-----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, OkJSF+yl33aHaaGv1MpC5364r6/A4O0FKZSrTr8MdN9wYs7s3jEi9xr6hK+km2Gz jHRk1q3eryoTSPDW1uR8Mw== 0000820027-03-000794.txt : 20031106 0000820027-03-000794.hdr.sgml : 20031106 20031106091631 ACCESSION NUMBER: 0000820027-03-000794 CONFORMED SUBMISSION TYPE: N-CSR/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20030731 FILED AS OF DATE: 20031106 EFFECTIVENESS DATE: 20031106 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AXP MONEY MARKET SERIES INC CENTRAL INDEX KEY: 0000049698 IRS NUMBER: 411254759 STATE OF INCORPORATION: MN FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: N-CSR/A SEC ACT: 1940 Act SEC FILE NUMBER: 811-02591 FILM NUMBER: 03981054 BUSINESS ADDRESS: STREET 1: 80 SOUTH 8TH STREET STREET 2: T33/52 CITY: MINNEAPLOS STATE: MN ZIP: 55440 BUSINESS PHONE: 6123722772 MAIL ADDRESS: STREET 1: 80 SOUTH 8TH STREET STREET 2: T33/52 CITY: MINNEAPOLIS STATE: MN ZIP: 55440 FORMER COMPANY: FORMER CONFORMED NAME: IDS MONEY MARKET SERIES INC DATE OF NAME CHANGE: 19920917 FORMER COMPANY: FORMER CONFORMED NAME: IDS CASH MANAGEMENT FUND INC DATE OF NAME CHANGE: 19920703 N-CSR/A 1 moneymkt-ncsr.txt AXP MONEY MARKET SERIES, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR AMENDMENT TO CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-2591 ------------ AXP MONEY MARKET SERIES, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) 200 AXP Financial Center, Minneapolis, Minnesota 55474 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Leslie L. Ogg - 901 S. Marquette Avenue, Suite 2810, Minneapolis, MN 55402-3268 - -------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: (612) 330-9283 ----------------- Date of fiscal year end: 7/31 -------------- Date of reporting period: 7/31 -------------- AXP(R) Cash Management Fund Annual Report for the Period Ended July 31, 2003 AXP Cash Management Fund seeks to provide shareholders with maximum current income consistent with liquidity and stability of principal. - -------------------------------------------------------------------------------- (logo) (logo) American AMERICAN Express(R) EXPRESS Funds (R) - -------------------------------------------------------------------------------- Table of Contents Fund Snapshot 3 Questions & Answers with Portfolio Management 4 Investments in Securities 7 Financial Statements 11 Notes to Financial Statements 14 Independent Auditors' Report 20 Federal Income Tax Information 21 Board Members and Officers 25 - -------------------------------------------------------------------------------- 2 -- AXP CASH MANAGEMENT FUND -- 2003 ANNUAL REPORT Fund Snapshot AS OF JULY 31, 2003 PORTFOLIO MANAGER Portfolio manager Jerri I. Cohen, CFA* Since 12/02 Years in industry 22 * Team managed, led by Jerri I. Cohen. FUND OBJECTIVE For investors seeking maximum current income consistent with liquidity and conservation of capital. Inception dates A: 10/6/75 B: 3/20/95 C: 6/26/00 Y: 3/20/95 Ticker symbols A: IDSXX B: ACBXX C: -- Y: IDYXX Total net assets $5.194 billion Number of holdings 162 STYLE MATRIX Shading within the style matrix indicates areas in which the Fund generally invests. DURATION SHORT INT. LONG X HIGH MEDIUM QUALITY LOW SECTOR COMPOSITION Percentage of portfolio assets (pie chart) Commercial paper 72.4% Certificates of deposit 21.7% U.S. Government agencies 5.9% An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. Fund holdings are subject to change. - -------------------------------------------------------------------------------- 3 -- AXP CASH MANAGEMENT FUND -- 2003 ANNUAL REPORT Questions & Answers WITH PORTFOLIO MANAGEMENT In December 2002, Jerri I. Cohen, CFA, joined American Express Financial Corporation and began leading a team that manages AXP Cash Management Fund's portfolio. Q: How did AXP Cash Management Fund perform for the 12 months ended July 31, 2003? A: AXP Cash Management Fund's Class A shares returned 0.77% for the period. The Class A shares seven-day yield was 0.32% on July 31, 2003.* The Fund serves as a conservative investment choice for individuals who want to avoid riskier markets. It also continues to be a good avenue to place cash that may be needed in the near future. Q: What factors significantly affected the Fund's performance? A: The most significant factors were the economy and the actions taken by the Federal Reserve Board (the Fed). During the year, the Fed maintained a stimulative monetary policy designed to provide ongoing support to a sluggish economy. The Fed reduced its target interest rate by 0.50% in November 2002 and 0.25% in June 2003. These cuts brought the target rate down to 1.00% -- a level last seen in 1958 -- and reduced the income potential of money market investments. As short-term securities matured, the Fund reinvested the proceeds in securities with lower rates and the yield of the Fund gradually declined. Q: What changes did you make to the Fund during this period? A: The Fund sought to invest assets in an effective manner to generate a competitive yield while maintaining a stable net asset value. During the period, we increased the Fund's allocation to both commercial paper and certificates of deposit, while reducing its position in government agency securities. All of the Fund's investments continue to be in high quality securities with minimal credit risk. We also actively managed the average maturity of the Fund. With interest rates likely to stay low for a considerable period of time, we tried to selectively extend the maturity when the yield curve provided attractive opportunities. On July 31, 2003, the Fund's average maturity was 72 days, an increase from the start of the fiscal year. With these adjustments, we believe the Fund is strategically positioned to better navigate the current low interest rate environment. * Past performance does not guarantee future results. The Fund is neither insured nor guaranteed by the FDIC (Federal Deposit Insurance Corporation) or any other government agency. Yields will fluctuate. Although the Fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in the Fund. The seven-day current yield more closely reflects the current earnings of the Fund than the total return. - -------------------------------------------------------------------------------- 4 -- AXP CASH MANAGEMENT FUND -- 2003 ANNUAL REPORT Questions & Answers (begin callout quote)> The Fund sought to invest assets in an effective manner to generate a competitive yield while maintaining a stable net asset value. (end callout quote) (line chart) CHANGES IN FEDERAL RESERVE MONETARY POLICY JULY 31, 2002 TO JULY 31, 2003 TARGET FEDERAL FUNDS RATE 2.00% 1.75%-----------------------------------| | 1.50% | ---------------------------------| | 1.00% | 1.00% 0.50% 7/02 9/02 12/02 3/03 7/03 Source: Bloomberg To help spur economic growth, the Federal Reserve has reduced its target Federal Funds rate from 1.75% to 1.00% over the 12 months ended July 31, 2003. This was the lowest level for short-term interest rates since 1958.
AVERAGE ANNUAL TOTAL RETURNS as of July 31, 2003 Class A Class B Class C Class Y (Inception dates) (10/6/75) (3/20/95) (6/26/00) (3/20/95) NAV(1) NAV(2) After CDSC(3) NAV(2) After CDSC(4) NAV(1) 1 year +0.77% +0.20% -3.80% +0.20% +0.20% +0.85% 5 years +3.64% +2.91% +2.73% N/A N/A +3.67% 10 years +4.13% N/A N/A N/A N/A N/A Since inception N/A +3.56% +3.56% +2.13% +2.13% +4.33%
(1) Sales charge is not applicable to these shares. Class Y shares available to institutional investors only. (2) Excluding sales charge. (3) Returns at maximum contingent deferred sales charge (CDSC). CDSC applies as follows: first year 5%; second and third year 4%; fourth year 3%; fifth year 2%; sixth year 1%; no sales charge thereafter. (4) 1% CDSC applies to redemptions made within the first year of purchase. Past performance is no guarantee of future results. Investment return and principal value will fluctuate, so that your shares, when redeemed, may be worth more or less than the original cost. The performance shown for each class of shares will vary due to differences in sales charges and fees. Short term performance may be higher or lower than the figures shown. Visit americanexpress.com/funds for current information. - -------------------------------------------------------------------------------- 5 -- AXP CASH MANAGEMENT FUND -- 2003 ANNUAL REPORT Questions & Answers Q: How do you plan to manage the Fund for the coming months? A: We believe there are several factors in place to spur economic growth, including relatively low interest rates, a reduction in federal income tax rates and improving corporate profits. However, we expect inflation to remain low due to the current excess production capacity in the economy and the lack of pricing power in most sectors. In addition, the labor market remains weak. Given these conditions, we expect the Fed to keep rates low through the end of the year. However, we could see rates rise in 2004. As always, we attempt to maximize the Fund's yield without taking unnecessary risks. Since we do not anticipate a near-term increase in interest rates, we have positioned the portfolio with an average maturity at the longer end of our range. We will continue to closely monitor economic data and the interest rate yield curve, striving to strategically adjust our portfolio positioning to maximize the return to Fund shareholders. Short-term income potential has fallen in the past year (column chart) U.S Treasury Yields 2% (X) 1.69% (X) 1.68% 1% (Y) 0.94% (Y) 1.01% 3 month 6 month Maturity (X) July 31, 2002 (Y) July 31, 2003 Source: Bloomberg. This illustration is not intended to represent the yield of any American Express Fund. - -------------------------------------------------------------------------------- 6 -- AXP CASH MANAGEMENT FUND -- 2003 ANNUAL REPORT Investments in Securities AXP Cash Management Fund July 31, 2003 (Percentages represent value of investments compared to net assets) U.S. government agencies (5.9%) Issuer Annualized Amount Value(a) yield on date payable at of purchase maturity Federal Home Loan Nts 04-08-04 1.20% $50,000,000 $50,000,000 06-02-04 1.40 25,000,000 25,000,000 Federal Natl Mtge Assn Nts 07-20-04 1.06 50,400,000 50,400,000 07-26-04 1.03 42,000,000 42,000,000 07-27-04 1.18 42,000,000 42,000,000 08-13-04 1.20 42,000,000 42,000,000 08-30-04 1.30 33,500,000 33,500,000 10-29-03 1.06 23,500,000 23,438,417 Total U.S. government agencies (Cost: $308,338,417) $308,338,417 Certificates of deposit (21.8%) Issuer Annualized Amount Value(a) yield on date payable at of purchase maturity Abbey Natl Yankee 03-03-04 1.04% $55,000,000(c) $54,995,115 Bank One 04-16-04 1.03 60,000,000(c) 59,995,754 Banque Nationale de Paris Yankee 06-07-04 1.04 42,000,000(c) 41,990,955 Bayerische Landesbank Yankee 04-16-04 1.29 59,500,000 59,493,669 Canadian Imperial Bank of Commerce Yankee 08-06-03 1.29 26,900,000 26,900,000 03-05-04 1.30 55,000,000 55,000,000 05-28-04 1.06 33,500,000(c) 33,497,221 06-18-04 1.00 34,000,000 34,000,000 Credit Agricole Yankee 09-03-03 1.05 24,000,000 24,000,000 10-03-03 1.03 35,000,000 35,000,000 10-08-03 1.03 46,200,000 46,200,000 Credit Suisse First Boston NY Yankee 10-07-03 1.05% 30,000,000 30,000,000 01-16-04 1.11 50,000,000(c) 50,000,000 07-06-04 1.09 40,000,000(c) 40,000,000 Danske Bank NY Yankee 07-15-04 1.11 16,000,000 16,000,000 KBC Bank Yankee 09-08-03 1.04 40,000,000 39,999,995 Landesbank-Hessen-Thueringen Girozentrale Yankee 12-10-03 1.03 35,000,000 35,000,000 Lloyds TSB Bank Yankee 04-01-04 1.09 30,000,000 30,000,000 Nordea Bank NY Yankee 01-15-04 1.05 32,500,000 32,499,250 Royal Bank of Scotland Yankee 04-19-04 1.34 59,500,000 59,493,599 Societe Generale Yankee 02-26-04 1.05 60,000,000(c) 59,996,544 03-03-04 1.05 55,000,000(c) 54,996,769 Svenska Handelsbanken Yankee 09-03-03 1.04 38,000,000 38,000,000 09-30-03 1.06 15,000,000 15,000,000 Toronto Dominion Yankee 10-14-03 1.02 40,000,000 40,002,178 Wells Fargo Bank 08-22-03 1.02 55,000,000 55,000,000 Westdeutsche Landesbank Yankee 11-21-03 1.05 25,000,000(c) 25,000,000 02-19-04 1.36 39,700,000 39,700,000 Total certificates of deposit (Cost: $1,131,761,049) $1,131,761,049 See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 7 -- AXP CASH MANAGEMENT FUND -- 2003 ANNUAL REPORT Commercial paper (72.6%) Issuer Annualized Amount Value(a) yield on date payable at of purchase maturity Asset-backed (35.6%) Alpine Securitization 08-13-03 1.03% $34,500,000(b) $34,488,155 08-19-03 1.03 26,100,000(b) 26,086,559 Amsterdam Funding 08-08-03 1.04 32,700,000(b) 32,693,387 08-13-03 1.04 39,000,000(b) 38,986,480 10-02-03 1.05 35,000,000(b) 34,936,708 Barton Capital 08-12-03 1.03 29,000,000(b) 28,990,873 08-12-03 1.04 30,000,000(b) 29,990,467 08-19-03 1.03 28,000,000(b) 27,985,580 08-28-03 1.07 38,700,000(b) 38,668,943 CAFCO LLC 08-27-03 1.02 48,400,000(b) 48,364,345 09-02-03 1.04 33,000,000(b) 32,969,493 09-17-03 1.04 48,000,000(b) 47,934,827 CHARTA LLC 10-06-03 1.07 25,000,000(b) 24,950,958 CRC Funding LLC 08-11-03 1.13 33,000,000(b) 32,989,642 09-04-03 1.04 37,000,000(b) 36,963,658 CXC LLP 08-01-03 0.99 20,945,000(b) 20,945,000 08-07-03 0.98 8,500,000(b) 8,498,612 09-02-03 1.04 35,700,000(b) 35,666,997 Edison Asset Securitization 08-06-03 1.14 30,000,000(b) 29,995,250 08-07-03 1.01 20,000,000(b) 19,996,633 08-07-03 1.14 29,200,000(b) 29,194,452 12-04-03 1.03 28,500,000(b) 28,398,073 Fairway Finance 08-15-03 1.04 24,000,000(b) 23,990,293 09-15-03 1.00 30,000,000(b) 29,962,500 09-25-03 0.94 22,035,000(b) 22,003,355 Falcon Asset Securitization 08-14-03 1.08 12,400,000(b) 12,395,164 08-15-03 1.04 38,100,000(b) 38,084,591 08-18-03 1.05 33,000,000(b) 32,983,638 08-21-03 1.04 27,100,000(b) 27,084,342 08-22-03 1.05 20,000,000(b) 19,987,750 Fleet Funding 08-25-03 1.00 44,300,000(b) 44,270,467 10-09-03 1.03 49,000,000(b) 48,903,266 Galaxy Funding 08-25-03 1.00 10,000,000(b) 9,993,333 08-26-03 1.06 18,000,000(b) 17,986,750 08-26-03 1.08 53,700,000(b) 53,659,726 09-11-03 0.94 25,000,000(b) 24,973,236 09-19-03 1.03 9,000,000(b) 8,987,383 09-24-03 1.03 20,400,000(b) 20,368,482 Greyhawk Funding LLC 08-01-03 1.02 25,000,000(b) 25,000,000 08-01-03 1.03 20,000,000(b) 20,000,000 08-19-03 0.95 20,000,000(b) 19,990,500 08-27-03 1.04 35,000,000(b) 34,973,838 09-10-03 1.04 19,000,000(b) 18,978,044 09-24-03 1.04 25,000,000(b) 24,961,000 Kitty Hawk Funding 08-04-03 1.04 20,011,000(b) 20,009,266 08-22-03 1.04 7,600,000(b) 7,595,389 08-29-03 1.03 5,000,000(b) 4,995,994 08-29-03 1.04 15,000,000(b) 14,987,867 08-29-03 1.05 40,600,000(b) 40,566,843 Old Line Funding 08-28-03 1.05 6,416,000(b) 6,410,947 Preferred Receivables Funding 08-12-03 1.26 28,200,000(b) 28,189,143 08-21-03 1.05 20,000,000(b) 19,988,333 08-28-03 1.06 17,000,000(b) 16,986,485 Receivables Capital 09-10-03 1.03 38,600,000(b) 38,555,824 Sheffield Receivables 08-01-03 1.06 35,000,000(b) 35,000,000 08-04-03 1.04 25,000,000(b) 24,997,833 08-07-03 1.05 33,500,000(b) 33,494,138 08-11-03 0.98 17,060,000(b) 17,055,356 09-29-03 1.07 25,000,000(b) 24,956,160 Sigma Finance 05-06-04 1.06 42,000,000(b,c) 41,998,399 05-10-04 1.06 42,000,000(b,c) 41,995,220 06-09-04 1.06 43,000,000(b,c) 42,992,744 Variable Funding Capital 08-13-03 1.04 34,400,000(b) 34,388,075 Windmill Funding 10-10-03 1.04 8,600,000(b) 8,582,609 12-18-03 1.03 35,100,000(b) 34,960,409 12-22-03 1.03 42,000,000(b) 41,828,162 Total 1,849,767,946 See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 8 -- AXP CASH MANAGEMENT FUND -- 2003 ANNUAL REPORT Commercial paper (continued) Issuer Annualized Amount Value(a) yield on date payable at of purchase maturity Banks and savings & loans (25.7%) AIB North America 08-20-03 1.19% $48,300,000 $48,269,665 08-20-03 1.22 40,000,000 39,974,350 09-18-03 0.93 42,000,000 41,947,920 ANZ (Delaware) 12-11-03 1.03 34,000,000 33,871,593 Bank of Ireland 09-08-03 1.09 35,000,000(b) 34,959,915 09-08-03 1.10 35,000,000(b) 34,959,546 09-22-03 0.93 35,000,000(b) 34,952,983 09-25-03 1.04 22,000,000(b) 21,965,044 Barclays U.S. Funding 08-25-03 0.93 70,000,000 69,956,599 12-19-03 1.04 30,000,000 29,878,667 Danske Bank 08-11-03 1.04 43,100,000 43,087,549 09-30-03 1.04 40,000,000 39,930,667 12-23-03 1.03 23,000,000 22,905,240 Dexia Delaware LLC 08-06-03 1.04 20,800,000 20,796,996 08-22-03 1.04 21,500,000 21,486,957 HBOS Treasury Services 08-20-03 0.95 6,350,000 6,346,816 08-26-03 0.95 5,000,000 4,996,701 09-23-03 1.04 48,000,000 47,926,507 11-03-03 1.04 67,000,000 66,818,057 Landesbank Baden-Wuerttemberg Girozentrale 10-10-03 1.03 54,500,000 54,390,848 Nordea North America 08-06-03 1.03 35,000,000 34,994,993 09-24-03 1.04 18,000,000 17,971,920 Northern Rock 08-05-03 1.20 50,000,000(b) 49,993,333 08-18-03 1.00 24,500,000(b) 24,488,431 11-25-03 0.92 34,000,000(b) 33,899,209 11-26-03 1.05 25,000,000(b) 24,914,688 Scotiabanc 10-09-03 1.03 30,000,000(b) 29,940,775 Societe Generale North America 09-10-03 1.10 15,000,000 14,981,750 Spintab 08-14-03 1.07 46,000,000 45,982,226 08-21-03 1.00 40,000,000 39,977,778 10-02-03 1.04 18,900,000 18,866,148 Svenska Handelsbanken 10-01-03 1.04 50,000,000 49,911,889 10-03-03 1.03 25,000,000 24,954,938 Swedbank 09-10-03 0.95 13,400,000 13,385,856 09-15-03 1.05 15,000,000 14,980,313 Toronto Dominion Holdings 08-14-03 1.00 33,000,000 32,988,083 09-09-03 1.09 34,900,000 34,858,789 11-13-03 1.04 25,000,000 24,925,250 UBS Finance (Delaware) LLC 09-18-03 0.93 40,000,000 39,950,400 Westdeutsche Landesbank Girozentrale 01-27-04 1.36 42,500,000(b) 42,214,719 Total 1,333,604,108 Beverages & tobacco (0.3%) Diageo Capital 10-02-03 1.03 16,000,000(b) 15,971,618 Broker dealers (4.4%) Citigroup Global Markets Holdings 10-08-03 1.04 20,100,000 20,060,705 Goldman Sachs Group 11-17-03 1.31 58,700,000 58,471,069 11-18-03 1.31 37,200,000 37,053,577 11-20-03 0.92 48,500,000 48,362,422 Lehman Brothers Holdings 08-22-04 1.15 42,000,000(c) 42,000,000 Merrill Lynch 11-19-03 1.14 25,000,000(c) 25,000,000 Total 230,947,773 Chemicals (1.2%) BASF AG 08-18-03 0.92 60,000,000(b) 59,973,933 See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 9 -- AXP CASH MANAGEMENT FUND -- 2003 ANNUAL REPORT Commercial paper (continued) Issuer Annualized Amount Value(a) yield on date payable at of purchase maturity Finance companies (1.7%) Household Financial 08-08-03 1.20% $28,500,000 $28,493,350 09-04-03 1.04 29,000,000 28,971,516 09-12-03 1.00 30,000,000 29,965,000 Total 87,429,866 Financial services (1.2%) Toyota Motor Credit 09-16-03 0.93 23,000,000(b) 22,972,668 10-09-03 1.03 10,000,000(b) 9,980,258 Verizon Network Funding 08-26-03 1.00 14,000,000 13,990,278 08-28-03 1.00 15,550,000 15,538,338 Total 62,481,542 Multi-industry (2.5%) GE Capital Intl Funding 08-12-03 1.24 25,000,000(b) 24,990,528 12-11-03 1.05 26,000,000(b) 25,899,900 12-17-03 1.06 26,000,000(b) 25,894,353 General Electric Capital 09-12-03 1.02 21,000,000 20,975,010 11-07-03 1.02 32,200,000 32,110,591 Total 129,870,382 Total commercial paper (Cost: $3,770,047,168) $3,770,047,168 Total investments in securities (Cost: $5,210,146,634)(d) $5,210,146,634 Notes to investments in securities (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Commercial paper sold within terms of a private placement memorandum, exempt from registration under Section 4(2) of the Securities Act of 1933, as amended, and may be sold only to dealers in that program or other "accredited investors." This security has been determined to be liquid under guidelines established by the board. (c) Interest rate varies either based on a predetermined schedule or to reflect current market conditions; rate shown is the effective rate on July 31, 2003. (d) Also represents the cost of securities for federal income tax purposes at July 31, 2003. - -------------------------------------------------------------------------------- 10 -- AXP CASH MANAGEMENT FUND -- 2003 ANNUAL REPORT Financial Statements
Statements of assets and liabilities AXP Cash Management Fund July 31, 2003 Assets Investments in securities, at value (Note 1) (identified cost $5,210,146,634) $5,210,146,634 Cash in bank on demand deposit 15,149,335 Capital shares receivable 187,324 Accrued interest receivable 3,011,581 --------- Total assets 5,228,494,874 ------------- Liabilities Dividends payable to shareholders 357,067 Capital shares payable 204,888 Payable for investment securities purchased 33,500,000 Accrued investment management services fee 43,716 Accrued distribution fee 18,526 Accrued transfer agency fee 14,059 Accrued administrative services fee 3,312 Other accrued expenses 581,420 ------- Total liabilities 34,722,988 ---------- Net assets applicable to outstanding capital stock $5,193,771,886 ============== Represented by Capital stock -- $.01 par value (Note 1) $ 51,938,370 Additional paid-in capital 5,141,830,916 Undistributed net investment income 2,601 Accumulated net realized gain (loss) (1) -- Total -- representing net assets applicable to outstanding capital stock $5,193,771,886 ============== Net assets applicable to outstanding shares: Class A $4,648,884,255 Class B $ 278,198,615 Class C $ 4,433,014 Class Y $ 262,256,002 Net asset value per share of outstanding capital stock: Class A shares 4,648,700,315 $ 1.00 Class B shares 278,367,960 $ 1.00 Class C shares 4,433,221 $ 1.00 Class Y shares 262,335,527 $ 1.00 ----------- --------------
See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 11 -- AXP CASH MANAGEMENT FUND -- 2003 ANNUAL REPORT
Statement of operations AXP Cash Management Fund Year ended July 31, 2003 Investment income Income: Interest $85,139,716 ----------- Expenses (Note 2): Investment management services fee 17,632,026 Distribution fee Class A 2,919,113 Class B 2,697,618 Class C 32,851 Transfer agency fee 13,060,974 Incremental transfer agency fee Class A 1,061,178 Class B 74,947 Class C 914 Administrative services fees and expenses 1,445,919 Compensation of board members 42,042 Custodian fees 459,350 Printing and postage 2,410,823 Registration fees 563,581 Audit fees 36,500 Other 86,428 ------ Total expenses 42,524,264 Expenses waived/reimbursed by AEFC (Note 2) (438,221) -------- 42,086,043 Earnings credits on cash balances (Note 2) (379,316) -------- Total net expenses 41,706,727 ---------- Investment income (loss) -- net 43,432,989 ---------- Net increase (decrease) in net assets resulting from operations $43,432,989 ===========
See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 12 -- AXP CASH MANAGEMENT FUND -- 2003 ANNUAL REPORT
Statements of changes in net assets AXP Cash Management Fund Year ended July 31, 2003 2002 Operations and distributions Investment income (loss) -- net $ 43,432,989 $ 122,004,892 Net realized gain (loss) on investments -- 37,386 ---------- ----------- Net increase (decrease) in net assets resulting from operations 43,432,989 122,042,278 ---------- ----------- Distributions to shareholders from: Net investment income Class A (40,755,461) (114,798,111) Class B (747,377) (3,590,767) Class C (9,174) (22,053) Class Y (1,920,977) (3,594,108) ---------- ---------- Total distributions (43,432,989) (122,005,039) ----------- ------------ Capital share transactions at constant $1 net asset value Proceeds from sales Class A shares (Note 2) 7,310,087,893 15,251,379,851 Class B shares 399,414,994 557,524,233 Class C shares 19,021,332 12,962,225 Class Y shares 263,665,221 212,427,535 Reinvestment of distributions at net asset value Class A shares 40,976,910 115,021,206 Class B shares 754,160 3,560,788 Class C shares 8,811 20,690 Class Y shares 1,907,585 3,612,868 Payments for redemptions Class A shares (8,468,383,146) (15,748,777,409) Class B shares (Note 2) (501,593,543) (454,014,609) Class C shares (Note 2) (18,156,196) (10,288,817) Class Y shares (205,942,507) (187,522,143) ------------ ------------ Increase (decrease) in net assets from capital share transactions (1,158,238,486) (244,093,582) -------------- ------------ Total increase (decrease) in net assets (1,158,238,486) (244,056,343) Net assets at beginning of year 6,352,010,372 6,596,066,715 ------------- ------------- Net assets at end of year $ 5,193,771,886 $ 6,352,010,372 =============== ================ Undistributed (excess of distributions over) net investment income $ 2,601 $ (1) --------------- ----------------
See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 13 -- AXP CASH MANAGEMENT FUND -- 2003 ANNUAL REPORT Notes to Financial Statements AXP Cash Management Fund 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Fund is a series of AXP Money Market Series, Inc. and is registered under the Investment Company Act of 1940 (as amended) (the 1940 Act) as a diversified, open-end management investment company. AXP Money Market Series, Inc. has 10 billion authorized shares of capital stock that can be allocated among the separate series as designated by the board. The Fund invests primarily in money market instruments. The Fund offers Class A, Class B, Class C and Class Y shares. o Class A shares have no sales charge. o Class B shares may be subject to a contingent deferred sales charge (CDSC) and automatically convert to Class A shares during the ninth calendar year of ownership. o Class C shares may be subject to a CDSC. o Class Y shares have no sales charge and are offered only to qualifying institutional investors. All classes of shares have identical voting, dividend and liquidation rights. The distribution fee and incremental transfer agency fee (class specific expenses) differ among classes. Income, expenses (other than class specific expenses) and realized and unrealized gains or losses on investments are allocated to each class of shares based upon its relative net assets. The Fund's significant accounting policies are summarized below: Use of estimates Preparing financial statements that conform to accounting principles generally accepted in the United States of America requires management to make estimates (e.g., on assets, liabilities and contingent assets and liabilities) that could differ from actual results. Valuation of securities Pursuant to Rule 2a-7 of the 1940 Act, all securities are valued daily at amortized cost, which approximates market value, in order to maintain a constant net asset value of $1 per share. - -------------------------------------------------------------------------------- 14 -- AXP CASH MANAGEMENT FUND -- 2003 ANNUAL REPORT Federal taxes The Fund's policy is to comply with all sections of the Internal Revenue Code that apply to regulated investment companies and to distribute substantially all of its taxable income to shareholders. No provision for income or excise taxes is thus required. Net investment income (loss) and net realized gains (losses) may differ for financial statement and tax purposes. The character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gains (losses) were recorded by the Fund. On the statement of assets and liabilities, as a result of permanent book-to-tax differences, undistributed net investment income has been increased by $2,602 and accumulated net realized gain has been decreased by $2,602. The tax character of distributions paid for the years indicated is as follows: Year ended July 31, 2003 2002 Class A Distributions paid from: Ordinary income $40,755,461 $114,798,111 Long-term capital gain -- -- Class B Distributions paid from: Ordinary income 747,377 3,590,767 Long-term capital gain -- -- Class C Distributions paid from: Ordinary income 9,174 22,053 Long-term capital gain -- -- Class Y Distributions paid from: Ordinary income 1,920,977 3,594,108 Long-term capital gain -- -- As of July 31, 2003, the components of distributable earnings on a tax basis are as follows: Undistributed ordinary income $359,668 Accumulated long-term gain (loss) $ (1) Unrealized appreciation (depreciation) $ -- Dividends to shareholders Dividends from net investment income, declared daily and payable monthly, are reinvested in additional shares of the Fund at net asset value or payable in cash. Other Security transactions are accounted for on the date securities are purchased or sold. Interest income, including amortization of premium and discount, is recognized daily. - -------------------------------------------------------------------------------- 15 -- AXP CASH MANAGEMENT FUND -- 2003 ANNUAL REPORT 2. EXPENSES AND SALES CHARGES The Fund has agreements with American Express Financial Corporation (AEFC) to manage its portfolio and provide administrative services. Under an Investment Management Services Agreement, AEFC determines which securities will be purchased, held or sold. The management fee is a percentage of the Fund's average daily net assets in reducing percentages from 0.36% to 0.25% annually. Under an Administrative Services Agreement, the Fund pays AEFC a fee for administration and accounting services at a percentage of the Fund's average daily net assets in reducing percentages from 0.03% to 0.02% annually. A minor portion of additional administrative service expenses paid by the Fund are consultants' fees and fund office expenses. Under this agreement, the Fund also pays taxes, audit and certain legal fees, registration fees for shares, compensation of board members, corporate filing fees and any other expenses properly payable by the Fund and approved by the board. Under a separate Transfer Agency Agreement, American Express Client Service Corporation (AECSC) maintains shareholder accounts and records. The incremental transfer agency fee is the amount charged to the specific classes for the additional expense above the fee for Class Y. The Fund pays AECSC an annual fee per shareholder account for this service as follows: o Class A $22.00 o Class B $23.00 o Class C $22.50 o Class Y $20.00 In addition, there is an annual closed-account fee of $5 per inactive account, charged on a pro rata basis from the date the account becomes inactive until the date the account is purged from the transfer agent system generally within one year. Under terms of a prior agreement that ended April 30, 2003, the Fund paid a transfer agency fee at an annual rate per shareholder account of $24 for Class A, $25 for Class B, $24.50 for Class C and $22 for Class Y. The Fund has agreements with American Express Financial Advisors Inc. (the Distributor) for distribution and shareholder services. Under a Plan and Agreement of Distribution, the Fund pays a fee at an annual rate of 0.75% of the Fund's average daily net assets attributable to Class B and Class C shares. Effective Jan. 1, 2003, the Fund has an agreement to pay a fee at an annual rate of 0.10% of the Fund's average daily net assets attributable to Class A shares and the fee for Class B will increase to 0.85% of the Fund's average daily net assets. As of July 31, 2003, the additional 0.10% for Class B has not been implemented. Sales charges received by the Distributor for distributing Fund shares were $2,559,926 for Class B and $10,165 for Class C for the year ended July 31, 2003. Effective Jan. 1, 2003, AEFC and its affiliates may limit the expenses of one or more classes for the purpose of increasing its yield. This expense limitation policy may be revised or terminated at any time without notice. As of July 31, 2003, AEFC and its affiliates waived certain fees and expenses to 1.26% for Class B and 1.27% for Class C. During the year ended July 31, 2003, the Fund's custodian and transfer agency fees were reduced by $379,316 as a result of earnings credits from overnight cash balances. - -------------------------------------------------------------------------------- 16 -- AXP CASH MANAGEMENT FUND -- 2003 ANNUAL REPORT 3. SECURITIES TRANSACTIONS Cost of purchases and proceeds from sales of securities aggregated $29,717,946,611 and $30,842,043,633, respectively, for the year ended July 31, 2003. Realized gains and losses are determined on an identified cost basis. 4. BANK BORROWINGS The Fund has a revolving credit agreement with a syndicate of banks headed by Deutsche Bank, whereby the Fund is permitted to have bank borrowings for temporary or emergency purposes to fund shareholder redemptions. The agreement went into effect Sept. 24, 2002. The Fund must maintain asset coverage for borrowings of at least 300%. The agreement, which enables the Fund to participate with other American Express mutual 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 LIBOR plus 0.50%, the IBOR plus 0.50% or the higher of the Federal Funds Rate plus 0.25% and the Prime Lending Rate. Borrowings are payable within 60 days after such loan is executed. The Fund also pays a commitment fee equal to its pro rata share of the amount of the credit facility at a rate of 0.09% per annum. Prior to this agreement, the Fund had a revolving credit agreement that permitted borrowings up to $200 million with U.S. Bank, N.A. The Fund had no borrowings outstanding during the year ended July 31, 2003. - -------------------------------------------------------------------------------- 17 -- AXP CASH MANAGEMENT FUND -- 2003 ANNUAL REPORT 5. FINANCIAL HIGHLIGHTS The tables below show certain important financial information for evaluating the Fund's results.
Class A Per share income and capital changes(a) Fiscal period ended July 31, 2003 2002 2001 2000 1999 Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 Income from investment operations: Net investment income (loss) .01 .02 .05 .05 .05 Less distributions: Dividends from net investment income (.01) (.02) (.05) (.05) (.05) Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00 Ratios/supplemental data Net assets, end of period (in millions) $4,649 $5,766 $6,149 $5,438 $5,032 Ratio of expenses to average daily net assets(c) .69% .59% .59% .58% .57% Ratio of net investment income (loss) to average daily net assets .78% 1.89% 5.18% 5.37% 4.65% Total return(g) .77% 1.93% 5.35% 5.55% 4.71% Class B Per share income and capital changes(a) Fiscal period ended July 31, 2003 2002 2001 2000 1999 Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 Income from investment operations: Net investment income (loss) -- .01 .05 .05 .04 Less distributions: Dividends from net investment income -- (.01) (.05) (.05) (.04) Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00 Ratios/supplemental data Net assets, end of period (in millions) $278 $380 $273 $232 $192 Ratio of expenses to average daily net assets(c) 1.26%(e) 1.34% 1.34% 1.33% 1.32% Ratio of net investment income (loss) to average daily net assets .21% 1.13% 4.37% 4.64% 3.88% Total return(g) .20% 1.13% 4.57% 4.76% 3.94%
See accompanying notes to financial highlights. - -------------------------------------------------------------------------------- 18 -- AXP CASH MANAGEMENT FUND -- 2003 ANNUAL REPORT
Class C Per share income and capital changes(a) Fiscal period ended July 31, 2003 2002 2001 2000(b) Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 Income from investment operations: Net investment income (loss) -- .01 .05 -- Less distributions: Dividends from net investment income -- (.01) (.05) -- Net asset value, end of period $1.00 $1.00 $1.00 $1.00 Ratios/supplemental data Net assets, end of period (in millions) $4 $4 $1 $-- Ratio of expenses to average daily net assets(c) 1.27%(f) 1.34% 1.34% 1.33%(d) Ratio of net investment income (loss) to average daily net assets .21% .99% 3.88% 6.10%(d) Total return(g) .20% 1.14% 4.68% .63%(h)
Class Y Per share income and capital changes(a) Fiscal period ended July 31, 2003 2002 2001 2000 1999 Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 Income from investment operations: Net investment income (loss) .01 .02 .05 .05 .05 Less distributions: Dividends from net investment income (.01) (.02) (.05) (.05) (.05) Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00 Ratios/supplemental data Net assets, end of period (in millions) $262 $203 $174 $142 $124 Ratio of expenses to average daily net assets(c) .62% .57% .57% .57% .56% Ratio of net investment income (loss) to average daily net assets .82% 1.86% 5.18% 5.42% 4.64% Total return(g) .85% 1.95% 5.37% 5.56% 4.72%
Notes to financial highlights (a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) Inception date was June 26, 2000. (c) Expense ratio is based on total expenses of the Fund before reduction of earnings credits on cash balances. (d) Adjusted to an annual basis. (e) AEFC waived/reimbursed the Fund for certain expenses. Had AEFC not done so, the annual ratio of expenses for Class B would have been 1.38% for the year ended July 31, 2003. (f) AEFC waived/reimbursed the Fund for certain expenses. Had AEFC not done so, the annual ratio of expenses for Class C would have been 1.38% for the year ended July 31, 2003. (g) Total return does not reflect payment of a sales charge. (h) Not annualized. - -------------------------------------------------------------------------------- 19 -- AXP CASH MANAGEMENT FUND -- 2003 ANNUAL REPORT Independent Auditors' Report THE BOARD AND SHAREHOLDERS AXP MONEY MARKET SERIES, INC. We have audited the accompanying statement of assets and liabilities, including the schedule of investments in securities, of AXP Cash Management Fund (a series of AXP Money Market Series, Inc.) as of July 31, 2003, the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period ended July 31, 2003, and the financial highlights for each of the years in the five-year period ended July 31, 2003. These financial statements and the financial highlights are the responsibility of fund management. Our responsibility is to express an opinion on these financial statements and the financial highlights based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of July 31, 2003, by correspondence with the custodian or by other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of AXP Cash Management Fund as of July 31, 2003, and the results of its operations, changes in its net assets, and the financial highlights for each of the periods stated in the first paragraph above, in conformity with accounting principles generally accepted in the United States of America. KPMG LLP Minneapolis, Minnesota September 12, 2003 - -------------------------------------------------------------------------------- 20 -- AXP CASH MANAGEMENT FUND -- 2003 ANNUAL REPORT Federal Income Tax Information (UNAUDITED) The Fund is required by the Internal Revenue Code of 1986 to tell its shareholders about the tax treatment of the dividends it pays during its fiscal year. The dividends listed below are reported to you on Form 1099-DIV, Dividends and Distributions. Shareholders should consult a tax advisor on how to report distributions for state and local tax purposes. AXP Cash Management Fund Fiscal year ended July 31, 2003 Class A Income distributions -- taxable as dividend income: Qualified Dividend Income for individuals (effective for distributions made after Jan. 1, 2003) 0.00% Dividends Received Deduction for corporations 0.00% Payable date Per share Aug. 26, 2002 $0.00097 Sept. 26, 2002 0.00110 Oct. 25, 2002 0.00096 Nov. 25, 2002 0.00094 Dec. 20, 2002 0.00072 Jan. 22, 2003 0.00070 Feb. 21, 2003 0.00048 March 24, 2003 0.00041 April 24, 2003 0.00045 May 23, 2003 0.00040 June 23, 2003 0.00039 July 24, 2003 0.00030 Total Distributions $0.00782 - -------------------------------------------------------------------------------- 21 -- AXP CASH MANAGEMENT FUND -- 2003 ANNUAL REPORT Class B Income distributions -- taxable as dividend income: Qualified Dividend Income for individuals (effective for distributions made after Jan. 1, 2003) 0.00% Dividends Received Deduction for corporations 0.00% Payable date Per share Aug. 26, 2002 $0.00037 Sept. 26, 2002 0.00042 Oct. 25, 2002 0.00036 Nov. 25, 2002 0.00034 Dec. 20, 2002 0.00017 Jan. 22, 2003 0.00011 Feb. 21, 2003 0.00009 March 24, 2003 0.00005 April 24, 2003 0.00005 May 23, 2003 0.00004 June 23, 2003 0.00005 July 24, 2003 0.00005 Total Distributions $0.00210 - -------------------------------------------------------------------------------- 22 -- AXP CASH MANAGEMENT FUND -- 2003 ANNUAL REPORT Class C Income distributions -- taxable as dividend income: Qualified Dividend Income for individuals (effective for distributions made after Jan. 1, 2003) 0.00% Dividends Received Deduction for corporations 0.00% Payable date Per share Aug. 26, 2002 $0.00038 Sept. 26, 2002 0.00042 Oct. 25, 2002 0.00037 Nov. 25, 2002 0.00035 Dec. 20, 2002 0.00017 Jan. 22, 2003 0.00010 Feb. 21, 2003 0.00009 March 24, 2003 0.00005 April 24, 2003 0.00005 May 23, 2003 0.00004 June 23, 2003 0.00004 July 24, 2003 0.00006 Total Distributions $0.00212 - -------------------------------------------------------------------------------- 23 -- AXP CASH MANAGEMENT FUND -- 2003 ANNUAL REPORT Class Y Income distributions -- taxable as dividend income: Qualified Dividend Income for individuals (effective for distributions made after Jan. 1, 2003) 0.00% Dividends Received Deduction for corporations 0.00% Payable date Per share Aug. 26, 2002 $0.00098 Sept. 26, 2002 0.00111 Oct. 25, 2002 0.00097 Nov. 25, 2002 0.00095 Dec. 20, 2002 0.00074 Jan. 22, 2003 0.00077 Feb. 21, 2003 0.00058 March 24, 2003 0.00051 April 24, 2003 0.00056 May 23, 2003 0.00049 June 23, 2003 0.00048 July 24, 2003 0.00041 Total Distributions $0.00855 - -------------------------------------------------------------------------------- 24 -- AXP CASH MANAGEMENT FUND -- 2003 ANNUAL REPORT Board Members and Officers Shareholders elect a board that oversees the Fund's operations. The board appoints officers who are responsible for day-to-day business decisions based on policies set by the board. The following is a list of the Fund's board members. Each member oversees 15 Master Trust portfolios and 83 American Express mutual funds. Board members serve until the next regular shareholders' meeting or until he or she reaches the mandatory retirement age established by the board.
Independent Board Members Name, address, age Position held Principal occupation during past Other directorships with Fund and five years length of service - ---------------------------------- ------------------ ------------------------------------- --------------------------------- Arne H. Carlson Board member Chair, Board Services Corporation 901 S. Marquette Ave. since 1999 (provides administrative services Minneapolis, MN 55402 to boards). Former Governor of Age 68 Minnesota - ---------------------------------- ------------------ ------------------------------------- --------------------------------- Philip J. Carroll, Jr. Board member Retired Chairman and CEO, Fluor Scottish Power PLC, Vulcan 901 S. Marquette Ave. since 2002 Corporation (engineering and Materials Company, Inc. Minneapolis, MN 55402 construction) since 1998 (construction Age 65 materials/chemicals) - ---------------------------------- ------------------ ------------------------------------- --------------------------------- Livio D. DeSimone Board member Retired Chair of the Board and Cargill, Incorporated 30 Seventh Street East since 2001 Chief Executive Officer, Minnesota (commodity merchants and Suite 3050 Mining and Manufacturing (3M) processors), General Mills, St. Paul, MN 55101-4901 Inc. (consumer foods), Vulcan Age 69 Materials Company (construction materials/ chemicals), Milliken & Company (textiles and chemicals), and Nexia Biotechnologies, Inc. - ---------------------------------- ------------------ ------------------------------------- --------------------------------- Heinz F. Hutter* Board member Retired President and Chief 901 S. Marquette Ave. since 1994 Operating Officer, Cargill, Minneapolis, MN 55402 Incorporated (commodity merchants Age 74 and processors) - ---------------------------------- ------------------ ------------------------------------- --------------------------------- Anne P. Jones Board member Attorney and Consultant 901 S. Marquette Ave. since 1985 Minneapolis, MN 55402 Age 68 - ---------------------------------- ------------------ ------------------------------------- --------------------------------- Stephen R. Lewis, Jr.** Board member Retired President and Professor of Valmont Industries, Inc. 901 S. Marquette Ave. since 2002 Economics, Carleton College (manufactures irrigation Minneapolis, MN 55402 systems) Age 64 - ---------------------------------- ------------------ ------------------------------------- --------------------------------- Alan G. Quasha Board member President, Quadrant Management, Compagnie Financiere Richemont 901 S. Marquette Ave. since 2002 Inc. (management of private AG (luxury goods), Harken Minneapolis, MN 55402 equities) Energy Corporation (oil and gas Age 53 exploration) and SIRIT Inc. (radio frequency identification technology) - ---------------------------------- ------------------ ------------------------------------- ---------------------------------
* Interested person of AXP Partners International Aggressive Growth Fund and AXP Partners Aggressive Growth Fund by reason of being a security holder of J P Morgan Chase & Co., which has a 45% interest in American Century Companies, Inc., the parent company of the subadviser of two of the AXP Partners Funds, American Century Investment Management, Inc. ** Interested person of AXP Partners International Aggressive Growth Fund by reason of being a security holder of FleetBoston Financial Corporation, parent company of Liberty Wanger Asset Management, L.P., one of the fund's subadvisers. - -------------------------------------------------------------------------------- 25 -- AXP CASH MANAGEMENT FUND -- 2003 ANNUAL REPORT
Independent Board Members (continued) Name, address, age Position held Principal occupation during past Other directorships with Fund and five years length of service - --------------------------------- ------------------- ------------------------------------- --------------------------------- Alan K. Simpson Board member Former three-term United States Biogen, Inc. 1201 Sunshine Ave. since 1997 Senator for Wyoming (biopharmaceuticals) Cody, WY 82414 Age 71 - --------------------------------- ------------------- ------------------------------------- --------------------------------- Alison Taunton-Rigby Board member President, Forester Biotech since 901 S. Marquette Ave. since 2002 2000. Former President and CEO, Minneapolis, MN 55402 Aquila Biopharmaceuticals, Inc. Age 59 - --------------------------------- ------------------- ------------------------------------- --------------------------------- Board Members Affiliated with AEFC*** Name, address, age Position held Principal occupation during past Other directorships with Fund and five years length of service - --------------------------------- ------------------- ------------------------------------- --------------------------------- Barbara H. Fraser Board member Executive Vice President - AEFA 1546 AXP Financial Center since 2002 Products and Corporate Marketing of Minneapolis, MN 55474 AEFC since 2002. President - Age 53 Travelers Check Group, American Express Company, 2001-2002. Management Consultant, Reuters, 2000-2001. Managing Director - International Investments, Citibank Global, 1999-2000. Chairman and CEO, Citicorp Investment Services and Citigroup Insurance Group, U.S., 1998-1999 - --------------------------------- ------------------- ------------------------------------- --------------------------------- Stephen W. Roszell Board member Senior Vice President - 50238 AXP Financial Center since 2002, Vice Institutional Group of AEFC Minneapolis, MN 55474 President since Age 54 2002 - --------------------------------- ------------------- ------------------------------------- --------------------------------- William F. Truscott Board member Senior Vice President - Chief 53600 AXP Financial Center since 2001, Vice Investment Officer of AEFC since Minneapolis, MN 55474 President since 2001. Former Chief Investment Age 42 2002 Officer and Managing Director, Zurich Scudder Investments - --------------------------------- ------------------- ------------------------------------- ---------------------------------
*** Interested person by reason of being an officer, director and/or employee of AEFC. - -------------------------------------------------------------------------------- 26 -- AXP CASH MANAGEMENT FUND -- 2003 ANNUAL REPORT The board has appointed officers who are responsible for day-to-day business decisions based on policies it has established. The officers serve at the pleasure of the board. In addition to Mr. Roszell, who is vice president, and Mr. Truscott, who is vice president, the Fund's other officers are:
Other Officers Name, address, age Position held Principal occupation during past Other directorships with Fund and five years length of service - --------------------------------- ------------------- ------------------------------------- --------------------------------- Jeffrey P. Fox Treasurer since Vice President - Investment 50005 AXP Financial Center 2002 Accounting, AEFC, since 2002; Vice Minneapolis, MN 55474 President - Finance, American Age 48 Express Company, 2000-2002; Vice President - Corporate Controller, AEFC, 1996-2000 - --------------------------------- ------------------- ------------------------------------- --------------------------------- Paula R. Meyer President since Senior Vice President and General 596 AXP Financial Center 2002 Manager - Mutual Funds, AEFC, since Minneapolis, MN 55474 2002; Vice President and Managing Age 49 Director - American Express Funds, AEFC, 2000-2002; Vice President, AEFC, 1998-2000 - --------------------------------- ------------------- ------------------------------------- --------------------------------- Leslie L. Ogg Vice President, President of Board Services 901 S. Marquette Ave. General Counsel, Corporation Minneapolis, MN 55402 and Secretary Age 64 since 1978 - --------------------------------- ------------------- ------------------------------------- ---------------------------------
The SAI has additional information about the Fund's directors and is available, without charge, upon request by calling (800) 862-7919. - -------------------------------------------------------------------------------- 27 -- AXP CASH MANAGEMENT FUND -- 2003 ANNUAL REPORT The policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities can be found in the Fund's Statement of Additional Information (SAI) which is available (i) without charge, upon request, by calling toll-free (800) 862-7919; (ii) on the American Express Company Web site at americanexpress.com/funds; and (iii) on the Securities and Exchange Commission Web site at http://www.sec.gov. - -------------------------------------------------------------------------------- (logo) AMERICAN EXPRESS (R) - -------------------------------------------------------------------------------- American Express Funds 70100 AXP Financial Center Minneapolis, MN 55474 This report must be accompanied or preceded by the Fund's current prospectus. Distributed by American Express Financial Advisors Inc. Member NASD. American Express Company is separate from American Express Financial Advisors Inc. and is not a broker-dealer.This report must be accompanied or preceded by the Fund's current prospectus. Distributed by American Express Financial Advisors Inc. Member NASD. American Express Company is separate from American Express Financial Advisors Inc. and is not a broker-dealer. Item 2. (a) The Registrant has adopted a code of ethics that applies to the Registrant's principal executive officer and principal financial officer. A copy of the code of ethics is filed as an exhibit to this form N-CSR. (b) During the period covered by this report, there were not any amendments to the provisions of the code of ethics adopted in 2(a) above. (c) During the period covered by this report, there were not any implicit or explicit waivers to the provisions of the code of ethics adopted in 2(a). Item 3. The Registrant's board of directors has determined that independent directors Livio D. DeSimone, Anne P. Jones, and Alan G. Quasha, each qualify as audit committee financial experts. Item 4. Principal Accountant Fees and Services. Not applicable. Item 5. Audit Committee of Listed Registrants. Not applicable. Item 6. [Reserved] Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable. Item 8. [Reserved] Item 9. Controls and Procedures. (a) The registrant's Principal Executive Officer and Principal Financial Officer have evaluated the registrant's disclosure controls and procedures within 90 days of this filing and have concluded that the registrant's disclosure controls and procedures by the registrant in this Form N-CSR was recorded, processed, summarized, and reported timely. (b) At the date of filing this Form N-CSR, the registrant's Principal Executive Officer and Principal Financial Officer are aware of no significant changes in the registrant's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Item 10. Exhibits. (a)(1) Code of ethics as applies to the Registrant's principal executive officer and principal financial officer, as required to be disclosed under Item 2 of Form N-CSR, is attached as Ex. 99.CODE ETH. (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. (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) AXP Money Market Series, Inc. By /s/ Paula R. Meyer ------------------ Paula R. Meyer President and Principal Executive Officer Date November 6, 2003 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/ Paula R. Meyer ------------------ Paula R. Meyer President and Principal Executive Officer Date November 6, 2003 By /s/ Jeffrey P. Fox ------------------ Jeffrey P. Fox Treasurer and Principal Financial Officer Date November 6, 2003 EX-99.CODE ETH 3 code-ethics.txt CODE OF ETHICS AMERICAN EXPRESS FUNDS PREFERRED MASTER TRUST GROUP (THE AXP FUNDS) CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS I. Purpose of the Code; Covered Officers This code of ethics ("Code") for the AXP Funds (collectively, "Funds," and each, "Fund") applies to the Funds' Principal Executive Officer and Principal Financial Officer (the "Covered Officers," each of whom is identified in Exhibit A) for the purpose of promoting, in connection with his or her duties: o honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; o full, fair, accurate, timely, and understandable disclosure in reports and documents that a Fund files with, or submits to, the Securities and Exchange Commission ("SEC") and in other public communications made by the Funds; o compliance with laws and governmental rules and regulations applicable to the conduct of the Funds' business and their financial reporting; o the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and o accountability for adherence to the Code. Each Covered Officer should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. II. Covered Officers Should Handle Ethically Actual and Apparent Conflicts of Interest A "conflict of interest" occurs when a Covered Officer's private interest interferes with the interests of, or his or her service to, the Funds. For example, a conflict of interest would arise if a Covered Officer, or a member of his or her family, receives improper personal benefits as a result of his or her position with the Funds. Certain conflicts of interest arise out of the relationships between Covered Officers and the Funds and already are subject to conflict of interest provisions in the Investment Company Act of 1940 ("Investment Company Act") and the Investment Advisers Act of 1940 ("Investment Advisers Act"). For example, Covered Officers may not individually engage in certain transactions, such as the purchase or sale of securities or other property, with the Funds because of their status as "affiliated persons" of the Funds. The compliance programs and -1- procedures of the Funds and of American Express Financial Corporation ("AEFC"), the investment adviser to the Funds, are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code. Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationship between the Funds and AEFC, of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties, whether formally for the Funds or for AEFC, or for both, be involved in establishing policies and implementing decisions that will have different effects on AEFC and the Funds. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the Funds and AEFC and is consistent with the performance by the Covered Officers of their duties as officers of the Funds. Thus, if performed in conformity with the provisions of the Investment Company Act and the Investment Advisers Act, such activities will be deemed to have been handled ethically. Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the Investment Company Act and the Investment Advisers Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of the Funds. Each Covered Officer must: o not use his or her personal influence or personal relationships improperly to influence investment decisions or financial reporting by the Funds whereby the Covered Officer would benefit personally to the detriment of the Funds; o not cause the Funds to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than the benefit of the Funds; o not use material non-public knowledge of portfolio transactions made or contemplated for the Company to trade personally or cause others to trade personally in contemplation of the market effect of such transactions; III. Disclosure and Compliance o Each Covered Officer should familiarize himself or herself with the disclosure requirements generally applicable to the Funds; o Each Covered Officer should not knowingly misrepresent, or cause others to misrepresent, facts about the Funds to others, whether within or outside the Funds, including to the Funds' directors and auditors, and to governmental regulators and self-regulatory organizations; o Each Covered Officer should, to the extent appropriate within his or her area of responsibility, consult with other officers and employees of the Funds and AEFC with the goal of promoting full, fair, accurate, timely, and understandable disclosure in the reports -2- and documents the Funds file with, or submit to, the SEC and in other public communications made by the Funds; and o It is the responsibility of each Covered Officer to promote compliance with the standards and restrictions imposed by applicable laws, rules, and regulations. IV. Reporting and Accountability Each Covered Officer must: o upon adoption of the Code (or thereafter as applicable, upon becoming a Covered Officer), affirm in writing to the Board that he or she has received, read, and understands the Code; o annually thereafter affirm to the Board that he or she has complied with the requirements of the Code; o not retaliate against any other Covered Officer or any employee of AEFC or its affiliated persons for reports of potential violations that are made in good faith; and o notify the general counsel of the Funds ("Funds General Counsel") promptly if he or she knows of any violation of this Code. Failure to do so is itself a violation of this Code. The Funds General Counsel is responsible for applying this Code to specific situations in which questions are presented under it and has the authority to interpret this Code in any particular situation. However, any approvals or waivers sought by a Covered Officers will be considered by the Board Effectiveness Committees (the "Committees"). The Funds will follow these procedures in investigating and enforcing this Code: o The Funds General Counsel will take all appropriate action to investigate any potential violations reported to him; o If, after such investigation, the Funds General Counsel believes that no violation has occurred, he or she is not required to take any further action; o Any matter that the Funds General Counsel believes is a violation will be reported to the Committees; o If the Committees concur that a violation has occurred, they will inform the Board, and the Board will consider appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures; notification to appropriate personnel of the investment adviser or its board; or a recommendation to dismiss the Covered Officer; o The Committees will be responsible for granting waivers, as appropriate; and o Any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules. V. Other Policies and Procedures This Code shall be the sole code of ethics adopted by the Funds for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the Funds, AEFC, or any -3- affiliate of AEFC govern or purport to govern the activities of the Covered Officers, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code. AEFC's code of ethics under Rule 17j-1 under the Investment Company Act is a separate requirement applying to the Covered Officers and others, and is not part of this Code. VI. Amendments Any amendments to this Code, other than amendments to Exhibit A, must be approved or ratified by a majority vote of each Fund's Board, including a majority of its independent directors. Date: July, 2003 -4- Exhibit A Persons Covered by this Code of Ethics Paula R. Meyer President Jeffrey P. Fox Treasurer -5- EX-99.CERT 4 ex99-cert.txt CERTIFICATION PURSUANT TO 270.30A-2 OF THE INVESTMENT COMPANY ACT OF 1940 Certification Pursuant to 270.30a-2 of the Investment Company Act of 1940 I, Paula Meyer, certify that: 1. I have reviewed this report on Form N-CSR of AXP Money Market 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-2(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures 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) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, 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 in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: November 4, 2003 /s/ Paula R. Meyer -------------------------------- Name: Paula R. Meyer Title: President and Chief Executive Officer Certification Pursuant to 270.30a-2 of the Investment Company Act of 1940 I, Jeffrey Fox, certify that: 1. I have reviewed this report on Form N-CSR of AXP Money Market 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-2(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures 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) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, 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 in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: November 4, 2003 /s/ Jeffrey P. Fox -------------------------------- Name: Jeffrey P. Fox Title: Treasurer and Chief Financial Officer EX-99.906 CERT 5 ex99-906cert.txt CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 CERTIFICATION AXP Money Market 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: November 4, 2003 /s/ Paula R. Meyer ------------------ Paula R. Meyer President and Chief Executive Officer Date: November 4, 2003 /s/ Jeffrey P. Fox ------------------ Jeffrey P. Fox Treasurer and Chief 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-----