-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, HY46l2HrjzQY2BJDJlpk2SHTi2axITPevM72ng+JGBAFqtkn91v7bRBXmWIeBJPz mNo4YI1dwgDZP4Zm6UIgFw== 0000912057-95-001040.txt : 19950302 0000912057-95-001040.hdr.sgml : 19950302 ACCESSION NUMBER: 0000912057-95-001040 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 16 FILED AS OF DATE: 19950228 EFFECTIVENESS DATE: 19950228 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: IDS CALIFORNIA TAX EXEMPT TRUST CENTRAL INDEX KEY: 0000792717 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: MN FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1933 Act SEC FILE NUMBER: 033-05103 FILM NUMBER: 95515872 BUSINESS ADDRESS: STREET 1: IDS TOWER 10 STREET 2: T33/52 CITY: MINNEAPOLIS 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 485BPOS 1 485BPOS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM N-1A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Pre-Effective Amendment No. __ Post-Effective Amendment No. 18 (File No. 33-5103) /X/ and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 Amendment No. 21 (File No. 811-4646) /X/ ------------------------ IDS CALIFORNIA TAX-EXEMPT TRUST IDS Tower 10, Minneapolis, Minnesota 55440-0534 Leslie L. Ogg 901 Marquette Avenue South Minneapolis, MN 55402-3268 (612) 330-9283 ------------------------ APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: It is proposed that this filing will become effective (check appropriate box) / / immediately upon filing pursuant to paragraph (b) /X/ on March 30, 1995 pursuant to paragraph (b) / / 60 days after filing pursuant to paragraph (a)(i) / / on (date) pursuant to paragraph (a)(i) / / 75 days after filing pursuant to paragraph (a)(ii) / / on (date) pursuant to paragraph (a)(ii) of rule 485. If appropriate, check the following box: /X/ This post-effective amendment designates a new effective date for a previously filed post-effective amendment. ------------------------ THE REGISTRANT HAS REGISTERED AN INDEFINITE NUMBER OR AMOUNT OF SECURITIES UNDER THE SECURITIES ACT OF 1933 PURSUANT TO SECTION 24F-2 OF THE INVESTMENT COMPANY ACT OF 1940. RULE 24F-2 NOTICE FOR ITS MOST RECENT FISCAL YEAR WAS FILED ON OR ABOUT AUG. 31, 1994. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- EXPLANATORY NOTE The prospectus and Statement of Additional Information contained in this Post-Effective Amendment No. 18 to Registration Statement No. 33-5103 are related to and are identical with the prospectus and Statement of Additional Information for the IDS Minnesota, Massachusetts, Michigan, New York and Ohio Funds contained in Post-Effective Amendment No. 24 to Registration Statement No. 33-5102 for IDS Special Tax-Exempt Series Trust. The cross reference sheet below shows the location in the prospectus and the Statement of Additional Information of the information called for by the items enumerated in Part A and Part B of Form N-1A. Negative answers omitted from Part A or Part B are so indicated.
PART A - --------------------------------------------------------------------------------- ITEM NO. SECTION IN PROSPECTUS - ------------ ------------------------------------------------------------------ 1 Cover page of prospectus 2 The fund in brief; Sales charge and fund expenses 3(a) Financial highlights (b) NA (c) Performance (d) Financial highlights 4(a) The fund in brief; Investment policies and risks; How the fund is organized (b) Investment policies and risks (c) Investment policies and risks 5(a) Directors and officers; Directors and officers of the fund (listing) (b) How the fund is organized; About American Express Financial Corporation (b)(i) About American Express Financial Corporation -- General information (b)(ii) Investment manager and transfer agent (b)(iii) Investment manager and transfer agent (c) Portfolio manager (d) The fund in brief (e) Investment manager and transfer agent (f) Distributor (g) Investment manager and transfer agent 5A(a) * (b) * 6(a) Shares; Voting rights (b) NA (c) NA (d) Voting rights (e) Cover page; Special shareholder services (f) Dividends and capital gain distributions; Reinvestments (g) Taxes 7(a) Distributor (b) Key terms; Valuing assets (c) How to buy, exchange or sell shares (d) How to buy shares (e) NA (f) Distributor 8(a) How to sell shares (b) NA (c) How to buy shares: Three ways to invest (d) How to buy, exchange or sell shares: Redemption policies -- "Important..." 9 None
PART B - --------------------------------------------------------------------------------- ITEM NO. SECTION IN SAI - ------------ ------------------------------------------------------------------ 10 Cover page of SAI 11 Table of Contents 12 NA 13(a) Additional Investment Policies; all appendices except Dollar-Cost Averaging (b) Additional Investment Policies (c) Additional Investment Policies (d) Portfolio Transactions 14(a) Directors and officers of the fund;** Directors and Officers (b) Directors and Officers (c) Directors and Officers 15(a) NA (b) NA (c) Directors and Officers 16(a)(i) How the fund is organized; About American Express Financial Corporation** (a)(ii) Agreements: Investment Management Services Agreement, Plan and Agreement of Distribution (a)(iii) Agreements: Investment Management Services Agreement (b) Agreements: Investment Management Services Agreement (c) NA (d) Agreements: Administrative Services Agreement, Shareholder Service Agreement (e) NA (f) Agreements: Distribution Agreement (g) NA (h) Custodian; Independent Auditors (i) Agreements: Transfer Agency Agreement; Custodian 17(a) Portfolio Transactions (b) Brokerage Commissions Paid to Brokers Affiliated with American Express Financial Corporation (c) Portfolio Transactions (d) Portfolio Transactions (e) Portfolio Transactions 18(a) Shares and Voting rights** (b) NA 19(a) Investing in the Fund (b) Valuing Fund Shares; Investing in the Fund (c) NA 20 Taxes 21(a) Agreements: Distribution Agreement (b) Agreements: Distribution Agreement (c) NA 22(a) Performance Information (for money market funds only) (b) Performance Information (for all funds except money market funds) 23 Financial Statements - ------------------------ *Designates information is located in annual report. **Designates page number in prospectus.
This prospectus contains facts IDS CALIFORNIA TAX-EXEMPT TRUST that can help you decide if CALIFORNIA TAX-EXEMPT FUND one or more of the funds is IDS SPECIAL TAX-EXEMPT SERIES TRUST the right investment for you. MASSACHUSETTS TAX-EXEMPT FUND Read it before you invest and MICHIGAN TAX-EXEMPT FUND keep it for future reference. MINNESOTA TAX-EXEMPT FUND NEW YORK TAX-EXEMPT FUND Additional facts about the OHIO TAX-EXEMPT FUND funds are in a Statement of PROSPECTUS Additional Information (SAI), AUG. 29, 1994 filed with the Securities and AS REVISED MARCH 20, 1995 Exchange Commission. The SAI, EACH FUND'S GOAL IS TO dated Aug. 29, 1994 as revised PROVIDE A HIGH LEVEL OF March 20, 1995, is INCOME GENERALLY EXEMPT incorporated here by FROM FEDERAL INCOME TAX AS reference. For a free copy, WELL AS FROM THE RESPECTIVE contact American Express STATE AND LOCAL INCOME TAX. Shareholder Service. A PORTION OF EACH FUND'S ASSETS MAY BE INVESTED IN THESE SECURITIES HAVE NOT BEEN BONDS WHOSE INTEREST IS APPROVED OR DISAPPROVED BY THE SUBJECT TO THE ALTERNATIVE SECURITIES AND EXCHANGE MINIMUM TAX COMPUTATION. COMMISSION OR ANY STATE American Express Shareholder SECURITIES COMMISSION, NOR HAS Service THE SECURITIES AND EXCHANGE P.O. Box 534 COMMISSION OR ANY STATE Minneapolis, MN SECURITIES COMMISSION PASSED 55440-0534 UPON THE ACCURACY OR ADEQUACY 612-671-3733 OF THIS PROSPECTUS. ANY TTY: 800-846-4852 REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. SHARES IN THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK, AND SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. --------------------------------------------------------------------------- TABLE OF CONTENTS - -------------------------------------------------------------- THE FUNDS IN BRIEF Goals 3P Types of fund investments 3P Manager and distributor 3P Portfolio manager 3P Alternative sales arrangements 3P - -------------------------------------------------------------- SALES CHARGE AND FUND EXPENSES - -------------------------------------------------------------- PERFORMANCE Financial highlights 8P Total returns 14P Yield 15P Key terms 16P - -------------------------------------------------------------- INVESTMENT POLICIES AND RISKS Facts about investments and their risks 17P Alternative investment option 22P Valuing assets 22P - -------------------------------------------------------------- HOW TO BUY, EXCHANGE OR SELL SHARES Alternative sales arrangements 23P How to buy shares 26P How to exchange shares 28P How to sell shares 28P Reductions and waivers of the sales charge 32P - -------------------------------------------------------------- SPECIAL SHAREHOLDER SERVICES Services 36P Quick telephone reference 36P - -------------------------------------------------------------- DISTRIBUTIONS AND TAXES Dividend and capital gain distributions 37P Reinvestments 37P Taxes 38P - -------------------------------------------------------------- HOW THE FUNDS ARE ORGANIZED Shares 41P Voting rights 42P Shareholder meetings 42P Trustees and officers 42P Investment manager and transfer agent 44P Distributor 45P - -------------------------------------------------------------- ABOUT AMERICAN EXPRESS FINANCIAL CORPORATION General information 47P - -------------------------------------------------------------- APPENDICES A: Tax-exempt vs. taxable income 48P B: Description of corporate bond ratings 62P C: Descriptions of derivative instruments 63P 2P - ------------------------------------------------------------------------------- The funds in brief GOALS Each fund seeks to provide shareholders a high level of income generally exempt from federal income tax as well as from the respective state and local income tax. Because any investment involves risk, achieving these goals cannot be guaranteed. Only shareholders can change the goals. TYPES OF FUND INVESTMENTS Each fund is a non-diversified mutual fund that invests primarily in high- or medium-grade municipal securities that are generally exempt from federal income tax as well as from the respective state and local income tax. A portion of each fund's assets may be invested in bonds subject to the alternative minimum tax computation. Each of the funds may invest in lower-quality securities that tend to be more price volatile than higher-quality securities. Funds that concentrate their investments in a single state or invest more than 5% of their assets in a single issuer may have more market risk than funds that have broader diversification. MANAGER AND DISTRIBUTOR The funds are managed by American Express Financial Corporation, a provider of financial services since 1894. American Express Financial Corporation currently manages more than $37 billion in assets for the IDS MUTUAL FUND GROUP. Shares of the funds are sold through American Express Financial Advisors Inc., a wholly owned subsidiary of American Express Financial Corporation. PORTFOLIO MANAGER Paul Hylle joined American Express Financial Corporation in 1993 and serves as portfolio manager. He also is portfolio manager of IDS Insured Tax-Exempt Fund. Prior to joining American Express Financial Corporation, he had been a portfolio manager at Lutheran Brotherhood, a Minnesota based fraternal benefit society offering financial services to Lutherans. ALTERNATIVE SALES ARRANGEMENTS Each fund offers its shares in three classes. Class A shares are subject to a sales charge at the time of purchase. Class B shares are subject to a contingent deferred sales charge (CDSC) on redemptions made within 6 years of purchase and an annual distribution (12b-1) fee. Class Y shares are sold without a sales charge to qualifying institutional investors. Other differences between the classes include the fees paid by each class. Each fund offers these alternatives so you may choose the method of purchasing shares that is most beneficial given the amount of purchase, length of time you expect to hold the shares and other circumstances. 3P - ------------------------------------------------------------------------------- Sales charge and fund expenses When you buy Class A shares, you pay a maximum sales charge of 5% of the public offering price. This charge can be reduced, depending on your total investments in IDS funds. See "Reductions of the sales charge." No sales charge applies at the time of purchase of Class B shares, although Class B shares may be subject to a CDSC on redemptions made within 6 years and are subject to annual distribution (12b-1) fees. Class Y shares are sold without a sales charge to qualifying institutional investors. Shareholder transaction expenses are incurred directly by an investor on the purchase or redemption of fund shares. Fund operating expenses are paid out of fund assets for each class of assets. Operating expenses are reflected in each fund's daily share price and dividends, and are not charged directly to shareholder accounts. ------------------------------------------------------------------- SHAREHOLDER TRANSACTION EXPENSES Maximum sales charge on purchases (as a percentage of offering price)
California Massachusetts Michigan Minnesota New York Ohio ---------------------------------------------------------------------------------------- Class A 5% 5% 5% 5% 5% 5% Class B 0% 0% 0% 0% 0% 0% Class Y 0% 0% 0% 0% 0% 0%
Maximum deferred sales charge imposed on redemptions (as a percentage of original purchase price)
California Massachusetts Michigan Minnesota New York Ohio ---------------------------------------------------------------------------------------- Class A 0% 0% 0% 0% 0% 0% Class B 5% 5% 5% 5% 5% 5% Class Y 0% 0% 0% 0% 0% 0%
------------------------------------------------------------------- ANNUAL FUND OPERATING EXPENSES* (% OF AVERAGE DAILY NET ASSETS):
CALIFORNIA CLASS A CLASS B CLASS Y ----------------------------------------------------------- Management fee............... 0.47% 0.47% 0.47% ----------------------------------------------------------- 12b-1 fee.................... -- 0.75% -- ----------------------------------------------------------- Other expenses**............. 0.28% 0.28% 0.11% ----------------------------------------------------------- Total........................ 0.75% 1.50% 0.58% MASSACHUSETTS CLASS A CLASS B CLASS Y ----------------------------------------------------------- Management fee............... 0.47% 0.47% 0.47% ----------------------------------------------------------- 12b-1 fee.................... -- 0.75% -- ----------------------------------------------------------- Other expenses**............. 0.36% 0.36% 0.18% ----------------------------------------------------------- Total........................ 0.83% 1.58% 0.65%
4P - -------------------------------------------------------------------------------- ------------------------------------------------------------------- ANNUAL FUND OPERATING EXPENSES* (CONTINUED) (% OF AVERAGE DAILY NET ASSETS):
MICHIGAN CLASS A CLASS B CLASS Y ----------------------------------------------------------- Management fee............... 0.47% 0.47% 0.47% ----------------------------------------------------------- 12b-1 fee.................... -- 0.75% -- ----------------------------------------------------------- Other expenses**............. 0.32% 0.33% 0.14% ----------------------------------------------------------- Total........................ 0.79% 1.55% 0.61% MINNESOTA CLASS A CLASS B CLASS Y ----------------------------------------------------------- Management fee............... 0.46% 0.46% 0.46% ----------------------------------------------------------- 12b-1 fee.................... -- 0.75% -- ----------------------------------------------------------- Other expenses**............. 0.33% 0.33% 0.15% ----------------------------------------------------------- Total........................ 0.79% 1.54% 0.61% NEW YORK CLASS A CLASS B CLASS Y ----------------------------------------------------------- Management fee............... 0.47% 0.47% 0.47% ----------------------------------------------------------- 12b-1 fee.................... -- 0.75% -- ----------------------------------------------------------- Other expenses**............. 0.32% 0.32% 0.14% ----------------------------------------------------------- Total........................ 0.79% 1.54% 0.61% OHIO CLASS A CLASS B CLASS Y ----------------------------------------------------------- Management fee............... 0.47% 0.47% 0.47% ----------------------------------------------------------- 12b-1 fee.................... -- 0.75% -- ----------------------------------------------------------- Other expenses**............. 0.33% 0.33% 0.16% ----------------------------------------------------------- Total........................ 0.80% 1.55% 0.63% *Expenses for Class A are based on actual expenses for the last fiscal year, restated to reflect current fees. Expenses for Class B and Class Y are estimated based on the restated expenses for Class A, except that the 12b-1 fee and transfer agent fee (under other expenses) for Class B are based on agreements for that class. **Other expenses include an administrative services fee, a shareholder services fee, a transfer agent fee and other non-advisory expenses.
5P - -------------------------------------------------------------------------------- Sales charge and fund expenses EXAMPLE: Suppose for each year for the next 10 years, fund expenses are as above and annual return is 5%. If you sold your shares at the end of the following years, for each $1,000 invested, you would pay total expenses of:
California 1 year 3 years 5 years 10 years** ------------------------------------------------------------------------ Class A...................... $ 57 $ 73 $ 90 $ 139 ------------------------------------------------------------------------ Class B...................... $ 65 $ 87 $ 102 $ 159 ------------------------------------------------------------------------ Class B*..................... $ 15 $ 47 $ 82 $ 159 ------------------------------------------------------------------------ Class Y...................... $ 6 $ 19 $ 32 $ 73 Massachusetts 1 year 3 years 5 years 10 years** ------------------------------------------------------------------------ Class A...................... $ 58 $ 75 $ 94 $ 148 ------------------------------------------------------------------------ Class B...................... $ 66 $ 90 $ 106 $ 168 ------------------------------------------------------------------------ Class B*..................... $ 16 $ 50 $ 86 $ 168 ------------------------------------------------------------------------ Class Y...................... $ 7 $ 21 $ 36 $ 81 Michigan 1 year 3 years 5 years 10 years** ------------------------------------------------------------------------ Class A...................... $ 58 $ 74 $ 92 $ 143 ------------------------------------------------------------------------ Class B...................... $ 66 $ 89 $ 105 $ 164 ------------------------------------------------------------------------ Class B*..................... $ 16 $ 49 $ 85 $ 164 ------------------------------------------------------------------------ Class Y...................... $ 6 $ 20 $ 34 $ 77 Minnesota 1 year 3 years 5 years 10 years** ------------------------------------------------------------------------ Class A...................... $ 58 $ 74 $ 92 $ 143 ------------------------------------------------------------------------ Class B...................... $ 66 $ 89 $ 104 $ 164 ------------------------------------------------------------------------ Class B*..................... $ 16 $ 49 $ 84 $ 164 ------------------------------------------------------------------------ Class Y...................... $ 6 $ 20 $ 34 $ 77 New York 1 year 3 years 5 years 10 years** ------------------------------------------------------------------------ Class A...................... $ 58 $ 74 $ 92 $ 143 ------------------------------------------------------------------------ Class B...................... $ 66 $ 89 $ 104 $ 164 ------------------------------------------------------------------------ Class B*..................... $ 16 $ 49 $ 84 $ 164 ------------------------------------------------------------------------ Class Y...................... $ 6 $ 20 $ 34 $ 77 *Assuming Class B shares are not redeemed at the end of the period. **Based on conversion of Class B shares to Class A shares after 8 years.
6P - --------------------------------------------------------------------------------
Ohio 1 year 3 years 5 years 10 years** ------------------------------------------------------------------------ Class A...................... $ 58 $ 74 $ 92 $ 144 ------------------------------------------------------------------------ Class B...................... $ 66 $ 89 $ 105 $ 165 ------------------------------------------------------------------------ Class B*..................... $ 16 $ 49 $ 85 $ 165 ------------------------------------------------------------------------ Class Y...................... $ 6 $ 20 $ 35 $ 79 *Assuming Class B shares are not redeemed at the end of the period. **Based on conversion of Class B shares to Class A shares after 8 years.
THIS EXAMPLE DOES NOT REPRESENT ACTUAL EXPENSES, PAST OR FUTURE. ACTUAL EXPENSES MAY BE HIGHER OR LOWER THAN THOSE SHOWN. Because Class B pays annual distribution (12b-1) fees, long-term shareholders of Class B may indirectly pay an equivalent of more than a 6.25% sales charge, the maximum permitted by the National Association of Securities Dealers. 7P - ------------------------------------------------------------------------------- Performance IDS CALIFORNIA TAX-EXEMPT TRUST IDS CALIFORNIA TAX-EXEMPT FUND FINANCIAL HIGHLIGHTS PERIOD ENDED JUNE 30, - -------------------------------------------------------------------------------- PER SHARE INCOME AND CAPITAL CHANGES* (11994) 1994 1993 1992 1991 1990 1989** 1988*** 1987*** 1986+ ----------------------------------------------------------------------------------------------- Net asset value, $5.13 $5.41 $5.18 $4.94 $4.89 $4.97 $4.82 $4.66 $5.07 $5.00 beginning of period INCOME FROM INVESTMENT OPERATIONS: ----------------------------------------------------------------------------------------------- Net investment .15 .31 .30 .31 .32 .32 .16 .32 .32 .11 income ----------------------------------------------------------------------------------------------- Net gains (losses) ) (.18 (.28) .23 .24 .05 (.08) .15 .16 (.41) .07 on securities (both realized and unrealized) ----------------------------------------------------------------------------------------------- Total from ) (.03 .03 .53 .55 .37 .24 .31 .48 (.09) .18 investment operations LESS DISTRIBUTIONS: ----------------------------------------------------------------------------------------------- Dividends from net ) (.15 (.31) (.30) (.31) (.32) (.32) (.16) (.32) (.32) (.11) investment income ----------------------------------------------------------------------------------------------- Net asset value, end $ 4.95 $5.13 $5.41 $5.18 $4.94 $4.89 $4.97 $ 4.82 $ 4.66 $5.07 of period
- -------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA 1994(1) 1994 1993 1992 1991 1990 1989 ** 1988 *** 1987 *** 1986 + ----------------------------------------------------------------------------------------------- Net assets, end of $231 $255 $261 $222 $185 $142 $95 $63 $40 $21 period (in millions) ----------------------------------------------------------------------------------------------- Ratio of expenses to **.61%** .61% .63% .64% .60% .62% .64%**** .72% .78% .75%****++ average daily net assets ----------------------------------------------------------------------------------------------- Ratio of net income **6.0%** 5.67% 5.78% 6.16% 6.51% 6.53% 6.67%**** 6.61% 6.74% 6.44%****++ to average daily net assets ----------------------------------------------------------------------------------------------- Portfolio turnover 18% 27% 5% 7% 23% 20% 6% 13% 16% 0% rate (excluding short-term securities) ----------------------------------------------------------------------------------------------- Total return+++ )(0.6%(2) 0.4% 10.8% 11.4% 7.7% 5.0% 6.5%++++ 10.5% (1.6%) 3.5%++++ *For a share outstanding throughout the year. Rounded to the nearest cent. **Six months ended June 30, 1989. The fund's fiscal year end was changed from Dec. 31, to June 30, effective 1989. ***Fiscal years ended Dec. 31, 1987 and Dec. 31, 1988. ****Adjusted to an annual basis. +Commencement of operations. Period from Aug. 18, 1986 to Dec. 31, 1986. ++During this period, IDS voluntarily reimbursed the fund for expenses in excess of 0.75% of its average daily net assets, on an annual basis. Had IDS not done so, the ratio of expenses and ratio of net investment income would have been 0.93% and 6.26%, respectively. +++Total return does not reflect payment of a sales charge. ++++For the fiscal periods ended Dec. 31, 1986 and June 30, 1989, the annualized total returns are 13.0% and 13.6%, respectively. (1)Six months ended Dec. 31, 1994 (Unaudited). (2)For the period ended Dec. 31, 1994, the annualized total return is (1.2%).
8P - -------------------------------------------------------------------------------- IDS SPECIAL TAX-EXEMPT SERIES TRUST IDS MASSACHUSETTS TAX-EXEMPT FUND FINANCIAL HIGHLIGHTS PERIOD ENDED JUNE 30, - -------------------------------------------------------------------------------- PER SHARE INCOME AND CAPITAL CHANGES*
1994++ 1994 1993 1992 1991 1990 1989 1988 -------------------------------------------------------------- Net asset value, beginning of year $5.24 $5.49 $5.20 $4.96 $4.88 $5.01 $4.91 $5.00 INCOME FROM INVESTMENT OPERATIONS: -------------------------------------------------------------- Net investment income .15 .30 .30 .31 .32 .32 .32 .31 -------------------------------------------------------------- Net gains (losses) on securities (.20) (.25) .29 .24 .08 (.12) .12 (.06) (both realized and unrealized) -------------------------------------------------------------- Total from investment (.05) .05 .59 .55 .40 .20 .44 .25 operations LESS DISTRIBUTIONS: -------------------------------------------------------------- Dividends from net investment (.15) (.30) (.30) (.31) (.32) (.32) (.32) (.31) income -------------------------------------------------------------- Distributions from realized gains -- -- -- -- -- (.01) (.02) (.03) -------------------------------------------------------------- Total distributions (.15) (.30) (.30) (.31) (.32) (.33) (.34) (.34) -------------------------------------------------------------- Net asset value, end of year $5.04 $5.24 $5.49 $5.20 $4.96 $4.88 $5.01 $4.91
- -------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA
1994++ 1994 1993 1992 1991 1990 1989 1988 -------------------------------------------------------------- Net assets, end of year (in $66 $72 $64 $44 $27 $19 $13 $4 millions) -------------------------------------------------------------- Ratio of expenses to average daily .68%*** .69% .72% .72% .69% .70% .84% .93%+ net assets -------------------------------------------------------------- Ratio of net income to average 5.83%*** 5.40% 5.57% 6.05% 6.53% 6.59% 6.55% 6.40%+ daily net assets -------------------------------------------------------------- Portfolio turnover rate (excluding 6% 6% 0% 2% 16% 36% 25% 34% short-term securities) -------------------------------------------------------------- Total return** (.09%)+++ 0.9% 11.5% 11.4% 8.5% 4.2% 9.2% 5.3% *For a share outstanding throughout the year. Rounded to the nearest cent. **Total return does not reflect payment of a sales charge. ***Adjusted to an annual basis. +During the period from July 2, 1987 to March 31, 1988, IDS voluntarily reimbursed the fund for expenses in excess of 0.75% of its average daily net assets, on an annual basis. Had IDS not done so, the ratio of expenses and ratio of net investment income would have been 1.30% and 6.03%, respectively. ++Six months ended Dec. 31, 1994 (unaudited). +++For the period ended Dec. 31, 1994, the annualized total return is (1.8%).
9P - -------------------------------------------------------------------------------- Performance IDS SPECIAL TAX-EXEMPT SERIES TRUST IDS MICHIGAN TAX-EXEMPT FUND FINANCIAL HIGHLIGHTS PERIOD ENDED JUNE 30, - -------------------------------------------------------------------------------- PER SHARE INCOME AND CAPITAL CHANGES* 1994 ++ 1994 1993 1992 1991 1990 1989 1988 -------------------------------------------------------------- Net asset value, beginning of year $5.35 $5.60 $5.31 $5.04 $4.96 $5.08 $4.85 $5.00 INCOME FROM INVESTMENT OPERATIONS: -------------------------------------------------------------- Net investment income .15 .31 .31 .32 .32 .32 .32 .31 -------------------------------------------------------------- Net gains (losses) on securities (.19) (.25) .29 .27 .08 (.12) .23 (.11) (both realized and unrealized) -------------------------------------------------------------- Total from investment (.04) .06 .60 .59 .40 .20 .55 .20 operations LESS DISTRIBUTIONS: -------------------------------------------------------------- Dividends from net investment (.15) (.31) (.31) (.32) (.32) (.32) (.32) (.31) income -------------------------------------------------------------- Distributions from realized gains -- -- -- -- -- -- -- (.04) -------------------------------------------------------------- Total distributions (.15) (.31) (.31) (.32) (.32) (.32) (.32) (.35) -------------------------------------------------------------- Net asset value, end of year $5.16 $5.35 $5.60 $5.31 $5.04 $4.96 $5.08 $4.85
- -------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA 1994 ++ 1994 1993 1992 1991 1990 1989 1988 -------------------------------------------------------------- Net assets, end of year (in $77 $77 $72 $55 $41 $29 $16 $8 millions) -------------------------------------------------------------- Ratio of expenses to average daily .68%*** .65% .68% .67% .67% .71% .81% .87%+ net assets -------------------------------------------------------------- Ratio of net income to average 5.80%*** 5.43% 5.64% 6.18% 6.45% 6.47% 6.50% 6.56%+ daily net assets -------------------------------------------------------------- Portfolio turnover rate (excluding 18% 16% 2% 0% 3% 5% 10% 14% short-term securities) -------------------------------------------------------------- Total return** (0.7%)+++ 1.0% 11.6% 12.0% 8.3% 4.1% 11.7% 4.4% *For a share outstanding throughout the year. Rounded to the nearest cent. **Total return does not reflect payment of a sales charge. ***Adjusted to an annual basis. +During the period from July 2, 1987 to March 31, 1988, IDS voluntarily reimbursed the fund for expenses in excess of 0.75% of its average daily net assets, on an annual basis. Had IDS not done so, the ratio of expenses and ratio of net investment income would have been 1.09% and 6.34%, respectively. ++Six months ended Dec. 31, 1994 (unaudited). +++For the period ended Dec. 31, 1994, the annualized total return is (1.4%).
10P - -------------------------------------------------------------------------------- IDS SPECIAL TAX-EXEMPT SERIES TRUST IDS MINNESOTA TAX-EXEMPT FUND FINANCIAL HIGHLIGHTS PERIOD ENDED JUNE 30, - -------------------------------------------------------------------------------- PER SHARE INCOME AND CAPITAL CHANGES*
19941 1994 1993 1992 1991 1990 1989** 1988*** 1987*** 1986+ ------------------------------------------------------------------------------------------ Net asset value, $5.16 $5.44 $5.22 $5.01 $4.95 $5.05 $4.86 $4.76 $5.18 $5.00 beginning of period INCOME FROM INVESTMENT OPERATIONS: ------------------------------------------------------------------------------------------ Net investment .15 .31 .31 .33 .33 .32 .16 .33 .33 .12 income ------------------------------------------------------------------------------------------ Net gains (losses) (.17) (.28) .22 .21 .06 (.10) .19 .10 (.42) .19 on securities (both realized and unrealized) ------------------------------------------------------------------------------------------ Total from (.02) .03 .53 .54 .39 .22 .35 .43 (.09) .31 investment operations LESS DISTRIBUTIONS: ------------------------------------------------------------------------------------------ Dividends from net (.15) (.31) (.31) (.33) (.33) (.32) (.16) (.33) (.33) (.12) investment income ------------------------------------------------------------------------------------------ Distributions from -- -- -- -- -- -- -- -- -- (.01) realized gains ------------------------------------------------------------------------------------------ Total distributions (.15) (.31) (.31) (.33) (.33) (.32) (.16) (.33) (.33) (.13) ------------------------------------------------------------------------------------------ Net asset value, end $4.99 $5.16 $5.44 $5.22 $5.01 $4.95 $5.05 $4.86 $4.76 $5.18 of period
- -------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA
19941 1994 1993 1992 1991 1990 1989** 1988*** 1987*** 1986+ ------------------------------------------------------------------------------------------ Net assets, end of $374 $408 $402 $313 $233 $181 $121 $82 $50 $32 period (in millions) ------------------------------------------------------------------------------------------ Ratio of expenses to .69%**** .66% .67% .66% .63% .64% .65%**** .65% .78% .75%****++ average daily net assets ------------------------------------------------------------------------------------------ Ratio of net income 6.06%**** 5.73% 5.91% 6.43% 6.67% 6.62% 6.84%**** 6.73% 6.83% 6.85%****++ to average daily net assets ------------------------------------------------------------------------------------------ Portfolio turnover 12% 13% 2% 7% 10% 8% 0% 14% 40% 27% rate (excluding short-term securities) ------------------------------------------------------------------------------------------ Total return+++ (0.3%)2 0.4% 10.5% 11.0% 8.2% 4.8% 7.4%++++ 9.3% (1.4%) 6.1%++++ *For a share outstanding throughout the period. Rounded to the nearest cent. **Six months ended June 30, 1989. The fund's fiscal year end was changed from Dec. 31 to June 30, effective 1989. ***Fiscal years ended Dec. 31, 1987 and Dec. 31, 1988. ****Adjusted to an annual basis. +Commencement of operations. Period from Aug. 18, 1986 to Dec. 31, 1986. ++During this period IDS voluntarily reimbursed the fund for expenses in excess of 0.75% of its average daily net assets, on an annual basis. Had IDS not so, the ratio of expenses and ratio of net investment income would have been 0.88% and 6.72%, respectively. +++Total return does not reflect payment of a sales charge. ++++For the fiscal periods ended Dec. 31, 1986 and June 30, 1989, the annualized total returns are 16.7% and 15.5%, respectively. 1Six months ended Dec. 31, 1994 (unaudited). 2For the period ended Dec. 31, 1994, the annualized total return is (0.5%).
11P - -------------------------------------------------------------------------------- Performance IDS SPECIAL TAX-EXEMPT SERIES TRUST IDS NEW YORK TAX-EXEMPT FUND FINANCIAL HIGHLIGHTS PERIOD ENDED JUNE 30, - -------------------------------------------------------------------------------- PER SHARE INCOME AND CAPITAL CHANGES*
19941 1994 1993 1992 1991 1990 1989** 1988*** 1987*** 1986+ ------------------------------------------------------------------------------------------ Net asset value, $5.12 $5.41 $5.13 $4.86 $4.80 $4.87 $4.73 $4.58 $5.07 $5.00 beginning of period INCOME FROM INVESTMENT OPERATIONS: ------------------------------------------------------------------------------------------ Net investment .15 .30 .30 .31 .31 .31 .16 .31 .31 .11 income ------------------------------------------------------------------------------------------ Net gains (losses) (.18) (.29) .28 .27 .06 (.07) .14 .15 (.49) .07 on securities (both realized and unrealized) ------------------------------------------------------------------------------------------ Total from (.03) .01 .58 .58 .37 .24 .30 .46 (.18) .18 investment operations LESS DISTRIBUTIONS: ------------------------------------------------------------------------------------------ Dividends from net (.15) (.30) (.30) (.31) (.31) (.31) (.16) (.31) (.31) (.11) investment income ------------------------------------------------------------------------------------------ Net asset value, end $4.94 $5.12 $5.41 $5.13 $4.86 $4.80 $4.87 $4.73 $4.58 $5.07 of period
- -------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA
19941 1994 1993 1992 1991 1990 1989** 1988*** 1987*** 1986+ ------------------------------------------------------------------------------------------ Net assets, end of $113 $120 $117 $95 $79 $68 $49 $34 $21 $13 period (in millions) ------------------------------------------------------------------------------------------ Ratio of expenses to .66%**** .65% .67% .67% .65% .65% .66%**** .71% .88% .75%****++ average daily net assets ------------------------------------------------------------------------------------------ Ratio of net income 5.97%**** 5.61% 5.79% 6.26% 6.53% 6.57% 6.78%**** 6.61% 6.79% 6.52%****++ to average daily net assets ------------------------------------------------------------------------------------------ Portfolio turnover 7% 10% 0% 8% 17% 8% 1% 6% 20% 3% rate (excluding short-term securities) ------------------------------------------------------------------------------------------ Total return+++ (0.5%)2 0.1% 11.6% 12.3% 8.2% 5.0% 6.5%++++ 10.3% (3.4%) 3.6%++++ *For a share outstanding throughout the period. Rounded to the nearest cent. **Six months ended June 30, 1989. The fund's fiscal year end was changed from Dec. 31, to June 30, effective 1989. ***Fiscal years ended Dec. 31, 1987 and Dec. 31, 1988. ****Adjusted to an annual basis. +Commencement of operations. Period from Aug. 18, 1986 to Dec. 31, 1986. ++During this period, IDS voluntarily reimbursed the fund for expenses in excess of 0.75% of its average daily net assets, on an annual basis. Had IDS not done so, the ratio of expenses and ratio of net investment income would have been 1.11% and 6.16%, respectively. +++Total return does not reflect payment of a sales charge. ++++For the fiscal periods ended Dec. 31, 1986 and June 30, 1989, the annualized total returns are 12.1% and 13.6%, respectively. 1Six months ended Dec. 31, 1994 (unaudited). 2For the period ended Dec. 31, 1994, the annualized total return is (1.1%).
12P - -------------------------------------------------------------------------------- IDS SPECIAL TAX-EXEMPT SERIES TRUST IDS OHIO TAX-EXEMPT FUND FINANCIAL HIGHLIGHTS PERIOD ENDED JUNE 30, - -------------------------------------------------------------------------------- PER SHARE INCOME AND CAPITAL CHANGES*
1994++ 1994 1993 1992 1991 1990 1989 1988 --------------------------------------------------------------- Net asset value, beginning of year $5.26 $5.58 $5.28 $5.01 $4.94 $5.04 $4.87 $5.00 INCOME FROM INVESTMENT OPERATIONS: --------------------------------------------------------------- Net investment income .15 .30 .30 .31 .32 .31 .31 .32 --------------------------------------------------------------- Net gains (losses) on securities (both (.18) (.32) .31 .27 .07 (.09) .18 (.10) realized and unrealized) --------------------------------------------------------------- Total from investment (.03) (.02) .61 .58 .39 .22 .49 .22 operations LESS DISTRIBUTIONS: --------------------------------------------------------------- Dividends from net investment income (.15) (.30) (.30) (.31) (.32) (.31) (.31) (.32) --------------------------------------------------------------- Distributions from realized gains -- -- (.01) -- -- (.01) (.01) (.03) --------------------------------------------------------------- Total distributions (.15) (.30) (.31) (.31) (.32) (.32) (.32) (.35) --------------------------------------------------------------- Net asset value, end of year $5.08 $5.26 $5.58 $5.28 $5.01 $4.94 $5.04 $4.87
- -------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA
1994++ 1994 1993 1992 1991 1990 1989 1988 --------------------------------------------------------------- Net assets, end of year (in millions) $69 $72 $65 $47 $33 $25 $16 $8 --------------------------------------------------------------- Ratio of expenses to average daily net assets .66%*** .66% .67% .70% .68% .70% .82% .86%+ --------------------------------------------------------------- Ratio of net income to average daily net 5.78%*** 5.44% 5.65% 6.14% 6.41% 6.43% 6.40% 6.64%+ assets --------------------------------------------------------------- Portfolio turnover rate (excluding short-term 25% 11% 0% 5% 2% 6% 10% 0% securities) --------------------------------------------------------------- Total return** (0.5%)+++ (0.5%) 12.1% 11.9% 8.1% 4.6% 10.5% 4.7% *For a share outstanding throughout the year. Rounded to the nearest cent. **Total return does not reflect payment of a sales charge. ***Adjusted to an annual basis. +During the period from July 2, 1987 to March 31, 1988, IDS voluntarily reimbursed the fund for expenses in excess of 0.75% of its average daily net assets, on an annual basis. Had IDS not done so, the ratio of expenses and ratio of net investment income would have been 1.09% and 6.41%, respectively. ++Six months ended Dec. 31, 1994 (unaudited). +++For the period ended Dec. 31, 1994, the annualized total return is (1.1%).
Except for the semi-annual period ended Dec. 31, 1994, the information in these tables has been audited by KPMG Peat Marwick LLP, independent auditors. The independent auditors' report and additional information about the performance of each fund are contained in the funds' annual report which, if not included with this prospectus, may be obtained without charge. Information on Class B and Class Y shares is not included because no shares of those classes were outstanding for the periods shown. 13P - -------------------------------------------------------------------------------- Performance TOTAL RETURNS - --------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS AS OF JUNE 30, 1994
1 YEAR 5 YEARS SINCE PURCHASE MADE AGO AGO INCEPTION* ------------------------------------------------------------------------------------------ California Fund -4.6% +5.9% +6.1% ------------------------------------------------------------------------------------------ Massachusetts Fund -4.2 +6.1 +6.4 ------------------------------------------------------------------------------------------ Michigan Fund -4.0 +6.2 +6.7 ------------------------------------------------------------------------------------------ Minnesota Fund -4.6 +5.8 +6.4 ------------------------------------------------------------------------------------------ New York Fund -4.9 +6.3 +6.1 ------------------------------------------------------------------------------------------ Ohio Fund -5.5 +6.0 +6.5 ------------------------------------------------------------------------------------------ Lehman Brothers Municipal Bond Index +0.2 +7.9 +7.8(1) +8.0(2) *(1)SINCE 8/18/86 FOR CALIFORNIA, MINNESOTA AND NEW YORK. (2)SINCE 7/2/87 FOR MASSACHUSETTS, MICHIGAN AND OHIO.
- --------------------------------------------------------- CUMULATIVE TOTAL RETURNS AS OF JUNE 30, 1994
1 YEAR 5 YEARS SINCE PURCHASE MADE AGO AGO INCEPTION* ------------------------------------------------------------------------------------------ California Fund -4.6% +33.2% +59.6% ------------------------------------------------------------------------------------------ Massachusetts Fund -4.2 +34.4 +54.5 ------------------------------------------------------------------------------------------ Michigan Fund -4.0 +35.2 +57.6 ------------------------------------------------------------------------------------------ Minnesota Fund -4.6 +32.7 +62.5 ------------------------------------------------------------------------------------------ New York Fund -4.9 +35.5 +59.3 ------------------------------------------------------------------------------------------ Ohio Fund -5.5 +34.1 +55.1 ------------------------------------------------------------------------------------------ Lehman Brothers Municipal Bond Index +0.02 +46.5 +80.6(1) +71.7(2) *(1)SINCE 8/18/86 FOR CALIFORNIA, MINNESOTA AND NEW YORK. (2)SINCE 7/2/87 FOR MASSACHUSETTS, MICHIGAN AND OHIO.
These examples show total returns from hypothetical investments in Class A shares of each fund. These returns are compared to those of a popular index for the same periods. No shares for Class B and Class Y were outstanding during the periods presented. For purposes of calculation, information about each fund assumes: - -a sales charge of 5% for Class A shares - -no adjustments for taxes an investor may have paid on the reinvested income and capital gains - -a period of widely fluctuating securities prices. Returns shown should not be considered a representation of fund's future performance. Each fund invests primarily in debt securities that may be different from those in the index. The index reflects reinvestment of all distributions and changes in market prices, but excludes brokerage commissions or other fees. Lehman Brothers Municipal Bond Index is made up of a representative list of general obligation, revenue, insured and pre-refunded bonds. The index is frequently used as a general measure of tax-exempt bond market performance. However, the securities used to create the index may not be representative of the bonds held in a fund. 14P - -------------------------------------------------------------------------------- YIELD SEC standardized yield for the 30-day period ended June 30, 1994 was 4.97% for California Fund, 5.03% for Massachusetts Fund, 4.73% for Michigan Fund, 5.10% for Minnesota Fund, 4.77% for New York Fund and 5.04% for Ohio Fund. Each fund calculates this 30-day SEC standardized yield by dividing: - -net investment income per share deemed earned during a 30-day period by - -the public offering price per share on the last day of the period, and - -converting the result to a yearly equivalent figure. Non-standardized (distribution) yield for the same 30-day period ended June 30, 1994 was 5.62% for California Fund, 5.37% for Massachusetts Fund, 5.41% for Michigan Fund, 5.62% for Minnesota Fund, 5.51% for New York Fund and 5.37% for Ohio Fund. Each fund computes distribution yield by dividing: - -the total dividends paid over the 30-day period by - -the sum of each day's public offering price for that period, and - -converting the result to a yearly equivalent figure. A fund also may calculate a tax equivalent yield by dividing the tax-exempt portion of its yield by one minus a stated income tax rate. A tax equivalent yield demonstrates the taxable yield necessary to produce an after-tax yield equivalent to that of a fund that invests in exempt obligations. These yield calculations do not include any contingent deferred sales charge, ranging from 5% to 0% on Class B shares, which would reduce the yields quoted. A fund's yield varies from day to day, mainly because share values and offering prices (which are calculated daily) vary in response to changes in interest rates. Net investment income normally changes much less in the short run. Thus, when interest rates rise and share values fall, yield tends to rise. When interest rates fall, yield tends to follow. Past yields should not be an indicator of future yields. 15P - -------------------------------------------------------------------------------- Performance - -------------------------------------------------------------------------------- KEY TERMS NET ASSET VALUE (NAV) Value of a single fund share. For each class, it is the total market value of all of a fund's investments and other assets attributable to that class, less any liabilities attributable to that class, divided by the number of shares of that class outstanding. When you buy shares, you pay the NAV plus any applicable sales charge. When you sell shares, the price you receive is the NAV minus any applicable sales charge. The NAV usually changes daily, and is calculated at the close of business, normally 3 p.m. Central time, each business day (any day the New York Stock Exchange is open). NAV generally declines as interest rates increase and rises as interest rates decline. PUBLIC OFFERING PRICE Price at which you buy shares. It is the NAV plus the sales charge for Class A. It is the NAV for Class B and Class Y. NAVs and public offering prices of IDS funds are listed each day in major newspapers and financial publications for classes of funds large enough to be listed. INVESTMENT INCOME Dividends and interest earned on securities held by the fund. CAPITAL GAINS OR LOSSES Increase or decrease in value of the securities the fund holds. Gains or losses are realized when securities that have increased or decreased in value are sold. A fund also may have unrealized gains or losses when securities increase or decrease in value but are not sold. DISTRIBUTIONS Payments to shareholders of two types: investment income (dividends) and realized net long-term capital gains (capital gains istributions). TOTAL RETURN Sum of all of your returns for a given period, assuming you reinvest all distributions. Calculated by taking the total value of shares you own at the end of the period (including shares acquired by reinvestment), less the price of shares you purchased at the beginning of the period. AVERAGE ANNUAL TOTAL RETURN The annually compounded rate of return over a given time period (usually two or more years) -- total return for the period converted to an equivalent annual figure. YIELD Net investment income earned per share for a specified time period, divided by the offering price at the end of the period. 16P - ------------------------------------------------------------------------------- Investment policies and risks Under normal market conditions, California, Massachusetts, Michigan, Minnesota, New York and Ohio Funds will invest at least 80% of their net assets in bonds, notes and commercial paper issued by or on behalf of their respective state or local governmental units whose interest, in the opinion of bond counsel for the issuer, is exempt from federal, state and local (if applicable) income tax in their respective states. In addition, a portion of each fund's assets may be invested in bonds whose interest is subject to the alternative minimum tax computation. As long as the staff of the SEC maintains its current position that a fund calling itself a "tax-exempt" fund may not invest more than 20% of its net assets in these bonds, each fund will limit its investments in these bonds to 20% of its net assets. The various types of investments the portfolio manager uses to achieve investment performance are described in more detail in the next section and in the SAI. FACTS ABOUT INVESTMENTS AND THEIR RISKS BONDS AND OTHER DEBT SECURITIES EXEMPT FROM FEDERAL, STATE AND LOCAL INCOME TAXES: The price of an investment-grade bond fluctuates as interest rates change or if its credit rating is upgraded or downgraded. At least 75% of each fund's investments will be in investment-grade securities, that is securities given the four highest ratings by Moody's Investors Service, Inc. (Moody's) and Standard & Poor's Corporation (S&P) or in non-rated securities of equivalent investment quality in the judgment of the fund's investment manager. The other 25% may be in securities rated Ba or B by Moody's or BB or B by S&P or the equivalent (commonly known as "junk bonds"). DEBT SECURITIES BELOW INVESTMENT GRADE: The price of these bonds may react more to the ability of a company to pay interest and principal when due than to changes in interest rates. They have greater price fluctuations, are more likely to experience a default, and sometimes are referred to as "junk bonds." Reduced market liquidity for these bonds may occasionally make it more difficult to value them. In valuing bonds the fund relies both on independent rating agencies and the investment manager's credit analysis. Securities that are subsequently downgraded in quality may continue to be held and will be sold only when the fund's investment manager believes it is advantageous to do so. ------------------------------------------------------------------- BOND RATINGS AND HOLDINGS FOR FISCAL 1994 FOR CALIFORNIA TAX-EXEMPT FUND
AMERICAN EXPRESS FINANCIAL CORPORATION'S S&P RATING PROTECTION ASSESSMENT PERCENT OF (OR MOODY'S OF PRINCIPAL OF UNRATED NET ASSETS EQUIVALENT) AND INTEREST SECURITIES -------------------------------------------------------------- 37.93% AAA Highest quality 12.34% -------------------------------------------------------------- 24.75 AA High quality -- -------------------------------------------------------------- 16.76 A Upper medium grade 0.17 -------------------------------------------------------------- 3.34 BBB Medium grade 0.11 -------------------------------------------------------------- Moderately -- BB speculative 1.63 -------------------------------------------------------------- -- B Speculative 0.09 -------------------------------------------------------------- -- CCC Highly speculative -- -------------------------------------------------------------- -- CC Poor quality -- -------------------------------------------------------------- -- C Lowest quality -- -------------------------------------------------------------- -- D In default -- -------------------------------------------------------------- 15.26 Unrated Unrated securities 0.92
17P - -------------------------------------------------------------------------------- Investment policies and risks ------------------------------------------------------------------- BOND RATINGS AND HOLDINGS FOR FISCAL 1994 FOR MASSACHUSETTS TAX-EXEMPT FUND
AMERICAN EXPRESS FINANCIAL CORPORATION'S S&P RATING PROTECTION ASSESSMENT PERCENT OF (OR MOODY'S OF PRINCIPAL OF UNRATED NET ASSETS EQUIVALENT) AND INTEREST SECURITIES -------------------------------------------------------------- 55.91% AAA Highest quality 1.67% -------------------------------------------------------------- 10.78 AA High quality -- -------------------------------------------------------------- 16.91 A Upper medium grade -- -------------------------------------------------------------- 7.38 BBB Medium grade -- -------------------------------------------------------------- Moderately 0.19 BB speculative 2.49 -------------------------------------------------------------- -- B Speculative -- -------------------------------------------------------------- -- CCC Highly speculative -- -------------------------------------------------------------- -- CC Poor quality -- -------------------------------------------------------------- -- C Lowest quality -- -------------------------------------------------------------- -- D In default -- -------------------------------------------------------------- 4.38 Unrated Unrated securities 0.22
------------------------------------------------------------------- BOND RATINGS AND HOLDINGS FOR FISCAL 1994 FOR MICHIGAN TAX-EXEMPT FUND
AMERICAN EXPRESS FINANCIAL CORPORATION'S S&P RATING PROTECTION ASSESSMENT PERCENT OF (OR MOODY'S OF PRINCIPAL OF UNRATED NET ASSETS EQUIVALENT) AND INTEREST SECURITIES -------------------------------------------------------------- 39.87% AAA Highest quality 10.08% -------------------------------------------------------------- 32.35 AA High quality -- -------------------------------------------------------------- 11.50 A Upper medium grade -- -------------------------------------------------------------- 2.52 BBB Medium grade 0.43 -------------------------------------------------------------- Moderately -- BB speculative -- -------------------------------------------------------------- -- B Speculative -- -------------------------------------------------------------- -- CCC Highly speculative -- -------------------------------------------------------------- -- CC Poor quality -- -------------------------------------------------------------- -- C Lowest quality -- -------------------------------------------------------------- -- D In default -- -------------------------------------------------------------- 11.40 Unrated Unrated securities 0.89
18P - -------------------------------------------------------------------------------- ------------------------------------------------------------------- BOND RATINGS AND HOLDINGS FOR FISCAL 1994 FOR MINNESOTA TAX-EXEMPT FUND
AMERICAN EXPRESS FINANCIAL CORPORATION'S S&P RATING PROTECTION ASSESSMENT PERCENT OF (OR MOODY'S OF PRINCIPAL OF UNRATED NET ASSETS EQUIVALENT) AND INTEREST SECURITIES -------------------------------------------------------------- 27.55% AAA Highest quality 6.67% -------------------------------------------------------------- 23.96 AA High quality 4.01 -------------------------------------------------------------- 22.52 A Upper medium grade 0.20 -------------------------------------------------------------- 0.57 BBB Medium grade 5.16 -------------------------------------------------------------- Moderately 0.59 BB speculative 2.61 -------------------------------------------------------------- -- B Speculative 1.78 -------------------------------------------------------------- -- CCC Highly speculative -- -------------------------------------------------------------- -- CC Poor quality -- -------------------------------------------------------------- -- C Lowest quality -- -------------------------------------------------------------- 1.12 D In default -- -------------------------------------------------------------- 21.13 Unrated Unrated securities 0.70
------------------------------------------------------------------- BOND RATINGS AND HOLDINGS FOR FISCAL 1994 FOR NEW YORK TAX-EXEMPT FUND
AMERICAN EXPRESS FINANCIAL CORPORATION'S S&P RATING PROTECTION ASSESSMENT PERCENT OF (OR MOODY'S OF PRINCIPAL OF UNRATED NET ASSETS EQUIVALENT) AND INTEREST SECURITIES -------------------------------------------------------------- 29.73% AAA Highest quality 5.60% -------------------------------------------------------------- 34.95 AA High quality -- -------------------------------------------------------------- 13.09 A Upper medium grade -- -------------------------------------------------------------- 13.79 BBB Medium grade -- -------------------------------------------------------------- Moderately -- BB speculative -- -------------------------------------------------------------- -- B Speculative -- -------------------------------------------------------------- -- CCC Highly speculative -- -------------------------------------------------------------- -- CC Poor quality -- -------------------------------------------------------------- -- C Lowest quality -- -------------------------------------------------------------- -- D In default -- -------------------------------------------------------------- 5.60 Unrated Unrated securities --
19P - -------------------------------------------------------------------------------- Investment policies and risks ------------------------------------------------------------------- BOND RATINGS AND HOLDINGS FOR FISCAL 1994 FOR OHIO TAX-EXEMPT FUND
AMERICAN EXPRESS FINANCIAL CORPORATION'S S&P RATING PROTECTION ASSESSMENT PERCENT OF (OR MOODY'S OF PRINCIPAL OF UNRATED NET ASSETS EQUIVALENT) AND INTEREST SECURITIES -------------------------------------------------------------- 50.94% AAA Highest quality 4.41% -------------------------------------------------------------- 14.50 AA High quality -- -------------------------------------------------------------- 17.76 A Upper medium grade -- -------------------------------------------------------------- 6.22 BBB Medium grade -- -------------------------------------------------------------- Moderately 0.04 BB speculative 1.99 -------------------------------------------------------------- -- B Speculative 1.42 -------------------------------------------------------------- -- CCC Highly speculative 0.25 -------------------------------------------------------------- -- CC Poor quality -- -------------------------------------------------------------- -- C Lowest quality -- -------------------------------------------------------------- -- D In default -- -------------------------------------------------------------- 8.27 Unrated Unrated securities 0.20
(See Appendix to this prospectus for further information regarding ratings.) DEBT SECURITIES SOLD AT A DEEP DISCOUNT: Some bonds are sold at deep discounts because they do not pay interest until maturity. They include zero coupon bonds and PIK (pay-in-kind) bonds. To comply with tax laws, the fund has to recognize a computed amount of interest income and pay dividends to shareholders even though no cash has been received. In some instances, the fund may have to sell securities to have sufficient cash to pay the dividends. CONCENTRATION: Each of the funds concentrates its investments in the securities of its respective state. In addition, each fund may invest more than 25% of its total assets in a particular segment of the municipal securities market, such as electric revenue bonds, hospital revenue bonds, housing agency bonds, industrial development bonds, airport bonds, or in securities the interest upon which is paid from revenues of a similar type of project. In such circumstances, an economic, business, political or other change affecting one bond (such as proposed legislation affecting the financing of a project, shortages or price increases of needed materials, or declining markets or needs of the projects) also may affect other bonds in the same segment. This could increase market risk. Each fund may invest more than 25% of its total assets in industrial revenue bonds, but does not intend to invest more than 25% of its total assets in industrial revenue bonds issued for companies in the same industry. As the similarity in issuers increases, the potential for fluctuation in the net asset value of each fund's shares also increases. 20P - -------------------------------------------------------------------------------- Economic conditions in each respective state affect both the total amount of taxes each state collects and the personal income growth within each state. In the recent past each state has experienced financial difficulty when budgeted expenses outpaced tax revenue collections. Budgetary shortfalls were managed either by short-term borrowing (in the case of California, New York and Massachusetts) or use of reserve funds (in the case of Michigan, Minnesota and Ohio). Current state budgets are assumed to be based on conservative economic forecasts and reduced spending levels. Budgetary shortfalls may result in reductions in credit ratings for securities issued by the states. This may cause an increase in the yield and a decrease in the price of a security issued by a particular state. Furthermore, because local finances are dependent upon the fiscal integrity of the state and upon the same financial factors that influence state government, the credit ratings of state agencies, authorities and municipalities may be similarly affected. See the SAI for more information concerning each state. TAXABLE INVESTMENTS: If, in the opinion of the investment manager, appropriate tax-exempt securities are not available, each fund may invest up to 20% of its net assets, or more on a temporary defensive basis, in investments the income from which is subject to federal, state or local income tax, as described more fully in the SAI. DERIVATIVE INSTRUMENTS: The portfolio manager may use derivative instruments in addition to securities to achieve investment performance. Derivative instruments include futures, options and forward contracts. Such instruments may be used to maintain cash reserves while remaining fully invested, to offset anticipated declines in values of investments, to facilitate trading, to reduce transaction costs, or to pursue higher investment returns. Derivative instruments are characterized by requiring little or no initial payment and a daily change in price based on or derived from a security, a currency, a group of securities or currencies, or an index. A number of strategies or combination of instruments can be used to achieve the desired investment performance characteristics. A small change in the value of the underlying security, currency or index will cause a sizable gain or loss in the price of the derivative instrument. Derivative instruments allow the portfolio manager to change the investment performance characteristics very quickly and at lower costs. Risks include losses of premiums, rapid changes in prices, defaults by other parties, and inability to close such instruments. A fund will use derivative instruments only to achieve the same investment performance characteristics it could achieve by directly holding those securities and currencies permitted under the investment policies. Each fund will designate cash or appropriate liquid assets to cover its portfolio obligations. The use of derivative instruments may produce taxable income. No more than 5% of each fund's net assets can be used at any one time for good faith deposits on futures and premiums for options on futures that do not offset existing investment positions. For further information, see Appendix C to this prospectus. 21P - -------------------------------------------------------------------------------- Investment policies and risks INVERSE FLOATERS: Inverse floaters are derivatives created by underwriters using the interest payments on securities. A portion of the interest received is paid to holders of instruments based on current interest rates for short-term securities. What is left over, less a servicing fee, is paid to holders of the inverse floaters. As interest rates go down, the holders of the inverse floaters receive more income and an increase in the price for the inverse floaters. As interest rates go up, the holders of the inverse floaters receive less income and a decrease in the price for the inverse floaters. No more than 10% of each fund's assets will be held in inverse floaters. SECURITIES AND DERIVATIVE INSTRUMENTS THAT ARE ILLIQUID: Illiquid means the security or derivative instrument cannot be sold quickly in the normal course of business. Some investments cannot be resold to the U.S. public because of their terms or government regulations. All securities and derivative instruments, however, can be sold in private sales, and many may be sold to other institutions and qualified buyers or on foreign markets. The portfolio manager will follow guidelines established by the board of trustees and consider relevant factors such as the nature of the security and the number of likely buyers when determining whether a security is illiquid. No more than 10% of each fund's net assets will be held in securities and derivative instruments that are illiquid. The investment policies described above, except for the policies concerning the type and amount of tax-exempt investments, may be changed by the trustees. LENDING PORTFOLIO SECURITIES: Each fund may lend its securities to earn income so long as borrowers provide collateral equal to the market value of the loans. The risks are that borrowers will not provide collateral when required or return securities when due. Unless shareholders approve otherwise, loans may not exceed 30% of a fund's net assets. ALTERNATIVE INVESTMENT OPTION In the future, the board of the funds may determine for operating efficiencies to use a master/ feeder structure. Under that structure, each fund's investment portfolio would be managed by another investment company with the same goal as the fund, rather than investing directly in a portfolio of securities. VALUING ASSETS - Bonds and assets without readily available market values are valued at fair value according to methods selected in good faith by the board of trustees. - Securities maturing in 60 days or less are valued at amortized cost. - Securities (except bonds) and assets with available market values are valued on that basis. 22P - ------------------------------------------------------------------------------- How to buy, exchange or sell shares ALTERNATIVE SALES ARRANGEMENTS Each fund offers three different classes of shares -- Class A, Class B and Class Y. The primary differences among the classes are in the sales charge structures and in their ongoing expenses. These differences are summarized in the table below. You may choose the class that best suits your circumstances and objectives.
SALES CHARGE SERVICE FEE AND DISTRIBUTION (AS A % OF AVERAGE (12B-1) FEE DAILY NET ASSETS) OTHER INFORMATION ---------------------------------------------------------------------------------------------- Class A Maximum initial sales charge Service fee of 0.175% Initial sales charge waived or of 5% reduced for certain purchases ---------------------------------------------------------------------------------------------- Class B No initial sales charge; Service fee of 0.175% Shares convert to Class A distribution fee of 0.75% of after 8 years; CDSC waived in daily net assets; maximum CDSC certain circumstances of 5% declines to 0% after 6 years ---------------------------------------------------------------------------------------------- Class Y None None Available only to certain qualifying institutional investors
CONVERSION OF CLASS B SHARES TO CLASS A SHARES -- Eight calendar years after Class B shares were originally purchased, Class B shares will convert to Class A shares and will no longer be subject to a distribution fee. The conversion will be on the basis of relative net asset values of the two classes, without the imposition of any sales charge. Class B shares purchased through reinvested dividends and distributions will convert to Class A shares in a pro-rata portion as the Class B shares purchased other than through reinvestment. 23P - -------------------------------------------------------------------------------- How to buy, exchange or sell shares CONSIDERATIONS IN DETERMINING WHETHER TO PURCHASE CLASS A OR CLASS B SHARES -- You should consider the information below in determining whether to purchase Class A or Class B shares. SALES CHARGES ON PURCHASE OR REDEMPTION IF YOU PURCHASE CLASS A SHARES IF YOU PURCHASE CLASS B SHARES - - You will not have all of your purchase - All of your money is invested in price invested. Part of your purchase shares of stock. However, you will price will go to pay the sales charge. pay a sales charge if you redeem You will not pay a sales charge when your shares within 6 years of you redeem your shares. purchase. - - You will be able to take advantage of - No reductions of the sales charge reductions in the sales charge. If are available for large purchases. your investments in IDS funds total $250,000 or more, you are better off paying the reduced sales charge in Class A than paying the higher fees in Class B. If you qualify for a waiver of the sales charge, you should purchase Class A shares. - - The sales charges and distribution fee are structured so that you will have approximately the same total return at the end of 8 years regardless of which class you chose. ONGOING EXPENSES - - Your shares will have a lower expense - The distribution and transfer ratio than Class B shares because agent fees for Class B will cause Class A does not pay a distribution your shares to have a higher fee and the transfer agent fee for expense ratio and to pay lower Class A is lower than the fee for dividends than Class A shares. Class B. As a result, Class A shares After 8 years, Class B shares will will pay higher dividends than Class B convert to Class A shares and will shares. no longer be subject to higher fees. You should consider how long you plan to hold your shares and whether the accumulated higher fees and CDSC on Class B shares prior to conversion would be less than the initial sales charge on Class A shares. Also consider to what extent the difference would be offset by the lower expenses on Class A shares. To help you in this analysis, the Example in the "Sales charge and fund expenses" section of the prospectus illustrates the charges applicable to each class of shares. 24P - -------------------------------------------------------------------------------- CLASS Y SHARES -- Class Y shares are offered to certain institutional investors. Class Y shares are sold without a front-end sales charge or a CDSC and are not subject to either a service fee or a distribution fee. The following investors are eligible to purchase Class Y shares: - Qualified employee benefit plans* if the plan: -- uses a daily transfer recordkeeping service offering participants daily access to IDS funds and has -- at least $10 million in plan assets or -- 500 or more participants; or -- does not use daily transfer recordkeeping and has -- at least $3 million invested in funds of the IDS MUTUAL FUND GROUP or -- 500 or more participants. - Trust companies or similar institutions, and charitable organizations that meet the definition in Section 501(c)(3) of the Internal Revenue Code.* These must have at least $10 million invested in funds of the IDS MUTUAL FUND GROUP. - Nonqualified deferred compensation plans* whose participants are included in a qualified employee benefit plan described above. * Eligibility must be determined in advance by American Express Financial Advisors. To do so, contact your financial advisor. Financial advisors may receive different compensation for selling Class A, Class B and Class Y shares. 25P - -------------------------------------------------------------------------------- How to buy, exchange or sell shares HOW TO BUY SHARES If you're investing in one of the funds for the first time, you'll need to set up an account. Your financial advisor will help you fill out and submit an application. Once your account is set up, you can choose among several convenient ways to invest. IMPORTANT: When opening an account, you must provide American Express Financial Corporation with your correct Taxpayer Identification Number (Social Security or Employer Identification number). See "Distributions and taxes." When you buy shares for a new or existing account, the price you pay per share is determined at the close of business on the day your investment is received and accepted at the Minneapolis headquarters. PURCHASE POLICIES: - Investments must be received and accepted in the Minneapolis headquarters on a business day before 3 p.m. Central time to be included in your account that day and to receive that day's share price. Otherwise your purchase will be processed the next business day and you will pay the next day's share price. - The minimums allowed for investment may change from time to time. - Wire orders can be accepted only on days when your bank, American Express Financial Corporation, the funds and Norwest Bank Minneapolis are open for business. - Wire purchases are completed when wired payment is received and the fund accepts the purchase. - American Express Financial Corporation and the funds are not responsible for any delays that occur in wiring funds, including delays in processing by the bank. - You must pay any fee the bank charges for wiring. - Each fund reserves the right to reject any application for any reason. - If your application does not specify which class of share you are purchasing, it will be assumed that you are investing in Class A shares. 26P - -------------------------------------------------------------------------------- THREE WAYS TO INVEST ----------------------------------------------------------------------------- --------------- 1 BY REGULAR Send your check and MINIMUM AMOUNTS ACCOUNT application (or your name and Initial investment per account number if you have an fund: $2,000 established account) to: Additional investments per American Express fund: $100 Financial Advisors Inc. Account balances per fund:$300* P.O. Box 74 Minneapolis, MN 55440-0074 Your financial advisor will help you with this process. ----------------------------------------------------------------------------- --------------- 2 BY Contact your financial advisor MINIMUM AMOUNTS SCHEDULED to set up one of the following Initial investment: $100 INVESTMENT scheduled plans: Additional investments: $100/mo PLAN - automatic payroll deduction Account balances: none - bank authorization (on active plans - direct deposit of Social of monthly payments) Security check - other plan approved by the Fund ----------------------------------------------------------------------------- --------------- 3 BY WIRE If you have an established If this information is not account, you may wire money included, the order may be to: rejected and all money Norwest Bank Minneapolis received by the fund, less any Routing No. 091000019 costs the fund or American Minneapolis, MN Express Financial Corporation Attn: Domestic Wire Dept. incurs, will be returned promptly. Give these instructions: MINIMUM AMOUNTS: Credit IDS Account #00-30-015 Each wire investment: $1,000 ** for personal account # (your account number) for (your name). *If your account balance falls below $300, you will be asked in writing to bring it up to $300 or establish a scheduled investment plan. If you don't do so within 30 days, your shares can be redeemed and the proceeds mailed to you. **The money sent by a single wire can be invested only in one fund. 27P - -------------------------------------------------------------------------------- How to buy, exchange or sell shares HOW TO EXCHANGE SHARES You can exchange your shares of the fund at no charge for shares of the same class of any other publicly offered fund in the IDS MUTUAL FUND GROUP available in your state. Exchanges into IDS Tax-Free Money Fund must be made from Class A shares. For complete information, including fees and expenses, read the prospectus carefully before exchanging into a new fund. If your exchange request arrives at the Minneapolis headquarters before the close of business, your shares will be redeemed at the net asset value set for that day. The proceeds will be used to purchase new fund shares the same day. Otherwise, your exchange will take place the next business day at that day's net asset value. For tax purposes, an exchange represents a sale and purchase and may result in a gain or loss. However, you cannot create a tax loss (or reduce a taxable gain) by exchanging from the fund within 91 days of your purchase. For further explanation, see the SAI. HOW TO SELL SHARES You can sell (redeem) your shares at any time. American Express Shareholder Service will mail payment within seven days after receiving your request. When you sell shares, the amount you receive may be more or less than the amount you invested. Your shares will be redeemed at net asset value, minus any applicable sales charge, at the close of business on the day your request is accepted at the Minneapolis headquarters. If your request arrives after the close of business, the price per share will be the net asset value, minus any applicable sales charge, at the close of business on the next business day. A redemption is a taxable transaction. If the fund's net asset value when you sell shares is more or less than the cost of your shares, you will have a gain or loss, which can affect your tax liability. 28P - -------------------------------------------------------------------------------- TWO WAYS TO REQUEST AN EXCHANGE OR SALE OF SHARES ----------------------------------------------------------------------------- --------------- 1 BY LETTER Include in your letter: - any paper certificates of - the name of the fund(s) shares you hold - the class of shares to be REGULAR MAIL: exchanged or redeemed American Express Shareholder - your account number(s) (for Service exchanges, both funds must be Attn: Redemptions registered in the same P.O. Box 534 ownership) Minneapolis, MN 55440-0534 - your Taxpayer Identification EXPRESS MAIL: Number (TIN) American Express Shareholder - the dollar amount or number Service of shares you want to Attn: Redemptions exchange or sell 733 Marquette Ave. - signature of all registered Minneapolis, MN 55402 account owners - for redemptions, indicate how you want your sales proceeds delivered to you ----------------------------------------------------------------------------- --------------- 2 BY PHONE - The fund and American Express American Express Shareholder American Financial Corporation will Service. Each registered owner Express honor any telephone exchange must sign the request. Telephone or redemption request - American Express Financial Transaction believed authentic and will Corporation answers phone Service: use reasonable procedures to requests promptly, but you 800-437-3133 confirm that they are. This may experience delays when or includes asking identifying call volume is high. If you 612-671-3800 questions and tape recording are unable to get through, calls. So long as reasonable use mail procedure as an procedures are followed, alternative. neither the fund nor American - Phone privileges may be Express Financial Corporation modified or discontinued at will be liable for any loss any time. resulting from fraudulent MINIMUM AMOUNT requests. Redemption: $100 - Phone exchange and redemption MAXIMUM AMOUNT privileges automatically Redemption: $50,000 apply to all accounts except custodial, corporate or qualified retirement accounts unless you request these privileges NOT apply by writing 29P - -------------------------------------------------------------------------------- How to buy, exchange or sell shares EXCHANGE POLICIES: - You may make up to three exchanges within any 30-day period, with each limited to $300,000. These limits do not apply to scheduled exchange programs and certain employee benefit plans or other arrangements through which one shareholder represents the interests of several. Exceptions may be allowed with pre-approval of the fund. - Exchanges must be made into the same class in the new fund. - If your exchange creates a new account, it must satisfy the minimum investment amount for new purchases. - Once we receive your exchange request, you cannot cancel it. - Shares of the new fund may not be used on the same day for another exchange. - If your shares are pledged as collateral, the exchange will be delayed until written approval is obtained from the secured party. - American Express Financial Corporation and the fund reserve the right to reject any exchange, limit the amount, or modify or discontinue the exchange privilege, to prevent abuse or adverse effects on the fund and its shareholders. For example, if exchanges are too numerous or too large, they may disrupt the fund's investment strategies or increase its costs. REDEMPTION POLICIES: - A "change of mind" option allows you to change your mind after requesting a redemption and to use all or part of the proceeds to buy new shares in the same account at the net asset value, rather than the offering price on the date of a new purchase. If you reinvest in this manner, any CDSC you paid on the amount you are reinvesting also will be reinvested in the fund. To take advantage of this option, send a written request within 30 days of the date your redemption request was received. Include your account number and mention this option. This privilege may be limited or withdrawn at any time, and it may have tax consequences. - A telephone redemption request will not be allowed within 30 days of a phoned-in address change. IMPORTANT: If you request a redemption of shares you recently purchased by a check or money order that is not guaranteed, the fund will wait for your check to clear. Please expect a minimum of 10 days from the date of purchase before a check is mailed to you. (A check may be mailed earlier if your bank provides evidence satisfactory to the fund and American Express Financial Corporation that your check has cleared.) 30P - -------------------------------------------------------------------------------- THREE WAYS TO RECEIVE PAYMENT WHEN YOU SELL SHARES ------------------------------------------------------------------- --------------- 1 BY REGULAR - Mailed to the address on record. OR EXPRESS - Payable to names listed on the account. MAIL NOTE: The express mail delivery charges you pay will vary depending on the courier you select. ------------------------------------------------------------------- --------------- 2 BY WIRE - Minimum wire redemption: $1,000. - Request that money be wired to your bank. - Bank account must be in the same ownership as the IDS fund account. NOTE: Pre-authorization required. For instructions, contact your financial advisor or American Express Shareholder Service. ------------------------------------------------------------------- --------------- 3 BY - Minimum payment: $50. SCHEDULED - Contact your financial advisor or American Express Shareholder PAYOUT Service to set up regular payments to you on a monthly, PLAN bimonthly, quarterly, semiannual or annual basis. - Buying new shares while under a payout plan may be disadvantageous because of the sales charges. 31P - -------------------------------------------------------------------------------- How to buy, exchange or sell shares REDUCTIONS AND WAIVERS OF THE SALES CHARGE CLASS A -- INITIAL SALES CHARGE ALTERNATIVE On purchases of Class A shares, you pay a 5% sales charge on the first $50,000 of your total investment and less on investments after the first $50,000:
SALES CHARGE AS A PERCENT OF:* ---------------------------- PUBLIC OFFERING NET AMOUNT TOTAL INVESTMENT PRICE INVESTED ------------------------------------------------------------------- Up to $50,000 5.0% 5.26% ------------------------------------------------------------------- Next $50,000 4.5 4.71 ------------------------------------------------------------------- Next $400,000 3.8 3.95 ------------------------------------------------------------------- Next $500,000 2.0 2.04 ------------------------------------------------------------------- More than $1,000,000 0.0 0.00 *To calculate the actual sales charge on an investment greater than $50,000, amounts for each applicable increment must be totaled. See the SAI.
REDUCTIONS OF THE SALES CHARGE ON CLASS A SHARES Your sales charge may be reduced, depending on the totals of: - the amount you are investing in this fund now, - the amount of your existing investment in this fund, if any, and - the amount you and your immediate family (spouse or unmarried children under 21) are investing or have in other funds in the IDS MUTUAL FUND GROUP that carry a sales charge. Other policies that affect your sales charge: - IDS Tax-Free Money Fund and Class A shares of IDS Cash Management Fund do not carry sales charges. However, you may count investments in these funds if you acquired shares in them by exchanging shares from IDS funds that carry sales charges. - Employee benefit plan purchases made through a payroll deduction plan or through a plan sponsored by an employer, association of employers, employee organization or other similar entity, may be added together to reduce sales charges for all shares purchased through that plan. For more details, see the SAI. WAIVERS OF THE SALES CHARGE FOR CLASS A SHARES Sales charges do not apply to: - Current or retired trustees, directors, officers or employees of the fund or American Express Financial Corporation or its subsidiaries, their spouses and unmarried children under 21. - Current or retired American Express financial advisors, their spouses and unmarried children under 21. - Qualified employee benefit plans* using a daily transfer recordkeeping system offering participants daily access to IDS funds. (Participants in certain qualified plans for which the initial sales charge is waived may be subject to a deferred sales charge of up to 4% on certain redemptions. For more information, see the SAI.) 32P - -------------------------------------------------------------------------------- - Shareholders who have at least $1 million invested in funds of the IDS MUTUAL FUND GROUP. If the investment is redeemed in the first year after purchase, a CDSC of 1% will be charged on the redemption. - Purchases made within 30 days after a redemption of shares (up to the amount redeemed): -- of a product distributed by American Express Financial Advisors in a qualified plan subject to a deferred sales charge or -- a qualified plan where American Express Trust Company acts as trustee or recordkeeper. Send the fund a written request along with your payment, indicating the amount of the redemption and the date on which it occurred. - Purchases made with dividend or capital gain distributions from another fund in the IDS MUTUAL FUND GROUP that has a sales charge. * Eligibility must be determined in advance by American Express Financial Advisors. To do so, contact your financial advisor. 33P - -------------------------------------------------------------------------------- How to buy, exchange or sell shares CLASS B -- CONTINGENT DEFERRED SALES CHARGE ALTERNATIVE Where a CDSC is imposed on a redemption, it is based on the amount of the redemption and the number of calendar years, including the year of purchase, between purchase and redemption. The following table shows the declining scale of percentages that apply to redemptions during each year after a purchase:
IF A REDEMPTION THE PERCENTAGE IS MADE RATE FOR THE DURING THE CDSC IS: ----------------------------------------------------------------- First year 5% ----------------------------------------------------------------- Second year 4% ----------------------------------------------------------------- Third year 4% ----------------------------------------------------------------- Fourth year 3% ----------------------------------------------------------------- Fifth year 2% ----------------------------------------------------------------- Sixth year 1% ----------------------------------------------------------------- Seventh year 0%
If the amount you are redeeming reduces the current net asset value of your investment in Class B shares below the total dollar amount of all your purchase payments during the last 6 years (including the year in which your redemption is made), the CDSC is based on the lower of the redeemed purchase payments or market value. The following example illustrates how the CDSC is applied. Assume you had invested $10,000 in Class B shares and that your investment had appreciated in value to $12,000 after 15 months, including reinvested dividend and capital gain distributions. You could redeem any amount up to $2,000 without paying a CDSC ($12,000 current value less $10,000 purchase amount). If you redeemed $2,500, the CDSC would apply only to the $500 that represented part of your original purchase price. The CDSC rate would be 4% because a redemption after 15 months would take place during the second year after purchase. 34P - -------------------------------------------------------------------------------- Because the CDSC is imposed only on redemptions that reduce the total of your purchase payments, you never have to pay a CDSC on any amount you redeem that represents appreciation in the value of your shares, income earned by your shares or capital gains. In addition, when determining the rate of any CDSC, your redemption will be made from the oldest purchase payment you made. Of course, once a purchase payment is considered to have been redeemed, the next amount redeemed is the next oldest purchase payment. By redeeming the oldest purchase payments first, lower CDSCs are imposed than would otherwise be the case. WAIVERS OF THE SALES CHARGE FOR CLASS B SHARES The CDSC on Class B shares will be waived on redemptions of shares: - In the event of the shareholder's death, - Purchased by any trustee, director, officer or employee of a fund or American Express Financial Corporation or its subsidiaries, - Purchased by any American Express financial advisor, - Held in a trusteed employee benefit plan, - Held in IRAs or certain qualified plans for which American Express Trust Company acts as custodian, such as Keogh plans, tax-sheltered custodial accounts or corporate pension plans, provided that the shareholder is: -- at least 59 1/2 years old, and -- taking a retirement distribution (if the redemption is part of a transfer to an IRA or qualified plan in a product distributed by American Express Financial Advisors, or a custodian-to-custodian transfer to a product not distributed by American Express Financial Advisors, the CDSC will not be waived), or -- redeeming under an approved substantially equal periodic payment arrangement. 35P - ------------------------------------------------------------------------------- Special shareholder services SERVICES To help you track and evaluate the performance of your investments, American Express Financial Corporation provides these services: QUARTERLY STATEMENTS listing all of your holdings and transactions during the previous three months. YEARLY TAX STATEMENTS featuring average-cost-basis reporting of capital gains or losses if you redeem your shares along with distribution information -- which simplifies tax calculations. A PERSONALIZED MUTUAL FUND PROGRESS REPORT detailing returns on your initial investment and cash-flow activity in your account. It calculates a total return to reflect your individual history in owning fund shares. This report is available from your financial advisor. ----------------------------------------------------------- QUICK TELEPHONE REFERENCE AMERICAN Redemptions and exchanges, National/Minnesota: EXPRESS dividend payments or 800-437-3133 TELEPHONE reinvestments and automatic Mpls./St. Paul TRANSACTION payment arrangements area: SERVICE 671-3800 ---------------------------------------------------- AMERICAN Fund performance, objectives and 612-671-3733 EXPRESS account inquiries SHAREHOLDER SERVICE ---------------------------------------------------- TTY SERVICE For the hearing impaired 800-846-4852 ---------------------------------------------------- AMERICAN Automated account information National/Minnesota: EXPRESS (TouchTone-Registered Trademark- 800-272-4445 INFOLINE phones only), including current Mpls./St. Paul fund prices and performance, area: account values and recent 671-1630 account transactions ---------------------------------------------------- 36P - ------------------------------------------------------------------------------- Distributions and taxes The fund distributes to shareholders investment income and net capital gains. It does so to qualify as a regulated investment company and to avoid paying corporate income and excise taxes. Dividend and capital gains distributions will have tax consequences you should know about. DIVIDEND AND CAPITAL GAIN DISTRIBUTIONS Each fund distributes its net investment income (dividends and interest earned on securities held by the fund, less operating expenses) to shareholders of record monthly. Short-term capital gains distributed are included in net investment income. Net realized capital gains, if any, from selling securities are distributed at the end of the calendar year. Before they're distributed, net capital gains are included in the value of each share. After they're distributed, the value of each share drops by the per-share amount of the distribution. (If your distributions are reinvested, the total value of your holdings will not change.) Dividends paid by each class will be calculated at the same time, in the same manner and in the same amount, except the expenses attributable solely to Class A, Class B and Class Y will be paid exclusively by that class. Class B shareholders will receive lower per share dividends than Class A and Class Y shareholders because expenses for Class B are higher than for Class A or Class Y. Class A shareholders will receive lower per share dividends than Class Y shareholders because expenses for Class A are higher than for Class Y. REINVESTMENTS Dividends and capital gain distributions are automatically reinvested in additional shares in the same class of the fund, unless: - you request the fund in writing or by phone to pay distributions to you in cash, or - you direct the fund to invest your distributions in any publicly available IDS fund for which you've previously opened an account. You pay no sales charge on shares purchased through reinvestment from this fund into any IDS fund. The reinvestment price is the net asset value at close of business on the day the distribution is paid. (Your quarterly statement will confirm the amount invested and the number of shares purchased.) If you choose cash distributions, you will receive only those declared after your request has been processed. If the U.S. Postal Service cannot deliver the checks for the cash distributions, we will reinvest the checks into your account at the then-current net asset value and make future distributions in the form of additional shares. 37P - -------------------------------------------------------------------------------- Distributions and taxes TAXES Dividends distributed from interest earned by each fund on tax-exempt securities (exempt-interest dividends) are exempt from federal income taxes but may be subject to state and local taxes. Dividends distributed from other income earned by each fund and capital gain distributions are not exempt from federal income taxes. Distributions are taxable in the year a fund pays them regardless of whether you take them in cash or reinvest them. Interest on certain private activity bonds is a preference item for purposes of the individual and corporate alternative minimum taxes. To the extent a fund earns such income, it will flow through to its shareholders and may be taxable to those shareholders who are subject to the alternative minimum tax. Because interest on municipal bonds and notes is tax-exempt for federal income tax purposes, any interest on borrowed money used directly or indirectly to purchase fund shares is not deductible on your federal income tax return. You should consult a tax advisor regarding its deductibility for state and local income tax purposes. Each January, you will receive a statement showing the kinds and total amount of all distributions you received during the previous year. You must report all distributions on your tax returns, even if they are reinvested in additional shares. "Buying a dividend" creates a tax liability. This means buying shares shortly before a capital gain distribution. You pay the full pre-distribution price for the shares, then receive a portion of your investment back as a distribution, which is taxable. 38P - -------------------------------------------------------------------------------- Redemptions and exchanges subject you to a tax on any capital gain. If you sell shares for more than their cost, the difference is a capital gain. Your gain may be either short term (for shares held for one year or less) or long term (for shares held for more than one year). YOUR TAXPAYER IDENTIFICATION NUMBER (TIN) IS IMPORTANT. As with any financial account you open, you must list your current and correct Taxpayer Identification Number (TIN) -- either your Social Security or Employer Identification number. The TIN must be certified under penalties of perjury on your application when you open an account at AEFC. If you don't provide the TIN, or the TIN you report is incorrect, you could be subject to backup withholding of 31% of taxable distributions and proceeds from certain sales and exchanges. You also could be subject to further penalties, such as: - a $50 penalty for each failure to supply your correct TIN - a civil penalty of $500 if you make a false statement that results in no backup withholding - criminal penalties for falsifying information You also could be subject to backup withholding because you failed to report interest or dividends on your tax return as required. 39P - -------------------------------------------------------------------------------- Distributions and taxes ----------------------------------------------------------- HOW TO DETERMINE THE CORRECT TIN
FOR THIS TYPE OF ACCOUNT: USE THE SOCIAL SECURITY OR EMPLOYER IDENTIFICATION NUMBER OF: --------------------------------------------------- Individual or joint The individual or first account person listed on the account --------------------------------------------------- Custodian account of a The minor minor (Uniform Gifts/Transfers to Minors Act) --------------------------------------------------- A living trust The grantor-trustee (the person who puts the money into the trust) --------------------------------------------------- An irrevocable trust, The legal entity (not the pension trust or estate personal representative or trustee, unless no legal entity is designated in the account title) --------------------------------------------------- Sole proprietorship or The owner or partnership partnership --------------------------------------------------- Corporate The corporation --------------------------------------------------- Association, club or The organization tax-exempt organization ---------------------------------------------------
For details on TIN requirements, ask your financial advisor or local American Express Financial Advisors office for Federal Form W-9, "Request for Taxpayer Identification Number and Certification." IMPORTANT: This information is a brief and selective summary of certain federal tax rules that apply to each fund. Tax matters are highly individual and complex, and you should consult a qualified tax advisor about your personal situation. 40P - ------------------------------------------------------------------------------- How the funds are organized IDS Special Tax-Exempt Series Trust, of which IDS Massachusetts Tax-Exempt Fund, IDS Michigan Tax-Exempt Fund, IDS Minnesota Tax-Exempt Fund, IDS New York Tax-Exempt Fund and IDS Ohio Tax-Exempt Fund are a part, is an open-end management investment company, as defined in the Investment Company Act of 1940. It was organized as a Massachusetts business trust on April 7, 1986. IDS California Tax-Exempt Trust, of which IDS California Tax-Exempt Fund is a part, was organized as a Massachusetts business trust on April 7, 1986. The funds' headquarters are at 901 S. Marquette Ave., Suite 2810, Minneapolis, MN 55402-3268. The trustees have considered that the use of a combined prospectus for six funds makes each fund responsible for disclosure contained in the prospectus regardless of the particular fund to which it pertains and have concluded that the cost savings available to shareholders support the use of a combined prospectus. SHARES IDS Special Tax-Exempt Series Trust currently is composed of six funds and IDS California Tax-Exempt Trust currently is composed of one fund. Each fund issues its own shares of capital stock. Each fund is owned by its shareholders. Each fund issues shares in three classes -- Class A, Class B and Class Y. Each class has different sales arrangements and bears different expenses. Each class represents interests in the assets of the fund. Par value is 1 cent per share. Both full and fractional shares can be issued. The shares of each fund represent an interest in that fund's assets only (and profits or losses), and, in the event of liquidation, each share of a fund would have the same rights to dividends and assets as every other share of that fund. The trustees may from time to time issue other funds of the Series Trust, the assets and liabilities of which will likewise be separate and distinct from any other fund. The funds no longer issue stock certificates. 41P - -------------------------------------------------------------------------------- How the funds are organized VOTING RIGHTS As a shareholder, you have voting rights over the fund's management and fundamental policies. You are entitled to one vote for each share you own. Each class has exclusive voting rights with respect to the provisions of the fund's distribution plan that pertain to a particular class and other matters for which separate class voting is appropriate under applicable law. SHAREHOLDER MEETINGS The funds do not hold annual shareholder meetings. However, the trustees may call meetings at their discretion, or on demand by holders of 10% or more of the outstanding shares, to elect or remove trustees. TRUSTEES AND OFFICERS Shareholders elect the trustees that oversees the operations of the fund and chooses its officers. Its officers are responsible for day-to-day business decisions based on policies set by the board. The board has named an executive committee that has authority to act on its behalf between meetings. The trustees also serve on the boards of all of the other funds in the IDS MUTUAL FUND GROUP, except for Mr. Dudley, who is a director of all publicly offered funds. 42P - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- TRUSTEES AND OFFICERS OF THE FUNDS President and WILLIAM R. PEARCE interested trustee President of all funds in the IDS MUTUAL FUND GROUP. - -------------------------------------------------------------------------------- Independent LYNNE V. CHENEY trustees Distinguished fellow, American Enterprise Institute for Public Policy Research. ROBERT F. FROEHLKE Former president of all funds in the IDS MUTUAL FUND GROUP. HEINZ F. HUTTER Former president and chief operating officer, Cargill, Inc. ANNE P. JONES Attorney and telecommunications consultant. DONALD M. KENDALL Former chairman and chief executive officer, PepsiCo, Inc. MELVIN R. LAIRD Senior counsellor for national and international affairs, The Reader's Digest Association, Inc. LEWIS W. LEHR Former chairman and chief executive officer, Minnesota Mining and Manufacturing Company (3M). EDSON W. SPENCER Former chairman and chief executive officer, Honeywell, Inc. WHEELOCK WHITNEY Chairman, Whitney Management Company. C. ANGUS WURTELE Chairman of the board and chief executive officer, The Valspar Corporation. - -------------------------------------------------------------------------------- Interested trustees WILLIAM H. DUDLEY who are officers Executive vice president, American Express Financial and/or employees Corporation. of American Express DAVID R. HUBERS Financial President and chief executive officer, American Express Corporation Financial Corporation. JOHN R. THOMAS Senior vice president, American Express Financial Corporation. - -------------------------------------------------------------------------------- Other officer LESLIE L. OGG Vice president of all funds in the IDS MUTUAL FUND GROUP and general counsel and treasurer of the publicly offered funds. Refer to the SAI for the trustees' and officers' biographies. 43P - -------------------------------------------------------------------------------- How the funds are organized INVESTMENT MANAGER AND TRANSFER AGENT The funds pay American Express Financial Corporation for managing their portfolios, providing administrative services and serving as transfer agent (handling shareholder accounts). Under its Investment Management Services Agreement, American Express Financial Corporation determines which securities will be purchased, held or sold (subject to the direction and control of the fund's trustees). Effective March 1995, each fund pays American Express Financial Corporation a fee for these services based on the average daily net assets of the fund, as follows:
ASSETS ANNUAL RATE (BILLIONS) AT EACH ASSET LEVEL ----------------------------------------- First $ 0.25 0.470% ----------------------------------------- Next 0.25 0.445 ----------------------------------------- Next 0.25 0.420 ----------------------------------------- Next 0.25 0.405 ----------------------------------------- Over 1.0 0.380
For the fiscal year ended June 30, 1994, under a prior agreement, each fund paid American Express Financial Corporation total investment management fees of 0.53% of its average daily net assets. Under the Agreement, each fund also pays taxes, brokerage commissions and nonadvisory expenses. Under an Administrative Services Agreement, each fund pays American Express Financial Corporation for administration and accounting services at an annual rate of 0.04% decreasing in gradual percentages to 0.02% as assets increase. In addition, under a separate Transfer Agency Agreement, American Express Financial Corporation maintains shareholder accounts and records. Each fund pays American Express Financial Corporation an annual fee per shareholder account for this service as follows: - Class A $15.50 - Class B $16.50 - Class Y $15.50 44P - -------------------------------------------------------------------------------- DISTRIBUTOR The funds sell shares through American Express Financial Advisors, a wholly owned subsidiary of American Express Financial Corporation, under a Distribution Agreement. Financial advisors representing American Express Financial Advisors provide information to investors about individual investment programs, the funds and their operations, new account applications, exchange and redemption requests. The cost of these services is paid partially by the funds' sales charge. Portions of sales charges may be paid to securities dealers who have sold the funds' shares, or to banks and other financial institutions. The proceeds paid to others range from 0.8% to 4% of each fund's offering price depending on the monthly sales volume. For Class B shares, to help defray costs not covered by sales charges, including costs for marketing, sales administration, training, overhead, direct marketing programs, advertising and related functions, each fund pays American Express Financial Advisors a distribution fee, also known as a 12b-1 fee. This fee is paid under a Plan and Agreement of Distribution that follows the terms of Rule 12b-1 of the Investment Company Act of 1940. Under this Agreement, each fund pays a distribution fee at an annual rate of 0.75% of the fund's average daily net assets attributable to Class B shares for distribution-related services. 45P - -------------------------------------------------------------------------------- How the funds are organized Total 12b-1 fees paid under a prior agreement were 0.02% of average daily net assets for California, 0.03% for Massachusetts, 0.02% for Michigan, 0.02% for Minnesota, 0.02% for New York and 0.02% for Ohio Fund for the fiscal year ended June 30, 1994. These fees will not cover all of the costs incurred by American Express Financial Advisors. Under a Shareholder Service Agreement, each fund also pays a fee for service provided to shareholders by financial advisors and other servicing agents. The fee is calculated at a rate of 0.175% of the fund's average daily net assets attributable to Class A and Class B shares. Total expenses paid by each fund amounted to 0.61% of average daily net assets for California, 0.69% for Massachusetts, 0.65% for Michigan, 0.66% for Minnesota, 0.65% for New York and 0.66% for Ohio Fund for the fiscal year ended June 30, 1994. Total fees and expenses (excluding taxes and brokerage commissions) cannot exceed the most restrictive applicable state expense limitation. 46P - ------------------------------------------------------------------------------- About American Express Financial Corporation GENERAL INFORMATION The American Express Financial Corporation family of companies offers not only mutual funds but also insurance, annuities, investment certificates and a broad range of financial management services. Besides managing investments for all publicly offered funds in the IDS MUTUAL FUND GROUP, American Express Financial Corporation also manages investments for itself and its subsidiaries, IDS Certificate Company and IDS Life Insurance Company. Total assets under management on June 30, 1994 were more than $100 billion. American Express Financial Advisors serves individuals and businesses through its nationwide network of more than 175 offices and more than 7,800 advisors. Other American Express Financial Corporation subsidiaries provide investment management and related services for pension, profit sharing, employee savings and endowment funds of businesses and institutions. American Express Financial Corporation is located at IDS Tower 10, Minneapolis, MN 55440-0010. It is a wholly owned subsidiary of American Express Company, a financial services company with headquarters at American Express Tower, World Financial Center, New York, NY 10285. The fund may pay brokerage commissions to broker-dealer affiliates of American Express and American Express Financial Corporation. 47P - ------------------------------------------------------------------------------- Appendix A - -------------------------------------------------------------------------------- TAX-EXEMPT INCOME VS. TAXABLE INCOME 1994 CALIFORNIA TAX-EXEMPT AND TAXABLE EQUIVALENT YIELD CALCULATION These tables will help you determine your combined federal and state taxable yields equivalents for given rates of tax-exempt income. STEP 1: CALCULATING YOUR MARGINAL TAX RATES. Using your Taxable Income and Adjusted Gross Income figures as guides you can locate your Marginal Tax Rate in the table below. First locate your Taxable Income in a filing status and income range in the left-hand column. Then, locate your Adjusted Gross Income at the top of the chart. At the point where your Taxable Income line meets your Adjusted Gross Income column the percentage indicated is an approximation of your Marginal Tax Rate. For example: Let's assume you are married filing jointly, your taxable income is $138,000 and your adjusted gross income is $175,000. Under Taxable Income married filing jointly status, $138,000 is in the $91,850-$140,000 range. Under Adjusted Gross Income, $175,000 is in the $167,700 to $290,200 column. The Taxable Income line and Adjusted Gross Income column meet at 38.26 percent. This is the rate you'll use in Step 2.
ADJUSTED GROSS INCOME* ------------------------------------------------------------------------ TAXABLE INCOME** $0 $ 111,800 $ 167,700 OVER to to to $111,800(1) $167,700(2) $290,200(3) $290,200(2) ------------------------------------------------------------------------------------------------------------- MARRIED FILING JOINTLY $ 0 - $ 9,332 15.85% 9,332 - 22,118 16.70 22,118 - 34,906 18.40 34,906 - 38,000 20.10 38,000 - 48,456 32.32 48,456 - 61,240 33.76 61,240 - 91,850 34.70 91,850 - 140,000 37.42 38.26% 38.26% 140,000 - 212,380 41.95 42.93 44.21 212,380 - 250,000 42.40 44.64 43.37% 250,000 - 424,760 45.64 48.11*** 46.71 424,760 + 46.24 47.30 ------------------------------------------------------------------------------------------------------------- $ 0 $ 111,800 OVER to to $111,800(1) $234,300(3) $234,300(2) ------------------------------------------------------------------------------------------------------------- SINGLE $ 0 - $ 4,666 15.85% 4,666 - 11,059 16.70 11,059 - 17,453 18.40 17,453 - 22,750 20.10 22,750 - 24,228 32.32 24,228 - 30,620 33.76 30,620 - 55,100 34.70 55,100 - 106,190 37.42 38.81% 106,190 - 115,000 37.90 39.28 115,000 - 212,380 42.40 44.01 212,380 - 250,000 43.04 44.63 44.00% 250,000 + 46.24 47.30 ------------------------------------------------------------------------------------------------------------- * Gross income with certain adjustments before taking itemized deductions and personal exemptions. ** Amount subject to federal income tax after itemized deduction and personal exemptions. *** This rate is applicable only in the limited case where your adjusted gross income is less than $290,200 and your taxable income exceeds $250,000. (1) No Phase-out -- Assumes no phase-out of itemized deductions or personal exemptions. (2) Itemized Deductions Phase-out -- Assumes a single taxpayer has one personal exemption and joint taxpayers have two personal exemptions. (3) Itemized Deductions and Personal Exemption Phase-outs -- Assumes a single taxpayer has one personal exemption, joint taxpayers have two personal exemptions and itemized deductions continue to phase-out. Federal taxes are not deductible on the California state tax return. The combined federal/California tax brackets are based on state tax rates in effect on Dec. 31, 1993. These rates may change if California tax rates change in 1994. If state tax rates change equivalent rates may be higher than those shown. If these assumptions do not apply to you, it will be necessary to construct your own personalized tax equivalency table.
48P - -------------------------------------------------------------------------------- STEP 2: DETERMINING YOUR COMBINED FEDERAL AND CALIFORNIA STATE TAXABLE YIELD EQUIVALENTS. Using 38.26 percent, you may determine that a tax-exempt yield of 4 percent is equivalent to earning a taxable 6.48 percent yield.
For these TAX-EXEMPT RATES: ------------------------------------------------------------------------------- 4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00% 7.50% ------------------------------------------------------------------------------- MARGINAL TAX RATES Equal the TAXABLE RATES shown below: - ------------------------------------------------------------------------------------------------------ 15.85% 4.75% 5.35% 5.94% 6.54% 7.13% 7.72% 8.32% 8.91% 16.70 4.80 5.40 6.00 6.60 7.20 7.80 8.40 9.00 18.40 4.90 5.51 6.13 6.74 7.35 7.97 8.58 9.19 20.10 5.01 5.63 6.26 6.88 7.51 8.14 8.76 9.39 32.32 5.91 6.65 7.39 8.13 8.87 9.60 10.34 11.08 33.76 6.04 6.79 7.55 8.30 9.06 9.81 10.57 11.32 34.70 6.13 6.89 7.66 8.42 9.19 9.95 10.72 11.49 37.42 6.39 7.19 7.99 8.79 9.59 10.39 11.19 11.98 37.90 6.44 7.25 8.05 8.86 9.66 10.47 11.27 12.08 38.26 6.48 7.29 8.10 8.91 9.72 10.53 11.34 12.15 38.74 6.53 7.35 8.16 8.98 9.79 10.61 11.43 12.24 38.81 6.54 7.35 8.17 8.99 9.81 10.62 11.44 12.26 39.28 6.59 7.41 8.23 9.06 9.88 10.70 11.53 12.35 41.95 6.89 7.75 8.61 9.47 10.34 11.20 12.06 12.92 42.40 6.94 7.81 8.68 9.55 10.42 11.28 12.15 13.02 42.93 7.01 7.89 8.76 9.64 10.51 11.39 12.27 13.14 43.04 7.02 7.90 8.78 9.66 10.53 11.41 12.29 13.17 43.37 7.06 7.95 8.83 9.71 10.60 11.48 12.36 13.24 44.00 7.14 8.04 8.93 9.82 10.71 11.61 12.50 13.39 44.01 7.14 8.04 8.93 9.82 10.71 11.61 12.50 13.39 44.21 7.17 8.07 8.96 9.86 10.75 11.65 12.55 13.44 44.63 7.22 8.13 9.03 9.93 10.84 11.74 12.64 13.55 44.64 7.23 8.13 9.03 9.93 10.84 11.74 12.64 13.55 45.64 7.36 8.28 9.20 10.12 11.04 11.96 12.88 13.80 46.24 7.44 8.37 9.30 10.23 11.16 12.09 13.02 13.95 46.71 7.51 8.44 9.38 10.32 11.26 12.20 13.14 14.07 47.30 7.59 8.54 9.49 10.44 11.39 12.33 13.28 14.23 47.99 7.69 8.65 9.61 10.57 11.54 12.50 13.46 14.42 48.11 7.71 8.67 9.64 10.60 11.56 2.53 13.49 14.45 48.68 7.71 8.67 9.64 10.60 11.56 12.53 13.49 14.45 - ------------------------------------------------------------------------------------------------------
49P - -------------------------------------------------------------------------------- Appendix A 1994 MASSACHUSETTS TAX-EXEMPT AND TAXABLE EQUIVALENT YIELD CALCULATION These tables will help you determine your combined federal and state taxable yields equivalents for given rates of tax-exempt income. STEP 1: CALCULATING YOUR MARGINAL TAX RATES. Using your Taxable Income and Adjusted Gross Income figures as guides you can locate your Marginal Tax Rate in the table below. First locate your Taxable Income in a filing status and income range in the left-hand column. Then, locate your Adjusted Gross Income at the top of the chart. At the point where your Taxable Income line meets your Adjusted Gross Income column the percentage indicated is an approximation of your Marginal Tax Rate. For example: Let's assume you are married filing jointly, your taxable income is $138,000 and your adjusted gross income is $175,000. Under Taxable Income married filing jointly status, $138,000 is in the $91,850-$140,000 range. Under Adjusted Gross Income, $175,000 is in the $167,700 to $290,200 column. The Taxable Income line and Adjusted Gross Income column meet at 40.10 percent. This is the rate you'll use in Step 2.
ADJUSTED GROSS INCOME* ---------------------------------------------------------- TAXABLE INCOME** $0 $ 111,800 $ 167,700 OVER to to to $111,800(1) $167,700(2) $290,200(3) $290,200(2) - ------------------------------------------------------------------------------------------------------ MARRIED FILING JOINTLY $ 12,000 - $ 38,000 25.20% 38,000 - 91,850 36.64 36.64% 91,850 - 140,000 39.28 40.10 40.10% 140,000 - 250,000 43.68 44.63 45.87 250,000 + 46.85 49.26*** 47.89% - ------------------------------------------------------------------------------------------------------ $ 0 $ 111,800 OVER to to $111,800(1) $234,300(3) $234,300(2) - ------------------------------------------------------------------------------------------------------ SINGLE $ 8,000 - $ 22,750 25.20% 22,750 - 55,100 36.64 55,100 - 115,000 39.28 40.63% 115,000 - 250,000 43.68 45.25 44.63% 250,000 + 46.85 47.89 - ------------------------------------------------------------------------------------------------------ * Gross income with certain adjustments before taking itemized deductions and personal exemptions. ** Amount subject to federal income tax after itemized deduction and personal exemptions. *** This rate is applicable only in the limited case where your adjusted gross income is less than $290,200 and your taxable income exceeds $250,000. (1)No Phase-out -- Assumes no phase-out of itemized deductions or personal exemptions. (2)Itemized Deductions Phase-out -- Assumes a single taxpayer has one personal exemption and joint taxpayers have two personal exemptions. (3)Itemized Deductions and Personal Exemption Phase-outs -- Assumes a single taxpayer has one personal exemption, joint taxpayers have two personal exemptions and itemized deductions continue to phase-out.\ Federal taxes are not deductible on the Massachusetts state tax return. The combined federal/Massachusetts tax brackets are based on state tax rates in effect on Jan. 1, 1994. These rates may change if Massachusetts tax rates change in 1994. If state tax rates change equivalent rates may be higher than those shown. If these assumptions do not apply to you, it will be necessary to construct your own personalized tax equivalency table.
50P - -------------------------------------------------------------------------------- STEP 2: DETERMINING YOUR COMBINED FEDERAL AND MASSACHUSETTS STATE TAXABLE YIELD EQUIVALENTS. Using 40.10 percent, you may determine that a tax-exempt yield of 4 percent is equivalent to earning a taxable 6.68 percent yield.
For these TAX-EXEMPT RATES: ------------------------------------------------------------------------------- 4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00% 7.50% ------------------------------------------------------------------------------- MARGINAL TAX RATES Equal the TAXABLE RATES shown below: - ------------------------------------------------------------------------------------------------------ 25.20% 5.35% 6.02% 6.68% 7.35% 8.02% 8.69% 9.36% 10.03% 36.64 6.31 7.10 7.89 8.68 9.47 10.26 11.05 11.84 39.28 6.59 7.41 8.23 9.06 9.88 10.70 11.53 12.35 40.10 6.68 7.51 8.35 9.18 10.02 10.85 11.69 12.52 40.63 6.74 7.58 8.42 9.26 10.11 10.95 11.79 12.63 43.68 7.10 7.99 8.88 9.77 10.65 11.54 12.43 13.32 44.63 7.22 8.13 9.03 9.93 10.84 11.74 12.64 13.55 45.25 7.31 8.22 9.13 10.05 10.96 11.87 12.79 13.70 45.87 7.39 8.31 9.24 10.16 11.08 12.01 12.93 13.86 46.85 7.53 8.47 9.41 10.35 11.29 12.23 13.17 14.11 47.89 7.68 8.64 9.60 10.55 11.51 12.47 13.43 14.39 48.58 7.78 8.75 9.72 10.70 11.67 12.64 13.61 14.59 49.26 7.88 8.87 9.85 10.84 11.82 12.81 13.80 14.78 - ------------------------------------------------------------------------------------------------------
51P - -------------------------------------------------------------------------------- Appendix A 1994 MICHIGAN TAX-EXEMPT AND TAXABLE EQUIVALENT YIELD CALCULATION These tables will help you determine your combined federal and state taxable yields equivalents for given rates of tax-exempt income. STEP 1: CALCULATING YOUR MARGINAL TAX RATES. Using your Taxable Income and Adjusted Gross Income figures as guides you can locate your Marginal Tax Rate in the table below. First locate your Taxable Income in a filing status and income range in the left-hand column. Then, locate your Adjusted Gross Income at the top of the chart. At the point where your Taxable Income line meets your Adjusted Gross Income column the percentage indicated is an approximation of your Marginal Tax Rate. For example: Let's assume you are married filing jointly, your taxable income is $138,000 and your adjusted gross income is $175,000. Under Taxable Income married filing jointly status, $138,000 is in the $91,850-$140,000 range. Under Adjusted Gross Income, $175,000 is in the $167,700 to $290,200 column. The Taxable Income line and Adjusted Gross Income column meet at 34.93 percent. This is the rate you'll use in Step 2.
ADJUSTED GROSS INCOME* ------------------------------------------------------------------------ TAXABLE INCOME** $0 $ 111,800 $ 167,700 OVER to to to $111,800(1) $167,700(2) $290,200(3) $290,200(2) ------------------------------------------------------------------------------------------------------------- MARRIED FILING JOINTLY $ 0 - $ 38,000 18.74% 38,000 - 91,850 31.17 31.17% 91,850 - 140,000 34.04 34.93 34.93% 140,000 - 250,000 38.82 39.85 41.20 250,000 + 42.26 44.88*** 43.39% ------------------------------------------------------------------------------------------------------------- $ 0 $ 111,800 OVER to to $111,800(1) $234,300(3) $234,300(2) ------------------------------------------------------------------------------------------------------------- SINGLE $ 0 - $ 22,750 18.74% 22,750 - 55,100 31.17 55,100 - 115,000 34.04 35.51% 115,000 - 250,000 38.82 40.52 39.85% 250,000 + 42.26 43.39 ------------------------------------------------------------------------------------------------------------- * Gross income with certain adjustments before taking itemized deductions and personal exemptions. ** Amount subject to federal income tax after itemized deduction and personal exemptions. *** This rate is applicable only in the limited case where your adjusted gross income is less than $290,200 and your taxable income exceeds $250,000. (1)No Phase-out -- Assumes no phase-out of itemized deductions or personal exemptions. (2)Itemized Deductions Phase-out -- Assumes a single taxpayer has one personal exemption and joint taxpayers have two personal exemptions. (3)Itemized Deductions and Personal Exemption Phase-outs -- Assumes a single taxpayer has one personal exemption, joint taxpayers have two personal exemptions and itemized deductions continue to phase-out. Federal taxes are not deductible on the Michigan state tax return. The combined federal/Michigan tax brackets are based on state tax rates in effect on May 1, 1994. These rates may change if Michigan tax rates change in 1994. If state tax rates change equivalent rates may be higher than those shown. If these assumptions do not apply to you, it will be necessary to construct your own personalized tax equivalency table.
52P - -------------------------------------------------------------------------------- STEP 2: DETERMINING YOUR COMBINED FEDERAL AND MICHIGAN STATE TAXABLE YIELD EQUIVALENTS. Using 34.93 percent, you may determine that a tax-exempt yield of 4 percent is equivalent to earning a taxable 6.15 percent yield. For these TAX-EXEMPT RATES: ------------------------------------------------------------------------------- 4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00% 7.50% -------------------------------------------------------------------------------
MARGINAL TAX RATES Equal the TAXABLE RATES shown below: - ------------------------------------------------------------------------------------------------------ 18.74% 4.92% 5.54% 6.15% 6.77% 7.38% 8.00% 8.61% 9.23% 31.17 5.81 6.54 7.26 7.99 8.72 9.44 10.17 10.90 34.04 6.06 6.82 7.58 8.34 9.10 9.85 10.61 11.37 34.93 6.15 6.92 7.68 8.45 9.22 9.99 10.76 11.53 35.51 6.20 6.98 7.75 8.53 9.30 10.08 10.85 11.63 38.82 6.54 7.36 8.17 8.99 9.81 10.62 11.44 12.26 39.85 6.65 7.48 8.31 9.14 9.98 10.81 11.64 12.47 40.52 6.72 7.57 8.41 9.25 10.09 10.93 11.77 12.61 41.20 6.80 7.65 8.50 9.35 10.20 11.05 11.90 12.76 42.26 6.93 7.79 8.66 9.53 10.39 11.26 12.12 12.99 43.39 7.07 7.95 8.83 9.72 10.60 11.48 12.37 13.25 44.14 7.16 8.06 8.95 9.85 10.74 11.64 12.53 13.43 44.88 7.26 8.16 9.07 9.98 10.89 11.79 12.70 13.61 - ------------------------------------------------------------------------------------------------------
53P - -------------------------------------------------------------------------------- Appendix A 1994 MINNESOTA TAX-EXEMPT AND TAXABLE EQUIVALENT YIELD CALCULATION These tables will help you determine your combined federal and state taxable yields equivalents for given rates of tax-exempt income. STEP 1: CALCULATING YOUR MARGINAL TAX RATES. Using your Taxable Income and Adjusted Gross Income figures as guides you can locate your Marginal Tax Rate in the table below. First locate your Taxable Income in a filing status and income range in the left-hand column. Then, locate your Adjusted Gross Income at the top of the chart. At the point where your Taxable Income line meets your Adjusted Gross Income column the percentage indicated is an approximation of your Marginal Tax Rate. For example: Let's assume you are married filing jointly, your taxable income is $138,000 and your adjusted gross income is $175,000. Under Taxable Income married filing jointly status, $138,000 is in the $91,850-$140,000 range. Under Adjusted Gross Income, $175,000 is in the $167,700 to $290,200 column. The Taxable Income line and Adjusted Gross Income column meet at 37.72 percent. This is the rate you'll use in Step 2.
ADJUSTED GROSS INCOME* ------------------------------------------------------------------------ TAXABLE INCOME** $0 $ 111,800 $ 167,700 OVER to to to $111,800(1) $167,700(2) $290,200(3) $290,200(2) ------------------------------------------------------------------------------------------------------------- MARRIED FILING JOINTLY $ 0 - $ 22,260 20.10% 22,260 - 38,000 21.80 38,000 - 88,460 33.76 33.76% 88,460 - 91,850 34.12 34.12 34.12% 91,850 - 140,000 36.87 37.72 37.72 140,000 - 250,000 41.44 42.43 43.72 250,000 + 44.73 47.24*** 45.82% ------------------------------------------------------------------------------------------------------------- $ 0 $ 111,800 OVER to to $111,800(1) $234,300(3) $234,300(2) ------------------------------------------------------------------------------------------------------------- SINGLE $ 0 - $ 15,230 20.10% 15,230 - 22,750 21.80 22,750 - 50,030 33.76 50,030 - 55,100 34.12 55,100 - 115,000 36.87 38.27% 115,000 - 250,000 41.44 43.07 42.43% 250,000 + 44.73 45.82 ------------------------------------------------------------------------------------------------------------- * Gross income with certain adjustments before taking itemized deductions and personal exemptions. ** Amount subject to federal income tax after itemized deduction and personal exemptions. *** This rate is applicable only in the limited case where your adjusted gross income is less than $290,200 and your taxable income exceeds $250,000. (1) No Phase-out -- Assumes no phase-out of itemized deductions or personal exemptions. (2) Itemized Deductions Phase-out -- Assumes a single taxpayer has one personal exemption and joint taxpayers have two personal exemptions. (3) Itemized Deductions and Personal Exemption Phase-outs -- Assumes a single taxpayer has one personal exemption, joint taxpayers have two personal exemptions and itemized deductions continue to phase-out. Federal taxes are not deductible on the Minnesota state tax return. The combined federal/Minnesota tax brackets are based on state tax rates in effect on Jan. 1, 1994. These rates may change if Minnesota tax rates change in 1994. If state tax rates change equivalent rates may be higher than those shown. If these assumptions do not apply to you, it will be necessary to construct your own personalized tax equivalency table.
54P - -------------------------------------------------------------------------------- STEP 2: DETERMINING YOUR COMBINED FEDERAL AND MINNESOTA STATE TAXABLE YIELD EQUIVALENTS. Using 37.72 percent, you may determine that a tax-exempt yield of 4 percent is equivalent to earning a taxable 6.42 percent yield.
For these TAX-EXEMPT RATES: ------------------------------------------------------------------------------- 4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00% 7.50% ------------------------------------------------------------------------------- MARGINAL TAX RATES Equal the TAXABLE RATES shown below: - ------------------------------------------------------------------------------------------------------ 20.10% 5.01% 5.63% 6.26% 6.88% 7.51% 8.14% 8.76% 9.39% 21.80 5.12 5.75 6.39 7.03 7.67 8.31 8.95 9.59 33.76 6.04 6.79 7.55 8.30 9.06 9.81 10.57 11.32 34.12 6.07 6.83 7.59 8.35 9.11 9.87 10.63 11.38 36.87 6.34 7.13 7.92 8.71 9.50 10.30 11.09 11.88 37.72 6.42 7.23 8.03 8.83 9.63 10.44 11.24 12.04 38.27 6.48 7.29 8.10 8.91 9.72 10.53 11.34 12.15 41.44 6.83 7.68 8.54 9.39 10.25 11.10 11.95 12.81 42.43 6.95 7.82 8.69 9.55 10.42 11.29 12.16 13.03 43.07 7.03 7.90 8.78 9.66 10.54 11.42 12.30 13.17 43.72 7.11 8.00 8.88 9.77 10.66 11.55 12.44 13.33 44.73 7.24 8.14 9.05 9.95 10.86 11.76 12.67 13.57 45.82 7.38 8.31 9.23 10.15 11.07 12.00 12.92 13.84 46.53 7.48 8.42 9.35 10.29 11.22 12.16 13.09 14.03 47.24 7.58 8.53 9.48 10.42 11.37 12.32 13.27 14.22 - ------------------------------------------------------------------------------------------------
55P - -------------------------------------------------------------------------------- Appendix A 1994 NEW YORK STATE TAX-EXEMPT AND TAXABLE EQUIVALENT YIELD CALCULATION These tables will help you determine your combined federal and state taxable yields equivalents for given rates of tax-exempt income. STEP 1: CALCULATING YOUR MARGINAL TAX RATES. Using your Taxable Income and Adjusted Gross Income figures as guides you can locate your Marginal Tax Rate in the table below. First locate your Taxable Income in a filing status and income range in the left-hand column. Then, locate your Adjusted Gross Income at the top of the chart. At the point where your Taxable Income line meets your Adjusted Gross Income column the percentage indicated is an approximation of your Marginal Tax Rate. For example: Let's assume you are married filing jointly, your taxable income is $138,000 and your adjusted gross income is $175,000. Under Taxable Income married filing jointly status, $138,000 is in the $91,850-$140,000 range. Under Adjusted Gross Income, $175,000 is in the $167,700 to $290,200 column. The Taxable Income line and Adjusted Gross Income column meet at 38.22 percent. This is the rate you'll use in Step 2.
ADJUSTED GROSS INCOME* ------------------------------------------------------------------------------ TAXABLE INCOME** $0 $ 111,800 $ 150,000 $ 167,700 OVER to to to to $111,800(1) $150,000(2) $167,700(3) $290,200(4) $290,200(3) ------------------------------------------------------------------------------------------------------------- MARRIED FILING JOINTLY $ 0 - $ 13,000 18.87% 13,000 - 19,000 19.72 19,000 - 25,000 20.57 25,000 - 38,000 21.45 38,000 - 91,850 33.47 91,850 - 140,000 36.24 38.08% 37.10% 38.22% 140,000 - 250,000 40.86 42.76 41.86 43.16 250,000 + 44.19 46.72*** 47.55% ------------------------------------------------------------------------------------------------------------- $ 0 $ 111,800 $ 150,000 OVER to to to $111,800(1) $150,000(5) $234,300(4) $234,300(3) ------------------------------------------------------------------------------------------------------------- SINGLE $ 0 - $ 6,500 18.87% 6,500 - 9,500 19.72 9,500 - 12,500 20.57 12,500 - 22,750 21.45 22,750 - 55,100 33.47 55,100 - 115,000 36.24 37.59% 115,000 - 250,000 40.86 42.31 42.51% 42.96% 250,000 + 44.19 46.42 ------------------------------------------------------------------------------------------------------------- * Gross income with certain adjustments before taking itemized deductions and personal exemptions. ** Amount subject to federal income tax after itemized deduction and personal exemptions. *** This rate is applicable only in the limited case where your adjusted gross income is less than $290,200 and your taxable income exceeds $250,000. (1) No Phase-out or recapture of personal income tax -- Assumes no phase-out of itemized deductions or personal exemptions and does not reflect the state recapture of personal income tax. (2) Itemized Deductions Phase-out and Recapture of Personal Income Tax -- Assumes a single taxpayer has one personal exemption, joint taxpayers have two personal exemptions and reflects the state AGI recapture of personal income tax beginning at $100,000 ending at $150,000. (3) Itemized Deductions Phase-out -- Assumes a single taxpayer has one personal exemption and joint taxpayers have two personal exemptions. (4) Deductions and Personal Exemption Phase-outs -- Assumes a single taxpayer has one personal exemption, joint taxpayers have two personal exemptions and itemized deductions continue to phase-out. (5) Deductions and Personal Exemption Phase-outs and Recapture of Personal Income Tax -- Assumes a single taxpayer has one personal exemption, joint taxpayers have two personal exemptions, itemized deductions continue to phase-out and reflects the state AGI recapture of personal income tax beginning at $100,000 ending at $150,000. Federal taxes are not deductible on the New York state tax return. The combined federal/New York state tax brackets are based on state tax rates in effect on Jan. 1, 1994. These rates may change if New York state tax rates change in 1994. If state tax rates change equivalent rates may be higher than those shown. This table does not refelect the state itemized deduction adjustment. If these assumptions do not apply to you, it will be necessary to construct your own personalized tax equivalency table.
56P - -------------------------------------------------------------------------------- STEP 2: DETERMINING YOUR COMBINED FEDERAL AND NEW YORK STATE TAXABLE YIELD EQUIVALENTS. Using 38.22 percent, you may determine that a tax-exempt yield of 4 percent is equivalent to earning a taxable 6.47 percent yield.
For these TAX-EXEMPT RATES: ------------------------------------------------------------------------------- 4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00% 7.50% ------------------------------------------------------------------------------- MARGINAL TAX RATES Equal the TAXABLE RATES shown below: - ------------------------------------------------------------------------------------------------------ 18.87% 4.93% 5.55% 6.16% 6.78% 7.40% 8.01% 8.63% 9.24% 19.72 4.98 5.61 6.23 6.85 7.47 8.10 8.72 9.34 20.57 5.04 5.67 6.29 6.92 7.55 8.18 8.81 9.44 21.45 5.09 5.73 6.37 7.00 7.64 8.27 8.91 9.55 31.93 5.88 6.61 7.35 8.08 8.81 9.55 10.28 11.02 32.54 5.93 6.67 7.41 8.15 8.89 9.64 10.38 11.12 33.15 5.98 6.73 7.48 8.23 8.98 9.72 10.47 11.22 33.47 6.01 6.76 7.52 8.27 9.02 9.77 10.52 11.27 36.24 6.27 7.06 7.84 8.63 9.41 10.19 10.98 11.76 37.10 6.36 7.15 7.95 8.74 9.54 10.33 11.13 11.92 37.59 6.41 7.21 8.01 8.81 9.61 10.41 11.22 12.02 37.66 6.42 7.22 8.02 8.82 9.62 10.43 11.23 12.03 38.08 6.46 7.27 8.07 8.88 9.69 10.50 11.30 12.11 38.14 6.47 7.27 8.08 8.89 9.70 10.51 11.32 12.12 38.22 6.47 7.28 8.09 8.90 9.71 10.52 11.33 12.14 39.18 6.58 7.40 8.22 9.04 9.87 10.69 11.51 12.33 40.86 6.76 7.61 8.45 9.30 10.15 10.99 11.84 12.68 41.86 6.88 7.74 8.60 9.46 10.32 11.18 12.04 12.90 42.31 6.93 7.80 8.67 9.53 10.40 11.27 12.13 13.00 42.51 6.96 7.83 8.70 9.57 10.44 11.31 12.18 13.05 42.76 6.99 7.86 8.74 9.61 10.48 11.36 12.23 13.10 42.96 7.01 7.89 8.77 9.64 10.52 11.40 12.27 13.15 43.16 7.04 7.92 8.80 9.68 10.56 11.44 12.32 13.19 44.04 7.15 8.04 8.93 9.83 10.72 11.62 12.51 13.40 44.19 7.17 8.06 8.96 9.85 10.75 11.65 12.54 13.44 45.28 7.31 8.22 9.14 10.05 10.96 11.88 12.79 13.71 45.71 7.37 8.29 9.21 10.13 11.05 11.97 12.89 13.81 46.00 7.41 8.33 9.26 10.19 11.11 12.04 12.96 13.89 46.13 7.43 8.35 9.28 10.21 11.14 12.07 12.99 13.92 46.42 7.47 8.40 9.33 10.27 11.20 12.13 13.06 14.00 46.72 7.51 8.45 9.38 10.32 11.26 12.20 13.14 14.08 47.55 7.63 8.58 9.53 10.49 11.44 12.39 13.35 14.30 - ------------------------------------------------------------------------------------------------------
57P - -------------------------------------------------------------------------------- Appendix A 1994 NEW YORK STATE AND NEW YORK CITY TAX-EXEMPT AND TAXABLE EQUIVALENT YIELD CALCULATION These tables will help you determine your combined federal and state taxable yields equivalents for given rates of tax-exempt income. STEP 1: CALCULATING YOUR MARGINAL TAX RATES. Using your Taxable Income and Adjusted Gross Income figures as guides you can locate your Marginal Tax Rate in the table below. First locate your Taxable Income in a filing status and income range in the left-hand column. Then, locate your Adjusted Gross Income at the top of the chart. At the point where your Taxable Income line meets your Adjusted Gross Income column the percentage indicated is an approximation of your Marginal Tax Rate. For example: Let's assume you are married filing jointly, your taxable income is $138,000 and your adjusted gross income is $175,000. Under Taxable Income married filing jointly status, $138,000 is in the $108,000-$140,000 range. Under Adjusted Gross Income, $175,000 is in the $167,700 to $290,200 column. The Taxable Income line and Adjusted Gross Income column meet at 40.13 percent. This is the rate you'll use in Step 2.
ADJUSTED GROSS INCOME* ------------------------------------------------------------------------------ TAXABLE INCOME** $0 $ 111,800 $ 150,000 $ 167,700 OVER to to to to $111,800(1) $150,000(2) $167,700(3) $290,200(4) $290,200(3) ------------------------------------------------------------------------------------------------------------- MARRIED FILING JOINTLY $ 0 - $ 13,000 21.05% 13,000 - 14,400 21.90 14,400 - 19,000 22.97 19,000 - 25,000 23.82 25,000 - 27,000 24.71 27,000 - 38,000 25.19 38,000 - 45,000 36.63 45,000 - 91,850 36.64 91,850 - 108,000 39.28 108,000 - 140,000 39.32 41.11% 40.13% 40.13% 140,000 - 250,000 43.71 45.57 44.66 45.90 250,000 + 46.88 49.29*** 50.12% ------------------------------------------------------------------------------------------------------------- $ 0 $ 111,800 $ 150,000 OVER to to to $111,800(1) $150,000(5) $234,300(4) $234,300(3) ------------------------------------------------------------------------------------------------------------- SINGLE $ 0 - $ 6,500 21.05% 6,500 - 8,400 21.90 8,400 - 9,500 22.97 9,500 - 12,500 23.82 12,500 - 15,000 24.71 15,000 - 22,750 25.19 22,750 - 25,000 36.63 25,000 - 55,100 36.64 55,100 - 60,000 39.28 60,000 - 115,000 39.32 41.15% 115,000 - 250,000 43.71 45.73 45.28% 44.66% 250,000 + 46.88 47.92 ------------------------------------------------------------------------------------------------------------- * Gross income with certain adjustments before taking itemized deductions and personal exemptions. ** Amount subject to federal income tax after itemized deduction and personal exemptions. *** This rate is applicable only in the limited case where your adjusted gross income is less than $290,200 and your taxable income exceeds $250,000. (1) No Phase-out -- Assumes no phase-out of itemized deductions or personal exemptions. (2) Itemized Deductions Phase-out and Recapture of Personal Income Tax -- Assumes a single taxpayer has one personal exemption, joint taxpayers have two personal exemptions and reflects the state AGI recapture of personal income tax beginning at $100,000 ending at $150,000. (3) Itemized Deductions Phase-out -- Assumes a single taxpayer has one personal exemption and joint taxpayers have two personal exemptions. (4) Deductions and Personal Exemption Phase-outs -- Assumes a single taxpayer has one personal exemption, joint taxpayers have two personal exemptions and itemized deductions continue to phase-out. (5) Deductions and Personal Exemption Phase-outs and Recapture of Personal Income Tax -- Assumes a single taxpayer has one personal exemption, joint taxpayers have two personal exemptions, itemized deductions continue to phase-out and reflects the state AGI recapture of personal income tax beginning at $100,000 ending at $150,000. Federal taxes are not deductible on the New York state tax return. The combined federal/New York state and city tax brackets are based on state and city tax rates in effect on Jan. 1, 1994. These rates may change if New York state or city tax rates change in 1994. If state or city tax rates change equivalent rates may be higher than those shown. This table does not reflect the state itemized deduction adjustment. If these assumptions do not apply to you, it will be necessary to construct your own personalized tax equivalency table.
58P - -------------------------------------------------------------------------------- STEP 2: DETERMINING YOUR COMBINED FEDERAL, NEW YORK STATE AND NEW YORK CITY TAXABLE YIELD EQUIVALENTS. Using 39.32 percent, you may determine that a tax-exempt yield of 4 percent is equivalent to earning a taxable 6.59 percent yield.
For these TAX-EXEMPT RATES: ------------------------------------------------------------------------------- 4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00% 7.50% ------------------------------------------------------------------------------- MARGINAL TAX RATES Equal the TAXABLE RATES shown below: - ------------------------------------------------------------------------------------------------------ 21.05% 5.07% 5.70% 6.33% 6.97% 7.60% 8.23% 8.87% 9.50% 21.90 5.12 5.76 6.40 7.04 7.68 8.32 8.96 9.60 22.97 5.19 5.84 6.49 7.14 7.79 8.44 9.09 9.74 23.82 5.25 5.91 6.56 7.22 7.88 8.53 9.19 9.85 24.71 5.31 5.98 6.64 7.31 7.97 8.63 9.30 9.96 25.19 5.35 6.02 6.68 7.35 8.02 8.69 9.36 10.03 36.63 6.31 7.10 7.89 8.68 9.47 10.26 11.05 11.84 36.64 6.31 7.10 7.89 8.68 9.47 10.26 11.05 11.84 39.28 6.59 7.41 8.23 9.06 9.88 10.70 11.53 12.35 39.32 6.59 7.42 8.24 9.06 9.89 10.71 11.54 12.36 40.09 6.68 7.51 8.35 9.18 10.02 10.85 11.68 12.52 40.13 6.68 7.52 8.35 9.19 10.02 10.86 11.69 12.53 40.62 6.74 7.58 8.42 9.26 10.10 10.95 11.79 12.63 40.67 6.74 7.58 8.43 9.27 10.11 10.96 11.80 12.64 41.11 6.79 7.64 8.49 9.34 10.19 11.04 11.89 12.74 41.15 6.80 7.65 8.50 9.35 10.20 11.05 11.89 12.74 43.71 7.11 7.99 8.88 9.77 10.66 11.55 12.44 13.32 44.66 7.23 8.13 9.04 9.94 10.84 11.75 12.65 13.55 45.11 7.29 8.20 9.11 10.02 10.93 11.84 12.75 13.66 45.28 7.31 8.22 9.14 10.05 10.96 11.88 12.79 13.71 45.57 7.35 8.27 9.19 10.10 11.02 11.94 12.86 13.78 45.73 7.37 8.29 9.21 10.13 11.06 11.98 12.90 13.82 45.90 7.39 8.32 9.24 10.17 11.09 12.01 12.94 13.86 46.79 7.52 8.46 9.40 10.34 11.28 12.22 13.16 14.10 46.88 7.53 8.47 9.41 10.35 11.30 12.24 13.18 14.12 47.92 7.68 8.64 9.60 10.56 11.52 12.48 13.44 14.40 48.35 7.74 8.71 9.68 10.65 11.62 12.58 13.55 14.52 48.61 7.78 8.76 9.73 10.70 11.68 12.65 13.62 14.59 48.77 7.81 8.78 9.76 10.74 11.71 12.69 13.66 14.64 49.03 7.85 8.83 9.81 10.79 11.77 12.75 13.73 14.71 49.29 7.89 8.87 9.86 10.85 11.83 12.82 13.80 14.79 50.12 8.02 9.02 10.02 11.03 12.03 13.03 14.03 15.04 - ------------------------------------------------------------------------------------------------------
59P - -------------------------------------------------------------------------------- Appendix A 1994 OHIO TAX-EXEMPT AND TAXABLE EQUIVALENT YIELD CALCULATION These tables will help you determine your combined federal and state taxable yields equivalents for given rates of tax-exempt income. STEP 1: CALCULATING YOUR MARGINAL TAX RATES. Using your Taxable Income and Adjusted Gross Income figures as guides you can locate your Marginal Tax Rate in the table below. First locate your Taxable Income in a filing status and income range in the left-hand column. Then, locate your Adjusted Gross Income at the top of the chart. At the point where your Taxable Income line meets your Adjusted Gross Income column the percentage indicated is an approximation of your Marginal Tax Rate. For example: Let's assume you are married filing jointly, your taxable income is $138,000 and your adjusted gross income is $175,000. Under Taxable Income married filing jointly status, $138,000 is in the $100,000-$140,000 range. Under Adjusted Gross Income, $175,000 is in the $167,700 to $290,200 column. The Taxable Income line and Adjusted Gross Income column meet at 42.74 percent. This is the rate you'll use in Step 2.
ADJUSTED GROSS INCOME* ------------------------------------------------------------------------ TAXABLE INCOME** $0 $ 111,800 $ 167,700 OVER to to to $111,800(1) $167,700(2) $290,200(3) $290,200(2) ------------------------------------------------------------------------------------------------------------- MARRIED FILING JOINTLY $ 0 - $ 5,000 15.63% 5,000 - 10,000 16.27 10,000 - 15,000 17.52 15,000 - 20,000 18.16 20,000 - 38,000 18.79 38,000 - 40,000 31.21 40,000 - 80,000 31.74 31.74% 80,000 - 91,850 32.28 32.28 91,850 - 100,000 35.10 35.10 100,000 - 140,000 35.76 36.63 42.74% 140,000 - 200,000 40.42 41.42 43.10 200,000 - 250,000 40.80 46.66*** 41.80% 250,000 + 44.13 45.23 ------------------------------------------------------------------------------------------------------------- $ 0 $ 111,800 OVER to to $111,800(1) $234,300(3) $234,300(2) ------------------------------------------------------------------------------------------------------------- SINGLE $ 0 - $ 5,000 15.63% 5,000 - 10,000 16.27 10,000 - 15,000 17.52 15,000 - 20,000 18.16 20,200 - 22,750 18.79 22,750 - 40,000 31.21 40,000 - 55,100 31.74 55,100 - 80,000 34.59 80,000 - 100,000 35.10 100,000 - 115,000 35.76 37.19% 115,000 - 200,000 40.42 42.08 41.42% 200,000 - 250,000 40.80 42.45 41.80 250,000 + 44.13 45.23 ------------------------------------------------------------------------------------------------------------- * Gross income with certain adjustments before taking itemized deductions and personal exemptions. ** Amount subject to federal income tax after itemized deduction and personal exemptions. *** This rate is applicable only in the limited case where your adjusted gross income is less than $290,200 and your taxable income exceeds $250,000. (1) No Phase-out -- Assumes no phase-out of itemized deductions or personal exemptions. (2) Itemized Deductions Phase-out -- Assumes a single taxpayer has one personal exemption and joint taxpayers have two personal exemptions. (3) Itemized Deductions and Personal Exemption Phase-outs -- Assumes a single taxpayer has one personal exemption, joint taxpayers have two personal exemptions and the itemized deductions continue to phase-out. Federal taxes are not deductible on the Ohio state tax return. The combined federal/Ohio tax brackets are based on state tax rates in effect on Dec. 31, 1993. These rates may change if Ohio tax rates change in 1994. If state tax rates change equivalent rates may be higher than those shown. This table does not reflect the state joint filing credit If these assumptions do not apply to you, it will be necessary to construct your own personalized tax equivalency table.
60P - -------------------------------------------------------------------------------- STEP 2: DETERMINING YOUR COMBINED FEDERAL AND OHIO STATE TAXABLE YIELD EQUIVALENTS. Using 42.74 percent, you may determine that a tax-exempt yield of 4 percent is equivalent to earning a taxable 6.99 percent yield.
For these TAX-EXEMPT RATES: ------------------------------------------------------------------------------- 4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00% 7.50% ------------------------------------------------------------------------------- MARGINAL TAX RATES Equal the TAXABLE RATES shown below: - ------------------------------------------------------------------------------------------------------ 15.63% 4.74% 5.33% 5.93% 6.52% 7.11% 7.70% 8.30% 8.89% 16.26 4.78 5.37 5.97 6.57 7.17 7.76 8.36 8.96 17.53 4.85 5.46 6.06 6.67 7.28 7.88 8.49 9.09 18.16 4.89 5.50 6.11 6.72 7.33 7.94 8.55 9.16 18.79 4.93 5.54 6.16 6.77 7.39 8.00 8.62 9.24 31.21 5.81 6.54 7.27 8.00 8.72 9.45 10.18 10.90 31.74 5.86 6.59 7.32 8.06 8.79 9.52 10.25 10.99 32.28 5.91 6.65 7.38 8.12 8.86 9.60 10.34 11.08 34.59 6.12 6.88 7.64 8.41 9.17 9.94 10.70 11.47 35.10 6.16 6.93 7.70 8.47 9.24 10.02 10.79 11.56 35.76 6.23 7.00 7.78 8.56 9.34 10.12 10.90 11.67 36.63 6.31 7.10 7.89 8.68 9.47 10.26 11.05 11.84 37.19 6.37 7.16 7.96 8.76 9.55 10.35 11.14 11.94 40.42 6.71 7.55 8.39 9.23 10.07 10.91 11.75 12.59 40.80 6.76 7.60 8.45 9.29 10.14 10.98 11.82 12.67 41.42 6.83 7.68 8.54 9.39 10.24 11.10 11.95 12.80 41.80 6.87 7.73 8.59 9.45 10.31 11.17 12.03 12.89 42.08 6.91 7.77 8.63 9.50 10.36 11.22 12.09 12.95 42.45 6.95 7.82 8.69 9.56 10.43 11.29 12.16 13.03 42.74 6.99 7.86 8.73 9.61 10.48 11.35 12.22 13.10 43.10 7.03 7.91 8.79 9.67 10.54 11.42 12.30 13.18 44.13 7.16 8.05 8.95 9.84 10.74 11.63 12.53 13.42 45.23 7.30 8.22 9.13 10.04 10.95 11.87 12.78 13.69 45.95 7.40 8.33 9.25 10.18 11.10 12.03 12.95 13.88 46.66 7.50 8.44 9.37 10.31 11.25 12.19 13.12 14.06 - ------------------------------------------------------------------------------------------------------
61P - ------------------------------------------------------------------------------- Appendix B ------------------------------------------------------------------- DESCRIPTION OF CORPORATE BOND RATINGS Bond ratings concern the quality of the issuing corporation. They are not an opinion of the market value of the security. Such ratings are opinions on whether the principal and interest will be repaid when due. A security's rating may change which could affect its price. Ratings by Moody's Investors Service, Inc. are Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C and D. Ratings by Standard & Poor's Corporation are AAA, AA, A, BBB, BB, B, CCC, CC, C and D. AAA/AAA Judged to be of the best quality and carry the smallest degree of investment risk. Interest and principal are secure. AA/AA Judged to be high-grade although margins of protection for interest and principal may not be quite as good as Aaa or AAA rated securities. A Considered upper-medium grade. Protection for interest and principal is deemed adequate but may be susceptible to future impairment. BAA/BBB Considered medium-grade obligations. Protection for interest and principal is adequate over the short-term; however, these obligations may have certain speculative characteristics. BA/BB Considered to have speculative elements. The protection of interest and principal payments may be very moderate. B Lack characteristics of the desirable investments. There may be small assurance over any long period of time of the payment of interest and principal. CAA/CCC Are of poor standing. Such issues may be in default or there may be risk with respect to principal or interest. CA/CC Represent obligations that are highly speculative. Such issues are often in default or have other marked shortcomings. C Are obligations with a higher degree of speculation. These securities have major risk exposures to default. D Are in payment default. The D rating is used when interest payments or principal payments are not made on the due date. NON-RATED SECURITIES will be considered for investment when they possess a risk comparable to that of rated securities consistent with the fund's objectives and policies. When assessing the risk involved in each non-rated security, the fund will consider the financial condition of the issuer or the protection afforded by the terms of the security. DEFINITIONS OF ZERO-COUPON AND PAY-IN-KIND SECURITIES A ZERO-COUPON SECURITY is a security that is sold at a deep discount from its face value and makes no periodic interest payments. The buyer of such a security receives a rate of return by gradual appreciation of the security, which is redeemed at face value on the maturity date. A PAY-IN-KIND SECURITY is a security in which the issuer has the option to make interest payments in cash or in additional securities. The securities issued as interest usually have the same terms, including maturity date, as the pay-in-kind securities. 62P - ------------------------------------------------------------------------------- Appendix C ------------------------------------------------------------------- DESCRIPTIONS OF DERIVATIVE INSTRUMENTS What follows are brief descriptions of derivative instruments the fund may use. At various times the fund may use some or all of these instruments and is not limited to these instruments. It may use other similar types of instruments if they are consistent with the fund's investment goal and policies. For more information on these instruments, see the Statement of Additional Information. OPTIONS AND FUTURES CONTRACTS. An option is an agreement to buy or sell an instrument at a set price during a certain period of time. A futures contract is an agreement to buy and sell an instrument for a set price on a future date. The fund may buy and sell options and futures contracts to manage its exposure to changing interest rates, security prices and currency exchange rates. Options and futures may be used to hedge the fund's investments against price fluctuations or to increase market exposure. ASSET-BACKED AND MORTGAGE-BACKED SECURITIES. Asset-backed and mortgage-backed securities include interests in pools of consumer loans or mortgages, such as collateralized mortgage obligations and stripped mortgage-backed securities. Interest and principal payments depend on payment of the underlying loans or mortgages. The value of these securities may also be affected by changes in interest rates, the market's perception of the issuers and the creditworthiness of the parties involved. Stripped mortgage-backed securities include interest only (IO) and principal only (PO) securities. Cash flows and yields on IOs and POs are extremely sensitive to the rate of principal payments on the underlying mortgage loans or mortgage-backed securities. INDEXED SECURITIES. The value of indexed securities is linked to currencies, interest rates, commodities, indexes or other financial indicators. Most indexed securities are short- to intermediate-term fixed income securities whose values at maturity or interest rates rise or fall according to the change in one or more specified underlying instruments. Indexed securities may be more volatile than the underlying instrument itself. INVERSE FLOATERS. Inverse floaters are created using the interest payment on securities. A portion of the interest received is paid to holders of instruments based on current interest rates for short-term securities. The remainder, minus a servicing fee, is paid to holders of inverse floaters. Inverse floaters are extremely sensitive to changes in interest rates. STRUCTURED PRODUCTS. Structured products are over-the-counter financial instruments created specifically to meet the needs of one or a small number of investors. The instrument may consist of a warrant, an option or a forward contract embedded in a note or any of a wide variety of debt, equity and/or currency combinations. Risks of structured products include the inability to close such instruments, rapid changes in the market and defaults by other parties. 63P IDS SPECIAL TAX-EXEMPT SERIES TRUST IDS CALIFORNIA TAX-EXEMPT TRUST STATEMENT OF ADDITIONAL INFORMATION FOR IDS CALIFORNIA TAX-EXEMPT FUND IDS MASSACHUSETTS TAX-EXEMPT FUND IDS MICHIGAN TAX-EXEMPT FUND IDS MINNESOTA TAX-EXEMPT FUND IDS NEW YORK TAX-EXEMPT FUND IDS OHIO TAX-EXEMPT FUND Aug. 29, 1994 as revised March 20, 1995 This Statement of Additional Information (SAI) is not a prospectus. It should be read together with the prospectus and the financial statements contained in the Annual Report which may be obtained from your American Express financial advisor or by writing to American Express Shareholder Service, P.O. Box 534, Minneapolis, MN 55440-0534. This SAI is dated Aug. 29, 1994 as revised March 20, 1995, and it is to be used with the prospectus dated Aug. 29, 1994 as revised March 20, 1995, the Annual Report for the fiscal year ended June 30, 1994, and the Semiannual Report for the period ended Dec. 31, 1994. -1- TABLE OF CONTENTS Goals and Investment Policies........................See Prospectus Additional Investment Policies................................p. Brokerage Commissions Paid to Brokers Affiliate with American Express Financial Corporation..............................p. Portfolio Transactions........................................p. Performance Information.......................................p. Valuing Each Fund's Shares....................................p. Investing in a Fund...........................................p. Redeeming Shares..............................................p. Pay-out Plans.................................................p. Exchanges.....................................................p. Capital Loss Carryover........................................p. Taxes.........................................................p. Agreements....................................................p. Trustees and Officers.........................................p. The Trusts....................................................p. Custodian.....................................................p. Independent Auditors..........................................p. Financial Statements..............................See Annual Report Prospectus....................................................p. Appendix A: Description of Ratings of Tax-Exempt Securities and Short-Term Securities........................p. Appendix B: Options and Interest Rate Futures Contracts......p. Appendix C: State Risk Factors...............................p. Appendix D: Dollar-Cost Averaging............................p. -2- ADDITIONAL INVESTMENT POLICIES These are investment policies in addition to those presented in the prospectus. Unless holders of a majority of the outstanding shares agree to make the change each fund will not: 'Act as an underwriter (sell securities for others). However, under the securities laws, a fund may be deemed to be an underwriter when it purchases securities directly from the issuer and later resells them. 'Borrow money or property, except as a temporary measure for extraordinary or emergency purposes, in an amount not exceeding one-third of the market value of its total assets (including borrowings) less liabilities (other than borrowings) immediately after the borrowing. No fund has borrowed in the past and has any present intention to borrow. 'Make cash loans if the total commitment amount exceeds 5% of the fund's total assets. 'Buy or sell real estate, unless acquired as a result of ownership of securities or other instruments, except this shall not prevent the fund from investing in securities or other instruments backed by real estate or securities of companies engaged in the real estate business. For purposes of this policy, real estate includes real estate limited partnerships. 'Buy or sell physical commodities unless acquired as a result of ownership of securities or other instruments, except this shall not prevent the fund from buying or selling options and futures contracts or from investing in securities or other instruments backed by, or whose value is derived from, physical commodities. 'Make a loan of any part of its assets to American Express Financial Corporation, to the directors and officers of American Express Financial Corporation or to its own trustees and officers. 'Purchase securities of an issuer if the trustees and officers of the fund or the directors and officers of American Express Financial Corporation hold more than a certain percentage of the issuer's outstanding securities. The rule is this: the holdings of all trustees and officers of a fund and the holding of all directors and officers of American Express Financial Corporation who own more than 0.5% of an issuer's securities are added together, and if in total they own more than 5%, the fund will not purchase securities of that issuer. 'Lend portfolio securities in excess of 30% of its net assets, at market value. This policy may not be changed without shareholders approval. The current policy of each fund's trustees is to make these loans, either long- or short-term, to broker-dealers. In making such loans the fund gets the market price in cash, -3- U.S.government securities, letters of credit or such other collateral as may be permitted by regulatory agencies and approved by the trustees. If the fund receives cash as collateral, a fund will invest the cash collateral in short-term debt securities. A fund reviews the market value of the loaned securities daily and will get additional collateral if this value goes up. The risks are that the borrower may not provide additional collateral when required or return the securities when due. Unless changed by the trustees, each fund will not: 'Buy on margin or sell short, but it may enter into interest rate futures contracts. 'Pledge or mortgage its assets beyond 15% of total assets. If a fund were ever to do so, valuation of the pledged or mortgaged assets would be based on market values. For purposes of this restriction, collateral arrangements for margin deposits on futures contracts are not deemed to be a pledge of assets. 'Invest more than 5% of its total assets in securities whose issuer or guarantor of principal and interest has been in operation for less than three years. 'Invest in voting securities, securities of investment companies or exploration or development programs, such as oil, gas or mineral programs. 'Invest more than 5% of its net assets in warrants. Under one state's law no more than 2% of the fund's net assets may be invested in warrants not listed on an Exchange. 'Invest more than 10% of its net assets in securities and derivative instruments that are illiquid. In determining the liquidity of municipal lease obligations, the investment manager, under guidelines established by the trustees, will consider the essential nature of the lease property, the likelihood that the municipality will continue appropriating funding for the leased property, and other relevant factors related to the general credit quality of the municipality and the marketability of the municipal lease obligation. For purposes of complying with Ohio law, the fund will not invest more than 15% of its assets in illiquid securities and 144A securities. In determining the liquidity of commercial paper issued in transactions not involving a public offering under Section 4(2) of the Securities Act of 1933, the investment manager, under guidelines established by the trustees, will evaluate relevant factors such as the issuer and the size and nature of its commercial paper programs, the willingness and ability of the issuer or dealer to repurchase the paper, and the nature of the clearance and settlement procedures for the paper. Each fund may invest up to 20% of its net assets in certain taxable investments for temporary defensive purposes. It may purchase short-term U.S. and Canadian government securities. It may invest in bank obligations including negotiable certificates of deposit, non-negotiable fixed time deposits, bankers' acceptances and letters of credit. The issuing bank or savings and loan generally -4- must have capital, surplus and undivided profits (as of the date of its most recently published annual financial statements) in excess of $100 million (or the equivalent in the instance of a foreign branch of a U.S. bank) at the date of investment. Each fund may purchase short-term corporate notes and obligations rated in the top two classifications by Moody's or S&P or the equivalent. It also may use repurchase agreements with broker-dealers registered under the Securities Exchange Act of 1934 and with commercial banks. Repurchase agreements involve investments in debt securities where the seller (broker-dealer or bank) agrees to repurchase the securities from the fund at cost plus an agreed-to interest rate within a specified time. A risk of a repurchase agreement is that if the seller seeks the protection of the bankruptcy laws, the fund's ability to liquidate the security involved could be impaired, and it might subsequently incur a loss if the value of the security declines or if the other party to a repurchase agreement defaults on its obligation. Each fund may purchase debt securities on a when-issued basis, which means that it may take as long as 45 days after the purchase before the securities are delivered to a fund. Payment and interest terms, however, are fixed at the time the purchaser enters into a commitment. Under normal market conditions, each fund does not intend to commit more than 5% of its total assets to these practices. A fund does not pay for the securities or start earning interest on them until the contractual settlement date. When-issued securities are subject to market fluctuations and they may affect a fund's total assets the same as owned securities. Each fund relies both on ratings assigned by credit agencies and on the investment manager's credit analysis because credit agencies may fail to reflect subsequent events on a timely basis and because credit ratings do not evaluate market risk. With lower rated securities, the achievement of each fund's investment objective may be more dependent upon the investment manager's credit analysis than is the case for higher quality securities. Notwithstanding any of the fund's other investment policies, the fund may invest its assets in an open-end management investment company having substantially the same investment objectives, policies and restrictions as the fund for the purpose of having those assets managed as part of a combined pool. For a description of ratings of tax-exempt securities and short- term securities, see Appendix A. For a discussion on options and interest rate futures contracts, see Appendix B. For a discussion of state risk factors, see Appendix C. PORTFOLIO TRANSACTIONS Subject to policies set by the board, American Express Financial Corporation is authorized to determine, consistent with each fund's investment goal and policies, which securities will be purchased, held or sold. In determining where the buy and sell orders are to be placed, American Express Financial Corporation has been directed to use its best efforts to obtain the best available price and the most favorable execution -5- except where otherwise authorized by the trustees. Normally, each fund's securities are traded on a principal rather than an agency basis. In other words, American Express Financial Corporation will trade directly with the issuer or with a dealer who buys or sells for its own account, rather than acting on behalf of another client. American Express Financial Corporation does not pay the dealer commissions. Instead, the dealer's profit, if any, is the difference, or spread, between the dealer's purchase and sale price for the security. Each investment decision made for each fund is made independently from any decision made for another fund in the IDS MUTUAL FUND GROUP or other account advised by American Express Financial Corporation or any of its subsidiaries. When a fund buys or sells the same security as another fund or account, American Express Financial Corporation carries out the purchase or sale in a way the fund agrees in advance is fair. Although sharing in large transactions may adversely affect the price or volume purchased or sold by a fund, the fund hopes to gain an overall advantage in execution. On occasion, it may be desirable to compensate a broker for research services or for brokerage services by paying a commission that might not otherwise be charged or a commission in excess of the amount another broker might charge. The board of Trustees has adopted a policy authorizing American Express Financial Corporation to do so to the extent authorized by law, if American Express Financial Corporation determines, in good faith, that such commission is reasonable in relation to the value of the brokerage or research services provided by a broker or dealer, viewed either in the light of that transaction or American Express Financial Corporation's overall responsibilities to the funds in the IDS MUTUAL FUND GROUP and other funds for which it acts as investment advisor. Research provided by brokers supplements American Express Financial Corporation's own research activities. Such services include economic data on, and analysis of, U.S. and foreign economies; information on specific industries; information about specific companies, including earnings estimates; purchase recommendations for stocks and bonds; portfolio strategy services; political, economic, business and industry trend assessments; historical statistical information; market data services providing information on specific issues and prices; and technical analysis of various aspects of the securities markets, including technical charts. Research services may take the form of written reports, computer software or personal contact by telephone or at seminars or other meetings. American Express Financial Corporation has obtained, and in the future may obtain, computer hardware from brokers, including but not limited to personal computers that will be used exclusively for investment decision-making purposes, which include the research, portfolio management and trading functions and other services to the extent permitted under an interpretation by the Securities and Exchange Commission. For the fiscal years ending June 30, each fund paid the following brokerage commissions on financial futures contracts.
CA MA MI MN NY OH - ------------------------------------------------------------------- 1994 $-0- $-0- $-0- $3,850 $1,260 $-0- 1993 -0- -0- -0- -0- -0- -0- 1992 1,442 210 322 1,848 630 280
-6- Each fund acquired no securities of their regular brokers or dealers or of the parents of those brokers or dealers that derived more than 15% of gross revenue from securities-related activities during the fiscal year ended June 30, 1994. The portfolio turnover rates for the fiscal years ended June 30 were as follows:
CA MA MI MN NY OH - ------------------------------------------------------------------- 1994 27% 6% 16% 13% 10% 11% 1993 5 0 2 2 0 0
BROKERAGE COMMISSIONS PAID TO BROKERS AFFILIATED WITH AMERICAN EXPRESS FINANCIAL CORPORATION Affiliates of American Express Company (American Express) (of which American Express Financial Corporation is a wholly-owned subsidiary) may engage in brokerage and other securities transactions on behalf of the fund according to procedures adopted by the fund's board of directors and to the extent consistent with applicable provisions of the federal securities laws. American Express Financial Corporation will use an American Express affiliate only if (i) American Express Financial Corporation determines that the fund will receive prices and executions at least as favorable as those offered by qualified independent brokers performing similar brokerage and other services for the fund and (ii) the affiliate charges the fund commission rates consistent with those the affiliate charges comparable unaffiliated customers in similar transactions and if such use is consistent with terms of the Investment Management Services Agreement. American Express Financial Corporation may direct brokerage to compensate an affiliate. American Express Financial Corporation will receive research on South Africa from New Africa Advisers a wholly-owned subsidiary of Sloan Financial Group. American Express Financial Corporation owns 100% of IDS Capital Holdings Inc. which in turn owns 40% of Sloan Financial Group. New Africa Advisers will send research to American Express Financial Corporation and in turn American Express Financial Corporation will direct trades to a particular broker. The broker will have an agreement to pay New Africa Advisers. All transactions will be on a best execution basis. Compensation received will be reasonable for the services rendered. No brokerage commissions were paid to brokers affiliated with American Express Financial Corporation for the three most recent fiscal periods. PERFORMANCE INFORMATION Each fund may quote various performance figures to illustrate past performance. Average annual total return and current yield quotations used by a fund are based on standardized methods of computing performance as required by the SEC. An explanation of the methods used by the fund to compute performance follows below. AVERAGE ANNUAL TOTAL RETURN Each fund may calculate average annual total return for a class for certain periods by finding the average annual compounded rates of return over the period that would equate the initial amount invested to the ending redeemable value, according to the following formula: P(1+T)n = ERV where: P = a hypothetical initial payment of $1,000 T = average annual total return n = number of years ERV = ending redeemable value of a hypothetical $1,000 payment, made at the beginning of a period, at the end of the period (or fractional portion thereof) AGGREGATE TOTAL RETURN Each fund may calculate aggregate total return for a class for certain periods representing the cumulative change in the value of an investment in the fund over a specified period of time according to the following formula: ERV - P ------- P where: P = a hypothetical initial payment of $1,000 ERV = ending redeemable value of a hypothetical $1,000 payment, made at the beginning of a period, at the end of the period (or fractional portion thereof) -7- ANNUALIZED YIELD Each fund may calculate an annualized yield for a class by dividing the net investment income per share deemed earned during a 30-day period by the public offering price per share (including the maximum sales charge) on the last day of the period and annualizing the results. Yield is calculated according to the following formula: Yield = 2[(a-b + 1)6 - 1] --- cd where: a = dividends and interest earned during the period b = expenses accrued for the period (net of reimbursements) c = the average daily number of shares outstanding during the period that were entitled to receive dividends d = the maximum offering price per share on the last day of the period The following table gives an annualized yield quotation for each of the funds: 30-Day Period Fund Ended June 30, 1994 Yield - ------------------------------------------------------------------- California 4.97% Massachusetts 5.03 Michigan 4.73 Minnesota 5.10 New York 4.77 Ohio 5.04 - ------------------------------------------------------------------- TAX-EQUIVALENT YIELD Tax-equivalent yield is calculated by dividing that portion of the yield (as calculated above) which is tax-exempt by one minus a stated income tax rate and adding the result to that portion, if any, of the yield that is not tax-exempt. The following table shows the tax equivalent yield, based on federal but not state tax rates, for the funds listed:
Marginal Income Tax Tax-Equivalent Yield Bracket for 30-Day Period Ended June 30,1994 - ------------------------------------------------------------------------ California Massachusetts Michigan Minnesota New York Ohio ---------- ------------- -------- --------- -------- ---- 15.0% 5.85% 5.92% 5.56% 6.00% 5.61% 5.93% 28.0% 6.90 6.99 6.57 7.08 6.63 7.00 33.0% 7.42 7.51 7.06 7.61 7.12 7.52
In its sales material and other communications, each fund may quote, compare or refer to rankings, yields or returns as published by independent statistical services or publishers and publications such as The Bank Rate Monitor National Index, Barron's, Business -8- Week, Donoghue's Money Market Fund Report, Financial Services Week, Financial Times, Financial World, Forbes, Fortune, Global Investor, Institutional Investor, Investor's Daily, Kiplinger's Personal Finance, Lipper Analytical Services, Money, Mutual Fund Forecaster, Newsweek, The New York Times, Personal Investor, Stanger Report, Sylvia Porter's Personal Finance, USA Today, U.S. News and World Report, The Wall Street Journal and Wiesenberger Investment Companies Service. VALUING FUND SHARES The value of an individual share is determined by using the net asset value before shareholder transactions for the day. On July 1, 1994, the first business day following the end of the year, the computation looked like this:
Net assets before Shares outstanding Net asset value Fund shareholder transactions at end of previous day of one share - ------------------------------------------------------------------------------------------------------------- Class A* California $255,560,404 divided by 49,714,953 equals $5.13 Massachusetts 72,071,218 13,749,968 5.24 Michigan 76,682,318 14,320,277 5.36 Minnesota 408,801,729 79,123,225 5.16 New York 120,156,154 23,481,717 5.12 Ohio 71,835,655 13,661,035 5.26 *Shares of Class B and Class Y were not outstanding on that date.
In determining net assets before shareholder transactions, each fund's portfolio securities are valued as follows as of the close of business of the New York Stock Exchange: 'Securities, except bonds, other than convertibles traded on a securities exchange for which a last-quoted sales price is readily available are valued at the last-quoted sales price on the exchange where such security is primarily traded. 'Securities other than convertibles traded on a securities exchange for which a last-quoted sales price is not readily available are valued at the mean of the closing bid and asked prices, looking first to the bid and asked prices on the exchange where the security is primarily traded, and if none exists, to the over-the- counter market. 'Securities included in the NASDAQ National Market System are valued at the last-quoted sales price in this market. 'Securities included in the NASDAQ National Market System for which a last-quoted sales price is not readily available, and other securities traded over-the-counter but not included in the NASDAQ National Market System are valued at the mean of the closing bid and asked prices. 'Futures and options traded on major exchanges are valued at their last-quoted sales price on their primary exchange. 'Short-term securities maturing more than 60 days from the valuation date are valued at the readily available market price or approximate market value based on current interest rates. Short- term securities maturing in 60 days or less that originally had maturities of more than 60 days at acquisition date are valued at -9- amortized cost using the market value on the 61st day before maturity. Short-term securities maturing in 60 days or less at acquisition date are valued at amortized cost. Amortized cost is an approximation of market value determined by systematically increasing the carrying value of a security if acquired at a discount, or systematically reducing the carrying value if acquired at a premium, so that the carrying value is equal to the maturity value on maturity date. 'Securities without a readily available market price, bonds other than convertibles and other assets are valued at fair value, as determined in good faith by the board of trustees (the "trustees"). The trustees are responsible for selecting methods they believe provide fair value. When possible bonds are valued by a pricing service independent from a fund. If a valuation of a bond is not available from a pricing service, the bond will be valued by a dealer knowledgeable about the bond if such a dealer is available. The New York Stock Exchange, American Express Financial Corporation, and each of the funds will be closed on the following holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. INVESTING IN A FUND Sales Charge Shares of the fund are sold at the public offering price determined at the close of business on the day an application is accepted. The public offering price is the net asset value of one share plus a sales charge if applicable. For Class B and Class Y, there is no initial sales charge so the public offering price is the same as the net asset value. For Class A, the public offering price for an investment of less than $50,000, made July 1, 1994, was determined as follows:
Fund Net asset value Divided by (1.00 Public offering of one share -0.05) for a price sales charge California 5.13 / 0.95 = $5.40 Massachusetts 5.24 / 0.95 = 5.52 Michigan 5.36 / 0.95 = 5.64 Minnesota 5.16 / 0.95 = 5.43 New York 5.12 / 0.95 = 5.39 Ohio 5.26 / 0.95 = 5.53
The sales charge is paid to American Express Financial Advisors by the person buying the shares. -10- Class A - Calculation of the Sales Charge Sales charges are determined as follows:
Within each increment, sales charge as a percentage of: ---------------------------------------- Public Net Amount of Investment Offering Price Amount Invested -------------------- -------------- --------------- First $ 50,000 5.0% 5.26% Next 50,000 4.5 4.71 Next 400,000 3.8 3.95 Next 500,000 2.0 2.04 More than 1,000,000 0.0 0.00
Sales charges on an investment greater than $50,000 are calculated for each increment separately and then totaled. The resulting total sales charge, expressed as a percentage of the public offering price and of the net amount invested, will vary depending on the proportion of the investment at different sales charge levels. For example, compare an investment of $60,000 with an investment of $85,000. The $60,000 investment is composed of $50,000 that incurs a sales charge of $2,500 (5.0% x $50,000) and $10,000 that incurs a sales charge of $450 (4.5% x $10,000). The total sales charge of $2,950 is 4.92% of the public offering price and 5.17% of the net amount invested. In the case of the $85,000 investment, the first $50,000 also incurs a sales charge of $2,500 (5.0% x $50,000) and $35,000 incurs a sales charge of $1,575 (4.5% x $35,000). The total sales charge of $4,075 is 4.79% of the public offering price and 5.04% of the net amount invested. The following table shows the range of sales charges as a percentage of the public offering price and of the net amount invested on total investments at each applicable level.
On total investment, sales charge as a percentage of - ------------------------------------------------------------------------------ Public Net Offering Price Amount Invested -------------- --------------- Amount of Investment ranges from: - -------------------- ------------------------------------------- First $ 50,000 5.00% 5.26% More than 50,000 to 100,000 5.00-4.50 5.26-4.71 More than 100,000 to 500,000 4.50-3.80 4.71-3.95 More than 500,000 to 1,000,000 3.80-2.00 3.95-2.04 More than 1,000,000 0.00 0.00
Class A - Reducing the Sales Charge Sales charges are based on the total amount of your investments in any of these funds. The amount of all prior investments plus any new purchase is referred to as your "total amount invested." For -11- example, suppose you have made an investment of $20,000 and later decide to invest $40,000 more. Your total amount invested would be $60,000. As a result, $10,000 of your $40,000 investment qualifies for the lower 4.5% sales charge that applies to investments of more than $50,000 to $100,000. The total amount invested includes any shares held in any of these funds in the name of a member of your immediate family (spouse and unmarried children under 21). For instance, if your spouse already has invested $20,000 and you want to invest $40,000, your total amount invested will be $60,000 and therefore you will pay the lower charge of 4.5% on $10,000 of the $40,000. Until a spouse remarries, the sales charge is waived for spouses and unmarried children under 21 of deceased trustees, directors, officers or employees of the fund or American Express Financial Corporation or its subsidiaries and deceased advisors. The total amount invested also includes any investment you or your immediate family already have in the other publicly offered funds in the IDS MUTUAL FUND GROUP where the investment is subject to a sales charge. For example, suppose you already have a direct investment of $25,000 in IDS Stock Fund and $5,000 in one of these funds (IDS California Tax-Exempt Fund, IDS Massachusetts Tax-Exempt Fund, IDS Michigan Tax-Exempt Fund, IDS Minnesota Tax-Exempt Fund, IDS New York Tax-Exempt Fund or IDS Ohio Tax-Exempt Fund). If you invest $40,000 more in one of these funds, your total amount invested in the funds will be $70,000 and therefore $20,000 of your $40,000 investment will incur a 4.5% sales charge. Class A - Letter of Intent You can reduce the sales charges in Class A by filing a letter-of- intent stating that you intend to invest $1 million over a period of 13 months. The agreement can start at any time and will remain in effect for 13 months. Your investment will be charged normal sales charges until you have invested $1 million. At that time, the sales charges previously paid will be reversed. If you do not invest $1 million by the end of 13 months, there is no penalty, you'll just miss out on the sales charge adjustment. A letter-of- intent is not an option (absolute right) to buy shares. Here's an example. You file a letter-of-intent to invest $1 million and make an investment of $100,000 at that time. You pay the normal 5% sales charge on the first $50,000 and 4.5% sales charge on the next $50,000 of this investment. Let's say you make a second investment of $900,000 (bringing the total up to $1 million) one month before the 13-month period is up. What sales charge do you pay? American Express Financial Corporation makes an adjustment on your last purchase so that there's no sales charge on the total $1 million investment, just as if you had invested $1 million all at once. Systematic Investment Programs After you make your investment of $2,000 or more in a fund, you can arrange to make additional payments of $100 or more in that fund on a regular basis. These minimums do not apply to all systematic -12- investment programs. You decide how often you want to make payments - monthly, quarterly or semiannually. You are not obligated to make any payments. You can omit payments, or discontinue the investment program altogether. A fund also can change the program or end it at any time. If there is no obligation, why do it? Putting money aside is an important part of financial planning. With a systematic investment program, you have a goal to work for. How does this work? Your regular investment amount will purchase more shares when the net asset value per share decreases, and fewer shares when the net asset value per share increases. Each purchase is a separate transaction. After each purchase your new shares will be added to your account. Shares bought through these programs are exactly the same as any other fund shares. They can be bought and sold at any time. A systematic investment program is not an option or an absolute right to buy shares. The systematic investment program itself cannot ensure a profit, nor can it protect against a loss in a declining market. If you decide to discontinue the program and redeem your shares when their net asset value is less than what you paid for them, you will incur a loss. For a discussion on dollar-cost averaging, see Appendix D. Automatic Directed Dividends Dividend and capital gain distributions, paid by another fund in the IDS MUTUAL FUND GROUP subject to a sales charge may be used to automatically purchase shares in the same class of any of these funds without paying a sales charge. Dividends may be directed to existing accounts only. Dividends declared by a fund are exchanged to one of these funds the following day. Dividends can be exchanged into one fund but cannot be split to make purchases in two or more funds. Automatic directed dividends are available between accounts of any ownership EXCEPT: 'Between a non-custodial account and an IRA, or 401(k) plan account or other qualified retirement account of which American Express Trust Company acts as custodian; 'Between two American Express Trust Company custodial accounts with different owners (for example, you may not exchange dividends from your IRA to the IRA of your spouse); 'Between different kinds of custodial accounts with the same ownership (for example, you may not exchange dividends from your IRA to your 401(k) plan account, although you may exchange dividends from one IRA to another IRA). Dividends may be directed from accounts established under the Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA) only into other UGMA or UTMA accounts with identical ownership. -13- Each fund has a different investment goal described in its prospectus along with other information, including fees and expense ratios. Before exchanging dividends into another fund, you should read its prospectus. You will receive a confirmation that the automatic directed dividend service has been set up for your account. REDEEMING SHARES You have a right to redeem your shares at any time. For an explanation of redemption procedures, please see the prospectus. DURING AN EMERGENCY, the board can suspend the computation of net asset value, stop accepting payments for purchase of shares or suspend the duty of a fund to redeem shares for more than seven days. Such emergency situations would occur if: 'The New York Stock Exchange closes for reasons other than the usual weekend and holiday closings or trading on the Exchange is restricted, or 'Disposal of a fund's securities is not reasonably practicable or it is not reasonably practicable for that fund to determine the fair value of its net assets, or 'The SEC, under the provisions of the Investment Company Act of 1940, as amended, declares a period of emergency to exist. Should a fund stop selling shares, the trustees may make a deduction from the value of the assets held by that fund to cover the cost of future liquidations of the assets so as to distribute fairly these costs among all shareholders. PAY-OUT PLANS You can use any of several pay-out plans to redeem your investment in regular installments. If you redeem Class B shares you may be subject to a contingent deferred sales charge as discussed in the prospectus. While the plans differ on how the pay-out is figured, they all are based on the redemption of your investment. Net investment income dividends and any capital gain distributions will automatically be reinvested, unless you elect to receive them in cash. Applications for a systematic investment in a class of any fund subject to a sales charge normally will not be accepted while a pay-out plan for any of those funds is in effect. Occasional investments, however, may be accepted. To start any of these plans, please write or call American Express Shareholder Service, P.O. Box 534, Minneapolis, MN 55440-0534, 612-671-3733. Your authorization must be received in the Minneapolis headquarters at least five days before the date you want your payments to begin. The initial payment must be at least -14- $50. Payments will be made on a monthly, bimonthly, quarterly, semiannual or annual basis. Your choice is effective until you change or cancel it. The following pay-out plans are designed to take care of the needs of most shareholders in a way American Express Financial Corporation can handle efficiently and at a reasonable cost. If you need a more irregular schedule of payments, it may be necessary for you to make a series of individual redemptions, in which case you'll have to send in a separate redemption request for each pay-out. Each fund reserves the right to change or stop any pay-out plan and to stop making such plans available. Plan #1: Pay-out for a fixed period of time If you choose this plan, a varying number of shares will be redeemed at regular intervals during the time period you choose. This plan is designed to end in complete redemption of all shares in your account by the end of the fixed period. Plan #2: Redemption of a fixed number of shares If you choose this plan, a fixed number of shares will be redeemed for each payment and that amount will be sent to you. The length of time these payments continue is based on the number of shares in the account. Plan #3: Redemption of a fixed dollar amount If you decide on a fixed dollar amount, whatever number of shares is necessary to make the payment will be redeemed in regular installments until the account is closed. Plan #4: Redemption of a percentage of net asset value Payments are made based on a fixed percentage of the net asset value of the shares in your account computed on the day of each payment. Percentages range from 0.25% to 0.75%. For example, if you are on this plan and arrange to take 0.5% each month, you will get $50 if the value of your account is $10,000 on the payment date. EXCHANGES If you buy shares in one of the funds and then exchange into another fund, it is considered a sale and subsequent purchase of shares. Under tax laws, if this exchange is done within 91 days, any sales charge waived on Class A shares on a subsequent purchase of shares applies to the new shares acquired in the exchange. Therefore, you cannot create a tax loss or reduce a tax gain attributable to the sales charge when exchanging shares within 91 days. CAPITAL LOSS CARRYOVER For federal income tax purposes, IDS California, Massachusetts, Michigan, Minnesota, New York and Ohio Tax-Exempt Fund's had total capital loss carryovers of $3,420,653, $199,063, $156,952, -15- $2,753,600, $1,267,843, and $185,465, respectively, at June 30, 1994, that if not offset by subsequent capital gains will expire as set-out below:
Fund 1996 1997 1998 1999 - ------------------------------------------------------------------------------- California $311,803 $29,089 Massachusetts $133,727 Michigan Minnesota 764,634 New York 284,215 Ohio 106,387 Fund 2000 2001 2002 - ------------------------------------------------------------------------------- California $3,079,761 Massachusetts $ 6,932 $ 25,326 33,078 Michigan 156,952 Minnesota 361,841 1,627,125 New York 32,265 22,639 822,337 Ohio 185,465
It is unlikely that the board of trustees will authorize a distribution of any net realized capital gains until the available capital loss carryover has been offset or has expired except as required by Internal Revenue Service rules. TAXES All distributions of net investment income during the year will have the same percentage designated as tax-exempt. This annual percentage is expected to be substantially the same as the percentage of tax-exempt income actually earned during any particular distribution period. For the fiscal year ended June 30, 1994, 100% of the income distributions for California, Massachusetts, Michigan, Minnesota, New York and Ohio were designated as exempt from federal income tax. In addition, 100% of exempt interest distributions were derived from interest on municipal securities for California, Massachusetts, Minnesota, New York and Ohio, whereas Michigan had 99% of exempt interest distributed on municipal securities. State law determines whether interest income on a particular municipal bond is tax-exempt for state tax purposes. Each fund will tell you the percentage of interest income from municipal bonds it received during the year. Each shareholder should consult a tax advisor about reporting income for local tax purposes. Capital gain distributions received by individual and corporate shareholders should be treated as long-term capital gains regardless of how long they owned their shares. Short-term capital gains earned by the fund are paid to shareholders as part of their ordinary income dividend and are taxable. If you are a "substantial user" (or related person) of facilities financed by industrial development bonds, you should consult your tax advisor before investing. The income from such bonds may not be tax-exempt for you. -16- Interest on private activity bonds generally issued after August 1986 is a preference item for purposes on the individual and corporate alternative minimum taxes. "Private-activity" (non- governmental purpose) municipal bonds include industrial revenue bonds, student loan bonds and multi-and single-family housing bonds. An exception is made for private-activity bonds issued for qualified--501(c)(3)--organizations, including non-profit colleges, universities and hospitals. These bonds will continue to be tax- exempt and will not be subject to the alternative minimum tax for individuals. To the extent a fund earns income subject to the alternative minimum tax, it will flow through to that fund's shareholders and may subject some shareholders, depending on their tax status, to the alternative minimum tax. Each fund reports the percentage of income earned from these bonds to shareholders with their other tax information. Under federal tax law, and an election made by each fund under federal tax rules, by the end of a calendar year each fund must declare and pay dividends representing, 98% of ordinary income through Dec. 31 and 98% of net capital gains (both long-term and short-term) for the 12-month period ending Oct. 31 of that calendar year. Each fund is subject to an excise tax equal to 4% of the excess, if any, of the amount required to be distributed over the amount actually distributed. Each fund intends to comply with federal tax law and avoid any excise tax. This is a brief summary that relates to federal income taxation only. Shareholders should consult their tax advisor for more complete information as the application of federal, state and local income tax laws to fund distributions. AGREEMENTS Investment Management Services Agreement Each fund has an Investment Management Services Agreement with American Express Financial Corporation. For its services, American Express Financial Corporation is paid a fee based on the following schedule:
Assets Annual rate at (billions) each asset level - ---------- ---------------- First $0.25 0.470% Next 0.25 0.445 Next 0.25 0.420 Next 0.25 0.405 Over 1.0 0.380
In March 1995, the daily rate applied to the funds' assets is expected to be approximately 0.47% on an annual basis for California, Massachusetts, Michigan, New York, and Ohio, and approximately 0.46% on an annual basis for Minnesota. The fee is calculated for each calendar day on the basis of net assets as of the close of business two business days prior to the day for which the calculation is made. The management fee is paid monthly. The table below shows the total amount paid by each fund over the past three fiscal years. -17-
Fiscal Year Ended June 30, ----------------------------------------------- Fund 1994 1993 1992 - ----------------------------------------------------------------- California $1,418,804 $1,292,626 $1,114,190 Massachusetts 377,077 288,822 189,795 Michigan 405,578 334,048 258,584 Minnesota 2,227,969 1,913,496 1,478,887 New York 648,514 567,263 472,912 Ohio 381,106 294,453 215,667
Under the current Agreement, each fund also pays taxes, brokerage commissions and nonadvisory expenses that include custodian fees; audit and certain legal fees; cost of prospectuses, proxies and reports sent to shareholders; fidelity bond premiums; registration fees for shares; fund office expenses; consultants' fees; compensation of trustees, officers and employees; corporate filing fees; organizational expenses; expenses incurred in connection with lending portfolio securities of each fund; and expenses properly payable by each fund, approved by the board of trustees. Under a prior agreement, each fund paid nonadvisory expenses. The table below shows the expenses paid over the past three fiscal years.
Fiscal Year Ended June 30, --------------------------------------------- Fund 1994 1993 1992 - --------------------------------------------------------------- California $82,545 $87,327 $97,528 Massachusetts 52,628 45,673 33,042 Michigan 40,366 43,191 26,931 Minnesota 229,572 172,869 91,681 New York 51,629 46,905 36,400 Ohio 40,747 30,732 32,498
Administrative Services Agreement Each fund has an Administrative Services Agreement with American Express Financial Corporation. Under this agreement, each fund pays American Express Financial Corporation for providing administration and accounting services. The fee is calculated as follows:
Assets Annual rate (billions) each asset level ---------- ---------------- First $0.25 0.040% Next 0.25 0.035 Next 0.25 0.030 Next 0.25 0.025 Over $1.0 0.020
Transfer Agency Agreement Each fund has a Transfer Agency Agreement with American Express Financial Corporation. This agreement governs American Express Financial Corporation's responsibility for administering and/or performing transfer agent functions, for acting as service agent in connection with dividend and distribution functions and for performing shareholder account administration agent functions in connection with the issuance, exchange and redemption or repurchase of each fund's shares. Under the agreement, American Express Financial Corporation will earn a fee from each fund determined by multiplying the number of shareholder accounts at the end of the day by a rate determined for each class and -18- dividing by the number of days in the year. The rate for class A and for Class Y is $15.50 per year. The rate for Class B is $16.50 per year. The fees paid to American Express Financial Corporation may be changed from time to time upon agreement of the parties without shareholder approval. Each fund paid the following fees for the fiscal year ended June 30, 1994: California $104,864 Massachusetts 47,474 Michigan 41,235 Minnesota 248,181 New York 72,277 Ohio 40,107
Distribution Agreement Under a Distribution Agreement, sales charges deducted for distributing fund shares are paid to American Express Financial Advisors daily. Line one of the following table shows total sales charges collected. Line two shows the amounts retained by American Express Financial Advisors for the past three fiscal years ending June 30.
Year California Massachusetts Michigan Minnesota New York Ohio ------------------------------------------------------------------------------------- 1992 (1) $1,453,718 $672,533 $493,246 $2,906,844 $638,700 $450,254 (2) 513,760 233,749 173,551 1,023,870 227,161 158,439 1993 (1) 1,429,331 915,161 610,586 3,248,432 820,465 620,667 (2) 501,684 328,492 213,345 1,145,154 283,310 214,778 1994 (1) 1,177,341 867,225 560,739 2,458,058 728,241 593,137 (2) 414,319 271,784 194,612 863,376 260,045 205,291
Additional information about commissions and compensation for the fiscal year ended June 30, 1994, is contained in the following table:
(1) (2) (3) (4) (5) Net Compensation Name of Underwriting on Redemption Principal Discounts and and Brokerage Other Fund Underwriter Commissions Repurchases Commissions Compensation* - --------------------------------------------------------------------------------------------- California American Express Financial Advisors $1,177,341 None None $41,568 Massachusetts American Express Financial Advisors 867,225 None None 18,719 Michigan American Express Financial Advisors 560,739 None None 16,271 Minnesota American Express Financial Advisors 2,458,058 None None 97,718 New York American Express Financial Advisors 728,241 None None 29,229 Ohio American Express Financial Advisors 593,137 None None 15,702 - --------------------------------------------------------------------------------------------- *Distribution fees paid pursuant to the Plan and Supplemental Agreement of Distribution.
-19- Shareholder Service Agreement Each fund pays a fee for service provided to shareholders by financial advisors and other servicing agents. The fee is calculated at a rate of 0.175% of each fund's average daily net assets attributable to Class A and Class B shares. Plan and Agreement of Distribution For Class B shares, to help American Express Financial Advisors defray the cost of distribution and servicing, not covered by sales charges received under the Distribution Agreement, each fund and American Express Financial Advisors entered into a Plan and Agreement of Distribution (Plan). These costs relate to most aspects of distributing each fund's shares including American Express Financial Advisors' overhead expenses. These costs do not include compensation to the sales force. A substantial portion of the costs are not specifically identified to any one fund in the IDS MUTUAL FUND GROUP. Under the Plan, American Express Financial Advisors is paid a fee at an annual rate of 0.75% of each fund's average daily net assets attributable to Class B shares. The Plan must be approved annually by the board, including a majority of the disinterested trustees, if it is to continue for more than a year. At least quarterly, the board must review written reports concerning the amounts expended under the Plan and the purposes for which such expenditures were made. The Plan and any agreement related to it may be terminated at any time by vote of a majority of the trustees who are not interested persons of the Trusts and have no direct or indirect financial interest in the operation of the Plan or in any agreement related to the Plan, or by vote of a majority of the outstanding voting securities of each fund or by American Express Financial Advisors. The Plan (or any agreement related to it) will terminate in the event of its assignment as that term is defined in the Investment Company Act of 1940, as amended. The Plan may not be amended to increase the amount to be spent for distribution without shareholders' approval, and all material amendments to the Plan must be approved by a majority of the trustees, including a majority of the trustees who are not interested persons of the Trusts and who do not have a financial interest in the operation of the Plan or any agreement related to it. The selection and nomination of disinterested trustees is the responsibility of disinterested trustees. No interested person of the Trusts, and no trustee who is not an interested person, has any direct or indirect financial interest in the operation of the Plan or any related agreement. Total fees and nonadvisory expenses cannot exceed the most restrictive applicable state limitation. Currently, the most restrictive applicable state expense limitation, subject to exclusion of certain expenses, is 2.5% of the first $30 million of the fund's average daily net assets, 2% of the next $70 million and 1.5% of average daily net assets over $100 million, on an annual basis. At the end of each month, if the fees and expenses of the fund exceed this limitation for the fund's fiscal year in progress, American Express Financial Corporation will assume all expenses in excess of the limitation. American Express Financial Corporation -20- then may bill the fund for such expenses in subsequent months up to the end of that fiscal year, but not after that date. No interest charges are assessed by American Express Financial Corporation for expenses it assumes. TRUSTEES AND OFFICERS The following is a list of the fund's trustees who, except for Mr. Dudley, also are directors of all other funds in the IDS MUTUAL FUND GROUP. Mr. Dudley is a director of all publicly offered funds. All shares have cumulative voting rights when voting on the election of trustees. LYNNE V. CHENEY+' Born in 1941. American Enterprise Institute for Public Policy Research (AEI) 1150 17th St., N.W. Washington, D.C. Distinguished Fellow AEI. Former Chair of National Endowment of the Humanities. Director, The Reader's Digest Association Inc., Lockheed Corp., and the Interpublic Group of Companies, Inc. (advertising). WILLIAM H. DUDLEY+** Born in 1932. 2900 IDS Tower Minneapolis, MN Executive vice president and director of American Express Financial Corporation. ROBERT F. FROEHLKE+ Born in 1922. 1201 Yale Place Minneapolis, MN Former president of all funds in the IDS MUTUAL FUND GROUP. Director, the ICI Mutual Insurance Co., Institute for Defense Analyses, Marshall Erdman and Associates, Inc. (architectural engineering) and Public Oversight Board of the American Institute of Certified Public Accountants. DAVID R. HUBERS** Born in 1943. 2900 IDS Tower Minneapolis, MN President, chief executive officer and director of American Express Financial Corporation. Previously, senior vice president, finance and chief financial officer of American Express Financial Corporation. HEINZ F. HUTTER+ Born in 1929. P.O. Box 5724 Minneapolis, MN President and chief operating officer, Cargill, Incorporated (commodity merchants and processors) from February 1991 to September 1994. Executive vice president from 1981 to February 1991. -21- ANNE P. JONES+ Born in 1935. 5716 Bent Branch Rd. Bethesda, MD Attorney and telecommunications consultant. Former partner, law firm of Sutherland, Asbill & Brennan. Director, Motorola, Inc. and C-Cor Electronics, Inc. DONALD M. KENDALL' Born in 1921. PepsiCo, Inc. Purchase, NY Former chairman and chief executive officer, PepsiCo, Inc. MELVIN R. LAIRD+ Born in 1922. Reader's Digest Association, Inc. 1730 Rhode Island Ave., N.W. Washington, D.C. Senior counsellor for national and international affairs, The Reader's Digest Association, Inc. Chairman of the board, COMSAT Corporation, former nine-term congressman, secretary of defense and presidential counsellor. Director, Martin Marietta Corp., Metropolitan Life Insurance Co., The Reader's Digest Association, Inc., Science Applications International Corp., Wallace Reader's Digest Funds and Public Oversight Board (SEC Practice Section, American Institute of Certified Public Accountants). LEWIS W. LEHR' Born in 1921. 3050 Minnesota World Trade Center 30 E. Seventh St. St. Paul, MN Former chairman of the board and chief executive officer, Minnesota Mining and Manufacturing Company (3M). Director, Jack Eckerd Corporation (drugstores). Advisory Director, Peregrine Inc. (microelectronics). WILLIAM R. PEARCE+* Born in 1927. 901 S. Marquette Ave. Minneapolis, MN President of all funds in the IDS MUTUAL FUND GROUP since June 1993. Former vice chairman of the board, Cargill, Incorporated (commodity merchants and processors). EDSON W. SPENCER Born in 1926. 4900 IDS Center 80 S. 8th St. Minneapolis, MN President, Spencer Associates Inc. (consulting). Chairman of the board, Mayo Foundation (healthcare). Former chairman of the board and chief executive officer, Honeywell Inc. Director, Boise Cascade Corporation (forest products) and CBS Inc. Member of International Advisory Councils, Robert Bosch (Germany) and NEC (Japan). -22- JOHN R. THOMAS** Born in 1937. 2900 IDS Tower Minneapolis, MN Senior vice president and director of American Express Financial Corporation. WHEELOCK WHITNEY+ Born in 1926. 1900 Foshay Tower 821 Marquette Ave. Minneapolis, MN Chairman, Whitney Management Company (manages family assets). C. ANGUS WURTELE Born in 1934. 1101 S. 3rd St. Minneapolis, MN Chairman of the board and chief executive officer, The Valspar Corporation (paints). Director, Bemis Corporation (packaging), Donaldson Company (air cleaners & mufflers) and General Mills, Inc. (consumer foods). + Member of executive committee. ' Member of joint audit committee. * Interested person by reason of being an officer and employee of the fund. **Interested person by reason of being an officer, director, employee and/or shareholder of American Express Financial Corporation or American Express. The board also has appointed officers who are responsible for day- to-day business decisions based on policies it has established. Besides Mr. Pearce, who is president, the fund's other officer is: LESLIE L. OGG Born in 1938. 901 S. Marquette Ave. Minneapolis, MN Vice president of all funds in the IDS MUTUAL FUND GROUP and general counsel and treasurer of the publicly offered funds. Members who are not officers of the fund or officers or directors of American Express Financial Corporation receive an annual base fee of $250. They receive a fee for all board and committee meetings they attend. The fee is shared equally among each fund in the IDS MUTUAL FUNDS GROUP holding concurrent meetings. The fees are $500 for Board, Executive, Audit and Investment Review committees, $750 for Personnel with out-of-state members receiving an additional $500 if an extra day of travel is required. The Chair of Contracts receives an additional $5,000. In addition members who retire after age 70 or earlier for health reasons receive monthly retirement benefits of 1/2 of the base fee on the date they retire divided by 12 for each month of service up to 120 months. During the fiscal year that ended June 30, 1994, the members of the board, for attending up to 51 meetings, received the following compensation, in total, from all funds in the IDS MUTUAL FUND GROUP. -23-
Board compensation Aggregate Retirement Estimated Total Cash compensation benefits annual compensation from the accrued as benefit on from the IDS Board member fund fund expenses retirement MUTUAL FUND GROUP - -------------------------------------------------------------------------------------------------- Lynne V. Cheney $1,551 $ --- $1,125 $25,600 (part of year) Robert F. Froehlke 4,734 2,709 1,125 77,400 Anne P. Jones 3,864 693 1,125 71,300 Donald M. Kendall 3,390 3,088 1,070 68,000 Melvin R. Laird 3,834 2,397 1,125 71,000 Lewis W. Lehr 3,894 3,217 1,061 71,500 William R. Pearce --- 1,036 1,125 --- (part of year) Edson W. Spencer 3,852 1,578 601 71,200 Wheelock Whitney 4,224 1,451 1,125 73,800
On June 30, 1994, the fund's trustees and officers as a group owned less than 1% of the outstanding shares of each fund. During the fiscal year ended June 30, 1994, no trustee or officer earned more than $60,000 from the California, Massachusetts, Michigan, Minnesota, New York and Ohio funds, respectively. Column A illustrates the amount all trustees and officers as a group earned from each fund; Column B details their retirement plan expenses.
A B - - California $ 8,683 $2,243 Massachusetts 4,288 1,640 Michigan 6,427 1,800 Minnesota 13,711 3,928 New York 7,262 1,800 Ohio 6,902 1,800
THE TRUSTS The Trusts are entities of the type commonly known as Massachusetts business trusts. Under Massachusetts law, shareholders of such a trust may, under certain circumstances, be held personally liable as partners for its obligations. However, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which the Trust itself is unable to meet its obligations. CUSTODIAN The fund's securities and cash are held by First Bank National Association, 180 E. Fifth St., St. Paul, MN 55101-1631, through a custodian agreement. The custodian is permitted to deposit some or all of its securities in central depository systems as allowed by federal law. INDEPENDENT AUDITORS The financial statements contained in the Annual Report to shareholders, for the fiscal year ended June 30, 1994, were audited by independent auditors, KPMG Peat Marwick LLP, 4200 Norwest Center, 90 S. Seventh St., Minneapolis, MN 55402-3900. The independent auditors also provide other accounting and tax-related services as requested by the fund. -24- FINANCIAL STATEMENTS The Independent Auditors' Report and the Financial Statements, including Notes to the Financial Statements and the Schedule of Investments in Securities, contained in the 1994 Annual Report to shareholders, pursuant to Section 30(d) of the Investment Company Act of 1940, as amended, are hereby incorporated in this SAI by reference. No other portion of the Annual Report however, is incorporated by reference. The 1994 Semiannual Report to shareholders is also incorporated in this SAI by reference. PROSPECTUS The prospectuses for IDS California Tax Exempt Fund, IDS Massachusetts Tax-Exempt Fund, IDS Michigan Tax-Exempt Fund, IDS Minnesota Tax-Exempt Fund, IDS New York Tax-Exempt Fund, and IDS Ohio Tax-Exempt Fund dated Aug. 29, 1994 as revised March 20, 1995, are hereby incorporated in this SAI by reference. -25- APPENDIX A DESCRIPTION OF RATINGS OF TAX-EXEMPT SECURITIES AND SHORT-TERM SECURITIES TAX-EXEMPT SECURITIES Tax-exempt securities are used to raise money for various public purposes, such as constructing public facilities and making loans to public institutions. Certain types of tax-exempt bonds are issued to obtain funding for privately operated facilities. There are two principal classifications of municipal securities: notes and bonds. Notes are used generally to provide for short-term capital needs and generally have a maturity of up to one year. These include tax anticipation notes, revenue anticipation notes, bond anticipation notes, construction loan notes, variable rate demand notes and tax-exempt commercial paper (also known as municipal paper). Bonds, which meet longer-term capital needs, generally have maturities of more than one year and fall into one of two categories. General obligation bonds are backed by the taxing power of the issuing municipality and are considered the safest type of municipal bond. Revenue bonds are payable only from the revenues of a particular project or facility and are generally dependent solely on a specific revenue source. Industrial development bonds are a specific type of revenue bond backed by the credit and security of a private user. The ratings concern the quality of the issuer. They are not an opinion of the market value of the security. Such ratings are opinions on whether the principal and interest will be repaid when due. A security's rating may change which could affect its price. Ratings by Moody's Investors Service, Inc. (Moody's) are Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C and D. Standard & Poor's Corporation (S&P) ratings are AAA, AA, A, BBB, BB, B, CCC, CC, C and D. Securities rated Aaa and AAA are judged to be of the best quality. Capacity to pay interest and repay principal is extremely strong. Prices are responsive only to interest rate fluctuations. Securities rated Aa and AA also are judged to be high-grade although margins of protection for interest and principal may not be quite as good as Aaa or AAA rated securities. Long-term risk may appear greater than the Aaa or AAA group. Prices are primarily responsive to interest rate fluctuations. Securities rated A are considered upper-medium grade. Protection for interest and principal are deemed adequate but susceptible to future impairment. The market prices of such obligations move primarily with interest rate fluctuations but also with changing economic or trade conditions. Securities rated Baa and BBB are considered upper-medium-grade obligations. Protection for interest and principal is adequate over the short term; however, these obligations have certain speculative characteristics. They are susceptible to changing economic conditions and require constant review. Such bonds are more responsive to business and trade conditions than to interest rate fluctuations. -26- Securities rated Ba and BB are considered to have speculative elements. Their future cannot be considered well assured. The protection of interest and principal payments may be very moderate and not well safeguarded during future good and bad times. Uncertainty of position characterizes these bonds. Securities rated B or lower lack characteristics of more desirable investments. There may be small assurance over any long period of time of the payment of interest and principal or of the maintenance of other contract terms. Some of these bonds are of poor standing and may be in default or have other marked shortcomings. Bonds rated Caa and CCC are of poor standing. Such issues may be in default or there may be elements of danger with respect to principal or interest. Bonds rated Ca and CC represent obligations that are highly speculative. Such issues are often in default or have other marked shortcomings. Bonds rated C are obligations with a higher degree of speculation. These securities have major risk exposures to default. Bonds rated D are in payment default. The D rating is used when interest payments or principal payments are not made on the due date. Non-rated securities will be considered for investment when they possess a risk comparable to that of rated securities consistent with fund objectives and policies. When assessing the risk involved in each nonrated security, the funds will consider the financial condition of the issuer or the protection afforded by the terms of the security. SHORT-TERM TAX-EXEMPT SECURITIES A portion of each fund's assets are in cash and short-term securities for day-to-day operating purposes. The investments will usually be in short-term municipal bonds and notes. These include: (1) Tax anticipation notes sold to finance working capital needs of municipalities in anticipation of receiving taxes on a future date. (2) Bond anticipation notes sold on an interim basis in anticipation of a municipality issuing a longer term bond in the future. (3) Revenue anticipation notes issued in anticipation of revenues from sources other than taxes, such as federal revenues available under the Federal Revenue Sharing Program. (4) Tax and revenue anticipation notes issued in anticipation of revenues from taxes and other sources of revenue, except bond placements. -27- (5) Construction loan notes insured by the Federal Housing Administration which remain outstanding until permanent financing by the Federal National Mortgage Association (FNMA) or the Government National Mortgage Association (GNMA) at the end of the project construction period. (6) Tax-exempt commercial paper with a stated maturity of 365 days or less issued by agencies of state and local governments to finance seasonal working capital needs or as short-term financing in anticipation of longer-term financing. (7) Variable rate demand notes, on which the yield is adjusted at periodic intervals not exceeding 31 days and on which the principal may be repaid after not more than seven days' notice, are considered short-term regardless of the stated maturity. Short-term municipal bonds and notes are rated by Moody's and by S&P. The ratings reflect the liquidity concerns and market access risks unique to notes. Moody's MIG 1/VMIG 1 indicates the best quality. There is present strong protection by established cash flows, superior liquidity support or demonstrated broad-based access to the market for refinancing. Moody's MIG 2/VMIG 2 indicates high quality. Margins of protection are ample although not so large as in the preceding group. Moody's MIG 3/VMIG 3 indicates favorable quality. All security elements are accounted for but there is lacking the undeniable strength of the preceding grades. Liquidity and cash flow protection may be narrow and market access for refinancing is likely to be less well established. Moody's MIG 4/VMIG 4 indicates adequate quality. Protection commonly regarded as required of an investment security is present and although not distinctly or predominantly speculative, there is specific risk. Standard & Poor's rating SP-1 indicates very strong or strong capacity to pay principal and interest. Those issues determined to possess overwhelming safety characteristics will be given a plus (+) designation. Standard & Poor's rating SP-2 indicates satisfactory capacity to pay principal and interest. Standard & Poor's rating SP-3 indicates speculative capacity to pay principal and interest. SHORT-TERM TAXABLE SECURITIES AND REPURCHASE AGREEMENTS Depending on market conditions, a portion of each fund's investments may be in short-term taxable securities. These include: -28- (1) Obligations of the U.S. government, its agencies and instrumentalities resulting principally from lending programs of the U.S. government; (2) U.S. Treasury bills with maturities up to one year. The difference between the purchase price and the maturity value or resale price is the interest income to the fund; (3) Certificates of deposit or receipts with fixed interest rates issued by banks in exchange for deposit of funds; (4) Bankers' acceptances arising from short-term credit arrangements designed to enable businesses to obtain funds to finance commercial transactions; (5) Letters of credit which are short-term notes issued in bearer form with a bank letter of credit obligating the bank to pay the bearer the amount of the note; (6) Commercial paper rated in the two highest grades by Moody's or S&P. Commercial paper is generally defined as unsecured short- term notes issued in bearer form by large well-known corporations and finance companies. These ratings reflect a review of management, economic evaluation of the industry competition, liquidity, long-term debt and ten-year earning trends; Moody's rating Prime-1 (P-1) and Standard & Poor's rating A-1 indicate that the degree of safety regarding timely payment of short-term promissory obligations is either overwhelming or very strong. Moody's rating Prime-2 (P-2) and Standard & Poor's rating A-2 indicate that capacity for timely payment of short-term promissory obligations with this designation is strong. (7) Repurchase agreements involving acquisition of securities by a fund with a concurrent agreement by the seller, usually a bank or securities dealer, to reacquire the securities at cost plus interest within a specified time. From this investment, a fund receives a fixed rate of return that is insulated from market rate changes while it holds the security. -29- APPENDIX B OPTIONS AND INTEREST RATE FUTURES CONTRACTS Each fund may buy or write options traded on any U.S. exchange or in the over-the-counter market. Each fund may enter into interest rate futures contracts traded on any U.S. exchange. Each fund also may buy or write put and call options on these futures. Bond options in the over-the-counter market will be purchased only when the investment manager believes a liquid secondary market exists for the options and only from dealers and institutions the investment manager believes present a minimal credit risk. Some options are exercisable only on a specific date. In that case, or if a liquid secondary market does not exist, a fund could be required to buy or sell securities at disadvantageous prices, thereby incurring losses. OPTIONS. An option is a contract. A person who buys a call option for a security has the right to buy the security at a set price for the length of the contract. A person who sells a call option is called a writer. The writer of a call option agrees to sell the security at the set price when the buyer wants to exercise the option, no matter what the market price of the security is at that time. A person who buys a put option has the right to sell a stock at a set price for the length of the contract. A person who writes a put option agrees to buy the security at the set price if the purchaser wants to exercise the option, no matter what the market price of the security is at that time. An option is covered if the writer owns the security (in the case of a call) or sets aside the cash (in the case of a put) that would be required upon exercise. The price paid by the buyer for an option is called a premium. In addition the buyer generally pays a broker a commission. The writer receives a premium, less a commission, at the time the option is written. The cash received is retained by the writer whether or not the option is exercised. A writer of a call option may have to sell the security for less than the market price if the market price rises above the exercise price. A writer of a put option may have to pay an above-market price for the security if the market price decreases below the exercise price. Options can be used to produce incremental earnings, protect gains and facilitate buying and selling securities for investment reasons. The use of options and futures contracts may benefit a fund and its shareholders by improving the fund's liquidity and by helping to stabilize the value of its net assets. BUYING OPTIONS. Put and call options may be used as a trading technique to facilitate buying and selling securities for investment reasons. They also may be used for investment. Options are used as a trading technique to take advantage of any disparity between the price of the underlying security in the security market and its price on the options market. It is anticipated the trading technique will be utilized only to effect a security transaction when the price of the security plus the option price will be as -30- good or better than the price at which the stock could be bought or sold directly. When the option is purchased, a fund pays a premium and a commission. It then pays a second commission on the purchase or sale of the underlying security when the option is exercised. For record keeping and tax purposes, the price obtained on the purchase of the underlying security will be the combination of the exercise price, the premium and both commissions. When using options as a trading technique, commissions on the option will be set as if only the underlying securities were traded. Put and call options also may be held by a fund for investment purposes. Options permit a fund to experience the change in the value of a security with a relatively small initial cash investment. The risk a fund assumes when it buys an option is the loss of the premium. To be beneficial to a fund, the price of the underlying security must change within the time set by the option contract. Furthermore, the change must be sufficient to cover the premium paid, the commissions paid both in the acquisition of the option and in a closing transaction or in the exercise of the option and subsequent sale (in the case of a call) or purchase (in the case of a put) of the underlying security. Even then the price change in the underlying security does not ensure a profit since prices in the option market may not reflect such a change. Each fund will not purchase puts, calls, straddles, spreads, and any combination thereof if by reason thereof the value of its aggregate investments in such classes of securities will exceed 5% of its total assets. WRITING COVERED OPTIONS. Each fund will write covered options when it feels it is appropriate and will follow these guidelines: 'Underlying securities will continue to be bought or sold solely on the basis of investment considerations consistent with that fund's goal. 'All options written by a fund will be covered. For covered call options if a decision is made to sell the security, that fund will attempt to terminate the option contract through a closing purchase transaction. 'Each fund will write options only as permitted under federal or state laws or regulations, such as those that limit the amount of total assets subject to the options. While no limit has been set by the funds, it will conform to the requirements of those states. For example, California limits the writing of options to 50% of the assets of a fund. Some regulations also affect the Custodian. Net premiums on call options closed or premiums on expired call options are treated as short-term capital gains. Since each fund is taxed as a regulated investment company under the Internal Revenue Code, any gains on options and other securities held less than three months must be limited to less than 30% of its annual gross income. If a covered call option is exercised, the security is sold by that fund. The fund will recognize a capital gain or loss based upon the difference between the proceeds and the security's basis. Options on many securities are listed on options exchanges. If a fund writes listed options, it will follow the rules of the options exchange. Options are valued at the close of the New York Stock -31- Exchange. An option listed on a national exchange or NASDAQ will be valued at the last quoted sales price or, if such a price is not readily available, at the mean of the last bid and asked prices. FUTURES CONTRACTS. A futures contract is an agreement between two parties to buy and sell a security for a set price on a future date. They have been established by boards of trade which have been designated contracts markets by the Commodity Futures Trading Commission (CFTC). Futures contracts trade on these markets in a manner similar to the way a stock trades on a stock exchange, and the boards of trade, through their clearing corporations, guarantee performance of the contracts. Currently, there are futures contracts based on such debt securities as long-term U.S. Treasury bonds, Treasury notes, GNMA modified pass-through mortgage-backed securities, three-month U.S. Treasury bills and bank certificates of deposit. While futures contracts based on debt securities do provide for the delivery and acceptance of securities, such deliveries and acceptances are very seldom made. Generally, the futures contract is terminated by entering into an offsetting transaction. An offsetting transaction for a futures contract sale is effected by each fund entering into a futures contract purchase for the same aggregate amount of the specific type of financial instrument and same delivery date. If the price in the sale exceeds the price in the offsetting purchase, that fund immediately is paid the difference and realizes a gain. If the offsetting purchase price exceeds the sale price, the fund pays the difference and realizes a loss. Similarly, closing out a futures contract purchase is effected by the fund entering into a futures contract sale. If the offsetting sale price exceeds the purchase price, the fund realizes a gain, and if the offsetting sale price is less than the purchase price, the fund realizes a loss. At the time a futures contract is made, a good-faith deposit called initial margin is set up within a segregated account at the fund's custodian bank. The initial margin deposit is approximately 1.5% of a contract's face value. Daily thereafter, the futures contract is valued and the payment of variation margin is required so that each day the fund would pay out cash in an amount equal to any decline in the contract's value or receive cash equal to any increase. At the time a futures contract is closed out, a nominal commission is paid, which is generally lower than the commission on a comparable transaction in the cash markets. The purpose of a futures contract, in the case of a portfolio holding long-term debt securities, is to gain the benefit of changes in interest rates without actually buying or selling long- term debt securities. For example, if a fund owned long-term bonds and interest rates were expected to increase, it might enter into futures contracts to sell securities which would have much the same effect as selling some of the long-term bonds it owned. Futures contracts are based on types of debt securities referred to above, which have historically reacted to an increase or decline in interest rates in a fashion similar to the debt securities a fund owns. If interest rates did increase, the value of the debt securities in the portfolio would decline, but the value of a fund's futures contracts would increase at approximately the same rate, thereby keeping the net asset value of a fund from declining as much as it otherwise would have. If, on the other hand, a fund -32- held cash reserves and interest rates were expected to decline, it might enter into interest rate futures contracts for the purchase of securities. If short-term rates were higher than long-term rates, the ability to continue holding these cash reserves would have a very beneficial impact on a fund's earnings. Even if short- term rates were not higher, a fund would still benefit from the income earned by holding these short-term investments. At the same time, by entering into futures contracts for the purchase of securities, a fund could take advantage of the anticipated rise in the value of long-term bonds without actually buying them until the market had stabilized. At that time, the futures contracts could be liquidated and a fund's cash reserves could then be used to buy long-term bonds on the cash market. A fund could accomplish similar results by selling bonds with long maturities and investing in bonds with short maturities when interest rates are expected to increase or by buying bonds with long maturities and selling bonds with short maturities when interest rates are expected to decline. But by using futures contracts as an investment tool, given the greater liquidity in the futures market than in the cash market, it might be possible to accomplish the same result more easily and more quickly. Successful use of futures contracts depends on the investment manager's ability to predict the future direction of interest rates. If the investment manager's prediction is incorrect, a fund would have been better off had it not entered into futures contracts. In addition to the requirement that futures contracts be offset by assets of a fund and not used for speculation, the Trustees have adopted two restrictions on the use of futures contracts. The first is that each fund may not commit more than 5% of its total assets to initial margin deposits. The second restriction is that the aggregate market value of the futures contracts the fund holds may not exceed 30% of the market value of its total assets. Neither of the restrictions would be changed by the Trustees without considering the concerns of the various federal and state regulatory agencies. OPTIONS ON FUTURES CONTRACTS. Options give the holder a right to buy or sell futures contracts in the future. Unlike a futures contract, which requires the parties to the contract to buy and sell a security on a set date, an option on a futures contract merely entitles its holder to decide on or before a future date (within nine months of the date of issue) whether to enter into such a contract. If the holder decides not to enter into the contract, all that is lost is the amount (premium) paid for the option. Furthermore, because the value of the option is fixed at the point of sale, there are no daily payments of cash to reflect the change in the value of the underlying contract. However, since an option gives the buyer the right to enter into a contract at a set price for a fixed period of time, its value does change daily and that change is reflected in the net asset value of that fund. RISKS. There are risks in engaging in each of the management tools described above. The risk each fund assumes when it buys an option is the loss of the premium paid for the option. Purchasing options also limits the use of monies that might otherwise be available for long-term investments. -33- The risk involved in writing options on futures contracts a fund owns, or on securities held in its portfolio, is that there could be an increase in the market value of such contracts or securities. If that occurred, the option would be exercised and the asset sold at a lower price than the cash market price. To some extent, the risk of not realizing a gain could be reduced by entering into a closing transaction. A fund could enter into a closing transaction by purchasing an option with the same terms as the one it had previously sold. The cost to close the option and terminate a fund's obligation, however, might be more or less than the premium received when it originally wrote the option. Furthermore, a fund might not be able to close the option because of insufficient activity in the options market. A risk in employing futures contracts to protect against the price volatility of portfolio securities is that the prices of securities subject to futures contracts may not correlate perfectly with the behavior of the cash prices of that fund's portfolio securities. The correlation may be distorted because the futures market is dominated by short-term traders seeking to profit from the difference between a contract or security price and their cost of borrowed funds. Such distortions are generally minor and would diminish as the contract approached maturity. Another risk is a fund's investment manager could be incorrect in anticipating as to the direction or extent of various interest rate movements or the time span within which the movements take place. For example, if a fund sold futures contracts for the sale of securities in anticipation of an increase in interest rates, and interest rates declined instead, it would lose money on the sale. TAX TREATMENT. As permitted under federal income tax laws, each fund intends to identify futures contracts as mixed straddles and not mark them to market, that is, not treat them as having been sold at the end of the year at market value. Such an election may result in a fund being required to defer recognizing losses incurred by entering into futures contracts and losses on underlying securities identified as being hedged against. Federal income tax treatment of gains or losses from transactions in options on futures contracts and indexes is currently unclear, although each fund's tax advisor currently believes marking to market is not required. Depending on developments, and although no assurance is given, a fund may seek Internal Revenue Service (IRS) rulings clarifying questions concerning such treatment. Certain provisions of the Internal Revenue Code may also limit a fund's ability to engage in futures contracts and related options transactions. For example, at the close of each quarter of a fund's taxable year, at least 50% of the value of its assets must consist of cash, government securities and other securities, subject to certain diversification requirements. Less than 30% of its gross income must be derived from sales of securities held less than three months. The IRS has ruled publicly that an exchange-traded call option is a security for purposes of the 50%-of-assets test and that its issuer is the issuer of the underlying security, not the writer of the -34- option, for purposes of the diversification requirements. In order to avoid realizing a gain within a three-month period, a fund may be required to defer closing out a contract beyond the time when it might otherwise be advantageous to do so. Each fund also may be restricted in purchasing put options for the purpose of hedging underlying securities because of applying the short sale holding period rules with respect to such underlying securities. Accounting for futures contracts will be according to generally accepted accounting principles. Initial margin deposits will be recognized as assets due from a broker (a fund's agent in acquiring the futures position). During the period the futures contract is open, changes in value of the contract will be recognized as unrealized gains or losses by marking to market on a daily basis to reflect the market value of the contract at the end of each day's trading. Variation margin payments will be made or received depending upon whether gains or losses are incurred. All contracts and options will be valued at the last-quoted sales price on their primary exchange. -35- APPENDIX C STATE RISK FACTORS Each fund's ability to achieve its investment objective is dependent upon the ability of the issuers of state tax-exempt bonds to meet their continuing obligation for the payment of principal and interest. The following information highlights certain legal, financial, political and economic affairs for California, Massachusetts, Michigan, Minnesota, New York and Ohio and their political subdivisions and is based on official statements and public information. No fund has acquired direct knowledge of this information, however, the funds are not aware of any facts which would render the information inaccurate. The matters discussed below constitute only a brief summary of financial information and do not purport to be a complete description. Although revenue obligations of any state or its political subdivisions may be payable from a specific project or source, there can be no assurance that past, current or future economic difficulties, and the resulting impact on state and local governmental finances will not adversely affect the market value of municipal obligations held in a fund or the ability of the respective issuers to make required payments on the obligations. FACTORS AFFECTING CALIFORNIA Financial stability continues to elude California's administration. Current budget difficulty is attributed to reduction of the aerospace and defense industries, closing of military bases and the federal government's failure to follow through on a promise of disaster funds. Several years of economic stress have strained both revenues and expenses. This has caused state general fund operating results to fall significantly under budget. Past budgets thought to have been balanced had unrealistic economic expectations. California's 1994 budget makes progress toward balancing its budget with recurring revenues and expenditures. Governor Wilson's January budget for fiscal year 1995 projects a $2.5 billion operating surplus and a pay down of the accumulated budgetary basis deficit by the end of fiscal year 1995. The deficit will be funded through short-term borrowing. Current credit agency ratings on general obligation debt is in the A+ to AA range. These ratings reflect continuing significant economic stress, moderate growth and the accumulation of a deficit. Certain California constitutional amendments, legislative measures, executive orders, civil actions and voter initiatives could adversely affect the ability of issuers of California state and municipal securities to obtain sufficient revenue to pay their bond obligations. Prior to 1977, revenues of the state government experienced significant growth primarily as a result of inflation and continuous expansion of the tax base of the state. In 1978, -36- California voters approved an amendment to the California constitution known as Proposition 13, which added Article XIIIA to the state Constitution. Article XIIIA reduced ad valorem (according to value) taxes on real property, and restricted the ability of taxing entities to increase real property tax revenues. In addition, Article XIIIA provides that additional taxes may be levied by cities, counties and special districts only upon approval of not less than a two-thirds vote of the "qualified electors" of such district and requires not less than a two-thirds vote of each of the two houses of the state legislature to enact any changes in state taxes for purposes of increasing revenues, whether by increased rate or changes in methods of computation. In 1986 Proposition 62, an initiative statute enacted in California, placed further limits on the ability of local governments to levy taxes other than ad valorem property taxes, except with voter approval. Legislation enacted subsequent to Article XIIIA provided for the redistribution of California's general fund surplus to local agencies, the reallocation of certain state revenues to local agencies and the assumption of certain local obligations by the state so as to help California municipal issuers raise revenues to pay their bond obligations. Primarily as a result of the reductions in local property tax revenues received by local governments following the passage of Proposition 13, the legislature undertook to provide assistance to such governments by substantially increasing expenditures from the general fund for that purpose beginning in the 1978-1979 fiscal year. In past years, in addition to such increased expenditures, the indexing of personal income tax rates (to adjust such rates for the effects of inflation), the elimination of certain inheritance and gift taxes, and the increase of exemption levels for certain other such taxes had a moderating impact on the growth in state revenues. In addition, the state has increased expenditures by providing a variety of tax credits, senior citizens' credits and energy credits. In 1979, the voters of California passed an initiative adding Article XIIIB to the California Constitution. Article XIIIB prohibits the state from spending "appropriations subject to limitation" in excess of the appropriations limit imposed. "Appropriations subject to limitations" are authorizations to spend "proceeds of taxes" which consist of tax revenues and certain other funds. One of the exclusions from these limitations is "debt service" (defined as "appropriations required to pay the cost of interest and redemption charges, including the funding of any reserve or sinking fund required in connection therewith, on indebtedness on existing or legally authorized as of Jan. 1, 1979, or on bonded indebtedness thereafter approved" by voters). In addition, appropriations required to comply with mandates of courts or the Federal government are not included as appropriations subject to limitation. The state's appropriations limit is adjusted annually to reflect change in cost of living and population and transfer of financial responsibility from one governmental unit to another. Revenues in any fiscal year which exceed the amount which may be appropriated -37- in compliance with Article XIIIB must be returned to taxpayers by a revision of tax rates or fee schedules within the two subsequent fiscal years. In November 1988, voters approved an initiative call Proposition 98 which substantially modified Article XIIIB, by providing that a substantial amount (up to $600 million per year currently) of any excess state revenues would, instead of being returned to taxpayers, be paid to public schools and community college districts. In the years immediately after enactment of Article XIIIB, very few California government entities neared their appropriations limits. To the extent the state remains constrained by its appropriations limit, the absolute level, or the rate of growth, of assistance to local governments may be reduced. Because of the complex nature of Articles XIIIA and XIIIB, the ambiguities and possible inconsistencies in their terms and the applicability of their exemptions and exceptions and impossibility of predicting future appropriations or changes in population and cost of living, it is not currently possible to determine the impact of Article XIIIA or Article XIIIB or any related legislation on the securities held in the Fund or the ability of state or local governments to pay interest on or repay the principal of such securities. With a limited exception, to date the California courts have either upheld the constitutionality of Article XIIIA and its implementing and related legislation or have interpreted them in such a manner as to avoid the necessity for direct determination of constitutional issues. Article XIIIA and XIIIB and their respective implementing and related legislation will most probably be subject to continuing or future legal challenges. It is not presently possible to predict the outcome of any such legislation with respect to the ultimate scope, impact or constitutionality of either Article XIIIA or Article XIIIB, or their respective related legislation; or the impact of any determinations upon state agencies or local government, or upon the abilities of such entities to pay the interest on, or repay the principal of, the securities held by the Fund. FACTORS AFFECTING MASSACHUSETTS Massachusetts administration continues to demonstrate spending discipline, reduce reliance on short-term borrowing and non- recurring revenues, and balance general fund operations and make reasonable budget projections. Continuing success is primarily attributed to a better working relationship between the legislative and executive branches of government. The government collected $7 million more in taxes at June 30 fiscal year end than anticipated. The commonwealth's finances continue to stabilize. Following several years in which revenue fell short of estimates and resulted in two deficits, the general fund closed two fiscal years in balance and more revenue than anticipated. The governor's proposed 1994-1995 budget contemplates eliminating a personal income tax cut, $10 million reduction in state fees, overhaul of the welfare system and $125 million in revenue from gambling venues. -38- The Massachusetts constitution requires that a balanced budget be provided for each year. In addition, the commonwealth adopted certain budgetary and fiscal controls to eliminate the possibilities of expenditures exceeding available revenues and funds. The general fund, the local aid fund and the highway fund are the three principal operating funds of the commonwealth and the condition of these funds is generally regarded as the principal indicator of whether the commonwealth's operating revenues and expenses are balanced. The commonwealth had and may continue to have unfunded general liabilities of its retirement systems and a program to fund these liabilities. In 1978, the commonwealth began assuming full financial responsibility for all costs of the administration of justice within the state, and Medicaid expenditures which have increased each year. It also raised aggregate aid to cities, towns schools and other districts and transit authorities. In the past the commonwealth signed constant decrees to improve mental health care and programs for the mentally retarded to meet federal standards including those governing federal reimbursements under various programs. All of the 351 cities and towns in Massachusetts have achieved a property tax level of no more than 2.5% of full property values. Legislation that effected this leveling is Proposition 2 1/2. Under Proposition 2 1/2, cities and towns may increase the property tax levy annually. In most cases property taxes can increase by 2.5% of the prior year's tax levy plus 2.5% of the value of new properties and of significant improvements to property. The reductions in local revenues and reductions in local personnel and services resulting from Proposition 2 1/2 created a strong demand for substantial increases in state-funded local aid, with increases in fiscal years 1982 through 1987. The effect of this increase in local aid was to shift a major part of the impact of Proposition 2 1/2 to the commonwealth. Legislation had been enacted providing for certain local option taxes. Efforts to limit and reduce the levels of taxation in Massachusetts have been underway for several years. Chapter 62F of the Massachusetts General Laws establishes a state tax revenue growth limit and does not exclude principal and interest payments on commonwealth debt obligations from the scope of the limit. Lawsuits filed against the commonwealth or its authorities may affect its future fiscal condition. Among the more significant of these suits are suits regarding the clean up of pollution in Boston Harbor, services to be provided at state schools for the retarded and at a state mental hospital, the governor's authority to reduce allotments of appropriated funds and Medicaid reimbursement levels. There have also been actions filed in which recipients of human service benefits seek expanded levels of services and benefits and in which providers of such services or benefits challenge the rate at which they are reimbursed by the commonwealth. Any lawsuits that result in judgments requiring the commonwealth to provide expanded services or benefits, to pay increased rates or to take other remedial measures, operating capital expenditures might be needed to implement such judgements. -39- FACTORS AFFECTING MICHIGAN Michigan continues to recover from the effect of the national recession problems it faced in the early 1980's and weak economic performance in fiscal years 1991 and 1992. The current challenge is rebuilding the general and budget stabilization reserves which had been depleted. The state had managed to balance its general fund operations through the use of reserves, changes in accounting practices, severe cuts in public assistance, and a state employee wage freeze. As of February 1994 Michigan's general obligation debt rated AA. Michigan's low debt position helped it to weather recent difficult economic times. Financial operations remained solvent through budget adjustments, spending cuts and use of non-recurring items. Previous budget problems arose from revenue estimates falling below expectation and increased spending levels. This caused deficits in the general fund budget for fiscal years ended 1990 and 1991. The principal sectors of Michigan's economy are manufacturing of durable goods (including automobiles and office equipment), tourism and agriculture. As of August 1987, manufacturing represented 25.8% of total employment in the state. Income derived from manufacturing exceeded 35% of total state income from all employment sectors. Because of the emphasis on durable goods, however, economic activity in the state has tended to be more cyclical than in the nation as a whole. Moreover, this domination left the state's economy more susceptible to upward and downward cycles. The manufacturer sector has benefitted from significant private investment and improved international competitiveness. The current low interest rate environment should continue to help strengthen business investment. The state's economy has improved over the years, primarily due to diversification of the economic base, yet it remains vulnerable. Service industry employment continues to replace manufacturing as primary employment. The declining trend of personal income has placed a strain on the state as income taxes are a primary source of income. Other factors that could strain the state's budget are property tax- relief proposals (which are expected to reduce assessments by 30 percent over five years), and a requirement that the state government appropriate 42% of its expenditures to local government to insulate them from decreased state aid. Budget pressure could occur if voters pass any property tax reform legislation. Such reform will cause the state administration to have to aid school districts affected by loss of property tax revenue. FACTORS AFFECTING MINNESOTA The governor's 1994-1995 biennium budget is based on conservative economic forecasts and a restraint on spending. The governor's supplemental budget carried a recommendation to bring the state's -40- budget reserve to $680 million by June 1995. The recommendation is founded on a forecast of slower economic growth in the next biennium. Economic weakness has tested Minnesota's historically strong financial management. The rainy day fund established in the mid- 1980's totaled $550 million as of fiscal 1990. To address budget gaps in 1991 and the 1992-1993 biennium, the reserve was drawn down to $240 million as of June, 1992. The state operates on a cash basis in its accounting general fund and ended fiscal year 1991 with a $555 million fund balance, including the budgetary reserve and $42 million reserved for appropriations carried forward to fiscal 1992. Because most Minnesota tax-exempt bonds are revenue or general obligations of local governments or authorities, rather than general obligations of the state of Minnesota itself, ratings on Minnesota tax-exempt bonds in the Trust's portfolio may be different from the ratings given to the general obligation bonds of the state. The unemployment rate, growth rates and income trends in Minnesota compare favorably with national averages, but the economy is cyclically sensitive. Minnesota's employment and population are forecasted to continue to grow at rates near the national average. Total employment in the state is expected to grow at an average annual rate of 1.3% a year through 2005, slightly below the projected national growth rate of 1.5% annually. During the recessionary period from 1980 to 1983, economic conditions in the agricultural and iron mining industries, which are two of the leading sectors of Minnesota's economy, were poor. However, mining is a less significant factor in the state economy than it once was while the manufacture of durable and non-durable goods is relatively more important to the economy. The state relies heavily on a progressive individual income tax for revenue, which results in a fiscal system unusually sensitive to economic conditions. There can be no assurances, however, that Minnesota's economy and fiscal situation will continue to improve or that further difficulties will not occur. FACTORS AFFECTING NEW YORK The financial health of New York state showed more signs of improvement. Over the past few years, the state's administration has: adopted accurate and conservative economic assumptions, balanced operations, eliminated its operating deficit and closed the past two years with an operating surplus. The 1994-1995 budget may continue the trend. The state used the past two year's general fund operating surpluses to eliminate leftover deficit notes cover tax refunds. As of March 1994 New York's general obligation debt carried an agency rating of A-. The state has historically been one of the wealthiest in the nation. For decades, however, the state economy has grown more slowly than that of the nation as a whole, resulting in a gradual -41- erosion of its relative economic affluence. The causes of this decline are varied and complex, in many cases involving national and international developments beyond the state's control. Part of the reason for the long-term relative decline in the state economy has been attributed to the combined state and local tax burden, which is among the highest in the nation. The existence of this tax burden limits the state's ability to impose higher taxes in the event of future financial difficulties. The financial condition of the state may be affected by various financial, social, economic and political factors. Those factors can be very complex, may vary from fiscal year to fiscal year, and are frequently the result of actions taken not only by the state and its authorities and municipalities but also entities that are not under control by the state. The fiscal stability of the state is related to the fiscal stability of New York City and the authorities (which generally finance, construct and operate revenue-producing public benefit facilities). The state's experience has been that if New York City or any of the authorities suffer serious financial difficulties, the ability of the state, New York City, the state's political subdivisions and the authorities to obtain financing in the public credit markets is adversely affected. This results in part from the expectation that to the extent that any authority or local government experiences financial difficulty, it will seek and receive state financial assistance. Moreover, New York City accounts for approximately 40% of the state's population and tax receipts, so New York City's financial integrity affects the state directly. Accordingly, if there should be a default by New York City or any of the authorities, the market value and marketability of all New York tax-exempt securities could be adversely affected. Since the enactment of the Federal Tax Reform Act of 1986, the state has found it difficult to accurately estimate tax receipts. In the 1988-89 fiscal year, the state overestimated tax receipts of $1.9 billion. After implementing various deficit-reduction measures, the state completed its 1988-89 fiscal year with a cash- basis operating deficit of $529 million. The state faced a potential budget gap for the 1989-90 fiscal year of approximately $2.8 billion, but took measures to close that gap through a combination of tax and fee increases and spending cuts, including a reduction of financial aid to localities. New York state adopted a balanced 1992-1993 budget based on realistic economic assumptions. Quick adoption of the budget also afforded administrators more time to implement their plan and be proactive instead of reactive to economic changes. The budget maintained essential revenue-raising features including a deferral of any cut in state's personal income tax rate, increases in energy taxes and deferral of a scheduled reduction in business taxes. Past fiscal problems have left the state's economy in a weak position. Issues that affect the state's budget are: freezing personal and business tax rates, escalating social service costs, and costs associated with civil service employee collective bargaining. -42- While principal and interest payments on outstanding authority obligations are normally paid from revenues generated by the projects of the authorities, in recent years New York has had to appropriate large amounts to enable certain authorities to meet their financial obligations and in some cases to prevent default. Further assistance may be required in the future. In particular, the New York State Urban Development Corporation (UDC), the New York State Housing Finance Agency (HFA), and the Metropolitan Transportation Authority (MTA) may require substantial amounts of assistance from the state. The HFA provides financing for multifamily housing, state university construction, hospital and nursing home development and other programs. HFA depends upon mortgagors in each of its programs to generate sufficient funds from rental income, subsidies and other payments to meet their respective mortgage repayment obligations to HFA as well as to meet the operating and maintenance costs of the project. On several occasions in the past, in fulfillment of its moral obligation commitment, New York appropriated funds on behalf of HFA to replenish its debt service reserve funds. There can be no assurance that the state will not be called upon to provide further assistance in the future. Any litigation decided against HFA also may have an adverse effect on the financial condition of HFA mortgages. The MTA oversees the operations of the city's bus and subway system by the New York City Transit Authority and the Manhattan and Bronx Surface Operating Authority (collectively, the TA) and, through subsidiaries, operates certain commuter rail lines. The MTA has depended and will continue to depend upon federal, state and local government support to operate the transit system because fare revenues are insufficient. The TA and New York City had damage claims filed against it from deaths and injuries sustained during a Dec. 1990 subway fire and an Aug. 1991 train derailment. Law suits could have an adverse financial impact on TA. Beginning in 1975 (in part as a result of the New York City and UDC financial crises), various localities of New York began experiencing difficulty in marketing their securities. As a result, certain localities, in addition to New York City, have experienced financial problems leading to requests for state assistance. If future financial problems cause agencies or localities to seek special state assistance, this could adversely affect New York's ability to pay its obligations. Similarly, if financial difficulties of the state result in the inability to meet its regular aid commitments or to provide further emergency financing, issuers may default on their outstanding obligations, which would affect the marketability of debt obligations of the state, its agencies and municipalities, such as the New York tax- exempt bonds in the Fund's portfolio. Reductions in federal spending could materially and adversely affect the financial condition and budget projections of New York's localities. Should localities be adversely affected by federal -43- cutbacks, they may seek additional assistance from the state that might, in turn, have an adverse impact on New York's ability to maintain a balanced budget. The Long Island Lighting Company (LILCO) is the investor-owned utility which supplies gas service and substantially all electric service in Nassau and Suffolk Counties and a small portion of Queens County and New York City. In early 1984, LILCO reported that it faced serious cash-flow and other financial difficulties that were attributable to, among other things, construction problems on its 809-megawatt Shoreham Nuclear Power Facility. LILCO is the largest single real property taxpayer in both Suffolk and Nassau Counties and if its financial problems continue, there could be severe financial difficulties for the affected localities, particularly in Suffolk County. State legislation was enacted in 1986 creating the Long Island Power Authority (LIPA), a public benefit corporation that has the power to acquire LILCO if it determines that to do so would result in lower electric rates for LILCO customers. The legislation requires that, with certain exceptions, if LILCO property is acquired by LIPA and is therefore removed from the tax rolls, LIPA is to make payments in lieu of most state and local taxes that would otherwise have been paid by LILCO. LIPA made and subsequently amended an offer to the Board of Directors of LILCO for a negotiated acquisition of LILCO by LIPA. The New York State comptroller recently reached a preliminary conclusion that the issuance of tax-exempt bonds by LIPA to acquire LILCO may create a temporary oversupply in the market for new and outstanding issues of New York tax-exempt bonds. In February 1989, the Governor and LILCO reached an agreement pursuant to which LILCO would sell Shorham to the New York Power Authority for $1 (which would then decommission Shoreham) in return for a schedule of rate increases which have since been approved by the State Public Service Commission (the PSC). The agreement has been approved by the New York Power Authority and LIPA. The agreement and PSC rate increases have enabled LILCO to reenter the public credit markets. It is difficult to predict the ultimate fiscal and economic impact on the state or on local governments on Long Island of any litigation to which LILCO is or may become a party, or of any bankruptcy by or takeover of LILCO. NEW YORK CITY AND MUNICIPAL ASSISTANCE CORPORATION. In 1975, New York City encountered severe financial difficulties that impaired the borrowing ability of the city, the state and the authorities. As a result, New York City lost access to public credit markets and was not able to sell debt to the public until 1979. MAC was organized in 1975 to provide financing assistance for New York City and to exercise certain oversight and review functions with respect to the city's financing. Prior to 1985, MAC had the authority to issue bonds and notes and to pay or lend the proceeds to the city. Since 1985, MAC has been authorized to issue bonds and notes only to refund its outstanding bonds and notes. MAC also has the authority to exchange its obligations for New York City obligations. MAC bonds are payable from appropriations of certain state sales and use taxes imposed by New York City, the state stock transfer tax and per capita state aid to New York City. The state is not, however, obligated to continue these taxes, to continue to appropriate revenue from these taxes or to continue the -44- appropriation of per capita state aid to pay MAC obligations. MAC does not have taxing powers and its bonds are not obligations enforceable against either New York City or New York. New York City has maintained a balanced budget for several fiscal years and has retired all of its federally guaranteed debt. As a result, certain restrictions imposed on New York City by the New York State Financial Control Board (the Control Board), which was created in response to New York City's 1975 fiscal crisis, have been suspended. Those restrictions, including the Control Board's power to approve or disapprove certain contracts, long-term and short-term borrowings and the four-year financial plan of the City, will remain suspended unless and until, among other things, there is a substantial threat of or an actual failure by the City to pay debt service on its notes and bonds or to keep its annual operating deficits below $100 million. The City's four-year financial plan for fiscal years 1989 through 1992 was submitted to the Control Board on July 5, 1988, and had been subsequently modified by the City. As modified it projects a balanced budget for the 1989 fiscal year, and budget gaps of $661 million, $945 million and $818 million for the 1990, 1991, and 1992 fiscal years, respectively, before implementation of gap closing programs. The ability of New York City to balance its future budgets as provided in its financial plans depend on various actions the City expects will be taken but are not within its control. If expected federal and state aid is not forthcoming, if economic conditions significantly further reduce revenue derived from economically sensitive taxes or increase expenditure for public assistance, or if other uncertainties materialize which reduce expected revenues or increase projected expenditures, then, to avoid operating deficits, it is likely that New York City would make demands upon the state for substantial additional financial assistance. LITIGATION. Certain litigation pending against the state, its subdivisions and their officers and employees could have a substantial and long-term adverse effect on state finances. In addition, New York City is a defendant in a significant number of lawsuits pertaining to material matters, including those claims asserted that are incidental to performing routine governmental and other functions. FACTORS AFFECTING OHIO Ohio's general obligation bonds had AA ratings as of February 1994. Ohio's financial operations continue to demonstrate significant improvements in recent years. Increased employment opportunities led by services and trade sectors has helped diversify the state's economy and give greater stability through the current recession. As with other states, Ohio has experienced economic weakness in some revenue areas. This and other factors, led to budget short- falls in 1991-1992. However, these short-falls were effectively managed through a draw-down on the state's budget stabilization fund and an executive order to reduce state spending by $196 million. -45- In the early 1980s, Ohio's financial operations continued a trend of vulnerability to economic cycles. Spending reductions coupled with tax increases were implemented as a method of maintaining control during recessionary periods. Ohio may face similar scenarios in future years. However, the effects of economic cycles should be less severe because the state's economic base is more diversified than it has been in the two previous decades. Constitutional and statutory provisions require the state to close each fiscal year with a positive general fund balance, in conjunction with Ohio's advantageous current budgetary practice should help future financial performance. Ohio benefits from a diversified revenue structure and a relatively low tax burden. The state carries out most of its operations through the general revenue fund which receives general state revenues not otherwise dedicated. General fund revenues are derived mainly from personal income, sales, corporate and franchise taxes. General fund operations historically have paralleled economic trends, as evidenced by the performance in recent recessionary periods. While diversifying more into the service area, Ohio's economy continues to rely in part on durable-goods and manufacturing. This reliance is largely concentrated in motor vehicles and equipment, steel, rubber products and household appliances. As a result, economic activity in Ohio, as in many other industrially developed states, tends to be more cyclical than in some other states and in the nation as a whole. However, the manufacturing industry is stronger after downsizing and restructuring in the 1980's and has performed reasonably well through the current recession. The state's export activity also has been stabilizing during the current recession. Agriculture also is an important segment of the economy. The state has instituted several programs to provide financial assistance to farmers. A number of local Ohio communities and school districts have faced significant financial problems. The state has established procedures for municipal fiscal emergencies, under which joint state and local commissions are established to monitor the fiscal affairs of a financially troubled municipality the municipality must develop a financial plan to eliminate deficits and cure any defaults. Since their adoption in 1979, these procedures have been applied to approximately twenty cities and villages, including the City of Cleveland; in a majority of these communities, the fiscal situation has been resolved and the procedures terminated. Local school districts in Ohio receive a major portion of their operational funds from state subsidies, but are dependent upon local taxes for significant portions of their budgets. Local school districts are authorized to submit for voter approval an income tax on the district income of individuals and estates. A small number of local school districts have required emergency advances from the state in order to prevent year-end deficits. The number of districts applying for aid has fluctuated over the years. Legislation (with enhanced provision for individual district borrowing) has replaced the emergency advance loan program. Ohio's current economic recovery reflects both a turnaround in the manufacturing sector and economic restructuring that has shifted -46- employment from manufacturing to the wholesale and retail trade and services sectors. Manufacturing employment in 1990 accounted for 22.7% of total employment, down from 28.9% in 1980. Despite its decreasing prominence, manufacturing remains Ohio's major employment and earnings sector. Services and trade follow closely as second and third largest employment sectors. Since 1980, Ohio has experienced an unemployment rate generally higher than the United States average. Income levels are slightly below the national average, but show a stable to positive trend. -47- APPENDIX D DOLLAR-COST AVERAGING A technique that works well for many investors is one that eliminates random buy and sell decisions. One such system is dollar-cost averaging. Dollar-cost averaging involves building a portfolio through the investment of fixed amounts of money on a regular basis regardless of the price or market condition. This may enable an investor to smooth out the effects of the volatility of the financial markets. By using this strategy, more shares will be purchased when the price is low and less when the price is high. As the accompanying chart illustrates, dollar-cost averaging tends to keep the average price paid for the shares lower than the average market price of shares purchased, although there is no guarantee. While this does not ensure a profit and does not protect against a loss if the market declines, it is an effective way for many shareholders who can continue investing through changing market conditions to accumulate shares in a fund to meet long term goals. DOLLAR-COST AVERAGING
- ------------------------------------------------------------------- REGULAR MARKET PRICE SHARES INVESTMENT OF A SHARE ACQUIRED $100 $ 6.00 16.7 100 4.00 25.0 100 4.00 25.0 100 6.00 16.7 100 5.00 20.0 $500 $25.00 103.4
AVERAGE MARKET PRICE OF A SHARE OVER 5 PERIODS: $5.00 ($25.00 DIVIDED BY 5). THE AVERAGE PRICE YOU PAID FOR EACH SHARE: $4.84 ($500 DIVIDED BY 103.4). -48- ___________________________________________________________________ Independent auditors' report The board of trustees and shareholders IDS California Tax-Exempt Trust IDS Special Tax-Exempt Series Trust: We have audited the accompanying statements of assets and liabilities, including the schedules of investments in securities, of IDS California Tax-Exempt Fund (a fund within IDS California Tax-Exempt Trust), and IDS Massachusetts Tax-Exempt Fund, IDS Michigan Tax-Exempt Fund, IDS Minnesota Tax-Exempt Fund, IDS New York Tax-Exempt Fund and IDS Ohio Tax-Exempt Fund (funds within IDS Special Tax-Exempt Series Trust) as of June 30, 1994, and the related statements 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 June 30, 1994, the financial highlights for each of the years in the five-year period ended June 30, 1994, the six months ended June 30, 1989, each of the years in the two-year period ended December 31, 1988, and the period from August 18, 1986 (commencement of operations), to December 31, 1986, of IDS California Tax-Exempt Fund, IDS Minnesota Tax-Exempt Fund and IDS New York Tax-Exempt Fund; and the financial highlights for each of the years in the seven-year period ended June 30, 1994, of IDS Massachusetts Tax-Exempt Fund, IDS Michigan Tax-Exempt Fund and IDS Ohio Tax-Exempt Fund. 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 generally accepted auditing standards. 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. Investment securities held in custody are confirmed to us by the custodian. As to securities purchased and sold but not received or delivered, we request confirmations from brokers, and where replies are not received, we carry out 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 referred to above present fairly, in all material respects, the financial position of IDS California Tax-Exempt Fund, IDS Massachusetts Tax-Exempt Fund, IDS Michigan Tax-Exempt Fund, IDS Minnesota Tax-Exempt Fund, IDS New York Tax-Exempt Fund and IDS Ohio Tax-Exempt Fund at June 30, 1994, and the results of their operations for the year then ended, the changes in their net assets for each of the years in the two-year period ended June 30, 1994, and the financial highlights for the periods stated in the first paragraph above, in conformity with generally accepted accounting principles. /s/ KPMG Peat Marwick LLP KPMG Peat Marwick LLP Minneapolis, Minnesota August 5, 1994
Financial statements Statements of assets and liabilities IDS California Tax-Exempt Trust IDS Special Tax-Exempt Series Trust June 30, 1994 _____________________________________________________________________________________________________________________________ Assets _____________________________________________________________________________________________________________________________ California Massachusetts Michigan Tax-Exempt Tax-Exempt Tax-Exempt Fund Fund Fund _____________________________________________________________________________________________________________________________ Investments in securities, at value (Note 1) (identified cost $238,921,908, $68,569,018 and $72,083,775) $250,756,406 $ 70,150,034 $75,396,329 Cash in bank on demand deposit 16,912 348,034 418,827 Accrued interest receivable 4,989,483 1,649,762 1,334,666 Receivable for investment securities sold -- -- 2,221,242 _____________________________________________________________________________________________________________________________ Total assets 255,762,801 72,147,830 79,371,064 _____________________________________________________________________________________________________________________________ Liabilities _____________________________________________________________________________________________________________________________ Dividends payable to shareholders 129,639 35,115 36,782 Payable for investment securities purchased 262,500 -- 2,593,349 Accrued investment management and services fee 112,274 31,505 33,498 Accrued distribution fee 3,421 1,602 1,409 Accrued transfer agency fee 8,708 4,107 3,617 Other accrued expenses 49,503 26,919 19,595 _____________________________________________________________________________________________________________________________ Total liabilities 566,045 99,248 2,688,250 _____________________________________________________________________________________________________________________________ Net assets applicable to outstanding shares $255,196,756 $ 72,048,582 $76,682,814 _____________________________________________________________________________________________________________________________ Represented by _____________________________________________________________________________________________________________________________ Shares of beneficial interest - $.01 par value, unlimited number of shares authorized; outstanding 49,714,953; 13,749,968 and 14,320,277 shares $ 497,150 $ 137,500 $ 143,203 Additional paid-in capital 246,797,727 70,634,128 73,515,716 Undistributed net investment income 35 -- -- Accumulated net realized loss (Notes 1 and 6) (3,252,279) (304,062) (288,659) Unrealized appreciation (Note 5) 11,154,123 1,581,016 3,312,554 _____________________________________________________________________________________________________________________________ Total -- representing net assets applicable to outstanding shares $255,196,756 $ 72,048,582 $76,682,814 _____________________________________________________________________________________________________________________________ Net asset value per share $ 5.13 $ 5.24 $ 5.35 _____________________________________________________________________________________________________________________________ See accompanying notes to financial statements. Financial statements Statements of assets and liabilities IDS California Tax-Exempt Trust IDS Special Tax-Exempt Series Trust June 30, 1994 _____________________________________________________________________________________________________________________________ Assets _____________________________________________________________________________________________________________________________ Minnesota New York Ohio Tax-Exempt Tax-Exempt Tax-Exempt Fund Fund Fund _____________________________________________________________________________________________________________________________ Investments in securities, at value (Note 1) (identified cost $392,601,640, $112,351,032 and $68,841,082) $400,662,645 $117,798,265 $70,538,749 Cash in bank on demand deposit 4,885,147 77,025 346,514 Accrued interest receivable 9,254,717 2,549,320 1,044,978 Receivable for investment securities sold 345,000 -- -- _____________________________________________________________________________________________________________________________ Total assets 415,147,509 120,424,610 71,930,241 _____________________________________________________________________________________________________________________________ Liabilities _____________________________________________________________________________________________________________________________ Dividends payable to shareholders 202,557 58,755 34,189 Payable for investment securities purchased 6,241,965 118,125 -- Accrued investment management and services fee 178,143 52,348 31,452 Accrued distribution fee 8,090 2,437 1,358 Accrued transfer agency fee 20,766 6,247 3,486 Other accrued expenses 105,357 28,066 24,821 _____________________________________________________________________________________________________________________________ Total liabilities 6,756,878 265,978 95,306 _____________________________________________________________________________________________________________________________ Net assets applicable to outstanding shares $408,390,631 $120,158,632 $71,834,935 _____________________________________________________________________________________________________________________________ Represented by _____________________________________________________________________________________________________________________________ Shares of beneficial interest - $.01 par value, unlimited shares authorized; outstanding 79,123,225; 23,481,717 and 13,661,035 shares $ 791,232 $ 234,817 $ 136,610 Additional paid-in capital 402,653,683 115,982,775 70,304,997 Accumulated net realized loss (Notes 1 and 6) (2,179,071) (1,200,068) (304,339) Unrealized appreciation (Note 5) 7,124,787 5,141,108 1,697,667 _____________________________________________________________________________________________________________________________ Total -- representing net assets applicable to outstanding shares $408,390,631 $120,158,632 $71,834,935 _____________________________________________________________________________________________________________________________ Net asset value per share $ 5.16 $ 5.12 $ 5.26 _____________________________________________________________________________________________________________________________ See accompanying notes to financial statements. Financial statements Statements of operations IDS California Tax-Exempt Trust IDS Special Tax-Exempt Series Trust Year ended ended June 30, 1994 _____________________________________________________________________________________________________________________________ Investment income _____________________________________________________________________________________________________________________________ California Massachusetts Michigan Tax-Exempt Tax-Exempt Tax-Exempt Fund Fund Fund _____________________________________________________________________________________________________________________________ Income: Interest $16,884,415 $ 4,357,924 $ 4,674,907 _____________________________________________________________________________________________________________________________ Expenses (Note 2): Investment management and services fee 1,418,804 377,077 405,578 Distribution fee 41,568 18,719 16,271 Transfer agency fee 104,864 47,474 41,235 Compensation of trustees 6,710 3,547 5,804 Compensation of officers 1,973 741 623 Custodian fees 2 9 386 Postage 20,647 8,610 4,518 Registration fees 11,274 9,517 6,879 Reports to shareholders 15,146 2,574 1,033 Audit fees 14,750 13,000 13,000 Administrative 4,697 3,239 2,958 Other 7,346 11,391 5,165 _____________________________________________________________________________________________________________________________ Total expenses 1,647,781 495,898 503,450 _____________________________________________________________________________________________________________________________ Investment income -- net 15,236,634 3,862,026 4,171,457 _____________________________________________________________________________________________________________________________ Realized and unrealized loss -- net _____________________________________________________________________________________________________________________________ Net realized loss on security transactions (Note 3) (959,173) (29,934) (72,444) Net realized loss on closed interest rate futures contracts (1,416,331) -- -- _____________________________________________________________________________________________________________________________ Net realized loss on investments (2,375,504) (29,934) (72,444) Net change in unrealized appreciation or depreciation (11,906,345) (3,499,662) (3,496,616) _____________________________________________________________________________________________________________________________ Net loss on investments (14,281,849) (3,529,596) (3,569,060) _____________________________________________________________________________________________________________________________ Net increase in net assets resulting from operations $ 954,785 $ 332,430 $ 602,397 _____________________________________________________________________________________________________________________________ See accompanying notes to financial statements. Financial statements Statements of operations IDS California Tax-Exempt Trust IDS Special Tax-Exempt Series Trust Year ended June 30, 1994 _____________________________________________________________________________________________________________________________ Investment income _____________________________________________________________________________________________________________________________ Minnesota New York Ohio Tax-Exempt Tax-Exempt Tax-Exempt Fund Fund Fund _____________________________________________________________________________________________________________________________ Income: Interest $ 27,008,972 $ 7,698,991 $ 4,405,508 _____________________________________________________________________________________________________________________________ Expenses (Note 2): Investment management and services fee 2,227,969 648,514 381,106 Distribution fee 97,718 29,229 15,702 Transfer agency fee 248,181 74,277 40,107 Compensation of trustees 8,690 6,381 6,160 Compensation of officers 5,021 881 742 Custodian fees 50 -- -- Postage 45,706 11,886 6,640 Registration fees 108,888 8,623 8,797 Reports to shareholders 24,711 5,591 2,389 Audit fees 15,500 14,250 13,000 Administrative 5,280 2,454 1,406 Other 15,726 1,563 1,613 _____________________________________________________________________________________________________________________________ Total expenses 2,803,440 803,649 477,662 _____________________________________________________________________________________________________________________________ Investment income -- net 24,205,532 6,895,342 3,927,846 _____________________________________________________________________________________________________________________________ Realized and unrealized gain (loss) -- net _____________________________________________________________________________________________________________________________ Net realized gain (loss) on security transactions (Note 3) 1,590,129 134,546 (177,991) Net realized loss on closed interest rate futures contracts (1,941,413) (639,604) -- ______________________________________________________________________________________________________________________________ Net realized loss on investments (351,284) (505,058) (177,991) Net change in unrealized appreciation or depreciation (22,689,828) (6,437,361) (4,272,974) _____________________________________________________________________________________________________________________________ Net loss on investments (23,041,112) (6,942,419) (4,450,965) _____________________________________________________________________________________________________________________________ Net increase (decrease) in net assets resulting from operations $ 1,164,420 $ (47,077) $ (523,119) _____________________________________________________________________________________________________________________________ See accompanying notes to financial statements.
Financial statements Statements of changes in net assets IDS California Tax-Exempt Trust IDS Special Tax-Exempt Series Trust Year ended June 30, _____________________________________________________________________________________________________________________________ Operations and distributions 1994 1993 1994 1993 _____________________________________________________________________________________________________________________________ California Tax-Exempt Fund Massachusetts Tax-Exempt Fund _____________________________________________________________________________________________________________________________ Investment income -- net $ 15,236,634 $ 13,860,607 $ 3,862,026 $ 2,982,897 Net realized gain (loss) on investments (2,375,504) 170,092 (29,934) (479) Net change in unrealized appreciation or (11,906,345) 10,595,516 (3,499,662) 2,842,517 depreciation _____________________________________________________________________________________________________________________________ Net increase in net assets resulting from operations 954,785 24,626,215 332,430 5,824,935 _____________________________________________________________________________________________________________________________ Distributions to shareholders from: Net investment income (15,235,348) (13,861,943) (3,862,035) (2,982,956) _____________________________________________________________________________________________________________________________ Share transactions (Note 4) _____________________________________________________________________________________________________________________________ Proceeds from sales (Note 2) 35,683,408 43,318,047 22,403,265 22,543,737 Reinvestment of distributions 10,573,864 9,387,295 3,055,527 2,340,831 Payments for redemptions (37,967,003) (24,496,269) (14,032,861) (7,383,168) _____________________________________________________________________________________________________________________________ Increase in net assets from share transactions 8,290,269 28,209,073 11,425,931 17,501,400 _____________________________________________________________________________________________________________________________ Total increase (decrease) in net assets (5,990,294) 38,973,345 7,896,326 20,343,379 Net assets at beginning of year 261,187,050 222,213,705 64,152,256 43,808,877 _____________________________________________________________________________________________________________________________ Net assets at end of year (including undistributed net investment income for IDS California of $35 for 1994 and IDS Massachusetts of $9 for 1993) $255,196,756 $261,187,050 $ 72,048,582 $ 64,152,256 _____________________________________________________________________________________________________________________________ See accompanying notes to financial statements. Financial statements Statements of changes in net assets IDS California Tax-Exempt Trust IDS Special Tax-Exempt Series Year ended June 30, _____________________________________________________________________________________________________________________________ Operations and distributions 1994 1993 1994 1993 _____________________________________________________________________________________________________________________________ Michigan Tax-Exempt Fund Minnesota Tax-Exempt Fund _____________________________________________________________________________________________________________________________ Investment income -- net $ 4,171,457 $ 3,490,946 $ 24,205,532 $ 20,972,865 Net realized gain (loss) on investments (72,444) 25,065 (351,284) 114,873 Net change in unrealized appreciation or (3,496,616) 3,377,911 (22,689,828) 14,751,768 depreciation _____________________________________________________________________________________________________________________________ Net increase in net assets resulting from operations 602,397 6,893,922 1,164,420 35,839,506 _____________________________________________________________________________________________________________________________ Distributions to shareholders from: Net investment income (4,171,489) (3,491,044) (24,204,281) (20,974,210) Net realized gain on investments (68,841) -- -- -- _____________________________________________________________________________________________________________________________ Total distributions (4,240,330) (3,491,044) (24,204,281) (20,974,210) _____________________________________________________________________________________________________________________________ Share transactions (Note 4) _____________________________________________________________________________________________________________________________ Proceeds from sales (Note 2) 15,113,866 17,163,359 81,250,235 96,570,778 Reinvestment of distributions 3,148,115 2,459,045 19,448,232 16,613,955 Payments for redemptions (9,715,456) (5,905,586) (70,952,363) (39,837,405) _____________________________________________________________________________________________________________________________ Increase in net assets from share transactions 8,546,525 13,716,818 29,746,104 73,347,328 ______________________________________________________________________________________________________________________________ Total increase in net assets 4,908,592 17,119,696 6,706,243 88,212,624 Net assets at beginning of year 71,774,222 54,654,526 401,684,388 313,471,764 _____________________________________________________________________________________________________________________________ Net assets at end of year (including undistributed net investment income for IDS Michigan of $32 for 1993) $ 76,682,814 $ 71,774,222 $408,390,631 $401,684,388 _____________________________________________________________________________________________________________________________ See accompanying notes to financial statements. Financial statements Statements of changes in net assets IDS California Tax-Exempt Trust IDS Special Tax-Exempt Series Trust Year ended June 30, _____________________________________________________________________________________________________________________________ Operations and distributions 1994 1993 1994 1993 _____________________________________________________________________________________________________________________________ New York Tax-Exempt Fund Ohio Tax-Exempt Fund _____________________________________________________________________________________________________________________________ Investment income -- net $ 6,895,342 $ 6,091,422 $ 3,927,846 $ 3,083,675 Net realized gain (loss) on investments (505,058) (4,095) (177,991) 38,778 Net change in unrealized appreciation or (6,437,361) 5,557,017 (4,272,974) 3,216,945 depreciation _____________________________________________________________________________________________________________________________ Net increase (decrease) in net assets resulting from operations (47,077) 11,644,344 (523,119) 6,339,398 _____________________________________________________________________________________________________________________________ Distributions to shareholders from: Net investment income (6,894,339) (6,092,439) (3,927,883) (3,083,897) Net realized gain on investments -- -- (786) (78,831) _____________________________________________________________________________________________________________________________ Total distributions (6,894,339) (6,092,439) (3,928,669) (3,162,728) _____________________________________________________________________________________________________________________________ Share transactions (Note 4) _____________________________________________________________________________________________________________________________ Proceeds from sales (Note 2) 21,355,340 22,014,933 17,974,999 18,759,240 Reinvestment of distributions 5,365,427 4,602,258 3,100,875 2,456,447 Payments for redemptions (16,789,123) (10,260,106) (9,646,507) (6,171,189) _____________________________________________________________________________________________________________________________ Increase in net assets from share transactions 9,931,644 16,357,085 11,429,367 15,044,498 _____________________________________________________________________________________________________________________________ Total increase in net assets 2,990,228 21,908,990 6,977,579 18,221,168 Net assets at beginning of year 117,168,404 95,259,414 64,857,356 46,636,188 _____________________________________________________________________________________________________________________________ Net assets at end of year (including undistributed net investment income for IDS Ohio of $37 for 1993) $120,158,632 $117,168,404 $ 71,834,935 $ 64,857,356 _____________________________________________________________________________________________________________________________ See accompanying notes to financial statements.
Notes to financial statements IDS California Tax-Exempt Trust IDS Special Tax-Exempt Series Trust ___________________________________________________________________ 1. Summary of significant accounting policies IDS California Tax-Exempt Trust and IDS Special Tax-Exempt Series Trust were organized as Massachusetts business trusts. IDS California Tax-Exempt Trust includes only IDS California Tax-Exempt Fund. IDS Special Tax-Exempt Series Trust is a "series fund" that is presently comprised of six individual funds, including IDS Massachusetts Tax-Exempt Fund, IDS Michigan Tax-Exempt Fund, IDS Minnesota Tax-Exempt Fund, IDS New York Tax-Exempt Fund and IDS Ohio Tax-Exempt Fund (the funds). The funds are non-diversified, open-end management investment companies as defined in the Investment Company Act of 1940 (as amended). The funds concentrate their investments in a single state and therefore may have more credit risk related to the economic conditions of the respective state than funds that have a broader geographical diversification. Significant accounting policies followed by the funds are summarized below: Valuation of securities All securities are valued at the close of each business day. Securities for which market quotations are not readily available are valued at fair value according to methods selected in good faith by the board of trustees. Determination of fair value involves, among other things, reference to market indexes, matrixes and data from independent brokers. Short-term securities maturing in more than 60 days from the valuation date are valued at the market price or approximate market value based on current interest rates; those maturing in 60 days or less are valued at amortized cost. Futures transactions In order to gain exposure to or protect itself from changes in the market, each fund may buy and sell interest rate futures contracts. Risks of entering into futures contracts and related options include the possibility that there may be 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, each fund is 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 each fund each day. The variation margin payments are equal to the daily changes in the contract value and are recorded as unrealized gains and losses. Each fund recognizes a realized gain or loss when the contract is closed or expires. Notes to financial statements IDS California Tax-Exempt Trust IDS Special Tax-Exempt Series Trust ___________________________________________________________________ 1. Summary of significant accounting policies (continued) Federal taxes Since each fund's policy is to comply with all sections of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to shareholders, no provision for income or excise taxes is required. Net investment income (loss) and net realized gains (losses) may differ for financial statement and tax purposes primarily because of the deferral of losses on certain futures contracts, the recognition of certain foreign currency gains (losses) as ordinary income (loss) for tax purposes, 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. 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. Dividends to shareholders Dividends from net investment income, declared daily and paid monthly, are reinvested in additional shares of each fund at net asset value or payable in cash. Capital gains, when available, are distributed along with the last income dividend at the end of the calendar year. Other Security transactions are accounted for on the date securities are purchased or sold. Interest income, including level-yield amortization of premium and discount, is accrued daily. ___________________________________________________________________ 2. Expenses and sales charges Under terms of an agreement dated Nov. 14, 1991, each fund pays IDS Financial Corporation (IDS) a fee for managing its investments, recordkeeping and other specified services. The fee is a percentage of each fund's average daily net assets consisting of a group asset charge in reducing percentages from 0.46% to 0.32% annually on the combined net assets of all non-money market funds in the IDS MUTUAL FUND GROUP and an individual annual asset charge of 0.13% of average daily net assets for each fund. Each fund also pays IDS a distribution fee at an annual rate of $6 per shareholder account and a transfer agency fee at an annual rate of $15.50 per shareholder account. The transfer agency fee is reduced by earnings on monies pending shareholder redemptions. Notes to financial statements IDS California Tax-Exempt Trust IDS Special Tax-Exempt Series Trust ___________________________________________________________________ 2. Expenses and sales charges (continued) IDS will assume and pay any expenses (except taxes and brokerage commissions) that exceed the most restrictive applicable state expense limitation. Sales charges by IDS Financial Services Inc. for distributing the funds' shares were $1,177,341 for IDS California, $867,225 for IDS Massachusetts, $560,739 for IDS Michigan, $2,458,058 for IDS Minnesota, $728,241 for IDS New York and $593,137 for IDS Ohio Tax-Exempt Funds for the year ended June 30, 1994. Each fund also has a retirement plan for its independent trustees. Upon retirement, trustees receive monthly payments equal to one-half of the retainer fee for as many months as they served as trustees up to 120 months. There are no death benefits. The plan is not funded but each fund recognizes the cost of payments during the time the trustees serve on the board. The retirement plan expense amounted to $2,243 for IDS California, $1,640 for IDS Massachusetts, $3,928 for IDS Minnesota, $1,800 each for IDS Michigan, IDS New York and IDS Ohio Tax-Exempt Funds for the year ended June 30, 1994. ___________________________________________________________________ 3. Securities transactions For the year ended June 30, 1994, cost of purchases and proceeds from sales (other than short-term obligations) aggregated $82,551,185 and $71,318,373 for IDS California, $16,693,428 and $4,406,310 for IDS Massachusetts, $20,950,381 and $11,646,528 for IDS Michigan, $85,238,653 and $55,076,357 for IDS Minnesota, $22,253,738 and $11,722,684 for IDS New York and $19,654,275 and $7,444,006 for IDS Ohio Tax-Exempt Funds. Realized gains and losses are determined on an identified cost basis. Notes to financial statements IDS California Tax-Exempt Trust IDS Special Tax-Exempt Series Trust ___________________________________________________________________ 4. Share transactions Transactions in shares of each fund for the years indicated are as follows: Number of shares:
________________________________________________________________________________________________________________________ California Tax-Exempt Fund Massachusetts Tax-Exempt Fund Michigan Tax-Exempt Fund _____________________________ ______________________________ ______________________________ Year ended June 30, Year ended June 30, Year ended June 30, 1994 1993 1994 1993 1994 1993 ________________________________________________________________________________________________________________________ Sold 6,578,766 8,197,569 4,061,994 4,217,029 2,687,659 3,154,702 Issued for reinvested distributions 1,962,600 1,777,866 558,167 438,573 562,683 451,734 Redeemed (7,091,287) (4,641,462) (2,564,761) (1,380,830) (1,739,752) (1,088,585) ________________________________________________________________________________________________________________________ Net increase 1,450,079 5,333,973 2,055,400 3,274,772 1,510,590 2,517,851 ________________________________________________________________________________________________________________________ Number of shares: ________________________________________________________________________________________________________________________ Minnesota Tax-Exempt Fund New-York Tax-Exempt Fund Ohio Tax-Exempt Fund _____________________________ ______________________________ ______________________________ Year ended June 30, Year ended June 30, Year ended June 30, 1994 1993 1994 1993 1994 1993 ________________________________________________________________________________________________________________________ Sold 14,961,095 18,162,534 3,952,327 4,171,087 3,231,719 3,465,518 Issued for reinvested distributions 3,599,781 3,126,057 999,332 872,831 562,446 454,076 Redeemed (13,233,479) (7,491,955) (3,127,657) (1,944,622) (1,753,354) (1,139,720) ________________________________________________________________________________________________________________________ Net increase 5,327,397 13,796,636 1,824,002 3,099,296 2,040,811 2,779,874 ________________________________________________________________________________________________________________________
___________________________________________________________________ 5. Interest rate futures contracts Investments in securities at June 30, 1994, included securities valued at $1,067,400 for IDS California, $1,011,840 for IDS Minnesota and $958,820 for IDS New York Tax-Exempt Funds that were pledged as collateral to cover initial margin deposits on 200, 275 and 90 purchase contracts, respectively. The market value of the open contracts at June 30, 1994, was $20,243,750 for IDS California, $27,835,156 for IDS Minnesota and $9,109,688 for IDS New York Tax-Exempt Funds with a net unrealized loss of $680,375 for IDS California, $936,218 for IDS Minnesota and $306,125 for IDS New York Tax-Exempt Funds. Notes to financial statements IDS California Tax-Exempt Trust IDS Special Tax-Exempt Series Trust ___________________________________________________________________ 6. Capital loss carryover For federal income tax purposes, capital loss carryovers were $3,420,653 for IDS California, $199,063 for IDS Massachusetts, $2,753,600 for IDS Minnesota, $1,267,843 for IDS New York and $185,465 for IDS Ohio Tax-Exempt Funds at June 30, 1994. These capital loss carryovers will expire in 1996 through 2002 if not offset by subsequent capital gains. ___________________________________________________________________ 7. Financial highlights "Financial highlights" showing per share data and selected information are presented on pages 5-10 of the prospectus.
Investments in securities IDS California Tax-Exempt Fund (Percentage represents value of June 30, 1994 investments compared to net assets) _____________________________________________________________________________________________________________________________ Municipal bonds (98.3%) _____________________________________________________________________________________________________________________________ Name of issuer and Coupon Maturity Principal Value(a) title of issue (b,c,f) rate amount _____________________________________________________________________________________________________________________________ Adelanto Improvement Agency Tax Allocation Refunding Bonds Series B (FGIC Insured) 5.50% 2023 $3,000,000 $ 2,647,650 Aliso Viejo Orange County District Community Facilities District #88-1 Special Tax Bonds Series 1992A 7.35 2018 3,000,000 3,451,590 Burbank Redevelopment Agency Tax Allocation Bonds Golden State Series 1992A 6.00 2013 1,500,000 1,414,665 Chapman College Educational Facilities Authority Revenue Bonds Series 1989B 7.50 2018 500,000 518,400 Chico Walker Senior Housing Insured Revenue Bonds The Lodge Series 1993A 5.70 2023 1,500,000 1,284,585 Clearlake Redevelopment Agency Highlands Park Community Development Tax Allocation Bonds Series 1993 6.40 2023 1,420,000 1,293,947 Eastern Municipal Water District Riverside County Water & Sewer Revenue Certificates of Participation Series 1991 6.00 2023 1,000,000 914,510 Eastern Municipal Water District Riverside County Water & Sewer Pre-Refunded Revenue Certificates of Participation Series 1991 (FGIC Insured) 6.50 2020 3,000,000 3,277,650 Eden Township Hospital District Insured Health Facility Refunding Revenue Certificate of Participation Series 1993 (California Mortgage Insured) 5.75 2012 3,000,000 2,707,380 El Camino Hospital District Hospital Pre-Refunded Revenue Certificate of Participation Series A 8.50 2017 1,500,000 1,691,895 Fontana Redevelopment Agency Refunding Certificate of Participation Police Facility Series 1993 5.625 2016 1,750,000 1,541,400 Foothill-De Anza Community College Santa Clara County Refunding Certificate of Participation Series 1993 (Connie Lee Insured) 5.25 2021 1,675,000 1,403,801 Gilroy Las Animas Technology Park Refunding Bonds District #2 Series 1988-1 8.40 2006-07 500,000 518,611 Indian Wells Improvement Bonds Assessment District #13 7.50 2008 430,000 442,431 Lancaster Redevelopment Agency Tax Allocation Bonds (MBIA Insured) 5.80 2023 2,500,000 2,293,750 Long Beach Harbor Revenue Bonds AMT Series 1989A 7.25 2019 7,000,000 (e) 7,471,800 Los Angeles Convention & Exhibition Center Pre-Refunded Certificate of Participation Series 1989A 7.00 2020 5,000,000 5,517,150 Los Angeles Convention & Exhibition Center Pre-Refunded Certificate of Participation Series 1989A 7.30 2009 1,000,000 1,112,500 Los Angeles Convention & Exhibition Center Pre-Refunded Certificate of Participation Series 1989A 7.375 2018 2,900,000 3,235,965 Los Angeles County Transportation Commission Sales Tax Refunded Revenue Bonds Series A 7.00 2019 4,150,000 4,284,003 Los Angeles County Transportation Commission Sales Tax Pre-Refunded Revenue Bonds Series A 8.00 2016 2,000,000 2,217,760 Los Angeles County Transportation Commission Sales Tax Pre-Refunding Revenue Bonds Series 1988A 7.875 2008 500,000 562,715 Los Angeles County Transportation Commission Sales Tax Refunding Revenue Bonds Series 1989A 7.40 2015 2,000,000 2,170,000 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities. Investments in securities IDS California Tax-Exempt Fund (Percentage represents value of June 30, 1994 investments compared to net assets) _____________________________________________________________________________________________________________________________ Municipal bonds (continued) _____________________________________________________________________________________________________________________________ Name of issuer and Coupon Maturity Principal Value(a) title of issue (b,c,f) rate amount _____________________________________________________________________________________________________________________________ Los Angeles County Transportation Commission Sales Tax Pre-Refunded Revenue Bonds Series A 7.60% 2012 $ 640,000 $ 690,630 Los Angeles Department of Water & Power Electric Plant Revenue Bonds Series 1990 7.125 2030 6,500,000 7,173,270 Los Angeles Department of Water & Power Waterworks Refunding Revenue Bonds 5.80 2024 2,900,000 2,633,780 Los Angeles Multi-family Housing Revenue Bonds AMT (FHA Insured) 7.85 2029 130,000 138,272 Los Angeles Multi-family Housing Revenue Bonds AMT Park Parthenia Series 1986A (GNMA Insured) 7.40 2022 1,000,000 1,041,470 Los Angeles Single Family Home Mortgage Revenue Bonds AMT Series 1991A (GNMA & FNMA Insured) 6.875 2025 5,700,000 5,721,033 Los Angeles State Building Authority Lease Pre-Refunded Revenue Bonds State Department of General Services Lease Series 1988A 7.25 2006 3,000,000 3,285,150 Los Angeles State Building Authority Lease Pre-Refunded Revenue Bonds State Department of General Services Lease Series 1988A 7.50 2011 1,500,000 1,657,245 Los Angeles State Harbor Revenue Bonds Escrowed to Maturity 7.60 2018 1,000,000 1,137,200 Los Angeles USD Refunding Certficate of Participation (FSA Insured) 5.50 2010 1,000,000 921,880 Los Angeles Wastewater System Refunding Revenue Bonds Series A (MBIA Insured) 5.70 2020 5,775,000 5,246,067 Los Angeles Wastewater System Refunding Revenue Bonds Series A (MBIA Insured) 5.80 2021 4,250,000 3,909,107 Los Angeles Wastewater System Pre-Refunded Revenue Bonds Series 1987 8.125 2017 1,000,000 1,121,720 Marin County Municipal Water District Revenue Bonds Series 1993 5.65 2023 3,500,000 3,085,005 Mayer Memorial Hospital District Insured Health Facility Revenue Bonds (California Mortgage Insured) 5.50 2013 950,000 834,223 Modesto Certificate of Participation Pre-Refunded Bonds Community Center 8.10 2015 1,000,000 1,120,960 Modesto Irrigation Certificate of Participation 7.25 2015 2,000,000 2,134,720 Mount Diablo Hospital District Hospital Pre-Refunded Revenue Bonds Series 1990A (AMBAC Insured) 7.00 2017 3,000,000 3,360,840 Northern California Public Power Authority Power Pre-Refunded Revenue Bonds Hydroelectric Series 1986B-3 8.00 2024 2,000,000 2,226,840 Northern California Public Power Authority Power Pre-Refunded Revenue Bonds Hydroelectric #1 Series 1986B-1 8.00 2024 2,100,000 2,338,182 Northern California Public Power Authority Refunding Revenue Bonds Geothermal #3 Series 1985A 7.00 2010 830,000 839,645 Northern California Public Power Authority Refunding Revenue Bonds Geothermal #3 Series 1987A 7.00 2007 6,825,000 7,099,229 Northern California Transmission Agency California-Oregon Transmission Pre-Refunded Revenue Bonds Series 1990A (MBIA Insured) 7.00 2024 2,000,000 2,217,320 Pittsburg Public Financing Authority Wastewater Refunding Bonds Series 1994A (FGIC Insured) 5.125 2015 1,000,000 853,020 Pleasanton Joint Powers Financing Authority Reassessment Revenue Bonds Series 1993A 6.15 2012 1,960,000 1,826,054 Port of Oakland Revenue Bonds AMT Series 1989A (BIG Insured) 7.60 2016 500,000 542,340 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities. Investments in securities IDS California Tax-Exempt Fund (Percentage represents value of June 30, 1994 investments compared to net assets) _____________________________________________________________________________________________________________________________ Municipal bonds (continued) _____________________________________________________________________________________________________________________________ Name of issuer and Coupon Maturity Principal Value(a) title of issue (b,c,f) rate amount _____________________________________________________________________________________________________________________________ Rancho Cucamonga Redevelopment Agency 1990 Tax Allocation Bonds (MBIA Insured) 7.125% 2019 $3,460,000 $ 3,724,586 Rancho Cucamonga Redevelopment Agency 1990 Tax Allocation Pre-Refunded Bonds (MBIA Insured) 7.125 2019 3,540,000 3,942,180 Rancho Mirage Joint Powers Finance Authority Certificate of Participation Eisenhower Memorial Hospital 7.00 2022 4,250,000 4,314,897 Riverside County Transportation Commission Sales Tax Revenue Bonds Series 1993A (AMBAC Insured) 5.75 2009 1,750,000 1,710,520 Riverside Electric Revenue Bonds Series 1991 6.00 2015 6,530,000 6,246,206 Sacramento Municipal Utility District Series R 6.00 2015-17 7,500,000 7,057,770 Sacramento Municipal Utility District Pre-Refunded Series R 7.125 2013 3,000,000 3,228,420 Sacramento Municipal Utility District Pre-Refunded Series V 7.50 2018 2,775,000 3,046,867 Sacramento Municipal Utility District Pre-Refunded Series W 7.50 2018 1,980,000 2,173,981 Sacramento Municipal Utility District Pre-Refunded Series Y (MBIA Insured) 6.75 2019 3,400,000 3,769,682 Sacramento Redevelopment Agency Tax Allocation Bonds Series 1990A (MBIA Insured) 6.50 2013 3,500,000 3,546,725 San Diego County Capital Asset Lease Certificate of Participation Series 1993 Inverse Floater (AMBAC Insured) 7.82 2007 3,200,000 (d) 2,992,000 San Diego Industrial Development Revenue Bonds San Diego Gas & Electric Series A 7.625 2021 1,000,000 1,058,890 San Diego Regional Transportation Commission Sales Tax Pre-Refunded Revenue Bonds Limited Tax Series 1989A 6.25 2008 5,030,000 5,303,582 San Francisco Redevelopment Financing Authority Tax Allocation Refunding Bonds Series B (FGIC Insured) 5.25 2017 1,500,000 1,282,095 San Joaquin County Pre-Refunded Certificate of Participation Human Services Facility Series 1989 (BIG Insured) 6.70 2009 3,500,000 3,817,450 San Joaquin County Certificate of Participation Jail & Sheriffs Operation Center (MBIA Insured) 6.75 2015 2,000,000 2,198,760 San Jose Redevelopment Agency Merged Area Tax Allocation Bonds Series 1993 Inverse Floater (MBIA Insured) 7.448 2014 3,000,000 (d) 2,385,000 San Mateo County Transit District Limited Tax Pre-Refunded Bonds Series 1990A (MBIA Insured) 6.50 2020 2,500,000 2,662,900 Santa Clara County Pre-Refunded Certificates of Participation Housing Authority Office 7.875 2017 630,000 668,209 Santa Clara County Transit District Sales Tax Revenue Bonds Series 1991A 6.25 2021 9,980,000 9,512,038 Santa Cruz Certificate of Participation 8.375 2007 1,220,000 1,243,570 Santa Rosa Sonoma County Wastewater Service Facility District Pre-Refunded Improvement Bonds Series 1989 7.80 2015 1,000,000 1,103,410 Sonoma County Community Redevelopment Agency Tax Allocation Bonds Windsor Redevelopment Series C 7.90 2014 415,000 422,943 Southern California Home Financing Authority Single Family Mortgage Revenue Bonds AMT 1990B (GNMA Insured) 7.75 2024 665,000 683,879 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities. Investments in securities IDS California Tax-Exempt Fund (Percentage represents value of June 30, 1994 investments compared to net assets) _____________________________________________________________________________________________________________________________ Municipal bonds (continued) _____________________________________________________________________________________________________________________________ Name of issuer and Coupon Maturity Principal Value(a) title of issue (b,c,f) rate amount _____________________________________________________________________________________________________________________________ Southern California Public Power Authority Pre-Refunded Revenue Bonds Palo Verde Series B 7.125% 2015 $5,000,000 $ 5,350,450 Southern California Public Power Authority Transmission Pre-Refunded Revenue Bonds Series 1986A 7.875 2018 1,500,000 1,640,250 Southern California Public Power Authority Transmission Pre-Refunded Revenue Bonds Series 1986B 7.00 2022 5,000,000 5,363,600 Southern California Public Power Authority Transmission Revenue Bonds Series 1986B 7.00 2022 1,760,000 1,855,410 Southern California Public Power Authority Transportation Bonds Series B 7.375 2021 400,000 430,132 State Department of Water Resources Water System Pre-Refunded Revenue Bonds Central Valley Series D 7.70 2024 2,400,000 2,655,720 State Educational Facilities Authority Revenue Bonds Stanford University Series J 6.00 2016 7,275,000 7,082,358 State Health Facilities Finance Authority Revenue Bonds Kaiser Permanente Series 1989A 7.00 2018 2,000,000 2,100,360 State Health Facility Finance Authority Pre-Refunded Revenue Bonds St. Joseph Health System Series 1989A 6.90 2014 3,500,000 3,840,900 State Housing Finance Agency Home Mortgage Revenue Bonds Series 1986B 6.90 2016 1,990,000 2,004,547 State Housing Finance Agency Home Single Family Mortgage Revenue Bonds Series 1991A 7.375 2017 2,315,000 2,337,409 State Pollution Control Finance Authority Pollution Control Revenue Bonds AMT Southern California Edison Series 1988A 6.90 2006 2,000,000 2,066,900 State Public Works Board University of California Lease Pre-Refunded Revenue Bonds Series 1990A 7.00 2015 2,250,000 2,513,048 State Public Works Board Various Community Colleges Lease Revenue Bonds Series 1992A (AMBAC Insured) 6.00 2017 1,465,000 1,397,669 State University Parking System Revenue Bonds 7.70 2009 225,000 244,780 State University Revenue Bonds San Jose State University Student Union Series B 7.60 2007 150,000 161,348 Statewide Community Development Authority Health Facilities Revenue Bonds Unihealth America Series 1993A Inverse Floater (AMBAC Insured) 8.03 2011 5,000,000 (d) 4,368,750 Stockton Refunding Wastewater System Certificate of Participation (AMBAC Insured) 5.50 2015 1,250,000 1,127,088 Stockton Single Family Mortgage Revenue Bonds AMT Series 1990A 7.50 2023 145,000 153,147 (GNMA Insured) Suisun City Redevelopment Agency Tax Allocation Refunded Bonds (MBIA Insured) 5.50 2023 1,000,000 877,960 Turlock Irrigation District Pre-Refunded Bonds Series 1986A 7.75 2018 1,000,000 1,070,050 University of Southern California Educational Facilities Authority Pre-Refunded Revenue Bonds Series 1989B 6.75 2015 5,000,000 5,152,100 _____________________________________________________________________________________________________________________________ See accompany notes to investments in securities. Investments in securities IDS California Tax-Exempt Fund (Percentage represents value of June 30, 1994 investments compared to net assets) _____________________________________________________________________________________________________________________________ Municipal bonds (continued) _____________________________________________________________________________________________________________________________ Name of issuer and Coupon Maturity Principal Value(a) title of issue (b,c,f) rate amount _____________________________________________________________________________________________________________________________ Vacaville Limited Obligation Improvement Bonds Water Rights Assessment District 8.00% 2007 $ 925,000 $ 952,694 Walnut Valley Unified School District Unlimited Tax General Obligation Bonds (MBIA Insured) 6.00 2014-15 2,870,000 2,783,816 _____________________________________________________________________________________________________________________________ Total municipal bonds (Cost: $238,921,908) $250,756,406 _____________________________________________________________________________________________________________________________ Total investments in securities (Cost: $238,921,908)(g) $250,756,406 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities. Investments in securities IDS California Tax-Exempt Fund June 30, 1994 ___________________________________________________________________ Notes to investments in securities ___________________________________________________________________ (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Investments in bonds, by rating category as a percentage of total bonds, are as follows: (Unaudited) Rating 6-30-94 6-30-93 ___________________________________________________________________ AAA 63% 38% AA 18 35 A 16 19 BBB and below 3 3 Non-rated -- 5 Total 100% 100% ___________________________________________________________________ (c) The following abbreviations are used in portfolio descriptions to identify the insurer of the issue: AMBAC -- American Municipal Bond Association Corporation BIG -- Bond Investors Guarantee FGIC -- Financial Guarantee Insurance Corporation FHA -- Federal Housing Authority FNMA -- Federal National Mortgage Association FSA -- Financial Security Assurance GNMA -- Government National Mortgage Association MBIA -- Municipal Bond Investors Assurance (d) Inverse Floaters represents securities which pay interest at a rate that increases (decreases) based on (decreases) increases of market short-term rates. Interest rate disclosed is the rate in effect on June 30, 1994. (e) Partially pledged as inital deposit on the following open interest rate futures purchase contracts (see Note 5 to the financial statements): Type of security Par Value _____________________________________________________ U.S. Treasury Bond, Sept. 1994 $20,000,000 _____________________________________________________ (f) The following abbreviation is used in portfolio descriptions: AMT -- Alternative Minimum Tax (g) At June 30, 1994, the cost of securities for federal income tax purposes was $238,863,654 and the aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $15,609,964 Unrealized depreciation (3,717,212) ___________________________________________________________________ Net unrealized appreciation $11,892,752 ___________________________________________________________________
Investments in securities IDS Massachusetts Tax-Exempt Fund (Percentages represent June 30, 1994 value of investments compared to net assets) _____________________________________________________________________________________________________________________________ Municipal bonds (96.8%) _____________________________________________________________________________________________________________________________ Name of issuer and Coupon Maturity Principal Value(a) title of issue (b,c,d) rate amount _____________________________________________________________________________________________________________________________ Ashburnham-Westminister Regional School District Unlimited Tax General Obligation School Bonds (MBIA Insured) 6.00% 2013 $1,000,000 $ 978,630 Bay Transit Authority Series A (Secondary FGIC Insured) 5.75 2022 1,000,000 922,160 Bay Transportation Authority General Transportation System Refunding Bonds Series 1992B 6.20 2016 1,500,000 1,478,730 Boston City Hospital Refunding Revenue Bonds Series B (FHA Insured) 5.75 2023 3,000,000 2,701,890 Boston City Hospital Pre-Refunded Revenue Bonds Series A (FHA Insured) 7.625 2021 1,000,000 1,142,590 Boston General Obligation Bonds Series 1991A (MBIA Insured) 6.75 2011 500,000 550,740 Boston General Obligation Refunding Bonds Series 1993A (AMBAC Insured) 5.65 2009 1,500,000 1,445,115 Boston Industrial Development Financing Authority Revenue Bonds Massachusetts College of Pharmacy Series 1993A (Connie Lee Insured) 5.25 2026 1,000,000 837,850 Boston Water & Sewer Commission General Pre-Refunded Revenue Bonds Senior Pre-Refunded Series 1991A (FGIC Insured) 7.00 2018 1,000,000 1,119,640 Boston Water & Sewer Commission General Subordinate Revenue Bonds Series A (BIG Insured) 6.00 2008 500,000 502,785 Boston Water & Sewer Commission Senior Revenue Bonds Series A 7.875 2013 365,000 396,186 Boston Water & Sewer Commission Senior Pre-Refunded Revenue Bonds Series A 7.875 2013 210,000 229,364 Commonwealth General Obligation Consolidated Loan Pre-Refunded Bonds Series 1990A (FGIC Insured) 7.25 2009 500,000 558,592 Greater Lawrence Sanitary District North Andover General Obligation Bonds 8.50 2005 625,000 656,362 Health & Educational Facilities Authority Pre-Refunded Bonds Bentley College Series G 8.125 2017 400,000 423,952 Health & Educational Facilities Authority Refunding Revenue Bonds Beth Israel Hospital Series 1989E 7.00 2009-14 550,000 577,468 Health & Educational Facilities Authority Revenue Bonds Berkshire Health Systems Series A (MBIA Insured) 7.50 2008 500,000 549,335 Health & Educational Facilities Authority Revenue Bonds Berkshire Health Systems Series C 5.90 2011 1,000,000 888,840 Health & Educational Facilities Authority Pre-Refunded Revenue Bonds Beverly Hospital Series D (MBIA Insured) 7.30 2019 400,000 444,660 Health & Educational Facilities Authority Revenue Bonds Boston College Series J (FGIC Insured) 6.625 2021 2,000,000 2,037,260 Health & Educational Facilities Authority Revenue Bonds Boston College Series K 5.25 2023 1,000,000 850,460 Health & Educational Facilities Authority Revenue Bonds Brigham & Women's Hospital Series C 6.75 2021 500,000 506,285 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities. Investments in securities IDS Massachusetts Tax-Exempt Fund (Percentages represent June 30, 1994 value of investments compared to net assets) _____________________________________________________________________________________________________________________________ Municipal bonds (continued) _____________________________________________________________________________________________________________________________ Name of issuer and Coupon Maturity Principal Value(a) title of issue (b,c,d) rate amount _____________________________________________________________________________________________________________________________ Health & Educational Facilities Authority Revenue Bonds Brigham & Women's Hospital Series 1991D 6.75% 2024 $1,000,000 $ 1,016,820 Health & Educational Facilities Authority Revenue Bonds Charlton Memorial Hospital Series 1991B 7.25 2013 1,750,000 1,819,037 Health & Educational Facilities Authority Pre-Refunded Revenue Bonds Children's Hospital Series D 7.75 2018 500,000 556,405 Health & Educational Facilities Authority Revenue Bonds Holyoke Hospital Series B 6.50 2015 500,000 471,650 Health & Educational Facilities Authority Pre-Refunded Revenue Bonds Lahey Clinic Medical Center Series A (MBIA Insured) 7.625 2018 500,000 555,090 Health & Educational Facilities Authority Revenue Bonds Lahey Clinic Medical Center Series B (MBIA Insured) 5.625 2015 1,500,000 1,379,685 Health & Educational Facilities Authority Revenue Bonds Lahey Clinic Medical Center Series B (MBIA Insured) 5.375 2023 1,000,000 859,770 Health & Educational Facilities Authority Revenue Bonds Melrose-Wakefield Hospital Series 1992B 6.375 2016 1,000,000 951,840 Health & Educational Facilities Authority Revenue Bonds McLean Hospital Series 1992C (FGIC Insured) 6.625 2015 1,250,000 1,279,800 Health & Educational Facilities Authority Revenue Bonds Morton Hospital & Medical Center Series B (Connie Lee Insured) 5.25 2014 1,000,000 873,300 Health & Educational Facilities Authority Revenue Bonds Mount Auburn Hospital Series A (MBIA Insured) 7.875 2018 205,000 227,060 Health & Educational Facilities Authority Revenue Bonds New England Deaconess Hospital Series 1992D 6.625 2012 1,000,000 992,140 Health & Educational Facilities Authority Revenue Bonds Newton Wellesley Hospital Series 1991D (MBIA Insured) 7.00 2015 1,000,000 1,071,640 Health & Educational Facilities Authority Pre-Refunded Revenue Bonds Northeastern University Series 1989C (AMBAC Insured) 7.10 2006 1,000,000 1,088,000 Health & Educational Facilities Authority Pre-Refunded Revenue Bonds Northeastern University Series E (MBIA Insured) 6.55 2022 1,000,000 1,014,010 Health & Educational Facilities Authority Revenue Bonds South Shore Hospital Series 1992D (MBIA Insured) 6.50 2022 1,000,000 1,010,240 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities. Investments in securities IDS Massachusetts Tax-Exempt Fund (Percentages represent June 30, 1994 value of investments compared to net assets) _____________________________________________________________________________________________________________________________ Municipal bonds (continued) _____________________________________________________________________________________________________________________________ Name of issuer and Coupon Maturity Principal Value(a) title of issue (b,c,d) rate amount _____________________________________________________________________________________________________________________________ Health & Educational Facilities Authority Pre-Refunded Revenue Bonds Stonehill College Series 1990D (AMBAC Insured) 7.70% 2020 $1,000,000 $ 1,145,540 Health & Educational Facilities Authority Revenue Bonds Suffolk University Series B (Connie Lee Insured) 6.35 2022 2,495,000 2,459,621 Health & Educational Facilities Authority Pre-Refunded Revenue Bonds Wentworth Institute of Technology Series A (AMBAC Insured) 7.40 2010 750,000 843,810 Health & Educational Facilities Authority Revenue Bonds Wentworth Institute of Technology Series B (Connie Lee Insured) 5.50 2023 1,500,000 1,304,580 Holyoke Unlimited Tax General Obligation Municipal Purpose Loans Series 1993B (FSA Insured) 6.125 2013 1,100,000 1,089,550 Industrial Finance Agency 1st Mortgage Pre-Refunded Revenue Bonds Berkshire Retirement Community at Lennox 9.875 2018 200,000 227,394 Industrial Finance Agency Pollution Control Refunding Revenue Bonds Eastern Edison Series 1993 5.875 2008 1,500,000 1,402,440 Industrial Finance Agency Resource Recovery Revenue Bonds AMT Ogden Haverhill Series 1986A (AMBAC Insured) 7.375 2011 175,000 188,454 Industrial Finance Agency Resource Recovery Revenue Bonds SEMASS Series 1991A 9.00 2015 1,500,000 1,635,660 Industrial Finance Agency Revenue Bonds Brandeis University (MBIA Insured) 6.80 2019 700,000 721,665 Industrial Finance Agency Revenue Bonds Museum of Science Series 1989 (FSA Insured) 7.30 2009 1,000,000 1,119,830 Leominster General Obligation Bonds (MBIA Insured) 7.50 2009 1,000,000 1,101,580 Lowell Limited Tax General Obligation State Qualified Refunding Bonds Series A (FSA Insured) 5.50 2010 800,000 747,640 Mansfield General Obligation Bonds (AMBAC Insured) 6.70 2011 1,000,000 1,038,480 Municipal Wholesale Electric Power Supply System Revenue Bonds Series A 6.00 2018 1,500,000 1,402,545 Municipal Wholesale Electric Power Supply System Pre-Refunded Revenue Bonds Series 1992B 6.75 2017 1,395,000 1,540,038 Municipal Wholesale Electric Power Supply System Revenue Bonds Series 1992B 6.75 2017 605,000 618,667 Nantucket General Obligation Bonds 6.80 2011 1,000,000 1,071,710 North Andover General Obligation Bonds (MBIA Insured) 7.35 2008 310,000 342,091 Port Authority Pre-Refunded Revenue Bonds AMT Series 1988A 7.75 2018 485,000 512,640 Port Authority Revenue Bonds AMT Series 1988A 7.75 2018 515,000 539,566 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities. Investments in securities IDS Massachusetts Tax-Exempt Fund (Percentages represent June 30, 1994 value of investments compared to net assets) _____________________________________________________________________________________________________________________________ Municipal bonds (continued) _____________________________________________________________________________________________________________________________ Name of issuer and Coupon Maturity Principal Value(a) title of issue (b,c,d) rate amount _____________________________________________________________________________________________________________________________ Port Authority Revenue Bonds AMT Series 1990A (FGIC Insured) 7.50% 2020 $1,000,000 $ 1,089,230 Quincy Pre-Refunded Revenue Bonds Quincy City Hospital (FHA Insured) 7.875 2016 1,000,000 1,085,820 Quincy Refunding Revenue Bonds Quincy Hospital Issue Series 1993 (FSA Insured) 5.25 2016 1,000,000 878,170 Southeastern University Building Authority Refunding Revenue Bonds Series 1986A 7.80 2016 100,000 106,214 Southeastern University Building Revenue Bonds 7.80 2011 325,000 345,195 Southern Berkshire Regional School District Unlimited Tax General Obligation Pre-Refunded Bonds (AMBAC Insured) 7.55 2010 1,000,000 1,133,120 Springfield Limited Tax General Obligation Municipal Purpose Loan Bonds Series 1993B (MBIA Insured) 6.00 2013 750,000 731,963 State College Building Authority Refunding Revenue Bonds Series 1986A 7.125 2006 150,000 157,572 State College Building Authority Refunding Revenue Bonds Series 1986A 7.25 2016 250,000 263,160 State General Obligation Consolidated Loan Bonds Series 1991A (FGIC Insured) 6.00 2011 1,095,000 1,073,297 State Housing Finance Agency Housing Revenue Rental Bonds Series 1 (AMBAC Insured) 7.20 2026 850,000 861,653 State Housing Finance Agency Single Family Housing Revenue Bonds AMT Series 13 7.95 2023 500,000 516,210 State Housing Finance Authority Residential Development Bonds Series 1992A (FNMA Insured) 6.875 2011 1,000,000 1,037,230 State Housing Finance Authority Single Family Mortgage Housing Revenue Bonds Series 4 7.375 2014 475,000 492,447 State Housing Finance Authority Single Family Mortgage Housing Revenue Bonds AMT Series 7 8.10 2020 265,000 272,460 University of Lowell Building Authority Facilities Revenue Bonds 4th Series A 7.40 2007 125,000 133,589 University of Lowell Building Authority Facilities Revenue Bonds 4th Series A 7.60 2012 50,000 53,735 University of Massachusetts Building Authority Revenue Bonds Series A (FSA Insured) 7.50 2014 500,000 547,505 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities. Investments in securities IDS Massachusetts Tax-Exempt Fund (Percentages represent June 30, 1994 value of investments compared to net assets) _____________________________________________________________________________________________________________________________ Municipal bonds (continued) _____________________________________________________________________________________________________________________________ Name of issuer and Coupon Maturity Principal Value(a) title of issue (b,c,d) rate amount _____________________________________________________________________________________________________________________________ University of Massachusetts Building Authority Revenue Bonds Series A Escrowed to Maturity 7.50% 2011 $ 120,000 $ 135,467 Water Resource Authority General Pre-Refunded Revenue Bonds Series 1990A 7.625 2014 500,000 567,805 Water Resource Authority General Pre-Refunded Revenue Bonds Series 1991A 6.50 2019 1,000,000 1,086,980 Water Resource Authority General Revenue Bonds Series 1993C 5.25 2020 1,400,000 1,161,258 _____________________________________________________________________________________________________________________________ Total municipal bonds (Cost: $68,167,340) $ 69,748,962 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities. (Percentages represent value of investments compared to net assets) _____________________________________________________________________________________________________________________________ Short-term security (0.6%) _____________________________________________________________________________________________________________________________ Issuer Annualized Amount Value(a) yield on date payable at of purchase maturity _____________________________________________________________________________________________________________________________ Municipal note Massachusetts Bay Transit Authority 03-01-95 3.10% $400,000 $ 401,072 _____________________________________________________________________________________________________________________________ Total short-term security (Cost: $401,678) $ 401,072 _____________________________________________________________________________________________________________________________ Total investments in securities (Cost: $68,569,018)(e) $ 70,150,034 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities.
Investments in securities IDS Massachusetts Tax-Exempt Fund June 30, 1994 Notes to investments in securities ___________________________________________________________________ (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Investments in bonds, by rating category as a percentage of total bonds, are as follows: (Unaudited) Rating 06-30-94 06-30-93 ___________________________________________________________________ AAA 64% 54% AA 12 15 A 17 20 BBB and below 7 8 Non-rated -- 3 Total 100% 100% ___________________________________________________________________ (c) The following abbreviations are used in portfolio descriptions to identify the insurer of the issue: AMBAC -- American Municipal Bond Association Corporation BIG -- Bond Investors Guarantee FGIC -- Financial Guarantee Insurance Corporation FHA -- Federal Housing Authority FNMA -- Federal National Mortgage Association FSA -- Financial Security Assurance MBIA -- Municipal Bond Investors Assurance (d) The following abbreviation is used in the portfolio descriptions: AMT -- Alternative Minimum Tax (e) At June 30, 1994, the cost of securities for federal income tax purposes was $68,596,143 and the aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $3,213,492 Unrealized depreciation (1,659,601) ___________________________________________________________________ Net unrealized appreciation $1,553,891 ___________________________________________________________________
Investments in securities IDS Michigan Tax-Exempt Fund (Percentages represent value of June 30, 1994 investments compared to net assets) _____________________________________________________________________________________________________________________________ Municipal bonds (97.7%) _____________________________________________________________________________________________________________________________ Name of issuer and Coupon Maturity Principal Value(a) title of issue (b,c,d) rate amount _____________________________________________________________________________________________________________________________ Alpena County Limited Tax Hospital Improvement Pre-Refunded Bonds Series B (AMBAC Insured) 8.75% 2002 $ 150,000 $ 159,464 Auburn Hills Limited Tax General Obligation Street Improvement Bonds 6.00 2004 200,000 205,894 Battle Creek Water Supply System Pre-Refunded Revenue Bonds Series 1990B 6.375 2008-10 1,640,000 1,752,373 Buena Vista School District Saginaw County School Building & Site Unlimited Tax General Obligation Pre-Refunded Bonds Series 1991 7.20 2016 1,500,000 1,675,140 Caledonia Community School Unlimited Tax General Obligation Refunding Revenue Bonds (AMBAC Insured) 5.50 2022 2,000,000 1,793,420 Central Michigan University Board of Trustees General Pre-Refunded Revenue Bonds Series 1987 (MBIA Insured) 7.90 2015 250,000 277,017 Chassell Township Schools County of Houghton Refunding Unlimited Tax General Obligation Bonds Qualified School Bond Loan Fund 5.25 2020 1,045,000 891,657 Chelsea General Obligation Bonds (BIG Insured) 8.20 2006 145,000 163,205 Chippewa Valley School Macomb County Qualified School Building Loan Fund Unlimited Tax General Obligation Bonds (FGIC Insured) 5.00 2021 1,000,000 828,130 Comstock Park Public School Kent County Unlimited Tax General Obligation Pre-Refunded Bonds Series 1989 6.00 2016 400,000 422,732 Comstock Park Public School Kent County Unlimited Tax General Obligation Pre-Refunded Bonds Series 1989 6.875 2010 260,000 284,079 Detroit General Obligation Pre-Refunded Bonds Distributable State Aid Series 1989 (AMBAC Insured) 7.20 2009 1,000,000 1,105,490 Detroit Sewer Disposal Pre-Refunded Revenue Bonds 8.00 2008 500,000 552,320 Detroit Unlimited Tax General Obligation Bonds Series A 7.25 2009 1,000,000 1,029,320 Detroit Unlimited Tax General Obligation Bonds Series A 8.625 2007 100,000 109,725 Detroit Unlimited Tax General Obligation Bonds Series 1988A 7.875 2008 700,000 752,913 Detroit Water Supply System Pre-Refunded Revenue Bonds Series 1988 (MBIA Insured) 7.875 2008 400,000 447,656 Detroit Water Supply System Refunding Revenue Bonds Series 1993 (FGIC Insured) 5.00 2023 1,000,000 817,550 Dexter Community Schools Building Site & Refunding Unlimited Tax General Obligation Bonds 5.00 2017 1,500,000 1,240,230 East Lansing School District School Building & Site Unlimited Tax General Obligation Bonds Series 1991 6.625 2014 1,000,000 1,029,140 Eastern Michigan University Pre-Refunded Revenue Bonds Residence Hall 7.80 2006 205,000 221,035 Farmington Hills Hospital Finance Authority Revenue Bonds Botsford General Hospital Series 1992A (MBIA Insured) 6.50 2022 1,500,000 1,510,485 Forest Hills School District Unlimited Tax General Obligation Pre-Refunded Bonds 7.375 2015 1,000,000 1,117,190 Frenchtown Resort Drainage District Monroe County Drain Pre-Refunded Bonds Series 1987 7.50 2011-12 615,000 687,976 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities. Investments in securities IDS Michigan Tax-Exempt Fund (Percentages represent value of June 30, 1994 investments compared to net assets) _____________________________________________________________________________________________________________________________ Municipal Bonds (continued) _____________________________________________________________________________________________________________________________ Name of issuer and Coupon Maturity Principal Value(a) title of issue (b,c,d) rate amount _____________________________________________________________________________________________________________________________ Garden City School District Authority Pre-Refunded Revenue Bonds 7.80% 2010 $ 305,000 $ 336,357 Grand Haven Electrical Pre-Refunded Revenue Bonds 6.75 2016 1,000,000 1,037,630 Grand Rapids Water Supply System Improvement Pre-Refunded Revenue Bonds Series 1988 7.875 2018 700,000 777,861 Grand Rapids Water Supply System Improvement Pre-Refunded Revenue Bonds Series 1990 (FGIC Insured) 7.25 2020 1,250,000 1,393,925 Grand Rapids Water Supply System Refunding Revenue Bonds Series 1991 (FGIC Insured) 5.75 2018 500,000 465,920 Holland School District Unlimited Tax General Obligation Bonds Counties of Ottawa & Allegan 1989 School Building & Site Boards 7.375 2019 1,000,000 1,090,140 Inkster School District Unlimited Tax General Obligation Pre-Refunded Bonds (AMBAC Insured) 7.00 2018 450,000 496,237 Isoco County Water Supply System Limited Tax General Obligation Bonds (AMBAC Insured) 5.50 2008-10 575,000 553,610 Jackson County Unlimited Tax General Obligation Refunding Bonds Series 1987 6.75 2011 150,000 160,197 Kalamazoo Hospital Financial Authorization Bronson Methodist Hospital Pre-Refunded Bonds 9.375 2016 150,000 159,456 Kent County Hospital Pre-Refunded Revenue Bonds Butterworth Hospital Series 1989A 7.00 2019 500,000 546,660 Kent County Hospital Pre-Refunded Revenue Bonds Butterworth Hospital Series 1989A 7.25 2013 500,000 551,675 Kent County Refuse Disposal System Limited Tax General Obligation Refunding Bonds Series 1987 8.40 2010 150,000 164,946 Laingsburg Community Schools Unlimited Tax General Obligation Bonds 6.375 2021 1,500,000 1,485,555 Lincoln Consolidated School District Refunding Revenue Bonds (FGIC Insured) 5.80 2014 1,000,000 942,640 Lincoln Consolidated School District Refunding Revenue Bonds (FGIC Insured) 5.85 2021 500,000 470,380 Marquette Hospital Finance Authority Refunding Revenue Bonds Marquette General Hospital Series 1989C 7.50 2007-19 825,000 877,280 Monroe County Pollution Control Revenue Bonds AMT Detroit Edison Fermi Plants Series 1990I (FGIC Insured) 7.65 2020 1,000,000 1,100,520 Monroe County Pollution Control Revenue Bonds AMT Detroit Edison Fermi 2 Plants Series CC (AMBAC Insured) 7.50 2019 1,750,000 1,940,207 Muskegon Hospital Finance Authority Refunding Revenue Bonds Hackley Hospital Series 1988A 8.00 2008 400,000 437,192 Northville Public Schools Unlimited Tax General Obligation Bonds Series 1991B 7.00 2008 1,500,000 1,603,650 Oak Park School District Unlimited Tax General Obligation Pre-Refunded Bonds 7.15 2009 705,000 765,461 Plymouth-Canton Community School District Series 1992C 6.50 2016 1,000,000 1,035,870 River Rouge School District #19 Unlimited Tax General Obligation Bonds (FSA Insured) 5.50 2009 1,185,000 1,113,367 Rochester Hill Unlimited Tax General Obligation Bonds Series 1990A 6.00 2009-10 735,000 726,017 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities. Investments in securities IDS Michigan Tax-Exempt Fund (Percentages represent value of June 30, 1994 investments compared to net assets) _____________________________________________________________________________________________________________________________ Municipal Bonds (continued) _____________________________________________________________________________________________________________________________ Name of issuer and Coupon Maturity Principal Value(a) title of issue (b,c,d) rate amount _____________________________________________________________________________________________________________________________ Rockford Public Schools Kent County Unlimited Tax General Obligation Pre-Refunded Bonds 7.375% 2019 $1,000,000 $ 1,117,190 Rockford Public Schools Unlimited Tax General Obligation Bonds Qualified School Bond Loan Fund 5.875 2019 1,500,000 1,390,260 Southfield Public Schools Building & Site Unlimited Tax General Obligation Bonds 5.875 2022 1,975,000 1,836,000 South Lake District Unlimited Tax General Obligation Bonds 6.80 2010 355,000 374,046 State Building Authority Refunding Revenue Bonds Series 1991I 6.25 2020 2,200,000 2,138,950 State Comprehensive Transportation Pre-Refunded Bonds Series 1986II 7.75 2011 135,000 144,669 State Hospital Finance Authority Hospital Pre-Refunded Revenue Bonds Detroit Medical Center Series 1988A 8.125 2012 310,000 350,114 State Hospital Finance Authority Hospital Refunding Revenue Bonds Detroit Medical Center Series 1988A 8.125 2012 90,000 98,731 State Hospital Finance Authority Hospital Refunding Revenue Bonds Detroit Medical Center Series 1988B 8.00 2008 500,000 564,430 State Hospital Finance Authority Hospital Refunding Revenue Bonds Sisters of Mercy Health Group Series 1993P (MBIA Insured) 5.25 2021 1,200,000 1,013,856 State Hospital Finance Authority Hospital Pre-Refunded Revenue Bonds McLaren Obligated Group Series 1991A 7.50 2021 1,750,000 2,002,053 State Hospital Finance Authority Revenue Bonds Henry Ford Hospital Series A 7.50 2013 400,000 433,076 State Hospital Finance Authority Revenue Bonds Henry Ford Hospital Series 1990A 7.00 2010 1,000,000 1,035,220 State Hospital Finance Authority Revenue Bonds Henry Ford Hospital Series 1992A 5.75 2017 1,500,000 1,352,850 State Hospital Finance Authority Pre-Refunded Revenue Bonds Oakwood Hospital Group Series 1990A (FGIC Insured) 7.10 2018 1,000,000 1,113,780 State Job Development Authority Pollution Control Revenue Bonds Chrysler Project 5.70 1999 1,000,000 997,180 State Public Power Agency Belle River Pre-Refunded Bonds Series 1983 6.625 2019 675,000 697,639 State Public Power Agency Belle River Pre-Refunded Revenue Bonds Series 1986 7.00 2018 1,510,000 1,584,443 State Strategic Fund Limited Tax Obligation Refunding Revenue Bonds Detroit Edison Series 1990BB (MBIA Insured) 7.00 2008 1,000,000 1,089,960 State Strategic Fund Limited Tax Obligation Refunding Revenue Bonds Detroit Edison Series 1992BB (FGIC Insured) 6.50 2016 2,500,000 2,540,525 State Strategic Fund Limited Tax Obligation Refunding Revenue Bonds Ford Motor Series 1991A 7.10 2006 1,650,000 1,786,950 State Strategic Fund Limited Tax Obligation Refunding Revenue Bonds Escrowed to Maturity Oxford Institute 7.875 2005 150,000 173,898 State Trunk Line Series A (FGIC Insured) 5.75 2020 2,730,000 2,518,097 State University Board of Trustees General Revenue Bonds Series 1992A 6.25 2015 3,000,000 2,975,370 State University Hospital Pre-Refunded Revenue Bonds Series 1986A 7.75 2012 150,000 163,633 State University Revenue Parking System Pre-Refunded Bonds Ann Arbor Campus Series A 7.40 2015 150,000 161,005 Taylor Tax Increment Finance Authority Bonds Series 1989A (MBIA Insured) 6.00 2007-09 1,205,000 1,220,455 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities. Investments in securities IDS Michigan Tax-Exempt Fund (Percentages represent value of June 30, 1994 investments compared to net assets) _____________________________________________________________________________________________________________________________ Municipal Bonds (continued) _____________________________________________________________________________________________________________________________ Name of issuer and Coupon Maturity Principal Value(a) title of issue (b,c,d) rate amount _____________________________________________________________________________________________________________________________ Warren Consolidated School District Refunding Revenue Bonds Unlimited Tax General Obligation Bonds (MBIA Insured) 5.50% 2021 $1,500,000 $ 1,343,640 Waterford School District Unlimited Tax General Obligation Bonds Series Q 6.25 2013 340,000 337,372 Wayne County Airport Revenue Bonds AMT Detroit Metropolitan Airport Series 1986 (FGIC Insured) 8.00 2014 250,000 273,472 Wayne County Airport Revenue Bonds AMT Detroit Metropolitan Airport Series 1990A (AMBAC Insured) 7.00 2020 1,080,000 1,148,299 Wayne County Airport Revenue Bonds Detroit Metropolitan Airport Series 1993C (MBIA Insured) 5.25 2021 1,500,000 1,279,980 Wyandotte Electric Pre-Refunded Revenue Bonds Series 1987 (AMBAC Insured) 7.875 2017 300,000 332,292 _____________________________________________________________________________________________________________________________ Total municipal bonds (Cost: $71,583,775) $ 74,896,329 _____________________________________________________________________________________________________________________________ Short-term security (0.6%) _____________________________________________________________________________________________________________________________ Issuer (e) Effective Amount Value(a) yield payable at maturity _____________________________________________________________________________________________________________________________ Municipal note Regents of the University of Michigan Hospital Refunding Revenue Bonds Series 1992A 12-01-19 2.65% $ 500,000 $ 500,000 _____________________________________________________________________________________________________________________________ Total short-term security (Cost: $500,000) $ 500,000 _____________________________________________________________________________________________________________________________ Total investments in securities (Cost: $72,083,775)(f) $ 75,396,329 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities.
Investments in securities IDS Michigan Tax-Exempt Fund June 30, 1994 ___________________________________________________________________ Investments in securities (continued) ___________________________________________________________________ Notes to investments in securities ___________________________________________________________________ (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Investments in bonds, by rating category as a percentage of total bonds, are as follows: (Unaudited) Rating 06-30-94 06-30-93 ___________________________________________________________________ AAA 65% 36% AA 25 40 A 6 19 BBB and below 4 3 Non-rated - 2 Total 100% 100% ___________________________________________________________________ (c) The following abbreviations are used in portfolio descriptions to identify the insurer of the issue: AMBAC -- American Municipal Bond Association Corporation BIG -- Bond Investors Guarantee FGIC -- Financial Guarantee Insurance Corporation FSA -- Financial Security Assurance MBIA -- Municipal Bond Investors Assurance (d) The following abbreviation is used in portfolio descriptions: AMT -- Alternative Minimum Tax (e) Interest rate varies to reflect current market conditions; rate shown is the effective rate on June 30, 1994. (f) At June 30, 1994, the cost of securities for federal income tax purposes was $72,060,816 and the aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $ 4,576,063 Unrealized depreciation (1,240,550) ___________________________________________________________________ Net unrealized appreciation $ 3,335,513 ___________________________________________________________________
Investments in securities (Percentages represent IDS Minnesota Tax-Exempt Fund value of investments June 30, 1994 compared to net assets) _____________________________________________________________________________________________________________________________ Municipal bonds (96.4%) _____________________________________________________________________________________________________________________________ Name of issuer and Coupon Maturity Principal Value(a) title of issue (b,c,g) rate amount _____________________________________________________________________________________________________________________________ Anoka County General Obligation Capital Improvement Revenue Bonds Series 1989B 7.00% 2007-10 $7,950,000 $ 8,546,807 Anoka County Resource Recovery Revenue Bonds Northern States Power Series 1985 7.15 2008 3,750,000 3,970,800 Apple Valley Certificate of Participation Lease Pre-Refunded Bonds Central Garage Facility Financial Agreement 7.25 2001 155,000 164,660 Apple Valley Certificate of Participation Lease Pre-Refunded Bonds Central Garage Facility Financial Agreement 7.30 2002 175,000 186,064 Apple Valley Certificate of Participation Lease Pre-Refunded Bonds Central Garage Facility Financial Agreement 7.40 2003 190,000 202,441 Apple Valley Certificate of Participation Lease Pre-Refunded Bonds Central Garage Facility Financial Agreement 7.50 2004 450,000 480,384 Appleton Correctional Facility Revenue Bonds Series 1990A 9.875 2020 4,000,000 (d) 2,520,000 Bass Brook Pollution Control Revenue Bonds Minnesota Power & Light Series 1992 6.00 2022 6,300,000 5,942,412 Becker Pollution Control Revenue Bonds Northern States Power Series 1987A 6.80 2007 4,025,000 4,180,727 Becker Pollution Control Revenue Bonds Northern States Power Sherburne County Generating Station Units 1 & 2 Series 1987A 7.25 2005 2,000,000 2,072,200 Bemidji Hospital Facilities 1st Mortgage Revenue Bonds North Country Health Services Series 1991 7.00 2021 1,755,000 1,819,566 Bloomington Community Development Refunding Revenue Bonds Note 24th Avenue Motel 8.50 2005 1,858,796 1,905,266 Braham Independent School District #314 Refunding Bonds 5.20 2019 3,340,000 2,947,917 Brainerd Hospital Refunding Revenue Bonds Evangelical Lutheran Good Samaritan Society Series 1992A (Capital Guaranty Insured) 6.65 2017 1,695,000 1,765,919 Brainerd Hospital Revenue Bonds Evangelical Lutheran Good Samaritan Society Series 1992B (Capital Guaranty Insured) 6.65 2017 2,865,000 2,984,872 Burnsville Multi-family Housing Refunding Revenue Bonds FHA-Summit Park Apartments Series 1993 6.00 2033 4,000,000 3,675,560 Chaska Advance Refunded Certificate of Participation Lease Purchase Agreement Bonds Series 1986C 7.25 2001 800,000 850,784 Columbia Heights Multi-family Housing Revenue Bonds Crestview Lutheran Home Royce Place Series 1991 10.00 2032 560,000 607,830 Columbia Heights Multi-family Housing Revenue Bonds Crestview Lutheran Home Royce Place Series 1991 (FHA Insured) 7.75 2032 2,755,000 2,852,802 Duluth Economic Development Authority Health Care Facility Pre-Refunded Revenue Bonds Benedictine Health System St. Mary's Medical Center Series 1990 8.375 2020 2,000,000 2,336,040 Duluth Hospital Facilities St. Lukes Hospital Pre-Refunded Revenue Bonds Series 1988 9.00 2018 2,500,000 2,882,400 Duluth Housing and Redevelopment Authority 1st Mortgage Revenue Bonds Lakeshore Lutheran Home 8.25 2009 125,000 122,686 Duluth Recreation Revenue Certificate of Participation 9.00 2003-07 1,430,000 1,572,905 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities.
Investments in securities (Percentages represent IDS Minnesota Tax-Exempt Fund value of investments June 30, 1994 compared to net assets) _____________________________________________________________________________________________________________________________ Municipal bonds (continued) _____________________________________________________________________________________________________________________________ Name of issuer and Coupon Maturity Principal Value(a) title of issue (b,c,g) rate amount _____________________________________________________________________________________________________________________________ Eden Prairie Housing Development Refunding Revenue Bonds Eden Commons Series 1990 (FHA Insured) 8.25% 2025 $6,420,000 $ 6,313,235 Edina Hospital System Revenue Bonds Fairview Hospital & Health Care Services Series 1989A 7.125 2019 2,500,000 2,585,350 Edina Multi-family Housing Revenue Bonds Walker Assisted Living Series 1991 9.00 2031 6,700,000 7,249,936 Faribault Single Family Mortgage Refunding Revenue Bonds Series 1991A 7.50 2011 3,550,000 3,634,348 Hennepin County Lease Revenue Certificate of Participation Series 1991 6.80 2017 7,250,000 7,657,088 Hennepin County Solid Waste Resource Recovery General Obligation Revenue Bonds Series 1987A 8.20 2009 1,760,000 1,873,344 Hermantown Independent School District #700 General Obligation School Building Pre-Refunded Bonds Series 1986A (MBIA Insured) 8.10 2006 290,000 311,895 Hubbard County Solid Waste Disposal Revenue Bonds AMT Potlatch Series 1989 7.375 2013 5,610,000 5,960,401 International Falls Solid Waste Disposal Revenue Bonds AMT Boise Cascade Series 1990 7.75 2015 4,000,000 4,194,080 Maplewood Care Institute Series 1994 7.75 2024 3,830,000 3,651,637 Maplewood Multi-family Housing Revenue Bonds Maplewood (FHA Insured) 7.75 2021 2,135,000 2,139,206 Minneapolis & St. Paul Housing Board Multi-family Mortgage Revenue Bonds AMT GNMA Collateral Mortgage Revenue Loan Riverside Plaza Series 1988 8.25 2030 3,945,000 4,186,316 Minneapolis Community Development Agency & St. Paul Housing & Redevelopment Authority Home Ownership Mortgage Revenue Bonds Family Housing Mortgage Phase II 7.875 2017 1,515,000 1,579,887 Minneapolis Convention Center Sales Tax Pre-Refunded Revenue Bonds Series 1986 (AMBAC Insured) 7.625 2004 1,750,000 1,880,778 Minneapolis Convention Center Sales Tax Pre-Refunded Revenue Bonds Series 1986 (AMBAC Insured) 7.75 1996 700,000 753,774 Minneapolis General Obligation Sales Tax Refunding Bonds Series 1992 6.25 2012 13,000,000 13,567,190 Minneapolis Health Care Facilities Revenue Bonds Fairview Hospital & Healthcare Services Series 1993A (MBIA Insured) 5.25 2019 3,750,000 3,288,450 Minneapolis Hospital Facility Pre-Refunded Revenue Bonds Lifespan Incorporated Series 1987A 8.125 2017 3,630,000 4,007,012 Minneapolis Hospital Facility Pre-Refunded Revenue Bonds Lifespan Incorporated Series 1989A 7.00 2014 5,000,000 5,528,250 Minneapolis Housing & Redevelopment Authority of St. Paul Health Care System Revenue Bonds Healthspan Series 1993 (AMBAC Insured) 4.75 2018 3,000,000 2,386,620 Minneapolis Nursing Home Revenue Bonds Walker Cityview & Southview Projects Series 1992 8.50 2022 5,565,000 5,720,931 Minneapolis St. Paul Housing & Redevelopment Authority Health Care System Revenue Bonds Healthspan Series 1993A (AMBAC Insured) 5.00 2007-13 6,690,000 5,991,651 Minneapolis Water & Sewer Revenue Bonds Series 1992 5.00 1995 5,000,000 5,057,050 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities. Investments in securities (Percentages represent IDS Minnesota Tax-Exempt Fund value of investments June 30, 1994 compared to net assets) _____________________________________________________________________________________________________________________________ Municipal bonds (continued) _____________________________________________________________________________________________________________________________ Name of issuer and Coupon Maturity Principal Value(a) title of issue (b,c,g) rate amount _____________________________________________________________________________________________________________________________ Minnetonka Multi-family Housing Refunding Revenue Bonds Cedar Hill West (FHA Insured) 7.75% 2026 $5,625,000 $ 5,520,150 Minnetonka Multi-family Housing Revenue Bonds The Cedar Hills Series 1985 7.50 2017 500,000 513,065 Montevideo Independent School District #129 General Obligation Unlimited Tax Bonds School Credit Enhancement Program 4.90 2014 1,875,000 1,581,844 Northern Municipal Power Agency Electric Refunding Revenue Bonds Series A (AMBAC Insured) 6.00 2019 2,250,000 2,174,422 Northern Municipal Power Agency Electric System Refunding Revenue Bonds Series 1989A 7.25 2016 5,475,000 5,909,824 Northern Municipal Power Agency Electric System Pre-Refunded Revenue Bonds Series 1989A (AMBAC Insured) 7.40 2018 1,000,000 1,107,480 Northern Municipal Power Agency Electric System Pre-Refunded Revenue Bonds Series 1989B (AMBAC Insured) 7.40 2018 1,800,000 1,964,448 Norwood-Young America Independent School District #108 General Obligation School Building Bonds Unlimited Tax School Credit Enhancement Program Series 1994A 5.00 2014 1,345,000 1,159,229 Osseo Area Schools Independent School District #279 General Obligation School Building Bonds Series 1993A Inverse Floater 7.30 2012 5,000,000 (e) 4,250,000 Owatanna Public Utilities Pre-Refunded Revenue Bonds Series 1991 6.75 2016 1,000,000 1,075,470 Plymouth Multi-family Housing Revenue Bonds AMT Harbor Lane Apartments Project Series 1993 (Asset Guaranty Insured) 5.90 2013 2,325,000 2,142,069 Port Authority St. Paul General Obligation Bonds Series 1994 5.125 2017 2,885,000 2,544,916 Red Wing Industrial Development Refunding Revenue Bonds K mart Series 1993 5.50 2008 400,000 363,580 Richfield Independent School District #280 Unlimited Tax General Obligation School Building Bonds Series 1993C Inverse Floater (FGIC Insured) 7.15 2010 3,300,000 (e) 2,833,875 Richfield Independent School District #280 Unlimited Tax General Obligation School Building Bonds Series 1993C Inverse Floater (FGIC Insured) 7.25 2012 2,510,000 (e) 2,081,694 Robbinsdale Hospital Pre-Refunded Revenue Bonds North Memorial Medical Center Series 1989 (AMBAC Insured) 7.375 2019 2,200,000 2,439,800 Rochester Health Care Facility Revenue Bonds Mayo Foundation/Mayo Medical Center Series 1992I 5.75 2021 3,000,000 2,752,920 Rochester Multi-family Housing Development Revenue Bonds Civic Square Series 1991 (FHA Insured) 7.45 2031 4,475,000 4,569,736 Roseville Health Care Facility Refunding Revenue Bonds Presbyterian Homes of Minnesota Series 1987 7.50 2007 2,250,000 2,339,910 Rush City Independent School District #139 Unlimited Tax School Building Refunding Bonds School Credit Enhancement Program 5.25 2018 2,595,000 2,297,250 St. Cloud Hospital Facilities Revenue Bonds St. Cloud Hospital Series 1990B (AMBAC Insured) 7.00 2020 5,000,000 5,561,350 St. Cloud Hospital Refunding Revenue Bonds Series 1993C (AMBAC Insured) 5.25 2013 1,000,000 897,070 St. Cloud Hydro Electric Generation Facility Gross Revenue Bonds 7.375 2018 1,100,000 1,165,296 Series 1986 St. Louis Park Health Care Facilities Revenue Bonds Healthsystem Minnesota Obligated Group Series 1993 (AMBAC Insured) 5.20 2023 4,500,000 3,817,935 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities. Investments in securities (Percentages represent IDS Minnesota Tax-Exempt Fund value of investments June 30, 1994 compared to net assets) _____________________________________________________________________________________________________________________________ Municipal bonds (continued) _____________________________________________________________________________________________________________________________ Name of issuer and Coupon Maturity Principal Value(a) title of issue (b,c,g) rate amount _____________________________________________________________________________________________________________________________ St. Louis Park Health Care Facilities Revenue Bonds Healthsystem Minnesota Obligated Group Series 1993A (AMBAC Insured) 5.20% 2016 $ 3,000,000 $ 2,629,350 St. Louis Park Health Care Facilities Revenue Bonds Healthsystem Minnesota Obligated Group Series 1993B Inverse Floater (AMBAC Insured) 6.773 2013 7,000,000 (e) 5,232,500 St. Louis Park Health Care Facilities Pre-Refunded Revenue Bonds Park Nicollet Medical Center Series 1990A 9.25 2020 4,000,000 4,822,680 St. Louis Park Health Care Facilities Pre-Refunded Revenue Bonds Park Nicollet Medical Center Series 1991A 8.625 2021 2,000,000 2,358,160 St. Louis Park Multi-family Rental Housing Revenue Bonds Mortgage Loan-Community Housing & Services Series 1985 (FHA Insured) 7.375 2028 2,250,000 2,343,555 St. Paul & Minneapolis Housing & Redevelopment Authority Health Care Facility Revenue Bonds Group Health Plan Series 1992 6.75 2013 10,500,000 (f) 10,624,320 St. Paul Housing & Redevelopment Authority Hospital Facility Revenue Bonds St. Paul Ramsey Medical Center (AMBAC Insured) 5.55 2023 2,000,000 1,821,140 St. Paul Housing & Development Bonds Highland Retirement (FHA Insured) 7.013 2026 5,210,000 (d) 4,793,200 St. Paul Housing & Redevelopment Authority Commercial Development Refunding Revenue Bonds Beverly Enterprises Series 1992 7.75 2002 2,900,000 3,053,265 St. Paul Housing & Redevelopment Authority Health Care Facility Revenue Bonds Lyngblomsten Care Center Series 1993A 7.125 2017 1,960,000 1,889,714 St. Paul Housing & Redevelopment Authority Health Care Facility Revenue Bonds Lyngblomsten Care Center Series 1993A 9.60 2006 1,110,000 1,108,912 St. Paul Housing & Redevelopment Authority Health Care Facility Revenue Bonds Multi-family Rental Housing Revenue Bonds Lynblomsten Project 1993B 7.00 2024 1,930,000 1,786,794 St. Paul Housing & Redevelopment Authority Sales Tax Revenue Bonds Civic Center Series 1993 5.55 2023 5,000,000 4,506,900 St. Paul Sewer Refunding Revenue Bonds Series 1993 (AMBAC Insured) 5.60 2008 7,700,000 7,484,477 Southern Minnesota Municipal Power Agency Power Supply System Revenue Bonds Series 1992B 5.75 2018 1,100,000 1,023,770 Southern Minnesota Municipal Power Agency Pre-Refunded Bonds Series 1988A 8.125 2018 1,315,000 1,471,722 Southern Minnesota Municipal Power Agency Pre-Refunded Bonds Series 1988B 8.125 2018 1,000,000 1,119,180 Southern Minnesota Municipal Power Agency Power Supply System Pre-Refunded Revenue Bonds Series 1986A 6.75 2013 1,000,000 1,055,090 Southern Minnesota Municipal Power Agency Power Supply System Pre-Refunded Revenue Bonds Series 1986B 7.00 2016 2,500,000 2,646,725 Southern Minnesota Municipal Power Agency Power Supply System Pre-Refunded Revenue Bonds Series 1984B 7.00 2018 3,475,000 3,707,269 Southern Minnesota Municipal Power Agency Power Supply System Pre-Refunded Revenue Bonds Series 1986C 7.125 2015 8,000,000 8,484,000 Spring Park Health Care Facility Revenue Bonds Twin Birch Health Care Center Series 1991 8.25 2011 1,780,000 1,920,175 State General Obligation Various Purpose Pre-Refunded Bonds Series 1990 7.00 2009 7,850,000 8,604,306 State General Obligation Various Purpose Pre-Refunded Bonds Series 1991 6.70 2011 9,065,000 9,828,273 State Higher Education Facility Authority Mortgage Pre-Refunded Revenue Bonds St. Mary's College Series 2M 8.375 2017 1,000,000 1,140,060 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities. Investments in securities (Percentages represent IDS Minnesota Tax-Exempt Fund value of investments June 30, 1994 compared to net assets) _____________________________________________________________________________________________________________________________ Municipal bonds (continued) _____________________________________________________________________________________________________________________________ Name of issuer and Coupon Maturity Principal Value(a) title of issue (b,c,g) rate amount _____________________________________________________________________________________________________________________________ State Housing Facility Authority Housing Development Bonds Series A 7.125% 2020 $ 845,000 $ 862,120 State Housing Facility Authority Housing Development Bonds Series 1976A 7.25 2018 205,000 209,799 State Housing Facility Authority Housing Development Bonds Series 1978B 7.10 2021 470,000 479,142 State Housing Facility Authority Housing Development Bonds Series 1979A 7.00 2022 700,000 714,595 State Housing Facility Authority Housing Finance Agency Housing Development Single Family Mortgage Bonds Series B 7.25 2016 480,000 495,912 State Housing Finance Agency Single Family Mortgage Bonds Series AMT 1989A 8.00 2029 1,860,000 1,915,819 State Housing Finance Agency Single Family Mortgage Bonds Series AMT 1990A 7.95 2022 3,915,000 3,988,954 State Housing Finance Agency Single Family Mortgage Bonds Series AMT 1991A 7.45 2022 3,595,000 3,722,874 State Housing Finance Agency Single Family Mortgage Bonds Series 1992A 6.95 2016 3,330,000 3,390,107 State Public Facilities Authority Water Pollution Control Revenue Bonds Series 1989A 7.00 2009 6,250,000 6,647,937 State Public Facilities Authority Water Pollution Control Revenue Bonds Series 1992A 6.50 2014 9,050,000 9,574,538 State University Board of Regents General Obligation Bonds Series 1993A Inverse Floater 6.427 2003 5,000,000 (e) 4,400,000 State University Board of Regents General Obligation Pre-Refunded Bonds Series 1986A 7.75 2010 1,675,000 1,794,427 State University Board of Regents General Obligation Pre-Refunded Bonds Series 1989A 6.00 2011 4,625,000 4,572,090 State University Board State University System Pre-Refunded Revenue Bonds Series 1989A (MBIA Insured) 7.40 2019 4,000,000 4,412,640 Washington County General Obligation Capital Improvement Bonds Series 1989A 7.00 2009-10 4,425,000 4,775,858 Washington County Housing & Redevelopment Authority Multi-family Housing Revenue Bonds AMT Orleans Homes Series 1987-2 9.00 2017 2,000,000 2,155,480 Western Minnesota Municipal Power Agency Revenue Bonds Escrowed to Maturity (AMBAC Insured) 6.75 2016 5,935,000 6,124,445 Western Minnesota Municipal Power Agency Supply Refunding Revenue Bonds Series 1987A 5.50 2015 5,000,000 4,503,250 Western Minnesota Municipal Power Agency Supply Refunding Revenue Bonds Series 1987A 6.875 2007 2,500,000 2,627,775 Western Minnesota Municipal Power Agency Supply Refunding Revenue Bonds Series 1987A 7.00 2013 7,300,000 7,694,273 Western Minnesota Municipal Power Agency Supply Refunding Revenue Bonds Series A (Secondary MBIA Insured) 5.50 2015 6,250,000 5,719,062 White Bear Lake Industrial Development Revenue Bonds AMT Taylor 8.75 2008 2,250,000 2,443,207 Series 1988A _____________________________________________________________________________________________________________________________ Total municipal bonds (Cost: $385,791,640) $393,852,645 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities. Investments in securities (Percentages represent IDS Minnesota Tax-Exempt Fund value of investments June 30, 1994 compared to net assets) _____________________________________________________________________________________________________________________________ Short-term securities (1.7%) _____________________________________________________________________________________________________________________________ Issuer(g) Annualized Amount Value(a) yield on payable at date of maturity purchase _____________________________________________________________________________________________________________________________ Municipal notes Regents of University of Minnesota Series I 07-01-94 2.30% $1,000,000 $ 1,000,000 Richfield Independent School District #280 S.A.V.R. (FGIC Insured) 08-01-94 3.16% 5,810,000 5,810,000 _____________________________________________________________________________________________________________________________ Total short-term securities (Cost: $6,810,000) $ 6,810,000 _____________________________________________________________________________________________________________________________ Total investments in securities (Cost: $392,601,640)(h) $400,662,645 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities.
Investments in securities IDS Minnesota Tax-Exempt Fund June 30, 1994 ___________________________________________________________________ Notes to investments in securities ___________________________________________________________________ (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Investments in bonds, by rating category as a percentage of total bonds, are as follows: (Unaudited) Rating 06-30-94 06-30-93 ___________________________________________________________________ AAA 43% 22% AA 24 28 A 20 31 BBB and below 13 3 Non-rated -- 16 Total 100% 100% ___________________________________________________________________ (c) The following abbreviations are used in portfolio descriptions to identify the insurer of the issue: AMBAC -- American Municipal Bond Association Corporation FGIC -- Financial Guarantee Insurance Corporation FHA -- Federal Housing Authority MBIA -- Municipal Bond Investors Assurance (d) Presently non-income producing. Item identified is in default as to payment of interest and/or principal. (e) Inverse floaters represent securities which pay interest at a rate that increases (decreases) based on (decreases) increases of market short-term rates. Interest rate disclosed is the rate in effect on June 30, 1994. (f) Partially pledged as initial deposit on the following open interest rate futures purchase contracts (see Note 5 to the financial statements): Type of security Par value _____________________________________________________ U.S. Treasury Bond, Sept. 1994 $27,500,000 _____________________________________________________ (g) The following abbreviations are used in portfolio descriptions: AMT -- Alternative Minimum Tax S.A.V.R. -- Select Auction Variable Rate (h) At June 30, 1994, the cost of securities for federal income tax purposes was $392,505,556 and the aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $19,346,065 Unrealized depreciation (11,188,976) ___________________________________________________________________ Net unrealized appreciation $ 8,157,089 ___________________________________________________________________
Investments in securities IDS New York Tax-Exempt Fund (Percentages represent value of June 30, 1994 investments compared to net assets) _____________________________________________________________________________________________________________________________ Municipal bonds (96.9%) _____________________________________________________________________________________________________________________________ Name of issuer and Coupon Maturity Principal Value(a) title of issue (b,c,h) rate amount _____________________________________________________________________________________________________________________________ Battery Park City Authority Senior Refunding Revenue Bonds Series 1993A 5.25% 2017 $4,000,000 $ 3,456,920 Broome County Certificates of Partication Public Safety Facility Series 1994 (MBIA Insured) 5.25 2022 1,250,000 1,064,338 Buffalo Municipal Water Finance Authority Water System Revenue Bonds (FSA Insured) 5.75 2019 700,000 643,615 Erie County Water Authority Fourth Resolution Water Refunding Revenue Bonds Zero Coupon Series 1992 (AMBAC Insured) 7.30 2017 1,215,000 (d) 225,613 Erie County Water Authority Water Works System Revenue Bonds Escrowed to Maturity Series 1990A (AMBAC Insured) 6.00 2008 1,765,000 1,781,856 Fallsburg Sullivan County Unlimited Tax General Obligation Improvement Pre-Refunded Bonds Series 1991 7.05 2011-14 1,300,000 1,450,566 Great Neck North Water Authority Water System Pre-Refunded Revenue Bonds Series 1989A 6.00 2020 1,415,000 1,471,996 Metropolitan Transportation Authority Commuter Facilities 1987 Service Contract Refunding Bonds Series 5 6.50 2016 1,775,000 1,754,534 Metropolitan Transportation Authority Service Transit Facilities Pre-Refunded Revenue Bonds Series G 8.50 2011 1,000,000 1,096,210 Metropolitan Transportation Authority Transit Facilities Bonds Series 5 6.00 2018 1,500,000 1,388,085 Metropolitan Transportation Authority Transit Facilities Pre-Refunded Revenue Bonds Series F 8.375 2016 725,000 793,027 Monroe County Utility General Obligation Pre-Refunded Bonds Water Improvement System 7.10 2008-14 2,190,000 2,406,328 Municipal Assistance New York City Series 57 7.25 2008 500,000 532,310 Municipal Assistance New York City Series 59 7.75 2006 660,000 722,561 Municipal Assistance New York City Series 62 6.75 2006 2,200,000 2,347,224 New York & New Jersey Port Authority Consolidated Revenue Bonds AMT Series 61 8.125 2023 750,000 790,965 New York & New Jersey Port Authority Consolidated Revenue Bonds AMT Series 62 8.00 2023 1,000,000 1,061,640 New York & New Jersey Port Authority Consolidated Revenue Bonds AMT Series 84 6.00 2028 2,500,000 2,339,725 New York City General Obligation Unlimited Tax Bonds Series E (Capital Guaranty Insured) 6.00 2016 1,500,000 (e) 1,438,230 New York City Municipal Water Finance Authority Water & Sewer System Revenue Bonds Series B Inverse Floater (MBIA Insured) 7.35 2009 2,000,000 (f) 1,705,000 New York City Water Finance Authority Water & Sewer System Pre-Refunded Revenue Bonds Series A (FGIC Insured) 6.75 2014 1,185,000 1,288,996 New York City Water Finance Authority Water & Sewer System Revenue Bonds Series A (FGIC Insured) 6.75 2014 565,000 584,571 New York City Water Finance Authority Water & Sewer System Revenue Pre-Refunded Bonds Series 1988A 7.00 2018 2,500,000 2,686,825 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities. Investments in securities IDS New York Tax-Exempt Fund (Percentages represent value of June 30, 1994 investments compared to net assets) _____________________________________________________________________________________________________________________________ Municipal bonds (continued) _____________________________________________________________________________________________________________________________ Name of issuer and Coupon Maturity Principal Value(a) title of issue (b,c,h) rate amount _____________________________________________________________________________________________________________________________ New York City Water Finance Authority Water & Sewer System Revenue Bonds Series 1993A (AMBAC Insured) 5.75% 2018 $4,000,000 $ 3,706,400 State Certificate of Participation City University John J. College 7.25 2007 360,000 379,375 State Dormitory Authority City University System Pre-Refunded Revenue Bonds 8.125 2017 3,400,000 3,781,990 State Dormitory Authority City University System Pre-Refunded Revenue Bonds Series 1986A 7.625 2013 1,000,000 1,079,900 State Dormitory Authority City University System Revenue Bonds Series 1993A 5.75 2013 3,000,000 2,753,430 State Dormitory Authority State University Education Facility Refunding Revenue Bonds Series 1990B 7.50 2011 1,900,000 2,098,968 State Dormitory Authority State University Education Facility Pre-Refunded Revenue Bonds Series 1990A 7.70 2012 1,750,000 2,000,513 State Dormitory Authority Upstate Community Colleges Series A (Connie Lee Insured) 5.625 2012 1,500,000 1,390,350 State Energy Research & Development Authority Electric Facility Revenue Bonds AMT Consolidated Edison Series 1986A 7.50 2021 1,750,000 1,847,878 State Energy Research & Development Authority Electric Facility Revenue Bonds AMT Consolidated Edison Series 1989A 7.75 2024 1,000,000 1,070,330 State Energy Research & Development Authority Electric Facility Revenue Bonds AMT Consolidated Edison Series 1990A 7.50 2025 5,000,000 5,314,900 State Energy Research & Development Authority Gas Facility Revenue Bonds Brooklyn Union Gas Series I 7.125 2020 2,000,000 2,114,620 State Energy Research & Development Authority Gas Facility Revenue Bonds Brooklyn Union Gas Series II 7.00 2020 1,500,000 1,581,765 State Environmental Facility State Water & Pollution Control Revolving Fund Revenue Bonds New York City Municipal Water Finance Authority Series 1990A 7.50 2012 3,000,000 3,291,600 State Housing Finance Authority State University Construction Program Pre-Refunded Bonds Series 1986A 8.00 2016 400,000 432,148 State Housing Finance Authority State University Construction Program Pre-Refunded Bonds Series A 8.30 2018 500,000 563,535 State Local Government Assistance Pre-Refunded Bonds Series 1991A 7.00 2016 4,000,000 4,461,840 State Local Government Assistance Bonds Series 1992A 6.875 2019 2,000,000 2,103,380 State Medical Care Facility Finance Agency Hospital & Nursing Home Mortgage Revenue Bonds Montefiore Hospital Series 1989A (FHA Insured) 7.25 2024 1,400,000 1,487,990 State Medical Care Facility Finance Agency Mental Health Services Facility Improving Refunding Revenue Bonds Series 1993F 5.375 2014 1,000,000 867,180 State Medical Care Facility Finance Agency Mental Health Services Facility Improving Refunding Revenue Bonds Series 1994A 5.25 2023 1,500,000 1,232,700 State Medical Care Facility Finance Agency Pre-Refunded Bonds Presbyterian Hospital Series 1985B 8.00 2025 1,320,000 1,465,094 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities. Investments in securities IDS New York Tax-Exempt Fund (Percentages represent value of June 30, 1994 investments compared to net assets) _____________________________________________________________________________________________________________________________ Municipal bonds (continued) _____________________________________________________________________________________________________________________________ Name of issuer and Coupon Maturity Principal Value(a) title of issue (b,c,h) rate amount _____________________________________________________________________________________________________________________________ State Medical Care Facility Finance Agency Revenue Bonds Buffalo General Hospital Series 1988C (FHA Insured) 7.60% 2008 $1,500,000 $ 1,680,120 State Medical Care Facility Finance Agency Revenue Bonds Buffalo General Hospital Series 1988C (FHA Insured) 7.70 2022 1,950,000 2,187,471 State Medical Care Facility Finance Agency Revenue Bonds North Shore University Glen Cove Series A (MBIA Insured) 5.125 2012 1,000,000 874,190 State Medical Care Facility Finance Agency Secured Hospital Revenue Bonds Series 1987A 7.10 2027 550,000 571,148 State Mortgage Agency Homeowner Mortgage Revenue Bonds Series TT 7.50 2015 4,000,000 4,205,960 State Mortgage Agency Homeowner Mortgage Revenue Bonds Series 27 6.90 2015 3,000,000 3,046,320 State Mortgage Agency Revenue Bonds AMT Series 9 7.30 2017 1,000,000 1,019,880 State Power Authority General Purpose Pre-Refunded Revenue Bonds Series T 7.375 2018 1,000,000 1,063,120 State Thruway Authority Local Highway & Bridge Service Contract Bonds Series 1991 6.00 2011 2,500,000 2,374,575 State Urban Development Correction Facility Pre-Refunded Bonds Series B 8.00 2015 1,000,000 1,073,260 State Urban Development Correction Facility Pre-Refunded Revenue Bonds Series 1986 8.00 2015 750,000 804,945 State Urban Development Correction Facility Pre-Refunded Revenue Bonds Series 1 (FSA Insured) 7.50 2020 4,500,000 5,080,950 State Urban Development Correctional Capital Facilities Refunding Revenue Bonds Series 1993A 5.25 2021 2,500,000 2,066,600 Suffolk County General Obligation Public Improvement Refunding Bonds Series G (MBIA Insured) 5.40 2014 1,000,000 902,120 Triborough Bridge & Tunnel Authority General Purpose Pre-Refunded Revenue Bonds Series S 7.00 2021 3,000,000 3,327,030 Triborough Bridge & Tunnel Authority Special Obligation Refunding Bonds Series 1991B (FGIC Insured) 6.875 2015 2,000,000 2,098,240 United Nations Development Pre-Refunded Revenue Bonds Phase II & III 7.875 2026 1,460,000 1,574,333 United Nations Development Senior Lien Pre-Refunded Revenue Bonds 1986 Phase II & III 7.875 2006 250,000 269,577 United Nations Development Senior Lien Refunding Revenue Bonds Series 1992A 6.00 2026 4,500,000 4,221,405 _____________________________________________________________________________________________________________________________ Total municipal bonds (Cost: $111,051,032) $116,498,265 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities. Investments in securities IDS New York Tax-Exempt Fund (Percentages represent value of June 30, 1994 investments compared to net assets) _____________________________________________________________________________________________________________________________ Short-term securities (1.1%) _____________________________________________________________________________________________________________________________ Issuer (g) Effective Amount Value(a) yield payable at maturity _____________________________________________________________________________________________________________________________ Municipal notes New York City General Obligation Bonds Series H-5 08-12-12 3.50% $ 500,000 $ 500,000 New York City General Obligation Bonds Subseries 1994A-4 08-01-22 2.90 600,000 600,000 New York City Municipal Water Finance Authority Water & Sewer System Series 1992C 06-15-22 2.75 200,000 200,000 _____________________________________________________________________________________________________________________________ Total short-term securities (Cost: $1,300,000) $ 1,300,000 _____________________________________________________________________________________________________________________________ Total investments in securities (Cost: $112,351,032)(i) $117,798,265 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities.
Investments in securities IDS New York Tax-Exempt Fund June 30, 1994 ___________________________________________________________________ Notes to investments in securities ___________________________________________________________________ (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Investments in bonds, by rating category as a percentage of total bonds, are as follows: (Unaudited) Rating 06-30-94 06-30-93 ___________________________________________________________________ AAA 46% 26% AA 30 43 A 11 15 BBB and below 13 16 Non-rated -- -- Total 100% 100% ___________________________________________________________________ (c) The following abbreviations are used in portfolio descriptions to identify the insurer of the issue: AMBAC - American Municipal Bond Association Corporation FGIC - Financial Guarantee Insurance Corporation FHA - Federal Housing Authority FSA - Financial Security Assurance MBIA - Municipal Bond Investors Assurance (d) For zero coupon bonds, the interest rate disclosed represents the annualized effective yield on the date of acquisition. (e) Partially pledged as initial deposit on the following open interest rate futures purchase contracts (see Note 5 to the financial statements): Type of security Par value ___________________________________________________________________ U.S. Treasury Bonds, Sept. 94 $9,000,000 ___________________________________________________________________ (f) Inverse floaters represent securities which pay interest at a rate that increases (decreases) based on (decreases) increases of market short-term rates. Interest rate disclosed is the rate in effect on June 30, 1994. (g) Interest rate varies to reflect current market conditions; rate shown is the effective rate on June 30, 1994. (h) The following abbreviation is used in portfolio descriptions: AMT - Alternative Minimum Tax (i) At June 30, 1994, the cost of securities for federal income tax purposes was $112,324,643 and the aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $7,810,635 Unrealized depreciation (2,337,013) ___________________________________________________________________ Net unrealized appreciation $5,473,622 ___________________________________________________________________
Investments in securities IDS Ohio Tax-Exempt Fund (Percentages represent value of June 30, 1994 investments compared to net assets) _____________________________________________________________________________________________________________________________ Municipal bonds (98.2%) _____________________________________________________________________________________________________________________________ Name of issuer and Coupon Maturity Principal Value(a) title of issue (b,c) rate amount _____________________________________________________________________________________________________________________________ Akron Bath & Copley Joint Township Hospital Refunding Revenue Bonds Childrens Hospital Medical Center (AMBAC Insured) 5.00% 2015 $1,000,000 $ 854,640 Akron Bath & Copley Joint Township Hospital Refunding Revenue Bonds Childrens Hospital Medical Center Series 1993 (AMBAC Insured) 5.25 2020 1,500,000 1,300,290 Barberton Limited Tax Various Purpose General Obligation Bonds Series 1989-1 7.35 2009 700,000 727,020 Bedford School District Unlimited Tax Improvement General Obligation Various Purpose Bonds Series 1993 6.25 2013 700,000 688,373 Bedford Sewer System Mortgage Revenue Bonds Series 1986 (AMBAC Insured) 7.80 2010 300,000 327,597 Bellefontaine Hospital Facility Refunding Revenue Bonds Mary Rutan Health Association of Logan County Series 1993 6.00 2013 1,000,000 892,680 Benjamin Logan Local School District Refunding Revenue Bonds Childrens Hospital Medical Center (AMBAC Insured) 5.20 2010 550,000 502,271 Butler County Hospital Facility Improvement Refunding Revenue Bonds 7.50 2010 1,750,000 1,709,347 Cincinnati Student Loan Funding Corporation Junior Sub Bonds AMT Series 1993B 6.20 2012 1,000,000 961,100 Cincinnati Student Loan Funding Corporation Senior Sub Bonds Series 1993A 6.15 2010 500,000 481,210 Clermont County Hospital Facility Refunding Revenue Bonds Mercy Health Systems Series B (AMBAC Insured) 5.875 2015 1,250,000 1,193,837 Clermont County Hospital Facility Revenue Bonds Mercy Health System Province of Cincinnati Series 1989A (AMBAC Insured) 7.50 2019 750,000 831,165 Cleveland Airport Systems Revenue Bonds AMT Series 1990A (MBIA Insured) 7.40 2020 500,000 547,750 Cleveland General Obligation Pre-Refunded Bonds 7.375 2003 125,000 136,746 Cleveland Public Power System 1st Mortgage Pre-Refunded Revenue Bonds 8.375 2017 100,000 111,740 Cleveland Waterworks Improvement 1st Mortgage Pre-Refunded Revenue Bonds Series F 1992A (AMBAC Insured) 6.50 2021 1,590,000 1,722,145 Cleveland Waterworks Improvement 1st Mortgage Refunding Revenue Bonds Series F 1992B (AMBAC Insured) 6.25 2016 1,000,000 999,980 Cleveland Waterworks Improvement 1st Mortgage Revenue Bonds Series 1987E 6.00 2017 200,000 189,614 Cleveland Waterworks Improvement 1st Mortgage Pre-Refunded Revenue Bonds Series 1987E 7.875 2016 650,000 709,280 Columbus Sewer Pre-Refunded Revenue Bonds Series A 8.00 2008 100,000 108,391 Columbus Water System Refunding Revenue Bonds Series 1991 6.375 2010 1,000,000 1,009,320 Coshocton County Solid Waste Disposal Refunding Revenue Bonds Stone Container Series 1992 7.875 2013 1,000,000 1,000,980 Cuyahoga County Hospital Improvement Revenue Bonds Cleveland Clinic Foundation 7.00 2013 500,000 522,105 Cuyahoga County Hospital Improvement Pre-Refunded Revenue Bonds Cleveland Clinic Foundation Series 1987A 7.875 2010 275,000 304,931 Cuyahoga County Hospital Improvement Revenue Bonds Mount Sinai Medical Center Series 1991 (AMBAC Insured) 6.625 2021 600,000 615,288 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities. Investments in securities IDS Ohio Tax-Exempt Fund Percentages represent value of June 30, 1994 investments compared to net assets) _____________________________________________________________________________________________________________________________ Municipal bonds (continued) _____________________________________________________________________________________________________________________________ Name of issuer and Coupon Maturity Principal Value(a) title of issue (b,c) rate amount _____________________________________________________________________________________________________________________________ Cuyahoga County Hospital Improvement Revenue Bonds University Hospitals Health System Series 1992 (AMBAC Insured) 6.50% 2011 $ 500,000 $ 514,645 Cuyahoga County Hospital Refunding Revenue Bonds Cleveland Clinic Foundation Series 1992 5.50 2011 1,500,000 1,399,695 Cuyahoga County Hospital Refunding Revenue Bonds Mount Sinai Medical Center Series 1987A 8.125 2014 400,000 439,992 Cuyahoga County Hospital Revenue Bonds Cleveland Fairview General & Lutheran Medical Center Series 1993 6.25 2010 500,000 494,455 Cuyahoga County Hospital Revenue Bonds Meridia Health Series 1991 7.00 2023 1,000,000 1,035,290 Cuyahoga County Limited Tax General Obligation Bonds 5.60 2013 500,000 471,620 Cuyahoga Hospital Revenue Bonds Metrohealth System Series 1989 (MBIA Insured) 6.00 2019 1,000,000 971,130 Dover Limited Tax Improvement General Obligation Municipal Sewer System Bonds 7.10 2009 1,000,000 1,077,700 Dublin Local School District Unlimited Tax Improvement School Building Construction Pre-Refunded Bonds (FGIC Insured) 7.50 2003 100,000 110,048 Elyria Limited Tax Improvement General Obligation Recreation Facility Bonds 7.10 2009 715,000 765,379 Erie County Hospital Improvement Refunding Revenue Bonds Firelands Community Hospital Series 1992 6.75 2015 2,000,000 2,030,780 Fairfield Union Local School District School Facilities Unlimited Tax Improvement General Obligation Bonds (AMBAC Insured) 5.90 2018 625,000 601,525 Findlay Limited Tax General Obligation Sewage System Pre-Refunded Bonds Series 1989 7.20 2011 500,000 555,180 Franklin County Convention Facilities Authority Tax & Lease Revenue Anticipation Bond (MBIA Insured) 5.80 2013 1,000,000 960,570 Franklin County Convention Facilities Authority Tax & Lease Revenue Anticipation Pre-Refunded Bonds (MBIA Insured) 7.00 2019 1,500,000 1,672,485 Franklin County Limited Tax General Obligation Refunding Bonds Series 1993 5.50 2013 1,000,000 929,510 Highland Heights Limited Tax Improvement General Obligation Street Bonds 7.75 2008 400,000 447,168 Kettering School District Improvement General Obligation Bonds (FGIC Insured) 5.25 2022 1,000,000 872,530 Lake County Water System Limited Tax Improvement General Obligation Pre-Refunded Bonds Series 1987-2 8.125 2010 700,000 783,503 Lakota Local School District Butler County School Unlimited Tax Improvement Bonds 7.00 2012 500,000 545,200 Lakota Local School District Butler County School Unlimited Tax Improvement Pre-Refunded Bonds 7.90 2011 200,000 222,648 Lima Limited Tax Improvement General Obligation Sanitary Sewer System Pre-Refunded Bonds 8.25 2012 200,000 224,640 Lucas County Hospital Refunding Revenue Bonds St. Vincent's Medical Center Series B (MBIA Insured) 5.25 2020 2,000,000 1,734,700 Lucas County Hospital Pre-Refunded Revenue Bonds Toledo Hospital (MBIA Insured) 7.00 2014 100,000 106,587 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities.
Investments in securities IDS Ohio Tax-Exempt Fund June 30, 1994 (Percentages represent value of investments compared to net assets) _____________________________________________________________________________________________________________________________ Municipal bonds (continued) _____________________________________________________________________________________________________________________________ Name of issuer and Coupon Maturity Principal Value(a) title of issue (b,c) rate amount _____________________________________________________________________________________________________________________________ Marietta Sewer System Improvement Bonds (BIG Insured) 7.50% 2007 $ 200,000 $ 221,496 Marion County Health Care Facilities Improvement Refunding Revenue Bonds United Church Homes Series 1993 6.375 2010 1,000,000 956,410 Marysville Sewer System 1st Mortgage Revenue Bonds AMT Series 1988 (BIG Insured) 7.85 2008 400,000 444,604 Marysville Water System Mortgage Revenue Bonds Series 1991 (MBIA Insured) 7.05 2021 1,000,000 1,077,830 Mason Waterworks System Refunding Revenue Bonds Series 1993 (AMBAC Insured) 6.00 2017 600,000 585,234 Massillon School District School Unlimited Tax Improvement General Obligation Bonds Series 1989-1 (AMBAC Insured) 7.10 2011 300,000 333,552 Medina County Hospital Revenue Bonds Medina County Community Hospital Series 1987 (AMBAC Insured) 6.875 2016 100,000 106,662 Miami County Hospital Facility Refunding Revenue Bonds Upper Valley Medical Center Series 1987A 8.375 2013 75,000 82,701 Miami State University General Receipts Bonds Series 1993 (FGIC Insured) 5.60 2013 500,000 468,505 Montgomery County Health Facilities Revenue Bonds Friendship Village Dayton Series 1990A 9.25 2016 1,000,000 1,054,270 Montgomery County Industrial Development Revenue Bonds AMT SPM System Series 1991 10.00 2005 720,000 (d) 360,000 Montgomery County Sewer System Refunding Revenue Bonds Greater Moraine - Beavercreek District Series 1993 (FGIC Insured) 5.60 2011 1,000,000 943,090 Newark Water System Limited Tax Improvement General Obligation Bonds (AMBAC Insured) 6.00 2018 500,000 488,085 Parma Hospital Improvement Revenue Bonds Parma Community General Hospital Series 1989B (MBIA Insured) 7.125 2013 500,000 541,490 Pickerington Local School District Unlimited Tax General Obligation Pre-Refunded Bonds (AMBAC Insured) 7.00 2013 1,000,000 1,114,990 Pleasant Local School District Unlimited Tax Improvement General Obligation Bonds Series 1993 (AMBAC Insured) 5.10 2018 780,000 669,224 Rocky River City School District Unlimited Tax Improvement General Obligation Bonds Series 1991A 6.90 2011 2,220,000 2,344,409 Rural Loraine County Water Authority Water Resource Improvement Pre-Refunded Revenue Bonds Series 1991 (AMBAC Insured) 7.00 2011 1,000,000 1,107,360 South Euclid Lyndhurst School District General Obligation Bonds (FGIC Insured) 5.25 2018 1,000,000 876,670 Southwest Local School District Hamilton & Butler Counties School Unlimited Tax Improvement Bonds (AMBAC Insured) 7.65 2010 500,000 572,640 Stark County Hospital Pre-Refunded Revenue Bonds Timkin Mercy Medical Center 7.50 2007 125,000 135,503 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities.
Investments in securities IDS Ohio Tax-Exempt Fund June 30, 1994 (Percentages represent value of investments compared to net assets) _____________________________________________________________________________________________________________________________ Municipal bonds (continued) _____________________________________________________________________________________________________________________________ Name of issuer and Coupon Maturity Principal Value(a) title of issue (b,c) rate amount _____________________________________________________________________________________________________________________________ State Air Quality Development Authority Revenue Bonds Cleveland Electric Illuminating Series A 7.00% 2009 $ 350,000 $ 350,431 State Building Authority Local Jail Grant Bonds Series 1989A (MBIA Insured) 7.35 2009 500,000 560,265 State Building Authority State Correctional Facility Refunding Revenue Bonds Series 1993A 5.90 2007 1,000,000 991,730 State Building Authority State Correctional Facility Refunding Revenue Bonds Series 1993A 6.00 2008 500,000 509,065 State Building Authority State Correctional Facility Revenue Bonds Series B 7.125 2009 75,000 79,022 State Building Authority State Facility Pre-Refunded Bonds Columbus State Office Building Series 1985C 7.35 2005 1,000,000 1,126,940 State Building Authority State Facility Pre-Refunded Bonds Department of Administrative Services Data Center Series 1988A 7.80 2007 300,000 331,626 State Higher Educational Facility Pre-Refunded Revenue Bonds Oberlin College Series 1989 7.375 2014 500,000 560,195 State Higher Educational Facility Revenue Bonds University of Dayton Series 1994 (FGIC Insured) 5.80 2019 900,000 848,700 State Housing Finance Agency Mortgage Revenue Bonds AMT Aristocrat South Board & Care Series 1991A (FHA Insured) 7.30 2031 1,500,000 1,525,515 State Housing Finance Agency Single Family Mortgage Revenue Bonds AMT Series 1990A (GNMA Insured) 7.80 2030 745,000 772,200 State Housing Finance Agency Single Family Mortgage Revenue Bonds AMT Series 1990C (GNMA Insured) 7.85 2021 990,000 1,025,977 State Municipal Electric Generation Agency Joint Venture #5 Revenue Bonds (AMBAC Insured) 5.375 2024 1,250,000 1,098,600 State Water Development Authority Improvement Refunding Revenue Bonds Pure Water Series (AMBAC Insured) 6.00 2008 1,500,000 1,517,265 State Water Development Authority Pollution Control Revenue Bonds Phillip Morris 7.25 2008 150,000 161,028 State Water Development Authority Water Development Pre-Refunded Bonds Pure Water Series 1987I 7.75 2006-14 200,000 219,190 State Water Development Authority Water Development Pre-Refunded Bonds Pure Water Series 1988I 7.00 2014 500,000 535,165 Summit County Industrial Development Revenue Bonds Century Products 7.75 2005 100,000 107,639 Summit County Limited Tax General Obligation Pre-Refunded Bonds Human Services Facility (AMBAC Insured) 8.00 2007 100,000 111,541 Sycamore Board of Education Community School District Hamilton County School Improvement Bonds 6.50 2009 500,000 508,150 University of Cincinnati General Receipt Bonds Series 1991G 7.00 2011 1,000,000 1,068,220 University of Cincinnati General Receipt Pre-Refunded Bonds Series H 7.50 2008 250,000 276,100 University of Cincinnati General Receipt Pre-Refunded Bonds Series I-1 7.10 2010 750,000 828,270 University of Toledo General Receipt Bonds Series A (FGIC Insured) 5.90 2020 1,000,000 955,290 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities. Investments in securities IDS Ohio Tax-Exempt Fund June 30, 1994 (Percentages represent value of investments compared to net assets) _____________________________________________________________________________________________________________________________ Municipal bonds (continued) _____________________________________________________________________________________________________________________________ Name of issuer and Coupon Maturity Principal Value(a) title of issue (b,c) rate amount _____________________________________________________________________________________________________________________________ University of Toledo General Receipt Bonds Series B (FGIC Insured) 5.90% 2020 $ 1,000,000 $ 955,290 University of Toledo General Receipt Pre-Refunded Bonds Series 1990 (MBIA Insured) 7.125 2020 500,000 556,935 Warren County Various Purpose Limited Tax General Obligation Bonds Series 1992 6.10 2012 500,000 499,960 Whitehall City School District Franklin County Unlimited Tax Improvement General Obligation School Building Construction Pre-Refunded Bonds 7.25 2013 500,000 558,935 _____________________________________________________________________________________________________________________________ Total municipal bonds (Cost: $68,841,082) 70,260,000 $ 70,538,749 _____________________________________________________________________________________________________________________________ Total investments in securities (Cost: $68,841,082)(e) 70,260,000 $ 70,538,749 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities.
Investments in securities IDS Ohio Tax-Exempt Fund June 30, 1994 ___________________________________________________________________ Notes to investments in securities ___________________________________________________________________ (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Investments in bonds, by rating category as a percentage of total bonds, are as follows: (Unaudited) Rating 06-30-94 06-30-93 ___________________________________________________________________ AAA 65% 43% AA 11 22 A 14 23 BBB and below 10 6 Non-rated -- 6 Total 100% 100% ___________________________________________________________________ (c) The following abbreviations are used in portfolio descriptions to identify the insurer of the issue: AMBAC -- American Municipal Bond Association Corporation BIG -- Bond Investors Guarantee FGIC -- Financial Guarantee Insurance Corporation FHA -- Federal Housing Authority GNMA -- Government National Mortgage Association MBIA -- Municipal Bond Investors Assurance (d) Presently non-income producing. For long-term debt securities item identified is in default as to payment of interest and/or principal. (e) At June 30, 1994, the cost of securities for federal income tax purposes was $68,810,402 and the aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $3,370,429 Unrealized depreciation (1,642,082) ___________________________________________________________________ Net unrealized appreciation $1,728,347 ___________________________________________________________________
Financial statements Statements of assets and liabilities IDS California Tax-Exempt Trust IDS Special Tax-Exempt Series Trust Dec. 31, 1994 _____________________________________________________________________________________________________________________________ Assets _____________________________________________________________________________________________________________________________ California Massachusetts Michigan Tax-Exempt Tax-Exempt Tax-Exempt Fund Fund Fund (Unaudited) (Unaudited) (Unaudited) _____________________________________________________________________________________________________________________________ Investments in securities, at value (Note 1) (identified cost $226,241,022, $64,891,403 and $73,604,255) $228,034,493 $63,663,446 $73,714,460 Cash in bank on demand deposit 12,740 613,041 2,730,756 Accrued interest receivable 4,804,924 1,557,079 1,270,367 Receivable for investment securities sold 21,875 5,188 5,250 _____________________________________________________________________________________________________________________________ Total assets 232,874,032 65,838,754 77,720,833 _____________________________________________________________________________________________________________________________ Liabilities _____________________________________________________________________________________________________________________________ Dividends payable to shareholders 429,535 84,156 24,020 Payable for investment securities purchased 981,370 -- 942,317 Accrued investment management and services fee 99,297 28,107 31,401 Accrued distribution fee 3,215 1,501 1,381 Accrued transfer agency fee 8,114 3,801 3,534 Other accrued expenses 70,822 30,059 25,177 _____________________________________________________________________________________________________________________________ Total liabilities 1,592,353 147,624 1,027,830 _____________________________________________________________________________________________________________________________ Net assets applicable to outstanding shares $231,281,679 $65,691,130 $76,693,003 _____________________________________________________________________________________________________________________________ Represented by _____________________________________________________________________________________________________________________________ Shares of beneficial interest - $.01 par value, unlimited number of shares authorized; outstanding 46,744,339; 13,028,192 and 14,857,463 shares $ 467,443 $ 130,282 $ 148,575 Additional paid-in capital 232,102,156 67,003,640 76,266,075 Accumulated net realized gain (loss) (Notes 1 and 7) (3,444,354) (312,724) 68,884 Unrealized appreciation (depreciation) (Note 5) 2,156,434 (1,130,068) 209,469 _____________________________________________________________________________________________________________________________ Total -- representing net assets applicable to outstanding shares $231,281,679 $65,691,130 $76,693,003 _____________________________________________________________________________________________________________________________ Net asset value per share $ 4.95 $ 5.04 $ 5.16 _____________________________________________________________________________________________________________________________ See accompanying notes to financial statements. Financial statements Statements of assets and liabilities IDS California Tax-Exempt Trust IDS Special Tax-Exempt Series Trust Dec. 31, 1994 _____________________________________________________________________________________________________________________________ Assets _____________________________________________________________________________________________________________________________ Minnesota New York Ohio Tax-Exempt Tax-Exempt Tax-Exempt Fund Fund Fund (Unaudited) (Unaudited) (Unaudited) _____________________________________________________________________________________________________________________________ Investments in securities, at value (Note 1) (identified cost $370,458,586, $109,313,325 and $67,632,022) $367,298,692 $110,422,200 $66,747,987 Cash in bank on demand deposit -- 768,849 1,080,032 Accrued interest receivable 8,767,837 2,387,466 1,023,329 Receivable for investment securities sold 368,750 14,063 5,188 _____________________________________________________________________________________________________________________________ Total assets 376,435,279 113,592,578 68,856,536 _____________________________________________________________________________________________________________________________ Liabilities _____________________________________________________________________________________________________________________________ Disbursements in excess of cash on demand deposit 2,162,803 -- -- Dividends payable to shareholders 123,839 36,627 21,903 Accrued investment management and services fee 163,354 48,423 29,333 Accrued distribution fee 7,730 2,336 1,323 Accrued transfer agency fee 19,590 5,947 3,362 Other accrued expenses 260,330 40,622 24,194 _____________________________________________________________________________________________________________________________ Total liabilities 2,737,646 133,955 80,115 _____________________________________________________________________________________________________________________________ Net assets applicable to outstanding shares $373,697,633 $113,458,623 $68,776,421 _____________________________________________________________________________________________________________________________ Represented by _____________________________________________________________________________________________________________________________ Shares of beneficial interest - $.01 par value, unlimited number of shares authorized; outstanding 74,855,838; 22,978,473 and 13,540,588 shares $ 748,558 $ 229,785 $ 135,406 Additional paid-in capital 381,558,224 113,492,683 69,747,411 Accumulated net realized loss (Notes 1 and 7) (6,196,783) (1,608,405) (320,250) Unrealized appreciation (depreciation) (Note 5) (2,412,366) 1,344,560 (786,146) _____________________________________________________________________________________________________________________________ Total -- representing net assets applicable to outstanding shares $373,697,633 $113,458,623 $68,776,421 _____________________________________________________________________________________________________________________________ Net asset value per share $ 4.99 $ 4.94 $ 5.08 _____________________________________________________________________________________________________________________________ See accompanying notes to financial statements. Financial statements Statements of operations IDS California Tax-Exempt Trust IDS Special Tax-Exempt Series Trust Six months ended Dec. 31, 1994 _____________________________________________________________________________________________________________________________ Investment income _____________________________________________________________________________________________________________________________ California Massachusetts Michigan Tax-Exempt Tax-Exempt Tax-Exempt Fund Fund Fund (Unaudited) (Unaudited) (Unaudited) _____________________________________________________________________________________________________________________________ Income: Interest $8,159,010 $2,256,616 $2,427,005 _____________________________________________________________________________________________________________________________ Expenses (Note 2): Investment management and services fee 645,698 181,449 196,929 Distribution fee 20,260 9,481 8,515 Transfer agency fee 51,277 24,206 21,753 Compensation of trustees 4,184 4,107 3,209 Compensation of officers 1,524 439 236 Postage 11,006 3,298 2,842 Registration fees 5,941 1,953 940 Reports to shareholders 6,713 1,703 1,624 Audit fees 7,375 6,500 6,500 Administrative 2,664 1,427 1,212 Other 775 1,938 995 _____________________________________________________________________________________________________________________________ Total expenses 757,417 236,501 244,755 _____________________________________________________________________________________________________________________________ Investment income -- net 7,401,593 2,020,115 2,182,250 _____________________________________________________________________________________________________________________________ Realized and unrealized gain (loss) -- net _____________________________________________________________________________________________________________________________ Net realized gain (loss) on security transactions (Note 3) 810,520 (4,450) 397,970 Net realized loss on closed interest rate futures contracts (1,296,613) (62,823) (62,823) Net realized gain on exercised or expired option contracts written (Note 6) 294,020 58,611 58,611 _____________________________________________________________________________________________________________________________ Net realized gain (loss) on investments (192,073) (8,662) 393,758 Net change in unrealized appreciation or depreciation (8,997,689) (2,711,084) (3,103,085) _____________________________________________________________________________________________________________________________ Net loss on investments (9,189,762) (2,719,746) (2,709,327) _____________________________________________________________________________________________________________________________ Net decrease in net assets resulting from operations $(1,788,169) $ (699,631) $ (527,077) _____________________________________________________________________________________________________________________________ See accompanying notes to financial statements. Financial statements Statements of operations IDS California Tax-Exempt Trust IDS Special Tax-Exempt Series Trust Six months ended Dec. 31, 1994 _____________________________________________________________________________________________________________________________ Investment income _____________________________________________________________________________________________________________________________ Minnesota New York Ohio Tax-Exempt Tax-Exempt Tax-Exempt Fund Fund Fund (Unaudited) (Unaudited) (Unaudited) _____________________________________________________________________________________________________________________________ Income: Interest $13,427,126 $3,883,051 $2,275,088 _____________________________________________________________________________________________________________________________ Expenses (Note 2): Investment management and services fee 1,043,298 306,852 185,087 Distribution fee 48,462 14,583 8,197 Transfer agency fee 123,738 37,298 20,996 Compensation of trustees 13,465 3,779 2,455 Compensation of officers 1,665 613 400 Custodian fees 110 -- -- Postage 41,965 5,777 2,547 Registration fees 29,995 2,194 1,217 Reports to shareholders 44,398 2,212 1,421 Audit fees 7,750 7,125 6,500 Administrative 3,093 1,206 657 Other 8,920 2,277 2,335 _____________________________________________________________________________________________________________________________ Total expenses 1,366,859 383,916 231,812 _____________________________________________________________________________________________________________________________ Investment income -- net 12,060,267 3,499,135 2,043,276 _____________________________________________________________________________________________________________________________ Realized and unrealized gain (loss) -- net _____________________________________________________________________________________________________________________________ Net realized gain (loss) on security transactions (Note 3) (2,616,945) 45,533 (11,687) Net realized loss on closed interest rate futures contracts (2,124,681) (633,831) (62,823) Net realized gain on exercised or expired option contracts written (Note 6) 723,957 179,961 58,611 ______________________________________________________________________________________________________________________________ Net realized loss on investments (4,017,669) (408,337) (15,899) Net change in unrealized appreciation or depreciation (9,537,153) (3,796,548) (2,483,813) _____________________________________________________________________________________________________________________________ Net loss on investments (13,554,822) (4,204,885) (2,499,712) _____________________________________________________________________________________________________________________________ Net decrease in net assets resulting from operations $(1,494,555) $ (705,750) $ (456,436) _____________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
Financial statements Statements of changes in net assets IDS California Tax-Exempt Trust IDS Special Tax-Exempt Series Trust _____________________________________________________________________________________________________________________________ Operations and distributions _____________________________________________________________________________________________________________________________ California Tax-Exempt Fund Massachusetts Tax-Exempt Fund _____________________________________________________________________________________________________________________________ Six months ended Year ended Six months ended Year ended 12/31/94 6/30/94 12/31/94 6/30/94 (Unaudited) (Unaudited) _____________________________________________________________________________________________________________________________ Investment income -- net $ 7,401,593 $ 15,236,634 $ 2,020,115 $ 3,862,026 Net realized loss on investments (192,073) (2,375,504) (8,662) (29,934) Net change in unrealized appreciation or depreciation (8,997,689) (11,906,345) (2,711,084) (3,499,662) _____________________________________________________________________________________________________________________________ Net increase (decrease) in net assets resulting from operations (1,788,169) 954,785 (699,631) 332,430 _____________________________________________________________________________________________________________________________ Distributions to shareholders from: Net investment income (7,401,630) (15,235,348) (2,020,115) (3,862,035) _____________________________________________________________________________________________________________________________ Share transactions (Note 4) _____________________________________________________________________________________________________________________________ Proceeds from sales (Note 2) 9,800,491 35,683,408 5,228,979 22,403,265 Reinvestment of distributions 5,157,785 10,573,864 1,578,221 3,055,527 Payments for redemptions (29,683,554) (37,967,003) (10,444,906) (14,032,861) _____________________________________________________________________________________________________________________________ Increase (decrease) in net assets from share transactions (14,725,278) 8,290,269 (3,637,706) 11,425,931 _____________________________________________________________________________________________________________________________ Total increase (decrease) in net assets (23,915,077) (5,990,294) (6,357,452) 7,896,326 Net assets at beginning of period 255,196,756 261,187,050 72,048,582 64,152,256 _____________________________________________________________________________________________________________________________ Net assets at end of period $231,281,679 $255,196,756 $65,691,130 $72,048,582 _____________________________________________________________________________________________________________________________ See accompanying notes to financial statements. Financial statements Statements of changes in net assets IDS California Tax-Exempt Trust IDS Special Tax-Exempt Series _____________________________________________________________________________________________________________________________ Operations and distributions ______________________________________________________________________________________________________________________________ Michigan Tax-Exempt Fund Minnesota Tax-Exempt Fund ______________________________________________________________________________________________________________________________ Six months ended Year ended Six months ended Year ended 12/31/94 6/30/94 12/31/94 6/30/94 (Unaudited) (Unaudited) ______________________________________________________________________________________________________________________________ Investment income -- net $ 2,182,250 $ 4,171,457 $ 12,060,267 $ 24,205,532 Net realized gain (loss) on investments 393,758 (72,444) (4,017,669) (351,284) Net change in unrealized appreciation or depreciation (3,103,085) (3,496,616) (9,537,153) (22,689,828) _____________________________________________________________________________________________________________________________ Net increase (decrease) in net assets resulting from operations (527,077) 602,397 (1,494,555) 1,164,420 _____________________________________________________________________________________________________________________________ Distributions to shareholders from: Net investment income (2,182,176) (4,171,489) (12,060,310) (24,204,281) Net realized gain (36,289) (68,841) -- -- _____________________________________________________________________________________________________________________________ Total distributions (2,218,465) (4,240,330) (12,060,310) (24,204,281) _____________________________________________________________________________________________________________________________ Share transactions (Note 4) _____________________________________________________________________________________________________________________________ Proceeds from sales (Note 2) 8,581,243 15,113,866 24,303,818 81,250,235 Reinvestment of distributions 1,661,930 3,148,115 9,632,645 19,448,232 Payments for redemptions (7,487,442) (9,715,456) (55,074,596) (70,952,363) _____________________________________________________________________________________________________________________________ Increase (decrease) in net assets from share transactions 2,755,731 8,546,525 (21,138,133) 29,746,104 _____________________________________________________________________________________________________________________________ Total increase (decrease) in net assets 10,189 4,908,592 (34,692,998) 6,706,243 Net assets at beginning of period 76,682,814 71,774,222 408,390,631 401,684,388 _____________________________________________________________________________________________________________________________ Net assets at end of period $76,693,003 $76,682,814 $373,697,633 $408,390,631 _____________________________________________________________________________________________________________________________ See accompanying notes to financial statements. Financial statements Statements of changes in net assets IDS California Tax-Exempt Trust IDS Special Tax-Exempt Series Trust _____________________________________________________________________________________________________________________________ Operations and distributions _____________________________________________________________________________________________________________________________ New York Tax-Exempt Fund Ohio Tax-Exempt Fund _____________________________________________________________________________________________________________________________ Six months ended Year ended Six months ended Year ended 12/31/94 6/30/94 12/31/94 6/30/94 (Unaudited) (Unaudited) ______________________________________________________________________________________________________________________________ Investment income -- net $ 3,499,135 $ 6,895,342 $ 2,043,276 $ 3,927,846 Net realized loss on investments (408,337) (505,058) (15,899) (177,991) Net change in unrealized appreciation or depreciation (3,796,548) (6,437,361) (2,483,813) (4,272,974) _____________________________________________________________________________________________________________________________ Net decrease in net assets resulting from operations (705,750) (47,077) (456,436) (523,119) _____________________________________________________________________________________________________________________________ Distributions to shareholders from: Net investment income (3,499,135) (6,894,339) (2,043,288) (3,927,883) Net realized gain -- -- -- (786) _____________________________________________________________________________________________________________________________ Total distributions (3,499,135) (6,894,339) (2,043,288) (3,928,669) _____________________________________________________________________________________________________________________________ Share transactions (Note 4) _____________________________________________________________________________________________________________________________ Proceeds from sales (Note 2) 6,999,349 21,355,340 6,805,529 17,974,999 Reinvestment of distributions 2,715,805 5,365,427 1,600,824 3,100,875 Payments for redemptions (12,210,278) (16,789,123) (8,965,143) (9,646,507) _____________________________________________________________________________________________________________________________ Increase (decrease) in net assets from share transactions (2,495,124) 9,931,644 (558,790) 11,429,367 _____________________________________________________________________________________________________________________________ Total increase (decrease) in net assets (6,700,009) 2,990,228 (3,058,514) 6,977,579 Net assets at beginning of period 120,158,632 117,168,404 71,834,935 64,857,356 _____________________________________________________________________________________________________________________________ Net assets at end of period $113,458,623 $120,158,632 $68,776,421 $71,834,935 _____________________________________________________________________________________________________________________________ See accompanying notes to financial statements.
Notes to financial statements IDS California Tax-Exempt Trust IDS Special Tax-Exempt Series Trust (Unaudited as to Dec. 31, 1994) ______________________________________________________________________________ 1. Summary of significant accounting policies IDS California Tax-Exempt Trust and IDS Special Tax- Exempt Series Trust were organized as Massachusetts business trusts. IDS California Tax-Exempt Trust includes only IDS California Tax-Exempt Fund. IDS Special Tax-Exempt Series Trust is a "series fund" that is currently composed of individual state tax- exempt funds and one insured national tax-exempt fund, including IDS Massachusetts Tax-Exempt Fund, IDS Michigan Tax-Exempt Fund, IDS Minnesota Tax- Exempt Fund, IDS New York Tax-Exempt Fund and IDS Ohio Tax-Exempt Fund (the funds). The funds are non- diversified, open-end management investment companies as defined in the Investment Company Act of 1940 (as amended). The funds, excluding IDS Insured Tax-Exempt Fund, concentrate their investments in a single state and therefore may have more credit risk related to the economic conditions of the respective state than funds that have a broader geographical diversification. Significant accounting policies followed by the funds are summarized below: Valuation of securities All securities are valued at the close of each business day. Securities for which market quotations are not readily available are valued at fair value according to methods selected in good faith by the board of trustees. Determination of fair value involves, among other things, reference to market indexes, matrixes and data from independent brokers. Short-term securities maturing in more than 60 days from the valuation date are valued at the market price or approximate market value based on current interest rates; those maturing in 60 days or less are valued at amortized cost. Options transactions In order to produce incremental earnings, protect gains and facilitate buying and selling of securities for investment purposes, each fund may buy and sell put and call options and write covered call options on portfolio securities and may write cash-secured put options. The risk in writing a call option is that each fund gives up the opportunity of profit if the market price of the security increases. The risk in writing a put option is that each fund may incur a loss if the market price of the security decreases and the option is exercised. Each fund also has the additional risk of not being able to enter into a closing transaction if a liquid secondary market does not exist. Each fund also may write over-the-counter options where the completion of the obligation is dependent upon the credit standing of the other party. Option contracts are valued daily at the closing prices on their primary exchanges and unrealized appreciation or depreciation is recorded. Each fund will realize a gain or loss upon expiration or closing of the option transaction. When options on debt securities or futures are exercised, the fund will realize a gain or loss. When other options are 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 purchase put or call option is adjusted by the amount of the premium received or paid. Futures transactions In order to gain exposure to or protect itself from changes in the market, each fund may buy and sell interest rate futures contracts. Risks of entering into futures contracts and related options include the possibility that there may be 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, each fund is 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 each fund each day. The variation margin payments are equal to the daily changes in the contract value and are recorded as unrealized gains and losses. Each fund recognizes a realized gain or loss when the contract is closed or expires. Federal taxes Since each fund's policy is to comply with all sections of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to shareholders, no provision for income or excise taxes is required. Net investment income (loss) and net realized gains (losses) may differ for financial statement and tax purposes primarily because of the deferral of losses on certain futures contracts, the recognition of certain foreign currency gains (losses) as ordinary income (loss) for tax purposes, 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. 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. Dividends to shareholders Dividends from net investment income, declared daily and paid monthly, are reinvested in additional shares of each fund at net asset value or payable in cash. Capital gains, when available, are distributed along with the last income dividend at the end of the calendar year. Other Security transactions are accounted for on the date securities are purchased or sold. Interest income, including level-yield amortization of premium and discount, is accrued daily. ______________________________________________________________________________ 2. Expenses and sales charges Under terms of an agreement dated Nov. 14, 1991, each fund pays American Express Financial Corporation a fee for managing its investments, recordkeeping and other specified services. The fee is a percentage of each fund's average daily net assets consisting of a group asset charge in reducing percentages from 0.46% to 0.32% annually on the combined net assets of all non-money market funds in the IDS MUTUAL FUND GROUP and an individual annual asset charge of 0.13% of average daily net assets for each fund. Each fund also pays American Express Financial Corporation a distribution fee at an annual rate of $6 per shareholder account and a transfer agency fee at an annual rate of $15.50 per shareholder account. The transfer agency fee is reduced by earnings on monies pending shareholder redemptions. American Express Financial Corporation will assume and pay any expenses (except taxes and brokerage commissions) that exceed the most restrictive applicable state expense limitation. Sales charges by American Express Financial Advisors Inc. for distributing the funds' shares were $227,465 for IDS California, $154,982 for IDS Massachusetts, $98,362 for IDS Michigan, $580,207 for IDS Minnesota, $192,480 for IDS New York and $115,834 for IDS Ohio Tax-Exempt Funds for the six months ended Dec. 31, 1994. Each fund also has a retirement plan for its independent trustees. Upon retirement, trustees receive monthly payments equal to one-half of the retainer fee for as many months as they served as trustees up to 120 months. There are no death benefits. The plan is not funded but each fund recognizes the cost of payments during the time the trustees serve on the board. The retirement plan expense amounted to $1,159 for IDS California, $984 for IDS Massachusetts, $2,156 for IDS Minnesota, $977 for IDS Michigan and $983 each for IDS New York and IDS Ohio Tax-Exempt Funds for the six months ended Dec. 31, 1994. ______________________________________________________________________________ 3. Securities transactions For the six months ended Dec. 31, 1994, cost of purchases and proceeds from sales (other than short- term obligations) aggregated $44,412,773 and $61,704,150 for IDS California, $3,823,059 and $7,096,186 for IDS Massachusetts, $13,362,305 and $13,039,795 for IDS Michigan, $45,755,558 and $58,471,667 for IDS Minnesota, $7,879,149 and $9,662,389 for IDS New York and $17,614,116 and $18,811,489 for IDS Ohio Tax-Exempt Funds. Realized gains and losses are determined on an identified cost basis. ______________________________________________________________________________ 4. Share transactions
Transactions in shares of each fund for the periods indicated are as follows: Number of shares: ________________________________________________________________________________________________________________________ California Tax-Exempt Fund Massachusetts Tax-Exempt Fund Michigan Tax-Exempt Fund _____________________________ ______________________________ ______________________________ Six months Year ended Six months Year ended Six months Year ended ended 12/31/94 6/30/94 ended 12/31/94 6/30/94 ended 12/31/94 6/30/94 (Unaudited) (Unaudited) (Unaudited) ________________________________________________________________________________________________________________________ Sold 1,942,845 6,578,766 1,018,916 4,061,994 1,652,212 2,687,659 Issued for reinvested distributions 1,024,853 1,962,600 308,743 558,167 317,657 562,683 Redeemed (5,938,312) (7,091,287) (2,049,435) (2,564,761) (1,432,683) (1,739,752) ________________________________________________________________________________________________________________________ Net increase (decrease) (2,970,614) 1,450,079 (721,776) 2,055,400 537,186 1,510,590 ________________________________________________________________________________________________________________________ Number of shares: ________________________________________________________________________________________________________________________ Minnesota Tax-Exempt Fund New-York Tax-Exempt Fund Ohio Tax-Exempt Fund _____________________________ ______________________________ ______________________________ Six months Year ended Six months Year ended Six months Year ended ended 12/31/94 6/30/94 ended 12/31/94 6/30/94 ended 12/31/94 6/30/94 (Unaudited) (Unaudited) (Unaudited) ________________________________________________________________________________________________________________________ Sold 4,816,184 14,961,095 1,404,397 3,952,327 1,319,523 3,231,719 Issued for reinvested distributions 1,908,677 3,599,781 542,355 999,332 311,523 562,446 Redeemed (10,992,248) (13,233,479) (2,449,996) (3,127,657) (1,751,493) (1,753,354) ________________________________________________________________________________________________________________________ Net increase (decrease) (4,267,387) 5,327,397 (503,244) 1,824,002 (120,447) 2,040,811 ________________________________________________________________________________________________________________________
______________________________________________________________________________ 5. Interest rate futures contracts Investments in securities at Dec. 31, 1994, included securities valued at $2,015,620 for IDS California, $458,115 for IDS Massachusetts, $424,075 for IDS Michigan, $4,854,250 for IDS Minnesota, $1,383,045 for IDS New York and $483,010 for IDS Ohio Tax-Exempt Funds that were pledged as collateral to cover initial margin deposits on 350, 83, 84, 1,400, 225 and 83 open purchase contracts and 350, 83, 84, 1,400, 225 and 83 open sale contracts, respectively. The market value of the open contracts at Dec. 31, 1994, was $64,421,875 for IDS California, $15,277,188 for IDS Massachusetts, $15,461,250 for IDS Michigan, $128,843,750 for IDS Minnesota, $41,414,062 for IDS New York and $15,277,188 for IDS Ohio Tax-Exempt Funds with a net unrealized gain of $362,963 for IDS California, $97,889 for IDS Massachusetts, $99,264 for IDS Michigan, $747,528 for IDS Minnesota, $235,685 for IDS New York and $97,889 for IDS Ohio Tax-Exempt Funds. __________________________________________________________________________ 6. Option contracts written
The number of contracts and premium amounts associated with option contracts written is as follows: California Tax-Exempt Six months ended Dec. 31, 1994 ____________________________________________ Puts Calls ____________________________________________ Contracts Premium Contracts Premium ____________________________________________ Balance June 30, 1994 -- $ -- -- $ -- Opened 150 219,810 162 74,210 Exercised (150) (219,810) -- -- Expired -- -- (162) (74,210) _____________________________________________________________ Balance Dec. 31, 1994 -- $ -- -- $ -- _____________________________________________________________ Massachusetts Tax-Exempt Six months ended Dec. 31, 1994 ____________________________________________ Puts ____________________________________________ Contracts Premium ____________________________________________ Balance June 30, 1994 -- $ -- Opened 40 58,611 Expired (40) (58,611) ____________________________________________ Balance Dec. 31, 1994 -- $ -- ____________________________________________ Michigan Tax-Exempt Six months ended Dec. 31, 1994 ____________________________________________ Puts ____________________________________________ Contracts Premium ____________________________________________ Balance June 30, 1994 -- $ -- Opened 40 58,611 Expired (40) (58,611) ____________________________________________ Balance Dec. 31, 1994 -- $ -- ____________________________________________ Minnesota Tax-Exempt Six months ended Dec. 31, 1994 ____________________________________________ Puts Calls ____________________________________________ Contracts Premium Contracts Premium ____________________________________________ Balance June 30, 1994 -- $ -- -- $ -- Opened 425 622,088 222 101,868 Exercised (425) (622,088) -- -- Expired -- -- (222) (101,868) _____________________________________________________________ Balance Dec. 31, 1994 -- $ -- -- $ -- _____________________________________________________________ New York Tax-Exempt Six months ended Dec. 31, 1994 ____________________________________________ Puts Calls ____________________________________________ Contracts Premium Contracts Premium ____________________________________________ Balance June 30, 1994 -- $ -- -- $ -- Opened 100 146,441 73 33,520 Exercised (100) (146,441) -- -- Expired -- -- (73) (33,520) _____________________________________________________________ Balance Dec. 31, 1994 -- $ -- -- $ -- _____________________________________________________________ Ohio Tax-Exempt Six months ended Dec. 31, 1994 ____________________________________________ Puts ____________________________________________ Contracts Premium ____________________________________________ Balance June 30, 1994 -- $ -- Opened 40 58,611 Expired (40) (58,611) ____________________________________________ Balance Dec. 31, 1994 -- $ -- ____________________________________________
______________________________________________________________________________ 7. Capital loss carryover For federal income tax purposes, capital loss carryovers were approximately $3,617,000 for IDS California, $208,000 for IDS Massachusetts, $6,787,000 for IDS Minnesota, $1,680,000 for IDS New York and $209,000 for IDS Ohio Tax-Exempt Funds at Dec. 31, 1994. These capital loss carryovers will expire in 1996 through 2003 if not offset by subsequent capital gains. IDS California Tax-Exempt Trust IDS California Tax-Exempt Fund ______________________________________________________________________________ 8. Financial highlights
The table below shows certain important financial information for evaluating each fund's results. Fiscal period ended June 30, Per share income and capital changes* 1994** 1994 1993 1992 1991 1990 Net asset value, $5.13 $5.41 $5.18 $4.94 $4.89 $4.97 beginning of period Income from investment operations: Net investment income .15 .31 .30 .31 .32 .32 Net gains (losses) (.18) (.28) .23 .24 .05 (.08) (both realized and unrealized) Total from investment (.03) .03 .53 .55 .37 .24 operations Less distributions: Dividends from net (.15) (.31) (.30) (.31) (.32) (.32) investment income Net asset value, $4.95 $5.13 $5.41 $5.18 $4.94 $4.89 end of period Ratios/supplemental data 1994** 1994 1993 1992 1991 1990 Net assets, end of period $231 $255 $261 $222 $185 $142 (in millions) Ratio of expenses to .61%*** .61% .63% .64% .60% .62% average daily net assets Ratio of net income to 6.00%*** 5.67% 5.78% 6.16% 6.51% 6.53% average daily net assets Portfolio turnover rate 18% 27% 5% 7% 23% 20% (excluding short-term securities) Total return+ (0.6%)++ 0.4% 10.8% 11.4% 7.7% 5.0% *For a share outstanding throughout the period. Rounded to the nearest cent. **Six months ended Dec. 31, 1994 (Unaudited). ***Adjusted to an annual basis. +Total return does not reflect payment of a sales charge. ++For the fiscal period ended Dec. 31, 1994, the annualized total return is (1.2%).
IDS Special Tax-Exempt Series Trust IDS Massachusetts Tax-Exempt Fund
Financial highlights The table below shows certain important financial information for evaluating the fund's results. Fiscal period ended June 30, Per share income and capital changes* 1994** 1994 1993 1992 1991 1990 Net asset value, $5.24 $5.49 $5.20 $4.96 $4.88 $5.01 beginning of period Income from investment operations: Net investment income .15 .30 .30 .31 .32 .32 Net gains (losses) (.20) (.25) .29 .24 .08 (.12) (both realized and unrealized) Total from investment (.05) .05 .59 .55 .40 .20 operations Less distributions: Dividends from net (.15) (.30) (.30) (.31) (.32) (.32) investment income Distributions from -- -- -- -- -- (.01) realized gains Total distributions (.15) (.30) (.30) (.31) (.32) (.33) Net asset value, $5.04 $5.24 $5.49 $5.20 $4.96 $4.88 end of period Ratios/supplemental data 1994** 1994 1993 1992 1991 1990 Net assets, end of period $66 $72 $64 $44 $27 $19 (in millions) Ratio of expenses to .68%*** .69% .72% .72% .69% .70% average daily net assets Ratio of net income to 5.83%*** 5.40% 5.57% 6.05% 6.53% 6.59% average daily net assets Portfolio turnover rate 6% 6% 0% 2% 16% 36% (excluding short-term securities) Total return+ (0.9%)++ 0.9% 11.5% 11.4% 8.5% 4.2% *For a share outstanding throughout the period. Rounded to the nearest cent. **Six months ended Dec. 31, 1994 (Unaudited). ***Adjusted to an annual basis. +Total return does not reflect payment of a sales charge. ++For the fiscal period ended Dec. 31, 1994, the annualized total return is (1.8%).
IDS Special Tax-Exempt Series Trust IDS Michigan Tax-Exempt Fund
Financial highlights The table below shows certain important financial information for evaluating the fund's results. Fiscal period ended June 30, Per share income and capital changes* 1994** 1994 1993 1992 1991 1990 Net asset value, $5.35 $5.60 $5.31 $5.04 $4.96 $5.08 beginning of period Income from investment operations: Net investment income .15 .31 .31 .32 .32 .32 Net gains (losses) (.18) (.25) .29 .27 .08 (.12) (both realized and unrealized) Total from investment (.03) .06 .60 .59 .40 .20 operations Less distributions: Dividends from net (.16) (.31) (.31) (.32) (.32) (.32) investment income Net asset value, $5.16 $5.35 $5.60 $5.31 $5.04 $4.96 end of period Ratios/supplemental data 1994** 1994 1993 1992 1991 1990 Net assets, end of period $77 $77 $72 $55 $41 $29 (in millions) Ratio of expenses to .65%*** .65% .68% .67% .67% .71% average daily net assets Ratio of net income to 5.80%*** 5.43% 5.64% 6.18% 6.45% 6.47% average daily net assets Portfolio turnover rate 18% 16% 2% 0% 3% 5% (excluding short-term securities) Total return+ (0.7%)++ 1.0% 11.6% 12.0% 8.3% 4.1% *For a share outstanding throughout the period. Rounded to the nearest cent. **Six months ended Dec. 31, 1994 (Unaudited). ***Adjusted to an annual basis. +Total return does not reflect payment of a sales charge. ++For the fiscal period ended Dec. 31, 1994, the annualized total return is (1.4%).
IDS Special Tax-Exempt Series Trust IDS Minnesota Tax-Exempt Fund
Financial highlights The table below shows certain important financial information for evaluating the fund's results. Fiscal period ended June 30, Per share income and capital changes* 1994** 1994 1993 1992 1991 1990 Net asset value, $5.16 $5.44 $5.22 $5.01 $4.95 $5.05 beginning of period Income from investment operations: Net investment income .15 .31 .31 .33 .33 .32 Net gains (losses) (.17) (.28) .22 .21 .06 (.10) (both realized and unrealized) Total from investment (.02) .03 .53 .54 .39 .22 operations Less distributions: Dividends from net (.15) (.31) (.31) (.33) (.33) (.32) investment income Net asset value, $4.99 $5.16 $5.44 $5.22 $5.01 $4.95 end of period Ratios/supplemental data 1994** 1994 1993 1992 1991 1990 Net assets, end of period $374 $408 $402 $313 $233 $181 (in millions) Ratio of expenses to .69%*** .66% .67% .66% .63% .64% average daily net assets Ratio of net income to 6.06%*** 5.73% 5.91% 6.43% 6.67% 6.62% average daily net assets Portfolio turnover rate 12% 13% 2% 7% 10% 8% (excluding short-term securities) Total return+ (0.3%)++ 0.4% 10.5% 11.0% 8.2% 4.8% *For a share outstanding throughout the period. Rounded to the nearest cent. **Six months ended Dec. 31, 1994 (Unaudited). ***Adjusted to an annual basis. +Total return does not reflect payment of a sales charge. ++For the fiscal period ended Dec. 31, 1994, the annualized total return is (0.5%).
IDS Special Tax-Exempt Series Trust IDS New York Tax-Exempt Fund
Financial highlights The table below shows certain important financial information for evaluating the fund's results. Fiscal period ended June 30, Per share income and capital changes* 1994** 1994 1993 1992 1991 1990 Net asset value, $5.12 $5.41 $5.13 $4.86 $4.80 $4.87 beginning of period Income from investment operations: Net investment income .15 .30 .30 .31 .31 .31 Net gains (losses) (.18) (.29) .28 .27 .06 (.07) (both realized and unrealized) Total from investment (.03) .01 .58 .58 .37 .24 operations Less distributions: Dividends from net (.15) (.30) (.30) (.31) (.31) (.31) investment income Net asset value, $4.94 $5.12 $5.41 $5.13 $4.86 $4.80 end of period Ratios/supplemental data 1994** 1994 1993 1992 1991 1990 Net assets, end of period $113 $120 $117 $95 $79 $68 (in millions) Ratio of expenses to .66%*** .65% .67% .67% .65% .65% average daily net assets Ratio of net income to 5.97%*** 5.61% 5.79% 6.26% 6.53% 6.57% average daily net assets Portfolio turnover rate 7% 10% 0% 8% 17% 8% (excluding short-term securities) Total return+ (0.5%)++ 0.1% 11.6% 12.3% 8.2% 5.0% *For a share outstanding throughout the period. Rounded to the nearest cent. **Six months ended Dec. 31, 1994 (Unaudited). ***Adjusted to an annual basis. +Total return does not reflect payment of a sales charge. ++For the fiscal period ended Dec. 31, 1994, the annualized total return is (1.1%).
IDS Special Tax-Exempt Series Trust IDS Ohio Tax-Exempt Fund
Financial highlights The table below shows certain important financial information for evaluating the fund's results. Fiscal period ended June 30, Per share income and capital changes* 1994** 1994 1993 1992 1991 1990 Net asset value, $5.26 $5.58 $5.28 $5.01 $4.94 $5.04 beginning of period Income from investment operations: Net investment income .15 .30 .30 .31 .32 .31 Net gains (losses) (.18) (.32) .31 .27 .07 (.09) (both realized and unrealized) Total from investment (.03) (.02) .61 .58 .39 .22 operations Less distributions: Dividends from net (.15) (.30) (.30) (.31) (.32) (.31) investment income Distributions from -- -- (.01) -- -- (.01) realized gains Total distributions (.15) (.30) (.31) (.31) (.32) (.32) Net asset value, $5.08 $5.26 $5.58 $5.28 $5.01 $4.94 end of period Ratios/supplemental data 1994** 1994 1993 1992 1991 1990 Net assets, end of period $69 $72 $65 $47 $33 $25 (in millions) Ratio of expenses to .66%*** .66% .67% .70% .68% .70% average daily net assets Ratio of net income 5.78%*** 5.44% 5.65% 6.14% 6.41% 6.43% to average daily net assets Portfolio turnover rate 25% 11% 0% 5% 2% 6% (excluding short-term securities) Total return+ (0.5%)++ (0.5%) 12.1% 11.9% 8.1% 4.6% *For a share outstanding throughout the period. Rounded to the nearest cent. **Six months ended Dec. 31, 1994 (Unaudited). ***Adjusted to an annual basis. +Total return does not reflect payment of a sales charge. ++For the fiscal period ended Dec. 31, 1994, the annualized total return is (1.1%).
Investments in securities
IDS California Tax-Exempt Fund (Percentages represent value of Dec. 31, 1994 (Unaudited) investments compared to net assets) ____________________________________________________________________________________________________________________________ Municipal bonds (97.0%) ____________________________________________________________________________________________________________________________ Name of issuer and Coupon Maturity Principal Value(a) title of issue (b,c,f) rate amount _____________________________________________________________________________________________________________________________ Adelanto Improvement Agency Tax Allocation Refunding Bonds Series B (FGIC Insured) 5.50 % 2023 $3,000,000 $ 2,496,090 Aliso Viejo Orange County District Community Facilities District #88-1 Special Tax Bonds Series 1992A 7.35 2018 3,000,000 3,339,390 Anaheim Public Finance Authority Revenue 2nd Series Electric Utilities San Juan (FGIC Insured) 5.75 2022 1,400,000 1,197,434 Burbank Redevelopment Agency Tax Allocation Bonds Golden State Series 1992A 6.00 2013 1,500,000 1,321,080 Burbank Redevelopment Agency Tax Allocation Bonds Golden State Series 1993A 6.00 2023 2,000,000 1,690,540 Chapman College Educational Facilities Authority Revenue Bonds Series 1989B 7.50 2018 500,000 495,670 Chico Walker Senior Housing Insured Revenue Bonds The Lodge Series 1993A 5.70 2023 1,500,000 1,211,130 Clearlake Redevelopment Agency Highlands Park Community Development Tax Allocation Bonds Series 1993 6.40 2023 1,420,000 1,244,076 Eastern Municipal Water District Riverside County Water & Sewer Revenue Certificates of Participation Series 1991 6.00 2023 1,000,000 875,030 Eastern Municipal Water District Riverside County Water & Sewer Pre-Refunded Revenue Certificates of Participation Series 1991 (FGIC Insured) 6.50 2020 3,000,000 3,160,440 Eden Township Hospital District Insured Health Facility Refunding Revenue Certificate of Participation Series 1993 (California Mortgage Insured) 5.75 2012 3,000,000 2,555,130 El Camino Hospital District Hospital Pre-Refunded Revenue Certificate of Participation Series A 8.50 2017 1,500,000 1,646,580 Fontana Redevelopment Agency Refunding Certificate of Participation Police Facility Series 1993 5.625 2016 1,750,000 1,462,055 Foothill-De Anza Community College Santa Clara County Refunding Certificate of Participation Series 1993 (Connie Lee Insured) 5.25 2021 1,675,000 1,327,990 Fresno Health Facility Refunding Revenue Bonds Holy Cross Health System (MBIA Insured) 5.625 2018 2,000,000 1,705,320 Garden Grove Certificate of Participation Bahia Village/Emerald Isle (FSA Insured) 5.70 2023 2,660,000 2,240,651 Health Facility Finance Revenue Bonds Kaiser Permanente Series A 6.50 2020 1,945,000 1,794,496 Indian Wells Improvement Bonds Assessment District #13 7.50 2008 430,000 442,900 Lancaster Redevelopment Agency Tax Allocation Bonds (MBIA Insured) 5.80 2023 2,500,000 2,189,350 Long Beach Harbor Revenue Bonds AMT Series 1989A 7.25 2019 7,000,000 (e) 7,054,670 Los Angeles Convention & Exhibition Center Pre-Refunded Certificate of Participation Series 1989A 7.00 2020 5,000,000 5,337,100 Los Angeles Convention & Exhibition Center Pre-Refunded Certificate of Participation Series 1989A 7.30 2009 1,000,000 1,079,620 Los Angeles Convention & Exhibition Center Pre-Refunded Certificate of Participation Series 1989A 7.375 2018 2,900,000 3,139,279 Los Angeles County Transportation Commission Sales Tax Refunding Revenue Bonds Series A 7.00 2019 4,150,000 4,152,075 Los Angeles County Transportation Commission Sales Tax Pre-Refunded Revenue Bonds Series A 8.00 2016 2,000,000 2,161,440 Los Angeles County Transportation Commission Sales Tax Pre-Refunded Revenue Bonds Series 1988A 7.875 2008 500,000 545,780 See accompanying notes to investments in securities. Los Angeles County Transportation Commission Sales Tax Refunding Revenue Bonds Series 1989A 7.40 2015 2,000,000 2,052,720 Los Angeles County Transportation Commission Sales Tax Pre-Refunded Revenue Bonds Series A 7.60 2012 640,000 674,598 Los Angeles Department of Water & Power Electric Plant Revenue Bonds Series 1990 7.125 2030 6,500,000 6,926,010 Los Angeles Multi-family Housing Revenue Bonds AMT Park Parthenia Series 1986A (GNMA Insured) 7.40 2022 1,000,000 1,025,480 Los Angeles Single Family Home Mortgage Revenue Bonds AMT Series 1991A (GNMA & FNMA Insured) 6.875 2025 3,000,000 2,960,190 Los Angeles State Building Authority Lease Pre-Refunded Revenue Bonds State Department of General Services Lease Series 1988A 7.25 2006 3,000,000 3,202,680 Los Angeles State Building Authority Lease Pre-Refunded Revenue Bonds State Department of General Services Lease Series 1988A 7.50 2011 1,500,000 1,611,630 Los Angeles State Harbor Revenue Bonds Escrowed to Maturity 7.60 2018 1,000,000 1,083,480 Los Angeles USD Refunding Certficate of Participation (FSA Insured) 5.50 2010 1,000,000 886,540 Los Angeles Wastewater System Refunding Revenue Bonds Series A (MBIA Insured) 5.70 2020 5,500,000 4,772,460 Los Angeles Wastewater System Pre-Refunded Revenue Bonds Series 1987 8.125 2017 1,000,000 1,090,260 Marin County Municipal Water District Revenue Bonds Series 1993 5.65 2023 3,500,000 2,883,055 Mayer Memorial Hospital District Insured Health Facility Revenue Bonds (California Mortgage Insured) 5.50 2013 950,000 779,048 Metropolitan Water District Southern California Waterworks Revenue Bonds 5.50 2019 4,500,000 3,788,055 Modesto Certificate of Participation Pre-Refunded Bonds Community Center 8.10 2015 1,000,000 1,090,720 Modesto Irrigation Certificate of Participation 7.25 2015 2,000,000 2,028,640 Mount Diablo Hospital District Hospital Pre-Refunded Revenue Bonds Series 1990A (AMBAC Insured) 7.00 2017 3,000,000 3,242,670 Northern California Public Power Authority Power Pre-Refunded Revenue Bonds Hydroelectric Series 1986B-3 8.00 2024 2,000,000 2,157,860 Northern California Public Power Authority Power Pre-Refunded Revenue Bonds Hydroelectric #1 Series 1986B-1 8.00 2024 2,100,000 2,266,467 Northern California Public Power Authority Refunding Revenue Bonds Geothermal #3 Series 1985A 7.00 2010 830,000 838,989 Northern California Public Power Authority Refunding Revenue Bonds Geothermal #3 Series 1987A 7.00 2007 6,825,000 6,975,833 Northern California Transmission Agency California-Oregon Transmission Pre-Refunded Revenue Bonds Series 1990A (MBIA Insured) 7.00 2024 2,000,000 2,143,940 Northern California Transmission Revenue Linked Select Auction Variable Rate Security & Residual Interest Bonds (MBIA Insured) 5.358 2024 2,500,000 (g) 2,080,875 Novato Community Facility District #1 Vintage Oaks Public Improvement Special Tax Refunding Bonds 7.25 2021 2,000,000 1,894,300 Pittsburg Public Financing Authority Wastewater Refunding Bonds Series 1994A (FGIC Insured) 5.125 2015 1,000,000 814,600 Pleasanton Joint Powers Financing Authority Reassessment Revenue Bonds Series 1993A 6.15 2012 1,955,000 1,760,321 Port of Oakland Revenue Bonds AMT Series 1989A (BIG Insured) 7.60 2016 500,000 514,160 Rancho Cucamonga Redevelopment Agency 1990 Tax Allocation Pre-Refunded Bonds (MBIA Insured) 7.125 2019 3,540,000 3,811,837 Rancho Mirage Joint Powers Finance Authority Certificate of Participation Eisenhower Memorial Hospital 7.00 2022 4,250,000 4,104,480 Redding Redevelopment Agency Tax Allocation Refunding Bonds Canby Hilltop Cypress Series D (CGIC Insured) 5.00 2023 4,700,000 3,562,177 Riverside Electric Revenue Bonds Series 1991 6.00 2015 6,530,000 5,939,230 Sacramento Municipal Utility District Series R 6.00 2015-17 7,500,000 6,741,735 Sacramento Municipal Utility District Pre-Refunded Series V 7.50 2018 2,775,000 2,950,075 Sacramento Municipal Utility District Pre-Refunded Series W 7.50 2018 1,980,000 2,108,918 Sacramento Municipal Utility District Pre-Refunded Series Y (MBIA Insured) 6.75 2019 3,400,000 3,630,316 Sacramento Redevelopment Agency Tax Allocation Bonds Series 1990A (MBIA Insured) 6.50 2013 3,500,000 3,492,020 San Diego County Capital Asset Lease Certificate of Participation Series 1993 Inverse Floater (AMBAC Insured) 6.83 2007 3,200,000 (d) 2,720,000 San Diego Industrial Development Revenue Bonds San Diego Gas & Electric Series A 7.625 2021 1,000,000 1,026,920 San Diego Regional Transportation Commission Sales Tax Pre-Refunded Revenue Bonds Limited Tax Series 1989A 6.25 2008 5,030,000 5,151,575 San Francisco City & County Airport Commission International Airport Refunding Revenue Bonds Second Series Issue 1 (AMBAC Insured) 6.30 2011 1,000,000 976,000 San Francisco Redevelopment Financing Authority Tax Allocation Refunding Bonds Series B (FGIC Insured) 5.25 2017 1,500,000 1,226,070 San Joaquin County Pre-Refunded Certificate of Participation Human Services Facility Series 1989 (BIG Insured) 6.70 2009 3,500,000 3,700,725 San Joaquin County Certificate of Participation Jail & Sheriffs Operation Center (MBIA Insured) 6.75 2015 2,000,000 2,126,400 San Jose Redevelopment Agency Merged Area Tax Allocation Bonds Series 1993 Inverse Floater (MBIA Insured) 6.586 2014 3,000,000 (d) 2,141,250 San Jose Redevelopment Agency Merged Area Tax Allocation Redevelopment Project (MBIA Insured) 6.00 2015 5,500,000 5,107,575 San Mateo County Transit District Limited Tax Pre-Refunded Bonds Series 1990A (MBIA Insured) 6.50 2020 1,500,000 1,550,925 Santa Clara County Transit District Sales Tax Revenue Bonds Series 1991A 6.25 2021 3,000,000 2,764,230 Santa Cruz Certificate of Participation 8.375 2007 1,220,000 1,236,092 Santa Rosa Sonoma County Wastewater Service Facility District Pre-Refunded Improvement Bonds Series 1989 7.80 2015 1,000,000 1,076,150 Sonoma County Community Redevelopment Agency Tax Allocation Bonds Windsor Redevelopment Series C 7.90 2014 400,000 408,460 Southern California Home Financing Authority Single Family Mortgage Revenue Bonds AMT 1990B (GNMA Insured) 7.75 2024 575,000 600,162 Southern California Public Power Authority Transmission Pre-Refunded Revenue Bonds Series 1986A 7.875 2018 1,500,000 1,599,060 Southern California Public Power Authority Transmission Revenue Subordinate Refunding Bonds Southern Transmission 5.50 2020 3,000,000 2,474,430 Southern California Public Power Authority Transportation Bonds Series B 7.375 2021 400,000 421,696 State Department Water Resources Water System Pre-Refunded Revenue Bonds Central Valley Series D 7.70 2024 2,400,000 2,587,200 State Department Water Resource Water System Revenue Bonds Central Valley Project Series L 5.50 2023 3,000,000 2,457,510 State Education Facility Authority Revenue Bonds Pomona College 6.00 2017 3,000,000 2,730,330 State Health Facility Finance Authority Pre-Refunded Revenue Bonds St. Joseph Health System Series 1989A 6.90 2014 3,500,000 3,737,685 State Housing Finance Agency Home Mortgage Revenue Bonds Series 1986B 6.90 2016 1,990,000 1,987,612 State Pollution Control Finance Authority Pollution Control Revenue Bonds AMT Southern California Edison Series 1988A 6.90 2006 2,000,000 2,037,520 State Public Works Board Lease Revenue Bonds California Community Colleges Series 1994B 7.00 2019 2,000,000 1,985,880 State Public Works Board University of California Lease Pre-Refunded Revenue Bonds Series 1990A 7.00 2015 2,250,000 2,425,838 State University Parking System Revenue Bonds 7.70 2009 225,000 238,909 State University Revenue Bonds San Jose State University Student Union Series B 7.60 2007 150,000 156,897 Statewide Community Development Authority Health Facilities Revenue Bonds Unihealth America Series 1993A Inverse Floater (AMBAC Insured) 5.897 2011 5,000,000 (d) 3,925,000 Stockton Refunding Wastewater System Certificate of Participation (AMBAC Insured) 5.50 2015 1,250,000 1,070,887 Stockton Single Family Mortgage Revenue Bonds AMT Series 1990A (GNMA Insured) 7.50 2023 115,000 123,802 Suisun City Redevelopment Agency Tax Allocation Refunded Bonds (MBIA Insured) 5.50 2023 1,000,000 836,660 Turlock Irrigation District Pre-Refunded Bonds Series 1986A 7.75 2018 1,000,000 1,043,730 University of Southern California Educational Facilities Authority Pre-Refunded Revenue Bonds Series 1989B 6.75 2015 5,000,000 4,982,700 Upland Certificate of Participation Water System Refunding Bonds (FGIC Insured) 6.60 2016 1,000,000 993,090 Vacaville Limited Obligation Improvement Bonds Water Rights Assessment District 8.00 2007 830,000 853,838 ______________________________________________________________________________________________________________________________ Total municipal bonds (Cost: $222,441,022) $224,234,493 _____________________________________________________________________________________________________________________________
Short-term security (1.6%) ______________________________________________________________________________________________________________________________ Issuer (c) Effective Amount Value(a) yield payable at maturity _____________________________________________________________________________________________________________________________ Municipal note Contra Costa Transportation Authority Series 1993A (FGIC Insured) 03-01-09 5.65% $3,800,000 (g) $ 3,800,000 _____________________________________________________________________________________________________________________________ Total short-term security (Cost: $3,800,000) $ 3,800,000 _____________________________________________________________________________________________________________________________ Total investments in securities (Cost: $226,241,022)(h) $228,034,493 _____________________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________________ Notes to investments in securities _______________________________________________________________________________________________________________________________ (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Investments in bonds, by rating category as a percentage of total bonds, are as follows: (Unaudited) Rating 12-31-94 6-30-94 _____________________________________________________________________________ AAA 59% 63% AA 22 18 A 16 16 BBB and below 3 3 Non-rated -- -- Total 100% 100% _____________________________________________________________________________ (c) The following abbreviations are used in portfolio descriptions to identify the insurer of the issue: AMBAC -- American Municipal Bond Association Corporation BIG -- Bond Investors Guarantee CGIC -- Capital Guarantee Insurance Company FGIC -- Financial Guarantee Insurance Corporation FHA -- Federal Housing Authority FNMA -- Federal National Mortgage Association FSA -- Financial Security Assurance GNMA -- Government National Mortgage Association MBIA -- Municipal Bond Investors Assurance (d) 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 market short-term rates. Interest rate disclosed is the rate in effect on Dec. 31, 1994. Inverse floaters in the aggregate represent 3.8% of the fund's net assets as of Dec. 31, 1994. (e) Partially pledged as inital deposit on the following open interest rate futures contracts (see Note 5 to the financial statements): Type of security Notional amount _____________________________________________________ Purchase contracts Municipal Bonds March 1995 $35,000,000 Sales contracts U.S. Treasury Bonds March 1995 35,000,000 _____________________________________________________ (f) The following abbreviation is used in portfolio descriptions: AMT -- Alternative Minimum Tax (g) Interest rate varies to reflect current market conditions; rate shown is the effective rate on Dec. 31, 1994. (h) At Dec. 31, 1994, the cost of securities for federal income tax purposes was approximately $226,148,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $9,434,000 Unrealized depreciation (7,548,000) ______________________________________________________________________ Net unrealized appreciation $1,886,000 ______________________________________________________________________
Investments in securities IDS Massachusetts Tax-Exempt Fund (Percentages represent value of Dec. 31, 1994 (Unaudited) investments compared to net assets) _____________________________________________________________________________________________________________________________ Municipal bonds (96.9%) _____________________________________________________________________________________________________________________________ Name of issuer and title of issue (b,c,d) Coupon Maturity Principal Value(a) rate amount _____________________________________________________________________________________________________________________________ Bay Transit Authority Series A (Secondary FGIC Insured) 5.75 % 2022 $1,000,000 $ 879,510 Bay Transportation Authority General Transportation System Refunding Bonds Series 1992B 6.20 2016 1,500,000 1,415,625 Boston City Hospital Refunding Revenue Bonds Series B (FHA Insured) 5.75 2023 3,000,000 2,512,590 Boston City Hospital Pre-Refunded Revenue Bonds Series A (FHA Insured) 7.625 2021 1,000,000 1,099,380 Boston General Obligation Bonds Series 1991A (MBIA Insured) 6.75 2011 500,000 534,840 Boston General Obligation Refunding Bonds Series 1993A (AMBAC Insured) 5.65 2009 1,500,000 (e) 1,374,345 Boston Industrial Development Financing Authority Revenue Bonds Massachusetts College of Pharmacy Series 1993A (Connie Lee Insured) 5.25 2026 1,000,000 782,180 Boston Water & Sewer Commission General Pre-Refunded Revenue Bonds Senior Pre-Refunded Series 1991A (FGIC Insured) 7.00 2018 1,000,000 1,086,230 Boston Water & Sewer Commission General Subordinate Revenue Bonds Series A (BIG Insured) 6.00 2008 500,000 486,230 Boston Water & Sewer Commission Senior Revenue Bonds Series A 7.875 2013 365,000 386,221 Boston Water & Sewer Commission Senior Pre-Refunded Revenue Bonds Series A 7.875 2013 210,000 223,539 Chelsea General Obligation Bonds School Loan Act of 1948 Full Construction Program (AMBAC Insured) 6.00 2014 2,000,000 1,869,500 Commonwealth General Obligation Consolidated Loan Pre-Refunded Bonds Series 1990A (FGIC Insured) 7.25 2009 500,000 542,938 Greater Lawrence Sanitary District North Andover General Obligation Bonds 8.50 2005 625,000 645,600 Health & Educational Facilities Authority Refunding Revenue Bonds Beth Israel Hospital Series 1989E 7.00 2009-14 550,000 555,751 Health & Educational Facilities Authority Revenue Bonds Berkshire Health Systems Series A (MBIA Insured) 7.50 2008 500,000 531,920 Health & Educational Facilities Authority Revenue Bonds Berkshire Health Systems Series C 5.90 2011 1,000,000 795,420 Health & Educational Facilities Authority Pre-Refunded Revenue Bonds Beverly Hospital Series D (MBIA Insured) 7.30 2019 400,000 432,788 Health & Educational Facilities Authority Revenue Bonds Boston College Series J (FGIC Insured) 6.625 2021 2,000,000 1,991,340 Health & Educational Facilities Authority Revenue Bonds Boston College Series K 5.25 2023 1,000,000 801,860 Health & Educational Facilities Authority Revenue Bonds Brigham & Women's Hospital Series C 6.75 2021 500,000 487,340 See accompanying notes to investments in securities. Health & Educational Facilities Authority Revenue Bonds Brigham & Women's Hospital Series 1991D 6.75 2024 1,000,000 958,170 Health & Educational Facilities Authority Revenue Bonds Charlton Memorial Hospital Series 1991B 7.25 2013 1,750,000 1,753,290 Health & Educational Facilities Authority Revenue Bonds Holyoke Hospital Series B 6.50 2015 500,000 436,780 Health & Educational Facilities Authority Pre-Refunded Revenue Bonds Lahey Clinic Medical Center Series A (MBIA Insured) 7.625 2018 500,000 541,015 Health & Educational Facilities Authority Revenue Bonds Lahey Clinic Medical Center Series B (MBIA Insured) 5.625 2015 1,500,000 1,314,090 Health & Educational Facilities Authority Revenue Bonds Lahey Clinic Medical Center Series B (MBIA Insured) 5.375 2023 1,000,000 819,450 Health & Educational Facilities Authority Revenue Bonds Melrose-Wakefield Hospital Series 1992B 6.375 2016 1,000,000 894,450 Health & Educational Facilities Authority Revenue Bonds McLean Hospital Series 1992C (FGIC Insured) 6.625 2015 1,250,000 1,245,125 Health & Educational Facilities Authority Revenue Bonds Morton Hospital & Medical Center Series B (Connie Lee Insured) 5.25 2014 1,000,000 828,280 Health & Educational Facilities Authority Pre-Refunded Revenue Bonds Mount Auburn Hospital Series A (MBIA Insured) 7.875 2018 205,000 223,770 Health & Educational Facilities Authority Revenue Bonds New England Deaconess Hospital Series 1992D 6.625 2012 1,000,000 942,610 Health & Educational Facilities Authority Revenue Bonds Newton Wellesley Hospital Series 1991D (MBIA Insured) 7.00 2015 1,000,000 1,019,850 Health & Educational Facilities Authority Pre-Refunded Revenue Bonds Northeastern University Series 1989C (AMBAC Insured) 7.10 2006 1,000,000 1,061,990 Health & Educational Facilities Authority Pre-Refunded Revenue Bonds Northeastern University Series E (MBIA Insured) 6.55 2022 1,000,000 986,020 Health & Educational Facilities Authority Revenue Bonds South Shore Hospital Series 1992D (MBIA Insured) 6.50 2022 1,000,000 966,490 Health & Educational Facilities Authority Pre-Refunded Revenue Bonds Stonehill College Series 1990D (AMBAC Insured) 7.70 2020 1,000,000 1,110,980 Health & Educational Facilities Authority Revenue Bonds Suffolk University Series B (Connie Lee Insured) 6.35 2022 2,495,000 2,334,122 Health & Educational Facilities Authority Pre-Refunded Revenue Bonds Wentworth Institute of Technology Series A (AMBAC Insured) 7.40 2010 750,000 819,653 Health & Educational Facilities Authority Revenue Bonds Valley Regional Health System Series C (Connie Lee Insured) 5.75 2018 1,000,000 864,060 Health & Educational Facilities Authority Revenue Bonds Wentworth Institute of Technology Series B (Connie Lee Insured) 5.50 2023 1,500,000 1,233,945 Industrial Finance Agency 1st Mortgage Pre-Refunded Revenue Bonds Berkshire Retirement Community at Lennox 9.875 2018 200,000 220,144 Industrial Finance Agency Pollution Control Refunding Revenue Bonds Eastern Edison Series 1993 5.875 2008 1,500,000 1,328,250 Industrial Finance Agency Resource Recovery Revenue Bonds AMT Ogden Haverhill Series 1986A (AMBAC Insured) 7.375 2011 175,000 180,190 Industrial Finance Agency Resource Recovery Revenue Bonds SEMASS Series 1991A 9.00 2015 1,500,000 1,585,710 Industrial Finance Agency Revenue Bonds Museum of Science Series 1989 (FSA Insured) 7.30 2009 1,000,000 1,087,210 Leominster General Obligation Bonds (MBIA Insured) 7.50 2009 1,000,000 1,064,920 Lowell Limited Tax General Obligation State Qualified Refunding Bonds Series A (FSA Insured) 5.50 2010 800,000 709,864 Mansfield General Obligation Bonds (AMBAC Insured) 6.70 2011 1,000,000 1,009,380 Municipal Wholesale Electric Power Supply System Revenue Bonds Series A 6.00 2018 1,125,000 996,188 Municipal Wholesale Electric Power Supply System Pre-Refunded Revenue Bonds Series 1992B 6.75 2017 1,395,000 1,496,361 Nantucket General Obligation Bonds 6.80 2011 1,000,000 1,007,220 North Andover General Obligation Bonds (MBIA Insured) 7.35 2008 310,000 334,366 Port Authority Revenue Bonds AMT Series 1988A 7.75 2018 515,000 528,411 Port Authority Revenue Bonds AMT Series 1990A (FGIC Insured) 7.50 2020 1,000,000 1,040,000 Quincy Refunding Revenue Bonds Quincy Hospital Series 1993 (FSA Insured) 5.25 2016 1,000,000 826,880 Southeastern University Building Authority Refunding Revenue Bonds Series 1986A 7.80 2016 100,000 103,417 Southeastern University Building Revenue Bonds 7.80 2011 325,000 336,105 Southern Berkshire Regional School District Unlimited Tax General Obligation Pre-Refunded Bonds (AMBAC Insured) 7.55 2010 1,000,000 1,100,110 Springfield Limited Tax General Obligation Municipal Purpose Loan Bonds Series 1993B (MBIA Insured) 6.00 2013 750,000 699,930 State College Building Authority Pre-Refunded Revenue Bonds Series 1986A 7.125 2006 150,000 156,181 State College Building Authority Pre-Refunded Revenue Bonds Series 1986A 7.25 2016 250,000 261,408 State General Obligation Consolidated Loan Bonds Series 1991A (FGIC Insured) 6.00 2011 1,095,000 1,034,895 State Housing Finance Agency Single Family Housing Revenue Bonds AMT Series 13 7.95 2023 500,000 517,730 State Housing Finance Authority Residential Development Bonds Series 1992A (FNMA Insured) 6.875 2011 1,000,000 1,014,010 State Housing Finance Authority Single Family Mortgage Housing Revenue Bonds Series 4 7.375 2014 465,000 477,950 State Housing Finance Authority Single Family Mortgage Housing Revenue Bonds AMT Series 7 8.10 2020 260,000 267,509 State Water Resource Authority Revenue Bonds Series A (Secondary MBIA Insured) 5.50 2022 1,100,000 931,403 University of Lowell Building Authority Facilities Revenue Bonds 4th Series A 7.40 2007 125,000 129,427 University of Lowell Building Authority Facilities Revenue Bonds 4th Series A 7.60 2012 50,000 52,075 University of Massachusetts Building Authority Revenue Bonds Series A (FSA Insured) 7.50 2014 500,000 517,850 University of Massachusetts Building Authority Revenue Bonds Series A Escrowed to Maturity 7.50 2011 120,000 128,315 Water Resource Authority General Pre-Refunded Revenue Bonds Series 1990A 7.625 2014 500,000 551,240 Water Resource Authority General Pre-Refunded Revenue Bonds Series 1991A 6.50 2019 1,000,000 1,058,110 Water Resource Authority General Revenue Bonds Series 1993C 5.25 2020 1,400,000 1,121,400 _____________________________________________________________________________________________________________________________ Total municipal bonds (Cost: $64,891,403) $63,663,446 _____________________________________________________________________________________________________________________________ Total investments in securities (Cost: $64,891,403)(f) $63,663,446 _____________________________________________________________________________________________________________________________ Notes to investments in securities _____________________________________________________________________________________________________________________________ (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Investments in bonds, by rating category as a percentage of total bonds, are as follows: (Unaudited) Rating 12-31-94 06-30-94 _______________________________________________________________________________________________________ AAA 67% 64% AA 8 12 A 18 17 BBB and below 7 7 Non-rated -- -- Total 100% 100% _______________________________________________________________________________________________________ (c) The following abbreviations are used in portfolio descriptions to identify the insurer of the issue: AMBAC -- American Municipal Bond Association Corporation BIG -- Bond Investors Guarantee FGIC -- Financial Guarantee Insurance Corporation FHA -- Federal Housing Authority FNMA -- Federal National Mortgage Association FSA -- Financial Security Assurance MBIA -- Municipal Bond Investors Assurance (d) The following abbreviation is used in the portfolio descriptions: AMT -- Alternative Minimum Tax (e) Partially pledged as initial deposit on the following open interest rate futures contracts (see Note 5 to the financial statements): Type of security Notional amount Purchase contracts __________________________________________________________ Municipal Bonds March 1995 $8,300,000 __________________________________________________________ Sale contracts __________________________________________________________ U.S. Treasury Bonds March 1995 8,300,000 __________________________________________________________ (f) At Dec. 31, 1994, the cost of securities for federal income tax purposes was approximately $64,878,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $1,826,000 Unrealized depreciation (3,041,000) _______________________________________________________________________________________________________ Net unrealized depreciation $(1,215,000) _______________________________________________________________________________________________________
Investments in securities IDS Michigan Tax-Exempt Fund (Percentages represent value of Dec. 31, 1994 (Unaudited) investments compared to net assets) _____________________________________________________________________________________________________________________________ Municipal bonds (94.4%) _____________________________________________________________________________________________________________________________ Name of issuer and Coupon Maturity Principal Value(a) title of issue (b,c,d) rate amount _____________________________________________________________________________________________________________________________ Alpena County Limited Tax Hospital Improvement Pre-Refunded Bonds Series B (AMBAC Insured) 8.75 % 2002 $ 150,000 $ 155,532 Auburn Hills Limited Tax General Obligation Street Improvement Bonds 6.00 2004 200,000 200,802 Battle Creek Calhoun County Downtown Development Authority Bonds Series 1994 7.65 2022 1,250,000 1,266,788 Battle Creek Water Supply System Pre-Refunded Revenue Bonds Series 1990B 6.375 2008-10 1,640,000 1,713,210 Brighton District Library Unlimited Tax Improvement General Obligation Bonds Series 1994 (MBIA Insured) 6.00 2015 1,000,000 929,400 Buena Vista School District Saginaw County School Building & Site Unlimited Tax General Obligation Pre-Refunded Bonds Series 1991 7.20 2016 1,500,000 1,627,350 Caledonia Community School Unlimited Tax General Obligation Refunding Revenue Bonds (AMBAC Insured) 5.50 2022 2,000,000 (e) 1,696,300 Chassell Township Schools County of Houghton Refunding Unlimited Tax General Obligation Bonds Qualified School Bond Loan Fund 5.25 2020 1,045,000 837,693 Chelsea General Obligation Bonds (BIG Insured) 8.20 2006 145,000 159,023 Chippewa Valley School Macomb County Qualified School Building Loan Fund Unlimited Tax General Obligation Bonds (FGIC Insured) 5.00 2021 1,000,000 786,790 Comstock Park Public School Kent County Unlimited Tax General Obligation Pre-Refunded Bonds Series 1989 6.00 2016 400,000 412,652 Comstock Park Public School Kent County Unlimited Tax General Obligation Pre-Refunded Bonds Series 1989 6.875 2010 260,000 276,663 Detroit General Obligation Pre-Refunded Bonds Distributable State Aid Series 1989 (AMBAC Insured) 7.20 2009 1,000,000 1,075,240 Detroit Sewer Disposal Pre-Refunded Revenue Bonds 8.00 2008 500,000 538,895 Detroit Unlimited Tax General Obligation Bonds Series A 7.25 2009 1,000,000 1,007,310 Detroit Unlimited Tax General Obligation Bonds Series A 8.625 2007 100,000 105,514 Detroit Unlimited Tax General Obligation Bonds Series 1988A 7.875 2008 700,000 717,794 Detroit Water Supply System Pre-Refunded Revenue Bonds Series 1988 (MBIA Insured) 7.875 2008 400,000 435,952 Detroit Water Supply System Refunding Revenue Bonds Series 1993 (FGIC Insured) 5.00 2023 1,000,000 771,580 Dexter Community Schools Building Site & Refunding Unlimited Tax General Obligation Bonds 5.00 2017 1,500,000 1,176,180 East Lansing School District School Building & Site Unlimited Tax General Obligation Bonds Series 1991 6.625 2014 1,000,000 989,680 Eastern Michigan University Pre-Refunded Revenue Bonds Residence Hall 7.80 2006 205,000 215,547 Farmington Hills Hospital Finance Authority Revenue Bonds Botsford General Hospital Series 1992A (MBIA Insured) 6.50 2022 1,500,000 1,455,270 Forest Hills School District Unlimited Tax General Obligation Pre-Refunded Bonds 7.375 2015 1,000,000 1,085,310 Frenchtown Resort Drainage District Monroe County Drain Pre-Refunded Bonds Series 1987 7.50 2011-12 615,000 668,776 Garden City School District Authority Pre-Refunded Revenue Bonds 7.80 2010 305,000 333,405 Grand Rapids Tax Increment Revenue Bonds Series 1994 (MBIA Insured) 6.875 2024 380,000 383,705 Grand Rapids Water Supply System Improvement Pre-Refunded Revenue Bonds Series 1988 7.875 2018 700,000 757,505 Grand Rapids Water Supply System Improvement Pre-Refunded Revenue Bonds Series 1990 (FGIC Insured) 7.25 2020 1,250,000 1,355,550 Grand Rapids Water Supply System Refunding Revenue Bonds Series 1991 (FGIC Insured) 5.75 2018 2,500,000 2,226,050 Holland School District Unlimited Tax General Obligation Bonds Counties of Ottawa & Allegan 1989 School Building & Site Boards 7.375 2019 1,000,000 1,063,370 Inkster School District Unlimited Tax General Obligation Pre-Refunded Bonds (AMBAC Insured) 7.00 2018 450,000 482,386 Isoco County Water Supply System Limited Tax General Obligation Bonds (AMBAC Insured) 5.50 2008-10 575,000 520,535 Jackson County Unlimited Tax General Obligation Refunding Bonds Series 1987 6.75 2011 150,000 156,651 Kalamazoo Hospital Financial Authorization Bronson Methodist Hospital Pre-Refunded Bonds 9.375 2016 150,000 154,833 Kent County Hospital Pre-Refunded Revenue Bonds Butterworth Hospital Series 1989A 7.25 2013 500,000 538,190 Kent County Refuse Disposal System Limited Tax General Obligation Refunding Bonds Series 1987 8.40 2010 150,000 162,648 Laingsburg Community Schools Unlimited Tax General Obligation Bonds 6.375 2021 1,500,000 1,425,690 Lincoln Consolidated School District Refunding Revenue Bonds (FGIC Insured) 5.80 2014 1,000,000 905,130 Lincoln Consolidated School District Refunding Revenue Bonds (FGIC Insured) 5.85 2021 500,000 443,765 Marquette Hospital Finance Authority Refunding Revenue Bonds Marquette General Hospital Series 1989C 7.50 2007-19 825,000 843,442 Monroe County Pollution Control Revenue Bonds AMT Detroit Edison Fermi Plants Series 1990I (FGIC Insured) 7.65 2020 1,000,000 1,048,760 Monroe County Pollution Control Revenue Bonds AMT Detroit Edison Fermi 2 Plants Series CC (AMBAC Insured) 7.50 2019 1,750,000 1,817,375 Muskegon Hospital Finance Authority Refunding Revenue Bonds Hackley Hospital Series 1988A 8.00 2008 400,000 428,848 Northville Public Schools Unlimited Tax General Obligation Bonds Series 1991B 7.00 2008 1,500,000 1,553,310 Plymouth-Canton Community School District Series 1992C 6.50 2016 1,000,000 971,820 Richmond Limited Obligation Refunding Revenue Bonds Kmart Series A 6.625 2007 530,000 513,199 River Rouge School District #19 Unlimited Tax General Obligation Bonds (FSA Insured) 5.50 2009 1,185,000 1,073,397 Rochester Hill Unlimited Tax General Obligation Bonds Series 1990A 6.00 2009-10 735,000 702,147 Rockford Public Schools Kent County Unlimited Tax General Obligation Pre-Refunded Bonds 7.375 2019 1,000,000 1,084,830 Rockford Public Schools Unlimited Tax General Obligation Bonds Qualified School Bond Loan Fund 5.875 2019 1,500,000 1,305,495 Rockford Public Schools Unlimited Tax Improvement General Obligation Bonds (Secondary AMBAC Insured) 5.875 2019 1,000,000 898,220 Southfield Public Schools Building & Site Unlimited Tax General Obligation Bonds 5.875 2022 1,000,000 876,790 South Lake District Unlimited Tax General Obligation Bonds 6.80 2010 355,000 362,881 State Building Authority Refunding Revenue Bonds Series 1991I 6.25 2020 2,200,000 2,041,006 State Hospital Finance Authority Hospital Pre-Refunded Revenue Bonds Detroit Medical Center Series 1988A 8.125 2012 310,000 340,600 State Hospital Finance Authority Hospital Refunding Revenue Bonds Detroit Medical Center Series 1988A 8.125 2012 90,000 97,465 State Hospital Finance Authority Hospital Refunding Revenue Bonds Detroit Medical Center Series 1988B 8.00 2008 500,000 548,880 State Hospital Finance Authority Hospital Refunding Revenue Bonds Sisters of Mercy Health Group Series 1993P (MBIA Insured) 5.25 2021 1,200,000 963,168 State Hospital Finance Authority Hospital Pre-Refunded Revenue Bonds McLaren Obligated Group Series 1991A 7.50 2021 1,750,000 1,941,082 State Hospital Finance Authority Revenue Bonds Henry Ford Hospital Series 1990A 7.00 2010 1,000,000 1,009,250 State Hospital Finance Authority Revenue Bonds Henry Ford Hospital Series 1992A 5.75 2017 1,500,000 1,271,775 State Hospital Finance Authority Pre-Refunded Revenue Bonds Oakwood Hospital Group Series 1990A (FGIC Insured) 7.10 2018 1,000,000 1,081,950 State Municipal Bond Authority Refunding Revenue Bonds (AMBAC Insured) 5.70 2016 1,000,000 889,170 State Public Power Agency Belle River Refunding Revenue Bonds Series A 5.25 2018 1,000,000 815,020 State Strategic Fund Limited Tax Obligation Refunding Revenue Bonds Detroit Edison Series 1990BB (MBIA Insured) 7.00 2008 1,000,000 1,064,020 State Strategic Fund Limited Tax Obligation Refunding Revenue Bonds Detroit Edison Series 1992BB (FGIC Insured) 6.50 2016 2,500,000 2,474,250 State Strategic Fund Limited Tax Obligation Refunding Revenue Bonds Ford Motor Series 1991A 7.10 2006 1,650,000 1,707,436 State Strategic Fund Limited Tax Obligation Refunding Revenue Bonds Escrowed to Maturity Oxford Institute 7.875 2005 150,000 166,970 State Strategic Fund Limited Tax Obligation Revenue Bonds AMT Great Lakes Pulp & Fibre 10.25 2016 1,000,000 1,002,530 State Trunk Line Bonds Series A (FGIC Insured) 5.75 2020 1,065,000 933,132 State Trunk Line Refunded Bonds Series B-1 5.50 2021 2,500,000 2,093,600 State University Revenue Bonds Series A 5.50 2022 560,000 469,162 State University Revenue Parking System Pre-Refunded Bonds Ann Arbor Campus Series A 7.40 2015 150,000 157,125 Taylor Tax Increment Finance Authority Bonds Series 1989A (MBIA Insured) 6.00 2007-09 1,205,000 1,166,403 Van Buren Township Tax Increment Revenue Bonds Series 1994 8.40 2016 1,000,000 1,011,670 Warren Consolidated School District Refunding Revenue Bonds Unlimited Tax General Obligation Bonds (MBIA Insured) 5.50 2021 1,500,000 1,267,185 Waterford School District Unlimited Tax General Obligation Bonds Series Q 6.25 2013 340,000 324,958 Wayne County Airport Revenue Bonds AMT Detroit Metropolitan Airport Series 1986 (FGIC Insured) 8.00 2014 250,000 262,857 Wayne County Airport Revenue Bonds AMT Detroit Metropolitan Airport Series 1990A (AMBAC Insured) 7.00 2020 1,080,000 1,086,404 Wayne County Airport Revenue Bonds Detroit Metropolitan Airport Series 1993C (MBIA Insured) 5.25 2021 1,500,000 1,208,250 Wyandotte Electric Pre-Refunded Revenue Bonds Series 1987 (AMBAC Insured) 7.875 2017 300,000 323,964 _____________________________________________________________________________________________________________________________ Total municipal bonds (Cost: $72,304,255) $72,414,460 _____________________________________________________________________________________________________________________________
Short-term security (1.7%) _____________________________________________________________________________________________________________________________ Issuer (f) Effective Amount Value(a) yield payable at maturity _____________________________________________________________________________________________________________________________ Municipal note Regents of the University of Michigan Hospital Refunding Revenue Bonds Series 1992A 12-01-19 6.15% $1,300,000 $ 1,300,000 _____________________________________________________________________________________________________________________________ Total short-term security (Cost: $1,300,000) $ 1,300,000 _____________________________________________________________________________________________________________________________ Total investments in securities (Cost: $73,604,255)(g) $73,714,460 _____________________________________________________________________________________________________________________________ Notes to investments in securities _____________________________________________________________________________________________________________________________ (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Investments in bonds, by rating category as a percentage of total bonds, are as follows: (Unaudited) Rating 12-31-94 06-30-94 ______________________________________________________________________________________________________ AAA 62% 65% AA 25 25 A 6 6 BBB and below 6 4 Non-rated 1 - Total 100% 100% (c) The following abbreviations are used in portfolio descriptions to identify the insurer of the issue: AMBAC -- American Municipal Bond Association Corporation BIG -- Bond Investors Guarantee FGIC -- Financial Guarantee Insurance Corporation FSA -- Financial Security Assurance MBIA -- Municipal Bond Investors Assurance (d) The following abbreviation is used in portfolio descriptions: AMT -- Alternative Minimum Tax (e) Partially pledged as initial deposit on the following open interest rate futures contracts (see Note 5 to the financial statements): Type of security Notional amount ________________________________________________________________________________ Purchase contracts Municipal Bonds March 1995 $8,400,000 Sales contracts U.S. Treasury Bonds March 1995 8,400,000 ________________________________________________________________________________ (f) Interest rate varies to reflect current market conditions; rate shown is the effective rate on Dec. 31, 1994. (g) At Dec. 31, 1994, the cost of securities for federal income tax purposes was approximately $73,578,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $ 2,698,000 Unrealized depreciation (2,562,000) ______________________________________________________________________________________________________ Net unrealized appreciation $ 136,000 ______________________________________________________________________________________________________
Investments in securities (Percentages represent IDS Minnesota Tax-Exempt Fund value of investments Dec. 31, 1994 (Unaudited) compared to net assets) _____________________________________________________________________________________________________________________________ Municipal bonds (98.3%) _____________________________________________________________________________________________________________________________ Name of issuer and Coupon Maturity Principal Value(a) title of issue (b,c,d) rate amount _____________________________________________________________________________________________________________________________ Anoka County General Obligation Capital Improvement Revenue Bonds Series 1989B 7.00 % 2007-10 $ 7,950,000 $ 8,318,244 Anoka County Resource Recovery Revenue Bonds Northern States Power Series 1985 7.15 2008 3,750,000 3,887,025 Apple Valley Certificate of Participation Lease Pre-Refunded Bonds Central Garage Facility Financial Agreement 7.25 2001 155,000 160,630 Apple Valley Certificate of Participation Lease Pre-Refunded Bonds Central Garage Facility Financial Agreement 7.30 2002 175,000 181,513 Apple Valley Certificate of Participation Lease Pre-Refunded Bonds Central Garage Facility Financial Agreement 7.40 2003 190,000 197,412 Apple Valley Certificate of Participation Lease Pre-Refunded Bonds Central Garage Facility Financial Agreement 7.50 2004 450,000 468,369 Appleton Correctional Facility Revenue Bonds Series 1990A 9.875 2020 4,000,000 (e) 2,600,000 Bass Brook Pollution Control Revenue Bonds Minnesota Power & Light Series 1992 6.00 2022 6,300,000 5,570,397 Becker Pollution Control Revenue Bonds Northern States Power Sherburne County Generating Station Units 1 & 2 Series 1987A 7.25 2005 2,000,000 2,038,320 Becker Solid Waste Disposal Facility Revenue Bonds AMT Liberty Paper Series 1994B 9.00 2015 3,825,000 3,712,813 Bemidji Hospital Facilities 1st Mortgage Revenue Bonds North Country Health Services Series 1991 7.00 2021 1,755,000 1,748,436 Bloomington Community Development Refunding Revenue Bonds Note 24th Avenue Motel 8.50 2005 1,843,781 1,908,313 Braham Independent School District #314 Refunding Bonds 5.20 2019 3,340,000 2,748,386 Brainerd Hospital Refunding Revenue Bonds Evangelical Lutheran Good Samaritan Society Series 1992A (C.G.I.C.) 6.65 2017 1,695,000 1,697,644 Brainerd Hospital Revenue Bonds Evangelical Lutheran Good Samaritan Society Series 1992B (C.G.I.C.) 6.65 2017 2,865,000 2,869,469 Burnsville Multi-family Housing Refunding Revenue Bonds FHA-Summit Park Apartments Series 1993 6.00 2033 4,000,000 3,411,040 Chaska Advance Refunded Certificate of Participation Lease Purchase Agreement Bonds Series 1986C 7.25 2001 800,000 828,008 Columbia Heights Multi-family Housing Revenue Bonds Crestview Lutheran Home Royce Place Series 1991 10.00 2032 560,000 596,400 Columbia Heights Multi-family Housing Revenue Bonds Crestview Lutheran Home Royce Place Series 1991 (FHA Insured) 7.75 2032 2,750,000 2,809,455 Duluth Economic Development Authority Health Care Facility Pre-Refunded Revenue Bonds Benedictine Health System St. Mary's Medical Center Series 1990 8.375 2020 2,000,000 2,264,540 Duluth Hospital Facilities St. Lukes Hospital Pre-Refunded Revenue Bonds Series 1988 9.00 2018 2,500,000 2,801,300 Duluth Housing and Redevelopment Authority 1st Mortgage Revenue Bonds Lakeshore Lutheran Home 8.25 2009 125,000 122,931 Duluth Recreation Revenue Certificate of Participation 9.00 2003-07 1,430,000 1,531,216 See accompanying notes to investments in securities. Eden Prairie Housing Development Refunding Revenue Bonds Eden Commons Series 1990 (FHA Insured) 8.25 2025 6,360,000 6,254,615 Edina Hospital System Revenue Bonds Fairview Hospital & Health Care Services Series 1989A 7.125 2019 2,500,000 2,555,250 Edina Multi-family Housing Revenue Bonds Walker Assisted Living Series 1991 9.00 2031 6,700,000 7,065,351 Faribault Single Family Mortgage Refunding Revenue Bonds Series 1991A 7.50 2011 3,160,000 3,234,513 Hennepin County Lease Revenue Certificate of Participation Series 1991 6.80 2017 7,250,000 7,340,190 Hennepin County Solid Waste Resource Recovery General Obligation Revenue Bonds Series 1987A 8.20 2009 1,760,000 1,826,651 Hopkins Revenue Bonds Blake School 6.70 2024 3,120,000 3,068,302 Hubbard County Solid Waste Disposal Revenue Bonds AMT Potlatch Series 1989 7.375 2013 5,610,000 5,802,367 International Falls Solid Waste Disposal Revenue Bonds AMT Boise Cascade Series 1990 7.75 2015 4,000,000 4,021,320 Maplewood Care Institute Series 1994 7.75 2024 3,830,000 3,507,016 Maplewood Multi-family Housing Revenue Bonds Maplewood (FHA Insured) 7.75 2021 2,115,000 2,125,533 Minneapolis & St. Paul Housing Board Multi-family Mortgage Revenue Bonds AMT GNMA Collateral Mortgage Revenue Loan Riverside Plaza Series 1988 8.25 2030 3,945,000 4,157,754 Minneapolis Community Development Agency & St. Paul Housing & Redevelopment Authority Home Ownership Mortgage Revenue Bonds Family Housing Mortgage Phase II 7.875 2017 1,515,000 1,563,071 Minneapolis General Obligation Sales Tax Refunding Bonds Series 1992 6.25 2012 5,260,000 5,156,062 Minneapolis Health Care Facilities Revenue Bonds Fairview Hospital & Healthcare Services Series 1993A (MBIA Insured) 5.25 2019 3,750,000 3,060,713 Minneapolis Hospital Facility Pre-Refunded Revenue Bonds Lifespan Incorporated Series 1987A 8.125 2017 3,630,000 3,901,633 Minneapolis Hospital Facility Pre-Refunded Revenue Bonds Lifespan Incorporated Series 1989A 7.00 2014 5,000,000 5,370,900 Minneapolis Housing & Redevelopment Authority of St. Paul Health Care System Revenue Bonds Healthspan Series 1993 (AMBAC Insured) 4.75 2018 3,000,000 2,267,100 Minneapolis Nursing Home Revenue Bonds Walker Cityview & Southview Series 1992 8.50 2022 5,565,000 5,568,729 Minneapolis St. Paul Housing & Redevelopment Authority Health Care System Revenue Bonds Healthspan Series 1993A (AMBAC Insured) 5.00 2007-13 6,690,000 5,699,915 Minneapolis Water & Sewer Revenue Bonds Series 1992 5.00 1995 5,000,000 4,975,900 Minnetonka Multi-family Housing Refunding Revenue Bonds Cedar Hill West (FHA Insured) 7.75 2026 5,605,000 5,481,802 Minnetonka Multi-family Housing Revenue Bonds The Cedar Hills Series 1985 7.50 2017 500,000 518,040 Montevideo Independent School District #129 General Obligation Unlimited Tax Bonds School Credit Enhancement Program 4.90 2014 1,875,000 1,530,037 Northern Municipal Power Agency Electric System Refunding Revenue Bonds Series 1989A 7.25 2016 5,475,000 5,592,055 Northern Municipal Power Agency Electric System Pre-Refunded Revenue Bonds Series 1989A (AMBAC Insured) 7.40 2018 1,000,000 1,074,160 Northern Municipal Power Agency Electric System Pre-Refunded Revenue Bonds Series 1989B (AMBAC Insured) 7.40 2018 1,800,000 1,876,698 Norwood-Young America Independent School District #108 General Obligation School Building Bonds Unlimited Tax School Credit Enhancement Program Series 1994A 5.00 2014 1,345,000 1,110,123 Osseo Area Schools Independent School District #279 General Obligation School Building Bonds Series 1993A Inverse Floater 4.775 2012 5,000,000 (f) 3,825,000 Owatanna Public Utilities Pre-Refunded Revenue Bonds Series 1991 6.75 2016 1,000,000 1,046,020 Plymouth Multi-family Housing Revenue Bonds AMT Harbor Lane Apartments Series 1993 (Asset Guaranty Insured) 5.90 2013 2,325,000 2,100,777 Port Authority St. Paul General Obligation Bonds Series 1994 5.125 2017 2,885,000 2,378,279 Port Authority St. Paul Unlimited Tax General Obligation Bonds 5.125 2024 2,270,000 1,811,801 Red Wing Industrial Development Refunding Revenue Bonds K mart Series 1993 5.50 2008 400,000 346,564 Richfield Independent School District #280 Unlimited Tax General Obligation School Building Bonds Series 1993C Inverse Floater (FGIC Insured) 4.575 2010 3,300,000 (f) 2,532,750 Richfield Independent School District #280 Unlimited Tax General Obligation School Building Bonds Series 1993C Trust Inverse Floater (FGIC Insured) 4.675 2012 2,510,000 (f) 1,888,775 Robbinsdale Hospital Pre-Refunded Revenue Bonds North Memorial Medical Center Series 1989 (AMBAC Insured) 7.375 2019 2,200,000 2,379,234 Rochester Health Care Facility Revenue Bonds Mayo Foundation/Mayo Medical Center Series 1992I 5.75 2021 4,240,000 3,665,522 Rochester Multi-family Housing Development Revenue Bonds Civic Square Series 1991 (FHA Insured) 7.45 2031 4,450,000 4,485,911 Roseville Health Care Facility Refunding Revenue Bonds Presbyterian Homes of Minnesota Series 1987 7.50 2007 2,250,000 2,263,635 Rush City Independent School District #139 Unlimited Tax School Building Refunding Bonds School Credit Enhancement Program 5.25 2018 2,595,000 2,196,097 St. Cloud Hospital Facilities Revenue Bonds St. Cloud Hospital Series 1990B (AMBAC Insured) 7.00 2020 5,000,000 5,387,200 St. Cloud Hospital Facility Refunding Revenue Bonds Series C (AMBAC Insured) 5.30 2020 1,515,000 1,241,921 St. Cloud Hospital Refunding Revenue Bonds Series 1993C (AMBAC Insured) 5.25 2013 1,000,000 853,000 St. Cloud Hydro Electric Generation Facility Gross Revenue Bonds Series 1986 7.375 2018 1,100,000 1,122,715 St. Louis Park Health Care Facilities Revenue Bonds Healthsystem Minnesota Obligated Group Series 1993 (AMBAC Insured) 5.20 2023 6,000,000 4,804,440 St. Louis Park Health Care Facilities Revenue Bonds Healthsystem Minnesota Obligated Group Series 1993A (AMBAC Insured) 5.20 2016 3,000,000 2,494,170 St. Louis Park Health Care Facilities Revenue Bonds Healthsystem Minnesota Obligated Group Series 1993B Inverse Floater (AMBAC Insured) 4.175 2013 7,000,000 (f) 4,550,000 St. Louis Park Health Care Facilities Pre-Refunded Revenue Bonds Park Nicollet Medical Center Series 1990A 9.25 2020 4,000,000 4,672,600 St. Louis Park Health Care Facilities Pre-Refunded Revenue Bonds Park Nicollet Medical Center Series 1991A 8.625 2021 2,000,000 2,286,140 St. Louis Park Multi-family Rental Housing Revenue Bonds Mortgage Loan-Community Housing & Services Series 1985 (FHA Insured) 7.375 2028 2,250,000 2,276,258 St. Paul & Minneapolis Housing & Redevelopment Authority Health Care Facility Revenue Bonds Group Health Plan Series 1992 6.75 2013 10,500,000 (g) 10,193,925 St. Paul Housing & Redevelopment Authority Hospital Facility Revenue Bonds St. Paul Ramsey Medical Center (AMBAC Insured) 5.55 2023 5,000,000 4,223,750 St. Paul Housing & Development Bonds Highland Retirement (FHA Insured) 7.013 2026 5,210,000 4,793,200 St. Paul Housing & Redevelopment Authority Commercial Development Refunding Revenue Bonds Beverly Enterprises Series 1992 7.75 2002 2,700,000 2,754,000 St. Paul Housing & Redevelopment Authority Health Care Facility Revenue Bonds Lyngblomsten Care Center Series 1993A 7.125 2017 1,945,000 1,801,829 St. Paul Housing & Redevelopment Authority Health Care Facility Revenue Bonds Lyngblomsten Care Center Series 1993A 9.60 2006 1,060,000 1,071,660 St. Paul Housing & Redevelopment Authority Health Care Facility Multi-family Rental Housing Revenue Bonds Lynblomsten 1993B 7.00 2024 1,930,000 1,721,579 St. Paul Housing & Redevelopment Authority Sales Tax Revenue Bonds Civic Center Series 1993 5.55 2023 5,000,000 4,159,500 St. Paul Sewer Refunding Revenue Bonds Series 1993 (AMBAC Insured) 5.60 2008 7,700,000 7,259,252 Southern Minnesota Municipal Power Agency Bonds Escrowed to Maturity 5.75 2018 370,000 330,247 Southern Minnesota Municipal Power Agency Pre-Refunded Bonds Series 1988A 8.125 2018 1,315,000 1,431,996 Southern Minnesota Municipal Power Agency Pre-Refunded Bonds Series 1988B 8.125 2018 1,000,000 1,088,970 Southern Minnesota Municipal Power Agency Power Supply System Revenue Bonds Zero Coupon Series 1994A (MBIA Insured) 6.67 2019 19,500,000 (h) 4,019,145 6.88 2022 12,000,000 (h) 1,988,160 Southern Minnesota Municipal Power Agency Series A (Secondary MBIA Insured) 5.75 2018 3,000,000 2,671,260 Southern Minnesota Municipal Power Agency Un-Refunded Balance Power Revenue Bonds Series A 5.75 2018 1,895,000 1,655,320 Spring Park Health Care Facility Revenue Bonds Twin Birch Health Care Center Series 1991 8.25 2011 1,780,000 1,948,833 State General Obligation Various Purpose Pre-Refunded Bonds Series 1990 7.00 2009 7,850,000 8,354,677 State General Obligation Various Purpose Pre-Refunded Bonds Series 1991 6.70 2011 8,000,000 8,424,560 State Higher Education Facility Authority Mortgage Pre-Refunded Revenue Bonds St. Mary's College Series 2-M 8.375 2017 1,000,000 1,104,940 State Housing Facility Authority Housing Development Bonds Series A 7.125 2020 845,000 854,388 State Housing Facility Authority Housing Development Bonds Series 1976A 7.25 2018 205,000 207,837 State Housing Facility Authority Housing Development Bonds Series 1978B 7.10 2021 470,000 474,733 State Housing Facility Authority Housing Development Bonds Series 1979A 7.00 2022 700,000 697,410 State Housing Facility Authority Housing Finance Agency Housing Development Single Family Mortgage Bonds Series B 7.25 2016 440,000 448,395 State Housing Finance Agency Single Family Mortgage Bonds AMT Series 1989A 8.00 2029 1,625,000 1,655,062 State Housing Finance Agency Single Family Mortgage Bonds AMT Series 1990A 7.95 2022 3,670,000 3,831,627 State Housing Finance Agency Single Family Mortgage Bonds AMT Series 1991A 7.45 2022 3,570,000 3,656,180 State Housing Finance Agency Single Family Mortgage Bonds Series 1992A 6.95 2016 3,330,000 3,336,560 State Housing Finance Agency Single Family Mortgage Revenue Bonds AMT Series L 6.70 2020 1,100,000 1,053,470 State Public Facilities Authority Water Pollution Control Revenue Bonds Series 1989A 7.00 2009 6,250,000 6,512,000 State Public Facilities Authority Water Pollution Control Revenue Bonds Series 1992A 6.50 2014 9,050,000 9,019,411 State University Board of Regents General Obligation Bonds Series 1993A Inverse Floater 5.171 2003 5,000,000 (f) 4,075,000 State University Board of Regents General Obligation Pre-Refunded Bonds Series 1989A 6.00 2011 4,625,000 4,400,456 State University Board State University System Pre-Refunded Revenue Bonds Series 1989A (MBIA Insured) 7.40 2019 2,250,000 2,410,897 Washington County General Obligation Capital Improvement Bonds Series 1989A 7.00 2009-10 4,425,000 4,629,966 Washington County Housing & Redevelopment Authority Multi-family Housing Revenue Bonds AMT Orleans Homes Series 1987-2 9.00 2017 2,000,000 2,142,840 Western Minnesota Municipal Power Agency Revenue Bonds Escrowed to Maturity (AMBAC Insured) 6.75 2016 5,935,000 6,015,360 Western Minnesota Municipal Power Agency Supply Refunding Revenue Bonds Series 1987A 5.50 2015 5,000,000 4,324,400 Western Minnesota Municipal Power Agency Supply Refunding Revenue Bonds Series 1987A 6.875 2007 2,500,000 2,543,075 Western Minnesota Municipal Power Agency Supply Refunding Revenue Bonds Series 1987A 7.00 2013 7,300,000 7,355,407 Western Minnesota Municipal Power Agency Supply Refunding Revenue Bonds Series A (Secondary MBIA Insured) 5.50 2015 6,250,000 5,473,750 White Bear Lake Industrial Development Revenue Bonds AMT Taylor Series 1988A 8.75 2008 2,250,000 2,397,195 _____________________________________________________________________________________________________________________________ Total municipal bonds (Cost: $370,458,586) $367,298,692 _____________________________________________________________________________________________________________________________ Total investments in securities (Cost: $370,458,586)(i) $367,298,692 _____________________________________________________________________________________________________________________________ _____________________________________________________________________________________________________________________________ Notes to investments in securities _____________________________________________________________________________________________________________________________ (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Investments in bonds, by rating category as a percentage of total bonds, are as follows: (Unaudited) Rating 12-30-94 06-30-94 _______________________________________________________________________________________________________ AAA 41% 43% AA 23 24 A 21 20 BBB and below 14 13 Non-rated 1 -- Total 100% 100% (c) The following abbreviations are used in portfolio descriptions to identify the insurer of the issue: AMBAC -- American Municipal Bond Association Corporation CGIC -- Capital Guaranty Insurance Company FGIC -- Financial Guarantee Insurance Corporation FHA -- Federal Housing Authority MBIA -- Municipal Bond Investors Assurance (d) The following abbreviation is used in portfolio descriptions: AMT -- Alternative Minimum Tax (e) Presently non-income producing. Item identified is in default as to payment of interest and/or principal. (f) Inverse floaters represent securities which pay interest at a rate that increases (decreases) in the same magnitude as, or in a multiple of, a decline (increase) in market short-term rates. Interest rate disclosed is the rate in effect on Dec. 31, 1994. Inverse floaters in the aggregate represent 4.5% of the fund's net assets as of Dec. 31, 1994. (g) Partially pledged as initial deposit on the following open interest rate futures contracts (see Note 5 to the financial statements): Type of security Notional amount _____________________________________________________ Purchase contracts Municipal Bonds March 1995 $70,000,000 Sales contracts U.S. Treasury Bonds March 1995 70,000,000 _____________________________________________________ (h) For zero coupon bonds, the interest rate disclosed represents the annualized effective yield on the date of acquisition. (i) At Dec. 31, 1994, the cost of securities for federal income tax purposes was approximately $370,333,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $11,091,000 Unrealized depreciation (14,125,000) ______________________________________________________________________________________________________ Net unrealized depreciation $(3,034,000) ______________________________________________________________________________________________________
Investments in securities IDS New York Tax-Exempt Fund (Percentages represent value of Dec. 31, 1994 (Unaudited) investments compared to net assets) _____________________________________________________________________________________________________________________________ Municipal bonds (97.3%) _____________________________________________________________________________________________________________________________ Name of issuer and title of issue (b,c,d) Coupon Maturity Principal Value(a) rate amount _____________________________________________________________________________________________________________________________ Battery Park City Authority Senior Refunding Revenue Bonds Series 1993A 5.25 % 2017 $4,000,000 $ 3,192,000 Broome County Certificates of Partication Public Safety Facility Series 1994 (MBIA Insured) 5.25 2022 1,250,000 1,008,362 Buffalo Municipal Water Finance Authority Water System Revenue Bonds (FSA Insured) 5.75 2019 700,000 617,435 Erie County Water Authority Fourth Resolution Water Refunding Revenue Bonds Zero Coupon Series 1992 (AMBAC Insured) 7.30 2017 1,215,000 (e) 234,191 Erie County Water Authority Water Works System Revenue Bonds Escrowed to Maturity Series 1990A (AMBAC Insured) 6.00 2008 1,765,000 1,713,091 Fallsburg Sullivan County Unlimited Tax General Obligation Improvement Pre-Refunded Bonds Series 1991 7.05 2011-14 1,300,000 1,409,330 Great Neck North Water Authority Water System Pre-Refunded Revenue Bonds Series 1989A 6.00 2020 1,415,000 1,435,079 Metropolitan Transportation Authority Commuter Facilities 1987 Service Contract Refunding Bonds Series 5 6.50 2016 1,775,000 1,651,070 Metropolitan Transportation Authority Service Transit Facilities Pre-Refunded Revenue Bonds Series G 8.50 2011 1,000,000 1,067,500 Metropolitan Transportation Authority Transit Facilities Pre-Refunded Revenue Bonds Series F 8.375 2016 725,000 772,524 Metropolitan Transportation Authority Transit Facilities Revenue Bonds Series 1994 (MBIA Insured) 6.00 2024 1,500,000 1,371,060 Monroe County Utility General Obligation Pre-Refunded Bonds Water Improvement System 7.10 2008-09 1,000,000 1,070,700 Municipal Assistance New York City Series 57 7.25 2008 500,000 520,175 Municipal Assistance New York City Series 59 7.75 2006 660,000 703,527 Municipal Assistance New York City Series 62 6.75 2006 2,200,000 2,286,636 New York & New Jersey Port Authority Consolidated Revenue Bonds AMT Series 61 8.125 2023 750,000 780,360 New York & New Jersey Port Authority Consolidated Revenue Bonds AMT Series 62 8.00 2023 1,000,000 1,041,170 New York City General Obligation Bonds Series 1995B 7.00 2016 1,500,000 1,473,615 New York City General Obligation Unlimited Tax Bonds Series E (CGIC Insured) 6.00 2016 1,500,000 (f) 1,383,045 New York City Municipal Water Finance Authority Water & Sewer System Revenue Bonds Series B Inverse Floater (MBIA Insured) 6.04 2009 2,000,000 (g) 1,495,000 New York City Water Finance Authority Water & Sewer System Pre-Refunded Revenue Bonds Series A (FGIC Insured) 6.75 2014 1,185,000 1,251,561 New York City Water Finance Authority Water & Sewer System Revenue Bonds Series A (FGIC Insured) 6.75 2014 565,000 568,633 New York City Water Finance Authority Water & Sewer System Revenue Pre-Refunded Bonds Series 1988A 7.00 2018 1,500,000 1,577,010 See accompanying notes to investments in securities. New York City Water Finance Authority Water & Sewer System Revenue Bonds Series 1993A (AMBAC Insured) 5.75 2018 4,000,000 3,544,920 State Certificate of Participation City University John J. College 7.25 2007 360,000 365,411 State Dormitory Authority City University System Consolidated 3rd Resolution Revenue Bonds Series 1994-2 (MBIA Insured) 6.25 2019 1,500,000 1,420,995 State Dormitory Authority City University System Pre-Refunded Revenue Bonds 8.125 2017 3,400,000 3,689,306 State Dormitory Authority City University System Pre-Refunded Revenue Bonds Series 1986A 7.625 2013 1,000,000 1,052,630 State Dormitory Authority City University System Revenue Bonds Series 1993A 5.75 2013 3,000,000 2,603,100 State Dormitory Authority State University Education Facility Refunding Revenue Bonds Series 1990B 7.50 2011 1,900,000 2,002,904 State Dormitory Authority State University Education Facility Pre-Refunded Revenue Bonds Series 1990A 7.70 2012 1,750,000 1,947,750 State Dormitory Authority Upstate Community Colleges Series A (Connie Lee Insured) 5.625 2012 1,500,000 1,339,530 State Energy Research & Development Authority Electric Facility Revenue Bonds AMT Consolidated Edison Series 1986A 7.50 2021 1,750,000 1,767,815 State Energy Research & Development Authority Electric Facility Revenue Bonds AMT Consolidated Edison Series 1989A 7.75 2024 1,000,000 1,021,490 State Energy Research & Development Authority Electric Facility Revenue Bonds AMT Consolidated Edison Series 1990A 7.50 2025 5,000,000 5,061,250 State Energy Research & Development Authority Gas Facility Revenue Bonds Brooklyn Union Gas Series I 7.125 2020 2,000,000 2,010,780 State Energy Research & Development Authority Gas Facility Revenue Bonds Brooklyn Union Gas Series II 7.00 2020 1,500,000 1,496,295 State Energy Research & Development Authority Pollution Control Refunding Revenue Bonds AMT Rochester Gas & Electric (MBIA Insured) 6.50 2032 2,500,000 2,385,525 State Environmental Facility State Water & Pollution Control Revolving Fund Revenue Bonds New York City Municipal Water Finance Authority Series 1990A 7.50 2012 3,000,000 3,162,240 State Housing Finance Authority State University Construction Program Pre-Refunded Bonds Series 1986A 8.00 2016 400,000 422,684 State Housing Finance Authority State University Construction Program Pre-Refunded Bonds Series A 8.30 2018 500,000 549,345 State Local Government Assistance Bonds Series C 5.50 2022 1,500,000 1,238,640 State Local Government Assistance Bonds Series 1992A 6.875 2019 2,000,000 2,008,500 State Local Government Assistance Pre-Refunded Bonds Series 1991A 7.00 2016 4,000,000 4,334,760 State Medical Care Facility Finance Agency Hospital & Nursing Home Mortgage Revenue Bonds Montefiore Hospital Series 1989A (FHA Insured) 7.25 2024 1,400,000 1,436,582 State Medical Care Facility Finance Agency Mental Health Services Facility Improving Refunding Revenue Bonds Series 1993F 5.375 2014 1,000,000 814,640 State Medical Care Facility Finance Agency Mental Health Services Facility Improving Refunding Revenue Bonds Series 1994A 5.25 2023 1,500,000 1,139,925 State Medical Care Facility Finance Agency Pre-Refunded Bonds Presbyterian Hospital Series 1985B 8.00 2025 1,320,000 1,433,124 State Medical Care Facility Finance Agency Revenue Bonds Buffalo General Hospital Series 1988C (FHA Insured) 7.60 2008 1,500,000 1,632,360 State Medical Care Facility Finance Agency Revenue Bonds Buffalo General Hospital Series 1988C (FHA Insured) 7.70 2022 1,950,000 2,128,406 State Medical Care Facility Finance Agency Revenue Bonds North Shore University Glen Cove Series A (MBIA Insured) 5.125 2012 1,000,000 839,230 State Medical Care Facility Finance Agency Secured Hospital Revenue Bonds Series 1987A 7.10 2027 550,000 529,793 State Mortgage Agency Homeowner Mortgage Revenue Bonds Series TT 7.50 2015 4,000,000 4,143,280 State Mortgage Agency Homeowner Mortgage Revenue Bonds Series 27 6.90 2015 3,000,000 2,999,550 State Mortgage Agency Revenue Bonds AMT Series 9 7.30 2017 970,000 987,896 State Thruway Authority Local Highway & Bridge Service Contract Bonds Series 1991 6.00 2011 2,500,000 2,289,675 State Urban Development Correction Facility Pre-Refunded Revenue Bonds Series 1986 8.00 2015 750,000 785,805 State Urban Development Correction Facility Pre-Refunded Revenue Bonds Series 1 (FSA Insured) 7.50 2020 4,500,000 4,942,170 State Urban Development Correctional Capital Facilities Refunding Revenue Bonds Series 1993A 5.25 2021 2,500,000 1,935,250 Suffolk County General Obligation Public Improvement Refunding Bonds Series G (MBIA Insured) 5.40 2014 1,000,000 867,220 Triborough Bridge & Tunnel Authority General Purpose Pre-Refunded Revenue Bonds Series S 7.00 2021 3,000,000 3,226,380 Triborough Bridge & Tunnel Authority Special Obligation Refunding Bonds Series 1991B (FGIC Insured) 6.875 2015 2,000,000 2,036,220 United Nations Development Senior Lien Pre-Refunded Revenue Bonds 1986 Phase II & III 7.875 2006 250,000 264,830 United Nations Development Senior Lien Refunding Revenue Bonds Series 1992A 6.00 2026 4,500,000 3,940,920 _____________________________________________________________________________________________________________________________ Total municipal bonds (Cost: $109,313,325) $110,422,200 _____________________________________________________________________________________________________________________________ Total investments in securities (Cost: $109,313,325)(h) $110,422,200 _____________________________________________________________________________________________________________________________ Notes to investments in securities _____________________________________________________________________________________________________________________________ (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Investments in bonds, by rating category as a percentage of total bonds, are as follows: (Unaudited) Rating 12-31-94 06-30-94 _______________________________________________________________________________________________________ AAA 51% 46% AA 26 30 A 11 11 BBB and below 12 13 Non-rated - - Total 100% 100% _______________________________________________________________________________________________________ (c) The following abbreviations are used in portfolio descriptions to identify the insurer of the issue: AMBAC -- American Municipal Bond Association Corporation CGIC -- Capital Guaranty Insurance Company FGIC -- Financial Guarantee Insurance Corporation FHA -- Federal Housing Authority FSA -- Financial Security Assurance MBIA -- Municipal Bond Investors Assurance (d) The following abbreviation is used in portfolio descriptions: AMT -- Alternative Minimum Tax (e) For zero coupon bonds, the interest rate disclosed represents the annualized yield on the date of acquisition. (f) Partially pledged as initial deposit on the following open interest rate futures contracts (see Note 5 to the financial statements): Type of security Notional amount Purchase contracts ___________________________________________________________ Municipal Bonds March 1995 $22,500,000 Sale contracts U.S. Treasury Bonds March 1995 22,500,000 ___________________________________________________________ (g) 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 market short-term rates. Interest rate disclosed is the rate in effect on Dec. 31, 1994. Inverse floaters in the aggregate represent 1.3% of the fund's net assets as of Dec. 31, 1994. (h) At Dec. 31, 1994, the cost of securities for federal income tax purposes was approximately $109,283,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $4,960,000 Unrealized depreciation (3,821,000) ______________________________________________________________________________________________________ Net unrealized appreciation $1,139,000 ______________________________________________________________________________________________________
Investments in securities IDS Ohio Tax-Exempt Fund Dec. 31, 1994 (Unaudited) (Percentages represent value of investments compared to net assets) _____________________________________________________________________________________________________________________________ Municipal bonds (97.1%) _____________________________________________________________________________________________________________________________ Name of issuer and Coupon Maturity Principal Value(a) title of issue (b,c,d) rate amount _____________________________________________________________________________________________________________________________ Akron Bath & Copley Joint Township Hospital Refunding Revenue Bonds Childrens Hospital Medical Center (AMBAC Insured) 5.00 % 2015 $1,000,000 $ 807,420 Akron Bath & Copley Joint Township Hospital Refunding Revenue Bonds Childrens Hospital Medical Center Series 1993 (AMBAC Insured) 5.25 2020 1,500,000 1,220,115 Barberton Limited Tax Various Purpose General Obligation Bonds Series 1989-1 7.35 2009 700,000 713,958 Bedford Sewer System Mortgage Revenue Bonds Series 1986 (AMBAC Insured) 7.80 2010 300,000 319,224 Bellefontaine Hospital Facility Refunding Revenue Bonds Mary Rutan Health Association of Logan County Series 1993 6.00 2013 1,000,000 826,840 Butler County Hospital Facility Improvement Refunding Revenue Bonds 7.50 2010 1,750,000 1,687,595 Clermont County Hospital Facility Revenue Bonds Mercy Health System Province of Cincinnati Series 1989A (AMBAC Insured) 7.50 2019 750,000 818,992 Cleveland Airport Systems Revenue Bonds AMT Series 1990A (MBIA Insured) 7.40 2020 500,000 518,740 Cleveland Airport Systems Revenue Bonds AMT Series A (FGIC Insured) 6.00 2024 1,500,000 1,364,685 Cleveland General Obligation Pre-Refunded Bonds 7.375 2003 125,000 133,624 Cleveland Public Power System 1st Mortgage Pre-Refunded Revenue Bonds 8.375 2017 100,000 108,845 Cleveland School District Unlimited Tax Improvement General Obligation Bonds Series A (FGIC Insured) 5.875 2011 1,000,000 942,220 Cleveland Waterworks Improvement 1st Mortgage Refunding Revenue Bonds Series F 1992B (AMBAC Insured) 6.25 2016 1,000,000 (f) 966,020 Cleveland Waterworks Improvement 1st Mortgage Revenue Bonds Series 1987E 6.00 2017 200,000 182,936 Cleveland Waterworks Improvement 1st Mortgage Pre-Refunded Revenue Bonds Series 1987E 7.875 2016 650,000 692,562 Coshocton County Solid Waste Disposal Refunding Revenue Bonds Stone Container Series 1992 7.875 2013 1,000,000 971,920 Cuyahoga County Hospital Improvement Revenue Bonds Cleveland Clinic Foundation 7.00 2013 500,000 502,170 Cuyahoga County Hospital Improvement Pre-Refunded Revenue Bonds Cleveland Clinic Foundation Series 1987A 7.875 2010 275,000 297,209 Cuyahoga County Hospital Improvement Revenue Bonds Mount Sinai Medical Center Series 1991 (AMBAC Insured) 6.625 2021 600,000 599,562 Cuyahoga County Hospital Improvement Revenue Bonds University Hospitals Health System Series 1992 (AMBAC Insured) 6.50 2011 500,000 499,485 Cuyahoga County Hospital Refunding Revenue Bonds Cleveland Clinic Foundation Series 1992 5.50 2011 1,500,000 1,347,525 Cuyahoga County Hospital Refunding Revenue Bonds Mount Sinai Medical Center Series 1987A 8.125 2014 400,000 431,356 Cuyahoga County Hospital Revenue Bonds Meridia Health Series 1991 7.00 2023 1,000,000 976,950 Cuyahoga County Limited Tax General Obligation Bonds 5.60 2013 500,000 440,400 Cuyahoga Hospital Revenue Bonds Metrohealth System Series 1989 (MBIA Insured) 6.00 2019 1,000,000 917,850 Dover Limited Tax Improvement General Obligation Municipal Sewer System Bonds 7.10 2009 1,000,000 1,025,650 Dover Waterworks System Revenue Bonds Series 1994 (AMBAC Insured) 6.00 2020 1,000,000 930,590 See accompanying notes to investments in securities. Elyria Limited Tax Improvement General Obligation Recreation Facility Bonds 7.10 2009 715,000 733,340 Erie County Hospital Improvement Refunding Revenue Bonds Firelands Community Hospital Series 1992 6.75 2015 2,000,000 1,879,240 Fairfield Union Local School District School Facilities Unlimited Tax Improvement General Obligation Bonds (AMBAC Insured) 5.90 2018 625,000 573,388 Findlay Water System Limited Tax Improvement General Obligation Bonds 5.55 2018 365,000 315,663 Franklin County Convention Facilities Authority Tax & Lease Revenue Anticipation Bonds (MBIA Insured) 5.80 2013 1,000,000 922,310 Franklin County Convention Facilities Authority Tax & Lease Revenue Anticipation Pre-Refunded Bonds (MBIA Insured) 7.00 2019 1,500,000 1,622,910 Franklin County Hospital Refunding Revenue Bonds Riverside United Methodist Hospital Series 1993A 5.75 2012 1,000,000 879,010 Franklin County Limited Tax General Obligation Refunding Bonds Series 1993 5.50 2013 1,000,000 886,000 Highland Heights Limited Tax Improvement General Obligation Street Bonds 7.75 2008 400,000 432,900 Kettering School District Improvement General Obligation Bonds (FGIC Insured) 5.25 2022 1,000,000 816,820 Lake County Water System Limited Tax Improvement General Obligation Pre-Refunded Bonds Series 1987-2 8.125 2010 700,000 762,972 Lakota Local School District Butler County School Unlimited Tax Improvement Bonds 7.00 2012 500,000 529,470 Lakota Local School District Butler County School Unlimited Tax Improvement Pre-Refunded Bonds 7.90 2011 200,000 216,398 Lokata Local School District Unlimited Tax Improvement General Obligation Bonds (AMBAC Insured) 6.25 2014 2,000,000 1,955,360 Lima Limited Tax Improvement General Obligation Pre-Refunded Bonds Sanitary Sewer System 8.25 2012 200,000 218,656 Lucas County Hospital Refunding Revenue Bonds St. Vincent's Medical Center Series B (MBIA Insured) 5.25 2020 2,000,000 1,638,580 Lucas County Hospital Pre-Refunded Revenue Bonds Toledo Hospital (MBIA Insured) 7.00 2014 100,000 101,873 Marietta Sewer System Improvement Bonds (BIG Insured) 7.50 2007 200,000 212,144 Marion County Health Care Facilities Improvement Refunding Revenue Bonds United Church Homes Series 1993 6.375 2010 1,000,000 874,700 Marysville Sewer System 1st Mortgage Revenue Bonds AMT Series 1988 (BIG Insured) 7.85 2008 400,000 427,380 Marysville Water System Mortgage Revenue Bonds Series 1991 (MBIA Insured) 7.05 2021 1,000,000 1,079,420 Mason Waterworks System Refunding Revenue Bonds Series 1993 (AMBAC Insured) 6.00 2017 600,000 560,406 Medina County Hospital Revenue Bonds Medina County Community Hospital Series 1987 (AMBAC Insured) 6.875 2016 100,000 101,089 Miami County Hospital Facility Refunding Revenue Bonds Upper Valley Medical Center Series 1987A 8.375 2013 75,000 79,834 Miami State University General Receipts Bonds Series 1993 (FGIC Insured) 5.60 2013 500,000 450,370 Montgomery County Health Facilities Revenue Bonds Friendship Village Dayton Series 1990A 9.25 2016 1,000,000 1,008,580 Montgomery County Industrial Development Revenue Bonds AMT SPM System Series 1991 10.00 2005 720,000 (e) 360,000 Montgomery County Sewer System Refunding Revenue Bonds Greater Moraine - Beavercreek District Series 1993 (FGIC Insured) 5.60 2011 1,000,000 911,000 Montgomery County Water Revenue Bonds Greater Moraine - Beavercreek District (FGIC Insured) 6.25 2017 1,000,000 966,880 Newark Water System Limited Tax Improvement General Obligation Bonds (AMBAC Insured) 6.00 2018 500,000 466,965 Parma Hospital Improvement Revenue Bonds Parma Community General Hospital Series 1989B (MBIA Insured) 7.125 2013 500,000 518,820 Pickerington Local School District Unlimited Tax General Obligation Pre-Refunded Bonds (AMBAC Insured) 7.00 2013 1,000,000 1,081,940 Pleasant Local School District Unlimited Tax Improvement General Obligation Bonds Series 1993 (AMBAC Insured) 5.10 2018 780,000 633,773 Rural Loraine County Water Authority Water Resource Improvement Pre-Refunded Revenue Bonds Series 1991 (AMBAC Insured) 7.00 2011 1,000,000 1,075,220 South Euclid Lyndhurst School District General Obligation Bonds (FGIC Insured) 5.25 2018 1,000,000 832,400 Southwest Local School District Hamilton & Butler Counties School Unlimited Tax Improvement Bonds (AMBAC Insured) 7.65 2010 500,000 555,380 Stark County Hospital Pre-Refunded Revenue Bonds Timkin Mercy Medical Center 7.50 2007 125,000 132,226 State Air Quality Development Authority Refunding Revenue Bonds AMT Series 1994 (AMBAC Insured) 6.375 2029 2,000,000 1,887,860 State Air Quality Development Authority Revenue Bonds Cleveland Electric Illuminating Series A 7.00 2009 350,000 331,565 State Building Authority Local Jail Grant Bonds Series 1989A (MBIA Insured) 7.35 2009 500,000 545,090 State Building Authority State Correctional Facility Revenue Bonds Series B 7.125 2009 75,000 77,790 State Building Authority State Facility Pre-Refunded Bonds Columbus State Office Building Series 1985C 7.35 2005 1,000,000 1,095,060 State Higher Educational Facility Pre-Refunded Revenue Bonds Oberlin College Series 1989 7.375 2014 500,000 543,980 State Higher Educational Facility Revenue Bonds University of Dayton Series 1994 (FGIC Insured) 5.80 2019 900,000 806,436 State Housing Finance Agency Mortgage Revenue Bonds AMT Aristocrat South Board & Care Series 1991A (FHA Insured) 7.30 2031 1,500,000 1,512,165 State Housing Finance Agency Single Family Mortgage Revenue Bonds AMT Series 1990A (GNMA Insured) 7.80 2030 675,000 702,614 State Housing Finance Agency Single Family Mortgage Revenue Bonds AMT Series 1990C (GNMA Insured) 7.85 2021 990,000 1,032,570 State Municipal Electric Generation Agency Joint Venture #5 Revenue Bonds (AMBAC Insured) 5.375 2024 1,250,000 1,032,088 State Turnpike Revenue Bonds Series A 5.75 2024 1,750,000 1,536,080 State Water Development Authority Pollution Control Revenue Bonds Phillip Morris 7.25 2008 150,000 151,488 State Water Development Authority Bonds AMT Toledo Edison Series 1994 8.00 2023 1,000,000 976,750 State Water Development Authority Water Development Pre-Refunded Bonds Pure Water Series 1987I 7.75 2006-14 200,000 214,417 State Water Development Authority Water Development Pre-Refunded Bonds Pure Water Series 1988I 7.00 2014 500,000 522,405 State Water Development Authority Water Development Refunding Revenue Bonds Pure Water (AMBAC Insured) 5.50 2018 750,000 646,575 Summit County Industrial Development Revenue Bonds Century Products 7.75 2005 100,000 104,852 Summit County Limited Tax General Obligation Pre-Refunded Bonds Human Services Facility (AMBAC Insured) 8.00 2007 100,000 108,662 Sycamore Board of Education Community School District Hamilton County School Improvement Bonds 6.50 2009 500,000 504,345 Toledo General Obligation Improvement Bonds (AMBAC Insured) 6.10 2014 1,000,000 958,820 Toledo Sewerage System Mortgage Revenue Bonds Series 1994 (AMBAC Insured) 6.45 2024 500,000 493,430 University of Cincinnati General Receipt Pre-Refunded Bonds Series I-1 7.10 2010 750,000 805,792 University of Toledo General Receipt Bonds Series A (FGIC Insured) 5.90 2020 1,000,000 907,400 University of Toledo General Receipt Pre-Refunded Bonds Series 1990 (MBIA Insured) 7.125 2020 500,000 541,115 Warren County Various Purpose Limited Tax General Obligation Bonds Series 1992 6.10 2012 500,000 476,945 Warren County Waterworks System Revenue Bonds Series 1994 (MBIA Insured) 6.00 2019 675,000 631,213 Whitehall City School District Franklin County Unlimited Tax Improvement General Obligation Pre-Refunded Bonds School Building Construction 7.25 2013 500,000 542,620 _____________________________________________________________________________________________________________________________ Total municipal bonds (Cost: $67,632,022) $66,747,987 _____________________________________________________________________________________________________________________________ Total investments in securities (Cost: $67,632,022)(g) $66,747,987 _____________________________________________________________________________________________________________________________ Notes to investments in securities _____________________________________________________________________________________________________________________________ (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Investments in bonds, by rating category as a percentage of total bonds, are as follows: (Unaudited) Rating 12-31-94 06-30-94 ___________________________________________________________________________________________________________ AAA 70% 65% AA 9 11 A 9 14 BBB and below 12 10 Non-rated -- -- Total 100% 100% (c) The following abbreviations are used in portfolio descriptions to identify the insurer of the issue: AMBAC -- American Municipal Bond Association Corporation BIG -- Bond Investors Guarantee FGIC -- Financial Guarantee Insurance Corporation FHA -- Federal Housing Authority GNMA -- Government National Mortgage Association MBIA -- Municipal Bond Investors Assurance (d) The following abbreviation is used in portfolio descriptions: AMT -- Alternative Minimum Tax (e) Presently non-income producing. For long-term debt securities, item identified is in default as to payment of interest and/or principal. (f) Partially pledged as initial deposit on the following open interest rate futures contracts (see Note 4 to the financial statements): Type of security Notional amount ______________________________________________________________________________________________________ Purchase contracts Municipal Bonds March 1995 $8,300,000 Sale contracts U.S. Treasury Bonds March 1995 8,300,000 ______________________________________________________________________________________________________ (g) At Dec. 31, 1994, the cost of securities for federal income tax purposes was approximately $67,594,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $ 1,908,000 Unrealized depreciation (2,754,000) ________________________________________________________________________________________________________ Net unrealized depreciation $ (846,000) ________________________________________________________________________________________________________
PART C. OTHER INFORMATION ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS (a) FINANCIAL STATEMENTS: List of financial statements filed as part of this Post-Effective Amendment to the Registration Statement: - Independent Auditors' Report dated August 5, 1994 - Statement of Assets and Liabilities, June 30, 1994 - Statement of Operations, Year ended June 30, 1994 - Statement of Changes in Net Assets, for the two-year period ended June 30, 1993 and June 30, 1994 - Notes to Financial Statements - Investments in Securities, June 30, 1994 - Notes to Investments in Securities Semiannual Report Data (unaudited): - Statement of Assets and Liabilities, December 31, 1994 - Statement of Operations, Period ended December 31, 1994 - Statement of Changes in Net Assets, for the period ended December 31, 1994 - Notes to Financial Statements - Investments in Securities, December 31, 1994 - Notes to Investments in Securities (b) EXHIBITS: 1. Declaration of Trust dated April 7, 1986, filed as Exhibit No. 1 to Registration Statement No. 33-5103 is incorporated herein by reference. 2. Amended By-laws dated May 14, 1987, filed as Exhibit No. 2 to Registration Statement 33-5103 is incorporated herein by reference. 3. Not Applicable. 4. Form of Certificate for shares of beneficial interest filed as Exhibit No. 4 to Pre-Effective Amendment No. 1 to Registration Statement No. 33-5103 is incorporated herein by reference. 5. Form of Investment Management Services Agreement between Registrant and American Express Financial Corporation, dated March 20, 1995, is filed electronically herewith. 6. Form of Distribution Agreement between Registrant and American Express Financial Advisors Inc., dated March 20, 1995, is filed electronically herewith. 7. All employees are eligible to participate in a profit sharing plan. Entry into the plan is Jan. 1 or July 1. The Registrant contributes each year an amount up to 15 percent of their annual salaries, the maximum deductible amount permitted under Section 404(a) of the Internal Revenue Code. 8. Form of Custodian Agreement between Registrant and American Express Trust Company, dated March 20, 1995, is filed electronically herewith. 9.(a) Form of Transfer Agency Agreement between Registrant and American Express Financial Corporation, dated March 20, 1995, is filed electronically herewith. 9.(b) Form of Administrative Services Agreement between Registrant and American Express Financial Corporation, dated March 20, 1995, is filed electronically herewith. 9.(c) Form of Shareholder Service Agreement between Registrant and American Express Financial Advisors Inc., dated March 20, 1995, is filed electronically herewith. 10. Opinion and Consent of Counsel filed as Exhibit No. 10 to Pre-Effective Amendment No. 3 to Registration Statement No. 33-5103 is incorporated herein by reference. 11. Independent Auditors' Consent is filed electronically herewith. 12. None.
II-1 13. Not Applicable. 14. Forms of Keogh, IRA and other retirement plans filed as Exhibits 14(a) through 14(n) to IDS Growth Fund, Inc. Post-Effective Amendment No. 34 to Registration Statement No. 2-38355 on Sept. 8, 1986, are incorporated herein by reference. 15. Form of Plan and Agreement of Distribution between Registrant and American Express Financial Advisors Inc., dated March 20, 1995, is filed electronically herewith. 16. Schedule for computation of each performance quotation provided in the Registration Statement in response to Item 22, filed as exhibit 16 to Registration Statement No. 33-5103 is incorporated herein by reference. 17. Financial Data Schedule is filed electronically herewith. 18.(a) Trustees' Power of Attorney to sign Amendments to this Registration Statement dated November 10, 1994, filed electronically as Exhibit 18(a) to Registrant's Post-Effective Amendment No. 17, is incorporated herein by reference. 18.(b) Officers' Power of Attorney to sign Amendments to this Registration Statement dated June 1, 1993 filed as Exhibit 17(a) to Registration Statement No. 33-5103 is incorporated herein by reference.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT Subsidiaries of IDS Financial Corporation: IDS Financial Services Inc.; IDS Real Estate Services, Inc.; Advisory Bank & Trust Company; IDS Securities Corporation; Investors Accumulation Plan, Inc.; IDS Life Insurance Company; IDS Life Insurance Company of New York; IDS Certificate Company; Investors Syndicate Development Corp.; Mankato Ventures (Joint Venture); Lawyers Joint Law Library Associates; Peninsular Properties, Inc.; Relco-Bo, Inc.; IDS International, Inc.; IDS Fund Management Ltd.; IDS Insurance Agency Inc.; IDS Insurance Agency of Arkansas Inc.; IDS Insurance Agency of Alabama Inc.; IDS Insurance Agency of New Mexico Inc.; IDS Insurance Agency of North Carolina Inc.; IDS Insurance Agency of Massachusetts Inc.; IDS Insurance Agency of Utah, Inc.; IDS Insurance Agency of Wyoming Inc.; IDS Advisory Group Inc. ITEM 26. NUMBER OF HOLDERS OF SECURITIES
(1) (2) NUMBER OF RECORD HOLDERS AS OF JANUARY 23, TITLE OF CLASS 1995 - -------------------------------------- ------------- IDS California Tax-Exempt Fund 6,418 Shares of Beneficial Interest $.01 par value
ITEM 27. INDEMNIFICATION The Declaration of Trust of the registrant provides that the Trust shall indemnify any person who was or is a party or is threatened to be made a party, by reason of the fact that he is or was a trustee, officer, employee or agent of the Trust, or is or was serving at the request of the Trust as a trustee, officer, employee or agent of another company, partnership, joint venture, trust or other enterprise, to any threatened, pending or completed action, suit or proceeding, wherever brought, and the Trust may purchase liability insurance and advance legal expenses, all to the fullest extent permitted by the laws of the State of Massachusetts, as now existing or hereafter amended. The By-laws of the registrant provide that present or former directors or officers of the Trust made or threatened to be made a party to or involved (including as a witness) in an actual or threatened action, suit or proceeding shall be indemnified by the Trust to the full extent authorized by the laws of the Commonwealth of Massachusetts, all as more fully set forth in the By-laws filed as an exhibit to this registration statement. Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to trustees, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such II-2 indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a trustee, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such trustee, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. Any indemnification hereunder shall not be exclusive of any other rights of indemnification to which the trustees, officers, employees or agents might otherwise be entitled. No indemnification shall be made in violation of the Investment Company Act of 1940. II-3 PAGE 1
Item 28. Business and Other Connections of Investment Adviser (American Express Financial Corporation) Directors and officers of American Express Financial Corporation who are directors and/or officers of one or more other companies: Ronald G. Abrahamson, Vice President--Service Quality and Reengineering American Express Financial Advisors IDS Tower 10 Vice President-Field Minneapolis, MN 55440 Service Quality and Reengineering American Express Service Corporation Vice President Douglas A. Alger, Vice President--Total Compensation American Express Financial Advisors IDS Tower 10 Vice President- Minneapolis, MN 55440 Total Compensation Jerome R. Amundson, Vice President and Controller--Investment Accounting American Express Financial Advisors IDS Tower 10 Vice President and Minneapolis, MN 55440 Controller-Investment Accounting Peter J. Anderson, Director and Senior Vice President--Investments American Express Financial Advisors IDS Tower 10 Senior Vice President- Minneapolis, MN 55440 Investments IDS Advisory Group Inc. Director and Chairman of the Board IDS Capital Holdings Inc. Director and President IDS Fund Management Limited Director IDS International, Inc. Director, Chairman of the Board and Executive Vice President IDS Securities Corporation Executive Vice President- Investments NCM Capital Management Group, Inc. 2 Mutual Plaza Director 501 Willard Street Durham, NC 27701 Ward D. Armstrong, Vice President-Sales and Marketing, American Express Institutional Services American Express Financial Advisors IDS Tower 10 Vice President-Sales and Minneapolis, MN 55440 Marketing, American Express Institutional Services Kent L. Ashton, Vice President--Financial Education Services American Express Financial Advisors IDS Tower 10 Vice President-Financial Minneapolis, MN 55440 Education Services PAGE 2 Item 28. Business and Other Connections of Investment Adviser (American Express Financial Corporation)(cont'd) Joseph M. Barsky III, Vice President--Senior Portfolio Manager American Express Financial Advisors IDS Tower 10 Vice President-Senior Minneapolis, MN 55440 Portfolio Manager IDS Advisory Group Inc. Vice President Robert C. Basten, Vice President--Tax and Business Services American Express Financial Advisors IDS Tower 10 Vice President-Tax Minneapolis, MN 55440 and Business Services American Express Tax & Business Director, President and Services Inc. Chief Executive Officer Timothy V. Bechtold, Vice President--Insurance Product Development American Express Financial Advisors IDS Tower 10 Vice President-Insurance Minneapolis, MN 55440 Product Development IDS Life Insurance Company Vice President-Insurance Product Development Carl E. Beihl, Vice President--Strategic Technology Planning American Express Financial Advisors IDS Tower 10 Vice President- Minneapolis, MN 55440 Strategic Technology Planning Alan F. Bignall, Vice President--Financial Planning Systems American Express Financial Advisors IDS Tower 10 Vice President- Minneapolis, MN 55440 Financial Planning Systems American Express Service Corporation Vice President John C. Boeder, Vice President--Mature Market Group American Express Financial Advisors IDS Tower 10 Vice President- Minneapolis, MN 55440 Mature Market Group IDS Life Insurance Company of New York Box 5144 Director Albany, NY 12205 Karl J. Breyer, Director and Senior Vice President--Corporate Affairs and General Counsel American Express Financial Advisors IDS Tower 10 Senior Vice President- Minneapolis, MN 55440 Corporate Affairs and Special Counsel American Express Minnesota Foundation Director IDS Aircraft Services Corporation Director and President PAGE 3 Item 28. Business and Other Connections of Investment Adviser (American Express Financial Corporation)(cont'd) Harold E. Burke, Vice President and Assistant General Counsel American Express Financial Advisors IDS Tower 10 Vice President and Minneapolis, MN 55440 Assistant General Counsel American Express Service Corporation Vice President Daniel J. Candura, Vice President--Marketing Support American Express Financial Advisors IDS Tower 10 Vice President-Marketing Minneapolis, MN 55440 Support Cynthia M. Carlson, Vice President--American Express Securities Services American Enterprise Investment IDS Tower 10 Director, President and Services Inc. Minneapolis, MN 55440 Chief Executive Officer American Express Financial Advisors Vice President-IDS Securities Services Orison Y. Chaffee III, Vice President--Field Real Estate American Express Financial Advisors IDS Tower 10 Vice President-Field Minneapolis, MN 55440 Real Estate James E. Choat, Director and Senior Vice President--Field Management American Express Financial Advisors IDS Tower 10 Senior Vice President- Minneapolis, MN 55440 Field Management American Express Minnesota Foundation Director American Express Service Corporation Vice President IDS Insurance Agency of Alabama Inc. Vice President--North Central Region IDS Insurance Agency of Arkansas Inc. Vice President--North Central Region IDS Insurance Agency of Massachusetts Inc. Vice President--North Central Region IDS Insurance Agency of Nevada Inc. Vice President--North Central Region IDS Insurance Agency of New Mexico Inc. Vice President--North Central Region IDS Insurance Agency of North Carolina Inc. Vice President--North Central Region IDS Insurance Agency of Ohio Inc. Vice President--North Central Region IDS Insurance Agency of Wyoming Inc. Vice President-- North Central Region IDS Property Casualty Insurance Co. Director PAGE 4 Item 28. Business and Other Connections of Investment Adviser (American Express Financial Corporation)(cont'd) Kenneth J. Ciak, Vice President and General Manager--IDS Property Casualty American Express Financial Advisors IDS Tower 10 Vice President and General Minneapolis, MN 55440 Manager-IDS Property Casualty IDS Property Casualty Insurance Co. I WEG Blvd. Director and President DePere, Wisconsin 54115 Alan R. Dakay, Vice President--Institutional Insurance Marketing American Enterprise Life Insurance Co. IDS Tower 10 Director and President Minneapolis, MN 55440 American Express Financial Advisors Vice President - Institutional Insurance Marketing American Partners Life Insurance Co. Director and President IDS Life Insurance Company Vice President - Institutional Insurance Marketing Regenia David, Vice President--Systems Services American Express Financial Advisors IDS Tower 10 Vice President- Minneapolis, MN 55440 Systems Services William H. Dudley, Director and Executive Vice President--Investment Operations American Express Financial Advisors IDS Tower 10 Director and Executive Minneapolis, MN 55440 Vice President- Investment Operations IDS Advisory Group Inc. Director IDS Capital Holdings Inc. Director IDS Futures Corporation Director IDS Futures III Corporation Director IDS International, Inc. Director IDS Securities Corporation Director, Chairman of the Board, President and Chief Executive Officer Roger S. Edgar, Director and Senior Vice President--Information Systems American Express Financial Advisors IDS Tower 10 Senior Vice President- Minneapolis, MN 55440 Information Systems PAGE 5 Item 28. Business and Other Connections of Investment Adviser (American Express Financial Corporation)(cont'd) Gordon L. Eid, Director, Senior Vice President and Deputy General Counsel American Express Financial Advisors IDS Tower 10 Senior Vice President and Minneapolis, MN 55440 General Counsel IDS Insurance Agency of Alabama Inc. Director and Vice President IDS Insurance Agency of Arkansas Inc. Director and Vice President IDS Insurance Agency of Massachusetts Inc. Director and Vice President IDS Insurance Agency of Nevada Inc. Director and Vice President IDS Insurance Agency of New Mexico Inc. Director and Vice President IDS Insurance Agency of North Carolina Inc. Director and Vice President IDS Insurance Agency of Ohio Inc. Director and Vice President IDS Insurance Agency of Wyoming Inc. Director and Vice President IDS Real Estate Services, Inc. Vice President Investors Syndicate Development Corp. Director Robert M. Elconin, Vice President--Government Relations American Express Financial Advisors IDS Tower 10 Vice President- Minneapolis, MN 55440 Government Relations IDS Life Insurance Company Vice President Mark A. Ernst, Vice President--Retail Services American Enterprise Investment IDS Tower 10 Director Services Inc. Minneapolis, MN 55440 American Express Financial Advisors Vice President- Retail Services American Express Tax & Business Director and Chairman of Services Inc. the Board Gordon M. Fines, Vice President--Mutual Fund Equity Investments American Express Financial Advisors IDS Tower 10 Vice President- Minneapolis, MN 55440 Mutual Fund Equity Investments IDS Advisory Group Inc. Executive Vice President IDS International, Inc. Vice President and Portfolio Manager PAGE 6 Item 28. Business and Other Connections of Investment Adviser (American Express Financial Corporation)(cont'd) Louis C. Fornetti, Director, Senior Vice President and Chief Financial Officer American Enterprise Investment IDS Tower 10 Vice President Services Inc. Minneapolis, MN 55440 American Express Financial Advisors Senior Vice President and Chief Financial Officer American Express Tax & Business Director Services Inc. American Express Trust Company Director IDS Cable Corporation Director IDS Cable II Corporation Director IDS Capital Holdings Inc. Senior Vice President IDS Certificate Company Vice President IDS Insurance Agency of Alabama Inc. Vice President IDS Insurance Agency of Arkansas Inc. Vice President IDS Insurance Agency of Massachusetts Inc. Vice President IDS Insurance Agency of Nevada Inc. Vice President IDS Insurance Agency of New Mexico Inc. Vice President IDS Insurance Agency of North Carolina Inc. Vice President IDS Insurance Agency of Ohio Inc. Vice President IDS Insurance Agency of Wyoming Inc. Vice President IDS Life Insurance Company Director IDS Life Series Fund, Inc. Vice President IDS Life Variable Annuity Funds A&B Vice President IDS Property Casualty Insurance Co. Director and Vice President IDS Real Estate Services, Inc. Vice President IDS Sales Support Inc. Director IDS Securities Corporation Vice President Investors Syndicate Development Corp. Vice President Robert G. Gilbert, Vice President--Real Estate American Express Financial Advisors IDS Tower 10 Vice President- Minneapolis, MN 55440 Real Estate John J. Golden, Vice President--Field Compensation Development American Express Financial Advisors IDS Tower 10 Vice President-Field Minneapolis, MN 55440 Compensation Development Harvey Golub, Director American Express Company American Express Tower Chairman and Chief World Financial Center Executive Officer New York, New York 10285 American Express Travel Chairman and Chief Related Services Company, Inc. Executive Officer National Computer Systems, Inc. 11000 Prairie Lakes Drive Director Minneapolis, MN 55440 PAGE 7 Item 28. Business and Other Connections of Investment Adviser (American Express Financial Corporation)(cont'd) Morris Goodwin Jr., Vice President and Corporate Treasurer American Enterprise Investment IDS Tower 10 Vice President and Services Inc. Minneapolis, MN 55440 Treasurer American Enterprise Life Insurance Vice President and Company Treasurer American Express Financial Advisors Vice President and Corporate Treasurer American Express Minnesota Foundation Director, Vice President and Treasurer American Express Service Corporation Vice President and Treasurer American Express Tax & Business Vice President and Services Inc. Treasurer IDS Advisory Group Inc. Vice President and Treasurer IDS Aircraft Services Corporation Vice President and Treasurer IDS Cable Corporation Vice President and Treasurer IDS Cable II Corporation Vice President and Treasurer IDS Capital Holdings Inc. Vice President and Treasurer IDS Certificate Company Vice President and Treasurer IDS Deposit Corp. Director, President and Treasurer IDS Insurance Agency of Alabama Inc. Vice President and Treasurer IDS Insurance Agency of Arkansas Inc. Vice President and Treasurer IDS Insurance Agency of Massachusetts Inc. Vice President and Treasurer IDS Insurance Agency of Nevada Inc. Vice President and Treasurer IDS Insurance Agency of New Mexico Inc. Vice President and Treasurer IDS Insurance Agency of North Carolina Inc. Vice President and Treasurer IDS Insurance Agency of Ohio Inc. Vice President and Treasurer IDS Insurance Agency of Wyoming Inc. Vice President and Treasurer IDS International, Inc. Vice President and Treasurer IDS Life Insurance Company Vice President and Treasurer IDS Life Series Fund, Inc. Vice President and Treasurer PAGE 8 Item 28. Business and Other Connections of Investment Adviser (American Express Financial Corporation)(cont'd) IDS Life Variable Annuity Funds A&B Vice President and Treasurer IDS Management Corporation Vice President and Treasurer IDS Partnership Services Corporation Vice President and Treasurer IDS Plan Services of California, Inc. Vice President and Treasurer IDS Property Casualty Insurance Co. Vice President and Treasurer IDS Real Estate Services, Inc Vice President and Treasurer IDS Realty Corporation Vice President and Treasurer IDS Sales Support Inc. Director, Vice President and Treasurer IDS Securities Corporation Vice President and Treasurer Investors Syndicate Development Corp. Vice President and Treasurer NCM Capital Management Group, Inc. 2 Mutual Plaza Director 501 Willard Street Durham, NC 27701 Sloan Financial Group, Inc. Director Suzanne Graf, Vice President--Systems Services American Express Financial Advisors IDS Tower 10 Vice President- Minneapolis, MN 55440 Systems Services David A. Hammer, Vice President and Marketing Controller American Express Financial Advisors IDS Tower 10 Vice President and Minneapolis, MN 55440 Marketing Controller IDS Plan Services of California, Inc. Director and Vice President Lorraine R. Hart, Vice President--Insurance Investments American Enterprise Life IDS Tower 10 Vice President-Investments Insurance Company Minneapolis, MN 55440 American Express Financial Advisors Vice President-Insurance Investments American Partners Life Insurance Co. Director and Vice President-Investments IDS Certificate Company Vice President-Investments IDS Life Insurance Company Vice President-Investments IDS Property Casualty Insurance Company Vice President-Investment Officer Investors Syndicate Development Corp. Vice President-Investments PAGE 9 Item 28. Business and Other Connections of Investment Adviser (American Express Financial Corporation)(cont'd) Scott A. Hawkinson, Vice President--Assured Assets Product Development and Management American Express Financial Advisors IDS Tower 10 Vice President-Assured Minneapolis, MN 55440 Assets Product Development & Management Raymond E. Hirsch, Vice President--Senior Portfolio Manager American Express Financial Advisors IDS Tower 10 Vice President-Senior Minneapolis, MN 55440 Portfolio Manager IDS Advisory Group Inc. Vice President James G. Hirsh, Vice President and Assistant General Counsel American Express Financial Advisors IDS Tower 10 Vice President and Minneapolis, MN 55440 Assistant General Counsel IDS Securities Corporation Director, Vice President and General Counsel Darryl G. Horsman, Vice President--Product Development and Technology, American Express Institutional Services American Express Trust Company IDS Tower 10 Vice President Minneapolis, MN 55440 Kevin P. Howe, Vice President--Government and Customer Relations and Chief Compliance Officer American Enterprise Investment IDS Tower 10 Vice President and Services Inc. Minneapolis, MN 55440 Compliance Officer American Express Financial Advisors Vice President- Government and Customer Relations American Express Service Corporation Vice President IDS Securities Corporation Vice President and Chief Compliance Officer David R. Hubers, Director, President and Chief Executive Officer American Express Financial Advisors IDS Tower 10 Chairman, Chief Executive Minneapolis, MN 55440 Officer and President American Express Service Corporation Director and President IDS Aircraft Services Corporation Director IDS Certificate Company Director IDS Life Insurance Company Director IDS Plan Services of California, Inc. Director and President IDS Property Casualty Insurance Co. Director Marietta L. Johns, Director and Senior Vice President--Field Management American Express Financial Advisors IDS Tower 10 Senior Vice President- Minneapolis, MN 55440 Field Management PAGE 10 Item 28. Business and Other Connections of Investment Adviser (American Express Financial Corporation)(cont'd) Douglas R. Jordal, Vice President--Taxes American Express Financial Advisors IDS Tower 10 Vice President-Taxes Minneapolis, MN 55440 IDS Aircraft Services Corporation Vice President Craig A. Junkins, Vice President--IDS 1994 Implementation Planning and Financial Planning Development American Express Financial Advisors IDS Tower 10 Vice President-IDS 1994 Minneapolis, MN 55440 Implementation Planning and Financial Planning Development American Express Service Corporation Vice President James E. Kaarre, Vice President--Marketing Information American Express Financial Advisors IDS Tower 10 Vice President- Minneapolis, MN 55440 Marketing Information Linda B. Keene, Vice President--Market Development American Express Financial Advisors IDS Tower 10 Vice President- Minneapolis, MN 55440 Market Development G. Michael Kennedy, Vice President--Investment Services and Investment Research American Express Financial Advisors IDS Tower 10 Vice President-Investment Minneapolis, MN 55440 Services and Investment Research Susan D. Kinder, Director and Senior Vice President--Human Resources American Express Financial Advisors IDS Tower 10 Senior Vice President- Minneapolis, MN 55440 Human Resources American Express Minnesota Foundation Director American Express Service Corporation Vice President PAGE 11 Item 28. Business and Other Connections of Investment Adviser (American Express Financial Corporation)(cont'd) Richard W. Kling, Director and Senior Vice President--Risk Management Products American Enterprise Life Insurance Co. IDS Tower 10 Director and Chairman of Minneapolis, MN 55440 the Board American Express Financial Advisors Senior Vice President- Risk Management Products American Partners Life Insurance Co. Director and Chairman of the Board IDS Insurance Agency of Alabama Inc. Director and President IDS Insurance Agency of Arkansas Inc. Director and President IDS Insurance Agency of Massachusetts Inc. Director and President IDS Insurance Agency of Nevada Inc. Director and President IDS Insurance Agency of New Mexico Inc. Director and President IDS Insurance Agency of North Carolina Inc. Director and President IDS Insurance Agency of Ohio Inc. Director and President IDS Insurance Agency of Wyoming Inc. Director and President IDS Life Insurance Company Director and President IDS Life Series Fund, Inc. Director and President IDS Life Variable Annuity Funds A&B Member of Board of Managers, Chairman of the Board and President IDS Property Casualty Insurance Co. Director and Chairman of the Board IDS Life Insurance Company P.O. Box 5144 Director, Chairman of the of New York Albany, NY 12205 Board and President Harold D. Knutson, Vice President--System Services American Express Financial Advisors IDS Tower 10 Vice President-- Minneapolis, MN 55440 System Services Paul F. Kolkman, Vice President--Actuarial Finance American Express Financial Advisors IDS Tower 10 Vice President- Minneapolis, MN 55440 Actuarial Finance IDS Life Insurance Company Director and Executive Vice President IDS Life Series Fund, Inc. Vice President and Chief Actuary Claire Kolmodin, Vice President--Service Quality American Express Financial Advisors IDS Tower 10 Vice President- Minneapolis, MN 55440 Service Quality Steven C. Kumagai, Director and Senior Vice President--Field Management and Business Systems American Express Financial Advisors IDS Tower 10 Director and Senior Vice Minneapolis, MN 55440 President-Field Management and Business Systems American Express Service Corporation Vice President PAGE 12 Item 28. Business and Other Connections of Investment Adviser (American Express Financial Corporation)(cont'd) Edward Labenski, Vice President--Senior Portfolio Manager American Express Financial Advisors IDS Tower 10 Vice President- Minneapolis, MN 55440 Senior Portfolio Manager IDS Advisory Group Inc. Senior Vice President Kurt A. Larson, Vice President--Senior Portfolio Manager American Express Financial Advisors IDS Tower 10 Vice President- Minneapolis, MN 55440 Senior Portfolio Manager Lori J. Larson, Vice President--Variable Assets Product Development American Express Financial Advisors IDS Tower 10 Vice President-Variable Minneapolis, MN 55440 Assets Product Development IDS Cable Corporation Director and Vice President IDS Cable II Corporation Director and Vice President IDS Futures Brokerage Group Assistant Vice President- General Manager/Director IDS Futures Corporation Director and Vice President IDS Futures III Corporation Director and Vice President IDS Management Corporation Director and Vice President IDS Partnership Services Corporation Director and Vice President IDS Realty Corporation Director and Vice President Ryan R. Larson, Vice President--IPG Product Development American Express Financial Advisors IDS Tower 10 Vice President- Minneapolis, MN 55440 IPG Product Development IDS Life Insurance Company Vice President- Annuity Product Development Daniel E. Laufenberg, Vice President and Chief U.S. Economist American Express Financial Advisors IDS Tower 10 Vice President and Minneapolis, MN 55440 Chief U.S. Economist Richard J. Lazarchic, Vice President--Senior Portfolio Manager American Express Financial Advisors IDS Tower 10 Vice President-Senior Minneapolis, MN 55440 Portfolio Manager PAGE 13 Item 28. Business and Other Connections of Investment Adviser (American Express Financial Corporation)(cont'd) Peter A. Lefferts, Director, Senior Vice President and Chief Marketing Officer American Express Financial Advisors IDS Tower 10 Senior Vice President and Minneapolis, MN 55440 Chief Marketing Officer American Express Trust Company Director and Chairman of the Board IDS Life Insurance Company Director and Executive Vice President-Marketing IDS Plan Services of California, Inc. Director Investors Syndicate Development Corp. Director Douglas A. Lennick, Director and Executive Vice President--Private Client Group American Express Financial Advisors IDS Tower 10 Director and Executive Minneapolis, MN 55440 Vice President-Private Client Group American Express Service Corporation Vice President Mary J. Malevich, Vice President--Senior Portfolio Manager American Express Financial Advisors IDS Tower 10 Vice President- Minneapolis, MN 55440 Senior Portfolio Manager IDS International, Inc. Vice President and Portfolio Manager Fred A. Mandell, Vice President--Field Marketing Readiness American Express Financial Advisors IDS Tower 10 Vice President-Field Minneapolis, MN 55440 Marketing Readiness William J. McKinney, Vice President--Field Management Support American Express Financial Advisors IDS Tower 10 Vice President-Field Minneapolis, MN 55440 Management Support Thomas W. Medcalf, Vice President--Senior Portfolio Manager American Express Financial Advisors IDS Tower 10 Vice President-Senior Minneapolis, MN 55440 Portfolio Manager William C. Melton, Vice President-International Research and Chief International Economist American Express Financial Advisors IDS Tower 10 Vice President- Minneapolis, MN 55440 International Research and Chief International Economist PAGE 14 Item 28. Business and Other Connections of Investment Adviser (American Express Financial Corporation)(cont'd) Janis E. Miller, Vice President--Variable Assets American Express Financial Advisors IDS Tower 10 Vice President- Minneapolis, MN 55440 Variable Assets IDS Cable Corporation Director and President IDS Cable II Corporation Director and President IDS Futures Corporation Director and President IDS Futures III Corporation Director and President IDS Life Insurance Company Director and Executive Vice President-Variable Assets IDS Life Series Fund, Inc. Director IDS Life Variable Annuity Funds A&B Director IDS Management Corporation Director and President IDS Partnership Services Corporation Director and President IDS Realty Corporation Director and President IDS Life Insurance Company of New York Box 5144 Executive Vice President Albany, NY 12205 James A. Mitchell, Director and Executive Vice President--Marketing and Products American Enterprise Investment IDS Tower 10 Director Services Inc. Minneapolis, MN 55440 American Express Financial Advisors Executive Vice President- Marketing and Products IDS Certificate Company Director and Chairman of the Board IDS Life Insurance Company Director, Chairman of the Board and Chief Executive Officer IDS Plan Services of California, Inc. Director IDS Property Casualty Insurance Co. Director Pamela J. Moret, Vice President--Corporate Communications American Express Financial Advisors IDS Tower 10 Vice President- Minneapolis, MN 55440 Corporate Communications American Express Minnesota Foundation Director and President Barry J. Murphy, Director and Senior Vice President--Client Service American Express Financial Advisors IDS Tower 10 Senior Vice President- Minneapolis, MN 55440 Client Service IDS Life Insurance Company Director and Executive Vice President-Client Service PAGE 15 Item 28. Business and Other Connections of Investment Adviser (American Express Financial Corporation)(cont'd) Robert J. Neis, Vice President--Information Systems Operations American Express Financial Advisors IDS Tower 10 Vice President- Minneapolis, MN 55440 Information Systems Operations James R. Palmer, Vice President--Insurance Operations American Express Financial Advisors IDS Tower 10 Vice President- Minneapolis, MN 55440 Insurance Operations IDS Life Insurance Company Vice President-Taxes Carla P. Pavone, Vice President--Specialty Service Teams and Emerging Business American Express Financial Advisors IDS Tower 10 Vice President-Specialty Minneapolis, MN 55440 Service Teams and Emerging Business Judith A. Pennington, Vice President--Field Technology American Express Financial Advisors IDS Tower 10 Vice President- Minneapolis, MN 55440 Field Technology George M. Perry, Vice President--Corporate Strategy and Development American Express Financial Advisors IDS Tower 10 Vice President- Minneapolis, MN 55440 Corporate Strategy and Development IDS Property Casualty Insurance Co. Director Susan B. Plimpton, Vice President--Segmentation Development and Support American Express Financial Advisors IDS Tower 10 Vice President-- Minneapolis, MN 55440 Segmentation Development and Support Ronald W. Powell, Vice President and Assistant General Counsel American Express Financial Advisors IDS Tower 10 Vice President and Minneapolis, MN 55440 Assistant General Counsel IDS Cable Corporation Vice President and Assistant Secretary IDS Cable II Corporation Vice President and Assistant Secretary IDS Management Corporation Vice President and Assistant Secretary IDS Partnership Services Corporation Vice President and Assistant Secretary IDS Plan Services of California, Inc. Vice President and Assistant Secretary IDS Realty Corporation Vice President and Assistant Secretary PAGE 16 Item 28. Business and Other Connections of Investment Adviser (American Express Financial Corporation)(cont'd) James M. Punch, Vice President--TransAction Services American Express Financial Advisors IDS Tower 10 Vice President-Trans Minneapolis, MN 55440 Action Services Frederick C. Quirsfeld, Vice President--Taxable Mutual Fund Investments American Express Financial Advisors IDS Tower 10 Vice President-- Minneapolis, MN 55440 Taxable Mutual Fund Investments IDS Advisory Group Inc. Vice President ReBecca K. Roloff, Vice President--1994 Program Director American Express Financial Advisors IDS Tower 10 Vice President-1994 Minneapolis, MN 55440 Program Director Stephen W. Roszell, Vice President--Advisory Institutional Marketing American Express Financial Advisors IDS Tower 10 Vice President-Advisory Minneapolis, MN 55440 Institutional Marketing IDS Advisory Group Inc. President and Chief Executive Officer Robert A. Rudell, Vice President--American Express Institutional Services American Express Financial Advisors IDS Tower 10 Vice President-American Minneapolis, MN 55440 Express Institutional Services American Express Trust Company Director IDS Sales Support Inc. Director and President John P. Ryan, Vice President and General Auditor American Express Financial Advisors IDS Tower 10 Vice President and General Minneapolis, MN 55440 Auditor PAGE 17 Item 28. Business and Other Connections of Investment Adviser (American Express Financial Corporation)(cont'd) Erven A. Samsel, Director and Senior Vice President--Field Management American Express Financial Advisors IDS Tower 10 Senior Vice President- Minneapolis, MN 55440 Field Management American Express Service Corporation Vice President IDS Insurance Agency of Alabama Inc. Vice President- New England Region IDS Insurance Agency of Arkansas Inc. Vice President- New England Region IDS Insurance Agency of Massachusetts Inc. Vice President- New England Region IDS Insurance Agency of Nevada Inc. Vice President- New England Region IDS Insurance Agency of New Mexico Inc. Vice President- New England Region IDS Insurance Agency of North Carolina Inc. Vice President- New England Region IDS Insurance Agency of Ohio Inc. Vice President- New England Region IDS Insurance Agency of Wyoming Inc. Vice President- New England Region Stuart A. Sedlacek, Vice President--Assured Assets American Enterprise Life Insurance Co. IDS Tower 10 Director and Executive Minneapolis, MN 55440 Vice President, Assured Assets American Express Financial Advisors Vice President- Assured Assets IDS Certificate Company Director and President IDS Life Insurance Company Director and Executive Vice President, Assured Assets Investors Syndicate Development Corp. Chairman of the Board and President Donald K. Shanks, Vice President--Property Casualty American Express Financial Advisors IDS Tower 10 Vice President- Minneapolis, MN 55440 Property Casualty IDS Property Casualty Insurance Co. Senior Vice President PAGE 18 Item 28. Business and Other Connections of Investment Adviser (American Express Financial Corporation)(cont'd) F. Dale Simmons, Vice President--Senior Portfolio Manager, Insurance Investments American Enterprise Life Insurance Co. IDS Tower 10 Vice President-Real Minneapolis, MN 55440 Estate Loan Management American Express Financial Advisors Vice President-Senior Portfolio Manager Insurance Investments American Partners Life Insurance Co. Vice President-Real Estate Loan Management IDS Certificate Company Vice President-Real Estate Loan Management IDS Life Insurance Company Vice President-Real Estate Loan Management IDS Partnership Services Corporation Vice President IDS Real Estate Services Inc. Director and Vice President IDS Realty Corporation Vice President IDS Life Insurance Company of New York Box 5144 Vice President and Albany, NY 12205 Assistant Treasurer Judy P. Skoglund, Vice President--Human Resources and Organization Development American Express Financial Advisors IDS Tower 10 Vice President-Human Minneapolis, MN 55440 Resources and Organization Development Ben C. Smith, Vice President--Workplace Marketing American Express Financial Advisors IDS Tower 10 Vice President- Minneapolis, MN 55440 Workplace Marketing William A. Smith, Vice President and Controller--Private Client Group American Express Financial Advisors IDS Tower 10 Vice President and Minneapolis, MN 55440 Controller-Private Client Group Bridget Sperl, Vice President--Human Resources Management Services American Express Financial Advisors IDS Tower 10 Vice President-Human Minneapolis, MN 55440 Resources Management Services Jeffrey E. Stiefler, Director American Express Company American Express Tower Director and President World Financial Center New York, NY 10285 PAGE 19 Item 28. Business and Other Connections of Investment Adviser (American Express Financial Corporation)(cont'd) William A. Stoltzmann, Vice President and Assistant General Counsel American Express Financial Advisors IDS Tower 10 Vice President and Minneapolis, MN 55440 Assistant General Counsel American Partners Life Insurance Co. Director, Vice President, General Counsel and Secretary IDS Life Insurance Company Vice President, General Counsel and Secretary IDS Life Series Fund, Inc. General Counsel and Assistant Secretary IDS Life Variable Annuity Funds A&B General Counsel and Assistant Secretary American Enterprise Life Insurance P.O. Box 534 Director, Vice President, Company Minneapolis, MN 55440 General Counsel and Secretary James J. Strauss, Vice President--Corporate Planning and Analysis American Express Financial Advisors IDS Tower 10 Vice President- Minneapolis, MN 55440 Corporate Planning and Analysis Jeffrey J. Stremcha, Vice President--Information Resource Management/ISD American Express Financial Advisors IDS Tower 10 Vice President-Information Minneapolis, MN 55440 Resource Management/ISD Fenton R. Talbott, Director ACUMA Ltd. ACUMA House President and Chief The Glanty, Egham Executive Officer Surrey TW 20 9 AT UK PAGE 20 Item 28. Business and Other Connections of Investment Adviser (American Express Financial Corporation)(cont'd) John R. Thomas, Director and Senior Vice President--Information and Technology American Express Financial Advisors IDS Tower 10 Senior Vice President- Minneapolis, MN 55440 Information and Technology IDS Bond Fund, Inc. Director IDS California Tax-Exempt Trust Trustee IDS Discovery Fund, Inc. Director IDS Equity Select Fund, Inc. Director IDS Extra Income Fund, Inc. Director IDS Federal Income Fund, Inc. Director IDS Global Series, Inc. Director IDS Growth Fund, Inc. Director IDS High Yield Tax-Exempt Fund, Inc. Director IDS Investment Series, Inc. Director IDS Managed Retirement Fund, Inc. Director IDS Market Advantage Series, Inc. Director IDS Money Market Series, Inc. Director IDS New Dimensions Fund, Inc. Director IDS Precious Metals Fund, Inc. Director IDS Progressive Fund, Inc. Director IDS Selective Fund, Inc. Director IDS Special Tax-Exempt Series Trust Trustee IDS Stock Fund, Inc. Director IDS Strategy Fund, Inc. Director IDS Tax-Exempt Bond Fund, Inc. Director IDS Tax-Free Money Fund, Inc. Director IDS Utilities Income Fund, Inc. Director Melinda S. Urion, Vice President and Corporate Controller American Enterprise Life IDS Tower 10 Vice President and Insurance Company Minneapolis, MN 55440 Controller American Express Financial Advisors Vice President and Corporate Controller American Partners Life Insurance Co. Director, Vice President, Controller and Treasurer IDS Life Insurance Company Director, Executive Vice President and Controller IDS Life Series Fund, Inc. Vice President and Controller Wesley W. Wadman, Vice President--Senior Portfolio Manager American Express Financial Advisors IDS Tower 10 Vice President- Minneapolis, MN 55440 Senior Portfolio Manager IDS Advisory Group Inc. Executive Vice President IDS Fund Management Limited Director and Chairman IDS International, Inc. Senior Vice President PAGE 21 Item 28. Business and Other Connections of Investment Adviser (American Express Financial Corporation)(cont'd) Norman Weaver, Jr., Director and Senior Vice President--Field Management American Express Financial Advisors IDS Tower 10 Senior Vice President- Minneapolis, MN 55440 Field Management American Express Service Corporation Vice President IDS Insurance Agency of Alabama Inc. Vice President- Pacific Region IDS Insurance Agency of Arkansas Inc. Vice President- Pacific Region IDS Insurance Agency of Massachusetts Inc. Vice President- Pacific Region IDS Insurance Agency of Nevada Inc. Vice President- Pacific Region IDS Insurance Agency of New Mexico Inc. Vice President- Pacific Region IDS Insurance Agency of North Carolina Inc. Vice President- Pacific Region IDS Insurance Agency of Ohio Inc. Vice President- Pacific Region IDS Insurance Agency of Wyoming Inc. Vice President- Pacific Region Michael L. Weiner, Vice President--Corporate Tax Operations American Express Financial Advisors IDS Tower 10 Vice President-Corporate Minneapolis, MN 55440 Tax Operations IDS Capital Holdings Inc. Vice President IDS Futures Brokerage Group Vice President IDS Futures Corporation Vice President, Treasurer and Secretary IDS Futures III Corporation Vice President, Treasurer and Secretary Lawrence J. Welte, Vice President--Investment Administration American Express Financial Advisors IDS Tower 10 Vice President- Minneapolis, MN 55440 Investment Administration IDS Securities Corporation Director, Executive Vice President and Chief Operating Officer Jeffry F. Welter, Vice President--Equity and Fixed Income Trading American Express Financial Advisors IDS Tower 10 Vice President-Equity Minneapolis, MN 55440 and Fixed Income Trading PAGE 22 Item 28. Business and Other Connections of Investment Adviser (American Express Financial Corporation)(cont'd) William N. Westhoff, Director, Senior Vice President and Global Chief Investment Officer American Enterprise Life Insurance IDS Tower 10 Director Company Minneapolis, MN 55440 American Express Financial Advisors Senior Vice President and Global Chief Investment Officer IDS International, Inc. Director IDS Partnership Services Corporation Director and Vice President IDS Real Estate Services Inc. Director, Chairman of the Board and President IDS Realty Corporation Director and Vice President Investors Syndicate Development Corp. Director Edwin M. Wistrand, Vice President and Assistant General Counsel American Express Financial Advisors IDS Tower 10 Vice President and Minneapolis, MN 55440 Assistant General Counsel Michael R. Woodward, Director and Senior Vice President--Field Management American Express Financial Advisors IDS Tower 10 Senior Vice President- Minneapolis, MN 55440 Field Management American Express Service Corporation Vice President IDS Insurance Agency of Alabama Inc. Vice President- North Region IDS Insurance Agency of Arkansas Inc. Vice President- North Region IDS Insurance Agency of Massachusetts Inc. Vice President- North Region IDS Insurance Agency of Nevada Inc. Vice President- North Region IDS Insurance Agency of New Mexico Inc. Vice President- North Region IDS Insurance Agency of North Carolina Inc. Vice President- North Region IDS Insurance Agency of Ohio Inc. Vice President- North Region IDS Insurance Agency of Wyoming Inc. Vice President- North Region IDS Life Insurance Company Box 5144 Director of New York Albany, NY 12205
PAGE 23 Item 29. Principal Underwriters. (a) American Express Financial Advisors acts as principal underwriter for the following investment companies: IDS Bond Fund, Inc.; IDS California Tax-Exempt Trust; IDS Discovery Fund, Inc.; IDS Equity Select Fund, Inc.; IDS Extra Income Fund, Inc.; IDS Federal Income Fund, Inc.; IDS Global Series, Inc.; IDS Growth Fund, Inc.; IDS High Yield Tax-Exempt Fund, Inc.; IDS International Fund, Inc.; IDS Investment Series, Inc.; IDS Managed Retirement Fund, Inc.; IDS Market Advantage Series, Inc.; IDS Money Market Series, Inc.; IDS New Dimensions Fund, Inc.; IDS Precious Metals Fund, Inc.; IDS Progressive Fund, Inc.; IDS Selective Fund, Inc.; IDS Special Tax-Exempt Series Trust; IDS Stock Fund, Inc.; IDS Strategy Fund, Inc.; IDS Tax-Exempt Bond Fund, Inc.; IDS Tax-Free Money Fund, Inc.; IDS Utilities Income Fund, Inc. and IDS Certificate Company. (b) As to each director, officer or partner of the principal underwriter: Positions and Name and Principal Position and Offices Offices with Business Address with Underwriter Registrant Ronald G. Abrahamson Vice President- None IDS Tower 10 Service Quality and Minneapolis, MN 55440 Reengineering Douglas A. Alger Vice President-Total None IDS Tower 10 Compensation Minneapolis, MN 55440 Jerome R. Amundson Vice President and None IDS Tower 10 Controller-Investment Minneapolis, MN 55440 Accounting Peter J. Anderson Senior Vice President- None IDS Tower 10 Investments Minneapolis, MN 55440 Ward D. Armstrong Vice President- None IDS Tower 10 Sales and Marketing, Minneapolis, MN 55440 American Express Institutional Services Alvan D. Arthur Group Vice President- None IDS Tower 10 Central California/ Minneapolis, MN 55440 Western Nevada Kent L. Ashton Vice President- None IDS Tower 10 Financial Education Minneapolis, MN 55440 Services PAGE 24 Item 29(b). (Continued) Positions and Name and Principal Position and Offices Offices with Business Address with Underwriter Registrant Joseph M. Barsky III Vice President-Senior None IDS Tower 10 Portfolio Manager Minneapolis, MN 55440 Robert C. Basten Vice President-Tax None IDS Tower 10 and Business Services Minneapolis, MN 55440 Timothy V. Bechtold Vice President-Insurance None IDS Tower 10 Product Development Minneapolis, MN 55440 John D. Begley Group Vice Presdient- None Olentangy Valley Center Ohio/Indiana Suite 300 7870 Olentangy River Rd. Columbus, OH 43235 Carl E. Beihl Vice President- None IDS Tower 10 Strategic Technology Minneapolis, MN 55440 Planning Jack A. Benjamin Group Vice President- None Greater Pennsylvania Alan F. Bignall Vice President- None IDS Tower 10 Financial Planning Minneapolis, MN 55440 Systems Brent L. Bisson Group Vice President- None Seafirst Financial Los Angeles Metro Center, Suite 1730 601 W. Riverside Ave. Spokane, WA 99201 John C. Boeder Vice President- None IDS Tower 10 Mature Market Group Minneapolis, MN 55440 Bruce J. Bordelon Group Vice President- None Gulf States Charles R. Branch Group Vice President- None Northwest Karl J. Breyer Senior Vice President- None IDS Tower 10 Corporate Affairs and Minneapolis, MN 55440 Special Counsel Harold E. Burke Vice President None IDS Tower 10 and Assistant Minneapolis, MN 55440 General Counsel PAGE 25 Item 29(b). (Continued) Positions and Name and Principal Position and Offices Offices with Business Address with Underwriter Registrant Daniel J. Candura Vice President- None IDS Tower 10 Marketing Support Minneapolis, MN 55440 Cynthia M. Carlson Vice President- None IDS Tower 10 American Express Minneapolis, MN 55440 Securities Services Orison Y. Chaffee III Vice President-Field None IDS Tower 10 Real Estate Minneapolis, MN 55440 James E. Choat Senior Vice President- None Suite 124 Field Management 6210 Campbell Rd. Dallas, TX 75248 Kenneth J. Ciak Vice President and None IDS Property Casualty General Manager- 1400 Lombardi Avenue IDS Property Casualty Green Bay, WI 54304 Roger C. Corea Group Vice President- None 345 Woodcliff Drive Upstate New York Fairport, NY 14450 Henry J. Cormier Group Vice President- None Connecticut John M. Crawford Group Vice President- None Arkansas/Springfield/Memphis Kevin F. Crowe Group Vice President- None IDS Tower 10 Carolinas/Eastern Georgia Minneapolis, MN 55440 Alan R. Dakay Vice President- None IDS Tower 10 Institutional Insurance Minneapolis, MN 55440 Marketing Regenia David Vice President- None Systems Services Scott M. Digiammarino Group Vice President- None Washington/Baltimore Bradford L. Drew Group Vice President- None Eastern Florida PAGE 26 Item 29(b). (Continued) Positions and Name and Principal Position and Offices Offices with Business Address with Underwriter Registrant William H. Dudley Director and Executive Director/ IDS Tower 10 Vice President- Trustee Minneapolis MN 55440 Investment Operations Roger S. Edgar Senior Vice President- None IDS Tower 10 Information Systems Minneapolis, MN 55440 Gordon L. Eid Senior Vice President None IDS Tower 10 and General Counsel Minneapolis, MN 55440 Robert M. Elconin Vice President- None IDS Tower 10 Government Relations Minneapolis, MN 55440 Mark A. Ernst Vice President- None IDS Tower 10 Retail Services Minneapolis, MN 55440 Joseph Evanovich Jr. Group Vice President- None Nebraska/Iowa/Dakotas Louise P. Evenson Group Vice President- None San Francisco Bay Area Gordon M. Fines Vice President- None IDS Tower 10 Mutual Fund Equity Minneapolis MN 55440 Investments Louis C. Fornetti Senior Vice President None IDS Tower 10 and Chief Financial Minneapolis, MN 55440 Officer Douglas L. Forsberg Group Vice President- None IDS Tower 10 Portland/Eugene Minneapolis, MN 55440 William P. Fritz Group Vice President- None Northern Missouri Carl W. Gans Group Vice President- None IDS Tower 10 Twin City Metro Minneapolis, MN 55440 Bruce M. Gaurino Group Vice President- None Hawaii PAGE 27 Item 29(b). (Continued) Positions and Name and Principal Position and Offices Offices with Business Address with Underwriter Registrant Robert G. Gilbert Vice President- None IDS Tower 10 Real Estate Minneapolis, MN 55440 John J. Golden Vice President- None IDS Tower 10 Field Compensation Minneapolis, MN 55440 Development Morris Goodwin Jr. Vice President and None IDS Tower 10 Corporate Treasurer Minneapolis, MN 55440 Suzanne Graf Vice President- None IDS Tower 10 Systems Services Minneapolis, MN 55440 Bruce M. Guarino Group Vice President- None Hawaii David A. Hammer Vice President None IDS Tower 10 and Marketing Minneapolis, MN 55440 Controller Teresa A. Hanratty Group Vice President- None Northern New England John R. Hantz Group Vice President- None Detroit Metro Robert L. Harden Group Vice President- None Suite 403 Boston Metro 8500 Leesburg Pike Vienna, VA 22180 Lorraine R. Hart Vice President- None IDS Tower 10 Insurance Investments Minneapolis, MN 55440 Scott A. Hawkinson Vice President-Assured None IDS Tower 10 Assets Product Development Minneapolis, MN 55440 and Management Brian M. Heath Group Vice President- None IDS Tower 10 North Texas Minneapolis, MN 55440 Raymond E. Hirsch Vice President-Senior None IDS Tower 10 Portfolio Manager Minneapolis, MN 55440 PAGE 28 Item 29(b). (Continued) Positions and Name and Principal Position and Offices Offices with Business Address with Underwriter Registrant James G. Hirsh Vice President and None IDS Tower 10 Assistant General Minneapolis, MN 55440 Counsel David J. Hockenberry Group Vice President- None Eastern Tennessee Kevin P. Howe Vice President- None IDS Tower 10 Government and Minneapolis, MN 55440 Customer Relations David R. Hubers Chairman, Chief None IDS Tower 10 Executive Officer and Minneapolis, MN 55440 President Marietta L. Johns Senior Vice President- None IDS Tower 10 Field Management Minneapolis, MN 55440 Douglas R. Jordal Vice President-Taxes None IDS Tower 10 Minneapolis, MN 55440 Craig A. Junkins Vice President - IDS 1994 None IDS Tower 10 Implementation Planning Minneapolis, MN 55440 and Financial Planning Development James E. Kaarre Vice President- None IDS Tower 10 Marketing Information Minneapolis, MN 55440 Linda B. Keene Vice President- None Market Development G. Michael Kennedy Vice President-Investment None IDS Tower 10 Services and Investment Minneapolis, MN 55440 Research Susan D. Kinder Senior Vice President- None IDS Tower 10 Human Resources Minneapolis, MN 55440 Richard W. Kling Senior Vice President- None IDS Tower 10 Risk Management Products Minneapolis, MN 55440 PAGE 29 Item 29(b). (Continued) Positions and Name and Principal Position and Offices Offices with Business Address with Underwriter Registrant Harold D. Knutson Vice President- None IDS Tower 10 System Services Minneapolis, MN 55440 Paul F. Kolkman Vice President- None IDS Tower 10 Actuarial Finance Minneapolis, MN 55440 Claire Kolmodin Vice President- None IDS Tower 10 Service Quality Minneapolis, MN 55440 David S. Kreager Group Vice President- None IDS Tower 10 Greater Michigan Minneapolis, MN 55440 Steven C. Kumagai Director and Senior None IDS Tower 10 Vice President-Field Minneapolis, MN 55440 Management and Business Systems Mitre Kutanovski Group Vice President- None IDS Tower 10 Chicago Metro Minneapolis, MN 55440 Edward Labenski Vice President- None IDS Tower 10 Senior Portfolio Minneapolis, MN 55440 Manager Kurt A. Larson Vice President- None IDS Tower 10 Senior Portfolio Minneapolis, MN 55440 Manager Lori J. Larson Vice President- None IDS Tower 10 Variable Assets Product Minneapolis, MN 55440 Development Ryan R. Larson Vice President- None IDS Tower 10 IPG Product Development Minneapolis, MN 55440 Daniel E. Laufenberg Vice President and None IDS Tower 10 Chief U.S. Economist Minneapolis, MN 55440 Richard J. Lazarchic Vice President- None IDS Tower 10 Senior Portfolio MInneapolis, MN 55440 Manager Peter A. Lefferts Senior Vice President and None IDS Tower 10 Chief Marketing Officer Minneapolis, MN 55440 PAGE 30 Item 29(b). (Continued) Positions and Name and Principal Position and Offices Offices with Business Address with Underwriter Registrant Douglas A. Lennick Director and Executive None IDS Tower 10 Vice President-Private Minneapolis, MN 55440 Client Group Mary J. Malevich Vice President- None IDS Tower 10 Senior Portfolio Minneapolis, MN 55440 Manager Fred A. Mandell Vice President- None IDS Tower 10 Field Marketing Readiness Minneapolis, MN 55440 Daniel E. Martin Group Vice President- None Pittsburgh Metro William J. McKinney Vice President- None IDS Tower 10 Field Management Minneapolis, MN 55440 Support Thomas W. Medcalf Vice President- None IDS Tower 10 Senior Portfolio Manager Minneapolis, MN 55440 William C. Melton Vice President- None IDS Tower 10 International Research Minneapolis, MN 55440 and Chief International Economist Janis E. Miller Vice President- None IDS Tower 10 Variable Assets Minneapolis, MN 55440 James A. Mitchell Executive Vice President- None IDS Tower 10 Marketing and Products Minneapolis, MN 55440 John P. Moraites Group Vice President- None Kansas/Oklahoma Pamela J. Moret Vice President- None IDS Tower 10 Corporate Communications Minneapolis, MN 55440 Barry J. Murphy Senior Vice President- None IDS Tower 10 Client Service Minneapolis, MN 55440 Robert J. Neis Vice President- None IDS Tower 10 Information Systems Minneapolis, MN 55440 Operations PAGE 31 Item 29(b). (Continued) Positions and Name and Principal Position and Offices Offices with Business Address with Underwriter Registrant Ronald E. Newton Group Vice President- None Rhode Island/Central Massachusetts Thomas V. Nicolosi Group Vice President- None New York Metro Area Vernon F. Palen Region Vice President- None Suite D-222 Rocky Mountain Region 7100 E. Lincoln Drive Scottsdale, AZ 85253 James R. Palmer Vice President- None IDS Tower 10 Insurance Operations Minneapolis, MN 55440 Carla P. Pavone Vice President- None IDS Tower 10 Specialty Service Teams Minneapolis, MN 55440 and Emerging Business Judith A. Pennington Vice President- None IDS Tower 10 Field Technology Minneapolis, MN 55440 George M. Perry Vice President- None IDS Tower 10 Corporate Strategy Minneapolis, MN 55440 and Development Susan B. Plimpton Vice President- None IDS Tower 10 Segmentation Development Minneapolis, MN 55440 and Support Larry M. Post Group Vice President- None Philadelphia Metro Ronald W. Powell Vice President and None IDS Tower 10 Assistant General Minneapolis, MN 55440 Counsel James M. Punch Vice President- None IDS Tower 10 TransAction Services Minneapolis, MN 55440 Frederick C. Quirsfeld Vice President-Taxable None IDS Tower 10 Mutual Fund Investments Minneapolis, MN 55440 R. Daniel Richardson Group Vice President- None Southern Texas PAGE 32 Item 29(b). (Continued) Positions and Name and Principal Position and Offices Offices with Business Address with Underwriter Registrant Roger B. Rogos Group Vice President- None Suite 15, Parkside Pl. Western Florida 945 Boardman-Canfield Rd Youngstown, Ohio 44512 ReBecca K. Roloff Vice President-1994 None IDS Tower 10 Program Director Minneapolis, MN 55440 Stephen W. Roszell Vice President- None IDS Tower 10 Advisory Institutional Minneapolis, MN 55440 Marketing Max G. Roth Group Vice President- None Wisconsin/Upper Michigan Robert A. Rudell Vice President- None IDS Tower 10 American Express Minneapolis, MN 55440 Institutional Services John P. Ryan Vice President and None IDS Tower 10 General Auditor Minneapolis, MN 55440 Erven A. Samsel Senior Vice President- None 45 Braintree Hill Park Field Management Braintree, MA 02184 Russell L. Scalfano Group Vice President- None Illinois/Indiana/Kentucky William G. Scholz Group Vice President- None Arizona/Las Vegas Stuart A. Sedlacek Vice President- None IDS Tower 10 Assured Assets Minneapolis, MN 55440 Donald K. Shanks Vice President- None IDS Tower 10 Property Casualty Minneapolis, MN 55440 F. Dale Simmons Vice President-Senior None IDS Tower 10 Portfolio Manager, Minneapolis, MN 55440 Insurance Investments Judy P. Skoglund Vice President- None IDS Tower 10 Human Resources and Minneapolis, MN 55440 Organization Development PAGE 33 Item 29(b). (Continued) Positions and Name and Principal Position and Offices Offices with Business Address with Underwriter Registrant Julian W. Sloter Group Vice Presidnet- None 9040 Roswell Rd. Orlando/Jacksonville River Ridge-Suite 600 Atlanta, GA 30350 Ben C. Smith Vice President- None IDS Tower 10 Workplace Marketing Minneapolis, MN 55440 William A. Smith Vice President and None IDS Tower 10 Controller-Private Minneapolis, MN 55440 Client Group James B. Solberg Group Vice President- None IDS Tower 10 Eastern Iowa Area Minneapolis, MN 55440 Bridget Sperl Vice President- None IDS Tower 10 Human Resources Minneapolis, MN 55440 Management Services Paul J. Stanislaw Group Vice President- None Southern California Lois A. Stilwell Group Vice President- None IDS Tower 10 Outstate Minnesota Area/ Minneapolis, MN 55440 North Dakota/Western Wisconsin William A. Stoltzmann Vice President and None IDS Tower 10 Assistant General Minneapolis, MN 55440 Counsel James J. Strauss Vice President- None IDS Tower 10 Corporate Planning Minneapolis, MN 55440 and Analysis Jeffrey J. Stremcha Vice President-Information None IDS Tower 10 Resource Management/ISD Minneapolis, MN 55440 Neil G. Taylor Group Vice President- None IDS Tower 10 Seattle/Tacoma Minneapolis, MN 55440 John R. Thomas Senior Vice President- Director/ IDS Tower 10 Information and Trustee Minneapolis, MN 55440 Technology Melinda S. Urion Vice President and None IDS Tower 10 Corporate Controller Minneapolis, MN 55440 PAGE 34 Item 29(b). (Continued) Positions and Name and Principal Position and Offices Offices with Business Address with Underwriter Registrant Peter S. Velardi Group Vice President- None Atlanta/Birmingham Charles F. Wachendorfer Group Vice President- None Denver/Salt Lake City/ Albuquerque Wesley W. Wadman Vice President- None IDS Tower 10 Senior Portfolio Minneapolis, MN 55440 Manager Norman Weaver Jr. Senior Vice President- None Suite 215 Field Management 1501 Westcliff Drive Newport Beach, CA 92660 Michael L. Weiner Vice President- None IDS Tower 10 Corporate Tax Minneapolis, MN 55440 Operations Lawrence J. Welte Vice President- None IDS Tower 10 Investment Administration Minneapolis, MN 55440 Jeffry M. Welter Vice President- None IDS Tower 10 Equity and Fixed Income Minneapolis, MN 55440 Trading William N. Westhoff Senior Vice President and None IDS Tower 10 Global Chief Investment Minneapolis, MN 55440 Officer Thomas L. White Group Vice President- None Cleveland Metro Eric S. Williams Group Vice President- None Virginia Edwin M. Wistrand Vice President and None IDS Tower 10 Assistant General Minneapolis, MN 55440 Counsel Michael R. Woodward Senior Vice President- None Suite 815 Field Management 8585 Broadway Merrillville, IN 46410 PAGE 35 Item 29(c). Not applicable. Item 30. Location of Accounts and Records IDS Financial Corporation IDS Tower 10 Minneapolis, MN 55440 Item 31. Management Services Not Applicable. Item 32. Undertakings (a) Not Applicable. (b) Not Applicable. (c) The Registrant undertakes to furnish each person to whom a prospectus is delivered with a copy of the Registrant's latest annual report to shareholders, upon request and without charge. SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant, IDS California Tax-Exempt Trust, certifies that it meets the requirements for the effectiveness of this Amendment to its Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Amendment to its Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minneapolis and the State of Minnesota on the 27th day of February, 1995. IDS CALIFORNIA TAX-EXEMPT TRUST By /s/ WILLIAM R. PEARCE** ------------------------------------ William R. Pearce, PRESIDENT Pursuant to the requirements of the Securities Act of 1933, this Amendment to its Registration Statement has been signed below by the following persons in the capacities indicated on the 27th day of February, 1995. SIGNATURE CAPACITY - ----------------------------------- ------------------------- /s/ WILLIAM R. PEARCE** President, Principal - ----------------------------------- Executive Officer and William R. Pearce Trustee Treasurer, Principal /s/ LESLIE L. OGG** Financial Officer and - ----------------------------------- Principal Accounting Leslie L. Ogg Officer /s/ LYNNE V. CHENEY* - ----------------------------------- Trustee Lynne V. Cheney /s/ WILLIAM H. DUDLEY* - ----------------------------------- Trustee William H. Dudley /s/ ROBERT F. FROEHLKE* - ----------------------------------- Trustee Robert F. Froehlke /s/ DAVID R. HUBERS* - ----------------------------------- Trustee David R. Hubers /s/ HEINZ F. HUTTER* - ----------------------------------- Trustee Heinz F. Hutter II-4 SIGNATURE CAPACITY - ----------------------------------- ------------------------- /s/ ANNE P. JONES* - ----------------------------------- Trustee Anne P. Jones /s/ DONALD M. KENDALL* - ----------------------------------- Trustee Donald M. Kendall /s/ MELVIN R. LAIRD* - ----------------------------------- Trustee Melvin R. Laird /s/ LEWIS W. LEHR* - ----------------------------------- Trustee Lewis W. Lehr /s/ EDSON W. SPENCER* - ----------------------------------- Trustee Edson W. Spencer /s/ JOHN R. THOMAS* - ----------------------------------- Trustee John R. Thomas /s/ WHEELOCK WHITNEY* - ----------------------------------- Trustee Wheelock Whitney /s/ C. ANGUS WURTELE* - ----------------------------------- Trustee C. Angus Wurtele *Signed pursuant to Trustees' Power of Attorney, dated November 10, 1994, filed electronically as Exhibit 18(a) to Registrant's Post-Effective Amendment No. 17, by: /s/ LESLIE L. OGG - ------------------------------------------- Leslie L. Ogg **Signed pursuant to Officers' Power of Attorney filed on or about June 23, 1994 as Exhibit 17(a) to Post-Effective Amendment No. 14 to Registration Statement No. 33-5103 by: /s/ LESLIE L. OGG - ------------------------------------------- Leslie L. Ogg II-5 CONTENTS OF THIS POST-EFFECTIVE AMENDMENT NO. 18 TO REGISTRATION STATEMENT NO. 33-5103 This Post-Effective Amendment comprises the following papers and documents: The facing sheet. The cross-reference page. Part A. The prospectus. Part B. Statement of Additional Information. Financial Statements. Part C. Other information. Exhibits. The signatures. EX-99 2 EXHIBIT INDEX IDS California Tax-Exempt Trust Registration Number 33-5103/811-4646 EXHIBIT INDEX Exhibit 5: Form of Investment Management Services Agreement between Registrant and American Express Financial Corporation, dated March 20, 1995. Exhibit 6: Form of Distribution Agreement between Registrant and American Express Financial Advisors Inc., dated March 20, 1995. Exhibit 8: Form of Custodian Agreement between Registrant and American Express Trust Company, dated March 20, 1995. Exhibit 9a: Form of Transfer Agency Agreement between Registrant and American Express Financial Corporation, dated March 20, 1995. Exhibit 9b: Form of Administrative Services Agreement between Registrant and American Express Financial Corporation Inc., dated March 20, 1995. Exhibit 9c: Form of Shareholder Service Agreement between Registrant and American Express Financial Advisors Inc., dated March 20, 1995. Exhibit 11: Independent Auditors' Consent. Exhibit 15: Form of Plan and Agreement of Distribution between Registrant and American Express Financial Advisors Inc., dated March 20, 1995. Exhibit 17: Financial Data Schedule.
EX-99.5-IMSAGR 3 5 FORM OF INVESTMENT MANAGEMENT SERVICES AGREEMENT FORM OF INVESTMENT MANAGEMENT SERVICES AGREEMENT AGREEMENT made the 20th day of March, 1995, by and between IDS California Tax-Exempt Trust (the "Fund"), a Massachusetts business trust, and American Express Financial Corporation, a Delaware corporation. PART ONE: INVESTMENT MANAGEMENT AND OTHER SERVICES (1) The Fund hereby retains American Express Financial Corporation, and American Express Financial Corporation hereby agrees, for the period of this Agreement and under the terms and conditions hereinafter set forth, to furnish the Fund continuously with suggested investment planning; to determine, consistent with the Fund's investment objectives and policies, which securities in American Express Financial Corporation's discretion shall be purchased, held or sold and to execute or cause the execution of purchase or sell orders; to prepare and make available to the Fund all necessary research and statistical data in connection therewith; to furnish all services of whatever nature required in connection with the management of the Fund as provided under this Agreement; and to pay such expenses as may be provided for in Part Three; subject always to the direction and control of the Board of Trustees (the "Board"), the Executive Committee and the authorized officers of the Fund. American Express Financial Corporation agrees to maintain an adequate organization of competent persons to provide the services and to perform the functions herein mentioned. American Express Financial Corporation agrees to meet with any persons at such times as the Board deems appropriate for the purpose of reviewing American Express Financial Corporation's performance under this Agreement. (2) American Express Financial Corporation agrees that the investment planning and investment decisions will be in accordance with general investment policies of the Fund as disclosed to American Express Financial Corporation from time to time by the Fund and as set forth in its prospectuses and registration statements filed with the United States Securities and Exchange Commission (the "SEC"). (3) American Express Financial Corporation agrees that it will maintain all required records, memoranda, instructions or authorizations relating to the acquisition or disposition of securities for the Fund. (4) The Fund agrees that it will furnish to American Express Financial Corporation any information that the latter may reasonably request with respect to the services performed or to be performed by American Express Financial Corporation under this Agreement. (5) American Express Financial Corporation is authorized to select the brokers or dealers that will execute the purchases and sales of portfolio securities for the Fund and is directed to use its best efforts to obtain the best available price and most favorable execution, except as prescribed herein. Subject to prior authorization by the Fund's Board of appropriate policies and procedures, and subject to termination at any time by the Board, American Express Financial Corporation may also be authorized to effect individual securities transactions at commission rates in excess of the minimum commission rates available, to the extent authorized by law, if American Express Financial Corportion determines in good faith that such amount of commission was reasonable in relation to the value of the brokerage and research services provided by such broker or dealer, viewed in terms of either that particular transaction or American Express Financial Corporation's overall responsibilities with respect to the Fund and other funds for which it acts as investment adviser. (6) It is understood and agreed that in furnishing the Fund with the services as herein provided, neither American Express Financial Corporation, nor any officer, trustee or agent thereof shall be held liable to the Fund or its creditors or shareholders for errors of judgment or for anything except willful misfeasance, bad faith, or gross negligence in the performance of its duties, or reckless disregard of its obligations and duties under the terms of this Agreement. It is further understood and agreed that American Express Financial Corporation may rely upon information furnished to it reasonably believed to be accurate and reliable. PART TWO: COMPENSATION TO INVESTMENT MANAGER (1) The Fund agrees to pay to American Express Financial Corporation, and American Express Financial Corporation covenants and agrees to accept from the Fund in full payment for the services furnished, a fee for each calendar day of each year equal to the total of 1/365th (1/366th in each leap year) of the amount computed as shown below. The computation shall be made for each day on the basis of net assets as of the close of business of the full business day two (2) business days prior to the day for which the computation is being made. In the case of the suspension of the computation of net asset value, the asset charge for each day during such suspension shall be computed as of the close of business on the last full business day on which the net assets were computed. Net assets as of the close of a full business day shall include all transactions in shares of the Fund recorded on the books of the Fund for that day. The asset charge shall be based on the net assets of the Fund as set forth in the following table. ASSET CHARGE
Assets Annual Rate at (Billions) Each Asset Level ----------- ---------------- First $0.25 0.470% Next $0.25 0.445 Next $0.25 0.420 Next $0.25 0.405 Over $1 0.380
(2) The fee shall be paid on a monthly basis and, in the event of the termination of this Agreement, the fee accrued shall be prorated on the basis of the number of days that this Agreement is in effect during the month with respect to which such payment is made. (3) The fee provided for hereunder shall be paid in cash by the Fund to American Express Financial Corporation within five business days after the last day of each month. PART THREE: ALLOCATION OF EXPENSES (1) The Fund agrees to pay: (a) Fees payable to American Express Financial Corporation for its services under the terms of this Agreement. (b) Taxes. (c) Brokerage commissions and charges in connection with the purchase and sale of assets. (d) Custodian fees and charges. (e) Fees and charges of its independent certified public accountants for services the Fund requests. (f) Premium on the bond required by Rule 17g-1 under the Investment Company Act of 1940. (g) Fees and expenses of attorneys (i) it employs in matters not involving the assertion of a claim by a third party against the Fund, its trustees and officers, (ii) it employs in conjunction with a claim asserted by the Board against American Express Financial Corporation, except that American Express Financial Corporation shall reimburse the Fund for such fees and expenses if it is ultimately determined by a court of competent jurisdiction, or American Express Financial Corporation agrees, that it is liable in whole or in part to the Fund, and (iii) it employs to assert a claim against a third party. (h) Fees paid for the qualification and registration for public sale of the securities of the Fund under the laws of the United States and of the several states in which such securities shall be offered for sale. (i) Fees of consultants employed by the Fund. (j) Trustees, officers and employees expenses which shall include fees, salaries, memberships, dues, travel, seminars, pension, profit sharing, and all other benefits paid to or provided for trustees, officers and employees, trustees and officers liability insurance, errors and omissions liability insurance, worker's compensation insurance and other expenses applicable to the trustees, officers and employees, except the Fund will not pay any fees or expenses of any person who is an officer or employee of American Express Financial Corporation or its affiliates. (k) Filing fees and charges incurred by the Fund in connection with filing any amendment to its articles of incorporation, or incurred in filing any other document with the State of Minnesota or its political subdivisions. (l) Organizational expenses of the Fund. (m) Expenses incurred in connection with lending portfolio securities of the Fund. (n) Expenses properly payable by the Fund, approved by the Board. (2) American Express Financial Corporation agrees to pay all expenses associated with the services it provides under the terms of this Agreement. Further, American Express Financial Corporation agrees that if, at the end of any month, the expenses of the Fund under this Agreement and any other agreement between the Fund and American Express Financial Corporation, but excluding those expenses set forth in (1)(b) and (1)(c) of this Part Three, exceed the most restrictive applicable state expenses limitation, the Fund shall not pay those expenses set forth in (1)(a) and (d) through (n) of this Part Three to the extent necessary to keep the Fund's expenses from exceeding the limitation, it being understood that American Express Financial Corporation will assume all unpaid expenses and bill the Fund for them in subsequent months but in no event can the accumulation of unpaid expenses or billing be carried past the end of the Fund's fiscal year. PART FOUR: MISCELLANEOUS (1) American Express Financial Corporation shall be deemed to be an independent contractor and, except as expressly provided or authorized in this Agreement, shall have no authority to act for or represent the Fund. (2) A "full business day" shall be as defined in the By-laws. (3) The Fund recognizes that American Express Financial Corporation now renders and may continue to render investment advice and other services to other investment companies and persons which may or may not have investment policies and investments similar to those of the Fund and that American Express Financial Corporation manages its own investments and/or those of its subsidiaries. American Express Financial Corporation shall be free to render such investment advice and other services and the Fund hereby consents thereto. (4) Neither this Agreement nor any transaction had pursuant hereto shall be invalidated or in any way affected by the fact that trustees, officers, agents and/or shareholders of the Fund are or may be interested in American Express Financial Corporation or any successor or assignee thereof, as trustees, officers, stockholders or otherwise; that trustees, officers, stockholders or agents of American Express Financial Corporation are or may be interested in the Fund as trustees, officers, shareholders, or otherwise; or that American Express Financial Corporation or any successor or assignee, is or may be interested in the Fund as shareholder or otherwise, provided, however, that neither American Express Financial Corporation, nor any officer, trustee or employee thereof or of the Fund, shall sell to or buy from the Fund any property or security other than shares issued by the Fund, except in accordance with applicable regulations or orders of the SEC. (5) Any notice under this Agreement shall be given in writing, addressed, and delivered, or mailed postpaid, to the party to this Agreement entitled to receive such, at such party's principal place of business in Minneapolis, Minnesota, or to such other address as either party may designate in writing mailed to the other. (6) American Express Financial Corporation agrees that no officer, trustee or employee of American Express Financial Corporation will deal for or on behalf of the Fund with himself as principal or agent, or with any corporation or partnership in which he may have a financial interest, except that this shall not prohibit: (a) Officers, trustees or employees of American Express Financial Corporation from having a financial interest in the Fund or in American Express Financial Corporation. (b) The purchase of securities for the Fund, or the sale of securities owned by the Fund, through a security broker or dealer, one or more of whose partners, officers, trustees or employees is an officer, trustee or employee of American Express Financial Corporation, provided such transactions are handled in the capacity of broker only and provided commissions charged do not exceed customary brokerage charges for such services. (c) Transactions with the Fund by a broker-dealer affiliate of American Express Financial Corporation as may be allowed by rule or order of the SEC, and if made pursuant to procedures adopted by the Fund's Board. (7) American Express Financial Corporation agrees that, except as herein otherwise expressly provided or as may be permitted consistent with the use of a broker-dealer affiliate of American Express Financial Corporation under applicable provisions of the federal securities laws, neither it nor any of its officers, trustees or employees shall at any time during the period of this Agreement, make, accept or receive, directly or indirectly, any fees, profits or emoluments of any character in connection with the purchase or sale of securities (except shares issued by the Fund) or other assets by or for the Fund. PART FIVE: RENEWAL AND TERMINATION (1) This Agreement shall continue in effect until March 19, 1997, or until a new agreement is approved by a vote of the majority of the outstanding shares of the Fund and by vote of the Fund's Board, including the vote required by (b) of this paragraph, and if no new agreement is so approved, this Agreement shall continue from year to year thereafter unless and until terminated by either party as hereinafter provided, except that such continuance shall be specifically approved at least annually (a) by the Board of the Fund or by a vote of the majority of the outstanding shares of the Fund and (b) by the vote of a majority of the trustees who are not parties to this Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval. As used in this paragraph, the term "interested person" shall have the same meaning as set forth in the Investment Company Act of 1940, as amended (the "1940 Act"). (2) This Agreement may be terminated by either the Fund or American Express Financial Corporation at any time by giving the other party 60 days' written notice of such intention to terminate, provided that any termination shall be made without the payment of any penalty, and provided further that termination may be effected either by the Board of the Fund or by a vote of the majority of the outstanding voting shares of the Fund. The vote of the majority of the outstanding voting shares of the Fund for the purpose of this Part Five shall be the vote at a shareholders' regular meeting, or a special meeting duly called for the purpose, of 67% or more of the Fund's shares present at such meeting if the holders of more than 50% of the outstanding voting shares are present or represented by proxy, or more than 50% of the outstanding voting shares of the Fund, whichever is less. (3) This Agreement shall terminate in the event of its assignment, the term "assignment" for this purpose having the same meaning as set forth in the 1940 Act. IN WITNESS THEREOF, the parties hereto have executed the foregoing Agreement as of the day and year first above written. IDS CALIFORNIA TAX-EXEMPT TRUST By: ----------------------------- Leslie L. Ogg, Vice President AMERICAN EXPRESS FINANCIAL CORPORATION By: ----------------------------- EX-99.6-DISTAGR 4 6 FORM OF DISTRIBUTION AGREEMENT DISTRIBUTION AGREEMENT Agreement made as of the 20th day of March, 1995, by and between IDS California Tax-Exempt Trust (the "Fund"), a Massachusetts business trust, for and on behalf of each class of the Fund, and American Express Financial Advisors Inc., a Delaware corporation. Part One: DISTRIBUTION OF SECURITIES (1) The Fund covenants and agrees that, during the term of this agreement and any renewal or extension, American Express Financial Advisors shall have the exclusive right to act as principal underwriter for the Fund and to offer for sale and to distribute either directly or through any affiliate any and all shares of each class of capital stock issued or to be issued by the Fund. (2) American Express Financial Advisors hereby covenants and agrees to act as the principal underwriter of each class of capital shares issued and to be issued by the Fund during the period of this agreement and agrees during such period to offer for sale such shares as long as such shares remain available for sale, unless American Express Financial Advisors is unable or unwilling to make such offer for sale or sales or solicitations therefor legally because of any federal, state, provincial or governmental law, rule or agency or for any financial reason. (3) With respect to the offering for sale and sale of shares of each class to be issued by the Fund, it is mutually understood and agreed that such shares are to be sold on the following terms: (a) All sales shall be made by means of an application, and every application shall be subject to acceptance or rejection by the Fund at its principal place of business. Shares are to be sold for cash, payable at the time the application and payment for such shares are received at the principal place of business of the Fund. (b) No shares shall be sold at less than the asset value (computed in the manner provided by the currently effective prospectus or Statement of Additional Information and the Investment Company Act of 1940, and rules thereunder). The number of shares or fractional shares to be acquired by each applicant shall be determined by dividing the amount of each accepted application by the public offering price of one share of the capital stock of the appropriate class as of the close of business on the day when the application, together with payment, is received by the Fund at its principal place of business. The computation as to the number of shares and fractional shares shall be carried to three decimal points of one share with the computation being carried to the nearest 1/lOOOth of a share. If the day of receipt of the application and payment is not a full business day, then the asset value of the share for use in such computation shall be determined as of the close of business on the next succeeding full business day. In the event of a period of emergency, the computation of the asset value for the purpose of determining the number of shares or fractional shares to be acquired by the applicant may be deferred until the close of business on the first full business day following the termination of the period of emergency. A period of emergency shall have the definition given thereto in the Investment Company Act of 1940, and rules thereunder. (4) The Fund agrees to make prompt and reasonable effort to do any and all things necessary, in the opinion of American Express Financial Advisors, to have and to keep the Fund and the shares properly registered or qualified in all appropriate jurisdictions and, as to shares, in such amounts as American Express Financial Advisors may from time to time designate in order that the Fund's shares may be offered or sold in such jurisdictions. (5) The Fund agrees that it will furnish American Express Financial Advisors with information with respect to the affairs and accounts of the Fund, and in such form, as American Express Financial Advisors may from time to time reasonably require and further agrees that American Express Financial Advisors, at all reasonable times, shall be permitted to inspect the books and records of the Fund. (6) American Express Financial Advisors or its agents may prepare or cause to be prepared from time to time circulars, sales literature, broadcast material, publicity data and other advertising material to be used in the sales of shares issued by the Fund, including material which may be deemed to be a prospectus under rules promulgated by the Securities and Exchange Commission (each separate promotional piece is referred to as an "Item of Soliciting Material"). At its option, American Express Financial Advisors may submit any Item of Soliciting Material to the Fund for its prior approval. Unless a particular Item of Soliciting Material is approved in writing by the Fund prior to its use, American Express Financial Advisors agrees to indemnify the Fund and its trustees and officers against any and all claims, demands, liabilities and expenses which the Fund or such persons may incur arising out of or based upon the use of any Item of Soliciting Material. The term "expenses" includes amounts paid in satisfaction of judgments or in settlements. The foregoing right of indemnification shall be in addition to any other rights to which the Fund or any trustee or officer may be entitled as a matter of law. Notwithstanding the foregoing, such indemnification shall not be deemed to abrogate or diminish in any way any right or claim American Express Financial Advisors may have against the Fund or its officers or trustees in connection with the Fund's registration statement, prospectus, Statement of Additional Information or other information furnished by or caused to be furnished by the Fund. (7) American Express Financial Advisors agrees to submit to the Fund each application for shares immediately after the receipt of such application and payment therefor by American Express Financial Advisors at its principal place or business. (8) American Express Financial Advisors agrees to cause to be delivered to each person submitting an application a prospectus or circular to be furnished by the Fund in the form required by the applicable federal laws or by the acts or statutes of any applicable state, province or country. (9) The Fund shall have the right to extend to shareholders of each class the right to use the proceeds of any cash dividend paid by the Fund to that shareholder to purchase shares of the same class at the net asset value at the close of business upon the day of purchase, to the extent set forth in the currently effective prospectus or Statement of Additional Information. (10) Shares of each class issued by the Fund may be offered and sold at their asset value to the shareholders of the same class of other Funds in the IDS MUTUAL FUND GROUP who wish to exchange their investments in shares of the other Funds in the IDS MUTUAL FUND GROUP to investments in shares of the Fund, to the extent set forth in the currently effective prospectus or Statement of Additional Information, such asset value to be computed as of the close of business on the day of sale of such shares of the Fund. (11) American Express Financial Advisors and the Fund agree to use their best efforts to conform with all applicable state and federal laws and regulations relating to any rights or obligations under the term of this agreement. Part Two: ALLOCATION OF EXPENSES Except as provided by any other agreements between the parties, American Express Financial Advisors covenants and agrees that during the period of this agreement it will pay or cause or be paid all expenses incurred by American Express Financial Advisors, or any of its affiliates, in the offering for sale or sale of each class of the Fund's shares. Part Three: COMPENSATION (1) It is covenanted and agreed that American Express Financial Advisors shall be paid: (i) for a class of shares imposing a front-end sales charge, by the purchasers of Fund shares in an amount equal to the difference between the total amount received upon each sale of shares issued by the Fund and the asset value of such shares at the time of such sale; and (ii) for a class of shares imposing a deferred sales charge, by owners of Fund shares at the time the sales charge is imposed in an amount equal to any deferred sales charge, as described in the Fund's prospectus. Such sums as are received by the Fund shall be received as Agent for American Express Financial Advisors and shall be remitted to American Express Financial Advisors daily as soon as practicable after receipt. (2) The asset value of any share of each class of the Fund shall be determined in the manner provided by the classes currently effective prospectus and Statement of Additional Information and the Investment Company Act of 1940, and rules thereunder. Part Four: MISCELLANEOUS (1) American Express Financial Advisors shall be deemed to be an independent contractor and, except as expressly provided or authorized in this agreement, shall have no authority to act for or represent the Fund. (2) American Express Financial Advisors shall be free to render to others services similar to those rendered under this agreement. (3) Neither this agreement nor any transaction had pursuant hereto shall be invalidated or in any way affected by the fact that trustees, officers, agents and/or shareholders of the Fund are or may be interested in American Express Financial Advisors as trustees, officers, shareholders or otherwise; that trustees, officers, shareholders or agents of American Express Financial Advisors are or may be interested in the Fund as trustees, officers, shareholders or otherwise; or that American Express Financial Advisors is or may be interested in the Fund as shareholder or otherwise, provided, however, that neither American Express Financial Advisors nor any officer or trustee of American Express Financial Advisors or any officers or trustees of the Fund shall sell to or buy from the Fund any property or security other than a security issued by the Fund, except in accordance with a rule, regulation or order of the federal Securities and Exchange Commission. (4) For the purposes of this agreement, a "business day" shall have the same meaning as is given to the term in the By-laws of the Fund. (5) Any notice under this agreement shall be given in writing, addressed and delivered, or mailed postpaid, to the parties to this agreement at each company's principal place of business in Minneapolis, Minnesota, or to such other address as either party may designate in writing mailed to the other. (6) American Express Financial Advisors agrees that no officer, trustee or employee of American Express Financial Advisors will deal for or on behalf of the Fund with himself as principal or agent, or with any corporation or partnership in which he may have a financial interest, except that this shall not prohibit: (a) Officers, trustees and employees of American Express Financial Advisors from having a financial interest in the Fund or in American Express Financial Advisors. (b) The purchase of securities for the Fund, or the sale of securities owned by the Fund, through a security broker or dealer, one or more of whose partners, officers, trustees or employees is an officer, trustee or employee of American Express Financial Advisors, provided such transactions are handled in the capacity of broker only and provided commissions charged do not exceed customary brokerage charges for such services. (c) Transactions with the Fund by a broker-dealer affiliate of American Express Financial Advisors if allowed by rule or order of the Securities and Exchange Commission and if made pursuant to procedures adopted by the Fund's Board of Trustees. (7) American Express Financial Advisors agrees that, except as otherwise provided in this agreement, or as may be permitted consistent with the use of a broker-dealer affiliate of American Express Financial Advisors under applicable provisions of the federal securities laws, neither it nor any of its officers, trustees or employees shall at any time during the period of this agreement make, accept or receive, directly or indirectly, any fees, profits or emoluments of any character in connection with the purchase or sale of securities (except securities issued by the Fund) or other assets by or for the Fund. Part Five: TERMINATION (1) This agreement shall continue from year to year unless and until terminated by American Express Financial Advisors or the Fund, except that such continuance shall be specifically approved at least annually by a vote of a majority of the Board of Trustees who are not parties to this agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval, and by a majority of the Board of Trustees or by vote of a majority of the outstanding voting securities of the Trust. As used in this paragraph, the term "interested person" shall have the meaning as set forth in the Investment Company Act of 1940, as amended. (2) This agreement may be terminated by American Express Financial Advisors or the Trust at any time by giving the other party sixty (60) days written notice of such intention to terminate. (3) This agreement shall terminate in the event of its assignment, the term "assignment" for this purpose having the same meaning as set forth in the Investment Company Act of 1940, as amended. IN WITNESS WHEREOF, The parties hereto have executed the foregoing agreement on the date and year first above written. IDS CALIFORNIA TAX-EXEMPT TRUST By _____________________________________ Leslie L. Ogg Vice President AMERICAN EXPRESS FINANCIAL ADVISORS INC. By ____________________________________ Vice President EX-99.8-CUSTAGR 5 8 FORM OF CUSTODIAN AGREEMENT CUSTODIAN AGREEMENT THIS CUSTODIAN AGREEMENT dated March 20, 1995, between IDS California Tax-Exempt Trust (the "Trust"), a Massachusetts business trust, and American Express Trust Company, a corporation organized under the laws of the State of Minnesota with its principal place of business at Minneapolis, Minnesota (the "Custodian"). WHEREAS, the Trust desires that its securities and cash be hereafter held and administered by Custodian pursuant to the terms of this Agreement. NOW, THEREFORE, in consideration of the mutual agreements herein made, the Trust and the Custodian agree as follows: SECTION 1. DEFINITIONS The word "securities" as used herein shall be construed to include, without being limited to, shares, stocks, treasury stocks, including any stocks of this Trust, notes, bonds, debentures, evidences of indebtedness, options to buy or sell stocks or stock indexes, certificates of interest or participation in any profit- sharing agreements, collateral trust certificates, preorganization certificates or subscriptions, transferable shares, investment contracts, voting trust certificates, certificates of deposit for a security, fractional or undivided interests in oil, gas or other mineral rights, or any certificates of interest or participation in, temporary or interim certificates for, receipts for, guarantees of, or warrants or rights to subscribe to or purchase any of the foregoing, acceptances and other obligations and any evidence of any right or interest in or to any cash, property or assets and any interest or instrument commonly known as a security. In addition, for the purpose of this Custodian Agreement, the word "securities" also shall include other instruments in which the Trust may invest including currency forward contracts and commodities such as interest rate or index futures contracts, margin deposits on such contracts or options on such contracts. The words "custodian order" shall mean a request or direction, including a computer printout, directed to the Custodian and signed in the name of the Trust by any two individuals designated in the current certified list referred to in Section 2. The word "facsimile" shall mean an exact copy or likeness which is electronically transmitted for instant reproduction. SECTION 2. NAMES, TITLES AND SIGNATURES OF AUTHORIZED PERSONS The Trust will certify to the Custodian the names and signatures of its present officers and other designated persons authorized on behalf of the Trust to direct the Custodian by custodian order as herein before defined. The Trust agrees that whenever any change occurs in this list it will file with the Custodian a copy of a resolution certified by the Secretary or an Assistant Secretary of the Trust as having been duly adopted by the Board of Trustees or the Executive Committee of the Board of Trustees of the Trust designating those persons currently authorized on behalf of the Trust to direct the Custodian by custodian order, as herein before defined, and upon such filing (to be accompanied by the filing of specimen signatures of the designated persons) the persons so designated in said resolution shall constitute the current certified list. The Custodian is authorized to rely and act upon the names and signatures of the individuals as they appear in the most recent certified list from the Trust which has been delivered to the Custodian as herein above provided. SECTION 3. USE OF SUBCUSTODIANS The Custodian may make arrangements, where appropriate, with other banks having not less than two million dollars aggregate capital, surplus and undivided profits for the custody of securities. Any such bank selected by the Custodian to act as subcustodian shall be deemed to be the agent of the Custodian. The Custodian also may enter into arrangements for the custody of securities entrusted to its care through foreign branches of United States banks; through foreign banks, banking institutions or trust companies; through foreign subsidiaries of United States banks or bank holding companies, or through foreign securities depositories or clearing agencies (hereinafter also called, collectively, the "Foreign Subcustodian" or indirectly through an agent, established under the first paragraph of this section, if and to the extent permitted by Section 17(f) of the Investment Company Act of 1940 and the rules promulgated by the Securities and Exchange Commission thereunder, any order issued by the Securities and Exchange Commission, or any "no-action" letter received from the staff of the Securities and Exchange Commission. To the extent the existing provisions of the Custodian Agreement are consistent with the requirements of such Section, rules, order or no-action letter, they shall apply to all such foreign custodianships. To the extent such provisions are inconsistent with or additional requirements are established by such Section, rules, order or no-action letter, the requirements of such Section, rules, order or no-action letter will prevail and the parties will adhere to such requirements; provided, however, in the absence of notification from the Trust of any changes or additions to such requirements, the Custodian shall have no duty or responsibility to inquire as to any such changes or additions. SECTION 4. RECEIPT AND DISBURSEMENT OF MONEY (1) The Custodian shall open and maintain a separate account or accounts in the name of the Trust or cause its agent to open and maintain such account or accounts subject only to checks, drafts or directives by the Custodian pursuant to the terms of this Agreement. The Custodian or its agent shall hold in such account or accounts, subject to the provisions hereof, all cash received by it from or for the account of the Trust. The Custodian or its agent shall make payments of cash to or for the account of the Trust from such cash only: (a) for the purchase of securities for the portfolio of the Trust upon the receipt of such securities by the Custodian or its agent unless otherwise instructed on behalf of the Corporation; (b) for the purchase or redemption of shares of capital stock of the Trust; (c) for the payment of interest, dividends, taxes, management fees, or operating expenses (including, without limitation thereto, fees for legal, accounting and auditing services); (d) for payment of distribution fees, commissions, or redemption fees, if any; (e) for payments in connection with the conversion, exchange or surrender of securities owned or subscribed to by the Trust held by or to be delivered to the Custodian; (f) for payments in connection with the return of securities loaned by the Trust upon receipt of such securities or the reduction of collateral upon receipt of proper notice; (g) for payments for other proper corporate purposes; (h) or upon the termination of this Agreement. Before making any such payment for the purposes permitted under the terms of items (a), (b), (c), (d), (e), (f) or (g) of paragraph (1) of this section, the Custodian shall receive and may rely upon a custodian order directing such payment and stating that the payment is for such a purpose permitted under these items (a), (b), (c), (d), (e), (f) or (g) and that in respect to item (g), a copy of a resolution of the Board of Trustees or of the Executive Committee of the Board of Trustees of the Trust signed by an officer of the Trust and certified by its Secretary or an Assistant Secretary, specifying the amount of such payment, setting forth the purpose to be a proper corporate purpose, and naming the person or persons to whom such payment is made. Notwithstanding the above, for the purposes permitted under items (a) or (f) of paragraph (1) of this section, the Custodian may rely upon a facsimile order. (2) The Custodian is hereby appointed the attorney-in-fact of the Trust to endorse and collect all checks, drafts or other orders for the payment of money received by the Custodian for the account of the Trust and drawn on or to the order of the Trust and to deposit same to the account of the Trust pursuant to this Agreement. SECTION 5. RECEIPT OF SECURITIES Except as permitted by the second paragraph of this section, the Custodian or its agent shall hold in a separate account or accounts, and physically segregated at all times from those of any other persons, firms or Trusts, pursuant to the provisions hereof, all securities received by it for the account of the Trust. The Custodian shall record and maintain a record of all certificate numbers. Securities so received shall be held in the name of the Trust, in the name of an exclusive nominee duly appointed by the Custodian or in bearer form, as appropriate. Subject to such rules, regulations or guidelines as the Securities and Exchange Commission may adopt, the Custodian may deposit all or any part of the securities owned by the Trust in a securities depository which includes any system for the central handling of securities established by a national securities exchange or a national securities association registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934, or such other person as may be permitted by the Commission, pursuant to which system all securities of any particular class or series of any issuer deposited within the system are treated as fungible and may be transferred or pledged by bookkeeping entry without physical delivery of such securities. All securities are to be held or disposed of by the Custodian for, and subject at all times to the instructions of, the Trust pursuant to the terms of this Agreement. The Custodian shall have no power or authority to assign, hypothecate, pledge or otherwise dispose of any such securities, except pursuant to the directive of the Trust and only for the account of the Trust as set forth in Section 6 of this Agreement. SECTION 6. TRANSFER EXCHANGE, DELIVERY, ETC. OF SECURITIES The Custodian shall have sole power to release or deliver any securities of the Trust held by it pursuant to this Agreement. The Custodian agrees to transfer, exchange or deliver securities held by it or its agent hereunder only: (a) for sales of such securities for the account of the Trust, upon receipt of payment therefor; (b) when such securities are called, redeemed, retired or otherwise become payable; (c) for examination upon the sale of any such securities in accordance with "street delivery" custom which would include delivery against interim receipts or other proper delivery receipts; (d) in exchange for or upon conversion into other securities alone or other securities and cash whether pursuant to any plan of (e) merger, consolidation, reorganization, recapitalization or readjustment, or otherwise; (f) for the purpose of exchanging interim receipts or temporary certificates for permanent certificates; (g) upon conversion of such securities pursuant to their terms into other securities; (h) upon exercise of subscription, purchase or other similar rights represented by such securities; for loans of such securities by the Trust upon receipt of collateral; or (i) for other proper corporate purposes. As to any deliveries made by the Custodian pursuant to items (a), (b), (c), (d), (e), (f), (g) and (h), securities or cash received in exchange therefore shall be delivered to the Custodian, its agent, or to a securities depository. Before making any such transfer, exchange or delivery, the Custodian shall receive a custodian order or a facsimile from the Trust requesting such transfer, exchange or delivery and stating that it is for a purpose permitted under Section 6 (whenever a facsimile is utilized, the Trust will also deliver an original signed custodian order) and, in respect to item (i), a copy of a resolution of the Board of Trustees or of the Executive Committee of the Board of Trustees of the Trust signed by an officer of the Trust and certified by its Secretary or an Assistant Secretary, specifying the securities, setting forth the purpose for which such payment, transfer, exchange or delivery is to be made, declaring such purpose to be a proper corporate purpose, and naming the person or persons to whom such transfer, exchange or delivery of such securities shall be made. SECTION 7. CUSTODIAN'S ACTS WITHOUT INSTRUCTIONS Unless and until the Custodian receives a contrary custodian order from the Trust, the Custodian shall or shall cause its agent to: (a) present for payment all coupons and other income items held by the Custodian or its agent for the account of the Trust which call for payment upon presentation and hold all cash received by it upon such payment for the account of the Trust; (b) present for payment all securities held by it or its agent which mature or when called, redeemed, retired or otherwise become payable; (c) ascertain all stock dividends, rights and similar securities to be issued with respect to any securities held by the Custodian or its agent hereunder, and to collect and hold for the account of the Trust all such securities; and (d) ascertain all interest and cash dividends to be paid to security holders with respect to any securities held by the Custodian or its agent, and to collect and hold such interest and cash dividends for the account of the Trust. SECTION 8. VOTING AND OTHER ACTION Neither the Custodian nor any nominee of the Custodian shall vote any of the securities held hereunder by or for the account of the Trust. The Custodian shall promptly deliver to the Trust all notices, proxies and proxy soliciting materials with relation to such securities, such proxies to be executed by the registered holder of such securities (if registered otherwise than in the name of the Trust), but without indicating the manner in which such proxies are to be voted. Custodian shall transmit promptly to the Trust all written information (including, without limitation, pendency of calls and maturities of securities and expirations of rights in connection therewith) received by the Custodian from issuers of the securities being held for the Trust. With respect to tender or exchange offers, the Custodian shall transmit promptly to the Trust all written information received by the Custodian from issuers of the securities whose tender or exchange is sought and from the party (or his agents) making the tender or exchange offer. SECTION 9. TRANSFER TAXES The Trust shall pay or reimburse the Custodian for any transfer taxes payable upon transfers of securities made hereunder, including transfers resulting from the termination of this Agreement. The Custodian shall execute such certificates in connection with securities delivered to it under this Agreement as may be required, under any applicable law or regulation, to exempt from taxation any transfers and/or deliveries of any such securities which may be entitled to such exemption. SECTION 10. CUSTODIAN'S REPORTS The Custodian shall furnish the Trust as of the close of business each day a statement showing all transactions and entries for the account of the Trust. The books and records of the Custodian pertaining to its actions as Custodian under this Agreement and securities held hereunder by the Custodian shall be open to inspection and audit by officers of the Trust, internal auditors employed by the Trust's investment adviser, and independent auditors employed by the Trust. The Custodian shall furnish the Trust in such form as may reasonably be requested by the Trust a report, including a list of the securities held by it in custody for the account of the Trust, identification of any subcustodian, and identification of such securities held by such subcustodian, as of the close of business of the last business day of each month, which shall be certified by a duly authorized officer of the Custodian. It is further understood that additional reports may from time to time be requested by the Trust. Should any report ever be filed with any governmental authority pertaining to lost or stolen securities, the Custodian will concurrently provide the Trust with a copy of that report. The Custodian also shall furnish such reports on its systems of internal accounting control as the Trust may reasonably request from time to time. SECTION 11. CONCERNING CUSTODIAN For its services hereunder the Custodian shall be paid such compensation at such times as may from time to time be agreed on in writing by the parties hereto in a Custodian Fee Agreement. The Custodian shall not be liable for any action taken in good faith upon any custodian order or facsimile herein described or certified copy of any resolution of the Board of Trustees or of the Executive Committee of the Board of Trustees of the Trust, and may rely on the genuineness of any such document which it may in good faith believe to have been validly executed. The Trust agrees to indemnify and hold harmless Custodian and its nominee from all taxes, charges, expenses, assessments, claims and liabilities (including counsel fees) incurred or assessed against it or its nominee in connection with the performance of this Agreement, except such as may arise from the Custodian's or its nominee's own negligent action, negligent failure to act or willful misconduct. Custodian is authorized to charge any account of the Trust for such items. In the event of any advance of cash for any purpose made by Custodian resulting from orders or instructions of the Trust, or in the event that Custodian or its nominee shall incur or be assessed any taxes, charges, expenses, assessments, claims or liabilities in connection with the performance of this Agreement, except such as may arise from its or its nominee's own negligent action, negligent failure to act or willful misconduct, any property at any time held for the account of the Trust shall be security therefor. The Custodian shall maintain a standard of care equivalent to that which would be required of a bailee for hire and shall not be liable for any loss or damage to the Trust resulting from participation in a securities depository unless such loss or damage arises by reason of any negligence, misfeasance, or willful misconduct of officers or employees of the Custodian, or from its failure to enforce effectively such rights as it may have against any securities depository or from use of an agent, unless such loss or damage arises by reason of any negligence, misfeasance, or willful misconduct of officers or employees of the Custodian, or from its failure to enforce effectively such rights as it may have against any agent. SECTION 12. TERMINATION AND AMENDMENT OF AGREEMENT The Trust and the Custodian mutually may agree from time to time in writing to amend, to add to, or to delete from any provision of this Agreement. The Custodian may terminate this Agreement by giving the Trust ninety days' written notice of such termination by registered mail addressed to the Trust at its principal place of business. The Trust may terminate this Agreement at any time by written notice thereof delivered, together with a copy of the resolution of the Board of Trustees authorizing such termination and certified by the Secretary of the Trust, by registered mail to the Custodian. Upon such termination of this Agreement, assets of the Trust held by the Custodian shall be delivered by the Custodian to a successor custodian, if one has been appointed by the Trust, upon receipt by the Custodian of a copy of the resolution of the Board of Trustees of the Trust certified by the Secretary, showing appointment of the successor custodian, and provided that such successor custodian is a bank or trust company, organized under the laws of the United States or of any State of the United States, having not less than two million dollars aggregate capital, surplus and undivided profits. Upon the termination of this Agreement as a part of the transfer of assets, either to a successor custodian or otherwise, the Custodian will deliver securities held by it hereunder, when so authorized and directed by resolution of the Board of Trustees of the Trust, to a duly appointed agent of the successor custodian or to the appropriate transfer agents for transfer of registration and delivery as directed. Delivery of assets on termination of this Agreement shall be effected in a reasonable, expeditious and orderly manner; and in order to accomplish an orderly transition from the Custodian to the successor custodian, the Custodian shall continue to act as such under this Agreement as to assets in its possession or control. Termination as to each security shall become effective upon delivery to the successor custodian, its agent, or to a transfer agent for a specific security for the account of the successor custodian, and such delivery shall constitute effective delivery by the Custodian to the successor under this Agreement. In addition to the means of termination herein before authorized, this Agreement may be terminated at any time by the vote of a majority of the outstanding shares of the Trust and after written notice of such action to the Custodian. SECTION 13. GENERAL Nothing expressed or mentioned in or to be implied from any provision of this Agreement is intended to, or shall be construed to give any person or Trust other than the parties hereto, any legal or equitable right, remedy or claim under or in respect of this Agreement, or any covenant, condition or provision herein contained, this Agreement and all of the covenants, conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of the parties hereto and their respective successors and assigns. This Agreement shall be governed by the laws of the State of Minnesota. This Agreement supersedes all prior agreements between the parties. IDS CALIFORNIA TAX-EXEMPT TRUST By: __________________________________ Leslie L. Ogg Vice President AMERICAN EXPRESS TRUST COMPANY By: __________________________________ Vice President EX-99.9A-TAAGR 6 9(A) FORM OF TRANSFER AGENCY AGREEMENT TRANSFER AGENCY AGREEMENT AGREEMENT dated as of March 20, 1995, between IDS California Tax-Exempt Trust (the "Trust"), a Massachusetts business trust, and American Express Financial Corporation (the "Transfer Agent"), a Delaware corporation. In consideration of the mutual promises set forth below, the Trust and the Transfer Agent agree as follows: 1. Appointment of the Transfer Agent. The Trust hereby appoints the Transfer Agent, as transfer agent for its shares and as shareholder servicing agent for the Trust, and the Transfer Agent accepts such appointment and agrees to perform the duties set forth below. 2. Compensation. The Trust will compensate the Transfer Agent for the performance of its obligations as set forth in Schedule A. Schedule A does not include out-of-pocket disbursements of the Transfer Agent for which the Transfer Agent shall be entitled to bill the Trust separately. The Transfer Agent will bill the Trust monthly. The fee provided for hereunder shall be paid in cash by the Trust to American Express Financial Corporation within five (5) business days after the last day of each month. Out-of-pocket disbursements shall include, but shall not be limited to, the items specified in Schedule B. Reimbursement by the Trust for expenses incurred by the Transfer Agent in any month shall be made as soon as practicable after the receipt of an itemized bill from the Transfer Agent. Any compensation jointly agreed to hereunder may be adjusted from time to time by attaching to this Agreement a revised Schedule A, dated and signed by an officer of each party. 3. Documents. The Trust will furnish from time to time such certificates, documents or opinions as the Transfer Agent deems to be appropriate or necessary for the proper performance of its duties. 4. Representations of the Trust and the Transfer Agent. (a) The Trust represents to the Transfer Agent that all outstanding shares are validly issued, fully paid and non-assessable by the Trust. When shares are hereafter issued in accordance with the terms of the Trust's Articles of Incorporation and its prospectus, such shares shall be validly issued, fully paid and non-assessable by the Trust. (b) The Transfer Agent represents that it is registered under Section 17A(c) of the Securities Exchange Act of 1934. The Transfer Agent agrees to maintain the necessary facilities, equipment and personnel to perform its duties and obligations under this agreement and to comply with all applicable laws. 5. Duties of the Transfer Agent. The Transfer Agent shall be responsible, separately and through its subsidiaries or affiliates, for the following functions: (a) Sale of Trust Shares. (1) On receipt of an application and payment, wired instructions and payment, or payment identified as being for the account of a shareholder, the Transfer Agent will deposit the payment, prepare and present the necessary report to the Custodian and record the purchase of shares in a timely fashion in accordance with the terms of the prospectus. All shares shall be held in book entry form and no certificate shall be issued unless the Trust is permitted to do so by the prospectus and the purchaser so requests. (2) On receipt of notice that payment was dishonored, the Transfer Agent shall stop redemptions of all shares owned by the purchaser related to that payment, place a stop payment on any checks that have been issued to redeem shares of the purchaser and take such other action as it deems appropriate. (b) Redemption of Trust Shares. On receipt of instructions to redeem shares in accordance with the terms of the Trust's prospectus, the Transfer Agent will record the redemption of shares of the Trust, prepare and present the necessary report to the Custodian and pay the proceeds of the redemption to the shareholder, an authorized agent or legal representative upon the receipt of the monies from the Custodian. (c) Transfer or Other Change Pertaining to Trust Shares. On receipt of instructions or forms acceptable to the Transfer Agent to transfer the shares to the name of a new owner, change the name or address of the present owner or take other legal action, the Transfer Agent will take such action as is requested. (d) Exchange of Trust Shares. On receipt of instructions to exchange the shares of the Trust for the shares of another fund in the IDS MUTUAL FUND GROUP or other American Express Financial Corporation product in accordance with the terms of the prospectus, the Transfer Agent will process the exchange in the same manner as a redemption and sale of shares. (e) Right to Seek Assurance. The Transfer Agent may refuse to transfer, exchange or redeem shares of the Trust or take any action requested by a shareholder until it is satisfied that the requested transaction or action is legally authorized or until it is satisfied there is no basis for any claims adverse to the transaction or action. It may rely on the provisions of the Uniform Act for the Simplification of Fiduciary Security Transfers or the Uniform Commercial Code. The Trust shall indemnify the Transfer Agent for any act done or omitted to be done in reliance on such laws or for refusing to transfer, exchange or redeem shares or taking any requested action if it acts on a good faith belief that the transaction or action is illegal or unauthorized. (f) Shareholder Records, Reports and Services. (1) The Transfer Agent shall maintain all shareholder accounts, which shall contain all required tax, legally imposed and regulatory information; shall provide shareholders, and file with federal and state agencies, all required tax and other reports pertaining to shareholder accounts; shall prepare shareholder mailing lists; shall cause to be printed and mailed all required prospectuses, annual reports, semiannual reports, statements of additional information (upon request), proxies and other mailings to shareholders; and shall cause proxies to be tabulated. (2) The Transfer Agent shall respond to all valid inquiries related to its duties under this Agreement. (3) The Transfer Agent shall create and maintain all records in accordance with all applicable laws, rules and regulations, including, but not limited to, the records required by Section 31(a) of the Investment Company Act of 1940. (g) Dividends and Distributions. The Transfer Agent shall prepare and present the necessary report to the Custodian and shall cause to be prepared and transmitted the payment of income dividends and capital gains distributions or cause to be recorded the investment of such dividends and distributions in additional shares of the Trust or as directed by instructions or forms acceptable to the Transfer Agent. (h) Confirmations and Statements. The Transfer Agent shall confirm each transaction either at the time of the transaction or through periodic reports as may be legally permitted. (i) Lost or Stolen Checks. The Transfer Agent will replace lost or stolen checks issued to shareholders upon receipt of proper notification and will maintain any stop payment orders against the lost or stolen checks as it is economically desirable to do. (j) Reports to Trust. The Transfer Agent will provide reports pertaining to the services provided under this Agreement as the Trust may request to ascertain the quality and level of services being provided or as required by law. (k) Other Duties. The Transfer Agent may perform other duties for additional compensation if agreed to in writing by the parties to this Agreement. 6. Ownership and Confidentiality of Records. The Transfer Agent agrees that all records prepared or maintained by it relating to the services to be performed by it under the terms of this Agreement are the property of the Trust and may be inspected by the Trust or any person retained by the Trust at reasonable times. The Trust and Transfer Agent agree to protect the confidentiality of those records. 7. Action by Board and Opinion of Trust's Counsel. The Transfer Agent may rely on resolutions of the Board of Trustees or the Executive Committee of the Board of Trustees and on opinion of counsel for the Trust. 8. Duty of Care. It is understood and agreed that, in furnishing the Trust with the services as herein provided, neither the Transfer Agent, nor any officer, trustee or agent thereof shall be held liable for any loss arising out of or in connection with their actions under this Agreement so long as they act in good faith and with due diligence, and are not negligent or guilty of any willful misconduct. It is further understood and agreed that the Transfer Agent may rely upon information furnished to it reasonably believed to be accurate and reliable. In the event the Transfer Agent is unable to perform its obligations under the terms of this Agreement because of an act of God, strike or equipment or transmission failure reasonably beyond its control, the Transfer Agent shall not be liable for any damages resulting from such failure. 9. Term and Termination. This Agreement shall become effective on the date first set forth above (the "Effective Date") and shall continue in effect from year to year thereafter as the parties may mutually agree; provided that either party may terminate this Agreement by giving the other party notice in writing specifying the date of such termination, which shall be not less than 60 days after the date of receipt of such notice. In the event such notice is given by the Trust, it shall be accompanied by a vote of the Board of Trustees, certified by the Secretary, electing to terminate this Agreement and designating a successor transfer agent or transfer agents. Upon such termination and at the expense of the Trust, the Transfer Agent will deliver to such successor a certified list of shareholders of the Trust (with name, address and taxpayer identification or Social Security number), a historical record of the account of each shareholder and the status thereof, and all other relevant books, records, correspondence, and other data established or maintained by the Transfer Agent under this Agreement in the form reasonably acceptable to the Trust, and will cooperate in the transfer of such duties and responsibilities, including provisions for assistance from the Transfer Agent's personnel in the establishment of books, records and other data by such successor or successors. 10. Amendment. This Agreement may not be amended or modified in any manner except by a written agreement executed by both parties. 11. Subcontracting. The Trust agrees that the Transfer Agent may subcontract for certain of the services described under this Agreement with the understanding that there shall be no diminution in the quality or level of the services and that the Transfer Agent remains fully responsible for the services. Except for out-of-pocket expenses identified in Schedule B, the Transfer Agent shall bear the cost of subcontracting such services, unless otherwise agreed by the parties. 12. Miscellaneous. (a) This Agreement shall extend to and shall be binding upon the parties hereto, and their respective successors and assigns; provided, however, that this Agreement shall not be assignable without the written consent of the other party. (b) This Agreement shall be governed by the laws of the State of Minnesota. 13. Limitation of Liability. The Trust and the Transfer Agent agree that the obligations of the Trust hereunder shall not be binding upon any of the trustees, shareholders, nominees, officers, employees or agents, whether past, present or future, of the Trust, individually, but are binding only upon the assets and property of the Trust, as provided in the Agreement and Declaration of Trust. The execution and delivery of this Agreement have been authorized by the trustees of the Trust, and signed by an authorized officer of the Trust, acting as such, and neither such authorization by such trustees nor such execution and delivery by such officer shall be deemed to have been made by any of them individually or to impose any liability on any of them or any shareholder of the Trust personally, but shall bind only the property of the Trust as provided in the Agreement and Declaration of Trust. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers as of the day and year written above. IDS CALIFORNIA TAX-EXEMPT TRUST By: __________________________________ Leslie L. Ogg Vice President AMERICAN EXPRESS FINANCIAL CORPORATION By: __________________________________ Vice President SCHEDULE A IDS CALIFORNIA TAX-EXEMPT TRUST TRANSFER AGENT FEE Effective the 20th day of March, 1995, the Annual Per Account Fee accrued daily and payable monthly is revised as follows: CLASS FEE ----- --- A $ 15.50 B 16.50 Y 15.50 Schedule B OUT-OF-POCKET EXPENSES The Trust shall reimburse the Transfer Agent monthly for the following out-of-pocket expenses: - - typesetting, printing, paper, envelopes, postage and return postage for proxy soliciting material, and proxy tabulation costs - - printing, paper, envelopes and postage for dividend notices, dividend checks, records of account, purchase confirmations, exchange confirmations and exchange prospectuses, redemption confirmations, redemption checks, confirmations on changes of address and any other communication required to be sent to shareholders - - typesetting, printing, paper, envelopes and postage for prospectuses, annual and semiannual reports, statements of additional information, supplements for prospectuses and statements of additional information and other required mailings to shareholders - - stop orders - - outgoing wire charges - - other expenses incurred at the request or with the consent of the Trust EX-99.9B-ASAGR 7 9(B) FORM OF ADMINISTRATIVE SERVICES AGREEMENT ADMINISTRATIVE SERVICES AGREEMENT AGREEMENT made the 20th day of March, 1995, by and between IDS California Tax-Exempt Trust (the "Fund"), a Massachusetts business trust, and American Express Financial Corporation, a Delaware corporation. PART ONE: SERVICES (1) The Fund hereby retains American Express Financial Corporation, and American Express Financial Corporation hereby agrees, for the period of this Agreement and under the terms and conditions hereinafter set forth, to furnish the Fund continuously with all administrative, accounting, clerical, statistical, correspondence, corporate and all other services of whatever nature required in connection with the administration of the Fund as provided under this Agreement; and to pay such expenses as may be provided for in Part Three hereof; subject always to the direction and control of the Board of Trustees, the Executive Committee and the authorized officers of the Fund. American Express Financial Corporation agrees to maintain an adequate organization of competent persons to provide the services and to perform the functions herein mentioned. American Express Financial Corporation agrees to meet with any persons at such times as the Board of Trustees deems appropriate for the purpose of reviewing American Express Financial Corporation's performance under this Agreement. (2) The Fund agrees that it will furnish to American Express Financial Corporation any information that the latter may reasonably request with respect to the services performed or to be performed by American Express Financial Corporation under this Agreement. (3) It is understood and agreed that in furnishing the Fund with the services as herein provided, neither American Express Financial Corporation, nor any officer, trustee or agent thereof shall be held liable to the Fund or its creditors or shareholders for errors of judgment or for anything except willful misfeasance, bad faith, or gross negligence in the performance of its duties, or reckless disregard of its obligations and duties under the terms of this Agreement. It is further understood and agreed that American Express Financial Corporation may rely upon information furnished to it reasonably believed to be accurate and reliable. PART TWO: COMPENSATION FOR SERVICES (1) The Fund agrees to pay to American Express Financial Corporation, and American Express Financial Corporation covenants and agrees to accept from the Fund in full payment for the services furnished, based on the net assets of the Fund as set forth in the following table:
Assets Annual Rate At (Billions) Each Asset Level ----------- ---------------- First $0.25 0.040% Next 0.25 0.035 Next 0.25 0.030 Next 0.25 0.025 Over 1 0.020
The administrative fee for each calendar day of each year shall be equal to 1/365th (1/366th in each leap year) of the total amount computed. The computation shall be made for each such day on the basis of net assets as of the close of business of the full business day two (2) business days prior to the day for which the computation is being made. In the case of the suspension of the computation of net asset value, the administrative fee for each day during such suspension shall be computed as of the close of business on the last full business day on which the net assets were computed. As used herein, "net assets" as of the close of a full business day shall include all transactions in shares of the Fund recorded on the books of the Fund for that day. (2) The administrative fee shall be paid on a monthly basis and, in the event of the termination of this Agreement, the administrative fee accrued shall be prorated on the basis of the number of days that this Agreement is in effect during the month with respect to which such payment is made. (3) The administrative fee provided for hereunder shall be paid in cash by the Fund to American Express Financial Corporation within five (5) business days after the last day of each month. PART THREE: ALLOCATION OF EXPENSES (1) The Fund agrees to pay: (a) Administrative fees payable to American Express Financial Corporation for its services under the terms of this Agreement. (b) Taxes. (c) Fees and charges of its independent certified public accountants for services the Fund requests. (d) Fees and expenses of attorneys (i) it employs in matters not involving the assertion of a claim by a third party against the Fund, its trustees and officers, (ii) it employs in conjunction with a claim asserted by the Board of Trustees against American Express Financial Corporation, except that American Express Financial Corporation shall reimburse the Fund for such fees and expenses if it is ultimately determined by a court of competent jurisdiction, or American Express Financial Corporation agrees, that it is liable in whole or in part to the Fund, and (iii) it employs to assert a claim against a third party. (e) Fees paid for the qualification and registration for public sale of the securities of the Fund under the laws of the United States and of the several states in which such securities shall be offered for sale. (f) Office expenses which shall include a charge for occupancy, insurance on the premises, furniture and equipment, telephone, telegraph, electronic information services, books, periodicals, published services, and office supplies used by the Fund, equal to the cost of such incurred by American Express Financial Corporation. (g) Fees of consultants employed by the Fund. (h) Trustees, officers and employees expenses which shall include fees, salaries, memberships, dues, travel, seminars, pension, profit sharing, and all other benefits paid to or provided for trustees, officers and employees, trustees and officers liability insurance, errors and omissions liability insurance, worker's compensation insurance and other expenses applicable to the trustees, officers and employees, except the Fund will not pay any fees or expenses of any person who is an officer or employee of American Express Financial Corporation or its affiliates. (i) Filing fees and charges incurred by the Fund in connection with filing any amendment to its articles of incorporation, or incurred in filing any other document with the State of Minnesota or its political subdivisions. (j) Organizational expenses of the Fund. (k) One-half of the Investment Company Institute membership dues charged jointly to the IDS MUTUAL FUND GROUP and American Express Financial Corporation. (l) Expenses properly payable by the Fund, approved by the Board of Trustees. (2) American Express Financial Corporation agrees to pay all expenses associated with the services it provides under the terms of this Agreement. Further, American Express Financial Corporation agrees that if, at the end of any month, the expenses of the Fund under this Agreement and any other agreement between the Fund and American Express Financial Corporation, but excluding those expenses set forth in (1)(b) of this Part Three, exceed the most restrictive applicable state expenses limitation, the Fund shall not pay those expenses set forth in (1)(a) and (c) through (m) of this Part Three to the extent necessary to keep the Fund's expenses from exceeding the limitation, it being understood that American Express Financial Corporation will assume all unpaid expenses and bill the Fund for them in subsequent months but in no event can the accumulation of unpaid expenses or billing be carried past the end of the Fund's fiscal year. PART FOUR: MISCELLANEOUS (1) American Express Financial Corporation shall be deemed to be an independent contractor and, except as expressly provided or authorized in this Agreement, shall have no authority to act for or represent the Fund. (2) A "full business day" shall be as defined in the By-laws. (3) The Fund recognizes that American Express Financial Corporation now renders and may continue to render investment advice and other services to other investment companies and persons which may or may not have investment policies and investments similar to those of the Fund and that American Express Financial Corporation manages its own investments and/or those of its subsidiaries. American Express Financial Corporation shall be free to render such investment advice and other services and the Fund hereby consents thereto. (4) Neither this Agreement nor any transaction had pursuant hereto shall be invalidated or in anyway affected by the fact that trustees, officers, agents and/or shareholders of the Fund are or may be interested in American Express Financial Corporation or any successor or assignee thereof, as trustees, officers, stockholders or otherwise; that trustees, officers, stockholders or agents of American Express Financial Corporation are or may be interested in the Fund as trustees, officers, shareholders, or otherwise; or that American Express Financial Corporation or any successor or assignee, is or may be interested in the Fund as shareholder or otherwise, provided, however, that neither American Express Financial Corporation, nor any officer, trustee or employee thereof or of the Fund, shall sell to or buy from the Fund any property or security other than shares issued by the Fund, except in accordance with applicable regulations or orders of the United States Securities and Exchange Commission. (5) Any notice under this Agreement shall be given in writing, addressed, and delivered, or mailed postpaid, to the party to this Agreement entitled to receive such, at such party's principal place of business in Minneapolis, Minnesota, or to such other address as either party may designate in writing mailed to the other. (6) American Express Financial Corporation agrees that no officer, trustee or employee of American Express Financial Corporation will deal for or on behalf of the Fund with himself as principal or agent, or with any corporation or partnership in which he may have a financial interest, except that this shall not prohibit officers, trustees or employees of American Express Financial Corporation from having a financial interest in the Fund or in American Express Financial Corporation. (7) The Fund agrees that American Express Financial Corporation may subcontract for certain of the services described under this Agreement with the understanding that there shall be no diminution in the quality or level of the services and that American Express Financial Corporation remains fully responsible for the services. (8) This Agreement shall extend to and shall be binding upon the parties hereto, and their respective successors and assigns; provided, however, that this Agreement shall not be assignable without the written consent of the other party. This Agreement shall be governed by the laws of the State of Minnesota. PART FIVE: RENEWAL AND TERMINATION (1) This Agreement shall become effective on the date first set forth above (the "Effective Date") and shall continue in effect from year to year thereafter as the parties may mutually agree; provided that either party may terminate this Agreement by giving the other party notice in writing specifying the date of such termination, which shall be not less than 60 days after the date of receipt of such notice. (2) This Agreement may not be amended or modified in any manner except by a written agreement executed by both parties. IN WITNESS THEREOF, the parties hereto have executed the foregoing Agreement as of the day and year first above written. IDS CALIFORNIA TAX-EXEMPT TRUST By: __________________________________ Leslie L. Ogg Vice President AMERICAN EXPRESS FINANCIAL CORPORATION By: __________________________________ Vice President EX-99.9C-SSAGR 8 9(C) FORM OF SHAREHOLDER SERVICE AGREEMENT SHAREHOLDER SERVICE AGREEMENT This agreement is between IDS California Tax-Exempt Trust (the "Fund) and American Express Financial Advisors Inc., the principal underwriter of the Fund, for services to be provided to shareholders by personal financial advisors and other servicing agents. It is effective on the first day the Fund offers multiple classes of shares. American Express Financial Advisors represents that shareholders consider their financial advisor or servicing agent a significant factor in their satisfaction with their investment and, to help retain financial advisors or servicing agents, it is necessary for the Fund to pay annual servicing fees to financial advisors and other servicing agents. American Express Financial Advisors represents that fees paid to financial advisors will be used by financial advisors to help shareholders thoughtfully consider their investment goals and objectively monitor how well the goals are being achieved. As principal underwriter, American Express Financial Advisors will use its best efforts to assure that other distributors provide comparable services to shareholders for the servicing fees received. American Express Financial Advisors agrees to monitor the services provided by financial advisors and servicing agents, to measure the level and quality of services provided, to provide training and support to financial advisors and servicing agents and to devise methods for rewarding financial advisors and servicing agents who achieve an exemplary level and quality of services. The Fund agrees to pay American Express financial advisors and other servicing agents 0.15 percent of the net asset value for each shareholder account assigned to a financial advisor or servicing agent that holds either Class A or Class B shares. In addition, the Fund agrees to pay American Express Financial Advisors' costs to monitor, measure, train and support services provided by financial advisors or servicing agents up to 0.025 percent of the net asset value for each shareholder account assigned to a financial advisor or servicing agent that holds either Class A or Class B shares. The Fund agrees to pay American Express Financial Advisors in cash within five (5) business days after the last day of each month. American Express Financial Advisors agrees to provide the Fund, prior to the beginning of the calendar year, a budget covering its expected costs to monitor, measure, train and support services and a quarterly report of its actual expenditures. American Express Financial Advisors agrees to meet with representatives of the Fund at their request to provide information as may be reasonably necessary to evaluate its performance under the terms of this agreement. American Express Financial Advisors agrees that if, at the end of any month, the expenses of the Fund, including fees under this agreement and any other agreement between the Fund and American Express Financial Advisors or American Express Financial Corporation, but excluding taxes, brokerage commissions and charges in connection with the purchase and sale of assets exceed the most restrictive applicable state expense limitation for the Fund's current fiscal year, the Fund shall not pay fees and expenses under this agreement to the extent necessary to keep the Fund's expenses from exceeding the limitation, it being understood that American Express Financial Advisors will assume all unpaid expenses and bill the Fund for them in subsequent months but in no event can the accumulation of unpaid expenses or billing be carried past the end of the Fund's fiscal year. This agreement shall continue in effect for a period of more than one year so long as it is reapproved at least annually at a meeting called for the purpose of voting on the agreement by a vote, in person, of the members of the Board who are not interested persons of the Fund and have no financial interest in the operation of the agreement, and of all the members of the Board. This agreement may be terminated at any time without payment of any penalty by a vote of a majority of the members of the Board who are not interested persons of the Fund and have no financial interest in the operation of the agreement or by American Express Financial Advisors. The agreement will terminate automatically in the event of its assignment as that term is defined in the Investment Company Act of 1940. This agreement may be amended at any time provided the amendment is approved in the same manner the agreement was initially approved and the amendment is agreed to by American Express Financial Advisors. Approved this 20th day of March, 1995. IDS CALIFORNIA TAX-EXEMPT TRUST __________________________________ Leslie L. Ogg Vice President AMERICAN EXPRESS FINANCIAL ADVISORS INC. __________________________________ Vice President EX-99.11-AUDCON 9 11 INDEPENDENT AUDITORS' CONSENT INDEPENDENT AUDITORS' CONSENT ______________________________________________________________________________ The Board of Directors and Shareholders IDS California Tax-Exempt Trust: We consent to the use of our report incorporated herein by reference and to the references to our Firm under the headings "Financial highlights" in Part A and "INDEPENDENT AUDITORS" in Part B of the Registration Statement. /s/ KPMG Peat Marwick LLP KPMG Peat Marwick LLP Minneapolis, Minnesota February 27, 1995 EX-99.15-PADIST 10 15 FORM OF PLAN AND AGREEMENT OF DISTRIBUTION PLAN AND AGREEMENT OF DISTRIBUTION This plan and agreement is between IDS California Tax-Exempt Trust (the "Fund"), and American Express Financial Advisors Inc., the principal underwriter of the Fund, for distribution services to the Fund. It is effective on the first day the Fund offers multiple classes of shares. The plan and agreement has been approved by members of the Board of Trustees (the "Board") of the Fund who are not interested persons of the Fund and have no direct or indirect financial interest in the operation of the plan or any related agreement, and all of the members of the Board, in person, at a meeting called for the purpose of voting on the plan and agreement. The plan and agreement provides that: 1. The Fund will reimburse American Express Financial Advisors for all sales and promotional expenses attributable to the sale of Class B shares, including sales commissions, business and employee expenses charged to distribution of Class B shares, and corporate overhead appropriately allocated to the sale of Class B shares. 2. The amount of the reimbursement shall be equal on an annual basis to 0.75% of the average daily net assets of the Fund attributable to Class B shares. The amount so determined shall be paid to American Express Financial Advisors in cash within five (5) business days after the last day of each month. American Express Financial Advisorsagrees that if, at the end of any month, the expenses of the Fund, including fees under this agreement and any other agreement between the Fund and American Express Financial Advisorsor American Express Financial Corporation, but excluding taxes, brokerage commissions and charges in connection with the purchase and sale of assets exceed the most restrictive applicable state expense limitation for the Fund's current fiscal year, the Fund shall not pay fees and expenses under this agreement to the extent necessary to keep the Fund's expenses from exceeding the limitation, it being understood that American Express Financial Advisors will assume all unpaid expenses and bill the Fund for them in subsequent months, but in no event can the accumulation of unpaid expenses or billing be carried past the end of the Fund's fiscal year. 3. For each purchase of Class B shares, after eight years the Class B shares will be converted to Class A shares and those assets will no longer be included in determining the reimbursement amount. 4. The Fund understands that if a shareholder redeems Class B shares before they are converted to Class A shares, American Express Financial Advisors will impose a sales charge directly on the redemption proceeds to cover those expenses it has previously incurred on the sale of those shares. 5. American Express Financial Advisors agrees to provide at least quarterly an analysis of distribution expenses and to meet with representatives of the Fund as reasonably requested to provide additional information. 6. The plan and agreement shall continue in effect for a period of more than one year provided it is reapproved at least annually in the same manner in which it was initially approved. 7. The plan and agreement may not be amended to increase materially the amount that may be paid by the Fund without the approval of a least a majority of the outstanding shares of Class B. Any other amendment must be approved in the manner in which the plan and agreement was initially approved. 8. This agreement may be terminated at any time without payment of any penalty by a vote of a majority of the members of the Board who are not interested persons of the Fund and have no financial interest in the operation of the plan and agreement, or by vote of a majority of the outstanding Class B shares, or by American Express Financial Advisors. The plan and agreement will terminate automatically in the event of its assignment as that term is defined in the Investment Company Act of 1940. Approved this 20th day of March, 1995. IDS CALIFORNIA TAX-EXEMPT TRUST __________________________________ Leslie L. Ogg Vice President AMERICAN EXPRESS FINANCIAL ADVISORS INC. __________________________________ Vice President EX-99.17A-FDS 11 17 FINANCIAL DATA SCHEDULE [ARTICLE] 6 [PERIOD-TYPE] 6-MOS [FISCAL-YEAR-END] JUN-30-1995 [PERIOD-END] DEC-31-1994 [INVESTMENTS-AT-COST] 226241022 [INVESTMENTS-AT-VALUE] 228034493 [RECEIVABLES] 4826799 [ASSETS-OTHER] 12740 [OTHER-ITEMS-ASSETS] 0 [TOTAL-ASSETS] 232874032 [PAYABLE-FOR-SECURITIES] 981370 [SENIOR-LONG-TERM-DEBT] 0 [OTHER-ITEMS-LIABILITIES] 610983 [TOTAL-LIABILITIES] 1592353 [SENIOR-EQUITY] 0 [PAID-IN-CAPITAL-COMMON] 232569599 [SHARES-COMMON-STOCK] 46744339 [SHARES-COMMON-PRIOR] 49714953 [ACCUMULATED-NII-CURRENT] 0 [OVERDISTRIBUTION-NII] 0 [ACCUMULATED-NET-GAINS] (3444354) [OVERDISTRIBUTION-GAINS] 0 [ACCUM-APPREC-OR-DEPREC] 2156434 [NET-ASSETS] 231281679 [DIVIDEND-INCOME] 0 [INTEREST-INCOME] 8159010 [OTHER-INCOME] 0 [EXPENSES-NET] 757417 [NET-INVESTMENT-INCOME] 7401593 [REALIZED-GAINS-CURRENT] (192073) [APPREC-INCREASE-CURRENT] (8997689) [NET-CHANGE-FROM-OPS] (1788169) [EQUALIZATION] 0 [DISTRIBUTIONS-OF-INCOME] (7401630) [DISTRIBUTIONS-OF-GAINS] 0 [DISTRIBUTIONS-OTHER] 0 [NUMBER-OF-SHARES-SOLD] 1942845 [NUMBER-OF-SHARES-REDEEMED] (5938312) [SHARES-REINVESTED] 1024853 [NET-CHANGE-IN-ASSETS] (23915077) [ACCUMULATED-NII-PRIOR] 15236634 [ACCUMULATED-GAINS-PRIOR] (2375504) [OVERDISTRIB-NII-PRIOR] 0 [OVERDIST-NET-GAINS-PRIOR] 0 [GROSS-ADVISORY-FEES] 645698 [INTEREST-EXPENSE] 0 [GROSS-EXPENSE] 757417 [AVERAGE-NET-ASSETS] 230414360 [PER-SHARE-NAV-BEGIN] 5.13 [PER-SHARE-NII] .15 [PER-SHARE-GAIN-APPREC] (.18) [PER-SHARE-DIVIDEND] (.15) [PER-SHARE-DISTRIBUTIONS] 0 [RETURNS-OF-CAPITAL] 0 [PER-SHARE-NAV-END] 4.95 [EXPENSE-RATIO] .61 [AVG-DEBT-OUTSTANDING] 0 [AVG-DEBT-PER-SHARE] 0
EX-99.17B-FDS 12 FINANCIAL DATA SCHEDULE [ARTICLE] 6 [PERIOD-TYPE] 6-MOS [FISCAL-YEAR-END] JUN-30-1995 [PERIOD-END] DEC-31-1994 [INVESTMENTS-AT-COST] 63663446 [INVESTMENTS-AT-VALUE] 64891403 [RECEIVABLES] 1562267 [ASSETS-OTHER] 613041 [OTHER-ITEMS-ASSETS] 0 [TOTAL-ASSETS] 65838754 [PAYABLE-FOR-SECURITIES] 0 [SENIOR-LONG-TERM-DEBT] 0 [OTHER-ITEMS-LIABILITIES] 147624 [TOTAL-LIABILITIES] 147624 [SENIOR-EQUITY] 0 [PAID-IN-CAPITAL-COMMON] 67133922 [SHARES-COMMON-STOCK] 13028192 [SHARES-COMMON-PRIOR] 13749968 [ACCUMULATED-NII-CURRENT] 0 [OVERDISTRIBUTION-NII] 0 [ACCUMULATED-NET-GAINS] (312724) [OVERDISTRIBUTION-GAINS] 0 [ACCUM-APPREC-OR-DEPREC] (1130068) [NET-ASSETS] 65691130 [DIVIDEND-INCOME] 0 [INTEREST-INCOME] 2256616 [OTHER-INCOME] 0 [EXPENSES-NET] 236501 [NET-INVESTMENT-INCOME] 2020115 [REALIZED-GAINS-CURRENT] (8662) [APPREC-INCREASE-CURRENT] (2711084) [NET-CHANGE-FROM-OPS] (699631) [EQUALIZATION] 0 [DISTRIBUTIONS-OF-INCOME] (2020115) [DISTRIBUTIONS-OF-GAINS] 0 [DISTRIBUTIONS-OTHER] 0 [NUMBER-OF-SHARES-SOLD] 1018916 [NUMBER-OF-SHARES-REDEEMED] (2049435) [SHARES-REINVESTED] 308743 [NET-CHANGE-IN-ASSETS] (6357452) [ACCUMULATED-NII-PRIOR] 3862026 [ACCUMULATED-GAINS-PRIOR] (29934) [OVERDISTRIB-NII-PRIOR] 0 [OVERDIST-NET-GAINS-PRIOR] 0 [GROSS-ADVISORY-FEES] 181449 [INTEREST-EXPENSE] 0 [GROSS-EXPENSE] 2020115 [AVERAGE-NET-ASSETS] 69100681 [PER-SHARE-NAV-BEGIN] 5.24 [PER-SHARE-NII] .15 [PER-SHARE-GAIN-APPREC] (.20) [PER-SHARE-DIVIDEND] (.15) [PER-SHARE-DISTRIBUTIONS] 0 [RETURNS-OF-CAPITAL] 0 [PER-SHARE-NAV-END] 5.04 [EXPENSE-RATIO] .66 [AVG-DEBT-OUTSTANDING] 0 [AVG-DEBT-PER-SHARE] 0
EX-99.17C-FDS 13 FINANCIAL DATA SCHEDULE [ARTICLE] 6 [PERIOD-TYPE] 6-MOS [FISCAL-YEAR-END] JUN-30-1995 [PERIOD-END] DEC-31-1994 [INVESTMENTS-AT-COST] 73604255 [INVESTMENTS-AT-VALUE] 73714460 [RECEIVABLES] 1275887 [ASSETS-OTHER] 2730756 [OTHER-ITEMS-ASSETS] 0 [TOTAL-ASSETS] 77720833 [PAYABLE-FOR-SECURITIES] 942317 [SENIOR-LONG-TERM-DEBT] 0 [OTHER-ITEMS-LIABILITIES] 85513 [TOTAL-LIABILITIES] 1027830 [SENIOR-EQUITY] 0 [PAID-IN-CAPITAL-COMMON] 76414650 [SHARES-COMMON-STOCK] 14857463 [SHARES-COMMON-PRIOR] 14320277 [ACCUMULATED-NII-CURRENT] 0 [OVERDISTRIBUTION-NII] 0 [ACCUMULATED-NET-GAINS] 68884 [OVERDISTRIBUTION-GAINS] 0 [ACCUM-APPREC-OR-DEPREC] 209469 [NET-ASSETS] 76693003 [DIVIDEND-INCOME] 0 [INTEREST-INCOME] 2427005 [OTHER-INCOME] 0 [EXPENSES-NET] 244755 [NET-INVESTMENT-INCOME] 2182250 [REALIZED-GAINS-CURRENT] 393758 [APPREC-INCREASE-CURRENT] (3103085) [NET-CHANGE-FROM-OPS] (527077) [EQUALIZATION] 0 [DISTRIBUTIONS-OF-INCOME] (2182176) [DISTRIBUTIONS-OF-GAINS] (36289) [DISTRIBUTIONS-OTHER] 0 [NUMBER-OF-SHARES-SOLD] 1652212 [NUMBER-OF-SHARES-REDEEMED] (1432683) [SHARES-REINVESTED] 317657 [NET-CHANGE-IN-ASSETS] 10189 [ACCUMULATED-NII-PRIOR] 4171458 [ACCUMULATED-GAINS-PRIOR] (72444) [OVERDISTRIB-NII-PRIOR] 0 [OVERDIST-NET-GAINS-PRIOR] 0 [GROSS-ADVISORY-FEES] 196929 [INTEREST-EXPENSE] 0 [GROSS-EXPENSE] 244755 [AVERAGE-NET-ASSETS] 74980711 [PER-SHARE-NAV-BEGIN] 5.35 [PER-SHARE-NII] .15 [PER-SHARE-GAIN-APPREC] (.18) [PER-SHARE-DIVIDEND] (.16) [PER-SHARE-DISTRIBUTIONS] 0 [RETURNS-OF-CAPITAL] 0 [PER-SHARE-NAV-END] 5.16 [EXPENSE-RATIO] .65 [AVG-DEBT-OUTSTANDING] 0 [AVG-DEBT-PER-SHARE] 0
EX-99.17D-FDS 14 FINANCIAL DATA SCHEDULE [ARTICLE] 6 [PERIOD-TYPE] 6-MOS [FISCAL-YEAR-END] JUN-30-1995 [PERIOD-END] DEC-31-1994 [INVESTMENTS-AT-COST] 370458586 [INVESTMENTS-AT-VALUE] 367298692 [RECEIVABLES] 9136587 [ASSETS-OTHER] 0 [OTHER-ITEMS-ASSETS] 0 [TOTAL-ASSETS] 376435279 [PAYABLE-FOR-SECURITIES] 0 [SENIOR-LONG-TERM-DEBT] 0 [OTHER-ITEMS-LIABILITIES] 2737646 [TOTAL-LIABILITIES] 2737646 [SENIOR-EQUITY] 0 [PAID-IN-CAPITAL-COMMON] 382306782 [SHARES-COMMON-STOCK] 74855838 [SHARES-COMMON-PRIOR] 79123225 [ACCUMULATED-NII-CURRENT] 0 [OVERDISTRIBUTION-NII] 0 [ACCUMULATED-NET-GAINS] (6196783) [OVERDISTRIBUTION-GAINS] 0 [ACCUM-APPREC-OR-DEPREC] (2412366) [NET-ASSETS] 373697633 [DIVIDEND-INCOME] 0 [INTEREST-INCOME] 13427126 [OTHER-INCOME] 0 [EXPENSES-NET] 1366859 [NET-INVESTMENT-INCOME] 12060267 [REALIZED-GAINS-CURRENT] (4017669) [APPREC-INCREASE-CURRENT] (9537153) [NET-CHANGE-FROM-OPS] (1494555) [EQUALIZATION] 0 [DISTRIBUTIONS-OF-INCOME] (12060310) [DISTRIBUTIONS-OF-GAINS] 0 [DISTRIBUTIONS-OTHER] 0 [NUMBER-OF-SHARES-SOLD] 4816184 [NUMBER-OF-SHARES-REDEEMED] (10992248) [SHARES-REINVESTED] 1908677 [NET-CHANGE-IN-ASSETS] (34692998) [ACCUMULATED-NII-PRIOR] 24205532 [ACCUMULATED-GAINS-PRIOR] (351284) [OVERDISTRIB-NII-PRIOR] 0 [OVERDIST-NET-GAINS-PRIOR] 0 [GROSS-ADVISORY-FEES] 1043298 [INTEREST-EXPENSE] 0 [GROSS-EXPENSE] 1366859 [AVERAGE-NET-ASSETS] 397240976 [PER-SHARE-NAV-BEGIN] 5.16 [PER-SHARE-NII] .15 [PER-SHARE-GAIN-APPREC] (.17) [PER-SHARE-DIVIDEND] (.15) [PER-SHARE-DISTRIBUTIONS] 0 [RETURNS-OF-CAPITAL] 0 [PER-SHARE-NAV-END] 4.99 [EXPENSE-RATIO] .69 [AVG-DEBT-OUTSTANDING] 0 [AVG-DEBT-PER-SHARE] 0
EX-99.17E-FDS 15 FINANCIAL DATA SCHEDULE [ARTICLE] 6 [PERIOD-TYPE] 6-MOS [FISCAL-YEAR-END] JUN-30-1995 [PERIOD-END] DEC-31-1994 [INVESTMENTS-AT-COST] 109313325 [INVESTMENTS-AT-VALUE] 110422200 [RECEIVABLES] 2401529 [ASSETS-OTHER] 768849 [OTHER-ITEMS-ASSETS] 0 [TOTAL-ASSETS] 113592578 [PAYABLE-FOR-SECURITIES] 0 [SENIOR-LONG-TERM-DEBT] 0 [OTHER-ITEMS-LIABILITIES] 133955 [TOTAL-LIABILITIES] 133955 [SENIOR-EQUITY] 0 [PAID-IN-CAPITAL-COMMON] 113722468 [SHARES-COMMON-STOCK] 22978473 [SHARES-COMMON-PRIOR] 23481717 [ACCUMULATED-NII-CURRENT] 0 [OVERDISTRIBUTION-NII] 0 [ACCUMULATED-NET-GAINS] (1608405) [OVERDISTRIBUTION-GAINS] 0 [ACCUM-APPREC-OR-DEPREC] 1344560 [NET-ASSETS] 113458623 [DIVIDEND-INCOME] 0 [INTEREST-INCOME] 3883051 [OTHER-INCOME] 0 [EXPENSES-NET] 383916 [NET-INVESTMENT-INCOME] 3499135 [REALIZED-GAINS-CURRENT] (408337) [APPREC-INCREASE-CURRENT] (3796548) [NET-CHANGE-FROM-OPS] (705750) [EQUALIZATION] 0 [DISTRIBUTIONS-OF-INCOME] (13499135) [DISTRIBUTIONS-OF-GAINS] 0 [DISTRIBUTIONS-OTHER] 0 [NUMBER-OF-SHARES-SOLD] 1404397 [NUMBER-OF-SHARES-REDEEMED] (2449996) [SHARES-REINVESTED] 542355 [NET-CHANGE-IN-ASSETS] (6700009) [ACCUMULATED-NII-PRIOR] 6895342 [ACCUMULATED-GAINS-PRIOR] (505058) [OVERDISTRIB-NII-PRIOR] 0 [OVERDIST-NET-GAINS-PRIOR] 0 [GROSS-ADVISORY-FEES] 306852 [INTEREST-EXPENSE] 0 [GROSS-EXPENSE] 383916 [AVERAGE-NET-ASSETS] 116845720 [PER-SHARE-NAV-BEGIN] 5.12 [PER-SHARE-NII] .15 [PER-SHARE-GAIN-APPREC] (.18) [PER-SHARE-DIVIDEND] (.15) [PER-SHARE-DISTRIBUTIONS] 0 [RETURNS-OF-CAPITAL] 0 [PER-SHARE-NAV-END] 4.94 [EXPENSE-RATIO] .66 [AVG-DEBT-OUTSTANDING] 0 [AVG-DEBT-PER-SHARE] 0
EX-99.17F-FDS 16 FINANCIAL DATA SCHEDULE [ARTICLE] 6 [PERIOD-TYPE] 6-MOS [FISCAL-YEAR-END] JUN-30-1995 [PERIOD-END] DEC-31-1994 [INVESTMENTS-AT-COST] 67632022 [INVESTMENTS-AT-VALUE] 66747987 [RECEIVABLES] 1028517 [ASSETS-OTHER] 1080032 [OTHER-ITEMS-ASSETS] 0 [TOTAL-ASSETS] 68856536 [PAYABLE-FOR-SECURITIES] 0 [SENIOR-LONG-TERM-DEBT] 0 [OTHER-ITEMS-LIABILITIES] 80115 [TOTAL-LIABILITIES] 80115 [SENIOR-EQUITY] 0 [PAID-IN-CAPITAL-COMMON] 69882817 [SHARES-COMMON-STOCK] 13540588 [SHARES-COMMON-PRIOR] 13661035 [ACCUMULATED-NII-CURRENT] 0 [OVERDISTRIBUTION-NII] 0 [ACCUMULATED-NET-GAINS] (320250) [OVERDISTRIBUTION-GAINS] 0 [ACCUM-APPREC-OR-DEPREC] (786146) [NET-ASSETS] 68776421 [DIVIDEND-INCOME] 0 [INTEREST-INCOME] 2275088 [OTHER-INCOME] 0 [EXPENSES-NET] 231812 [NET-INVESTMENT-INCOME] 2043276 [REALIZED-GAINS-CURRENT] (15899) [APPREC-INCREASE-CURRENT] (2483813) [NET-CHANGE-FROM-OPS] (456436) [EQUALIZATION] 0 [DISTRIBUTIONS-OF-INCOME] (2043288) [DISTRIBUTIONS-OF-GAINS] 0 [DISTRIBUTIONS-OTHER] 0 [NUMBER-OF-SHARES-SOLD] 1319523 [NUMBER-OF-SHARES-REDEEMED] (1751493) [SHARES-REINVESTED] 311523 [NET-CHANGE-IN-ASSETS] (3058514) [ACCUMULATED-NII-PRIOR] 3927846 [ACCUMULATED-GAINS-PRIOR] (177991) [OVERDISTRIB-NII-PRIOR] 0 [OVERDIST-NET-GAINS-PRIOR] 0 [GROSS-ADVISORY-FEES] 185087 [INTEREST-EXPENSE] 0 [GROSS-EXPENSE] 231812 [AVERAGE-NET-ASSETS] 70481039 [PER-SHARE-NAV-BEGIN] 5.26 [PER-SHARE-NII] .15 [PER-SHARE-GAIN-APPREC] (.18) [PER-SHARE-DIVIDEND] (.15) [PER-SHARE-DISTRIBUTIONS] 0 [RETURNS-OF-CAPITAL] 0 [PER-SHARE-NAV-END] 5.08 [EXPENSE-RATIO] .66 [AVG-DEBT-OUTSTANDING] 0 [AVG-DEBT-PER-SHARE] 0
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