) 223,675 NRG Energy 02-01-14 7.25 180,000(j) 180,450 01-15-17 7.38 230,000 230,863
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 186 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Global Bond Fund
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) UNITED STATES (CONT.) Omnicare 12-15-13 6.75% $715,000(j) $682,825 12-15-15 6.88 105,000 99,750 Oncor Electric Delivery Secured 01-15-15 6.38 915,000 928,059 Popular ABS Mtge Pass-Through Trust Series 2005-A Cl AF2 06-25-35 4.49 202,793 201,688 Qwest 03-15-12 8.88 265,000(j) 285,538 Qwest Sr Unsecured 10-01-14 7.50 220,000 225,500 Range Resources 03-15-15 6.38 195,000 184,763 05-15-16 7.50 50,000 50,625 Regions Bank Sub Nts 06-26-37 6.45 1,025,000 1,028,875 Renaissance Home Equity Loan Trust Series 2005-4 Cl A3 02-25-36 5.57 855,000 851,546 Residential Capital LLC 06-30-10 6.38 1,955,000 1,929,765 RH Donnelley Sr Disc Nts Series A-2 01-15-13 6.88 375,000 355,313 RR Donnelley & Sons Sr Unsecured 01-15-17 6.13 2,745,000(j) 2,672,652 Sierra Pacific Power Series P 07-01-37 6.75 740,000 745,550 SLM 10-01-13 5.00 350,000 300,104 Smurfit-Stone Container Enterprises Sr Unsecured 03-15-17 8.00 400,000 388,000 Southern Star Central Sr Nts 03-01-16 6.75 150,000 147,750 Toyota Motor Credit (Japanese Yen) Sr Unsub 06-09-08 0.75 557,000,000 4,516,934 Travelers Companies Sr Unsecured 06-15-37 6.25 850,000 827,339 U.S. Treasury 11-30-07 4.25 2,975,000 2,967,098 02-15-08 3.38 1,055,000(j) 1,044,368 02-15-09 4.50 4,930,000 4,895,722 02-15-10 4.75 2,875,000 2,864,443 05-31-12 4.75 1,835,000 1,820,665 05-15-17 4.50 5,000 4,794 02-15-26 6.00 3,415,000 3,727,684
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) UNITED STATES (CONT.) U.S. Treasury Inflation-Indexed Bond 04-15-12 2.00% $19,089,563(g) $18,531,321 U-Haul S Fleet LLC Series 2007-CP1 Cl CP 05-25-12 5.40 3,000,000(d) 2,999,999 UnitedHealth Group 06-15-37 6.50 790,000(d) 796,106 Verizon New York Series A 04-01-12 6.88 2,595,000 2,705,567 Verizon Pennsylvania Series A 11-15-11 5.65 1,675,000 1,671,666 Wachovia Bank Commercial Mtge Trust Series 2003-C7 Cl A2 10-15-35 5.08 1,064,000(d,f) 1,026,994 Wachovia Bank Commercial Mtge Trust Series 2003-C8 Cl A2 11-15-35 3.89 750,000(f) 734,728 Wachovia Bank Commercial Mtge Trust Series 2005-C18 Cl A4 04-15-42 4.94 925,000(f) 874,695 Wachovia Bank Commercial Mtge Trust Series 2005-C20 Cl A5 07-15-42 5.09 925,000(f) 903,553 Wachovia Bank Commercial Mtge Trust Series 2006-C24 Cl A3 03-15-45 5.56 2,425,000(f) 2,373,351 Wachovia Bank Commercial Mtge Trust Series 2006-C27 Cl A3 07-15-45 5.77 700,000(f) 693,926 Wachovia Bank Commercial Mtge Trust Series 2006-C27 Cl APB 07-15-45 5.73 1,200,000(f) 1,192,057 WellPoint Sr Unsub 01-15-36 5.85 850,000 775,619 06-15-37 6.38 215,000 212,259 Williams Companies Sr Nts 07-15-19 7.63 754,000(j) 795,470 Windstream 08-01-16 8.63 375,000 396,563 --------------- Total 314,489,165 - ----------------------------------------------------------------------------------- TOTAL BONDS (Cost: $880,493,154) $893,214,465 - -----------------------------------------------------------------------------------
SENIOR LOANS (1.7%)(c,k) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) CANADA (--%) Domtar Tranche B Term Loan 03-07-14 6.74% $451,250(b) $447,586 - -----------------------------------------------------------------------------------
SENIOR LOANS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) GERMANY (0.1%) Celanese Tranche B Term Loan 04-06-11 7.10% $100,000(b) $100,078 04-06-11 7.10 590,000 590,460 --------------- Total 690,538 - ----------------------------------------------------------------------------------- NETHERLANDS (0.2%) VNU Tranche B Term Loan 08-09-13 7.61 1,595,055 1,602,201 - ----------------------------------------------------------------------------------- UNITED STATES (1.4%) Aramark Letter of Credit 01-26-14 5.20 40,492 40,569 Aramark Tranche B Term Loan 01-26-14 7.48 566,592 567,584 Charter Communications Tranche B Term Loan 03-06-14 7.35 1,795,000 1,778,738 Community Health Term Loan 06-28-14 7.57 1,674,559(b) 1,677,004 Community Health Delayed Draw Term Loan 06-28-14 0.50 110,441(b,n) 110,602 Dresser 1st Lien Term Loan 05-04-14 7.86 905,000 906,882 Fontainebleau Las Vegas Delayed Draw Term Loan 06-05-14 2.00 305,000(b,n) 304,619 Fontainebleau Las Vegas Term Loan 06-05-14 8.61 611,000(b) 612,784 Freeport-McMoRan Copper & Gold Tranche B Term Loan 03-19-14 9.00 648,555 648,399 HCA Tranche B Term Loan 01-21-13 7.60-7.61 2,225,558 2,237,911 Level 3 Communications Tranche B Term Loan 03-13-14 7.61 980,000 980,921 Michaels Stores Term Loan 10-31-13 7.63 358,000 354,420 Neiman Marcus Group Tranche B Term Loan 04-27-13 7.32-7.36 490,000 491,793 Pinnacle Foods Finance Tranche B Term Loan 04-02-14 8.10 745,000 746,333 Univision Communications Delayed Draw Term Loan 09-23-14 1.00 102,685(b,n) 100,952
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS - 2007 SEMIANNUAL REPORT 187 RiverSource VP - Global Bond Fund
SENIOR LOANS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) UNITED STATES (CONT.) Univision Communications Tranche B Term Loan 09-29-14 7.61% $1,597,315 $1,562,382 West Corp Tranche B Term Loan 10-24-13 7.73-7.76 358,202 358,843 --------------- Total 13,480,736 - ----------------------------------------------------------------------------------- TOTAL SENIOR LOANS (Cost: $16,287,361) $16,221,061 - -----------------------------------------------------------------------------------
MUNICIPAL BONDS (0.2%) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) UNITED STATES Tobacco Settlement Financing Corporation Revenue Bonds Series 2007A-1 06-01-46 6.71% $2,200,000 $2,111,010 - ----------------------------------------------------------------------------------- TOTAL MUNICIPAL BONDS (Cost: $2,199,780) $2,111,010 - -----------------------------------------------------------------------------------
MONEY MARKET FUND (3.1%) SHARES VALUE(A) RiverSource Short-Term Cash Fund 29,634,098(l) $29,634,098 - ----------------------------------------------------------------------------------- TOTAL MONEY MARKET FUND (Cost: $29,634,098) $29,634,098 - ----------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES (Cost: $928,614,393)(o) $941,180,634 ===================================================================================
NOTES TO INVESTMENTS IN SECURITIES (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) At June 30, 2007, the cost of securities purchased, including interest purchased, on a when-issued and/or other forward-commitment basis was $8,842,562. (c) Foreign security values are stated in U.S. dollars. For debt securities, principal amounts are denominated in U.S. dollar currency unless otherwise noted. (d) Represents a security sold under Rule 144A, which is exempt from registration under the Securities Act of 1933, as amended. This security has been determined to be liquid under guidelines established by the Fund's Board of Directors. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2007, the value of these securities amounted to $40,191,725 or 4.3% of net assets. (e) Interest only represents securities that entitle holders to receive only interest payments on the underlying mortgages. The yield to maturity of an interest only is extremely sensitive to the rate of principal payments on the underlying mortgage assets. A rapid (slow) rate of principal repayments may have an adverse (positive) effect on yield to maturity. The principal amount shown is the notional amount of the underlying mortgages. Interest rate disclosed represents yield based upon the estimated timing and amount of future cash flows at June 30, 2007. (f) Mortgage-backed securities represent direct or indirect participations in, or are secured by and payable from, mortgage loans secured by real property, and include single- and multi-class pass-through securities and collateralized mortgage obligations. These securities may be issued or guaranteed by U.S. government agencies or instrumentalities, or by private issuers, generally originators and investors in mortgage loans, including savings associations, mortgage bankers, commercial banks, investment bankers and special purpose entities. The maturity dates shown represent the original maturity of the underlying obligation. Actual maturity may vary based upon prepayment activity on these obligations. Unless otherwise noted, the coupon rates presented are fixed rates. (g) Inflation-indexed bonds are securities in which the principal amount is adjusted for inflation and the semiannual interest payments equal a fixed percentage of the inflation-adjusted principal amount. (h) Interest rate varies either based on a predetermined schedule or to reflect current market conditions; rate shown is the effective rate on June 30, 2007. (i) The following abbreviations are used in the portfolio security descriptions to identify the insurer of the issue: AMBAC -- Ambac Assurance Corporation MBIA -- MBIA Insurance Corporation
(j) Partially pledged as initial deposit on the following open interest rate futures contracts (see Note 7 to the financial statements):
TYPE OF SECURITY NOTIONAL AMOUNT - ------------------------------------------------------------------------------------ PURCHASE CONTRACTS Euro-Bobl, Sept. 2007, 5-year $3,000,000 Euro-Bund, Sept. 2007, 10-year 16,000,000 Japanese Govt Bond, Sept. 2007, 10-year 1,000,000 U.S. Long Bond, Sept. 2007, 20-year 22,000,000 U.S. Treasury Note, Sept. 2007, 2-year 23,200,000 SALE CONTRACTS U.S. Treasury Note, Sept. 2007, 5-year 10,600,000 U.S. Treasury Note, Sept. 2007, 10-year 3,300,000
(k) Senior loans have rates of interest that float periodically based primarily on the London Interbank Offered Rate ("LIBOR") and other short-term rates. Remaining maturities of senior loans may be less than the stated maturities shown as a result of contractual or optional prepayments by the borrower. Such prepayments cannot be predicted with certainty. (l) Affiliated Money Market Fund - See Note 10 to the financial statements. (m) Adjustable rate mortgage; interest rate varies to reflect current market conditions; rate shown is the effective rate on June 30, 2007. - -------------------------------------------------------------------------------- 188 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Global Bond Fund NOTES TO INVESTMENTS IN SECURITIES (CONTINUED) (n) At June 30, 2007, the Fund had unfunded senior loan commitments pursuant to the term of the loan agreement. The Fund receives a stated coupon rate until the borrower draws on the loan commitment, at which time the rate will become the stated rate in the loan agreement.
UNFUNDED BORROWER COMMITMENT - ------------------------------------------------------------------------------- Community Health $110,602 Fontainebleau Las Vegas 304,238 Univision Communications 100,952 - ------------------------------------------------------------------------------- Total $515,792 - -------------------------------------------------------------------------------
(o) At June 30, 2007, the cost of securities for federal income tax purposes was approximately $928,614,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $25,805,000 Unrealized depreciation (13,238,000) - -------------------------------------------------------------------------------- Net unrealized appreciation $12,567,000 - --------------------------------------------------------------------------------
HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS (i) The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (Commission) for the first and third quarters of each fiscal year on Form N-Q; (ii) The Fund's Forms N-Q are available on the Commission's website at http://www.sec.gov; (iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC (information on the operations of the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iv) The Fund's complete schedule of portfolio holdings, as disclosed in its annual and semiannual shareholder reports and in its filings on Form N-Q, can be found at riversource.com. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 189 INVESTMENTS IN SECURITIES RiverSource VP - Global Inflation Protected Securities Fund JUNE 30, 2007 (UNAUDITED) (Percentages represent value of investments compared to net assets)
BONDS (97.4%) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) CANADA (2.8%) Govt of Canada (Canadian Dollar) 12-01-26 4.25% 18,940,471(b,c) $23,780,649 - ------------------------------------------------------------------------------------- FRANCE (9.7%) Govt of France (European Monetary Unit) 07-25-12 3.00 35,614,314(b,c) 49,584,242 07-25-20 2.25 24,051,595(b,c) 31,911,841 --------------- Total 81,496,083 - ------------------------------------------------------------------------------------- GERMANY (4.6%) Deutsche Bundesrepublik (European Monetary Unit) 04-15-16 1.50 30,433,644(b,c) 38,122,334 - ------------------------------------------------------------------------------------- ITALY (7.0%) Buoni Poliennali Del Tesoro (European Monetary Unit) 09-15-10 0.95 25,842,435(b,c) 33,302,882 09-15-35 2.35 19,501,124(b,c) 24,876,830 --------------- Total 58,179,712 - ------------------------------------------------------------------------------------- JAPAN (3.4%) Govt of Japan (Japanese Yen) 06-20-08 0.50 765,000,000(c) 6,194,771 03-20-15 1.30 2,874,000,000(c) 22,625,700 --------------- Total 28,820,471 - -------------------------------------------------------------------------------------
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) SWEDEN (1.9%) Govt of Sweden (Swedish Krone) 12-01-28 3.50% 76,710,000(c,d) $15,748,110 - ------------------------------------------------------------------------------------- UNITED KINGDOM (16.7%) United Kingdom Gilt Inflation Linked (British Pound) 07-26-16 2.50 7,000,000(c,d) 35,291,185 04-16-20 2.50 11,610,000(c,d) 59,586,746 07-22-30 4.13 10,070,000(c,d) 45,257,096 --------------- Total 140,135,027 - ------------------------------------------------------------------------------------- UNITED STATES (51.3%) Federal Natl Mtge Assn 02-16-12 5.00 14,000,000 13,829,998 05-18-12 4.88 1,740,000 1,707,810 U.S. Treasury Inflation-Indexed Bond 01-15-08 3.63 17,903,200(b) 17,918,312 04-15-12 2.00 72,082,188(b) 69,974,268 07-15-12 3.00 26,364,723(b) 26,881,387 01-15-14 2.00 54,507,863(b) 52,394,171 07-15-14 2.00 31,932,543(b) 30,659,462 01-15-15 1.63 33,844,022(b) 31,465,755
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) UNITED STATES (CONT.) 01-15-16 2.00% $36,051,918(b,e) $34,236,836 07-15-16 2.50 14,899,995(b) 14,736,701 01-15-17 2.38 48,456,958(b) 47,320,045 01-15-25 2.38 35,757,653(b) 34,390,729 04-15-28 3.63 40,070,156(b) 46,432,093 04-15-29 3.88 5,931,718(b) 7,163,163 --------------- Total 429,110,730 - ------------------------------------------------------------------------------------- TOTAL BONDS (Cost: $819,772,917) $815,393,116 - -------------------------------------------------------------------------------------
MONEY MARKET FUND (3.0%) SHARES VALUE(A) RiverSource Short-Term Cash Fund 25,185,071(f) $25,185,071 - ----------------------------------------------------------------------------------- TOTAL MONEY MARKET FUND (Cost: $25,185,071) $25,185,071 - ----------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES (Cost: $844,957,988)(g) $840,578,187 ===================================================================================
NOTES TO INVESTMENTS IN SECURITIES (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Inflation-indexed bonds are securities in which the principal amount is adjusted for inflation and the semiannual interest payments equal a fixed percentage of the inflation-adjusted principal amount. (c) Foreign security values are stated in U.S. dollars. For debt securities, principal amounts are denominated in U.S. dollar currency unless otherwise noted. (d) These inflation-indexed bonds are securities in which the principal amount disclosed represents the original face. (e) Partially pledged as initial deposit on the following open interest rate futures contracts (see Note 7 to the financial statements):
TYPE OF SECURITY NOTIONAL AMOUNT - ------------------------------------------------------------------------------------ SALE CONTRACTS U.S. Treasury Note, Sept. 2007, 5-year $15,700,000
(f) Affiliated Money Market Fund - See Note 10 to the financial statements. (g) At June 30, 2007, the cost of securities for federal income tax purposes was approximately $844,958,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $7,174,000 Unrealized depreciation (11,554,000) - --------------------------------------------------------------------------------- Net unrealized depreciation $(4,380,000) - ---------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- 190 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Global Inflation Protected Securities Fund HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS (i) The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (Commission) for the first and third quarters of each fiscal year on Form N-Q; (ii) The Fund's Forms N-Q are available on the Commission's website at http://www.sec.gov; (iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC (information on the operations of the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iv) The Fund's complete schedule of portfolio holdings, as disclosed in its annual and semiannual shareholder reports and in its filings on Form N-Q, can be found at riversource.com. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 191 INVESTMENTS IN SECURITIES RiverSource VP - Growth Fund JUNE 30, 2007 (UNAUDITED) (Percentages represent value of investments compared to net assets)
COMMON STOCKS (96.5%) ISSUER SHARES VALUE(A) AEROSPACE & DEFENSE (2.1%) Boeing 100,070 $9,622,731 Honeywell Intl 52,215 2,938,660 Lockheed Martin 17,314 1,629,767 --------------- Total 14,191,158 - ----------------------------------------------------------------------------------- BEVERAGES (2.4%) Anheuser-Busch Companies 19,084 995,421 Coca-Cola 67,209 3,515,703 PepsiCo 179,890 11,665,867 --------------- Total 16,176,991 - ----------------------------------------------------------------------------------- BIOTECHNOLOGY (4.5%) Amgen 182,009(b) 10,063,278 Biogen Idec 100,160(b) 5,358,560 Genentech 190,528(b) 14,415,348 --------------- Total 29,837,186 - ----------------------------------------------------------------------------------- CAPITAL MARKETS (1.6%) Blackstone Group LP 4,555(b) 133,325 Fortress Investment Group LLC Cl A 36,707(f) 874,361 Goldman Sachs Group 9,171 1,987,814 KKR Private Equity Investors LP Unit 294,984(d) 6,637,140 Oaktree Capital Group LLC Cl A Unit 32,000(b,d,i) 1,312,000 --------------- Total 10,944,640 - ----------------------------------------------------------------------------------- COMMUNICATIONS EQUIPMENT (11.5%) Alcatel-Lucent ADR 145,871(c) 2,042,194 Avaya 439,590(b) 7,402,696 Cisco Systems 592,457(b) 16,499,927 JDS Uniphase 263,015(b) 3,532,291 QUALCOMM 632,713 27,453,417 Telefonaktiebolaget LM Ericsson ADR 360,707(c) 14,388,602 Tellabs 428,499(b) 4,610,649 --------------- Total 75,929,776 - ----------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS (2.9%) Apple 87,876(b) 10,724,388 Brocade Communications Systems 23,511(b) 183,856 Dell 56,880(b) 1,623,924 Hewlett-Packard 103,504 4,618,348 SanDisk 45,216(b) 2,212,871 --------------- Total 19,363,387 - ----------------------------------------------------------------------------------- CONSTRUCTION & ENGINEERING (0.2%) KBR 49,704(b) 1,303,736 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) DIVERSIFIED TELECOMMUNICATION SERVICES (4.9%) AT&T 219,440 $9,106,760 Chunghwa Telecom ADR 13,628(c) 257,024 COLT Telecom Group 213,750(b,c) 630,970 Deutsche Telekom 523,160(c) 9,693,131 Embarq 31,283 1,982,404 Indosat 1,674,697(c) 1,207,491 Qwest Communications Intl 689,846(b) 6,691,506 Telefonica 151,525(c) 3,391,922 --------------- Total 32,961,208 - ----------------------------------------------------------------------------------- FOOD & STAPLES RETAILING (0.1%) CVS Caremark 17,999 656,064 - ----------------------------------------------------------------------------------- FOOD PRODUCTS (1.6%) Dean Foods 42,209 1,345,201 Kellogg 25,174 1,303,761 Kraft Foods Cl A 220,163 7,760,746 --------------- Total 10,409,708 - ----------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES (2.2%) Boston Scientific 754,900(b) 11,580,166 Medtronic 63,964 3,317,173 --------------- Total 14,897,339 - ----------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES (3.9%) Cardinal Health 155,680 10,997,235 Humana 40,330(b) 2,456,500 McKesson 118,809 7,085,769 UnitedHealth Group 108,541 5,550,787 --------------- Total 26,090,291 - ----------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE (0.6%) Intl Game Technology 16,580 658,226 Pinnacle Entertainment 117,983(b) 3,321,221 --------------- Total 3,979,447 - ----------------------------------------------------------------------------------- HOUSEHOLD DURABLES (3.9%) Harman Intl Inds 225,002 26,280,234 - ----------------------------------------------------------------------------------- HOUSEHOLD PRODUCTS (2.5%) Colgate-Palmolive 116,298 7,541,925 Procter & Gamble 151,893 9,294,333 --------------- Total 16,836,258 - ----------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES (1.7%) General Electric 295,824 11,324,143 - ----------------------------------------------------------------------------------- INSURANCE (2.8%) ACE 47,404(c) 2,963,698 AFLAC 39,761 2,043,715 American Intl Group 134,740 9,435,842 Hartford Financial Services Group 7,682 756,754 Prudential Financial 34,865 3,389,924 --------------- Total 18,589,933 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) INTERNET SOFTWARE & SERVICES (3.5%) eBay 180,571(b) $5,810,775 Google Cl A 28,769(b) 15,057,119 Yahoo! 92,877(b) 2,519,753 --------------- Total 23,387,647 - ----------------------------------------------------------------------------------- IT SERVICES (0.1%) HCL Technologies 46,430(c) 392,373 - ----------------------------------------------------------------------------------- MACHINERY (0.2%) Flowserve 21,817 1,562,097 - ----------------------------------------------------------------------------------- MEDIA (11.2%) Charter Communications Cl A 525,715(b) 2,129,146 Comcast Cl A 187,258(b) 5,265,695 Idearc 3,376 119,274 News Corp Cl A 145,898 3,094,497 Time Warner Cable Cl A 17,855(b) 699,380 Virgin Media 2,023,447(e) 49,311,402 Vivendi 93,224(c) 4,026,064 WorldSpace Cl A 80,189(b,f) 387,313 XM Satellite Radio Holdings Cl A 800,276(b,e) 9,419,249 --------------- Total 74,452,020 - ----------------------------------------------------------------------------------- METALS & MINING (3.1%) Barrick Gold 45,216(c) 1,314,429 Coeur d'Alene Mines 1,104,070(b) 3,963,611 Goldcorp 38,040(c) 901,168 Harmony Gold Mining ADR 45,603(b,c) 650,755 Lihir Gold 3,470,078(b,c) 8,825,800 Newmont Mining 117,367 4,584,355 Stillwater Mining 48,742(b) 536,649 --------------- Total 20,776,767 - ----------------------------------------------------------------------------------- OIL, GAS & CONSUMABLE FUELS (2.7%) Chevron 28,019 2,360,321 Exxon Mobil 132,834 11,142,115 Kinder Morgan Management LLC --(b) 1 Total 54,506(c) 4,445,284 --------------- Total 17,947,721 - ----------------------------------------------------------------------------------- PHARMACEUTICALS (8.6%) AstraZeneca 224,186(c) 12,078,546 Bristol-Myers Squibb 119,958 3,785,874 Eli Lilly & Co 99,953 5,585,374 Johnson & Johnson 67,214 4,141,727 Merck & Co 279,627 13,925,424 Pfizer 416,288 10,644,484 Schering-Plough 154,397 4,699,845 Wyeth 38,952 2,233,508 --------------- Total 57,094,782 - -----------------------------------------------------------------------------------
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 192 RIVERSOURCE GROWTH FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Growth Fund
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) ROAD & RAIL (0.6%) Hertz Global Holdings 162,560(b) $4,319,219 - ----------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (3.3%) Atmel 725,872(b) 4,035,848 Broadcom Cl A 20,018(b) 585,527 Intel 364,033 8,649,424 LSI 513,800(b) 3,858,638 Spansion Cl A 420,000(b) 4,662,000 United Microelectronics ADR 44,861(c) 153,425 --------------- Total 21,944,862 - ----------------------------------------------------------------------------------- SOFTWARE (2.4%) Microsoft 378,964 11,168,069 Symantec 232,114(b) 4,688,703 --------------- Total 15,856,772 - ----------------------------------------------------------------------------------- SPECIALTY RETAIL (0.3%) Office Depot 8,972(b) 271,852 TJX Companies 63,383 1,743,032 --------------- Total 2,014,884 - ----------------------------------------------------------------------------------- THRIFTS & MORTGAGE FINANCE (0.2%) Countrywide Financial 44,482 1,616,921 - ----------------------------------------------------------------------------------- TOBACCO (1.9%) Altria Group 178,011 12,485,692 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) WIRELESS TELECOMMUNICATION SERVICES (8.9%) ALLTEL 69,315 $4,682,228 Clearwire Cl A 108,851(b,f) 2,659,230 Hutchison Telecommunications Intl 3,592,904(c) 4,631,855 Millicom Intl Cellular 33,091(b,c) 3,032,459 Orascom Telecom Holding GDR 23,290(c) 1,511,521 Sprint Nextel 430,570 8,917,105 Vivo Participacoes ADR 323,855(c) 1,622,514 Vodafone Group 8,430,750(c) 28,408,195 Vodafone Group ADR 107,272(c) 3,607,557 --------------- Total 59,072,664 - ----------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $594,466,406) $642,695,920 - -----------------------------------------------------------------------------------
OPTIONS PURCHASED (0.3%) EXERCISE EXPIRATION ISSUER CONTRACTS PRICE DATE VALUE(A) CALLS QUALCOMM 215 $50.00 Jan. 2008 $43,000 Virgin Media 2,036 27.50 Jan. 2008 295,220 - --------------------------------------------------------------------------------------------------------------------------
OPTIONS PURCHASED (CONTINUED) EXERCISE EXPIRATION ISSUER CONTRACTS PRICE DATE VALUE(A) PUTS XM Satellite Radio Holdings Cl A 4,632 $15.00 Jan. 2008 $1,713,840 - -------------------------------------------------------------------------------------------------------------------------- TOTAL OPTIONS PURCHASED (Cost: $1,734,792) $2,052,060 - --------------------------------------------------------------------------------------------------------------------------
MONEY MARKET FUND (2.3%)(g) SHARES VALUE(A) RiverSource Short-Term Cash Fund 15,582,203(h) $15,582,203 - ----------------------------------------------------------------------------------- TOTAL MONEY MARKET FUND (Cost: $15,582,203) $15,582,203 - ----------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES (Cost: $611,783,401)(j) $660,330,183 ===================================================================================
NOTES TO INVESTMENTS IN SECURITIES (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Non-income producing. (c) Foreign security values are stated in U.S. dollars. At June 30, 2007, the value of foreign securities represented 16.5% of net assets. (d) Identifies issues considered to be illiquid as to their marketability (see Note 1 to the financial statements). These securities may be valued at fair value according to procedures approved, in good faith, by the Fund's Board of Directors. Information concerning such security holdings at June 30, 2007, is as follows:
ACQUISITION SECURITY DATES COST - --------------------------------------------------------------------------------------------------------- KKR Private Equity Investors LP Unit 05-01-06 thru 06-18-07 $6,629,405 Oaktree Capital Group LLC Cl A Unit* 05-21-07 1,408,000
* Represents a security sold under Rule 144A, which is exempt from registration under the Securities Act of 1933, as amended. (e) At June 30, 2007, securities valued at $15,765,543 were held to cover open call options written as follows (see Note 8 to the financial statements):
EXERCISE EXPIRATION ISSUER CONTRACTS PRICE DATE VALUE(A) - ------------------------------------------------------------------------------------------------------------------------------ Virgin Media 1,995 $30.00 Jan. 2008 $144,638 XM Satellite Radio Holdings Cl A 4,632 20.00 Jan. 2008 104,220 - ------------------------------------------------------------------------------------------------------------------------------ Total value $248,858 - ------------------------------------------------------------------------------------------------------------------------------
At June 30, 2007, cash or short-term securities were designated to cover open put options written as follows (see Note 8 to the financial statements):
EXERCISE EXPIRATION ISSUER CONTRACTS PRICE DATE VALUE(A) - ------------------------------------------------------------------------------------------------------------------------------ XM Satellite Radio Holdings Cl A 4,632 $12.50 Jan. 2008 $891,660
(f) At June 30, 2007, security was partially or fully on loan. See Note 6 to the financial statements. (g) Cash collateral received from security lending activity is invested in an affiliated money market fund and represents 0.4% of net assets. See Note 6 to the financial statements. Cash collateral received for open options contracts is invested in an affiliated money market fund and represents 0.1% of net assets. See Note 1 to the financial statements. 1.8% of net assets is the Fund's cash equivalent position. (h) Affiliated Money Market Fund - See Note 10 to the financial statements. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 193 RiverSource VP - Growth Fund NOTES TO INVESTMENTS IN SECURITIES (CONTINUED) (i) Represents a security sold under Rule 144A, which is exempt from registration under the Securities Act of 1933, as amended. This security has been determined to be liquid under guidelines established by the Fund's Board of Directors. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2007, the value of these securities amounted to $1,312,000 or 0.2% of net assets. (j) At June 30, 2007, the cost of securities for federal income tax purposes was approximately $611,783,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $65,526,000 Unrealized depreciation (16,979,000) - -------------------------------------------------------------------------------- Net unrealized appreciation $48,547,000 - --------------------------------------------------------------------------------
The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS (i) The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (Commission) for the first and third quarters of each fiscal year on Form N-Q; (ii) The Fund's Forms N-Q are available on the Commission's website at http://www.sec.gov; (iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC (information on the operations of the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iv) The Fund's complete schedule of portfolio holdings, as disclosed in its annual and semiannual shareholder reports and in its filings on Form N-Q, can be found at riversource.com. - -------------------------------------------------------------------------------- 194 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT INVESTMENTS IN SECURITIES RiverSource VP - High Yield Bond Fund JUNE 30, 2007 (UNAUDITED) (Percentages represent value of investments compared to net assets)
BONDS (84.1%) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) AEROSPACE & DEFENSE (3.1%) Alion Science and Technology 02-01-15 10.25% $5,835,000 $6,024,638 Communications & Power Inds 02-01-12 8.00 6,955,000 7,024,549 CPI Intl Sr Unsecured 02-01-15 11.15 4,200,000(k) 4,326,000 DRS Technologies 11-01-13 6.88 2,745,000 2,662,650 02-01-16 6.63 3,185,000 3,073,525 02-01-18 7.63 2,410,000 2,434,100 L-3 Communications 06-15-12 7.63 4,425,000 4,480,313 07-15-13 6.13 1,010,000 954,450 L-3 Communications Series B 10-15-15 6.38 6,450,000 6,095,250 --------------- Total 37,075,475 - ------------------------------------------------------------------------------------- AUTOMOTIVE (1.3%) Ford Motor Credit LLC Sr Nts 08-10-11 9.88 4,217,000 4,429,705 GMAC 04-15-16 7.70 8,971,000 8,343,031 Goodyear Tire & Rubber Sr Nts 12-01-09 9.13 3,465,000(d,k) 3,469,331 --------------- Total 16,242,067 - ------------------------------------------------------------------------------------- BROKERAGE (0.5%) LaBranche & Co Sr Nts 05-15-12 11.00 5,824,000 6,173,440 - ------------------------------------------------------------------------------------- BUILDING MATERIALS (1.2%) Gibraltar Inds Series B 12-01-15 8.00 5,638,000 5,638,000 Interline Brands Sr Sub Nts 06-15-14 8.13 1,931,000 1,945,483 Norcraft Companies LP/Finance 11-01-11 9.00 2,616,000 2,701,020 Norcraft Holdings LP/Capital Sr Disc Nts (Zero coupon through 09-01-08, thereafter 9.75%) 09-01-12 7.85 4,900,000(l) 4,483,500 --------------- Total 14,768,003 - ------------------------------------------------------------------------------------- CHEMICALS (4.8%) Chemtura 06-01-16 6.88 9,610,000 9,081,450
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) CHEMICALS (CONT.) Georgia Gulf 10-15-16 10.75% $5,519,000 $5,491,405 Georgia Gulf Sr Nts 12-15-13 7.13 5,063,000 4,607,330 Hexion US Finance/Nova Scotia Finance 11-15-14 9.75 4,778,000 4,945,230 INVISTA 05-01-12 9.25 12,097,000(d) 12,641,364 MacDermid Sr Sub Nts 04-15-17 9.50 4,280,000(d) 4,408,400 Momentive Performance Materials Sr Nts Pay-in-kind 12-01-14 10.13 3,800,000(d,h) 3,809,500 NALCO Sr Sub Nts 11-15-13 8.88 3,845,000 3,989,188 NALCO Sr Unsecured 11-15-11 7.75 2,490,000 2,508,675 NewMarket 12-15-16 7.13 3,785,000 3,661,988 PQ 02-15-13 7.50 3,305,000 3,503,300 --------------- Total 58,647,830 - ------------------------------------------------------------------------------------- CONSTRUCTION MACHINERY (0.8%) Chart Inds Sr Sub Nts 10-15-15 9.13 5,890,000 6,243,400 United Rentals North America Sr Sub Nts 02-15-14 7.00 3,595,000 3,505,125 --------------- Total 9,748,525 - ------------------------------------------------------------------------------------- CONSUMER PRODUCTS (3.2%) AAC Group Holding Sr Disc Nts (Zero coupon through 10-01-08, thereafter 10.25%) 10-01-12 10.28 4,225,000(l) 3,802,500 AAC Group Holding Sr Unsecured Pay-in-kind 10-01-12 14.75 815,341(h) 894,837 Jarden 05-01-17 7.50 8,865,000 8,754,188 Sealy Mattress 06-15-14 8.25 5,838,000 5,983,950 Visant Holding Sr Disc Nts (Zero coupon through 12-01-08, thereafter 10.25%) 12-01-13 10.14 3,350,000(l) 3,082,000
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) CONSUMER PRODUCTS (CONT.) Visant Holding Sr Nts 12-01-13 8.75% $5,845,000 $6,078,800 Vitro Sr Unsecured 02-01-17 9.13 9,645,000(c,d) 9,862,012 --------------- Total 38,458,287 - ------------------------------------------------------------------------------------- DIVERSIFIED MANUFACTURING (0.7%) ALH Finance LLC 01-15-13 8.50 1,182,000 1,173,135 Baldor Electric 02-15-17 8.63 3,040,000 3,214,800 RBS Global & Rexnord 08-01-14 9.50 4,210,000 4,315,250 --------------- Total 8,703,185 - ------------------------------------------------------------------------------------- ELECTRIC (3.9%) Dynegy Holdings Sr Unsecured 05-01-16 8.38 5,550,000 5,425,125 05-15-18 7.13 4,885,000 4,347,650 Edison Mission Energy Sr Nts 05-15-17 7.00 4,890,000(d) 4,608,825 Edison Mission Energy Sr Unsecured 06-15-16 7.75 3,828,000 3,808,860 Midwest Generation LLC Pass-Through Ctfs Series B 01-02-16 8.56 3,966,136 4,228,892 Mirant Americas Generation LLC Sr Unsecured 05-01-11 8.30 4,315,000 4,455,238 Mirant North America LLC 12-31-13 7.38 5,390,000 5,511,275 NRG Energy 02-01-14 7.25 3,589,000 3,597,973 01-15-17 7.38 6,555,000 6,579,580 Reliant Energy 12-15-14 6.75 975,000 998,156 Reliant Energy Sr Nts 06-15-17 7.88 4,430,000 4,313,713 --------------- Total 47,875,287 - ------------------------------------------------------------------------------------- ENTERTAINMENT (0.7%) AMC Entertainment 02-01-16 11.00 5,575,000 6,160,375 United Artists Theatre Circuit Pass-Through Ctfs Series AU4 07-01-15 9.30 1,903,273(j) 1,979,404
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS - 2007 SEMIANNUAL REPORT 195 RiverSource VP - High Yield Bond Fund
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) ENTERTAINMENT (CONT.) United Artists Theatre Circuit Pass-Through Ctfs Series AV2 07-01-15 9.30% $620,743(j) $645,572 --------------- Total 8,785,351 - ------------------------------------------------------------------------------------- ENVIRONMENTAL (0.9%) Allied Waste North America Series B 04-15-14 7.38 595,000 587,563 05-15-16 7.13 2,625,000 2,565,938 Clean Harbors 07-15-12 11.25 3,872,000 4,275,806 WCA Waste 06-15-14 9.25 3,410,000 3,546,400 --------------- Total 10,975,707 - ------------------------------------------------------------------------------------- FOOD AND BEVERAGE (4.1%) Aramark Sr Nts 02-01-15 8.50 3,650,000(d) 3,704,750 02-01-15 8.86 1,700,000(d,k) 1,729,750 ASG Consolidated LLC/Finance Sr Disc Nts (Zero coupon through 11-01-08, thereafter 11.50%) 11-01-11 10.97 11,850,000(l) 11,020,500 Constellation Brands 09-01-16 7.25 3,860,000 3,763,500 Constellation Brands Sr Nts 05-15-17 7.25 3,975,000(d) 3,895,500 Cott Beverages USA 12-15-11 8.00 10,946,000 11,055,459 Del Monte 02-15-15 6.75 635,000 604,838 Pinnacle Foods Finance LLC Sr Sub Nts 04-01-17 10.63 9,255,000(d) 9,046,763 Smithfield Foods Sr Unsecured 07-01-17 7.75 4,485,000 4,485,000 --------------- Total 49,306,060 - ------------------------------------------------------------------------------------- GAMING (5.6%) Boyd Gaming Sr Sub Nts 02-01-16 7.13 814,000 789,580 Buffalo Thunder Development Authority Secured 12-15-14 9.38 4,880,000(d) 4,880,000 Circus & Eldorado Jt Venture/Silver Legacy Capital 1st Mtge 03-01-12 10.13 3,970,000 4,153,613 Fontainebleau Las Vegas Holdings LLC/Capital 06-15-15 10.25 8,630,000(d) 8,500,549 Harrah's Operating 06-01-16 6.50 5,086,000 4,246,810 10-01-17 5.75 4,250,000 3,400,000
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) GAMING (CONT.) Majestic Star Casino LLC/Capital 10-15-10 9.50% $6,405,000 $6,661,200 MGM Mirage 06-01-16 7.50 6,100,000 5,787,375 Pokagon Gaming Authority Sr Nts 06-15-14 10.38 6,300,000(d) 6,945,750 Shingle Springs Tribal Gaming Authority Sr Nts 06-15-15 9.38 5,660,000(d) 5,695,375 Station Casinos Sr Sub Nts 03-01-16 6.88 2,203,000 1,944,148 03-15-18 6.63 1,155,000 993,300 Tunica-Biloxi Gaming Authority Sr Unsecured 11-15-15 9.00 7,450,000(d) 7,822,500 Wheeling Island Gaming 12-15-09 10.13 560,000 567,000 Wynn Las Vegas LLC/Capital 1st Mtge 12-01-14 6.63 6,390,000 6,158,363 --------------- Total 68,545,563 - ------------------------------------------------------------------------------------- GAS PIPELINES (1.9%) Southern Star Central Sr Nts 03-01-16 6.75 4,260,000 4,196,100 Williams Companies Sr Nts 07-15-19 7.63 14,735,000 15,545,425 Williams Partners LP/Finance 02-01-17 7.25 3,515,000 3,532,575 --------------- Total 23,274,100 - ------------------------------------------------------------------------------------- HEALTH CARE (10.0%) Community Health Systems Sr Nts 07-15-15 8.88 13,120,000(d,f) 13,300,399 Community Health Systems Sr Unsecured 12-15-12 6.50 7,295,000 7,613,930 DaVita 03-15-13 6.63 5,829,000 5,690,561 03-15-15 7.25 9,935,000 9,810,813 HCA Secured 11-15-16 9.25 9,540,000(d) 10,124,325 HCA Sr Unsecured 02-15-16 6.50 8,100,000 6,864,750 IASIS Healthcare LLC/Capital Bank Guaranteed 06-15-14 8.75 4,926,000 4,926,000 MedCath Holdings 07-15-12 9.88 10,033,000 10,760,392
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) HEALTH CARE (CONT.) NMH Holdings Sr Unsecured Pay-in-kind 06-15-14 12.49% $3,330,000(d,f,h) $3,280,050 Omnicare 12-15-13 6.75 5,530,000 5,281,150 12-15-15 6.88 5,003,000 4,752,850 Omnicare Sr Sub Nts 06-01-13 6.13 4,995,000 4,651,594 Select Medical 02-01-15 7.63 1,801,000 1,611,895 Select Medical Sr Unsecured 09-15-15 11.08 13,479,000(k) 12,569,167 Triad Hospitals Sr Nts 05-15-12 7.00 7,970,000 8,328,626 Triad Hospitals Sr Sub Nts 11-15-13 7.00 2,830,000 2,974,893 United Surgical Partners Intl Sr Sub Nts Pay-in-kind 05-01-17 9.25 1,465,000(d,h) 1,468,663 Vanguard Health Holding I LLC Sr Disc Nts (Zero coupon through 10-01-09, thereafter 11.25%) 10-01-15 9.11 2,830,000(l) 2,306,450 Vanguard Health Holding II LLC Sr Sub Nts 10-01-14 9.00 4,168,000 4,126,320 --------------- Total 120,442,828 - ------------------------------------------------------------------------------------- HOME CONSTRUCTION (1.0%) K Hovnanian Enterprises 05-15-16 7.50 5,985,000 5,446,350 Standard Pacific Sr Sub Nts 04-15-12 9.25 500,000 472,500 William Lyon Homes 02-15-14 7.50 7,960,000 6,686,400 --------------- Total 12,605,250 - ------------------------------------------------------------------------------------- INDEPENDENT ENERGY (4.7%) Chaparral Energy 12-01-15 8.50 1,284,000 1,255,110 Chaparral Energy Sr Nts 02-01-17 8.88 7,600,000(d) 7,504,999 Chesapeake Energy 08-15-14 7.00 4,643,000 4,608,178 01-15-16 6.63 4,314,000 4,152,225 01-15-18 6.25 1,545,000 1,442,644 Compton Petroleum Finance 12-01-13 7.63 5,993,000(c) 5,918,088 Denbury Resources Sr Sub Nts 12-15-15 7.50 4,095,000 4,095,000
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 196 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - High Yield Bond Fund
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) INDEPENDENT ENERGY (CONT.) EXCO Resources Secured 01-15-11 7.25% $8,423,000 $8,380,884 Forest Oil Sr Nts 06-15-19 7.25 4,735,000(d) 4,592,950 Hilcorp Energy I LP/Finance Sr Unsecured 11-01-15 7.75 4,490,000(d) 4,355,300 KCS Energy 04-01-12 7.13 4,380,000 4,325,250 PetroHawk Energy 07-15-13 9.13 3,935,000 4,161,263 Range Resources 05-15-16 7.50 1,970,000 1,994,625 --------------- Total 56,786,516 - ------------------------------------------------------------------------------------- MEDIA CABLE (4.9%) CCH II LLC/Capital 10-01-13 10.25 2,800,000 2,996,000 CCO Holdings LLC/Capital Sr Nts 11-15-13 8.75 3,560,000 3,622,300 Charter Communications Holdings II LLC/Capital Sr Unsecured Series B 09-15-10 10.25 5,775,000 6,027,656 CSC Holdings Sr Unsecured 04-15-12 6.75 3,095,000 2,940,250 DIRECTV Holdings LLC/Finance 06-15-15 6.38 7,480,000 7,031,200 EchoStar DBS 10-01-14 6.63 2,140,000 2,043,700 02-01-16 7.13 8,300,000 8,113,250 Quebecor Media Sr Nts 03-15-16 7.75 4,630,000(c) 4,699,450 Univision Communications Sr Nts Pay-in-kind 03-15-15 9.75 7,902,000(d,h) 7,882,245 Videotron Ltee 01-15-14 6.88 9,070,000(c) 8,888,600 Virgin Media Finance 04-15-14 8.75 3,550,000(c) 3,656,500 08-15-16 9.13 1,610,000(c) 1,686,475 --------------- Total 59,587,626 - ------------------------------------------------------------------------------------- MEDIA NON CABLE (7.2%) Clear Channel Communications Sr Unsub 12-15-16 5.50 9,505,000 7,831,739 Idearc 11-15-16 8.00 7,545,000 7,620,450 Intelsat Bermuda 06-15-16 9.25 2,250,000(c) 2,390,625 Intelsat Bermuda Sr Unsecured 06-15-13 11.41 3,460,000(c,k) 3,667,600
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MEDIA NON CABLE (CONT.) Lamar Media 01-01-13 7.25% $2,882,000 $2,874,795 Lamar Media Series B 08-15-15 6.63 3,650,000 3,458,375 Lamar Media Sr Unsecured 08-15-15 6.63 3,803,000 3,603,343 Liberty Media LLC Sr Unsecured 02-01-30 8.25 7,425,000 7,200,884 Liberty Media Sr Nts 05-15-13 5.70 8,824,000 8,293,809 Nielsen Finance LLC Sr Nts 08-01-14 10.00 3,466,000(d) 3,665,295 Radio One 02-15-13 6.38 6,833,000 6,423,020 Rainbow Natl Services LLC Sr Nts 09-01-12 8.75 7,950,000(d) 8,267,999 Rainbow Natl Services LLC Sr Sub Deb 09-01-14 10.38 3,775,000(d) 4,143,063 RH Donnelley Sr Disc Nts Series A-1 01-15-13 6.88 1,370,000 1,298,075 RH Donnelley Sr Disc Nts Series A-2 01-15-13 6.88 5,909,000 5,598,778 RH Donnelley Sr Unsecured 01-15-13 6.88 7,605,000 7,205,738 Sun Media 02-15-13 7.63 3,596,000(c) 3,613,980 --------------- Total 87,157,568 - ------------------------------------------------------------------------------------- METALS (0.7%) Freeport-McMoRan Copper & Gold Sr Unsecured 04-01-15 8.25 5,630,000 5,939,650 Noranda Aluminium Acquisition Sr Unsecured Pay-in-kind 05-15-15 9.36 3,205,000(d,h,k) 3,092,825 --------------- Total 9,032,475 - ------------------------------------------------------------------------------------- OIL FIELD SERVICES (1.4%) Bristow Group Sr Nts 09-15-17 7.50 3,510,000(d) 3,518,775 Cimarex Energy 05-01-17 7.13 1,575,000 1,535,625 OPTI Canada 12-15-14 8.25 3,464,000(c,d) 3,515,960 OPTI Canada Secured 12-15-14 7.88 3,005,000(c,d,f) 3,012,513
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) OIL FIELD SERVICES (CONT.) Quicksilver Resources 04-01-16 7.13% $5,965,000 $5,756,225 --------------- Total 17,339,098 - ------------------------------------------------------------------------------------- OTHER FINANCIAL INSTITUTIONS (1.6%) Cardtronics 08-15-13 9.25 9,795,000 9,892,950 Triad Acquisition Sr Unsecured Series B 05-01-13 11.13 9,380,000 8,957,900 --------------- Total 18,850,850 - ------------------------------------------------------------------------------------- OTHER INDUSTRY (0.2%) Rental Service 12-01-14 9.50 2,970,000(d) 3,029,400 - ------------------------------------------------------------------------------------- PACKAGING (1.2%) Crown Americas LLC/Capital 11-15-15 7.75 8,253,000 8,294,265 Owens-Brockway Glass Container 05-15-13 8.25 6,060,000 6,272,100 --------------- Total 14,566,365 - ------------------------------------------------------------------------------------- PAPER (4.1%) Abitibi-Consolidated Co of Canada 04-01-15 8.38 3,795,000(c) 3,320,625 Boise Cascade LLC 10-15-14 7.13 6,090,000 5,785,500 Cascades Sr Nts 02-15-13 7.25 3,670,000(c) 3,569,075 Georgia-Pacific 06-15-15 7.70 3,908,000 3,868,920 01-15-17 7.13 10,905,000(d) 10,468,800 Jefferson Smurfit US 06-01-13 7.50 5,840,000 5,664,800 NewPage 05-01-12 10.00 6,280,000 6,782,400 Norampac 06-01-13 6.75 4,270,000(c) 4,072,513 Smurfit-Stone Container Enterprises Sr Unsecured 03-15-17 8.00 6,205,000 6,018,850 --------------- Total 49,551,483 - ------------------------------------------------------------------------------------- PHARMACEUTICALS (0.6%) Warner Chilcott 02-01-15 8.75 6,969,000 7,160,648 - ------------------------------------------------------------------------------------- RAILROADS (0.3%) Kansas City Southern de Mexico Sr Nts 06-01-14 7.38 3,380,000(c,d) 3,401,125 - ------------------------------------------------------------------------------------- REITS (0.9%) Realogy Sr Sub Nts 04-15-15 12.38 12,145,000(d) 11,082,313 - -------------------------------------------------------------------------------------
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS - 2007 SEMIANNUAL REPORT 197 RiverSource VP - High Yield Bond Fund
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) RETAILERS (2.2%) AutoNation 04-15-14 7.00% $2,845,000 $2,809,438 Claire's Stores Sr Nts Pay-in-kind 06-01-15 9.63 2,710,000(d,h) 2,506,750 Claire's Stores Sr Sub Nts 06-01-17 10.50 9,400,000(d) 8,577,499 Michaels Stores Sr Sub Nts 11-01-16 11.38 4,370,000(d) 4,566,650 Toys "R" Us 10-15-18 7.38 4,345,000 3,660,663 Toys "R" Us Sr Unsecured 04-15-13 7.88 4,817,000 4,335,300 --------------- Total 26,456,300 - ------------------------------------------------------------------------------------- TECHNOLOGY (2.0%) Freescale Semiconductor Sr Nts Pay-in-kind 12-15-14 9.13 6,208,000(d,h) 5,835,520 Freescale Semiconductor Sr Sub Nts 12-15-16 10.13 2,587,000(d) 2,431,780 NXP Funding LLC Secured 10-15-13 8.11 3,727,000(c,k) 3,731,659 SS&C Technologies 12-01-13 11.75 3,765,000 4,216,800 West Corp 10-15-16 11.00 7,945,000(n) 8,302,525 --------------- Total 24,518,284 - ------------------------------------------------------------------------------------- TRANSPORTATION SERVICES (1.2%) Avis Budget Car Rental LLC/Finance 05-15-14 7.63 4,050,000 4,090,500 05-15-16 7.75 4,875,000 4,972,500 Hertz 01-01-16 10.50 2,694,000 2,976,870 Quality Distribution LLC/Capital 01-15-12 9.86 2,651,000(k) 2,677,510 --------------- Total 14,717,380 - ------------------------------------------------------------------------------------- WIRELESS (3.2%) American Tower Sr Nts 10-15-12 7.13 8,815,000 9,013,337 Centennial Communications Sr Nts 01-01-13 10.00 4,700,000 5,040,750 Centennial Communications/Cellular Operating LLC/Puerto Rico Operations Sr Unsecured 02-01-14 8.13 2,590,000 2,648,275 Cricket Communications 11-01-14 9.38 4,775,000 4,930,188
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) WIRELESS (CONT.) MetroPCS Wireless Sr Nts 11-01-14 9.25% $7,185,000(d) $7,418,513 Nextel Communications Series D 08-01-15 7.38 9,495,000 9,490,926 --------------- Total 38,541,989 - ------------------------------------------------------------------------------------- WIRELINES (3.9%) Embarq Sr Unsecured 06-01-16 7.08 6,639,000 6,676,192 GCI Sr Unsecured 02-15-14 7.25 7,454,000 7,044,030 Level 3 Financing 03-15-13 12.25 3,135,000 3,597,413 11-01-14 9.25 5,090,000 5,140,900 Level 3 Financing Sr Nts 02-15-17 8.75 555,000(d) 548,756 Qwest Sr Nts 06-15-15 7.63 7,015,000 7,242,988 Windstream 08-01-16 8.63 12,256,000 12,960,719 03-15-19 7.00 4,725,000 4,512,375 --------------- Total 47,723,373 - ------------------------------------------------------------------------------------- TOTAL BONDS (Cost: $1,019,546,623) $1,021,129,751 - -------------------------------------------------------------------------------------
MUNICIPAL BONDS (1.0%) NAME OF ISSUER AND TITLE OF COUPON PRINCIPAL ISSUE RATE AMOUNT VALUE(A) TOBACCO Tobacco Settlement Financing Corporation Revenue Bonds Series 2007A-1 06-01-46 6.71% $12,370,000 $11,869,634 - ------------------------------------------------------------------------------------- TOTAL MUNICIPAL BONDS (Cost: $12,368,763) $11,869,634 - -------------------------------------------------------------------------------------
SENIOR LOANS (10.0%)(i) COUPON PRINCIPAL BORROWER RATE AMOUNT VALUE(A) AUTOMOTIVE (0.7%) Ford Motor Tranche B Term Loan 12-15-13 8.36% $8,976,758 $9,016,076 - -------------------------------------------------------------------------------------
SENIOR LOANS (CONTINUED) COUPON PRINCIPAL BORROWER RATE AMOUNT VALUE(A) CHEMICALS (0.5%) Celanese Tranche B Term Loan 04-06-11 7.10% $760,000(c,f) $760,593 04-06-11 7.10 4,945,000(c) 4,948,857 --------------- Total 5,709,450 - ------------------------------------------------------------------------------------- CONSUMER PRODUCTS (0.3%) Spectrum Brands Letter of Credit 04-04-13 5.17 147,227 148,331 Spectrum Brands Tranche B1 Term Loan 03-30-13 9.32-9.36 2,978,402 2,994,546 Spectrum Brands Tranche B2 Term Loan 04-04-13 9.32 530,017 532,667 --------------- Total 3,675,544 - ------------------------------------------------------------------------------------- ENTERTAINMENT (0.3%) Marquee Holdings Term Loan 06-13-12 10.36 3,375,000 3,273,750 - ------------------------------------------------------------------------------------- ENVIRONMENTAL (0.3%) Allied Waste Inds North America Term Loan 03-28-14 7.06-7.15 3,252,401 3,265,411 - ------------------------------------------------------------------------------------- GAMING (1.1%) Fontainebleau Las Vegas Delayed Draw Term Loan 06-05-14 2.00 2,563,000(f,o) 2,559,796 Fontainebleau Las Vegas Term Loan 06-05-14 8.61 5,126,000(f) 5,140,968 Great Lakes Gaming of Michigan Term Loan 09-15-12 9.00 6,075,000(j) 5,953,500 --------------- Total 13,654,264 - ------------------------------------------------------------------------------------- HEALTH CARE (1.5%) HCA Tranche B Term Loan 01-21-13 7.60-7.61 7,561,050 7,603,014 IASIS Healthcare LLC Term Loan 06-22-11 10.61 11,370,000 11,540,549 --------------- Total 19,143,563 - ------------------------------------------------------------------------------------- INDEPENDENT ENERGY (0.5%) Sandridge Energy Term Loan 04-01-15 8.63 5,850,000 5,967,000 - -------------------------------------------------------------------------------------
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 198 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - High Yield Bond Fund
SENIOR LOANS (CONTINUED) COUPON PRINCIPAL BORROWER RATE AMOUNT VALUE(A) MEDIA CABLE (0.9%) Charter Communications Tranche B Term Loan 03-06-14 7.32-7.33% $3,920,000(f) $3,884,485 03-06-14 7.32-7.33 6,660,000 6,599,660 --------------- Total 10,484,145 - ------------------------------------------------------------------------------------- MEDIA NON CABLE (1.2%) Intelsat Bermuda Term Loan 02-01-14 7.86 1,995,000(c) 1,998,990 VNU Tranche B Term Loan 08-09-13 7.61 12,258,250(c) 12,313,167 --------------- Total 14,312,157 - ------------------------------------------------------------------------------------- OIL FIELD SERVICES (0.4%) Dresser 2nd Lien Term Loan 05-04-15 11.11 5,125,000 5,166,666 - ------------------------------------------------------------------------------------- OTHER FINANCIAL INSTITUTIONS (0.6%) ACE Cash Express Tranche B Term Loan 10-05-13 8.32-8.39 7,473,157 7,473,157 - ------------------------------------------------------------------------------------- RETAILERS (0.2%) Michaels Stores Term Loan 10-31-13 7.63 1,865,000 1,846,350 - -------------------------------------------------------------------------------------
SENIOR LOANS (CONTINUED) COUPON PRINCIPAL BORROWER RATE AMOUNT VALUE(A) WIRELESS (0.3%) Trilogy Intl Partners Term Loan 06-29-12 8.86% $3,185,000(f) $3,192,963 - ------------------------------------------------------------------------------------- WIRELINES (1.2%) Level 3 Communications Tranche B Term Loan 03-13-14 7.61 5,930,000 5,935,574 Qwest Tranche B Term Loan 06-30-10 6.95 8,955,000 9,115,474 --------------- Total 15,051,048 - ------------------------------------------------------------------------------------- TOTAL SENIOR LOANS (Cost: $120,581,542) $121,231,544 - -------------------------------------------------------------------------------------
COMMON STOCKS (--%) ISSUER SHARES VALUE(A) OIL, GAS & CONSUMABLE FUELS (--%) Link Energy LLC Unit 494,265(b) $12,356 - ----------------------------------------------------------------------------------- PAPER & FOREST PRODUCTS (--%) Crown Paper Escrow 4,785,000(b) 5 - ----------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $3,913,363) $12,361 - -----------------------------------------------------------------------------------
OTHER (0.1%) ISSUER SHARES VALUE(A) Varde Fund V LP 5,000,000(b,e,j) $666,700 - ----------------------------------------------------------------------------------- TOTAL OTHER (Cost: $--) $666,700 - -----------------------------------------------------------------------------------
MONEY MARKET FUND (5.5%)(m) SHARES VALUE(A) RiverSource Short-Term Cash Fund 67,045,789(g) $67,045,789 - ----------------------------------------------------------------------------------- TOTAL MONEY MARKET FUND (Cost: $67,045,789) $67,045,789 - ----------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES (Cost: $1,223,456,080)(p) $1,221,955,779 ===================================================================================
NOTES TO INVESTMENTS IN SECURITIES (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Non-income producing. (c) Foreign security values are stated in U.S. dollars. For debt securities, principal amounts are denominated in U.S. dollar currency unless otherwise noted. At June 30, 2007, the value of foreign securities represented 7.3% of net assets. (d) Represents a security sold under Rule 144A, which is exempt from registration under the Securities Act of 1933, as amended. This security has been determined to be liquid under guidelines established by the Fund's Board of Directors. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2007, the value of these securities amounted to $232,612,836 or 19.1% of net assets. (e) The share amount for Limited Liability Companies (LLC) or Limited Partnerships (LP) represents capital contributions. (f) At June 30, 2007, the cost of securities purchased, including interest purchased, on a when-issued and/or other forward-commitment basis was $34,884,165. (g) Affiliated Money Market Fund - See Note 10 to the financial statements. (h) Pay-in-kind securities are securities in which the issuer makes interest or dividend payments in cash or in additional securities. The securities usually have the same terms as the original holdings. (i) Senior loans have rates of interest that float periodically based primarily on the London Interbank Offered Rate ("LIBOR") and other short-term rates. Remaining maturities of senior loans may be less than the stated maturities shown as a result of contractual or optional prepayments by the borrower. Such prepayments cannot be predicted with certainty. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 199 RiverSource VP - High Yield Bond Fund NOTES TO INVESTMENTS IN SECURITIES (CONTINUED) (j) Identifies issues considered to be illiquid as to their marketability (see Note 1 to the financial statements). These securities may be valued at fair value according to procedures approved, in good faith, by the Fund's Board of Directors. Information concerning such security holdings at June 30, 2007, is as follows:
ACQUISITION SECURITY DATES COST - -------------------------------------------------------------------------------------------------------------- Great Lakes Gaming of Michigan 9.00% Term Loan 2012 03-01-07 $5,960,682 United Artists Theatre Circuit 9.30% Pass-Through Ctfs Series AU4 2015 08-15-96 thru 04-09-02 1,604,184 United Artists Theatre Circuit 9.30% Pass-Through Ctfs Series AV2 2015 12-11-01 thru 08-28-02 497,234 Varde Fund V LP 04-27-00 thru 06-19-00 --*
* The original cost for this position in fiscal year 2004 was $25,000,000. From Sept. 29, 2004 through March 7, 2005, $25,000,000 was returned to the fund in the form of return of capital. (k) Interest rate varies either based on a predetermined schedule or to reflect current market conditions; rate shown is the effective rate on June 30, 2007. (l) For those zero coupon bonds that become coupon paying at a future date, the interest rate disclosed represents the annualized effective yield from the date of acquisition to maturity. (m) Cash collateral received from security lending activity is invested in an affiliated money market fund and represents 0.4% of net assets. See Note 6 to the financial statements. 5.1% of net assets is the Fund's cash equivalent position. (n) At June 30, 2007, security was partially or fully on loan. See Note 6 to the financial statements. (o) At June 30, 2007, the Fund had unfunded senior loan commitments pursuant to the term of the loan agreement. The Fund receives a stated coupon rate until the borrower draws on the loan commitment, at which time the rate will become the stated rate in the loan agreement.
UNFUNDED BORROWER COMMITMENT - ------------------------------------------------------------------------------- Fontainebleau Las Vegas $2,589,593
(p) At June 30, 2007, the cost of securities for federal income tax purposes was approximately $1,223,456,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $17,462,000 Unrealized depreciation (18,962,000) - -------------------------------------------------------------------------------- Net unrealized depreciation $(1,500,000) - --------------------------------------------------------------------------------
HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS (i) The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (Commission) for the first and third quarters of each fiscal year on Form N-Q; (ii) The Fund's Forms N-Q are available on the Commission's website at http://www.sec.gov; (iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC (information on the operations of the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iv) The Fund's complete schedule of portfolio holdings, as disclosed in its annual and semiannual shareholder reports and in its filings on Form N-Q, can be found at riversource.com. - -------------------------------------------------------------------------------- 200 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT INVESTMENTS IN SECURITIES RiverSource VP - Income Opportunities Fund JUNE 30, 2007 (UNAUDITED) (Percentages represent value of investments compared to net assets)
BONDS (85.5%) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) AEROSPACE & DEFENSE (3.1%) Alion Science and Technology 02-01-15 10.25% $4,650,000 $4,801,125 Communications & Power Inds 02-01-12 8.00 3,685,000 3,721,850 CPI Intl Sr Unsecured 02-01-15 11.15 200,000(f) 206,000 DRS Technologies 11-01-13 6.88 2,575,000 2,497,750 02-01-16 6.63 1,585,000 1,529,525 02-01-18 7.63 1,705,000 1,722,050 L-3 Communications 06-15-12 7.63 1,650,000 1,670,625 07-15-13 6.13 80,000 75,600 01-15-15 5.88 225,000 208,688 L-3 Communications Series B 10-15-15 6.38 1,785,000 1,686,825 TransDigm 07-15-14 7.75 1,260,000 1,272,600 --------------- Total 19,392,638 - ------------------------------------------------------------------------------------- AUTOMOTIVE (3.4%) Ford Motor Credit LLC Sr Nts 08-10-11 9.88 5,292,000 5,558,928 Ford Motor Credit LLC Sr Unsecured 01-13-12 8.11 1,995,000(f) 1,990,386 GMAC 04-15-16 7.70 7,220,000 6,714,600 GMAC LLC 09-15-11 6.88 4,805,000 4,726,457 11-01-31 8.00 1,355,000 1,383,794 Goodyear Tire & Rubber Sr Nts 12-01-09 9.13 1,015,000(d,f) 1,016,269 --------------- Total 21,390,434 - ------------------------------------------------------------------------------------- BROKERAGE (0.5%) LaBranche & Co Sr Nts 05-15-12 11.00 2,952,000 3,129,120 - ------------------------------------------------------------------------------------- BUILDING MATERIALS (0.5%) Gibraltar Inds Series B 12-01-15 8.00 1,030,000 1,030,000 Interline Brands Sr Sub Nts 06-15-14 8.13 375,000 377,813 Norcraft Companies LP/Finance 11-01-11 9.00 1,676,000 1,730,470
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) BUILDING MATERIALS (CONT.) Norcraft Holdings LP/Capital Sr Disc Nts (Zero coupon through 09-01-08, thereafter 9.75%) 09-01-12 8.89% $280,000(e) $256,200 --------------- Total 3,394,483 - ------------------------------------------------------------------------------------- CHEMICALS (3.1%) Chemtura 06-01-16 6.88 3,021,000 2,854,845 Georgia Gulf 10-15-14 9.50 1,375,000 1,368,125 Hexion US Finance/Nova Scotia Finance 11-15-14 9.75 1,784,000 1,846,440 INVISTA 05-01-12 9.25 2,530,000(d) 2,643,850 Lyondell Chemical 06-15-17 6.88 2,150,000 2,074,750 Momentive Performance Materials Sr Nts Pay-in-kind 12-01-14 10.13 1,425,000(d,g) 1,428,563 NALCO Sr Unsecured 11-15-11 7.75 2,175,000 2,191,313 NewMarket 12-15-16 7.13 3,010,000 2,912,174 PQ 02-15-13 7.50 1,747,000 1,851,820 --------------- Total 19,171,880 - ------------------------------------------------------------------------------------- CONSTRUCTION MACHINERY (1.2%) Chart Inds Sr Sub Nts 10-15-15 9.13 3,970,000 4,208,200 United Rentals North America 02-15-12 6.50 3,400,000 3,340,500 --------------- Total 7,548,700 - ------------------------------------------------------------------------------------- CONSUMER PRODUCTS (2.9%) American Achievement Sr Sub Nts 04-01-12 8.25 595,000 599,463 Chattem Sr Sub Nts 03-01-14 7.00 2,600,000 2,593,500 Jarden 05-01-17 7.50 4,400,000 4,344,999 Sealy Mattress 06-15-14 8.25 2,879,000 2,950,975 Visant 10-01-12 7.63 2,315,000 2,303,425 Visant Holding Sr Nts 12-01-13 8.75 1,000,000 1,040,000
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) CONSUMER PRODUCTS (CONT.) Vitro Sr Unsecured 02-01-17 9.13% $4,205,000(c,d) $4,299,613 --------------- Total 18,131,975 - ------------------------------------------------------------------------------------- DIVERSIFIED MANUFACTURING (0.6%) ALH Finance LLC 01-15-13 8.50 29,000 28,783 Baldor Electric 02-15-17 8.63 3,728,000 3,942,360 --------------- Total 3,971,143 - ------------------------------------------------------------------------------------- ELECTRIC (5.7%) Dynegy Holdings Sr Unsecured 05-01-16 8.38 2,300,000 2,248,250 05-15-18 7.13 1,325,000 1,179,250 Edison Mission Energy Sr Nts 05-15-17 7.00 3,605,000(d) 3,397,712 Edison Mission Energy Sr Unsecured 06-15-13 7.50 3,510,000 3,474,899 06-15-16 7.75 600,000 597,000 IPALCO Enterprises Secured 11-14-08 8.38 65,000 66,300 11-14-11 8.63 1,540,000 1,647,800 Midwest Generation LLC Pass-Through Ctfs Series B 01-02-16 8.56 329,746 351,592 Mirant Americas Generation LLC Sr Unsecured 05-01-11 8.30 3,325,000 3,433,062 10-01-21 8.50 445,000 465,025 05-01-31 9.13 405,000 443,475 Mirant North America LLC 12-31-13 7.38 2,765,000 2,827,213 Nevada Power 04-15-12 6.50 550,000 560,072 Nevada Power Series N 04-01-36 6.65 3,100,000 3,110,276 NRG Energy 02-01-14 7.25 1,050,000 1,052,625 02-01-16 7.38 245,000 245,613 01-15-17 7.38 3,010,000 3,021,288 Reliant Energy 12-15-14 6.75 1,355,000 1,387,181 Reliant Energy Sr Nts 06-15-14 7.63 1,425,000 1,389,375 06-15-17 7.88 2,030,000 1,976,713
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS - 2007 SEMIANNUAL REPORT 201 RiverSource VP - Income Opportunities Fund
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) ELECTRIC (CONT.) Sierra Pacific Power Series P 07-01-37 6.75% $2,600,000 $2,619,500 --------------- Total 35,494,221 - ------------------------------------------------------------------------------------- ENVIRONMENTAL (1.2%) Allied Waste North America Series B 04-15-14 7.38 4,546,000 4,489,174 05-15-16 7.13 775,000 757,563 Clean Harbors 07-15-12 11.25 120,000 132,515 WCA Waste 06-15-14 9.25 2,195,000 2,282,800 --------------- Total 7,662,052 - ------------------------------------------------------------------------------------- FOOD AND BEVERAGE (3.0%) Aramark Sr Nts 02-01-15 8.50 1,305,000(d) 1,324,575 02-01-15 8.86 610,000(d,f) 620,675 ASG Consolidated LLC/Finance Sr Disc Nts (Zero coupon through 11-01-08, thereafter 11.50%) 11-01-11 9.52 3,870,000(e) 3,599,100 Constellation Brands 09-01-16 7.25 2,415,000 2,354,625 Constellation Brands Sr Nts 05-15-17 7.25 1,365,000(d) 1,337,700 Cott Beverages USA 12-15-11 8.00 6,460,000 6,524,600 Del Monte 02-15-15 6.75 815,000 776,288 Smithfield Foods Sr Unsecured 07-01-17 7.75 2,280,000 2,280,000 --------------- Total 18,817,563 - ------------------------------------------------------------------------------------- GAMING (5.5%) Boyd Gaming Sr Sub Nts 02-01-16 7.13 1,820,000 1,765,400 Buffalo Thunder Development Authority Secured 12-15-14 9.38 1,650,000(d) 1,650,000 Circus & Eldorado Jt Venture/Silver Legacy Capital 1st Mtge 03-01-12 10.13 2,930,000 3,065,513 Harrah's Operating 06-01-16 6.50 2,477,000 2,068,295 10-01-17 5.75 585,000 468,000 Majestic Star Casino LLC/Capital 10-15-10 9.50 4,690,000 4,877,599 MGM MIRAGE 04-01-13 6.75 1,845,000 1,752,750 06-01-16 7.50 4,675,000 4,435,406
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) GAMING (CONT.) Pokagon Gaming Authority Sr Nts 06-15-14 10.38% $1,865,000(d) $2,056,163 Shingle Springs Tribal Gaming Authority Sr Nts 06-15-15 9.38 1,150,000(b,d) 1,157,188 06-15-15 9.38 2,880,000(d) 2,898,000 Tunica-Biloxi Gaming Authority Sr Unsecured 11-15-15 9.00 4,835,000(d) 5,076,749 Wheeling Island Gaming 12-15-09 10.13 2,065,000 2,090,813 Wynn Las Vegas LLC/Capital 1st Mtge 12-01-14 6.63 980,000 944,475 --------------- Total 34,306,351 - ------------------------------------------------------------------------------------- GAS PIPELINES (3.6%) Colorado Interstate Gas Sr Nts 11-15-15 6.80 135,000 138,836 Colorado Interstate Gas Sr Unsecured 03-15-15 5.95 185,000 180,147 Southern Star Central Sr Nts 03-01-16 6.75 4,565,000 4,496,525 Tennessee Gas Pipeline 12-15-11 6.00 1,071,000 1,057,613 04-01-37 7.63 2,430,000 2,666,449 Williams Companies Sr Nts 07-15-19 7.63 4,440,000 4,684,200 Williams Companies Sr Unsecured 09-01-21 7.88 7,475,000 8,035,624 Williams Partners LP/Finance 02-01-17 7.25 1,160,000 1,165,800 --------------- Total 22,425,194 - ------------------------------------------------------------------------------------- HEALTH CARE (6.4%) Community Health Systems Sr Nts 07-15-15 8.88 6,280,000(b,d) 6,366,349 Community Health Systems Sr Unsecured 12-15-12 6.50 1,750,000 1,826,508 DaVita 03-15-15 7.25 3,530,000 3,485,875 HCA Secured 11-15-16 9.25 3,440,000(d) 3,650,700 HCA Secured Pay-in-kind 11-15-16 9.63 4,457,000(d,g) 4,791,275 IASIS Healthcare LLC/Capital Bank Guaranteed 06-15-14 8.75 895,000 895,000
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) HEALTH CARE (CONT.) MedCath Holdings 07-15-12 9.88% $610,000 $654,225 Omnicare 12-15-13 6.75 3,760,000 3,590,800 12-15-15 6.88 2,710,000 2,574,500 Omnicare Sr Sub Nts 06-01-13 6.13 2,645,000 2,463,156 Select Medical 02-01-15 7.63 1,000,000 895,000 Select Medical Sr Unsecured 09-15-15 11.08 4,605,000(f) 4,294,163 Triad Hospitals Sr Nts 05-15-12 7.00 680,000 710,598 Triad Hospitals Sr Sub Nts 11-15-13 7.00 4,237,000 4,453,930 --------------- Total 40,652,079 - ------------------------------------------------------------------------------------- HOME CONSTRUCTION (1.5%) Centex Sr Unsecured 05-01-16 6.50 1,625,000 1,562,698 DR Horton Sr Unsub 04-15-16 6.50 4,035,000 3,860,546 K Hovnanian Enterprises 05-15-16 7.50 1,025,000 932,750 Meritage Homes 03-15-15 6.25 1,300,000 1,157,000 Meritage Homes Sr Nts 05-01-14 7.00 1,000,000 930,000 Standard Pacific Sr Sub Nts 04-15-12 9.25 230,000 217,350 William Lyon Homes 02-15-14 7.50 570,000 478,800 --------------- Total 9,139,144 - ------------------------------------------------------------------------------------- INDEPENDENT ENERGY (5.0%) Chaparral Energy 12-01-15 8.50 2,218,000 2,168,095 Chesapeake Energy 07-15-13 7.63 1,405,000 1,440,125 06-15-14 7.50 225,000 227,813 08-15-14 7.00 1,230,000 1,220,775 01-15-16 6.63 315,000 303,188 01-15-16 6.88 4,170,000 4,076,174 01-15-18 6.25 175,000 163,406 Compton Petroleum Finance 12-01-13 7.63 2,225,000(c) 2,197,188 Denbury Resources 04-01-13 7.50 275,000 275,000
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 202 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Income Opportunities Fund
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) INDEPENDENT ENERGY (CONT.) Denbury Resources Sr Sub Nts 12-15-15 7.50% $1,445,000 $1,445,000 EXCO Resources Secured 01-15-11 7.25 4,309,000 4,287,454 Forest Oil Sr Nts 06-15-19 7.25 2,170,000(d) 2,104,900 Hilcorp Energy I LP/Finance Sr Unsecured 11-01-15 7.75 3,855,000(d) 3,739,349 KCS Energy 04-01-12 7.13 1,605,000 1,584,938 PetroHawk Energy 07-15-13 9.13 3,445,000 3,643,088 Range Resources 03-15-15 6.38 1,660,000 1,572,850 05-15-16 7.50 1,005,000 1,017,563 --------------- Total 31,466,906 - ------------------------------------------------------------------------------------- MEDIA CABLE (4.0%) Charter Communications Operating LLC/Capital Sr Nts 04-30-14 8.38 4,555,000(d) 4,634,713 CSC Holdings 07-15-18 7.63 1,210,000 1,149,500 CSC Holdings Sr Nts Series B 07-15-09 8.13 485,000 494,700 DIRECTV Holdings LLC/Finance 06-15-15 6.38 1,225,000 1,151,500 EchoStar DBS 10-01-11 6.38 185,000 181,300 10-01-14 6.63 1,210,000 1,155,550 02-01-16 7.13 6,155,000 6,016,512 Mediacom LLC/Capital Sr Nts 02-15-11 7.88 300,000 298,500 Quebecor Media Sr Nts 03-15-16 7.75 2,115,000(c) 2,146,725 Univision Communications Sr Nts Pay-in-kind 03-15-15 9.75 5,000,000(d,g) 4,987,500 Videotron Ltee 12-15-15 6.38 1,000,000(c) 950,000 Virgin Media Finance 04-15-14 8.75 1,810,000(c) 1,864,300 --------------- Total 25,030,800 - ------------------------------------------------------------------------------------- MEDIA NON CABLE (5.8%) Clear Channel Communications Sr Unsub 12-15-16 5.50 4,315,000 3,555,386
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MEDIA NON CABLE (CONT.) Dex Media Sr Disc Nts (Zero coupon through 11-15-08, thereafter 9.00%) 11-15-13 7.43% $2,675,000(e) $2,517,844 Dex Media Sr Unsecured 11-15-13 8.00 1,410,000 1,431,150 Idearc 11-15-16 8.00 2,819,000 2,847,190 Intelsat Intermediate Holding (Zero coupon through 02-01-10, thereafter 9.25%) 02-01-15 7.84 2,480,000(c,e) 2,039,800 Lamar Media 01-01-13 7.25 651,000 649,373 Lamar Media Series B 08-15-15 6.63 740,000 701,150 Lamar Media Sr Unsecured 08-15-15 6.63 1,219,000 1,155,003 Liberty Media LLC Sr Unsecured 02-01-30 8.25 1,950,000 1,891,141 Liberty Media Sr Nts 05-15-13 5.70 2,490,000 2,340,388 LIN TV Sr Sub Nts 05-15-13 6.50 380,000 371,450 Nielsen Finance LLC Sr Nts 08-01-14 10.00 2,225,000(d) 2,352,938 Radio One 02-15-13 6.38 285,000 267,900 Radio One Series B 07-01-11 8.88 1,160,000 1,190,450 Rainbow Natl Services LLC Sr Nts 09-01-12 8.75 1,130,000(d) 1,175,200 Rainbow Natl Services LLC Sr Sub Deb 09-01-14 10.38 1,025,000(d) 1,124,938 RH Donnelley 12-15-12 10.88 250,000 266,563 RH Donnelley Sr Disc Nts Series A-2 01-15-13 6.88 121,000 114,648 Salem Communications Holding 12-15-10 7.75 6,569,000 6,634,689 Sun Media 02-15-13 7.63 3,528,000(c) 3,545,639 --------------- Total 36,172,840 - -------------------------------------------------------------------------------------
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) METALS (1.3%) Freeport-McMoRan Copper & Gold Sr Unsecured 04-01-15 8.25% $4,435,000 $4,678,925 Noranda Aluminium Acquisition Sr Unsecured Pay-in-kind 05-15-15 9.36 1,470,000(d,f,g) 1,418,550 Peabody Energy Series B 03-15-13 6.88 1,918,000 1,908,410 --------------- Total 8,005,885 - ------------------------------------------------------------------------------------- OIL FIELD SERVICES (1.7%) Bristow Group Sr Nts 09-15-17 7.50 1,605,000(d) 1,609,013 Cimarex Energy 05-01-17 7.13 955,000 931,125 OPTI Canada 12-15-14 8.25 4,819,000(c,d) 4,891,285 Quicksilver Resources 04-01-16 7.13 3,310,000 3,194,150 --------------- Total 10,625,573 - ------------------------------------------------------------------------------------- OTHER FINANCIAL INSTITUTIONS (5.8%) Cardtronics 08-15-13 9.25 5,030,000 5,080,300 Dow Jones CDX North America High Yield Pass-Through Ctfs Series 8-T1 06-29-12 7.63 25,000,000(d) 23,639,999 Residential Capital LLC 02-22-11 6.00 435,000 420,922 06-30-15 6.88 2,785,000 2,701,213 Triad Acquisition Sr Unsecured Series B 05-01-13 11.13 4,565,000 4,359,575 --------------- Total 36,202,009 - ------------------------------------------------------------------------------------- OTHER INDUSTRY (0.9%) Actuant Sr Nts 06-15-17 6.88 1,815,000(d) 1,810,463 Mobile Mini Sr Nts 05-01-15 6.88 3,530,000(d) 3,441,750 Rental Service 12-01-14 9.50 580,000(d) 591,600 --------------- Total 5,843,813 - ------------------------------------------------------------------------------------- PACKAGING (2.3%) Ball 12-15-12 6.88 1,475,000 1,463,938 Crown Americas LLC/Capital 11-15-13 7.63 1,225,000 1,237,250 Crown Cork & Seal 04-15-23 8.00 1,450,000 1,399,250
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS - 2007 SEMIANNUAL REPORT 203 RiverSource VP - Income Opportunities Fund
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) PACKAGING (CONT.) Greif Sr Unsecured 02-01-17 6.75% $2,590,000 $2,531,725 Owens-Brockway Glass Container 05-15-11 7.75 1,120,000 1,149,400 05-15-13 8.25 2,530,000 2,618,550 Plastipak Holdings Sr Nts 12-15-15 8.50 1,400,000(d) 1,449,000 Silgan Holdings Sr Sub Nts 11-15-13 6.75 2,650,000 2,590,375 --------------- Total 14,439,488 - ------------------------------------------------------------------------------------- PAPER (4.1%) Abitibi-Consolidated 08-01-29 8.50 2,955,000(c) 2,423,100 Boise Cascade LLC 10-15-12 8.23 625,000(f) 625,000 10-15-14 7.13 1,885,000 1,790,750 Cascades Sr Nts 02-15-13 7.25 950,000(c) 923,875 Georgia-Pacific 01-15-17 7.13 5,332,000(d) 5,118,720 NewPage 05-01-12 10.00 3,347,000 3,614,760 Norampac 06-01-13 6.75 2,250,000(c) 2,145,938 Smurfit-Stone Container Enterprises Sr Nts 07-01-12 8.38 2,160,000 2,165,400 Smurfit-Stone Container Enterprises Sr Unsecured 03-15-17 8.00 7,350,000 7,129,500 --------------- Total 25,937,043 - ------------------------------------------------------------------------------------- PHARMACEUTICALS (0.8%) Elan Finance 11-15-11 7.75 1,600,000(c) 1,602,000 Warner Chilcott 02-01-15 8.75 3,035,000 3,118,463 --------------- Total 4,720,463 - ------------------------------------------------------------------------------------- RAILROADS (0.9%) Kansas City Southern de Mexico Sr Nts 12-01-13 7.63 2,760,000(c,d) 2,753,100 06-01-14 7.38 3,050,000(c,d) 3,069,063 --------------- Total 5,822,163 - ------------------------------------------------------------------------------------- REITS (0.5%) Realogy Sr Sub Nts 04-15-15 12.38 3,270,000(d) 2,983,875 - -------------------------------------------------------------------------------------
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) RETAILERS (0.8%) AutoNation 04-15-14 7.00% $1,430,000 $1,412,125 Michaels Stores Sr Nts 11-01-14 10.00 3,210,000(d) 3,290,250 --------------- Total 4,702,375 - ------------------------------------------------------------------------------------- TECHNOLOGY (3.3%) Flextronics Intl Sr Sub Nts 11-15-14 6.25 3,890,000(c) 3,539,900 Freescale Semiconductor Sr Nts Pay-in-kind 12-15-14 9.13 6,318,000(d,g) 5,938,920 Freescale Semiconductor Sr Sub Nts 12-15-16 10.13 1,017,000(d) 955,980 Seagate Technology HDD Holdings 10-01-16 6.80 6,600,000(c) 6,336,000 West Corp 10-15-16 11.00 3,920,000 4,096,400 --------------- Total 20,867,200 - ------------------------------------------------------------------------------------- TRANSPORTATION SERVICES (0.5%) Avis Budget Car Rental LLC/Finance 05-15-14 7.63 325,000 328,250 05-15-16 7.75 1,240,000 1,264,800 Hertz 01-01-14 8.88 1,475,000 1,537,688 --------------- Total 3,130,738 - ------------------------------------------------------------------------------------- WIRELESS (1.6%) Centennial Cellular Operating/Communications 06-15-13 10.13 1,000,000 1,072,500 Centennial Communications/Cellular Operating LLC/ Puerto Rico Operations Sr Unsecured 02-01-14 8.13 900,000 920,250 Dobson Cellular Systems Secured 11-01-11 8.38 1,350,000 1,410,750 Nextel Communications Series D 08-01-15 7.38 3,210,000 3,208,623 Nextel Communications Series E 10-31-13 6.88 140,000 138,954 Rogers Wireless 12-15-12 7.25 1,150,000(c) 1,214,238 Rogers Wireless Sr Sub Nts 12-15-12 8.00 210,000(c) 223,449 Rural Cellular Secured 03-15-12 8.25 1,550,000 1,584,875 --------------- Total 9,773,639 - -------------------------------------------------------------------------------------
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) WIRELINES (4.0%) Cincinnati Bell 07-15-13 7.25% $110,000 $112,750 Embarq Sr Unsecured 06-01-16 7.08 1,095,000 1,101,134 GCI Sr Unsecured 02-15-14 7.25 1,748,000 1,651,860 Level 3 Financing 11-01-14 9.25 1,685,000 1,701,850 Level 3 Financing Sr Nts 02-15-17 8.75 2,535,000(d) 2,506,481 Qwest 03-15-12 8.88 3,385,000 3,647,338 09-15-33 6.88 3,720,000 3,487,500 Qwest Communications Intl 02-15-14 7.50 250,000 253,125 Qwest Sr Nts 06-15-15 7.63 3,025,000 3,123,313 Qwest Sr Unsecured 10-01-14 7.50 600,000 615,000 Windstream 08-01-16 8.63 6,490,000 6,863,173 --------------- Total 25,063,524 - ------------------------------------------------------------------------------------- TOTAL BONDS (Cost: $540,244,300) $535,415,311 - -------------------------------------------------------------------------------------
MUNICIPAL BONDS (0.9%) NAME OF ISSUER AND TITLE OF COUPON PRINCIPAL ISSUE RATE AMOUNT VALUE(A) TOBACCO Tobacco Settlement Financing Corporation Revenue Bonds Series 2007A-1 06-01-46 6.71% $5,700,000 $5,469,435 - ------------------------------------------------------------------------------------- TOTAL MUNICIPAL BONDS (Cost: $5,699,430) $5,469,435 - -------------------------------------------------------------------------------------
SENIOR LOANS (8.0%)(i) COUPON PRINCIPAL BORROWER RATE AMOUNT VALUE(A) AUTOMOTIVE (0.8%) Ford Motor Tranche B Term Loan 12-15-13 8.36% $5,057,106 $5,079,256 - -------------------------------------------------------------------------------------
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 204 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Income Opportunities Fund
SENIOR LOANS (CONTINUED) COUPON PRINCIPAL BORROWER RATE AMOUNT VALUE(A) CONSUMER PRODUCTS (--%) Spectrum Brands Tranche B2 Term Loan 04-04-13 9.32-9.36% $24 $24 - ------------------------------------------------------------------------------------- ENTERTAINMENT (0.1%) Marquee Holdings Term Loan 06-13-12 10.36 770,000 746,900 - ------------------------------------------------------------------------------------- FOOD AND BEVERAGE (1.0%) Pinnacle Foods Finance Tranche B Term Loan 04-02-14 8.10 6,155,000 6,166,017 - ------------------------------------------------------------------------------------- GAMING (0.9%) Fontainebleau Las Vegas Delayed Draw Term Loan 06-05-14 2.00 1,173,000(b,k) 1,171,534 Fontainebleau Las Vegas Term Loan 06-05-14 8.61 2,347,000(b) 2,353,853 Great Lakes Gaming of Michigan Term Loan 09-15-12 9.00 2,175,000(j) 2,131,500 --------------- Total 5,656,887 - ------------------------------------------------------------------------------------- HEALTH CARE (0.4%) HCA Tranche B Term Loan 01-21-13 7.60-7.61 2,636,750 2,651,384 - ------------------------------------------------------------------------------------- INDEPENDENT ENERGY (0.9%) Sandridge Energy Term Loan 04-01-15 8.63 5,495,000 5,604,900 - -------------------------------------------------------------------------------------
SENIOR LOANS (CONTINUED) COUPON PRINCIPAL BORROWER RATE AMOUNT VALUE(A) MEDIA CABLE (0.8%) Charter Communications Tranche B Term Loan 03-06-14 7.32-7.35% $4,925,000 $4,880,380 - ------------------------------------------------------------------------------------- MEDIA NON CABLE (0.6%) VNU Tranche B Term Loan 08-09-13 7.61 3,484,994(c) 3,500,607 - ------------------------------------------------------------------------------------- OIL FIELD SERVICES (0.9%) Dresser 1st Lien Term Loan 05-04-14 7.86 3,210,000 3,216,677 Dresser 2nd Lien Term Loan 05-04-15 11.11 2,365,000 2,384,227 --------------- Total 5,600,904 - ------------------------------------------------------------------------------------- OTHER FINANCIAL INSTITUTIONS (0.4%) ACE Cash Express Tranche B Term Loan 10-05-13 8.34-8.39 2,605,708 2,605,708 - ------------------------------------------------------------------------------------- OTHER INDUSTRY (0.1%) Rental Service 2nd Lien Term Loan 11-30-13 8.82-10.75 684,423 691,267 - ------------------------------------------------------------------------------------- RETAILERS (0.2%) Michaels Stores Term Loan 10-31-13 7.63 477,000 472,230 Toys "R" Us Tranche B Term Loan 07-19-12 9.61 1,000,000 1,017,140 --------------- Total 1,489,370 - -------------------------------------------------------------------------------------
SENIOR LOANS (CONTINUED) COUPON PRINCIPAL BORROWER RATE AMOUNT VALUE(A) TECHNOLOGY (0.3%) West Corp Tranche B Term Loan 10-24-13 7.73-7.76% $1,810,911 $1,814,153 - ------------------------------------------------------------------------------------- WIRELESS (0.3%) Trilogy Intl Partners Term Loan 06-29-12 8.86 1,620,000(b) 1,624,050 - ------------------------------------------------------------------------------------- WIRELINES (0.3%) Level 3 Communications Tranche B Term Loan 03-13-14 7.61 2,120,000 2,121,993 - ------------------------------------------------------------------------------------- TOTAL SENIOR LOANS (Cost: $50,229,811) $50,233,800 - -------------------------------------------------------------------------------------
MONEY MARKET FUND (4.4%) SHARES VALUE(A) RiverSource Short-Term Cash Fund 27,576,760(h) $27,576,760 - ----------------------------------------------------------------------------------- TOTAL MONEY MARKET FUND (Cost: $27,576,760) $27,576,760 - ----------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES (Cost: $623,750,301)(l) $618,695,306 ===================================================================================
NOTES TO INVESTMENTS IN SECURITIES (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) At June 30, 2007, the cost of securities purchased, including interest purchased, on a when-issued and/or other forward-commitment basis was $12,539,904. (c) Foreign security values are stated in U.S. dollars. For debt securities, principal amounts are denominated in U.S. dollar currency unless otherwise noted. At June 30, 2007, the value of foreign securities represented 7.9% of net assets. (d) Represents a security sold under Rule 144A, which is exempt from registration under the Securities Act of 1933, as amended. This security has been determined to be liquid under guidelines established by the Fund's Board of Directors. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2007, the value of these securities amounted to $129,302,968 or 20.6% of net assets. (e) For those zero coupon bonds that become coupon paying at a future date, the interest rate disclosed represents the annualized effective yield from the date of acquisition to maturity. (f) Interest rate varies either based on a predetermined schedule or to reflect current market conditions; rate shown is the effective rate on June 30, 2007. (g) Pay-in-kind securities are securities in which the issuer makes interest or dividend payments in cash or in additional securities. The securities usually have the same terms as the original holdings. (h) Affiliated Money Market Fund - See Note 10 to the financial statements. (i) Senior loans have rates of interest that float periodically based primarily on the London Interbank Offered Rate ("LIBOR") and other short-term rates. Remaining maturities of senior loans may be less than the stated maturities shown as a result of contractual or optional prepayments by the borrower. Such prepayments cannot be predicted with certainty. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 205 RiverSource VP - Income Opportunities Fund NOTES TO INVESTMENTS IN SECURITIES (CONTINUED) (j) Identifies issues considered to be illiquid as to their marketability (see Note 1 to the financial statements). These securities may be valued at fair value according to procedures approved, in good faith, by the Fund's Board of Directors. Information concerning such security holdings at June 30, 2007, is as follows:
ACQUISITION SECURITY DATES COST - ---------------------------------------------------------------------------------------------- Great Lakes Gaming of Michigan 9.00% Term Loan 2012 03-01-07 $2,134,071
(k) At June 30, 2007, the Fund had unfunded senior loan commitments pursuant to the term of the loan agreement. The Fund receives a stated coupon rate until the borrower draws on the loan commitment, at which time the rate will become the stated rate in the loan agreement.
UNFUNDED BORROWER COMMITMENT - ------------------------------------------------------------------------------- Fontainebleau Las Vegas $1,170,068
(l) At June 30, 2007, the cost of securities for federal income tax purposes was approximately $623,750,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $3,643,000 Unrealized depreciation (8,698,000) - -------------------------------------------------------------------------------- Net unrealized depreciation $(5,055,000) - --------------------------------------------------------------------------------
HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS (i) The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (Commission) for the first and third quarters of each fiscal year on Form N-Q; (ii) The Fund's Forms N-Q are available on the Commission's website at http://www.sec.gov; (iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC (information on the operations of the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iv) The Fund's complete schedule of portfolio holdings, as disclosed in its annual and semiannual shareholder reports and in its filings on Form N-Q, can be found at riversource.com. - -------------------------------------------------------------------------------- 206 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT INVESTMENTS IN SECURITIES RiverSource VP - International Opportunity Fund JUNE 30, 2007 (UNAUDITED) (Percentages represent value of investments compared to net assets)
COMMON STOCKS (98.3%)(c) ISSUER SHARES VALUE(A) AUSTRALIA (2.9%) CAPITAL MARKETS (0.6%) Macquarie Bank 116,841 $8,419,916 - ----------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES (0.4%) Brambles 489,480(b) 5,054,472 - ----------------------------------------------------------------------------------- INSURANCE (0.4%) QBE Insurance Group 208,979 5,527,781 - ----------------------------------------------------------------------------------- METALS & MINING (1.5%) BHP Billiton 272,158 8,082,669 Newcrest Mining 229,418 4,444,340 Rio Tinto 75,932(d) 6,359,624 --------------- Total 18,886,633 - ----------------------------------------------------------------------------------- AUSTRIA (0.7%) COMMERCIAL BANKS Erste Bank der Oesterreichischen Sparkassen 111,277 8,704,811 - ----------------------------------------------------------------------------------- BELGIUM (2.4%) BEVERAGES (1.0%) InBev 173,071 13,780,001 - ----------------------------------------------------------------------------------- CHEMICALS (0.6%) Umicore 33,373 7,284,084 - ----------------------------------------------------------------------------------- FOOD & STAPLES RETAILING (0.8%) Colruyt 47,841 10,035,292 - ----------------------------------------------------------------------------------- BRAZIL (0.5%) AIRLINES GOL Linhas Aereas Inteligentes ADR 214,159 7,065,105 - ----------------------------------------------------------------------------------- CANADA (1.5%) OIL, GAS & CONSUMABLE FUELS (0.9%) Canadian Natural Resources 70,000 4,652,207 EnCana 108,000 6,644,281 --------------- Total 11,296,488 - ----------------------------------------------------------------------------------- ROAD & RAIL (0.6%) Canadian Pacific Railway 110,000(d) 7,598,779 - ----------------------------------------------------------------------------------- CHILE (0.6%) COMMERCIAL BANKS Banco Santander Chile ADR 155,495 7,703,222 - ----------------------------------------------------------------------------------- CHINA (0.9%) COMMERCIAL BANKS China Merchants Bank Series H 3,678,500 11,196,867 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) DENMARK (0.5%) CHEMICALS Novozymes Series B 61,450 $7,153,017 - ----------------------------------------------------------------------------------- FINLAND (0.6%) INSURANCE Sampo Series A 275,824 7,973,691 - ----------------------------------------------------------------------------------- FRANCE (11.5%) AUTOMOBILES (0.6%) Renault 46,246 7,461,273 - ----------------------------------------------------------------------------------- BEVERAGES (1.1%) Pernod Ricard 66,073(d) 14,660,930 - ----------------------------------------------------------------------------------- COMMERCIAL BANKS (1.4%) BNP Paribas 37,152 4,442,874 Societe Generale 71,513 13,310,934 --------------- Total 17,753,808 - ----------------------------------------------------------------------------------- CONSTRUCTION & ENGINEERING (0.6%) VINCI 108,318 8,133,233 - ----------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT (1.6%) ALSTOM 63,304(b,d) 10,642,625 Schneider Electric 70,202 9,893,534 --------------- Total 20,536,159 - ----------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES (0.9%) Essilor Intl 102,634 12,275,020 - ----------------------------------------------------------------------------------- INSURANCE (1.7%) AXA 240,522 10,419,972 Euler Hermes 82,914 11,816,323 --------------- Total 22,236,295 - ----------------------------------------------------------------------------------- MACHINERY (0.7%) Vallourec 27,927(d) 9,003,479 - ----------------------------------------------------------------------------------- OFFICE ELECTRONICS (0.7%) Neopost 61,275 8,998,688 - ----------------------------------------------------------------------------------- OIL, GAS & CONSUMABLE FUELS (2.2%) Total 344,722 28,114,102 - ----------------------------------------------------------------------------------- GERMANY (9.0%) AEROSPACE & DEFENSE (0.6%) MTU Aero Engines Holding 127,001 8,291,642 - ----------------------------------------------------------------------------------- AUTO COMPONENTS (0.8%) Continental 77,112 10,899,709 - ----------------------------------------------------------------------------------- AUTOMOBILES (1.1%) DaimlerChrysler 148,812 13,814,172 - ----------------------------------------------------------------------------------- CHEMICALS (0.8%) Bayer 133,272 10,118,773 - ----------------------------------------------------------------------------------- COMMERCIAL BANKS (0.7%) Deutsche Postbank 97,042 8,546,074 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) GERMANY (CONT.) COMPUTERS & PERIPHERALS (0.8%) Wincor Nixdorf 115,386 $10,744,041 - ----------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES (0.4%) Carl Zeiss Meditec 251,036 5,405,455 - ----------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES (0.6%) Fresenius Medical Care & Co 168,606 7,788,170 - ----------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES (0.6%) Siemens 57,863 8,345,685 - ----------------------------------------------------------------------------------- INSURANCE (1.8%) Allianz 99,913 23,473,227 - ----------------------------------------------------------------------------------- MACHINERY (0.8%) MAN 70,633 10,205,688 - ----------------------------------------------------------------------------------- GREECE (1.4%) COMMERCIAL BANKS EFG Eurobank Ergasias 294,529 9,646,494 Piraeus Bank 238,634 8,739,492 --------------- Total 18,385,986 - ----------------------------------------------------------------------------------- HONG KONG (3.4%) COMMERCIAL BANKS (0.2%) Bank of East Asia 430,000 2,419,747 - ----------------------------------------------------------------------------------- DISTRIBUTORS (0.7%) Li & Fung 2,404,000 8,654,892 - ----------------------------------------------------------------------------------- REAL ESTATE MANAGEMENT & DEVELOPMENT (1.0%) Cheung Kong Holdings 386,000 5,055,173 China Overseas Land & Investment 5,804,000 9,055,993 --------------- Total 14,111,166 - ----------------------------------------------------------------------------------- SPECIALTY RETAIL (0.7%) Esprit Holdings 741,500 9,407,443 - ----------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES (0.8%) China Mobile 922,000 9,899,207 - ----------------------------------------------------------------------------------- INDONESIA (0.4%) DIVERSIFIED TELECOMMUNICATION SERVICES Telekomunikasi Indonesia 4,667,000 5,099,273 - ----------------------------------------------------------------------------------- IRELAND (0.8%) CONSTRUCTION MATERIALS CRH 219,244 10,869,028 - ----------------------------------------------------------------------------------- ITALY (1.9%) COMMERCIAL BANKS (0.9%) UniCredito Italiano 1,278,831 11,475,002 - ----------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES (1.0%) Saipem 375,191 12,877,387 - -----------------------------------------------------------------------------------
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS - 2007 SEMIANNUAL REPORT 207 RiverSource VP - International Opportunity Fund
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) JAPAN (18.9%) AUTO COMPONENTS (0.3%) Keihin 222,200 $4,286,544 - ----------------------------------------------------------------------------------- AUTOMOBILES (2.0%) Honda Motor 224,000 8,187,667 Toyota Motor 278,100 17,619,565 --------------- Total 25,807,232 - ----------------------------------------------------------------------------------- BUILDING PRODUCTS (0.6%) Asahi Glass 610,000 8,244,850 - ----------------------------------------------------------------------------------- CAPITAL MARKETS (0.6%) Marusan Securities 254,900 2,867,604 Nomura Holdings 157,100 3,062,578 Tokai Tokyo Securities 416,000 2,382,221 --------------- Total 8,312,403 - ----------------------------------------------------------------------------------- CHEMICALS (1.2%) Mitsubishi Rayon 371,000 2,648,881 Showa Denko 2,110,000 7,643,933 Sumitomo Chemical 809,000 5,440,997 --------------- Total 15,733,811 - ----------------------------------------------------------------------------------- COMMERCIAL BANKS (2.7%) Mitsubishi UFJ Financial Group 1,295 14,305,672 Mitsui Trust Holdings 372,000 3,245,240 Mizuho Financial Group 889 6,159,570 Sumitomo Mitsui Financial Group 1,055 9,854,848 --------------- Total 33,565,330 - ----------------------------------------------------------------------------------- CONSTRUCTION & ENGINEERING (0.2%) Okumura 568,000 2,911,235 - ----------------------------------------------------------------------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS (1.3%) Kyocera 72,700 7,759,423 Nidec 94,300 5,545,617 Yokogawa Electric 266,300 3,577,719 --------------- Total 16,882,759 - ----------------------------------------------------------------------------------- FOOD & STAPLES RETAILING (0.1%) Sundrug 72,800 1,590,682 - ----------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE (--%) Pacific Golf Group Intl Holdings 180(b) 165,215 - ----------------------------------------------------------------------------------- HOUSEHOLD DURABLES (2.1%) Daito Trust Construction 80,400 3,833,485 GOLDCREST 108,230 5,547,236 Haseko 1,392,500(b) 4,128,456 Sekisui Chemical 908,000 7,028,754 Sharp 389,000 7,393,756 --------------- Total 27,931,687 - ----------------------------------------------------------------------------------- INSURANCE (0.7%) T&D Holdings 128,950 8,725,011 - ----------------------------------------------------------------------------------- INTERNET SOFTWARE & SERVICES (0.2%) eAccess 5,048(d) 3,021,944 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) JAPAN (CONT.) MACHINERY (1.0%) AMADA 412,000 $5,157,028 SMC 55,300 7,366,626 --------------- Total 12,523,654 - ----------------------------------------------------------------------------------- METALS & MINING (0.7%) Kobe Steel 1,651,000 6,276,139 Tokyo Steel Mfg 211,500 3,322,511 --------------- Total 9,598,650 - ----------------------------------------------------------------------------------- MULTILINE RETAIL (1.2%) Daimaru 376,000 4,498,733 Mitsukoshi 1,025,000 5,136,989 Ryohin Keikaku 94,900 5,881,531 --------------- Total 15,517,253 - ----------------------------------------------------------------------------------- OFFICE ELECTRONICS (1.2%) Canon 196,950 11,566,284 Ricoh 202,000 4,676,230 --------------- Total 16,242,514 - ----------------------------------------------------------------------------------- OIL, GAS & CONSUMABLE FUELS (0.4%) Nippon Mining Holdings 592,000 5,683,800 - ----------------------------------------------------------------------------------- PHARMACEUTICALS (0.4%) Takeda Pharmaceutical 71,900 4,648,808 - ----------------------------------------------------------------------------------- REAL ESTATE MANAGEMENT & DEVELOPMENT (0.2%) Sumitomo Real Estate Sales 26,360 2,068,341 - ----------------------------------------------------------------------------------- SOFTWARE (0.5%) Nintendo 17,800 6,520,729 - ----------------------------------------------------------------------------------- TRADING COMPANIES & DISTRIBUTORS (0.6%) Sumitomo 404,400 7,390,831 - ----------------------------------------------------------------------------------- TRANSPORTATION INFRASTRUCTURE (0.3%) Mitsubishi Logistics 267,000 4,402,577 - ----------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES (0.4%) KDDI 664 4,924,232 - ----------------------------------------------------------------------------------- NETHERLANDS (2.0%) COMMERCIAL SERVICES & SUPPLIES (0.5%) Randstad Holding 86,870 6,918,985 - ----------------------------------------------------------------------------------- METALS & MINING (0.8%) Arcelor Mittal 166,530 10,491,516 - ----------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (0.7%) ASML Holding 326,199(b) 9,050,292 - ----------------------------------------------------------------------------------- PORTUGAL (0.6%) FOOD & STAPLES RETAILING Jeronimo Martins 1,338,007 7,913,451 - ----------------------------------------------------------------------------------- RUSSIA (0.5%) OIL, GAS & CONSUMABLE FUELS Gazprom ADR 161,379 6,761,780 - ----------------------------------------------------------------------------------- SINGAPORE (1.8%) COMMERCIAL BANKS (0.5%) DBS Group Holdings 422,000 6,286,162 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) SINGAPORE (CONT.) INDUSTRIAL CONGLOMERATES (0.7%) Keppel 1,222,000 $9,979,747 - ----------------------------------------------------------------------------------- REAL ESTATE MANAGEMENT & DEVELOPMENT (0.6%) City Developments 659,200 7,450,777 - ----------------------------------------------------------------------------------- SOUTH AFRICA (1.1%) MEDIA (0.6%) Naspers Series N 327,310 8,440,486 - ----------------------------------------------------------------------------------- METALS & MINING (0.5%) Impala Platinum Holdings 207,864 6,361,651 - ----------------------------------------------------------------------------------- SOUTH KOREA (0.7%) COMMERCIAL BANKS Shinhan Financial Group 154,140 9,387,373 - ----------------------------------------------------------------------------------- SPAIN (2.0%) COMMERCIAL BANKS (1.1%) Banco Bilbao Vizcaya Argentaria 544,485 13,411,687 - ----------------------------------------------------------------------------------- SPECIALTY RETAIL (0.9%) Inditex 206,997 12,262,152 - ----------------------------------------------------------------------------------- SWEDEN (1.0%) BUILDING PRODUCTS (0.3%) ASSA ABLOY Series B 191,000 4,231,844 - ----------------------------------------------------------------------------------- COMMERCIAL BANKS (0.7%) Skandinaviska Enskilda Banken Series A 257,400 8,356,898 - ----------------------------------------------------------------------------------- SWITZERLAND (6.6%) CAPITAL MARKETS (1.3%) Credit Suisse Group 166,925 11,939,323 Julius Baer Holding 75,278 5,418,167 --------------- Total 17,357,490 - ----------------------------------------------------------------------------------- CHEMICALS (2.1%) Lonza Group 86,262 7,953,409 Sika 4,908 10,047,084 Syngenta 46,271 9,062,864 --------------- Total 27,063,357 - ----------------------------------------------------------------------------------- FOOD PRODUCTS (0.9%) Nestle 31,675 12,086,428 - ----------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES (0.8%) Nobel Biocare Holding 31,562 10,350,527 - ----------------------------------------------------------------------------------- PHARMACEUTICALS (1.5%) Roche Holding 110,834 19,730,039 - ----------------------------------------------------------------------------------- TAIWAN (0.5%) SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT Taiwan Semiconductor Mfg 2,892,263 6,246,160 - -----------------------------------------------------------------------------------
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 208 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - International Opportunity Fund
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) UNITED KINGDOM (23.6%) AEROSPACE & DEFENSE (1.6%) BAE Systems 600,901 $4,887,012 Cobham 1,746,320 7,136,310 Rolls-Royce Group 781,651(b) 8,452,479 --------------- Total 20,475,801 - ----------------------------------------------------------------------------------- BEVERAGES (0.5%) Diageo 317,830 6,618,493 - ----------------------------------------------------------------------------------- CHEMICALS (0.5%) Johnson Matthey 185,462 6,301,454 - ----------------------------------------------------------------------------------- COMMERCIAL BANKS (1.2%) Standard Chartered 494,967 16,201,280 - ----------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES (0.7%) Serco Group 1,054,287 9,553,479 - ----------------------------------------------------------------------------------- FOOD & STAPLES RETAILING (3.3%) Tesco 3,418,356 28,727,526 Wm Morrison Supermarkets 2,212,586 13,440,364 --------------- Total 42,167,890 - ----------------------------------------------------------------------------------- FOOD PRODUCTS (0.7%) Associated British Foods 491,273 8,760,348 - ----------------------------------------------------------------------------------- INSURANCE (2.3%) Admiral Group 639,547 11,417,202 Prudential 497,121 7,127,640 Royal & SunAlliance Insurance Group 2,095,922 6,123,837 Standard Life 867,220 5,751,188 --------------- Total 30,419,867 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) UNITED KINGDOM (CONT.) METALS & MINING (2.4%) Anglo American 370,734 $21,924,677 Lonmin 117,361 9,474,043 --------------- Total 31,398,720 - ----------------------------------------------------------------------------------- MULTILINE RETAIL (0.6%) Marks & Spencer Group 588,840 7,425,786 - ----------------------------------------------------------------------------------- OIL, GAS & CONSUMABLE FUELS (3.0%) BG Group 1,762,369 29,073,004 BP 800,678 9,695,287 --------------- Total 38,768,291 - ----------------------------------------------------------------------------------- PHARMACEUTICALS (0.9%) Shire 456,287 11,370,914 - ----------------------------------------------------------------------------------- ROAD & RAIL (0.3%) FirstGroup 275,523 3,695,897 - ----------------------------------------------------------------------------------- SPECIALTY RETAIL (0.6%) Carphone Warehouse Group 1,147,444 7,609,565 - ----------------------------------------------------------------------------------- TOBACCO (2.1%) British American Tobacco 394,625 13,455,745 Imperial Tobacco Group 294,659 13,650,633 --------------- Total 27,106,378 - ----------------------------------------------------------------------------------- TRADING COMPANIES & DISTRIBUTORS (1.3%) SIG 429,854 11,463,165 Wolseley 233,885 5,645,369 --------------- Total 17,108,534 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) UNITED KINGDOM (CONT.) WIRELESS TELECOMMUNICATION SERVICES (1.6%) Vodafone Group 6,230,702 $20,994,929 - ----------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $992,541,123) $1,280,501,433 - -----------------------------------------------------------------------------------
PREFERRED STOCKS & OTHER (0.7%)(c) ISSUER SHARES VALUE(A) GERMANY Porsche 4,343 $7,770,472 - ----------------------------------------------------------------------------------- HONG KONG China Overseas Land & Investment Warrants 797,250(b,f) 764,724 - ----------------------------------------------------------------------------------- TOTAL PREFERRED STOCKS & OTHER (Cost: $6,750,589) $8,535,196 - -----------------------------------------------------------------------------------
MONEY MARKET FUND (3.7%)(e) SHARES VALUE(A) RiverSource Short-Term Cash Fund 48,791,748(g) $48,791,748 - ----------------------------------------------------------------------------------- TOTAL MONEY MARKET FUND (Cost: $48,791,748) $48,791,748 - ----------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES (Cost: $1,048,083,460)(h) $1,337,828,377 ===================================================================================
NOTES TO INVESTMENTS IN SECURITIES (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Non-income producing. (c) Foreign security values are stated in U.S. dollars. (d) At June 30, 2007, security was partially or fully on loan. See Note 6 to the financial statements. (e) Cash collateral received from security lending activity is invested in an affiliated money market fund and represents 3.1% of net assets. See Note 6 to the financial statements. 0.6% of net assets is the Fund's cash equivalent position. (f) Identifies issues considered to be illiquid as to their marketability (see Note 1 to the financial statements). These securities may be valued at fair value according to procedures approved, in good faith, by the Fund's Board of Directors. Information concerning such security holdings at June 30, 2007, is as follows:
ACQUISITION SECURITY DATES COST - ---------------------------------------------------------------------------------------- China Overseas Land & Investment Warrants 06-29-06 $--
(g) Affiliated Money Market Fund - See Note 10 to the financial statements. (h) At June 30, 2007, the cost of securities for federal income tax purposes was approximately $1,048,083,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $300,739,000 Unrealized depreciation (10,994,000) - --------------------------------------------------------------------------------- Net unrealized appreciation $289,745,000 - ---------------------------------------------------------------------------------
The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 209 RiverSource VP - International Opportunity Fund HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS (i) The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (Commission) for the first and third quarters of each fiscal year on Form N-Q; (ii) The Fund's Forms N-Q are available on the Commission's website at http://www.sec.gov; (iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC (information on the operations of the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iv) The Fund's complete schedule of portfolio holdings, as disclosed in its annual and semiannual shareholder reports and in its filings on Form N-Q, can be found at riversource.com. - -------------------------------------------------------------------------------- 210 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT INVESTMENTS IN SECURITIES RiverSource VP - Large Cap Equity Fund JUNE 30, 2007 (UNAUDITED) (Percentages represent value of investments compared to net assets)
COMMON STOCKS (96.2%) ISSUER SHARES VALUE(A) AEROSPACE & DEFENSE (3.6%) Boeing 447,740 $43,054,678 DRS Technologies 31,220 1,787,969 General Dynamics 28,864 2,257,742 Goodrich 176,900 10,536,164 Honeywell Intl 538,274 30,294,061 L-3 Communications Holdings 78,656 7,660,308 Lockheed Martin 125,762 11,837,977 Northrop Grumman 52,371 4,078,130 United Technologies 182,758 12,963,025 --------------- Total 124,470,054 - ----------------------------------------------------------------------------------- AIR FREIGHT & LOGISTICS (--%) United Parcel Service Cl B 23,313 1,701,849 - ----------------------------------------------------------------------------------- AIRLINES (0.1%) UAL 77,366(b) 3,140,286 - ----------------------------------------------------------------------------------- AUTO COMPONENTS (0.1%) Goodyear Tire & Rubber 15,204(b) 528,491 Johnson Controls 16,574 1,918,772 --------------- Total 2,447,263 - ----------------------------------------------------------------------------------- AUTOMOBILES (0.1%) Ford Motor 159,634 1,503,752 General Motors 47,709 1,803,400 Harley-Davidson 21,708 1,294,014 --------------- Total 4,601,166 - ----------------------------------------------------------------------------------- BEVERAGES (1.8%) Anheuser-Busch Companies 98,903 5,158,780 Brown-Forman Cl B 6,647 485,763 Coca-Cola 362,936 18,985,182 Coca-Cola Enterprises 23,477 563,448 Constellation Brands Cl A 69,148(b) 1,678,913 Molson Coors Brewing Cl B 3,959 366,049 Pepsi Bottling Group 11,090 373,511 PepsiCo 530,814 34,423,289 --------------- Total 62,034,935 - ----------------------------------------------------------------------------------- BIOTECHNOLOGY (2.1%) Amgen 507,546(b) 28,062,218 Biogen Idec 285,382(b) 15,267,937 Genentech 354,406(b) 26,814,358 Gilead Sciences 69,996(b) 2,713,745 --------------- Total 72,858,258 - ----------------------------------------------------------------------------------- BUILDING PRODUCTS (0.1%) Masco 112,697 3,208,484 - ----------------------------------------------------------------------------------- CAPITAL MARKETS (3.3%) Bank of New York Mellon 141,733 5,873,416 Bear Stearns Companies 10,102 1,414,280 Blackstone Group LP 42,870(b,e) 1,254,805 Charles Schwab 64,610 1,325,797
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) CAPITAL MARKETS (CONT.) Fortress Investment Group LLC Cl A 73,687(e) $1,755,224 Franklin Resources 35,015 4,638,437 Goldman Sachs Group 67,315 14,590,526 KKR Private Equity Investors LP Unit 607,522(i) 13,669,245 Lehman Brothers Holdings 218,817 16,306,243 Merrill Lynch & Co 209,370 17,499,145 Morgan Stanley 248,720 20,862,633 Oaktree Capital Group LLC Cl A Unit 98,000(b,i,k) 4,018,000 State Street 75,415 5,158,386 T Rowe Price Group 155,038 8,044,922 --------------- Total 116,411,059 - ----------------------------------------------------------------------------------- CHEMICALS (1.0%) Air Products & Chemicals 18,257 1,467,315 Ashland 21,742 1,390,401 Dow Chemical 265,665 11,747,706 Eastman Chemical 53,325 3,430,397 Ecolab 15,010 640,927 EI du Pont de Nemours & Co 135,227 6,874,941 Hercules 9,819(b) 192,943 Intl Flavors & Fragrances 6,588 343,498 Monsanto 45,844 3,096,304 PPG Inds 13,832 1,052,754 Praxair 27,023 1,945,386 Rohm & Haas 12,006 656,488 Sigma-Aldrich 11,140 475,344 --------------- Total 33,314,404 - ----------------------------------------------------------------------------------- COMMERCIAL BANKS (2.2%) BB&T 45,716 1,859,727 Comerica 13,298 790,832 Commerce Bancorp 15,818 585,108 Compass Bancshares 10,994 758,366 Fifth Third Bancorp 76,083 3,025,821 First Horizon Natl 10,571 412,269 Huntington Bancshares 19,863 451,685 M&T Bank 6,480 692,712 Natl City 49,975 1,665,167 PNC Financial Services Group 83,279 5,961,111 Regions Financial 61,721 2,042,965 SunTrust Banks 29,966 2,569,285 Synovus Financial 27,550 845,785 US Bancorp 376,320 12,399,744 Wachovia 383,931 19,676,464 Wells Fargo & Co 602,743 21,198,470 Zions Bancorporation 9,278 713,571 --------------- Total 75,649,082 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) COMMERCIAL SERVICES & SUPPLIES (0.1%) Allied Waste Inds 21,510(b) $289,525 Avery Dennison 16,990 1,129,495 Cintas 11,450 451,474 Equifax 11,010 489,064 Monster Worldwide 10,838(b) 445,442 Robert Half Intl 14,168 517,132 Waste Management 44,964 1,755,844 --------------- Total 5,077,976 - ----------------------------------------------------------------------------------- COMMUNICATIONS EQUIPMENT (5.9%) Alcatel-Lucent 22,271(c) 312,869 Alcatel-Lucent ADR 458,332(c) 6,416,648 Avaya 1,186,386(b) 19,978,740 Ciena 18,352(b) 663,058 Cisco Systems 1,771,421(b) 49,334,075 Corning 38,207(b) 976,189 JDS Uniphase 576,290(b,e) 7,739,575 Motorola 378,742 6,703,733 Nokia ADR 112,651(c,e) 3,166,620 QUALCOMM 1,437,563 62,375,859 Telefonaktiebolaget LM Ericsson ADR 873,256(c) 34,834,182 Tellabs 1,211,253(b) 13,033,082 --------------- Total 205,534,630 - ----------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS (3.3%) Apple 248,701(b) 30,351,470 Brocade Communications Systems 43,031(b) 336,502 Dell 413,853(b) 11,815,503 EMC 77,479(b) 1,402,370 Hewlett-Packard 726,052 32,396,441 Intl Business Machines 279,403 29,407,166 SanDisk 196,614(b) 9,622,289 --------------- Total 115,331,741 - ----------------------------------------------------------------------------------- CONSTRUCTION & ENGINEERING (0.2%) Fluor 16,666 1,856,092 KBR 242,558(b) 6,362,297 --------------- Total 8,218,389 - ----------------------------------------------------------------------------------- CONSTRUCTION MATERIALS (--%) Vulcan Materials 8,014 917,924 - ----------------------------------------------------------------------------------- CONSUMER FINANCE (0.8%) American Express 187,544 11,473,942 Capital One Financial 194,708 15,272,895 SLM 26,977 1,553,336 --------------- Total 28,300,173 - -----------------------------------------------------------------------------------
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS - 2007 SEMIANNUAL REPORT 211 RiverSource VP - Large Cap Equity Fund
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) CONTAINERS & PACKAGING (0.2%) Ball 8,695 $462,313 Bemis 8,823 292,747 Pactiv 11,209(b) 357,455 Sealed Air 13,610 422,182 Temple-Inland 62,812 3,864,823 --------------- Total 5,399,520 - ----------------------------------------------------------------------------------- DISTRIBUTORS (--%) Genuine Parts 14,381 713,298 - ----------------------------------------------------------------------------------- DIVERSIFIED CONSUMER SERVICES (--%) Apollo Group Cl A 11,804(b) 689,708 - ----------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES (4.6%) Bank of America 1,170,858 57,243,248 Chicago Mercantile Exchange Holdings Cl A 2,939 1,570,484 CIT Group 16,322 894,935 Citigroup 1,191,481 61,111,059 Consumer Discretionary Select Sector SPDR Fund 21,035(e) 826,255 Financial Select Sector SPDR Fund 60,418(e) 2,185,319 iShares Dow Jones US Healthcare Sector Index Fund 1 70 JPMorgan Chase & Co 728,868 35,313,655 Materials Select Sector SPDR Trust 27,581 1,114,272 Moody's 12,673 788,261 --------------- Total 161,047,558 - ----------------------------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES (3.6%) AT&T 1,210,685 50,243,428 Chunghwa Telecom ADR 24,602(c) 463,994 Citizens Communications 99,511 1,519,533 COLT Telecom Group 378,034(b,c) 1,115,922 Deutsche Telekom 1,097,778(c) 20,339,677 Embarq 82,726 5,242,347 Indosat 3,441,016(c) 2,481,043 Qwest Communications Intl 1,218,616(b) 11,820,575 Telecom Italia 116,378(c) 319,737 Telefonica 300,298(c) 6,722,240 Verizon Communications 571,165 23,514,863 Windstream 96,124 1,418,790 --------------- Total 125,202,149 - ----------------------------------------------------------------------------------- ELECTRIC UTILITIES (1.5%) Allegheny Energy 13,870(b) 717,634 American Electric Power 33,459 1,506,993 Duke Energy 106,036 1,940,459 Edison Intl 27,482 1,542,290 Entergy 82,812 8,889,868 Exelon 193,140 14,021,963 FirstEnergy 27,118 1,755,348 FPL Group 69,894 3,965,786 Hawaiian Electric Inds 64,911 1,537,742
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) ELECTRIC UTILITIES (CONT.) Pinnacle West Capital 31,583 $1,258,583 PPL 111,138 5,200,147 Progress Energy 44,028 2,007,237 Southern 286,108 9,810,643 --------------- Total 54,154,693 - ----------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT (0.4%) Cooper Inds Cl A 14,580 832,372 Emerson Electric 282,300 13,211,640 Rockwell Automation 13,307 924,038 --------------- Total 14,968,050 - ----------------------------------------------------------------------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS (--%) Agilent Technologies 2,415(b) 92,833 - ----------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES (0.7%) Baker Hughes 51,468 4,330,003 Cameron Intl 25,664(b) 1,834,206 Halliburton 74,964 2,586,258 Natl Oilwell Varco 22,147(b) 2,308,603 Pride Intl 168,989(b) 6,330,329 Transocean 15,834(b) 1,678,087 Weatherford Intl 85,876(b) 4,743,790 --------------- Total 23,811,276 - ----------------------------------------------------------------------------------- FOOD & STAPLES RETAILING (0.8%) Costco Wholesale 66,543 3,894,096 CVS Caremark 340,265 12,402,659 Kroger 59,967 1,686,872 Safeway 53,986 1,837,144 SUPERVALU 17,556 813,194 SYSCO 52,043 1,716,899 Wal-Mart Stores 120,858 5,814,478 Whole Foods Market 11,863 454,353 --------------- Total 28,619,695 - ----------------------------------------------------------------------------------- FOOD PRODUCTS (1.4%) Archer-Daniels-Midland 55,522 1,837,223 Campbell Soup 79,375 3,080,544 ConAgra Foods 42,610 1,144,505 Dean Foods 85,918 2,738,207 General Mills 70,902(g) 4,142,095 Groupe Danone 10,520(c) 854,551 Hershey 14,599 739,001 HJ Heinz 27,402(g) 1,300,773 Kellogg 160,111 8,292,149 Kraft Foods Cl A 652,851 23,012,997 McCormick & Co 10,980 419,216 Sara Lee 61,967 1,078,226 Tyson Foods Cl A 21,277 490,222 WM Wrigley Jr 18,401 1,017,759 --------------- Total 50,147,468 - ----------------------------------------------------------------------------------- GAS UTILITIES (0.1%) Nicor 3,788 162,581 ONEOK 80,046 4,035,119 Questar 14,498 766,219 --------------- Total 4,963,919 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) HEALTH CARE EQUIPMENT & SUPPLIES (1.5%) Bausch & Lomb 45,001 $3,124,869 Boston Scientific 2,170,683(b) 33,298,278 Medtronic 217,363 11,272,445 St. Jude Medical 18,090(b) 750,554 Stryker 63,240 3,989,812 --------------- Total 52,435,958 - ----------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES (2.3%) Aetna 155,781 7,695,581 Cardinal Health 353,644 24,981,413 CIGNA 84,860 4,431,389 Coventry Health Care 13,124(b) 756,599 Express Scripts 22,308(b) 1,115,623 Humana 85,032(b) 5,179,299 Laboratory Corp of America Holdings 10,328(b) 808,269 Manor Care 6,091 397,681 McKesson 258,396 15,410,737 Patterson Companies 11,444(b) 426,518 Quest Diagnostics 13,173 680,385 Tenet Healthcare 38,814(b) 252,679 UnitedHealth Group 343,056 17,543,885 --------------- Total 79,680,058 - ----------------------------------------------------------------------------------- HEALTH CARE TECHNOLOGY (--%) IMS Health 16,327 524,587 - ----------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE (1.1%) Carnival Unit 52,160(g) 2,543,843 Chipotle Mexican Grill Cl A 3,629(b) 309,481 Chipotle Mexican Grill Cl B 1(b) 79 Harrah's Entertainment 15,785 1,345,829 Hilton Hotels 32,784 1,097,280 Intl Game Technology 106,852 4,242,024 Marriott Intl Cl A 134,788 5,828,233 McDonald's 201,284 10,217,177 Pinnacle Entertainment 294,256(b) 8,283,306 Starbucks 63,296(b) 1,660,887 Starwood Hotels & Resorts Worldwide 18,109 1,214,571 Wyndham Worldwide 15,921(b) 577,295 Yum! Brands 44,440 1,454,077 --------------- Total 38,774,082 - ----------------------------------------------------------------------------------- HOUSEHOLD DURABLES (1.8%) Black & Decker 5,533 488,619 DR Horton 234,601 4,675,598 Fortune Brands 12,860 1,059,278 Harman Intl Inds 403,538 47,133,238 Hovnanian Enterprises Cl A 113,522(b,e) 1,876,519 Leggett & Platt 14,962 329,912 Lennar Cl A 68,435 2,501,984 Meritage Homes 27,200(b) 727,600 Newell Rubbermaid 23,414 689,074 NVR 531(b) 360,947 Snap-On 4,968 250,934 Standard-Pacific 118,863 2,083,668
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 212 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Large Cap Equity Fund
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) HOUSEHOLD DURABLES (CONT.) Stanley Works 6,985 $423,990 Whirlpool 6,638 738,146 --------------- Total 63,339,507 - ----------------------------------------------------------------------------------- HOUSEHOLD PRODUCTS (1.8%) Clorox 12,759 792,334 Colgate-Palmolive 319,863 20,743,116 Kimberly-Clark 38,501 2,575,332 Procter & Gamble 621,969 38,058,283 Spectrum Brands 333,073(b,e) 2,254,904 --------------- Total 64,423,969 - ----------------------------------------------------------------------------------- INDEPENDENT POWER PRODUCERS & ENERGY TRADERS (0.2%) AES 56,024(b) 1,225,805 Constellation Energy Group 15,240 1,328,471 Dynegy Cl A 33,933(b) 320,328 TXU 38,737 2,607,000 --------------- Total 5,481,604 - ----------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES (2.2%) 3M 19,915 1,728,423 General Electric 1,793,429 68,652,462 Tyco Intl 208,031 7,029,367 --------------- Total 77,410,252 - ----------------------------------------------------------------------------------- INSURANCE (4.6%) ACE 318,694(c) 19,924,749 AFLAC 315,878 16,236,129 American Intl Group 798,380 55,910,552 Aon 44,879 1,912,294 Arch Capital Group 26,402(b,c) 1,915,201 Assurant 9,134 538,175 Chubb 86,364 4,675,747 Endurance Specialty Holdings 33,630(c) 1,346,545 Genworth Financial Cl A 14,508 499,075 Hartford Financial Services Group 233,492 23,001,297 Lincoln Natl 5,729 406,473 MetLife 88,310 5,694,229 Principal Financial Group 12,535 730,665 Prudential Financial 268,210 26,078,058 XL Capital Cl A 36,195(c) 3,050,877 --------------- Total 161,920,066 - ----------------------------------------------------------------------------------- INTERNET & CATALOG RETAIL (0.1%) IAC/InterActiveCorp 18,530(b) 641,323 Liberty Media - Interactive Cl A 153,546(b,d) 3,428,682 --------------- Total 4,070,005 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) INTERNET SOFTWARE & SERVICES (1.8%) eBay 467,268(b) $15,036,684 Google Cl A 69,865(b) 36,565,944 VeriSign 71,285(b) 2,261,873 Yahoo! 280,057(b) 7,597,946 --------------- Total 61,462,447 - ----------------------------------------------------------------------------------- IT SERVICES (0.8%) Accenture Cl A 25,187(c) 1,080,270 Affiliated Computer Services Cl A 75,944(b) 4,307,543 Automatic Data Processing 118,799 5,758,187 Broadridge Financial Solutions 1 19 Cognizant Technology Solutions Cl A 25,825(b) 1,939,199 Computer Sciences 6,218(b) 367,795 Convergys 8,238(b) 199,689 Electronic Data Systems 87,901 2,437,495 Fidelity Natl Information Services 13,046 708,137 First Data 134,476 4,393,330 HCL Technologies 285,800(c) 2,415,256 Ness Technologies 45,254(b,c) 588,755 Paychex 67,215 2,629,451 Satyam Computer Services ADR 31,906(c) 789,993 Unisys 28,199(b) 257,739 Western Union 24,991 520,563 --------------- Total 28,393,421 - ----------------------------------------------------------------------------------- LEISURE EQUIPMENT & PRODUCTS (0.1%) Brunswick 7,647 249,522 Eastman Kodak 24,253 674,961 Hasbro 13,558 425,857 Mattel 33,140 838,110 --------------- Total 2,188,450 - ----------------------------------------------------------------------------------- LIFE SCIENCES TOOLS & SERVICES (0.1%) PerkinElmer 111,231 2,898,680 - ----------------------------------------------------------------------------------- MACHINERY (1.4%) Caterpillar 199,820 15,645,906 Deere & Co 65,939 7,961,475 Flowserve 150,963 10,808,951 Illinois Tool Works 27,640 1,497,812 Ingersoll-Rand Cl A 31,932(c) 1,750,512 ITT 32,941 2,249,211 Navistar Intl 5,214(b) 344,750 Parker Hannifin 72,273 7,076,249 --------------- Total 47,334,866 - ----------------------------------------------------------------------------------- MEDIA (6.7%) CBS Cl B 1 33 Charter Communications Cl A 929,952(b) 3,766,306 Citadel Broadcasting 13,547 87,381 Comcast Cl A 566,299(b) 15,924,328 Comcast Special Cl A 151,638(b) 4,239,798
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) MEDIA (CONT.) EchoStar Communications Cl A 42,787(b) $1,855,672 Idearc 6,375 225,229 Liberty Media - Capital Series A 73(b,d) 8,591 McGraw-Hill Companies 6,384 434,623 News Corp Cl A 1,396,841 29,626,998 Time Warner 878,786 18,489,657 Time Warner Cable Cl A 31,945(b) 1,251,286 Viacom Cl B 144,119(b) 5,999,674 Virgin Media 4,227,312(h) 103,019,592 Vivendi 515,958(c) 22,282,671 Walt Disney 174,480 5,956,747 WorldSpace Cl A 141,807(b,e) 684,928 XM Satellite Radio Holdings Cl A 1,680,481(b,h) 19,779,261 --------------- Total 233,632,775 - ----------------------------------------------------------------------------------- METALS & MINING (1.5%) Alcan 19,301(c) 1,569,171 Alcoa 173,133 7,017,080 Allegheny Technologies 8,603 902,283 Barrick Gold 79,985(c) 2,325,164 Coeur d'Alene Mines 1,953,021(b) 7,011,345 Freeport-McMoRan Copper & Gold 31,617 2,618,520 Goldcorp 68,058(c) 1,612,294 Harmony Gold Mining ADR 80,671(b,c) 1,151,175 Lihir Gold 6,175,450(b,c) 15,706,647 Newmont Mining 245,651 9,595,128 Nucor 25,400 1,489,710 Stillwater Mining 87,924(b) 968,043 --------------- Total 51,966,560 - ----------------------------------------------------------------------------------- MULTILINE RETAIL (0.9%) Dillard's Cl A 11,496 413,051 JC Penney 78,024 5,647,377 Kohl's 53,137(b) 3,774,321 Macy's 81,612 3,246,525 Nordstrom 54,375 2,779,650 Target 253,916 16,149,058 --------------- Total 32,009,982 - ----------------------------------------------------------------------------------- MULTI-UTILITIES (0.7%) Ameren 17,427 854,097 CenterPoint Energy 26,997 469,748 CMS Energy 18,831 323,893 Consolidated Edison 21,732 980,548 Dominion Resources 139,751 12,061,909 DTE Energy 14,941 720,455 Integrys Energy Group 6,340 321,628 KeySpan 14,811 621,766 NiSource 23,100 478,401 PG&E 29,591 1,340,472 Public Service Enterprise Group 21,321 1,871,557 Sempra Energy 22,177 1,313,544
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS - 2007 SEMIANNUAL REPORT 213 RiverSource VP - Large Cap Equity Fund
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) MULTI-UTILITIES (CONT.) TECO Energy 17,679 $303,725 Xcel Energy 158,816(e) 3,250,964 --------------- Total 24,912,707 - ----------------------------------------------------------------------------------- OIL, GAS & CONSUMABLE FUELS (7.4%) Anadarko Petroleum 21,352 1,110,090 Apache 7,484 610,620 BP ADR 132,213(c) 9,537,846 Canadian Natural Resources 6,890(c) 457,152 Chesapeake Energy 31,673 1,095,886 Chevron 571,841 48,171,885 ConocoPhillips 281,312 22,082,992 CONSOL Energy 15,592 718,947 Devon Energy 51,705 4,047,984 El Paso 54,812 944,411 Exxon Mobil 1,403,268 117,706,119 Newfield Exploration 12,571(b) 572,609 Occidental Petroleum 106,442 6,160,863 Peabody Energy 21,793 1,054,345 Petroleo Brasileiro ADR 4,817(c) 584,158 Range Resources 1,393 52,112 Royal Dutch Shell ADR 27,042(c) 2,195,810 Ship Finance Intl 67,096(c) 1,991,409 Spectra Energy 50,358 1,307,294 Sunoco 6,189 493,140 Total 374,958(c) 30,580,025 Valero Energy 106,149 7,840,165 Williams Companies 48,127 1,521,776 XTO Energy 27,222 1,636,042 --------------- Total 262,473,680 - ----------------------------------------------------------------------------------- PAPER & FOREST PRODUCTS (0.5%) Bowater 106,781(e) 2,664,186 Intl Paper 150,121 5,862,225 MeadWestvaco 15,391 543,610 Weyerhaeuser 95,842(g) 7,564,809 --------------- Total 16,634,830 - ----------------------------------------------------------------------------------- PERSONAL PRODUCTS (0.1%) Avon Products 37,204 1,367,247 Estee Lauder Companies Cl A 9,808 446,362 Herbalife 14,758(c) 585,155 --------------- Total 2,398,764 - ----------------------------------------------------------------------------------- PHARMACEUTICALS (6.6%) AstraZeneca 434,991(c) 23,436,159 Bristol-Myers Squibb 790,118 24,936,124 Eli Lilly & Co 382,810 21,391,423 Johnson & Johnson 174,763 10,768,896 Merck & Co 982,708 48,938,857 Novartis ADR 38,729(c) 2,171,535 Pfizer 2,534,331 64,802,843 Roche Holding 14,790(c) 2,632,832 Schering-Plough 652,233 19,853,973
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) PHARMACEUTICALS (CONT.) Teva Pharmaceutical Inds ADR 54,466(c) $2,246,723 Wyeth 246,289 14,122,211 --------------- Total 235,301,576 - ----------------------------------------------------------------------------------- REAL ESTATE INVESTMENT TRUSTS (REITS) (0.4%) Annaly Capital Management 51,106 736,949 Apartment Investment & Management Cl A 50,166 2,529,369 Archstone-Smith Trust 18,588 1,098,737 AvalonBay Communities 6,693 795,664 Boston Properties 10,033 1,024,670 Developers Diversified Realty 10,694 563,681 Equity Residential 24,800 1,131,624 HomeBanc 95,310 121,044 Host Hotels & Resorts 43,928 1,015,615 Kimco Realty 19,066 725,843 Plum Creek Timber 14,955 623,025 ProLogis 21,613 1,229,780 Public Storage 10,348 794,933 Simon Property Group 3,642 338,852 Vornado Realty Trust 10,997 1,207,910 --------------- Total 13,937,696 - ----------------------------------------------------------------------------------- REAL ESTATE MANAGEMENT & DEVELOPMENT (--%) CB Richard Ellis Group Cl A 15,755(b) 575,058 - ----------------------------------------------------------------------------------- ROAD & RAIL (0.3%) CSX 43,273 1,950,747 Hertz Global Holdings 287,557(b) 7,640,390 Norfolk Southern 32,313 1,698,694 --------------- Total 11,289,831 - ----------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (2.6%) Applied Materials 48,128 956,303 Atmel 2,285,325(b) 12,706,407 Broadcom Cl A 97,675(b) 2,856,994 Cypress Semiconductor 191,224(b) 4,453,607 Intel 1,519,556 36,104,650 KLA-Tencor 16,847 925,743 LSI 1,340,513(b) 10,067,253 Maxim Integrated Products 50,623 1,691,314 Natl Semiconductor 23,067 652,104 NVIDIA 12,676(b) 523,646 PMC-Sierra 148,218(b) 1,145,725 Spansion Cl A 1,341,224(b) 14,887,586 Texas Instruments 90,831 3,417,971 United Microelectronics ADR 220,187(c) 753,040 Xilinx 25,998 695,966 --------------- Total 91,838,309 - ----------------------------------------------------------------------------------- SOFTWARE (2.3%) Adobe Systems 97,526(b) 3,915,669 BEA Systems 96,712(b) 1,323,987 Business Objects ADR 19,239(b,c) 747,243 Cadence Design Systems 50,093(b) 1,100,042 Citrix Systems 79,796(b) 2,686,731
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) SOFTWARE (CONT.) Compuware 87,619(b) $1,039,161 Electronic Arts 11,752(b) 556,105 Microsoft 1,510,710 44,520,625 Oracle 305,372(b) 6,018,882 Quest Software 36,811(b) 595,970 Red Hat 85,465(b) 1,904,160 Salesforce.com 8,679(b) 371,982 Symantec 747,616(b) 15,101,843 TIBCO Software 40,744(b) 368,733 Transaction Systems Architects 35,574(b) 1,197,421 --------------- Total 81,448,554 - ----------------------------------------------------------------------------------- SPECIALTY RETAIL (1.3%) Abercrombie & Fitch Cl A 7,490 546,620 AutoNation 12,698(b) 284,943 AutoZone 4,190(b) 572,438 Best Buy 24,610(g) 1,148,549 Gap 138,274 2,641,033 Home Depot 312,591 12,300,455 Limited Brands 100,042 2,746,153 Lowe's Companies 339,938 10,432,697 Office Depot 39,145(b) 1,186,094 OfficeMax 6,325 248,573 RadioShack 11,489 380,745 Sherwin-Williams 9,413 625,682 Staples 60,479 1,435,167 TJX Companies 353,746 9,728,015 --------------- Total 44,277,164 - ----------------------------------------------------------------------------------- TEXTILES, APPAREL & LUXURY GOODS (0.1%) Jones Apparel Group 9,151 258,516 Liz Claiborne 8,727 325,517 Nike Cl B 31,883 1,858,460 Polo Ralph Lauren 3,911 383,708 VF 7,596 695,642 --------------- Total 3,521,843 - ----------------------------------------------------------------------------------- THRIFTS & MORTGAGE FINANCE (1.5%) Countrywide Financial 691,568 25,138,497 Fannie Mae 228,027 14,897,004 Freddie Mac 199,502 12,109,771 --------------- Total 52,145,272 - ----------------------------------------------------------------------------------- TOBACCO (1.5%) Altria Group 723,860 50,771,540 Reynolds American 14,463 942,988 UST 13,548 727,663 --------------- Total 52,442,191 - ----------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES (4.0%) ALLTEL 246,918 16,679,311 Clearwire Cl A 211,818(b,e) 5,174,714 Hutchison Telecommunications Intl 6,518,928(c) 8,403,990 Millicom Intl Cellular 58,888(b,c) 5,396,496 Orascom Telecom Holding GDR 42,182(c,e) 2,737,612
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 214 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Large Cap Equity Fund
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) WIRELESS TELECOMMUNICATION SERVICES (CONT.) Sprint Nextel 1,547,435 $32,047,379 Vivo Participacoes ADR 698,416(c) 3,499,064 Vodafone Group 16,192,886(c) 54,563,434 Vodafone Group ADR 330,810(c) 11,125,140 --------------- Total 139,627,140 - ----------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $2,935,117,773) $3,373,799,724 - -----------------------------------------------------------------------------------
OPTIONS PURCHASED (0.1%) EXERCISE EXPIRATION ISSUER CONTRACTS PRICE DATE VALUE(A) CALLS QUALCOMM 397 $50.00 Jan. 2008 $79,400 Virgin Media 3,790 27.50 Jan. 2008 549,550 - --------------------------------------------------------------------------------------------------------------------------
OPTIONS PURCHASED (CONTINUED) EXERCISE EXPIRATION ISSUER CONTRACTS PRICE DATE VALUE(A) PUTS Oil Service Sector Index 197 $215.00 Sept. 2007 $32,505 XM Satellite Radio Holdings Cl A 10,306 15.00 Jan. 2008 3,813,220 - -------------------------------------------------------------------------------------------------------------------------- TOTAL OPTIONS PURCHASED (Cost: $3,928,331) $4,474,675 - --------------------------------------------------------------------------------------------------------------------------
MONEY MARKET FUND (4.0%)(f) SHARES VALUE(A) RiverSource Short-Term Cash Fund 138,971,842(j) $138,971,842 - ----------------------------------------------------------------------------------- TOTAL MONEY MARKET FUND (Cost: $138,971,842) $138,971,842 - ----------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES (Cost: $3,078,017,946)(l) $3,517,246,241 ===================================================================================
NOTES TO INVESTMENTS IN SECURITIES (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Non-income producing. (c) Foreign security values are stated in U.S. dollars. At June 30, 2007, the value of foreign securities represented 9.1% of net assets. (d) Shareholders of tracking stocks have a financial interest only in a unit or division of the company. Unlike the common stock of the company itself, a tracking stock usually has limited or no voting rights. In the event of a company's liquidation, tracking stock shareholders typically do not have a legal claim on the company's assets. (e) At June 30, 2007, security was partially or fully on loan. See Note 6 to the financial statements. (f) Cash collateral received from security lending activity is invested in an affiliated money market fund and represents 0.7% of net assets. See Note 6 to the financial statements. Cash collateral received for open options contracts is invested in an affiliated money market fund and represents 0.04% of net assets. See Note 1 to the financial statements. 3.3% of net assets is the Fund's cash equivalent position. (g) Partially pledged as initial margin deposit on the following open stock index futures contracts (see Note 8 to the financial statements):
TYPE OF SECURITY CONTRACTS - ------------------------------------------------------------------------------ PURCHASE CONTRACTS S&P 500 Index, Sept. 2007 94
(h) At June 30, 2007, securities valued at $21,271,349 were held to cover open call options written as follows (see Note 8 to the financial statements):
EXERCISE EXPIRATION ISSUER CONTRACTS PRICE DATE VALUE(A) - -------------------------------------------------------------------------------------------------------------------------------- Virgin Media 3,751 $30.00 Jan. 2008 $271,948 XM Satellite Radio Holdings Cl A 10,306 20.00 Jan. 2008 231,885 Total value $503,833
At June 30, 2007, cash or short-term securities were designated to cover open put options written as follows (see Note 8 to the financial statements):
EXERCISE EXPIRATION ISSUER CONTRACTS PRICE DATE VALUE(A) - -------------------------------------------------------------------------------------------------------------------------------- XM Satellite Radio Holdings Cl A 10,306 $12.50 Jan. 2008 $1,983,905
(i) Identifies issues considered to be illiquid as to their marketability (see Note 1 to the financial statements). These securities may be valued at fair value according to procedures approved, in good faith, by the Fund's Board of Directors. Information concerning such security holdings at June 30, 2007, is as follows:
ACQUISITION SECURITY DATES COST - ---------------------------------------------------------------------------------------------------------- KKR Private Equity Investors LP Unit 05-01-06 thru 06-18-07 $13,817,037 Oaktree Capital Group LLC Cl A Unit 05-21-07 4,312,000
(j) Affiliated Money Market Fund - See Note 10 to the financial statements. (k) Represents a security sold under Rule 144A, which is exempt from registration under the Securities Act of 1933, as amended. This security has been determined to be liquid under guidelines established by the Fund's Board of Directors. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2007, the value of these securities amounted to $4,018,000 or 0.1% of net assets. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 215 RiverSource VP - Large Cap Equity Fund NOTES TO INVESTMENTS IN SECURITIES (CONTINUED) (l) At June 30, 2007, the cost of securities for federal income tax purposes was approximately $3,078,018,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $488,022,000 Unrealized depreciation (48,794,000) - --------------------------------------------------------------------------------- Net unrealized appreciation $439,228,000 - ---------------------------------------------------------------------------------
The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS (i) The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (Commission) for the first and third quarters of each fiscal year on Form N-Q; (ii) The Fund's Forms N-Q are available on the Commission's website at http://www.sec.gov; (iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC (information on the operations of the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iv) The Fund's complete schedule of portfolio holdings, as disclosed in its annual and semiannual shareholder reports and in its filings on Form N-Q, can be found at riversource.com. - -------------------------------------------------------------------------------- 216 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT INVESTMENTS IN SECURITIES RiverSource VP - Large Cap Value Fund JUNE 30, 2007 (UNAUDITED) (Percentages represent value of investments compared to net assets)
COMMON STOCKS (96.3%) ISSUER SHARES VALUE(A) AEROSPACE & DEFENSE (4.1%) Boeing 1,737 $167,030 DRS Technologies 704 40,318 General Dynamics 694 54,285 Goodrich 2,584 153,903 Honeywell Intl 4,728 266,091 L-3 Communications Holdings 809 78,789 Lockheed Martin 1,585 149,196 Northrop Grumman 1,259 98,038 United Technologies 1,500 106,395 --------------- Total 1,114,045 - ----------------------------------------------------------------------------------- BEVERAGES (0.9%) Coca-Cola 1,727 90,339 Constellation Brands Cl A 1,234(b) 29,962 PepsiCo 1,721 111,607 --------------- Total 231,908 - ----------------------------------------------------------------------------------- BIOTECHNOLOGY (0.3%) Amgen 494(b) 27,313 Biogen Idec 799(b) 42,747 --------------- Total 70,060 - ----------------------------------------------------------------------------------- BUILDING PRODUCTS (0.3%) Masco 2,635 75,018 - ----------------------------------------------------------------------------------- CAPITAL MARKETS (4.9%) Bank of New York Mellon 3,272 135,592 Blackstone Group LP 835(b) 24,440 Franklin Resources 207 27,421 Goldman Sachs Group 393 85,183 KKR Private Equity Investors LP Unit 1,683(e) 37,868 Lehman Brothers Holdings 4,214 314,027 Merrill Lynch & Co 3,256 272,136 Morgan Stanley 3,839 322,016 Oaktree Capital Group LLC Cl A Unit 1,000(b,e,f) 41,000 State Street 603 41,245 T Rowe Price Group 820 42,550 --------------- Total 1,343,478 - ----------------------------------------------------------------------------------- CHEMICALS (1.3%) Ashland 394 25,196 Dow Chemical 4,401 194,612 Eastman Chemical 1,082 69,605 EI du Pont de Nemours & Co 1,339 68,075 --------------- Total 357,488 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) COMMERCIAL BANKS (3.1%) Fifth Third Bancorp 637 $25,333 PNC Financial Services Group 1,306 93,483 US Bancorp 5,405 178,095 Wachovia 5,392 276,341 Wells Fargo & Co 7,676 269,965 --------------- Total 843,217 - ----------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES (0.1%) Avery Dennison 371 24,664 - ----------------------------------------------------------------------------------- COMMUNICATIONS EQUIPMENT (1.9%) Alcatel-Lucent 499(c) 7,010 Alcatel-Lucent ADR 4,350(c) 60,900 Avaya 1,976(b) 33,276 Cisco Systems 3,679(b) 102,460 Motorola 4,568 80,854 Nokia ADR 2,344(c) 65,890 QUALCOMM 987 42,826 Telefonaktiebolaget LM Ericsson ADR 2,835(c) 113,088 --------------- Total 506,304 - ----------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS (2.6%) Dell 1,139(b) 32,518 Hewlett-Packard 5,534 246,927 Intl Business Machines 3,226 339,537 SanDisk 1,554(b) 76,053 --------------- Total 695,035 - ----------------------------------------------------------------------------------- CONSTRUCTION & ENGINEERING (0.2%) Fluor 280 31,184 KBR 1,110(b) 29,115 --------------- Total 60,299 - ----------------------------------------------------------------------------------- CONSUMER FINANCE (1.5%) American Express 1,974 120,769 Capital One Financial 3,781 296,582 --------------- Total 417,351 - ----------------------------------------------------------------------------------- CONTAINERS & PACKAGING (0.3%) Temple-Inland 1,261 77,589 - ----------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES (8.7%) Bank of America 18,686 913,559 Citigroup 18,620 955,020 JPMorgan Chase & Co 10,452 506,399 --------------- Total 2,374,978 - ----------------------------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES (4.8%) AT&T 15,961 662,382 Citizens Communications 2,301 35,136 Deutsche Telekom 1,561(c) 28,922 Embarq 660 41,824
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) DIVERSIFIED TELECOMMUNICATION SERVICES (CONT.) Verizon Communications 12,280 $505,568 Windstream 2,309 34,081 --------------- Total 1,307,913 - ----------------------------------------------------------------------------------- ELECTRIC UTILITIES (3.0%) Entergy 1,586 170,257 Exelon 3,278 237,982 FPL Group 834 47,321 Hawaiian Electric Inds 1,559 36,933 Pinnacle West Capital 549 21,878 PPL 1,839 86,047 Progress Energy 530 24,163 Southern 5,334 182,903 --------------- Total 807,484 - ----------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT (0.3%) Emerson Electric 1,983 92,804 - ----------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES (1.2%) Baker Hughes 367 30,876 Cameron Intl 616(b) 44,026 Halliburton 1,493 51,509 Natl Oilwell Varco 423(b) 44,094 Pride Intl 1,018(b) 38,134 Transocean 380(b) 40,272 Weatherford Intl 1,405(b) 77,611 --------------- Total 326,522 - ----------------------------------------------------------------------------------- FOOD & STAPLES RETAILING (0.9%) CVS Caremark 2,872 104,684 Safeway 371 12,625 Wal-Mart Stores 2,908 139,904 --------------- Total 257,213 - ----------------------------------------------------------------------------------- FOOD PRODUCTS (1.2%) Campbell Soup 1,425 55,304 General Mills 977 57,076 Kellogg 2,268 117,460 Kraft Foods Cl A 2,935 103,459 --------------- Total 333,299 - ----------------------------------------------------------------------------------- GAS UTILITIES (0.3%) ONEOK 1,871 94,317 - ----------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES (0.5%) Bausch & Lomb 591 41,039 Boston Scientific 7,004(b) 107,441 --------------- Total 148,480 - ----------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES (1.3%) Aetna 2,725 134,616 Cardinal Health 958 67,673 CIGNA 1,392 72,690 McKesson 558 33,279 UnitedHealth Group 938 47,969 --------------- Total 356,227 - -----------------------------------------------------------------------------------
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS - 2007 SEMIANNUAL REPORT 217 RiverSource VP - Large Cap Value Fund
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) HOTELS, RESTAURANTS & LEISURE (1.1%) Carnival Unit 341 $16,631 Intl Game Technology 343 13,617 Marriott Intl Cl A 2,306 99,711 McDonald's 2,406 122,129 Pinnacle Entertainment 1,401(b) 39,438 --------------- Total 291,526 - ----------------------------------------------------------------------------------- HOUSEHOLD DURABLES (0.7%) DR Horton 3,776 75,255 Hovnanian Enterprises Cl A 2,738(b) 45,259 Lennar Cl A 794 29,029 Standard-Pacific 1,930 33,833 --------------- Total 183,376 - ----------------------------------------------------------------------------------- HOUSEHOLD PRODUCTS (1.0%) Colgate-Palmolive 1,711 110,958 Procter & Gamble 1,700 104,023 Spectrum Brands 7,996(b) 54,133 --------------- Total 269,114 - ----------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES (2.7%) 3M 481 41,746 General Electric 14,435 552,572 Tyco Intl 4,193 141,681 --------------- Total 735,999 - ----------------------------------------------------------------------------------- INSURANCE (6.8%) ACE 3,511(c) 219,508 AFLAC 2,663 136,878 American Intl Group 7,499 525,155 Aon 697 29,699 Arch Capital Group 465(b,c) 33,731 Chubb 1,524 82,509 Endurance Specialty Holdings 747(c) 29,910 Hartford Financial Services Group 3,726 367,048 MetLife 1,289 83,115 Prudential Financial 2,664 259,021 XL Capital Cl A 846(c) 71,309 --------------- Total 1,837,883 - ----------------------------------------------------------------------------------- INTERNET & CATALOG RETAIL (0.3%) Liberty Media - Interactive Cl A 3,551(b,d) 79,294 - ----------------------------------------------------------------------------------- IT SERVICES (1.2%) Affiliated Computer Services Cl A 1,835(b) 104,081 Automatic Data Processing 1,359 65,871 Electronic Data Systems 1,394 38,656 First Data 2,070 67,627 HCL Technologies 1,770(c) 14,958 Paychex 735 28,753 --------------- Total 319,946 - ----------------------------------------------------------------------------------- LIFE SCIENCES TOOLS & SERVICES (0.1%) PerkinElmer 618 16,105 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) MACHINERY (2.1%) Caterpillar 2,015 $157,774 Deere & Co 953 115,065 Flowserve 1,036 74,178 Illinois Tool Works 639 34,627 Ingersoll-Rand Cl A 763(c) 41,828 ITT 770 52,576 Parker Hannifin 1,016 99,477 --------------- Total 575,525 - ----------------------------------------------------------------------------------- MEDIA (5.3%) Citadel Broadcasting 324 2,088 Comcast Cl A 5,678(b) 159,665 Comcast Special Cl A 3,663(b) 102,417 EchoStar Communications Cl A 1,000(b) 43,370 Liberty Media - Capital Series A 2(b,d) 235 News Corp Cl A 10,848 230,086 Time Warner 12,525 263,527 Viacom Cl B 2,012(b) 83,760 Virgin Media 10,274 250,377 Vivendi 3,602(c) 155,560 Walt Disney 4,215 143,900 --------------- Total 1,434,985 - ----------------------------------------------------------------------------------- METALS & MINING (0.5%) Alcan 459(c) 37,317 Alcoa 2,333 94,556 --------------- Total 131,873 - ----------------------------------------------------------------------------------- MULTILINE RETAIL (0.9%) JC Penney 679 49,146 Macy's 1,000 39,780 Target 2,596 165,106 --------------- Total 254,032 - ----------------------------------------------------------------------------------- MULTI-UTILITIES (1.1%) Dominion Resources 2,665 230,016 Xcel Energy 2,909 59,547 --------------- Total 289,563 - ----------------------------------------------------------------------------------- OIL, GAS & CONSUMABLE FUELS (11.0%) Anadarko Petroleum 514 26,723 BP ADR 1,942(c) 140,096 Chesapeake Energy 741 25,639 Chevron 7,335 617,900 ConocoPhillips 5,898 462,993 Devon Energy 1,209 94,653 Exxon Mobil 14,990 1,257,361 Royal Dutch Shell ADR 632(c) 51,318 Total 2,783(c) 226,970 Valero Energy 640 47,270 XTO Energy 448 26,925 --------------- Total 2,977,848 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) PAPER & FOREST PRODUCTS (1.2%) Bowater 2,563 $63,947 Intl Paper 2,704 105,591 Weyerhaeuser 1,859 146,731 --------------- Total 316,269 - ----------------------------------------------------------------------------------- PERSONAL PRODUCTS (0.1%) Herbalife 351(c) 13,917 - ----------------------------------------------------------------------------------- PHARMACEUTICALS (5.8%) Bristol-Myers Squibb 7,709 243,296 Eli Lilly & Co 1,662 92,873 Johnson & Johnson 1,339 82,509 Merck & Co 5,695 283,611 Novartis ADR 905(c) 50,743 Pfizer 23,240 594,247 Schering-Plough 4,708 143,312 Wyeth 1,566 89,794 --------------- Total 1,580,385 - ----------------------------------------------------------------------------------- REAL ESTATE INVESTMENT TRUSTS (REITS) (0.2%) Apartment Investment & Management Cl A 980 49,411 HomeBanc 1,162 1,476 --------------- Total 50,887 - ----------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (1.9%) Atmel 12,184(b) 67,743 Cypress Semiconductor 4,471(b) 104,130 Intel 7,555 179,507 LSI 5,267(b) 39,555 Spansion Cl A 9,780(b) 108,558 Texas Instruments 451 16,971 United Microelectronics ADR 1,655(c) 5,660 --------------- Total 522,124 - ----------------------------------------------------------------------------------- SOFTWARE (1.5%) BEA Systems 2,310(b) 31,624 Cadence Design Systems 1,189(b) 26,110 Compuware 2,091(b) 24,799 Microsoft 5,192 153,008 Oracle 2,456(b) 48,408 Quest Software 843(b) 13,648 Symantec 3,874(b) 78,255 TIBCO Software 893(b) 8,082 Transaction Systems Architects 438(b) 14,743 --------------- Total 398,677 - ----------------------------------------------------------------------------------- SPECIALTY RETAIL (1.4%) Best Buy 585 27,302 Gap 1,461 27,905 Home Depot 2,550 100,343 Limited Brands 2,117 58,112 Lowe's Companies 3,524 108,151 TJX Companies 2,394 65,835 --------------- Total 387,648 - -----------------------------------------------------------------------------------
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 218 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Large Cap Value Fund
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) THRIFTS & MORTGAGE FINANCE (2.7%) Countrywide Financial 8,652 $314,500 Fannie Mae 3,493 228,198 Freddie Mac 3,297 200,128 --------------- Total 742,826 - ----------------------------------------------------------------------------------- TOBACCO (1.4%) Altria Group 5,597 392,574 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) WIRELESS TELECOMMUNICATION SERVICES (1.6%) ALLTEL 1,938 $130,912 Sprint Nextel 9,969 206,457 Vodafone Group ADR 3,285(c) 110,475 --------------- Total 447,844 - ----------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $22,661,236) $26,165,913 - -----------------------------------------------------------------------------------
MONEY MARKET FUND (3.6%) SHARES VALUE(A) RiverSource Short-Term Cash Fund 978,811(g) $978,811 - ----------------------------------------------------------------------------------- TOTAL MONEY MARKET FUND (Cost: $978,811) $978,811 - ----------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES (Cost: $23,640,047)(h) $27,144,724 ===================================================================================
NOTES TO INVESTMENTS IN SECURITIES (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Non-income producing. (c) Foreign security values are stated in U.S. dollars. At June 30, 2007, the value of foreign securities represented 5.4% of net assets. (d) Shareholders of tracking stocks have a financial interest only in a unit or division of the company. Unlike the common stock of the company itself, a tracking stock usually has limited or no voting rights. In the event of a company's liquidation, tracking stock shareholders typically do not have a legal claim on the company's assets. (e) Identifies issues considered to be illiquid as to their marketability (see Note 1 to the financial statements). These securities may be valued at fair value according to procedures approved, in good faith, by the Fund's Board of Directors. Information concerning such security holdings at June 30, 2007, is as follows:
ACQUISITION SECURITY DATES COST - ------------------------------------------------------------------------------------------------------ KKR Private Equity Investors LP Unit 05-01-06 thru 06-18-07 $40,569 Oaktree Capital Group LLC Cl A Unit* 05-21-07 44,000
* Represents a security sold under Rule 144A, which is exempt from registration under the Securities Act of 1933, as amended. (f) Represents a security sold under Rule 144A, which is exempt from registration under the Securities Act of 1933, as amended. This security has been determined to be liquid under guidelines established by the Fund's Board of Directors. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2007, the value of these securities amounted to $41,000 or 0.2% of net assets. (g) Affiliated Money Market Fund - See Note 10 to the financial statements. (h) At June 30, 2007, the cost of securities for federal income tax purposes was approximately $23,640,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $3,731,000 Unrealized depreciation (226,000) - ------------------------------------------------------------------------------- Net unrealized appreciation $3,505,000 - -------------------------------------------------------------------------------
The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS (i) The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (Commission) for the first and third quarters of each fiscal year on Form N-Q; (ii) The Fund's Forms N-Q are available on the Commission's website at http://www.sec.gov; (iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC (information on the operations of the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iv) The Fund's complete schedule of portfolio holdings, as disclosed in its annual and semiannual shareholder reports and in its filings on Form N-Q, can be found at riversource.com. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 219 INVESTMENTS IN SECURITIES RiverSource VP - Mid Cap Growth Fund JUNE 30, 2007 (UNAUDITED) (Percentages represent value of investments compared to net assets)
COMMON STOCKS (97.0%) ISSUER SHARES VALUE(A) AEROSPACE & DEFENSE (1.4%) Cubic 21,818 $658,467 Precision Castparts 22,560 2,737,882 Rockwell Collins 83,712 5,913,416 --------------- Total 9,309,765 - ----------------------------------------------------------------------------------- AIR FREIGHT & LOGISTICS (0.7%) CH Robinson Worldwide 32,692 1,716,984 UTI Worldwide 113,558(c) 3,042,219 --------------- Total 4,759,203 - ----------------------------------------------------------------------------------- AIRLINES (1.2%) AMR 61,314(b) 1,615,624 Southwest Airlines 222,512 3,317,654 UAL 42,811(b) 1,737,698 US Airways Group 44,255(b) 1,339,599 --------------- Total 8,010,575 - ----------------------------------------------------------------------------------- AUTOMOBILES (0.7%) Harley-Davidson 77,182 4,600,819 - ----------------------------------------------------------------------------------- BEVERAGES (0.7%) Hansen Natural 17,136(b) 736,505 Pepsi Bottling Group 105,114 3,540,240 --------------- Total 4,276,745 - ----------------------------------------------------------------------------------- BIOTECHNOLOGY (3.8%) Amylin Pharmaceuticals 119,821(b) 4,931,832 Applera-Celera Group 663,880(b,d) 8,232,111 Biogen Idec 32,099(b) 1,717,297 Cephalon 36,108(b) 2,902,722 OSI Pharmaceuticals 93,561(b) 3,387,844 Vertex Pharmaceuticals 116,560(b) 3,328,954 --------------- Total 24,500,760 - ----------------------------------------------------------------------------------- CAPITAL MARKETS (6.2%) E*TRADE Financial 195,069(b) 4,309,074 Fortress Investment Group LLC Cl A 26,029(e) 620,011 Legg Mason 38,589 3,796,386 Northern Trust 91,671 5,888,945 T Rowe Price Group 260,650 13,525,128 TD Ameritrade Holding 625,895(b) 12,517,900 --------------- Total 40,657,444 - ----------------------------------------------------------------------------------- CHEMICALS (0.9%) Sigma-Aldrich 133,262 5,686,290 - ----------------------------------------------------------------------------------- COMMERCIAL BANKS (0.6%) TCF Financial 129,408 3,597,542 - ----------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES (2.7%) Cintas 167,922 6,621,164 Monster Worldwide 111,636(b) 4,588,240 Robert Half Intl 182,733 6,669,755 --------------- Total 17,879,159 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) COMMUNICATIONS EQUIPMENT (3.2%) Ciena 183,283(b) $6,622,014 F5 Networks 40,708(b) 3,281,065 Foundry Networks 270,004(b) 4,498,267 Juniper Networks 262,110(b) 6,597,309 --------------- Total 20,998,655 - ----------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS (1.9%) Data Domain 13,119(b) 301,737 Isilon Systems 68,256(b) 1,052,508 Network Appliance 104,110(b) 3,040,012 Qimonda ADR 101,755(b,c) 1,572,115 SanDisk 132,449(b) 6,482,053 --------------- Total 12,448,425 - ----------------------------------------------------------------------------------- CONSTRUCTION & ENGINEERING (1.2%) Fluor 43,117 4,801,940 Foster Wheeler 27,409(b) 2,932,489 --------------- Total 7,734,429 - ----------------------------------------------------------------------------------- CONSTRUCTION MATERIALS (0.2%) Martin Marietta Materials 9,972 1,615,663 - ----------------------------------------------------------------------------------- DIVERSIFIED CONSUMER SERVICES (0.4%) Strayer Education 21,509 2,832,950 - ----------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES (0.7%) NYSE Euronext 59,250 4,361,985 - ----------------------------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES (1.1%) Level 3 Communications 427,249(b) 2,499,407 Time Warner Telecom Cl A 225,289(b) 4,528,309 --------------- Total 7,027,716 - ----------------------------------------------------------------------------------- ELECTRIC UTILITIES (0.4%) Allegheny Energy 45,454(b) 2,351,790 - ----------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT (1.5%) FuelCell Energy 91,169(b) 722,058 Hubbell Cl B 101,935 5,526,916 Rockwell Automation 50,890 3,533,802 --------------- Total 9,782,776 - ----------------------------------------------------------------------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS (0.5%) Amphenol Cl A 91,724 3,269,961 - ----------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES (4.4%) BJ Services 235,796 6,706,038 ENSCO Intl 139,618 8,518,094 Helmerich & Payne 37,587 1,331,332 Natl Oilwell Varco 18,795(b) 1,959,191 Patterson-UTI Energy 68,751 1,801,964 Smith Intl 83,844 4,916,612 TETRA Technologies 125,925(b) 3,551,085 --------------- Total 28,784,316 - ----------------------------------------------------------------------------------- FOOD & STAPLES RETAILING (0.5%) Whole Foods Market 92,395(e) 3,538,729 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) FOOD PRODUCTS (1.9%) Hershey 100,929 $5,109,026 HJ Heinz 68,571 3,255,065 WM Wrigley Jr 77,652 4,294,932 --------------- Total 12,659,023 - ----------------------------------------------------------------------------------- GAS UTILITIES (0.5%) Questar 56,812 3,002,514 - ----------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES (3.3%) Hologic 32,464(b) 1,795,584 ResMed 106,226(b) 4,382,885 St. Jude Medical 324,934(b) 13,481,511 Varian Medical Systems 40,743(b) 1,731,985 --------------- Total 21,391,965 - ----------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES (2.9%) Express Scripts 76,482(b) 3,824,865 Humana 128,053(b) 7,799,708 Lincare Holdings 134,781(b) 5,371,023 Patterson Companies 46,298(b) 1,725,526 --------------- Total 18,721,122 - ----------------------------------------------------------------------------------- HEALTH CARE TECHNOLOGY (0.5%) Cerner 61,001(b) 3,383,725 - ----------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE (3.3%) Brinker Intl 84,186 2,464,124 Hilton Hotels 138,017 4,619,429 Intl Game Technology 122,628 4,868,332 Panera Bread Cl A 126,659(b) 5,833,913 Starwood Hotels & Resorts Worldwide 60,759 4,075,106 --------------- Total 21,860,904 - ----------------------------------------------------------------------------------- HOUSEHOLD DURABLES (0.3%) Harman Intl Inds 18,668 2,180,422 - ----------------------------------------------------------------------------------- INDEPENDENT POWER PRODUCERS & ENERGY TRADERS (0.8%) AES 245,026(b) 5,361,169 - ----------------------------------------------------------------------------------- INTERNET SOFTWARE & SERVICES (3.7%) Akamai Technologies 64,095(b) 3,117,581 Ariba 456,183(b) 4,520,774 VeriSign 258,100(b) 8,189,513 VistaPrint 215,853(b) 8,256,377 --------------- Total 24,084,245 - ----------------------------------------------------------------------------------- IT SERVICES (1.2%) Fiserv 36,944(b) 2,098,419 VeriFone Holdings 165,068(b) 5,818,647 --------------- Total 7,917,066 - ----------------------------------------------------------------------------------- LIFE SCIENCES TOOLS & SERVICES (1.0%) Invitrogen 26,653(b) 1,965,659 Techne 82,952(b) 4,745,684 --------------- Total 6,711,343 - -----------------------------------------------------------------------------------
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 220 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Mid Cap Growth Fund
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) MACHINERY (1.6%) ITT 43,312 $2,957,343 Joy Global 130,500 7,612,065 --------------- Total 10,569,408 - ----------------------------------------------------------------------------------- MEDIA (2.4%) Lamar Advertising Cl A 42,356 2,658,263 Sirius Satellite Radio 2,959,331(b,e) 8,937,179 XM Satellite Radio Holdings Cl A 339,730(b) 3,998,622 --------------- Total 15,594,064 - ----------------------------------------------------------------------------------- METALS & MINING (0.8%) Allegheny Technologies 28,732 3,013,412 Freeport-McMoRan Copper & Gold 28,006 2,319,457 --------------- Total 5,332,869 - ----------------------------------------------------------------------------------- OIL, GAS & CONSUMABLE FUELS (4.3%) Denbury Resources 156,591(b) 5,872,163 El Paso 248,256 4,277,451 Murphy Oil 35,486 2,109,288 Newfield Exploration 188,622(b) 8,591,731 Southwestern Energy 33,302(b) 1,481,939 Williams Companies 174,324 5,512,125 --------------- Total 27,844,697 - ----------------------------------------------------------------------------------- PHARMACEUTICALS (3.7%) Allergan 119,140 6,867,230 Endo Pharmaceuticals Holdings 298,457(b) 10,216,182 Forest Laboratories 58,884(b) 2,688,055 Sepracor 107,545(b) 4,411,496 --------------- Total 24,182,963 - ----------------------------------------------------------------------------------- REAL ESTATE INVESTMENT TRUSTS (REITS) (0.7%) Alexandria Real Estate Equities 15,980 1,547,184 Camden Property Trust 22,589 1,512,785 Federal Realty Investment Trust 19,238 1,486,328 --------------- Total 4,546,297 - ----------------------------------------------------------------------------------- REAL ESTATE MANAGEMENT & DEVELOPMENT (0.7%) St. Joe 94,563(e) 4,382,049 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (9.1%) Analog Devices 41,512 $1,562,512 Broadcom Cl A 50,298(b) 1,471,217 FormFactor 82,130(b) 3,145,579 Hittite Microwave 60,909(b) 2,602,642 Intersil Cl A 56,878 1,789,382 KLA-Tencor 75,757 4,162,847 Kulicke & Soffa Inds 293,693(b) 3,074,966 Marvell Technology Group 201,181(b,c) 3,663,506 Maxim Integrated Products 436,934 14,597,964 Microchip Technology 207,767 7,695,690 Micron Technology 624,713(b) 7,827,654 NVIDIA 100,797(b) 4,163,924 PMC-Sierra 339,363(b) 2,623,276 Rambus 50,583(b) 909,482 --------------- Total 59,290,641 - ----------------------------------------------------------------------------------- SOFTWARE (10.6%) Adobe Systems 79,393(b) 3,187,629 Advent Software 414,533(b) 13,493,049 BEA Systems 570,898(b) 7,815,594 BMC Software 60,185(b) 1,823,606 Citrix Systems 221,048(b) 7,442,686 Electronic Arts 220,152(b) 10,417,593 Fair Isaac 175,215 7,029,626 Intuit 169,331(b) 5,093,476 Lawson Software 327,428(b) 3,238,263 NAVTEQ 148,775(b) 6,299,134 TIBCO Software 375,724(b) 3,400,302 --------------- Total 69,240,958 - ----------------------------------------------------------------------------------- SPECIALTY RETAIL (3.9%) Abercrombie & Fitch Cl A 41,768 3,048,229 Coldwater Creek 152,783(b) 3,549,149 GameStop Cl A 166,326(b) 6,503,346 Limited Brands 102,908 2,824,825 Penske Auto Group 81,757 1,740,607 PetSmart 51,152 1,659,882 TJX Companies 157,615 4,334,413 Urban Outfitters 68,312(b) 1,641,537 --------------- Total 25,301,988 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) TEXTILES, APPAREL & LUXURY GOODS (0.7%) Coach 69,062(b) $3,272,848 Quiksilver 82,115(b) 1,160,285 --------------- Total 4,433,133 - ----------------------------------------------------------------------------------- TRADING COMPANIES & DISTRIBUTORS (1.2%) Fastenal 189,656 7,939,000 - ----------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES (3.0%) American Tower Cl A 200,133(b) 8,405,586 Crown Castle Intl 55,468(b) 2,011,824 NII Holdings 71,247(b) 5,752,483 SBA Communications Cl A 101,939(b) 3,424,131 --------------- Total 19,594,024 - ----------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $590,555,380) $633,551,286 - -----------------------------------------------------------------------------------
MONEY MARKET FUND (4.7%)(f) SHARES VALUE(A) RiverSource Short-Term Cash Fund 30,598,126(g) $30,598,126 - ----------------------------------------------------------------------------------- TOTAL MONEY MARKET FUND (Cost: $30,598,126) $30,598,126 - ----------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES (Cost: $621,153,506)(h) $664,149,412 ===================================================================================
NOTES TO INVESTMENTS IN SECURITIES (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Non-income producing. (c) Foreign security values are stated in U.S. dollars. At June 30, 2007, the value of foreign securities represented 1.3% of net assets. (d) Shareholders of tracking stocks have a financial interest only in a unit or division of the company. Unlike the common stock of the company itself, a tracking stock usually has limited or no voting rights. In the event of a company's liquidation, tracking stock shareholders typically do not have a legal claim on the company's assets. (e) At June 30, 2007, security was partially or fully on loan. See Note 6 to the financial statements. (f) Cash collateral received from security lending activity is invested in an affiliated money market fund and represents 1.5% of net assets. See Note 6 to the financial statements. 3.2% of net assets is the Fund's cash equivalent position. (g) Affiliated Money Market Fund - See Note 10 to the financial statements. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 221 RiverSource VP - Mid Cap Growth Fund NOTES TO INVESTMENTS IN SECURITIES (CONTINUED) (h) At June 30, 2007, the cost of securities for federal income tax purposes was approximately $621,154,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $62,620,000 Unrealized depreciation (19,625,000) - -------------------------------------------------------------------------------- Net unrealized appreciation $42,995,000 - --------------------------------------------------------------------------------
The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS (i) The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (Commission) for the first and third quarters of each fiscal year on Form N-Q; (ii) The Fund's Forms N-Q are available on the Commission's website at http://www.sec.gov; (iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC (information on the operations of the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iv) The Fund's complete schedule of portfolio holdings, as disclosed in its annual and semiannual shareholder reports and in its filings on Form N-Q, can be found at riversource.com. - -------------------------------------------------------------------------------- 222 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT INVESTMENTS IN SECURITIES RiverSource VP - Mid Cap Value Fund JUNE 30, 2007 (UNAUDITED) (Percentages represent value of investments compared to net assets)
COMMON STOCKS (98.0%) ISSUER SHARES VALUE(A) AEROSPACE & DEFENSE (0.7%) Goodrich 68,469 $4,078,014 - ----------------------------------------------------------------------------------- AIRLINES (0.9%) AMR 56,188(b) 1,480,554 Continental Airlines Cl B 52,021(b) 1,761,951 UAL 23,244(b) 943,474 US Airways Group 34,880(b) 1,055,818 --------------- Total 5,241,797 - ----------------------------------------------------------------------------------- AUTO COMPONENTS (0.7%) Johnson Controls 23,314 2,699,062 Magna Intl Cl A 14,977(c) 1,362,757 --------------- Total 4,061,819 - ----------------------------------------------------------------------------------- AUTOMOBILES (2.6%) Ford Motor 1,408,504 13,268,108 General Motors 47,585 1,798,713 --------------- Total 15,066,821 - ----------------------------------------------------------------------------------- BUILDING PRODUCTS (2.3%) American Standard Companies 177,578 10,473,550 USG 51,816(b) 2,541,057 --------------- Total 13,014,607 - ----------------------------------------------------------------------------------- CAPITAL MARKETS (0.2%) Invesco 89,697(c) 1,164,480 - ----------------------------------------------------------------------------------- CHEMICALS (5.3%) Eastman Chemical 102,411 6,588,100 Imperial Chemical Inds ADR 55,453(c) 2,768,086 Lubrizol 51,164 3,302,636 Lyondell Chemical 86,849 3,223,835 Mosaic 185,003(b) 7,218,817 PPG Inds 93,506 7,116,742 --------------- Total 30,218,216 - ----------------------------------------------------------------------------------- COMMERCIAL BANKS (1.4%) Comerica 58,657 3,488,332 Huntington Bancshares 69,764 1,586,433 Regions Financial 92,797 3,071,581 --------------- Total 8,146,346 - ----------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES (1.6%) Deluxe 67,764 2,751,896 Dun & Bradstreet 18,262 1,880,621 Pitney Bowes 31,209 1,461,205 Ritchie Bros Auctioneers 49,214(c) 3,081,781 --------------- Total 9,175,503 - ----------------------------------------------------------------------------------- COMMUNICATIONS EQUIPMENT (0.7%) Tellabs 379,259(b) 4,080,827 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) CONSTRUCTION & ENGINEERING (1.4%) Chicago Bridge & Iron 84,919(c) $3,204,843 Fluor 40,975 4,563,386 Insituform Technologies Cl A 23,253(b) 507,148 --------------- Total 8,275,377 - ----------------------------------------------------------------------------------- DISTRIBUTORS (0.2%) Genuine Parts 26,387 1,308,795 - ----------------------------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES (2.7%) CenturyTel 121,764 5,972,524 Embarq 18,277 1,158,213 Qwest Communications Intl 412,828(b) 4,004,432 Windstream 291,051 4,295,913 --------------- Total 15,431,082 - ----------------------------------------------------------------------------------- ELECTRIC UTILITIES (2.9%) American Electric Power 69,543 3,132,217 DPL 32,266 914,418 Edison Intl 87,326 4,900,736 Pinnacle West Capital 88,485 3,526,127 PPL 86,309 4,038,398 --------------- Total 16,511,896 - ----------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT (1.7%) Cooper Inds Cl A 99,912 5,703,976 Rockwell Automation 55,932 3,883,918 --------------- Total 9,587,894 - ----------------------------------------------------------------------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS (0.8%) Celestica 290,654(b,c) 1,816,588 Solectron 685,017(b) 2,520,862 --------------- Total 4,337,450 - ----------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES (5.1%) BJ Services 85,953 2,444,503 Cameron Intl 66,885(b) 4,780,271 ENSCO Intl 21,678 1,322,575 GlobalSantaFe 132,608 9,580,928 Nabors Inds 37,320(b,c) 1,245,742 Natl Oilwell Varco 26,918(b) 2,805,932 Smith Intl 32,505 1,906,093 Weatherford Intl 92,826(b) 5,127,708 --------------- Total 29,213,752 - ----------------------------------------------------------------------------------- FOOD PRODUCTS (1.8%) Del Monte Foods 224,232 2,726,661 Reddy Ice Holdings 81,368 2,320,615 Tyson Foods Cl A 231,838 5,341,548 --------------- Total 10,388,824 - ----------------------------------------------------------------------------------- GAS UTILITIES (0.3%) Questar 33,546 1,772,906 - ----------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES (0.3%) Hospira 47,591(b) 1,857,953 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) HEALTH CARE PROVIDERS & SERVICES (2.6%) Health Management Associates Cl A 237,777 $2,701,147 Health Net 95,426(b) 5,038,492 Humana 47,069(b) 2,866,973 McKesson 28,742 1,714,173 Omnicare 69,383 2,501,951 --------------- Total 14,822,736 - ----------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE (1.8%) Hilton Hotels 109,445 3,663,124 Royal Caribbean Cruises 153,792 6,609,980 --------------- Total 10,273,104 - ----------------------------------------------------------------------------------- HOUSEHOLD DURABLES (2.0%) Mohawk Inds 18,364(b) 1,850,908 Stanley Works 81,313 4,935,698 Whirlpool 39,803 4,426,094 --------------- Total 11,212,700 - ----------------------------------------------------------------------------------- INDEPENDENT POWER PRODUCERS & ENERGY TRADERS (0.5%) Mirant 66,208(b) 2,823,771 - ----------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES (2.5%) McDermott Intl 132,152(b) 10,984,474 Textron 29,829 3,284,471 --------------- Total 14,268,945 - ----------------------------------------------------------------------------------- INSURANCE (16.8%) ACE 171,061(c) 10,694,734 Ambac Financial Group 24,964 2,176,611 Aon 298,719 12,728,416 Axis Capital Holdings 146,728(c) 5,964,493 Everest Re Group 134,297(c) 14,590,025 Lincoln Natl 85,090 6,037,136 Loews 144,753 7,379,508 MBIA 34,004 2,115,729 PartnerRe 123,531(c) 9,573,653 Torchmark 55,656 3,728,952 Willis Group Holdings 84,147(c) 3,707,517 XL Capital Cl A 208,158(c) 17,545,637 --------------- Total 96,242,411 - ----------------------------------------------------------------------------------- IT SERVICES (1.8%) Computer Sciences 79,101(b) 4,678,824 Electronic Data Systems 208,379 5,778,350 --------------- Total 10,457,174 - ----------------------------------------------------------------------------------- LEISURE EQUIPMENT & PRODUCTS (1.1%) Eastman Kodak 145,558 4,050,879 Hasbro 69,678 2,188,586 --------------- Total 6,239,465 - ----------------------------------------------------------------------------------- MACHINERY (6.3%) AGCO 193,366(b) 8,394,018 Eaton 120,567 11,212,731 Ingersoll-Rand Cl A 175,915(c) 9,643,660
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS - 2007 SEMIANNUAL REPORT 223 RiverSource VP - Mid Cap Value Fund
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) MACHINERY (CONT.) Manitowoc 55,661 $4,474,031 Terex 28,104(b) 2,284,855 --------------- Total 36,009,295 - ----------------------------------------------------------------------------------- MEDIA (2.9%) Interpublic Group of Companies 276,005(b) 3,146,457 Natl CineMedia 85,143(b) 2,384,855 Regal Entertainment Group Cl A 224,768 4,929,162 RH Donnelley 83,386(b) 6,318,992 --------------- Total 16,779,466 - ----------------------------------------------------------------------------------- METALS & MINING (1.5%) Freeport-McMoRan Copper & Gold 69,842 5,784,314 Nucor 51,867 3,042,000 --------------- Total 8,826,314 - ----------------------------------------------------------------------------------- MULTILINE RETAIL (1.4%) Family Dollar Stores 158,478 5,438,965 Macy's 58,616 2,331,744 --------------- Total 7,770,709 - ----------------------------------------------------------------------------------- MULTI-UTILITIES (3.3%) Consolidated Edison 62,635 2,826,091 DTE Energy 65,104 3,139,315 Energy East 125,884 3,284,314 NiSource 166,689 3,452,129 Sempra Energy 100,427 5,948,291 --------------- Total 18,650,140 - ----------------------------------------------------------------------------------- OIL, GAS & CONSUMABLE FUELS (5.3%) El Paso 288,925 4,978,178 Enbridge 158,217(c) 5,344,569 Hess 49,760 2,933,850 Newfield Exploration 84,172(b) 3,834,035 Pioneer Natural Resources 104,753 5,102,519 Southwestern Energy 118,668(b) 5,280,726 Sunoco 34,241 2,728,323 --------------- Total 30,202,200 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) PAPER & FOREST PRODUCTS (0.5%) MeadWestvaco 77,837 $2,749,203 - ----------------------------------------------------------------------------------- PHARMACEUTICALS (1.4%) King Pharmaceuticals 104,187(b) 2,131,666 Mylan Laboratories 230,236 4,187,993 Watson Pharmaceuticals 51,900(b) 1,688,307 --------------- Total 8,007,966 - ----------------------------------------------------------------------------------- REAL ESTATE INVESTMENT TRUSTS (REITS) (2.1%) Boston Properties 13,199 1,348,014 Equity Residential 91,804 4,189,016 Rayonier 91,122 4,113,247 Simon Property Group 25,116 2,336,793 --------------- Total 11,987,070 - ----------------------------------------------------------------------------------- REAL ESTATE MANAGEMENT & DEVELOPMENT (0.4%) St. Joe 48,261 2,236,415 - ----------------------------------------------------------------------------------- ROAD & RAIL (1.6%) CSX 161,062 7,260,675 Kansas City Southern 52,874(b) 1,984,890 --------------- Total 9,245,565 - ----------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (3.1%) Intersil Cl A 138,033 4,342,518 LSI 164,774(b) 1,237,453 Maxim Integrated Products 45,301 1,513,506 Microchip Technology 81,642 3,024,020 Micron Technology 159,850(b) 2,002,921 Natl Semiconductor 197,969 5,596,583 --------------- Total 17,717,001 - ----------------------------------------------------------------------------------- SOFTWARE (1.4%) BMC Software 144,452(b) 4,376,896 McAfee 95,866(b) 3,374,483 --------------- Total 7,751,379 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) TEXTILES, APPAREL & LUXURY GOODS (1.6%) Liz Claiborne 84,614 $3,156,102 VF 68,022 6,229,455 --------------- Total 9,385,557 - ----------------------------------------------------------------------------------- TOBACCO (2.5%) Loews-Carolina Group 138,349(d) 10,690,227 Reynolds American 51,793 3,376,904 --------------- Total 14,067,131 - ----------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $479,060,350) $560,660,076 - -----------------------------------------------------------------------------------
BONDS (0.2%) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) Qwest Communications Intl Sr Unsecured 11-15-25 3.50% $794,000 $1,384,744 - ----------------------------------------------------------------------------------- TOTAL BONDS (Cost: $1,150,803) $1,384,744 - -----------------------------------------------------------------------------------
MONEY MARKET FUND (1.8%) SHARES VALUE(A) RiverSource Short-Term Cash Fund 10,067,351(e) $10,067,351 - ----------------------------------------------------------------------------------- TOTAL MONEY MARKET FUND (Cost: $10,067,351) $10,067,351 - ----------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES (Cost: $490,278,504)(f) $572,112,171 ===================================================================================
NOTES TO INVESTMENTS IN SECURITIES (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Non-income producing. (c) Foreign security values are stated in U.S. dollars. At June 30, 2007, the value of foreign securities represented 16.0% of net assets. (d) Shareholders of tracking stocks have a financial interest only in a unit or division of the company. Unlike the common stock of the company itself, a tracking stock usually has limited or no voting rights. In the event of a company's liquidation, tracking stock shareholders typically do not have a legal claim on the company's assets. (e) Affiliated Money Market Fund - See Note 10 to the financial statements. (f) At June 30, 2007, the cost of securities for federal income tax purposes was approximately $490,279,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $88,963,000 Unrealized depreciation (7,130,000) - -------------------------------------------------------------------------------- Net unrealized appreciation $81,833,000 - --------------------------------------------------------------------------------
The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. - -------------------------------------------------------------------------------- 224 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Mid Cap Value Fund HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS (i) The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (Commission) for the first and third quarters of each fiscal year on Form N-Q; (ii) The Fund's Forms N-Q are available on the Commission's website at http://www.sec.gov; (iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC (information on the operations of the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iv) The Fund's complete schedule of portfolio holdings, as disclosed in its annual and semiannual shareholder reports and in its filings on Form N-Q, can be found at riversource.com. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 225 INVESTMENTS IN SECURITIES RiverSource VP - S&P 500 Index Fund JUNE 30, 2007 (UNAUDITED) (Percentages represent value of investments compared to net assets)
COMMON STOCKS (98.7%) ISSUER SHARES VALUE(A) AEROSPACE & DEFENSE (2.6%) Boeing 23,626 $2,271,877 General Dynamics 12,152 950,529 Goodrich 3,758 223,826 Honeywell Intl 23,397 1,316,783 L-3 Communications Holdings 3,745 364,726 Lockheed Martin 10,654 1,002,861 Northrop Grumman 10,360 806,733 Precision Castparts 4,130 501,217 Raytheon 13,323 717,976 Rockwell Collins 5,022 354,754 United Technologies 29,842 2,116,693 --------------- Total 10,627,975 - ----------------------------------------------------------------------------------- AIR FREIGHT & LOGISTICS (0.9%) CH Robinson Worldwide 5,140 269,953 FedEx 9,234 1,024,697 United Parcel Service Cl B 31,783 2,320,159 --------------- Total 3,614,809 - ----------------------------------------------------------------------------------- AIRLINES (0.1%) Southwest Airlines 23,434(e) 349,401 - ----------------------------------------------------------------------------------- AUTO COMPONENTS (0.2%) Goodyear Tire & Rubber 6,195(b) 215,338 Johnson Controls 5,916 684,896 --------------- Total 900,234 - ----------------------------------------------------------------------------------- AUTOMOBILES (0.4%) Ford Motor 56,417 531,448 General Motors 16,972 641,542 Harley-Davidson 7,726 460,547 --------------- Total 1,633,537 - ----------------------------------------------------------------------------------- BEVERAGES (2.0%) Anheuser-Busch Companies 22,797 1,189,092 Brown-Forman Cl B 2,364 172,761 Coca-Cola 60,304 3,154,502 Coca-Cola Enterprises 8,370 200,880 Constellation Brands Cl A 5,800(b) 140,824 Molson Coors Brewing Cl B 1,425 131,756 Pepsi Bottling Group 3,944 132,834 PepsiCo 48,878 3,169,738 --------------- Total 8,292,387 - ----------------------------------------------------------------------------------- BIOTECHNOLOGY (1.1%) Amgen 34,800(b) 1,924,092 Biogen Idec 8,594(b) 459,779 Celgene 11,405(b) 653,849 Genzyme 7,892(b) 508,245 Gilead Sciences 28,020(b) 1,086,335 --------------- Total 4,632,300 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) BUILDING PRODUCTS (0.2%) American Standard Companies 5,277 $311,237 Masco 11,339 322,822 --------------- Total 634,059 - ----------------------------------------------------------------------------------- CAPITAL MARKETS (3.7%) Ameriprise Financial 7,056 448,550 Bank of New York Mellon 35,174 1,489,585 Bear Stearns Companies 3,577 500,780 Charles Schwab 30,366 623,110 E*TRADE Financial 12,810(b) 282,973 Federated Investors Cl B 2,660 101,958 Franklin Resources 4,945 655,064 Goldman Sachs Group 12,255 2,656,270 Janus Capital Group 5,563 154,874 Legg Mason 3,945 388,109 Lehman Brothers Holdings 15,978 1,190,681 Merrill Lynch & Co 26,127 2,183,695 Morgan Stanley 31,627 2,652,873 Northern Trust 5,667 364,048 State Street 11,612 794,261 T Rowe Price Group 7,970 413,563 --------------- Total 14,900,394 - ----------------------------------------------------------------------------------- CHEMICALS (1.6%) Air Products & Chemicals 6,505 522,807 Ashland 1,679 107,372 Dow Chemical 28,603 1,264,825 Eastman Chemical 2,527 162,562 Ecolab 5,264 224,773 EI du Pont de Nemours & Co 27,722 1,409,386 Hercules 3,495(b) 68,677 Intl Flavors & Fragrances 2,326 121,278 Monsanto 16,312 1,101,712 PPG Inds 4,923 374,690 Praxair 9,568 688,800 Rohm & Haas 4,269 233,429 Sigma-Aldrich 3,936 167,949 --------------- Total 6,448,260 - ----------------------------------------------------------------------------------- COMMERCIAL BANKS (3.7%) BB&T 16,285 662,474 Comerica 4,677 278,141 Commerce Bancorp 5,740 212,323 Compass Bancshares 3,950 272,471 Fifth Third Bancorp 16,506 656,444 First Horizon Natl 3,776 147,264 Huntington Bancshares 10,952 249,048 KeyCorp 11,775 404,236 M&T Bank 2,270 242,663 Marshall & Ilsley 7,780 370,561 Natl City 17,275 575,603 PNC Financial Services Group 10,354 741,139
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) COMMERCIAL BANKS (CONT.) Regions Financial 21,146 $699,933 SunTrust Banks 10,699 917,332 Synovus Financial 9,817 301,382 US Bancorp 52,179 1,719,298 Wachovia 57,421 2,942,826 Wells Fargo & Co 100,216 3,524,597 Zions Bancorporation 3,298 253,649 --------------- Total 15,171,384 - ----------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES (0.5%) Allied Waste Inds 7,662(b) 103,131 Avery Dennison 2,754 183,086 Cintas 4,043 159,415 Equifax 4,370 194,115 Monster Worldwide 3,923(b) 161,235 Pitney Bowes 6,596 308,825 Robert Half Intl 4,987 182,026 RR Donnelley & Sons 6,608 287,514 Waste Management 15,530 606,446 --------------- Total 2,185,793 - ----------------------------------------------------------------------------------- COMMUNICATIONS EQUIPMENT (2.6%) Avaya 13,499(b) 227,323 Ciena 2,565(b) 92,673 Cisco Systems 182,186(b) 5,073,881 Corning 47,194(b) 1,205,807 JDS Uniphase 6,337(b) 85,106 Juniper Networks 16,990(b) 427,638 Motorola 69,459 1,229,424 QUALCOMM 50,012 2,170,021 Tellabs 13,133(b) 141,311 --------------- Total 10,653,184 - ----------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS (3.9%) Apple 25,954(b) 3,167,426 Dell 68,171(b) 1,946,282 EMC 62,966(b) 1,139,685 Hewlett-Packard 78,593 3,506,820 Intl Business Machines 40,988(e) 4,313,986 Lexmark Intl Cl A 2,841(b) 140,090 NCR 5,394(b) 283,401 Network Appliance 11,139(b) 325,259 QLogic 4,768(b) 79,387 SanDisk 6,850(b) 335,239 Sun Microsystems 107,141(b) 563,562 --------------- Total 15,801,137 - ----------------------------------------------------------------------------------- CONSTRUCTION & ENGINEERING (0.1%) Fluor 2,649 295,019 - ----------------------------------------------------------------------------------- CONSTRUCTION MATERIALS (0.1%) Vulcan Materials 2,857 327,241 - -----------------------------------------------------------------------------------
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 226 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - S&P 500 Index Fund
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) CONSUMER FINANCE (1.0%) American Express 35,664 $2,181,924 Capital One Financial 12,400 972,656 SLM 12,347 710,940 --------------- Total 3,865,520 - ----------------------------------------------------------------------------------- CONTAINERS & PACKAGING (0.2%) Ball 3,068 163,126 Bemis 3,138 104,119 Pactiv 3,908(b) 124,626 Sealed Air 4,850 150,447 Temple-Inland 3,180 195,665 --------------- Total 737,983 - ----------------------------------------------------------------------------------- DISTRIBUTORS (0.1%) Genuine Parts 5,116 253,754 - ----------------------------------------------------------------------------------- DIVERSIFIED CONSUMER SERVICES (0.1%) Apollo Group Cl A 4,203(b) 245,581 H&R Block 9,692 226,502 --------------- Total 472,083 - ----------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES (5.0%) Bank of America 133,170(e) 6,510,681 Chicago Mercantile Exchange Holdings Cl A 1,065 569,093 CIT Group 5,755 315,547 Citigroup 148,431 7,613,025 JPMorgan Chase & Co 102,515 4,966,852 Moody's 6,900 429,180 --------------- Total 20,404,378 - ----------------------------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES (3.1%) AT&T 185,013 7,678,040 CenturyTel 3,285 161,129 Citizens Communications 10,278 156,945 Embarq 4,535 287,383 Qwest Communications Intl 46,612(b) 452,136 Verizon Communications 87,123 3,586,854 Windstream 14,307 211,171 --------------- Total 12,533,658 - ----------------------------------------------------------------------------------- ELECTRIC UTILITIES (1.8%) Allegheny Energy 4,977(b) 257,510 American Electric Power 11,965 538,904 Duke Energy 37,793 691,612 Edison Intl 9,781 548,910 Entergy 5,922 635,727 Exelon 20,184 1,465,357 FirstEnergy 9,146 592,021 FPL Group 12,194 691,888 Pinnacle West Capital 3,007 119,829 PPL 11,556(e) 540,705 Progress Energy 7,631 347,897 Southern 22,564 773,719 --------------- Total 7,204,079 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) ELECTRICAL EQUIPMENT (0.4%) Cooper Inds Cl A 5,490 $313,424 Emerson Electric 23,864 1,116,835 Rockwell Automation 4,734 328,729 --------------- Total 1,758,988 - ----------------------------------------------------------------------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS (0.2%) Agilent Technologies 11,883(b) 456,783 Jabil Circuit 5,375 118,626 Molex 4,263 127,933 Solectron 27,130(b) 99,838 Tektronix 2,453 82,764 --------------- Total 885,944 - ----------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES (2.1%) Baker Hughes 9,611 808,573 BJ Services 8,798 250,215 ENSCO Intl 4,470 272,715 Halliburton 27,434 946,473 Nabors Inds 8,450(b,c) 282,061 Natl Oilwell Varco 5,325(b) 555,078 Noble 4,022 392,225 Rowan Companies 3,320 136,054 Schlumberger 35,362 3,003,648 Smith Intl 6,015 352,720 Transocean 8,649(b) 916,621 Weatherford Intl 10,120(b) 559,029 --------------- Total 8,475,412 - ----------------------------------------------------------------------------------- FOOD & STAPLES RETAILING (2.3%) Costco Wholesale 13,399 784,109 CVS Caremark 46,313 1,688,109 Kroger 21,244 597,594 Safeway 13,253 451,000 SUPERVALU 6,233 288,713 SYSCO 18,547 611,866 Walgreen 30,034 1,307,680 Wal-Mart Stores 72,743 3,499,665 Whole Foods Market 4,240 162,392 --------------- Total 9,391,128 - ----------------------------------------------------------------------------------- FOOD PRODUCTS (1.5%) Archer-Daniels-Midland 19,585 648,068 Campbell Soup 6,514 252,808 ConAgra Foods 14,942 401,342 Dean Foods 3,905 124,452 General Mills 10,394 607,217 Hershey 5,140 260,187 HJ Heinz 9,747 462,690 Kellogg 7,521 389,513 Kraft Foods Cl A 48,141 1,696,970 McCormick & Co 3,910 149,284 Sara Lee 22,045 383,583 Tyson Foods Cl A 7,590 174,874 WM Wrigley Jr 6,469 357,800 --------------- Total 5,908,788 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) GAS UTILITIES (0.1%) Nicor 1,348 $57,856 Questar 5,170 273,235 --------------- Total 331,091 - ----------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES (1.6%) Bausch & Lomb 1,628 113,048 Baxter Intl 19,554 1,101,672 Becton Dickinson & Co 7,350 547,575 Biomet 7,363 336,636 Boston Scientific 35,611(b) 546,273 CR Bard 3,102 256,318 Hospira 4,677(b) 182,590 Medtronic 34,559 1,792,231 St. Jude Medical 10,154(b) 421,289 Stryker 8,958 565,160 Varian Medical Systems 3,825(b) 162,601 Zimmer Holdings 7,108(b) 603,398 --------------- Total 6,628,791 - ----------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES (2.2%) Aetna 15,498 765,601 AmerisourceBergen 5,738 283,859 Cardinal Health 11,543 815,398 CIGNA 8,640 451,181 Coventry Health Care 4,695(b) 270,667 Express Scripts 8,180(b) 409,082 Humana 5,041(b) 307,047 Laboratory Corp of America Holdings 3,528(b) 276,101 Manor Care 2,194 143,246 McKesson 8,864 528,649 Medco Health Solutions 8,405(b) 655,506 Patterson Companies 4,175(b) 155,602 Quest Diagnostics 4,740 244,821 Tenet Healthcare 14,199(b) 92,435 UnitedHealth Group 40,208 2,056,238 WellPoint 18,412(b) 1,469,830 --------------- Total 8,925,263 - ----------------------------------------------------------------------------------- HEALTH CARE TECHNOLOGY (--%) IMS Health 5,885 189,085 - ----------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE (1.5%) Carnival Unit 13,277 647,518 Darden Restaurants 4,243 186,650 Harrah's Entertainment 5,602 477,627 Hilton Hotels 11,692 391,331 Intl Game Technology 9,976 396,047 Marriott Intl Cl A 9,858 426,260 McDonald's 35,830 1,818,730 Starbucks 22,232(b,e) 583,368 Starwood Hotels & Resorts Worldwide 6,455 432,937 Wendy's Intl 2,622 96,359 Wyndham Worldwide 5,475(b) 198,524 Yum! Brands 15,712 514,097 --------------- Total 6,169,448 - -----------------------------------------------------------------------------------
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS - 2007 SEMIANNUAL REPORT 227 RiverSource VP - S&P 500 Index Fund
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) HOUSEHOLD DURABLES (0.6%) Black & Decker 1,982 $175,030 Centex 3,582 143,638 DR Horton 8,200 163,426 Fortune Brands 4,579 377,172 Harman Intl Inds 1,950 227,760 KB HOME 2,306 90,787 Leggett & Platt 5,317 117,240 Lennar Cl A 4,180 152,821 Newell Rubbermaid 8,370 246,329 Pulte Homes 6,380 143,231 Snap-On 1,741 87,938 Stanley Works 2,501 151,811 Whirlpool 2,368 263,322 --------------- Total 2,340,505 - ----------------------------------------------------------------------------------- HOUSEHOLD PRODUCTS (2.0%) Clorox 4,559 283,114 Colgate-Palmolive 15,350 995,448 Kimberly-Clark 13,684 915,323 Procter & Gamble 94,493(e) 5,782,026 --------------- Total 7,975,911 - ----------------------------------------------------------------------------------- INDEPENDENT POWER PRODUCERS & ENERGY TRADERS (0.5%) AES 20,033(b) 438,322 Constellation Energy Group 5,426 472,984 Dynegy Cl A 12,073(b) 113,969 TXU 13,780 927,395 --------------- Total 1,952,670 - ----------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES (4.0%) 3M 21,616 1,876,053 General Electric 308,731(e) 11,818,222 Textron 3,763 414,344 Tyco Intl 59,488 2,010,100 --------------- Total 16,118,719 - ----------------------------------------------------------------------------------- INSURANCE (4.7%) ACE 9,774(c) 611,070 AFLAC 14,679 754,501 Allstate 18,226 1,121,081 Ambac Financial Group 3,060 266,801 American Intl Group 77,845 5,451,485 Aon 8,806 375,224 Assurant 2,975 175,287 Chubb 12,052 652,495 Cincinnati Financial 5,150 223,510 Genworth Financial Cl A 12,550 431,720 Hartford Financial Services Group 9,503 936,141 Lincoln Natl 8,130 576,824 Loews 13,374 681,807 Marsh & McLennan Companies 16,663 514,553 MBIA 3,921 243,965 MetLife 22,253 1,434,873 Principal Financial Group 8,038 468,535 Progressive 22,092 528,662
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) INSURANCE (CONT.) Prudential Financial 14,032 $1,364,331 Safeco 3,188 198,485 Torchmark 2,865 191,955 Travelers Companies 19,923 1,065,881 UnumProvident 10,291 268,698 XL Capital Cl A 5,580(c) 470,338 --------------- Total 19,008,222 - ----------------------------------------------------------------------------------- INTERNET & CATALOG RETAIL (0.2%) Amazon.com 9,330(b,e) 638,265 IAC/InterActiveCorp 6,555(b) 226,869 --------------- Total 865,134 - ----------------------------------------------------------------------------------- INTERNET SOFTWARE & SERVICES (1.4%) eBay 33,968(b) 1,093,090 Google Cl A 6,540(b) 3,422,905 VeriSign 7,360(b) 233,533 Yahoo! 36,290(b) 984,548 --------------- Total 5,734,076 - ----------------------------------------------------------------------------------- IT SERVICES (1.1%) Affiliated Computer Services Cl A 2,980(b) 169,026 Automatic Data Processing 16,602 804,699 Cognizant Technology Solutions Cl A 4,315(b) 324,013 Computer Sciences 5,194(b) 307,225 Convergys 4,107(b) 99,554 Electronic Data Systems 15,270 423,437 Fidelity Natl Information Services 4,905 266,243 First Data 22,636 739,518 Fiserv 5,051(b) 286,897 Paychex 10,199 398,985 Unisys 10,433(b) 95,358 Western Union 23,186 482,964 --------------- Total 4,397,919 - ----------------------------------------------------------------------------------- LEISURE EQUIPMENT & PRODUCTS (0.2%) Brunswick 2,707 88,329 Eastman Kodak 8,633 240,256 Hasbro 4,785 150,297 Mattel 11,799 298,397 --------------- Total 777,279 - ----------------------------------------------------------------------------------- LIFE SCIENCES TOOLS & SERVICES (0.3%) Applera-Applied Biosystems Group 5,512(d) 168,336 Millipore 1,620(b) 121,646 PerkinElmer 3,596 93,712 Thermo Fisher Scientific 12,659(b) 654,724 Waters 3,026(b) 179,623 --------------- Total 1,218,041 - ----------------------------------------------------------------------------------- MACHINERY (1.7%) Caterpillar 19,220 1,504,927 Cummins 3,126 316,382 Danaher 7,146 539,523
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) MACHINERY (CONT.) Deere & Co 6,756 $815,720 Dover 6,135 313,805 Eaton 4,392 408,456 Illinois Tool Works 12,360 669,788 Ingersoll-Rand Cl A 9,048(c) 496,011 ITT 5,452 372,263 PACCAR 7,452 648,622 Pall 3,677 169,105 Parker Hannifin 3,480 340,727 Terex 3,090(b) 251,217 --------------- Total 6,846,546 - ----------------------------------------------------------------------------------- MEDIA (3.3%) CBS Cl B 21,983 732,474 Clear Channel Communications 14,897 563,405 Comcast Cl A 93,392(b) 2,626,182 DIRECTV Group 23,135(b) 534,650 Dow Jones & Co 1,959 112,545 EW Scripps Cl A 2,500 114,225 Gannett 7,039 386,793 Interpublic Group of Companies 14,074(b) 160,444 McGraw-Hill Companies 10,302 701,360 Meredith 1,167 71,887 New York Times Cl A 4,320 109,728 News Corp Cl A 69,900 1,482,579 Omnicom Group 9,930 525,496 Time Warner 113,593 2,389,996 Tribune 2,531 74,411 Viacom Cl B 20,683(b) 861,033 Walt Disney 59,469 2,030,272 --------------- Total 13,477,480 - ----------------------------------------------------------------------------------- METALS & MINING (0.9%) Alcoa 26,093 1,057,550 Allegheny Technologies 3,066 321,562 Freeport-McMoRan Copper & Gold 11,266 933,050 Newmont Mining 13,539 528,833 Nucor 9,056 531,134 United States Steel 3,553 386,389 --------------- Total 3,758,518 - ----------------------------------------------------------------------------------- MULTILINE RETAIL (1.1%) Big Lots 3,282(b) 96,556 Dillard's Cl A 1,830 65,752 Dollar General 9,446 207,056 Family Dollar Stores 4,522 155,195 JC Penney 6,748 488,420 Kohl's 9,682(b) 687,712 Macy's 13,796 548,805 Nordstrom 6,738(e) 344,447 Sears Holdings 2,470(b) 418,665 Target 25,555 1,625,299 --------------- Total 4,637,907 - -----------------------------------------------------------------------------------
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 228 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - S&P 500 Index Fund
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) MULTI-UTILITIES (1.1%) Ameren 6,190 $303,372 CenterPoint Energy 9,626 167,492 CMS Energy 6,736 115,859 Consolidated Edison 8,114 366,104 Dominion Resources 10,511 907,204 DTE Energy 5,285 254,843 Integrys Energy Group 2,268 115,056 KeySpan 5,272 221,319 NiSource 8,223 170,298 PG&E 10,551 477,960 Public Service Enterprise Group 7,588 666,075 Sempra Energy 7,921 469,161 TECO Energy 6,285 107,976 Xcel Energy 12,267 251,105 --------------- Total 4,593,824 - ----------------------------------------------------------------------------------- OFFICE ELECTRONICS (0.1%) Xerox 28,130(b) 519,842 - ----------------------------------------------------------------------------------- OIL, GAS & CONSUMABLE FUELS (8.6%) Anadarko Petroleum 13,924 723,909 Apache 9,934 810,515 Chesapeake Energy 12,290 425,234 Chevron 64,494 5,432,974 ConocoPhillips 49,043 3,849,876 CONSOL Energy 5,465 251,991 Devon Energy 13,346 1,044,858 El Paso 21,013 362,054 EOG Resources 7,338 536,114 Exxon Mobil 169,048 14,179,745 Hess 8,192 483,000 Marathon Oil 20,580 1,233,977 Murphy Oil 5,645 335,539 Occidental Petroleum 25,022 1,448,273 Peabody Energy 7,955 384,863 Spectra Energy 18,956 492,098 Sunoco 3,646 290,513 Valero Energy 16,470 1,216,474 Williams Companies 17,975 568,370 XTO Energy 11,506 691,511 --------------- Total 34,761,888 - ----------------------------------------------------------------------------------- PAPER & FOREST PRODUCTS (0.3%) Intl Paper 13,066 510,227 MeadWestvaco 5,533 195,426 Weyerhaeuser 6,479 511,387 --------------- Total 1,217,040 - ----------------------------------------------------------------------------------- PERSONAL PRODUCTS (0.2%) Avon Products 13,166 483,851 Estee Lauder Companies Cl A 3,540 161,105 --------------- Total 644,956 - ----------------------------------------------------------------------------------- PHARMACEUTICALS (6.2%) Abbott Laboratories 46,224 2,475,295 Allergan 9,220 531,441
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) PHARMACEUTICALS (CONT.) Barr Pharmaceuticals 3,290(b) $165,257 Bristol-Myers Squibb 59,061 1,863,965 Eli Lilly & Co 29,608 1,654,495 Forest Laboratories 9,540(b) 435,501 Johnson & Johnson 86,925 5,356,318 King Pharmaceuticals 7,315(b) 149,665 Merck & Co 65,039 3,238,942 Mylan Laboratories 7,450 135,516 Pfizer 210,608(e) 5,385,246 Schering-Plough 44,695 1,360,516 Watson Pharmaceuticals 3,072(b) 99,932 Wyeth 40,363 2,314,414 --------------- Total 25,166,503 - ----------------------------------------------------------------------------------- REAL ESTATE INVESTMENT TRUSTS (REITS) (1.2%) Apartment Investment & Management Cl A 2,920 147,226 Archstone-Smith Trust 6,690 395,446 AvalonBay Communities 2,390 284,123 Boston Properties 3,575 365,115 Developers Diversified Realty 3,745 197,399 Equity Residential 8,729 398,304 General Growth Properties 7,355 389,447 Host Hotels & Resorts 15,665 362,175 Kimco Realty 6,810 259,257 Plum Creek Timber 5,309 221,173 ProLogis 7,695 437,846 Public Storage 3,680 282,698 Simon Property Group 6,699 623,274 Vornado Realty Trust 3,920 430,573 --------------- Total 4,794,056 - ----------------------------------------------------------------------------------- REAL ESTATE MANAGEMENT & DEVELOPMENT (0.1%) CB Richard Ellis Group Cl A 5,630(b) 205,495 - ----------------------------------------------------------------------------------- ROAD & RAIL (0.8%) Burlington Northern Santa Fe 10,689 910,061 CSX 13,122 591,540 Norfolk Southern 11,796 620,116 Ryder System 1,837 98,831 Union Pacific 8,122 935,248 --------------- Total 3,155,796 - ----------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (2.6%) Advanced Micro Devices 16,520(b) 236,236 Altera 10,659 235,884 Analog Devices 9,813 369,361 Applied Materials 41,466 823,929 Broadcom Cl A 13,966(b) 408,506 Intel 174,407 4,143,911 KLA-Tencor 5,753 316,127 Linear Technology 7,618 275,619 LSI 23,119(b) 173,624 Maxim Integrated Products 9,625 321,571
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (CONT.) MEMC Electronic Materials 6,730(b) $411,338 Micron Technology 22,699(b) 284,418 Natl Semiconductor 8,368 236,563 Novellus Systems 3,790(b) 107,522 NVIDIA 10,892(b) 449,949 Teradyne 5,694(b) 100,101 Texas Instruments 43,023 1,618,955 Xilinx 8,941 239,351 --------------- Total 10,752,965 - ----------------------------------------------------------------------------------- SOFTWARE (3.2%) Adobe Systems 17,646(b) 708,487 Autodesk 6,942(b) 326,829 BMC Software 6,121(b) 185,466 CA 12,342 318,794 Citrix Systems 5,415(b) 182,323 Compuware 9,034(b) 107,143 Electronic Arts 9,304(b) 440,265 Intuit 10,282(b) 309,283 Microsoft 252,634 7,445,124 Novell 10,454(b) 81,437 Oracle 118,790(b) 2,341,351 Symantec 27,039(b) 546,188 --------------- Total 12,992,690 - ----------------------------------------------------------------------------------- SPECIALTY RETAIL (1.9%) Abercrombie & Fitch Cl A 2,645 193,032 AutoNation 4,530(b) 101,653 AutoZone 1,436(b) 196,186 Bed Bath & Beyond 8,215(b) 295,658 Best Buy 12,143 566,714 Circuit City Stores 4,154 62,642 Gap 15,910(e) 303,881 Home Depot 59,237 2,330,977 Limited Brands 10,273 281,994 Lowe's Companies 45,160 1,385,960 Office Depot 8,299(b) 251,460 OfficeMax 2,261 88,857 RadioShack 4,068 134,814 Sherwin-Williams 3,287 218,487 Staples 21,462 509,293 Tiffany & Co 4,105 217,811 TJX Companies 13,648 375,320 --------------- Total 7,514,739 - ----------------------------------------------------------------------------------- TEXTILES, APPAREL & LUXURY GOODS (0.4%) Coach 11,140(b) 527,925 Jones Apparel Group 3,272 92,434 Liz Claiborne 3,132 116,824 Nike Cl B 11,382 663,456 Polo Ralph Lauren 1,835 180,032 VF 2,678 245,251 --------------- Total 1,825,922 - -----------------------------------------------------------------------------------
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS - 2007 SEMIANNUAL REPORT 229 RiverSource VP - S&P 500 Index Fund
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) THRIFTS & MORTGAGE FINANCE (1.3%) Countrywide Financial 17,806 $647,248 Fannie Mae 29,203 1,907,831 Freddie Mac 19,854 1,205,138 Hudson City Bancorp 14,535 177,618 MGIC Investment 2,493 141,752 Sovereign Bancorp 10,841 229,179 Washington Mutual 26,681 1,137,678 --------------- Total 5,446,444 - ----------------------------------------------------------------------------------- TOBACCO (1.2%) Altria Group 63,111 4,426,605 Reynolds American 5,130 334,476 UST 4,805 258,077 --------------- Total 5,019,158 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) TRADING COMPANIES & DISTRIBUTORS (--%) WW Grainger 2,136 $198,755 - ----------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES (0.6%) ALLTEL 10,369 700,426 Sprint Nextel 86,835 1,798,353 --------------- Total 2,498,779 - ----------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $295,266,010) $401,020,286 - -----------------------------------------------------------------------------------
MONEY MARKET FUND (1.3%) SHARES VALUE(A) RiverSource Short-Term Cash Fund 5,272,124(f) $5,272,124 - ----------------------------------------------------------------------------------- TOTAL MONEY MARKET FUND (Cost: $5,272,124) $5,272,124 - ----------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES (Cost: $300,538,134)(g) $406,292,410 ===================================================================================
NOTES TO INVESTMENTS IN SECURITIES (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Non-income producing. (c) Foreign security values are stated in U.S. dollars. At June 30, 2007, the value of foreign securities represented 0.5% of net assets. (d) Shareholders of tracking stocks have a financial interest only in a unit or division of the company. Unlike the common stock of the company itself, a tracking stock usually has limited or no voting rights. In the event of a company's liquidation, tracking stock shareholders typically do not have a legal claim on the company's assets. (e) Partially pledged as initial margin deposit on the following open stock index futures contracts (see Note 7 to the financial statements):
TYPE OF SECURITY CONTRACTS - ------------------------------------------------------------------------------ PURCHASE CONTRACTS E-Mini S&P 500 Index, Sept. 2007 68
(f) Affiliated Money Market Fund - See Note 10 to the financial statements. (g) At June 30, 2007, the cost of securities for federal income tax purposes was approximately $300,538,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $112,745,000 Unrealized depreciation (6,991,000) - --------------------------------------------------------------------------------- Net unrealized appreciation $105,754,000 - ---------------------------------------------------------------------------------
The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS (i) The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (Commission) for the first and third quarters of each fiscal year on Form N-Q; (ii) The Fund's Forms N-Q are available on the Commission's website at http://www.sec.gov; (iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC (information on the operations of the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iv) The Fund's complete schedule of portfolio holdings, as disclosed in its annual and semiannual shareholder reports and in its filings on Form N-Q, can be found at riversource.com. - -------------------------------------------------------------------------------- 230 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT INVESTMENTS IN SECURITIES RiverSource VP - Select Value Fund JUNE 30, 2007 (UNAUDITED) (Percentages represent value of investments compared to net assets)
COMMON STOCKS (96.8%) ISSUER SHARES VALUE(A) AEROSPACE & DEFENSE (0.4%) Goodrich 2,100 $125,076 - ----------------------------------------------------------------------------------- AUTO COMPONENTS (1.3%) American Axle & Mfg Holdings 8,600 254,732 BorgWarner 1,900 163,476 --------------- Total 418,208 - ----------------------------------------------------------------------------------- BEVERAGES (1.7%) Central European Distribution 4,500(b) 155,790 Molson Coors Brewing Cl B 4,300 397,578 --------------- Total 553,368 - ----------------------------------------------------------------------------------- CAPITAL MARKETS (2.0%) AG Edwards 3,200 270,560 Northern Trust 6,200 398,288 --------------- Total 668,848 - ----------------------------------------------------------------------------------- CHEMICALS (1.8%) Celanese Series A 9,800 380,044 CF Inds Holdings 1,400 83,846 Intl Flavors & Fragrances 2,500 130,350 --------------- Total 594,240 - ----------------------------------------------------------------------------------- COMMERCIAL BANKS (2.3%) Comerica 10,500 624,435 Webster Financial 2,900 123,743 --------------- Total 748,178 - ----------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES (3.2%) Covanta Holding 14,100(b) 347,565 Knoll 3,400 76,160 RR Donnelley & Sons 14,700 639,597 --------------- Total 1,063,322 - ----------------------------------------------------------------------------------- COMMUNICATIONS EQUIPMENT (0.7%) ARRIS Group 13,300(b) 233,947 - ----------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS (1.3%) Electronics for Imaging 10,500(b) 296,310 NCR 2,300(b) 120,842 --------------- Total 417,152 - ----------------------------------------------------------------------------------- CONSTRUCTION & ENGINEERING (2.5%) Chicago Bridge & Iron 5,400(c) 203,796 URS 12,900(b) 626,295 --------------- Total 830,091 - ----------------------------------------------------------------------------------- CONTAINERS & PACKAGING (4.7%) AptarGroup 17,800 632,968 Ball 5,500 292,435 Sonoco Products 14,900 637,869 --------------- Total 1,563,272 - ----------------------------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES (0.7%) NTELOS Holdings 8,100 223,884 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) ELECTRIC UTILITIES (7.7%) American Electric Power 10,400 $468,416 Edison Intl 5,800 325,496 Idacorp 19,500 624,780 Northeast Utilities 13,200 374,352 Pinnacle West Capital 14,700 585,795 PPL 3,300 154,407 --------------- Total 2,533,246 - ----------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT (2.0%) Cooper Inds Cl A 6,000 342,540 General Cable 4,300(b) 325,725 --------------- Total 668,265 - ----------------------------------------------------------------------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS (1.9%) Flextronics Intl 42,700(b,c) 461,160 Mettler Toledo Intl 1,800(b,c) 171,918 --------------- Total 633,078 - ----------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES (1.4%) Noble 3,600 351,072 Oil States Intl 2,300(b) 95,082 --------------- Total 446,154 - ----------------------------------------------------------------------------------- FOOD & STAPLES RETAILING (1.2%) Longs Drug Stores 1,600 84,032 Ruddick 10,400 313,248 --------------- Total 397,280 - ----------------------------------------------------------------------------------- FOOD PRODUCTS (1.6%) HJ Heinz 4,600 218,362 JM Smucker 2,200 140,052 Sara Lee 9,100 158,340 --------------- Total 516,754 - ----------------------------------------------------------------------------------- GAS UTILITIES (2.3%) AGL Resources 6,400 259,072 Energen 600 32,964 Questar 8,900 470,365 --------------- Total 762,401 - ----------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES (2.1%) Beckman Coulter 7,100 459,228 DENTSPLY Intl 6,500 248,690 --------------- Total 707,918 - ----------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES (1.7%) Chemed 1,600 106,064 CIGNA 5,500 287,210 McKesson 2,700 161,028 --------------- Total 554,302 - ----------------------------------------------------------------------------------- HEALTH CARE TECHNOLOGY (1.5%) IMS Health 15,200 488,376 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) HOTELS, RESTAURANTS & LEISURE (2.9%) Darden Restaurants 15,100 $664,249 Jack in the Box 4,300(b) 305,042 --------------- Total 969,291 - ----------------------------------------------------------------------------------- HOUSEHOLD DURABLES (0.9%) Jarden 2,000(b) 86,020 Snap-On 4,200 212,142 --------------- Total 298,162 - ----------------------------------------------------------------------------------- INSURANCE (9.9%) Aon 7,100 302,531 Lincoln Natl 12,100 858,495 Nationwide Financial Services Cl A 1,400 88,508 Old Republic Intl 30,600 650,556 ProAssurance 2,300(b) 128,041 Safeco 10,600 659,956 UnumProvident 12,200 318,542 Zenith Natl Insurance 6,400 301,376 --------------- Total 3,308,005 - ----------------------------------------------------------------------------------- INTERNET & CATALOG RETAIL (0.8%) Priceline.com 3,700(b) 254,338 - ----------------------------------------------------------------------------------- IT SERVICES (1.9%) Computer Sciences 10,700(b) 632,905 - ----------------------------------------------------------------------------------- LEISURE EQUIPMENT & PRODUCTS (0.6%) Mattel 4,600 116,334 Polaris Inds 1,600 86,656 --------------- Total 202,990 - ----------------------------------------------------------------------------------- LIFE SCIENCES TOOLS & SERVICES (0.6%) Millipore 2,700(b) 202,743 - ----------------------------------------------------------------------------------- MACHINERY (2.9%) CNH Global 5,100(c) 260,559 Cummins 1,800 182,178 Eaton 3,400 316,200 Harsco 4,100 213,200 --------------- Total 972,137 - ----------------------------------------------------------------------------------- MARINE (0.4%) DryShips 3,400(c) 147,492 - ----------------------------------------------------------------------------------- MEDIA (0.7%) Shaw Communications Series B 5,200(c) 218,608 - ----------------------------------------------------------------------------------- METALS & MINING (0.8%) Chaparral Steel 1,800 129,366 Haynes Intl 1,700(b) 143,531 --------------- Total 272,897 - -----------------------------------------------------------------------------------
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS - 2007 SEMIANNUAL REPORT 231 RiverSource VP - Select Value Fund
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) MULTILINE RETAIL (1.9%) Big Lots 3,100(b) $91,202 Family Dollar Stores 9,900 339,768 JC Penney 2,500 180,950 --------------- Total 611,920 - ----------------------------------------------------------------------------------- MULTI-UTILITIES (1.0%) NSTAR 9,900 321,255 - ----------------------------------------------------------------------------------- OIL, GAS & CONSUMABLE FUELS (3.1%) Chesapeake Energy 9,500 328,700 CONSOL Energy 3,400 156,774 Frontier Oil 8,100 354,537 Williams Companies 5,300 167,586 --------------- Total 1,007,597 - ----------------------------------------------------------------------------------- REAL ESTATE INVESTMENT TRUSTS (REITS) (6.8%) Apartment Investment & Management Cl A 5,800 292,436 DiamondRock Hospitality 12,400 236,592 Duke Realty 16,800 599,256 Health Care REIT 9,700 391,492 Mid-America Apartment Communities 1,400 73,472 Realty Income 15,600 392,964 Simon Property Group 2,900 269,816 --------------- Total 2,256,028 - ----------------------------------------------------------------------------------- REAL ESTATE MANAGEMENT & DEVELOPMENT (0.5%) Jones Lang LaSalle 1,500 170,250 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) ROAD & RAIL (1.4%) Werner Enterprises 23,500 $473,525 - ----------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (1.9%) MEMC Electronic Materials 5,100(b) 311,712 Microchip Technology 8,300 307,432 --------------- Total 619,144 - ----------------------------------------------------------------------------------- SOFTWARE (3.5%) Cadence Design Systems 38,100(b) 836,676 Sybase 13,100(b) 312,959 --------------- Total 1,149,635 - ----------------------------------------------------------------------------------- SPECIALTY RETAIL (0.8%) GameStop Cl A 2,800(b) 109,480 Payless ShoeSource 4,400(b) 138,820 --------------- Total 248,300 - ----------------------------------------------------------------------------------- TEXTILES, APPAREL & LUXURY GOODS (2.9%) Phillips-Van Heusen 5,100 308,907 VF 6,900 631,902 --------------- Total 940,809 - ----------------------------------------------------------------------------------- THRIFTS & MORTGAGE FINANCE (1.4%) New York Community Bancorp 17,500 297,850 PMI Group 3,900 174,213 --------------- Total 472,063 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) TOBACCO (1.1%) Loews-Carolina Group 4,900(d) $378,623 - ----------------------------------------------------------------------------------- TRADING COMPANIES & DISTRIBUTORS (1.0%) United Rentals 9,700(b) 315,638 - ----------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES (1.1%) Rogers Communications Cl B 8,200(c) 348,418 - ----------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $28,899,308) $31,940,133 - -----------------------------------------------------------------------------------
MONEY MARKET FUND (2.8%) SHARES VALUE(A) RiverSource Short-Term Cash Fund 935,945(e) $935,945 - ----------------------------------------------------------------------------------- TOTAL MONEY MARKET FUND (Cost: $935,945) $935,945 - ----------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES (Cost: $29,835,253)(f) $32,876,078 ===================================================================================
NOTES TO INVESTMENTS IN SECURITIES (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Non-income producing. (c) Foreign security values are stated in U.S. dollars. At June 30, 2007, the value of foreign securities represented 5.5% of net assets. (d) Shareholders of tracking stocks have a financial interest only in a unit or division of the company. Unlike the common stock of the company itself, a tracking stock usually has limited or no voting rights. In the event of a company's liquidation, tracking stock shareholders typically do not have a legal claim on the company's assets. (e) Affiliated Money Market Fund - See Note 10 to the financial statements. (f) At June 30, 2007, the cost of securities for federal income tax purposes was approximately $29,835,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $3,619,000 Unrealized depreciation (578,000) - ------------------------------------------------------------------------------- Net unrealized appreciation $3,041,000 - -------------------------------------------------------------------------------
The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS (i) The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (Commission) for the first and third quarters of each fiscal year on Form N-Q; (ii) The Fund's Forms N-Q are available on the Commission's website at http://www.sec.gov; (iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC (information on the operations of the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iv) The Fund's complete schedule of portfolio holdings, as disclosed in its annual and semiannual shareholder reports and in its filings on Form N-Q, can be found at riversource.com. - -------------------------------------------------------------------------------- 232 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT INVESTMENTS IN SECURITIES RiverSource VP - Short Duration U.S. Government Fund JUNE 30, 2007 (UNAUDITED) (Percentages represent value of investments compared to net assets)
BONDS (97.3%) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) FOREIGN AGENCIES (2.2%) KFW 05-19-09 5.25% $10,000,000(c) $10,018,770 - ----------------------------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS & AGENCIES (37.0%) Federal Farm Credit Bank 10-10-08 4.25 4,040,000 3,991,734 Federal Home Loan Bank 10-19-07 4.13 15,000,000 14,943,840 01-18-08 4.63 4,665,000 4,648,393 02-08-08 4.63 1,470,000 1,463,436 02-13-08 5.25 3,970,000 3,966,693 11-21-08 4.63 2,215,000 2,196,604 12-29-08 5.13 1,825,000 1,823,319 Federal Home Loan Mtge Corp 08-17-07 4.00 6,210,000 6,199,540 06-15-08 3.88 920,000 907,736 Federal Natl Mtge Assn 10-15-08 4.50 1,545,000 1,530,919 U.S. Treasury 09-30-07 4.00 27,745,000 27,684,294 11-30-07 4.25 7,410,000 7,390,319 02-15-08 3.38 13,015,000 12,883,835 10-31-08 4.88 40,235,000(k) 40,178,430 01-31-09 4.88 17,545,000 17,521,700 06-30-09 4.88 5,175,000(b) 5,174,596 05-31-12 4.75 1,450,000 1,438,673 05-15-17 4.50 4,250,000 4,074,688 02-15-26 6.00 515,000 562,154 U.S. Treasury Inflation-Indexed Bond 04-15-12 2.00 9,162,990(g) 8,895,034 --------------- Total 167,475,937 - ----------------------------------------------------------------------------------- ASSET-BACKED (3.0%) Capital Auto Receivables Asset Trust Series 2006-SN1A Cl A4B 03-20-10 5.43 1,525,000(d,e) 1,525,216 Countrywide Asset-Backed Certificates Series 2007-7 Cl 2A2 10-25-37 5.48 1,450,000(e) 1,449,774 Fannie Mae Grantor Trust Series 2005-T4 Cl A1C 09-25-35 5.47 3,159,661(e) 3,181,375 Franklin Auto Trust Series 2004-2 Cl A4 (MBIA) 08-15-12 3.93 4,938,844(m) 4,893,673 Residential Asset Securities Series 2007-KS3 Cl AI2 04-25-37 5.50 2,200,000(e) 2,203,300 Small Business Administration Participation Ctfs Series 2001-20H Cl 1 08-01-21 6.34 280,150 286,155
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) ASSET-BACKED (CONT.) Small Business Administration Series 2001-10B Cl 1 09-10-11 5.89% $223,895 $224,960 --------------- Total 13,764,453 - ----------------------------------------------------------------------------------- COMMERCIAL MORTGAGE-BACKED (1.8%)(f) Citigroup Commercial Mtge Trust Series 2005-C3 Cl A1 05-15-43 4.39 3,347,868 3,290,194 Federal Home Loan Mtge Corp Multifamily Structured Pass-Through Ctfs Series K001 Cl A2 04-25-16 5.65 3,354,431 3,361,776 Federal Natl Mtge Assn #360800 01-01-09 5.74 876,802 877,337 Federal Natl Mtge Assn #381990 10-01-09 7.11 461,003 475,520 --------------- Total 8,004,827 - ----------------------------------------------------------------------------------- MORTGAGE-BACKED (53.3%)(f) Adjustable Rate Mtge Trust Collateralized Mtge Obligation Series 2005-12 Cl 2A1 03-25-36 5.69 1,222,248(j) 1,222,192 Adjustable Rate Mtge Trust Collateralized Mtge Obligation Series 2006-1 Cl 2A1 03-25-36 5.94 1,415,139(j) 1,410,569 Adjustable Rate Mtge Trust Collateralized Mtge Obligation Series 2007-1 Cl 3A21 03-25-37 6.20 1,198,500(j) 1,198,752 American Home Mtge Assets Collateralized Mtge Obligation Series 2007-2 Cl A2A 03-25-47 5.49 1,911,558(j) 1,909,485 American Home Mtge Investment Trust Collateralized Mtge Obligation Series 2007-1 Cl GA1C 05-25-47 5.51 2,465,469(j) 2,464,377 Banc of America Alternative Loan Trust Collateralized Mtge Obligation Series 2006-9 Cl 1CB1 01-25-37 6.00 2,816,241 2,764,139 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Interest Only Series 2007-8CB Cl A13 05-25-37 7.73 978,657(i) 168,505 Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2005-6CB Cl 1A1 04-25-35 7.50 782,252 806,077
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Countrywide Alternative Loan Trust Collateralized Mtge Obligation Series 2006-2CB Cl A11 03-25-36 6.00% $2,378,786 $2,365,650 Countrywide Home Loans Collateralized Mtge Obligation Series 2005-R2 Cl 2A1 06-25-35 7.00 1,748,052(d) 1,808,675 Federal Home Loan Mtge Corp 07-01-37 6.00 5,800,000(b) 5,745,626 07-01-37 6.50 4,575,000(b) 4,622,177 08-01-37 6.50 7,500,000(b) 7,567,966 Federal Home Loan Mtge Corp #1G2496 09-01-36 6.20 1,290,051(j) 1,299,610 Federal Home Loan Mtge Corp #1J0283 02-01-37 5.83 1,512,097(j) 1,510,371 Federal Home Loan Mtge Corp #1J1445 01-01-37 5.91 2,704,211(j) 2,708,598 Federal Home Loan Mtge Corp #1J1621 05-01-37 5.89 3,449,827(j) 3,456,074 Federal Home Loan Mtge Corp #A18107 01-01-34 5.50 2,086,394 2,019,904 Federal Home Loan Mtge Corp #B16408 09-01-19 5.50 1,227,572(k) 1,211,827 Federal Home Loan Mtge Corp #C73304 11-01-32 7.00 376,880 388,461 Federal Home Loan Mtge Corp #D95319 03-01-22 6.00 143,192 143,940 Federal Home Loan Mtge Corp #E00489 06-01-12 7.00 6,514 6,697 Federal Home Loan Mtge Corp #E81240 06-01-15 7.50 992,997 1,026,591 Federal Home Loan Mtge Corp #E92454 11-01-17 5.00 740,927 718,728 Federal Home Loan Mtge Corp #E95188 03-01-18 6.00 460,805 464,012 Federal Home Loan Mtge Corp #G10669 03-01-12 7.50 381,594 394,735 Federal Home Loan Mtge Corp #G11243 04-01-17 6.50 1,190,361 1,218,311 Federal Home Loan Mtge Corp #G12100 11-01-13 5.00 87,053 85,009 Federal Home Loan Mtge Corp Collateralized Mtge Obligation Interest Only Series 237 Cl IO 05-15-36 9.81 732,027(i) 201,018 Federal Home Loan Mtge Corp Collateralized Mtge Obligation Interest Only Series 2590 Cl BI 02-15-14 20.00 443,237(i) 13,590
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS - 2007 SEMIANNUAL REPORT 233 RiverSource VP - Short Duration U.S. Government Fund
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Federal Home Loan Mtge Corp Collateralized Mtge Obligation Interest Only Series 2639 Cl UI 03-15-22 10.11% $2,530,742(i) $377,824 Federal Home Loan Mtge Corp Collateralized Mtge Obligation Interest Only Series 2718 Cl IA 10-15-22 20.00 304,896(i) 8,065 Federal Home Loan Mtge Corp Collateralized Mtge Obligation Interest Only Series 2783 Cl MI 03-15-25 20.00 1,135,814(i) 56,594 Federal Home Loan Mtge Corp Collateralized Mtge Obligation Interest Only Series 2795 Cl IY 07-15-17 12.40 997,232(i) 100,392 Federal Home Loan Mtge Corp Collateralized Mtge Obligation Interest Only/Inverse Floater Series 2882 Cl XS 11-15-19 10.91 1,877,795(h,i) 123,304 Federal Home Loan Mtge Corp Collateralized Mtge Obligation Series 2617 Cl HD 06-15-16 7.00 1,163,063 1,195,571 Federal Home Loan Mtge Corp Collateralized Mtge Obligation Series 2843 Cl BA 01-15-18 5.00 1,062,196 1,047,842 Federal Natl Mtge Assn 07-01-37 5.50 2,000,000(b) 1,928,750 07-01-37 7.00 4,000,000(b) 4,106,248 08-01-37 6.00 18,000,000(b) 17,791,885 08-01-37 6.50 3,500,000(b) 3,529,533 Federal Natl Mtge Assn #190353 08-01-34 5.00 2,628,707 2,473,434 Federal Natl Mtge Assn #252211 01-01-29 6.00 107,385 107,039 Federal Natl Mtge Assn #252409 03-01-29 6.50 1,212,421 1,236,523 Federal Natl Mtge Assn #254384 06-01-17 7.00 315,585 325,457 Federal Natl Mtge Assn #254723 05-01-23 5.50 3,361,999 3,287,104 Federal Natl Mtge Assn #254748 04-01-13 5.50 832,241(k) 820,440 Federal Natl Mtge Assn #254757 05-01-13 5.00 843,167 831,779 Federal Natl Mtge Assn #254774 05-01-13 5.50 682,622 674,813 Federal Natl Mtge Assn #255488 10-01-14 5.50 1,149,542 1,145,751
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Federal Natl Mtge Assn #255501 09-01-14 6.00% $959,474(k) $968,226 Federal Natl Mtge Assn #313470 08-01-10 7.50 212,173 215,973 Federal Natl Mtge Assn #323133 04-01-13 5.50 37,659 37,406 Federal Natl Mtge Assn #357324 01-01-33 5.00 3,306,233 3,113,274 Federal Natl Mtge Assn #357485 02-01-34 5.50 4,411,575 4,274,340 Federal Natl Mtge Assn #507182 07-01-14 6.00 83,542 84,053 Federal Natl Mtge Assn #512232 05-01-29 7.00 32,117 33,281 Federal Natl Mtge Assn #535168 12-01-14 5.50 132,097 131,033 Federal Natl Mtge Assn #545818 07-01-17 6.00 1,185,749 1,194,586 Federal Natl Mtge Assn #545864 08-01-17 5.50 1,597,431 1,580,995 Federal Natl Mtge Assn #545910 08-01-17 6.00 1,411,064 1,421,584 Federal Natl Mtge Assn #555063 11-01-17 5.50 1,956,292 1,935,854 Federal Natl Mtge Assn #555343 08-01-17 6.00 542,506 545,705 Federal Natl Mtge Assn #555367 03-01-33 6.00 2,704,976 2,692,437 Federal Natl Mtge Assn #555375 04-01-33 6.00 128,575 128,381 Federal Natl Mtge Assn #555740 08-01-18 4.50 169,787 161,795 Federal Natl Mtge Assn #602630 10-01-31 7.00 249,794 258,898 Federal Natl Mtge Assn #606789 10-01-31 7.00 1,897,084 1,966,223 Federal Natl Mtge Assn #626720 01-01-17 6.00 400,594 402,982 Federal Natl Mtge Assn #630992 09-01-31 7.00 919,435 962,409 Federal Natl Mtge Assn #630993 09-01-31 7.50 809,556 847,468 Federal Natl Mtge Assn #633672 06-01-17 6.00 342,840 345,738 Federal Natl Mtge Assn #636720 05-01-17 5.50 104,260 103,098 Federal Natl Mtge Assn #638210 05-01-32 6.50 97,735 99,665 Federal Natl Mtge Assn #648040 06-01-32 6.50 590,271 600,726 Federal Natl Mtge Assn #648349 06-01-17 6.00 1,034,421 1,042,134 Federal Natl Mtge Assn #648679 07-01-32 6.00 2,383,167 2,372,120 Federal Natl Mtge Assn #654413 09-01-32 7.00 188,697 195,458
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Federal Natl Mtge Assn #656562 02-01-33 7.00% $261,835 $273,894 Federal Natl Mtge Assn #665752 09-01-32 6.50 554,875 564,703 Federal Natl Mtge Assn #668412 02-01-18 5.50 569,234 562,929 Federal Natl Mtge Assn #670387 08-01-32 7.00 16,495 17,107 Federal Natl Mtge Assn #671054 01-01-33 7.00 24,135 25,000 Federal Natl Mtge Assn #671174 02-01-33 4.67 547,455(j) 541,482 Federal Natl Mtge Assn #675692 02-01-18 6.00 453,995 456,672 Federal Natl Mtge Assn #678940 02-01-18 5.50 821,144 812,507 Federal Natl Mtge Assn #684588 03-01-33 6.50 209,137 213,263 Federal Natl Mtge Assn #688181 03-01-33 6.00 1,355,969 1,349,684 Federal Natl Mtge Assn #695838 04-01-18 5.50 244,685 242,091 Federal Natl Mtge Assn #701937 04-01-33 6.00 158,406 157,477 Federal Natl Mtge Assn #704610 06-01-33 5.50 3,242,698 3,141,824 Federal Natl Mtge Assn #705655 05-01-33 5.00 1,476,764 1,391,060 Federal Natl Mtge Assn #720378 06-01-18 4.50 1,430,772 1,363,289 Federal Natl Mtge Assn #722325 07-01-33 4.97 713,889(j) 703,747 Federal Natl Mtge Assn #723448 07-01-13 5.00 819,096 809,315 Federal Natl Mtge Assn #725232 03-01-34 5.00 3,455,874 3,255,312 Federal Natl Mtge Assn #725424 04-01-34 5.50 5,764,285 5,584,970 Federal Natl Mtge Assn #725425 04-01-34 5.50 3,714,522 3,599,293 Federal Natl Mtge Assn #725431 08-01-15 5.50 1,917,016 1,904,108 Federal Natl Mtge Assn #725558 06-01-34 4.57 1,468,339(j) 1,438,790 Federal Natl Mtge Assn #725737 08-01-34 4.54 852,253(j) 848,571 Federal Natl Mtge Assn #725773 09-01-34 5.50 4,372,294 4,233,189 Federal Natl Mtge Assn #735212 12-01-34 5.00 3,989,054 3,753,428 Federal Natl Mtge Assn #735841 11-01-19 4.50 2,115,926(b) 2,013,138 Federal Natl Mtge Assn #740843 11-01-18 5.00 118,090 114,575 Federal Natl Mtge Assn #744010 07-01-13 5.00 1,291,853 1,273,965
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 234 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Short Duration U.S. Government Fund
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Federal Natl Mtge Assn #747536 11-01-33 5.00% $1,928,089 $1,816,193 Federal Natl Mtge Assn #754297 12-01-33 4.73 267,442(j) 258,553 Federal Natl Mtge Assn #755891 03-01-13 5.00 279,191(k) 276,384 Federal Natl Mtge Assn #791447 10-01-34 6.00 622,790 618,222 Federal Natl Mtge Assn #797044 07-01-34 5.50 3,216,922 3,114,576 Federal Natl Mtge Assn #799769 11-01-34 5.05 1,102,828(j) 1,092,594 Federal Natl Mtge Assn #801344 10-01-34 5.07 1,189,899(j) 1,175,835 Federal Natl Mtge Assn #815264 05-01-35 5.23 1,716,682(j) 1,695,587 Federal Natl Mtge Assn #815463 02-01-35 5.50 697,509 675,318 Federal Natl Mtge Assn #849082 01-01-36 5.82 1,181,381(j) 1,183,394 Federal Natl Mtge Assn #849170 01-01-36 5.95 2,404,456(j) 2,416,244 Federal Natl Mtge Assn #865689 02-01-36 5.86 2,719,205(j) 2,708,926 Federal Natl Mtge Assn #866097 02-01-36 6.16 2,132,042(j) 2,132,703 Federal Natl Mtge Assn #878661 02-01-36 5.50 4,312,574 4,139,812 Federal Natl Mtge Assn #881629 02-01-36 5.50 3,279,004 3,147,647 Federal Natl Mtge Assn #885827 06-01-36 6.50 2,399,230 2,439,111 Federal Natl Mtge Assn #885871 06-01-36 7.00 1,775,771 1,839,393 Federal Natl Mtge Assn #886461 08-01-36 6.18 1,359,494(j) 1,369,623 Federal Natl Mtge Assn #887096 07-01-36 5.81 2,418,756(j) 2,411,341 Federal Natl Mtge Assn #888414 11-01-35 5.00 958,431 900,488 Federal Natl Mtge Assn #900197 10-01-36 5.94 1,558,414(j) 1,572,471 Federal Natl Mtge Assn #902818 11-01-36 5.94 1,475,913(j) 1,486,289 Federal Natl Mtge Assn Collateralized Mtge Obligation Interest Only Series 2003-24 Cl PI 12-25-12 20.00 189,825(i) 1,751 Federal Natl Mtge Assn Collateralized Mtge Obligation Interest Only Series 2003-26 Cl MI 03-25-23 10.96 655,322(i) 125,893
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Federal Natl Mtge Assn Collateralized Mtge Obligation Interest Only Series 2003-63 Cl IP 07-25-33 12.39% $2,485,747(i) $604,279 Federal Natl Mtge Assn Collateralized Mtge Obligation Interest Only Series 2003-71 Cl IM 12-25-31 12.80 530,717(i) 96,826 Federal Natl Mtge Assn Collateralized Mtge Obligation Interest Only Series 2003-81 Cl LI 11-25-13 12.92 901,491(i) 32,736 Federal Natl Mtge Assn Collateralized Mtge Obligation Interest Only Series 2004-84 Cl GI 12-25-22 11.02 428,812(i) 61,995 Federal Natl Mtge Assn Collateralized Mtge Obligation Interest Only Series 2005-92 CL SC 10-25-35 17.34 4,193,402(i) 210,089 Federal Natl Mtge Assn Collateralized Mtge Obligation Interest Only Series 367 Cl 2 01-01-36 9.52 1,938,610(i) 530,055 Federal Natl Mtge Assn Collateralized Mtge Obligation Series 2003-133 Cl GB 12-25-26 8.00 362,106 381,747 Federal Natl Mtge Assn Collateralized Mtge Obligation Series 2003-94 Cl QB 07-25-23 5.50 1,338,762 1,334,616 Federal Natl Mtge Assn Collateralized Mtge Obligation Series 2003-W11 Cl A1 06-25-33 8.04 19,780(j) 19,957 Federal Natl Mtge Assn Collateralized Mtge Obligation Series 2004-60 Cl PA 04-25-34 5.50 1,916,607 1,903,596 Govt Natl Mtge Assn #3501 01-20-34 6.00 6,700,546 6,673,904 Govt Natl Mtge Assn #498182 05-15-16 6.00 781,865 786,502 Govt Natl Mtge Assn #605970 03-15-33 6.00 272,908 272,158 Govt Natl Mtge Assn #615738 03-15-18 7.00 943,526 971,503 Govt Natl Mtge Assn #615740 08-15-13 6.00 1,707,752 1,723,393
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Govt Natl Mtge Assn #780758 04-15-13 7.00% $153,873 $158,920 Govt Natl Mtge Assn #781507 09-15-14 6.00 789,000 796,390 Govt Natl Mtge Assn Collateralized Mtge Obligation Series 2003-17 Cl B 10-16-27 5.00 125,000 122,431 Govt Natl Mtge Assn Collateralized Mtge Obligation Series 2004-19 Cl DJ 03-20-34 4.50 1,126,029 1,100,068 Govt Natl Mtge Assn Collateralized Mtge Obligation Series 2006-32 Cl A 01-16-30 5.08 4,325,786 4,279,565 Harborview Mtge Loan Trust Collateralized Mtge Obligation Series 2004-4 Cl 3A 06-19-34 6.07 278,197(j) 277,447 Harborview Mtge Loan Trust Collateralized Mtge Obligation Series 2005-12 Cl 2A11 10-19-35 7.03 1,411,547(j) 1,433,006 Harborview Mtge Loan Trust Collateralized Mtge Obligation Series 2006-8 Cl 2A1B 08-21-36 5.57 838,200(j) 839,557 IndyMac Index Mtge Loan Trust Collateralized Mtge Obligation Series 2006-AR13 Cl A1 07-25-36 6.09 2,321,761(j) 2,305,682 Lehman XS Net Interest Margin Nts Collateralized Mtge Obligation Series 2006-GPM6 Cl A1 10-28-46 6.25 383,208(d) 381,906 Morgan Stanley Mtge Loan Trust Collateralized Mtge Obligation Series 2004-2AR Cl 3A 02-25-34 5.02 1,176,662(j) 1,159,306 Structured Adjustable Rate Mtge Loan Trust Collateralized Mtge Obligation Series 2005-15 Cl 4A1 07-25-35 5.51 2,737,861(j) 2,673,692 Structured Adjustable Rate Mtge Loan Trust Collateralized Mtge Obligation Series 2006-5 Cl 4A1 06-25-36 5.95 1,702,072(j) 1,690,703 Vendee Mtge Trust Collateralized Mtge Obligation Series 2003-1 Cl D 12-15-25 5.75 219,296 218,707 Vendee Mtge Trust Collateralized Mtge Obligation Series 2003-2 Cl D 11-15-23 5.00 5,738 5,722
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS - 2007 SEMIANNUAL REPORT 235 RiverSource VP - Short Duration U.S. Government Fund
BONDS (CONTINUED) COUPON PRINCIPAL ISSUER RATE AMOUNT VALUE(A) MORTGAGE-BACKED (CONT.) Washington Mutual Mtge Pass-Through Ctfs Collateralized Mtge Obligation Series 2006-AR3 Cl A1A 02-25-46 6.03% $1,406,071(j) $1,407,885 Wells Fargo Mtge Backed Securities Trust Collateralized Mtge Obligation Series 2005-10 Cl A1 10-25-35 5.00 4,275,637 4,048,900 Wells Fargo Mtge Backed Securities Trust Collateralized Mtge Obligation Series 2005-5 Cl 2A1 05-25-35 5.50 1,601,886 1,535,559 Wells Fargo Mtge Backed Securities Trust Collateralized Mtge Obligation Series 2006-AR6 Cl 5A1 03-25-36 5.11 1,822,634(j) 1,792,423 --------------- Total 240,880,812 - ----------------------------------------------------------------------------------- TOTAL BONDS (Cost: $444,151,368) $440,144,799 - -----------------------------------------------------------------------------------
MONEY MARKET FUND (1.8%) SHARES VALUE(A) RiverSource Short-Term Cash Fund 8,310,341(l) $8,310,341 - ----------------------------------------------------------------------------------- TOTAL MONEY MARKET FUND (Cost: $8,310,341) $8,310,341 - -----------------------------------------------------------------------------------
SHORT-TERM SECURITIES (11.1%) AMOUNT EFFECTIVE PAYABLE AT ISSUER YIELD MATURITY VALUE(A) U.S. GOVERNMENT AGENCIES Federal Home Loan Bank Disc Nts 07-02-07 4.80% $4,000,000 $3,998,400 07-09-07 5.09 20,000,000 19,971,778 07-13-07 5.15 12,000,000 11,976,013 02-21-08 5.38 10,000,000 9,994,580 03-07-08 4.82 4,250,000 4,246,307 - ----------------------------------------------------------------------------------- TOTAL SHORT-TERM SECURITIES (Cost: $50,200,560) $50,187,078 - ----------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES (Cost: $502,662,269)(n) $498,642,218 ===================================================================================
NOTES TO INVESTMENTS IN SECURITIES (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) At June 30, 2007, the cost of securities purchased, including interest purchased, on a when-issued and/or other forward-commitment basis was $52,614,151. (c) Foreign security values are stated in U.S. dollars. At June 30, 2007, the value of foreign securities represented 2.2% of net assets. (d) Represents a security sold under Rule 144A, which is exempt from registration under the Securities Act of 1933, as amended. This security has been determined to be liquid under guidelines established by the Fund's Board of Directors. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2007, the value of these securities amounted to $3,715,797 or 0.8% of net assets. (e) Interest rate varies either based on a predetermined schedule or to reflect current market conditions; rate shown is the effective rate on June 30, 2007. (f) Mortgage-backed securities represent direct or indirect participations in, or are secured by and payable from, mortgage loans secured by real property, and include single- and multi-class pass-through securities and collateralized mortgage obligations. These securities may be issued or guaranteed by U.S. government agencies or instrumentalities, or by private issuers, generally originators and investors in mortgage loans, including savings associations, mortgage bankers, commercial banks, investment bankers and special purpose entities. The maturity dates shown represent the original maturity of the underlying obligation. Actual maturity may vary based upon prepayment activity on these obligations. Unless otherwise noted, the coupon rates presented are fixed rates. (g) Inflation-indexed bonds are securities in which the principal amount is adjusted for inflation and the semiannual interest payments equal a fixed percentage of the inflation-adjusted principal amount. (h) Inverse floaters represent securities that pay interest at a rate that increases (decreases) in the same magnitude as, or in a multiple of, a decline (increase) in the LIBOR (London InterBank Offering Rate) Index. Interest rate disclosed is the rate in effect on June 30, 2007. At June 30, 2007, the value of inverse floaters represented 0.03% of net assets. (i) Interest only represents securities that entitle holders to receive only interest payments on the underlying mortgages. The yield to maturity of an interest only is extremely sensitive to the rate of principal payments on the underlying mortgage assets. A rapid (slow) rate of principal repayments may have an adverse (positive) effect on yield to maturity. The principal amount shown is the notional amount of the underlying mortgages. Interest rate disclosed represents yield based upon the estimated timing and amount of future cash flows at June 30, 2007. (j) Adjustable rate mortgage; interest rate varies to reflect current market conditions; rate shown is the effective rate on June 30, 2007. (k) Partially pledged as initial deposit on the following open interest rate futures contracts (see Note 7 to the financial statements):
TYPE OF SECURITY NOTIONAL AMOUNT - ------------------------------------------------------------------------------------ PURCHASE CONTRACTS U.S. Long Bond, Sept. 2007, 20-year $4,500,000 U.S. Treasury Note, Sept. 2007, 2-year 79,200,000 SALE CONTRACTS U.S. Treasury Note, Sept. 2007, 5-year 11,600,000 U.S. Treasury Note, Sept. 2007, 10-year 10,100,000
(l) Affiliated Money Market Fund - See Note 10 to the financial statements. - -------------------------------------------------------------------------------- 236 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Short Duration U.S. Government Fund NOTES TO INVESTMENTS IN SECURITIES (CONTINUED) (m) The following abbreviation is used in the portfolio security description to identify the insurer of the issue: MBIA -- MBIA Insurance Corporation
(n) At June 30, 2007, the cost of securities for federal income tax purposes was approximately $502,662,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $536,000 Unrealized depreciation (4,556,000) - -------------------------------------------------------------------------------- Net unrealized depreciation $(4,020,000) - --------------------------------------------------------------------------------
HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS (i) The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (Commission) for the first and third quarters of each fiscal year on Form N-Q; (ii) The Fund's Forms N-Q are available on the Commission's website at http://www.sec.gov; (iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC (information on the operations of the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iv) The Fund's complete schedule of portfolio holdings, as disclosed in its annual and semiannual shareholder reports and in its filings on Form N-Q, can be found at riversource.com. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 237 INVESTMENTS IN SECURITIES RiverSource VP - Small Cap Advantage Fund JUNE 30, 2007 (UNAUDITED) (Percentages represent value of investments compared to net assets)
COMMON STOCKS (99.1%) ISSUER SHARES VALUE(A) AEROSPACE & DEFENSE (1.0%) Ceradyne 10,851(b) $802,540 Curtiss-Wright 17,000 792,370 United Industrial 7,000 419,860 --------------- Total 2,014,770 - ----------------------------------------------------------------------------------- AIR FREIGHT & LOGISTICS (0.4%) Hub Group Cl A 23,959(b) 842,398 - ----------------------------------------------------------------------------------- AIRLINES (0.9%) AirTran Holdings 26,000(b) 283,920 Allegiant Travel 10,000(b) 307,400 JetBlue Airways 26,000(b) 305,500 Pinnacle Airlines 17,000(b) 318,750 Republic Airways Holdings 16,000(b) 325,600 SkyWest 12,700 302,641 --------------- Total 1,843,811 - ----------------------------------------------------------------------------------- AUTO COMPONENTS (0.9%) Aftermarket Technology 14,000(b) 415,520 American Axle & Mfg Holdings 8,000 236,960 ArvinMeritor 18,695 415,029 Drew Inds 12,000(b) 397,680 Tenneco 12,200(b) 427,488 --------------- Total 1,892,677 - ----------------------------------------------------------------------------------- BEVERAGES (0.1%) Coca-Cola Bottling Company Consolidated 4,000 201,200 - ----------------------------------------------------------------------------------- BIOTECHNOLOGY (2.5%) Affymax 7,000(b) 188,720 Alkermes 21,000(b) 306,600 Alnylam Pharmaceuticals 15,000(b) 227,850 Applera-Celera Group 33,800(b,d) 419,120 BioMarin Pharmaceutical 26,244(b) 470,817 Enzon Pharmaceuticals 40,000(b) 314,000 Human Genome Sciences 46,200(b) 412,104 Isis Pharmaceuticals 27,000(b) 261,360 Medarex 38,100(b) 544,449 Myriad Genetics 13,200(b) 490,908 Onyx Pharmaceuticals 8,000(b) 215,200 OSI Pharmaceuticals 9,000(b) 325,890 Progenics Pharmaceuticals 17,800(b) 383,946 Regeneron Pharmaceuticals 17,200(b) 308,224 United Therapeutics 5,000(b) 318,800 --------------- Total 5,187,988 - ----------------------------------------------------------------------------------- BUILDING PRODUCTS (0.4%) Apogee Enterprises 30,000 834,600 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) CAPITAL MARKETS (1.1%) Apollo Investment 20,000 $430,400 GFI Group 6,000(b) 434,880 Knight Capital Group Cl A 30,373(b) 504,192 MCG Capital 18,000 288,360 Piper Jaffray Companies 5,000(b) 278,650 SWS Group 20,000 432,400 --------------- Total 2,368,882 - ----------------------------------------------------------------------------------- CHEMICALS (2.0%) CF Inds Holdings 13,000 778,570 HB Fuller 20,000 597,800 Hercules 36,900(b,e) 725,085 OM Group 6,000(b) 317,520 Rockwood Holdings 14,000(b) 511,700 Sensient Technologies 8,034 203,983 Spartech 9,987 265,155 Terra Inds 26,000(b) 660,920 --------------- Total 4,060,733 - ----------------------------------------------------------------------------------- COMMERCIAL BANKS (3.4%) Cathay General Bancorp 14,000 469,560 Central Pacific Financial 11,000 363,110 City Holding 12,700 486,791 F.N.B. 34,000 569,160 First BanCorp 35,000(c) 384,650 Hanmi Financial 23,800 406,028 Pacific Capital Bancorp 16,997 458,579 Preferred Bank 11,850 474,000 Prosperity Bancshares 12,000 393,120 Sterling Financial 27,700 801,638 Susquehanna Bancshares 16,000 357,920 SVB Financial Group 11,000(b) 584,210 Texas Capital Bancshares 22,000(b) 491,700 UCBH Holdings 30,000 548,100 Wintrust Financial 8,000 350,800 --------------- Total 7,139,366 - ----------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES (4.0%) ABM Inds 22,000 567,820 American Reprographics 19,700(b) 606,563 CBIZ 61,300(b) 450,555 Consolidated Graphics 6,900(b) 478,032 Deluxe 19,000 771,590 GEO Group 12,000(b) 349,200 Heidrick & Struggles Intl 14,600(b) 748,104 Herman Miller 18,200 575,120 IHS Cl A 20,100(b) 924,600 Knoll 32,000 716,800 Viad 10,000 421,700 Waste Connections 25,000(b) 756,000 Watson Wyatt Worldwide Cl A 17,500 883,400 --------------- Total 8,249,484 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) COMMUNICATIONS EQUIPMENT (3.0%) 3Com 60,900(b) $251,517 ADTRAN 17,800 462,266 ARRIS Group 55,000(b) 967,449 Black Box 9,000 372,420 C-COR 25,000(b) 351,500 CommScope 10,236(b) 597,271 Comtech Telecommunications 12,000(b) 557,040 Dycom Inds 14,000(b) 419,720 Finisar 108,861(b) 411,495 Foundry Networks 35,100(b) 584,766 InterDigital 10,400(b) 334,568 Polycom 17,800(b) 598,080 Sonus Networks 48,900(b) 416,628 --------------- Total 6,324,720 - ----------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS (0.8%) Brocade Communications Systems 59,400(b) 464,508 Electronics for Imaging 16,000(b) 451,520 Emulex 18,800(b) 410,592 Imation 10,241 377,483 --------------- Total 1,704,103 - ----------------------------------------------------------------------------------- CONSTRUCTION & ENGINEERING (0.8%) EMCOR Group 12,300(b) 896,670 Perini 14,000(b) 861,420 --------------- Total 1,758,090 - ----------------------------------------------------------------------------------- CONSTRUCTION MATERIALS (0.2%) Texas Inds 5,400 423,414 - ----------------------------------------------------------------------------------- CONSUMER FINANCE (1.1%) Advanta Cl B 12,000 373,680 Cash America Intl 11,189 443,644 CompuCredit 12,000(b) 420,240 EZCORP Cl A 37,100(b) 491,204 World Acceptance 13,000(b) 555,490 --------------- Total 2,284,258 - ----------------------------------------------------------------------------------- CONTAINERS & PACKAGING (0.9%) AptarGroup 20,800 739,648 Rock-Tenn Cl A 13,986 443,636 Silgan Holdings 14,000 773,920 --------------- Total 1,957,204 - ----------------------------------------------------------------------------------- DISTRIBUTORS (0.6%) Core-Mark Holding 12,000(b) 431,760 DXP Enterprises 7,000(b) 299,250 Keystone Automotive Inds 14,600(b) 604,002 --------------- Total 1,335,012 - -----------------------------------------------------------------------------------
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 238 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Small Cap Advantage Fund
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) DIVERSIFIED CONSUMER SERVICES (1.4%) DeVry 23,000 $782,460 Pre-Paid Legal Services 4,000(b) 257,240 Regis 13,000 497,250 Sotheby's 21,000 966,420 Stewart Enterprises Cl A 60,000 467,400 --------------- Total 2,970,770 - ----------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES (0.3%) iShares Russell 2000 Index Fund 4,000 331,760 Portfolio Recovery Associates 5,000 300,100 --------------- Total 631,860 - ----------------------------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES (1.4%) Alaska Communications Systems Group 17,400 275,616 Cbeyond 12,100(b) 465,971 Cincinnati Bell 81,200(b) 469,336 Golden Telecom 8,100(c) 445,581 PAETEC Holding 36,000(b) 406,440 Premiere Global Services 26,000(b) 338,520 Time Warner Telecom Cl A 21,300(b) 428,130 --------------- Total 2,829,594 - ----------------------------------------------------------------------------------- ELECTRIC UTILITIES (1.2%) El Paso Electric 26,000(b) 638,560 Empire District Electric 17,000 380,290 Portland General Electric 11,000 301,840 Unisource Energy 21,000 690,690 Westar Energy 17,200 417,616 --------------- Total 2,428,996 - ----------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT (2.0%) Acuity Brands 15,600 940,368 Baldor Electric 9,000 443,520 Belden 7,000 387,450 Genlyte Group 13,900(b) 1,091,706 GrafTech Intl 26,000(b) 437,840 Woodward Governor 14,218 763,080 --------------- Total 4,063,964 - ----------------------------------------------------------------------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS (2.8%) Agilysys 17,000 382,500 Anixter Intl 12,400(b) 932,604 Benchmark Electronics 9,000(b) 203,580 FLIR Systems 21,400(b) 989,750 Insight Enterprises 16,000(b) 361,120 KEMET 55,000(b) 387,750 Littelfuse 11,000(b) 371,470 MTS Systems 7,000 312,690 Plexus 18,824(b) 432,764 Rofin-Sinar Technologies 8,000(b) 552,000 SYNNEX 10,000(b) 206,100 Technitrol 12,000 344,040 Zygo 21,000(b) 300,090 --------------- Total 5,776,458 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) ENERGY EQUIPMENT & SERVICES (3.0%) Allis-Chalmers Energy 12,000(b) $275,880 BASiC Energy Services 13,800(b) 352,866 CARBO Ceramics 9,000 394,290 Dawson Geophysical 6,000(b) 368,760 Dril-Quip 5,600(b) 251,720 Grey Wolf 96,500(b) 795,160 GulfMark Offshore 15,000(b) 768,300 Hercules Offshore 10,000(b) 323,800 Input/Output 28,000(b) 437,080 Matrix Service 19,000(b) 472,150 Oil States Intl 19,600(b) 810,264 Parker Drilling 47,714(b) 502,906 W-H Energy Services 7,296(b) 451,695 --------------- Total 6,204,871 - ----------------------------------------------------------------------------------- FOOD & STAPLES RETAILING (0.7%) Casey's General Stores 12,000 327,120 Longs Drug Stores 11,400 598,728 Performance Food Group 6,000(b) 194,940 Spartan Stores 6,400 210,624 Winn-Dixie Stores 7,000(b) 205,100 --------------- Total 1,536,512 - ----------------------------------------------------------------------------------- FOOD PRODUCTS (1.0%) Flowers Foods 20,000 667,200 Hain Celestial Group 11,000(b) 298,540 Pilgrim's Pride 10,000 381,700 Ralcorp Holdings 12,000(b) 641,400 --------------- Total 1,988,840 - ----------------------------------------------------------------------------------- GAS UTILITIES (0.8%) Nicor 9,413 404,006 Northwest Natural Gas 10,000 461,900 Southwest Gas 24,400 824,964 --------------- Total 1,690,870 - ----------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES (2.3%) Align Technology 23,000(b) 555,680 Hologic 24,286(b) 1,343,259 Immucor 25,000(b) 699,250 Medical Action Inds 14,000(b) 252,840 Mentor 13,400 545,112 Palomar Medical Technologies 11,100(b) 385,281 West Pharmaceutical Services 10,889 513,416 ZOLL Medical 26,000(b) 580,060 --------------- Total 4,874,898 - ----------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES (3.2%) Amedisys 9,000(b) 326,970 Apria Healthcare Group 11,000(b) 316,470 Chemed 6,000 397,740 Emergency Medical Services Cl A 11,000(b) 430,430 Healthways 12,000(b) 568,440 HMS Holdings 16,000(b) 306,240 inVentiv Health 12,701(b) 464,984 LCA-Vision 7,000 330,820
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) HEALTH CARE PROVIDERS & SERVICES (CONT.) Magellan Health Services 20,500(b) $952,635 MedCath 17,000(b) 540,600 NightHawk Radiology Holdings 18,000(b) 324,900 Owens & Minor 9,000 314,460 Psychiatric Solutions 20,700(b) 750,582 Sunrise Senior Living 13,900(b) 555,861 --------------- Total 6,581,132 - ----------------------------------------------------------------------------------- HEALTH CARE TECHNOLOGY (0.6%) Omnicell 19,000(b) 394,820 TriZetto Group 26,900(b) 520,784 Vital Images 14,000(b) 380,240 --------------- Total 1,295,844 - ----------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE (3.4%) Bob Evans Farms 12,000 442,200 Buffalo Wild Wings 10,000(b) 415,900 CEC Entertainment 11,000(b) 387,200 Chipotle Mexican Grill Cl B 8,000(b) 629,040 Domino's Pizza 10,414 190,264 Gaylord Entertainment 6,000(b) 321,840 IHOP 8,000 435,440 Jack in the Box 12,923(b) 916,758 Luby's 52,000(b) 502,320 Monarch Casino & Resort 13,000(b) 349,050 O'Charley's 22,000 443,520 Texas Roadhouse Cl A 23,000(b) 294,170 Triarc Companies Cl B 23,000 361,100 Vail Resorts 15,300(b) 931,310 WMS Inds 16,500(b) 476,190 --------------- Total 7,096,302 - ----------------------------------------------------------------------------------- HOUSEHOLD DURABLES (1.2%) American Greetings Cl A 27,200 770,576 Avatar Holdings 3,000(b) 230,820 Champion Enterprises 29,600(b) 290,968 Tempur-Pedic Intl 20,000 518,000 Universal Electronics 18,000(b) 653,760 --------------- Total 2,464,124 - ----------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES (0.2%) Tredegar 17,600 374,880 - ----------------------------------------------------------------------------------- INSURANCE (7.0%) American Physicians Capital 14,199(b) 575,060 Amerisafe 20,000(b) 392,600 Argonaut Group 30,000 936,300 Aspen Insurance Holdings 22,000(c) 617,540 Assured Guaranty 20,000(c) 591,200 Commerce Group 16,052 557,325 Delphi Financial Group Cl A 26,425 1,105,094 FPIC Insurance Group 11,000(b) 448,470 Hilb Rogal & Hobbs 6,000 257,160 Horace Mann Educators 43,378 921,349 Max Capital Group 24,000(c) 679,200 Meadowbrook Insurance Group 32,000(b) 350,720 Navigators Group 15,200(b) 819,280
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS - 2007 SEMIANNUAL REPORT 239 RiverSource VP - Small Cap Advantage Fund
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) INSURANCE (CONT.) Odyssey Re Holdings 12,000 $514,680 Phoenix Companies 46,300 694,963 Platinum Underwriters Holdings 18,000(c) 625,500 ProAssurance 11,500(b) 640,205 RLI 12,700 710,565 Safety Insurance Group 19,645 813,303 SeaBright Insurance Holdings 32,000(b) 559,360 Selective Insurance Group 24,300 653,184 Universal American Financial 15,226(b) 324,009 Zenith Natl Insurance 14,100 663,969 --------------- Total 14,451,036 - ----------------------------------------------------------------------------------- INTERNET & CATALOG RETAIL (0.2%) FTD Group 19,000 349,790 - ----------------------------------------------------------------------------------- INTERNET SOFTWARE & SERVICES (1.7%) Chordiant Software 14,000(b) 219,240 CMGI 70,000(b) 136,500 Internap Network Services 30,000(b) 432,600 Liquidity Services 19,000(b) 356,820 LoopNet 23,000(b) 536,590 NIC 40,900 279,756 SAVVIS 7,000(b) 346,570 Switch & Data Facilities 20,475(b) 392,915 ValueClick 27,000(b) 795,420 --------------- Total 3,496,411 - ----------------------------------------------------------------------------------- IT SERVICES (2.2%) Authorize.Net Holdings 23,000(b) 411,470 Ciber 38,000(b) 310,840 CSG Systems Intl 24,000(b) 636,240 Euronet Worldwide 11,000(b) 320,760 Gartner 20,800(b) 511,472 infoUSA 41,726 426,440 MPS Group 47,500(b) 635,075 SAIC 40,000(b) 722,800 Sykes Enterprises 36,500(b) 693,135 --------------- Total 4,668,232 - ----------------------------------------------------------------------------------- LEISURE EQUIPMENT & PRODUCTS (0.5%) JAKKS Pacific 23,000(b) 647,220 Polaris Inds 8,000 433,280 --------------- Total 1,080,500 - ----------------------------------------------------------------------------------- LIFE SCIENCES TOOLS & SERVICES (1.3%) Exelixis 45,600(b) 551,760 Illumina 14,000(b) 568,260 Kendle Intl 11,000(b) 404,470 Nektar Therapeutics 25,000(b,e) 237,250 PAREXEL Intl 8,000(b) 336,480 Varian 11,900(b) 652,477 --------------- Total 2,750,697 - ----------------------------------------------------------------------------------- MACHINERY (2.9%) Accuride 29,700(b) 457,677 Actuant Cl A 6,000 378,360 Barnes Group 11,000 348,480
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) MACHINERY (CONT.) Cascade 7,600 $596,144 Clarcor 9,000 336,870 Columbus McKinnon 11,400(b) 367,080 Kaydon 10,000 521,200 Middleby 7,200(b) 430,704 Nordson 10,000 501,600 RBC Bearings 12,000(b) 495,000 Robbins & Myers 7,000 371,910 Valmont Inds 8,800 640,288 Wabtec 18,200 664,846 --------------- Total 6,110,159 - ----------------------------------------------------------------------------------- MARINE (0.1%) American Commercial Lines 7,000(b) 182,350 - ----------------------------------------------------------------------------------- MEDIA (1.8%) Arbitron 6,000 309,180 Charter Communications Cl A 66,000(b) 267,300 Courier 8,000 320,000 Cumulus Media Cl A 37,700(b,e) 352,495 Entravision Communications Cl A 30,000(b) 312,900 Gemstar-TV Guide Intl 90,000(b) 442,800 Global Sources 20,000(b,c) 454,000 Interactive Data 15,000 401,700 LodgeNet Entertainment 9,000(b) 288,540 Marvel Entertainment 20,900(b) 532,532 --------------- Total 3,681,447 - ----------------------------------------------------------------------------------- METALS & MINING (1.3%) Brush Engineered Materials 7,000(b) 293,930 Century Aluminum 10,000(b) 546,300 Haynes Intl 4,000(b) 337,720 Hecla Mining 50,000(b) 427,000 Metal Management 9,000 396,630 Quanex 9,000 438,300 RTI Intl Metals 4,400(b) 331,628 --------------- Total 2,771,508 - ----------------------------------------------------------------------------------- MULTILINE RETAIL (0.2%) Big Lots 16,100(b) 473,662 - ----------------------------------------------------------------------------------- MULTI-UTILITIES (0.4%) Black Hills 21,100 838,725 - ----------------------------------------------------------------------------------- OIL, GAS & CONSUMABLE FUELS (2.7%) Alon USA Energy 12,000 528,120 Alpha Natural Resources 19,000(b) 395,010 Arena Resources 4,700(b) 273,117 Atlas America 4,948 265,856 Carrizo Oil & Gas 10,000(b) 414,700 Knightsbridge Tankers 11,000(c) 335,610 Mariner Energy 22,800(b) 552,900 Parallel Petroleum 24,000(b) 525,600 Penn Virginia 15,600 627,120 Petroleum Development 8,000(b) 379,840 Rosetta Resources 13,000(b) 280,020
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) OIL, GAS & CONSUMABLE FUELS (CONT.) Swift Energy 12,000(b) $513,120 USEC 23,000(b) 505,540 --------------- Total 5,596,553 - ----------------------------------------------------------------------------------- PAPER & FOREST PRODUCTS (0.3%) Buckeye Technologies 39,700(b) 614,159 - ----------------------------------------------------------------------------------- PERSONAL PRODUCTS (0.4%) Elizabeth Arden 23,000(b) 557,980 NBTY 8,000(b) 345,600 --------------- Total 903,580 - ----------------------------------------------------------------------------------- PHARMACEUTICALS (2.0%) Adams Respiratory Therapeutics 5,000(b) 196,950 Inspire Pharmaceuticals 35,000(b) 221,200 KV Pharmaceutical Cl A 18,000(b) 490,320 Medicines 16,000(b) 281,920 Medicis Pharmaceutical Cl A 7,900 241,266 MGI PHARMA 19,600(b) 438,452 Noven Pharmaceuticals 14,000(b) 328,300 Perrigo 19,400 379,852 Sciele Pharma 21,300(b) 501,828 SuperGen 33,000(b) 183,480 Valeant Pharmaceuticals Intl 20,000 333,800 ViroPharma 22,000(b) 303,600 XenoPort 5,000(b) 222,100 --------------- Total 4,123,068 - ----------------------------------------------------------------------------------- REAL ESTATE INVESTMENT TRUSTS (REITS) (6.3%) Agree Realty 13,000 406,250 Arbor Realty Trust 14,800 381,988 Ashford Hospitality Trust 53,000 623,280 BioMed Realty Trust 15,000 376,800 Capital Trust Cl A 8,000 273,120 Cousins Properties 20,000 580,200 Digital Realty Trust 11,000 414,480 Entertainment Properties Trust 12,000 645,360 Equity Lifestyle Properties 8,000 417,520 Gramercy Capital 18,000 495,720 Highwoods Properties 18,000 675,000 Home Properties 7,600 394,668 LaSalle Hotel Properties 11,000 477,620 LTC Properties 16,000 364,000 Nationwide Health Properties 24,400 663,680 Natl Retail Properties 28,000 612,080 Newcastle Investment 18,000 451,260 Pennsylvania Real Estate Investment Trust 9,000 398,970 Potlatch 13,000 559,650 PS Business Parks 11,700 741,429 RAIT Financial Trust 15,000 390,300 Ramco-Gershenson Properties Trust 15,000 538,950 Saul Centers 8,000 362,800
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 240 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Small Cap Advantage Fund
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) REAL ESTATE INVESTMENT TRUSTS (CONT.) Sunstone Hotel Investors 15,000 $425,850 Universal Health Realty Income Trust 12,000 399,600 Washington Real Estate Investment Trust 14,000 476,000 Winthrop Realty Trust 64,000 442,240 --------------- Total 12,988,815 - ----------------------------------------------------------------------------------- ROAD & RAIL (0.5%) Heartland Express 42,000 684,600 Old Dominion Freight Line 11,050(b) 333,158 --------------- Total 1,017,758 - ----------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (5.0%) Advanced Energy Inds 22,800(b) 516,648 AMIS Holdings 27,000(b) 338,040 Amkor Technology 27,000(b) 425,250 ANADIGICS 25,000(b) 344,750 Atheros Communications 17,393(b) 536,400 Atmel 67,200(b) 373,632 Axcelis Technologies 29,000(b) 188,210 Brooks Automation 24,000(b) 435,600 Cirrus Logic 40,200(b) 333,660 Cymer 16,900(b) 679,380 FEI 10,000(b) 324,600 IXYS 13,000(b) 108,550 Micrel 39,000 496,080 Microsemi 18,000(b) 431,100 MKS Instruments 30,400(b) 842,080 NetLogic Microsystems 10,000(b) 318,400 ON Semiconductor 67,100(b) 719,312 RF Micro Devices 79,700(b) 497,328 Silicon Storage Technology 78,600(b) 293,178 SiRF Technology Holdings 12,000(b) 248,880 Tessera Technologies 11,400(b) 462,270 Trident Microsystems 22,000(b) 403,700 Varian Semiconductor Equipment Associates 12,900(b) 516,774 Zoran 23,000(b) 460,920 --------------- Total 10,294,742 - ----------------------------------------------------------------------------------- SOFTWARE (4.1%) Actuate 77,000(b) 522,830 ANSYS 13,644(b) 361,566 Aspen Technology 36,583(b) 512,162 Double-Take Software 14,000(b) 229,740 Informatica 14,000(b) 206,780
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) SOFTWARE (CONT.) Jack Henry & Associates 18,891 $486,443 JDA Software Group 19,000(b) 372,970 Lawson Software 32,000(b) 316,480 Macrovision 12,000(b) 360,720 Magma Design Automation 20,800(b) 292,032 Manhattan Associates 9,700(b) 270,727 MICROS Systems 8,000(b) 435,200 MicroStrategy Cl A 3,300(b) 311,817 Nuance Communications 20,000(b) 334,600 OPNET Technologies 25,400(b) 292,354 Parametric Technology 17,000(b) 367,370 Quality Systems 10,000 379,700 Radiant Systems 25,000(b) 331,000 SPSS 9,000(b) 397,260 Sybase 27,700(b) 661,753 THQ 9,000(b) 274,680 TIBCO Software 50,100(b) 453,405 Transaction Systems Architects 10,000(b) 336,600 --------------- Total 8,508,189 - ----------------------------------------------------------------------------------- SPECIALTY RETAIL (3.8%) Aeropostale 17,000(b) 708,560 Asbury Automotive Group 8,000 199,600 Brown Shoe 13,000 316,160 Charlotte Russe Holding 13,000(b) 349,310 Dress Barn 29,000(b) 595,080 DSW Cl A 15,200(b) 529,264 GUESS? 8,900 427,556 Gymboree 13,800(b) 543,858 Hibbett Sports 14,000(b) 383,320 J Crew Group 12,000(b) 649,080 Jo-Ann Stores 11,000(b) 312,730 Jos A Bank Clothiers 7,000(b) 290,290 Men's Wearhouse 14,100 720,087 Midas 19,000(b) 430,730 Payless ShoeSource 24,200(b) 763,510 Tween Brands 8,000(b) 356,800 Wet Seal Cl A 53,000(b) 318,530 --------------- Total 7,894,465 - ----------------------------------------------------------------------------------- TEXTILES, APPAREL & LUXURY GOODS (2.1%) Columbia Sportswear 5,000 343,400 Deckers Outdoor 6,819(b) 688,037 Kellwood 10,000 281,200 Maidenform Brands 27,000(b) 536,220
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) TEXTILES, APPAREL & LUXURY GOODS (CONT.) Movado Group 11,400 $384,636 Perry Ellis Intl 10,000(b) 321,700 Phillips-Van Heusen 11,500 696,555 Warnaco Group 11,176(b) 439,664 Wolverine World Wide 21,100 584,681 --------------- Total 4,276,093 - ----------------------------------------------------------------------------------- THRIFTS & MORTGAGE FINANCE (1.6%) BankUnited Financial Cl A 23,063 462,874 Downey Financial 12,690 837,287 FirstFed Financial 11,392(b) 646,268 Ocwen Financial 34,000(b) 453,220 Triad Guaranty 9,367(b) 374,024 WSFS Financial 8,700 569,241 --------------- Total 3,342,914 - ----------------------------------------------------------------------------------- TOBACCO (0.3%) Alliance One Intl 28,500(b) 286,425 Universal 4,000 243,680 --------------- Total 530,105 - ----------------------------------------------------------------------------------- TRADING COMPANIES & DISTRIBUTORS (0.3%) Applied Industrial Technologies 20,000 590,000 - ----------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES (0.5%) Centennial Communications 36,000(b) 341,640 Dobson Communications Cl A 60,000(b) 666,600 --------------- Total 1,008,240 - ----------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $189,711,022) $205,775,823 - -----------------------------------------------------------------------------------
MONEY MARKET FUND (1.6%)(f) SHARES VALUE(A) RiverSource Short-Term Cash Fund 3,395,053(g) $3,395,053 - ----------------------------------------------------------------------------------- TOTAL MONEY MARKET FUND (Cost: $3,395,053) $3,395,053 - ----------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES (Cost: $193,106,075)(h) $209,170,876 ===================================================================================
NOTES TO INVESTMENTS IN SECURITIES (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Non-income producing. (c) Foreign security values are stated in U.S. dollars. At June 30, 2007, the value of foreign securities represented 2.0% of net assets. (d) Shareholders of tracking stocks have a financial interest only in a unit or division of the company. Unlike the common stock of the company itself, a tracking stock usually has limited or no voting rights. In the event of a company's liquidation, tracking stock shareholders typically do not have a legal claim on the company's assets. (e) At June 30, 2007, security was partially or fully on loan. See Note 6 to the financial statements. (f) Cash collateral received from security lending activity is invested in an affiliated money market fund and represents 0.4% of net assets. See Note 6 to the financial statements. 1.2% of net assets is the Fund's cash equivalent position. (g) Affiliated Money Market Fund - See Note 10 to the financial statements. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 241 RiverSource VP - Small Cap Advantage Fund NOTES TO INVESTMENTS IN SECURITIES (CONTINUED) (h) At June 30, 2007, the cost of securities for federal income tax purposes was approximately $193,106,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $22,084,000 Unrealized depreciation (6,019,000) - -------------------------------------------------------------------------------- Net unrealized appreciation $16,065,000 - --------------------------------------------------------------------------------
The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS (i) The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (Commission) for the first and third quarters of each fiscal year on Form N-Q; (ii) The Fund's Forms N-Q are available on the Commission's website at http://www.sec.gov; (iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC (information on the operations of the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iv) The Fund's complete schedule of portfolio holdings, as disclosed in its annual and semiannual shareholder reports and in its filings on Form N-Q, can be found at riversource.com. - -------------------------------------------------------------------------------- 242 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT INVESTMENTS IN SECURITIES RiverSource VP - Small Cap Value Fund JUNE 30, 2007 (UNAUDITED) (Percentages represent value of investments compared to net assets)
COMMON STOCKS (88.1%) ISSUER SHARES VALUE(A) AEROSPACE & DEFENSE (0.3%) Ceradyne 9,200(b) $680,432 Cubic 14,500 437,610 Orbital Sciences 43,900(b) 922,339 --------------- Total 2,040,381 - ----------------------------------------------------------------------------------- AIRLINES (1.2%) Air France-KLM ADR 56,650(c) 2,633,659 Alaska Air Group 189,100(b) 5,268,326 ExpressJet Holdings 36,000(b) 215,280 SkyWest 36,000 857,880 --------------- Total 8,975,145 - ----------------------------------------------------------------------------------- AUTO COMPONENTS (3.2%) American Axle & Mfg Holdings 303,400 8,986,708 Lear 229,900(b) 8,186,739 Modine Mfg 23,200 524,320 Superior Inds Intl 189,400(f) 4,121,344 Visteon 174,000(b) 1,409,400 --------------- Total 23,228,511 - ----------------------------------------------------------------------------------- BEVERAGES (0.9%) Boston Beer Cl A 31,400(b) 1,235,590 Central European Distribution 9,800(b) 339,276 Coca-Cola Bottling Company Consolidated 73,208 3,682,362 Natl Beverage 141,276(b,f) 1,626,087 --------------- Total 6,883,315 - ----------------------------------------------------------------------------------- BIOTECHNOLOGY (0.2%) Applera-Celera Group 46,400(b,h) 575,360 BioMarin Pharmaceutical 34,200(b) 613,548 Geron 21,800(b) 153,472 Savient Pharmaceuticals 32,900(b) 408,618 --------------- Total 1,750,998 - ----------------------------------------------------------------------------------- CAPITAL MARKETS (1.0%) Knight Capital Group Cl A 80,700(b) 1,339,620 Oppenheimer Holdings Cl A 91,272(c) 4,700,508 Prospect Capital 43,203 754,756 SWS Group 21,300 460,506 --------------- Total 7,255,390 - ----------------------------------------------------------------------------------- CHEMICALS (1.8%) CF Inds Holdings 40,200 2,407,578 Olin 72,900 1,530,900 PolyOne 759,800(b) 5,462,962 Sensient Technologies 18,100 459,559 Spartech 52,500 1,393,875 Stepan 37,186 1,125,992 Terra Inds 41,700(b) 1,060,014 --------------- Total 13,440,880 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) COMMERCIAL BANKS (3.9%) 1st Source 10,400 $259,168 BancFirst 3,100 132,742 Bank of Hawaii 70,900 3,661,275 Boston Private Financial Holdings 73,490 1,974,676 Capitol Bancorp 11,300 308,829 Chemical Financial 7,200 186,264 Citizens Republic Bancorp 50,860 930,738 City Holding 12,100 463,793 Community Bank System 63,900 1,279,278 Cullen/Frost Bankers 46,510 2,486,890 First BanCorp 22,700(c) 249,473 First Financial Bancorp 44,600 668,554 FirstMerit 75,800 1,586,494 Hancock Holding 10,900 409,295 Hanmi Financial 21,200 361,672 Independent Bank 25,730 442,813 Intl Bancshares 77,363 1,982,040 Irwin Financial 18,400 275,448 Macatawa Bank 7,245 115,268 Mercantile Bank 11,866 321,569 Natl Penn Bancshares 29,700 495,396 Pacific Capital Bancorp 38,900 1,049,522 Preferred Bank 4,450 178,000 Republic Bancorp Cl A 78,723 1,306,015 Security Bank 21,700 436,170 Simmons First Natl Cl A 12,500 344,875 Sterling Bancshares 58,500 661,635 Sterling Financial 14,400 416,736 Susquehanna Bancshares 66,300 1,483,131 Taylor Capital Group 5,000 137,650 Trustmark 14,100 364,626 UCBH Holdings 47,300 864,171 Umpqua Holdings 96,160 2,260,722 United Community Banks 20,500 530,745 --------------- Total 28,625,673 - ----------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES (4.5%) ABM Inds 14,800 381,988 Bowne & Co 97,300 1,898,323 Brink's 52,950 3,277,076 Comfort Systems USA 62,300 883,414 Consolidated Graphics 48,060(b) 3,329,597 Ennis 16,100 378,672 Exponent 49,850(b) 1,115,145 First Advantage Cl A 68,760(b) 1,582,168 G&K Services Cl A 4,700 185,697 Heidrick & Struggles Intl 3,300(b) 169,092 IKON Office Solutions 97,400 1,520,414 Kelly Services Cl A 79,590 2,185,541 Layne Christensen 7,200(b) 294,840 Mac-Gray 338,700(b) 5,182,110 Pike Electric 86,980(b) 1,946,612 Schawk 41,440 829,629
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) COMMERCIAL SERVICES & SUPPLIES (CONT.) School Specialty 11,100(b) $393,384 Spherion 104,600(b) 982,194 Viad 26,700 1,125,939 Volt Information Sciences 44,560(b) 821,686 Waste Inds USA 12,800 436,992 WCA Waste 376,978(b) 3,343,795 --------------- Total 32,264,308 - ----------------------------------------------------------------------------------- COMMUNICATIONS EQUIPMENT (1.5%) 3Com 1,131,000(b) 4,671,030 Anaren 55,400(b) 975,594 ARRIS Group 71,300(b) 1,254,167 Bel Fuse Cl A 11,880 439,322 Bel Fuse Cl B 6,090 207,243 Black Box 4,800 198,624 C-COR 75,400(b) 1,060,124 CommScope 4,200(b) 245,070 EMS Technologies 23,900(b) 527,234 Oplink Communications 81,200(b) 1,218,000 Sycamore Networks 19,000(b) 76,380 UTStarcom 36,400(b,f) 204,204 --------------- Total 11,076,992 - ----------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS (1.8%) Brocade Communications Systems 130,400(b) 1,019,728 Diebold 133,200 6,953,040 Hutchinson Technology 142,500(b) 2,680,425 Imation 74,420 2,743,121 --------------- Total 13,396,314 - ----------------------------------------------------------------------------------- CONSTRUCTION & ENGINEERING (0.7%) Insituform Technologies Cl A 214,800(b) 4,684,788 Perini 6,800(b) 418,404 --------------- Total 5,103,192 - ----------------------------------------------------------------------------------- CONSUMER FINANCE (0.1%) Advanta Cl B 32,400 1,008,936 - ----------------------------------------------------------------------------------- CONTAINERS & PACKAGING (1.0%) AptarGroup 210,940 7,501,026 - ----------------------------------------------------------------------------------- DISTRIBUTORS (0.4%) Audiovox Cl A 166,198(b) 2,155,588 Building Materials Holding 33,500 475,365 --------------- Total 2,630,953 - ----------------------------------------------------------------------------------- DIVERSIFIED CONSUMER SERVICES (1.4%) Coinmach Service Cl A 226,180(f) 2,992,361 Coinmach Service Unit 133,000(i) 2,642,710 Regis 112,000 4,284,000 --------------- Total 9,919,071 - -----------------------------------------------------------------------------------
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS - 2007 SEMIANNUAL REPORT 243 RiverSource VP - Small Cap Value Fund
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) DIVERSIFIED FINANCIAL SERVICES (0.6%) Financial Federal 44,800 $1,335,936 Medallion Financial 268,808 3,179,999 --------------- Total 4,515,935 - ----------------------------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES (0.5%) Alaska Communications Systems Group 76,700 1,214,928 Atlantic Tele-Network 41,334 1,183,806 PAETEC Holding 26,900(b) 303,701 SureWest Communications 26,780 729,487 --------------- Total 3,431,922 - ----------------------------------------------------------------------------------- ELECTRIC UTILITIES (1.2%) Allete 38,490 1,810,955 El Paso Electric 59,900(b) 1,471,144 MGE Energy 19,200 627,264 Portland General Electric 139,970 3,840,776 Westar Energy 46,700 1,133,876 --------------- Total 8,884,015 - ----------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT (1.3%) Belden 18,200 1,007,370 Chase 23,760 399,168 Encore Wire 6,300 185,472 GrafTech Intl 99,800(b) 1,680,632 Regal-Beloit 138,500 6,445,790 --------------- Total 9,718,432 - ----------------------------------------------------------------------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS (4.3%) Anixter Intl 18,300(b) 1,376,343 Ingram Micro Cl A 92,570(b) 2,009,695 Insight Enterprises 32,390(b) 731,042 Littelfuse 161,700(b) 5,460,609 Mercury Computer Systems 198,700(b) 2,424,140 Methode Electronics 12,600 197,190 Newport 36,000(b) 557,280 Park Electrochemical 30,110 848,500 Plexus 343,400(b) 7,894,766 ScanSource 10,900(b) 348,691 SYNNEX 8,900(b) 183,429 Tech Data 73,700(b) 2,834,502 Vishay Intertechnology 350,600(b) 5,546,492 --------------- Total 30,412,679 - ----------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES (1.2%) Bristow Group 68,670(b) 3,402,599 CHC Helicopter Cl A 70,540(c) 1,834,745 GulfMark Offshore 6,300(b) 322,686 Oil States Intl 37,200(b) 1,537,848 Trico Marine Services 32,300(b) 1,320,424 --------------- Total 8,418,302 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) FOOD & STAPLES RETAILING (2.6%) Casey's General Stores 274,120 $7,472,512 Ingles Markets Cl A 36,100 1,243,645 Performance Food Group 67,280(b) 2,185,927 Ruddick 128,660 3,875,239 Village Super Market Cl A 91,940 4,395,651 --------------- Total 19,172,974 - ----------------------------------------------------------------------------------- FOOD PRODUCTS (2.0%) American Dairy 86,982(b,f) 1,623,084 Hain Celestial Group 5,700(b) 154,698 HQ Sustainable Maritime Inds 21,900(b) 222,285 Imperial Sugar 39,100(f) 1,203,889 Industrias Bachoco ADR 186,908(c) 6,070,771 J&J Snack Foods 68,120 2,570,849 Maui Land & Pineapple 28,550(b) 1,048,642 Zapata 298,560(b) 2,015,280 --------------- Total 14,909,498 - ----------------------------------------------------------------------------------- GAS UTILITIES (0.4%) Laclede Group 4,700 149,836 New Jersey Resources 22,500 1,147,950 Northwest Natural Gas 6,600 304,854 Piedmont Natural Gas 53,800 1,326,170 WGL Holdings 5,600 182,784 --------------- Total 3,111,594 - ----------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES (0.3%) Greatbatch 13,600(b) 440,640 ICU Medical 15,300(b) 656,982 STERIS 17,800 544,680 ZOLL Medical 16,400(b) 365,884 --------------- Total 2,008,186 - ----------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES (2.0%) AMERIGROUP 34,900(b) 830,620 Apria Healthcare Group 50,800(b) 1,461,516 Genesis HealthCare 134,000(b) 9,168,280 MedCath 22,000(b) 699,600 Owens & Minor 72,710 2,540,487 --------------- Total 14,700,503 - ----------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE (3.9%) Benihana 35,965(b) 721,818 Benihana Cl A 71,930(b) 1,438,600 Canterbury Park Holding 60,880 789,614 CBRL Group 143,100 6,078,887 Centerplate Unit 72,690(f,i) 1,275,710 Frisch's Restaurants 65,205 1,991,361 Interstate Hotels & Resorts 185,310(b) 967,318 Intl Speedway Cl A 24,150 1,272,947 Isle of Capri Casinos 58,170(b) 1,393,753 Jack in the Box 20,600(b) 1,461,364 Lodgian 149,300(b) 2,243,979 Marcus 6,800 161,568 Morgans Hotel Group 75,666(b) 1,844,737 Nathan's Famous 26,832(b) 464,194 Pinnacle Entertainment 13,300(b) 374,395
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) HOTELS, RESTAURANTS & LEISURE (CONT.) Ruby Tuesday 44,100 $1,161,153 Speedway Motorsports 115,080 4,600,897 --------------- Total 28,242,295 - ----------------------------------------------------------------------------------- HOUSEHOLD DURABLES (1.9%) American Greetings Cl A 55,000 1,558,150 Avatar Holdings 16,800(b,f) 1,292,592 California Coastal Communities 155,500(b) 2,634,170 Champion Enterprises 478,000(b) 4,698,740 Helen of Troy 130,200(b,c) 3,515,400 --------------- Total 13,699,052 - ----------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES (0.1%) Sequa Cl A 8,000(b) 896,000 - ----------------------------------------------------------------------------------- INSURANCE (3.2%) American Natl Insurance 35,700 5,447,820 American Physicians Capital 21,550(b) 872,775 Amerisafe 8,600(b) 168,818 Commerce Group 47,400 1,645,728 Delphi Financial Group Cl A 4,400 184,008 Harleysville Group 17,800 593,808 Hilb Rogal & Hobbs 93,290 3,998,409 Odyssey Re Holdings 31,900 1,368,191 Ohio Casualty 19,800 857,538 Phoenix Companies 102,500 1,538,525 Presidential Life 11,700 230,022 Quanta Capital Holdings 689,300(b,c) 1,654,320 RLI 26,900 1,505,055 Safety Insurance Group 18,520 766,728 SeaBright Insurance Holdings 17,900(b) 312,892 United Fire & Casualty 4,700 166,286 Unitrin 15,910 782,454 Zenith Natl Insurance 24,400 1,148,996 --------------- Total 23,242,373 - ----------------------------------------------------------------------------------- INTERNET & CATALOG RETAIL (0.3%) FTD Group 34,300 631,463 Systemax 37,000(f) 769,970 ValueVision Media Cl A 41,800(b) 473,176 --------------- Total 1,874,609 - ----------------------------------------------------------------------------------- INTERNET SOFTWARE & SERVICES (0.4%) Interwoven 87,100(b) 1,222,884 RealNetworks 105,700(b) 863,569 Vignette 59,200(b) 1,134,272 --------------- Total 3,220,725 - ----------------------------------------------------------------------------------- IT SERVICES (1.5%) Cass Information Systems 36,657 1,329,183 Ciber 66,700(b) 545,606 Computer Services 10,980 371,124 MAXIMUS 160,800 6,975,504 MPS Group 70,100(b) 937,237 Sykes Enterprises 57,900(b) 1,099,521 --------------- Total 11,258,175 - -----------------------------------------------------------------------------------
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 244 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Small Cap Value Fund
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) LEISURE EQUIPMENT & PRODUCTS (1.2%) Arctic Cat 21,900 $433,620 Brunswick 125,000 4,078,750 Head 139,000(b,c) 568,510 MarineMax 169,700(b) 3,397,394 Nautilus 22,100 266,084 --------------- Total 8,744,358 - ----------------------------------------------------------------------------------- LIFE SCIENCES TOOLS & SERVICES (0.1%) Cambrex 61,830 820,484 - ----------------------------------------------------------------------------------- MACHINERY (4.5%) CIRCOR Intl 7,800 315,354 Federal Signal 34,100 540,826 Flowserve 96,900 6,938,040 FreightCar America 10,500 502,320 Harsco 110,300 5,735,600 Kadant 12,900(b) 402,480 Kaydon 160,600 8,370,472 Terex 114,600(b) 9,316,981 --------------- Total 32,122,073 - ----------------------------------------------------------------------------------- MARINE (0.8%) Horizon Lines Cl A 20,700 678,132 Kirby 125,600(b) 4,821,784 --------------- Total 5,499,916 - ----------------------------------------------------------------------------------- MEDIA (2.2%) Belo Cl A 78,700 1,620,433 Interactive Data 19,100 511,498 Journal Communications Cl A 25,100 326,551 Lakes Entertainment 25,400(b) 299,974 Marvel Entertainment 42,100(b) 1,072,708 Media General Cl A 26,500 881,655 Meredith 72,450 4,462,920 RCN 21,100(b) 396,469 Valassis Communications 360,300(b) 6,193,557 Value Line 8,796 386,144 --------------- Total 16,151,909 - ----------------------------------------------------------------------------------- METALS & MINING (2.2%) Century Aluminum 106,100(b) 5,796,243 Chaparral Steel 10,200 733,074 Cleveland-Cliffs 21,600 1,677,672 Quanex 3,300 160,710 Steel Dynamics 29,000 1,215,390 Stillwater Mining 595,000(b) 6,550,950 --------------- Total 16,134,039 - ----------------------------------------------------------------------------------- MULTILINE RETAIL (2.0%) Big Lots 46,100(b) 1,356,262 Dillard's Cl A 193,700 6,959,641 Dollar General 277,900 6,091,568 --------------- Total 14,407,471 - -----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) MULTI-UTILITIES (1.5%) Avista 409,100 $8,816,105 CH Energy Group 27,300 1,227,681 PNM Resources 27,500 764,225 --------------- Total 10,808,011 - ----------------------------------------------------------------------------------- OIL, GAS & CONSUMABLE FUELS (3.9%) Adams Resources & Energy 8,910 265,874 Barnwell Inds 35,927 747,282 Callon Petroleum 48,800(b) 691,496 Comstock Resources 14,600(b) 437,562 Eastern American Natural Gas 45,550 1,142,394 Encore Acquisition 225,950(b) 6,281,410 Energy Partners 63,070(b) 1,052,638 Evolution Petroleum 290,153(b) 884,967 EXCO Resources 204,200(b) 3,561,248 Holly 5,600 415,464 Mariner Energy 14,400(b) 349,200 Petrohawk Energy 12,900(b) 204,594 Rosetta Resources 6,700(b) 144,318 Stone Energy 224,500(b) 7,691,370 USEC 122,000(b) 2,681,560 Western Refining 30,400 1,757,120 --------------- Total 28,308,497 - ----------------------------------------------------------------------------------- PAPER & FOREST PRODUCTS (1.4%) Domtar 655,400(b,c) 7,314,264 Glatfelter 147,170 2,000,040 Mercer Intl 51,500(b) 525,300 --------------- Total 9,839,604 - ----------------------------------------------------------------------------------- PERSONAL PRODUCTS (0.3%) NBTY 28,500(b) 1,231,200 Parlux Fragrances 186,350(b,f) 827,394 --------------- Total 2,058,594 - ----------------------------------------------------------------------------------- PHARMACEUTICALS (0.5%) Pain Therapeutics 156,760(b) 1,365,380 Sciele Pharma 52,600(b) 1,239,256 ViroPharma 81,700(b) 1,127,460 --------------- Total 3,732,096 - ----------------------------------------------------------------------------------- REAL ESTATE INVESTMENT TRUSTS (REITS) (2.3%) Arbor Realty Trust 26,000 671,060 Ashford Hospitality Trust 117,400 1,380,624 BRT Realty Trust 5,800 150,858 Capital Trust Cl A 4,300 146,802 Deerfield Triarc Capital 83,000 1,214,290 DiamondRock Hospitality 10,900 207,972 Extra Space Storage 88,900 1,466,850 FelCor Lodging Trust 46,400 1,207,792 First Industrial Realty Trust 8,400 325,584 Franklin Street Properties 42,600 704,604 Highland Hospitality 17,200 330,240 Inland Real Estate 83,500 1,417,830 Investors Real Estate Trust 52,600(f) 543,358 Kite Realty Group Trust 11,500 218,730
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) REAL ESTATE INVESTMENT TRUSTS (REITS) (CONT.) LaSalle Hotel Properties 22,200 $963,924 Nationwide Health Properties 48,200 1,311,040 Natl Retail Properties 34,000 743,240 Omega Healthcare Investors 37,900 599,957 Ramco-Gershenson Properties Trust 37,600 1,350,968 Realty Income 21,100 531,509 Redwood Trust 3,100 149,978 Resource Capital 65,600 917,088 Spirit Finance 11,500 167,440 Universal Health Realty Income Trust 4,700 156,510 --------------- Total 16,878,248 - ----------------------------------------------------------------------------------- REAL ESTATE MANAGEMENT & DEVELOPMENT (0.9%) FirstService 57,730(b,c) 2,079,435 Gyrodyne Company of America 20,187 1,159,743 MI Developments Cl A 100,500(c) 3,662,220 --------------- Total 6,901,398 - ----------------------------------------------------------------------------------- ROAD & RAIL (1.1%) Amerco 42,900(b,f) 3,238,950 Covenant Transportation Cl A 91,400(b) 1,041,960 Marten Transport 94,190(b) 1,696,362 Saia 28,700(b) 782,362 YRC Worldwide 41,860(b) 1,540,448 --------------- Total 8,300,082 - ----------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (3.5%) Advanced Energy Inds 57,000(b) 1,291,620 Axcelis Technologies 102,000(b) 661,980 Brooks Automation 303,300(b) 5,504,895 Exar 28,400(b) 380,560 Integrated Silicon Solution 182,800(b) 1,151,640 ON Semiconductor 49,400(b) 529,568 Pericom Semiconductor 15,300(b) 170,748 Semiconductor Mfg Intl ADR 985,400(b,c) 6,789,406 Spansion Cl A 461,800(b) 5,125,980 TriQuint Semiconductor 830,587(b) 4,202,770 --------------- Total 25,809,167 - ----------------------------------------------------------------------------------- SOFTWARE (1.3%) Manhattan Associates 44,300(b) 1,236,413 Mentor Graphics 474,900(b) 6,254,433 THQ 19,200(b) 585,984 TIBCO Software 141,200(b) 1,277,860 --------------- Total 9,354,690 - ----------------------------------------------------------------------------------- SPECIALTY RETAIL (3.2%) Asbury Automotive Group 53,800 1,342,310 Barnes & Noble 117,480 4,519,456 Big 5 Sporting Goods 12,000 306,000 Books-A-Million 23,700 401,478
See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS - 2007 SEMIANNUAL REPORT 245 RiverSource VP - Small Cap Value Fund
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) SPECIALTY RETAIL (CONT.) Charming Shoppes 25,300(b) $273,999 CSK Auto 39,300(b) 723,120 Haverty Furniture Companies 21,500 250,905 Men's Wearhouse 148,650 7,591,555 TravelCenters of America LLC 73,160(b) 2,959,322 Tween Brands 101,490(b) 4,526,454 West Marine 14,500(b) 199,520 --------------- Total 23,094,119 - ----------------------------------------------------------------------------------- TEXTILES, APPAREL & LUXURY GOODS (1.9%) Fossil 36,400(b) 1,073,436 Hampshire Group 83,980(b) 1,398,267 Kellwood 24,700 694,564 Lazare Kaplan Intl 78,300(b) 620,136 Maidenform Brands 46,800(b) 929,448 Perry Ellis Intl 33,000(b) 1,061,610 UniFirst 17,640 777,042 Wolverine World Wide 270,800 7,503,868 --------------- Total 14,058,371 - ----------------------------------------------------------------------------------- THRIFTS & MORTGAGE FINANCE (0.8%) Bank Mutual 21,800 251,354 BankUnited Financial Cl A 26,000 521,820
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(A) THRIFTS & MORTGAGE FINANCE (CONT.) Corus Bankshares 46,100(f) $795,686 FirstFed Financial 9,600(b) 544,608 ITLA Capital 9,300 484,716 KNBT Bancorp 57,000 837,900 Ocwen Financial 65,600(b) 874,448 PFF Bancorp 19,000 530,670 TierOne 16,200 487,620 WSFS Financial 9,100 595,413 --------------- Total 5,924,235 - ----------------------------------------------------------------------------------- TRADING COMPANIES & DISTRIBUTORS (0.6%) Applied Industrial Technologies 14,300 421,850 Houston Wire & Cable 28,600(b) 812,526 NuCO2 116,574(b) 2,992,455 --------------- Total 4,226,831 - ----------------------------------------------------------------------------------- WATER UTILITIES (0.2%) SJW 42,370 1,410,921 - ----------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES (0.1%) USA Mobility 36,800 984,768 - ----------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $568,124,804) $642,388,236 - -----------------------------------------------------------------------------------
OTHER (0.1%) ISSUER SHARES VALUE(A) Air France-KLM ADR Warrants 51,500(b,c,d) $690,615 - ----------------------------------------------------------------------------------- TOTAL OTHER (Cost: $--) $690,615 - -----------------------------------------------------------------------------------
MONEY MARKET FUND (13.9%)(g) SHARES VALUE(A) RiverSource Short-Term Cash Fund 101,423,554(e) $101,423,554 - ----------------------------------------------------------------------------------- TOTAL MONEY MARKET FUND (Cost: $101,423,554) $101,423,554 - ----------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES (Cost: $669,548,358)(j) $744,502,405 ===================================================================================
NOTES TO INVESTMENTS IN SECURITIES (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Non-income producing. (c) Foreign security values are stated in U.S. dollars. At June 30, 2007, the value of foreign securities represented 5.7% of net assets. (d) Identifies issues considered to be illiquid as to their marketability (see Note 1 to the financial statements). These securities may be valued at fair value according to procedures approved, in good faith, by the Fund's Board of Directors. Information concerning such security holdings at June 30, 2007, is as follows:
ACQUISITION SECURITY DATES COST - --------------------------------------------------------------------------------------------------------------- Air France-KLM ADR Warrants 05-05-04 $--
(e) Affiliated Money Market Fund - See Note 10 to the financial statements. (f) At June 30, 2007, security was partially or fully on loan. See Note 6 to the financial statements. (g) Cash collateral received from security lending activity is invested in an affiliated money market fund and represents 2.1% of net assets. See Note 6 to the financial statements. 11.8% of net assets is the Fund's cash equivalent position. (h) Shareholders of tracking stocks have a financial interest only in a unit or division of the company. Unlike the common stock of the company itself, a tracking stock usually has limited or no voting rights. In the event of a company's liquidation, tracking stock shareholders typically do not have a legal claim on the company's assets. (i) An Income Deposit Security (IDS) also known as an enhanced income security (EIS), is an exchange-traded security composed of both an issuer's common shares and its subordinated notes. The holder of the IDS may receive dividends from the common stock and interest income from the debt instrument. (j) At June 30, 2007, the cost of securities for federal income tax purposes was approximately $669,548,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $98,377,000 Unrealized depreciation (23,423,000) - -------------------------------------------------------------------------------- Net unrealized appreciation $74,954,000 - --------------------------------------------------------------------------------
The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. - -------------------------------------------------------------------------------- 246 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT RiverSource VP - Small Cap Value Fund HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS (i) The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (Commission) for the first and third quarters of each fiscal year on Form N-Q; (ii) The Fund's Forms N-Q are available on the Commission's website at http://www.sec.gov; (iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC (information on the operations of the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iv) The Fund's complete schedule of portfolio holdings, as disclosed in its annual and semiannual shareholder reports and in its filings on Form N-Q, can be found at riversource.com. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 247 APPROVAL OF INVESTMENT MANAGEMENT SERVICES AGREEMENT RiverSource Investments, LLC ("RiverSource"), a wholly-owned subsidiary of Ameriprise Financial, Inc. ("Ameriprise Financial"), serves as the investment manager to each of the RiverSource Variable Portfolio ("VP") Funds (each, a "VP Fund" and collectively, the "VP Funds"). Under an investment management services agreement (the "IMS Agreement") RiverSource provides investment advice and other services to the VP Funds and all RiverSource funds (collectively, the "Funds"). In addition, for RiverSource VP - Emerging Markets Fund ("Emerging Markets"), RiverSource VP - Fundamental Value Fund ("Fundamental Value"), RiverSource VP - International Opportunity Fund ("International Opportunity"), RiverSource VP - Select Value Fund ("Select Value"), RiverSource VP - Small Cap Advantage Fund ("SC Advantage") and RiverSource VP - Small Cap Value Fund ("SC Value") (collectively, the "Subadvised Funds"), under subadvisory agreements between RiverSource and each subadviser (collectively, the "Subadvisers") (the "Subadvisory Agreements"), the Subadvisers perform portfolio management and related services for their respective Subadvised Funds. The VP Funds' Board of Directors (the "Board") and the Board's Investment Review and Contracts Committees monitor these services throughout the year. On an annual basis, the Board, including the independent Board members (the "Independent Directors"), considers renewal of the IMS Agreement and the Subadvisory Agreements (together, the "Advisory Agreements"). RiverSource prepares detailed reports for the Board and its Contracts Committee in March and April, including reports based on data provided by independent organizations to assist the Board in making this determination. In addition, throughout the year, the Board (or its committees) reviews information prepared by RiverSource addressing the services RiverSource provides and each VP Fund's performance. The Board accords particular weight to the work, deliberations and conclusions of the Contracts and Investment Review Committees in determining whether to continue the Advisory Agreements. At the April 11-12, 2007 in-person Board meeting, independent legal counsel to the Independent Directors reviewed with the Independent Directors various factors relevant to the Board's consideration of advisory agreements and the Board's legal responsibilities related to such consideration. Following an analysis and discussion of the factors identified below, the Board, including all of the Independent Directors, approved renewal of the Advisory Agreements. Nature, Extent and Quality of Services Provided by RiverSource and the Subadvisers: The Board analyzed various reports and presentations it had received detailing the services performed by RiverSource and the Subadvisers, as well as their expertise, resources and capabilities. The Board specifically considered many developments during the past year concerning the services provided by RiverSource, including, in particular, the growing strength and capabilities of many RiverSource offices and the increased investment and resources dedicated to the VP Funds' operations, particularly in the areas of trading systems, legal and compliance. Further, in connection with the Board's evaluation of the overall package of services provided by RiverSource, the Board considered the quality of the administrative, custody and transfer agency services provided by RiverSource affiliates to the VP Funds. The Board also reviewed the financial condition of RiverSource and each Subadviser, and each entity's ability to carry out its responsibilities under the Advisory Agreements. The Board also discussed the acceptability of the terms of the Advisory Agreements (including the relatively broad scope of services required to be performed by RiverSource and each Subadviser). The Board concluded that the services being performed under the Advisory Agreements were of a reasonably high quality. Based on the foregoing, and based on other information received (both oral and written, including the information on investment performance referenced below) and other considerations, the Board determined that RiverSource, with respect to each VP Fund, and each of the Subadvisers, with regard to the applicable Subadvised Fund, were in a position to continue to provide a high quality and level of services to the VP Funds. Investment Performance: For purposes of evaluating the nature, extent and quality of services provided under the Advisory Agreements, the Board carefully reviewed the investment performance of each of the VP Funds other than Fundamental Value, which was first launched in May 2006. In this regard, the Board considered: (i) detailed reports containing data prepared by an independent organization showing, for various periods, the performance of each of the VP Funds, the performance of a benchmark index, the percentage ranking of each VP Fund among its comparison group and the net assets of each VP Fund; and (ii) a report detailing each VP Fund's performance over various periods (including since inception), recent VP Fund inflows (and outflows) and a comparison of each VP Fund's net assets from August 2006 to August 2005. The Board observed that: (i) for RiverSource VP - Balanced Fund, RiverSource VP - Cash Management Fund, RiverSource VP - Diversified Bond Fund, RiverSource VP - Diversified Equity Income Fund, Emerging Markets, RiverSource VP - Global Bond Fund, RiverSource VP - Global Inflation Protected Securities Fund, RiverSource VP - Growth Fund, RiverSource VP - High Yield Bond Fund, RiverSource VP - Large Cap Equity Fund, RiverSource VP - Large Cap Value Fund, RiverSource VP - S&P 500 Index Fund and SC Value, investment performance met expectations, (ii) for RiverSource VP - Core Bond Fund, International Opportunity, RiverSource VP - Mid Cap Value Fund, Select Value, RiverSource VP - Short Duration U.S. Government Fund and SC Advantage, investment performance was appropriate in light of the particular management style and market conditions involved and (iii) for RiverSource VP - Income Opportunities Fund ("Income Opportunities") and RiverSource VP - Mid Cap - -------------------------------------------------------------------------------- 248 RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT Growth Fund ("MC Growth"), investment performance reflected the interrelationship of particular market conditions with the specific management style employed by the portfolio management team. With regard to Income Opportunities, the Board observed, in particular, that performance lagged because higher-quality bonds in the fund's portfolio underperformed lower- quality bonds owned by funds in its peer group. With respect to MC Growth, the Board observed that RiverSource replaced the portfolio manager in October 2006. Additionally, for the Subadvised Funds, the Board reviewed the performance of the Subadvisers and the overall "subadvised" strategy. The Board considered, in particular, management's ongoing oversight and monitoring of each Subadviser's investment process and performance. Comparative Fees, Costs of Services Provided and the Profits Realized By RiverSource and its Affiliates from their Relationships with the VP Funds: The Board reviewed comparative fees and the costs of services to be provided under the Advisory Agreements. The Board members considered detailed comparative information set forth in an annual report on fees and expenses, including, among other things, data (prepared by an independent organization) showing a comparison of each of the VP Fund's expenses with median expenses paid by funds in its peer group, as well as data showing each VP Fund's contribution to RiverSource's profitability. The Board accorded particular weight to the notion that the level of fees should reflect a rational pricing model applied consistently across the various product lines in the Funds' family, while assuring that the overall fees for each of the Funds are generally in line with the "pricing philosophy" (i.e., that the total expense ratio of each of the Funds, with few exceptions, is at or below the median expense ratio of funds in the same comparison group). With respect to each of the VP Funds, excluding Select Value and SC Value, the Board took into account that the total expense ratio (after considering proposed expense caps/waivers) approximated, or was below, the peer group's median expense ratio shown in the reports. For Select Value and SC Value, the Board observed that, although the expense ratio was higher than the median ratio, their fees were in line with the consistent and rational fee schedules applicable to all Funds. Based on its review, the Board concluded that each VP Fund's management fee was fair and reasonable in light of the extent and quality of services that each of the VP Funds receives. The Board also considered the expected profitability of RiverSource and its affiliates in connection with RiverSource providing investment management services to each of the VP Funds. In this regard, the Board referred to a detailed profitability report, discussing the profitability to RiverSource and Ameriprise Financial from managing and operating each of the VP Funds, including data showing comparative profitability over the last three years, as applicable. The Board also considered the services acquired by the investment manager through the use of commission dollars paid by the VP Funds on portfolio transactions. The Board noted that the fees paid by the VP Funds should permit the investment manager to offer competitive compensation to its personnel, make necessary investments in its business and earn an appropriate profit. The Board concluded that overall profitability levels were reasonable. Economies of Scale to be Realized: The Board also considered the economies of scale that might be realized by RiverSource as each of the VP Funds grows and took note of the extent to which VP Fund shareholders might also benefit from such growth. The Board considered, with respect to each VP Fund, that the IMS Agreement provides for lower fees as assets increase at pre-established breakpoints and concluded that the IMS Agreement satisfactorily provided for sharing these economies of scale. Based on the foregoing, the Board, including all of the Independent Directors, concluded that the investment management service fees, and subadvisory fees for the Subadvised Funds, were fair and reasonable in light of the extent and quality of services provided. In reaching this conclusion, no single factor was determinative. On April 12, 2007, the Board, including all of the Independent Directors, approved the renewal of the Advisory Agreements. PROXY VOTING The policy of the Board is to vote the proxies of the companies in which the Fund holds investments consistent with the procedures as stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by calling RiverSource Funds at (888) 791-3380; contacting your financial institution; visiting riversource.com; or searching the website of the Securities and Exchange Commission (SEC) at http://www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31 for the most recent 12-month period ending June 30 of that year, and is available without charge by visiting riversource.com/funds; or searching the website of the SEC at www.sec.gov. - -------------------------------------------------------------------------------- RIVERSOURCE VARIABLE PORTFOLIO FUNDS -- 2007 SEMIANNUAL REPORT 249 RiverSource Variable Portfolio Funds 734 Ameriprise Financial Center Minneapolis, MN 55474 This report must be accompanied or preceded by the Fund's current prospectus. Distributed by RiverSource Distributors, Inc. Member FINRA. Insurance and Annuities are issued by RiverSource Life Insurance Company. S-6462 Z (8/07) Item 2. Code of Ethics. Not applicable for semi-annual reports. Item 3. Audit Committee Financial Expert. Not applicable for semi-annual reports. Item 4. Principal Accountant Fees and Services. Not applicable for semi-annual reports. Item 5. Audit Committee of Listed Registrants. Not applicable. Item 6. The complete schedule of investments is included in Item 1 of this Form N-CSR. Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable. Item 8. Portfolio Managers of Closed-End Management Investment Companies. Not applicable. Item 9. Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. Not applicable. Item 10. Submission of matters to a vote of security holders. Not applicable. Item 11. Controls and Procedures. (a) Based upon their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this Form N-CSR, the registrant's Principal Financial Officer and Principal Executive Officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. (b) There were no changes in the registrant's internal controls over financial reporting that occurred during the registrant's last fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 12. Exhibits. (a)(1) Not applicable for semi-annual reports. (a)(2) Separate certification for the Registrant's principal executive officer and principal financial officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are attached as EX.99.CERT. (a)(3) Not applicable. (b) A certification by the Registrant's principal executive officer and principal financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(b) under the Investment Company Act of 1940, is attached as EX.99.906 CERT. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) RiverSource Variable Portfolio Investment Series, Inc. By /s/ Patrick T. Bannigan ----------------------------------------- Patrick T. Bannigan President and Principal Executive Officer Date August 30, 2007 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, 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/ Patrick T. Bannigan ----------------------------------------- Patrick T. Bannigan President and Principal Executive Officer Date August 30, 2007 By /s/ Jeffrey P. Fox ----------------------------------------- Jeffrey P. Fox Treasurer and Principal Financial Officer Date August 30, 2007 EX-99.CERT 2 c18227exv99wcert.txt CERTIFICATION Certification Pursuant to 270.30a-2 of the Investment Company Act of 1940 I, Patrick T. Bannigan, certify that: 1. I have reviewed this report on Form N-CSR of RiverSource Variable Portfolio - Investment Series, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of a date within 90 days prior to the filing date of this report based on such evaluation; d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 23, 2007 /s/ Patrick T. Bannigan - ------------------------------------------------ Name: Patrick T. Bannigan Title: President and Principal Executive Officer Certification Pursuant to 270.30a-2 of the Investment Company Act of 1940 I, Jeffrey P. Fox, certify that: 1. I have reviewed this report on Form N-CSR of RiverSource Variable Portfolio - Investment Series, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of a date within 90 days prior to the filing date of this report based on such evaluation; d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 23, 2007 /s/ Jeffrey P. Fox - ------------------------------------------------ Name: Jeffrey P. Fox Title: Treasurer and Principal Financial Officer EX-99.906CERT 3 c18227exv99w906cert.txt CERTIFICATION CERTIFICATION RIVERSOURCE VARIABLE PORTFOLIO - INVESTMENT SERIES, INC. (the Registrant) Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Each of the undersigned below certifies that 1. This report on Form N-CSR of the Registrant (the Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Date: August 23, 2007 /s/ Patrick T. Bannigan ----------------------------------------- Patrick T. Bannigan President and Principal Executive Officer Date: August 23, 2007 /s/ Jeffrey P. Fox ----------------------------------------- Jeffrey P. Fox Treasurer and Principal Financial Officer A SIGNED ORIGINAL OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906, OR OTHER DOCUMENT AUTHENTICATING, ACKNOWLEDGING, OR OTHERWISE ADOPTING THE SIGNATURE THAT APPEARS IN TYPED FORM WITHIN ELECTRONIC VERSION OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906, HAS BEEN PROVIDED TO THE REGISTRANT AND WILL BE RETAINED BY THE REGISTRANT AND FURNISHED TO THE SECURITIES AND EXCHANGE COMMISSION OR ITS STAFF UPON REQUEST. This certification is being furnished to the Commission solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Form N-CSR filed with the Commission. -----END PRIVACY-ENHANCED MESSAGE-----