485BPOS 1 rava-partc.txt IDS LIFE VARIABLE ACCOUNT 10 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Pre-Effective Amendment No. [ ] Post-Effective Amendment No. 14 (File No. 333-79311) [X] and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 Amendment No. 16 (File No. 811-07355) [X] --------- (Check appropriate box or boxes) IDS LIFE VARIABLE ACCOUNT 10 -------------------------------------------------------------------------------- (Exact Name of Registrant) IDS Life Insurance Company -------------------------------------------------------------------------------- (Name of Depositor) 70100 AXP Financial Center, Minneapolis, MN 55474 -------------------------------------------------------------------------------- (Address of Depositor's Principal Executive Offices) (Zip Code) Depositor's Telephone Number, including Area Code (612) 671-3678 -------------------------------------------------------------------------------- Mary Ellyn Minenko, 50607 AXP Financial Center, Minneapolis, MN 55474 -------------------------------------------------------------------------------- (Name and Address of Agent for Service) It is proposed that this filing will become effective (check appropriate box) [ ] immediately upon filing pursuant to paragraph (b) of Rule 485 [X] on May 1, 2003 pursuant to paragraph (b) of Rule 485 [ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485 [ ] on (date) pursuant to paragraph (a)(1) of Rule 485 If appropriate, check the following box: [ ] this post-effective amendment designates a new effective date for a previously filed post-effective amendment. PROSPECTUS MAY 1, 2003 AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) INDIVIDUAL FLEXIBLE PREMIUM DEFERRED COMBINATION FIXED/VARIABLE ANNUITY NEW AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) CONTRACTS ARE NOT CURRENTLY BEING OFFERED. ISSUED BY: IDS LIFE INSURANCE COMPANY (IDS LIFE) 70100 AXP Financial Center Minneapolis, MN 55474 Telephone: (800) 862-7919 americanexpress.com IDS LIFE VARIABLE ACCOUNT 10 This prospectus contains information that you should know before investing. Prospectuses are also available for: - American Express(R) Variable Portfolio Funds - AIM Variable Insurance Funds - American Century(R) Variable Portfolios, Inc. - Calvert Variable Series, Inc. - Credit Suisse Trust - Fidelity(R) Variable Insurance Products - Service Class - Franklin(R) Templeton(R) Variable Insurance Products Trust (FTVIPT) - Class 2 - Goldman Sachs Variable Insurance Trust (VIT) - Janus Aspen Series: Service Shares - Lazard Retirement Series, Inc. - MFS(R) Variable Insurance Trust(SM) - Putnam Variable Trust - Class IB Shares - Royce Capital Fund - Third Avenue Variable Series Trust - Wanger Advisors Trust - Wells Fargo Variable Trust Funds Please read the prospectuses carefully and keep them for future reference. The contract provides for purchase payment credits which we may reverse under certain circumstances. Surrender charges from contracts with purchase payment credits may be higher than surrender charges for contracts without such credits. The amount of the credit may be more than offset by additional surrender charges associated with the credit. THE SECURITIES AND EXCHANGE COMMISSION (SEC) HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. AN INVESTMENT IN THIS CONTRACT IS NOT A DEPOSIT OF A BANK OR FINANCIAL INSTITUTION AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN THIS CONTRACT INVOLVES INVESTMENT RISK INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. A Statement of Additional Information (SAI), dated the same date as this prospectus, is incorporated by reference into this prospectus. It is filed with the SEC and is available without charge by contacting IDS Life at the telephone number and address listed above. The table of contents of the SAI is on the last page of this prospectus. The SEC maintains an Internet site. This prospectus, the SAI and other information about the product are available on the EDGAR Database on the SEC's Internet site at (http://www.sec.gov). Variable annuities are complex investment vehicles. Be sure to ask your sales representative about the variable annuity's features, benefits, risks and fees. This prospectus provides a general description of the contract. Your actual contract and any riders or endorsements are the controlling documents. IDS Life has not authorized any person to give any information or to make any representations regarding the contract other than those contained in this prospectus or the Fund prospectuses. Do not rely on any such information or representations. IDS Life and its affiliated insurance companies offer several different annuities which your sales representative may be authorized to offer to you. Each annuity has different features and benefits that may be appropriate for you based on your financial situation and needs, your age and how you intend to use the annuity. The different features and benefits may include the investment and fund manager options, variations in interest rate amount and guarantees, credits, surrender charge schedules and access to annuity account values. The fees and charges may also be different between each annuity. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 1 TABLE OF CONTENTS KEY TERMS 3 THE CONTRACT IN BRIEF 4 EXPENSE SUMMARY 6 CONDENSED FINANCIAL INFORMATION (UNAUDITED) 11 FINANCIAL STATEMENTS 20 PERFORMANCE INFORMATION 20 THE VARIABLE ACCOUNT AND THE FUNDS 21 THE FIXED ACCOUNT 28 BUYING YOUR CONTRACT 28 CHARGES 30 VALUING YOUR INVESTMENT 33 MAKING THE MOST OF YOUR CONTRACT 34 SURRENDERS 37 TSA-- SPECIAL SURRENDER PROVISIONS 38 CHANGING OWNERSHIP 38 BENEFITS IN CASE OF DEATH -- STANDARD DEATH BENEFIT 39 OPTIONAL BENEFITS 40 THE ANNUITY PAYOUT PERIOD 44 TAXES 46 VOTING RIGHTS 48 SUBSTITUTION OF INVESTMENTS 48 ABOUT THE SERVICE PROVIDERS 49 TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION 50 AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 2 KEY TERMS THESE TERMS CAN HELP YOU UNDERSTAND DETAILS ABOUT YOUR CONTRACT. ACCUMULATION UNIT: A measure of the value of each subaccount before annuity payouts begin. ANNUITANT: The person on whose life or life expectancy the annuity payouts are based. ANNUITY PAYOUTS: An amount paid at regular intervals under one of several plans. ASSUMED INVESTMENT RATE: The rate of return we assume your investments will earn when we calculate your initial annuity payout amount using the annuity table in your contract. The standard assumed investment rate we use is 5% but you may request we substitute an assumed investment rate of 3.5%. BENEFICIARY: The person you designate to receive benefits in case of the owner's or annuitant's death while the contract is in force. CLOSE OF BUSINESS: When the New York Stock Exchange (NYSE) closes, normally 4 p.m. Eastern time. CONTRACT: A deferred annuity contract that permits you to accumulate money for retirement by making one or more purchase payments. It provides for lifetime or other forms of payouts beginning at a specified time in the future. CONTRACT VALUE: The total value of your contract before we deduct any applicable charges. CONTRACT YEAR: A period of 12 months, starting on the effective date of your contract and on each anniversary of the effective date. ENHANCED EARNINGS DEATH BENEFIT (EEB): This is an optional benefit you can add to your contract for an extra charge. It is intended to provide an additional benefit to your beneficiary to help offset expenses after your death such as funeral expenses or federal and state taxes. FIXED ACCOUNT: An account to which you may allocate purchase payments. Amounts you allocate to this account earn interest at rates that we declare periodically. FUNDS: Investment options under your contract. You may allocate your purchase payments into subaccounts investing in shares of any or all of these funds. IDS LIFE: In this prospectus, "we," "us," "our" and "IDS Life" refer to IDS Life Insurance Company. MAXIMUM ANNIVERSARY VALUE DEATH BENEFIT (MAV): This is an optional benefit you can add to your contract for an extra charge that is intended to provide additional death benefit protection in the event of fluctuating fund values. OWNER (YOU, YOUR): The person who controls the contract (decides on investment allocations, transfers, payout options, etc.). Usually, but not always, the owner is also the annuitant. The owner is responsible for taxes, regardless of whether he or she receives the contract's benefits. PURCHASE PAYMENT CREDITS: An addition we make to your contract value. We base the amount of the credit on the surrender charge schedule you elect and/or total purchase payments. QUALIFIED ANNUITY: A contract that you purchase to fund one of the following tax-deferred retirement plans that is subject to applicable federal law and any rules of the plan itself: - Individual Retirement Annuities (IRAs) under Section 408(b) of the Internal Revenue Code of 1986, as amended (the Code) - Roth IRAs under Section 408A of the Code - SIMPLE IRAs under Section 408(p) of the Code - Simplified Employee Pension (SEP) plans under Section 408(k) of the Code - Plans under Section 401(k) of the Code - Custodial and trusteed plans under Section 401(a) of the Code - Tax-Sheltered Annuities (TSAs) under Section 403(b) of the Code A qualified annuity will not provide any necessary or additional tax deferral if it is used to fund a retirement plan that is already tax deferred. All other contracts are considered NONQUALIFIED ANNUITIES. RIDER: You receive a rider when you purchase the EEB and/or MAV. The rider adds the terms of the optional benefit to your contract. RIDER EFFECTIVE DATE: The date you add a rider to your contract. SETTLEMENT DATE: The date when annuity payouts are scheduled to begin. SURRENDER VALUE: The amount you are entitled to receive if you make a full surrender from your contract. It is the contract value minus any applicable charges. VALUATION DATE: Any normal business day, Monday through Friday, that the NYSE is open. Each valuation date ends at the close of business. We calculate the value of each subaccount at the close of business on each valuation date. VARIABLE ACCOUNT: Consists of separate subaccounts to which you may allocate purchase payments; each invests in shares of one fund. The value of your investment in each subaccount changes with the performance of the particular fund. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 3 THE CONTRACT IN BRIEF PURPOSE: The purpose of the contract is to allow you to accumulate money for retirement. You do this by making one or more purchase payments. You may allocate your purchase payments to the fixed account and/or subaccounts under the contract. These accounts, in turn, may earn returns that increase the value of the contract. Beginning at a specified time in the future called the settlement date, the contract provides lifetime or other forms of payouts of your contract value (less any applicable premium tax). Most annuities have a tax-deferred feature. So do many retirement plans under the Code. As a result, when you use the contract to fund a retirement plan that is tax deferred, your contract will not provide any necessary or additional tax deferral for that retirement plan. But the contract has features other than tax deferral that may help you reach your retirement goals. You should consult your tax advisor for an explanation of the tax implications to you. FREE LOOK PERIOD: You may return your contract to your sales representative or to our office within the time stated on the first page of your contract and receive a full refund of the contract value, less the amount of any purchase payment credits. (See "Valuing Your Investment -- Purchase payment credits.") We will not deduct any other charges. However, you bear the investment risk from the time of purchase until you return the contract; the refund amount may be more or less than the payment you made. (Exception: If the law requires, we will refund all of your purchase payments.) ACCOUNTS: Currently, you may allocate your purchase payments among any or all of: - the subaccounts, each of which invests in a fund with a particular investment objective. The value of each subaccount varies with the performance of the particular fund in which it invests. We cannot guarantee that the value at the settlement date will equal or exceed the total purchase payments you allocate to the subaccounts. (p. 21) - the fixed account, which earns interest at a rate that we adjust periodically. (p. 28) BUYING YOUR CONTRACT: We no longer offer new contracts. However, you have the option of making additional purchase payments in the future. (p. 28) MINIMUM ALLOWABLE PURCHASE PAYMENTS If paying by installments under a scheduled payment plan: $23.08 biweekly, or $50 per month If paying by any other method: $50 MAXIMUM ALLOWABLE ANNUAL PURCHASE PAYMENTS $100,000 up to age 85 $50,000 for ages 86 to 90 AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 4 TRANSFERS: Subject to certain restrictions, you currently may redistribute your contract value among the accounts without charge at any time until annuity payouts begin, and once per contract year among the subaccounts after annuity payouts begin. You may establish automated transfers among the accounts. Fixed account transfers are subject to special restrictions. (p. 35) SURRENDERS: You may surrender all or part of your contract value at any time before the settlement date. You also may establish automated partial surrenders. Surrenders may be subject to charges and tax penalties (including an IRS penalty if you surrender prior to your reaching age 59 1/2) and may have other tax consequences; also, certain restrictions apply. (p. 37) CHANGING OWNERSHIP: You may change ownership of a nonqualified annuity by written instruction, but this may have federal income tax consequences. Restrictions apply to changing ownership of a qualified annuity. (p. 38) BENEFITS IN CASE OF DEATH: If you or the annuitant die before annuity payouts begin, we will pay the beneficiary an amount at least equal to the contract value. (p. 39) OPTIONAL BENEFITS: This contract offers optional features that are available for additional charges if you meet certain criteria. (p. 40) ANNUITY PAYOUTS: You can apply your contract value to an annuity payout plan that begins on the settlement date. You may choose from a variety of plans to make sure that payouts continue as long as you like. If you purchased a qualified annuity, the payout schedule must meet the requirements of the tax-deferred retirement plan. We can make payouts on a fixed or variable basis, or both. Total monthly payouts may include amounts from each subaccount and the fixed account. During the annuity payout period, you cannot be invested in more than five subaccounts at any one time unless we agree otherwise. (p. 44) TAXES: Generally, your contract grows tax deferred until you surrender it or begin to receive payouts. (Under certain circumstances, IRS penalty taxes may apply.) Even if you direct payouts to someone else, you will be taxed on the income if you are the owner. (p. 46) CHARGES: We assess certain charges in connection with your contract: - $30 annual contract administrative charge; - for nonqualified annuities a 0.95% mortality and expense risk fee (if you allocate money to one or more subaccounts); - for qualified annuities a 0.75% mortality and expense risk fee (if you allocate money to one or more subaccounts); - surrender charge; - any premium taxes that may be imposed on us by state or local governments (currently, we deduct any applicable premium tax when annuity payouts begin but we reserve the right to deduct this tax at other times such as when you make purchase payments or when you surrender your contract); - the operating expenses of the funds in which the subaccounts invest; - if you select the MAV, an annual fee of 0.15% of the contract value; and - if you select the EEB, an annual fee of 0.30% of the contract value. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 5 EXPENSE SUMMARY THE FOLLOWING TABLES DESCRIBE THE FEES AND EXPENSES THAT ARE PAID WHEN BUYING, OWNING AND SURRENDERING THE CONTRACT. THE FIRST TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU PAID AT THE TIME THAT YOU BOUGHT THE CONTRACT AND MAY PAY WHEN YOU SURRENDER THE CONTRACT. STATE PREMIUM TAXES ALSO MAY BE DEDUCTED. CONTRACT OWNER TRANSACTION EXPENSES SURRENDER CHARGE (Contingent deferred sales load as a percentage of purchase payment surrendered) The owner selects either a seven-year or ten-year surrender charge schedule at the time of application.*
SEVEN-YEAR SCHEDULE TEN-YEAR SCHEDULE* YEARS FROM PURCHASE SURRENDER CHARGE YEARS FROM PURCHASE SURRENDER CHARGE PAYMENT RECEIPT PERCENTAGE PAYMENT RECEIPT PERCENTAGE 1 7% 1 8% 2 7 2 8 3 7 3 8 4 6 4 7 5 5 5 7 6 4 6 6 7 2 7 5 Thereafter 0 8 4 9 3 10 2 Thereafter 0
* Ten-year surrender charge schedule is not available for contracts issued in Oregon. For contracts issued in Massachusetts, Oregon and Washington, surrender charges are waived after the tenth contract anniversary. A surrender charge also applies to payouts under certain annuity payout plans (see "Charges -- Surrender Charge" p. 31 and "The Annuity Payout Period -- Annuity Payout Plans" p. 45). THE NEXT TWO TABLES DESCRIBE THE FEES AND EXPENSES THAT YOU WILL PAY PERIODICALLY DURING THE TIME THAT YOU OWN THE CONTRACT, NOT INCLUDING FUND FEES AND EXPENSES. PERIODIC EXPENSES ANNUAL CONTRACT ADMINISTRATIVE CHARGE $ 30 (We will waive this charge when your contract value, or total purchase payments less any payments surrendered, is $50,000 or more on the current contract anniversary, except at full surrender.) MAV RIDER FEE 0.15%** (As a percentage of the contract value charged annually at the contract anniversary.) EEB RIDER FEE 0.30%** (As a percentage of the contract value charged annually at the contract anniversary.)
ANNUAL VARIABLE ACCOUNT EXPENSES (As a percentage of average subaccount value.)
MORTALITY AND EXPENSE RISK FEE FOR NONQUALIFIED ANNUITIES 0.95% FOR QUALIFIED ANNUITIES 0.75%
** This fee applies only if you elect this optional feature. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 6 ANNUAL OPERATING EXPENSES OF THE FUNDS THE NEXT TWO TABLES DESCRIBE THE OPERATING EXPENSES OF THE FUNDS. THE FIRST TABLE SHOWS THE MINIMUM AND MAXIMUM TOTAL OPERATING EXPENSES CHARGED BY THE FUNDS THAT YOU MAY PAY PERIODICALLY DURING THE TIME THAT YOU OWN THE CONTRACT. THE SECOND TABLE SHOWS THE ACTUAL FEES AND EXPENSES CHARGED BY EACH FUND FOR THE LAST FISCAL YEAR. MORE DETAIL CONCERNING EACH FUND'S FEES AND EXPENSES IS CONTAINED IN THE PROSPECTUS FOR EACH FUND. MINIMUM AND MAXIMUM TOTAL ANNUAL OPERATING EXPENSES FOR THE FUNDS (Including management fee, distribution and/or service (12b-1) fees and other expenses)
MINIMUM MAXIMUM Total expenses before contractual fee waivers and/or expense reimbursements .69% 3.14%
TOTAL ANNUAL OPERATING EXPENSES FOR EACH FUND (Before fee waivers and/or expense reimbursements, if applicable, as a percentage of average daily net assets)
GROSS TOTAL MANAGEMENT 12b-1 OTHER ANNUAL FEES FEES EXPENSES EXPENSES AXP(R) Variable Portfolio - Blue Chip Advantage Fund .53% .13% .13% .79%(1) Bond Fund .60 .13 .07 .80(1) Capital Resource Fund .62 .13 .05 .80(1) Cash Management Fund .51 .13 .05 .69(1) Diversified Equity Income Fund .56 .13 .18 .87(1) Emerging Markets Fund 1.18 .13 1.05 2.36(2) Equity Select Fund .69 .13 .57 1.39(2) Extra Income Fund .62 .13 .08 .83(1) Federal Income Fund .61 .13 .09 .83(1) Global Bond Fund .84 .13 .11 1.08(1) Growth Fund .56 .13 .12 .81(1) International Fund .84 .13 .10 1.07(1) Managed Fund .60 .13 .04 .77(1) NEW DIMENSIONS FUND(R) .61 .13 .05 .79(1) S&P 500 Index Fund .29 .13 .40 .82(2) Small Cap Advantage Fund .73 .13 .25 1.11(1) Strategy Aggressive Fund .62 .13 .06 .81(1) AIM V.I. Capital Appreciation Fund, Series I Shares .61 -- .24 .85(3) Capital Development Fund, Series I Shares .75 -- .39 1.14(3) American Century(R) Variable Portfolios, Inc. VP International, Class I 1.30 -- -- 1.30(4) VP Value, Class I .95 -- -- .95(4) Calvert Variable Series, Inc. Social Balanced Portfolio .70 -- .21 .91(5) Credit Suisse Trust Emerging Growth Portfolio .90 -- .46 1.36(6) Fidelity(R) VIP Growth & Income Portfolio Service Class .48 .10 .11 .69(7) Mid Cap Portfolio Service Class .58 .10 .12 .80(7) Overseas Portfolio Service Class .73 .10 .17 1.00(7)
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 7 TOTAL ANNUAL OPERATING EXPENSES FOR EACH FUND (CONTINUED) (Before fee waivers and/or expense reimbursements, if applicable, as a percentage of average daily net assets)
GROSS TOTAL MANAGEMENT 12b-1 OTHER ANNUAL FEES FEES EXPENSES EXPENSES FTVIPT Franklin Real Estate Fund - Class 2 .53% .25% .04% .82%(8),(9) Franklin Small Cap Value Securities Fund - Class 2 .59 .25 .20 1.04(9),(10) Templeton Foreign Securities Fund - Class 2 .70 .25 .20 1.15(9),(10) Goldman Sachs VIT CORE(SM) Small Cap Equity Fund .75 -- .50 1.25(11) CORE(SM) U.S. Equity Fund .70 -- .16 .86(11) Mid Cap Value Fund .80 -- .13 .93(11) Janus Aspen Series Global Technology Portfolio: Service Shares .65 .25 .07 .97(12) International Growth Portfolio: Service Shares .65 .25 .09 .99(12) Mid Cap Growth Portfolio: Service Shares .65 .25 .02 .92(12) (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) Lazard Retirement Series International Equity Portfolio .75 .25 .65 1.65(13) MFS(R) Investors Growth Stock Series - Service Class .75 .25 .13 1.13(14),(15) New Discovery Series - Service Class .90 .25 .15 1.30(14),(15) Putnam Variable Trust Putnam VT International New Opportunities Fund - Class IB Shares 1.00 .25 .27 1.52(7) Putnam VT Vista Fund - Class IB Shares .64 .25 .10 .99(7) Royce Capital Fund Micro-Cap Portfolio 1.25 -- .13 1.38(16) Third Avenue Value Portfolio .90 -- .40 1.30(17) Wanger International Small Cap 1.24 -- .23 1.47(18) U.S. Smaller Companies .94 -- .11 1.05(18) Wells Fargo VT Asset Allocation Fund .55 .25 .23 1.03(19) International Equity Fund .75 .25 2.14 3.14(19) Small Cap Growth Fund .75 .25 .33 1.33(19)
We entered into certain arrangements under which it is compensated by the funds' advisers and/or distributors for the administrative services it provides to these funds. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 8 (1) The Fund's expense figures are based on actual expenses for the fiscal year ended Aug. 31, 2002. (2) The Fund's expense figures are based on actual expenses, before fee waivers and expense reimbursements, for the fiscal year ending Aug. 31, 2002. Through April 3, 2003, IDS Life and AEFC have agreed to waive certain fees and reimburse expenses to the extent that total expenses exceed the following percentage of Fund average daily net assets. "Gross total annual expenses" after these fee waivers and expense reimbursements would have been 1.75% for AXP(R) Variable Portfolio - Emerging Markets Fund, 1.10% for AXP(R) Variable Portfolio - Equity Select Fund and 0.495% for AXP(R) Variable Portfolio - S&P 500 Index Fund. (3) Figures shown in the table are for the year ended Dec. 31, 2002 and are expressed as a percentage of Fund average daily net assets. There is no guarantee that actual expenses will be the same as those shown in the table. (4) Annualized operating expenses of funds at Dec. 31, 2002. The Fund has a stepped fee schedule. As a result, the Fund's management fee generally decreases as fund assets increase. (5) Expenses are based on the Portfolio's most recent fiscal year. Management fees include the Subadvisory fee paid by the Advisor (Calvert Asset Management Company, Inc.) and the administrative fee paid by the Portfolio to Calvert Administrative Services Company, an affiliate of the Advisor. (6) Expenses are shown before fee waivers and expense reimbursements. Fee waivers and expense reimbursements or credits are expected to reduce expenses for the Emerging Growth Portfolio during 2003 but may be discontinued at any time. The total expense ratios after the waiver and reimbursements would have been: Credit Suisse Trust Emerging Growth Portfolio (.79%, 0%, .46% and 1.25%). (7) The Fund's expense figures are based on actual expenses for the fiscal year ended Dec. 31, 2002. (8) The Fund administration fee is paid indirectly through the management fee. (9) The Fund's Class 2 distribution plan or "Rule 12b-1 plan" is described in the Fund's prospectus. (10) The manager had agreed in advance to reduce its fee to reflect reduced services resulting from the fund's investment in a Franklin Templeton money fund for cash management. This reduction is required by the Fund's Board of Trustees and an exemptive order of the Securities and Exchange Commission. (11) Goldman Sachs Asset Management, L.P. and Goldman Sachs Asset Management International, the investment advisers to the funds, have voluntarily agreed to reduce or limit certain "Other expenses" of such funds (excluding management fees, transfer agent fees, taxes, interest, brokerage fees, litigation, indemnification, shareholder meeting and other extraordinary expenses) to the extent that such expenses exceed 0.29%, 0.24% and 0.29% of the average daily net assets of the CORE(SM) Small Cap Equity, CORE(SM) US. Equity, and Mid Cap Value Fund, respectively. The expenses shown do not include these expense reductions and limitations. There were no expense reductions and limitations for Mid Cap Value or CORE(SM) U.S. Equity for the period ended Dec. 31, 2002. The expense reductions or limitations may be discontinued or modified by the investment adviser at their discretion at any time. CORE(SM) is a service mark of Goldman, Sachs & Co. (12) Expenses are based upon expenses for the fiscal year ended Dec. 31, 2002. All expenses are shown without the effect of expense offset arrangements. (13) The Investment Manager of the Portfolios has voluntarily agreed, for the year ended Dec. 31, 2002, to reduce its fees and, if necessary, reimburse the Portfolio's expenses to the extent that annualized operating expenses exceed 1.25% of the respective Portfolio's average net assets. After fee waivers and expense reimbursements "Other expense" and "Gross total annual expenses" would be 0.25% and 1.25% for Lazard Retirement International Equity Portfolio. (14) Each series has adopted a distribution plan under Rule 12b-1 that permits it to pay marketing and other fees to support the sales and distribution of service class shares (these fees are referred to as distribution fees). (15) Each series has an expense offset arrangement that reduces the series' custodian fee based upon the amount of cash maintained by the series with its custodian and dividend disbursing agent. Each series may enter into other similar arrangements and directed brokerage arrangements, which would also have the effect of reducing the series' expenses. "Other expenses" do not take into account these fee reductions, and are therefore higher than the actual expenses of the series. Had these fee reductions been taken into account, "Gross total annual expenses" would be lower for certain series and would equal: 1.12% for Investors Growth Stock Series and 1.29% for New Discovery Series. (16) Royce has contractually agreed to waive its fees and reimburse expenses to the extent necessary to maintain the Funds Net Annual Operating Expense ratio at or below 1.35% through Dec. 31, 2003 and 1.99% through Dec. 31, 2010. After fee waivers "Other expenses" and "Gross total annual expenses" would be 0.10% and 1.35% for Royce Micro-Cap Portfolio. (17) The Fund's expenses figures are based on actual expenses before fee waivers and expense reimbursements, for the fiscal year ending Dec. 31, 2002. After fee waivers and expense reimbursements "Other expenses" and "Gross total annual expenses" would be 0.35% and 1.25% for Third Avenue Value Portfolio. Waivers and/or reimbursements are voluntary and may be terminated at the managers discretion. (18) Figures in "Management fees," "12b-1 fees," "Other expenses," and "Gross total annual expenses" are based on actual expenses for the fiscal year ended Dec. 31, 2002. Liberty Wanger Asset Management, L.P. will reimburse the Fund if its annual ordinary operating expenses exceed 2.00% of average daily net assets. This commitment expires on July 31, 2003. (19) Other expenses have been adjusted as necessary from amounts incurred during the Funds' most recent fiscal year to reflect current fees and expenses. Other expenses may include expenses payable to affiliates of Wells Fargo & Company. The adviser has committed through April 30, 2004 to waive fees and/or reimburse the expenses to the extent necessary to maintain the Fund's net operating expense ratio as follows. After fee waivers and expense reimbursements "Other expenses" and "Gross total annual expenses" would be 0.20% and 1.00% for Wells Fargo VT Asset Allocation Fund, 0% and 1.00% for Wells Fargo VT International Equity Fund and 0.20% and 1.20% for Wells Fargo VT Small Cap Growth Fund. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 9 EXAMPLES THESE EXAMPLES ARE INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN THESE CONTRACTS WITH THE COST OF INVESTING IN OTHER VARIABLE ANNUITY CONTRACTS. THESE COSTS INCLUDE YOUR TRANSACTION EXPENSES, CONTRACT ADMINISTRATIVE CHARGES*, VARIABLE ACCOUNT ANNUAL EXPENSES AND FUND FEES AND EXPENSES. THESE EXAMPLES ASSUME THAT YOU INVEST $10,000 IN THE CONTRACT FOR THE TIME PERIODS INDICATED. THESE EXAMPLES ALSO ASSUME THAT YOUR INVESTMENT HAS A 5% RETURN EACH YEAR. MAXIMUM EXPENSES. These examples assume the most expensive combination of contract features and benefits and the maximum fees and expense of any of the funds. They assume that you select both the optional MAV and EEB. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
IF YOU DO NOT SURRENDER YOUR CONTRACT IF YOU SURRENDER YOUR CONTRACT OR IF YOU SELECT AN ANNUITY PAYOUT PLAN AT THE END OF THE APPLICABLE TIME PERIOD: AT THE END OF THE APPLICABLE TIME PERIOD: NONQUALIFIED ANNUITY 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS RAVA with a ten-year surrender charge schedule $1,272.12 $2,220.30 $3,073.78 $4,980.83 $472.12 $1,420.30 $2,373.78 $4,780.83 RAVA with a seven-year surrender charge schedule 1,172.12 2,120.30 2,873.78 4,780.83 472.12 1,420.30 2,373.78 4,780.83 QUALIFIED ANNUITY 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS RAVA with a ten-year surrender charge schedule $1,251.62 $2,161.41 $2,980.03 $4,815.76 $451.62 $1,361.41 $2,280.03 $4,615.76 RAVA with a seven-year surrender charge schedule 1,151.62 2,061.41 2,780.03 4,615.76 451.62 1,361.41 2,280.03 4,615.76
MINIMUM EXPENSES. These examples assume the least expensive combination of contract features and benefits and the minimum fees and expenses of any of the funds. They assume that you do not select any optional benefits. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
IF YOU DO NOT SURRENDER YOUR CONTRACT IF YOU SURRENDER YOUR CONTRACT OR IF YOU SELECT AN ANNUITY PAYOUT PLAN AT THE END OF THE APPLICABLE TIME PERIOD: AT THE END OF THE APPLICABLE TIME PERIOD: NONQUALIFIED ANNUITY 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS RAVA with a ten-year surrender charge schedule $974.87 $1,341.84 $1,633.06 $2,227.99 $174.87 $541.84 $933.06 $2,027.99 RAVA with a seven-year surrender charge schedule 874.87 1,241.84 1,433.06 2,027.99 174.87 541.84 933.06 2,027.99 QUALIFIED ANNUITY 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS RAVA with a ten-year surrender charge schedule $954.37 $1,279.29 $1,527.06 $2,007.27 $154.37 $479.29 $827.06 $1,807.27 RAVA with a seven-year surrender charge schedule 854.37 1,179.29 1,327.06 1,807.27 154.37 479.29 827.06 1,807.27
* In these examples, the $30 contract administrative charge is approximated as a .066% charge. This percentage was determined by dividing the total amount of the contract administrative charges collected during the year that are attributable to the contract by the total average net assets that are attributable to the contract. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 10 CONDENSED FINANCIAL INFORMATION (UNAUDITED) The following tables give per-unit information about the financial history of each subaccount.
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT BC1(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - BLUE CHIP ADVANTAGE FUND) Accumulation unit value at beginning of period $ 0.81 $ 0.98 $ 1.11 $ 1.00 Accumulation unit value at end of period $ 0.62 $ 0.81 $ 0.98 $ 1.11 Number of accumulation units outstanding at end of period (000 omitted) 44,110 49,897 43,161 8,145 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT BC2(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - BLUE CHIP ADVANTAGE FUND) Accumulation unit value at beginning of period $ 0.82 $ 0.99 $ 1.11 $ 1.00 Accumulation unit value at end of period $ 0.63 $ 0.82 $ 0.99 $ 1.11 Number of accumulation units outstanding at end of period (000 omitted) 39,019 41,083 32,624 7,503 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT BD1(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - BOND FUND) Accumulation unit value at beginning of period $ 1.13 $ 1.06 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.18 $ 1.13 $ 1.06 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 159,405 106,760 43,920 11,675 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT BD2(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - BOND FUND) Accumulation unit value at beginning of period $ 1.13 $ 1.06 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.19 $ 1.13 $ 1.06 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 154,530 83,968 30,783 7,186 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT CR1(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - CAPITAL RESOURCE FUND) Accumulation unit value at beginning of period $ 0.76 $ 0.93 $ 1.14 $ 1.00 Accumulation unit value at end of period $ 0.58 $ 0.76 $ 0.93 $ 1.14 Number of accumulation units outstanding at end of period (000 omitted) 34,956 26,779 22,159 3,227 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT CR2(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - CAPITAL RESOURCE FUND) Accumulation unit value at beginning of period $ 0.76 $ 0.93 $ 1.14 $ 1.00 Accumulation unit value at end of period $ 0.59 $ 0.76 $ 0.93 $ 1.14 Number of accumulation units outstanding at end of period (000 omitted) 52,124 26,327 24,003 5,333 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT CM1(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND) Accumulation unit value at beginning of period $ 1.09 $ 1.06 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.09 $ 1.09 $ 1.06 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 228,237 265,455 203,922 87,424 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% Simple yield(2) (0.17%) 0.65% 4.96% 5.03% Compound yield(2) (0.17%) 0.65% 5.08% 5.16% SUBACCOUNT CM2(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND) Accumulation unit value at beginning of period $ 1.09 $ 1.06 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.10 $ 1.09 $ 1.06 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 255,251 243,870 171,785 65,522 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% Simple yield(2) 0.01% 0.82% 5.16% 5.26% Compound yield(2) 0.01% 0.82% 5.29% 5.40% SUBACCOUNT DE1(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND) Accumulation unit value at beginning of period $ 1.02 $ 1.01 $ 1.03 $ 1.00 Accumulation unit value at end of period $ 0.82 $ 1.02 $ 1.01 $ 1.03 Number of accumulation units outstanding at end of period (000 omitted) 67,958 41,299 14,227 3,441 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95%
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 11
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT DE2(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND) Accumulation unit value at beginning of period $ 1.02 $ 1.01 $ 1.03 $ 1.00 Accumulation unit value at end of period $ 0.82 $ 1.02 $ 1.01 $ 1.03 Number of accumulation units outstanding at end of period (000 omitted) 86,442 43,328 12,124 3,149 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT EM1(3) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - EMERGING MARKETS FUND) Accumulation unit value at beginning of period $ 0.72 $ 0.74 $ 1.00 -- Accumulation unit value at end of period $ 0.67 $ 0.72 $ 0.74 -- Number of accumulation units outstanding at end of period (000 omitted) 3,888 1,542 693 -- Ratio of operating expense to average net assets 0.95% 0.95% 0.95% -- SUBACCOUNT EM2(3) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - EMERGING MARKETS FUND) Accumulation unit value at beginning of period $ 0.72 $ 0.74 $ 1.00 -- Accumulation unit value at end of period $ 0.68 $ 0.72 $ 0.74 -- Number of accumulation units outstanding at end of period (000 omitted) 4,750 1,789 906 -- Ratio of operating expense to average net assets 0.75% 0.75% 0.75% -- SUBACCOUNT ES1(4) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - EQUITY SELECT FUND) Accumulation unit value at beginning of period $ 0.99 $ 1.00 -- -- Accumulation unit value at end of period $ 0.85 $ 0.99 -- -- Number of accumulation units outstanding at end of period (000 omitted) 12,145 2,238 -- -- Ratio of operating expense to average net assets 0.95% 0.95% -- -- SUBACCOUNT ES2(4) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - EQUITY SELECT FUND) Accumulation unit value at beginning of period $ 1.00 $ 1.00 -- -- Accumulation unit value at end of period $ 0.85 $ 1.00 -- -- Number of accumulation units outstanding at end of period (000 omitted) 16,388 2,489 -- -- Ratio of operating expense to average net assets 0.75% 0.75% -- -- SUBACCOUNT EI1(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - EXTRA INCOME FUND) Accumulation unit value at beginning of period $ 0.94 $ 0.91 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 0.87 $ 0.94 $ 0.91 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 122,784 88,813 52,655 10,137 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT EI2(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - EXTRA INCOME FUND) Accumulation unit value at beginning of period $ 0.95 $ 0.91 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 0.88 $ 0.95 $ 0.91 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 93,845 58,348 31,722 7,774 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT FI1(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - FEDERAL INCOME FUND) Accumulation unit value at beginning of period $ 1.13 $ 1.08 $ 1.00 $ 1.00 Accumulation unit value at end of period $ 1.19 $ 1.13 $ 1.08 $ 1.00 Number of accumulation units outstanding at end of period (000 omitted) 116,147 56,966 24,654 12,796 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT FI2(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - FEDERAL INCOME FUND) Accumulation unit value at beginning of period $ 1.14 $ 1.08 $ 1.00 $ 1.00 Accumulation unit value at end of period $ 1.20 $ 1.14 $ 1.08 $ 1.00 Number of accumulation units outstanding at end of period (000 omitted) 124,866 50,510 16,258 11,135 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT GB1(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - GLOBAL BOND FUND) Accumulation unit value at beginning of period $ 1.03 $ 1.02 $ 1.00 $ 1.00 Accumulation unit value at end of period $ 1.17 $ 1.03 $ 1.02 $ 1.00 Number of accumulation units outstanding at end of period (000 omitted) 36,626 23,970 14,137 2,368 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT GB2(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - GLOBAL BOND FUND) Accumulation unit value at beginning of period $ 1.03 $ 1.03 $ 1.00 $ 1.00 Accumulation unit value at end of period $ 1.18 $ 1.03 $ 1.03 $ 1.00 Number of accumulation units outstanding at end of period (000 omitted) 31,133 16,572 8,968 1,552 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75%
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 12
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT GR1(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - GROWTH FUND) Accumulation unit value at beginning of period $ 0.64 $ 0.94 $ 1.18 $ 1.00 Accumulation unit value at end of period $ 0.47 $ 0.64 $ 0.94 $ 1.18 Number of accumulation units outstanding at end of period (000 omitted) 118,986 130,764 106,410 13,813 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT GR2(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - GROWTH FUND) Accumulation unit value at beginning of period $ 0.65 $ 0.95 $ 1.18 $ 1.00 Accumulation unit value at end of period $ 0.48 $ 0.65 $ 0.95 $ 1.18 Number of accumulation units outstanding at end of period (000 omitted) 135,693 129,186 97,754 16,891 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT IE1(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - INTERNATIONAL FUND) Accumulation unit value at beginning of period $ 0.67 $ 0.95 $ 1.27 $ 1.00 Accumulation unit value at end of period $ 0.54 $ 0.67 $ 0.95 $ 1.27 Number of accumulation units outstanding at end of period (000 omitted) 19,189 18,664 15,670 2,173 Ratio of operating expenses to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT IE2(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - INTERNATIONAL FUND) Accumulation unit value at beginning of period $ 0.67 $ 0.95 $ 1.27 $ 1.00 Accumulation unit value at end of period $ 0.55 $ 0.67 $ 0.95 $ 1.27 Number of accumulation units outstanding at end of period (000 omitted) 20,012 15,821 13,967 2,575 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT MF1(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - MANAGED FUND) Accumulation unit value at beginning of period $ 0.93 $ 1.05 $ 1.09 $ 1.00 Accumulation unit value at end of period $ 0.80 $ 0.93 $ 1.05 $ 1.09 Number of accumulation units outstanding at end of period (000 omitted) 64,613 53,096 39,810 6,539 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT MF2(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - MANAGED FUND) Accumulation unit value at beginning of period $ 0.94 $ 1.05 $ 1.09 $ 1.00 Accumulation unit value at end of period $ 0.81 $ 0.94 $ 1.05 $ 1.09 Number of accumulation units outstanding at end of period (000 omitted) 64,273 37,760 28,348 5,220 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT ND1(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)) Accumulation unit value at beginning of period $ 0.88 $ 1.07 $ 1.19 $ 1.00 Accumulation unit value at end of period $ 0.68 $ 0.88 $ 1.07 $ 1.19 Number of accumulation units outstanding at end of period (000 omitted) 347,841 307,320 219,316 32,483 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT ND2(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)) Accumulation unit value at beginning of period $ 0.89 $ 1.07 $ 1.19 $ 1.00 Accumulation unit value at end of period $ 0.69 $ 0.89 $ 1.07 $ 1.19 Number of accumulation units outstanding at end of period (000 omitted) 373,715 276,054 177,036 31,537 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT IV1(3) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - S&P 500 INDEX FUND) Accumulation unit value at beginning of period $ 0.79 $ 0.91 $ 1.00 -- Accumulation unit value at end of period $ 0.60 $ 0.79 $ 0.91 -- Number of accumulation units outstanding at end of period (000 omitted) 65,011 40,575 14,084 -- Ratio of operating expense to average net assets 0.95% 0.95% 0.95% -- SUBACCOUNT IV2(3) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - S&P 500 INDEX FUND) Accumulation unit value at beginning of period $ 0.79 $ 0.91 $ 1.00 -- Accumulation unit value at end of period $ 0.61 $ 0.79 $ 0.91 -- Number of accumulation units outstanding at end of period (000 omitted) 64,771 35,957 9,812 -- Ratio of operating expense to average net assets 0.75% 0.75% 0.75% -- SUBACCOUNT SC1(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND) Accumulation unit value at beginning of period $ 1.07 $ 1.16 $ 1.12 $ 1.00 Accumulation unit value at end of period $ 0.88 $ 1.07 $ 1.16 $ 1.12 Number of accumulation units outstanding at end of period (000 omitted) 29,341 24,346 16,349 3,029 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95%
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 13
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT SC2(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND) Accumulation unit value at beginning of period $ 1.08 $ 1.16 $ 1.12 $ 1.00 Accumulation unit value at end of period $ 0.89 $ 1.08 $ 1.16 $ 1.12 Number of accumulation units outstanding at end of period (000 omitted) 29,202 22,792 14,830 2,970 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT SA1(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND) Accumulation unit value at beginning of period $ 0.81 $ 1.21 $ 1.51 $ 1.00 Accumulation unit value at end of period $ 0.54 $ 0.81 $ 1.21 $ 1.51 Number of accumulation units outstanding at end of period (000 omitted) 55,183 65,574 58,414 3,901 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT SA2(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND) Accumulation unit value at beginning of period $ 0.81 $ 1.22 $ 1.51 $ 1.00 Accumulation unit value at end of period $ 0.55 $ 0.81 $ 1.22 $ 1.51 Number of accumulation units outstanding at end of period (000 omitted) 58,958 58,748 46,978 4,470 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT 1CA(1) (INVESTING IN SHARES OF AIM V.I. CAPITAL APPRECIATION FUND, SERIES I SHARES) Accumulation unit value at beginning of period $ 0.88 $ 1.16 $ 1.31 $ 1.00 Accumulation unit value at end of period $ 0.66 $ 0.88 $ 1.16 $ 1.31 Number of accumulation units outstanding at end of period (000 omitted) 48,704 55,044 46,419 5,160 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT 2CA(1) (INVESTING IN SHARES OF AIM V.I. CAPITAL APPRECIATION FUND, SERIES I SHARES) Accumulation unit value at beginning of period $ 0.88 $ 1.16 $ 1.31 $ 1.00 Accumulation unit value at end of period $ 0.66 $ 0.88 $ 1.16 $ 1.31 Number of accumulation units outstanding at end of period (000 omitted) 46,932 49,574 37,379 4,337 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT 1CD(1) (INVESTING IN SHARES OF AIM V.I. CAPITAL DEVELOPMENT FUND, SERIES I SHARES) Accumulation unit value at beginning of period $ 1.25 $ 1.37 $ 1.26 $ 1.00 Accumulation unit value at end of period $ 0.97 $ 1.25 $ 1.37 $ 1.26 Number of accumulation units outstanding at end of period (000 omitted) 23,015 25,531 19,878 1,892 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT 2CD(1) (INVESTING IN SHARES OF AIM V.I. CAPITAL DEVELOPMENT FUND, SERIES I SHARES) Accumulation unit value at beginning of period $ 1.25 $ 1.37 $ 1.26 $ 1.00 Accumulation unit value at end of period $ 0.98 $ 1.25 $ 1.37 $ 1.26 Number of accumulation units outstanding at end of period (000 omitted) 21,745 23,324 16,977 1,678 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT 1IF(1) (INVESTING IN SHARES OF AMERICAN CENTURY(R) VP INTERNATIONAL, CLASS I) Accumulation unit value at beginning of period $ 0.83 $ 1.18 $ 1.44 $ 1.00 Accumulation unit value at end of period $ 0.66 $ 0.83 $ 1.18 $ 1.44 Number of accumulation units outstanding at end of period (000 omitted) 31,512 32,127 20,591 2,094 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT 2IF(1) (INVESTING IN SHARES OF AMERICAN CENTURY(R) VP INTERNATIONAL, CLASS I) Accumulation unit value at beginning of period $ 0.83 $ 1.19 $ 1.44 $ 1.00 Accumulation unit value at end of period $ 0.66 $ 0.83 $ 1.19 $ 1.44 Number of accumulation units outstanding at end of period (000 omitted) 26,878 25,459 15,533 1,791 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT 1VA(1) (INVESTING IN SHARES OF AMERICAN CENTURY(R) VP VALUE, CLASS I) Accumulation unit value at beginning of period $ 1.20 $ 1.08 $ 0.92 $ 1.00 Accumulation unit value at end of period $ 1.04 $ 1.20 $ 1.08 $ 0.92 Number of accumulation units outstanding at end of period (000 omitted) 49,161 41,460 21,041 4,775 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT 2VA(1) (INVESTING IN SHARES OF AMERICAN CENTURY(R) VP VALUE, CLASS I) Accumulation unit value at beginning of period $ 1.21 $ 1.08 $ 0.92 $ 1.00 Accumulation unit value at end of period $ 1.05 $ 1.21 $ 1.08 $ 0.92 Number of accumulation units outstanding at end of period (000 omitted) 43,222 35,248 14,536 3,657 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75%
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 14
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 1SR(3) (INVESTING IN SHARES OF CALVERT VARIABLE SERIES, INC. SOCIAL BALANCED PORTFOLIO) Accumulation unit value at beginning of period $ 0.89 $ 0.96 $ 1.00 -- Accumulation unit value at end of period $ 0.77 $ 0.89 $ 0.96 -- Number of accumulation units outstanding at end of period (000 omitted) 9,832 6,090 1,693 -- Ratio of operating expense to average net assets 0.95% 0.95% 0.95% -- SUBACCOUNT 2SR(3) (INVESTING IN SHARES OF CALVERT VARIABLE SERIES, INC. SOCIAL BALANCED PORTFOLIO) Accumulation unit value at beginning of period $ 0.89 $ 0.96 $ 1.00 -- Accumulation unit value at end of period $ 0.78 $ 0.89 $ 0.96 -- Number of accumulation units outstanding at end of period (000 omitted) 9,520 4,490 1,283 -- Ratio of operating expense to average net assets 0.75% 0.75% 0.75% -- SUBACCOUNT 1EG(5) (INVESTING IN SHARES OF CREDIT SUISSE TRUST - EMERGING GROWTH PORTFOLIO) Accumulation unit value at beginning of period $ 1.06 $ 1.28 $ 1.32 $ 1.00 Accumulation unit value at end of period $ 0.74 $ 1.06 $ 1.28 $ 1.32 Number of accumulation units outstanding at end of period (000 omitted) 20,303 24,697 22,624 2,872 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT 2EG(5) (INVESTING IN SHARES OF CREDIT SUISSE TRUST - EMERGING GROWTH PORTFOLIO) Accumulation unit value at beginning of period $ 1.07 $ 1.29 $ 1.32 $ 1.00 Accumulation unit value at end of period $ 0.75 $ 1.07 $ 1.29 $ 1.32 Number of accumulation units outstanding at end of period (000 omitted) 17,821 20,158 17,825 1,838 Ratio of operating expenses to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT 1GI(1) (INVESTING IN SHARES OF FIDELITY(R) VIP GROWTH & INCOME PORTFOLIO SERVICE CLASS) Accumulation unit value at beginning of period $ 0.90 $ 1.00 $ 1.04 $ 1.00 Accumulation unit value at end of period $ 0.74 $ 0.90 $ 1.00 $ 1.04 Number of accumulation units outstanding at end of period (000 omitted) 117,223 119,736 77,558 18,137 Ratio of operating expenses to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT 2GI(1) (INVESTING IN SHARES OF FIDELITY(R) VIP GROWTH & INCOME PORTFOLIO SERVICE CLASS) Accumulation unit value at beginning of period $ 0.90 $ 1.00 $ 1.05 $ 1.00 Accumulation unit value at end of period $ 0.75 $ 0.90 $ 1.00 $ 1.05 Number of accumulation units outstanding at end of period (000 omitted) 108,027 103,719 63,414 15,603 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT 1MP(1) (INVESTING IN SHARES OF FIDELITY(R) VIP MID CAP PORTFOLIO SERVICE CLASS) Accumulation unit value at beginning of period $ 1.57 $ 1.64 $ 1.24 $ 1.00 Accumulation unit value at end of period $ 1.40 $ 1.57 $ 1.64 $ 1.24 Number of accumulation units outstanding at end of period (000 omitted) 68,203 67,132 48,251 6,945 Ratio of operating expenses to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT 2MP(1) (INVESTING IN SHARES OF FIDELITY(R) VIP MID CAP PORTFOLIO SERVICE CLASS) Accumulation unit value at beginning of period $ 1.58 $ 1.65 $ 1.24 $ 1.00 Accumulation unit value at end of period $ 1.41 $ 1.58 $ 1.65 $ 1.24 Number of accumulation units outstanding at end of period (000 omitted) 63,268 59,393 38,193 5,709 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT 1OS(1) (INVESTING IN SHARES OF FIDELITY(R) VIP OVERSEAS PORTFOLIO SERVICE CLASS) Accumulation unit value at beginning of period $ 0.77 $ 0.98 $ 1.23 $ 1.00 Accumulation unit value at end of period $ 0.60 $ 0.77 $ 0.98 $ 1.23 Number of accumulation units outstanding at end of period (000 omitted) 33,063 32,758 22,910 3,612 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT 2OS(1) (INVESTING IN SHARES OF FIDELITY(R) VIP OVERSEAS PORTFOLIO SERVICE CLASS) Accumulation unit value at beginning of period $ 0.77 $ 0.98 $ 1.23 $ 1.00 Accumulation unit value at end of period $ 0.61 $ 0.77 $ 0.98 $ 1.23 Number of accumulation units outstanding at end of period (000 omitted) 28,991 27,850 18,802 3,421 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT 1RE(1) (INVESTING IN SHARES OF FTVIPT FRANKLIN REAL ESTATE FUND - CLASS 2) Accumulation unit value at beginning of period $ 1.33 $ 1.25 $ 0.96 $ 1.00 Accumulation unit value at end of period $ 1.35 $ 1.33 $ 1.25 $ 0.96 Number of accumulation units outstanding at end of period (000 omitted) 44,591 19,803 6,181 683 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95%
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 15
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 2RE(1) (INVESTING IN SHARES OF FTVIPT FRANKLIN REAL ESTATE FUND - CLASS 2) Accumulation unit value at beginning of period $ 1.34 $ 1.25 $ 0.96 $ 1.00 Accumulation unit value at end of period $ 1.36 $ 1.34 $ 1.25 $ 0.96 Number of accumulation units outstanding at end of period (000 omitted) 59,317 24,477 6,879 885 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT 1SI(1) (INVESTING IN SHARES OF FTVIPT FRANKLIN SMALL CAP VALUE SECURITIES FUND - CLASS 2) Accumulation unit value at beginning of period $ 1.34 $ 1.19 $ 0.96 $ 1.00 Accumulation unit value at end of period $ 1.21 $ 1.34 $ 1.19 $ 0.96 Number of accumulation units outstanding at end of period (000 omitted) 23,553 9,584 2,897 590 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT 2SI(1) (INVESTING IN SHARES OF FTVIPT FRANKLIN SMALL CAP VALUE SECURITIES FUND - CLASS 2) Accumulation unit value at beginning of period $ 1.35 $ 1.19 $ 0.96 $ 1.00 Accumulation unit value at end of period $ 1.21 $ 1.35 $ 1.19 $ 0.96 Number of accumulation units outstanding at end of period (000 omitted) 29,743 10,800 2,846 586 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT 1TF(6),(7) (INVESTING IN SHARES OF FTVIPT TEMPLETON FOREIGN SECURITIES FUND - CLASS 2) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.84 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 9,570 -- -- -- Ratio of operating expense to average net assets 0.95% -- -- -- SUBACCOUNT 2TF(6),(7) (INVESTING IN SHARES OF FTVIPT TEMPLETON FOREIGN SECURITIES FUND - CLASS 2) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.84 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 8,386 -- -- -- Ratio of operating expenses to average net assets 0.75% -- -- -- SUBACCOUNT 1SE(1) (INVESTING IN SHARES OF GOLDMAN SACHS VIT CORE(SM) SMALL CAP EQUITY FUND) Accumulation unit value at beginning of period $ 1.18 $ 1.14 $ 1.13 $ 1.00 Accumulation unit value at end of period $ 1.00 $ 1.18 $ 1.14 $ 1.13 Number of accumulation units outstanding at end of period (000 omitted) 17,792 18,974 14,809 2,665 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT 2SE(1) (INVESTING IN SHARES OF GOLDMAN SACHS VIT CORE(SM) SMALL CAP EQUITY FUND) Accumulation unit value at beginning of period $ 1.19 $ 1.14 $ 1.13 $ 1.00 Accumulation unit value at end of period $ 1.00 $ 1.19 $ 1.14 $ 1.13 Number of accumulation units outstanding at end of period (000 omitted) 14,285 14,153 10,252 1,876 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT 1UE(1) (INVESTING IN SHARES OF GOLDMAN SACHS VIT CORE(SM) U.S. EQUITY FUND) Accumulation unit value at beginning of period $ 0.86 $ 0.99 $ 1.10 $ 1.00 Accumulation unit value at end of period $ 0.67 $ 0.86 $ 0.99 $ 1.10 Number of accumulation units outstanding at end of period (000 omitted) 75,489 71,185 55,239 9,951 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT 2UE(1) (INVESTING IN SHARES OF GOLDMAN SACHS VIT CORE(SM) U.S. EQUITY FUND) Accumulation unit value at beginning of period $ 0.86 $ 0.99 $ 1.10 $ 1.00 Accumulation unit value at end of period $ 0.67 $ 0.86 $ 0.99 $ 1.10 Number of accumulation units outstanding at end of period (000 omitted) 71,820 60,343 42,626 8,981 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT 1MC(1) (INVESTING IN SHARES OF GOLDMAN SACHS VIT MID CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.37 $ 1.23 $ 0.95 $ 1.00 Accumulation unit value at end of period $ 1.29 $ 1.37 $ 1.23 $ 0.95 Number of accumulation units outstanding at end of period (000 omitted) 47,539 24,711 10,265 2,023 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT 2MC(1) (INVESTING IN SHARES OF GOLDMAN SACHS VIT MID CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.37 $ 1.23 $ 0.95 $ 1.00 Accumulation unit value at end of period $ 1.30 $ 1.37 $ 1.23 $ 0.95 Number of accumulation units outstanding at end of period (000 omitted) 56,079 23,748 7,622 1,634 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75%
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 16
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 1GT(3) (INVESTING IN SHARES OF JANUS ASPEN SERIES GLOBAL TECHNOLOGY PORTFOLIO: SERVICE SHARES) Accumulation unit value at beginning of period $ 0.42 $ 0.68 $ 1.00 -- Accumulation unit value at end of period $ 0.25 $ 0.42 $ 0.68 -- Number of accumulation units outstanding at end of period (000 omitted) 31,354 34,050 22,949 -- Ratio of operating expense to average net assets 0.95% 0.95% 0.95% -- SUBACCOUNT 2GT(3) (INVESTING IN SHARES OF JANUS ASPEN SERIES GLOBAL TECHNOLOGY PORTFOLIO: SERVICE SHARES) Accumulation unit value at beginning of period $ 0.43 $ 0.68 $ 1.00 -- Accumulation unit value at end of period $ 0.25 $ 0.43 $ 0.68 -- Number of accumulation units outstanding at end of period (000 omitted) 37,200 34,767 20,288 -- Ratio of operating expense to average net assets 0.75% 0.75% 0.75% -- SUBACCOUNT 1IG(3) (INVESTING IN SHARES OF JANUS ASPEN SERIES INTERNATIONAL GROWTH PORTFOLIO: SERVICE SHARES) Accumulation unit value at beginning of period $ 0.61 $ 0.80 $ 1.00 -- Accumulation unit value at end of period $ 0.45 $ 0.61 $ 0.80 -- Number of accumulation units outstanding at end of period (000 omitted) 74,111 64,147 29,251 -- Ratio of operating expense to average net assets 0.95% 0.95% 0.95% -- SUBACCOUNT 2IG(3) (INVESTING IN SHARES OF JANUS ASPEN SERIES INTERNATIONAL GROWTH PORTFOLIO: SERVICE SHARES) Accumulation unit value at beginning of period $ 0.61 $ 0.80 $ 1.00 -- Accumulation unit value at end of period $ 0.45 $ 0.61 $ 0.80 -- Number of accumulation units outstanding at end of period (000 omitted) 81,189 60,527 25,763 -- Ratio of operating expense to average net assets 0.75% 0.75% 0.75% -- SUBACCOUNT 1AG(3) (INVESTING IN SHARES OF JANUS ASPEN SERIES MID CAP GROWTH PORTFOLIO: SERVICE SHARES) (PREVIOUSLY JANUS ASPEN SERIES AGGRESSIVE GROWTH PORTFOLIO: SERVICE SHARES) Accumulation unit value at beginning of period $ 0.42 $ 0.70 $ 1.00 -- Accumulation unit value at end of period $ 0.30 $ 0.42 $ 0.70 -- Number of accumulation units outstanding at end of period (000 omitted) 42,883 51,500 33,689 -- Ratio of operating expense to average net assets 0.95% 0.95% 0.95% -- SUBACCOUNT 2AG(3) (INVESTING IN SHARES OF JANUS ASPEN SERIES MID CAP GROWTH PORTFOLIO: SERVICE SHARES) (PREVIOUSLY JANUS ASPEN SERIES AGGRESSIVE GROWTH PORTFOLIO: SERVICE SHARES) Accumulation unit value at beginning of period $ 0.42 $ 0.70 $ 1.00 -- Accumulation unit value at end of period $ 0.30 $ 0.42 $ 0.70 -- Number of accumulation units outstanding at end of period (000 omitted) 52,428 54,805 29,626 -- Ratio of operating expense to average net assets 0.75% 0.75% 0.75% -- SUBACCOUNT 1IP(1) (INVESTING IN SHARES OF LAZARD RETIREMENT INTERNATIONAL EQUITY PORTFOLIO) Accumulation unit value at beginning of period $ 0.72 $ 0.96 $ 1.07 $ 1.00 Accumulation unit value at end of period $ 0.64 $ 0.72 $ 0.96 $ 1.07 Number of accumulation units outstanding at end of period (000 omitted) 28,853 19,727 10,774 2,504 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT 2IP(1) (INVESTING IN SHARES OF LAZARD RETIREMENT INTERNATIONAL EQUITY PORTFOLIO) Accumulation unit value at beginning of period $ 0.72 $ 0.96 $ 1.07 $ 1.00 Accumulation unit value at end of period $ 0.64 $ 0.72 $ 0.96 $ 1.07 Number of accumulation units outstanding at end of period (000 omitted) 29,532 15,860 7,958 1,981 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT 1MG(3) (INVESTING IN SHARES OF MFS(R) INVESTORS GROWTH STOCK SERIES - SERVICE CLASS) Accumulation unit value at beginning of period $ 0.67 $ 0.90 $ 1.00 -- Accumulation unit value at end of period $ 0.48 $ 0.67 $ 0.90 -- Number of accumulation units outstanding at end of period (000 omitted) 62,663 51,051 21,973 -- Ratio of operating expense to average net assets 0.95% 0.95% 0.95% -- SUBACCOUNT 2MG(3) (INVESTING IN SHARES OF MFS(R) INVESTORS GROWTH STOCK SERIES - SERVICE CLASS) Accumulation unit value at beginning of period $ 0.68 $ 0.91 $ 1.00 -- Accumulation unit value at end of period $ 0.48 $ 0.68 $ 0.91 -- Number of accumulation units outstanding at end of period (000 omitted) 69,576 50,212 19,521 -- Ratio of operating expense to average net assets 0.75% 0.75% 0.75% -- SUBACCOUNT 1MD(3) (INVESTING IN SHARES OF MFS(R) NEW DISCOVERY SERIES - SERVICE CLASS) Accumulation unit value at beginning of period $ 0.90 $ 0.96 $ 1.00 -- Accumulation unit value at end of period $ 0.61 $ 0.90 $ 0.96 -- Number of accumulation units outstanding at end of period (000 omitted) 53,383 36,822 15,060 -- Ratio of operating expense to average net assets 0.95% 0.95% 0.95% --
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 17
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 2MD(3) (INVESTING IN SHARES OF MFS(R) NEW DISCOVERY SERIES - SERVICE CLASS) Accumulation unit value at beginning of period $ 0.90 $ 0.96 $ 1.00 -- Accumulation unit value at end of period $ 0.61 $ 0.90 $ 0.96 -- Number of accumulation units outstanding at end of period (000 omitted) 59,272 34,072 12,308 -- Ratio of operating expense to average net assets 0.75% 0.75% 0.75% -- SUBACCOUNT 1IN(1) (INVESTING IN SHARES OF PUTNAM VT INTERNATIONAL NEW OPPORTUNITIES FUND - CLASS IB SHARES) Accumulation unit value at beginning of period $ 0.65 $ 0.92 $ 1.51 $ 1.00 Accumulation unit value at end of period $ 0.56 $ 0.65 $ 0.92 $ 1.51 Number of accumulation units outstanding at end of period (000 omitted) 74,769 90,196 80,679 8,200 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT 2IN(1) (INVESTING IN SHARES OF PUTNAM VT INTERNATIONAL NEW OPPORTUNITIES FUND - CLASS IB SHARES) Accumulation unit value at beginning of period $ 0.65 $ 0.92 $ 1.51 $ 1.00 Accumulation unit value at end of period $ 0.56 $ 0.65 $ 0.92 $ 1.51 Number of accumulation units outstanding at end of period (000 omitted) 72,395 78,901 62,964 6,079 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT 1VS(1) (INVESTING IN SHARES OF PUTNAM VT VISTA FUND - CLASS IB SHARES) Accumulation unit value at beginning of period $ 0.85 $ 1.29 $ 1.36 $ 1.00 Accumulation unit value at end of period $ 0.58 $ 0.85 $ 1.29 $ 1.36 Number of accumulation units outstanding at end of period (000 omitted) 73,930 87,722 68,407 7,245 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT 2VS(1) (INVESTING IN SHARES OF PUTNAM VT VISTA FUND - CLASS IB SHARES) Accumulation unit value at beginning of period $ 0.85 $ 1.29 $ 1.36 $ 1.00 Accumulation unit value at end of period $ 0.59 $ 0.85 $ 1.29 $ 1.36 Number of accumulation units outstanding at end of period (000 omitted) 72,033 74,819 49,764 5,084 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT 1MI(1) (INVESTING IN SHARES OF ROYCE MICRO-CAP PORTFOLIO) Accumulation unit value at beginning of period $ 1.74 $ 1.35 $ 1.15 $ 1.00 Accumulation unit value at end of period $ 1.50 $ 1.74 $ 1.35 $ 1.15 Number of accumulation units outstanding at end of period (000 omitted) 27,063 23,583 11,880 1,886 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT 2MI(1) (INVESTING IN SHARES OF ROYCE MICRO-CAP PORTFOLIO) Accumulation unit value at beginning of period $ 1.75 $ 1.36 $ 1.15 $ 1.00 Accumulation unit value at end of period $ 1.51 $ 1.75 $ 1.36 $ 1.15 Number of accumulation units outstanding at end of period (000 omitted) 25,593 20,056 8,005 1,228 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT 1SV(5) (INVESTING IN SHARES OF THIRD AVENUE VALUE PORTFOLIO) Accumulation unit value at beginning of period $ 1.69 $ 1.50 $ 1.08 $ 1.00 Accumulation unit value at end of period $ 1.50 $ 1.69 $ 1.50 $ 1.08 Number of accumulation units outstanding at end of period (000 omitted) 35,110 31,848 11,524 2,043 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT 2SV(5) (INVESTING IN SHARES OF THIRD AVENUE VALUE PORTFOLIO) Accumulation unit value at beginning of period $ 1.70 $ 1.51 $ 1.08 $ 1.00 Accumulation unit value at end of period $ 1.51 $ 1.70 $ 1.51 $ 1.08 Number of accumulation units outstanding at end of period (000 omitted) 31,335 27,040 8,231 1,873 Ratio of operating expenses to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT 1IT(1) (INVESTING IN SHARES OF WANGER INTERNATIONAL SMALL CAP) Accumulation unit value at beginning of period $ 0.84 $ 1.08 $ 1.51 $ 1.00 Accumulation unit value at end of period $ 0.72 $ 0.84 $ 1.08 $ 1.51 Number of accumulation units outstanding at end of period (000 omitted) 42,309 30,297 21,844 1,343 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT 2IT(1) (INVESTING IN SHARES OF WANGER INTERNATIONAL SMALL CAP) Accumulation unit value at beginning of period $ 0.85 $ 1.08 $ 1.51 $ 1.00 Accumulation unit value at end of period $ 0.72 $ 0.85 $ 1.08 $ 1.51 Number of accumulation units outstanding at end of period (000 omitted) 43,554 27,818 18,245 1,234 Ratio of operating expenses to average net assets 0.75% 0.75% 0.75% 0.75%
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 18
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 1SP(1) (INVESTING IN SHARES OF WANGER U.S. SMALLER COMPANIES) Accumulation unit value at beginning of period $ 1.15 $ 1.05 $ 1.15 $ 1.00 Accumulation unit value at end of period of period (000 omitted) $ 0.95 $ 1.15 $ 1.05 $ 1.15 Number of accumulation units outstanding at end of period (000 omitted) 72,853 46,456 29,881 2,723 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT 2SP(1) (INVESTING IN SHARES OF WANGER U.S. SMALLER COMPANIES) Accumulation unit value at beginning of period $ 1.16 $ 1.05 $ 1.15 $ 1.00 Accumulation unit value at end of period $ 0.96 $ 1.16 $ 1.05 $ 1.15 Number of accumulation units outstanding at end of period (000 omitted) 78,311 40,791 23,813 2,476 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT 1AA(4) (INVESTING IN SHARES OF WELLS FARGO VT ASSET ALLOCATION FUND) Accumulation unit value at beginning of period $ 0.97 $ 1.00 -- -- Accumulation unit value at end of period $ 0.84 $ 0.97 -- -- Number of accumulation units outstanding at end of period (000 omitted) 11,859 3,224 -- -- Ratio of operating expense to average net assets 0.95% 0.95% -- -- SUBACCOUNT 2AA(4) (INVESTING IN SHARES OF WELLS FARGO VT ASSET ALLOCATION FUND) Accumulation unit value at beginning of period $ 0.97 $ 1.00 -- -- Accumulation unit value at end of period $ 0.84 $ 0.97 -- -- Number of accumulation units outstanding at end of period (000 omitted) 14,864 3,799 -- -- Ratio of operating expense to average net assets 0.75% 0.75% -- -- SUBACCOUNT 1WI(4) (INVESTING IN SHARES OF WELLS FARGO VT INTERNATIONAL EQUITY FUND) Accumulation unit value at beginning of period $ 0.90 $ 1.00 -- -- Accumulation unit value at end of period $ 0.69 $ 0.90 -- -- Number of accumulation units outstanding at end of period (000 omitted) 2,781 1,031 -- -- Ratio of operating expense to average net assets 0.95% 0.95% -- -- SUBACCOUNT 2WI(4) (INVESTING IN SHARES OF WELLS FARGO VT INTERNATIONAL EQUITY FUND) Accumulation unit value at beginning of period $ 0.90 $ 1.00 -- -- Accumulation unit value at end of period $ 0.69 $ 0.90 -- -- Number of accumulation units outstanding at end of period (000 omitted) 4,703 1,200 -- -- Ratio of operating expense to average net assets 0.75% 0.75% -- -- SUBACCOUNT 1SG(4) (INVESTING IN SHARES OF WELLS FARGO VT SMALL CAP GROWTH FUND) Accumulation unit value at beginning of period $ 0.94 $ 1.00 -- -- Accumulation unit value at end of period $ 0.58 $ 0.94 -- -- Number of accumulation units outstanding at end of period (000 omitted) 7,655 2,230 -- -- Ratio of operating expense to average net assets 0.95% 0.95% -- -- SUBACCOUNT 2SG(4) (INVESTING IN SHARES OF WELLS FARGO VT SMALL CAP GROWTH FUND) Accumulation unit value at beginning of period $ 0.94 $ 1.00 -- -- Accumulation unit value at end of period $ 0.58 $ 0.94 -- -- Number of accumulation units outstanding at end of period (000 omitted) 9,992 2,060 -- -- Ratio of operating expense to average net assets 0.75% 0.75% -- --
(1) Operations commenced on Sept. 15, 1999. (2) Net of annual contract administrative charge and mortality and expense risk fee. (3) Operations commenced on May 1, 2000. (4) Operations commenced on May 1, 2001. (5) Operations commenced on Sept. 21, 1999. (6) Operations commenced on March 1, 2002. (7) FTVIPT Templeton International Smaller Companies Fund - Class 2 merged into FTVIPT Templeton Foreign Securities Fund - Class 2 as of April 30, 2002. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 19 FINANCIAL STATEMENTS You can find our audited financial statements and the audited financial statements of the subaccounts in the SAI. PERFORMANCE INFORMATION Performance information for the subaccounts may appear from time to time in advertisements or sales literature. This information reflects the performance of a hypothetical investment in a particular subaccount during a specified time period. We show actual performance from the date the subaccounts began investing in funds. We also show performance from the commencement date of the funds as if the subaccounts invested in them at that time, which, in some cases, they did not. Although we base performance figures on historical earnings, past performance does not guarantee future results. We include non-recurring charges (such as surrender charges) in total return figures, but not in yield quotations. Excluding non-recurring charges in yield calculations increases the reported value. Total return figures do not reflect any purchase payment credits. We may show total return quotations by means of schedules, charts or graphs. Total return figures reflect deduction of the following charges: - contract administrative charge, - applicable mortality and expense risk fee, - MAV rider fee, - EEB rider fee, and - applicable surrender charge (assuming a surrender at the end of the illustrated period). We may also show optional total return quotations that reflect deduction of the MAV or EEB rider fee. We also show optional total return quotations that do not reflect a surrender charge deduction (assuming no surrender). AVERAGE ANNUAL TOTAL RETURN is the average annual compounded rate of return of the investment over a period of one, five and ten years (or up to the life of the subaccount if it is less than ten years old). CUMULATIVE TOTAL RETURN is the cumulative change in the value of an investment over a specified time period. We assume that income earned by the investment is reinvested. Cumulative total return generally will be higher than average annual total return. ANNUALIZED SIMPLE YIELD (FOR SUBACCOUNTS INVESTING IN MONEY MARKET FUNDS) "annualizes" the income generated by the investment over a given seven-day period. That is, we assume the amount of income generated by the investment during the period will be generated each seven-day period for a year. We show this as a percentage of the investment. ANNUALIZED COMPOUND YIELD (FOR SUBACCOUNTS INVESTING IN MONEY MARKET FUNDS) is calculated like simple yield except that we assume the income is reinvested when we annualize it. Compound yield will be higher than the simple yield because of the compounding effect of the assumed reinvestment. ANNUALIZED YIELD (FOR SUBACCOUNTS INVESTING IN INCOME FUNDS) divides the net investment income (income less expenses) for each accumulation unit during a given 30-day period by the value of the unit on the last day of the period. We then convert the result to an annual percentage. You should consider performance information in light of the investment objectives, policies, characteristics and quality of the fund in which the subaccount invests and the market conditions during the specified time period. Advertised yields and total return figures include charges that reduce advertised performance. Therefore, you should not compare subaccount performance to that of mutual funds that sell their shares directly to the public. (See the SAI for a further description of methods used to determine total return and yield.) If you would like additional information about actual performance, please contact us at the address or telephone number on the first page of this prospectus. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 20 THE VARIABLE ACCOUNT AND THE FUNDS You may allocate purchase payments and transfers to any or all of the subaccounts of the variable account that invest in shares of the following funds:
SUBACCOUNT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER BC1 AXP(R) Variable Portfolio - Blue Objective: long-term total return exceeding IDS Life, adviser; BC2 Chip Advantage Fund that of the U.S. stock market. Invests American Express primarily in blue chip stocks. Blue chip stocks Financial Corporation are issued by companies with a market (AEFC), subadviser. capitalization of at least $1 billion, an established management, a history of consistent earnings and a leading position within their respective industries. BD1 AXP(R) Variable Portfolio - Bond Objective: high level of current income while IDS Life, adviser; AEFC, BD2 Fund (effective 6-27-03 AXP(R) conserving the value of the investment and subadviser. Variable Portfolio - Bond Fund continuing a high level of income for the longest will change to AXP(R) time period. Invests primarily in bonds and Variable Portfolio - Diversified other debt obligations. Bond Fund) CR1 AXP(R) Variable Portfolio - Objective: capital appreciation. Invests IDS Life, adviser; AEFC, CR2 Capital Resource Fund primarily in U.S. common stocks and other subadviser. securities convertible into common stocks. CM1 AXP(R) Variable Portfolio - Cash Objective: maximum current income consistent IDS Life, adviser; AEFC, CM2 Management Fund with liquidity and stability of principal. subadviser. Invests primarily in money market securities. DE1 AXP(R) Variable Portfolio - Objective: high level of current income and, as IDS Life, adviser; AEFC, DE2 Diversified Equity Income Fund a secondary goal, steady growth of capital. subadviser. Invests primarily in dividend-paying common and preferred stocks. EM1 AXP(R) Variable Portfolio - Objective: long-term capital growth. Invests IDS Life, adviser; AEFC, EM2 Emerging Markets Fund primarily in equity securities of companies in subadviser; American emerging market countries. Express Asset Management International, Inc., a wholly-owned subsidiary of AEFC, subadviser. ES1 AXP(R) Variable Portfolio - Objective: growth of capital. Invests primarily IDS Life, adviser; AEFC, ES2 Equity Select Fund in equity securities of medium-sized companies. subadviser. EI1 AXP(R) Variable Portfolio - Objective: high current income, with capital IDS Life, adviser; AEFC, EI2 Extra Income Fund (effective growth as a secondary objective. Invests subadviser. 6-2703 AXP(R) Variable primarily in high-yielding, high-risk corporate Portfolio - Extra Income Fund bonds (junk bonds) issued by U.S. and foreign will change to AXP(R) Variable companies and governments. Portfolio - High Yield Bond Fund)
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 21
SUBACCOUNT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER FI1 AXP(R) Variable Portfolio - Objective: a high level of current income and IDS Life, adviser; AEFC, FI2 Federal Income Fund (effective safety of principal consistent with an subadviser. 6-27-03 AXP(R) Variable investment in U.S. government and government Portfolio - Federal Income Fund agency securities. Invests primarily in debt will change to AXP(R) Variable obligations issued or guaranteed as to Portfolio - Short Term U.S. principal and interest by the U.S. government, Government Fund) its agencies or instrumentalities. GB1 AXP(R) Variable Portfolio - Objective: high total return through income and IDS Life, adviser; AEFC, GB2 Global Bond Fund growth of capital. Non-diversified mutual fund subadviser. that invests primarily in debt obligations of U.S. and foreign issuers. GR1 AXP(R) Variable Portfolio - Objective: long-term capital growth. Invests IDS Life, adviser; AEFC, GR2 Growth Fund primarily in common stocks and securities subadviser. convertible into common stocks that appear to offer growth opportunities. IE1 AXP(R) Variable Portfolio - Objective: capital appreciation. Invests IDS Life, adviser; AEFC, IE2 International Fund primarily in common stocks or convertible subadviser; American securities of foreign issuers that offer strong Express Asset Management growth potential. International, Inc., a wholly-owned subsidiary of AEFC, subadviser. MF1 AXP(R) Variable Portfolio - Objective: maximum total investment return IDS Life, adviser; AEFC, MF2 Managed Fund through a combination of capital growth and subadviser. current income. Invests primarily in a combination of common and preferred stocks, convertible securities, bonds and other debt securities. ND1 AXP(R) Variable Portfolio - Objective: long-term growth of capital. Invests IDS Life, adviser; AEFC, ND2 NEW DIMENSIONS FUND(R) primarily in common stocks showing potential subadviser. for significant growth. IV1 AXP(R) Variable Portfolio - Objective: long-term capital appreciation. IDS Life, adviser; AEFC, IV2 S&P 500 Index Fund Non-diversified fund that invests primarily in subadviser. securities that are expected to provide investment results that correspond to the performance of the S&P 500(R) Index. SC1 AXP(R) Variable Portfolio - Objective: long-term capital growth. Invests IDS Life, adviser; AEFC, SC2 Small Cap Advantage Fund primarily in equity stocks of small companies subadviser; Kenwood that are often included in the Russell 2000 Capital Management LLC, Index and/or have market capitalization under subadviser. $2 billion. SA1 AXP(R) Variable Portfolio - Objective: capital appreciation. Invests IDS Life, adviser; AEFC, SA2 Strategy Aggressive Fund primarily in equity securities of growth subadviser. companies.
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 22
SUBACCOUNT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER 1CA AIM V.I. Capital Appreciation Objective: growth of capital. Invests A I M Advisors, Inc. 2CA Fund, Series I Shares principally in common stocks of companies likely to benefit from new or innovative products, services or processes as well as those with above-average growth and excellent prospects for future growth. The Fund may invest up to 25% of its assets in foreign securities. 1CD AIM V.I. Capital Development Objective: long-term growth of capital. Invests A I M Advisors, Inc. 2CD Fund, Series I Shares primarily in securities (including common stocks, convertible securities and bonds) of small- and medium-sized companies. The Fund may invest up to 25% of its assets in foreign securities. 1IF American Century(R) VP Objective: long-term capital growth. Invests American Century 2IF International, Class I primarily in stocks of growing foreign Investment Management, companies in developed countries. Inc. IVA American Century(R) VP Value, Objective: long-term capital growth, with American Century 2VA Class I income as a secondary objective. Invests Investment Management, primarily in stocks of companies that Inc. management believes to be undervalued at the time of purchase. 1SR Calvert Variable Series, Inc. Objective: income and capital growth. Invests Calvert Asset Management 2SR Social Balanced Portfolio primarily in stocks, bonds and money market Company, Inc. (CAMCO), instruments which offer income and capital investment adviser. SsgA growth opportunity and which satisfy the Funds Management, Inc. investment and social criteria. and Brown Capital Management are the investment subadvisers. 1EG Credit Suisse Trust - Emerging Objective: maximum capital appreciation. Credit Suisse Asset 2EG Growth Portfolio Invests in U.S. equity securities of Management, LLC emerging-growth companies with growth characteristics such as positive earnings and potential for accelerated growth. 1GI Fidelity(R) VIP Growth & Income Objective: seeks high total return through a Fidelity Management & 2GI Portfolio Service Class combination of current income and capital Research Company (FMR), appreciation. Normally invests a majority of investment manager; FMR assets in common stocks of foreign and U.K., FMR Far East, domestic issuers with a focus on those that pay sub-investment advisers. current dividends and show potential for capital appreciation. May invest in bonds, including lower-quality debt securities, as well as stocks that are not currently paying dividends, but offer prospects for future income or capital appreciation.
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 23
SUBACCOUNT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER 1MP Fidelity(R) VIP Mid Cap Objective: seeks long-term growth of capital. Fidelity Management & 2MP Portfolio Service Class Normally invests at least 80% of assets in Research Company (FMR), securities of foreign and domestic companies investment manager; FMR with medium market capitalization common U.K., FMR Far East, stocks. Invests in growth or value common sub-investment advisers. stocks. May invest in companies with smaller or larger market capitalizations. 1OS Fidelity(R) VIP Overseas Strategy: seeks long-term growth of capital. Fidelity Management & 2OS Portfolio Service Class Normally invests primarily in common stocks of Research Company (FMR), foreign securities. Normally invests at least investment manager; FMR 80% of assets in non-U.S. securities. U.K., FMR Far East, Fidelity International Investment Advisors (FIIA) and FIIA U.K., sub-investment advisers. 1RE FTVIPT Franklin Real Estate Objective: seeks capital appreciation, with Franklin Advisers, Inc. 2RE Fund - Class 2 current income as a secondary goal. The Fund normally invests at least 80% of its net assets in investments of companies operating in the real estate sector. The Fund invests primarily in equity real estate investment trusts (REITs). 1SI FTVIPT Franklin Small Cap Value Objective: seeks long-term total return. The Franklin Advisory 2SI Securities Fund - Class 2 Fund normally invests at least 80% of its net Services, LLC assets in investments of small capitalization companies. For this Fund, small cap companies are those with market cap values not exceeding $2.5 billion, at the time of purchase. The Fund's manager invests in small companies that it believes are undervalued. 1TF FTVIPT Templeton Foreign Objective: seeks long-term capital growth. The Templeton Investment 2TF Securities Fund - Class 2 Fund normally invests at least 80% of its net Counsel, LLC assets in investments of issuers located outside the U.S.; including those in emerging markets. 1SE Goldman Sachs VIT CORE(SM) Objective: The Goldman Sachs VIT CORE Small Cap Goldman Sachs Asset 2SE Small Cap Equity Fund Equity Fund seeks long-term growth of capital. Management, L.P. The Fund invests, under normal circumstances, CORE(SM) is a service mark of at least 80% of its net assets plus any Goldman, Sachs & Co. borrowings for investment purposes (measured at time or purchase) in a broadly diversified portfolio of equity investments in small-cap U.S. issuers, including foreign issuers that are traded in the United States, within the range of the market capitalization of companies constituting the Russell 2000 Index at the time of investment.
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 24
SUBACCOUNT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER 1UE Goldman Sachs VIT CORE(SM) U.S. Objective: The Goldman Sachs VIT CORE U.S. Goldman Sachs Asset 2UE Equity Fund Equity Fund seeks long-term growth of capital Management, L.P. and dividend income. The Fund invests, under CORE(SM) is a service mark of normal circumstances, at least 90% of its total Goldman, Sachs & Co. assets (not including securities lending collateral and any investment of that collateral) measured at time of purchase in a broadly diversified portfolio of large-cap and blue chip equity investments representing all major sectors of the U.S. economy. 1MC Goldman Sachs VIT Mid Cap Value Objective: The Goldman Sachs VIT Mid Cap Value Goldman Sachs Asset 2MC Fund Fund seeks long-term capital appreciation. The Management, L.P. Fund invests, under normal circumstances, at least 80% of its net assets plus any borrowing for investment purposes (measured at time of purchase) in a diversified portfolio of equity investments in mid-capitalization issuers within the range of the market capitalization of companies constituting the Russell Midcap Value Index at the time of investment. 1GT Janus Aspen Series Global Objective: long-term growth of capital. Janus Capital 2GT Technology Portfolio: Service Non-diversified mutual fund that invests, under Shares normal circumstances, at least 80% of its net assets in securities of companies that the portfolio manager believes will benefit significantly from advances or improvements in technology. It implements this policy by investing primarily in equity securities of U.S. and foreign companies selected for their growth potential. 1IG Janus Aspen Series Objective: long-term growth of capital. Janus Capital 2IG International Growth Portfolio: Invests, under normal circumstances, at least Service Shares 80% of its net assets in securities of issuers from at least five different countries, excluding the United States. Although the Portfolio intends to invest substantially all of its assets in issuers located outside the United States, it may at times invest in U.S. issuers and under unusual circumstances, it may invest all of its assets in fewer than five countries or even a single country. 1AG Janus Aspen Series Mid Cap Objective: invests, under normal circumstances, Janus Capital 2AG Growth Portfolio: Service at least 80% of its net assets in equity Shares (previously Janus Aspen securities of mid-sized companies whose market Series Aggressive Growth capitalization falls, at the time of initial Portfolio: Service Shares purchase, in the 12-month average of the capitalization ranges of the Russell Midcap Growth Index.
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 25
SUBACCOUNT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER 1IP Lazard Retirement International Objective: long-term capital appreciation. Lazard Asset Management, 2IP Equity Portfolio Invests primarily in equity securities, LLC principally common stocks, of relatively large non-U.S. companies with market capitalizations in the range of the Morgan Stanley Capital International (MSCI) Europe, Australia and Far East (EAFE(R)) Index that the Investment Manager believes are undervalued based on their earnings, cash flow or asset values. 1MG MFS(R) Investors Growth Stock Objective: long-term growth of capital and MFS Investment Management(R) 2MG Series - Service Class future income. Invests at least 80% of its net assets in common stocks and related securities of companies which MFS(R) believes offer better than average prospects for long-term growth. 1MD MFS(R) New Discovery Series - Objective: capital appreciation. Invests in at MFS Investment Management(R) 2MD Service Class least 65% of its net assets in equity securities of emerging growth companies. 1IN Putnam VT International New Objective: long-term capital appreciation. The Putnam Investment 2IN Opportunities Fund - Class IB fund pursues its goal by investing mainly in Management, LLC Shares common stocks of companies outside the United States with a focus on growth stocks. 1VS Putnam VT Vista Fund - Class IB Objective: capital appreciation. The fund Putnam Investment 2VS Shares pursues its goal by investing mainly in common Management, LLC stocks of U.S. companies with a focus on growth stocks. 1MI Royce Micro-Cap Portfolio Objective: long-term growth of capital. Invests Royce & Associates, LLC 2MI primarily in a broadly diversified portfolio of equity securities issued by micro-cap companies (companies with stock market capitalizations below $400 million). 1SV Third Avenue Value Portfolio Objective: long-term capital appreciation. Third Avenue Management 2SV Invests primarily in common stocks of well LLC financed, well managed companies at a substantial discount to what the Adviser believes is their true value. 1IT Wanger International Small Cap Objective: long-term growth of capital. Invests Liberty Wanger Asset 2IT primarily in stocks of small and medium-size Management, L.P. non-U.S. companies with capitalizations of less than $2 billion at time of purchase. 1SP Wanger U.S. Smaller Companies Objective: long-term growth of capital. Invests Liberty Wanger Asset 2SP primarily in stocks of small- and medium-size Management, L.P. U.S. companies with capitalizations of less than $5 billion at time of purchase.
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 26
SUBACCOUNT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER 1AA Wells Fargo VT Asset Allocation Objective: long-term total return consistent Wells Fargo Funds 2AA Fund with reasonable risk. Invests in equity and Management, LLC, adviser; fixed-income securities in varying proportions, Wells Capital Management with "neutral" target allocation of 60% equity Incorporated, subadviser. securities and 40% fixed-income securities. The Fund invests its equity portion of assets in common stocks to replicate the S&P 500(R) Index and its fixed-income portion of assets in U.S. Treasury Bonds to replicate the Lehman Brothers 20+ Treasury Index. The Fund seeks to maintain a 95% or better performance correlation with the respective indexes. 1WI Wells Fargo VT International Objective: total return with an emphasis on Wells Fargo Funds 2WI Equity Fund long-term capital appreciation. Invests Management, LLC, adviser; principally in equity securities of companies Wells Capital Management based in developed foreign countries or Incorporated, subadviser. emerging markets. 1SG Wells Fargo VT Small Cap Growth Objective: long-term capital appreciation. Wells Fargo Funds 2SG Fund Focus is on companies believed to have Management, LLC, adviser; above-average growth potential or that may be Wells Capital Management involved in new or innovative products, Incorporated, subadviser. services and processes. Invests principally in securities of companies with above-average growth potential and whose market capitalizations equal to or lower than the company with the largest market capitalization in falls within the range of the Russell 2000 Index, which is considered a small capitalization index.
A fund underlying your contract in which a subaccount invests may have a name, portfolio manager, objectives, strategies and characteristics that are the same or substantially similar to those of a publicly-traded retail mutual fund. Despite these similarities, an underlying fund is not the same as any publicly-traded retail mutual fund. Each underlying fund will have its own unique portfolio holdings, fees, operating expenses and operating results. The results of each underlying fund may differ significantly from any publicly-traded retail mutual fund. The investment advisers cannot guarantee that the funds will meet their investment objectives. Please read the funds' prospectuses for facts you should know before investing. These prospectuses are available by contacting us at the address or telephone number on the first page of this prospectus. All funds are available to serve as the underlying investments for variable annuities and variable life insurance policies. Some funds also are available to serve as investment options for tax-deferred retirement plans. It is possible that in the future, it may be disadvantageous for variable annuity accounts and variable life insurance accounts and/or tax-deferred retirement plans to invest in the available funds simultaneously. Although the insurance company and the funds do not currently foresee any such disadvantages, the boards of directors or trustees of the appropriate funds will monitor events in order to identify any material conflicts between annuity owners, policy owners and tax-deferred retirement plans and to determine what action, if any, should be taken in response to a conflict. If a board were to conclude that it should establish separate funds for the variable annuity, variable life insurance and tax-deferred retirement plan accounts, you would not bear any expenses associated with establishing separate funds. Please refer to the funds' prospectuses for risk disclosure regarding simultaneous investments by variable annuity, variable life insurance and tax-deferred retirement plan accounts. The Internal Revenue Service (IRS) issued final regulations relating to the diversification requirements under Section 817(h) of the Code. Each fund intends to comply with these requirements. The variable account was established under Minnesota law on Aug. 23, 1995, and the subaccounts are registered together as a single unit investment trust under the Investment Company Act of 1940 (the 1940 Act). This registration does not involve any supervision of our management or investment practices and policies by the SEC. All obligations arising under the contracts are general obligations of IDS Life. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 27 The variable account meets the definition of a separate account under federal securities laws. We credit or charge income, capital gains and capital losses of each subaccount only to that subaccount. State insurance law prohibits us from charging a subaccount with liabilities of any other subaccount or of our general business. The variable account includes other subaccounts that are available under contracts that are not described in this prospectus. The U.S. Treasury and the IRS indicated that they may provide additional guidance on investment control. This concerns how many variable subaccounts an insurance company may offer and how many exchanges among subaccounts it may allow before the contract owner would be currently taxed on income earned within subaccount assets. At this time, we do not know what the additional guidance will be or when action will be taken. We reserve the right to modify the contract, as necessary, so that the owner will not be subject to current taxation as the owner of the subaccount assets. We intend to comply with all federal tax laws so that the contract continues to qualify as an annuity for federal income tax purposes. We reserve the right to modify the contract as necessary to comply with any new tax laws. THE FIXED ACCOUNT You also may allocate purchase payments and transfers to the fixed account. We back the principal and interest guarantees relating to the fixed account. These guarantees are based on the continued claims-paying ability of the company. The value of the fixed account increases as we credit interest to the account. Purchase payments and transfers to the fixed account become part of our general account. Interest is calculated and compounded daily based on a 365-day year so as to produce the annual effective rate which we declare. We do not credit interest on leap days (Feb. 29). The interest rate we apply to each purchase payment or transfer to the fixed account is guaranteed for one year. Thereafter, we will change the rates from time to time at our discretion. These rates will be based on various factors including, but not limited to, the interest rate environment, returns earned on investments backing these annuities, the rates currently in effect for new and existing company annuities, product design, competition, and the company's revenues and expenses. Interests in the fixed account are not required to be registered with the SEC. The SEC staff does not review the disclosures in this prospectus on the fixed account. Disclosures regarding the fixed account, however, may be subject to certain generally applicable provisions of the federal securities laws relating to the accuracy and completeness of statements made in prospectuses. (See "Making the Most of Your Contract -- Transfer policies" for restrictions on transfers involving the fixed account.) BUYING YOUR CONTRACT New contracts are not currently being offered. As the owner, you have all rights and may receive all benefits under the contract. You can own a nonqualified annuity in joint tenancy with rights of survivorship only in spousal situations. You cannot own a qualified annuity in joint tenancy. You can become an owner or an annuitant if you are 90 or younger. The contract provides for allocation of purchase payments to the subaccounts of the variable account and/or to the fixed account in even 1% increments. We applied your initial purchase payment within two business days after we received it at our office. However, we will credit additional purchase payments you make to your accounts on the valuation date we receive them. We will value additional payments at the next accumulation unit value calculated after we receive your payments at our office. THE SETTLEMENT DATE Annuity payouts are scheduled to begin on the settlement date. When we processed your application, we established the settlement date to the maximum age or date described below. You can also select a date within the maximum limits. You can align this date with your actual retirement from a job, or it can be a different future date, depending on your needs and goals and on certain restrictions. You also can change the date, provided you send us written instructions at least 30 days before annuity payouts begin. FOR NONQUALIFIED ANNUITIES AND ROTH IRAs, the settlement date must be: - no earlier than the 60th day after the contract's effective date; and - no later than the annuitant's 85th birthday or the tenth contract anniversary, if purchased after age 75. (In Pennsylvania, the maximum settlement date ranges from age 85 to 96 based on the annuitant's age when we issue the contract. See contract for details.) FOR QUALIFIED ANNUITIES EXCEPT ROTH IRAs, to avoid IRS penalty taxes, the settlement date generally must be: - on or after the date the annuitant reaches age 59 1/2; and - for IRAs, SIMPLE IRAs and SEPs, by April 1 of the year following the calendar year when the annuitant reaches age 70 1/2; or - for all other qualified annuities, by April 1 of the year following the calendar year when the annuitant reaches age 70 1/2, or, if later, retires (except that 5% business owners may not select a settlement date that is later than April 1 of the year following the calendar year when they reach age 70 1/2). AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 28 If you take the minimum IRA or TSA distributions as required by the Code from another tax-qualified investment, or in the form of partial surrenders from this contract, annuity payouts can start as late as the annuitant's 85th birthday or the tenth contract anniversary, if later. (In Pennsylvania, the annuity payout ranges from age 85 to 96 based on the annuitant's age when the contract is issued. See contract for details.) BENEFICIARY If death benefits become payable before the settlement date while the contract is in force and before annuity payouts begin, we will pay your named beneficiary all or part of the contract value. If there is no named beneficiary, then you or your estate will be the beneficiary. (See "Benefits in Case of Death" for more about beneficiaries.) PURCHASE PAYMENTS MINIMUM ALLOWABLE PURCHASE PAYMENTS(1) If paying by installments under a scheduled payment plan: $23.08 biweekly, or $50 per month If paying by any other method: $50 (1) Installments must total at least $600 in the first year. If you do not make any purchase payments for 24 months, and your previous payments total $600 or less, we have the right to give you 30 days' written notice and pay you the total value of your contract in a lump sum. This right does not apply to contracts in New Jersey. MAXIMUM ALLOWABLE ANNUAL PURCHASE PAYMENTS(2) $100,000 up to age 85 $50,000 for ages 86 to 90 (2) These limits apply in total to all IDS Life annuities you own. We reserve the right to increase maximum limits. For qualified annuities the tax-deferred retirement plan's or the Code's limits on annual contributions also apply. Except for TSAs, purchase payments are limited and may not be made after the third contract anniversary in Massachusetts, Washington and Oregon. We reserve the right to not accept purchase payments allocated to the fixed account for twelve months following either: 1. a partial surrender from the fixed account; or 2. a lump sum transfer from the fixed account to a subaccount. HOW TO MAKE PURCHASE PAYMENTS 1 BY LETTER Send your check along with your name and contract number to: IDS LIFE INSURANCE COMPANY 70200 AXP FINANCIAL CENTER MINNEAPOLIS, MN 55474 2 BY SCHEDULED PAYMENT PLAN We can help you set up: - an automatic payroll deduction, salary reduction or other group billing arrangement; or - a bank authorization. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 29 CHARGES CONTRACT ADMINISTRATIVE CHARGE We charge this fee for establishing and maintaining your records. We deduct $30 from the contract value on your contract anniversary at the end of each contract year. We prorate this charge among the subaccounts and the fixed account in the same proportion your interest in each account bears to your total contract value. We will waive this charge when your contract value, or total purchase payments less any payments surrendered, is $50,000 or more on the current contract anniversary. If you surrender your contract, we will deduct the charge at the time of surrender regardless of the contract value or purchase payments made. We cannot increase the annual contract administrative charge and it does not apply after annuity payouts begin or when we pay death benefits. MORTALITY AND EXPENSE RISK FEE We charge this fee daily to the subaccounts. The unit values of your subaccounts reflect this fee. For nonqualified annuities the fee totals 0.95% of the average daily net assets on an annual basis. For qualified annuities the fee totals 0.75% of the average daily net assets on an annual basis. This fee covers the mortality and expense risk that we assume. Approximately two-thirds of this amount is for our assumption of mortality risk, and one-third is for our assumption of expense risk. This fee does not apply to the fixed account. Mortality risk arises because of our guarantee to pay a death benefit and our guarantee to make annuity payouts according to the terms of the contract, no matter how long a specific annuitant lives and no matter how long our entire group of annuitants live. If, as a group, annuitants outlive the life expectancy we assumed in our actuarial tables, we must take money from our general assets to meet our obligations. If, as a group, annuitants do not live as long as expected, we could profit from the mortality risk fee. Expense risk arises because we cannot increase the contract administrative charge and this charge may not cover our expenses. We would have to make up any deficit from our general assets. We could profit from the expense risk fee if future expenses are less than expected. The subaccounts pay us the mortality and expense risk fee they accrued as follows: - first, to the extent possible, the subaccounts pay this fee from any dividends distributed from the funds in which they invest; - then, if necessary, the funds redeem shares to cover any remaining fees payable. We may use any profits we realize from the subaccounts' payment to us of the mortality and expense risk fee for any proper corporate purpose, including, among others, payment of distribution (selling) expenses. We do not expect that the surrender charge, discussed in the following paragraphs, will cover sales and distribution expenses. MAV RIDER FEE We charge a fee for the optional feature only if you select it(1). If selected, we deduct 0.15% of your contract value on your contract anniversary at the end of each contract year. We prorate this fee among the subaccounts and fixed accounts in the same proportion your interest in each account bears to your total contract value. When annuity payouts begin or if you terminate the contract for any reason other than death, we will deduct this fee, adjusted for the number of calendar days coverage was in place. We reserve the right to assess charges for the number of days the rider was in force for any rider that is terminated due to a change of ownership. If you choose to drop this rider on an anniversary (subject to the restrictions given in "Optional Benefits"), we will deduct this fee on that anniversary. We cannot increase this annual fee after the rider effective date and it does not apply after annuity payouts begin or when we pay death benefits. EEB RIDER FEE We charge a fee for the optional feature only if you select it(1). If selected, we deduct 0.30% of your contract value on your contract anniversary at the end of each contract year. We prorate this fee among the subaccounts and fixed accounts in the same proportion your interest in each account bears to your total contract value. When annuity payouts begin or if you terminate the contract for any reason other than death, we will deduct this fee, adjusted for the number of calendar days coverage was in place. We reserve the right to assess charges for the number of days the rider was in force for any rider that is terminated due to a change in ownership. If you chose to drop this rider on an anniversary (subject to the restrictions given in "Optional Benefits"), we will deduct this fee on that anniversary. We cannot increase this annual fee after the rider effective date and it does not apply after annuity payouts begin or when we pay death benefits. (1) You may select either the MAV or EEB rider. Or you may select the MAV and the EEB. Riders may not be available in all states. The MAV and EEB are only available if you and the annuitant are 75 or younger at the rider effective date. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 30 SURRENDER CHARGE If you surrender all or part of your contract, you may be subject to a surrender charge. A surrender charge applies if all or part of the surrender amount is from purchase payments we received within seven (7) or ten (10) years before surrender. You select the surrender charge period at the time of your application for the contract.* The surrender charge percentages that apply to you are shown in your contract. * The ten-year surrender charge schedule is not available in Oregon. For contracts issued in Massachusetts, Oregon and Washington, surrender charges are waived after the tenth contract anniversary. For purposes of calculating any surrender charge, we treat amounts surrendered from your contract value in the following order: 1. First, we surrender any contract earnings (contract value less purchase payments received and not previously surrendered). We do not assess a surrender charge on contract earnings. NOTE: We determine contract earnings by looking at the entire contract value, not the earnings of any particular subaccount or the fixed account. 2. Next, in each contract year, we surrender amounts totaling up to 10% of your prior contract anniversary contract value, but only to the extent not included and surrendered in number one above. (Your initial purchase payment is considered the prior contract anniversary contract value during the first contract year.) We do not assess a surrender charge on this amount. 3. Next we surrender purchase payments received prior to the surrender charge period you selected and shown in your contract. We do not assess a surrender charge on these purchase payments. 4. Finally, if necessary, we surrender purchase payments received that are still within the surrender charge period you selected and shown in your contract. We surrender these payments on a "first-in, first-out" (FIFO) basis. We do assess a surrender charge on these payments. We determine your surrender charge by multiplying each of your payments surrendered by the applicable surrender charge percentage, and then adding the total surrender charges. The surrender charge percentage depends on the number of years since you made the payments that are surrendered, depending on the schedule you selected*:
SEVEN-YEAR SCHEDULE TEN-YEAR SCHEDULE* YEARS FROM PURCHASE SURRENDER CHARGE YEARS FROM PURCHASE SURRENDER CHARGE PAYMENT RECEIPT PERCENTAGE PAYMENT RECEIPT PERCENTAGE 1 7% 1 8% 2 7 2 8 3 7 3 8 4 6 4 7 5 5 5 7 6 4 6 6 7 2 7 5 Thereafter 0 8 4 9 3 10 2 Thereafter 0
For a partial surrender that is subject to a surrender charge, the amount we actually deduct from your contract value will be the amount you request plus any applicable surrender charge. The surrender charge percentage is applied to this total amount. We pay you the amount you requested. EXAMPLE: Assume you requested a surrender of $1,000 and there is a surrender charge of 7%. The total amount we actually deduct from your contract is $1,075.27. We determine this amount as follows: AMOUNT REQUESTED $1,000 -------------------------------- OR ------ = $1,075.27 1.00 - SURRENDER CHARGE .93 By applying the 7% surrender charge to $1,075.27, the surrender charge is $75.27. We pay you the $1,000 you requested. If you make a full surrender of your contract, we also will deduct the applicable contract administrative charge and applicable prorated MAV Death Benefit or EEB charge. * The ten-year surrender charge schedule is not available in Oregon. For contracts issued in Massachusetts, Oregon and Washington, we waive surrender charges after the tenth contract anniversary. SURRENDER CHARGE UNDER ANNUITY PAYOUT PLAN E -- PAYOUTS FOR A SPECIFIED PERIOD: Under this payout plan, you can choose to take a surrender. The amount that you can surrender is the present value of any remaining variable payouts. For qualified contracts, the discount rate we use in the calculation will be 4.72% if the assumed investment rate is 3.5% and 6.22% if the assumed investment rate is 5%. For nonqualified contracts, the discount rate we use in the calculation will be 4.92% if the assumed investment rate is 3.5% and 6.42% if the AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 31 assumed investment rate is 5%. The surrender charge equals the present value of the remaining payouts using the assumed investment rate minus the present value of the remaining payouts using the discount rate. In no event would your surrender charge exceed 9% of the amount available for payouts under the plan. SURRENDER CHARGE CALCULATION EXAMPLE The following is an example of the calculation we would make to determine the surrender charge on a contract that contains a seven-year surrender charge schedule with this history: - The contract date is July 1, 2002 with a contract year of July 1 through June 30 and with an anniversary date of July 1 each year; and - We received these payments: -- $10,000 July 1, 2002; -- $ 8,000 Dec. 31, 2007; -- $ 6,000 Feb. 20, 2010; and - The owner surrenders the contract for its total surrender value of $26,500 on Aug. 5, 2011 and had not made any other surrenders during that contract year; and - The prior anniversary July 1, 2010 contract value was $28,000. SURRENDER CHARGE EXPLANATION $ 0 $2,500 is contract earnings surrendered without charge; and 0 $300 is 10% of the prior anniversary's contract value that is in excess of contract earnings surrendered without charge (from above). 10% of $28,000 = $2,800 - $2,500 = $300 0 $10,000 July 1, 2002 purchase payment was received eight or more years before surrender and is surrendered without surrender charge; and 480 $8,000 Dec. 31, 2007 purchase payment is in its fourth year from receipt, surrendered with a 6% surrender charge; and 420 $6,000 Feb. 20, 2010 purchase payment is in its second year from receipt, surrendered with a 7% surrender charge. ------ $ 900
WAIVER OF SURRENDER CHARGES We do not assess surrender charges for: - surrenders of any contract earnings; - surrenders of amounts totaling up to 10% of your prior contract anniversary contract value to the extent it exceeds contract earnings; - amounts surrendered after the tenth contract anniversary in Massachusetts, Washington and Oregon. - required minimum distributions from a qualified annuity (for those amounts required to be distributed from the contract described in this prospectus); - contracts settled using an annuity payout plan, unless an annuity payout Plan E is later surrendered; - amounts we refund to you during the free look period*; - death benefits*; and - surrenders you make under your contract's "Waiver of Surrender Charges for Nursing Home Confinement" provision*. To the extent permitted by state law, this provision applies when you are under age 76 at contract issue. Under this provision, we will waive surrender charges that we normally assess upon full or partial surrender if you provide proof satisfactory to us that, as of the date you request the surrender, you or the annuitant are confined to a nursing home and have been for the prior 90 days and the confinement began after the contract date. (See your contract for additional conditions and restrictions on this waiver.) * However, we will reverse certain purchase payment credits. (See "Valuing Your Investment -- Purchase payment credits.") OTHER INFORMATION ON CHARGES: AEFC makes certain custodial services available to some profit sharing, money purchase and target benefit plans funded by our annuities. Fees for these services start at $30 per calendar year per participant. AEFC will charge a termination fee for owners under age 59 1/2 (fee waived in case of death or disability). POSSIBLE GROUP REDUCTIONS: In some cases we may incur lower sales and administrative expenses due to the size of the group, the average contribution and the use of group enrollment procedures. In such cases, we may be able to reduce or eliminate the contract administrative and surrender charges. However, we expect this to occur infrequently. PREMIUM TAXES Certain state and local governments impose premium taxes on us (up to 3.5%). These taxes depend upon your state of residence or the state in which the contract was sold. Currently, we deduct any applicable premium tax when annuity payouts begin, but we reserve the right to deduct this tax at other times such as when you surrender your contract. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 32 VALUING YOUR INVESTMENT We value your accounts as follows: FIXED ACCOUNT We value the amounts allocated to the fixed account directly in dollars. The fixed account value equals: - the sum of your purchase payments and transfer amounts allocated to the fixed account; - plus any purchase payment credits allocated to the fixed account; - plus interest credited; - minus the sum of amounts surrendered (including any applicable surrender charges) and amounts transferred out; - minus any prorated portion of the contract administrative charge; - minus any prorated portion of the MAV rider fee (if selected); and - minus any prorated portion of the EEB rider fee (if selected). SUBACCOUNTS We convert amounts you allocated to the subaccounts into accumulation units. Each time you make a purchase payment or transfer amounts into one of the subaccounts or we apply any purchase payment credits to a subaccount, we credit a certain number of accumulation units to your contract for that subaccount. Conversely, each time you take a partial surrender, transfer amounts out of a subaccount or we assess an administrative charge, surrender charge or any applicable charge for an optional benefit, we subtract a certain number of accumulation units from your contract. The accumulation units are the true measure of investment value in each subaccount during the accumulation period. They are related to, but not the same as, the net asset value of the fund in which the subaccount invests. The dollar value of each accumulation unit can rise or fall daily depending on the variable account expenses, performance of the fund and on certain fund expenses. Here is how we calculate accumulation unit values: NUMBER OF UNITS: to calculate the number of accumulation units for a particular subaccount we divide your investment by the current accumulation unit value. ACCUMULATION UNIT VALUE: the current accumulation unit value for each subaccount equals the last value times the subaccount's current net investment factor. WE DETERMINE THE NET INVESTMENT FACTOR BY: - adding the fund's current net asset value per share, plus the per share amount of any accrued income or capital gain dividends to obtain a current adjusted net asset value per share; then - dividing that sum by the previous adjusted net asset value per share; and - subtracting the percentage factor representing the mortality and expense risk fee from the result. Because the net asset value of the fund may fluctuate, the accumulation unit value may increase or decrease. You bear all the investment risk in a subaccount. FACTORS THAT AFFECT SUBACCOUNT ACCUMULATION UNITS: accumulation units may change in two ways -- in number and in value. The number of accumulation units you own may fluctuate due to: - additional purchase payments you allocate to the subaccounts; - any purchase payment credits allocated to the subaccounts; - transfers into or out of the subaccounts; - partial surrenders; - surrender charges; - a prorated portion of the contract administrative charge; - a prorated portion of the MAV rider fee (if selected); and/or - a prorated portion of the EEB rider fee (if selected). Accumulation unit values will fluctuate due to: - changes in funds' net asset value; - dividends distributed to the subaccounts; - capital gains or losses of funds; - fund operating expenses; and/or - mortality and expense risk fees. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 33 PURCHASE PAYMENT CREDITS We add a credit* to your contract in the amount of: - 1% of each purchase payment received: -- if you elect the ten-year surrender charge schedule for your contract; OR -- if you elect the seven-year surrender charge schedule for your contract AND your initial purchase payment to the contract is at least $100,000. - 2% of each purchase payment received if you elect the ten-year surrender charge schedule for your contract AND your initial purchase payment to the contract is at least $100,000. We fund the credit from our general account. We do not consider credits to be "investments" for income tax purposes. (See "Taxes.") We allocate each credit to your contract value when the applicable purchase payment is applied to your contract value. We allocate such credits to your contract value according to allocation instructions in effect for your purchase payments. We will reverse credits from the contract value for any purchase payment that is not honored. The amount returned to you under the free look provision also will not include any credits applied to your contract. (See "The Contract in Brief -- Free look period.") To the extent a death benefit or surrender payment includes purchase payment credits applied within twelve months preceding: (1) the date of death that results in a lump sum death benefit under this contract; or (2) a request for surrender charge waiver due to Nursing Home Confinement, we will assess a charge, similar to a surrender charge, equal to the amount of the purchase payment credits. The amount we pay to you under these circumstances will always equal or exceed your surrender value. Surrender charges under the contract may be higher than those for contracts that do not have purchase payment credits. The amount of the credits may be more than offset by the additional charges associated them. Because of higher charges, there could be circumstances where you may be worse off purchasing this contract with the credits than purchasing other contracts. All things being equal (such as fund performance and availability), this may occur if you select the ten-year surrender charge and you make a full withdrawal in years five through ten. We pay for the credits primarily through revenue from a higher and longer withdrawal charge schedule and through lower costs associated with larger sized contracts, including lower compensation paid on the sales of these contracts. We reserve the right to increase the amount of the credit for certain groups of contract owners. The increase will not be greater than 8% of total net purchase payments. We would pay for increases in credit amounts primarily through reduced expenses expected from such groups. * The ten-year surrender charge is not available in Oregon. Contracts purchased in Oregon are only eligible for a 1% purchase payment credit if the initial purchase payment is at least $100,000. MAKING THE MOST OF YOUR CONTRACT AUTOMATED DOLLAR-COST AVERAGING Currently, you can use automated transfers to take advantage of dollar-cost averaging (investing a fixed amount at regular intervals). For example, you might transfer a set amount monthly from a relatively conservative subaccount to a more aggressive one, or to several others, or from the fixed account to one or more subaccounts. There is no charge for dollar-cost averaging. This systematic approach can help you benefit from fluctuations in accumulation unit values caused by fluctuations in the market values of the funds. Since you invest the same amount each period, you automatically acquire more units when the market value falls and fewer units when it rises. The potential effect is to lower your average cost per unit. HOW DOLLAR-COST AVERAGING WORKS
NUMBER AMOUNT ACCUMULATION OF UNITS MONTH INVESTED UNIT VALUE PURCHASED By investing an equal number of dollars each month... Jan $100 $20 5.00 Feb 100 18 5.56 you automatically buy more Mar 100 17 5.88 units when the per unit market price is low ... ----> Apr 100 15 6.67 May 100 16 6.25 Jun 100 18 5.56 Jul 100 17 5.88 Aug 100 19 5.26 and fewer units when the per unit market price is high. ----> Sept 100 21 4.76 Oct 100 20 5.00
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 34 You paid an average price of only $17.91 per unit over the 10 months, while the average market price actually was $18.10. Dollar-cost averaging does not guarantee that any subaccount will gain in value nor will it protect against a decline in value if market prices fall. Because dollar-cost averaging involves continuous investing, your success will depend upon your willingness to continue to invest regularly through periods of low price levels. Dollar-cost averaging can be an effective way to help meet your long-term goals. For specific features contact your sales representative. ASSET REBALANCING You can ask us in writing to have the variable subaccount portion of your contract value allocated according to the percentages (in whole percentage amounts ) that you choose. We automatically will rebalance the variable subaccount portion of your contract value either quarterly, semi-annually, or annually. The period you select will start to run on the date we record your request. On the first valuation date of each of these periods, we automatically will rebalance your contract value so that the value in each subaccount matches your current subaccount percentage allocations. These percentage allocations must be in whole numbers. Asset rebalancing does not apply to the fixed account. There is no charge for asset rebalancing. The contract value must be at least $2,000. You can change your percentage allocations or your rebalancing period at any time by contacting us in writing. We will restart the rebalancing period you selected as of the date we record your change. You also can ask us in writing to stop rebalancing your contract value. You must allow 30 days for us to change any instructions that currently are in place. For more information on asset rebalancing, contact your sales representative. TRANSFERRING BETWEEN ACCOUNTS You may transfer contract value from any one subaccount, or the fixed account, to another subaccount before annuity payouts begin. (Certain restrictions apply to transfers involving the fixed account.) We will process your transfer on the valuation date we receive your request. We will value your transfer at the next accumulation unit value calculated after we receive your request. There is no charge for transfers. Before making a transfer, you should consider the risks involved in changing investments. We may suspend or modify transfer privileges at any time. The contract is not designed for use by individuals, professional market timing organizations, or other entities that do "market timing," programmed transfers, frequent transfers, or excessive trading, or transfers that are large in relation to the total assets of any fund underlying the contract. These and similar activities may adversely affect a fund's ability to invest effectively in accordance with its investment objectives and policies, may increase expenses and may harm other contract owners who allocated purchase payments to the fund regardless of their transfer activity. Accordingly, individuals and organizations that use market-timing investment strategies and make frequent transfers should not own this contract. We monitor the frequency of transfers, including the size of transfers in relation to fund assets in each underlying fund, and we take appropriate action as necessary. In order to prevent market timing activities that may harm or disadvantage other contract owners, we may apply modifications or restrictions (including suspending the transfer privilege) in any reasonable manner to prevent a transfer. We may also reject or restrict any specific payment or transfer request and impose specific limitations with respect to market timers, including restricting transfers by market timers to certain underlying funds. We may also apply other restrictions or modifications that could include, but not be limited to: - not accepting telephone or electronic transfer requests; - requiring a minimum time period between each transfer; - not accepting transfer requests of an agent acting under power of attorney on behalf of more than one contract owner; or - limiting the dollar amount that a contract owner may transfer at any one time. We agree to provide notice of our intent to restrict transfer privileges to contract owners who have engaged in disruptive activity. In addition, some of the underlying funds have reserved the right to temporarily or permanently refuse payments or transfer requests from us if, in the judgment of the fund's investment adviser, the fund would be unable to invest effectively in accordance with its investment objective or policies, or would otherwise potentially be adversely affected. Accordingly, we may not be in a position to effect certain allocations or transfers requested by market timers and may refuse such requests without prior notice. Subject to state law, we reserve the right to impose, without prior notice, restrictions on allocations and transfers that we determine, in our sole discretion, will disadvantage or potentially hurt the rights or interests of other contract owners. For information on transfers after annuity payouts begin, see "Transfer policies" below. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 35 TRANSFER POLICIES - Before annuity payouts begin, you may transfer contract values between the subaccounts, or from the subaccounts to the fixed account at any time. However, if you made a transfer from the fixed account to the subaccounts, you may not make a transfer from any subaccount back to the fixed account until the next contract anniversary. - You may transfer contract values from the fixed account to the subaccounts once a year during a 31-day transfer period starting on each contract anniversary (except for automated transfers, which can be set up at any time for certain transfer periods subject to certain minimums). - If we receive your request within 30 days before the contract anniversary date, the transfer from the fixed account to the subaccounts will be effective on the anniversary. - If we receive your request on or within 30 days after the contract anniversary date, the transfer from the fixed account to the subaccounts will be effective on the valuation date we receive it. - We will not accept requests for transfers from the fixed account at any other time. - Once annuity payouts begin, you may not make transfers to or from the fixed account, but you may make transfers once per contract year among the subaccounts. During the annuity payout period, you cannot invest in more than five subaccounts at any one time unless we agree otherwise. HOW TO REQUEST A TRANSFER OR SURRENDER 1 BY LETTER Send your name, contract number, Social Security Number or Taxpayer Identification Number and signed request for a transfer or surrender to: IDS LIFE INSURANCE COMPANY 70100 AXP FINANCIAL CENTER MINNEAPOLIS, MN 55474 MINIMUM AMOUNT Transfers or surrenders: $250 or entire account balance MAXIMUM AMOUNT Transfers or surrenders: Contract value or entire account balance 2 BY AUTOMATED TRANSFERS AND AUTOMATED PARTIAL SURRENDERS Your sales representative can help you set up automated transfers among your subaccounts or fixed account or partial surrenders from the accounts. You can start or stop this service by written request or other method acceptable to us. You must allow 30 days for us to change any instructions that are currently in place. - Automated transfers from the fixed account to any one of the subaccounts may not exceed an amount that, if continued, would deplete the fixed account within 12 months. - Automated surrenders may be restricted by applicable law under some contracts. - You may not make additional purchase payments if automated partial surrenders are in effect. - Automated partial surrenders may result in IRS taxes and penalties on all or part of the amount surrendered. - The balance in any account from which you make an automated transfer or automated partial surrender must be sufficient to satisfy your instructions. If not, we will suspend your entire automated arrangement until the balance is adequate. - If we must suspend your automated transfer or automated partial surrender arrangement for six months, we reserve the right to discontinue the arrangement in its entirety. MINIMUM AMOUNT Transfers or surrenders: $50 MAXIMUM AMOUNT Transfers or surrenders: None (except for automated transfers from the fixed account) AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 36 3 BY PHONE Call between 7 a.m. and 10 p.m. Central time: (800) 862-7919 TTY service for the hearing impaired: (800) 285-8846 MINIMUM AMOUNT Transfers or surrenders: $250 or entire account balance MAXIMUM AMOUNT Transfers: Contract value or entire account balance Surrenders: $100,000 We answer telephone requests promptly, but you may experience delays when the call volume is unusually high. If you are unable to get through, use the mail procedure as an alternative. We will honor any telephone transfer or surrender requests that we believe are authentic and we will use reasonable procedures to confirm that they are. This includes asking identifying questions and tape recording calls. We will not allow a telephone surrender within 30 days of a phoned-in address change. As long as we follow the procedures, we (and our affiliates) will not be liable for any loss resulting from fraudulent requests. Telephone transfers or surrenders are automatically available. You may request that telephone transfers or surrenders NOT be authorized from your account by writing to us. SURRENDERS You may surrender all or part of your contract at any time before annuity payouts begin by sending us a written request or calling us. We will process your surrender request on the valuation date we receive it. For total surrenders, we will compute the value of your contract at the next accumulation unit value calculated after we receive your request. We may ask you to return the contract. You may have to pay surrender charges (see "Charges -- Surrender Charge"), MAV charges (see "Charges -- MAV rider fee"), EEB charges (see "Charges -- EEB rider fee"), and IRS taxes and penalties (see "Taxes"). You cannot make surrenders after annuity payouts begin except under Plan E (see "The Annuity Payout Period -- Annuity Payout Plans"). SURRENDER POLICIES If you have a balance in more than one account and you request a partial surrender, we will withdraw money from all your subaccounts and/or the fixed account in the same proportion as your value in each account correlates to your total contract value, unless you request otherwise. The minimum contract value after partial surrender is $600. RECEIVING PAYMENT 1 BY REGULAR OR EXPRESS MAIL - payable to you; - mailed to address of record. NOTE: We will charge you a fee if you request express mail delivery. 2 BY WIRE - request that payment be wired to your bank; - bank account must be in the same ownership as your contract; and - pre-authorization required. NOTE: We will charge you a fee if you request that payment be wired to your bank. For instructions, please contact your sales representative. Normally, we will send the payment within seven days after receiving your request. However, we may postpone the payment if: -- the surrender amount includes a purchase payment check that has not cleared; -- the NYSE is closed, except for normal holiday and weekend closings; -- trading on the NYSE is restricted, according to SEC rules; -- an emergency, as defined by SEC rules, makes it impractical to sell securities or value the net assets of the accounts; or -- the SEC permits us to delay payment for the protection of security holders. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 37 TSA -- SPECIAL SURRENDER PROVISIONS PARTICIPANTS IN TAX-SHELTERED ANNUITIES The Code imposes certain restrictions on your right to receive early distributions from a TSA: - Distributions attributable to salary reduction contributions (plus earnings) made after Dec. 31, 1988, or to transfers or rollovers from other contracts, may be made from the TSA only if: -- you are at least age 59 1/2; -- you are disabled as defined in the Code; -- you severed employment with the employer who purchased the contract; or -- the distribution is because of your death. - If you encounter a financial hardship (as provided by the Code), you may be eligible to receive a distribution of all contract values attributable to salary reduction contributions made after Dec. 31, 1988, but not the earnings on them. - Even though a distribution may be permitted under the above rules, it may be subject to IRS taxes and penalties (see "Taxes"). - The employer must comply with certain nondiscrimination requirements for certain types of contributions under a TSA contract to be excluded from taxable income. You should consult your employer to determine whether the nondiscrimination rules apply to you. - The above restrictions on distributions do not affect the availability of the amount credited to the contract as of Dec. 31, 1988. The restrictions also do not apply to transfers or exchanges of contract value within the contract, or to another registered variable annuity contract or investment vehicle available through the employer. - If the contract has a loan provision, the right to receive a loan is described in detail in your contract. CHANGING OWNERSHIP You may change ownership of your nonqualified annuity at any time by completing a change of ownership form we approve and sending it to our office. The change will become binding on us when we receive and record it. We will honor any change of ownership request that we believe is authentic and we will use reasonable procedures to confirm authenticity. If we follow these procedures, we will not take any responsibility for the validity of the change. Please consider carefully whether or not you wish to change ownership of your nonqualified annuity if you have elected the MAV or EEB. The terms of the EEB and the MAV will change due to a change of ownership. If either the new owner or the annuitant is older than age 75, the EEB will terminate. Otherwise, the EEB will effectively "start over." We will treat the EEB as if it is issued on the day the change of ownership is made, using the attained age of the new owner as the "issue age" to determine the benefit levels. The account value on the date of the ownership change will be treated as a "purchase payment" in determining future values of "earnings at death" under the EEB. If either the new owner or the annuitant is older than age 75, the MAV will terminate. If the MAV on the date of ownership change is greater than the account value on the date of the ownership change, we will set the MAV equal to the account value. Otherwise, the MAV value will not change due to a change in ownership. Please see the descriptions of these riders in "Optional Benefits." The rider charges described in "Charges" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force) for any rider that continues after a change of ownership. We reserve the right to assess charges for the number of days the rider was in force for any rider that is terminated due to a change of ownership. If you have a nonqualified annuity, you may incur income tax liability by transferring, assigning or pledging any part of it. (See "Taxes.") If you have a qualified annuity, you may not sell, assign, transfer, discount or pledge your contract as collateral for a loan, or as security for the performance of an obligation or for any other purpose except as required or permitted by the Code. However, if the owner is a trust or custodian, or an employer acting in a similar capacity, ownership of the contract may be transferred to the annuitant. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 38 BENEFITS IN CASE OF DEATH -- STANDARD DEATH BENEFIT We will pay the death benefit to your beneficiary upon the earlier of your death or the annuitant's death. If a contract has more than one person as the owner, we will pay benefits upon the first to die of any owner or the annuitant. If you or the annuitant die before annuity payouts begin while this contract is in force, we will pay the beneficiary as follows: If both you and the annuitant are age 80 or younger on the date of death, the beneficiary receives the greatest of: - contract value; - purchase payments minus adjusted partial surrenders; or - the contract value as of the most recent sixth contract anniversary, preceding the date of death, plus any purchase payments since that anniversary, minus adjusted partial surrenders since that anniversary. If either you or the annuitant are age 81 or older on the date of death, the beneficiary receives the greater of: - contract value; or - purchase payments minus adjusted partial surrenders. ADJUSTED PARTIAL SURRENDERS PS X DB ------- CV PS = the partial surrender including any applicable surrender charge. DB = the death benefit on the date of (but prior to) the partial surrender. CV = the contract value on the date of (but prior to) the partial surrender. EXAMPLE OF STANDARD DEATH BENEFIT CALCULATION WHEN YOU AND ANNUITANT ARE AGE 80 OR YOUNGER - You purchase the contract with a payment of $20,000 on Jan. 1, 2003. - On Jan 1, 2009 (the sixth contract anniversary) the contract value grows to $30,000. - March 1, 2009 the contract value falls to $28,000 at which point you take a $1,500 partial surrender, leaving a contract value of $26,500. We calculate the death benefit on March 1, 2009 as follows: The contract value on the most recent sixth contract anniversary: $30,000.00 plus purchase payments made since that anniversary: +0.00 minus adjusted partial surrenders taken since that anniversary calculated as: $1,500 X $30,000 ---------------- -1,607.14 $28,000 ---------- for a death benefit of: $28,392.86
IF YOU DIE BEFORE YOUR SETTLEMENT DATE When paying the beneficiary, we will process the death claim on the valuation date our death claim requirements are fulfilled. We will determine the contract's value at the next accumulation unit value calculated after our death claim requirements are fulfilled. We pay interest, if any, at a rate no less than required by law. We will mail payment to the beneficiary within seven days after our death claim requirements are fulfilled. NONQUALIFIED ANNUITIES If your spouse is sole beneficiary and you die before the settlement date, your spouse may keep the contract as owner. To do this your spouse must, within 60 days after we receive proof of death, give us written instructions to keep the contract in force. If your beneficiary is not your spouse, we will pay the beneficiary in a single sum unless you give us other written instructions. We must fully distribute the death benefit within five years of your death. However, the beneficiary may receive payouts under any annuity payout plan available under this contract if: - the beneficiary asks us in writing within 60 days after we receive proof of death; and - payouts begin no later than one year after your death, or other date as permitted by the Code; and - the payout period does not extend beyond the beneficiary's life or life expectancy. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 39 QUALIFIED ANNUITIES - SPOUSE BENEFICIARY: If you have not elected an annuity payout plan, and if your spouse is the sole beneficiary, your spouse may either elect to treat the contract as his/her own or elect an annuity payout plan or another plan agreed to by us. If your spouse elects a payout plan, the payouts must begin no later than the year in which you would have reached age 70 1/2. If you attained age 70 1/2 at the time of death, payouts must begin no later than Dec. 31 of the year following the year of your death. - NON-SPOUSE BENEFICIARY: If you have not elected an annuity payout plan, and if death occurs prior to the year you would have attained age 70 1/2, the beneficiary may elect to receive payouts from the contract over a five year period. If your death occurs after attaining age 70 1/2, we will pay the beneficiary in a single sum unless the beneficiary elects to receive payouts under any annuity payout plan available under this contract if: - the beneficiary asks us in writing within 60 days after we receive proof of death; and - payouts begin no later than one year following the year of your death; and - the payout period does not extend beyond the beneficiary's life or life expectancy. - ANNUITY PAYOUT PLAN: If you elect an annuity payout plan, the payouts to your beneficiary will continue pursuant to the annuity payout plan you elect. OPTIONAL BENEFITS MAXIMUM ANNIVERSARY VALUE DEATH BENEFIT The MAV is intended to provide additional death benefit protection in the event of fluctuating fund values. This is an optional benefit that you may select for an additional annual charge (see "Charges"). The MAV does not provide any additional benefit before the first contract anniversary after the rider effective date. The MAV may be of less value if you or the annuitant is older since we stop resetting the maximum anniversary value at age 81. Although we stop resetting the maximum anniversary value at age 81, the MAV rider fee continues to apply until the rider terminates. In addition, the MAV does not provide any additional benefit with respect to fixed account values during the time you have amounts allocated to the fixed account. Be sure to discuss with your sales representative whether or not the MAV is appropriate for your situation. If this rider is available in your state and both you and the annuitant are age 75 or younger at the rider effective date, you may choose to add the MAV to your contract. Generally, you must elect the MAV at the time you purchase your contract and your rider effective date will be the contract issue date. In some instances the rider effective date for the MAV may be after we issue the contract. We will determine the rider effective date for the MAV added after we issue the contract according to terms determined by us and at our sole discretion. On the first contract anniversary after the rider effective date, we set the maximum anniversary value equal to the highest of your (a) current contract value, or (b) total purchase payments minus adjusted partial surrenders. Every contract anniversary after that, through age 80, we compare the previous anniversary's maximum anniversary value plus subsequent purchase payments less subsequent adjusted partial surrenders to the current contract value and we reset the maximum anniversary value if the current contract value is higher. We stop resetting the maximum anniversary value after you or the annuitant reach age 81. However, we continue to add subsequent purchase payments and subtract adjusted partial surrenders from the maximum anniversary value. When annuity payouts begin, or if you terminate the contract for any reason other than death, this rider will terminate. TERMINATING THE MAV - You may terminate the MAV rider within 30 days of the first contract anniversary after the rider effective date. - You may terminate the MAV rider within 30 days of any contract anniversary beginning with the seventh contract anniversary after the rider effective date. - The MAV rider will terminate when you make a full surrender from the contract or when annuity payouts begin. - The MAV rider will terminate in the case of spousal continuation or ownership change if the new owner is age 76 or older. If you terminate the MAV, the standard death benefit applies. EXAMPLE - You add the MAV on Jan. 1, 2003 when your contract value is $20,000. - On Jan. 1, 2004 (the first contract anniversary after the rider effective date) the contract value grows to $24,000. - On March 1, 2004 the contract value falls to $22,000, at which point you take a $1,500 partial surrender, leaving a contract value of $20,500. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 40 We calculate the death benefit on March 1, 2004 as follows: The maximum anniversary value immediately preceding the date of death plus any payments made since that anniversary minus adjusted partial surrenders: Greatest of your contract anniversary contract values: $24,000 plus purchase payments made since that anniversary: +0 minus adjusted partial surrenders, calculated as: $1,500 X $24,000 = ---------------- -1,636 $22,000 ------- for a death benefit of: $22,364
NONQUALIFIED ANNUITIES: If you die before the settlement date and your spouse is the only beneficiary, your spouse may choose to keep the contract and become the contract owner. The contract will then value equal to the death benefit that would otherwise have been paid under the MAV. To do this your spouse must, within 60 days after we receive proof of death, give us written instructions to keep the contract in force. If your spouse at the time he or she elects to continue the contract has reached age 76, the MAV rider will terminate. If your spouse at the time he or she elects to continue the contract has not yet reached age 76, he or she may choose to continue the MAV rider. In this case, the rider charges described in "Charges" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force). These charges will be based on the total contract value on the anniversary, including the additional amounts paid into the contract under the MAV rider. If, at the time he or she elects to continue the contract, your spouse has not yet reached age 76 and chooses not to continue the MAV rider, the contract value will be increased to the MAV death benefit amount if it is greater than the contract value on the death benefit valuation date. QUALIFIED ANNUITIES: If your spouse is the sole beneficiary, your spouse may keep the contract as owner until the date on which the annuitant would have reached age 70 1/2, or any other date permitted by the Code. The contract value will be equal to the death benefit that would otherwise have been paid under the MAV. To do this your spouse must, within 60 days after we receive proof of death, give us written instructions to keep the contract in force. If your spouse at the time he or she elects to continue the contract has reached age 76, the MAV rider will terminate. If your spouse at the time he or she elects to continue the contract has not yet reached age 76, he or she may choose to continue the MAV rider. In this case, the rider charges described in "Charges" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force). These charges will be based on the total contract value on the anniversary, including the additional amounts paid into the contract under the MAV rider. If, at the time he or she elects to continue the contract, your spouse has not yet reached age 76 and chooses not to continue the MAV rider, the contract value will be increased to the MAV death benefit amount if it is greater than the contract value on the death benefit valuation date. ENHANCED EARNINGS DEATH BENEFIT The EEB is intended to provide an additional benefit to your beneficiary to help offset expenses after your death such as funeral expenses or federal and state taxes. This is an optional benefit that you may select for an additional annual charge (see "Charges"). The EEB provides reduced benefits if you or the annuitant is age 70 or older at the rider effective date and it does not provide any additional benefit before the first contract anniversary after the rider effective date. The EEB also may result in reduced benefits if you take required minimum distributions from your qualified annuity or any partial surrenders during the life of your contract, both of which may reduce contract earnings. This is because the benefit paid by the EEB is determined by the amount of earnings at death. Be sure to discuss with your sales representative whether or not the EEB is appropriate for your situation. If this EEB rider is available in your state and both you and the annuitant are age 75 or younger at the rider effective date, you may choose to add the EEB to your contract. Generally, you must elect the EEB at the time you purchase your contract and your rider effective date will be the contract issue date. In some instances the rider effective date for the EEB may be after we issue the contract. We will determine the rider effective date for the EEB added after we issue the contract according to terms determined by us and at our sole discretion. When annuity payouts begin, or if you terminate the contract for any reason other than death, this rider will terminate. The EEB provides that if you or the annuitant dies after the first contract anniversary after the rider effective date, but before annuity payouts begin, and while this contract is in force, we will pay the beneficiary: - the standard death benefit amount (see "Benefits in Case of Death - Standard Benefit") or the MAV death benefit amount, if applicable, PLUS - 40% of your earnings at death if you and the annuitant were under age 70 on the rider effective date; or - 15% of your earnings at death if you or the annuitant were age 70 or older on the rider effective date. Additional death benefits payable under the EEB are not included in the adjusted partial surrender calculation. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 41 EARNINGS AT DEATH FOR THE EEB: If the rider effective date for the EEB is the contract issue date, earnings at death is an amount equal to: - the standard death benefit amount or the MAV death benefit amount, if applicable (the "death benefit amount") - MINUS purchase payments not previously surrendered. The earnings at death may not be less than zero and may not be more than 250% of the purchase payments not previously surrendered that are one or more years old. If the rider effective date for the EEB is AFTER the contract issue date, earnings at death is an amount equal to the death benefit amount - MINUS the greater of: - the contract value as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that contract value since that rider effective date; or - an amount equal to the death benefit amount as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that death benefit amount since that rider effective date. - PLUS any purchase payments made on or after the EEB rider effective date not previously surrendered. The earnings at death may not be less than zero and may not be more than 250% multiplied by: - the greater of: - the contract value as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that contract value since that rider effective date; or - an amount equal to the death benefit amount as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that death benefit amount since the rider effective date - PLUS any purchase payments made on or after the EEB rider effective date not previously surrendered that are one or more years old. TERMINATING THE EEB - You may terminate the EEB rider within 30 days of the first contract anniversary after the rider effective date. - You may terminate the EEB rider within 30 days of any contract anniversary beginning with the seventh contract anniversary after the rider effective date. - The EEB rider will terminate when you make a full surrender from the contract or when annuity payouts begin. - The EEB rider will terminate in the case of spousal continuation or ownership change if the new owner is age 76 or older. EXAMPLE OF THE EEB - You purchased the contract on Jan. 1, 2003 with a purchase payment of $100,000. You add the EEB rider Jan. 1, 2005 when your contract value is $100,000 and both you and the annuitant are under age 70. You selected the seven-year surrender charge schedule, the MAV and the EEB. - On July 1, 2005 the contract value grows to $105,000. The death benefit on July 1, 2005 equals the standard death benefit, which is the contract value, or $105,000. You have not reached the first contract anniversary after the rider effective date so the EEB does not provide any additional benefit at this time. - On Jan. 1, 2006 the contract value grows to $110,000. The death benefit on Jan. 1, 2006 equals: MAV death benefit amount (contract value): $110,000 plus the EEB which equals 40% of earnings at death (MAV death benefit amount minus payments not previously surrendered): 0.40 X ($110,000 - $100,000) = +4,000 -------- Total death benefit of: $114,000
- On Jan. 1, 2007 the contract value falls to $105,000. The death benefit on Jan. 1, 2007 equals: MAV death benefit amount (maximum anniversary value): $110,000 plus the EEB (40% of earnings at death): 0.40 X ($110,000 - $100,000) = +4,000 -------- Total death benefit of: $114,000
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 42 - On Feb. 1, 2007 the contract value remains at $105, 000 and you request a partial surrender, including the applicable 5% surrender charge, of $50,000. We will surrender $10,500 from your contract value free of charge (10% of your prior anniversary's contract value). The remainder of the surrender is subject to a 5% surrender charge because your purchase payment is four years old, so we will surrender $39,500 ($37,525 + $1,975 in surrender charges) from your contract value. Altogether, we will surrender $50,000 and pay you $47,235. We calculate purchase payments not previously surrendered as $100,000 - $45,000 = $55,000 (remember that $5,000 of the partial surrender is contract earnings). The death benefit on Feb. 1, 2005 equals: MAV death benefit amount (maximum anniversary value adjusted for partial surrenders): $110,000 - ($50,000 X $110,000) = $57,619 -------------------- $105,000 plus the EEB (40% of earnings at death): 0.40 X ($57,619 - $55,000) = +1,048 -------- Total death benefit of: $58,667
- On Jan. 1, 2008 the contract value falls by $40,000. The death benefit on Jan. 1, 2008 equals the death benefit paid on Feb. 1, 2007. The reduction in contract value has no effect. - On Jan. 1, 2014 the contract value grows to a new high of $200,000. Earnings at death reaches its maximum of 250% of purchase payments not previously surrendered that are one or more years old. The death benefit on Jan. 1, 2014 equals: MAV death benefit amount (contract value): $200,000 plus the EEB (40% of earnings at death) 0.40 X 2.50 X ($55,000) = +55,000 -------- Total death benefit of: $255,000
- On July 1, 2014 you make an additional purchase payment of $50,000 and your contract value grows to $250,000. The new purchase payment is less than one year old and so it has no effect on the EEB. The death benefit on July 1, 2014 equals: MAV death benefit amount (contract value): $250,000 plus the EEB(40% of earnings at death, up to a maximum of 100% of purchase payments not previously surrendered that are one or more years old) 0.40 X 2.50 X ($55,000) = +55,000 -------- Total death benefit of: $305,000
- On July 1, 2015 the contract value remains $250,000 and the "new" purchase payment is one year old. The value of the EEB changes. The death benefit on July 1, 2015 equals: MAV death benefit amount (contract value): $250,000 plus the EEB which equals 40% of earnings at death (the standard death benefit amount minus payments not previously surrendered): 0.40 X ($250,000 - $105,000) = +58,000 -------- Total death benefit of: $308,000
If your spouse is the sole beneficiary and your spouse elects to continue the contract, we will pay an amount into the contract so that the contract value equals the total death benefit payable under the EEB. If the spouse is age 76 or older at the time he or she elects to continue the contract, then the EEB rider will terminate. If your spouse is less than age 76 at the time he or she elects to continue the contract then he or she may choose to continue the EEB. In this case, the following conditions will apply: - the rider will continue, but we will treat the new contract value on the date the ownership of the contract changes to your spouse (after the additional amount is paid into the contract) as if it is a purchase payment in calculating future values of "earnings at death." - the percentages of "earnings at death " payable will be based on your spouse's age at the time he or she elects to continue the contract. - the rider charges described in "Charges - Enhanced Earnings Death Benefit Rider Fee" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force). These charges will be based on the total contract value on the anniversary, including the additional amounts paid into the contract under the EEB rider. NOTE: For special tax considerations associated with the EEB, see "Taxes." AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 43 THE ANNUITY PAYOUT PERIOD As owner of the contract, you have the right to decide how and to whom annuity payouts will be made starting at the settlement date. You may select one of the annuity payout plans outlined below, or we may mutually agree on other payout arrangements. We do not deduct any surrender charges under the payout plans listed below. You also decide whether we will make annuity payouts on a fixed or variable basis, or a combination of fixed and variable. The amount available to purchase payouts under the plan you select is the contract value on your settlement date (less any applicable premium tax). You may reallocate this contract value to the fixed account to provide fixed dollar payouts and/or among the subaccounts to provide variable annuity payouts. During the annuity payout period, you cannot invest in more than five subaccounts at any one time unless we agree otherwise. AMOUNTS OF FIXED AND VARIABLE PAYOUTS DEPEND ON: - the annuity payout plan you select; - the annuitant's age and, in most cases, sex; - the annuity table in the contract; and - the amounts you allocated to the accounts at settlement. In addition, for variable payouts only, amounts depend on the investment performance of the subaccounts you select. These payouts will vary from month to month because the performance of the funds will fluctuate. (Fixed payouts remain the same from month to month.) For information with respect to transfers between accounts after annuity payouts begin, see "Making the Most of Your Contract -- Transfer policies." ANNUITY TABLES The annuity tables in your contract show the amount of the monthly payout for each $1,000 of contract value according to the age and, when applicable, the sex of the annuitant. (Where required by law, we will use a unisex table of settlement rates.) Table B shows the minimum amount of each fixed payout. Amounts in Table B are based on the guaranteed annual effective interest rate shown in your contract. We declare current payout rates that we use in determining the actual amount of your fixed payout. The current payout rates will equal or exceed the guaranteed payout rates shown in Table B. We will furnish these rates to you upon request. Table A shows the amount of the first variable payout assuming that the contract value is invested at the beginning of the annuity payout period and earns a 5% rate of return, which is reinvested and helps to support future payouts. If you ask us at least 30 days before the settlement date, we will substitute an annuity table based on an assumed 3.5% investment rate for the 5% Table A in the contract. The assumed investment rate affects both the amount of the first payout and the extent to which subsequent payouts increase or decrease. For example, annuity payouts will increase if the investment return is above the assumed investment rate and payouts will decrease if the return is below the assumed investment rate. Using the 5% Table A results in a higher initial payment, but later payouts will increase more slowly when annuity unit values rise and decrease more rapidly when they decline. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 44 ANNUITY PAYOUT PLANS You may choose any one of these annuity payout plans by giving us written instructions at least 30 days before contract values are used to purchase the payout plan: - PLAN A: LIFE ANNUITY -- NO REFUND: We make monthly payouts until the annuitant's death. Payouts end with the last payout before the annuitant's death. We will not make any further payouts. This means that if the annuitant dies after we made only one monthly payout, we will not make any more payouts. - PLAN B: LIFE ANNUITY WITH FIVE, TEN OR 15 YEARS CERTAIN: We make monthly payouts for a guaranteed payout period of five, ten or 15 years that you elect. This election will determine the length of the payout period to the beneficiary if the annuitant should die before the elected period expires. We calculate the guaranteed payout period from the settlement date. If the annuitant outlives the elected guaranteed payout period, we will continue to make payouts until the annuitant's death. - PLAN C: LIFE ANNUITY -- INSTALLMENT REFUND: We make monthly payouts until the annuitant's death, with our guarantee that payouts will continue for some period of time. We will make payouts for at least the number of months determined by dividing the amount applied under this option by the first monthly payout, whether or not the annuitant is living. - PLAN D: JOINT AND LAST SURVIVOR LIFE ANNUITY -- NO REFUND: We make monthly payouts while both the annuitant and a joint annuitant are living. If either annuitant dies, we will continue to make monthly payouts at the full amount until the death of the surviving annuitant. Payouts end with the death of the second annuitant. - PLAN E: PAYOUTS FOR A SPECIFIED PERIOD: We make monthly payouts for a specific payout period of ten to 30 years that you elect. We will make payouts only for the number of years specified whether the annuitant is living or not. Depending on the selected time period, it is foreseeable that an annuitant can outlive the payout period selected. During the payout period, you can elect to have us determine the present value of any remaining variable payouts and pay it to you in a lump sum. We determine the present value of the remaining annuity payouts which are assumed to remain level at the initial payout. For qualified annuities, the discount rate we use in the calculation will vary between 4.72% and 6.22%, depending on the applicable assumed investment rate. For nonqualified annuities, the discount rate we use in the calculation will vary between 4.92% and 6.42%, depending on the applicable assumed investment rate. (See "Charges -- Surrender charge under Annuity Payout Plan E.") You can also take a portion of the discounted value once a year. If you do so, your monthly payouts will be reduced by the proportion of your surrender to the full discounted value. An IRS penalty tax could apply if you take a surrender. (See "Taxes.") ANNUITY PAYOUT PLAN REQUIREMENTS FOR QUALIFIED ANNUITIES: If you elect an annuity payout plan from your qualified annuity, it must comply with certain IRS regulations governing required minimum distributions. In general, your annuity payout plan will meet these regulations if payouts are made: - in equal or substantially equal payments over a period not longer than the life of the annuitant or over the life of the annuitant and designated beneficiary; or - in equal or substantially equal payments over a period not longer than the life expectancy of the annuitant or over the life expectancy of the annuitant and designated beneficiary; or - over a period certain not longer than the life expectancy of the annuitant or over the life expectancy of the annuitant and designated beneficiary. IF WE DO NOT RECEIVE INSTRUCTIONS: You must give us written instructions for the annuity payouts at least 30 days before the annuitant's settlement date. If you do not, we will make payouts under Plan B, with 120 monthly payouts guaranteed. Contract values that you allocated to the fixed account will provide fixed dollar payouts and contract values that you allocated among the subaccounts will provide variable annuity payouts. IF MONTHLY PAYOUTS WOULD BE LESS THAN $20: We will calculate the amount of monthly payouts at the time the contract value is used to purchase a payout plan. If the calculations show that monthly payouts would be less than $20, we have the right to pay the contract value to the owner in a lump sum or to change the frequency of the payouts. DEATH AFTER ANNUITY PAYOUTS BEGIN: If you or the annuitant die after annuity payouts begin, we will pay any amount payable to the beneficiary as provided in the annuity payout plan in effect. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 45 TAXES Generally, under current law, your contract has a tax-deferral feature. This means any increase in the value of the fixed account and/or subaccounts in which you invest is taxable to you only when you receive a payout or surrender (see detailed discussion below). Any portion of the annuity payouts and any surrenders you request that represent ordinary income are normally taxable. We will send you a tax information reporting form for any year in which we made a taxable distribution according to our records. Roth IRAs may grow and be distributed tax free if you meet certain distribution requirements. NONQUALIFIED ANNUITIES: Tax law requires that all nonqualified deferred annuities issued by the same company (and possibly its affiliates) to the same owner during a calendar year be taxed as a single, unified contract when you take distributions from any one of those contracts. ANNUITY PAYOUTS FROM NONQUALIFIED ANNUITIES: A portion of each payout will be ordinary income and subject to tax, and a portion of each payout will be considered a return of part of your investment and will not be taxed. Under Annuity Payout Plan A: Life annuity - no refund, where the annuitant dies before your investment in the contract is fully recovered, the remaining portion of the unrecovered investment may be available as a federal income tax deduction to the owner for the last taxable year of the annuitant. Under all other annuity payout plans, where the annuity payouts end before your investment in the contract is fully recovered, the remaining portion of the unrecovered investment may be available as a federal income tax deduction to the taxpayer for the tax year in which the payouts end. (See "Annuity Payout Plans.") All amounts you receive after your investment in the contract is fully recovered will be subject to tax. QUALIFIED ANNUITIES: When your contract is used to fund a retirement plan that is already tax deferred under the Code, the contract will not provide any necessary or additional tax deferral for that retirement plan. If your contract is used to fund a 401(k) plan, your rights to benefits may be subject to the terms and conditions of the plan regardless of the terms of the contract. Adverse tax consequences may result if you do not ensure that contributions, distributions and other transactions under the contract comply with the law. Qualified annuities have minimum distribution rules that govern the timing and amount of distributions. You should refer to your retirement plan or adoption agreement or consult a tax advisor for more information about your distribution rules. ANNUITY PAYOUTS FROM QUALIFIED ANNUITIES (EXCEPT ROTH IRAs): Under a qualified annuity, the entire payout generally is includable as ordinary income and is subject to tax unless: (1) the contract is an IRA to which you made non-deductible contributions; or (2) you rolled after-tax dollars from a retirement plan into your IRA, or (3) the contract is used to fund a retirement plan and you or your employer have contributed after-tax dollars. ANNUITY PAYOUTS FROM ROTH IRAs: In general, the entire payout from a Roth IRA can be free from income and penalty taxes if you have attained age 59 1/2 and met the five year holding period. SURRENDERS FROM NONQUALIFIED ANNUITIES: If you surrender part or all of your nonqualified contract before your annuity payouts begin, your surrender payment will be taxed to the extent that the value of your contract immediately before the surrender exceeds your investment. You also may have to pay a 10% IRS penalty for surrenders you make before reaching age 59 1/2 unless certain exceptions apply. SURRENDERS FROM QUALIFIED ANNUITIES (EXCEPT ROTH IRAs): Under a qualified annuity, the entire surrender will generally be includable as ordinary income and is subject to tax unless: (1) the contract is an IRA to which you made non-deductible contributions; or (2) you rolled after-tax dollars from a retirement plan into your IRA, or (3) the contract is used to fund a retirement plan and you or your employer have contributed after-tax dollars. SURRENDERS FROM ROTH IRAs: In general, the entire payout from a Roth IRA can be free from income and penalty taxes if you have attained age 59 1/2 and met the five year holding period. PURCHASE PAYMENT CREDITS: These are considered earnings and are taxed accordingly when surrendered or paid out. DEATH BENEFITS TO BENEFICIARIES UNDER NONQUALIFIED ANNUITIES: The death benefit under a contract is not tax exempt. Any amount your beneficiary receives that represents previously deferred earnings within the contract is taxable as ordinary income to the beneficiary in the year he or she receives the payments. DEATH BENEFITS TO BENEFICIARIES UNDER QUALIFIED ANNUITIES: The entire death benefit generally is taxable as ordinary income to the beneficiary in the year he or she receives the payments from the qualified annuity. If, under your 401(k) plan you or your employer made after-tax contributions to your contract, the portion of any distribution from the annuity that represents after-tax contributions are not taxable as ordinary income to your beneficiary. Death benefits under a Roth IRA generally are not taxable as ordinary income to the beneficiary if certain distribution requirements are met. SPECIAL CONSIDERATIONS IF YOU SELECT ONE OF THE DEATH BENEFIT RIDERS (MAV OR EEB): As of the date of this prospectus, we believe that charges related to these riders are not subject to current taxation. Therefore, we will not report these charges as partial surrenders from your contract. However, the IRS may determine that these charges should be treated as partial surrenders subject to taxation to the extent of any gain as well as the 10% IRS tax penalty for surrenders before the age of 59 1/2, if applicable. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 46 We reserve the right to report charges for these riders as partial surrenders if we, as a withholding and reporting agent, believe that we are required to report them. In addition, we will report the benefits attributable to these riders on the death of you or annuitant as an annuity death benefit distribution, not as proceeds for life insurance. ANNUITIES OWNED BY CORPORATIONS, PARTNERSHIPS OR TRUSTS: For nonqualified annuities, any annual increase in the value of annuities held by such entities generally will be treated as ordinary income received during that year. This provision is effective for purchase payments made after Feb. 28, 1986. However, if the trust was set up for the benefit of a natural person only, the income will remain tax-deferred. PENALTIES: In general, if you receive amounts from your contract (or, if applicable, from the plan) before reaching age 59 1/2, you may have to pay a 10% IRS penalty on the amount includable in your ordinary income. However, if you have a SIMPLE IRA and if you receive these amounts before age 59 1/2 and within the first two years of your participation in the SIMPLE IRA plan, the IRS penalty will be assessed at a rate of 25% instead of 10%. However, this penalty will not apply to any amount received by you: - because of your death; - because you become disabled (as defined in the Code); - if the distribution is part of a series of substantially equal periodic payments, made at least annually, over your life or life expectancy (or joint lives or life expectancies of you and your beneficiary); or - if it is allocable to an investment before Aug. 14, 1982 (except for qualified annuities). For qualified annuities under 401(a), 401(k) plans or TSA's, other exceptions may apply if you surrender your contract before your plan specifies that payouts can be made. WITHHOLDING, GENERALLY: If you receive all or part of the contract value, we may deduct withholding against the taxable income portion of the payment. Any withholding represents a prepayment of your tax due for the year. You take credit for these amounts on your annual income tax return. If the payment is part of an annuity payout plan, we generally compute the amount of withholding using payroll tables. You may provide us with a statement of how many exemptions to use in calculating the withholding. As long as you've provided us with a valid Social Security Number or Taxpayer Identification Number, you can elect not to have any withholding occur. If the distribution is any other type of payment (such as a partial or full surrender), we compute withholding using 10% of the taxable portion. Similar to above, as long as you have provided us with a valid Social Security Number or Taxpayer Identification Number, you can elect not to have this withholding occur. The withholding requirements may differ if we are making payment to a non-U.S. citizen or if we deliver the payment outside the United States. Some states also impose withholding requirements similar to the federal withholding described above. If this should be the case, we may deduct state withholding from any payment from which we deduct federal withholding. WITHHOLDING FROM QUALIFIED ANNUITIES: If you receive directly all or part of the contract value from a qualified annuity (except an IRA, Roth IRA, SIMPLE IRA or SEP), mandatory 20% federal income tax withholding (and possibly state income tax withholding) generally will be imposed at the time the payout is made from the plan. This mandatory withholding is in place of the elective withholding discussed above. This mandatory withholding will not be imposed if: - instead of receiving the distribution check, you elect to have the distribution rolled over directly to an IRA or another eligible plan; - the payout is one in a series of substantially equal periodic payouts, made at least annually, over your life or life expectancy (or the joint lives or life expectancies of you and your designated beneficiary) or over a specified period of 10 years or more; - the payout is a minimum distribution required under the Code; - the payout is made on account of an eligible hardship; or - the payout is a corrective distribution. Payments we make to a surviving spouse instead of being directly rolled over to an IRA also may be subject to mandatory 20% income tax withholding. State withholding also may be imposed on taxable distributions. TRANSFER OF OWNERSHIP OF A NONQUALIFIED ANNUITY: If you transfer a nonqualified annuity without receiving adequate consideration, the transfer is a gift and also may be treated as a surrender for federal income tax purposes. If the gift is a currently taxable event for income tax purposes, the original owner will be taxed on the amount of deferred earnings at the time of the transfer and also may be subject to the 10% IRS penalty discussed earlier. In this case, the new owner's investment in the contract will be the value of the contract at the time of the transfer. In general, this rule does not apply to transfers between spouses. Please consult your tax advisor for further details. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 47 COLLATERAL ASSIGNMENT OF A NONQUALIFIED ANNUITY: If you collaterally assign or pledge your contract, earnings on purchase payments you made after Aug. 13, 1982 will be taxed to you like a surrender and you may have to pay a 10% IRS tax penalty. You may not collaterally assign or pledge your qualified contracts. IMPORTANT: Our discussion of federal tax laws is based upon our understanding of current interpretations of these laws. Federal tax laws or current interpretations of them may change. For this reason and because tax consequences are complex and highly individual and cannot always be anticipated, you should consult a tax advisor if you have any questions about taxation of your contract. IDS LIFE'S TAX STATUS: IDS Life is taxed as a life insurance company under the Code. For federal income tax purposes, the subaccounts are considered a part of IDS Life, although their operations are treated separately in accounting and financial statements. Investment income from the subaccounts is reinvested and becomes part of the subaccounts' value. This investment income, including realized capital gains, is not taxed to IDS Life, and therefore no charge is made against the subaccounts for federal income taxes. IDS Life reserves the right to make such a charge in the future if there is a change in the tax treatment of variable annuities. TAX QUALIFICATION: We intend that the contract qualify as an annuity for federal income tax purposes. To that end, the provisions of the contract are to be interpreted to ensure or maintain such tax qualification, in spite of any other provisions of the contract. We reserve the right to amend the contract to reflect any clarifications that may be needed or are appropriate to maintain such qualification or to conform the contract to any applicable changes in the tax qualification requirements. We will send you a copy of any amendments. VOTING RIGHTS As a contract owner with investments in the subaccounts, you may vote on important fund policies until annuity payouts begin. Once they begin, the person receiving them has voting rights. We will vote fund shares according to the instructions of the person with voting rights. Before annuity payouts begin, the number of votes you have is determined by applying your percentage interest in each subaccount to the total number of votes allowed to the subaccount. After annuity payouts begin, the number of votes you have is equal to: - the reserve held in each subaccount for your contract; divided by - the net asset value of one share of the applicable fund. As we make annuity payouts, the reserve for the contract decreases; therefore, the number of votes also will decrease. We calculate votes separately for each subaccount. We will send notice of shareholders' meetings, proxy materials and a statement of the number of votes to which the voter is entitled. We will vote shares for which we have not received instructions in the same proportion as the votes for which we received instructions. We also will vote the shares for which we have voting rights in the same proportion as the votes for which we received instructions. SUBSTITUTION OF INVESTMENTS We may substitute the funds in which the subaccounts invest if: - laws or regulations change; - the existing funds become unavailable; or - in our judgment, the funds no longer are suitable for the subaccounts. If any of these situations occur, and if we believe it is in the best interest of persons having voting rights under the contract, we have the right to substitute the funds currently listed in this prospectus for other funds. We may also: - add new subaccounts; - combine any two or more subaccounts; - make additional subaccounts investing in additional funds; - transfer assets to and from the subaccounts or the variable account; and - eliminate or close any subaccounts. In the event of substitution or any of these changes, we may amend the contract and take whatever action is necessary and appropriate without your consent or approval. However, we will not make any substitution or change without the necessary approval of the SEC and state insurance departments. We will notify you of any substitution or change. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 48 ABOUT THE SERVICE PROVIDERS ISSUER AND PRINCIPAL UNDERWRITER IDS Life issues and is the principal underwriter for the contracts. IDS Life is a stock life insurance company organized in 1957 under the laws of the State of Minnesota and is located at 70100 AXP Financial Center, Minneapolis, MN 55474. IDS Life conducts a conventional life insurance business. IDS Life is a wholly-owned subsidiary of AEFC, which itself is a wholly-owned subsidiary of American Express Company, a financial services company headquartered in New York City. The AEFC family of companies offers not only insurance and annuities, but also mutual funds, investment certificates, and a broad range of financial management services. American Express Financial Advisors Inc. (AEFA) serves individuals and businesses through its nationwide network of more than 3,600 registered branch offices and more than 10,100 financial advisors. IDS Life pays commissions for sales of the contracts of up to 7% of the total purchase payments received. This revenue is used to cover distribution costs that include compensation to advisors and field leadership for the selling advisors. These commissions consist of a combination of time of sale and on-going service/trail commissions (which, when totaled, could exceed 7% of purchase payments). From time to time, IDS Life will pay or permit other promotional incentives, in cash or credit or other compensation. LEGAL PROCEEDINGS We are a party to litigation and arbitration proceedings in the ordinary course of our business, none of which is expected to have a material adverse effect on us. In recent years, life insurance companies have been named as defendants in lawsuits, including class action lawsuits, alleging improper life insurance sales practices, alleged agent misconduct, failure to properly supervise agents and other matters relating to life insurance policies and annuity contracts. We and our affiliates were named defendants in three purported class-action lawsuits alleging improper insurance and annuity sales practices including improper replacement of existing annuity contracts and insurance policies, improper use of annuities to fund tax deferred contributory retirement plans, alleged agent misconduct, failure to properly supervise agents and other matters relating to life insurance policies and annuity contracts (BENACQUISTO V. IDS LIFE INSURANCE COMPANY filed in Minnesota State Court 12/13/96; MORK, ET. AL. V. IDS LIFE INSURANCE COMPANY filed in Minnesota State Court 3/21/97; THORESEN V. IDS LIFE INSURANCE COMPANY, ET. AL. filed in Minnesota State Court 10/13/98). A fourth lawsuit was filed against us and our affiliates in federal court (BENACQUISTO, ET. AL. V. IDS LIFE INSURANCE COMPANY, ET. AL. filed in United States District Court - Minnesota 8/00). In January 2000, AEFC reached an agreement in principle to settle the four class action lawsuits described above. It is expected the settlement will provide $215 million of benefits to more than two million participants in exchange for a release by class members of all insurance and annuity state and federal market conduct claims dating back to 1985. The settlement received court approval. Implementation of the settlement commenced October 15, 2001 and is substantially complete. Claim review payments have been made. Numerous individuals opted out of the settlement described above and therefore did not release their claims against AEFC and its subsidiaries. Some of these class members who opted out were represented by counsel and presented separate claims to AEFC and us. Most of their claims have been settled. In November 2002, a suit, captioned HARITOS ET. AL. V. AMERICAN EXPRESS FINANCIAL CORPORATION AND IDS LIFE INSURANCE COMPANY, was filed in the United States District Court for the District of Arizona. The suit is filed by the plaintiffs who purport to represent a class of all persons that have purchased financial plans from AEFA advisors during an undefined class period. Plaintiffs allege that the sale of the plans violate the Investment Advisers Act of 1940. The suit seeks an unspecified amount of damages, rescission and injunctive relief. We believe that we have meritorious defenses to this suit and intend to defend this case vigorously. The outcome of any litigation or threatened litigation cannot be predicted with any certainty. However, in the aggregate, we do not consider any lawsuits in which we are named as a defendant to have a material impact on our financial position or operating results. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 49 TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION Performance Information p. 3 Calculating Annuity Payouts p. 30 Rating Agencies p. 31 Principal Underwriter p. 31 Independent Auditors p. 31 Financial Statements AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS 50 [AMERICAN EXPRESS(R) LOGO] IDS LIFE INSURANCE COMPANY 70100 AXP FINANCIAL CENTER MINNEAPOLIS, MN 55474 (800) 862-7919 S-6467 G (5/03) PROSPECTUS MAY 1, 2003 AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 INDIVIDUAL FLEXIBLE PREMIUM DEFERRED COMBINATION FIXED/VARIABLE ANNUITY FOR: - current or retired employees of American Express Financial Corporation or its subsidiaries and their spouses (employees), - current or retired American Express financial advisors and their spouses (advisors), and - individuals investing an initial purchase payment of $1 million (other individuals). NEW AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 CONTRACTS ARE NOT CURRENTLY BEING OFFERED. ISSUED BY: IDS LIFE INSURANCE COMPANY (IDS LIFE) 70100 AXP Financial Center Minneapolis, MN 55474 Telephone: (800) 862-7919 americanexpress.com IDS LIFE VARIABLE ACCOUNT 10 This prospectus contains information that you should know before investing. Prospectuses are also available for: - American Express(R) Variable Portfolio Funds - AIM Variable Insurance Funds - American Century(R) Variable Portfolios, Inc. - Calvert Variable Series, Inc. - Credit Suisse Trust - Fidelity(R) Variable Insurance Products Funds - Service Class - Franklin(R) Templeton(R) Variable Insurance Products Trust (FTVIPT) - Class 2 - Goldman Sachs Variable Insurance Trust (VIT) - Janus Aspen Series: Service Shares - Lazard Retirement Series, Inc. - MFS(R) Variable Insurance Trust(SM) - Putnam Variable Trust - Class IB Shares - Royce Capital Fund - Third Avenue Variable Series Trust - Wanger Advisors Trust - Wells Fargo Variable Trust Funds Please read the prospectuses carefully and keep them for future reference. THE SECURITIES AND EXCHANGE COMMISSION (SEC) HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. AN INVESTMENT IN THIS CONTRACT IS NOT A DEPOSIT OF A BANK OR FINANCIAL INSTITUTION AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN THIS CONTRACT INVOLVES INVESTMENT RISK INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. A Statement of Additional Information (SAI), dated the same date as this prospectus, is incorporated by reference into this prospectus. It is filed with the SEC and is available without charge by contacting IDS Life at the telephone number and address listed above. The table of contents of the SAI is on the last page of this prospectus. The SEC maintains an Internet site. This prospectus, the SAI and other information about the product are available on the EDGAR Database on the SEC's Internet site at (http://www.sec.gov). Variable annuities are complex investment vehicles. Be sure to ask your sales representative about the variable annuity's features, benefits, risks and fees. This prospectus provides a general description of the contract. Your actual contract and any riders or endorsements are the controlling documents. IDS Life has not authorized any person to give any information or to make any representations regarding the contract other than those contained in this prospectus or the Fund prospectuses. Do not rely on any such information or representations. IDS Life and its affiliated insurance companies offer several different annuities which your sales representative may be authorized to offer to you. Each annuity has different features and benefits that may be appropriate for you based on your financial situation and needs, your age and how you intend to use the annuity. The different features and benefits may include the investment and fund manager options, variations in interest rate amount and guarantees, credits, surrender charge schedules and access to annuity account values. The fees and charges may also be different between each annuity. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 1 TABLE OF CONTENTS KEY TERMS 3 THE CONTRACT IN BRIEF 4 EXPENSE SUMMARY 5 CONDENSED FINANCIAL INFORMATION (UNAUDITED) 9 FINANCIAL STATEMENTS 14 PERFORMANCE INFORMATION 14 THE VARIABLE ACCOUNT AND THE FUNDS 15 THE FIXED ACCOUNT 22 BUYING YOUR CONTRACT 22 CHARGES 24 VALUING YOUR INVESTMENT 25 MAKING THE MOST OF YOUR CONTRACT 26 SURRENDERS 29 TSA -- SPECIAL SURRENDER PROVISIONS 29 CHANGING OWNERSHIP 30 BENEFITS IN CASE OF DEATH -- STANDARD DEATH BENEFIT 30 OPTIONAL BENEFITS 32 THE ANNUITY PAYOUT PERIOD 35 TAXES 37 VOTING RIGHTS 39 SUBSTITUTION OF INVESTMENTS 39 ABOUT THE SERVICE PROVIDERS 40 TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION 41 AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 2 KEY TERMS THESE TERMS CAN HELP YOU UNDERSTAND DETAILS ABOUT YOUR CONTRACT. ACCUMULATION UNIT: A measure of the value of each subaccount before annuity payouts begin. ANNUITANT: The person on whose life or life expectancy the annuity payouts are based. ANNUITY PAYOUTS: An amount paid at regular intervals under one of several plans. ASSUMED INVESTMENT RATE: The rate of return we assume your investments will earn when we calculate your initial annuity payout amount using the annuity table in your contract. The standard assumed investment rate we use is 5% but you may request we substitute an assumed investment rate of 3.5%. BENEFICIARY: The person you designate to receive benefits in case of the owner's or annuitant's death while the contract is in force. CLOSE OF BUSINESS: When the New York Stock Exchange (NYSE) closes, normally 4 p.m. Eastern time. CONTRACT: A deferred annuity contract that permits you to accumulate money for retirement by making one or more purchase payments. It provides for lifetime or other forms of payouts beginning at a specified time in the future. CONTRACT VALUE: The total value of your contract before we deduct any applicable charges. CONTRACT YEAR: A period of 12 months, starting on the effective date of your contract and on each anniversary of the effective date. ENHANCED EARNINGS DEATH BENEFIT (EEB): This is an optional benefit you can add to your contract for an extra charge. It is intended to provide an additional benefit to your beneficiary to help offset expenses after your death such as funeral expenses or federal and state taxes. FIXED ACCOUNT: An account to which you may allocate purchase payments. Amounts you allocate to this account earn interest at rates that we declare periodically. FUNDS: Investment options under your contract. You may allocate your purchase payments into subaccounts investing in shares of any or all of these funds. IDS LIFE: In this prospectus, "we," "us," "our" and "IDS Life" refer to IDS Life Insurance Company. MAXIMUM ANNIVERSARY VALUE DEATH BENEFIT (MAV): This is an optional benefit you can add to your contract for an extra charge that is intended to provide additional death benefit protection in the event of fluctuating fund values. OWNER (YOU, YOUR): The person who controls the contract (decides on investment allocations, transfers, payout options, etc.). Usually, but not always, the owner is also the annuitant. The owner is responsible for taxes, regardless of whether he or she receives the contract's benefits. QUALIFIED ANNUITY: A contract that you purchase to fund one of the following tax-deferred retirement plans that is subject to applicable federal law and any rules of the plan itself: - Individual Retirement Annuities (IRAs) under Section 408(b) of the Internal Revenue Code of 1986, as amended (the Code) - Roth IRAs under Section 408A of the Code - SIMPLE IRAs under Section 408(p) of the Code - Simplified Employee Pension (SEP) plans under Section 408(k) of the Code - Plans under Section 401(k) of the Code - Custodial and trusteed plans under Section 401(a) of the Code - Tax-Sheltered Annuities (TSAs) under Section 403(b) of the Code A qualified annuity will not provide any necessary or additional tax deferral if it is used to fund a retirement plan that is already tax deferred. All other contracts are considered NONQUALIFIED ANNUITIES. RIDER: You receive a rider when you purchase the EEB and/or MAV. The rider adds the terms of the optional benefit to your contract. RIDER EFFECTIVE DATE: The date you add a rider to your contract. SETTLEMENT DATE: The date when annuity payouts are scheduled to begin. SURRENDER VALUE: The amount you are entitled to receive if you make a full surrender from your contract. It is the contract value minus any applicable charges. VALUATION DATE: Any normal business day, Monday through Friday, that the NYSE is open. Each valuation date ends at the close of business. We calculate the value of each subaccount at the close of business on each valuation date. VARIABLE ACCOUNT: Consists of separate subaccounts to which you may allocate purchase payments; each invests in shares of one fund. The value of your investment in each subaccount changes with the performance of the particular fund. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 3 THE CONTRACT IN BRIEF PURPOSE: The purpose of the contract is to allow you to accumulate money for retirement. You do this by making one or more purchase payments. You may allocate your purchase payments to the fixed account and/or subaccounts under the contract. These accounts, in turn, may earn returns that increase the value of the contract. Beginning at a specified time in the future called the settlement date, the contract provides lifetime or other forms of payouts of your contract value (less any applicable premium tax). Most annuities have a tax-deferred feature. So do many retirement plans under the Code. As a result, when you use the contract to fund a retirement plan that is tax deferred, your contract will not provide any necessary or additional tax deferral for that retirement plan. But the contract has features other than tax deferral that may help you reach your retirement goals. You should consult your tax advisor for an explanation of the tax implications to you. FREE LOOK PERIOD: You may return your contract to your sales representative or to our office within the time stated on the first page of your contract and receive a full refund of the contract value. We will not deduct any charges. However, you bear the investment risk from the time of purchase until you return the contract; the refund amount may be more or less than the payment you made. (Exception: If the law requires, we will refund all of your purchase payments.) ACCOUNTS: Currently, you may allocate your purchase payments among any or all of: - the subaccounts, each of which invests in a fund with a particular investment objective. The value of each subaccount varies with the performance of the particular fund in which it invests. We cannot guarantee that the value at the settlement date will equal or exceed the total purchase payments you allocate to the subaccounts. (p. 15) - the fixed account, which earns interest at a rate that we adjust periodically. (p. 22) BUYING YOUR CONTRACT: We no longer offer new contracts. However, you have the option of making additional purchase payments in the future. (p. 22) MINIMUM ALLOWABLE PURCHASE PAYMENTS If paying by installments under a scheduled payment plan: $23.08 biweekly, or $50 per month If paying by any other method: $50 MAXIMUM ALLOWABLE ANNUAL PURCHASE PAYMENTS For employees/advisors: $100,000 up to age 85 $50,000 for ages 86 to 90 For other individuals: $100,000 TRANSFERS: Subject to certain restrictions, you currently may redistribute your contract value among the accounts without charge at any time until annuity payouts begin, and once per contract year among the subaccounts after annuity payouts begin. You may establish automated transfers among the accounts. Fixed account transfers are subject to special restrictions. (p. 27) SURRENDERS: You may surrender all or part of your contract value at any time before the settlement date. You also may establish automated partial surrenders. Surrenders may be subject to charges and tax penalties (including an IRS penalty if you surrender prior to your reaching age 59 1/2) and may have other tax consequences; also, certain restrictions apply. (p. 29) AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 4 CHANGING OWNERSHIP: You may change ownership of a nonqualified annuity by written instruction, but this may have federal income tax consequences. Restrictions apply to changing ownership of a qualified annuity. (p. 30) BENEFITS IN CASE OF DEATH: If you or the annuitant die before annuity payouts begin, we will pay the beneficiary an amount at least equal to the contract value. (p. 30) OPTIONAL BENEFITS: This contract offers optional features that are available for additional charges if you meet certain criteria. (p. 32) ANNUITY PAYOUTS: You can apply your contract value to an annuity payout plan that begins on the settlement date. You may choose from a variety of plans to make sure that payouts continue as long as you like. If you purchased a qualified annuity, the payout schedule must meet the requirements of the tax-deferred retirement plan. We can make payouts on a fixed or variable basis, or both. Total monthly payouts may include amounts from each subaccount and the fixed account. During the annuity payout period, you cannot be invested in more than five subaccounts at any one time unless we agree otherwise. (p. 35) TAXES: Generally, your contract grows tax deferred until you surrender it or begin to receive payouts. (Under certain circumstances, IRS penalty taxes may apply.) Even if you direct payouts to someone else, you will be taxed on the income if you are the owner. (p. 37) CHARGES: We assess certain charges in connection with your contract: - $30 annual contract administrative charge; - a 0.55% mortality and expense risk fee (if you allocate money to one or more subaccounts); - any premium taxes that may be imposed on us by state or local governments (currently, we deduct any applicable premium tax when annuity payouts begin but we reserve the right to deduct this tax at other times such as when you make purchase payments or when you surrender your contract); - the operating expenses of the funds in which the subaccounts invest; - if you select the MAV, an annual fee of 0.15% of the contract value; and - if you select the EEB, an annual fee of 0.30% of the contract value. EXPENSE SUMMARY THE FOLLOWING TABLES DESCRIBE THE FEES AND EXPENSES THAT ARE PAID WHEN BUYING, OWNING AND SURRENDERING THE CONTRACT. THE FIRST TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU PAID AT THE TIME THAT YOU BOUGHT THE CONTRACT AND MAY PAY WHEN YOU SURRENDER THE CONTRACT. STATE PREMIUM TAXES ALSO MAY BE DEDUCTED. CONTRACT OWNER TRANSACTION EXPENSES SURRENDER CHARGE 0%
A surrender charge applies to payouts under certain annuity payout plans (See "Charges -- Surrender Charge" p. 24 and "The Annuity Payout Period -- Annuity Payout Plans" p. 36). THE NEXT TWO TABLES DESCRIBE THE FEES AND EXPENSES THAT YOU WILL PAY PERIODICALLY DURING THE TIME THAT YOU OWN THE CONTRACT, NOT INCLUDING FUND FEES AND EXPENSES. PERIODIC EXPENSES ANNUAL CONTRACT ADMINISTRATIVE CHARGE $30 (We will waive this charge when your contract value, or total purchase payments less any payments surrendered, is $50,000 or more on the current contract anniversary, except at full surrender.) MAV RIDER FEE 0.15%* (As a percentage of the contract value charged annually at the contract anniversary.) EEB RIDER FEE 0.30%* (As a percentage of the contract value charged annually at the contract anniversary.) ANNUAL VARIABLE ACCOUNT EXPENSES (As a percentage of average subaccount value.) MORTALITY AND EXPENSE RISK FEE 0.55%
* This fee applies only if you elect this optional feature AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 5 ANNUAL OPERATING EXPENSES OF THE FUNDS THE NEXT TWO TABLES DESCRIBE THE OPERATING EXPENSES OF THE FUNDS. THE FIRST TABLE SHOWS THE MINIMUM AND MAXIMUM TOTAL OPERATING EXPENSES CHARGED BY THE FUNDS THAT YOU MAY PAY PERIODICALLY DURING THE TIME THAT YOU OWN THE CONTRACT. THE SECOND TABLE SHOWS THE TOTAL FEES AND EXPENSES CHARGED BY EACH FUND FOR THE LAST FISCAL YEAR. MORE DETAIL CONCERNING EACH FUND'S FEES AND EXPENSES IS CONTAINED IN THE PROSPECTUS FOR EACH FUND. MINIMUM AND MAXIMUM TOTAL ANNUAL OPERATING EXPENSES FOR THE FUNDS (Including management fee, distribution and/or service (12b-1) fees and other expenses)
MINIMUM MAXIMUM Total expenses before contractual fee waivers and/or expense reimbursements .69% 3.14%
TOTAL ANNUAL OPERATING EXPENSES FOR EACH FUND (Before fee waivers and/or expense reimbursements, if applicable, as a percentage of average daily net assets)
GROSS TOTAL MANAGEMENT 12b-1 OTHER ANNUAL FEES FEES EXPENSES EXPENSES AXP(R) Variable Portfolio - Blue Chip Advantage Fund .53% .13% .13% .79%(1) Bond Fund .60 .13 .07 .80(1) Capital Resource Fund .62 .13 .05 .80(1) Cash Management Fund .51 .13 .05 .69(1) Diversified Equity Income Fund .56 .13 .18 .87(1) Emerging Markets Fund 1.18 .13 1.05 2.36(2) Equity Select Fund .69 .13 .57 1.39(2) Extra Income Fund .62 .13 .08 .83(1) Federal Income Fund .61 .13 .09 .83(1) Global Bond Fund .84 .13 .11 1.08(1) Growth Fund .56 .13 .12 .81(1) International Fund .84 .13 .10 1.07(1) Managed Fund .60 .13 .04 .77(1) NEW DIMENSIONS FUND(R) .61 .13 .05 .79(1) S&P 500 Index Fund .29 .13 .40 .82(2) Small Cap Advantage Fund .73 .13 .25 1.11(1) Strategy Aggressive Fund .62 .13 .06 .81(1) AIM V.I Capital Appreciation Fund, Series I Shares .61 -- .24 .85(3) Capital Development Fund, Series I Shares .75 -- .39 1.14(3) American Century(R) Variable Portfolios, Inc. VP International, Class I 1.30 -- -- 1.30(4) VP Value, Class I .95 -- -- .95(4) Calvert Variable Series, Inc. Social Balanced Portfolio .70 -- .21 .91(5) Credit Suisse Trust Emerging Growth Portfolio .90 -- .46 1.36(6) Fidelity(R) VIP Growth & Income Portfolio Service Class .48 .10 .11 .69(7) Mid Cap Portfolio Service Class .58 .10 .12 .80(7) Overseas Portfolio Service Class .73 .10 .17 1.00(7)
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 6 TOTAL ANNUAL OPERATING EXPENSES FOR EACH FUND (CONTINUED) (Before fee waivers and/or expense reimbursements, if applicable, as a percentage of average daily net assets)
GROSS TOTAL MANAGEMENT 12b-1 OTHER ANNUAL FEES FEES EXPENSES EXPENSES FTVIPT Franklin Real Estate Fund - Class 2 .53% .25% .04% .82%(8),(9) Franklin Small Cap Value Securities Fund - Class 2 .59 .25 .20 1.04(9),(10) Templeton Foreign Securities Fund - Class 2 .70 .25 .20 1.15(9),(10) Goldman Sachs VIT CORE(SM) Small Cap Equity Fund .75 -- .50 1.25(11) CORE(SM) U.S. Equity Fund .70 -- .16 .86(11) Mid Cap Value Fund .80 -- .13 .93(11) Janus Aspen Series Global Technology Portfolio: Service Shares .65 .25 .07 .97(12) International Growth Portfolio: Service Share .65 .25 .09 .99(12) Mid Cap Growth Portfolio: Service Shares .65 .25 .02 .92(12) (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) Lazard Retirement Series International Equity Portfolio .75 .25 .65 1.65(13) MFS(R) Investors Growth Stock Series - Service Class .75 .25 .13 1.13(14),(15) New Discovery Series - Service Class .90 .25 .15 1.30(14),(15) Putnam Variable Trust Putnam VT International New Opportunities Fund - Class IB Shares 1.00 .25 .27 1.52(7) Putnam VT Vista Fund - Class IB Shares .64 .25 .10 .99(7) Royce Capital Fund Micro-Cap Portfolio 1.25 -- .13 1.38(16) Third Avenue Value Portfolio .90 -- .40 1.30(17) Wanger International Small Cap 1.24 -- .23 1.47(18) U.S. Smaller Companies .94 -- .11 1.05(18) Wells Fargo VT Asset Allocation Fund .55 .25 .23 1.03(19) International Equity Fund .75 .25 2.14 3.14(19) Small Cap Growth Fund .75 .25 .33 1.33(19)
We entered into certain arrangements under which it is compensated by the funds' advisers and/or distributors for the administrative services it provides to these funds. (1) The Fund's expense figures are based on actual expenses for the fiscal year ended Aug. 31, 2002. (2) The Fund's expense figures are based on actual expenses, before fee waivers and expense reimbursements, for the fiscal year ending Aug. 31, 2002. Through April 3, 2003, IDS Life and AEFC have agreed to waive certain fees and reimburse expenses to the extent that total expenses exceed the following percentage of Fund average daily net assets. "Gross total annual expenses" after these fee waivers and expense reimbursements would have been 1.75% for AXP(R) Variable Portfolio - Emerging Markets Fund, 1.10% for AXP(R) Variable Portfolio - Equity Select Fund and 0.495% for AXP(R) Variable Portfolio - S&P 500 Index Fund. (3) Figures shown in the table are for the year ended Dec. 31, 2002 and are expressed as a percentage of Fund average daily net assets. There is no guarantee that actual expenses will be the same as those shown in the table. (4) Annualized operating expenses of funds at Dec. 31, 2002. The Fund has a stepped fee schedule. As a result, the Fund's management fee generally decreases as fund assets increase. (5) Expenses are based on the Portfolio's most recent fiscal year. Management fees include the Subadvisory fee paid by the Advisor (Calvert Asset Management Company, Inc.) and the administrative fee paid by the Portfolio to Calvert Administrative Services Company, an affiliate of the Advisor. (6) Expenses are shown before fee waivers and expense reimbursements. Fee waivers and expense reimbursements or credits are expected to reduce expenses for the Emerging Growth Portfolio during 2003 but may be discontinued at any time. The total expense ratios after the waiver and reimbursements would have been: Credit Suisse Trust Emerging Growth Portfolio (.79%, 0%, .46% and 1.25%). AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 7 (7) The Fund's expense figures are based on actual expenses for the fiscal year ended Dec. 31, 2002. (8) The Fund administration fee is paid indirectly through the management fee. (9) The Fund's Class 2 distribution plan or "Rule 12b-1 plan" is described in the Fund's prospectus. (10) The manager had agreed in advance to reduce its fee to reflect reduced services resulting from the fund's investment in a Franklin Templeton money fund for cash management. This reduction is required by the Fund's Board of Trustees and an exemptive order of the Securities and Exchange Commission (11) Goldman Sachs Asset Management, L.P. and Goldman Sachs Asset Management International, the investment advisers to the funds, have voluntarily agreed to reduce or limit certain "Other expenses" of such funds (excluding management fees, transfer agent fees, taxes, interest, brokerage fees, litigation, indemnification, shareholder meeting and other extraordinary expenses) to the extent that such expenses exceed 0.29%, 0.24% and 0.29% of the average daily net assets of the CORE(SM) Small Cap Equity, CORE(SM) US. Equity, and Mid Cap Value Fund, respectively. The expenses shown do not include these expense reductions and limitations. There were no expense reductions and limitations for Mid Cap Value or CORE(SM) U.S. Equity for the period ended Dec. 31, 2002. The expense reductions or limitations may be discontinued or modified by the investment adviser at their discretion at any time. CORE(SM) is a service mark of Goldman, Sachs & Co. (12) Expenses are based upon expenses for the fiscal year ended Dec. 31, 2002. All expenses are shown without the effect of expense offset arrangements. (13) The Investment Manager of the Portfolios has voluntarily agreed, for the year ended Dec. 31, 2002, to reduce its fees and, if necessary, reimburse the Portfolio's expenses to the extent that annualized operating expenses exceed 1.25% of the respective Portfolio's average net assets. After fee waivers and expense reimbursements "Other expense" and "Gross total annual expenses" would be 0.25% and 1.25% for Lazard Retirement International Equity Portfolio. (14) Each series has adopted a distribution plan under Rule 12b-1 that permits it to pay marketing and other fees to support the sales and distribution of service class shares (these fees are referred to as distribution fees). (15) Each series has an expense offset arrangement that reduces the series' custodian fee based upon the amount of cash maintained by the series with its custodian and dividend disbursing agent. Each series may enter into other similar arrangements and directed brokerage arrangements, which would also have the effect of reducing the series' expenses. "Other expenses" do not take into account these fee reductions, and are therefore higher than the actual expenses of the series. Had these fee reductions been taken into account, "Gross total annual expenses" would be lower for certain series and would equal: 1.12% for Investors Growth Stock Series and 1.29% for New Discovery Series. (16) Royce has contractually agreed to waive its fees and reimburse expenses to the extent necessary to maintain the Funds Net Annual Operating Expense ratio at or below 1.35% through Dec. 31, 2003 and 1.99% through Dec. 31, 2010. After fee waivers "Other expenses" and "Gross total annual expenses" would be 0.10% and 1.35% for Royce Micro-Cap Portfolio. (17) The Fund's expenses figures are based on actual expenses before fee waivers and expense reimbursements, for the fiscal year ending Dec. 31, 2002. After fee waivers and expense reimbursements "Other expenses" and "Gross total annual expenses" would be 0.35% and 1.25% for Third Avenue Value Portfolio. Waivers and/or reimbursements are voluntary and may be terminated at the managers discretion. (18) Figures in "Management fees," "12b-1 fees," "Other expenses," and "Gross total annual expenses" are based on actual expenses for the fiscal year ended Dec. 31, 2002. Liberty Wanger Asset Management, L.P. will reimburse the Fund if its annual ordinary operating expenses exceed 2.00% of average daily net assets. This commitment expires on July 31, 2003. (19) Other expenses have been adjusted as necessary from amounts incurred during the Funds' most recent fiscal year to reflect current fees and expenses. Other expenses may include expenses payable to affiliates of Wells Fargo & Company. The adviser has committed through April 30, 2004 to waive fees and/or reimburse the expenses to the extent necessary to maintain the Fund's net operating expense ratio as follows. After fee waivers and expense reimbursements "Other expenses" and "Gross total annual expenses" would be 0.20% and 1.00% for Wells Fargo VT Asset Allocation Fund, 0% and 1.00% for Wells Fargo VT International Equity Fund and 0.20% and 1.20% for Wells Fargo VT Small Cap Growth Fund. EXAMPLES THESE EXAMPLES ARE INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN THE CONTRACT WITH THE COST OF INVESTING IN OTHER VARIABLE ANNUITY CONTRACTS. THESE COSTS INCLUDE YOUR TRANSACTION EXPENSES, CONTRACT ADMINISTRATIVE CHARGES*, VARIABLE ACCOUNT ANNUAL EXPENSES AND FUND FEES AND EXPENSES. THESE EXAMPLES ASSUME THAT YOU INVEST $10,000 IN THE CONTRACT FOR THE TIME PERIODS INDICATED. THESE EXAMPLES ALSO ASSUME THAT YOUR INVESTMENT HAS A 5% RETURN EACH YEAR. MAXIMUM EXPENSES. This example assumes the maximum fees and expenses of any of the funds. They assume that you select both the optional MAV and EEB. Although your actual costs may be higher or lower, based on this assumption, your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS $ 431.12 $ 1,302.27 $ 2,185.48 $ 4,447.27
MINIMUM EXPENSES. These examples assume the least expensive combination of contract features and benefits and the minimum fees and expenses of any of the funds. They assume that you do not select any optional benefits. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS $ 133.87 $ 416.48 $ 720.17 $ 1,582.18
* In these examples, the $30 contract administrative charge is approximated as a .066% charge. This percentage was determined by dividing the total amount of the contract administrative charges collected during the year that are attributable to this contract by the total average net assets that are attributable to the contract. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 8 CONDENSED FINANCIAL INFORMATION (UNAUDITED) The following tables give per-unit information about the financial history of each subaccount.
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT BC3(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - BLUE CHIP ADVANTAGE FUND) Accumulation unit value at beginning of period $ 0.82 $ 0.99 $ 1.11 $ 1.00 Accumulation unit value at end of period $ 0.63 $ 0.82 $ 0.99 $ 1.11 Number of accumulation units outstanding at end of period (000 omitted) 314 729 454 211 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT BD3(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - BOND FUND) Accumulation unit value at beginning of period $ 1.14 $ 1.06 $ 1.02 $ 1.00 Accumulation unit value at end of period $ 1.20 $ 1.14 $ 1.06 $ 1.02 Number of accumulation units outstanding at end of period (000 omitted) 762 985 410 47 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT CR3(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - CAPITAL RESOURCE FUND) Accumulation unit value at beginning of period $ 0.76 $ 0.94 $ 1.14 $ 1.00 Accumulation unit value at end of period $ 0.59 $ 0.76 $ 0.94 $ 1.14 Number of accumulation units outstanding at end of period (000 omitted) 202 291 266 872 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT CM3(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND) Accumulation unit value at beginning of period $ 1.10 $ 1.07 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.11 $ 1.10 $ 1.07 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 3,911 5,658 6,615 2,266 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% Simple yield(2) 0.23% 1.04% 5.31% 5.51% Compound yield(2) 0.23% 1.05% 5.45% 5.66% ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT DE3(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND) Accumulation unit value at beginning of period $ 1.02 $ 1.01 $ 1.02 $ 1.00 Accumulation unit value at end of period $ 0.82 $ 1.02 $ 1.01 $ 1.02 Number of accumulation units outstanding at end of period (000 omitted) 1,262 281 218 23 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT EM3(3) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - EMERGING MARKETS FUND) Accumulation unit value at beginning of period $ 0.73 $ 0.75 $ 1.00 -- Accumulation unit value at end of period $ 0.69 $ 0.73 $ 0.75 -- Number of accumulation units outstanding at end of period (000 omitted) 277 3 1 -- Ratio of operating expense to average net assets 0.55% 0.55% 0.55% -- ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT ES3(4) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - EQUITY SELECT FUND) Accumulation unit value at beginning of period $ 1.01 $ 1.00 -- -- Accumulation unit value at end of period $ 0.87 $ 1.01 -- -- Number of accumulation units outstanding at end of period (000 omitted) 328 38 -- -- Ratio of operating expense to average net assets 0.55% 0.55% -- -- ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT EI3(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - EXTRA INCOME FUND) Accumulation unit value at beginning of period $ 0.95 $ 0.91 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 0.89 $ 0.95 $ 0.91 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 1,480 1,549 1,186 48 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT FI3(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - FEDERAL INCOME FUND) Accumulation unit value at beginning of period $ 1.15 $ 1.09 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.21 $ 1.15 $ 1.09 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 1,275 592 1 10 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT GB3(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - GLOBAL BOND FUND) Accumulation unit value at beginning of period $ 1.04 $ 1.03 $ 1.00 $ 1.00 Accumulation unit value at end of period $ 1.18 $ 1.04 $ 1.03 $ 1.00 Number of accumulation units outstanding at end of period (000 omitted) 251 249 4 3 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ----------------------------------------------------------------------------------------------------------------------------------
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 9
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT GR3(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - GROWTH FUND) Accumulation unit value at beginning of period $ 0.64 $ 0.94 $ 1.17 $ 1.00 Accumulation unit value at end of period $ 0.47 $ 0.64 $ 0.94 $ 1.17 Number of accumulation units outstanding at end of period (000 omitted) 1,064 1,285 1,762 401 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT IE3(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - INTERNATIONAL FUND) Accumulation unit value at beginning of period $ 0.67 $ 0.95 $ 1.27 $ 1.00 Accumulation unit value at end of period $ 0.55 $ 0.67 $ 0.95 $ 1.27 Number of accumulation units outstanding at end of period (000 omitted) 488 65 81 133 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT MF3(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - MANAGED FUND) Accumulation unit value at beginning of period $ 0.94 $ 1.06 $ 1.09 $ 1.00 Accumulation unit value at end of period $ 0.81 $ 0.94 $ 1.06 $ 1.09 Number of accumulation units outstanding at end of period (000 omitted) 120 296 145 10 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT ND3(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)) Accumulation unit value at beginning of period $ 0.89 $ 1.08 $ 1.19 $ 1.00 Accumulation unit value at end of period $ 0.69 $ 0.89 $ 1.08 $ 1.19 Number of accumulation units outstanding at end of period (000 omitted) 3,029 3,252 3,919 426 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT IV3(3) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - S&P 500 INDEX FUND) Accumulation unit value at beginning of period $ 0.79 $ 0.90 $ 1.00 -- Accumulation unit value at end of period $ 0.61 $ 0.79 $ 0.90 -- Number of accumulation units outstanding at end of period (000 omitted) 973 770 285 -- Ratio of operating expense to average net assets 0.55% 0.55% 0.55% -- ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT SC3(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND) Accumulation unit value at beginning of period $ 1.08 $ 1.16 $ 1.12 $ 1.00 Accumulation unit value at end of period $ 0.89 $ 1.08 $ 1.16 $ 1.12 Number of accumulation units outstanding at end of period (000 omitted) 393 378 286 28 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT SA3(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND) Accumulation unit value at beginning of period $ 0.81 $ 1.22 $ 1.52 $ 1.00 Accumulation unit value at end of period $ 0.55 $ 0.81 $ 1.22 $ 1.52 Number of accumulation units outstanding at end of period (000 omitted) 386 607 798 33 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3CA(1) (INVESTING IN SHARES OF AIM V.I. CAPITAL APPRECIATION FUND, SERIES I SHARES) Accumulation unit value at beginning of period $ 0.89 $ 1.17 $ 1.31 $ 1.00 Accumulation unit value at end of period $ 0.67 $ 0.89 $ 1.17 $ 1.31 Number of accumulation units outstanding at end of period (000 omitted) 1,024 1,358 1,343 185 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3CD(1) (INVESTING IN SHARES OF AIM V.I. CAPITAL DEVELOPMENT FUND, SERIES I SHARES) Accumulation unit value at beginning of period $ 1.26 $ 1.38 $ 1.27 $ 1.00 Accumulation unit value at end of period $ 0.98 $ 1.26 $ 1.38 $ 1.27 Number of accumulation units outstanding at end of period (000 omitted) 302 394 318 4 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3IF(1) (INVESTING IN SHARES OF AMERICAN CENTURY(R) VP INTERNATIONAL, CLASS I) Accumulation unit value at beginning of period $ 0.84 $ 1.19 $ 1.44 $ 1.00 Accumulation unit value at end of period $ 0.66 $ 0.84 $ 1.19 $ 1.44 Number of accumulation units outstanding at end of period (000 omitted) 634 781 532 9 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3VA(1) (INVESTING IN SHARES OF AMERICAN CENTURY(R) VP VALUE, CLASS I) Accumulation unit value at beginning of period $ 1.21 $ 1.08 $ 0.92 $ 1.00 Accumulation unit value at end of period $ 1.06 $ 1.21 $ 1.08 $ 0.92 Number of accumulation units outstanding at end of period (000 omitted) 766 506 435 59 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ----------------------------------------------------------------------------------------------------------------------------------
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 10
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3SR(3) (INVESTING IN SHARES OF CALVERT VARIABLE SERIES, INC SOCIAL BALANCED PORTFOLIO) Accumulation unit value at beginning of period $ 0.89 $ 0.96 $ 1.00 -- Accumulation unit value at end of period $ 0.78 $ 0.89 $ 0.96 -- Number of accumulation units outstanding at end of period (000 omitted) 8 6 5 -- Ratio of operating expense to average net assets 0.55% 0.55% 0.55% -- ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3EG(5) (INVESTING IN SHARES OF CREDIT SUISSE TRUST - EMERGING GROWTH PORTFOLIO) Accumulation unit value at beginning of period $ 1.07 $ 1.29 $ 1.32 $ 1.00 Accumulation unit value at end of period $ 0.75 $ 1.07 $ 1.29 $ 1.32 Number of accumulation units outstanding at end of period (000 omitted) 421 467 891 17 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3GI(1) (INVESTING IN SHARES OF FIDELITY(R) VIP GROWTH & INCOME PORTFOLIO SERVICE CLASS) Accumulation unit value at beginning of period $ 0.91 $ 1.00 $ 1.05 $ 1.00 Accumulation unit value at end of period $ 0.75 $ 0.91 $ 1.00 $ 1.05 Number of accumulation units outstanding at end of period (000 omitted) 1,172 1,090 764 445 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3MP(1) (INVESTING IN SHARES OF FIDELITY(R) VIP MID CAP PORTFOLIO SERVICE CLASS) Accumulation unit value at beginning of period $ 1.59 $ 1.65 $ 1.24 $ 1.00 Accumulation unit value at end of period $ 1.42 $ 1.59 $ 1.65 $ 1.24 Number of accumulation units outstanding at end of period (000 omitted) 862 781 616 102 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3OS(1) (INVESTING IN SHARES OF FIDELITY(R) VIP OVERSEAS PORTFOLIO SERVICE CLASS) Accumulation unit value at beginning of period $ 0.77 $ 0.99 $ 1.23 $ 1.00 Accumulation unit value at end of period $ 0.61 $ 0.77 $ 0.99 $ 1.23 Number of accumulation units outstanding at end of period (000 omitted) 82 114 116 25 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3RE(1) (INVESTING IN SHARES OF FTVIPT FRANKLIN REAL ESTATE FUND - CLASS 2) Accumulation unit value at beginning of period $ 1.35 $ 1.26 $ 0.96 $ 1.00 Accumulation unit value at end of period $ 1.37 $ 1.35 $ 1.26 $ 0.96 Number of accumulation units outstanding at end of period (000 omitted) 205 211 148 4 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3SI(1) (INVESTING IN SHARES OF FTVIPT FRANKLIN SMALL CAP VALUE SECURITIES FUND - CLASS 2) Accumulation unit value at beginning of period $ 1.35 $ 1.20 $ 0.96 $ 1.00 Accumulation unit value at end of period $ 1.22 $ 1.35 $ 1.20 $ 0.96 Number of accumulation units outstanding at end of period (000 omitted) 282 150 9 2 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3TF(6),(7) (INVESTING IN SHARES OF FTVIPT TEMPLETON FOREIGN SECURITIES FUND - CLASS 2) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.84 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 182 -- -- -- Ratio of operating expense to average net assets 0.55% -- -- -- ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3SE(1) (INVESTING IN SHARES OF GOLDMAN SACHS VIT CORE(SM) SMALL CAP EQUITY FUND) Accumulation unit value at beginning of period $ 1.19 $ 1.15 $ 1.13 $ 1.00 Accumulation unit value at end of period $ 1.01 $ 1.19 $ 1.15 $ 1.13 Number of accumulation units outstanding at end of period (000 omitted) 87 97 100 41 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3UE(1) (INVESTING IN SHARES OF GOLDMAN SACHS VIT CORE(SM) U.S. EQUITY FUND) Accumulation unit value at beginning of period $ 0.87 $ 0.99 $ 1.10 $ 1.00 Accumulation unit value at end of period $ 0.67 $ 0.87 $ 0.99 $ 1.10 Number of accumulation units outstanding at end of period (000 omitted) 694 943 577 170 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3MC(1) (INVESTING IN SHARES OF GOLDMAN SACHS VIT MID CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.38 $ 1.24 $ 0.95 $ 1.00 Accumulation unit value at end of period $ 1.31 $ 1.38 $ 1.24 $ 0.95 Number of accumulation units outstanding at end of period (000 omitted) 450 200 15 8 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ----------------------------------------------------------------------------------------------------------------------------------
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 11
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3GT(3) (INVESTING IN SHARES OF JANUS ASPEN SERIES GLOBAL TECHNOLOGY PORTFOLIO: SERVICE SHARES) Accumulation unit value at beginning of period $ 0.43 $ 0.68 $ 1.00 -- Accumulation unit value at end of period $ 0.25 $ 0.43 $ 0.68 -- Number of accumulation units outstanding at end of period (000 omitted) 343 202 310 -- Ratio of operating expense to average net assets 0.55% 0.55% 0.55% -- ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3IG(3) (INVESTING IN SHARES OF JANUS ASPEN SERIES INTERNATIONAL GROWTH PORTFOLIO: SERVICE SHARES) Accumulation unit value at beginning of period $ 0.61 $ 0.80 $ 1.00 -- Accumulation unit value at end of period $ 0.45 $ 0.61 $ 0.80 -- Number of accumulation units outstanding at end of period (000 omitted) 875 606 556 -- Ratio of operating expense to average net assets 0.55% 0.55% 0.55% -- ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3AG(3) (INVESTING IN SHARES OF JANUS ASPEN SERIES MID CAP PORTFOLIO: SERVICE SHARES) (PREVIOUSLY JANUS ASPEN SERIES AGGRESSIVE GROWTH PORTFOLIO: SERVICE SHARES) Accumulation unit value at beginning of period $ 0.42 $ 0.70 $ 1.00 -- Accumulation unit value at end of period $ 0.30 $ 0.42 $ 0.70 -- Number of accumulation units outstanding at end of period (000 omitted) 246 280 343 -- Ratio of operating expense to average net assets 0.55% 0.55% 0.55% -- ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3IP(1) (INVESTING IN SHARES OF LAZARD RETIREMENT INTERNATIONAL EQUITY PORTFOLIO) Accumulation unit value at beginning of period $ 0.73 $ 0.96 $ 1.07 $ 1.00 Accumulation unit value at end of period $ 0.65 $ 0.73 $ 0.96 $ 1.07 Number of accumulation units outstanding at end of period (000 omitted) 636 253 57 8 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3MG(3) (INVESTING IN SHARES OF MFS(R) INVESTORS GROWTH STOCK SERIES - SERVICE CLASS) Accumulation unit value at beginning of period $ 0.68 $ 0.91 $ 1.00 -- Accumulation unit value at end of period $ 0.49 $ 0.68 $ 0.91 -- Number of accumulation units outstanding at end of period (000 omitted) 785 913 533 -- Ratio of operating expense to average net assets 0.55% 0.55% 0.55% -- ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3MD(3) (INVESTING IN SHARES OF MFS(R) NEW DISCOVERY SERIES - SERVICE CLASS) Accumulation unit value at beginning of period $ 0.90 $ 0.96 $ 1.00 -- Accumulation unit value at end of period $ 0.61 $ 0.90 $ 0.96 -- Number of accumulation units outstanding at end of period (000 omitted) 485 548 352 -- Ratio of operating expense to average net assets 0.55% 0.55% 0.55% -- ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3IN(1) (INVESTING IN SHARES OF PUTNAM VT INTERNATIONAL NEW OPPORTUNITIES FUND - CLASS IB SHARES) Accumulation unit value at beginning of period $ 0.66 $ 0.92 $ 1.52 $ 1.00 Accumulation unit value at end of period $ 0.56 $ 0.66 $ 0.92 $ 1.52 Number of accumulation units outstanding at end of period (000 omitted) 914 1,347 1,802 87 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3VS(1) (INVESTING IN SHARES OF PUTNAM VT VISTA FUND - CLASS IB SHARES) Accumulation unit value at beginning of period $ 0.86 $ 1.29 $ 1.36 $ 1.00 Accumulation unit value at end of period $ 0.59 $ 0.86 $ 1.29 $ 1.36 Number of accumulation units outstanding at end of period (000 omitted) 525 1,092 1,330 183 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3MI(1) (INVESTING IN SHARES OF ROYCE MICRO-CAP PORTFOLIO) Accumulation unit value at beginning of period $ 1.75 $ 1.36 $ 1.15 $ 1.00 Accumulation unit value at end of period $ 1.52 $ 1.75 $ 1.36 $ 1.15 Number of accumulation units outstanding at end of period (000 omitted) 453 344 193 19 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3SV(5) (INVESTING IN SHARES OF THIRD AVENUE VALUE PORTFOLIO) Accumulation unit value at beginning of period $ 1.71 $ 1.51 $ 1.08 $ 1.00 Accumulation unit value at end of period $ 1.52 $ 1.71 $ 1.51 $ 1.08 Number of accumulation units outstanding at end of period (000 omitted) 279 314 70 120 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3IT(1) (INVESTING IN SHARES OF WANGER INTERNATIONAL SMALL CAP) Accumulation unit value at beginning of period $ 0.85 $ 1.09 $ 1.51 $ 1.00 Accumulation unit value at end of period $ 0.73 $ 0.85 $ 1.09 $ 1.51 Number of accumulation units outstanding at end of period (000 omitted) 1,484 769 599 112 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ----------------------------------------------------------------------------------------------------------------------------------
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 12
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3SP(1) (INVESTING IN SHARES OF WANGER U.S. SMALLER COMPANIES) Accumulation unit value at beginning of period $ 1.17 $ 1.05 $ 1.15 $ 1.00 Accumulation unit value at end of period $ 0.96 $ 1.17 $ 1.05 $ 1.15 Number of accumulation units outstanding at end of period (000 omitted) 847 820 990 125 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3AA(4) (INVESTING IN SHARES OF WELLS FARGO VT ASSET ALLOCATION FUND) Accumulation unit value at beginning of period $ 0.97 $ 1.00 -- -- Accumulation unit value at end of period $ 0.84 $ 0.97 -- -- Number of accumulation units outstanding at end of period (000 omitted) 29 8 -- -- Ratio of operating expense to average net assets 0.55% 0.55% -- -- ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3WI(4) (INVESTING IN SHARES OF WELLS FARGO VT INTERNATIONAL EQUITY FUND) Accumulation unit value at beginning of period $ 0.90 $ 1.00 -- -- Accumulation unit value at end of period $ 0.69 $ 0.90 -- -- Number of accumulation units outstanding at end of period (000 omitted) 144 1 -- -- Ratio of operating expense to average net assets 0.55% 0.55% -- -- ---------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3SG(4) (INVESTING IN SHARES OF WELLS FARGO VT SMALL CAP GROWTH FUND) Accumulation unit value at beginning of period $ 0.94 $ 1.00 -- -- Accumulation unit value at end of period $ 0.58 $ 0.94 -- -- Number of accumulation units outstanding at end of period (000 omitted) 6 2 -- -- Ratio of operating expense to average net assets 0.55% 0.55% -- -- ----------------------------------------------------------------------------------------------------------------------------------
(1) Operations commenced on Sept. 15, 1999. (2) Net of annual contract administrative charge and mortality and expense risk fee. (3) Operations commenced on May 1, 2000. (4) Operations commenced on May 1, 2001. (5) Operations commenced on Sept. 21, 1999. (6) Operations commenced on March 1, 2002. (7) FTVIPT Templeton International Smaller Companies Fund - Class 2 merged into FTVIPT Templeton Foreign Securities Fund - Class 2 as of April 30, 2002. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 13 FINANCIAL STATEMENTS You can find our audited financial statements and the audited financial statements of the subaccounts in the SAI. PERFORMANCE INFORMATION Performance information for the subaccounts may appear from time to time in advertisements or sales literature. This information reflects the performance of a hypothetical investment in a particular subaccount during a specified time period. We show actual performance from the date the subaccounts began investing in funds. However, we show performance from the commencement date of the funds as if the subaccounts invested in them existed at that time, which, in some cases, they did not. Although we base performance figures on historical earnings, past performance does not guarantee future results. We include non-recurring charges (such as surrender charges) in total return figures, but not in yield quotations. Excluding non-recurring charges in yield calculations increases the reported value. We may show total return quotations by means of schedules, charts or graphs. Total return figures reflect deduction of the following charges: - contract administrative charge, - mortality and expense risk fee, - MAV rider fee, and - EEB rider fee. We may also show optional total return quotations that reflect deduction of the MAV and/or EEB rider fee. We also show optional total return quotations that do not reflect fees for any of the optional features. AVERAGE ANNUAL TOTAL RETURN is the average annual compounded rate of return of the investment over a period of one, five and ten years (or up to the life of the subaccount if it is less than ten years old). CUMULATIVE TOTAL RETURN is the cumulative change in the value of an investment over a specified time period. We assume that income earned by the investment is reinvested. Cumulative total return generally will be higher than average annual total return. ANNUALIZED SIMPLE YIELD (FOR SUBACCOUNTS INVESTING IN MONEY MARKET FUNDS) "annualizes" the income generated by the investment over a given seven-day period. That is, we assume the amount of income generated by the investment during the period will be generated each seven-day period for a year. We show this as a percentage of the investment. ANNUALIZED COMPOUND YIELD (FOR SUBACCOUNTS INVESTING IN MONEY MARKET FUNDS) is calculated like simple yield except that we assume the income is reinvested when we annualize it. Compound yield will be higher than the simple yield because of the compounding effect of the assumed reinvestment. ANNUALIZED YIELD (FOR SUBACCOUNTS INVESTING IN INCOME FUNDS) divides the net investment income (income less expenses) for each accumulation unit during a given 30-day period by the value of the unit on the last day of the period. We then convert the result to an annual percentage. You should consider performance information in light of the investment objectives, policies, characteristics and quality of the fund in which the subaccount invests and the market conditions during the specified time period. Advertised yields and total return figures include charges that reduce advertised performance. Therefore, you should not compare subaccount performance to that of mutual funds that sell their shares directly to the public. (See the SAI for a further description of methods used to determine total return and yield.) If you would like additional information about actual performance, please contact us at the address or telephone number on the first page of this prospectus. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 14 THE VARIABLE ACCOUNT AND THE FUNDS You may allocate purchase payments and transfers to any or all of the subaccounts of the variable account that invest in shares of the following funds:
SUBACCOUNT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ---------------------------------------------------------------------------------------------------------------------------------- BC3 AXP(R) Variable Portfolio - Objective: long-term total return exceeding IDS Life, adviser; American Blue Chip Advantage Fund that of the U.S. stock market. Invests Express Financial Corporation primarily in blue chip stocks. (AEFC), subadviser. Blue chip stocks are issued by companies with a market capitalization of at least $1 billion, an established management, a history of consistent earnings and a leading position within their respective industries. BD3 AXP(R) Variable Portfolio - Objective: high level of current income while IDS Life, adviser; AEFC, Bond Fund conserving the value of the investment and subadviser. (effective 6-27-03 continuing a high level of income for the AXP(R) Variable Portfolio - longest time period. Invests primarily in Bond Fund will change to bonds and other debt obligations. AXP(R) Variable Portfolio - Diversified Bond Fund) CR3 AXP(R) Variable Portfolio - Objective: capital appreciation. Invests IDS Life, adviser; AEFC, Capital Resource Fund primarily in U.S. common stocks and other subadviser. securities convertible into common stocks. CM3 AXP(R) Variable Portfolio - Objective: maximum current income consistent IDS Life, adviser; AEFC, Cash Management Fund with liquidity and stability of principal. subadviser. Invests primarily in money market securities. DE3 AXP(R) Variable Portfolio - Objective: high level of current income and, IDS Life, adviser; AEFC, Diversified Equity Income as a secondary goal, steady growth of subadviser. Fund capital. Invests primarily in dividend-paying common and preferred stocks. EM3 AXP(R) Variable Portfolio - Objective: long-term capital growth. Invests IDS Life, adviser; AEFC, Emerging Markets Fund primarily in equity securities of companies subadviser; American in emerging market countries. Express Asset Management International, Inc., a wholly-owned subsidiary of AEFC, subadviser. ES3 AXP(R) Variable Portfolio - Objective: growth of capital. Invests IDS Life, adviser; AEFC, Equity Select Fund primarily in equity securities of subadviser. medium-sized companies. EI3 AXP(R) Variable Portfolio - Objective: high current income, with capital IDS Life, adviser; AEFC, Extra Income Fund growth as a secondary objective. Invests subadviser. (effective 6-27-03 primarily in high-yielding, high-risk AXP(R) Variable Portfolio - corporate bonds (junk bonds) issued by U.S. Extra Income Fund will and foreign companies and governments. change to AXP(R) Variable Portfolio - High Yield Bond Fund)
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 15
SUBACCOUNT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ---------------------------------------------------------------------------------------------------------------------------------- FI3 AXP(R) Variable Portfolio - Objective: a high level of current income and IDS Life, adviser; AEFC, Federal Income Fund safety of principal consistent with an subadviser. (effective 6-27-03 AXP(R) investment in U.S. government and government Variable Portfolio - agency securities. Invests primarily in debt Federal Income Fund will obligations issued or guaranteed as to change to AXP(R) Variable principal and interest by the U.S. Portfolio - Short Term government, its agencies or instrumentalities. U.S. Government Fund) GB3 AXP(R) Variable Portfolio - Objective: high total return through income IDS Life, adviser; AEFC, Global Bond Fund and growth of capital. Non-diversified mutual subadviser. fund that invests primarily in debt obligations of U.S. and foreign issuers. GR3 AXP(R) Variable Portfolio - Objective: long-term capital growth. Invests IDS Life, adviser; AEFC, Growth Fund primarily in common stocks and securities subadviser. convertible into common stocks that appear to offer growth opportunities. IE3 AXP(R) Variable Portfolio - Objective: capital appreciation. Invests IDS Life, adviser; AEFC, International Fund primarily in common stocks or convertible subadviser; American securities of foreign issuers that offer Express Asset Management strong growth potential. International, Inc., a wholly-owned subsidiary of AEFC, subadviser. MF3 AXP(R) Variable Portfolio - Objective: maximum total investment return IDS Life, adviser; AEFC, Managed Fund through a combination of capital growth and subadviser. current income. Invests primarily in a combination of common and preferred stocks, convertible securities, bonds and other debt securities. ND3 AXP(R) Variable Portfolio - Objective: long-term growth of capital. IDS Life, adviser; AEFC, NEW DIMENSIONS FUND(R) Invests primarily in common stocks showing subadviser. potential for significant growth. IV3 AXP(R) Variable Portfolio - Objective: long-term capital appreciation. IDS Life, adviser; AEFC, S&P 500 Index Fund Non-diversified fund that invests primarily subadviser. in securities that are expected to provide investment results that correspond to the performance of the S&P 500(R) Index. SC3 AXP(R) Variable Portfolio - Objective: long-term capital growth. Invests IDS Life, adviser; AEFC, Small Cap Advantage Fund primarily in equity stocks of small companies subadviser; Kenwood Capital that are often included in the Russell 2000 Management LLC, subadviser. Index and/or have market capitalization under $2 billion. SA3 AXP(R) Variable Portfolio - Objective: capital appreciation. Invests IDS Life, adviser; AEFC, Strategy Aggressive Fund primarily in equity securities of growth subadviser. companies.
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 16
SUBACCOUNT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ---------------------------------------------------------------------------------------------------------------------------------- 3CA AIM V.I. Capital Objective: growth of capital. Invests A I M Advisors, Inc. Appreciation Fund, Series principally in common stocks of companies I Shares likely to benefit from new or innovative products, services or processes as well as those with above-average growth and excellent prospects for future growth. The Fund may invest up to 25% of its assets in foreign securities. 3CD AIM V.I. Capital Objective: long-term growth of capital. A I M Advisors, Inc. Development Fund, Series Invests primarily in securities (including I Shares common stocks, convertible securities and bonds) of small- and medium-sized companies. The Fund may invest up to 25% of its assets in foreign securities. 3IF American Century(R) VP Objective: long-term capital growth. Invests American Century Investment International, Class I primarily in stocks of growing foreign Management, Inc. companies in developed countries. 3VA American Century(R) VP Objective: long-term capital growth, with American Century Investment Value, Class I income as a secondary objective. Invests Management, Inc. primarily in stocks of companies that management believes to be undervalued at the time of purchase. 3SR Calvert Variable Series, Objective: income and capital growth. Invests Calvert Asset Management Inc. Social Balanced primarily in stocks, bonds and money market Company, Inc. (CAMCO), Portfolio instruments which offer income and capital investment adviser. SsgA growth opportunity and which satisfy the Funds Management, Inc. and investment and social criteria. Brown Capital Management are the investment subadvisers. 3EG Credit Suisse Trust - Objective: maximum capital appreciation. Credit Suisse Asset Emerging Growth Portfolio Invests in U.S. equity securities of Management, LLC emerging-growth companies with growth characteristics such as positive earnings and potential for accelerated growth. 3GI Fidelity(R) VIP Growth & Objective: seeks high total return through a Fidelity Management & Income Portfolio Service combination of current income and capital Research Company (FMR), Class appreciation. Normally invests a majority of investment manager; FMR assets in common stocks of foreign and U.K., FMR Far East, domestic issuers with a focus on those that sub-investment advisers. pay current dividends and show potential for capital appreciation. May invest in bonds, including lower-quality debt securities, as well as stocks that are not currently paying dividends, but offer prospects for future income or capital appreciation.
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 17
SUBACCOUNT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ---------------------------------------------------------------------------------------------------------------------------------- 3MP Fidelity(R) VIP Mid Cap Objective: seeks long-term growth of capital. Fidelity Management & Portfolio Service Class Normally invests at least 80% of assets in Research Company (FMR), securities of foreign and domestic companies investment manager; FMR with medium market capitalization common U.K., FMR Far East, stocks. Invests in growth or value common sub-investment advisers. stocks. May invest in companies with smaller or larger market capitalizations. 3OS Fidelity(R) VIP Overseas Strategy: seeks long-term growth of capital. Fidelity Management & Portfolio Service Class Normally invests primarily in common stocks Research Company (FMR), of foreign securities. Normally invests at investment manager; FMR least 80% of assets in non-U.S. securities. U.K., FMR Far East, Fidelity International Investment Advisors (FIIA) and FIIA U.K., sub-investment advisers. 3RE FTVIPT Franklin Real Objective: seeks capital appreciation, with Franklin Advisers, Inc. Estate Fund - Class 2 current income as a secondary goal. The Fund normally invests at least 80% of its net assets in investments of companies operating in the real estate sector. The Fund invests primarily in equity real estate investment trusts (REITs). 3SI FTVIPT Franklin Small Cap Objective: seeks long-term total return. The Franklin Advisory Services, Value Securities Fund - Fund normally invests at least 80% of its net LLC Class 2 assets in investments of small capitalization companies. For this Fund, small cap companies are those with market cap values not exceeding $2.5 billion, at the time of purchase. The Fund's manager invests in small companies that it believes are undervalued. 3TF FTVIPT Templeton Foreign Objective: seeks long-term capital growth. Templeton Investment Securities Fund - Class 2 The Fund normally invests at least 80% of its Counsel, LLC net assets in investments of issuers located outside the U.S.; including those in emerging markets. 3SE Goldman Sachs VIT CORE(SM) Objective: The Goldman Sachs VIT CORE Small Goldman Sachs Asset Small Cap Equity Fund Cap Equity Fund seeks long-term growth of Management, L.P. capital. The Fund invests, under normal CORE(SM) is a service mark circumstances, at least 80% of its net assets of Goldman, Sachs & Co. plus any borrowings for investment purposes (measured at time or purchase) in a broadly diversified portfolio of equity investments in small-cap U.S. issuers, including foreign issuers that are traded in the United States, within the range of the market capitalization of companies constituting the Russell 2000 Index at the time of investment.
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 18
SUBACCOUNT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ---------------------------------------------------------------------------------------------------------------------------------- 3UE Goldman Sachs VIT CORE(SM) Objective: The Goldman Sachs VIT CORE U.S. Goldman Sachs Asset U.S. Equity Fund Equity Fund seeks long-term growth of capital Management, L.P. and dividend income. The Fund invests, under CORE(SM) is a service mark normal circumstances, at least 90% of its of Goldman, Sachs & Co. total assets (not including securities lending collateral and any investment of that collateral) measured at time of purchase in a broadly diversified portfolio of large-cap and blue chip equity investments representing all major sectors of the U.S. economy. 3MC Goldman Sachs VIT Mid Cap Objective: The Goldman Sachs VIT Mid Cap Goldman Sachs Asset Value Fund Value Fund seeks long-term capital Management, L.P. appreciation. The Fund invests, under normal circumstances, at least 80% of its net assets plus any borrowing for investment purposes (measured at time of purchase) in a diversified portfolio of equity investments in mid-capitalization issuers within the range of the market capitalization of companies constituting the Russell Midcap Value Index at the time of investment. 3GT Janus Aspen Series Global Objective: long-term growth of capital. Janus Capital Technology Portfolio: Non-diversified mutual fund that invests, Service Shares under normal circumstances, at least 80% of its net assets in securities of companies that the portfolio manager believes will benefit significantly from advances or improvements in technology. It implements this policy by investing primarily in equity securities of U.S. and foreign companies selected for their growth potential. 3IG Janus Aspen Series Objective: long-term growth of capital. Janus Capital International Growth Invests, under normal circumstances, at least Portfolio: Service Shares 80% of its net assets in securities of issuers from at least five different countries, excluding the United States. Although the Portfolio intends to invest substantially all of its assets in issuers located outside the United States, it may at times invest in U.S. issuers and under unusual circumstances, it may invest all of its assets in fewer than five countries or even a single country. 3AG Janus Aspen Series Mid Objective: invests, under normal Janus Capital Cap Growth Portfolio: circumstances, at least 80% of its net assets Service Shares in equity securities of mid-sized companies (previously Janus Aspen whose market capitalization falls, at the Series Aggressive Growth time of initial purchase, in the 12-month Portfolio: Service Shares) average of the capitalization ranges of the Russell Midcap Growth Index.
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 19
SUBACCOUNT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ---------------------------------------------------------------------------------------------------------------------------------- 3IP Lazard Retirement Objective: long-term capital appreciation. Lazard Asset Management, LLC International Equity Invests primarily in equity securities, Portfolio principally common stocks, of relatively large non-U.S. companies with market capitalizations in the range of the Morgan Stanley Capital International (MSCI) Europe, Australia and Far East (EAFE(R)) Index that the Investment Manager believes are undervalued based on their earnings, cash flow or asset values. 3MG MFS(R) Investors Growth Objective: long-term growth of capital and MFS Investment Management(R) Stock Series - Service future income. Invests at least 80% of its Class net assets in common stocks and related securities of companies which MFS(R) believes offer better than average prospects for long-term growth. 3MD MFS(R) New Discovery Series Objective: capital appreciation. Invests in MFS Investment Management(R) - Service Class at least 65% of its net assets in equity securities of emerging growth companies. 3IN Putnam VT International Objective: long-term capital appreciation. Putnam Investment New Opportunities Fund - The fund pursues its goal by investing mainly Management, LLC Class IB Shares in common stocks of companies outside the United States with a focus on growth stocks. 3VS Putnam VT Vista Fund - Objective: capital appreciation. The fund Putnam Investment Class IB Shares pursues its goal by investing mainly in Management, LLC common stocks of U.S. companies with a focus on growth stocks. 3MI Royce Micro-Cap Portfolio Objective: long-term growth of capital. Royce & Associates, LLC Invests primarily in a broadly diversified portfolio of equity securities issued by micro-cap companies (companies with stock market capitalizations below $400 million). 3SV Third Avenue Value Objective: long-term capital appreciation. Third Avenue Management LLC Portfolio Invests primarily in common stocks of well financed, well managed companies at a substantial discount to what the Adviser believes is their true value. 3IT Wanger International Objective: long-term growth of capital. Liberty Wanger Asset Small Cap Invests primarily in stocks of small and Management, L.P. medium-size non-U.S. companies with capitalizations of less than $2 billion at time of purchase. 3SP Wanger U.S. Smaller Objective: long-term growth of capital. Liberty Wanger Asset Companies Invests primarily in stocks of small- and Management, L.P. medium-size U.S. companies with capitalizations of less than $5 billion at time of purchase.
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 20
SUBACCOUNT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ---------------------------------------------------------------------------------------------------------------------------------- 3AA Wells Fargo VT Asset Objective: long-term total return consistent Wells Fargo Funds Allocation Fund with reasonable risk. Invests in equity and Management, LLC, adviser; fixed-income securities in varying Wells Capital Management proportions, with "neutral" target allocation Incorporated, subadviser. of 60% equity securities and 40% fixed-income securities. The Fund invests its equity portion of assets in common stocks to replicate the S&P 500(R) Index and its fixed-income portion of assets in U.S. Treasury Bonds to replicate the Lehman Brothers 20+ Treasury Index. The Fund seeks to maintain a 95% or better performance correlation with the respective indexes. 3WI Wells Fargo VT Objective: total return with an emphasis on Wells Fargo Funds International Equity Fund long-term capital appreciation. Invests Management, LLC, adviser; principally in equity securities of companies Wells Capital Management based in developed foreign countries or Incorporated, subadviser. emerging markets. 3SG Wells Fargo VT Small Cap Objective: long-term capital appreciation. Wells Fargo Funds Growth Fund Focus is on companies believed to have Management, LLC, adviser; above-average growth potential or that may be Wells Capital Management involved in new or innovative products, Incorporated, subadviser. services and processes. Invests principally in securities of companies with above-average growth potential and whose market capitalizations equal to or lower than the company with the largest market capitalization in falls within the range of the Russell 2000 Index, which is considered a small capitalization index.
A fund underlying your contract in which a subaccount invests may have a name, portfolio manager, objectives, strategies and characteristics that are the same or substantially similar to those of a publicly-traded retail mutual fund. Despite these similarities, an underlying fund is not the same as any publicly-traded retail mutual fund. Each underlying fund will have its own unique portfolio holdings, fees, operating expenses and operating results. The results of each underlying fund may differ significantly from any publicly-traded retail mutual fund. The investment advisers cannot guarantee that the funds will meet their investment objectives. Please read the funds' prospectuses for facts you should know before investing. These prospectuses are available by contacting us at the address or telephone number on the first page of this prospectus. All funds are available to serve as the underlying investments for variable annuities and variable life insurance policies. Some funds also are available to serve as investment options for tax-deferred retirement plans. It is possible that in the future, it may be disadvantageous for variable annuity accounts and variable life insurance accounts and/or tax-deferred retirement plans to invest in the available funds simultaneously. Although the insurance company and the funds do not currently foresee any such disadvantages, the boards of directors or trustees of the appropriate funds will monitor events in order to identify any material conflicts between annuity owners, policy owners and tax-deferred retirement plans and to determine what action, if any, should be taken in response to a conflict. If a board were to conclude that it should establish separate funds for the variable annuity, variable life insurance and tax-deferred retirement plan accounts, you would not bear any expenses associated with establishing separate funds. Please refer to the funds' prospectuses for risk disclosure regarding simultaneous investments by variable annuity, variable life insurance and tax-deferred retirement plan accounts. The Internal Revenue Service (IRS) issued final regulations relating to the diversification requirements under Section 817(h) of the Code. Each fund intends to comply with these requirements. The variable account was established under Minnesota law on Aug. 23, 1995, and the subaccounts are registered together as a single unit investment trust under the Investment Company Act of 1940 (the 1940 Act). This registration does not involve any supervision of our management or investment practices and policies by the SEC. All obligations arising under the contracts are general obligations of IDS Life. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 21 The variable account meets the definition of a separate account under federal securities laws. We credit or charge income, capital gains and capital losses of each subaccount only to that subaccount. State insurance law prohibits us from charging a subaccount with liabilities of any other subaccount or of our general business. The variable account includes other subaccounts that are available under contracts that are not described in this prospectus. The U.S. Treasury and the IRS indicated that they may provide additional guidance on investment control. This concerns how many variable subaccounts an insurance company may offer and how many exchanges among subaccounts it may allow before the contract owner would be currently taxed on income earned within subaccount assets. At this time, we do not know what the additional guidance will be or when action will be taken. We reserve the right to modify the contract, as necessary, so that the owner will not be subject to current taxation as the owner of the subaccount assets. We intend to comply with all federal tax laws so that the contract continues to qualify as an annuity for federal income tax purposes. We reserve the right to modify the contract as necessary to comply with any new tax laws. THE FIXED ACCOUNT You also may allocate purchase payments and transfers to the fixed account. We back the principal and interest guarantees relating to the fixed account. These guarantees are based on the continued claims-paying ability of the company. The value of the fixed account increases as we credit interest to the account. Purchase payments and transfers to the fixed account become part of our general account. Interest is calculated and compounded daily based on a 365-day year so as to produce the annual effective rate which we declare. We do not credit interest on leap days (Feb. 29). The interest rate for your fixed acount is guaranteed for 12 months from the contract issue date. Thereafter, we will change the rates from time to time at our discretion. These rates will be based on various factors including, but not limited to, the interest rate environment, returns earned on investments backing these annuities, the rates currently in effect for new and existing company annuities, product design, competition, and the company's revenues and expenses. Interests in the fixed account are not required to be registered with the SEC. The SEC staff does not review the disclosures in this prospectus on the fixed account. Disclosures regarding the fixed account, however, may be subject to certain generally applicable provisions of the federal securities laws relating to the accuracy and completeness of statements made in prospectuses. (See "Making the Most of Your Contract -- Transfer policies" for restrictions on transfers involving the fixed account.) BUYING YOUR CONTRACT New contracts are not currently being offered. As the owner, you have all rights and may receive all benefits under the contract. You can own a nonqualified annuity in joint tenancy with rights of survivorship only in spousal situations. You cannot own a qualified annuity in joint tenancy. You can become an owner or an annuitant if you are 90 or younger. The contract provides for allocation of purchase payments to the subaccounts of the variable account and/or to the fixed account in even 1% increments. We applied your initial purchase payment within two business days after we received it at our office. However, we will credit additional purchase payments you make to your accounts on the valuation date we receive them. We will value additional purchase payments at the next accumulation unit value calculated after we receive your payments at our office. THE SETTLEMENT DATE Annuity payouts are scheduled to begin on the settlement date. When we processed your application, we established the settlement date to the maximum age or date described below. You can also select a date within the maximum limits. You can align this date with your actual retirement from a job, or it can be a different future date, depending on your needs and goals and on certain restrictions. You also can change the date, provided you send us written instructions at least 30 days before annuity payouts begin. FOR NONQUALIFIED ANNUITIES AND ROTH IRAs, the settlement date must be: - no earlier than the 60th day after the contract's effective date; and - no later than the annuitant's 85th birthday or the tenth contract anniversary, if purchased after age 75. (In Pennsylvania, the maximum settlement date ranges from age 85 to 96 based on the annuitant's age when we issue the contract. See contract for details.) FOR QUALIFIED ANNUITIES EXCEPT ROTH IRAs, to avoid IRS penalty taxes, the settlement date generally must be: - on or after the date the annuitant reaches age 59 1/2; and - for IRAs, SIMPLE IRAs and SEPs, by April 1 of the year following the calendar year when the annuitant reaches age 70 1/2; or - for all other qualified annuities, by April 1 of the year following the calendar year when the annuitant reaches age 70 1/2, or, if later, retires (except that 5% business owners may not select a settlement date that is later than April 1 of the year following the calendar year when they reach age 70 1/2). AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 22 If you take the minimum IRA or TSA distributions as required by the Code from another tax-qualified investment, or in the form of partial surrenders from this contract, annuity payouts can start as late as the annuitant's 85th birthday or the tenth contract anniversary, if later. (In Pennsylvania, the annuity payout ranges from age 85 to 96 based on the annuitant's age when the contract is issued. See contract for details). BENEFICIARY If death benefits become payable before the settlement date while the contract is in force and before annuity payouts begin, we will pay your named beneficiary all or part of the contract value. If there is no named beneficiary, then you or your estate will be the beneficiary. (See "Benefits in Case of Death" for more about beneficiaries.) PURCHASE PAYMENTS MINIMUM ALLOWABLE PURCHASE PAYMENTS(1) If paying by installments under a scheduled payment plan: $23.08 biweekly, or $50 per month If paying by any other method: $50 (1) Installments must total at least $600 in the first year. If you do not make any purchase payments for 24 months, and your previous payments total $600 or less, we have the right to give you 30 days' written notice and pay you the total value of your contract in a lump sum. This right does not apply to contracts in New Jersey. MAXIMUM ALLOWABLE ANNUAL PURCHASE PAYMENTS(2) For employees/advisors: $100,000 up to age 85 $50,000 for ages 86 to 90 For other individuals: $100,000 for issue ages up to 85 $50,000 for issue ages 86-90 (2) These limits apply in total to all IDS Life annuities you own. We reserve the right to increase maximum limits. For qualified annuities the tax-deferred retirement plan's or the Code's limits on annual contributions also apply. We reserve the right to not accept purchase payments allocated to the fixed account for twelve months following either: 1. a partial surrender from the fixed account; or 2. a lump sum transfer from the fixed account to a subaccount. HOW TO MAKE PURCHASE PAYMENTS 1 BY LETTER Send your check along with your name and contract number to: IDS LIFE INSURANCE COMPANY 70200 AXP FINANCIAL CENTER MINNEAPOLIS, MN 55474 2 BY SCHEDULED PAYMENT PLAN FOR EMPLOYEES/ADVISORS ONLY We can help you set up: - an automatic payroll deduction, salary reduction or other group billing arrangement; or - a bank authorization. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 23 CHARGES CONTRACT ADMINISTRATIVE CHARGE We charge this fee for establishing and maintaining your records. We deduct $30 from the contract value on your contract anniversary at the end of each contract year. We prorate this charge among the subaccounts and the fixed account in the same proportion your interest in each account bears to your total contract value. We will waive this charge when your contract value, or total purchase payments less any payments surrendered, is $50,000 or more on the current contract anniversary. If you surrender your contract, we will deduct the charge at the time of surrender regardless of the contract value or purchase payments made. We cannot increase the annual contract administrative charge and it does not apply after annuity payouts begin or when we pay death benefits. MORTALITY AND EXPENSE RISK FEE We charge this fee daily to the subaccounts. The unit values of your subaccounts reflect this fee and it totals 0.55% of their average daily net assets on an annual basis. This fee covers the mortality and expense risk that we assume. Approximately two-thirds of this amount is for our assumption of mortality risk, and one-third is for our assumption of expense risk. This fee does not apply to the fixed account. Mortality risk arises because of our guarantee to pay a death benefit and our guarantee to make annuity payouts according to the terms of the contract, no matter how long a specific annuitant lives and no matter how long our entire group of annuitants live. If, as a group, annuitants outlive the life expectancy we assumed in our actuarial tables, we must take money from our general assets to meet our obligations. If, as a group, annuitants do not live as long as expected, we could profit from the mortality risk fee. Expense risk arises because we cannot increase the contract administrative charge and this charge may not cover our expenses. We would have to make up any deficit from our general assets. We could profit from the expense risk fee if future expenses are less than expected. The subaccounts pay us the mortality and expense risk fee they accrued as follows: - first, to the extent possible, the subaccounts pay this fee from any dividends distributed from the funds in which they invest; - then, if necessary, the funds redeem shares to cover any remaining fees payable. We may use any profits we realize from the subaccounts' payment to us of the mortality and expense risk fee for any proper corporate purpose, including, among others, payment of distribution (selling) expenses. MAV RIDER FEE We charge a fee for the optional feature only if you select it(1). If selected, we deduct 0.15% of your contract value on your contract anniversary at the end of each contract year. We prorate this fee among the subaccounts and fixed accounts in the same proportion your interest in each account bears to your total contract value. When annuity payouts begin or, if you terminate the contract for any reason other than death, we will deduct this fee, adjusted for the number of calendar days coverage was in place. We reserve the right to assess charges for the number of days the rider was in force for any rider that is terminated due to a change of ownership. If you choose to drop this rider on an anniversary (subject to the restrictions given in "Optional Benefits"), we will deduct this fee on that anniversary. We cannot increase this annual fee after the rider effective date and it does not apply after annuity payouts begin or when we pay death benefits. EEB RIDER FEE We charge a fee for the optional feature only if you select it(1). If selected, we deduct 0.30% of your contract value on your contract anniversary at the end of each contract year. We prorate this fee among the subaccounts and fixed accounts in the same proportion your interest in each account bears to your total contract value. When annuity payouts begin or, if you terminate the contract for any reason other than death, we will deduct this fee, adjusted for the number of calendar days coverage was in place. We reserve the right to assess charges for the number of days the rider was in force for any rider that is terminated due to a change in ownership. If you chose to drop this rider on an anniversary (subject to the restrictions given in "Optional Benefits"), we will deduct this fee on that anniversary. We cannot increase this annual fee after the rider effective date and it does not apply after annuity payouts begin or when we pay death benefits. (1) You may select either the MAV or EEB riders. Or you may select the MAV and the EEB. Riders may not be available in all states. The MAV and EEB are only available if you and the annuitant are 75 or younger at the rider effective date. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 24 SURRENDER CHARGE There is no charge if you surrender all or part of your contract. SURRENDER CHARGE UNDER ANNUITY PAYOUT PLAN E -- PAYOUTS FOR A SPECIFIED PERIOD: Under this payout plan, you can choose to take a surrender. The amount that you can surrender is the present value of any remaining variable payouts. The discount rate we use in the calculation will vary between 3.50% and 5.00% depending on the applicable assumed investment rate. The surrender charge equals the present value of the remaining payouts using the assumed investment rate minus the present value of the remaining payouts using the discount rate. In no event would your surrender charge exceed 9% of the amount available for payouts under the plan. OTHER INFORMATION ON CHARGES: AEFC makes certain custodial services available to some profit sharing, money purchase and target benefit plans funded by our annuities. Fees for these services start at $30 per calendar year per participant. AEFC will charge a termination fee for owners under age 59 1/2 (waived in case of death or disability). POSSIBLE GROUP REDUCTIONS: In some cases we may incur lower sales and administrative expenses due to the size of the group, the average contribution and the use of group enrollment procedures. In such cases, we may be able to reduce or eliminate the contract administrative and surrender charges. However, we expect this to occur infrequently. PREMIUM TAXES Certain state and local governments impose premium taxes on us (up to 3.5%). These taxes depend upon the state of residence or the state in which the contract was sold. Currently, we deduct any applicable premium tax when annuity payouts begin, but we reserve the right to deduct this tax at other times such as when you make purchase payments or when you surrender your contract. VALUING YOUR INVESTMENT We value your accounts as follows: FIXED ACCOUNT We value the amounts you allocated to the fixed account directly in dollars. The fixed account value equals: - the sum of your purchase payments and transfer amounts allocated to the fixed account; - plus interest credited; - minus the sum of amounts surrendered and amounts transferred out; - minus any prorated portion of the contract administrative charge; - minus any prorated portion of the MAV rider fee (if selected); and - minus any prorated portion of the EEB rider fee (if selected). SUBACCOUNTS We convert amounts you allocated to the subaccounts into accumulation units. Each time you make a purchase payment or transfer amounts into one of the subaccounts, we credit a certain number of accumulation units to your contract for that subaccount. Conversely, each time you take a partial surrender, transfer amounts out of a subaccount, or we assess a contract administrative charge or any applicable charge for an optional benefit, we subtract a certain number of accumulation units from your contract. The accumulation units are the true measure of investment value in each subaccount during the accumulation period. They are related to, but not the same as, the net asset value of the fund in which the subaccount invests. The dollar value of each accumulation unit can rise or fall daily depending on the variable account expenses, performance of the fund and on certain fund expenses. Here is how we calculate accumulation unit values: NUMBER OF UNITS: to calculate the number of accumulation units for a particular subaccount we divide your investment by the current accumulation unit value. ACCUMULATION UNIT VALUE: the current accumulation unit value for each subaccount equals the last value times the subaccount's current net investment factor. WE DETERMINE THE NET INVESTMENT FACTOR BY: - adding the fund's current net asset value per share, plus the per share amount of any accrued income or capital gain dividends to obtain a current adjusted net asset value per share; then - dividing that sum by the previous adjusted net asset value per share; and - subtracting the percentage factor representing the mortality and expense risk fee from the result. Because the net asset value of the fund may fluctuate, the accumulation unit value may increase or decrease. You bear all the investment risk in a subaccount. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 25 FACTORS THAT AFFECT SUBACCOUNT ACCUMULATION UNITS: accumulation units may change in two ways -- in number and in value. The number of accumulation units you own may fluctuate due to: - additional purchase payments you allocate to the subaccounts; - transfers into or out of the subaccounts; - partial surrenders; - a prorated portion of the contract administrative charge; - a prorated portion of the MAV rider fee (if selected); and/or - a prorated portion of the EEB rider fee (if selected). Accumulation unit values will fluctuate due to: - changes in funds' net asset value; - dividends distributed to the subaccounts; - capital gains or losses of funds; - fund operating expenses; and/or - mortality and expense risk fees. MAKING THE MOST OF YOUR CONTRACT AUTOMATED DOLLAR-COST AVERAGING Currently, you can use automated transfers to take advantage of dollar-cost averaging (investing a fixed amount at regular intervals). For example, you might transfer a set amount monthly from a relatively conservative subaccount to a more aggressive one, or to several others, or from the fixed account to one or more subaccounts. There is no charge for dollar-cost averaging. This systematic approach can help you benefit from fluctuations in accumulation unit values caused by fluctuations in the market values of the funds. Since you invest the same amount each period, you automatically acquire more units when the market value falls and fewer units when it rises. The potential effect is to lower your average cost per unit. HOW DOLLAR-COST AVERAGING WORKS
NUMBER AMOUNT ACCUMULATION OF UNITS MONTH INVESTED UNIT VALUE PURCHASED By investing an equal number of dollars each month ... Jan $100 $20 5.00 Feb 100 18 5.56 you automatically buy Mar 100 17 5.88 more units when the per unit market price is low ... ----> Apr 100 15 6.67 May 100 16 6.25 Jun 100 18 5.56 Jul 100 17 5.88 and fewer units Aug 100 19 5.26 when the per unit market price is high. ----> Sept 100 21 4.76 Oct 100 20 5.00
You paid an average price of only $17.91 per unit over the 10 months, while the average market price actually was $18.10. Dollar-cost averaging does not guarantee that any subaccount will gain in value nor will it protect against a decline in value if market prices fall. Because dollar-cost averaging involves continuous investing, your success will depend upon your willingness to continue to invest regularly through periods of low price levels. Dollar-cost averaging can be an effective way to help meet your long-term goals. For specific features contact your sales representative. ASSET REBALANCING You can ask us in writing to have the variable subaccount portion of your contract value allocated according to the percentages (in whole percentage amounts ) that you choose. We automatically will rebalance the variable subaccount portion of your contract value either quarterly, semi-annually, or annually. The period you select will start to run on the date we record your request. On the first valuation date of each of these periods, we automatically will rebalance your contract value so that the value in each subaccount matches your current subaccount percentage allocations. These percentage allocations must be in whole numbers. Asset rebalancing does not apply to the fixed account. There is no charge for asset rebalancing. The contract value must be at least $2,000. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 26 You can change your percentage allocations or your rebalancing period at any time by contacting us in writing. We will restart the rebalancing period you selected as of the date we record your change. You also can ask us in writing to stop rebalancing your contract value. You must allow 30 days for us to change any instructions that currently are in place. For more information on asset rebalancing, contact your sales representative. TRANSFERRING BETWEEN ACCOUNTS You may transfer contract value from any one subaccount, or the fixed account, to another subaccount before annuity payouts begin. (Certain restrictions apply to transfers involving the fixed account.) We will process your transfer on the valuation date we receive your request. We will value your transfer at the next accumulation unit value calculated after we receive your request. There is no charge for transfers. Before making a transfer, you should consider the risks involved in changing investments. We may suspend or modify transfer privileges at any time. The contract is not designed for use by individuals, professional market timing organizations, or other entities that do "market timing," programmed transfers, frequent transfers or excessive trading or transfers that are large in relation to the total assets of any fund underlying the contract. These and similar activities may adversely affect a fund's ability to invest effectively in accordance with its investment objectives and policies, may increase expenses and may harm other contract owners who allocated purchase payments to the fund regardless of their transfer activity. Accordingly, individuals and organizations that use market-timing investment strategies and make frequent transfers should not own this contract. We monitor the frequency of transfers, including the size of transfers in relation to fund assets in each underlying fund, and we take appropriate action as necessary. In order to prevent market timing activities that may harm or disadvantage other contract owners, we may apply modifications or restrictions (including suspending the transfer privilege) in any reasonable manner to prevent a transfer. We may also reject or restrict any specific payment or transfer request and impose specific limitations with respect to market timers, including restricting transfers by market timers to certain underlying funds. We may also apply other restrictions or modifications that could include, but not be limited to: - not accepting telephone or electronic transfer requests; - requiring a minimum time period between each transfer; - not accepting transfer requests of an agent acting under power of attorney on behalf of more than one contract owner; or - limiting the dollar amount that a contract owner may transfer at any one time. We agree to provide notice of our intent to restrict transfer privileges to contract owners who have engaged in disruptive activity. In addition, some of the underlying funds have reserved the right to temporarily or permanently refuse payments or transfer requests from us if, in the judgment of the fund's investment adviser, the fund would be unable to invest effectively in accordance with its investment objective or policies, or would otherwise potentially be adversely affected. Accordingly, we may not be in a position to effect certain allocations or transfers requested by market timers and may refuse such requests without prior notice. Subject to state law, we reserve the right to impose, without prior notice, restrictions on allocations and transfers that we determine, in our sole discretion, will disadvantage or potentially hurt the rights or interests of other contract owners. For information on transfers after annuity payouts begin, see "Transfer policies" below. TRANSFER POLICIES - Before annuity payouts begin, you may transfer contract values between the subaccounts, or from the subaccounts to the fixed account at any time. However, if you made a transfer from the fixed account to the subaccounts, you may not make a transfer from any subaccount back to the fixed account until the next contract anniversary. - You may transfer contract values from the fixed account to the subaccounts once a year during a 31-day transfer period starting on each contract anniversary (except for automated transfers, which can be set up at any time for certain transfer periods subject to certain minimums). - If we receive your request within 30 days before the contract anniversary date, the transfer from the fixed account to the subaccounts will be effective on the anniversary. - If we receive your request on or within 30 days after the contract anniversary date, the transfer from the fixed account to the subaccounts will be effective on the valuation date we receive it. - We will not accept requests for transfers from the fixed account at any other time. - Once annuity payouts begin, you may not make transfers to or from the fixed account, but you may make transfers once per contract year among the subaccounts. During the annuity payout period, you cannot invest in more than five subaccounts at any one time unless we agree otherwise. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 27 HOW TO REQUEST A TRANSFER OR SURRENDER 1 BY LETTER Send your name, contract number, Social Security Number or Taxpayer Identification Number and signed request for a transfer or surrender to: IDS LIFE INSURANCE COMPANY 70100 AXP FINANCIAL CENTER MINNEAPOLIS, MN 55474 MINIMUM AMOUNT Transfers or surrenders: $250 or entire contract balance MAXIMUM AMOUNT Transfers or surrenders: Contract value or entire account balance 2 BY AUTOMATED TRANSFERS AND AUTOMATED PARTIAL SURRENDERS Your sales representative can help you set up automated transfers among your subaccounts or fixed account or partial surrenders from the accounts. You can start or stop this service by written request or other method acceptable to us. You must allow 30 days for us to change any instructions that are currently in place. - Automated transfers from the fixed account to any one of the subaccounts may not exceed an amount that, if continued, would deplete the fixed account within 12 months. - Automated surrenders may be restricted by applicable law under some contracts. - You may not make additional purchase payments if automated partial surrenders are in effect. - Automated partial surrenders may result in IRS taxes and penalties on all or part of the amount surrendered. - The balance in any account from which you make an automated transfer or automated partial surrender must be sufficient to satisfy your instructions. If not, we will suspend your entire automated arrangement until the balance is adequate. - If we must suspend your automated transfer or automated partial surrender arrangement for six months, we reserve the right to discontinue the arrangement in its entirety. MINIMUM AMOUNT Transfers or surrenders: $50 MAXIMUM AMOUNT Transfers or surrenders: None (except for automated transfers from the fixed account) 3 BY PHONE Call between 7 a.m. and 10 p.m. Central time: (800) 862-7919 TTY service for the hearing impaired: (800) 285-8846 MINIMUM AMOUNT Transfers or surrenders: $250 or entire account balance MAXIMUM AMOUNT Transfers: Contract value or entire account balance Surrenders: $100,000 We answer telephone requests promptly, but you may experience delays when the call volume is unusually high. If you are unable to get through, use the mail procedure as an alternative. We will honor any telephone transfer or surrender requests that we believe are authentic and we will use reasonable procedures to confirm that they are. This includes asking identifying questions and tape recording calls. We will not allow a telephone surrender within 30 days of a phoned-in address change. As long as we follow the procedures, we (and our affiliates) will not be liable for any loss resulting from fraudulent requests. Telephone transfers or surrenders are automatically available. You may request that telephone transfers or surrenders NOT be authorized from your account by writing to us. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 28 SURRENDERS You may surrender all or part of your contract at any time before annuity payouts begin by sending us a written request or calling us. We will process your surrender request on the valuation date we receive it. For total surrenders, we will compute the value of your contract at the next accumulation unit value calculated after we receive your request. We may ask you to return the contract. You may have to pay MAV charges (see "Charges -- MAV rider fee"), EEB charges (see "Charges -- EEB rider fee"), and IRS taxes and penalties (see "Taxes"). You cannot make surrenders after annuity payouts begin except under Plan E (see "The Annuity Payout Period -- Annuity Payout Plans"). SURRENDER POLICIES If you have a balance in more than one account and you request a partial surrender, we will withdraw money from all your subaccounts and/or the fixed account in the same proportion as your value in each account correlates to your total contract value, unless you request otherwise. The minimum contract value after partial surrender is $600. RECEIVING PAYMENT 1 BY REGULAR OR EXPRESS MAIL - payable to you; - mailed to address of record. NOTE: We will charge you a fee if you request express mail delivery. 2 BY WIRE - request that payment be wired to your bank; - bank account must be in the same ownership as your contract; and - pre-authorization required. NOTE: We will charge you a fee if you request that payment be wired to your bank. For instructions, please contact your sales representative. Normally, we will send the payment within seven days after receiving your request. However, we may postpone the payment if: -- the surrender amount includes a purchase payment check that has not cleared; -- the NYSE is closed, except for normal holiday and weekend closings; -- trading on the NYSE is restricted, according to SEC rules; -- an emergency, as defined by SEC rules, makes it impractical to sell securities or value the net assets of the accounts; or -- the SEC permits us to delay payment for the protection of security holders. TSA -- SPECIAL SURRENDER PROVISIONS PARTICIPANTS IN TAX-SHELTERED ANNUITIES The Code imposes certain restrictions on your right to receive early distributions from a TSA: - Distributions attributable to salary reduction contributions (plus earnings) made after Dec. 31, 1988, or to transfers or rollovers from other contracts, may be made from the TSA only if: -- you are at least age 59 1/2; -- you are disabled as defined in the Code; -- you severed employment with the employer who purchased the contract; or -- the distribution is because of your death. - If you encounter a financial hardship (as provided by the Code), you may be eligible to receive a distribution of all contract values attributable to salary reduction contributions made after Dec. 31, 1988, but not the earnings on them. - Even though a distribution may be permitted under the above rules, it may be subject to IRS taxes and penalties (see "Taxes"). - The employer must comply with certain nondiscrimination requirements for certain types of contributions under a TSA contract to be excluded from taxable income. You should consult your employer to determine whether the nondiscrimination rules apply to you. - The above restrictions on distributions do not affect the availability of the amount credited to the contract as of Dec. 31, 1988. The restrictions also do not apply to transfers or exchanges of contract value within the contract, or to another registered variable annuity contract or investment vehicle available through the employer. - If the contract has a loan provision, the right to receive a loan is described in detail in your contract. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 29 CHANGING OWNERSHIP You may change ownership of your nonqualified annuity at any time by completing a change of ownership form we approve and sending it to our office. The change will become binding on us when we receive and record it. We will honor any change of ownership request that we believe is authentic and we will use reasonable procedures to confirm authenticity. If we follow these procedures, we will not take any responsibility for the validity of the change. Please consider carefully whether or not you wish to change ownership of your nonqualified annuity if you have elected the MAV or EEB. The terms of the EEB and the MAV will change due to a change of ownership. If either the new owner or the annuitant is older than age 75, the EEB will terminate. Otherwise, the EEB will effectively "start over." We will treat the EEB as if it is issued on the day the change of ownership is made, using the attained age of the new owner as the "issue age" to determine the benefit levels. The account value on the date of the ownership change will be treated as a "purchase payment" in determining future values of "earnings at death" under the EEB. If either the new owner or the annuitant is older than age 75, the MAV will terminate. If the MAV on the date of ownership change is greater than the account value on the date of the ownership change, we will set the MAV equal to the account value. Otherwise, the MAV value will not change due to a change in ownership. Please see the descriptions of these riders in "Optional Benefits." The rider charges described in "Charges" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force) for any rider that continues after a change of ownership. We reserve the right to assess charges for the number of days the rider was in force for any rider that is terminated due to a change of ownership. If you have a nonqualified annuity, you may incur income tax liability by transferring, assigning or pledging any part of it. (See "Taxes.") If you have a qualified annuity, you may not sell, assign, transfer, discount or pledge your contract as collateral for a loan, or as security for the performance of an obligation or for any other purpose except as required or permitted by the Code. However, if the owner is a trust or custodian, or an employer acting in a similar capacity, ownership of the contract may be transferred to the annuitant. BENEFITS IN CASE OF DEATH -- STANDARD DEATH BENEFIT We will pay the death benefit to your beneficiary upon the earlier of your death or the annuitant's death. If a contract has more than one person as the owner, we will pay benefits upon the first to die of any owner or the annuitant. If you or the annuitant die before annuity payouts begin while this contract is in force, we will pay the beneficiary as follows: If both you and the annuitant are age 80 or younger on the date of death, the beneficiary receives the greatest of: - contract value; - purchase payments minus adjusted partial surrenders; or - the contract value as of the most recent sixth contract anniversary, preceding the date of death, plus any purchase payments since that anniversary, minus adjusted partial surrenders since that anniversary. If either you or the annuitant are age 81 or older on the date of death, the beneficiary receives the greater of: - contract value; or - purchase payments minus adjusted partial surrenders. ADJUSTED PARTIAL SURRENDERS PS X DB ------- CV PS = the partial surrender including any applicable surrender charge. DB = is the death benefit on the date of (but prior to) the partial surrender. CV = the contract value on the date of (but prior to) the partial surrender. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 30 EXAMPLE OF STANDARD DEATH BENEFIT CALCULATION WHEN YOU AND ANNUITANT ARE AGE 80 OR YOUNGER: - You purchase the contract with a payment of $20,000 on Jan. 1, 2003. - On Jan 1, 2009 (the sixth contract anniversary) the contract value grows to $30,000. - March 1, 2009 the contract value falls to $28,000 at which point you take a $1,500 partial surrender, leaving a contract value of $26,500. We calculate the death benefit on March 1, 2009 as follows: The contract value on the most recent sixth contract anniversary: $30,000.00 plus purchase payments made since that anniversary: +0.00 minus adjusted partial surrenders taken since that anniversary calculated as: $1,500 X $30,000 -1,607.14 ---------------- ---------- $28,000 for a death benefit of: $28,392.86
IF YOU DIE BEFORE YOUR SETTLEMENT DATE When paying the beneficiary, we will process the death claim on the valuation date our death claim requirements are fulfilled. We will determine the contract's value at the next accumulation unit value calculated after our death claim requirements are fulfilled. We pay interest, if any, at a rate no less than required by law. We will mail payment to the beneficiary within seven days after our death claim requirements are fulfilled. NONQUALIFIED ANNUITIES If your spouse is sole beneficiary and you die before the settlement date, your spouse may keep the contract as owner. To do this your spouse must, within 60 days after we receive proof of death, give us written instructions to keep the contract in force. If your beneficiary is not your spouse, we will pay the beneficiary in a single sum unless you give us other written instructions. We must fully distribute the death benefit within five years of your death. However, the beneficiary may receive payouts under any annuity payout plan available under this contract if: - the beneficiary asks us in writing within 60 days after we receive proof of death; and - payouts begin no later than one year after your death, or other date as permitted by the Code; and - the payout period does not extend beyond the beneficiary's life or life expectancy. QUALIFIED ANNUITIES - SPOUSE BENEFICIARY: If you have not elected an annuity payout plan, and if your spouse is the sole beneficiary, your spouse may either elect to treat the contract as his/her own or elect an annuity payout plan or another plan agreed to by us. If your spouse elects a payout plan, the payouts must begin no later than the year in which you would have reached age 70 1/2. If you attained age 70 1/2 at the time of death, payouts must begin no later than Dec. 31 of the year following the year of your death. - NON-SPOUSE BENEFICIARY: If you have not elected an annuity payout plan, and if death occurs prior to the year you would have attained age 70 1/2, the beneficiary may elect to receive payouts from the contract over a five year period. If your death occurs after attaining age 70 1/2, we will pay the beneficiary in a single sum unless the beneficiary elects to receive payouts under any payout plan available under this contract if: - the beneficiary asks us in writing within 60 days after we receive proof of death; and - payouts begin no later than one year following the year of your death; and - the payout period does not extend beyond the beneficiary's life or life expectancy. - ANNUITY PAYOUT PLAN: If you elect an annuity payout plan, the payouts to your beneficiary will continue pursuant to the annuity payout plan you elect. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 31 OPTIONAL BENEFITS MAXIMUM ANNIVERSARY VALUE DEATH BENEFIT The MAV is intended to provide additional death benefit protection in the event of fluctuating fund values. This is an optional benefit that you may select for an additional annual charge (see "Charges"). The MAV does not provide any additional benefit before the first contract anniversary after the rider effective date. The MAV may be of less value if you or the annuitant is older since we stop resetting the maximum anniversary value at age 81. Although we stop resetting the maximum anniversary value at age 81, the MAV rider fee continues to apply until the rider terminates. In addition, the MAV does not provide any additional benefit with respect to fixed account values during the time you have amounts allocated to the fixed account. Be sure to discuss with your sales representative whether or not the MAV is appropriate for your situation. If this rider is available in your state and both you and the annuitant are 75 or younger at the rider effective date, you may choose to add the MAV to your contract. Generally, you must elect the MAV at the time you purchase your contract and your rider effective date will be the contract issue date. In some instances the rider effective date for the MAV may be after we issue the contract. We will determine the rider effective date for the MAV added after we issue the contract according to terms determined by us and at our sole discretion. On the first contract anniversary after the rider effective date we set the maximum anniversary value equal to the highest of your (a) current contract value, or (b) total purchase payments minus adjusted partial surrenders. Every contract anniversary after that, through age 80, we compare the previous anniversary's maximum anniversary value plus subsequent purchase payments less subsequent adjusted partial surrenders to the current contract value and we reset the maximum anniversary value if the current contract value is higher. We stop resetting the maximum anniversary value after you or the annuitant reach age 81. However, we continue to add subsequent purchase payments and subtract adjusted partial surrenders from the maximum anniversary value. When annuity payouts begin, or if you terminate the contract for any reason other than death, this rider will terminate. TERMINATING THE MAV - You may terminate the MAV rider within 30 days of the first contract anniversary after the rider effective date. - You may terminate the MAV rider within 30 days of any contract anniversary beginning with the seventh contract anniversary after the rider effective date. - The MAV rider will terminate when you make a full surrender from the contract or when annuity payouts begin. - The MAV rider will terminate in the case of spousal continuation or ownership change if the new owner is age 76 or older. If you terminate the MAV, the standard death benefit applies. EXAMPLE - You add the MAV on Jan. 1, 2003 when your contract value is $20,000. - On Jan. 1, 2004 (the first contract anniversary after the rider effective date) the contract value grows to $24,000. - On March 1, 2004 the contract value falls to $22,000, at which point you take a $1,500 partial surrender, leaving a contract value of $20,500. We calculate the death benefit on March 1, 2004 as follows: The maximum anniversary value immediately preceding the date of death plus any payments made since that anniversary minus adjusted partial surrenders: Greatest of your contract anniversary contract values: $24,000 plus purchase payments made since that anniversary: +0 minus adjusted partial surrenders, calculated as: ($1,500 X $24,000) -1,636 ----------------- = ------ $22,000 for a death benefit of: $22,364
NONQUALIFIED ANNUITIES: If you die before the settlement date and your spouse is the only beneficiary, your spouse may choose to keep the contract and become the contract owner. The contract will then value equal to the death benefit that would otherwise have been paid under the MAV. To do this your spouse must, within 60 days after we receive proof of death, give us written instructions to keep the contract in force. If your spouse at the time he or she elects to continue the contract has reached age 76, the MAV rider will terminate. If your spouse at the time he or she elects to continue the contract has not yet reached age 76, he or she may choose to continue the MAV rider. In this case, the rider charges described in "Charges" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force). These charges will be based on the total contract value on the anniversary, including the additional amounts paid into the contract under the MAV rider. If, at the time he or she elects to continue the contract, your spouse has not yet reached age 76 and chooses not to continue MAV rider, the contract value will be increased to the MAV death benefit amount if it is greater than the contract value on the death benefit. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 32 QUALIFIED ANNUITIES: If your spouse is the sole beneficiary, your spouse may keep the contract as owner until the date on which the annuitant would have reached age 70 1/2, or any other date permitted by the Code. The contract value will be equal to the death benefit that would otherwise have been paid under the MAV. To do this your spouse must, within 60 days after we receive proof of death, give us written instructions to keep the contract in force. If your spouse at the time he or she elects to continue the contract has reached age 76, the MAV rider will terminate. If your spouse at the time he or she elects to continue the contract has not yet reached age 76, he or she may choose to continue the MAV rider. In this case, the rider charges described in "Charges" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force). These charges will be based on the total contract value on the anniversary, including the additional amounts paid into the contract under the MAV rider. If, at the time he or she elects to continue the contract, your spouse has not yet reached age 76 and chooses not to continue MAV rider, the contract value will be increased to the MAV death benefit amount if it is greater than the contract value on the death benefit. ENHANCED EARNINGS DEATH BENEFIT The EEB is intended to provide an additional benefit to your beneficiary to help offset expenses after your death such as funeral expenses or federal and state taxes. This is an optional benefit that you may select for an additional annual charge (see "Charges"). The EEB provides reduced benefits if you or the annuitant is age 70 or older at the rider effective date and it does not provide any additional benefit before the first contract anniversary after the rider effective date. The EEB also may result in reduced benefits if you take required minimum distributions from your qualified annuity or any partial surrenders during the life of your contract, both of which may reduce contract earnings. This is because the benefit paid by the EEB is determined by the amount of earnings at death. Be sure to discuss with your sales representative whether or not the EEB is appropriate for your situation. If this EEB rider is available in your state and both you and the annuitant are age 75 or younger at the rider effective date, you may choose to add the EEB to your contract. Generally, you must elect the EEB at the time you purchase your contract and your rider effective date will be the contract issue date. In some instances the rider effective date for the EEB may be after we issue the contract. We will determine the rider effective date for the EEB added after we issue the contract according to terms determined by us and at our sole discretion. When annuity payouts begin, or if you terminate the contract for any reason other than death, this rider will terminate. The EEB provides that if you or the annuitant dies after the first contract anniversary after the rider effective date, but before annuity payouts begin, and while this contract is in force, we will pay the beneficiary: - the standard death benefit amount (see "Benefits in Case of Death -- Standard Benefit") or the MAV death benefit amount, if applicable, PLUS - 40% of your earnings at death if you and the annuitant were under age 70 on the rider effective date; or - 15% of your earnings at death if you or the annuitant were age 70 or older on the rider effective date. Additional death benefits payable under the EEB are not included in the adjusted partial surrender calculation. EARNINGS AT DEATH FOR THE EEB: If the rider effective date for the EEB is the contract issue date, earnings at death is an amount equal to: - the standard death benefit amount or the MAV death benefit amount, if applicable (the "death benefit amount") - MINUS purchase payments not previously surrendered. The earnings at death may not be less than zero and may not be more than 250% of the purchase payments not previously surrendered that are one or more years old. If the rider effective date for the EEB is AFTER the contract issue date, earnings at death is an amount equal to the death benefit amount - MINUS the greater of: - the contract value as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that contract value since that rider effective date; or - an amount equal to the death benefit amount as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that death benefit amount since that rider effective date - PLUS any purchase payments made on or after the EEB rider effective date not previously surrendered. The earnings at death may not be less than zero and may not be more than 250% multiplied by: - the greater of: - the contract value as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that contract value since that rider effective date; or - an amount equal to the death benefit amount as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that death benefit amount since the rider effective date - PLUS any purchase payments made on or after the EEB rider effective date not previously surrendered that are one or more years old. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 33 TERMINATING THE EEB - You may terminate the EEB rider within 30 days of the first contract anniversary after the rider effective date. - You may terminate the EEB rider within 30 days of any contract anniversary beginning with the seventh contract anniversary after the rider effective date. - The EEB rider will terminate when you make a full surrender from the contract or when annuity payouts begin. - The EEB rider will terminate in the case of spousal continuation or ownership change if the new owner is age 76 or older. EXAMPLE OF THE EEB - You purchased the contract on Jan. 1, 2001 with a purchase payment of $100,000. You add the EEB rider on Jan. 1, 2003 and both you and the annuitant are under age 70. You selected the MAV and the EEB. - On July 1, 2003 the contract value grows to $105,000. The death benefit on July 1, 2003 equals the standard death benefit, which is the contract value, or $105,000. You have not reached the first contract anniversary after the rider effective date, so the EEB does not provide any additional benefit at this time. - On Jan. 1, 2004 the contract value grows to $110,000. The death benefit on Jan. 1, 2004 equals: MAV death benefit amount (contract value): $110,000 plus the EEB which equals 40% of earnings at death (MAV death benefit amount minus payments not previously surrendered): 0.40 X ($110,000 - $100,000) = +4,000 -------- Total death benefit of: $114,000
- On Jan. 1, 2005 the contract value falls to $105,000. The death benefit on Jan. 1, 2005 equals: MAV death benefit amount (maximum anniversary value): $110,000 plus the EEB (40% of earnings at death): 0.40 X ($110,000 - $100,000) = +4,000 -------- Total death benefit of: $114,000
- On Feb. 1, 2005 the contract value remains at $105,000 and you request a partial surrender of $50,000. We calculate purchase payments not previously surrendered as $100,000 - $45,000 = $55,000 (remember that $5,000 of the partial surrender is contract earnings). The death benefit on Feb. 1, 2005 equals: MAV death benefit amount (maximum anniversary value adjusted for partial surrenders): $110,000 - ($50,000 X $110,000) = $57,619 ------------------ $105,000 plus the EEB (40% of earnings at death): 0.40 X ($57,619 - $55,000) = +1,048 ------- Total death benefit of: $58,667
- On Jan. 1, 2006 the contract value falls by $40,000. The death benefit on Jan. 1, 2006 equals the death benefit on Feb. 1, 2006. The reduction in contract value has no effect. - On Jan. 1, 2012 the contract value grows to a new high of $200,000. Earnings at death reaches its maximum of 250% of purchase payments not previously surrendered that are one or more years old. The death benefit on Jan. 1, 2012 equals: MAV death benefit amount (contract value): $200,000 plus the EEB (40% of earnings at death) .40 X 2.50 X ($55,000) = +55,000 -------- Total death benefit of: $255,000
- On July 1, 2012 you make an additional purchase payment of $50,000 and your contract value grows to $250,000. The new purchase payment is less than one year old and so it has no effect on the EEB. The death benefit on July 1, 2012 equals: MAV death benefit amount (contract value): $250,000 plus the EEB (40% of earnings at death, up to a maximum of 100% of purchase payments not previously surrendered that are one or more years old) .40 X 2.50 X ($55,000) = +55,000 -------- Total death benefit of: $305,000
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 34 - On July 1, 2013 the contract value remains $250,000 and the "new" purchase payment is one year old. The value of the EEB changes. The death benefit on July 1, 2013 equals: MAV death benefit amount (contract value): $250,000 plus the EEB which equals 40% of earnings at death (the standard death benefit minus payments not previously surrendered): 0.40 X ($250,000 - $105,000) = +58,000 -------- Total death benefit of: $308,000
If your spouse is the sole beneficiary and your spouse elects to continue the contract, we will pay an amount into the contract so that the contract value equals the total death benefit payable under the EEB. If the spouse is age 76 or older at the time he or she elects to continue the contract, then the EEB rider will terminate. If your spouse is less than age 76 at the time he or she elects to continue the contract then he or she may choose to continue the EEB. In this case, the following conditions will apply: - the EEB rider will continue, but we will treat the new contract value on the date the ownership of the contract changes to your spouse (after the additional amount is paid into the contract) as if it is a purchase payment in calculating future values of "earnings at death." - the percentages of "earnings at death" payable will be based on your spouse's age at the time he or she elects to continue the contract. - the EEB rider charges described in "Charges -- Enhanced Earnings Death Benefit Rider Fee" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force). These charges will be based on the total contract value on the anniversary, including the additional amounts paid into the contract under the EEB rider. NOTE: For special tax considerations associated with the EEB, see "Taxes." THE ANNUITY PAYOUT PERIOD As owner of the contract, you have the right to decide how and to whom annuity payouts will be made starting at the settlement date. You may select one of the annuity payout plans outlined below, or we may mutually agree on other payout arrangements. We do not deduct any surrender charges under the payout plans listed below. You also decide whether we will make annuity payouts on a fixed or variable basis, or a combination of fixed and variable. The amount available to purchase payouts under the plan you select is the contract value on your settlement date (less any applicable premium tax). You may reallocate this contract value to the fixed account to provide fixed dollar payouts and/or among the subaccounts to provide variable annuity payouts. During the annuity payout period, you cannot invest in more than five subaccounts at any one time unless we agree otherwise. AMOUNTS OF FIXED AND VARIABLE PAYOUTS DEPEND ON: - the annuity payout plan you select; - the annuitant's age and, in most cases, sex; - the annuity table in the contract; and - the amounts you allocated to the accounts at settlement. In addition, for variable payouts only, amounts depend on the investment performance of the subaccounts you select. These payouts will vary from month to month because the performance of the funds will fluctuate. (Fixed payouts remain the same from month to month.) For information with respect to transfers between accounts after annuity payouts begin, see "Making the Most of Your Contract -- Transfer policies." ANNUITY TABLES The annuity tables in your contract show the amount of the monthly payout for each $1,000 of contract value according to the age and, when applicable, the sex of the annuitant. (Where required by law, we will use a unisex table of settlement rates.) Table B shows the minimum amount of each fixed payout. Amounts in Table B are based on the guaranteed annual effective interest rate shown in your contract. We declare current payout rates that we use in determining the actual amount of your fixed payout. The current payout rates will equal or exceed the guaranteed payout rates shown in Table B. We will furnish these rates to you upon request. Table A shows the amount of the first variable payout assuming that the contract value is invested at the beginning of the annuity payout period and earns a 5% rate of return, which is reinvested and helps to support future payouts. If you ask us at least 30 days before the settlement date, we will substitute an annuity table based on an assumed 3.5% investment rate for the 5% Table A in the contract. The assumed investment rate affects both the amount of the first payout and the extent to which subsequent payouts increase or decrease. For example, annuity payouts will increase if the investment return is above the assumed investment rate and payouts will decrease if the return is below the assumed investment rate. Using the 5% Table A results in a higher initial payment, but later payouts will increase more slowly when annuity unit values rise and decrease more rapidly when they decline. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 35 ANNUITY PAYOUT PLANS You may choose any one of these annuity payout plans by giving us written instructions at least 30 days before contract values are used to purchase the payout plan: - PLAN A: LIFE ANNUITY -- NO REFUND: We make monthly payouts until the annuitant's death. Payouts end with the last payout before the annuitant's death. We will not make any further payouts. This means that if the annuitant dies after we made only one monthly payout, we will not make any more payouts. - PLAN B: LIFE ANNUITY WITH FIVE, TEN OR 15 YEARS CERTAIN: We make monthly payouts for a guaranteed payout period of five, ten or 15 years that you elect. This election will determine the length of the payout period to the beneficiary if the annuitant should die before the elected period expires. We calculate the guaranteed payout period from the settlement date. If the annuitant outlives the elected guaranteed payout period, we will continue to make payouts until the annuitant's death. - PLAN C: LIFE ANNUITY -- INSTALLMENT REFUND: We make monthly payouts until the annuitant's death, with our guarantee that payouts will continue for some period of time. We will make payouts for at least the number of months determined by dividing the amount applied under this option by the first monthly payout, whether or not the annuitant is living. - PLAN D: JOINT AND LAST SURVIVOR LIFE ANNUITY -- NO REFUND: We make monthly payouts while both the annuitant and a joint annuitant are living. If either annuitant dies, we will continue to make monthly payouts at the full amount until the death of the surviving annuitant. Payouts end with the death of the second annuitant. - PLAN E: PAYOUTS FOR A SPECIFIED PERIOD: We make monthly payouts for a specific payout period of 10 to 30 years that you elect. We will make payouts only for the number of years specified whether the annuitant is living or not. Depending on the selected time period, it is foreseeable that an annuitant can outlive the payout period selected. During the payout period, you can elect to have us determine the present value of any remaining variable payouts and pay it to you in a lump sum. We determine the present value of the remaining annuity payouts which are assumed to remain level at the initial payout. The discount rate we use in the calculation will vary between 3.50% and 5.00% depending on the applicable assumed investment rate. (See "Charges -- Surrender charge" under "Annuity Payout Plan E.") You can also take a portion of the discounted value once a year. If you do so, your monthly payouts will be reduced by the proportion of your surrender to the full discounted value. An IRS penalty tax could apply if you take a surrender. (See "Taxes.") ANNUITY PAYOUT PLAN REQUIREMENTS FOR QUALIFIED ANNUITIES: If you elect an annuity payout plan from your qualified annuity, it must comply with certain IRS regulations governing required minimum distributions. In general, your annuity payout plan will meet these regulations if payouts are made: - in equal or substantially equal payments over a period not longer than the life of the annuitant or over the life of the annuitant and designated beneficiary; or - in equal or substantially equal payments over a period not longer than the life expectancy of the annuitant or over the life expectancy of the annuitant and designated beneficiary; or - over a period certain not longer than the life expectancy of the annuitant or over the life expectancy of the annuitant and designated beneficiary. IF WE DO NOT RECEIVE INSTRUCTIONS: You must give us written instructions for the annuity payouts at least 30 days before the annuitant's settlement date. If you do not, we will make payouts under Plan B, with 120 monthly payouts guaranteed. Contract values that you allocated to the fixed account will provide fixed dollar payouts and contract values that you allocated among the subaccounts will provide variable annuity payouts. IF MONTHLY PAYOUTS WOULD BE LESS THAN $20: We will calculate the amount of monthly payouts at the time the contract value is used to purchase a payout plan. If the calculations show that monthly payouts would be less than $20, we have the right to pay the contract value to the owner in a lump sum or to change the frequency of the payouts. DEATH AFTER ANNUITY PAYOUTS BEGIN: If you or the annuitant die after annuity payouts begin, we will pay any amount payable to the beneficiary as provided in the annuity payout plan in effect. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 36 TAXES Generally, under current law, your contract has a tax-deferral feature. This means any increase in the value of the fixed account and/or subaccounts in which you invest is taxable to you only when you receive a payout or surrender (see detailed discussion below). Any portion of the annuity payouts and any surrenders you request that represent ordinary income are normally taxable. We will send you a tax information reporting form for any year in which we made a taxable distribution according to our records. Roth IRAs may grow and be distributed tax free if you meet certain distribution requirements. NONQUALIFIED ANNUITIES: Tax law requires that all nonqualified deferred annuities issued by the same company (and possibly its affiliates) to the same owner during a calendar year be taxed as a single, unified contract when you take distributions from any one of those contracts. ANNUITY PAYOUTS FROM NONQUALIFIED ANNUITIES: A portion of each payout will be ordinary income and subject to tax, and a portion of each payout will be considered a return of part of your investment and will not be taxed. Under Annuity Payout Plan A: Life annuity - no refund, where the annuitant dies before your investment in the contract is fully recovered, the remaining portion of the unrecovered investment may be available as a federal income tax deduction to the owner for the last taxable year of the annuitant. Under all other annuity payout plans, where the annuity payouts end before your investment in the contract is fully recovered, the remaining portion of the unrecovered investment may be available as a federal income tax deduction to the taxpayer for the tax year in which the payouts end. (See "Annuity Payout Plans.") All amounts you receive after your investment in the contract is fully recovered will be subject to tax. QUALIFIED ANNUITIES: When your contract is used to fund a retirement plan that is already tax deferred under the Code, the contract will not provide any necessary or additional tax deferral for that retirement plan. If your contract is used to fund a 401(k) plan, your rights to benefits may be subject to the terms and conditions of the plan regardless of the terms of the contract. Adverse tax consequences may result if you do not ensure that contributions, distributions and other transactions under the contract comply with the law. Qualified annuities have minimum distribution rules that govern the timing and amount of distributions. You should refer to your retirement plan or adoption agreement or consult a tax advisor for more information about your distribution rules. ANNUITY PAYOUTS FROM QUALIFIED ANNUITIES (EXCEPT ROTH IRAs): Under a qualified annuity, the entire payout generally is includable as ordinary income and is subject to tax unless: (1) the contract is an IRA to which you made non-deductible contributions; or (2) you rolled after-tax dollars from a retirement plan into your IRA, or (3) the contract is used to fund a retirement plan and you or your employer have contributed after-tax dollars. ANNUITY PAYOUTS FROM ROTH IRAs: In general, the entire payout from a Roth IRA can be free from income and penalty taxes if you have attained age 59 1/2 and met the five year holding period. SURRENDERS FROM NONQUALIFIED ANNUITIES: If you surrender part or all of your nonqualified contract before your annuity payouts begin, your surrender payment will be taxed to the extent that the value of your contract immediately before the surrender exceeds your investment. You also may have to pay a 10% IRS penalty for surrenders you make before reaching age 59 1/2 unless certain exceptions apply. SURRENDERS FROM QUALIFIED ANNUITIES (EXCEPT ROTH IRAs): Under a qualified annuity, the entire surrender will generally be includable as ordinary income and is subject to tax unless: (1) the contract is an IRA to which you made non-deductible contributions; or (2) you rolled after-tax dollars from a retirement plan into your IRA, or (3) the contract is used to fund a retirement plan and you or your employer have contributed after-tax dollars. SURRENDERS FROM ROTH IRAs: In general, the entire payout from a Roth IRA can be free from income and penalty taxes if you have attained age 59 1/2 and met the five year holding period. DEATH BENEFITS TO BENEFICIARIES UNDER NONQUALIFIED ANNUITIES: The death benefit under a contract is not tax exempt. Any amount your beneficiary receives that represents previously deferred earnings within the contract is taxable as ordinary income to the beneficiary in the year he or she receives the payments. DEATH BENEFITS TO BENEFICIARIES UNDER QUALIFIED ANNUITIES: The entire death benefit generally is taxable as ordinary income to the beneficiary in the year he or she receives the payments from the qualified annuity. If, under your 401(k) plan you or your employer made after-tax contributions to your contract or if you made non-deductible contributions to a traditional IRA, the portion of any distribution from the annuity that represents after-tax contributions are not taxable as ordinary income to your beneficiary. Death benefits under a Roth IRA generally are not taxable as ordinary income to the beneficiary if certain distribution requirements are met. SPECIAL CONSIDERATIONS IF YOU SELECT ONE OF THE DEATH BENEFIT RIDERS (MAV OR EEB): As of the date of this prospectus, we believe that charges related to these riders are not subject to current taxation. Therefore, we will not report these charges as partial surrenders from your contract. However, the IRS may determine that these charges should be treated as partial surrenders subject to taxation to the extent of any gain as well as the 10% IRS tax penalty for surrenders before the age of 59 1/2, if applicable. We reserve the right to report charges for these riders as partial surrenders if we, as a withholding and reporting agent, believe that we are required to report them. In addition, we will report the benefits attributable to these riders on the death of you or annuitant as an annuity death benefit distribution, not as proceeds for life insurance. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 37 ANNUITIES OWNED BY CORPORATIONS, PARTNERSHIPS OR TRUSTS: For nonqualified annuities, any annual increase in the value of annuities held by such entities generally will be treated as ordinary income received during that year. This provision is effective for purchase payments made after Feb. 28, 1986. However, if the trust was set up for the benefit of a natural person only, the income will remain tax-deferred. PENALTIES: In general, if you receive amounts from your contract (or, if applicable, from the plan) before reaching age 59 1/2, you may have to pay a 10% IRS penalty on the amount includable in your ordinary income. However, if you have a SIMPLE IRA and if you receive these amounts before age 59 1/2 and within the first two years of your participation in the SIMPLE IRA plan, the IRS penalty will be assessed at a rate of 25% instead of 10%. However, this penalty will not apply to any amount received by you: - because of your death; - because you become disabled (as defined in the Code); - if the distribution is part of a series of substantially equal periodic payments, made at least annually, over your life or life expectancy (or joint lives or life expectancies of you and your beneficiary); or - if it is allocable to an investment before Aug. 14, 1982 (except for qualified annuities). For qualified annuities under 401(a), 401(k) plans or TSA's, other exceptions may apply if you surrender your contract before your plan specifies that payouts can be made. WITHHOLDING, GENERALLY: If you receive all or part of the contract value, we may deduct withholding against the taxable income portion of the payment. Any withholding represents a prepayment of your tax due for the year. You take credit for these amounts on your annual income tax return. If the payment is part of an annuity payout plan, we generally compute the amount of withholding using payroll tables. You may provide us with a statement of how many exemptions to use in calculating the withholding. As long as you've provided us with a valid Social Security Number or Taxpayer Identification Number, you can elect not to have any withholding occur. If the distribution is any other type of payment (such as a partial or full surrender), we compute withholding using 10% of the taxable portion. Similar to above, as long as you have provided us with a valid Social Security Number or Taxpayer Identification Number, you can elect not to have this withholding occur. The withholding requirements may differ if we are making payment to a non-U.S. citizen or if we deliver the payment outside the United States. Some states also impose withholding requirements similar to the federal withholding described above. If this should be the case, we may deduct state withholding from any payment from which we deduct federal withholding. WITHHOLDING FROM QUALIFIED ANNUITIES: If you receive directly all or part of the contract value from a qualified annuity (except an IRA, Roth IRA, SIMPLE IRA or SEP), mandatory 20% federal income tax withholding (and possibly state income tax withholding) generally will be imposed at the time payout is made from the plan. This mandatory withholding is in place of the elective withholding discussed above. This mandatory withholding will not be imposed if: - instead of receiving the distribution check, you elect to have the distribution rolled over directly to an IRA or another eligible plan; - the payout is one in a series of substantially equal periodic payouts, made at least annually, over your life or life expectancy (or the joint lives or life expectancies of you and your designated beneficiary) or over a specified period of 10 years or more; - the payout is a minimum distribution required under the Code; or - the payout is a corrective distribution. Payments we make to a surviving spouse instead of being directly rolled over to an IRA also may be subject to mandatory 20% income tax withholding. State withholding also may be imposed on taxable distributions. TRANSFER OF OWNERSHIP OF A NONQUALIFIED ANNUITY: If you transfer a nonqualified annuity without receiving adequate consideration, the transfer is a gift and also may be treated as a surrender for federal income tax purposes. If the gift is a currently taxable event for income tax purposes, the original owner will be taxed on the amount of deferred earnings at the time of the transfer and also may be subject to the 10% IRS penalty discussed earlier. In this case, the new owner's investment in the contract will be the value of the contract at the time of the transfer. In general, this rule does not apply to transfers between spouses. Please consult your tax advisor for further details. COLLATERAL ASSIGNMENT OF A NONQUALIFIED ANNUITY: If you collaterally assign or pledge your contract, earnings on purchase payments you made after Aug. 13, 1982 will be taxed to you like a surrender and you may have to pay a 10% IRS penalty. You may not collaterally assign or pledge your qualified contracts. IMPORTANT: Our discussion of federal tax laws is based upon our understanding of current interpretations of these laws. Federal tax laws or current interpretations of them may change. For this reason and because tax consequences are complex and highly individual and cannot always be anticipated, you should consult a tax advisor if you have any questions about taxation of your contract. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 38 IDS LIFE'S TAX STATUS: IDS Life is taxed as a life insurance company under the Code. For federal income tax purposes, the subaccounts are considered a part of IDS Life, although their operations are treated separately in accounting and financial statements. Investment income from the subaccounts is reinvested and becomes part of the subaccounts' value. This investment income, including realized capital gains, is not taxed to IDS Life, and therefore no charge is made against the subaccounts for federal income taxes. IDS Life reserves the right to make such a charge in the future if there is a change in the tax treatment of variable annuities. TAX QUALIFICATION: We intend that the contract qualify as an annuity for federal income tax purposes. To that end, the provisions of the contract are to be interpreted to ensure or maintain such tax qualification, in spite of any other provisions of the contract. We reserve the right to amend the contract to reflect any clarifications that may be needed or are appropriate to maintain such qualification or to conform the contract to any applicable changes in the tax qualification requirements. We will send you a copy of any amendments. VOTING RIGHTS As a contract owner with investments in the subaccounts, you may vote on important fund policies until annuity payouts begin. Once they begin, the person receiving them has voting rights. We will vote fund shares according to the instructions of the person with voting rights. Before annuity payouts begin, the number of votes you have is determined by applying your percentage interest in each subaccount to the total number of votes allowed to the subaccount. After annuity payouts begin, the number of votes you have is equal to: - the reserve held in each subaccount for your contract; divided by - the net asset value of one share of the applicable fund. As we make annuity payouts, the reserve for the contract decreases; therefore, the number of votes also will decrease. We calculate votes separately for each subaccount. We will send notice of shareholders' meetings, proxy materials and a statement of the number of votes to which the voter is entitled. We will vote shares for which we have not received instructions in the same proportion as the votes for which we received instructions. We also will vote the shares for which we have voting rights in the same proportion as the votes for which we received instructions. SUBSTITUTION OF INVESTMENTS We may substitute the funds in which the subaccounts invest if: - laws or regulations change; - the existing funds become unavailable; or - in our judgment, the funds no longer are suitable for the subaccounts. If any of these situations occur, and if we believe it is in the best interest of persons having voting rights under the contract, we have the right to substitute the funds currently listed in this prospectus for other funds. We may also: - add new subaccounts; - combine any two or more subaccounts; - make additional subaccounts investing in additional funds; - transfer assets to and from the subaccounts or the variable account; and - eliminate or close any subaccounts. In the event of substitution or any of these changes, we may amend the contract and take whatever action is necessary and appropriate without your consent or approval. However, we will not make any substitution or change without the necessary approval of the SEC and state insurance departments. We will notify you of any substitution or change. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 39 ABOUT THE SERVICE PROVIDERS ISSUER AND PRINCIPAL UNDERWRITER IDS Life issues and is the principal underwriter for the contracts. IDS Life is a stock life insurance company organized in 1957 under the laws of the State of Minnesota and is located at 70100 AXP Financial Center, Minneapolis, MN 55474. IDS Life conducts a conventional life insurance business. IDS Life is a wholly-owned subsidiary of AEFC, which itself is a wholly-owned subsidiary of American Express Company, a financial services company headquartered in New York City. The AEFC family of companies offers not only insurance and annuities, but also mutual funds, investment certificates, and a broad range of financial management services. American Express Financial Advisors Inc. (AEFA) serves individuals and businesses through its nationwide network of more than 3,600 registered branch offices and more than 10,100 financial advisors. IDS Life pays commissions for sales of the contracts of up to 7% of the total purchase payments received. This revenue is used to cover distribution costs that include compensation to advisors and field leadership for the selling advisors. These commissions consist of a combination of time of sale and on-going service/trail commissions (which, when totaled, could exceed 7% of purchase payments). From time to time, IDS Life will pay or permit other promotional incentives, in cash or credit or other compensation. LEGAL PROCEEDINGS We are a party to litigation and arbitration proceedings in the ordinary course of our business, none of which is expected to have a material adverse effect on us. In recent years, life insurance companies have been named as defendants in lawsuits, including class action lawsuits, alleging improper life insurance sales practices, alleged agent misconduct, failure to properly supervise agents and other matters relating to life insurance policies and annuity contracts. We and our affiliates were named defendants in three purported class-action lawsuits alleging improper insurance and annuity sales practices including improper replacement of existing annuity contracts and insurance policies, improper use of annuities to fund tax deferred contributory retirement plans, alleged agent misconduct, failure to properly supervise agents and other matters relating to life insurance policies and annuity contracts (BENACQUISTO v. IDS LIFE INSURANCE COMPANY filed in Minnesota State Court 12/13/96; MORK, ET. AL. v. IDS LIFE INSURANCE COMPANY filed in Minnesota State Court 3/21/97; THORESEN v. IDS LIFE INSURANCE COMPANY, ET. AL. filed in Minnesota State Court 10/13/98). A fourth lawsuit was filed against us and our affiliates in federal court (BENACQUISTO, ET. AL. v. IDS LIFE INSURANCE COMPANY, ET. AL. filed in United States District Court - Minnesota 8/00). In January 2000, AEFC reached an agreement in principle to settle the four class action lawsuits described above. It is expected the settlement will provide $215 million of benefits to more than two million participants in exchange for a release by class members of all insurance and annuity state and federal market conduct claims dating back to 1985. The settlement received court approval. Implementation of the settlement commenced October 15, 2001 and is substantially complete. Claim review payments have been made. Numerous individuals opted out of the settlement described above and therefore did not release their claims against AEFC and its subsidiaries. Some of these class members who opted out were represented by counsel and presented separate claims to AEFC and us. Most of their claims have been settled. In November 2002, a suit, captioned HARITOS ET. AL. v. AMERICAN EXPRESS FINANCIAL CORPORATION AND IDS LIFE INSURANCE COMPANY, was filed in the United States District Court for the District of Arizona. The suit is filed by the plaintiffs who purport to represent a class of all persons that have purchased financial plans from AEFA advisors during an undefined class period. Plaintiffs allege that the sale of the plans violate the Investment Advisers Act of 1940. The suit seeks an unspecified amount of damages, rescission and injunctive relief. We believe that we have meritorious defenses to this suit and intend to defend this case vigorously. The outcome of any litigation or threatened litigation cannot be predicted with any certainty. However, in the aggregate, we do not consider any lawsuits in which we are named as a defendant to have a material impact on our financial position or operating results. AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 40 TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION Performance Information p. 3 Calculating Annuity Payouts p. 10 Rating Agencies p. 11 Principal Underwriter p. 11 Independent Auditors p. 11 Financial Statements AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 41 [AMERICAN EXPRESS(R) LOGO] IDS LIFE INSURANCE COMPANY 70100 AXP FINANCIAL CENTER MINNEAPOLIS, MN 55474 (800) 862-7919 S-6477 G (5/03) PROSPECTUS MAY 1, 2003 AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY AMERICAN EXPRESS RETIREMENT ADVISOR SELECT(R) VARIABLE ANNUITY INDIVIDUAL FLEXIBLE PREMIUM DEFERRED COMBINATION FIXED/VARIABLE ANNUITIES ISSUED BY: IDS LIFE INSURANCE COMPANY (IDS LIFE) 70100 AXP Financial Center Minneapolis, MN 55474 Telephone: (800) 862-7919 americanexpress.com IDS LIFE VARIABLE ACCOUNT 10 This prospectus contains information that you should know before investing in the American Express Retirement Advisor Advantage(R) Variable Annuity (RAVA Advantage) or the American Express Retirement Advisor Select(R) Variable Annuity (RAVA Select). Prospectuses are also available for: - American Express(R) Variable Portfolio Funds - AIM Variable Insurance Funds - AllianceBernstein Variable Products Series Fund, Inc. (previously Alliance Variable Products Series Fund, Inc. - American Century(R) Variable Portfolios, Inc. - Calvert Variable Series, Inc. - Evergreen Variable Annuity Trust - Fidelity(R) Variable Insurance Products - Service Class 2 - Franklin(R) Templeton(R) Variable Insurance Products Trust (FTVIPT) - Class 2 - Goldman Sachs Variable Insurance Trust (VIT) - INVESCO Variable Investment Funds, Inc. - Janus Aspen Series: Service Shares - Lazard Retirement Series, Inc. - MFS(R) Variable Insurance Trust(SM) - Pioneer Variable Contracts Trust (VCT), Class II Shares - Putnam Variable Trust - Class IB Shares - Strong Opportunity Fund II, Inc. - Wanger Advisors Trust - Wells Fargo Variable Trust Funds Please read the prospectuses carefully and keep them for future reference. The contracts provide for purchase payment credits which we may reverse under certain circumstances. Expenses and surrender charges from contracts with purchase payment credits may be higher than those for contracts without such credits. The amount of the credit may be more than offset by additional charges associated with the credit. THE SECURITIES AND EXCHANGE COMMISSION (SEC) HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. AN INVESTMENT IN THIS CONTRACT IS NOT A DEPOSIT OF A BANK OR FINANCIAL INSTITUTION AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN THIS CONTRACT INVOLVES INVESTMENT RISK INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. A Statement of Additional Information (SAI), dated the same date as this prospectus, is incorporated by reference into this prospectus. It is filed with the SEC and is available without charge by contacting IDS Life at the telephone number and address listed above. The table of contents of the SAI is on the last page of this prospectus. The SEC maintains an Internet site. This prospectus, the SAI and other information about the product are available on the EDGAR Database on the SEC's Internet site at (http://www.sec.gov). Variable annuities are complex investment vehicles. Before you invest, be sure to ask your sales representative about the variable annuity features, benefits, risks and fees, and whether the variable annuity is appropriate for you, based upon your financial situation and objectives. The contract may not be available in all jurisdictions. This prospectus constitutes an offering or solicitation only in those jurisdictions where such offering or solicitation may lawfully be made. State variations are covered in a special contract form used in that state. This prospectus provides a general description of the contract. Your actual contract and any riders or endorsements are the controlling documents. IDS Life has not authorized any person to give any information or to make any representations regarding the contract other than those contained in this prospectus or the fund prospectuses. Do not rely on any such information or representations. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 1 IDS Life and its affiliated insurance companies offer several different annuities which your sales representative may be authorized to offer to you. Each annuity has different features and benefits that may be appropriate for you based on your financial situation and needs, your age and how you intend to use the annuity. The different features and benefits may include the investment and fund manager options, variations in interest rate amount and guarantees, credits, surrender charge schedules and access to annuity account values. The fees and charges may also be different between each annuity. TABLE OF CONTENTS KEY TERMS 3 THE CONTRACT IN BRIEF 4 EXPENSE SUMMARY 6 CONDENSED FINANCIAL INFORMATION (UNAUDITED) 12 FINANCIAL STATEMENTS 33 PERFORMANCE INFORMATION 33 THE VARIABLE ACCOUNT AND THE FUNDS 34 THE FIXED ACCOUNT 45 BUYING YOUR CONTRACT 45 CHARGES 47 VALUING YOUR INVESTMENT 52 MAKING THE MOST OF YOUR CONTRACT 54 SURRENDERS 57 TSA -- SPECIAL SURRENDER PROVISIONS 57 CHANGING OWNERSHIP 58 BENEFITS IN CASE OF DEATH -- STANDARD DEATH BENEFIT 58 OPTIONAL BENEFITS 60 THE ANNUITY PAYOUT PERIOD 67 TAXES 69 VOTING RIGHTS 71 SUBSTITUTION OF INVESTMENTS 71 ABOUT THE SERVICE PROVIDERS 72 TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION 73 AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 2 KEY TERMS THESE TERMS CAN HELP YOU UNDERSTAND DETAILS ABOUT YOUR CONTRACT. ACCUMULATION UNIT: A measure of the value of each subaccount before annuity payouts begin. ANNUITANT: The person on whose life or life expectancy the annuity payouts are based. ANNUITY PAYOUTS: An amount paid at regular intervals under one of several plans. ASSUMED INVESTMENT RATE: The rate of return we assume your investments will earn when we calculate your initial annuity payout amount using the annuity table in your contract. The standard assumed investment rate we use is 5% but you may request we substitute an assumed investment rate of 3.5%. BENEFICIARY: The person you designate to receive benefits in case of the owner's or annuitant's death while the contract is in force. CLOSE OF BUSINESS: When the New York Stock Exchange (NYSE) closes, normally 4 p.m. Eastern time. CONTRACT: A deferred annuity contract that permits you to accumulate money for retirement by making one or more purchase payments. It provides for lifetime or other forms of payouts beginning at a specified time in the future. CONTRACT VALUE: The total value of your contract before we deduct any applicable charges. CONTRACT YEAR: A period of 12 months, starting on the effective date of your contract and on each anniversary of the effective date. ENHANCED EARNINGS DEATH BENEFIT (EEB) AND ENHANCED EARNINGS PLUS DEATH BENEFIT (EEP): These are optional benefits you can add to your contract for an extra charge. Each is intended to provide an additional benefit to your beneficiary to help offset expenses after your death such as funeral expenses or federal and state taxes. You can elect to purchase either the EEB or the EEP. FIXED ACCOUNT: An account to which you may allocate purchase payments. Amounts you allocate to this account earn interest at rates that we declare periodically. FUNDS: Investment options under your contract. You may allocate your purchase payments into subaccounts investing in shares of any or all of these funds. IDS LIFE: In this prospectus, "we," "us," "our" and "IDS Life" refer to IDS Life Insurance Company. MAXIMUM ANNIVERSARY VALUE DEATH BENEFIT (MAV): This is an optional benefit you can add to your contract for an extra charge that is intended to provide additional death benefit protection in the event of fluctuating fund values. OWNER (YOU, YOUR): The person who controls the contract (decides on investment allocations, transfers, payout options, etc.). Usually, but not always, the owner is also the annuitant. The owner is responsible for taxes, regardless of whether he or she receives the contract's benefits. PURCHASE PAYMENT CREDITS: An addition we make to your contract value. We base the amount of the credit on the surrender charge schedule you elect and/or total purchase payments. QUALIFIED ANNUITY: A contract that you purchase to fund one of the following tax-deferred retirement plans that is subject to applicable federal law and any rules of the plan itself: - Individual Retirement Annuities (IRAs) under Section 408(b) of the Internal Revenue Code of 1986, as amended (the Code) - Roth IRAs under Section 408A of the Code - SIMPLE IRAs under Section 408(p) of the Code - Simplified Employee Pension (SEP) plans under Section 408(k) of the Code - Plans under Section 401(k) of the Code - Custodial and trusteed plans under Section 401(a) of the Code - Tax-Sheltered Annuities (TSAs) under Section 403(b) of the Code A qualified annuity will not provide any necessary or additional tax deferral if it is used to fund a retirement plan that is already tax-deferred. All other contracts are considered NONQUALIFIED ANNUITIES. RIDER: You receive a rider when you purchase the EEB, EEP and/or MAV. The rider adds the terms of the optional benefit to your contract. RIDER EFFECTIVE DATE: The date you add a rider to your contract. SETTLEMENT DATE: The date when annuity payouts are scheduled to begin. SURRENDER VALUE: The amount you are entitled to receive if you make a full surrender from your contract. It is the contract value minus any applicable charges. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 3 VALUATION DATE: Any normal business day, Monday through Friday, that the NYSE is open. Each valuation date ends at the close of business. We calculate the value of each subaccount at the close of business on each valuation date. VARIABLE ACCOUNT: Consists of separate subaccounts to which you may allocate purchase payments; each invests in shares of one fund. The value of your investment in each subaccount changes with the performance of the particular fund. THE CONTRACT IN BRIEF This prospectus describes two contracts. RAVA Advantage offers a choice of a seven-year or a ten-year surrender charge schedule and relatively lower expenses. RAVA Select offers a three-year surrender charge schedule and relatively higher expenses. PURPOSE: The purpose of each contract is to allow you to accumulate money for retirement. You do this by making one or more purchase payments. You may allocate your purchase payments to the fixed accounts and/or subaccounts under the contract. These accounts, in turn, may earn returns that increase the value of the contract. Beginning at a specified time in the future called the settlement date, the contract provides lifetime or other forms of payouts of your contract value (less any applicable premium tax). As in the case of other annuities, it may not be advantageous for you to purchase one of these contracts as a replacement for, or in addition to, an existing annuity or life insurance contract. Most annuities have a tax-deferred feature. So do many retirement plans under the Code. As a result, when you use one of these contracts to fund a retirement plan that is tax-deferred, your contract will not provide any necessary or additional tax deferral for that retirement plan. But the contracts do have features other than tax deferral that may help you reach your retirement goals. You should consult your tax advisor prior to making a purchase for an explanation of the tax implications to you. FREE LOOK PERIOD: You may return your contract to your sales representative or to our office within the time stated on the first page of your contract. Under RAVA Advantage you will receive a full refund of the contract value, less the amount of any purchase payment credits. (See "Valuing Your Investment -- Purchase payment credits.") We will not deduct any other charges. However, you bear the investment risk from the time of purchase until you return the contract; the refund amount may be more or less than the payment you made. Under RAVA Select you will receive a refund of your contract value less the value of the purchase payment credit. (Exception: If the law requires, we will refund all of your purchase payments.) ACCOUNTS: Currently, you may allocate your purchase payments among any or all of: - the subaccounts, each of which invests in a fund with a particular investment objective. The value of each subaccount varies with the performance of the particular fund in which it invests. We cannot guarantee that the value at the settlement date will equal or exceed the total purchase payments you allocate to the subaccounts. (p. 34) - the fixed account, which earns interest at a rate that we adjust periodically. (p. 45) BUYING YOUR CONTRACT: Your sales representative will help you complete and submit an application. Applications are subject to acceptance at our office. You may buy a nonqualified annuity or a qualified annuity. After your initial purchase payment, you have the option of making additional purchase payments in the future. (p. 45) MINIMUM ALLOWABLE PURCHASE PAYMENTS If paying by installments under a scheduled payment plan: $23.08 biweekly, or $50 per month
RAVA ADVANTAGE RAVA SELECT If paying by any other method: initial payment for qualified annuities $ 1,000 $ 2,000 initial payment for nonqualified annuities 2,000 10,000 for any additional payments 50 50
MAXIMUM ALLOWABLE PURCHASE PAYMENTS based on the age of you or the annuitant, whoever is older, on the effective date of the contract:
RAVA ADVANTAGE RAVA SELECT For the first year: up to age 85 $1,000,000 $999,999 for ages 86 to 90 100,000 100,000 For each subsequent year: up to age 85 100,000 100,000 for ages 86-90 50,000 50,000
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 4 TRANSFERS: Subject to certain restrictions, you currently may redistribute your contract value among the accounts without charge at any time until annuity payouts begin, and once per contract year among the subaccounts after annuity payouts begin. You may establish automated transfers among the accounts. Fixed account transfers are subject to special restrictions. (p. 55) SURRENDERS: You may surrender all or part of your contract value at any time before the settlement date. You also may establish automated partial surrenders. Surrenders may be subject to charges and tax penalties (including an IRS penalty if you surrender prior to your reaching age 59 1/2) and may have other tax consequences; also, certain restrictions apply. (p. 57) CHANGING OWNERSHIP: You may change ownership of a nonqualified annuity by written instruction, but this may have federal income tax consequences. Restrictions apply to changing ownership of a qualified annuity. (p. 58) BENEFITS IN CASE OF DEATH: If you or the annuitant die before annuity payouts begin, we will pay the beneficiary an amount at least equal to the contract value. (p. 58) OPTIONAL BENEFITS: This contract offers optional features that are available for additional charges if you meet certain criteria. (p. 60) ANNUITY PAYOUTS: You can apply your contract value to an annuity payout plan that begins on the settlement date. You may choose from a variety of plans to make sure that payouts continue as long as you like. If you purchased a qualified annuity, the payout schedule must meet the requirements of the tax-deferred retirement plan. We can make payouts on a fixed or variable basis, or both. Total monthly payouts may include amounts from each subaccount and the fixed account. During the annuity payout period, you cannot be invested in more than five subaccounts at any one time unless we agree otherwise. (p. 67) TAXES: Generally, your contract grows tax-deferred until you surrender it or begin to receive payouts. (Under certain circumstances, IRS penalty taxes may apply.) Even if you direct payouts to someone else, you will be taxed on the income if you are the owner. (p. 69) CHARGES: We assess certain charges in connection with your contract: - $30 annual contract administrative charge; - for nonqualified annuities a 0.95% mortality and expense risk fee for RAVA Advantage and a 1.20% mortality and expense risk fee for RAVA Select (if you allocate money to one or more subaccounts); - for qualified annuities a 0.75% mortality and expense risk fee for RAVA Advantage and a 1.00% mortality and expense risk fee for RAVA Select (if you allocate money to one or more subaccounts); - surrender charge; - any premium taxes that may be imposed on us by state or local governments (currently, we deduct any applicable premium tax when annuity payouts begin but we reserve the right to deduct this tax at other times such as when you make purchase payments or when you surrender your contract); - the operating expenses of the funds in which the subaccounts invest; - if you select the MAV, an annual fee of 0.25%* of the contract value; - if you select the EEB, an annual fee of 0.30% of the contract value; and - if you select the EEP, an annual fee of 0.40% of the contract value. * For contracts purchased before May 1, 2003, the MAV rider fee for RAVA Advantage and RAVA Select is 0.15%. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 5 EXPENSE SUMMARY THE FOLLOWING TABLES DESCRIBE THE FEES AND EXPENSES THAT YOU WILL PAY WHEN BUYING, OWNING AND SURRENDERING THE CONTRACT. THE FIRST TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU WILL PAY AT THE TIME THAT YOU BUY THE CONTRACT OR SURRENDER THE CONTRACT. STATE PREMIUM TAXES ALSO MAY BE DEDUCTED. CONTRACT OWNER TRANSACTION EXPENSES SURRENDER CHARGE FOR RAVA ADVANTAGE (Contingent deferred sales load as a percentage of purchase payment surrendered) You select either a seven-year or ten-year surrender charge schedule at the time of application.**
SEVEN-YEAR SCHEDULE TEN-YEAR SCHEDULE** YEARS FROM PURCHASE SURRENDER CHARGE YEARS FROM PURCHASE SURRENDER CHARGE PAYMENT RECEIPT PERCENTAGE PAYMENT RECEIPT PERCENTAGE 1 7% 1 8% 2 7 2 8 3 7 3 8 4 6 4 7 5 5 5 7 6 4 6 6 7 2 7 5 Thereafter 0 8 4 9 3 10 2 Thereafter 0
** Ten-year surrender charge schedule is not available for contracts issued in Oregon. For contracts issued in Massachusetts, Oregon and Washington, surrender charges are waived after the tenth contract anniversary. SURRENDER CHARGE FOR RAVA SELECT (EXCEPT TEXAS) (Contingent deferred sales load as a percentage of purchase payment surrendered)
YEARS FROM SURRENDER CHARGE CONTRACT DATE PERCENTAGE 1 7% 2 7 3 7 Thereafter 0
SURRENDER CHARGE FOR RAVA SELECT IN TEXAS (Contingent deferred sales load)
SURRENDER CHARGE PERCENTAGE (AS A PERCENTAGE OF PURCHASE PAYMENTS SURRENDERED) IN CONTRACT YEAR PAYMENTS MADE IN CONTRACT YEAR 1 2 3 THEREAFTER 1 8% 7% 6% 0% 2 8 7 0 3 8 0 Thereafter 0
A surrender charge also applies to payouts under certain annuity payout plans (see "Charges -- Surrender Charge" p. 48 and "The Annuity Payout Period -- Annuity Payout Plans" p. 68). AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 6 THE NEXT TWO TABLES DESCRIBE THE FEES AND EXPENSES THAT YOU WILL PAY PERIODICALLY DURING THE TIME THAT YOU OWN THE CONTRACT, NOT INCLUDING FUND FEES AND EXPENSES. PERIODIC EXPENSES
RAVA ADVANTAGE RAVA SELECT ANNUAL CONTRACT ADMINISTRATIVE CHARGE $ 30 $ 30 (We will waive this charge when your contract value, or total purchase payments less any payments surrendered, is $50,000 or more on the current contract anniversary, except at full surrender.) MAV RIDER FEE* 0.25%** 0.25%** (As a percentage of the contract value charged annually at the contract anniversary.) EEB RIDER FEE 0.30%** 0.30%** (As a percentage of the contract value charged annually at the contract anniversary.) EEP RIDER FEE 0.40%** 0.40%** (As a percentage of the contract value charged annually at the contract anniversary.)
ANNUAL VARIABLE ACCOUNT EXPENSES (As a percentage of average subaccount value)
MORTALITY AND EXPENSE RISK FEE: RAVA ADVANTAGE RAVA SELECT For nonqualified annuities 0.95% 1.20% For qualified annuities 0.75% 1.00%
* For contracts purchased before May 1, 2003, the MAV rider fee for RAVA Advantage and RAVA Select is 0.15%. ** This fee applies only if you elect this optional feature. ANNUAL OPERATING EXPENSES OF THE FUNDS THE NEXT TWO TABLES DESCRIBE THE OPERATING EXPENSES OF THE FUNDS. THE FIRST TABLE SHOWS THE MINIMUM AND MAXIMUM TOTAL OPERATING EXPENSES CHARGED BY THE FUNDS THAT YOU MAY PAY PERIODICALLY DURING THE TIME THAT YOU OWN THE CONTRACT. THE SECOND TABLE SHOWS THE FEES AND EXPENSES CHARGED BY EACH FUND FOR THE LAST FISCAL YEAR. MORE DETAIL CONCERNING EACH FUND'S FEES AND EXPENSES IS CONTAINED IN THE PROSPECTUS FOR EACH FUND. MINIMUM AND MAXIMUM TOTAL ANNUAL OPERATING EXPENSES FOR THE FUNDS (Including management fee, distribution and/or service (12b-1) fees and other expenses)
MINIMUM MAXIMUM Total expenses before contractual fee waivers and/or expense reimbursements .69% 3.14%
TOTAL ANNUAL OPERATING EXPENSES FOR EACH FUND UNDERLYING RAVA ADVANTAGE AND RAVA SELECT (Before fee waivers and/or expense reimbursements, if applicable, as a percentage of average daily net assets)
GROSS TOTAL MANAGEMENT 12b-1 OTHER ANNUAL FEES FEES EXPENSES EXPENSES AXP(R) Variable Portfolio - Blue Chip Advantage Fund .53% .13% .13% .79%(1) Bond Fund .60 .13 .07 .80(1) Capital Resource Fund .62 .13 .05 .80(1) Cash Management Fund .51 .13 .05 .69(1) Diversified Equity Income Fund .56 .13 .18 .87(1) Emerging Markets Fund 1.18 .13 1.05 2.36(2) Equity Select Fund .69 .13 .57 1.39(2) Extra Income Fund .62 .13 .08 .83(1) Federal Income Fund .61 .13 .09 .83(1) Global Bond Fund .84 .13 .11 1.08(1) Growth Fund .56 .13 .12 .81(1) International Fund .84 .13 .10 1.07(1) Managed Fund .60 .13 .04 .77(1) NEW DIMENSIONS FUND(R) .61 .13 .05 .79(1)
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 7 TOTAL ANNUAL OPERATING EXPENSES FOR EACH FUND UNDERLYING RAVA ADVANTAGE AND RAVA SELECT (Before fee waivers and/or expense reimbursements, if applicable, as a percentage of average daily net assets)
GROSS TOTAL MANAGEMENT 12b-1 OTHER ANNUAL FEES FEES EXPENSES EXPENSES AXP(R) Variable Portfolio - (continued) Partners Small Cap Value Fund 1.03% .13% .32% 1.48%(1) S&P 500 Index Fund .29 .13 .40 .82(2) Small Cap Advantage Fund .73 .13 .25 1.11(1) Stock Fund .56 .13 1.75 2.44(2) Strategy Aggressive Fund .62 .13 .06 .81(1) AIM V.I. Capital Appreciation Fund, Series II Shares .61 .25 .24 1.10(3) Capital Development Fund, Series II Shares .75 .25 .39 1.39(3) AllianceBernstein Variable Products Series Fund, Inc. AllianceBernstein Growth and Income Portfolio (Class B) .63 .25 .05 .93(4) AllianceBernstein International Value Portfolio (Class B) 1.00 .25 1.22 2.47(5) American Century(R) Variable Portfolios, Inc. VP International, Class II 1.20 .25 -- 1.45(6) VP Value, Class II .85 .25 -- 1.10(6) Calvert Variable Series, Inc. Social Balanced Portfolio .70 -- .21 .91(7) Evergreen VA Capital Growth Fund - Class 2 .80 .25 .22 1.27(8) Fidelity(R) VIP Growth & Income Portfolio Service Class 2 .48 .25 .12 .85(4) Mid Cap Portfolio Service Class 2 .58 .25 .12 .95(4) Overseas Portfolio Service Class 2 .73 .25 .18 1.16(4) FTVIPT Franklin Real Estate Fund - Class 2 .53 .25 .04 .82(9),(10) Franklin Small Cap Value Securities Fund - Class 2 .59 .25 .20 1.04(10),(11) Mutual Shares Securities Fund - Class 2 .60 .25 .21 1.06(10),(11) Goldman Sachs VIT CORE(SM) U.S. Equity Fund .70 -- .16 .86(12) Mid Cap Value Fund .80 -- .13 .93(12) INVESCO VIF Dynamics Fund .75 -- .37 1.12(13),(14) Financial Services Fund .75 -- .34 1.09(13),(14) Technology Fund .75 -- .36 1.11(13),(14) Telecommunications Fund .75 -- .47 1.22(13),(14) Janus Aspen Series Global Technology Portfolio: Service Shares .65 .25 .07 .97(15) International Growth Portfolio: Service Shares .65 .25 .09 .99(15) Lazard Retirement Series International Equity Portfolio .75 .25 .65 1.65(16) MFS(R) Investors Growth Stock Series - Service Class .75% .25% .13% 1.13%(17),(18) New Discovery Series - Service Class .90 .25 .15 1.30(17),(18) Utilities Series - Service Class .75 .25 .19 1.19(17),(18)
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 8 TOTAL ANNUAL OPERATING EXPENSES FOR EACH FUND UNDERLYING RAVA ADVANTAGE AND RAVA SELECT (CONTINUED) (Before fee waivers and/or expense reimbursements, if applicable, as a percentage of average daily net assets)
GROSS TOTAL MANAGEMENT 12b-1 OTHER ANNUAL FEES FEES EXPENSES EXPENSES Pioneer VCT Pioneer Equity Income VCT Portfolio - Class II Shares .65% .25% .17% 1.07%(19) Pioneer Europe VCT Portfolio - Class II Shares 1.00 .25 1.41 2.66(19) Putnam Variable Trust Putnam VT Health Sciences Fund - Class IB Shares .70 .25 .13 1.08(4) Putnam VT International Equity Fund - Class IB Shares .77 .25 .22 1.24(4) (previously Putnam VT International Growth Fund - Class IB Shares) Putnam VT Vista Fund - Class IB Shares .64 .25 .10 .99(4) Strong Funds Strong Opportunity Fund II - Advisor Class .75 .25 .39 1.39(20) Wanger International Small Cap 1.24 -- .23 1.47(21) U.S. Smaller Companies .94 -- .11 1.05(21) Wells Fargo VT Asset Allocation Fund .55 .25 .23 1.03(22) International Equity Fund .75 .25 2.14 3.14(22) Small Cap Growth Fund .75 .25 .33 1.33(22)
We entered into certain arrangements under which it is compensated by the funds' advisers and/or distributors for the administrative services it provides to these funds. (1) The Fund's expense figures are based on actual expenses for the fiscal year ended Aug. 31, 2002. (2) The Fund's expense figures are based on actual expenses, before fee waivers and expense reimbursements, for the fiscal year ending Aug. 31, 2002. Through April 3, 2003, IDS Life and AEFC have agreed to waive certain fees and reimburse expenses to the extent that total expenses exceed the following percentage of Fund average daily net assets. "Gross total annual expenses" after these fee waivers and expense reimbursements would have been 1.75% for AXP(R) Variable Portfolio - Emerging Markets Fund, 1.10% for AXP(R) Variable Portfolio - Equity Select Fund, 0.495% for AXP(R) Variable Portfolio - S&P 500 Index Fund and 1.10% for AXP(R) Variable Portfolio - Stock Fund. (3) Figures shown in the table are for the year ended Dec. 31, 2002 and are expressed as a percentage of Fund average daily net assets. There is no guarantee that actual expenses will be the same as those shown in the table. (4) The Fund's expense figures are based on actual expenses for the fiscal year ended Dec. 31, 2002. (5) From 1/1/02 through 4/30/02, Fund was capped at 1.20%. From 5/1/02 on, Fund was capped at 1.45%. After such waivers, "Management fees," "Other expenses," and "Gross total annual expenses" would be 0.71%, 0.32% and 1.44%. (6) Annualized operating expenses of funds at Dec. 31, 2002. The Fund has a stepped fee schedule. As a result, the Fund's management fee generally decreases as fund assets increase. (7) Expenses are based on the Portfolio's most recent fiscal year. Management fees include the Subadvisory fee paid by the Advisor (Calvert Asset Management Company, Inc.) and the administrative fee paid by the Portfolio to Calvert Administrative Services Company, an affiliate of the Advisor. (8) The Total ratio of expenses to average net assets excludes expense reductions and fee waivers. From time to time, the Fund's investment advisor may, at its discretion, reduce or waive its fees or reimburse the Fund for certain of its expenses in order to reduce expense ratios. The Fund's investment advisor may cease these waivers or reimbursements at any time. With fee waivers and expense reimbursements, "Other expenses" and "Gross total annual expenses" would be 0.08% and 1.13% for Evergreen VA Capital Growth Fund - Class 2. (9) The Fund administration fee is paid indirectly through the management fee. (10) The Fund's Class 2 distribution plan or "Rule 12b-1 plan" is described in the Fund's prospectus. (11) The manager has agreed in advance to reduce its fee to reflect reduced services resulting from the Fund's investment in a Franklin Templeton money fund for cash management. This reduction is required by the Fund's Board of Trustees and an exemptive order of the Securities and Exchange Commission. (12) Goldman Sachs Asset Management, L.P. and Goldman Sachs Asset Management International, the investment advisers to the funds, have voluntarily agreed to reduce or limit certain "Other expenses" of such funds (excluding management fees, transfer agent fees, taxes, interest, brokerage fees, litigation, indemnification, shareholder meeting and other extraordinary expenses) to the extent that such expenses exceed 0.24% and 0.29% of the average daily net assets of the CORE(SM) US. Equity, and Mid Cap Value Fund, respectively. There were no expense reductions and limitations for Mid Cap Value or CORE(SM) U.S. Equity for the period ended Dec. 31, 2002. The expense reductions or limitations may be discontinued or modified by the investment adviser at their discretion at any time. CORE(SM) is a service mark of Goldman, Sachs & Co. (13) The Fund's actual "Other expenses" and "Gross total annual expenses" were lower than the figures shown, because their custodian fees were reduced under an expense offset arrangement. (14) Effective June 1, 2002, INVESCO is entitled to reimbursement from the Fund for fees and expenses absorbed pursuant to a voluntary expense limitation commitment between INVESCO and the Fund, if such reimbursements do not cause the Fund to exceed expense limitations and the reimbursement is made within three years after INVESCO incurred the expense. The voluntary expense limitations may be changed at any time following consultation with the Board of Directors. (15) Expenses are based upon expenses for the fiscal year ended Dec. 31, 2002. All expenses are shown without the effect of expense offset arrangements. (16) The Investment Manager of the Portfolios has voluntarily agreed, for the year ended Dec. 31, 2002, to reduce its fees and, if necessary, reimburse the Portfolio's expenses to the extent that annualized operating expenses exceed 1.25% of the respective Portfolio's average net assets. After fee waivers and expense reimbursements "Other expense" and "Gross total annual expenses" would be 0.25% and 1.25% for Lazard Retirement International Equity Portfolio. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 9 (17) Each series has adopted a distribution plan under Rule 12b-1 that permits it to pay marketing and other fees to support the sales and distribution of service class shares (these fees are referred to as distribution fees). (18) Each series has an expense offset arrangement that reduces the series' custodian fee based upon the amount of cash maintained by the series with its custodian and dividend disbursing agent. Each series may enter into other similar arrangements and directed brokerage arrangements, which would also have the effect of reducing the series' expenses. "Other expenses" do not take into account these fee reductions, and are therefore higher than the actual expenses of the series. Had these fee reductions been taken into account, "Gross total annual expenses" would be lower for certain series and would equal: 1.12% for Investors Growth Stock Series, 1.29% for New Discovery Series and 1.18% for Utilities Series. (19) The Portfolio's expense figures are based on actual expenses for the fiscal year ending Dec. 31, 2002 before fee waivers and expense reimbursements. The expenses reflect the contractual expense limitation in effect through Dec. 31, 2003 under which Pioneer has agreed not to impose all or a portion of its management fee and, if necessary, to limit other ordinary operating expense to the extent required to reduce Class I expenses to 1.25% of the average daily net assets attributable to Class I shares; the portion of portfolio expenses attributable to Class II shares will be reduced only to the extent such expenses are reduced for Class I shares. After the expense limitation Management fees would have been 0.20%. (20) As compensation for its advisory services, the fund pays Strong a monthly management fee at an annual rate of 0.75% of the fund's average daily net asset value. Strong has voluntarily agreed to waive the management fee and/or absorb the Fund's other expenses. Strong has no current intention to, but may in the future, discontinue or modify any fee waivers or expense absorptions after any appropriate notice to the Fund's shareholders. After fee waivers and expense reimbursements "Other expenses" and "Gross total annual expenses" would be 0.38% and 1.38% for Strong Opportunity Fund II - Advisor Class. (21) Figures in "Management fees," "12b-1 fees," "Other expenses," and "Gross total annual expenses" are based on actual expenses for the fiscal year ended Dec. 31, 2002. Liberty Wanger Asset Management, L.P. will reimburse the Fund if its annual ordinary operating expenses exceed 2.00% of average daily net assets. This commitment expires on July 31, 2003. (22) Other expenses have been adjusted as necessary from amounts incurred during the Funds' most recent fiscal year to reflect current fees and expenses. Other expenses may include expenses payable to affiliates of Wells Fargo & Company. The adviser has committed through April 30, 2004 to waive fees and/or reimburse the expenses to the extent necessary to maintain the Fund's net operating expense ratio as follows. After fee waivers and expense reimbursements "Other expenses" and "Gross total annual expenses" would be 0.20% and 1.00% for Wells Fargo VT Asset Allocation Fund, 0% and 1.00% for Wells Fargo VT International Equity Fund and 0.20% and 1.20% for Wells Fargo VT Small Cap Growth Fund. EXAMPLES THESE EXAMPLES ARE INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN THESE CONTRACTS WITH THE COST OF INVESTING IN OTHER VARIABLE ANNUITY CONTRACTS. THESE COSTS INCLUDE YOUR TRANSACTION EXPENSES, CONTRACT ADMINISTRATIVE CHARGES*, VARIABLE ACCOUNT ANNUAL EXPENSES AND FUND FEES AND EXPENSES. THESE EXAMPLES ASSUME THAT YOU INVEST $10,000 IN THE CONTRACT FOR THE TIME PERIODS INDICATED. THESE EXAMPLES ALSO ASSUME THAT YOUR INVESTMENT HAS A 5% RETURN EACH YEAR. MAXIMUM EXPENSES. These examples assume the most expensive combination of contract features and benefits and the maximum fees and expense of any of the funds. They assume that you select both the optional MAV and EEP. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
IF YOU SURRENDER YOUR CONTRACT AT THE END OF THE APPLICABLE TIME PERIOD: NONQUALIFIED ANNUITY 1 YEAR 3 YEARS 5 YEARS 10 YEARS RAVA ADVANTAGE With a ten-year surrender charge schedule $ 1,290.46 $ 2,272.79 $ 3,156.99 $ 5,125.73 RAVA ADVANTAGE With a seven-year surrender charge schedule 1,190.46 2,172.79 2,956.99 4,925.73 RAVA SELECT 1,217.22 2,248.98 2,577.19 5,132.27 RAVA SELECT - TEXAS 1,317.22 2,148.98 2,577.19 5,132.27 IF YOU DO NOT SURRENDER YOUR CONTRACT OR IF YOU SELECT AN ANNUITY PAYOUT PLAN AT THE END OF THE APPLICABLE TIME PERIOD: NONQUALIFIED ANNUITY 1 YEAR 3 YEARS 5 YEARS 10 YEARS RAVA ADVANTAGE With a ten-year surrender charge schedule $ 490.46 $ 1,472.79 $ 2,456.99 $ 4,925.73 RAVA ADVANTAGE With a seven-year surrender charge schedule 490.46 1,472.79 2,456.99 4,925.73 RAVA SELECT 517.22 1,548.98 2,577.19 5,132.27 RAVA SELECT - TEXAS 517.22 1,548.98 2,577.19 5,132.27
IF YOU SURRENDER YOUR CONTRACT AT THE END OF THE APPLICABLE TIME PERIOD: QUALIFIED ANNUITY 1 YEAR 3 YEARS 5 YEARS 10 YEARS RAVA ADVANTAGE With a ten-year surrender charge schedule $ 1,269.96 $ 2,214.13 $ 3,063.97 $ 4,963.66 RAVA ADVANTAGE With a seven-year surrender charge schedule 1,169.96 2,114.13 2,863.97 4,763.66 RAVA SELECT 1,196.72 2,190.63 2,485.21 4,974.50 RAVA SELECT - TEXAS 1,296.72 2,090.63 2,485.21 4,974.50 IF YOU DO NOT SURRENDER YOUR CONTRACT OR IF YOU SELECT AN ANNUITY PAYOUT PLAN AT THE END OF THE APPLICABLE TIME PERIOD: QUALIFIED ANNUITY 1 YEAR 3 YEARS 5 YEARS 10 YEARS RAVA ADVANTAGE With a ten-year surrender charge schedule $ 469.96 $ 1,414.13 $ 2,363.97 $ 4,763.66 RAVA ADVANTAGE With a seven-year surrender charge schedule 469.96 1,414.13 2,363.97 4,763.66 RAVA SELECT 496.72 1,490.63 2,485.21 4,974.50 RAVA SELECT - TEXAS 496.72 1,490.63 2,485.21 4,974.50
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 10 MINIMUM EXPENSES. These examples assume the least expensive combination of contract features and benefits and the minimum fees and expenses of any of the funds. They assume that you do not select any optional benefits. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
IF YOU SURRENDER YOUR CONTRACT AT THE END OF THE APPLICABLE TIME PERIOD: NONQUALIFIED ANNUITY 1 YEAR 3 YEARS 5 YEARS 10 YEARS RAVA ADVANTAGE With a ten-year surrender charge schedule $ 972.71 $ 1,335.28 $ 1,621.97 $ 2,205.02 RAVA ADVANTAGE With a seven-year surrender charge schedule 872.71 1,235.28 1,421.97 2,005.02 RAVA SELECT 899.47 1,316.56 1,059.10 2,287.21 RAVA SELECT - TEXAS 999.47 1,216.56 1,059.10 2,287.21 IF YOU DO NOT SURRENDER YOUR CONTRACT OR IF YOU SELECT AN ANNUITY PAYOUT PLAN AT THE END OF THE APPLICABLE TIME PERIOD: NONQUALIFIED ANNUITY 1 YEAR 3 YEARS 5 YEARS 10 YEARS RAVA ADVANTAGE With a ten-year surrender charge schedule $ 172.71 $ 535.28 $ 921.97 $ 2,005.02 RAVA ADVANTAGE With a seven-year surrender charge schedule 172.71 535.28 921.97 2,005.02 RAVA SELECT 199.47 616.56 1,059.10 2,287.21 RAVA SELECT - TEXAS 199.47 616.56 1,059.10 2,287.21
IF YOU SURRENDER YOUR CONTRACT AT THE END OF THE APPLICABLE TIME PERIOD: QUALIFIED ANNUITY 1 YEAR 3 YEARS 5 YEARS 10 YEARS RAVA ADVANTAGE With a ten-year surrender charge schedule $ 952.21 $ 1,272.70 $ 1,515.87 $ 1,983.84 RAVA ADVANTAGE With a seven-year surrender charge schedule 852.21 1,172.70 1,315.87 1,783.84 RAVA SELECT 878.97 1,254.32 954.15 2,071.62 RAVA SELECT - TEXAS 978.97 1,154.32 954.15 2,071.62 IF YOU DO NOT SURRENDER YOUR CONTRACT OR IF YOU SELECT AN ANNUITY PAYOUT PLAN AT THE END OF THE APPLICABLE TIME PERIOD: QUALIFIED ANNUITY 1 YEAR 3 YEARS 5 YEARS 10 YEARS RAVA ADVANTAGE With a ten-year surrender charge schedule $ 152.21 $ 472.70 $ 815.87 $ 1,783.84 RAVA ADVANTAGE With a seven-year surrender charge schedule 152.21 472.70 815.87 1,783.84 RAVA SELECT 178.97 554.32 954.15 2,071.62 RAVA SELECT - TEXAS 178.97 554.32 954.15 2,071.62
* In these examples, the $30 contract administrative charge is approximated as a .045% charge for RAVA Advantage, a .056% charge for RAVA Select and a .056% for RAVA Select - Texas. These percentages were determined by dividing the total amount of the contract administrative charges collected during the year that are attributable to each contract by the total average net assets that are attributable to that contract. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 11 CONDENSED FINANCIAL INFORMATION (UNAUDITED) The following tables give per-unit information about the financial history of each subaccount.
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ----------------------------------------------------------------------------------------------------------------------- SUBACCOUNT BC1(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - BLUE CHIP ADVANTAGE FUND) Accumulation unit value at beginning of period $ 0.81 $ 0.98 $ 1.11 $ 1.00 Accumulation unit value at end of period $ 0.62 $ 0.81 $ 0.98 $ 1.11 Number of accumulation units outstanding at end of period (000 omitted) 44,110 49,897 43,161 8,145 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT BC2(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - BLUE CHIP ADVANTAGE FUND) Accumulation unit value at beginning of period $ 0.82 $ 0.99 $ 1.11 $ 1.00 Accumulation unit value at end of period $ 0.63 $ 0.82 $ 0.99 $ 1.11 Number of accumulation units outstanding at end of period (000 omitted) 39,019 41,083 32,624 7,503 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT BD1(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - BOND FUND) Accumulation unit value at beginning of period $ 1.13 $ 1.06 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.18 $ 1.13 $ 1.06 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 159,405 106,760 43,920 11,675 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT BD2(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - BOND FUND) Accumulation unit value at beginning of period $ 1.13 $ 1.06 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.19 $ 1.13 $ 1.06 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 154,530 83,968 30,783 7,186 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT CR1(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - CAPITAL RESOURCE FUND) Accumulation unit value at beginning of period $ 0.76 $ 0.93 $ 1.14 $ 1.00 Accumulation unit value at end of period $ 0.58 $ 0.76 $ 0.93 $ 1.14 Number of accumulation units outstanding at end of period (000 omitted) 34,956 26,779 22,159 3,227 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT CR2(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - CAPITAL RESOURCE FUND) Accumulation unit value at beginning of period $ 0.76 $ 0.93 $ 1.14 $ 1.00 Accumulation unit value at end of period $ 0.59 $ 0.76 $ 0.93 $ 1.14 Number of accumulation units outstanding at end of period (000 omitted) 52,124 26,327 24,003 5,333 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT CM1(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND) Accumulation unit value at beginning of period $ 1.09 $ 1.06 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.09 $ 1.09 $ 1.06 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 228,237 265,455 203,922 87,424 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% Simple yield(2) (0.15%) 0.66% -- -- Compound yield(2) (0.15%) 0.66% -- -- SUBACCOUNT CM2(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND) Accumulation unit value at beginning of period $ 1.09 $ 1.06 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.10 $ 1.09 $ 1.06 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 255,251 243,870 171,785 65,522 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% Simple yield(2) 0.03% 0.83% -- -- Compound yield(2) 0.03% 0.83% -- -- SUBACCOUNT DE1(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND) Accumulation unit value at beginning of period $ 1.02 $ 1.01 $ 1.03 $ 1.00 Accumulation unit value at end of period $ 0.82 $ 1.02 $ 1.01 $ 1.03 Number of accumulation units outstanding at end of period (000 omitted) 67,958 41,299 14,227 3,441 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95%
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 12
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ----------------------------------------------------------------------------------------------------------------------- SUBACCOUNT DE2(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND) Accumulation unit value at beginning of period $ 1.02 $ 1.01 $ 1.03 $ 1.00 Accumulation unit value at end of period $ 0.82 $ 1.02 $ 1.01 $ 1.03 Number of accumulation units outstanding at end of period (000 omitted) 86,442 43,328 12,124 3,149 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT EM1(3) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - EMERGING MARKETS FUND) Accumulation unit value at beginning of period $ 0.72 $ 0.74 $ 1.00 -- Accumulation unit value at end of period $ 0.67 $ 0.72 $ 0.74 -- Number of accumulation units outstanding at end of period (000 omitted) 3,888 1,542 693 -- Ratio of operating expense to average net assets 0.95% 0.95% 0.95% -- SUBACCOUNT EM2(3) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - EMERGING MARKETS FUND) Accumulation unit value at beginning of period $ 0.72 $ 0.74 $ 1.00 -- Accumulation unit value at end of period $ 0.68 $ 0.72 $ 0.74 -- Number of accumulation units outstanding at end of period (000 omitted) 4,750 1,789 906 -- Ratio of operating expense to average net assets 0.75% 0.75% 0.75% -- SUBACCOUNT ES1(4) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - EQUITY SELECT FUND) Accumulation unit value at beginning of period $ 0.99 $ 1.00 -- -- Accumulation unit value at end of period $ 0.85 $ 0.99 -- -- Number of accumulation units outstanding at end of period (000 omitted) 12,145 2,238 -- -- Ratio of operating expense to average net assets 0.95% 0.95% -- -- SUBACCOUNT ES2(4) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - EQUITY SELECT FUND) Accumulation unit value at beginning of period $ 1.00 $ 1.00 -- -- Accumulation unit value at end of period $ 0.85 $ 1.00 -- -- Number of accumulation units outstanding at end of period (000 omitted) 16,388 2,489 -- -- Ratio of operating expense to average net assets 0.75% 0.75% -- -- SUBACCOUNT EI1(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - EXTRA INCOME FUND) Accumulation unit value at beginning of period $ 0.94 $ 0.91 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 0.87 $ 0.94 $ 0.91 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 122,784 88,813 52,655 10,137 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT EI2(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - EXTRA INCOME FUND) Accumulation unit value at beginning of period $ 0.95 $ 0.91 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 0.88 $ 0.95 $ 0.91 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 93,845 58,348 31,722 7,774 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT FI1(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - FEDERAL INCOME FUND) Accumulation unit value at beginning of period $ 1.13 $ 1.08 $ 1.00 $ 1.00 Accumulation unit value at end of period $ 1.19 $ 1.13 $ 1.08 $ 1.00 Number of accumulation units outstanding at end of period (000 omitted) 116,147 56,966 24,654 12,796 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT FI2(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - FEDERAL INCOME FUND) Accumulation unit value at beginning of period $ 1.14 $ 1.08 $ 1.00 $ 1.00 Accumulation unit value at end of period $ 1.20 $ 1.14 $ 1.08 $ 1.00 Number of accumulation units outstanding at end of period (000 omitted) 124,866 50,510 16,258 11,135 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT GB1(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - GLOBAL BOND FUND) Accumulation unit value at beginning of period $ 1.03 $ 1.02 $ 1.00 $ 1.00 Accumulation unit value at end of period $ 1.17 $ 1.03 $ 1.02 $ 1.00 Number of accumulation units outstanding at end of period (000 omitted) 36,626 23,970 14,137 2,368 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT GB2(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - GLOBAL BOND FUND) Accumulation unit value at beginning of period $ 1.03 $ 1.03 $ 1.00 $ 1.00 Accumulation unit value at end of period $ 1.18 $ 1.03 $ 1.03 $ 1.00 Number of accumulation units outstanding at end of period (000 omitted) 31,133 16,572 8,968 1,552 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75%
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 13
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ----------------------------------------------------------------------------------------------------------------------- SUBACCOUNT GR1(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - GROWTH FUND) Accumulation unit value at beginning of period $ 0.64 $ 0.94 $ 1.18 $ 1.00 Accumulation unit value at end of period $ 0.47 $ 0.64 $ 0.94 $ 1.18 Number of accumulation units outstanding at end of period (000 omitted) 118,986 130,764 106,410 13,813 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT GR2(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - GROWTH FUND) Accumulation unit value at beginning of period $ 0.65 $ 0.95 $ 1.18 $ 1.00 Accumulation unit value at end of period $ 0.48 $ 0.65 $ 0.95 $ 1.18 Number of accumulation units outstanding at end of period (000 omitted) 135,693 129,186 97,754 16,891 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT IE1(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - INTERNATIONAL FUND) Accumulation unit value at beginning of period $ 0.67 $ 0.95 $ 1.27 $ 1.00 Accumulation unit value at end of period $ 0.54 $ 0.67 $ 0.95 $ 1.27 Number of accumulation units outstanding at end of period (000 omitted) 19,189 18,664 15,670 2,173 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT IE2(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - INTERNATIONAL FUND) Accumulation unit value at beginning of period $ 0.67 $ 0.95 $ 1.27 $ 1.00 Accumulation unit value at end of period $ 0.55 $ 0.67 $ 0.95 $ 1.27 Number of accumulation units outstanding at end of period (000 omitted) 20,012 15,821 13,967 2,575 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT MF1(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - MANAGED FUND) Accumulation unit value at beginning of period $ 0.93 $ 1.05 $ 1.09 $ 1.00 Accumulation unit value at end of period $ 0.80 $ 0.93 $ 1.05 $ 1.09 Number of accumulation units outstanding at end of period (000 omitted) 64,613 53,096 39,810 6,539 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT MF2(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - MANAGED FUND) Accumulation unit value at beginning of period $ 0.94 $ 1.05 $ 1.09 $ 1.00 Accumulation unit value at end of period $ 0.81 $ 0.94 $ 1.05 $ 1.09 Number of accumulation units outstanding at end of period (000 omitted) 64,273 37,760 28,348 5,220 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT ND1(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)) Accumulation unit value at beginning of period $ 0.88 $ 1.07 $ 1.19 $ 1.00 Accumulation unit value at end of period $ 0.68 $ 0.88 $ 1.07 $ 1.19 Number of accumulation units outstanding at end of period (000 omitted) 347,841 307,320 219,316 32,483 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT ND2(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)) Accumulation unit value at beginning of period $ 0.89 $ 1.07 $ 1.19 $ 1.00 Accumulation unit value at end of period $ 0.69 $ 0.89 $ 1.07 $ 1.19 Number of accumulation units outstanding at end of period (000 omitted) 373,715 276,054 177,036 31,537 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT SV1(5) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - PARTNERS SMALL CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.07 $ 1.00 -- -- Accumulation unit value at end of period $ 0.93 $ 1.07 -- -- Number of accumulation units outstanding at end of period (000 omitted) 28,099 6,314 -- -- Ratio of operating expense to average net assets 0.95% 0.95% -- -- SUBACCOUNT SV2(5) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - PARTNERS SMALL CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.07 $ 1.00 -- -- Accumulation unit value at end of period $ 0.93 $ 1.07 -- -- Number of accumulation units outstanding at end of period (000 omitted) 43,199 6,885 -- -- Ratio of operating expense to average net assets 0.75% 0.75% -- -- SUBACCOUNT IV1(3) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - S&P 500 INDEX FUND) Accumulation unit value at beginning of period $ 0.79 $ 0.91 $ 1.00 -- Accumulation unit value at end of period $ 0.60 $ 0.79 $ 0.91 -- Number of accumulation units outstanding at end of period (000 omitted) 65,011 40,575 14,084 -- Ratio of operating expense to average net assets 0.95% 0.95% 0.95% --
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 14
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ----------------------------------------------------------------------------------------------------------------------- SUBACCOUNT IV2(3) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - S&P 500 INDEX FUND) Accumulation unit value at beginning of period $ 0.79 $ 0.91 $ 1.00 -- Accumulation unit value at end of period $ 0.61 $ 0.79 $ 0.91 -- Number of accumulation units outstanding at end of period (000 omitted) 64,771 35,957 9,812 -- Ratio of operating expense to average net assets 0.75% 0.75% 0.75% -- SUBACCOUNT SC1(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND) Accumulation unit value at beginning of period $ 1.07 $ 1.16 $ 1.12 $ 1.00 Accumulation unit value at end of period $ 0.88 $ 1.07 $ 1.16 $ 1.12 Number of accumulation units outstanding at end of period (000 omitted) 29,341 24,346 16,349 3,029 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT SC2(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND) Accumulation unit value at beginning of period $ 1.08 $ 1.16 $ 1.12 $ 1.00 Accumulation unit value at end of period $ 0.89 $ 1.08 $ 1.16 $ 1.12 Number of accumulation units outstanding at end of period (000 omitted) 29,202 22,792 14,830 2,970 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT ST1(6) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - STOCK FUND) Accumulation unit value at beginning of period $ 0.96 $ 1.00 -- -- Accumulation unit value at end of period $ 0.76 $ 0.96 -- -- Number of accumulation units outstanding at end of period (000 omitted) 2,921 517 -- -- Ratio of operating expense to average net assets 0.95% 0.95% -- -- SUBACCOUNT ST2(6) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - STOCK FUND) Accumulation unit value at beginning of period $ 0.97 $ 1.00 -- -- Accumulation unit value at end of period $ 0.76 $ 0.97 -- -- Number of accumulation units outstanding at end of period (000 omitted) 3,288 628 -- -- Ratio of operating expense to average net assets 0.75% 0.75% -- -- SUBACCOUNT SA1(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND) Accumulation unit value at beginning of period $ 0.81 $ 1.21 $ 1.51 $ 1.00 Accumulation unit value at end of period $ 0.54 $ 0.81 $ 1.21 $ 1.51 Number of accumulation units outstanding at end of period (000 omitted) 55,183 65,574 58,414 3,901 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT SA2(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND) Accumulation unit value at beginning of period $ 0.81 $ 1.22 $ 1.51 $ 1.00 Accumulation unit value at end of period $ 0.55 $ 0.81 $ 1.22 $ 1.51 Number of accumulation units outstanding at end of period (000 omitted) 58,958 58,748 46,978 4,470 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT 1AC(6) (INVESTING IN SHARES OF AIM V.I. CAPITAL APPRECIATION FUND, SERIES II SHARES) Accumulation unit value at beginning of period $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 0.73 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 7,624 1,711 -- -- Ratio of operating expense to average net assets 0.95% 0.95% -- -- SUBACCOUNT 2AC(6) (INVESTING IN SHARES OF AIM V.I. CAPITAL APPRECIATION FUND, SERIES II SHARES) Accumulation unit value at beginning of period $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 0.73 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 11,313 1,710 -- -- Ratio of operating expense to average net assets 0.75% 0.75% -- -- SUBACCOUNT 1AD(6) (INVESTING IN SHARES OF AIM V.I. CAPITAL DEVELOPMENT FUND, SERIES II SHARES) Accumulation unit value at beginning of period $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 0.76 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 4,808 1,224 -- -- Ratio of operating expense to average net assets 0.95% 0.95% -- -- SUBACCOUNT 2AD(6) (INVESTING IN SHARES OF AIM V.I. CAPITAL DEVELOPMENT FUND, SERIES II SHARES) Accumulation unit value at beginning of period $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 0.76 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 6,981 1,459 -- -- Ratio of operating expense to average net assets 0.75% 0.75% -- --
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 15
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ----------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 1AL(6) (INVESTING IN SHARES OF ALLIANCEBERNSTEIN VP GROWTH AND INCOME PORTFOLIO (CLASS B)) Accumulation unit value at beginning of period $ 0.96 $ 1.00 -- -- Accumulation unit value at end of period $ 0.74 $ 0.96 -- -- Number of accumulation units outstanding at end of period (000 omitted) 29,770 4,363 -- -- Ratio of operating expense to average net assets 0.95% 0.95% -- -- SUBACCOUNT 2AL(6) (INVESTING IN SHARES OF ALLIANCEBERNSTEIN VP GROWTH AND INCOME PORTFOLIO (CLASS B)) Accumulation unit value at beginning of period $ 0.96 $ 1.00 -- -- Accumulation unit value at end of period $ 0.74 $ 0.96 -- -- Number of accumulation units outstanding at end of period (000 omitted) 43,189 5,550 -- -- Ratio of operating expense to average net assets 0.75% 0.75% -- -- SUBACCOUNT 1AB(6) (INVESTING IN SHARES OF ALLIANCEBERNSTEIN VP INTERNATIONAL VALUE PORTFOLIO (CLASS B)) Accumulation unit value at beginning of period $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 0.92 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 9,270 790 -- -- Ratio of operating expense to average net assets 0.95% 0.95% -- -- SUBACCOUNT 2AB(6) (INVESTING IN SHARES OF ALLIANCEBERNSTEIN VP INTERNATIONAL VALUE PORTFOLIO (CLASS B)) Accumulation unit value at beginning of period $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 0.92 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 12,313 805 -- -- Ratio of operating expense to average net assets 0.75% 0.75% -- -- SUBACCOUNT 1AI(6) (INVESTING IN SHARES OF AMERICAN CENTURY(R) VP INTERNATIONAL, CLASS II) Accumulation unit value at beginning of period $ 0.93 $ 1.00 -- -- Accumulation unit value at end of period $ 0.73 $ 0.93 -- -- Number of accumulation units outstanding at end of period (000 omitted) 8,200 1,927 -- -- Ratio of operating expense to average net assets 0.95% 0.95% -- -- SUBACCOUNT 2AI(6) (INVESTING IN SHARES OF AMERICAN CENTURY(R) VP INTERNATIONAL, CLASS II) Accumulation unit value at beginning of period $ 0.93 $ 1.00 -- -- Accumulation unit value at end of period $ 0.73 $ 0.93 -- -- Number of accumulation units outstanding at end of period (000 omitted) 11,378 1,950 -- -- Ratio of operating expense to average net assets 0.75% 0.75% -- -- SUBACCOUNT 1AV(6) (INVESTING IN SHARES OF AMERICAN CENTURY(R) VP VALUE, CLASS II) Accumulation unit value at beginning of period $ 1.04 $ 1.00 -- -- Accumulation unit value at end of period $ 0.89 $ 1.04 -- -- Number of accumulation units outstanding at end of period (000 omitted) 30,523 7,298 -- -- Ratio of operating expense to average net assets 0.95% 0.95% -- -- SUBACCOUNT 2AV(6) (INVESTING IN SHARES OF AMERICAN CENTURY(R) VP VALUE, CLASS II) Accumulation unit value at beginning of period $ 1.04 $ 1.00 -- -- Accumulation unit value at end of period $ 0.90 $ 1.04 -- -- Number of accumulation units outstanding at end of period (000 omitted) 42,497 7,356 -- -- Ratio of operating expense to average net assets 0.75% 0.75% -- -- SUBACCOUNT 1SR(3) (INVESTING IN SHARES OF CALVERT VARIABLE SERIES, INC. SOCIAL BALANCED PORTFOLIO) Accumulation unit value at beginning of period $ 0.89 $ 0.96 $ 1.00 -- Accumulation unit value at end of period $ 0.77 $ 0.89 $ 0.96 -- Number of accumulation units outstanding at end of period (000 omitted) 9,832 6,090 1,693 -- Ratio of operating expense to average net assets 0.95% 0.95% 0.95% -- SUBACCOUNT 2SR(3) (INVESTING IN SHARES OF CALVERT VARIABLE SERIES, INC. SOCIAL BALANCED PORTFOLIO) Accumulation unit value at beginning of period $ 0.89 $ 0.96 $ 1.00 -- Accumulation unit value at end of period $ 0.78 $ 0.89 $ 0.96 -- Number of accumulation units outstanding at end of period (000 omitted) 9,520 4,490 1,283 -- Ratio of operating expense to average net assets 0.75% 0.75% 0.75% -- SUBACCOUNT 1CG(6) (INVESTING IN SHARES OF EVERGREEN VA CAPITAL GROWTH FUND - CLASS 2) Accumulation unit value at beginning of period $ 0.95 $ 1.00 -- -- Accumulation unit value at end of period $ 0.73 $ 0.95 -- -- Number of accumulation units outstanding at end of period (000 omitted) 4,440 1,015 -- -- Ratio of operating expense to average net assets 0.95% 0.95% -- --
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 16
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ----------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 2CG(6) (INVESTING IN SHARES OF EVERGREEN VA CAPITAL GROWTH FUND - CLASS 2) Accumulation unit value at beginning of period $ 0.95 $ 1.00 -- -- Accumulation unit value at end of period $ 0.73 $ 0.95 -- -- Number of accumulation units outstanding at end of period (000 omitted) 6,494 1,570 -- -- Ratio of operating expense to average net assets 0.75% 0.75% -- -- SUBACCOUNT 1FG(6) (INVESTING IN SHARES OF FIDELITY(R) VIP GROWTH & INCOME PORTFOLIO SERVICE CLASS 2) Accumulation unit value at beginning of period $ 1.00 $ 1.00 -- -- Accumulation unit value at end of period $ 0.82 $ 1.00 -- -- Number of accumulation units outstanding at end of period (000 omitted) 36,320 8,177 -- -- Ratio of operating expense to average net assets 0.95% 0.95% -- -- SUBACCOUNT 2FG(6) (INVESTING IN SHARES OF FIDELITY(R) VIP GROWTH & INCOME PORTFOLIO SERVICE CLASS 2) Accumulation unit value at beginning of period $ 1.00 $ 1.00 -- -- Accumulation unit value at end of period $ 0.82 $ 1.00 -- -- Number of accumulation units outstanding at end of period (000 omitted) 48,686 6,363 -- -- Ratio of operating expense to average net assets 0.75% 0.75% -- -- SUBACCOUNT 1FM(6) (INVESTING IN SHARES OF FIDELITY(R) VIP MID CAP PORTFOLIO SERVICE CLASS 2) Accumulation unit value at beginning of period $ 1.04 $ 1.00 -- -- Accumulation unit value at end of period $ 0.93 $ 1.04 -- -- Number of accumulation units outstanding at end of period (000 omitted) 35,541 6,689 -- -- Ratio of operating expense to average net assets 0.95% 0.95% -- -- SUBACCOUNT 2FM(6) (INVESTING IN SHARES OF FIDELITY(R) VIP MID CAP PORTFOLIO SERVICE CLASS 2) Accumulation unit value at beginning of period $ 1.04 $ 1.00 -- -- Accumulation unit value at end of period $ 0.93 $ 1.04 -- -- Number of accumulation units outstanding at end of period (000 omitted) 50,458 6,903 -- -- Ratio of operating expense to average net assets 0.75% 0.75% -- -- SUBACCOUNT 1FO(6) (INVESTING IN SHARES OF FIDELITY(R) VIP OVERSEAS PORTFOLIO SERVICE CLASS 2) Accumulation unit value at beginning of period $ 0.94 $ 1.00 -- -- Accumulation unit value at end of period $ 0.74 $ 0.94 -- -- Number of accumulation units outstanding at end of period (000 omitted) 10,123 2,157 -- -- Ratio of operating expense to average net assets 0.95% 0.95% -- -- SUBACCOUNT 2FO(6) (INVESTING IN SHARES OF FIDELITY(R) VIP OVERSEAS PORTFOLIO SERVICE CLASS 2) Accumulation unit value at beginning of period $ 0.95 $ 1.00 -- -- Accumulation unit value at end of period $ 0.75 $ 0.95 -- -- Number of accumulation units outstanding at end of period (000 omitted) 13,157 2,147 -- -- Ratio of operating expense to average net assets 0.75% 0.75% -- -- SUBACCOUNT 1RE(1) (INVESTING IN SHARES OF FTVIPT FRANKLIN REAL ESTATE FUND - CLASS 2) Accumulation unit value at beginning of period $ 1.33 $ 1.25 $ 0.96 $ 1.00 Accumulation unit value at end of period $ 1.35 $ 1.33 $ 1.25 $ 0.96 Number of accumulation units outstanding at end of period (000 omitted) 44,591 19,803 6,181 683 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT 2RE(1) (INVESTING IN SHARES OF FTVIPT FRANKLIN REAL ESTATE FUND - CLASS 2) Accumulation unit value at beginning of period $ 1.34 $ 1.25 $ 0.96 $ 1.00 Accumulation unit value at end of period $ 1.36 $ 1.34 $ 1.25 $ 0.96 Number of accumulation units outstanding at end of period (000 omitted) 59,317 24,477 6,879 885 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT 1SI(1) (INVESTING IN SHARES OF FTVIPT FRANKLIN SMALL CAP VALUE SECURITIES FUND - CLASS 2) Accumulation unit value at beginning of period $ 1.34 $ 1.19 $ 0.96 $ 1.00 Accumulation unit value at end of period $ 1.21 $ 1.34 $ 1.19 $ 0.96 Number of accumulation units outstanding at end of period (000 omitted) 23,553 9,584 2,897 590 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT 2SI(1) (INVESTING IN SHARES OF FTVIPT FRANKLIN SMALL CAP VALUE SECURITIES FUND - CLASS 2) Accumulation unit value at beginning of period $ 1.35 $ 1.19 $ 0.96 $ 1.00 Accumulation unit value at end of period $ 1.21 $ 1.35 $ 1.19 $ 0.96 Number of accumulation units outstanding at end of period (000 omitted) 29,743 10,800 2,846 586 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75%
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 17
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ----------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 1MS(6) (INVESTING IN SHARES OF FTVIPT MUTUAL SHARES SECURITIES FUND - CLASS 2) Accumulation unit value at beginning of period $ 0.96 $ 1.00 -- -- Accumulation unit value at end of period $ 0.84 $ 0.96 -- -- Number of accumulation units outstanding at end of period (000 omitted) 9,151 1,114 -- -- Ratio of operating expense to average net assets 0.95% 0.95% -- -- SUBACCOUNT 2MS(6) (INVESTING IN SHARES OF FTVIPT MUTUAL SHARES SECURITIES FUND - CLASS 2) Accumulation unit value at beginning of period $ 0.97 $ 1.00 -- -- Accumulation unit value at end of period $ 0.85 $ 0.97 -- -- Number of accumulation units outstanding at end of period (000 omitted) 10,942 942 -- -- Ratio of operating expense to average net assets 0.75% 0.75% -- -- SUBACCOUNT 1UE(1) (INVESTING IN SHARES OF GOLDMAN SACHS VIT CORE(SM) U.S. EQUITY FUND) Accumulation unit value at beginning of period $ 0.86 $ 0.99 $ 1.10 $ 1.00 Accumulation unit value at end of period $ 0.67 $ 0.86 $ 0.99 $ 1.10 Number of accumulation units outstanding at end of period (000 omitted) 75,489 71,185 55,239 9,951 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT 2UE(1) (INVESTING IN SHARES OF GOLDMAN SACHS VIT CORE(SM) U.S. EQUITY FUND) Accumulation unit value at beginning of period $ 0.86 $ 0.99 $ 1.10 $ 1.00 Accumulation unit value at end of period $ 0.67 $ 0.86 $ 0.99 $ 1.10 Number of accumulation units outstanding at end of period (000 omitted) 71,820 60,343 42,626 8,981 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT 1MC(1) (INVESTING IN SHARES OF GOLDMAN SACHS VIT MID CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.37 $ 1.23 $ 0.95 $ 1.00 Accumulation unit value at end of period $ 1.29 $ 1.37 $ 1.23 $ 0.95 Number of accumulation units outstanding at end of period (000 omitted) 47,539 24,711 10,265 2,023 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT 2MC(1) (INVESTING IN SHARES OF GOLDMAN SACHS VIT MID CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.37 $ 1.23 $ 0.95 $ 1.00 Accumulation unit value at end of period $ 1.30 $ 1.37 $ 1.23 $ 0.95 Number of accumulation units outstanding at end of period (000 omitted) 56,079 23,748 7,622 1,634 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT 1ID(6) (INVESTING IN SHARES OF INVESCO VIF - DYNAMICS FUND) Accumulation unit value at beginning of period $ 0.96 $ 1.00 -- -- Accumulation unit value at end of period $ 0.65 $ 0.96 -- -- Number of accumulation units outstanding at end of period (000 omitted) 4,845 1,426 -- -- Ratio of operating expense to average net assets 0.95% 0.95% -- -- SUBACCOUNT 2ID(6) (INVESTING IN SHARES OF INVESCO VIF - DYNAMICS FUND) Accumulation unit value at beginning of period $ 0.96 $ 1.00 -- -- Accumulation unit value at end of period $ 0.65 $ 0.96 -- -- Number of accumulation units outstanding at end of period (000 omitted) 6,887 1,550 -- -- Ratio of operating expense to average net assets 0.75% 0.75% -- -- SUBACCOUNT 1FS(6) (INVESTING IN SHARES OF INVESCO VIF - FINANCIAL SERVICES FUND) Accumulation unit value at beginning of period $ 0.96 $ 1.00 -- -- Accumulation unit value at end of period $ 0.82 $ 0.96 -- -- Number of accumulation units outstanding at end of period (000 omitted) 3,709 901 -- -- Ratio of operating expense to average net assets 0.95% 0.95% -- -- SUBACCOUNT 2FS(6) (INVESTING IN SHARES OF INVESCO VIF - FINANCIAL SERVICES FUND) Accumulation unit value at beginning of period $ 0.97 $ 1.00 -- -- Accumulation unit value at end of period $ 0.82 $ 0.97 -- -- Number of accumulation units outstanding at end of period (000 omitted) 5,572 1,081 -- -- Ratio of operating expense to average net assets 0.75% 0.75% -- -- SUBACCOUNT 1TC(6) (INVESTING IN SHARES OF INVESCO VIF - TECHNOLOGY FUND) Accumulation unit value at beginning of period $ 0.91 $ 1.00 -- -- Accumulation unit value at end of period $ 0.48 $ 0.91 -- -- Number of accumulation units outstanding at end of period (000 omitted) 2,845 911 -- -- Ratio of operating expense to average net assets 0.95% 0.95% -- --
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 18
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ----------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 2TC(6) (INVESTING IN SHARES OF INVESCO VIF - TECHNOLOGY FUND) Accumulation unit value at beginning of period $ 0.91 $ 1.00 -- -- Accumulation unit value at end of period $ 0.48 $ 0.91 -- -- Number of accumulation units outstanding at end of period (000 omitted) 3,769 490 -- -- Ratio of operating expense to average net assets 0.75% 0.75% -- -- SUBACCOUNT 1TL(6) (INVESTING IN SHARES OF INVESCO VIF - TELECOMMUNICATIONS FUND) Accumulation unit value at beginning of period $ 0.84 $ 1.00 -- -- Accumulation unit value at end of period $ 0.41 $ 0.84 -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,604 614 -- -- Ratio of operating expense to average net assets 0.95% 0.95% -- -- SUBACCOUNT 2TL(6) (INVESTING IN SHARES OF INVESCO VIF - TELECOMMUNICATIONS FUND) Accumulation unit value at beginning of period $ 0.84 $ 1.00 -- -- Accumulation unit value at end of period $ 0.41 $ 0.84 -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,938 404 -- -- Ratio of operating expense to average net assets 0.75% 0.75% -- -- SUBACCOUNT 1GT(3) (INVESTING IN SHARES OF JANUS ASPEN SERIES GLOBAL TECHNOLOGY PORTFOLIO: SERVICE SHARES) Accumulation unit value at beginning of period $ 0.42 $ 0.68 $ 1.00 -- Accumulation unit value at end of period $ 0.25 $ 0.42 $ 0.68 -- Number of accumulation units outstanding at end of period (000 omitted) 31,354 34,050 22,949 -- Ratio of operating expense to average net assets 0.95% 0.95% 0.95% -- SUBACCOUNT 2GT(3) (INVESTING IN SHARES OF JANUS ASPEN SERIES GLOBAL TECHNOLOGY PORTFOLIO: SERVICE SHARES) Accumulation unit value at beginning of period $ 0.43 $ 0.68 $ 1.00 -- Accumulation unit value at end of period $ 0.25 $ 0.43 $ 0.68 -- Number of accumulation units outstanding at end of period (000 omitted) 37,200 34,767 20,288 -- Ratio of operating expense to average net assets 0.75% 0.75% 0.75% -- SUBACCOUNT 1IG(3) (INVESTING IN SHARES OF JANUS ASPEN SERIES INTERNATIONAL GROWTH PORTFOLIO: SERVICE SHARES) Accumulation unit value at beginning of period $ 0.61 $ 0.80 $ 1.00 -- Accumulation unit value at end of period $ 0.45 $ 0.61 $ 0.80 -- Number of accumulation units outstanding at end of period (000 omitted) 74,111 64,147 29,251 -- Ratio of operating expense to average net assets 0.95% 0.95% 0.95% -- SUBACCOUNT 2IG(3) (INVESTING IN SHARES OF JANUS ASPEN SERIES INTERNATIONAL GROWTH PORTFOLIO: SERVICE SHARES) Accumulation unit value at beginning of period $ 0.61 $ 0.80 $ 1.00 -- Accumulation unit value at end of period $ 0.45 $ 0.61 $ 0.80 -- Number of accumulation units outstanding at end of period (000 omitted) 81,189 60,527 25,763 -- Ratio of operating expense to average net assets 0.75% 0.75% 0.75% -- SUBACCOUNT 1IP(1) (INVESTING IN SHARES OF LAZARD RETIREMENT INTERNATIONAL EQUITY PORTFOLIO) Accumulation unit value at beginning of period $ 0.72 $ 0.96 $ 1.07 $ 1.00 Accumulation unit value at end of period $ 0.64 $ 0.72 $ 0.96 $ 1.07 Number of accumulation units outstanding at end of period (000 omitted) 28,853 19,727 10,774 2,504 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT 2IP(1) (INVESTING IN SHARES OF LAZARD RETIREMENT INTERNATIONAL EQUITY PORTFOLIO) Accumulation unit value at beginning of period $ 0.72 $ 0.96 $ 1.07 $ 1.00 Accumulation unit value at end of period $ 0.64 $ 0.72 $ 0.96 $ 1.07 Number of accumulation units outstanding at end of period (000 omitted) 29,532 15,860 7,958 1,981 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT 1MG(3) (INVESTING IN SHARES OF MFS(R) INVESTORS GROWTH STOCK SERIES - SERVICE CLASS) Accumulation unit value at beginning of period $ 0.67 $ 0.90 $ 1.00 -- Accumulation unit value at end of period $ 0.48 $ 0.67 $ 0.90 -- Number of accumulation units outstanding at end of period (000 omitted) 62,663 51,051 21,973 -- Ratio of operating expense to average net assets 0.95% 0.95% 0.95% -- SUBACCOUNT 2MG(3) (INVESTING IN SHARES OF MFS(R) INVESTORS GROWTH STOCK SERIES - SERVICE CLASS) Accumulation unit value at beginning of period $ 0.68 $ 0.91 $ 1.00 -- Accumulation unit value at end of period $ 0.48 $ 0.68 $ 0.91 -- Number of accumulation units outstanding at end of period (000 omitted) 69,576 50,212 19,521 -- Ratio of operating expense to average net assets 0.75% 0.75% 0.75% --
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 19
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ----------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 1MD(3) (INVESTING IN SHARES OF MFS(R) NEW DISCOVERY SERIES - SERVICE CLASS) Accumulation unit value at beginning of period $ 0.90 $ 0.96 $ 1.00 -- Accumulation unit value at end of period $ 0.61 $ 0.90 $ 0.96 -- Number of accumulation units outstanding at end of period (000 omitted) 53,383 36,822 15,060 -- Ratio of operating expense to average net assets 0.95% 0.95% 0.95% -- SUBACCOUNT 2MD(3) (INVESTING IN SHARES OF MFS(R) NEW DISCOVERY SERIES - SERVICE CLASS) Accumulation unit value at beginning of period $ 0.90 $ 0.96 $ 1.00 -- Accumulation unit value at end of period $ 0.61 $ 0.90 $ 0.96 -- Number of accumulation units outstanding at end of period (000 omitted) 59,272 34,072 12,308 -- Ratio of operating expense to average net assets 0.75% 0.75% 0.75% -- SUBACCOUNT 1UT(6) (INVESTING IN SHARES OF MFS(R) UTILITIES SERIES - SERVICE CLASS) Accumulation unit value at beginning of period $ 0.89 $ 1.00 -- -- Accumulation unit value at end of period $ 0.68 $ 0.89 -- -- Number of accumulation units outstanding at end of period (000 omitted) 7,093 2,778 -- -- Ratio of operating expense to average net assets 0.95% 0.95% -- -- SUBACCOUNT 2UT(6) (INVESTING IN SHARES OF MFS(R) UTILITIES SERIES - SERVICE CLASS) Accumulation unit value at beginning of period $ 0.89 $ 1.00 -- -- Accumulation unit value at end of period $ 0.68 $ 0.89 -- -- Number of accumulation units outstanding at end of period (000 omitted) 10,543 2,997 -- -- Ratio of operating expense to average net assets 0.75% 0.75% -- -- SUBACCOUNT 1PE(6) (INVESTING IN SHARES OF PIONEER EQUITY INCOME VCT PORTFOLIO - CLASS II SHARES) Accumulation unit value at beginning of period $ 0.97 $ 1.00 -- -- Accumulation unit value at end of period $ 0.81 $ 0.97 -- -- Number of accumulation units outstanding at end of period (000 omitted) 7,193 1,106 -- -- Ratio of operating expense to average net assets 0.95% 0.95% -- -- SUBACCOUNT 2PE(6) (INVESTING IN SHARES OF PIONEER EQUITY INCOME VCT PORTFOLIO - CLASS II SHARES) Accumulation unit value at beginning of period $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 0.81 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 11,651 1,316 -- -- Ratio of operating expense to average net assets 0.75% 0.75% -- -- SUBACCOUNT 1EU(6) (INVESTING IN SHARES OF PIONEER EUROPE VCT PORTFOLIO - CLASS II SHARES) Accumulation unit value at beginning of period $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 0.78 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 698 143 -- -- Ratio of operating expense to average net assets 0.95% 0.95% -- -- SUBACCOUNT 2EU(6) (INVESTING IN SHARES OF PIONEER EUROPE VCT PORTFOLIO - CLASS II SHARES) Accumulation unit value at beginning of period $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 0.78 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,312 121 -- -- Ratio of operating expense to average net assets 0.75% 0.75% -- -- SUBACCOUNT 1HS(6) (INVESTING IN SHARES OF PUTNAM VT HEALTH SCIENCES FUND - CLASS IB SHARES) Accumulation unit value at beginning of period $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 0.77 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 6,574 1,743 -- -- Ratio of operating expense to average net assets 0.95% 0.95% -- -- SUBACCOUNT 2HS(6) (INVESTING IN SHARES OF PUTNAM VT HEALTH SCIENCES FUND - CLASS IB SHARES) Accumulation unit value at beginning of period $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 0.78 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 11,416 2,137 -- -- Ratio of operating expense to average net assets 0.75% 0.75% -- -- SUBACCOUNT 1PI(6) (INVESTING IN SHARES OF PUTNAM VT INTERNATIONAL EQUITY FUND - CLASS IB SHARES) (PREVIOUSLY PUTNAM VT INTERNATIONAL GROWTH FUND - CLASS IB SHARES) Accumulation unit value at beginning of period $ 0.96 $ 1.00 -- -- Accumulation unit value at end of period $ 0.78 $ 0.96 -- -- Number of accumulation units outstanding at end of period (000 omitted) 15,138 2,180 -- -- Ratio of operating expense to average net assets 0.95% 0.95% -- --
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 20
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ----------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 2PI(6) (INVESTING IN SHARES OF PUTNAM VT INTERNATIONAL EQUITY FUND - CLASS IB SHARES) (PREVIOUSLY PUTNAM VT INTERNATIONAL GROWTH FUND - CLASS IB SHARES) Accumulation unit value at beginning of period $ 0.96 $ 1.00 -- -- Accumulation unit value at end of period $ 0.78 $ 0.96 -- -- Number of accumulation units outstanding at end of period (000 omitted) 20,773 2,460 -- -- Ratio of operating expense to average net assets 0.75% 0.75% -- -- SUBACCOUNT 1VS(1) (INVESTING IN SHARES OF PUTNAM VT VISTA FUND - CLASS IB SHARES) Accumulation unit value at beginning of period $ 0.85 $ 1.29 $ 1.36 $ 1.00 Accumulation unit value at end of period $ 0.58 $ 0.85 $ 1.29 $ 1.36 Number of accumulation units outstanding at end of period (000 omitted) 73,930 87,722 68,407 7,245 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT 2VS(1) (INVESTING IN SHARES OF PUTNAM VT VISTA FUND - CLASS IB SHARES) Accumulation unit value at beginning of period $ 0.85 $ 1.29 $ 1.36 $ 1.00 Accumulation unit value at end of period $ 0.59 $ 0.85 $ 1.29 $ 1.36 Number of accumulation units outstanding at end of period (000 omitted) 72,033 74,819 49,764 5,084 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT 1SO(6) (INVESTING IN SHARES OF STRONG OPPORTUNITY FUND II - ADVISOR CLASS) Accumulation unit value at beginning of period $ 0.99 $ 1.00 -- -- Accumulation unit value at end of period $ 0.72 $ 0.99 -- -- Number of accumulation units outstanding at end of period (000 omitted) 17,130 3,747 -- -- Ratio of operating expense to average net assets 0.95% 0.95% -- -- SUBACCOUNT 2SO(6) (INVESTING IN SHARES OF STRONG OPPORTUNITY FUND II - ADVISOR CLASS) Accumulation unit value at beginning of period $ 0.99 $ 1.00 -- -- Accumulation unit value at end of period $ 0.72 $ 0.99 -- -- Number of accumulation units outstanding at end of period (000 omitted) 25,397 3,701 -- -- Ratio of operating expense to average net assets 0.75% 0.75% -- -- SUBACCOUNT 1IT(1) (INVESTING IN SHARES OF WANGER INTERNATIONAL SMALL CAP) Accumulation unit value at beginning of period $ 0.84 $ 1.08 $ 1.51 $ 1.00 Accumulation unit value at end of period $ 0.72 $ 0.84 $ 1.08 $ 1.51 Number of accumulation units outstanding at end of period (000 omitted) 42,309 30,297 21,844 1,343 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT 2IT(1) (INVESTING IN SHARES OF WANGER INTERNATIONAL SMALL CAP) Accumulation unit value at beginning of period $ 0.85 $ 1.08 $ 1.51 $ 1.00 Accumulation unit value at end of period $ 0.72 $ 0.85 $ 1.08 $ 1.51 Number of accumulation units outstanding at end of period (000 omitted) 43,554 27,818 18,245 1,234 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT 1SP(1) (INVESTING IN SHARES OF WANGER U.S. SMALLER COMPANIES) Accumulation unit value at beginning of period $ 1.15 $ 1.05 $ 1.15 $ 1.00 Accumulation unit value at end of period $ 0.95 $ 1.15 $ 1.05 $ 1.15 Number of accumulation units outstanding at end of period (000 omitted) 72,853 46,456 29,881 2,723 Ratio of operating expense to average net assets 0.95% 0.95% 0.95% 0.95% SUBACCOUNT 2SP(1) (INVESTING IN SHARES OF WANGER U.S. SMALLER COMPANIES) Accumulation unit value at beginning of period $ 1.16 $ 1.05 $ 1.15 $ 1.00 Accumulation unit value at end of period $ 0.96 $ 1.16 $ 1.05 $ 1.15 Number of accumulation units outstanding at end of period (000 omitted) 78,311 40,791 23,813 2,476 Ratio of operating expense to average net assets 0.75% 0.75% 0.75% 0.75% SUBACCOUNT 1AA(4) (INVESTING IN SHARES OF WELLS FARGO VT ASSET ALLOCATION FUND) Accumulation unit value at beginning of period $ 0.97 $ 1.00 -- -- Accumulation unit value at end of period $ 0.84 $ 0.97 -- -- Number of accumulation units outstanding at end of period (000 omitted) 11,859 3,224 -- -- Ratio of operating expense to average net assets 0.95% 0.95% -- -- SUBACCOUNT 2AA(4) (INVESTING IN SHARES OF WELLS FARGO VT ASSET ALLOCATION FUND) Accumulation unit value at beginning of period $ 0.97 $ 1.00 -- -- Accumulation unit value at end of period $ 0.84 $ 0.97 -- -- Number of accumulation units outstanding at end of period (000 omitted) 14,864 3,799 -- -- Ratio of operating expense to average net assets 0.75% 0.75% -- --
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 21
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ----------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 1WI(4) (INVESTING IN SHARES OF WELLS FARGO VT INTERNATIONAL EQUITY FUND) Accumulation unit value at beginning of period $ 0.90 $ 1.00 -- -- Accumulation unit value at end of period $ 0.69 $ 0.90 -- -- Number of accumulation units outstanding at end of period (000 omitted) 2,781 1,031 -- -- Ratio of operating expense to average net assets 0.95% 0.95% -- -- SUBACCOUNT 2WI(4) (INVESTING IN SHARES OF WELLS FARGO VT INTERNATIONAL EQUITY FUND) Accumulation unit value at beginning of period $ 0.90 $ 1.00 -- -- Accumulation unit value at end of period $ 0.69 $ 0.90 -- -- Number of accumulation units outstanding at end of period (000 omitted) 4,703 1,200 -- -- Ratio of operating expense to average net assets 0.75% 0.75% -- -- SUBACCOUNT 1SG(4) (INVESTING IN SHARES OF WELLS FARGO VT SMALL CAP GROWTH FUND) Accumulation unit value at beginning of period $ 0.94 $ 1.00 -- -- Accumulation unit value at end of period $ 0.58 $ 0.94 -- -- Number of accumulation units outstanding at end of period (000 omitted) 7,655 2,230 -- -- Ratio of operating expense to average net assets 0.95% 0.95% -- -- SUBACCOUNT 2SG(4) (INVESTING IN SHARES OF WELLS FARGO VT SMALL CAP GROWTH FUND) Accumulation unit value at beginning of period $ 0.94 $ 1.00 -- -- Accumulation unit value at end of period $ 0.58 $ 0.94 -- -- Number of accumulation units outstanding at end of period (000 omitted) 9,992 2,060 -- -- Ratio of operating expense to average net assets 0.75% 0.75% -- -- SUBACCOUNT BC4(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - BLUE CHIP ADVANTAGE FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.79 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 39 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT BC5(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - BLUE CHIP ADVANTAGE FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.79 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 126 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT BD4(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - BOND FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 1.04 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 5,971 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT BD5(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - BOND FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 1.04 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 6,481 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT CR4(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - CAPITAL RESOURCE FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.81 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 96 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT CR5(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - CAPITAL RESOURCE FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.75 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 291 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT CM4(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 1.00 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 12,148 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- Simple yield(2) (0.42%) -- -- -- Compound yield(2) (0.42%) -- -- --
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 22
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ----------------------------------------------------------------------------------------------------------------------- SUBACCOUNT CM5(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 1.00 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 12,452 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- Simple yield(2) (0.24%) -- -- -- Compound yield(2) (0.24%) -- -- -- SUBACCOUNT DE4(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.83 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 2,058 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT DE5(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.83 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 3,101 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT EM4(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - EMERGING MARKETS FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.90 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 121 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT EM5(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - EMERGING MARKETS FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.90 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 220 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT ES4(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - EQUITY SELECT FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.88 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 889 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT ES5(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - EQUITY SELECT FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.88 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,153 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT EI4(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - EXTRA INCOME FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.93 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 4,269 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT EI5(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - EXTRA INCOME FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.94 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 3,957 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT FI4(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - FEDERAL INCOME FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 1.04 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 7,646 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT FI5(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - FEDERAL INCOME FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 1.04 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 6,107 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- --
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 23
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ----------------------------------------------------------------------------------------------------------------------- SUBACCOUNT GB4(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - GLOBAL BOND FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 1.14 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,529 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT GB5(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - GLOBAL BOND FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 1.14 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,060 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT GR4(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - GROWTH FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.76 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 392 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT GR5(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - GROWTH FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.77 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 973 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT IE4(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - INTERNATIONAL FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.85 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 105 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT IE5(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - INTERNATIONAL FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.85 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 55 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT MF4(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - MANAGED FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.90 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 462 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT MF5(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - MANAGED FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.90 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 531 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT ND4(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.80 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 5,049 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT ND5(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.80 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 6,565 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT SV4(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - PARTNERS SMALL CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.88 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 2,665 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- --
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 24
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ----------------------------------------------------------------------------------------------------------------------- SUBACCOUNT SV5(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - PARTNERS SMALL CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.88 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 3,316 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT IV4(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - S&P 500 INDEX FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.80 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,648 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT IV5(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - S&P 500 INDEX FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.80 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,889 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT SC4(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.85 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 516 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT SC5(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.85 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 900 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT ST4(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - STOCK FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.80 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 125 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT ST5(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - STOCK FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.80 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 196 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT SA4(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.72 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 161 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT SA5(7) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.72 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 114 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4AC(7) (INVESTING IN SHARES OF AIM V.I. CAPITAL APPRECIATION FUND, SERIES II SHARES) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.78 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 447 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5AC(7) (INVESTING IN SHARES OF AIM V.I. CAPITAL APPRECIATION FUND, SERIES II SHARES) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.78 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 379 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- --
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 25
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ----------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 4AD(7) (INVESTING IN SHARES OF AIM V.I. CAPITAL DEVELOPMENT FUND, SERIES II SHARES) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.80 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 463 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5AD(7) (INVESTING IN SHARES OF AIM V.I. CAPITAL DEVELOPMENT FUND, SERIES II SHARES) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.80 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 552 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4AL(7) (INVESTING IN SHARES OF ALLIANCEBERNSTEIN VP GROWTH AND INCOME PORTFOLIO (CLASS B)) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.81 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 4,072 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5AL(7) (INVESTING IN SHARES OF ALLIANCEBERNSTEIN VP GROWTH AND INCOME PORTFOLIO (CLASS B)) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.81 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 3,503 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4AB(7) (INVESTING IN SHARES OF ALLIANCEBERNSTEIN VP INTERNATIONAL VALUE PORTFOLIO (CLASS B)) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.95 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,371 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5AB(7) (INVESTING IN SHARES OF ALLIANCEBERNSTEIN VP INTERNATIONAL VALUE PORTFOLIO (CLASS B)) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.95 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,417 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4AI(7) (INVESTING IN SHARES OF AMERICAN CENTURY(R) VP INTERNATIONAL, CLASS II) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.85 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 448 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5AI(7) (INVESTING IN SHARES OF AMERICAN CENTURY(R) VP INTERNATIONAL, CLASS II) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.85 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 944 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4AV(7) (INVESTING IN SHARES OF AMERICAN CENTURY(R) VP VALUE, CLASS II) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.89 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 2,396 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5AV(7) (INVESTING IN SHARES OF AMERICAN CENTURY(R) VP VALUE, CLASS II) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.89 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 2,837 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4SR(7) (INVESTING IN SHARES OF CALVERT VARIABLE SERIES, INC. SOCIAL BALANCED PORTFOLIO) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.88 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 208 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- --
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 26
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ----------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 5SR(7) (INVESTING IN SHARES OF CALVERT VARIABLE SERIES, INC. SOCIAL BALANCED PORTFOLIO) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.88 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 211 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4CG(7) (INVESTING IN SHARES OF EVERGREEN VA CAPITAL GROWTH FUND - CLASS 2) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.81 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 522 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5CG(7) (INVESTING IN SHARES OF EVERGREEN VA CAPITAL GROWTH FUND - CLASS 2) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.81 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 383 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4FG(7) (INVESTING IN SHARES OF FIDELITY(R) VIP GROWTH & INCOME PORTFOLIO SERVICE CLASS 2) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.85 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 3,508 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5FG(7) (INVESTING IN SHARES OF FIDELITY(R) VIP GROWTH & INCOME PORTFOLIO SERVICE CLASS 2) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.85 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 3,592 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4FM(7) (INVESTING IN SHARES OF FIDELITY(R) VIP MID CAP PORTFOLIO SERVICE CLASS 2) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.90 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 3,541 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5FM(7) (INVESTING IN SHARES OF FIDELITY(R) VIP MID CAP PORTFOLIO SERVICE CLASS 2) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.90 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 4,182 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4FO(7) (INVESTING IN SHARES OF FIDELITY(R) VIP OVERSEAS PORTFOLIO SERVICE CLASS 2) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.83 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 610 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5FO(7) (INVESTING IN SHARES OF FIDELITY(R) VIP OVERSEAS PORTFOLIO SERVICE CLASS 2) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.83 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 553 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4RE(7) (INVESTING IN SHARES OF FTVIPT FRANKLIN REAL ESTATE FUND - CLASS 2) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 1.01 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 2,989 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5RE(7) (INVESTING IN SHARES OF FTVIPT FRANKLIN REAL ESTATE FUND - CLASS 2) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 1.01 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 2,887 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- --
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 27
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ----------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 4SI(7) (INVESTING IN SHARES OF FTVIPT FRANKLIN SMALL CAP VALUE SECURITIES FUND - CLASS 2) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.92 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,610 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5SI(7) (INVESTING IN SHARES OF FTVIPT FRANKLIN SMALL CAP VALUE SECURITIES FUND - CLASS 2) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.92 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 2,075 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4MS(7) (INVESTING IN SHARES OF FTVIPT MUTUAL SHARES SECURITIES FUND - CLASS 2) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.89 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,418 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5MS(7) (INVESTING IN SHARES OF FTVIPT MUTUAL SHARES SECURITIES FUND - CLASS 2) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.89 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,735 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4UE(7) (INVESTING IN SHARES OF GOLDMAN SACHS VIT CORE(SM) U.S. EQUITY FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.80 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,483 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5UE(7) (INVESTING IN SHARES OF GOLDMAN SACHS VIT CORE(SM) U.S. EQUITY FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.80 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,048 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4MC(7) (INVESTING IN SHARES OF GOLDMAN SACHS VIT MID CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.95 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 2,777 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5MC(7) (INVESTING IN SHARES OF GOLDMAN SACHS VIT MID CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.95 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 2,583 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4ID(7) (INVESTING IN SHARES OF INVESCO VIF - DYNAMICS FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.71 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 286 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5ID(7) (INVESTING IN SHARES OF INVESCO VIF - DYNAMICS FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.71 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 242 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4FS(7) (INVESTING IN SHARES OF INVESCO VIF - FINANCIAL SERVICES FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.87 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 446 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- --
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 28
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ----------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 5FS(7) (INVESTING IN SHARES OF INVESCO VIF - FINANCIAL SERVICES FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.87 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 526 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4TC(7) (INVESTING IN SHARES OF INVESCO VIF - TECHNOLOGY FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.56 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 157 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5TC(7) (INVESTING IN SHARES OF INVESCO VIF - TECHNOLOGY FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.56 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 192 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4TL(7) (INVESTING IN SHARES OF INVESCO VIF - TELECOMMUNICATIONS FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.60 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 69 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5TL(7) (INVESTING IN SHARES OF INVESCO VIF - TELECOMMUNICATIONS FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.60 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 56 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4GT(7) (INVESTING IN SHARES OF JANUS ASPEN SERIES GLOBAL TECHNOLOGY PORTFOLIO: SERVICE SHARES) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.63 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 112 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5GT(7) (INVESTING IN SHARES OF JANUS ASPEN SERIES GLOBAL TECHNOLOGY PORTFOLIO: SERVICE SHARES) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.64 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 68 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4IG(7) (INVESTING IN SHARES OF JANUS ASPEN SERIES INTERNATIONAL GROWTH PORTFOLIO: SERVICE SHARES) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.79 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 646 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5IG(7) (INVESTING IN SHARES OF JANUS ASPEN SERIES INTERNATIONAL GROWTH PORTFOLIO: SERVICE SHARES) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.79 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 681 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4IP(7) (INVESTING IN SHARES OF LAZARD RETIREMENT INTERNATIONAL EQUITY PORTFOLIO) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.92 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 566 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5IP(7) (INVESTING IN SHARES OF LAZARD RETIREMENT INTERNATIONAL EQUITY PORTFOLIO) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.92 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 499 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- --
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 29
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ----------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 4MG(7) (INVESTING IN SHARES OF MFS(R) INVESTORS GROWTH STOCK SERIES - SERVICE CLASS) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.76 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 712 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5MG(7) (INVESTING IN SHARES OF MFS(R) INVESTORS GROWTH STOCK SERIES - SERVICE CLASS) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.76 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,088 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4MD(7) (INVESTING IN SHARES OF MFS(R) NEW DISCOVERY SERIES - SERVICE CLASS) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.72 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,784 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5MD(7) (INVESTING IN SHARES OF MFS(R) NEW DISCOVERY SERIES - SERVICE CLASS) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.72 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 2,112 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4UT(7) (INVESTING IN SHARES OF MFS(R) UTILITIES SERIES - SERVICE CLASS) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.85 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 431 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5UT(7) (INVESTING IN SHARES OF MFS(R) UTILITIES SERIES - SERVICE CLASS) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.85 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 276 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4PE(7) (INVESTING IN SHARES OF PIONEER EQUITY INCOME VCT PORTFOLIO - CLASS II SHARES) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.85 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,189 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5PE(7) (INVESTING IN SHARES OF PIONEER EQUITY INCOME VCT PORTFOLIO - CLASS II SHARES) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.85 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,439 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4EU(7) (INVESTING IN SHARES OF PIONEER EUROPE VCT PORTFOLIO - CLASS II SHARES) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.85 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 50 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5EU(7) (INVESTING IN SHARES OF PIONEER EUROPE VCT PORTFOLIO - CLASS II SHARES) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.85 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 50 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4HS(7) (INVESTING IN SHARES OF PUTNAM VT HEALTH SCIENCES FUND - CLASS IB SHARES) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.80 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 583 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- --
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 30
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ----------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 5HS(7) (INVESTING IN SHARES OF PUTNAM VT HEALTH SCIENCES FUND - CLASS IB SHARES) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.81 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 617 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4PI(7) (INVESTING IN SHARES OF PUTNAM VT INTERNATIONAL EQUITY FUND - CLASS IB SHARES) (PREVIOUSLY PUTNAM VT INTERNATIONAL GROWTH FUND - CLASS IB SHARES) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.86 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,392 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5PI(7) (INVESTING IN SHARES OF PUTNAM VT INTERNATIONAL EQUITY FUND - CLASS IB SHARES) (PREVIOUSLY PUTNAM VT INTERNATIONAL GROWTH FUND - CLASS IB SHARES) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.86 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 2,086 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4VS(7) (INVESTING IN SHARES OF PUTNAM VT VISTA FUND - CLASS IB SHARES) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.73 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 192 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5VS(7) (INVESTING IN SHARES OF PUTNAM VT VISTA FUND - CLASS IB SHARES) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.73 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 267 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4SO(7) (INVESTING IN SHARES OF STRONG OPPORTUNITY FUND II - ADVISOR CLASS) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.75 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,985 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5SO(7) (INVESTING IN SHARES OF STRONG OPPORTUNITY FUND II - ADVISOR CLASS) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.75 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 2,340 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4IT(7) (INVESTING IN SHARES OF WANGER INTERNATIONAL SMALL CAP) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.87 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,055 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5IT(7) (INVESTING IN SHARES OF WANGER INTERNATIONAL SMALL CAP) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.87 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,523 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4SP(7) (INVESTING IN SHARES OF WANGER U.S. SMALLER COMPANIES) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.85 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 3,131 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5SP(7) (INVESTING IN SHARES OF WANGER U.S. SMALLER COMPANIES) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.85 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 3,732 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- --
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 31
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ----------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 4AA(7) (INVESTING IN SHARES OF WELLS FARGO VT ASSET ALLOCATION FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.88 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 770 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5AA(7) (INVESTING IN SHARES OF WELLS FARGO VT ASSET ALLOCATION FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.88 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,279 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4WI(7) (INVESTING IN SHARES OF WELLS FARGO VT INTERNATIONAL EQUITY FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.81 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 80 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5WI(7) (INVESTING IN SHARES OF WELLS FARGO VT INTERNATIONAL EQUITY FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.81 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 81 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- -- SUBACCOUNT 4SG(7) (INVESTING IN SHARES OF WELLS FARGO VT SMALL CAP GROWTH FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.67 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 387 -- -- -- Ratio of operating expense to average net assets 1.20% -- -- -- SUBACCOUNT 5SG(7) (INVESTING IN SHARES OF WELLS FARGO VT SMALL CAP GROWTH FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 0.67 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 662 -- -- -- Ratio of operating expense to average net assets 1.00% -- -- --
(1) Operations commenced on Sept. 15, 1999. (2) Net of annual contract administrative charge and mortality and expense risk fee. (3) Operations commenced on May 1, 2000. (4) Operations commenced on May 1, 2001. (5) Operations commenced on Aug. 14, 2001. (6) Operations commenced on Aug. 13, 2001. (7) Operations commenced on Feb. 13, 2002. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 32 FINANCIAL STATEMENTS You can find our audited financial statements and the audited financial statements of the subaccounts in the SAI. PERFORMANCE INFORMATION Performance information for the subaccounts may appear from time to time in advertisements or sales literature. This information reflects the performance of a hypothetical investment in a particular subaccount during a specified time period. We show actual performance from the date the subaccounts began investing in funds. We also show performance from the commencement date of the funds as if the subaccounts invested in them at that time, which, in some cases, they did not. Although we base performance figures on historical earnings, past performance does not guarantee future results. We include non-recurring charges (such as surrender charges) in total return figures, but not in yield quotations. Excluding non-recurring charges in yield calculations increases the reported value. Total return figures do not reflect any purchase payment credits. We may show total return quotations by means of schedules, charts or graphs. Total return figures reflect deduction of the following charges: - contract administrative charge, - applicable mortality and expense risk fee, - MAV rider fee, - EEP rider fee, and - applicable surrender charge (assuming a surrender at the end of the illustrated period). We may also show optional total return quotations that reflect deduction of the EEB rider fee. We also show optional total return quotations that do not reflect a surrender charge deduction (assuming no surrender), or fees for any of the optional features. AVERAGE ANNUAL TOTAL RETURN is the average annual compounded rate of return of the investment over a period of one, five and ten years (or up to the life of the subaccount if it is less than ten years old). CUMULATIVE TOTAL RETURN is the cumulative change in the value of an investment over a specified time period. We assume that income earned by the investment is reinvested. Cumulative total return generally will be higher than average annual total return. ANNUALIZED SIMPLE YIELD (FOR SUBACCOUNTS INVESTING IN MONEY MARKET FUNDS) "annualizes" the income generated by the investment over a given seven-day period. That is, we assume the amount of income generated by the investment during the period will be generated each seven-day period for a year. We show this as a percentage of the investment. ANNUALIZED COMPOUND YIELD (FOR SUBACCOUNTS INVESTING IN MONEY MARKET FUNDS) is calculated like simple yield except that we assume the income is reinvested when we annualize it. Compound yield will be higher than the simple yield because of the compounding effect of the assumed reinvestment. ANNUALIZED YIELD (FOR SUBACCOUNTS INVESTING IN INCOME FUNDS) divides the net investment income (income less expenses) for each accumulation unit during a given 30-day period by the value of the unit on the last day of the period. We then convert the result to an annual percentage. You should consider performance information in light of the investment objectives, policies, characteristics and quality of the fund in which the subaccount invests and the market conditions during the specified time period. Advertised yields and total return figures include charges that reduce advertised performance. Therefore, you should not compare subaccount performance to that of mutual funds that sell their shares directly to the public. (See the SAI for a further description of methods used to determine total return and yield.) If you would like additional information about actual performance, please contact us at the address or telephone number on the first page of this prospectus. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 33 THE VARIABLE ACCOUNT AND THE FUNDS You may allocate purchase payments and transfers to any or all of the subaccounts of the variable account that invest in shares of the following funds:
SUBACCOUNT SUBACCOUNT FOR RAVA FOR RAVA ADVANTAGE SELECT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ---------------------------------------------------------------------------------------------------------------------------------- BC1 BC4 AXP(R) Variable Objective: long-term total return IDS Life, adviser; BC2 BC5 Portfolio - Blue exceeding that of the U.S. stock American Express Chip Advantage Fund market. Invests primarily in blue chip Financial Corporation stocks. Blue chip stocks are issued by (AEFC), subadviser. companies with a market capitalization of at least $1 billion, an established management, a history of consistent earnings and a leading position within their respective industries. BD1 BD4 AXP(R) Variable Objective: high level of current income IDS Life, adviser; AEFC, BD2 BD5 Portfolio - Bond while conserving the value of the subadviser. Fund (effective investment and continuing a high level 6-27-03 AXP(R) of income for the longest time period. Variable Portfolio Invests primarily in bonds and other - Bond Fund will debt obligations. change to AXP(R) Variable Portfolio - Diversified Bond Fund) CR1 CR4 AXP(R) Variable Objective: capital appreciation. IDS Life, adviser; AEFC, CR2 CR5 Portfolio - Capital Invests primarily in U.S. common stocks subadviser. Resource Fund and other securities convertible into common stocks. CM1 CM4 AXP(R) Variable Objective: maximum current income IDS Life, adviser; AEFC, CM2 CM5 Portfolio - Cash consistent with liquidity and stability subadviser. Management Fund of principal. Invests primarily in money market securities. DE1 DE4 AXP(R) Variable Objective: high level of current income IDS Life, adviser; AEFC, DE2 DE5 Portfolio - and, as a secondary goal, steady growth subadviser. Diversified Equity of capital. Invests primarily in Income Fund dividend-paying common and preferred stocks. EM1 EM4 AXP(R) Variable Objective: long-term capital growth. IDS Life, adviser; AEFC, EM2 EM5 Portfolio - Invests primarily in equity securities subadviser; American Emerging Markets of companies in emerging market Express Asset Management Fund countries. International, Inc., a wholly-owned subsidiary of AEFC, subadviser. ES1 ES4 AXP(R) Variable Objective: growth of capital. Invests IDS Life, adviser; AEFC, ES2 ES5 Portfolio - Equity primarily in equity securities of subadviser. Select Fund medium-sized companies.
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 34
SUBACCOUNT SUBACCOUNT FOR RAVA FOR RAVA ADVANTAGE SELECT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ----------------------------------------------------------------------------------------------------------------------------------- EI1 EI4 AXP(R) Variable Objective: high current income, with IDS Life, adviser; AEFC, EI2 EI5 Portfolio - Extra capital growth as a secondary subadviser. Income Fund objective. Invests primarily in (effective 6-27-03 high-yielding, high-risk corporate AXP(R) Variable bonds (junk bonds) issued by U.S. and Portfolio - Extra foreign companies and governments. Income Fund will change to AXP(R) Variable Portfolio - High Yield Bond Fund) FI1 FI4 AXP(R) Variable Objective: a high level of current IDS Life, adviser; AEFC, FI2 FI5 Portfolio - Federal income and safety of principal subadviser. Income Fund consistent with an investment in U.S. (effective 6-27-03 government and government agency AXP(R) Variable securities. Invests primarily in debt Portfolio - Federal obligations issued or guaranteed as to Income Fund will principal and interest by the U.S. change to AXP(R) government, its agencies or Variable Portfolio instrumentalities. - Short Term U.S. Government Fund) GB1 GB4 AXP(R) Variable Objective: high total return through IDS Life, adviser; AEFC, GB2 BG5 Portfolio - Global income and growth of capital. subadviser. Bond Fund Non-diversified mutual fund that invests primarily in debt obligations of U.S. and foreign issuers. GR1 GR4 AXP(R) Variable Objective: long-term capital growth. IDS Life, adviser; AEFC, GR2 GR5 Portfolio - Growth Invests primarily in common stocks and subadviser. Fund securities convertible into common stocks that appear to offer growth opportunities. IE1 IE4 AXP(R) Variable Objective: capital appreciation. IDS Life, adviser; AEFC, IE2 IE5 Portfolio - Invests primarily in common stocks or subadviser; American International Fund convertible securities of foreign Express Asset Management issuers that offer strong growth International, Inc., a potential. wholly-owned subsidiary of AEFC, subadviser. MF1 MF4 AXP(R) Variable Objective: maximum total investment IDS Life, adviser; AEFC, MF2 MF5 Portfolio - return through a combination of capital subadviser. Managed Fund growth and current income. Invests primarily in a combination of common and preferred stocks, convertible securities, bonds and other debt securities. ND1 ND4 AXP(R) Variable Objective: long-term growth of capital. IDS Life, adviser; AEFC, ND2 ND5 Portfolio - NEW Invests primarily in common stocks subadviser. DIMENSIONS FUND(R) showing potential for significant growth.
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 35
SUBACCOUNT SUBACCOUNT FOR RAVA FOR RAVA ADVANTAGE SELECT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ----------------------------------------------------------------------------------------------------------------------------------- SV1 SV4 AXP(R) Variable Objective: long-term capital IDS Life, adviser; AEFC, SV2 SV5 Portfolio - appreciation. Non-diversified fund subadviser; National Partners Small Cap that invests primarily in equity City Investment Company, Value Fund securities. Royce & Associates, LLC. and Third Avenue Management LLC, subadvisers. IV1 IV4 AXP(R) Variable Objective: long-term capital IDS Life, adviser; AEFC, IV2 IV5 Portfolio - S&P appreciation. Non-diversified fund subadviser. 500 Index Fund that invests primarily in securities that are expected to provide investment results that correspond to the performance of the S&P 500(R) Index. SC1 SC4 AXP(R) Variable Objective: long-term capital growth. IDS Life, adviser; AEFC, SC2 SC5 Portfolio - Small Invests primarily in equity stocks of subadviser; Kenwood Cap Advantage Fund small companies that are often Capital Management LLC, included in the Russell 2000 Index subadviser. and/or have market capitalization under $2 billion. ST1 ST4 AXP(R) Variable Objective: current income and growth IDS Life, adviser; AEFC, ST2 ST5 Portfolio - Stock of capital. Invests primarily in subadviser. Fund common stocks and securities convertible into common stock. SA1 SA4 AXP(R) Variable Objective: capital appreciation. IDS Life, adviser; AEFC, SA2 SA5 Portfolio - Invests primarily in equity securities subadviser. Strategy of growth companies. Aggressive Fund 1AC 4AC AIM V.I. Capital Objective: growth of capital. Invests A I M Advisors, Inc. 2AC 5AC Appreciation Fund, principally in common stocks of Series II Shares companies likely to benefit from new or innovative products, services or processes as well as those with above-average long-term growth and excellent prospects for future growth. The Fund may invest up to 25% of its assets in foreign securities. 1AD 4AD AIM V.I. Capital Objective: long-term growth of A I M Advisors, Inc. 2AD 5AD Development Fund, capital. Invests primarily in Series II Shares securities (including common stocks, convertible securities and bonds) of small- and medium-sized companies. The Fund may invest up to 25% of its assets in foreign securities. 1AL 4AL AllianceBernstein Objective: reasonable current income Alliance Capital 2AL 5AL VP Growth and and reasonable appreciation. Invests Management, L.P. Income Portfolio primarily in dividend-paying common (Class B) stocks of good quality. (previously Alliance VP Growth and Income Portfolio (Class B))
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 36
SUBACCOUNT SUBACCOUNT FOR RAVA FOR RAVA ADVANTAGE SELECT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ----------------------------------------------------------------------------------------------------------------------------------- 1AB 4AB AllianceBernstein Objective: long-term growth of capital. Alliance Capital 2AB 5AB VP International Invests primarily in a diversified Management, L.P. Value Portfolio portfolio of foreign equity securities. (Class B) (previously Alliance VP International Value Portfolio (Class B)) 1AI 4AI American Objective: long-term capital growth. American Century 2AI 5AI Century(R) VP Invests primarily in stocks of growing Investment Management, International, foreign companies in developed Inc. Class II countries. 1AV 4AV American Objective: long-term capital growth, American Century 2AV 5AV Century(R) VP with income as a secondary objective. Investment Management, Value, Class II Invests primarily in stocks of Inc. companies that management believes to be undervalued at the time of purchase. 1SR 4SR Calvert Variable Objective: income and capital growth. Calvert Asset Management 2SR 5SR Series, Inc. Invests primarily in stocks, bonds and Company, Inc. (CAMCO), Social Balanced money market instruments which offer investment adviser. SsgA Portfolio income and capital growth opportunity Funds Management, Inc. and which satisfy the investment and and Brown Capital social criteria. Management are the investment subadvisers. 1CG 4CG Evergreen VA Objective: long-term capital growth. Evergreen Investment 2CG 5CG Capital Growth The Fund seeks to achieve its goal by Management Company, LLC; Fund - Class 2 investing primarily in common stocks of Pilgrim Baxter & large U.S. companies, which the Associates, Ltd, is the portfolio managers believe have the sub-investment adviser. potential for capital growth over the intermediate- and long-term. 1FG 4FG Fidelity(R) VIP Objective: seeks high total return Fidelity Management & 2FG 5FG Growth & Income through a combination of current income Research Company (FMR), Portfolio Service and capital appreciation. Normally investment manager; FMR Class 2 invests a majority of assets in common U.K., FMR Far East, stocks of foreign and domestic issuers sub-investment advisers. with a focus on those that pay current dividends and show potential for capital appreciation. May invest in bonds, including lower-quality debt securities, as well as stocks that are not currently paying dividends, but offer prospects for future income or capital appreciation.
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 37
SUBACCOUNT SUBACCOUNT FOR RAVA FOR RAVA ADVANTAGE SELECT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ----------------------------------------------------------------------------------------------------------------------------------- 1FM 4FM Fidelity(R) VIP Mid Objective: seeks long-term growth of Fidelity Management & 2FM 5FM Cap Portfolio capital. Normally invests at least 80% Research Company (FMR), Service Class 2 of assets in securities of foreign and investment manager; FMR domestic companies with medium market U.K., FMR Far East, capitalization common stocks. Invests sub-investment advisers. in growth or value common common stocks. May invest in companies with smaller or larger market capitalizations. 1FO 4FO Fidelity(R) VIP Objective: seeks long-term growth of Fidelity Management & 2FO 5FO Overseas Portfolio capital. Normally invests primarily in Research Company (FMR), Service Class 2 common stocks of foreign securities. investment manager; FMR Normally invests at least 80% of U.K., FMR Far East, assets in non-U.S. securities. Fidelity International Investment Advisors (FIIA) and FIIA U.K., sub-investment advisers. 1RE 4RE FTVIPT Franklin Objective: seeks capital appreciation, Franklin Advisers, Inc. 2RE 5RE Real Estate Fund - with current income as a secondary Class 2 goal. The Fund normally invests at least 80% of its net assets in investments of companies operating in the real estate sector. The Fund invests primarily in equity real estate investment trusts (REITs). 1SI 4SI FTVIPT Franklin Objective: seeks long-term total Franklin Advisory 2SI 5SI Small Cap Value return. The Fund normally invests at Services, LLC Securities Fund - least 80% of its net assets in Class 2 investments of small capitalization companies. For this Fund, small cap companies are those with market cap values not exceeding $2.5 billion, at the time of purchase. The Fund's manager invests in small companies that it believes are undervalued. 1MS 4MS FTVIPT Mutual Objective: seeks capital appreciation, Franklin Mutual Advisers, 2MS 5MS Shares Securities with income as a secondary goal. The LLC Fund - Class 2 Fund normally invests mainly in U.S. equity securities that the Fund's manager believes are available at market prices less than their intrinsic value on certain recognized or objective criteria, including undervalued stocks, restructuring companies and distressed companies.
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 38
SUBACCOUNT SUBACCOUNT FOR RAVA FOR RAVA ADVANTAGE SELECT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ----------------------------------------------------------------------------------------------------------------------------------- 1UE 4UE Goldman Sachs VIT Objective: The Goldman Sachs VIT CORE Goldman Sachs Asset 2UE 5UE CORE(SM) U.S. U.S. Equity Fund seeks long-term Management, L.P. Equity Fund growth of capital and dividend income. The Fund invests, under normal CORE(SM) is a circumstances, at least 90% of its service mark of total assets (not including securities Goldman, Sachs & Co. lending collateral and any investment of that collateral) measured at time of purchase in a broadly diversified portfolio of large-cap and blue chip equity investments representing all major sectors of the U.S. economy. 1MC 4MC Goldman Sachs VIT Objective: The Goldman Sachs VIT Mid Goldman Sachs Asset 2MC 5MC Mid Cap Value Fund Cap Value Fund seeks long-term capital Management, L.P. appreciation. The Fund invests, under normal circumstances, at least 80% of its net assets plus any borrowing for investment purposes (measured at time of purchase) in a diversified portfolio of equity investments in mid-capitalization issuers within the range of the market capitalization of companies constituting the Russell Midcap Value Index at the time of investment. 1ID 4ID INVESCO VIF - Objective: long-term growth of capital. INVESCO Funds Group, Inc. 2ID 5ID Dynamics Fund Invests primarily in common stocks of mid-sized companies -- companies included in the Russell Midcap(R) Growth Index at the time of purchase, or if not included in that Index, those with market capitalizations between $2.5 billion and $15 billion at the time of purchase. The Fund also has the flexibility to invest in other types of securities, including preferred stocks, convertible securities and bonds. 1FS 4FS INVESCO VIF - Objective: long-term growth of capital. INVESCO Funds Group, Inc. 2FS 5FS Financial Services Aggressively managed. Invests at least Fund 80% of its assets in the equity securities and equity-related instruments of companies involved in the financial services sector. These companies include, but are not limited to, banks, insurance companies, investment and miscellaneous industries (asset managers, brokerage firms, and government-sponsored agencies and suppliers to financial services companies).
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 39
SUBACCOUNT SUBACCOUNT FOR RAVA FOR RAVA ADVANTAGE SELECT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ----------------------------------------------------------------------------------------------------------------------------------- 1TC 4TC INVESCO VIF - Objective: long-term growth of capital. INVESCO Funds Group, Inc. 2TC 5TC Technology Fund The Fund is aggressively managed. Invests at least 80% of its assets in equity securities and equity-related instruments of companies engaged in technology-related industries. These include, but are not limited to, various applied technologies, hardware, software, semiconductors, telecommunications equipment and services, and service-related companies in information technology. Many of these products and services are subject to rapid obsolescence, which may lower the market value of securities of the companies in this sector. 1TL 4TL INVESCO VIF - Objective: long-term growth of capital. INVESCO Funds Group, Inc. 2TL 5TL Telecommunications Current income is a secondary Fund objective. The Fund is aggressively managed. Invests at least 80% of its assets in equity securities and equity-related instruments of companies involved in the design, development manufacture, distribution or sale of communications services and equipment, and companies that are involved in supplying equipment or services to such companies. The telecommunications sector includes, but is not limited to companies that offer telephone services, wireless communications, satellite communications, television and movie programming, broadcasting and Internet access. Many of these products and services are subject to rapid obsolescence, which may lower the market value of securities of the companies in this sector. 1GT 4GT Janus Aspen Series Objective: long-term growth of capital. Janus Capital 2GT 5GT Global Technology Non-diversified mutual fund that Portfolio: invests, under normal circumstances, at Service Shares least 80% of its net assets in securities of companies that the portfolio manager believes will benefit significantly from advances or improvements in technology. It implements this policy by investing primarily in equity securities of U.S. and foreign companies selected for their growth potential.
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 40
SUBACCOUNT SUBACCOUNT FOR RAVA FOR RAVA ADVANTAGE SELECT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ----------------------------------------------------------------------------------------------------------------------------------- 1IG 4IG Janus Aspen Series Objective: long-term growth of capital. Janus Capital 2IG 5IG International Invests, under normal circumstances, at Growth Portfolio: least 80% of its net assets in Service Shares securities of issuers from at least five different countries, excluding the United States. Although the Portfolio intends to invest substantially all of its assets in issuers located outside the United States, it may at times invest in U.S. issuers and under unusual circumstances, it may invest all of its assets in fewer than five countries or even a single country. 1IP 4IP Lazard Retirement Objective: long-term capital Lazard Asset Management, 2IP 5IP International appreciation. Invests primarily in LLC Equity Portfolio equity securities, principally common stocks, of relatively large non-U.S. companies with market capitalizations in the range of the Morgan Stanley Capital International (MSCI) Europe, Australia and Far East (EAFE(R)) Index that the Investment Manager believes are undervalued based on their earnings, cash flow or asset values. 1MG 4MG MFS(R) Investors Objective: long-term growth of capital MFS Investment 2MG 5MG Growth Stock and future income. Invests at least 80% Management(R) Series - Service of its net assets in common stocks and Class related securities of companies which MFS(R) believes offer better than average prospects for long-term growth. 1MD 4MD MFS(R) New Objective: capital appreciation. MFS Investment 2MD 5MD Discovery Series - Invests in at least 65% of its net Management(R) Service Class assets in equity securities of emerging growth companies. 1UT 4UT MFS(R) Utilities Objective: capital growth and current MFS Investment 2UT 5UT Series - Service income. Invests primarily in equity and Management(R) Class debt securities of domestic and foreign companies in the utilities industry.
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 41
SUBACCOUNT SUBACCOUNT FOR RAVA FOR RAVA ADVANTAGE SELECT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ----------------------------------------------------------------------------------------------------------------------------------- 1PE 4PE Pioneer Equity Objective: current income and Pioneer Investment 2PE 5PE Income VCT long-term growth of capital from a Management, Inc. Portfolio - Class portfolio consisting primarily of II Shares income producing equity securities of U.S. corporations. Invests primarily in common stocks, preferred stocks and interests in real estate investment trusts (REITs). Normally, the portfolio invests at least 80% of its total assets in income producing equity securities. The remainder of the portfolio may be invested in debt securities, most of which are expected to be convertible into common stocks. 1EU 4EU Pioneer Europe VCT Objective: long-term growth of capital. Pioneer Investment 2EU 5EU Portfolio - Class Invests primarily in equity securities Management, Inc. II Shares of European issuers including common stocks, preferred stocks, rights, depositary receipts, warrants and debt securities convertible into common stock. Normally, the portfolio invests 80% of its total assets in equity securities of European issuers. The portfolio may also purchase and sell forward foreign currency contracts in connection with its investments. 1HS 4HS Putnam VT Health Objective: capital appreciation. The Putnam Investment 2HS 5HS Sciences Fund - fund pursues its goal by investing Management, LLC Class IB Shares mainly in growth stocks of companies in the health sciences industries. Under normal circumstances, the fund invests at least 80% of the fund's net assets in securities of (a) companies that derive at least 50% of their assets, revenues or profits from the pharmaceutical, health care services, applied research and development and medical equipment and supplies industries, or (b) companies we think have the potential for growth as a result of their particular products, technology, patents or other market advantages in the health sciences industries. 1PI 4PI Putnam VT Objective: capital appreciation. The Putnam Investment 2PI 5PI International fund pursues its goal by investing Management, LLC Equity Fund - mainly in common stocks of companies Class IB Shares outside the United States. (previously Putnam VT International Growth Fund - Class IB Shares)
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 42
SUBACCOUNT SUBACCOUNT FOR RAVA FOR RAVA ADVANTAGE SELECT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ----------------------------------------------------------------------------------------------------------------------------------- 1VS 4VS Putnam VT Vista Objective: capital appreciation. The Putnam Investment 2VS 5VS Fund - Class IB fund pursues its goal by investing Management, LLC Shares mainly in common stocks of U.S. companies with a focus on growth stocks. 1SO 4SO Strong Opportunity Objective: seeks capital growth. Strong Capital 2SO 5SO Fund II - Advisor Invests primarily in common stocks of Management, Inc. Class medium-capitalization companies that the Fund's managers believe are under-priced, yet have attractive growth prospects. 1IT 4IT Wanger International Objective: long-term growth of capital. Liberty Wanger Asset 2IT 5IT Small Cap Invests primarily in stocks of small Management, L.P. and medium-size non-U.S. companies with capitalizations of less than $2 billion at time of purchase. 1SP 4SP Wanger U.S. Smaller Objective: long-term growth of capital. Liberty Wanger Asset 2SP 5SP Companies Invests primarily in stocks of small- Management, L.P. and medium-size U.S. companies with capitalizations of less than $5 billion at time of purchase. 1AA 4AA Wells Fargo VT Objective: long-term total return Wells Fargo Funds 2AA 5AA Asset Allocation consistent with reasonable risk. Management, LLC, adviser; Fund Invests in equity and fixed-income Wells Capital Management securities in varying proportions, with Incorporated, subadviser. "neutral" target allocation of 60% equity securities and 40% fixed-income securities. The Fund invests its equity portion of assets in common stocks to replicate the S&P 500(R) Index and its fixed-income portion of assets in U.S. Treasury Bonds to replicate the Lehman Brothers 20+ Treasury Index. The Fund seeks to maintain a 95% or better performance correlation with the respective indexes. 1WI 4WI Wells Fargo VT Objective: total return with an Wells Fargo Funds 2WI 5WI International emphasis on long-term capital Management, LLC, adviser; Equity Fund appreciation. Invests principally in Wells Capital Management equity securities of companies based in Incorporated, subadviser. developed foreign countries or emerging markets.
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 43
SUBACCOUNT SUBACCOUNT FOR RAVA FOR RAVA ADVANTAGE SELECT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ----------------------------------------------------------------------------------------------------------------------------------- 1SG 4SG Wells Fargo VT Objective: long-term capital Wells Fargo Funds 2SG 5SG Small Cap Growth appreciation. Focus is on companies Management, LLC, adviser; Fund believed to have above-average growth Wells Capital Management potential or that may be involved in Incorporated, subadviser. new or innovative products, services and processes. Invests principally in securities of companies with above-average growth potential and whose market capitalizations equal to or lower than the company with the largest market capitalization in falls within the range of the Russell 2000 Index, which is considered a small capitalization index.
A fund underlying your contract in which a subaccount invests may have a name, portfolio manager, objectives, strategies and characteristics that are the same or substantially similar to those of a publicly-traded retail mutual fund. Despite these similarities, an underlying fund is not the same as any publicly-traded retail mutual fund. Each underlying fund will have its own unique portfolio holdings, fees, operating expenses and operating results. The results of each underlying fund may differ significantly from any publicly-traded retail mutual fund. The investment advisers cannot guarantee that the funds will meet their investment objectives. Please read the funds' prospectuses for facts you should know before investing. These prospectuses are available by contacting us at the address or telephone number on the first page of this prospectus. All funds are available to serve as the underlying investments for variable annuities and variable life insurance policies. Some funds also are available to serve as investment options for tax-deferred retirement plans. It is possible that in the future, it may be disadvantageous for variable annuity accounts and variable life insurance accounts and/or tax-deferred retirement plans to invest in the available funds simultaneously. Although the insurance company and the funds do not currently foresee any such disadvantages, the boards of directors or trustees of the appropriate funds will monitor events in order to identify any material conflicts between annuity owners, policy owners and tax-deferred retirement plans and to determine what action, if any, should be taken in response to a conflict. If a board were to conclude that it should establish separate funds for the variable annuity, variable life insurance and tax-deferred retirement plan accounts, you would not bear any expenses associated with establishing separate funds. Please refer to the funds' prospectuses for risk disclosure regarding simultaneous investments by variable annuity, variable life insurance and tax-deferred retirement plan accounts. The Internal Revenue Service (IRS) issued final regulations relating to the diversification requirements under Section 817(h) of the Code. Each fund intends to comply with these requirements. The variable account was established under Minnesota law on Aug. 23, 1995, and the subaccounts are registered together as a single unit investment trust under the Investment Company Act of 1940 (the 1940 Act). This registration does not involve any supervision of our management or investment practices and policies by the SEC. All obligations arising under the contracts are general obligations of IDS Life. The variable account meets the definition of a separate account under federal securities laws. We credit or charge income, capital gains and capital losses of each subaccount only to that subaccount. State insurance law prohibits us from charging a subaccount with liabilities of any other subaccount or of our general business. The variable account includes other subaccounts that are available under contracts that are not described in this prospectus. The U.S. Treasury and the IRS indicated that they may provide additional guidance on investment control. This concerns how many variable subaccounts an insurance company may offer and how many exchanges among subaccounts it may allow before the contract owner would be currently taxed on income earned within subaccount assets. At this time, we do not know what the additional guidance will be or when action will be taken. We reserve the right to modify the contract, as necessary, so that the owner will not be subject to current taxation as the owner of the subaccount assets. We intend to comply with all federal tax laws so that the contract continues to qualify as an annuity for federal income tax purposes. We reserve the right to modify the contract as necessary to comply with any new tax laws. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 44 THE FIXED ACCOUNT You also may allocate purchase payments and transfers to the fixed account. We back the principal and interest guarantees relating to the fixed account. These guarantees are based on the continued claims-paying ability of the company. The value of the fixed account increases as we credit interest to the account. Purchase payments and transfers to the fixed account become part of our general account. Interest is calculated and compounded daily based on a 365-day year so as to produce the annual effective rate which we declare. We do not credit interest on leap days (Feb. 29). The interest rate we apply to each purchase payment or transfer to the fixed account is guaranteed for one year. Thereafter, we will change rates from time to time at our discretion. These rates will be based on various factors including, but not limited to, the interest rate environment, returns earned on investments backing these annuities, the rates currently in effect for new and existing company annuities, product design, competition, and the company's revenues and expenses. Interests in the fixed account are not required to be registered with the SEC. The SEC staff does not review the disclosures in this prospectus on the fixed account. Disclosures regarding the fixed account, however, may be subject to certain generally applicable provisions of the federal securities laws relating to the accuracy and completeness of statements made in prospectuses. (See "Making the Most of Your Contract -- Transfer Policies" for restrictions on transfers involving the fixed account.) BUYING YOUR CONTRACT You can fill out an application and send it along with your initial purchase payment to our office. As the owner, you have all rights and may receive all benefits under the contract. You can own a nonqualified annuity in joint tenancy with rights of survivorship only in spousal situations. You cannot own a qualified annuity in joint tenancy. You can buy a contract or become an annuitant if you are 90 or younger. When you apply, you may select: - the optional MAV rider;(1) - the optional EEB rider;(1) - the optional EEP rider;(1) - the fixed account and/or subaccounts in which you want to invest; - how you want to make purchase payments; - a beneficiary; and - under RAVA Advantage, the length of the surrender charge period (seven or ten years).(2) (1) You may select any one of the MAV, EEB or EEP riders. Or you may select the MAV and either the EEB or the EEP. However, you cannot select both the EEB and EEP. Riders may not be available in all states. The MAV, EEB and EEP are only available if you and the annuitant are 75 or younger at the rider effective date. EEP is only available on contracts purchased through a transfer or exchange. (2) The ten-year surrender charge schedule under RAVA Advantage is not available for contracts issued in Oregon. For RAVA Advantage contracts issued in Massachusetts, Oregon and Washington, we waive surrender charges after the tenth contract anniversary. The contract provides for allocation of purchase payments to the subaccounts of the variable account and/or to the fixed account in even 1% increments. If your application is complete, we will process it and apply your purchase payment to the fixed account and subaccounts you selected within two business days after we receive it at our office. If we accept your application, we will send you a contract. If your application is not complete, you must give us the information to complete it within five business days. If we cannot accept your application within five business days, we will decline it and return your payment unless you specifically ask us to keep the payment and apply it once your application is complete. We will credit additional purchase payments you make to your accounts on the valuation date we receive them. We will value the additional payments at the next accumulation unit value calculated after we receive your payments at our office. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 45 THE SETTLEMENT DATE Annuity payouts are scheduled to begin on the settlement date. When we process your application, we will establish the settlement date to the maximum age or date described below. You can also select a date within the maximum limits. You can align this date with your actual retirement from a job, or it can be a different future date, depending on your needs and goals and on certain restrictions. You also can change the date, provided you send us written instructions at least 30 days before annuity payouts begin. FOR NONQUALIFIED ANNUITIES AND ROTH IRAS, the settlement date must be: - no earlier than the 60th day after the contract's effective date; and - no later than the annuitant's 85th birthday or the tenth contract anniversary, if purchased after age 75. FOR QUALIFIED ANNUITIES EXCEPT ROTH IRAS, to avoid IRS penalty taxes, the settlement date generally must be: - on or after the date the annuitant reaches age 59 1/2; and - for IRAs, SIMPLE IRAs and SEPs, by April 1 of the year following the calendar year when the annuitant reaches age 70 1/2; or o for all other qualified annuities, by April 1 of the year following the calendar year when the annuitant reaches age 70 1/2, or, if later, retires (except that 5% business owners may not select a settlement date that is later than April 1 of the year following the calendar year when they reach age 70 1/2). If you take the minimum IRA or TSA distributions as required by the Code from another tax-qualified investment, or in the form of partial surrenders from this contract, annuity payouts can start as late as the annuitant's 85th birthday or the tenth contract anniversary, if later. BENEFICIARY If death benefits become payable before the settlement date while the contract is in force and before annuity payouts begin, we will pay your named beneficiary all or part of the contract value. If there is no named beneficiary, then you or your estate will be the beneficiary. (See "Benefits in Case of Death" for more about beneficiaries.) PURCHASE PAYMENTS MINIMUM ALLOWABLE PURCHASE PAYMENTS* If paying by installments under a scheduled payment plan: $23.08 biweekly, or $50 per month
RAVA ADVANTAGE RAVA SELECT If paying by any other method: initial payment for qualified annuities $ 1,000 $ 2,000 initial payment for nonqualified annuities 2,000 10,000 for any additional payments 50 50
* Installments must total at least $600 in the first year. If you do not make any purchase payments for 24 months, and your previous payments total $600 or less, we have the right to give you 30 days' written notice and pay you the total value of your contract in a lump sum. This right does not apply to contracts in New Jersey. MAXIMUM ALLOWABLE PURCHASE PAYMENTS** based on the age of you or the annuitant, whoever is older, on the effective date of the contract:
RAVA ADVANTAGE RAVA SELECT For the first year: up to age 85 $ 1,000,000 $ 999,999 for ages 86 to 90 100,000 100,000 For each subsequent year: up to age 85 100,000 100,000 for ages 86-90 50,000 50,000
** These limits apply in total to all IDS Life annuities you own. We reserve the right to increase maximum limits. For qualified annuities the tax-deferred retirement plan's or the Code's limits on annual contributions also apply. Except for TSAs, purchase payments are limited and may not be made after the third contract anniversary in Massachusetts, Washington and Oregon. We reserve the right to not accept purchase payments allocated to the fixed account for twelve months following either: 1. a partial surrender from the fixed account; or 2. a lump sum transfer from the fixed account to a subaccount. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 46 HOW TO MAKE PURCHASE PAYMENTS 1 BY LETTER Send your check along with your name and contract number to: IDS LIFE INSURANCE COMPANY 70200 AXP FINANCIAL CENTER MINNEAPOLIS, MN 55474 2 BY SCHEDULED PAYMENT PLAN We can help you set up: - an automatic payroll deduction, salary reduction or other group billing arrangement; or - a bank authorization. CHARGES CONTRACT ADMINISTRATIVE CHARGE We charge this fee for establishing and maintaining your records. We deduct $30 from the contract value of RAVA Advantage or RAVA Select on your contract anniversary at the end of each contract year. We prorate this charge among the subaccounts and the fixed account in the same proportion your interest in each account bears to your total contract value. We will waive this charge when your contract value, or total purchase payments less any payments surrendered, is $50,000 or more on the current contract anniversary. If you surrender your contract, we will deduct the charge at the time of surrender regardless of the contract value or purchase payments made. We cannot increase the annual contract administrative charge and it does not apply after annuity payouts begin or when we pay death benefits. MORTALITY AND EXPENSE RISK FEE We charge this fee daily to the subaccounts. The unit values of your subaccounts reflect this fee. For nonqualified annuities the fee totals 0.95% for RAVA Advantage and 1.20% for RAVA Select of the average daily net assets on an annual basis. For qualified annuities the fee totals 0.75% for RAVA Advantage and 1.00% for RAVA Select of the average daily net assets on an annual basis. This fee covers the mortality and expense risk that we assume. Approximately two-thirds of this amount is for our assumption of mortality risk, and one-third is for our assumption of expense risk. This fee does not apply to the fixed account. Mortality risk arises because of our guarantee to pay a death benefit and our guarantee to make annuity payouts according to the terms of the contract, no matter how long a specific annuitant lives and no matter how long our entire group of annuitants live. If, as a group, annuitants outlive the life expectancy we assumed in our actuarial tables, we must take money from our general assets to meet our obligations. If, as a group, annuitants do not live as long as expected, we could profit from the mortality risk fee. Expense risk arises because we cannot increase the contract administrative charge and this charge may not cover our expenses. We would have to make up any deficit from our general assets. We could profit from the expense risk fee if future expenses are less than expected. The subaccounts pay us the mortality and expense risk fee they accrued as follows: - first, to the extent possible, the subaccounts pay this fee from any dividends distributed from the funds in which they invest; - then, if necessary, the funds redeem shares to cover any remaining fees payable. We may use any profits we realize from the subaccounts' payment to us of the mortality and expense risk fee for any proper corporate purpose, including, among others, payment of distribution (selling) expenses. We do not expect that the surrender charge, discussed in the following paragraphs, will cover sales and distribution expenses. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 47 MAV RIDER FEE We charge a fee for the optional feature only if you select it(1). If selected, we deduct 0.25%(2) of your contract value of RAVA Advantage or RAVA Select on your contract anniversary at the end of each contract year. We prorate this fee among the subaccounts and fixed accounts in the same proportion your interest in each account bears to your total contract value. When annuity payouts begin, if you terminate the contract for any reason other than death, we will deduct this fee, adjusted for the number of calendar days coverage was in place. We reserve the right to assess charges for the number of days the rider was in force for any rider that is terminated due to a change of ownership. If you choose to drop this rider on an anniversary (subject to the restrictions given in "Optional Benefits"), we will deduct this fee on that anniversary. We cannot increase this annual fee after the rider effective date, and it does not apply after annuity payouts begin or when we pay death benefits. EEB RIDER FEE We charge a fee for the optional feature only if you select it(1). If selected, we deduct 0.30% of your contract value of RAVA Advantage or RAVA Select on your contract anniversary at the end of each contract year. We prorate this fee among the subaccounts and fixed accounts in the same proportion your interest in each account bears to your total contract value. When annuity payouts begin, if you terminate the contract for any reason other than death, we will deduct this fee, adjusted for the number of calendar days coverage was in place. We reserve the right to assess charges for the number of days the rider was in force for any rider that is terminated due to a change in ownership. If you choose to drop this rider on an anniversary (subject to the restrictions given in "Optional Benefits"), we will deduct this fee on that anniversary. We cannot increase this annual fee after the rider effective date and it does not apply after annuity payouts begin or when we pay death benefits. EEP RIDER FEE We charge a fee for the optional feature only if you select it(1). If selected, we deduct 0.40% of your contract value of RAVA Advantage or RAVA Select on your contract anniversary at the end of each contract year. We prorate this fee among the subaccounts and fixed accounts in the same proportion your interest in each account bears to your total contract value. When annuity payouts begin, if you terminate the contract for any reason other than death, we will deduct this fee, adjusted for the number of calendar days coverage was in place. We reserve the right to assess charges for the number of days the rider was in force for any rider that is terminated due to a change in ownership. If you choose to drop this rider on an anniversary (subject to the restrictions given in "Optional Benefits"), we will deduct this fee on that anniversary. We cannot increase this annual fee after the rider effective date and it does not apply after annuity payouts begin or when we pay death benefits. (1) You may select any one of the MAV, EEB or EEP riders. Or you may select the MAV and either the EEB or the EEP. However, you cannot select both the EEB and the EEP. Riders may not be available in all states. The MAV, EEB and EEP riders are only available if you and the annuitant are age 75 or younger at the rider effective date. EEP is only available on contracts purchased through a transfer or exchange. (2) For contracts purchased before May 1, 2003, the MAV rider fee for RAVA Advantage and RAVA Select is 0.15%. SURRENDER CHARGE If you surrender all or part of your contract, you may be subject to a surrender charge. For RAVA Advantage, a surrender charge applies if all or part of the surrender amount is from purchase payments we received within seven (7) or ten (10) years before surrender. You select the surrender charge period at the time of your application for the contract.* For RAVA Select, a surrender charge applies if you surrender all or part of your purchase payments in the first three (3) contract years. The surrender charge percentages that apply to you are shown in your contract. * The ten-year surrender charge schedule under RAVA Advantage is not available in Oregon. For contracts issued in Massachusetts, Oregon and Washington, surrender charges are waived after the tenth contract anniversary. SURRENDER CHARGE UNDER RAVA ADVANTAGE: For purposes of calculating any surrender charge under RAVA Advantage, we treat amounts surrendered from your contract value in the following order: 1. First, we surrender any contract earnings (contract value less purchase payments received and not previously surrendered). We do not assess a surrender charge on contract earnings. NOTE: We determine contract earnings by looking at the entire contract value, not the earnings of any particular subaccount or the fixed account. 2. Next, in each contract year, we surrender amounts totaling up to 10% of your prior contract anniversary contract value, but only to the extent not included and surrendered in number one above. (Your initial purchase payment is considered the prior contract anniversary contract value during the first contract year.) We do not assess a surrender charge on this amount. 3. Next we surrender purchase payments received prior to the surrender charge period you selected and shown in your contract. We do not assess a surrender charge on these purchase payments. 4. Finally, if necessary, we surrender purchase payments received that are still within the surrender charge period you selected and shown in your contract. We surrender these payments on a "first-in, first-out" (FIFO) basis. We do assess a surrender charge on these payments. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 48 We determine your surrender charge by multiplying each of your payments surrendered by the applicable surrender charge percentage, and then adding the total surrender charges. The surrender charge percentage depends on the number of years since you made the payments that are surrendered, depending on the schedule you selected*:
SEVEN-YEAR SCHEDULE TEN-YEAR SCHEDULE* YEARS FROM PURCHASE SURRENDER CHARGE YEARS FROM PURCHASE SURRENDER CHARGE PAYMENT RECEIPT PERCENTAGE PAYMENT RECEIPT PERCENTAGE 1 7% 1 8% 2 7 2 8 3 7 3 8 4 6 4 7 5 5 5 7 6 4 6 6 7 2 7 5 Thereafter 0 8 4 9 3 10 2 Thereafter 0
SURRENDER CHARGE UNDER RAVA SELECT (EXCEPT TEXAS): For purposes of calculating any surrender charge under RAVA Select, we treat amounts surrendered from your contract value in the following order: 1. First, we surrender any contract earnings (contract value less purchase payments received and not previously surrendered). We do not assess a surrender charge on contract earnings. NOTE: We determine contract earnings by looking at the entire contract value, not the earnings of any particular subaccount or the fixed account. 2. Next, in each contract year, we surrender amounts totaling up to 10% of your prior contract anniversary contract value, but only to the extent not included and surrendered in number one above. We do not assess a surrender charge on this amount. (Your initial purchase payment is considered the prior contract anniversary contract value during the first contract year.) 3. Finally, if necessary, we surrender purchase payments. We do assess a surrender charge on these payments during the first three contract years as follows:
CONTRACT YEAR SURRENDER CHARGE PERCENTAGE 1 7% 2 7 3 7 Thereafter 0
* The ten-year surrender charge schedule under RAVA Advantage is not available in Oregon. For contracts issued in Massachusetts, Oregon and Washington, we waive surrender charges after the tenth contract anniversary. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 49 SURRENDER CHARGE UNDER RAVA SELECT IN TEXAS: For purposes of calculating any surrender charge under RAVA Select in Texas, we treat amounts surrendered from your contract value in the following order: 1. First, we surrender any contract earnings (contract value less purchase payments received and not previously surrendered). We do not assess a surrender charge on contract earnings. NOTE: We determine contract earnings by looking at the entire contract value, not the earnings of any particular subaccount or the fixed account. 2. Next, in each contract year, we surrender amounts totaling up to 10% of your prior contract anniversary contract value, but only to the extent not included and surrendered in number one above. We do not assess a surrender charge on this amount. (Your initial purchase payment is considered the prior contract anniversary contract value during the first contract year.) 3. Finally, if necessary, we surrender purchase payments. We surrender amounts from the oldest purchase payments first. We do assess a surrender charge on these payments during the first three contract years as follows:
SURRENDER CHARGE PERCENTAGE (AS A PERCENTAGE OF PURCHASE PAYMENTS SURRENDERED) IN CONTRACT YEAR PAYMENTS MADE IN CONTRACT YEAR 1 2 3 THEREAFTER 1 8% 7% 6% 0% 2 8 7 0 3 8 0 Thereafter 0
PARTIAL SURRENDERS UNDER RAVA ADVANTAGE AND RAVA SELECT For a partial surrender that is subject to a surrender charge, the amount we actually deduct from your contract value will be the amount you request plus any applicable surrender charge. The surrender charge percentage is applied to this total amount. We pay you the amount you requested. EXAMPLE: Assume you requested a surrender of $1,000 and there is a surrender charge of 7%. The total amount we actually deduct from your contract is $1,075.27. We determine this amount as follows: AMOUNT REQUESTED $1,000 ---------------------------- OR ------ = $1,075.27 1.00 - SURRENDER CHARGE .93 By applying the 7% surrender charge to $1,075.27, the surrender charge is $75.27. We pay you the $1,000 you requested. If you make a full surrender of your contract, we also will deduct the applicable contract administrative charge and the applicable prorated MAV, EEB or EEP charge. SURRENDER CHARGE UNDER ANNUITY PAYOUT PLAN E -- PAYOUTS FOR A SPECIFIED PERIOD: Under this payout plan, you can choose to take a surrender. The amount that you can surrender is the present value of any remaining variable payouts. For qualified contracts, the discount rate we use in the calculation will be 4.72% if the assumed investment rate is 3.5% and 6.22% if the assumed investment rate is 5%. For nonqualified contracts, the discount rate we use in the calculation will be 4.92% if the assumed investment rate is 3.5% and 6.42% if the assumed investment rate is 5%. The surrender charge equals the present value of the remaining payouts using the assumed investment rate minus the present value of the remaining payouts using the discount rate. In no event would your surrender charge exceed 9% of the amount available for payouts under the plan. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 50 SURRENDER CHARGE CALCULATION EXAMPLE The following is an example of the calculation we would make to determine the surrender charge on a RAVA Advantage contract that contains a seven-year surrender charge schedule with this history: - The contract date is July 1, 2002 with a contract year of July 1 through June 30 and with an anniversary date of July 1 each year; and - We received these payments: -- $10,000 July 1, 2002; -- $ 8,000 Dec. 31, 2007; -- $ 6,000 Feb. 20, 2010; and - The owner surrenders the contract for its total surrender value of $26,500 on Aug. 5, 2011 and had not made any other surrenders during that contract year; and - The prior anniversary July 1, 2011 contract value was $28,000.
SURRENDER CHARGE EXPLANATION $ 0 $2,500 is contract earnings surrendered without charge; and 0 $300 is 10% of the prior anniversary contract value that is in excess of contract earnings surrendered without charge (from above). 10% of $28,000 = $2,800 - $2,500 = $300 0 $10,000 July 1, 2002 payment was received eight or more years before surrender and is surrendered without surrender charge; and 480 $8,000 Dec. 31, 2007 payment is in its fourth year from receipt, surrendered with a 6% surrender charge; and 420 $6,000 Feb. 20, 2010 payment is in its second year from ---- receipt, surrendered with a 7% surrender charge. $900
WAIVER OF SURRENDER CHARGES We do not assess surrender charges under RAVA Advantage or RAVA Select for: - surrenders of any contract earnings; - surrenders of amounts totaling up to 10% of your prior contract anniversary contract value to the extent it exceeds contract earnings; - amounts surrendered after the tenth contract anniversary in Massachusetts, Washington and Oregon; - required minimum distributions from a qualified annuity (for those amounts required to be distributed from the contract described in this prospectus); - contracts settled using an annuity payout plan, unless an annuity payout Plan E is later surrendered; - amounts we refund to you during the free look period*; - death benefits*; and - surrenders you make under your contract's "Waiver of Surrender Charges for Nursing Home Confinement" provision*. To the extent permitted by state law, this provision applies when you are under age 76 on the date that we issue the contract. Under this provision, we will waive surrender charges that we normally assess upon full or partial surrender. Under RAVA Advantage, you must provide proof satisfactory to us that, as of the date you request the surrender, you or the annuitant are confined to a nursing home and have been for the prior 90 days and the confinement began after the contract date. Under RAVA Select, you must provide proof satisfactory to us that, as of the date you request the surrender, you or your spouse are confined to a nursing home or hospital and have been for the prior 90 days and the confinement began after the contract date. (See your contract for additional conditions and restrictions on this waiver.) * However, we will reverse certain purchase payment credits. (See "Valuing Your Investment -- Purchase payment credits.") OTHER INFORMATION ON CHARGES: AEFC makes certain custodial services available to some profit sharing, money purchase and target benefit plans funded by our annuities. Fees for these services start at $30 per calendar year per participant. AEFC will charge a termination fee for owners under age 59 1/2 (fee waived in case of death or disability). POSSIBLE GROUP REDUCTIONS: In some cases we may incur lower sales and administrative expenses due to the size of the group, the average contribution and the use of group enrollment procedures. In such cases, we may be able to reduce or eliminate the contract administrative and surrender charges. However, we expect this to occur infrequently. PREMIUM TAXES Certain state and local governments impose premium taxes on us (up to 3.5%). These taxes depend upon your state of residence or the state in which the contract was sold. Currently, we deduct any applicable premium tax when annuity payouts begin, but we reserve the right to deduct this tax at other times such as when you surrender your contract. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 51 VALUING YOUR INVESTMENT We value your accounts as follows: FIXED ACCOUNT We value the amounts you allocated to the fixed account directly in dollars. The fixed account value equals: - the sum of your purchase payments and transfer amounts allocated to the fixed account; - plus any purchase payment credits allocated to the fixed account; - plus interest credited; - minus the sum of amounts surrendered (including any applicable surrender charges) and amounts transferred out; - minus any prorated portion of the contract administrative charge; - minus any prorated portion of the MAV rider fee (if selected); - minus any prorated portion of the EEB rider fee (if selected); and - minus any prorated portion of the EEP rider fee (if selected). SUBACCOUNTS We convert amounts you allocated to the subaccounts into accumulation units. Each time you make a purchase payment or transfer amounts into one of the subaccounts or we apply any purchase payment credits to a subaccount, we credit a certain number of accumulation units to your contract for that subaccount. Conversely, each time you take a partial surrender, transfer amounts out of a subaccount, or we assess a contract administrative charge, a surrender charge or any applicable charge for an optional death benefit, we subtract a certain number of accumulation units from your contract. The accumulation units are the true measure of investment value in each subaccount during the accumulation period. They are related to, but not the same as, the net asset value of the fund in which the subaccount invests. The dollar value of each accumulation unit can rise or fall daily depending on the variable account expenses, performance of the fund and on certain fund expenses. Here is how we calculate accumulation unit values: NUMBER OF UNITS: to calculate the number of accumulation units for a particular subaccount we divide your investment by the current accumulation unit value. ACCUMULATION UNIT VALUE: the current accumulation unit value for each subaccount equals the last value times the subaccount's current net investment factor. WE DETERMINE THE NET INVESTMENT FACTOR BY: - adding the fund's current net asset value per share, plus the per share amount of any accrued income or capital gain dividends to obtain a current adjusted net asset value per share; then - dividing that sum by the previous adjusted net asset value per share; and - subtracting the percentage factor representing the mortality and expense risk fee from the result. Because the net asset value of the fund may fluctuate, the accumulation unit value may increase or decrease. You bear all the investment risk in a subaccount. FACTORS THAT AFFECT SUBACCOUNT ACCUMULATION UNITS: accumulation units may change in two ways -- in number and in value. The number of accumulation units you own may fluctuate due to: - additional purchase payments you allocate to the subaccounts; - any purchase payment credits allocated to the subaccounts; - transfers into or out of the subaccounts; - partial surrenders; - surrender charges; - a prorated portion of the contract administrative charge; - a prorated portion of the MAV rider fee (if selected); - a prorated portion of the EEB rider fee (if selected); and/or - a prorated portion of the EEP rider fee (if selected). AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 52 Accumulation unit values will fluctuate due to: - changes in funds' net asset value; - dividends distributed to the subaccounts; - capital gains or losses of funds; - fund operating expenses; and/or - mortality and expense risk fees. PURCHASE PAYMENT CREDITS UNDER RAVA ADVANTAGE For RAVA Advantage, we add a credit* to your contract in the amount of: - 1% of each purchase payment received: -- if you elect the ten-year surrender charge schedule for your contract; OR -- if you elect the seven-year surrender charge schedule for your contract AND your initial purchase payment to the contract is at least $100,000. - 2% of each purchase payment received if you elect the ten-year surrender charge schedule for your contract AND your initial purchase payment to the contract is at least $100,000. We fund the credits from our general account. We do not consider credits to be "investments" for income tax purposes. (See "Taxes.") We allocate each credit to your contract value when the applicable purchase payment is applied to your contract value. We allocate such credits to your contract value according to allocation instructions in effect for your purchase payments. We will reverse credits from the contract value for any purchase payment that is not honored. The amount returned to you under the free look provision also will not include any credits applied to your contract. (See "The Contract in Brief - Free look period.") To the extent a death benefit or surrender payment includes purchase payment credits applied within twelve months preceding: (1) the date of death that results in a lump sum death benefit under this contract; or (2) a request for surrender charge waiver due to Nursing Home Confinement, we will assess a charge, similar to a surrender charge, equal to the amount of the purchase payment credits. The amount we pay to you under these circumstances will always equal or exceed your surrender value. Surrender charges under the contract may be higher than those for contracts that do not have purchase payment credits. The amount of the credits may be more than offset by the additional charges associated them. Because of higher charges, there could be circumstances where you may be worse off purchasing this contract with the credits than purchasing other contracts. All things being equal (such as fund performance and availability), this may occur if you select the ten-year surrender charge and you make a full withdrawal in years five through ten. We pay for the credits primarily through revenue from a higher and longer withdrawal charge schedule and through lower costs associated with larger sized contracts, including lower compensation paid on the sales of these contracts. We reserve the right to increase the amount of the credit for certain groups of contract owners. The increase will not be greater than 8% of total net purchase payments. We would pay for increases in credit amounts primarily through reduced expenses expected from such groups. * The ten-year surrender charge under RAVA Advantage is not available in Oregon. RAVA Advantage contracts purchased in Oregon are only eligible for a 1% purchase payment credit if the initial purchase payment is at least $100,000. PURCHASE PAYMENT CREDITS UNDER RAVA SELECT For RAVA Select, we add a credit to your contract in the amount of 1% of each purchase payment received in the first contract year if your initial purchase payment to the contract is at least $250,000. We fund the credits from our general account. We do not consider credits to be "investments" for income tax purposes. (See "Taxes.") We allocate each credit to your contract value when the applicable purchase payment is applied to your contract value. We allocate such credits to your contract value according to allocation instructions in effect for your purchase payments. We will reverse credits from the contract value for any purchase payment that is not honored. The amount returned to you under the free look provision also will not include any credits applied to your contract. (See "The Contract in Brief - Free look period.") We will not assess a charge equal to the amount of the purchase payment credits upon payment of a death benefit or surrender. Expenses under the contract may be higher than those for contracts that do not have purchase payment credits. The amount of the credit may be more than offset by the additional charges associated with it. Because of higher charges, you may be worse off purchasing this contract with the credit than purchasing other contracts. We pay for the credit primarily through lower costs associated with larger sized contracts, including lower compensation paid on the sales of these contracts. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 53 MAKING THE MOST OF YOUR CONTRACT AUTOMATED DOLLAR-COST AVERAGING Currently, you can use automated transfers to take advantage of dollar-cost averaging (investing a fixed amount at regular intervals). For example, you might transfer a set amount monthly from a relatively conservative subaccount to a more aggressive one, or to several others, or from the fixed account to one or more subaccounts. There is no charge for dollar-cost averaging. This systematic approach can help you benefit from fluctuations in accumulation unit values caused by fluctuations in the market values of the funds. Since you invest the same amount each period, you automatically acquire more units when the market value falls and fewer units when it rises. The potential effect is to lower your average cost per unit. HOW DOLLAR-COST AVERAGING WORKS
NUMBER AMOUNT ACCUMULATION OF UNITS MONTH INVESTED UNIT VALUE PURCHASED By investing an equal number of dollars each month... Jan $100 $20 5.00 Feb 100 18 5.56 you automatically buy more Mar 100 17 5.88 units when the per unit market price is low... ----> Apr 100 15 6.67 May 100 16 6.25 Jun 100 18 5.56 July 100 17 5.88 Aug 100 19 5.26 and fewer units when the per unit market price is high. ----> Sept 100 21 4.76 Oct 100 20 5.00
You paid an average price of only $17.91 per unit over the 10 months, while the average market price actually was $18.10. Dollar-cost averaging does not guarantee that any subaccount will gain in value nor will it protect against a decline in value if market prices fall. Because dollar-cost averaging involves continuous investing, your success will depend upon your willingness to continue to invest regularly through periods of low price levels. Dollar-cost averaging can be an effective way to help meet your long-term goals. For specific features contact your sales representative. ASSET REBALANCING You can ask to have the variable subaccount portion of your contract value allocated according to the percentages (in whole percentage amounts ) that you choose. We automatically will rebalance the variable subaccount portion of your contract value either quarterly, semi-annually, or annually. The period you select will start to run on the date we record your request. On the first valuation date of each of these periods, we automatically will rebalance your contract value so that the value in each subaccount matches your current subaccount percentage allocations. These percentage allocations must be in whole numbers. Asset rebalancing does not apply to the fixed account. There is no charge for asset rebalancing. The contract value must be at least $2,000. You can change your percentage allocations or your rebalancing period at any time by contacting us in writing. We will restart the rebalancing period you selected as of the date we record your change. You also can ask us in writing to stop rebalancing your contract value. You must allow 30 days for us to change any instructions that currently are in place. For more information on asset rebalancing, contact your sales representative. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 54 TRANSFERRING BETWEEN ACCOUNTS You may transfer contract value from any one subaccount, or the fixed account, to another subaccount before annuity payouts begin. (Certain restrictions apply to transfers involving the fixed account.) We will process your transfer on the valuation date we receive your request. We will value your transfer at the next accumulation unit value calculated after we receive your request. There is no charge for transfers. Before making a transfer, you should consider the risks involved in changing investments. We may suspend or modify transfer privileges at any time. The contract is not designed for use by individuals, professional market timing organizations, or other entities that do "market timing," programmed transfers, frequent transfers or excessive trading, or transfers that are large in relation to the total assets of any fund underlying the contract. These and similar activities may adversely affect a fund's ability to invest effectively in accordance with its investment objectives and policies, may increase expenses and may harm other contract owners who allocated purchase payments to the fund regardless of their transfer activity. Accordingly, individuals and organizations that use market-timing investment strategies and make frequent transfers should not own this contract. We monitor the frequency of transfers, including the size of transfers in relation to fund assets in each underlying fund, and we take appropriate action as necessary. In order to prevent market timing activities that may harm or disadvantage other contract owners, we may apply modifications or restrictions (including suspending the transfer privilege) in any reasonable manner to prevent a transfer. We may also reject or restrict any specific payment or transfer request and impose specific limitations with respect to market timers, including restricting transfers by market timers to certain underlying funds. We may also apply other restrictions or modifications that could include, but not be limited to: - not accepting telephone or electronic transfer requests; - requiring a minimum time period between each transfer; - not accepting transfer requests of an agent acting under power of attorney on behalf of more than one contract owner; or - limiting the dollar amount that a contract owner may transfer at any one time. We agree to provide notice of our intent to restrict transfer privileges to contract owners who have engaged in disruptive activity. In addition, some of the underlying funds have reserved the right to temporarily or permanently refuse payments or transfer requests from us if, in the judgment of the fund's investment adviser, the fund would be unable to invest effectively in accordance with its investment objective or policies, or would otherwise potentially be adversely affected. Accordingly, we may not be in a position to effect certain allocations or transfers requested by market timers and may refuse such requests without prior notice. Subject to state law, we reserve the right to impose, without prior notice, restrictions on allocations and transfers that we determine, in our sole discretion, will disadvantage or potentially hurt the rights or interests of other contract owners. For information on transfers after annuity payouts begin, see "Transfer policies" below. TRANSFER POLICIES - Before annuity payouts begin, you may transfer contract values between the subaccounts, or from the subaccounts to the fixed account at any time. However, if you made a transfer from the fixed account to the subaccounts, you may not make a transfer from any subaccount back to the fixed account until the next contract anniversary. - You may transfer contract values from the fixed account to the subaccounts once a year during a 31-day transfer period starting on each contract anniversary (except for automated transfers, which can be set up at any time for certain transfer periods subject to certain minimums). - If we receive your request within 30 days before the contract anniversary date, the transfer from the fixed account to the subaccounts will be effective on the anniversary. - If we receive your request on or within 30 days after the contract anniversary date, the transfer from the fixed account to the subaccounts will be effective on the valuation date we receive it. - We will not accept requests for transfers from the fixed account at any other time. - Once annuity payouts begin, you may not make transfers to or from the fixed account, but you may make transfers once per contract year among the subaccounts. During the annuity payout period, you cannot invest in more than five subaccounts at any one time unless we agree otherwise. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 55 HOW TO REQUEST A TRANSFER OR SURRENDER 1 BY LETTER Send your name, contract number, Social Security Number or Taxpayer Identification Number and signed request for a transfer or surrender to: REGULAR MAIL: IDS LIFE INSURANCE COMPANY 70100 AXP FINANCIAL CENTER MINNEAPOLIS, MN 55474 MINIMUM AMOUNT Transfers or surrenders: $250 or entire account balance MAXIMUM AMOUNT Transfers or surrenders: Contract value or entire account balance 2 BY AUTOMATED TRANSFERS AND AUTOMATED PARTIAL SURRENDERS Your sales representative can help you set up automated transfers among your subaccounts or fixed account or partial surrenders from the accounts. You can start or stop this service by written request or other method acceptable to us. You must allow 30 days for us to change any instructions that are currently in place. - Automated transfers from the fixed account to any one of the subaccounts may not exceed an amount that, if continued, would deplete the fixed account within 12 months. - Automated surrenders may be restricted by applicable law under some contracts. - You may not make additional purchase payments if automated partial surrenders are in effect. - Automated partial surrenders may result in IRS taxes and penalties on all or part of the amount surrendered. - The balance in any account from which you make an automated transfer or automated partial surrender must be sufficient to satisfy your instructions. If not, we will suspend your entire automated arrangement until the balance is adequate. - If we must suspend your automated transfer or automated partial surrender arrangement for six months, we reserve the right to discontinue the arrangement in its entirety. MINIMUM AMOUNT Transfers or surrenders: $50 MAXIMUM AMOUNT Transfers or surrenders: None (except for automated transfers from the fixed account) 3 BY PHONE Call between 7 a.m. and 10 p.m. Central time: (800) 862-7919 TTY service for the hearing impaired: (800) 285-8846 MINIMUM AMOUNT Transfers or surrenders: $250 or entire account balance MAXIMUM AMOUNT Transfers: Contract value or entire account balance Surrenders: $100,000 We answer telephone requests promptly, but you may experience delays when the call volume is unusually high. If you are unable to get through, use the mail procedure as an alternative. We will honor any telephone transfer or surrender requests that we believe are authentic and we will use reasonable procedures to confirm that they are. This includes asking identifying questions and tape recording calls. We will not allow a telephone surrender within 30 days of a phoned-in address change. As long as we follow the procedures, we (and our affiliates) will not be liable for any loss resulting from fraudulent requests. Telephone transfers or surrenders are automatically available. You may request that telephone transfers or surrenders NOT be authorized from your account by writing to us. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 56 SURRENDERS You may surrender all or part of your contract at any time before annuity payouts begin by sending us a written request or calling us. We will process your surrender request on the valuation date we receive it. For total surrenders, we will compute the value of your contract at the next accumulation unit value calculated after we receive your request. We may ask you to return the contract. You may have to pay surrender charges (see "Charges -- Surrender Charge"), MAV charges (see "Charges - MAV rider fee"), EEB charges (see "Charges - EEB rider fee"), EEP charges (see "Charges - EEP rider fee"), and IRS taxes and penalties (see "Taxes"). You cannot make surrenders after annuity payouts begin except under Plan E (see "The Annuity Payout Period -- Annuity Payout Plans"). SURRENDER POLICIES If you have a balance in more than one account and you request a partial surrender, we will withdraw money from all your subaccounts and/or the fixed account in the same proportion as your value in each account correlates to your total contract value, unless you request otherwise. The minimum contract value after partial surrender is $600. RECEIVING PAYMENT 1 BY REGULAR OR EXPRESS MAIL - payable to you; - mailed to address of record. NOTE: We will charge you a fee if you request express mail delivery. 2 BY WIRE - request that payment be wired to your bank; - bank account must be in the same ownership as your contract; and - pre-authorization required. NOTE: We will charge you a fee if you request that payment be wired to your bank. For instructions, please contact your sales representative. Normally, we will send the payment within seven days after receiving your request. However, we may postpone the payment if: -- the surrender amount includes a purchase payment check that has not cleared; -- the NYSE is closed, except for normal holiday and weekend closings; -- trading on the NYSE is restricted, according to SEC rules; -- an emergency, as defined by SEC rules, makes it impractical to sell securities or value the net assets of the accounts; or -- the SEC permits us to delay payment for the protection of security holders. TSA -- SPECIAL SURRENDER PROVISIONS PARTICIPANTS IN TAX-SHELTERED ANNUITIES The Code imposes certain restrictions on your right to receive early distributions from a TSA: - Distributions attributable to salary reduction contributions (plus earnings) made after Dec. 31, 1988, or to transfers or rollovers from other contracts, may be made from the TSA only if: -- you are at least age 59 1/2; -- you are disabled as defined in the Code; -- you severed employment with the employer who purchased the contract; or -- the distribution is because of your death. - If you encounter a financial hardship (as provided by the Code), you may be eligible to receive a distribution of all contract values attributable to salary reduction contributions made after Dec. 31, 1988, but not the earnings on them. - Even though a distribution may be permitted under the above rules, it may be subject to IRS taxes and penalties (see "Taxes"). - The employer must comply with certain nondiscrimination requirements for certain types of contributions under a TSA contract to be excluded from taxable income. You should consult your employer to determine whether the nondiscrimination rules apply to you. - The above restrictions on distributions do not affect the availability of the amount credited to the contract as of Dec. 31, 1988. The restrictions also do not apply to transfers or exchanges of contract value within the contract, or to another registered variable annuity contract or investment vehicle available through the employer. - If the contract has a loan provision, the right to receive a loan is described in detail in your contract. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 57 CHANGING OWNERSHIP You may change ownership of your nonqualified annuity at any time by completing a change of ownership form we approve and sending it to our office. The change will become binding on us when we receive and record it. We will honor any change of ownership request that we believe is authentic and we will use reasonable procedures to confirm authenticity. If we follow these procedures, we will not take any responsibility for the validity of the change. Please consider carefully whether or not you wish to change ownership of your nonqualified annuity if you have elected the MAV, EEB or EEP. If you change ownership of your contract, we will terminate the EEP. This includes both the EEP Part I benefits and the EEP Part II benefits. (See the description of these terms in "Optional Benefits".) In addition, the terms of the EEB and the MAV Death Benefit will change due to a change of ownership. If either the new owner or the annuitant is older than age 75, the EEB will terminate. Otherwise, the EEB will effectively "start over." We will treat the EEB as if it is issued on the day the change of ownership is made, using the attained age of the new owner as the "issue age" to determine the benefit levels. The account value on the date of the ownership change will be treated as a "purchase payment" in determining future values of "earnings at death" under the EEB. If either the new owner or the annuitant is older than age 75, the MAV will terminate. If the MAV on the date of ownership change is greater than the account value on the date of the ownership change, we will set the MAV equal to the account value. Otherwise, the MAV value will not change due to a change in ownership. Please see the descriptions of these riders in "Optional Benefits." The rider charges described in "Charges" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force) for any rider that continues after a change of ownership. We reserve the right to assess charges for the number of days the rider was in force for any rider that is terminated due to a change of ownership. If you have a nonqualified annuity, you may incur income tax liability by transferring, assigning or pledging any part of it. (See "Taxes.") If you have a qualified annuity, you may not sell, assign, transfer, discount or pledge your contract as collateral for a loan, or as security for the performance of an obligation or for any other purpose except as required or permitted by the Code. However, if the owner is a trust or custodian, or an employer acting in similar capacity, ownership of the contract may be transferred to the annuitant. BENEFITS IN CASE OF DEATH -- STANDARD DEATH BENEFIT We will pay the death benefit to your beneficiary upon the earlier of your death or the annuitant's death. If a contract has more than one person as the owner, we will pay benefits upon the first to die of any owner or the annuitant. If you or the annuitant die before annuity payouts begin while this contract is in force, we will pay the beneficiary as follows: If both you and the annuitant are age 80 or younger on the date of death, the beneficiary receives the greatest of: - contract value; - purchase payments minus adjusted partial surrenders; or - the contract value as of the most recent sixth contract anniversary, plus purchase payments and minus adjusted partial surrenders since that anniversary. If either you or the annuitant are age 81 or older on the date of death, the beneficiary receives the greater of: - contract value; or - purchase payments minus adjusted partial surrenders. ADJUSTED PARTIAL SURRENDERS PS X DB ------- CV PS = the partial surrender including any applicable surrender charge. DB = the death benefit on the date of (but prior to) the partial surrender. CV = the contract value on the date of (but prior to) the partial surrender. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 58 EXAMPLE OF STANDARD DEATH BENEFIT CALCULATION WHEN THE OWNER AND ANNUITANT ARE AGE 80 OR YOUNGER: - You purchase the contract with a payment of $20,000 on Jan. 1, 2003. - On Jan 1, 2009 (the sixth contract anniversary) the contract value grows to $30,000. - March 1, 2009 the contract value falls to $28,000 at which point you take a $1,500 partial surrender, leaving a contract value of $26,500. We calculate the death benefit on March 1, 2009 as follows: The contract value on the most recent sixth contract anniversary: $ 30,000 plus purchase payments made since that anniversary: 0 minus "adjusted partial surrenders" taken since that anniversary calculated as: $1,500 X $30,000 -1,607 ---------------- = -------- $28,000 for a death benefit of: $ 28,393
IF YOU DIE BEFORE YOUR SETTLEMENT DATE When paying the beneficiary, we will process the death claim on the valuation date that our death claim requirements are fulfilled. We will determine the contract's value at the next accumulation unit value calculated after our death claim requirements are fulfilled. We pay interest, if any, at a rate no less than required by law. We will mail payment to the beneficiary within seven days after our death claim requirements are fulfilled. NONQUALIFIED ANNUITIES If your spouse is sole beneficiary and you die before the settlement date, your spouse may keep the contract as owner. To do this your spouse must, within 60 days after we receive proof of death, give us written instructions to keep the contract in force. If your beneficiary is not your spouse, we will pay the beneficiary in a single sum unless you give us other written instructions. We must fully distribute the death benefit within five years of your death. However, the beneficiary may receive payouts under any annuity payout plan available under this contract if: - the beneficiary asks us in writing within 60 days after we receive proof of death; and - payouts begin no later than one year after your death, or other date as permitted by the Code; and - the payout period does not extend beyond the beneficiary's life or life expectancy. QUALIFIED ANNUITIES - SPOUSE BENEFICIARY: If you have not elected an annuity payout plan, and if your spouse is the sole beneficiary, your spouse may either elect to treat the contract as his/her own or elect an annuity payout plan or another plan agreed to by us. If your spouse elects a payout plan, the payouts must begin no later than the year in which you would have reached age 70 1/2. If you attained age 70 1/2 at the time of death, payouts must begin no later than Dec. 31 of the year following the year of your death. - NON-SPOUSE BENEFICIARY: If you have not elected an annuity payout plan, and if death occurs prior to the year you would have attained age 70 1/2, the beneficiary may elect to receive payouts from the contract over a five year period. If your death occurs after attaining age 70 1/2, we will pay the beneficiary in a single sum unless the beneficiary elects to receive payouts under any payout plan available under this contract if: - the beneficiary asks us in writing within 60 days after we receive proof of death; and - payouts begin no later than one year following the year of your death; and - the payout period does not extend beyond the beneficiary's life or life expectancy. - ANNUITY PAYOUT PLAN: If you elect an annuity payout plan, the payouts to your beneficiary will continue pursuant to the annuity payout plan you elect. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 59 OPTIONAL BENEFITS MAXIMUM ANNIVERSARY VALUE DEATH BENEFIT The MAV is intended to provide additional death benefit protection in the event of fluctuating fund values. This is an optional benefit that you may select for an additional annual charge (see "Charges"). The MAV does not provide any additional benefit before the first contract anniversary after the rider effective date. The MAV may be of less value if you or the annuitant is older since we stop resetting the maximum anniversary value at age 81. Although we stop resetting the maximum anniversary value at age 81, the MAV rider fee continues to apply until the rider terminates. In addition, the MAV does not provide any additional benefit with respect to fixed account values during the time you have amounts allocated to the fixed account. Be sure to discuss with your sales representative whether or not the MAV is appropriate for your situation. If this MAV rider is available in your state and both you and the annuitant are age 75 or younger at contract issue, you may choose to add the MAV to your contract. Generally, you must elect the MAV at the time you purchase your contract and your rider effective date will be the contract issue date. In some instances the rider effective date for the MAV may be after we issue the contract according to terms determined by us and at our sole discretion. We reserve the right to discontinue offering the MAV for new contracts. On the first contract anniversary after the rider effective date we set the maximum anniversary value equal to the highest of your (a) current contract value, or (b) total purchase payments minus adjusted partial surrenders. Every contract anniversary after that, through age 80, we compare the previous anniversary's maximum anniversary value plus subsequent purchase payments less subsequent adjusted partial surrenders to the current contract value and we reset the maximum anniversary value if the current contract value is higher. We stop resetting the maximum anniversary value after you or the annuitant reach age 81. However, we continue to add subsequent purchase payments and subtract adjusted partial surrenders from the maximum anniversary value. When annuity payouts begin, or if you terminate the contract for any reason other than death, this rider will terminate. TERMINATING THE MAV - You may terminate the MAV rider within 30 days of the first contract anniversary after the rider effective date. - You may terminate the MAV rider within 30 days of any contract anniversary beginning with the seventh contract anniversary. - The MAV rider will terminate when you make a full surrender from the contract or when annuity payouts begin. - The MAV rider will terminate in the case of spousal continuation or ownership change if the new owner is age 76 or older. If you terminate the MAV, the standard death benefit applies. EXAMPLE - You purchase the contract (with the MAV rider) with a payment of $20,000 on Jan. 1, 2003. - On Jan. 1, 2004 (the first contract anniversary) the contract value grows to $24,000. - On March 1, 2004 the contract value falls to $22,000, at which point you take a $1,500 partial surrender, leaving a contract value of $20,500. We calculate the death benefit on March 1, 2004 as follows: The maximum anniversary value immediately preceding the date of death plus any payments made since that anniversary minus adjusted partial surrenders: Greatest of your contract anniversary contract values: $ 24,000 plus purchase payments made since that anniversary: +0 minus adjusted partial surrenders, calculated as: $1,500 X $24,000 -1,636 --------------- = --------- $22,000 for a death benefit of: $ 22,364
NONQUALIFIED ANNUITIES: If you die before the settlement date and your spouse is the only beneficiary, your spouse may choose to keep the contract and become the contract owner. The contract will then value equal to the death benefit that would otherwise have been paid under the MAV. To do this your spouse must, within 60 days after we receive proof of death, give us written instructions to keep the contract in force. If your spouse at the time he or she elects to continue the contract has reached age 76, the MAV rider will terminate. If your spouse at the time he or she elects to continue the contract has not yet reached age 76, he or she may choose to continue the MAV rider. In this case, the rider charges described in "Charges" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force). These charges will be based on the total contract value on the anniversary, including the additional amounts paid into the contract under the MAV rider. If, at the time he or she elects to continue the contract, your spouse has not yet reached age 76 and chooses not to continue the MAV rider, the contract value will be increased to the MAV death benefit amount if it is greater than the contract value on the death benefit valuation date. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 60 QUALIFIED ANNUITIES: If your spouse is the sole beneficiary, your spouse may keep the contract as owner until the date on which the annuitant would have reached age 70 1/2, or any other date permitted by the Code. The contract value will be equal to the death benefit that would otherwise have been paid under the MAV. To do this your spouse must, within 60 days after we receive proof of death, give us written instructions to keep the contract in force. If your spouse at the time he or she elects to continue the contract has reached age 76, the MAV rider will terminate. If your spouse at the time he or she elects to continue the contract has not yet reached age 76, he or she may choose to continue the MAV rider. In this case, the rider charges described in "Charges" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force). These charges will be based on the total contract value on the anniversary, including the additional amounts paid into the contract under the MAV rider. If, at the time he or she elects to continue the contract, your spouse has not yet reached age 76 and chooses not to continue the MAV rider, the contract value will be increased to the MAV death benefit amount if it is greater than the contract value on the death benefit valuation date. ENHANCED EARNINGS DEATH BENEFIT The EEB is intended to provide an additional benefit to your beneficiary to help offset expenses after your death such as funeral expenses or federal and state taxes. This is an optional benefit that you may select for an additional annual charge (see "Charges"). The EEB provides for reduced benefits if you or the annuitant is age 70 or older at the rider effective date and it does not provide any additional benefit before the first contract anniversary. The EEB also may result in reduced benefits if you take required minimum distributions from your qualified annuity or any partial surrenders during the life of your contract, both of which may reduce contract earnings. This is because the benefit paid by the EEB is determined by the amount of earnings at death. Be sure to discuss with your sales representative and your tax advisor whether or not the EEB is appropriate for your situation. If this EEB rider is available in your state and both you and the annuitant are age 75 or younger at the rider effective date, you may choose to add the EEB to your contract. Generally, you must elect the EEB at the time you purchase your contract and your rider effective date will be the contract issue date. In some instances the rider effective date for the EEB may be after we issue the contract according to terms determined by us and at our sole discretion. You may not select this rider if you select the EEP. We reserve the right to discontinue offering the EEB for new contracts. When annuity payouts begin, or if you terminate the contract for any reason other than death, this rider will terminate. The EEB provides that if you or the annuitant dies after the first contract anniversary, but before annuity payouts begin, and while this contract is in force, we will pay the beneficiary: - the standard death benefit amount (see "Benefits in Case of Death - Standard Benefit") or the MAV death benefit amount, if applicable, PLUS - 40% of your earnings at death if you and the annuitant were under age 70 on the rider effective date; or - 15% of your earnings at death if you or the annuitant were age 70 or older on the rider effective date. Additional death benefits payable under the EEB are not included in the adjusted partial surrender calculation. EARNINGS AT DEATH FOR THE EEB AND EEP: If the rider effective date for the EEB or EEP is the contract issue date, earnings at death is an amount equal to: - the standard death benefit amount or the MAV death benefit amount, if applicable (the "death benefit amount") - MINUS purchase payments not previously surrendered. The earnings at death may not be less than zero and may not be more than 250% of the purchase payments not previously surrendered that are one or more years old. If the rider effective date for the EEB is AFTER the contract issue date, earnings at death is an amount equal to the death benefit amount - MINUS the greater of: - the contract value as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that contract value since that rider effective date; or - an amount equal to the death benefit amount as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that death benefit amount since that rider effective date - PLUS any purchase payments made on or after the EEB rider effective date not previously surrendered. The earnings at death may not be less than zero and may not be more than 250% multiplied by: - the greater of: - the contract value as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that contract value since that rider effective date; or - an amount equal to the death benefit amount as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that death benefit amount since that rider effective date - PLUS any purchase payments made on or after the EEB rider effective date not previously surrendered that are one or more years old. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 61 TERMINATING THE EEB - You may terminate the EEB rider within 30 days of the first contract anniversary after the rider effective date. - You may terminate the EEB rider within 30 days of any contract anniversary beginning with the seventh contract anniversary after the rider effective date. - The EEB rider will terminate when you make a full surrender from the contract or when annuity payouts begin. - The EEB rider will terminate in the case of spousal continuation or ownership change if the new owner is age 76 or older. EXAMPLE OF THE EEB - You purchase the contract with a payment of $100,000 on Jan. 01, 2003 and both you and the annuitant are under age 70. You select the seven-year surrender charge schedule, the MAV and the EEB. - On July 1, 2003 the contract value grows to $105,000. The death benefit on July 1, 2003 equals the standard death benefit, which is the contract value, or $105,000. You have not reached the first contract anniversary so the EEB does not provide any additional benefit at this time. - On Jan. 1, 2004 the contract value grows to $110,000. The death benefit on Jan. 1, 2004 equals: MAV death benefit amount (contract value): $ 110,000 plus the EEB which equals 40% of earnings at death (MAV death benefit amount minus payments not previously surrendered): 0.40 X ($110,000 - $100,000) = +4,000 ---------- Total death benefit of: $ 114,000
- On Jan. 1, 2005 the contract value falls to $105,000. The death benefit on Jan. 1, 2005 equals: MAV death benefit amount (maximum anniversary value): $ 110,000 plus the EEB (40% of earnings at death): 0.40 X ($110,000 - $100,000) = +4,000 ---------- Total death benefit of: $ 114,000
- On Feb. 1, 2005 the contract value remains at $105, 000 and you request a partial surrender, including the applicable 7% surrender charge, of $50,000. We will surrender $10,500 from your contract value free of charge (10% of your prior anniversary's contract value). The remainder of the surrender is subject to a 7% surrender charge because your purchase payment is two years old, so we will surrender $39,500 ($36,735 + $2,765 in surrender charges) from your contract value. Altogether, we will surrender $50,000 and pay you $47,235. We calculate purchase payments not previously surrendered as $100,000 - $45,000 = $55,000 (remember that $5,000 of the partial surrender is contract earnings). The death benefit on Feb. 1, 2005 equals: MAV death benefit amount (maximum anniversary value adjusted for partial surrenders): ($50,000 X $110,000) $ 57,619 $110,000 - -------------------- = $105,000 plus the EEB (40% of earnings at death): 0.40 X ($57,619 - $55,000) = +1,048 ---------- Total death benefit of: $ 58,667
- On Jan. 1, 2006 the contract value falls by $40,000. The death benefit on Jan. 1, 2006 equals the death benefit on Feb. 1, 2005. The reduction in contract value has no effect. - On Jan. 1, 2012 the contract value grows to a new high of $200,000. Earnings at death reaches its maximum of 250% of purchase payments not previously surrendered that are one or more years old. The death benefit on Jan. 1, 2012 equals: MAV death benefit amount (contract value): $ 200,000 plus the EEB (40% of earnings at death) 0.40 X 2.50 X ($55,000) = +55,000 ---------- Total death benefit of: $ 255,000
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 62 - On July 1, 2012 you make an additional purchase payment of $50,000 and your contract value grows to $250,000. The new purchase payment is less than one year old and so it has no effect on the EEB. The death benefit on July 1, 2012 equals: MAV death benefit amount (contract value): $ 250,000 plus the EEB (40% of earnings at death) 0.40 X 2.50 X ($55,000) = +55,000 ---------- Total death benefit of: $ 305,000
- On July 1, 2013 the contract value remains $250,000 and the "new" purchase payment is one year old. The value of the EEB changes. The death benefit on July 1, 2013 equals: MAV death benefit amount (contract value): $ 250,000 plus the EEB which equals 40% of earnings at death (the standard death benefit amount minus payments not previously surrendered): 0.40 X ($250,000 - $105,000) = +58,000 ---------- Total death benefit of: $ 308,000
If your spouse is the sole beneficiary and your spouse elects to continue the contract, we will pay an amount into the contract so that the contract value equals the total death benefit payable under the EEB. If the spouse is age 76 or older at the time he or she elects to continue the contract, then the EEB rider will terminate. If your spouse is less than age 76 at the time he or she elects to continue the contract, he or she may choose to continue the EEB. In this case, the following conditions will apply: - the EEB rider will continue, but we will treat the new contract value on the date the ownership of the contract changes to your spouse (after the additional amount is paid into the contract) as if it is a purchase payment in calculating future values of "earnings at death." - the percentages of "earnings at death" payable will be based on your spouse's age at the time he or she elects to continue the contract. - the EEB rider charges described in "Charges - Enhanced Earnings Death Benefit Rider Fee" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force). These charges will be based on the total contract value on the anniversary, including the additional amounts paid into the contract under the EEB rider. NOTE: For special tax considerations associated with the EEB, see "Taxes." ENHANCED EARNINGS PLUS DEATH BENEFIT The EEP is intended to provide an additional benefit to your beneficiary to help offset expenses after your death such as funeral expenses or federal and state taxes. This is an optional benefit that you may select for an additional annual charge (see "Charges"). The EEP provides for reduced benefits if you or the annuitant is age 70 or older at the rider effective date. It does not provide any additional benefit before the first contract anniversary and it does not provide any benefit beyond what is offered under the EEB during the second contract year. The EEP also may result in reduced benefits if you take required minimum distributions from your qualified annuity or any partial surrenders during the life of your contract, both of which may reduce contract earnings. This is because part of the benefit paid by the EEP is determined by the amount of earnings at death. Be sure to discuss with your sales representative and your tax advisor whether or not the EEP is appropriate for your situation. If this EEP rider is available in your state and both you and the annuitant are age 75 or younger at contract issue, you may choose to add the EEP to your contract. You must elect the EEP at the time you purchase your contract and your rider effective date will be the contract issue date. THIS RIDER IS ONLY AVAILABLE UNDER ANNUITIES PURCHASED THROUGH AN EXCHANGE. You may not select this rider if you select the EEB. We reserve the right to discontinue offering the EEP for new contracts. When annuity payouts begin, or if you terminate the contract for any reason other than death, this rider will terminate. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 63 The EEP provides that if you or the annuitant dies after the first contract anniversary, but before annuity payouts begin, and while this contract is in force, we will pay the beneficiary: - EEP Part I benefits, which equal the benefits payable under the EEB described above; PLUS - EEP Part II benefits, which equal a percentage of exchange purchase payments identified at issue not previously surrendered as follows:
PERCENTAGE IF YOU AND THE ANNUITANT ARE PERCENTAGE IF YOU OR THE ANNUITANT ARE CONTRACT YEAR UNDER AGE 70 ON THE RIDER EFFECTIVE DATE 70 OR OLDER ON THE RIDER EFFECTIVE DATE One and Two 0% 0% Three and Four 10% 3.75% Five or more 20% 7.5%
Additional death benefits payable under the EEP are not included in the adjusted partial surrender calculation. If after 6 months, no exchange purchase payments have been received, we will contact you and you will have an additional 30 days to follow-up on exchange purchase payments identified at issue but not received by us. If after these 30 days we have not received any exchange purchase payments, we will convert the EEP rider into an EEB. Another way to describe the benefits payable under the EEP rider is as follows: - the standard death benefit amount (see "Benefits in Case of Death - Standard Death Benefit") or the MAV death benefit amount, if applicable PLUS
IF YOU AND THE ANNUITANT ARE UNDER AGE 70 IF YOU OR THE ANNUITANT ARE AGE 70 CONTRACT YEAR ON THE RIDER EFFECTIVE DATE, ADD... OR OLDER ON THE RIDER EFFECTIVE DATE, ADD... 1 Zero Zero 2 40% X earnings at death (see above) 15% X earnings at death 3 & 4 40% X (earnings at death + 25% of 15% X (earnings at death + 25% of exchange purchase payment*) exchange purchase payment*) 5+ 40% X (earnings at death + 50% of 15% X (earnings at death + 50% of exchange purchase payment*) exchange purchase payment*)
* Exchange purchase payments are purchase payments exchanged from another contract that are identified at issue and not previously surrendered. The company is not responsible for identifying exchange purchase payments if we did not receive proper notification from the company from which the purchase payments are exchanged. TERMINATING THE EEP - You may terminate the EEP rider within 30 days of the first contract anniversary after the rider effective date. - You may terminate the EEP rider within 30 days of any contract anniversary beginning with the seventh contract anniversary. - The EEP rider will terminate when you make a full surrender from the contract or when annuity payouts begin. - The EEP rider will terminate in the case of an ownership change. - The EEP rider will terminate in the case of the spousal continuation if the new owner is age 76 or older. EXAMPLE OF THE EEP - You purchase the contract with an exchange purchase payment of $100,000 on Jan. 01, 2003 and both you and the annuitant are under age 70. You select the seven-year surrender charge schedule, the MAV and the EEP. - On July 1, 2003 the contract value grows to $105,000. The death benefit on July 1, 2003 equals the standard death benefit amount, which is the contract value, or $105,000. You have not reached the first contract anniversary so neither the EEP Part I nor Part II provides any additional benefit at this time. - On Jan. 1, 2004 the contract value grows to $110,000. You have not reached the second contract anniversary so the EEP-Part II does not provide any additional benefit at this time. The death benefit on Jan. 1, 2004 equals: MAV death benefit amount (contract value): $ 110,000 plus the EEP Part I which equals 40% of earnings at death (the MAV death benefit amount minus purchase payments not previously surrendered): 0.40 X ($110,000 - $100,000) = +4,000 ---------- Total death benefit of: $ 114,000
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 64 - On Jan. 1, 2005 the contract value falls to $105,000. The death benefit on Jan. 1, 2005 equals: MAV death benefit amount (maximum anniversary value): $ 110,000 plus the EEP Part I (40% of earnings at death): 0.40 X ($110,000 - $100,000) = +4,000 plus the EEP Part II which in the third contract year equals 10% of exchange purchase payments identified at issue and not previously surrendered: 0.10 X $100,000 = +10,000 ---------- Total death benefit of: $ 124,000
- On Feb. 1, 2005 the contract value remains at $105,000 and you request a partial surrender, including the applicable 7% surrender charge, of $50,000. We will surrender $10,500 from your contract value free of charge (10% of your prior anniversary's contract value). The remainder of the surrender is subject to a 7% surrender charge because your purchase payment is two years old, so we will surrender $39,500 ($36,735 + $2,765 in surrender charges) from your contract value. Altogether, we will surrender $50,000 and pay you $47,235. We calculate purchase payments not previously surrendered as $100,000 - $45,000 = $55,000 (remember that $5,000 of the partial surrender is contract earnings). The death benefit on Feb. 1, 2005 equals: MAV death benefit amount (maximum anniversary value adjusted for partial surrenders): ($50,000 X $110,000) $ 57,619 $110,000 - ------------------- = $105,000 plus the EEP Part I (40% of earnings at death): 0.40 X ($57,619 - $55,000) = +1,048 plus the EEP Part II which in the third contract year equals 10% of exchange purchase payments identified at issue and not previously surrendered: 0.10 X $55,000 = +5,500 ---------- Total death benefit of: $ 64,167
- On Jan. 1, 2006 the contract value falls by $40,000. The death benefit on Jan. 1, 2006 equals the death benefit on Feb. 1, 2005. The reduction in contract value has no effect. - On Jan. 1, 2012 the contract value grows to a new high of $200,000. Earnings at death reaches its maximum of 250% of purchase payments not previously surrendered that are one or more years old. Because we are beyond the fourth contract anniversary the EEP also reaches its maximum of 20%. The death benefit on Jan. 1, 2012 equals: MAV death benefit amount (contract value): $ 200,000 plus the EEP Part I (40% of earnings at death) .40 X (2.50 X $55,000) = +55,000 plus the EEP Part II which after the fourth contract year equals 20% of exchange purchase payments identified at issue and not previously surrendered: 0.20 X $55,000 = +11,000 ---------- Total death benefit of: $ 266,000
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 65 - On July 1, 2012 you make an additional purchase payment of $50,000 and your contract value grows to $250,000. The new purchase payment is less than one year old and so it has no effect on either the EEP Part I or EEP Part II. The death benefit on July 1, 2012 equals: MAV death benefit amount (contract value): $ 250,000 plus the EEP Part I (40% of earnings at death) .40 X (2.50 X $55,000)= +55,000 plus the EEP Part II, which after the fourth contract year equals 20% of exchange purchase payments identified at issue and not previously surrendered: 0.20 X $55,000 = +11,000 ---------- Total death benefit of: $ 316,000
- On July 1, 2013 the contract value remains $250,000 and the "new" purchase payment is one year old. The value of the EEP Part I changes but the value of the EEP Part II remains constant. The death benefit on July 1, 2013 equals: MAV death benefit amount (contract value): $ 250,000 plus the EEP Part I which equals 40% of earnings at death (the MAV death benefit minus payments not previously surrendered): 0.40 X ($250,000 - $105,000) = +58,000 plus the EEP Part II, which after the fourth contract year equals 20% of exchange purchase payments identified at issue and not previously surrendered: 0.20 X $55,000 = +11,000 ---------- Total death benefit of: $ 319,000
IF YOUR SPOUSE IS THE SOLE BENEFICIARY and your spouse elects to continue the contract, we will pay an amount into the contract so that the contract value equals the total death benefit payable under the EEP. If your spouse at the time he or she elects to continue the contract has reached age 76, the EEP rider will terminate. If your spouse at the time he or she elects to continue the contract has not yet reached age 76, he or she cannot continue the EEP. However, he or she may choose to convert the EEP rider into an EEB. In this case, the following conditions will apply: - the EEB rider will treat the new contract value on the date the ownership of the contract changes to your spouse (after the additional amount is paid into the contract) as if it is a purchase payment in calculating future values of "earnings at death." - the percentages of "earnings at death" payable will be based on your spouse's age at the time he or she elects to continue the contract. - the EEB rider charges described in "Charges -- Enhanced Earnings Death Benefit Rider Fee" will be assessed at the next contract anniversary (and all future anniversaries when the EEB rider is in force). These charges will be based on the total contract value on the anniversary, including the additional amounts paid into the contract under the EEP rider. If your spouse chooses not to convert the EEP rider into an EEB, the standard death benefit amount (or the MAV death benefit amount, if applicable) will apply. NOTE: For special tax considerations associated with the EEP, see "Taxes." AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 66 THE ANNUITY PAYOUT PERIOD As owner of the contract, you have the right to decide how and to whom annuity payouts will be made starting at the settlement date. You may select one of the annuity payout plans outlined below, or we may mutually agree on other payout arrangements. We do not deduct any surrender charges under the payout plans listed below. You also decide whether we will make annuity payouts on a fixed or variable basis, or a combination of fixed and variable. The amount available to purchase payouts under the plan you select is the contract value on your settlement date (less any applicable premium tax). You may reallocate this contract value to the fixed account to provide fixed dollar payouts and/or among the subaccounts to provide variable annuity payouts. During the annuity payout period, you cannot invest in more than five subaccounts at any one time unless we agree otherwise. AMOUNTS OF FIXED AND VARIABLE PAYOUTS DEPEND ON: - the annuity payout plan you select; - the annuitant's age and, in most cases, sex; - the annuity table in the contract; and - the amounts you allocated to the accounts at settlement. In addition, for variable payouts only, amounts depend on the investment performance of the subaccounts you select. These payouts will vary from month to month because the performance of the funds will fluctuate. (Fixed payouts remain the same from month to month.) For information with respect to transfers between accounts after annuity payouts begin, see "Making the Most of Your Contract -- Transfer policies." ANNUITY TABLES The annuity tables in your contract show the amount of the monthly payout for each $1,000 of contract value according to the age and, when applicable, the sex of the annuitant. (Where required by law, we will use a unisex table of settlement rates.) Table B shows the minimum amount of each fixed payout. Amounts in Table B are based on the guaranteed annual effective interest rate shown in your contract. We declare current payout rates that we use in determining the actual amount of your fixed payout. The current payout rates will equal or exceed the guaranteed payout rates shown in Table B. We will furnish these rates to you upon request. Table A shows the amount of the first variable payout assuming that the contract value is invested at the beginning of the annuity payout period and earns a 5% rate of return, which is reinvested and helps to support future payouts. If you ask us at least 30 days before the settlement date, we will substitute an annuity table based on an assumed 3.5% investment rate for the 5% Table A in the contract. The assumed investment rate affects both the amount of the first payout and the extent to which subsequent payouts increase or decrease. For example, annuity payouts will increase if the investment return is above the assumed investment rate and payouts will decrease if the return is below the assumed investment rate. Using the 5% Table A results in a higher initial payment, but later payouts will increase more slowly when annuity unit values rise and decrease more rapidly when they decline. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 67 ANNUITY PAYOUT PLANS You may choose any one of these annuity payout plans by giving us written instructions at least 30 days before contract values are used to purchase the payout plan: - PLAN A: LIFE ANNUITY -- NO REFUND: We make monthly payouts until the annuitant's death. Payouts end with the last payout before the annuitant's death. We will not make any further payouts. This means that if the annuitant dies after we made only one monthly payout, we will not make any more payouts. - PLAN B: LIFE ANNUITY WITH FIVE, TEN OR 15 YEARS CERTAIN: We make monthly payouts for a guaranteed payout period of five, ten or 15 years that you elect. This election will determine the length of the payout period to the beneficiary if the annuitant should die before the elected period expires. We calculate the guaranteed payout period from the settlement date. If the annuitant outlives the elected guaranteed payout period, we will continue to make payouts until the annuitant's death. - PLAN C: LIFE ANNUITY -- INSTALLMENT REFUND: We make monthly payouts until the annuitant's death, with our guarantee that payouts will continue for some period of time. We will make payouts for at least the number of months determined by dividing the amount applied under this option by the first monthly payout, whether or not the annuitant is living. - PLAN D: JOINT AND LAST SURVIVOR LIFE ANNUITY -- NO REFUND: We make monthly payouts while both the annuitant and a joint annuitant are living. If either annuitant dies, we will continue to make monthly payouts at the full amount until the death of the surviving annuitant. Payouts end with the death of the second annuitant. - PLAN E: PAYOUTS FOR A SPECIFIED PERIOD: We make monthly payouts for a specific payout period of ten to 30 years that you elect. We will make payouts only for the number of years specified whether the annuitant is living or not. Depending on the selected time period, it is foreseeable that an annuitant can outlive the payout period selected. During the payout period, you can elect to have us determine the present value of any remaining variable payouts and pay it to you in a lump sum. We determine the present value of the remaining annuity payouts which are assumed to remain level at the initial payout. For qualified annuities, the discount rate we use in the calculation will vary between 4.72% and 6.22%, depending on the applicable assumed investment rate. For nonqualified annuities, the discount rate we use in the calculation will vary between 4.92% and 6.42%, depending on the applicable assumed investment rate. (See "Charges -- Surrender charge under Annuity Payout Plan E.") You can also take a portion of the discounted value once a year. If you do so, your monthly payouts will be reduced by the proportion of your surrender to the full discounted value. A 10% IRS penalty tax could apply if you take a surrender. (See "Taxes.") ANNUITY PAYOUT PLAN REQUIREMENTS FOR QUALIFIED ANNUITIES: If you elect an annuity payout plan from your qualified annuity, it must comply with certain IRS regulations governing required minimum distributions. In general, your annuity payout plan will meet these regulations if payouts are made: - in equal or substantially equal payments over a period not longer than the life of the annuitant or over the life of the annuitant and designated beneficiary; or - in equal or substantially equal payments over a period not longer than the life expectancy of the annuitant or over the life expectancy of the annuitant and designated beneficiary; or - over a period certain not longer than the life expectancy of the annuitant or over the life expectancy of the annuitant and designated beneficiary. IF WE DO NOT RECEIVE INSTRUCTIONS: You must give us written instructions for the annuity payouts at least 30 days before the annuitant's settlement date. If you do not, we will make payouts under Plan B, with 120 monthly payouts guaranteed. Contract values that you allocated to the fixed account will provide fixed dollar payouts and contract values that you allocated among the subaccounts will provide variable annuity payouts. IF MONTHLY PAYOUTS WOULD BE LESS THAN $20: We will calculate the amount of monthly payouts at the time the contract value is used to purchase a payout plan. If the calculations show that monthly payouts would be less than $20, we have the right to pay the contract value to the owner in a lump sum or to change the frequency of the payouts. DEATH AFTER ANNUITY PAYOUTS BEGIN: If you or the annuitant die after annuity payouts begin, we will pay any amount payable to the beneficiary as provided in the annuity payout plan in effect. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 68 TAXES Generally, under current law, your contract has a tax-deferral feature. This means any increase in the value of the fixed account and/or subaccounts in which you invest is taxable to you only when you receive a payout or surrender (see detailed discussion below). Any portion of the annuity payouts and any surrenders you request that represent ordinary income are normally taxable. We will send you a tax information reporting form for any year in which we made a taxable distribution according to our records. Roth IRAs may grow and be distributed tax free if you meet certain distribution requirements. NONQUALIFIED ANNUITIES: Tax law requires that all nonqualified deferred annuities issued by the same company (and possibly its affiliates) to the same owner during a calendar year be taxed as a single, unified contract when you take distributions from any one of those contracts. ANNUITY PAYOUTS FROM NONQUALIFIED ANNUITIES: A portion of each payout will be ordinary income and subject to tax, and a portion of each payout will be considered a return of part of your investment and will not be taxed. Under Annuity Payout Plan A: Life annuity - no refund, where the annuitant dies before your investment in the contract is fully recovered, the remaining portion of the unrecovered investment may be available as a federal income tax deduction to the owner for the last taxable year of the annuitant. Under all other annuity payout plans, where the annuity payouts end before your investment in the contract is fully recovered, the remaining portion of the unrecovered investment may be available as a federal income tax deduction to the taxpayer for the tax year in which the payouts end. (See "Annuity Payout Plans.") All amounts you receive after your investment in the contract is fully recovered will be subject to tax. QUALIFIED ANNUITIES: When your contract is used to fund a retirement plan that is already tax deferred under the Code, the contract will not provide any necessary or additional tax deferral for that retirement plan. If your contract is used to fund a 401(k) plan, your rights to benefits may be subject to the terms and conditions of the plan regardless of the terms of the contract. Adverse tax consequences may result if you do not ensure that contributions, distributions and other transactions under the contract comply with the law. Qualified annuities have minimum distribution rules that govern the timing and amount of distributions. You should refer to your retirement plan or adoption agreement or consult a tax advisor for more information about your distribution rules. ANNUITY PAYOUTS FROM QUALIFIED ANNUITIES (EXCEPT ROTH IRAS): Under a qualified annuity, the entire payout generally is includable as ordinary income and is subject to tax unless: (1) the contract is an IRA to which you made non-deductible contributions; or (2) you rolled after-tax dollars from a retirement plan into your IRA, or (3) the contract is used to fund a retirement plan and you or your employer have contributed after-tax dollars. ANNUITY PAYOUTS FROM ROTH IRAS: In general, the entire payout from a Roth IRA can be free from income and penalty taxes if you have attained age 59 1/2 and met the five year holding period. SURRENDERS FROM NONQUALIFIED ANNUITIES: If you surrender part or all of your nonqualified contract before your annuity payouts begin, your surrender payment will be taxed to the extent that the value of your contract immediately before the surrender exceeds your investment. You also may have to pay a 10% IRS penalty for surrenders you make before reaching age 59 1/2 unless certain exceptions apply. SURRENDERS FROM QUALIFIED ANNUITIES (EXCEPT ROTH IRAS): Under a qualified annuity, the entire surrender will generally be includable as ordinary income and is subject to tax unless: (1) the contract is an IRA to which you made non-deductible contributions; or (2) you rolled after-tax dollars from a retirement plan into your IRA, or (3) the contract is used to fund a retirement plan and you or your employer have contributed after-tax dollars. SURRENDERS FROM ROTH IRAS: In general, the entire payout from a Roth IRA can be free from income and penalty taxes if you have attained age 59 1/2 and met the five year holding period. PURCHASE PAYMENT CREDITS: These are considered earnings and are taxed accordingly when surrendered or paid out. DEATH BENEFITS TO BENEFICIARIES UNDER NONQUALIFIED ANNUITIES: The death benefit under a contract is not tax exempt. Any amount your beneficiary receives that represents previously deferred earnings within the contract is taxable as ordinary income to the beneficiary in the year he or she receives the payments. DEATH BENEFITS TO BENEFICIARIES UNDER QUALIFIED ANNUITIES: The entire death benefit generally is taxable as ordinary income to the beneficiary in the year he or she receives the payments from the qualified annuity. If, under your 401(k) plan you or your employer made after-tax contributions to your contract or if you made non-deductible contributions to a traditional IRA, the portion of any distribution from the plan that represents after-tax contributions are not taxable as ordinary income to your beneficiary. Death benefits under a Roth IRA generally are not taxable as ordinary income to the beneficiary if certain distribution requirements are met. SPECIAL CONSIDERATIONS IF YOU SELECT ONE OF THE DEATH BENEFIT RIDERS (MAV, EEB OR EEP): As of the date of this prospectus, we believe that charges related to these riders are not subject to current taxation. Therefore, we will not report these charges as partial surrenders from your contract. However, the IRS may determine that these charges should be treated as partial surrenders subject to taxation to the extent of any gain as well as the 10% IRS tax penalty for surrenders before the age of 59 1/2, if applicable. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 69 We reserve the right to report charges for these riders as partial surrenders if we, as a withholding and reporting agent, believe that we are required to report them. In addition, we will report the benefits attributable to these riders on the death of you or annuitant as an annuity death benefit distribution, not as proceeds for life insurance. ANNUITIES OWNED BY CORPORATIONS, PARTNERSHIPS OR TRUSTS: For nonqualified annuities, any annual increase in the value of annuities held by such entities generally will be treated as ordinary income received during that year. This provision is effective for purchase payments made after Feb. 28, 1986. However, if the trust was set up for the benefit of a natural person only, the income will remain tax-deferred. PENALTIES: In general, if you receive amounts from your contract (or, if applicable, from the plan) before reaching age 59 1/2, you may have to pay a 10% IRS penalty on the amount includable in your ordinary income. However, if you have a SIMPLEIRA and if you receive these amounts before age 59 1/2 and within the first two years of your participation in the SIMPLE IRA plan, the IRS penalty will be assessed at a rate of 25% instead of 10%. However, this penalty will not apply to any amount received by you: - because of your death; - because you become disabled (as defined in the Code); - if the distribution is part of a series of substantially equal periodic payments, made at least annually, over your life or life expectancy (or joint lives or life expectancies of you and your beneficiary); or - if it is allocable to an investment before Aug. 14, 1982 (except for qualified annuities). For qualified annuities under 401(a), 401(k) plans or TSA's, other exceptions may apply if you surrender your contract before your plan specifies that payouts can be made. WITHHOLDING, GENERALLY: If you receive all or part of the contract value, we may deduct withholding against the taxable income portion of the payment. Any withholding represents a prepayment of your tax due for the year. You take credit for these amounts on your annual income tax return. If the payment is part of an annuity payout plan, we generally compute the amount of withholding using payroll tables. You may provide us with a statement of how many exemptions to use in calculating the withholding. As long as you've provided us with a valid Social Security Number or Taxpayer Identification Number, you can elect not to have any withholding occur. If the distribution is any other type of payment (such as a partial or full surrender), we compute withholding using 10% of the taxable portion. Similar to above, as long as you have provided us with a valid Social Security Number or Taxpayer Identification Number, you can elect not to have this withholding occur. The withholding requirements may differ if we are making payment to a non-U.S. citizen or if we deliver the payment outside the United States. Some states also impose withholding requirements similar to the federal withholding described above. If this should be the case, we may deduct state withholding from any payment from which we deduct federal withholding. WITHHOLDING FROM QUALIFIED ANNUITIES: If you receive directly all or part of the contract value from a qualified annuity (except an IRA, Roth IRA, SIMPLE IRA or SEP), mandatory 20% federal income tax withholding (and possibly state income tax withholding) generally will be imposed at the time the payout is made from the plan. This mandatory withholding is in place of the elective withholding discussed above. This mandatory withholding will not be imposed if: - instead of receiving the distribution check, you elect to have the distribution rolled over directly to an IRA or another eligible plan; - the payout is one in a series of substantially equal periodic payouts, made at least annually, over your life or life expectancy (or the joint lives or life expectancies of you and your designated beneficiary) or over a specified period of 10 years or more; - the payout is a minimum distribution required under the Code; - the payout is made on account of an eligible hardship; or - the payout is a corrective distribution. Payments we make to a surviving spouse instead of being directly rolled over to an IRA also may be subject to mandatory 20% income tax withholding. State withholding also may be imposed on taxable distributions. TRANSFER OF OWNERSHIP OF A NONQUALIFIED ANNUITY: If you transfer a nonqualified annuity without receiving adequate consideration, the transfer is a gift and also may be treated as a surrender for federal income tax purposes. If the gift is a currently taxable event for income tax purposes, the original owner will be taxed on the amount of deferred earnings at the time of the transfer and also may be subject to the 10% IRS penalty discussed earlier. In this case, the new owner's investment in the contract will be the value of the contract at the time of the transfer. In general, this rule does not apply to transfers between spouses. Please consult your tax advisor for further details. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 70 COLLATERAL ASSIGNMENT OF A NONQUALIFIED ANNUITY: If you collaterally assign or pledge your contract, earnings on purchase payments you made after Aug. 13, 1982 will be taxed to you like a surrender and you may have to pay a 10% IRS penalty. You may not collaterally assign or pledge your qualified contracts. IMPORTANT: Our discussion of federal tax laws is based upon our understanding of current interpretations of these laws. Federal tax laws or current interpretations of them may change. For this reason and because tax consequences are complex and highly individual and cannot always be anticipated, you should consult a tax advisor if you have any questions about taxation of your contract. IDS LIFE'S TAX STATUS: IDS Life is taxed as a life insurance company under the Code. For federal income tax purposes, the subaccounts are considered a part of IDS Life, although their operations are treated separately in accounting and financial statements. Investment income from the subaccounts is reinvested and becomes part of the subaccounts' value. This investment income, including realized capital gains, is not taxed to IDS Life, and therefore no charge is made against the subaccounts for federal income taxes. IDS Life reserves the right to make such a charge in the future if there is a change in the tax treatment of variable annuities. TAX QUALIFICATION: We intend that the contract qualify as an annuity for federal income tax purposes. To that end, the provisions of the contract are to be interpreted to ensure or maintain such tax qualification, in spite of any other provisions of the contract. We reserve the right to amend the contract to reflect any clarifications that may be needed or are appropriate to maintain such qualification or to conform the contract to any applicable changes in the tax qualification requirements. We will send you a copy of any amendments. VOTING RIGHTS As a contract owner with investments in the subaccounts, you may vote on important fund policies until annuity payouts begin. Once they begin, the person receiving them has voting rights. We will vote fund shares according to the instructions of the person with voting rights. Before annuity payouts begin, the number of votes you have is determined by applying your percentage interest in each subaccount to the total number of votes allowed to the subaccount. After annuity payouts begin, the number of votes you have is equal to: - the reserve held in each subaccount for your contract; divided by - the net asset value of one share of the applicable fund. As we make annuity payouts, the reserve for the contract decreases; therefore, the number of votes also will decrease. We calculate votes separately for each subaccount. We will send notice of shareholders' meetings, proxy materials and a statement of the number of votes to which the voter is entitled. We will vote shares for which we have not received instructions in the same proportion as the votes for which we received instructions. We also will vote the shares for which we have voting rights in the same proportion as the votes for which we received instructions. SUBSTITUTION OF INVESTMENTS We may substitute the funds in which the subaccounts invest if: - laws or regulations change; - the existing funds become unavailable; or - in our judgment, the funds no longer are suitable for the subaccounts. If any of these situations occur, and if we believe it is in the best interest of persons having voting rights under the contract, we have the right to substitute the funds currently listed in this prospectus for other funds. We may also: - add new subaccounts; - combine any two or more subaccounts; - make additional subaccounts investing in additional funds; - transfer assets to and from the subaccounts or the variable account; and - eliminate or close any subaccounts. In the event of substitution or any of these changes, we may amend the contract and take whatever action is necessary and appropriate without your consent or approval. However, we will not make any substitution or change without the necessary approval of the SEC and state insurance departments. We will notify you of any substitution or change. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 71 ABOUT THE SERVICE PROVIDERS ISSUER AND PRINCIPAL UNDERWRITER IDS Life issues and is the principal underwriter for the contracts. IDS Life is a stock life insurance company organized in 1957 under the laws of the State of Minnesota and is located at 70100 AXP Financial Center, Minneapolis, MN 55474. IDS Life conducts a conventional life insurance business. IDS Life is a wholly-owned subsidiary of AEFC, which itself is a wholly-owned subsidiary of American Express Company, a financial services company headquartered in New York City. The AEFC family of companies offers not only insurance and annuities, but also mutual funds, investment certificates, and a broad range of financial management services. American Express Financial Advisors Inc. (AEFA) serves individuals and businesses through its nationwide network of more than 3,600 registered branch offices and more than 10,100 financial advisors. IDS Life pays commissions for sales of the contracts of up to 7% of the total purchase payments received. This revenue is used to cover distribution costs that include compensation to advisors and field leadership for the selling advisors. These commissions consist of a combination of time of sale and on-going service/trail commissions (which, when totaled, could exceed 7% of purchase payments). From time to time, IDS Life will pay or permit other promotional incentives, in cash or credit or other compensation. LEGAL PROCEEDINGS We are a party to litigation and arbitration proceedings in the ordinary course of our business, none of which is expected to have a material adverse effect on us. In recent years, life insurance companies have been named as defendants in lawsuits, including class action lawsuits, alleging improper life insurance sales practices, alleged agent misconduct, failure to properly supervise agents and other matters relating to life insurance policies and annuity contracts. We and our affiliates were named defendants in three purported class-action lawsuits alleging improper insurance and annuity sales practices including improper replacement of existing annuity contracts and insurance policies, improper use of annuities to fund tax deferred contributory retirement plans, alleged agent misconduct, failure to properly supervise agents and other matters relating to life insurance policies and annuity contracts (BENACQUISTO v. IDS LIFE INSURANCE COMPANY filed in Minnesota State Court 12/13/96; MORK, ET. AL. v. IDS LIFE INSURANCE COMPANY filed in Minnesota State Court 3/21/97; THORESEN v. IDS LIFE INSURANCE COMPANY, ET. AL. filed in Minnesota State Court 10/13/98). A fourth lawsuit was filed against us and our affiliates in federal court (BENACQUISTO, ET. AL. v. IDS LIFE INSURANCE COMPANY, ET. AL. filed in United States District Court - Minnesota 8/00). In January 2000, AEFC reached an agreement in principle to settle the four class action lawsuits described above. It is expected the settlement will provide $215 million of benefits to more than two million participants in exchange for a release by class members of all insurance and annuity state and federal market conduct claims dating back to 1985. The settlement received court approval. Implementation of the settlement commenced October 15, 2001 and is substantially complete. Claim review payments have been made. Numerous individuals opted out of the settlement described above and therefore did not release their claims against AEFC and its subsidiaries. Some of these class members who opted out were represented by counsel and presented separate claims to AEFC and us. Most of their claims have been settled. In November 2002, a suit, captioned HARITOS ET. AL. v. AMERICAN EXPRESS FINANCIAL CORPORATION AND IDS LIFE INSURANCE COMPANY, was filed in the United States District Court for the District of Arizona. The suit is filed by the plaintiffs who purport to represent a class of all persons that have purchased financial plans from AEFA advisors during an undefined class period. Plaintiffs allege that the sale of the plans violate the Investment Advisers Act of 1940. The suit seeks an unspecified amount of damages, rescission and injunctive relief. We believe that we have meritorious defenses to this suit and intend to defend this case vigorously. The outcome of any litigation or threatened litigation cannot be predicted with any certainty. However, in the aggregate, we do not consider any lawsuits in which we are named as a defendant to have a material impact on our financial position or operating results. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 72 TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION Performance Information p. 3 Calculating Annuity Payouts p. 67 Rating Agencies p. 68 Principal Underwriter p. 68 Independent Auditors p. 68 Financial Statements AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS 73 [AMERICAN EXPRESS(R) LOGO] IDS LIFE INSURANCE COMPANY 70100 AXP FINANCIAL CENTER MINNEAPOLIS, MN 55474 (800) 862-7919 S-6406 F (5/03) PROSPECTUS MAY 1, 2003 AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 INDIVIDUAL FLEXIBLE PREMIUM DEFERRED COMBINATION FIXED/VARIABLE ANNUITY FOR: - current or retired employees of American Express Financial Corporation or its subsidiaries and their spouses (employees), - current or retired American Express financial advisors and their spouses (advisors), and - individuals investing an initial purchase payment of $1 million (other individuals). ISSUED BY: IDS LIFE INSURANCE COMPANY (IDS LIFE) 70100 AXP Financial Center Minneapolis, MN 55474 Telephone: (800) 862-7919 americanexpress.com IDS LIFE VARIABLE ACCOUNT 10 This prospectus contains information that you should know before investing. Prospectuses are also available for: - American Express(R) Variable Portfolio Funds - AIM Variable Insurance Funds - AllianceBernstein Variable Products Series Fund, Inc. (previously Alliance Variable Products Series Fund, Inc.) - American Century(R) Variable Portfolios, Inc. - Calvert Variable Series, Inc. - Evergreen Variable Annuity Trust - Fidelity(R) Variable Insurance Products - Service Class 2 - Franklin(R) Templeton(R) Variable Insurance Products Trust (FTVIPT) - Class 2 - Goldman Sachs Variable Insurance Trust (VIT) - INVESCO Variable Investment Funds, Inc. - Janus Aspen Series: Service Shares - Lazard Retirement Series, Inc. - MFS(R) Variable Insurance Trust(SM) - Pioneer Variable Contracts Trust (VCT), Class II Shares - Putnam Variable Trust - Class IB Shares - Strong Opportunity Fund II, Inc. - Wanger Advisors Trust - Wells Fargo Variable Trust Funds Please read the prospectuses carefully and keep them for future reference. THE SECURITIES AND EXCHANGE COMMISSION (SEC) HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. AN INVESTMENT IN THIS CONTRACT IS NOT A DEPOSIT OF A BANK OR FINANCIAL INSTITUTION AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN THIS CONTRACT INVOLVES INVESTMENT RISK INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. A Statement of Additional Information (SAI), dated the same date as this prospectus, is incorporated by reference into this prospectus. It is filed with the SEC and is available without charge by contacting IDS Life at the telephone number and address listed above. The table of contents of the SAI is on the last page of this prospectus. The SEC maintains an Internet site. This prospectus, the SAI and other information about the product are available on the EDGAR Database on the SEC's Internet site at (http://www.sec.gov). Variable annuities are complex investment vehicles. Before you invest, be sure to ask your sales representative about the variable annuity's features, benefits, risks and fees, and whether the variable annuity is appropriate for you, based upon your financial situation and objectives. The contract may not be available in all jurisdictions. This prospectus constitutes an offering or solicitation only in those jurisdictions where such offering or solicitation may lawfully be made. State variations are covered in a special contract form used in that state. This prospectus provides a general description of the contract. Your actual contract and any riders or endorsements are the controlling documents. IDS Life has not authorized any person to give any information or to make any representations regarding the contract other than those contained in this prospectus or the fund prospectuses. Do not rely on any such information or representations. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 1 IDS Life and its affiliated insurance companies offer several different annuities which your sales representative may be authorized to offer to you. Each annuity has different features and benefits that may be appropriate for you based on your financial situation and needs, your age and how you intend to use the annuity. The different features and benefits may include the investment and fund manager options, variations in interest rate amount and guarantees, credits and access to annuity account values. The fees and charges may also be different between each annuity. TABLE OF CONTENTS KEY TERMS 3 THE CONTRACT IN BRIEF 4 EXPENSE SUMMARY 5 CONDENSED FINANCIAL INFORMATION (UNAUDITED) 10 FINANCIAL STATEMENTS 16 PERFORMANCE INFORMATION 16 THE VARIABLE ACCOUNT AND THE FUNDS 17 THE FIXED ACCOUNT 26 BUYING YOUR CONTRACT 26 CHARGES 28 VALUING YOUR INVESTMENT 30 MAKING THE MOST OF YOUR CONTRACT 31 SURRENDERS 34 TSA -- SPECIAL SURRENDER PROVISIONS 35 CHANGING OWNERSHIP 35 BENEFITS IN CASE OF DEATH -- STANDARD DEATH BENEFIT 36 OPTIONAL BENEFITS 37 THE ANNUITY PAYOUT PERIOD 44 TAXES 46 VOTING RIGHTS 48 SUBSTITUTION OF INVESTMENTS 48 ABOUT THE SERVICE PROVIDERS 49 TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION 50 AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 2 KEY TERMS THESE TERMS CAN HELP YOU UNDERSTAND DETAILS ABOUT YOUR CONTRACT. ACCUMULATION UNIT: A measure of the value of each subaccount before annuity payouts begin. ANNUITANT: The person on whose life or life expectancy the annuity payouts are based. ANNUITY PAYOUTS: An amount paid at regular intervals under one of several plans. ASSUMED INVESTMENT RATE: The rate of return we assume your investments will earn when we calculate your initial annuity payout amount using the annuity table in your contract. The standard assumed investment rate we use is 5% but you may request we substitute an assumed investment rate of 3.5%. BENEFICIARY: The person you designate to receive benefits in case of the owner's or annuitant's death while the contract is in force. CLOSE OF BUSINESS: When the New York Stock Exchange (NYSE) closes, normally 4 p.m. Eastern time. CONTRACT: A deferred annuity contract that permits you to accumulate money for retirement by making one or more purchase payments. It provides for lifetime or other forms of payouts beginning at a specified time in the future. CONTRACT VALUE: The total value of your contract before we deduct any applicable charges. CONTRACT YEAR: A period of 12 months, starting on the effective date of your contract and on each anniversary of the effective date. ENHANCED EARNINGS DEATH BENEFIT (EEB) AND ENHANCED EARNINGS PLUS DEATH BENEFIT (EEP): These are optional benefits you can add to your contract for an extra charge. Each is intended to provide an additional benefit to your beneficiary to help offset expenses after your death such as funeral expenses or federal and state taxes. You can elect to purchase either the EEB or the EEP. FIXED ACCOUNT: An account to which you may allocate purchase payments. Amounts you allocate to this account earn interest at rates that we declare periodically. FUNDS: Investment options under your contract. You may allocate your purchase payments into subaccounts investing in shares of any or all of these funds. IDS LIFE: In this prospectus, "we," "us," "our" and "IDS Life" refer to IDS Life Insurance Company. MAXIMUM ANNIVERSARY VALUE DEATH BENEFIT (MAV): This is an optional benefit you can add to your contract for an extra charge that is intended to provide additional death benefit protection in the event of fluctuating fund values. OWNER (YOU, YOUR): The person who controls the contract (decides on investment allocations, transfers, payout options, etc.). Usually, but not always, the owner is also the annuitant. The owner is responsible for taxes, regardless of whether he or she receives the contract's benefits. QUALIFIED ANNUITY: A contract that you purchase to fund one of the following tax-deferred retirement plans that is subject to applicable federal law and any rules of the plan itself: - Individual Retirement Annuities (IRAs) under Section 408(b) of the Internal Revenue Code of 1986, as amended (the Code) - Roth IRAs under Section 408A of the Code - SIMPLE IRAs under Section 408(p) of the Code - Simplified Employee Pension (SEP) plans under Section 408(k) of the Code - Plans under Section 401(k) of the Code - Custodial and trusteed plans under Section 401(a) of the Code - Tax-Sheltered Annuities (TSAs) under Section 403(b) of the Code A qualified annuity will not provide any necessary or additional tax deferral if it is used to fund a retirement plan that is already tax-deferred. All other contracts are considered NONQUALIFIED ANNUITIES. RIDER: You receive a rider when you purchase the EEB, EEP and/or MAV. The rider adds the terms of the optional benefit to your contract. RIDER EFFECTIVE DATE: The date you add a rider to your contract. SETTLEMENT DATE: The date when annuity payouts are scheduled to begin. SURRENDER VALUE: The amount you are entitled to receive if you make a full surrender from your contract. It is the contract value minus any applicable charges. VALUATION DATE: Any normal business day, Monday through Friday, that the NYSE is open. Each valuation date ends at the close of business. We calculate the value of each subaccount at the close of business on each valuation date. VARIABLE ACCOUNT: Consists of separate subaccounts to which you may allocate purchase payments; each invests in shares of one fund. The value of your investment in each subaccount changes with the performance of the particular fund. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 3 THE CONTRACT IN BRIEF PURPOSE: The purpose of the contract is to allow you to accumulate money for retirement. You do this by making one or more purchase payments. You may allocate your purchase payments to the fixed account and/or subaccounts under the contract. These accounts, in turn, may earn returns that increase the value of the contract. Beginning at a specified time in the future called the settlement date, the contract provides lifetime or other forms of payouts of your contract value (less any applicable premium tax). As in case of other annuities, it may not be advantageous for you to purchase this contract as a replacement for, or in addition to, our existing annuity or life insurance contract. Most annuities have a tax-deferred feature. So do many retirement plans under the Code. As a result, when you use an annuity to fund a retirement plan that is tax deferred, your annuity will not provide any necessary or additional tax deferral for that retirement plan. But the contract has features other than tax deferral that may help you reach your retirement goals. You should consult your tax advisor for an explanation of the tax implications to you. FREE LOOK PERIOD: You may return your contract to your sales representative or to our office within the time stated on the first page of your contract and receive a full refund of the contract value. We will not deduct any charges. However, you bear the investment risk from the time of purchase until you return the contract; the refund amount may be more or less than the payment you made. (Exception: If the law requires, we will refund all of your purchase payments.) ACCOUNTS: Currently, you may allocate your purchase payments among any or all of: - the subaccounts, each of which invests in a fund with a particular investment objective. The value of each subaccount varies with the performance of the particular fund in which it invests. We cannot guarantee that the value at the settlement date will equal or exceed the total purchase payments you allocate to the subaccounts. (p. 17) - the fixed account, which earns interest at a rate that we adjust periodically. (p. 26) BUYING YOUR CONTRACT: Your sales representative will help you complete and submit an application. Applications are subject to acceptance at our office. You may buy a nonqualified annuity or a qualified annuity. After your initial purchase payment, you have the option of making additional purchase payments in the future. (p. 26) MINIMUM ALLOWABLE PURCHASE PAYMENTS FOR EMPLOYEES/ADVISORS: If paying by installments under a scheduled payment plan: $23.08 biweekly, or $50 per month If paying by any other method: $1,000 initial payment for qualified annuities $2,000 initial payment for nonqualified annuities $50 for any additional payments FOR OTHER INDIVIDUALS: $1 million MAXIMUM ALLOWABLE PURCHASE PAYMENTS FOR EMPLOYEES/ADVISORS: For the first year: $2,000,000 for issue ages up to 85 $100,000 for issue ages 86 to 90 For each subsequent year: $100,000 for issue ages up to 85 $50,000 for issue ages 86 to 90 FOR OTHER INDIVIDUALS: For the first year: $2,000,000 for issue ages up to 85 $1,000,000 for issue ages 86 to 90 For each subsequent year: $100,000 TRANSFERS: Subject to certain restrictions, you currently may redistribute your contract value among the accounts without charge at any time until annuity payouts begin, and once per contract year among the subaccounts after annuity payouts begin. You may establish automated transfers among the accounts. Fixed account transfers are subject to special restrictions. (p. 32) AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 4 SURRENDERS: You may surrender all or part of your contract value at any time before the settlement date. You also may establish automated partial surrenders. Surrenders may be subject to charges and tax penalties (including an IRS penalty if you surrender prior to your reaching age 59 1/2) and may have other tax consequences; also, certain restrictions apply. (p. 34) CHANGING OWNERSHIP: You may change ownership of a nonqualified annuity by written instruction, but this may have federal income tax consequences. Restrictions apply to changing ownership of a qualified annuity. (p. 35) BENEFITS IN CASE OF DEATH: If you or the annuitant die before annuity payouts begin, we will pay the beneficiary an amount at least equal to the contract value. (p. 36) OPTIONAL BENEFITS: This contract offers optional features that are available for additional charges if you meet certain criteria. (p. 37) ANNUITY PAYOUTS: You can apply your contract value to an annuity payout plan that begins on the settlement date. You may choose from a variety of plans to make sure that payouts continue as long as you like. If you purchased a qualified annuity, the payout schedule must meet the requirements of the tax-deferred retirement plan. We can make payouts on a fixed or variable basis, or both. Total monthly payouts may include amounts from each subaccount and the fixed account. During the annuity payout period, you cannot be invested in more than five subaccounts at any one time unless we agree otherwise. (p. 45) TAXES: Generally, your contract grows tax deferred until you surrender it or begin to receive payouts. (Under certain circumstances, IRS penalty taxes may apply.) Even if you direct payouts to someone else, you will be taxed on the income if you are the owner. (p. 46) CHARGES: We assess certain charges in connection with your contract: - $30 annual contract administrative charge; - a 0.55% mortality and expense risk fee (if you allocate money to one or more subaccounts); - any premium taxes that may be imposed on us by state or local governments (currently, we deduct any applicable premium tax when annuity payouts begin but we reserve the right to deduct this tax at other times such as when you make purchase payments or when you surrender your contract); - the operating expenses of the funds in which the subaccounts invest; - if you select the MAV, an annual fee of 0.25%* of the contract value; - if you select the EEB, an annual fee of 0.30% of the contract value; and - if you select the EEP, an annual fee of 0.40% of the contract value. EXPENSE SUMMARY THE FOLLOWING TABLES DESCRIBE THE FEES AND EXPENSES THAT YOU WILL PAY WHEN BUYING, OWNING AND SURRENDERING THE CONTRACT. THE FIRST TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU WILL PAY AT THE TIME THAT YOU BUY THE CONTRACT OR SURRENDER THE CONTRACT. STATE PREMIUM TAXES ALSO MAY BE DEDUCTED. CONTRACT OWNER TRANSACTION EXPENSES SURRENDER CHARGE 0%
A surrender charge applies to payouts under certain annuity payout plans (see "Charges-- Surrender Charge" p. 29 and "The Annuity Payout Period-- Annuity Payout Plans" p. 44). THE NEXT TWO TABLES DESCRIBE THE FEES AND EXPENSES THAT YOU WILL PAY PERIODICALLY DURING THE TIME THAT YOU OWN THE CONTRACT, NOT INCLUDING FUND FEES AND EXPENSES. PERIODIC EXPENSES ANNUAL CONTRACT ADMINISTRATIVE CHARGE $30 (We will waive this charge when your contract value, or total purchase payments less any payments surrendered, is $50,000 or more on the current contract anniversary, except at full surrender.) MAV RIDER FEE* 0.25%** (As a percentage of the contract value charged annually at the contract anniversary.) EEB RIDER FEE 0.30%** (As a percentage of the contract value charged annually at the contract anniversary.) EEP RIDER FEE 0.40%** (As a percentage of the contract value charged annually at the contract anniversary.)
* For contracts purchased before May 1, 2003, the MAV rider fee is 0.15%. ** This fee applies only if you elect this optional feature. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 5 ANNUAL VARIABLE ACCOUNT EXPENSES (As a percentage of average subaccount value) MORTALITY AND EXPENSE RISK FEE 0.55%
ANNUAL OPERATING EXPENSES OF THE FUNDS THE NEXT TWO TABLES DESCRIBE THE OPERATING EXPENSES OF THE FUNDS. THE FIRST ITEM SHOWS THE MINIMUM AND MAXIMUM TOTAL OPERATING EXPENSES CHARGED BY THE FUNDS THAT YOU MAY PAY PERIODICALLY DURING THE TIME THAT YOU OWN THE CONTRACT. THE SECOND TABLE SHOWS THE TOTAL FEES AND EXPENSES CHARGED BY EACH FUND FOR THE LAST FISCAL YEAR. MORE DETAIL CONCERNING EACH FUND'S FEES AND EXPENSES IS CONTAINED IN THE PROSPECTUS FOR EACH FUND. MINIMUM AND MAXIMUM TOTAL ANNUAL OPERATING EXPENSES FOR THE FUNDS (Including management fee, distribution and/or service (12b-1) fees and other expenses)
MINIMUM MAXIMUM Total expenses before contractual fee waivers and/or expense reimbursements .69% 3.14%
TOTAL ANNUAL OPERATING EXPENSES FOR EACH FUND (Before fee waivers and/or expense reimbursements, if applicable, as a percentage of average daily net assets)
GROSS TOTAL MANAGEMENT 12b-1 OTHER ANNUAL FEES FEES EXPENSES EXPENSES AXP(R) Variable Portfolio - Blue Chip Advantage Fund .53% .13% .13% .79%(1) Bond Fund .60 .13 .07 .80(1) Capital Resource Fund .62 .13 .05 .80(1) Cash Management Fund .51 .13 .05 .69(1) Diversified Equity Income Fund .56 .13 .18 .87(1) Emerging Markets Fund 1.18 .13 1.05 2.36(2) Equity Select Fund .69 .13 .57 1.39(2) Extra Income Fund .62 .13 .08 .83(1) Federal Income Fund .61 .13 .09 .83(1) Global Bond Fund .84 .13 .11 1.08(1) Growth Fund .56 .13 .12 .81(1) International Fund .84 .13 .10 1.07(1) Managed Fund .60 .13 .04 .77(1) NEW DIMENSIONS FUND(R) .61 .13 .05 .79(1) Partners Small Cap Value Fund 1.03 .13 .32 1.48(1) S&P 500 Index Fund .29 .13 .40 .82(2) Small Cap Advantage Fund .73 .13 .25 1.11(1) Stock Fund .56 .13 1.75 2.44(2) Strategy Aggressive Fund .62 .13 .06 .81(1) AIM V.I. Capital Appreciation Fund, Series II Shares .61 .25 .24 1.10(3) Capital Development Fund, Series II Shares .75 .25 .39 1.39(3) AllianceBernstein Variable Products Series Fund, Inc. AllianceBernstein Growth and Income Portfolio (Class B) .63 .25 .05 .93(4) AllianceBernstein International Value Portfolio (Class B) 1.00 .25 1.22 2.47(5) American Century(R) Variable Portfolios, Inc. VP International, Class II 1.20 .25 -- 1.45(6) VP Value, Class II .85 .25 -- 1.10(6) Calvert Variable Series, Inc. Social Balanced Portfolio .70 -- .21 .91(7)
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 6 TOTAL ANNUAL OPERATING EXPENSES FOR EACH FUND (CONTINUED) (Before fee waivers and/or expense reimbursements, if applicable, as a percentage of average daily net assets)
GROSS TOTAL MANAGEMENT 12b-1 OTHER ANNUAL FEES FEES EXPENSES EXPENSES Evergreen VA Capital Growth Fund - Class 2 .80% .25% .22% 1.27%(8) Fidelity(R) VIP Growth & Income Portfolio Service Class 2 .48 .25 .12 .85(4) Mid Cap Portfolio Service Class 2 .58 .25 .12 .95(4) Overseas Portfolio Service Class 2 .73 .25 .18 1.16(4) FTVIPT Franklin Real Estate Fund - Class 2 .53 .25 .04 .82(9),(10) Franklin Small Cap Value Securities Fund - Class 2 .59 .25 .20 1.04(10),(11) Mutual Shares Securities Fund - Class 2 .60 .25 .21 1.06(10),(11) Goldman Sachs VIT CORE(SM) U.S. Equity Fund .70 -- .16 .86(12) Mid Cap Value Fund .80 -- .13 .93(12) INVESCO VIF Dynamics Fund .75 -- .37 1.12(13),(14) Financial Services Fund .75 -- .34 1.09(13),(14) Technology Fund .75 -- .36 1.11(13),(14) Telecommunications Fund .75 -- .47 1.22(13),(14) Janus Aspen Series Global Technology Portfolio: Service Shares .65 .25 .07 .97(15) International Growth Portfolio: Service Shares .65 .25 .09 .99(15) Lazard Retirement Series International Equity Portfolio .75 .25 .65 1.65(16) MFS(R) Investors Growth Stock Series - Service Class .75 .25 .13 1.13(17),(18) New Discovery Series - Service Class .90 .25 .15 1.30(17),(18) Utilities Series - Service Class .75 .25 .19 1.19(17),(18) Pioneer VCT Pioneer Equity Income VCT Portfolio - Class II Shares .65 .25 .17 1.07(19) Pioneer Europe VCT Portfolio - Class II Shares 1.00 .25 1.41 2.66(19) Putnam Variable Trust Putnam VT Health Sciences Fund - Class IB Shares .70 .25 .13 1.08(4) Putnam VT International Equity Fund - Class IB Shares .77 .25 .22 1.24(4) (previously Putnam VT International Growth Fund - Class IB Shares) Putnam VT Vista Fund - Class IB Shares .64 .25 .10 .99(4) Strong Funds Strong Opportunity Fund II - Advisor Class .75 .25 .39 1.39(20) Wanger International Small Cap 1.24 -- .23 1.47(21) U.S. Smaller Companies .94 -- .11 1.05(21) Wells Fargo VT Asset Allocation Fund .55 .25 .23 1.03(22) International Equity Fund .75 .25 2.14 3.14(22) Small Cap Growth Fund .75 .25 .33 1.33(22)
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 7 We entered into certain arrangements under which it is compensated by the funds' advisers and/or distributors for the administrative services it provides to these funds. (1) The Fund's expense figures are based on actual expenses for the fiscal year ended Aug. 31, 2002. (2) The Fund's expense figures are based on actual expenses, before fee waivers and expense reimbursements, for the fiscal year ending Aug. 31, 2002. Through April 3, 2003, IDS Life and AEFC have agreed to waive certain fees and reimburse expenses to the extent that total expenses exceed the following percentage of Fund average daily net assets. "Gross total annual expenses" after these fee waivers and expense reimbursements would have been 1.75% for AXP(R) Variable Portfolio - Emerging Markets Fund, 1.10% for AXP(R) Variable Portfolio - Equity Select Fund, 0.495% for AXP(R) Variable Portfolio - S&P 500 Index Fund and 1.10% for AXP(R) Variable Portfolio - Stock Fund. (3) Figures shown in the table are for the year ended Dec. 31, 2002 and are expressed as a percentage of Fund average daily net assets. There is no guarantee that actual expenses will be the same as those shown in the table. (4) The Fund's expense figures are based on actual expenses for the fiscal year ended Dec. 31, 2002. (5) From Jan. 1, 2002 through April 30, 2002, Fund was capped at 1.20%. From May 1, 2002 on, Fund was capped at 1.45%. After such waivers, "Management fees," "Other expenses," and "Gross total annual expenses" would be 0.71%, 0.32% and 1.44%. (6) Annualized operating expenses of funds at Dec. 31, 2002. The Fund has a stepped fee schedule. As a result, the Fund's management fee generally decreases as fund assets increase. (7) Expenses are based on the Portfolio's most recent fiscal year. Management fees include the Subadvisory fee paid by the Advisor (Calvert Asset Management Company, Inc.) and the administrative fee paid by the Portfolio to Calvert Administrative Services Company, an affiliate of the Advisor. (8) The Total ratio of expenses to average net assets excludes expense reductions and fee waivers. From time to time, the Fund's investment advisor may, at its discretion, reduce or waive its fees or reimburse the Fund for certain of its expenses in order to reduce expense ratios. The Fund's investment advisor may cease these waivers or reimbursements at any time. With fee waivers and expense reimbursements, "Other expenses" and "Gross total annual expenses" would be 0.08% and 1.13% for Evergreen VA Capital Growth Fund - Class 2. (9) The Fund administration fee is paid indirectly through the management fee. (10) The Fund's Class 2 distribution plan or "Rule 12b-1 plan" is described in the Fund's prospectus. (11) The manager has agreed in advance to reduce its fee to reflect reduced services resulting from the Fund's investment in a Franklin Templeton money fund for cash management. This reduction is required by the Fund's Board of Trustees and an exemptive order of the Securities and Exchange Commission. The management fee reduction and net total annual expense was (0.03%) and 1.01% for FTVIPT Franklin Small Cap Value Securities Fund - Class 2 and (0.01%) and 1.05% for FTVIPT Mutual Shares Securities Fund - Class 2. (12) Goldman Sachs Asset Management, L.P. and Goldman Sachs Asset Management International, the investment advisers to the funds, have voluntarily agreed to reduce or limit certain "Other expenses" of such funds (excluding management fees, transfer agent fees, taxes, interest, brokerage fees, litigation, indemnification, shareholder meeting and other extraordinary expenses) to the extent that such expenses exceed 0.24% and 0.29% of the average daily net assets of the CORE(SM) US. Equity, and Mid Cap Value Fund, respectively. There were no expense reductions and limitations for Mid Cap Value or CORE(SM) U.S. Equity for the period ended Dec. 31, 2002. The expense reductions or limitations may be discontinued or modified by the investment adviser at their discretion at any time. CORE(SM) is a service mark of Goldman, Sachs & Co. (13) The Fund's actual "Other expenses" and "Gross total annual expenses" were lower than the figures shown, because their custodian fees were reduced under an expense offset arrangement. (14) Effective June 1, 2002, INVESCO is entitled to reimbursement from the Fund for fees and expenses absorbed pursuant to a voluntary expense limitation commitment between INVESCO and the Fund, if such reimbursements do not cause the Fund to exceed expense limitations and the reimbursement is made within three years after INVESCO incurred the expense. The voluntary expense limitations may be changed at any time following consultation with the Board of Directors. (15) Expenses are based upon expenses for the fiscal year ended Dec. 31, 2002. All expenses are shown without the effect of expense offset arrangements. (16) The Investment Manager of the Portfolios has voluntarily agreed, for the year ended Dec. 31, 2002, to reduce its fees and, if necessary, reimburse the Portfolio's expenses to the extent that annualized operating expenses exceed 1.25% of the respective Portfolio's average net assets. After fee waivers and expense reimbursements "Other expense" and "Gross total annual expenses" would be 0.25% and 1.25% for Lazard Retirement International Equity Portfolio. (17) Each series has adopted a distribution plan under Rule 12b-1 that permits it to pay marketing and other fees to support the sales and distribution of service class shares (these fees are referred to as distribution fees). (18) Each series has an expense offset arrangement that reduces the series' custodian fee based upon the amount of cash maintained by the series with its custodian and dividend disbursing agent. Each series may enter into other similar arrangements and directed brokerage arrangements, which would also have the effect of reducing the series' expenses. "Other expenses" do not take into account these fee reductions, and are therefore higher than the actual expenses of the series. Had these fee reductions been taken into account, "Gross total annual expenses" would be lower for certain series and would equal: 1.12% for Investors Growth Stock Series, 1.29% for New Discovery Series and 1.18% for Utilities Series. (19) The Portfolio's expense figures are based on actual expenses for the fiscal year ending Dec. 31, 2002 before fee waivers and expense reimbursements. The expenses reflect the contractual expense limitation in effect through Dec. 31, 2003 under which Pioneer has agreed not to impose all or a portion of its management fee and, if necessary, to limit other ordinary operating expense to the extent required to reduce Class I expenses to 1.25% of the average daily net assets attributable to Class I shares; the portion of portfolio expenses attributable to Class II shares will be reduced only to the extent such expenses are reduced for Class I shares. After the expense limitation Management fees would have been 0.20%. (20) As compensation for its advisory services, the fund pays Strong a monthly management fee at an annual rate of 0.75% of the fund's average daily net asset value. Strong has voluntarily agreed to waive the management fee and/or absorb the Fund's other expenses. Strong has no current intention to, but may in the future, discontinue or modify any fee waivers or expense absorptions after any appropriate notice to the Fund's shareholders. After fee waivers and expense reimbursements "Other expenses" and "Gross total annual expenses" would be 0.38% and 1.38% for Strong Opportunity Fund II - Advisor Class. (21) Figures in "Management fees," "12b-1 fees," "Other expenses," and "Gross total annual expenses" are based on actual expenses for the fiscal year ended Dec. 31, 2002. Liberty Wanger Asset Management, L.P. will reimburse the Fund if its annual ordinary operating expenses exceed 2.00% of average daily net assets. This commitment expires on July 31, 2003. (22) Other expenses have been adjusted as necessary from amounts incurred during the Funds' most recent fiscal year to reflect current fees and expenses. Other expenses may include expenses payable to affiliates of Wells Fargo & Company. The adviser has committed through April 30, 2004 to waive fees and/or reimburse the expenses to the extent necessary to maintain the Fund's net operating expense ratio as follows. After fee waivers and expense reimbursements "Other expenses" and "Gross total annual expenses" would be 0.20% and 1.00% for Wells Fargo VT Asset Allocation Fund, 0% and 1.00% for Wells Fargo VT International Equity Fund and 0.20% and 1.20% for Wells Fargo VT Small Cap Growth Fund. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 8 EXAMPLES THESE EXAMPLES ARE INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN THESE CONTRACTS WITH THE COST OF INVESTING IN OTHER VARIABLE ANNUITY CONTRACTS. THESE COSTS INCLUDE YOUR TRANSACTION EXPENSES, CONTRACT ADMINISTRATIVE CHARGES*, VARIABLE ACCOUNT ANNUAL EXPENSES AND FUND FEES AND EXPENSES. THESE EXAMPLES ASSUME THAT YOU INVEST $10,000 IN THE CONTRACT FOR THE TIME PERIODS INDICATED. THESE EXAMPLES ALSO ASSUME THAT YOUR INVESTMENT HAS A 5% RETURN EACH YEAR. MAXIMUM EXPENSES. This example assumes the maximum fees and expenses of any of the funds. They assume that you select both the optional MAV and EEP. Although your actual costs may be higher or lower, based on this assumption, your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS $ 449.46 $ 1,355.21 $ 2,270.14 $ 4,598.23
MINIMUM EXPENSES. These examples assume the least expensive combination of contract features and benefits and the minimum fees and expenses of any of the funds. They assume that you do not select any optional benefits. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS $ 131.71 $ 409.87 $ 708.89 $ 1,558.29
* In these examples, the $30 contract administrative charge is approximated as a .045% charge. This percentage was determined by dividing the total amount of the contract administrative charges collected during the year that are attributable to the contract by the total average net assets that are attributable to the contract. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 9 CONDENSED FINANCIAL INFORMATION (UNAUDITED) The following tables give per-unit information about the financial history of each subaccount.
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT BC3(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - BLUE CHIP ADVANTAGE FUND) Accumulation unit value at beginning of period $ 0.82 $ 0.99 $ 1.11 $ 1.00 Accumulation unit value at end of period $ 0.63 $ 0.82 $ 0.99 $ 1.11 Number of accumulation units outstanding at end of period (000 omitted) 314 729 454 211 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% SUBACCOUNT BD3(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - BOND FUND) Accumulation unit value at beginning of period $ 1.14 $ 1.06 $ 1.02 $ 1.00 Accumulation unit value at end of period $ 1.20 $ 1.14 $ 1.06 $ 1.02 Number of accumulation units outstanding at end of period (000 omitted) 762 985 410 47 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% SUBACCOUNT CR3(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - CAPITAL RESOURCE FUND) Accumulation unit value at beginning of period $ 0.76 $ 0.94 $ 1.14 $ 1.00 Accumulation unit value at end of period $ 0.59 $ 0.76 $ 0.94 $ 1.14 Number of accumulation units outstanding at end of period (000 omitted) 202 291 266 872 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% SUBACCOUNT CM3(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND) Accumulation unit value at beginning of period $ 1.10 $ 1.07 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.11 $ 1.10 $ 1.07 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 3,911 5,658 6,615 2,266 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% Simple yield(2) 0.25% 1.05% -- -- Compound yield(2) 0.25% 1.06% -- -- SUBACCOUNT DE3(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND) Accumulation unit value at beginning of period $ 1.02 $ 1.01 $ 1.02 $ 1.00 Accumulation unit value at end of period $ 0.82 $ 1.02 $ 1.01 $ 1.02 Number of accumulation units outstanding at end of period (000 omitted) 1,262 281 218 23 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% SUBACCOUNT EM3(3) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - EMERGING MARKETS FUND) Accumulation unit value at beginning of period $ 0.73 $ 0.75 $ 1.00 -- Accumulation unit value at end of period $ 0.69 $ 0.73 $ 0.75 -- Number of accumulation units outstanding at end of period (000 omitted) 277 3 1 -- Ratio of operating expense to average net assets 0.55% 0.55% 0.55% -- SUBACCOUNT ES3(4) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - EQUITY SELECT FUND) Accumulation unit value at beginning of period $ 1.01 $ 1.00 -- -- Accumulation unit value at end of period $ 0.87 $ 1.01 -- -- Number of accumulation units outstanding at end of period (000 omitted) 328 38 -- -- Ratio of operating expense to average net assets 0.55% 0.55% -- -- SUBACCOUNT EI3(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - EXTRA INCOME FUND) Accumulation unit value at beginning of period $ 0.95 $ 0.91 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 0.89 $ 0.95 $ 0.91 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 1,480 1,549 1,186 48 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% SUBACCOUNT FI3(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - FEDERAL INCOME FUND) Accumulation unit value at beginning of period $ 1.15 $ 1.09 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.21 $ 1.15 $ 1.09 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 1,275 592 1 10 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% SUBACCOUNT GB3(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - GLOBAL BOND FUND) Accumulation unit value at beginning of period $ 1.04 $ 1.03 $ 1.00 $ 1.00 Accumulation unit value at end of period $ 1.18 $ 1.04 $ 1.03 $ 1.00 Number of accumulation units outstanding at end of period (000 omitted) 251 249 4 3 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55%
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 10
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT GR3(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - GROWTH FUND) Accumulation unit value at beginning of period $ 0.64 $ 0.94 $ 1.17 $ 1.00 Accumulation unit value at end of period $ 0.47 $ 0.64 $ 0.94 $ 1.17 Number of accumulation units outstanding at end of period (000 omitted) 1,064 1,285 1,762 401 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% SUBACCOUNT IE3(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - INTERNATIONAL FUND) Accumulation unit value at beginning of period $ 0.67 $ 0.95 $ 1.27 $ 1.00 Accumulation unit value at end of period $ 0.55 $ 0.67 $ 0.95 $ 1.27 Number of accumulation units outstanding at end of period (000 omitted) 488 65 81 133 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% SUBACCOUNT MF3(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - MANAGED FUND) Accumulation unit value at beginning of period $ 0.94 $ 1.06 $ 1.09 $ 1.00 Accumulation unit value at end of period $ 0.81 $ 0.94 $ 1.06 $ 1.09 Number of accumulation units outstanding at end of period (000 omitted) 120 296 145 10 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% SUBACCOUNT ND3(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)) Accumulation unit value at beginning of period $ 0.89 $ 1.08 $ 1.19 $ 1.00 Accumulation unit value at end of period $ 0.69 $ 0.89 $ 1.08 $ 1.19 Number of accumulation units outstanding at end of period (000 omitted) 3,029 3,252 3,919 426 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% SUBACCOUNT SV3(5) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - PARTNERS SMALL CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.07 $ 1.00 -- -- Accumulation unit value at end of period $ 0.93 $ 1.07 -- -- Number of accumulation units outstanding at end of period (000 omitted) 627 411 -- -- Ratio of operating expense to average net assets 0.55% 0.55% -- -- SUBACCOUNT IV3(3) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - S&P 500 INDEX FUND) Accumulation unit value at beginning of period $ 0.79 $ 0.90 $ 1.00 -- Accumulation unit value at end of period $ 0.61 $ 0.79 $ 0.90 -- Number of accumulation units outstanding at end of period (000 omitted) 973 770 285 -- Ratio of operating expense to average net assets 0.55% 0.55% 0.55% -- SUBACCOUNT SC3(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND) Accumulation unit value at beginning of period $ 1.08 $ 1.16 $ 1.12 $ 1.00 Accumulation unit value at end of period $ 0.89 $ 1.08 $ 1.16 $ 1.12 Number of accumulation units outstanding at end of period (000 omitted) 393 378 286 28 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% SUBACCOUNT ST3(6) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - STOCK FUND) Accumulation unit value at beginning of period $ 0.95 $ 1.00 -- -- Accumulation unit value at end of period $ 0.75 $ 0.95 -- -- Number of accumulation units outstanding at end of period (000 omitted) -- -- -- -- Ratio of operating expense to average net assets 0.55% 0.55% -- -- SUBACCOUNT SA3(1) (INVESTING IN SHARES OF AXP(R) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND) Accumulation unit value at beginning of period $ 0.81 $ 1.22 $ 1.52 $ 1.00 Accumulation unit value at end of period $ 0.55 $ 0.81 $ 1.22 $ 1.52 Number of accumulation units outstanding at end of period (000 omitted) 386 607 798 33 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% SUBACCOUNT 3AC(6) (INVESTING IN SHARES OF AIM V.I. CAPITAL APPRECIATION FUND, SERIES II SHARES) Accumulation unit value at beginning of period $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 0.73 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 4 6 -- -- Ratio of operating expense to average net assets 0.55% 0.55% -- -- SUBACCOUNT 3AD(6) (INVESTING IN SHARES OF AIM V.I. CAPITAL DEVELOPMENT FUND, SERIES II SHARES) Accumulation unit value at beginning of period $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 0.77 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 180 3 -- -- Ratio of operating expense to average net assets 0.55% 0.55% -- --
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 11
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3AL(6) (INVESTING IN SHARES OF ALLIANCEBERNSTEIN VP GROWTH AND INCOME PORTFOLIO (CLASS B)) Accumulation unit value at beginning of period $ 0.97 $ 1.00 -- -- Accumulation unit value at end of period $ 0.75 $ 0.97 -- -- Number of accumulation units outstanding at end of period (000 omitted) 310 136 -- -- Ratio of operating expense to average net assets 0.55% 0.55% -- -- SUBACCOUNT 3AB(6) (INVESTING IN SHARES OF ALLIANCEBERNSTEIN VP INTERNATIONAL VALUE PORTFOLIO (CLASS B)) Accumulation unit value at beginning of period $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 0.92 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 606 210 -- -- Ratio of operating expense to average net assets 0.55% 0.55% -- -- SUBACCOUNT 3AI(6) (INVESTING IN SHARES OF AMERICAN CENTURY(R) VP INTERNATIONAL, CLASS II) Accumulation unit value at beginning of period $ 0.93 $ 1.00 -- -- Accumulation unit value at end of period $ 0.74 $ 0.93 -- -- Number of accumulation units outstanding at end of period (000 omitted) 254 1 -- -- Ratio of operating expense to average net assets 0.55% 0.55% -- -- SUBACCOUNT 3AV(6) (INVESTING IN SHARES OF AMERICAN CENTURY(R) VP VALUE, CLASS II) Accumulation unit value at beginning of period $ 1.04 $ 1.00 -- -- Accumulation unit value at end of period $ 0.90 $ 1.04 -- -- Number of accumulation units outstanding at end of period (000 omitted) 483 146 -- -- Ratio of operating expense to average net assets 0.55% 0.55% -- -- SUBACCOUNT 3SR(3) (INVESTING IN SHARES OF CALVERT VARIABLE SERIES, INC. SOCIAL BALANCED PORTFOLIO) Accumulation unit value at beginning of period $ 0.89 $ 0.96 $ 1.00 -- Accumulation unit value at end of period $ 0.78 $ 0.89 $ 0.96 -- Number of accumulation units outstanding at end of period (000 omitted) 8 6 5 -- Ratio of operating expense to average net assets 0.55% 0.55% 0.55% -- SUBACCOUNT 3CG(6) (INVESTING IN SHARES OF EVERGREEN VA CAPITAL GROWTH FUND - CLASS 2) Accumulation unit value at beginning of period $ 0.95 $ 1.00 -- -- Accumulation unit value at end of period $ 0.73 $ 0.95 -- -- Number of accumulation units outstanding at end of period (000 omitted) 44 -- -- -- Ratio of operating expense to average net assets 0.55% 0.55% -- -- SUBACCOUNT 3FG(6) (INVESTING IN SHARES OF FIDELITY(R) VIP GROWTH & INCOME PORTFOLIO SERVICE CLASS 2) Accumulation unit value at beginning of period $ 1.00 $ 1.00 -- -- Accumulation unit value at end of period $ 0.83 $ 1.00 -- -- Number of accumulation units outstanding at end of period (000 omitted) 233 132 -- -- Ratio of operating expense to average net assets 0.55% 0.55% -- -- SUBACCOUNT 3FM(6) (INVESTING IN SHARES OF FIDELITY(R) VIP MID CAP PORTFOLIO SERVICE CLASS 2) Accumulation unit value at beginning of period $ 1.04 $ 1.00 -- -- Accumulation unit value at end of period $ 0.93 $ 1.04 -- -- Number of accumulation units outstanding at end of period (000 omitted) 325 132 -- -- Ratio of operating expense to average net assets 0.55% 0.55% -- -- SUBACCOUNT 3FO(6) (INVESTING IN SHARES OF FIDELITY(R) VIP OVERSEAS PORTFOLIO SERVICE CLASS 2) Accumulation unit value at beginning of period $ 0.95 $ 1.00 -- -- Accumulation unit value at end of period $ 0.75 $ 0.95 -- -- Number of accumulation units outstanding at end of period (000 omitted) 324 7 -- -- Ratio of operating expense to average net assets 0.55% 0.55% -- -- SUBACCOUNT 3RE(1) (INVESTING IN SHARES OF FTVIPT FRANKLIN REAL ESTATE FUND - CLASS 2) Accumulation unit value at beginning of period $ 1.35 $ 1.26 $ 0.96 $ 1.00 Accumulation unit value at end of period $ 1.37 $ 1.35 $ 1.26 $ 0.96 Number of accumulation units outstanding at end of period (000 omitted) 205 211 148 4 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% SUBACCOUNT 3SI(1) (INVESTING IN SHARES OF FTVIPT FRANKLIN SMALL CAP VALUE SECURITIES FUND - CLASS 2) Accumulation unit value at beginning of period $ 1.35 $ 1.20 $ 0.96 $ 1.00 Accumulation unit value at end of period $ 1.22 $ 1.35 $ 1.20 $ 0.96 Number of accumulation units outstanding at end of period (000 omitted) 282 150 9 2 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55%
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 12
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3MS(6) (INVESTING IN SHARES OF FTVIPT MUTUAL SHARES SECURITIES FUND - CLASS 2) Accumulation unit value at beginning of period $ 0.97 $ 1.00 -- -- Accumulation unit value at end of period $ 0.85 $ 0.97 -- -- Number of accumulation units outstanding at end of period (000 omitted) 130 -- -- -- Ratio of operating expense to average net assets 0.55% 0.55% -- -- SUBACCOUNT 3UE(1) (INVESTING IN SHARES OF GOLDMAN SACHS VIT CORE(SM) U.S. EQUITY FUND) Accumulation unit value at beginning of period $ 0.87 $ 0.99 $ 1.10 $ 1.00 Accumulation unit value at end of period $ 0.67 $ 0.87 $ 0.99 $ 1.10 Number of accumulation units outstanding at end of period (000 omitted) 694 943 577 170 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% SUBACCOUNT 3MC(1) (INVESTING IN SHARES OF GOLDMAN SACHS VIT MID CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.38 $ 1.24 $ 0.95 $ 1.00 Accumulation unit value at end of period $ 1.31 $ 1.38 $ 1.24 $ 0.95 Number of accumulation units outstanding at end of period (000 omitted) 450 200 15 8 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% SUBACCOUNT 3ID(6) (INVESTING IN SHARES OF INVESCO VIF - DYNAMICS FUND) Accumulation unit value at beginning of period $ 0.96 $ 1.00 -- -- Accumulation unit value at end of period $ 0.65 $ 0.96 -- -- Number of accumulation units outstanding at end of period (000 omitted) 149 1 -- -- Ratio of operating expense to average net assets 0.55% 0.55% -- -- SUBACCOUNT 3FS(6) (INVESTING IN SHARES OF INVESCO VIF - FINANCIAL SERVICES FUND) Accumulation unit value at beginning of period $ 0.97 $ 1.00 -- -- Accumulation unit value at end of period $ 0.82 $ 0.97 -- -- Number of accumulation units outstanding at end of period (000 omitted) 3 -- -- -- Ratio of operating expense to average net assets 0.55% 0.55% -- -- SUBACCOUNT 3TC(6) (INVESTING IN SHARES OF INVESCO VIF - TECHNOLOGY FUND) Accumulation unit value at beginning of period $ 0.91 $ 1.00 -- -- Accumulation unit value at end of period $ 0.48 $ 0.91 -- -- Number of accumulation units outstanding at end of period (000 omitted) 3 -- -- -- Ratio of operating expense to average net assets 0.55% 0.55% -- -- SUBACCOUNT 3TL(6) (INVESTING IN SHARES OF INVESCO VIF - TELECOMMUNICATIONS FUND) Accumulation unit value at beginning of period $ 0.84 $ 1.00 -- -- Accumulation unit value at end of period $ 0.41 $ 0.84 -- -- Number of accumulation units outstanding at end of period (000 omitted) 3 -- -- -- Ratio of operating expense to average net assets 0.55% 0.55% -- -- SUBACCOUNT 3GT(3) (INVESTING IN SHARES OF JANUS ASPEN SERIES GLOBAL TECHNOLOGY PORTFOLIO: SERVICE SHARES) Accumulation unit value at beginning of period $ 0.43 $ 0.68 $ 1.00 -- Accumulation unit value at end of period $ 0.25 $ 0.43 $ 0.68 -- Number of accumulation units outstanding at end of period (000 omitted) 343 202 310 -- Ratio of operating expense to average net assets 0.55% 0.55% 0.55% -- SUBACCOUNT 3IG(3) (INVESTING IN SHARES OF JANUS ASPEN SERIES INTERNATIONAL GROWTH PORTFOLIO: SERVICE SHARES) Accumulation unit value at beginning of period $ 0.61 $ 0.80 $ 1.00 -- Accumulation unit value at end of period $ 0.45 $ 0.61 $ 0.80 -- Number of accumulation units outstanding at end of period (000 omitted) 875 606 556 -- Ratio of operating expense to average net assets 0.55% 0.55% 0.55% -- SUBACCOUNT 3IP(1) (INVESTING IN SHARES OF LAZARD RETIREMENT INTERNATIONAL EQUITY PORTFOLIO) Accumulation unit value at beginning of period $ 0.73 $ 0.96 $ 1.07 $ 1.00 Accumulation unit value at end of period $ 0.65 $ 0.73 $ 0.96 $ 1.07 Number of accumulation units outstanding at end of period (000 omitted) 636 253 57 8 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% SUBACCOUNT 3MG(3) (INVESTING IN SHARES OF MFS(R) INVESTORS GROWTH STOCK SERIES - SERVICE CLASS) Accumulation unit value at beginning of period $ 0.68 $ 0.91 $ 1.00 -- Accumulation unit value at end of period $ 0.49 $ 0.68 $ 0.91 -- Number of accumulation units outstanding at end of period (000 omitted) 785 913 533 -- Ratio of operating expense to average net assets 0.55% 0.55% 0.55% --
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 13
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3MD(3) (INVESTING IN SHARES OF MFS(R) NEW DISCOVERY SERIES - SERVICE CLASS) Accumulation unit value at beginning of period $ 0.90 $ 0.96 $ 1.00 -- Accumulation unit value at end of period $ 0.61 $ 0.90 $ 0.96 -- Number of accumulation units outstanding at end of period (000 omitted) 485 548 352 -- Ratio of operating expense to average net assets 0.55% 0.55% 0.55% -- SUBACCOUNT 3UT(6) (INVESTING IN SHARES OF MFS(R) UTILITIES SERIES - SERVICE CLASS) Accumulation unit value at beginning of period $ 0.89 $ 1.00 -- -- Accumulation unit value at end of period $ 0.68 $ 0.89 -- -- Number of accumulation units outstanding at end of period (000 omitted) 139 138 -- -- Ratio of operating expense to average net assets 0.55% 0.55% -- -- SUBACCOUNT 3PE(6) (INVESTING IN SHARES OF PIONEER EQUITY INCOME VCT PORTFOLIO - CLASS II SHARES) Accumulation unit value at beginning of period $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 0.81 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 175 -- -- -- Ratio of operating expense to average net assets 0.55% 0.55% -- -- SUBACCOUNT 3EU(6) (INVESTING IN SHARES OF PIONEER EUROPE VCT PORTFOLIO - CLASS II SHARES) Accumulation unit value at beginning of period $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 0.79 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) -- -- -- -- Ratio of operating expense to average net assets 0.55% 0.55% -- -- SUBACCOUNT 3HS(6) (INVESTING IN SHARES OF PUTNAM VT HEALTH SCIENCES FUND - CLASS IB SHARES) Accumulation unit value at beginning of period $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 0.78 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 145 129 -- -- Ratio of operating expense to average net assets 0.55% 0.55% -- -- SUBACCOUNT 3PI(6) (INVESTING IN SHARES OF PUTNAM VT INTERNATIONAL EQUITY FUND - CLASS IB SHARES) (PREVIOUSLY PUTNAM VT INTERNATIONAL GROWTH FUND - CLASS IB SHARES) Accumulation unit value at beginning of period $ 0.96 $ 1.00 -- -- Accumulation unit value at end of period $ 0.79 $ 0.96 -- -- Number of accumulation units outstanding at end of period (000 omitted) 881 418 -- -- Ratio of operating expense to average net assets 0.55% 0.55% -- -- SUBACCOUNT 3VS(1) (INVESTING IN SHARES OF PUTNAM VT VISTA FUND - CLASS IB SHARES) Accumulation unit value at beginning of period $ 0.86 $ 1.29 $ 1.36 $ 1.00 Accumulation unit value at end of period $ 0.59 $ 0.86 $ 1.29 $ 1.36 Number of accumulation units outstanding at end of period (000 omitted) 525 1,092 1,330 183 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% SUBACCOUNT 3SO(6) (INVESTING IN SHARES OF STRONG OPPORTUNITY FUND II - ADVISOR CLASS) Accumulation unit value at beginning of period $ 0.99 $ 1.00 -- -- Accumulation unit value at end of period $ 0.72 $ 0.99 -- -- Number of accumulation units outstanding at end of period (000 omitted) 314 136 -- -- Ratio of operating expense to average net assets 0.55% 0.55% -- -- SUBACCOUNT 3IT(1) (INVESTING IN SHARES OF WANGER INTERNATIONAL SMALL CAP) Accumulation unit value at beginning of period $ 0.85 $ 1.09 $ 1.51 $ 1.00 Accumulation unit value at end of period $ 0.73 $ 0.85 $ 1.09 $ 1.51 Number of accumulation units outstanding at end of period (000 omitted) 1,484 769 599 112 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% SUBACCOUNT 3SP(1) (INVESTING IN SHARES OF WANGER U.S. SMALLER COMPANIES) Accumulation unit value at beginning of period $ 1.17 $ 1.05 $ 1.15 $ 1.00 Accumulation unit value at end of period $ 0.96 $ 1.17 $ 1.05 $ 1.15 Number of accumulation units outstanding at end of period (000 omitted) 847 820 990 125 Ratio of operating expense to average net assets 0.55% 0.55% 0.55% 0.55% SUBACCOUNT 3AA(4) (INVESTING IN SHARES OF WELLS FARGO VT ASSET ALLOCATION FUND) Accumulation unit value at beginning of period $ 0.97 $ 1.00 -- -- Accumulation unit value at end of period $ 0.84 $ 0.97 -- -- Number of accumulation units outstanding at end of period (000 omitted) 29 8 -- -- Ratio of operating expense to average net assets 0.55% 0.55% -- --
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 14
YEAR ENDED DEC. 31, 2002 2001 2000 1999 ------------------------------------------------------------------------------------------------------------------------------- SUBACCOUNT 3WI(4) (INVESTING IN SHARES OF WELLS FARGO VT INTERNATIONAL EQUITY FUND) Accumulation unit value at beginning of period $ 0.90 $ 1.00 -- -- Accumulation unit value at end of period $ 0.69 $ 0.90 -- -- Number of accumulation units outstanding at end of period (000 omitted) 144 1 -- -- Ratio of operating expense to average net assets 0.55% 0.55% -- -- SUBACCOUNT 3SG(4) (INVESTING IN SHARES OF WELLS FARGO VT SMALL CAP GROWTH FUND) Accumulation unit value at beginning of period $ 0.94 $ 1.00 -- -- Accumulation unit value at end of period $ 0.58 $ 0.94 -- -- Number of accumulation units outstanding at end of period (000 omitted) 6 2 -- -- Ratio of operating expense to average net assets 0.55% 0.55% -- --
(1) Operations commenced on Sept. 15, 1999. (2) Net of annual contract administrative charge and mortality and expense risk fee. (3) Operations commenced on May 1, 2000. (4) Operations commenced on May 1, 2001. (5) Operations commenced on Aug. 14, 2001. (6) Operations commenced on Aug. 13, 2001. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 15 FINANCIAL STATEMENTS You can find our audited financial statements and the audited financial statements of the subaccounts in the SAI. PERFORMANCE INFORMATION Performance information for the subaccounts may appear from time to time in advertisements or sales literature. This information reflects the performance of a hypothetical investment in a particular subaccount during a specified time period. We show actual performance from the date the subaccounts began investing in funds. We also show performance from the commencement date of the funds as if the subaccounts invested in them at that time, which, in some cases, they did not. Although we base performance figures on historical earnings, past performance does not guarantee future results. We include non-recurring charges (such as surrender charges) in total return figures, but not in yield quotations. Excluding non-recurring charges in yield calculations increases the reported value. We may show total return quotations by means of schedules, charts or graphs. Total return figures reflect deduction of the following charges: - contract administrative charge, - applicable mortality and expense risk fee, - MAV rider fee, and - EEP rider fee. We may also show optional total return quotations that reflect deduction of the EEB rider fee. We also show optional total return quotations that do not reflect fees for any of the optional features. AVERAGE ANNUAL TOTAL RETURN is the average annual compounded rate of return of the investment over a period of one, five and ten years (or up to the life of the subaccount if it is less than ten years old). CUMULATIVE TOTAL RETURN is the cumulative change in the value of an investment over a specified time period. We assume that income earned by the investment is reinvested. Cumulative total return generally will be higher than average annual total return. ANNUALIZED SIMPLE YIELD (FOR SUBACCOUNTS INVESTING IN MONEY MARKET FUNDS) "annualizes" the income generated by the investment over a given seven-day period. That is, we assume the amount of income generated by the investment during the period will be generated each seven-day period for a year. We show this as a percentage of the investment. ANNUALIZED COMPOUND YIELD (FOR SUBACCOUNTS INVESTING IN MONEY MARKET FUNDS) is calculated like simple yield except that we assume the income is reinvested when we annualize it. Compound yield will be higher than the simple yield because of the compounding effect of the assumed reinvestment. ANNUALIZED YIELD (FOR SUBACCOUNTS INVESTING IN INCOME FUNDS) divides the net investment income (income less expenses) for each accumulation unit during a given 30-day period by the value of the unit on the last day of the period. We then convert the result to an annual percentage. You should consider performance information in light of the investment objectives, policies, characteristics and quality of the fund in which the subaccount invests and the market conditions during the specified time period. Advertised yields and total return figures include charges that reduce advertised performance. Therefore, you should not compare subaccount performance to that of mutual funds that sell their shares directly to the public. (See the SAI for a further description of methods used to determine total return and yield.) If you would like additional information about actual performance, please contact us at the address or telephone number on the first page of this prospectus. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 16 THE VARIABLE ACCOUNT AND THE FUNDS You may allocate payments to any or all of the subaccounts of the variable account that invest in shares of the following funds:
SUBACCOUNT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ------------------------------------------------------------------------------------------------------------------------------------ BC3 AXP(R) Variable Portfolio - Objective: long-term total return exceeding IDS Life, adviser; American Blue Chip Advantage Fund that of the U.S. stock market. Invests Express Financial primarily in blue chip stocks. Blue chip Corporation (AEFC), stocks are issued by companies with a market subadviser. capitalization of at least $1 billion, an established management, a history of consistent earnings and a leading position within their respective industries. BD3 AXP(R) Variable Portfolio - Objective: high level of current income while IDS Life, adviser; AEFC, Bond Fund conserving the value of the investment and subadviser. continuing a high level of income for the (effective 6-27-03 AXP(R) longest time period. Invests primarily in Variable Portfolio - Bond Fund bonds and other debt obligations. will change to AXP(R) Variable Portfolio - Diversified Bond Fund) CR3 AXP(R) Variable Portfolio - Objective: capital appreciation. Invests IDS Life, adviser; AEFC, Capital Resource Fund primarily in U.S. common stocks and other subadviser. securities convertible into common stocks. CM3 AXP(R) Variable Portfolio - Objective: maximum current income consistent IDS Life, adviser; AEFC, Cash Management Fund with liquidity and stability of principal. subadviser. Invests primarily in money market securities. DE3 AXP(R) Variable Portfolio - Objective: high level of current income and, IDS Life, adviser; AEFC, Diversified Equity Income Fund as a secondary goal, steady growth of capital. subadviser. Invests primarily in dividend-paying common and preferred stocks. EM3 AXP(R) Variable Portfolio - Objective: long-term capital growth. Invests IDS Life, adviser; AEFC, Emerging Markets Fund primarily in equity securities of companies in subadviser; American emerging market countries. Express Asset Management International, Inc., a wholly-owned subsidiary of AEFC, subadviser. ES3 AXP(R) Variable Portfolio - Objective: growth of capital. Invests IDS Life, adviser; AEFC, Equity Select Fund primarily in equity securities of medium-sized subadviser. companies. EI3 AXP(R) Variable Portfolio - Objective: high current income, with capital IDS Life, adviser; AEFC, Extra Income Fund growth as a secondary objective. Invests subadviser. (effective 6-27-03 primarily in high-yielding, high-risk AXP(R) Variable corporate bonds (junk bonds) issued by U.S. Portfolio - Extra Income Fund and foreign companies and governments. will change to AXP(R) Variable Portfolio - High Yield Bond Fund)
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 17
SUBACCOUNT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ------------------------------------------------------------------------------------------------------------------------------------ FI3 AXP(R) Variable Portfolio - Objective: a high level of current income IDS Life, adviser; AEFC, Federal Income Fund (effective and safety of principal consistent with an subadviser. 6-27-03 AXP(R) Variable investment in U.S. government and government Portfolio - Federal Income Fund agency securities. Invests primarily in debt will change to AXP(R) Variable obligations issued or guaranteed as to Portfolio - Short Term U.S. principal and interest by the U.S. Government Fund) government, its agencies or instrumentalities. GB3 AXP(R) Variable Portfolio - Objective: high total return through income IDS Life, adviser; AEFC, Global Bond Fund and growth of capital. Non-diversified subadviser. mutual fund that invests primarily in debt obligations of U.S. and foreign issuers. GR3 AXP(R) Variable Portfolio - Objective: long-term capital growth. Invests IDS Life, adviser; AEFC, Growth Fund primarily in common stocks and securities subadviser. convertible into common stocks that appear to offer growth opportunities. IE3 AXP(R) Variable Portfolio - Objective: capital appreciation. Invests IDS Life, adviser; AEFC, International Fund primarily in common stocks or convertible subadviser; American securities of foreign issuers that offer Express Asset Management strong growth potential. International, Inc., a wholly-owned subsidiary of AEFC, subadviser. MF3 AXP(R) Variable Portfolio - Objective: maximum total investment return IDS Life, adviser; AEFC, Managed Fund through a combination of capital growth and subadviser. current income. Invests primarily in a combination of common and preferred stocks, convertible securities, bonds and other debt securities. ND3 AXP(R) Variable Portfolio - Objective: long-term growth of capital. IDS Life, adviser; AEFC, NEW DIMENSIONS FUND(R) Invests primarily in common stocks showing subadviser. potential for significant growth. SV3 AXP(R) Variable Portfolio - Objective: long-term capital appreciation. IDS Life, adviser; AEFC, Partners Small Cap Value Fund Non-diversified fund that invests primarily subadviser; Royce & in equity securities. Associates, LLC., Third Avenue Management LLC and National City Investment Company, subadvisers. IV3 AXP(R) Variable Portfolio - Objective: long-term capital appreciation. IDS Life, adviser; AEFC, S&P 500 Index Fund Non-diversified fund that invests primarily subadviser. in securities that are expected to provide investment results that correspond to the performance of the S&P 500(R) Index. SC3 AXP(R) Variable Portfolio - Objective: long-term capital growth. Invests IDS Life, adviser; AEFC, Small Cap Advantage Fund primarily in equity stocks of small companies subadviser; Kenwood Capital that are often included in the Management LLC, subadviser. Russell 2000 Index and/or have market capitalization under $2 billion.
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 18
SUBACCOUNT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ------------------------------------------------------------------------------------------------------------------------------------ ST3 AXP(R) Variable Portfolio - Objective: current income and growth of IDS Life, adviser; AEFC, Stock Fund capital. Invests primarily in common stocks subadviser. and securities convertible into common stock. SA3 AXP(R) Variable Portfolio - Objective: capital appreciation. Invests IDS Life, adviser; AEFC, Strategy Aggressive Fund primarily in equity securities of growth subadviser. companies. 3AC AIM V.I. Capital Appreciation Objective: growth of capital. Invests A I M Advisors, Inc. Fund, Series II Shares principally in common stocks of companies likely to benefit from new or innovative products, services or processes as well as those with above-average long-term growth and excellent prospects for future growth. The Fund may invest up to 25% of its assets in foreign securities. 3AD AIM V.I. Capital Development Objective: long-term growth of capital. A I M Advisors, Inc. Fund, Series II Shares Invests primarily in securities (including common stocks, convertible securities and bonds) of small- and medium-sized companies. The Fund may invest up to 25% of its assets in foreign securities. 3AL AllianceBernstein VP Growth Objective: reasonable current income and Alliance Capital Management, and Income Portfolio reasonable appreciation. Invests primarily in L.P. (Class B) dividend-paying common stocks of good quality. (previously Alliance VP Growth and Income Portfolio (Class B)) 3AB AllianceBernstein VP Objective: long-term growth of capital. Alliance Capital Management, International Value Portfolio Invests primarily in a diversified portfolio L.P. (Class B) of foreign equity securities. (previously Alliance VP International Value Portfolio (Class B)) 3AI American Century(R) VP Objective: long-term capital growth. Invests American Century Investment International, Class II primarily in stocks of growing foreign Management, Inc. companies in developed countries. 3AV American Century(R) VP Value, Objective: long-term capital growth, with American Century Investment Class II income as a secondary objective. Invests Management, Inc. primarily in stocks of companies that management believes to be undervalued at the time of purchase. 3SR Calvert Variable Series, Inc. Objective: income and capital growth. Invests Calvert Asset Management Social Balanced Portfolio primarily in stocks, bonds and money market Company, Inc. (CAMCO), instruments which offer income and capital investment adviser. SsgA growth opportunity and which satisfy the Funds Management, Inc. and investment and social criteria. Brown Capital Management are the investment subadvisers.
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 19
SUBACCOUNT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ------------------------------------------------------------------------------------------------------------------------------------ 3CG Evergreen VA Capital Growth Objective: long-term capital growth. The Fund Evergreen Investment Management Fund - Class 2 seeks to achieve its goal by investing Company, LLC; Pilgrim Baxter & primarily in common stocks of large U.S. Associates, Ltd, is the companies, which the portfolio managers believe sub-investment adviser. have the potential for capital growth over the intermediate- and long-term. 3FG Fidelity(R) VIP Growth & Objective: seeks high total return through a Fidelity Management & Research Income Portfolio Service combination of current income and capital Company (FMR), investment manager; Class 2 appreciation. Normally invests a majority of FMR U.K., FMR Far East, assets in common stocks of foreign and domestic sub-investment advisers. issuers with a focus on those that pay current dividends and show potential for capital appreciation. May invest in bonds, including lower-quality debt securities, as well as stocks that are not currently paying dividends, but offer prospects for future income or capital appreciation. 3FM Fidelity(R) VIP Mid Cap Objective: seeks long-term growth of capital. Fidelity Management & Research Portfolio Service Class 2 Normally invests at least 80% of assets in Company (FMR), investment manager; securities of foreign and domestic companies FMR U.K., FMR Far East, with medium market capitalization common sub-investment advisers. stocks. Invests in growth or value common common stocks. May invest in companies with smaller or larger market capitalizations. 3FO Fidelity(R) VIP Overseas Objective: seeks long-term growth of capital. Fidelity Management & Research Portfolio Service Class 2 Normally invests primarily in common stocks of Company (FMR), investment manager; foreign securities. Normally invests at least FMR U.K., FMR Far East, Fidelity 80% of assets in non-U.S. securities. International Investment Advisors (FIIA) and FIIA U.K., sub-investment advisers. 3RE FTVIPT Franklin Real Estate Objective: seeks capital appreciation, with Franklin Advisers, Inc. Fund - Class 2 current income as a secondary goal. The Fund normally invests at least 80% of its net assets in investments of companies operating in the real estate sector. The Fund invests primarily in equity real estate investment trusts (REITs). 3SI FTVIPT Franklin Small Cap Value Objective: seeks long-term total return. The Franklin Advisory Services, LLC Securities Fund - Class 2 Fund normally invests at least 80% of its net assets in investments of small capitalization companies. For this Fund, small cap companies are those with market cap values not exceeding $2.5 billion, at the time of purchase. The Fund's manager invests in small companies that it believes are undervalued.
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 20
SUBACCOUNT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ------------------------------------------------------------------------------------------------------------------------------------ 3MS FTVIPT Mutual Shares Securities Objective: seeks capital appreciation, with Franklin Mutual Advisers, LLC Fund - Class 2 income as a secondary goal. The Fund normally invests mainly in U.S. equity securities that the Fund's manager believes are available at market prices less than their intrinsic value on certain recognized or objective criteria, including undervalued stocks, restructuring companies and distressed companies. 3UE Goldman Sachs VIT CORE(SM) U.S. Objective: The Goldman Sachs VIT CORE U.S. Goldman Sachs Asset Equity Fund Equity Fund seeks long-term growth of capital Management, L.P. and dividend income. The Fund invests, under CORE(SM) is a service mark of normal circumstances, at least 90% of its Goldman, Sachs & Co. total assets (not including securities lending collateral and any investment of that collateral) measured at time of purchase in a broadly diversified portfolio of large-cap and blue chip equity investments representing all major sectors of the U.S. economy. 3MC Goldman Sachs VIT Mid Cap Value Objective: The Goldman Sachs VIT Mid Cap Value Goldman Sachs Asset Fund Fund seeks long-term capital appreciation. The Management, L.P. Fund invests, under normal circumstances, at least 80% of its net assets plus any borrowing for investment purposes (measured at time of purchase) in a diversified portfolio of equity investments in mid-capitalization issuers within the range of the market capitalization of companies constituting the Russell Midcap Value Index at the time of investment. 3ID INVESCO VIF - Dynamics Fund Objective: long-term growth of capital. Invests INVESCO Funds Group, Inc. primarily in common stocks of mid-sized companies -companies included in the Russell Midcap(R) Growth Index at the time of purchase, or if not included in that Index, those with market capitalizations between $2.5 billion and $15 billion at the time of purchase. The Fund also has the flexibility to invest in other types of securities, including preferred stocks, convertible securities and bonds. 3FS INVESCO VIF - Financial Services Objective: long-term growth of capital. INVESCO Funds Group, Inc. Fund Aggressively managed. Invests at least 80% of its assets in the equity securities and equity-related instruments of companies involved in the financial services sector. These companies include, but are not limited to, banks, insurance companies, investment and miscellaneous industries (asset managers, brokerage firms, and government-sponsored agencies and suppliers to financial services companies).
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 21
SUBACCOUNT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ------------------------------------------------------------------------------------------------------------------------------------ 3TC INVESCO VIF - Technology Fund Objective: long-term growth of capital. The INVESCO Funds Group, Inc. Fund is aggressively managed. Invests at least 80% of its assets in equity securities and equity-related instruments of companies engaged in technology-related industries. These include, but are not limited to, various applied technologies, hardware, software, semiconductors, telecommunications equipment and services, and service-related companies in information technology. Many of these products and services are subject to rapid obsolescence, which may lower the market value of securities of the companies in this sector. 3TL INVESCO VIF - Objective: long-term growth of capital. Current INVESCO Funds Group, Inc. Telecommunications Fund income is a secondary objective. The Fund is aggressively managed. Invests at least 80% of its assets in equity securities and equity-related instruments of companies involved in the design, development manufacture, distribution or sale of communications services and equipment, and companies that are involved in supplying equipment or services to such companies. The telecommunications sector includes, but is not limited to companies that offer telephone services, wireless communications, satellite communications, television and movie programming, broadcasting and Internet access. Many of these products and services are subject to rapid obsolescence, which may lower the market value of securities of the companies in this sector. 3GT Janus Aspen Series Global Objective: long-term growth of capital. Janus Capital Technology Portfolio: Service Non-diversified mutual fund that invests, under Shares normal circumstances, at least 80% of its net assets in securities of companies that the portfolio manager believes will benefit significantly from advances or improvements in technology. It implements this policy by investing primarily in equity securities of U.S. and foreign companies selected for their growth potential. 3IG Janus Aspen Series Objective: long-term growth of capital. Janus Capital International Growth Portfolio: Invests, under normal circumstances, at least Service Shares 80% of its net assets in securities of issuers from at least five different countries, excluding the United States. Although the Portfolio intends to invest substantially all of its assets in issuers located outside the United States, it may at times invest in U.S. issuers and under unusual circumstances, it may invest all of its assets in fewer than five countries or even a single country.
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 22
SUBACCOUNT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ------------------------------------------------------------------------------------------------------------------------------------ 3IP Lazard Retirement International Objective: long-term capital appreciation. Lazard Asset Management, LLC Equity Portfolio Invests primarily in equity securities, principally common stocks, of relatively large non-U.S. companies with market capitalizations in the range of the Morgan Stanley Capital International (MSCI) Europe, Australia and Far East (EAFE(R)) Index that the Investment Manager believes are undervalued based on their earnings, cash flow or asset values. 3MG MFS(R) Investors Growth Stock Objective: long-term growth of capital and MFS Investment Management(R) Series - Service Class future income. Invests at least 80% of its net assets in common stocks and related securities of companies which MFS(R) believes offer better than average prospects for long-term growth. 3MD MFS(R) New Discovery Series - Objective: capital appreciation. Invests in at MFS Investment Management(R) Service Class least 65% of its net assets in equity securities of emerging growth companies. 3UT MFS(R) Utilities Series - Objective: capital growth and current income. MFS Investment Management(R) Service Class Invests primarily in equity and debt securities of domestic and foreign companies in the utilities industry. 3PE Pioneer Equity Income VCT Objective: current income and long-term growth Pioneer Investment Portfolio - Class II Shares of capital from a portfolio consisting Management, Inc. primarily of income producing equity securities of U.S. corporations. Invests primarily in common stocks, preferred stocks and interests in real estate investment trusts (REITs). Normally, the portfolio invests at least 80% of its total assets in income producing equity securities. The remainder of the portfolio may be invested in debt securities, most of which are expected to be convertible into common stocks. 3EU Pioneer Europe VCT Portfolio - Objective: long-term growth of capital. Invests Pioneer Investment Class II Shares primarily in equity securities of European Management, Inc. issuers including common stocks, preferred stocks, rights, depositary receipts, warrants and debt securities convertible into common stock. Normally, the portfolio invests 80% of its total assets in equity securities of European issuers. The portfolio may also purchase and sell forward foreign currency contracts in connection with its investments.
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 23
SUBACCOUNT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ------------------------------------------------------------------------------------------------------------------------------------ 3HS Putnam VT Health Sciences Objective: capital appreciation. The fund Putnam Investment Fund - Class IB Shares pursues its goal by investing mainly in growth Management, LLC stocks of companies in the health sciences industries. Under normal circumstances, the fund invests at least 80% of the fund's net assets in securities of (a) companies that derive at least 50% of their assets, revenues or profits from the pharmaceutical, health care services, applied research and development and medical equipment and supplies industries, or (b) companies we think have the potential for growth as a result of their particular products, technology, patents or other market advantages in the health sciences industries. 3PI Putnam VT International Equity Objective: capital appreciation. The fund Putnam Investment Fund - Class IB Shares pursues its goal by investing mainly in common Management, LLC (previously Putnam VT stocks of companies outside the United States. International Growth Fund (Class IB Shares)) 3VS Putnam VT Vista Fund - Class IB Objective: capital appreciation. The fund Putnam Investment Shares pursues its goal by investing mainly in common Management, LLC stocks of U.S. companies with a focus on growth stocks. 3SO Strong Opportunity Fund II - Objective: seeks capital growth. Invests Strong Capital Management, Inc. Advisor Class primarily in common stocks of medium-capitalization companies that the Fund's managers believe are under priced, yet have attractive growth prospects. 3IT Wanger International Objective: long-term growth of capital. Invests Liberty Wanger Asset Small Cap primarily in stocks of small and medium-size Management, L.P. non-U.S. companies with capitalizations of less than $2 billion at time of purchase. 3SP Wanger U.S. Smaller Objective: long-term growth of capital. Invests Liberty Wanger Asset Companies primarily in stocks of small- and medium-size Management, L.P. U.S. companies with capitalizations of less than $5 billion at time of purchase. 3AA Wells Fargo VT Asset Objective: long-term total return consistent Wells Fargo Funds Management, Allocation Fund with reasonable risk. Invests in equity and LLC, adviser; Wells Capital fixed-income securities in varying proportions, Management Incorporated, with "neutral" target allocation of 60% equity subadviser. securities and 40% fixed-income securities. The Fund invests its equity portion of assets in common stocks to replicate the S&P 500(R) Index and its fixed-income portion of assets in U.S. Treasury Bonds to replicate the Lehman Brothers 20+ Treasury Index. The Fund seeks to maintain a 95% or better performance correlation with the respective indexes.
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 24
SUBACCOUNT INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ------------------------------------------------------------------------------------------------------------------------------------ 3WI Wells Fargo VT Objective: total return with an emphasis on Wells Fargo Funds Management, International long-term capital appreciation. Invests LLC, adviser; Wells Capital Equity Fund principally in equity securities of companies Management Incorporated, based in developed foreign countries or subadviser. emerging markets. 3SG Wells Fargo VT Objective: long-term capital appreciation. Wells Fargo Funds Management, Small Cap Growth Focus is on companies believed to have LLC, adviser; Wells Capital Fund above-average growth potential or that may be Management Incorporated, involved in new or innovative products, subadviser. services and processes. Invests principally in securities of companies with above-average growth potential and whose market capitalizations equal to or lower than the company with the largest market capitalization in falls within the range of the Russell 2000 Index, which is considered a small capitalization index.
A fund underlying your contract in which a subaccount invests may have a name, portfolio manager, objectives, strategies and characteristics that are the same or substantially similar to those of a publicly-traded retail mutual fund. Despite these similarities, an underlying fund is not the same as any publicly-traded retail mutual fund. Each underlying fund will have its own unique portfolio holdings, fees, operating expenses and operating results. The results of each underlying fund may differ significantly from any publicly-traded retail mutual fund. The investment advisers cannot guarantee that the funds will meet their investment objectives. Please read the funds' prospectuses for facts you should know before investing. These prospectuses are available by contacting us at the address or telephone number on the first page of this prospectus. All funds are available to serve as the underlying investments for variable annuities and variable life insurance policies. Some funds also are available to serve as investment options for tax-deferred retirement plans. It is possible that in the future, it may be disadvantageous for variable annuity accounts and variable life insurance accounts and/or tax-deferred retirement plans to invest in the available funds simultaneously. Although the insurance company and the funds do not currently foresee any such disadvantages, the boards of directors or trustees of the appropriate funds will monitor events in order to identify any material conflicts between annuity owners, policy owners and tax-deferred retirement plans and to determine what action, if any, should be taken in response to a conflict. If a board were to conclude that it should establish separate funds for the variable annuity, variable life insurance and tax-deferred retirement plan accounts, you would not bear any expenses associated with establishing separate funds. Please refer to the funds' prospectuses for risk disclosure regarding simultaneous investments by variable annuity, variable life insurance and tax-deferred retirement plan accounts. The Internal Revenue Service (IRS) issued final regulations relating to the diversification requirements under Section 817(h) of the Code. Each fund intends to comply with these requirements. The variable account was established under Minnesota law on Aug. 23, 1995, and the subaccounts are registered together as a single unit investment trust under the Investment Company Act of 1940 (the 1940 Act). This registration does not involve any supervision of our management or investment practices and policies by the SEC. All obligations arising under the contracts are general obligations of IDS Life. The variable account meets the definition of a separate account under federal securities laws. We credit or charge income, capital gains and capital losses of each subaccount only to that subaccount. State insurance law prohibits us from charging a subaccount with liabilities of any other subaccount or of our general business. The variable account includes other subaccounts that are available under contracts that are not described in this prospectus. The U.S. Treasury and the IRS indicated that they may provide additional guidance on investment control. This concerns how many variable subaccounts an insurance company may offer and how many exchanges among subaccounts it may allow before the contract owner would be currently taxed on income earned within subaccount assets. At this time, we do not know what the additional guidance will be or when action will be taken. We reserve the right to modify the contract, as necessary, so that the owner will not be subject to current taxation as the owner of the subaccount assets. We intend to comply with all federal tax laws so that the contract continues to qualify as an annuity for federal income tax purposes. We reserve the right to modify the contract as necessary to comply with any new tax laws. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 25 THE FIXED ACCOUNT You also may allocate purchase payments and transfers to the fixed account. We back the principal and interest guarantees relating to the fixed account. These guarantees are based on the continued claims-paying ability of the company. The value of the fixed account increases as we credit interest to the account. Purchase payments and transfers to the fixed account become part of our general account. Interest is calculated and compounded daily based on a 365-day year so as to produce the annual effective rate which we declare. We do not credit interest on leap days (Feb. 29). The interest rate for your fixed account is guaranteed for 12 months from the contract issue date. Thereafter, we will change rates from time to time at our discretion. These rates will be based on various factors including, but not limited to, the interest rate environment, returns earned on investments backing these annuities, the rates currently in effect for new and existing company annuities, product design, competition, and the company's revenues and expenses. Interests in the fixed account are not required to be registered with the SEC. The SEC staff does not review the disclosures in this prospectus on the fixed account. Disclosures regarding the fixed account, however, may be subject to certain generally applicable provisions of the federal securities laws relating to the accuracy and completeness of statements made in prospectuses. (See "Making the Most of Your Contract - Transfer Policies" for restrictions on transfers involving the fixed account.) BUYING YOUR CONTRACT You can fill out an application and send it along with your initial purchase payment to our office. As the owner, you have all rights and may receive all benefits under the contract. You can own a nonqualified annuity in joint tenancy with rights of survivorship only in spousal situations. You cannot own a qualified annuity in joint tenancy. You can buy a contract or become an annuitant if you are 90 or younger. When you apply, you may select: - the optional MAV rider*; - the optional EEB rider*; - the optional EEP rider*; - the fixed account and/or subaccounts in which you want to invest; - how you want to make purchase payments; and - a beneficiary. * You may select any one of the following: MAV, EEB or EEP riders. Or you may select the MAV and either the EEB or the EEP. However, you cannot select both the EEB and EEP. Riders may not be available in all states. The MAV, EEB and EEP are only available if you and the annuitant are 75 or younger at the rider effective date. EEP is only available on contracts purchased through a transfer or exchange. The contract provides for allocation of purchase payments to the subaccounts of the variable account and/or to the fixed account in even 1% increments. If your application is complete, we will process it and apply your purchase payment to the fixed account and subaccounts you selected within two business days after we receive it at our office. If we accept your application, we will send you a contract. If your application is not complete, you must give us the information to complete it within five business days. If we cannot accept your application within five business days, we will decline it and return your payment unless you specifically ask us to keep the payment and apply it once your application is complete. We will credit additional purchase payments you make to your accounts on the valuation date we receive them. We will value the additional payments at the next accumulation unit value calculated after we receive your payments at our office. THE SETTLEMENT DATE Annuity payouts are scheduled to begin on the settlement date. When we process your application, we will establish the settlement date to the maximum age or date described below. You can also select a date within the maximum limits. You can align this date with your actual retirement from a job, or it can be a different future date, depending on your needs and goals and on certain restrictions. You also can change the date, provided you send us written instructions at least 30 days before annuity payouts begin. FOR NONQUALIFIED ANNUITIES AND ROTH IRAs, the settlement date must be: - no earlier than the 60th day after the contract's effective date; and - no later than the annuitant's 85th birthday or the tenth contract anniversary, if purchased after age 75. (In Pennsylvania, the maximum settlement date ranges from age 85 to 96 based on the annuitant's age when we issue the contract. See contract for details.) FOR QUALIFIED ANNUITIES EXCEPT ROTH IRAs, to avoid IRS penalty taxes, the settlement date generally must be: - on or after the date the annuitant reaches age 59 1/2; and - for IRAs, SIMPLE IRAs and SEPs, by April 1 of the year following the calendar year when the annuitant reaches age 70 1/2; or - all other qualified annuities, by April 1 of the year following the calendar year when the annuitant reaches age 70 1/2, or, if later, retires (except that 5% business owners may not select a settlement date that is later than April 1 of the year following the calendar year when they reach age 70 1/2). AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 26 If you take the minimum IRA or TSA distributions as required by the Code from another tax-qualified investment, or in the form of partial surrenders from this contract, annuity payouts can start as late as the annuitant's 85th birthday or the tenth contract anniversary, if later. (In Pennsylvania, the annuity payout ranges from age 85 to 96 based on the annuitant's age when the contract is issued. See contract for details). BENEFICIARY If death benefits become payable before the settlement date while the contract is in force and before annuity payouts begin, we will pay your named beneficiary all or part of the contract value. If there is no named beneficiary, then you or your estate will be the beneficiary. (See "Benefits in Case of Death" for more about beneficiaries.) PURCHASE PAYMENTS MINIMUM ALLOWABLE PURCHASE PAYMENTS(1) FOR EMPLOYEES/ADVISORS If paying by installments under a scheduled payment plan: $23.08 biweekly, or $50 per month If paying by any other method: $1,000 initial payment for qualified annuities $2,000 initial payment for nonqualified annuities $50 for any additional payments FOR OTHER INDIVIDUALS: $1 million (1) Installments must total at least $600 in the first year. If you do not make any purchase payments for 24 months, and your previous payments total $600 or less, we have the right to give you 30 days' written notice and pay you the total value of your contract in a lump sum. This right does not apply to contracts in New Jersey. MAXIMUM ALLOWABLE PURCHASE PAYMENTS(2) FOR EMPLOYEES/ADVISORS For the first year: $2,000,000 for issue ages up to 85 $100,000 for issue ages 86 to 90 For each subsequent year: $100,000 for issue ages up to 85 $50,000 for issue ages 86 to 90 FOR OTHER INDIVIDUALS For the first year: $2,000,000 for issue ages up to 85 $1,000,000 for issue ages 86 to 90 For each subsequent year: $100,000 for issue ages up to 85 $50,000 for issue ages 86-90 (2) These limits apply in total to all IDS Life annuities you own. We reserve the right to increase maximum limits. For qualified annuities the tax-deferred retirement plan's or the Code's limits on annual contributions also apply. Except for TSAs, purchase payments are limited and may not be made after the third contract anniversary in Massachusetts, Washington and Oregon. We reserve the right to not accept purchase payments allocated to the fixed account for twelve months following either: 1. a partial surrender from the fixed account; or 2. a lump sum transfer from the fixed account to a subaccount. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 27 HOW TO MAKE PURCHASE PAYMENTS 1 BY LETTER Send your check along with your name and contract number to: IDS LIFE INSURANCE COMPANY 70200 AXP FINANCIAL CENTER MINNEAPOLIS, MN 55474 2 BY SCHEDULED PAYMENT PLAN FOR EMPLOYEES/ADVISORS ONLY We can help you set up: - an automatic payroll deduction, salary reduction or other group billing arrangement; or - a bank authorization. CHARGES CONTRACT ADMINISTRATIVE CHARGE We charge this fee for establishing and maintaining your records. We deduct $30 from the contract value on your contract anniversary at the end of each contract year. We prorate this charge among the subaccounts and the fixed account in the same proportion your interest in each account bears to your total contract value. We will waive this charge when your contract value, or total purchase payments less any payments surrendered, is $50,000 or more on the current contract anniversary. If you surrender your contract, we will deduct the charge at the time of surrender regardless of the contract value or purchase payments made. We cannot increase the annual contract administrative charge and it does not apply after annuity payouts begin or when we pay death benefits. MORTALITY AND EXPENSE RISK FEE We charge this fee daily to the subaccounts. The unit values of your subaccounts reflect this fee and it totals 0.55% of their average daily net assets on an annual basis. This fee covers the mortality and expense risk that we assume. Approximately two-thirds of this amount is for our assumption of mortality risk, and one-third is for our assumption of expense risk. This fee does not apply to the fixed account. Mortality risk arises because of our guarantee to pay a death benefit and our guarantee to make annuity payouts according to the terms of the contract, no matter how long a specific annuitant lives and no matter how long our entire group of annuitants live. If, as a group, annuitants outlive the life expectancy we assumed in our actuarial tables, we must take money from our general assets to meet our obligations. If, as a group, annuitants do not live as long as expected, we could profit from the mortality risk fee. Expense risk arises because we cannot increase the contract administrative charge and this charge may not cover our expenses. We would have to make up any deficit from our general assets. We could profit from the expense risk fee if future expenses are less than expected. The subaccounts pay us the mortality and expense risk fee they accrued as follows: - first, to the extent possible, the subaccounts pay this fee from any dividends distributed from the funds in which they invest; - then, if necessary, the funds redeem shares to cover any remaining fees payable. We may use any profits we realize from the subaccounts' payment to us of the mortality and expense risk fee for any proper corporate purpose, including, among others, payment of distribution (selling) expenses. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 28 MAV RIDER FEE We charge a fee for the optional feature only if you select it.(1) If selected, we deduct 0.25%(2) of your contract value on your contract anniversary at the end of each contract year. We prorate this fee among the subaccounts and fixed account in the same proportion your interest in each account bears to your total contract value. When annuity payouts begin, or if you terminate the contract for any reason other than death, we will deduct this fee, adjusted for the number of calendar days coverage was in place. We reserve the right to assess charges for the number of days the rider was in force for any rider that is terminated due to a change of ownership. If you choose to drop this rider on an anniversary (subject to the restrictions given in "Optional Benefits"), we will deduct this fee on that anniversary. We cannot increase this annual fee after the rider effective date and it does not apply after annuity payouts begin or when we pay death benefits. EEB RIDER FEE We charge a fee for the optional feature only if you select it.(1) If selected, we deduct 0.30% of your contract value on your contract anniversary at the end of each contract year. We prorate this fee among the subaccounts and fixed account in the same proportion your interest in each account bears to your total contract value. When annuity payouts begin, if you terminate the contract for any reason other than death, we will deduct this fee, adjusted for the number of calendar days coverage was in place. We reserve the right to assess charges for the number of days the rider was in force for any rider that is terminated due to a change of ownership. If you choose to drop this rider on an anniversary (subject to the restrictions given in "Optional Benefits"), we will deduct this fee on that anniversary. We cannot increase this annual fee after the rider effective date and it does not apply after annuity payouts begin or when we pay death benefits. EEP RIDER FEE We charge a fee for the optional feature only if you select it.(1) If selected, we deduct 0.40% of your contract value on your contract anniversary at the end of each contract year. We prorate this fee among the subaccounts and fixed account in the same proportion your interest in each account bears to your total contract value. When annuity payouts begin, or if you terminate the contract for any reason other than death, we will deduct this fee, adjusted for the number of calendar days coverage was in place. We reserve the right to assess charges for the number of days the rider was in force for any rider that is terminated due to a change in ownership. If you choose to drop this rider on an anniversary (subject to the restrictions given in "Optional Benefits"), we will deduct this fee on that anniversary. We cannot increase this annual fee after the rider effective date and it does not apply after annuity payouts begin or when we pay death benefits. SURRENDER CHARGE There is no charge if you surrender all or part of your contract. SURRENDER CHARGE UNDER ANNUITY PAYOUT PLAN E -- PAYOUTS FOR A SPECIFIED PERIOD: Under this payout plan, you can choose to take a surrender. The amount that you can surrender is the present value of any remaining variable payouts. The discount rate we use in the calculation will vary between 3.50% and 5.00% depending on the applicable assumed investment rate. The surrender charge equals the present value of the remaining payouts using the assumed investment rate minus the present value of the remaining payouts using the discount rate. In no event would your surrender charge exceed 9% of the amount available for payouts under the plan. (1) You may select any one of the MAV, EEB or EEP riders. Or you may select the MAV and either the EEB or the EEP. However, you cannot select both the EEB and EEP. Riders may not be available in all states. The MAV, EEB and EEP riders are only available if you and the annuitant are 75 or younger at the rider effective date. EEP is only available on contracts purchased through a transfer or exchange. (2) For contracts purchased before May 1, 2003, the MAV rider fee is 0.15%. OTHER INFORMATION ON CHARGES: AEFC makes certain custodial services available to some profit sharing, money purchase and target benefit plans funded by our annuities. Fees for these services start at $30 per calendar year per participant. AEFC will charge a termination fee for owners under age 59 1/2 (fee waived in case of death or disability). POSSIBLE GROUP REDUCTIONS: In some cases we may incur lower sales and administrative expenses due to the size of the group, the average contribution and the use of group enrollment procedures. In such cases, we may be able to reduce or eliminate the contract administrative charges. However, we expect this to occur infrequently. PREMIUM TAXES Certain state and local governments impose premium taxes on us (up to 3.5%). These taxes depend upon the state of residence or the state in which the contract was sold. Currently, we deduct any applicable premium tax when annuity payouts begin, but we reserve the right to deduct this tax at other times such as when you make purchase payments or when you surrender your contract. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 29 VALUING YOUR INVESTMENT We value your accounts as follows: FIXED ACCOUNT We value the amounts you allocated to the fixed account directly in dollars. The fixed account value equals: - the sum of your purchase payments and transfer amounts allocated to the fixed account; - plus interest credited; - minus the sum of amounts surrendered and amounts transferred out; - minus any prorated contract administrative charge; - minus any prorated portion of the MAV rider fee (if selected); - minus any prorated portion of the EEB rider fee (if selected); and - minus any prorated portion of the EEP rider fee (if selected). SUBACCOUNTS We convert amounts you allocated to the subaccounts into accumulation units. Each time you make a purchase payment or transfer amounts into one of the subaccounts, we credit a certain number of accumulation units to your contract for that subaccount. Conversely, each time you take a partial surrender, transfer amounts out of a subaccount, or we assess a contract administrative charge or an applicable charge for optional benefits we subtract a certain number of accumulation units from your contract. The accumulation units are the true measure of investment value in each subaccount during the accumulation period. They are related to, but not the same as, the net asset value of the fund in which the subaccount invests. The dollar value of each accumulation unit can rise or fall daily depending on the variable account expenses, performance of the fund and on certain fund expenses. Here is how we calculate accumulation unit values: NUMBER OF UNITS: to calculate the number of accumulation units for a particular subaccount we divide your investment by the current accumulation unit value. ACCUMULATION UNIT VALUE: the current accumulation unit value for each subaccount equals the last value times the subaccount's current net investment factor. WE DETERMINE THE NET INVESTMENT FACTOR BY: - adding the fund's current net asset value per share, plus the per share amount of any accrued income or capital gain dividends to obtain a current adjusted net asset value per share; then - dividing that sum by the previous adjusted net asset value per share; and - subtracting the percentage factor representing the mortality and expense risk fee from the result. Because the net asset value of the fund may fluctuate, the accumulation unit value may increase or decrease. You bear all the investment risk in a subaccount. FACTORS THAT AFFECT SUBACCOUNT ACCUMULATION UNITS: accumulation units may change in two ways -- in number and in value. The number of accumulation units you own may fluctuate due to: - additional purchase payments you allocate to the subaccounts; - transfers into or out of the subaccounts; - partial surrenders; - a prorated portion of the contract administrative charge; - a prorated portion of the MAV rider fee (if selected); - a prorated portion of the EEB rider fee (if selected); and - a prorated portion of the EEP rider fee (if selected). Accumulation unit values will fluctuate due to: - changes in funds' net asset value; - dividends distributed to the subaccounts; - capital gains or losses of funds; - fund operating expenses; and/or - mortality and expense risk fees. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 30 MAKING THE MOST OF YOUR CONTRACT AUTOMATED DOLLAR-COST AVERAGING Currently, you can use automated transfers to take advantage of dollar-cost averaging (investing a fixed amount at regular intervals). For example, you might transfer a set amount monthly from a relatively conservative subaccount to a more aggressive one, or to several others, or from the fixed account to one or more subaccounts. There is no charge for dollar-cost averaging. This systematic approach can help you benefit from fluctuations in accumulation unit values caused by fluctuations in the market values of the funds. Since you invest the same amount each period, you automatically acquire more units when the market value falls and fewer units when it rises. The potential effect is to lower your average cost per unit. HOW DOLLAR-COST AVERAGING WORKS
NUMBER AMOUNT ACCUMULATION OF UNITS MONTH INVESTED UNIT VALUE PURCHASED By investing an equal number of dollars each month ... Jan $ 100 $ 20 5.00 Feb 100 18 5.56 you automatically buy Mar 100 17 5.88 more units when the per unit market price is low ... ---> Apr 100 15 6.67 May 100 16 6.25 Jun 100 18 5.56 Jul 100 17 5.88 and fewer units Aug 100 19 5.26 when the per unit market price is high. ---> Sept 100 21 4.76 Oct 100 20 5.00
You paid an average price of only $17.91 per unit over the 10 months, while the average market price actually was $18.10. Dollar-cost averaging does not guarantee that any subaccount will gain in value nor will it protect against a decline in value if market prices fall. Because dollar-cost averaging involves continuous investing, your success will depend upon your willingness to continue to invest regularly through periods of low price levels. Dollar-cost averaging can be an effective way to help meet your long-term goals. For specific features contact your sales representative. ASSET REBALANCING You can ask us in writing to have the variable subaccount portion of your contract value allocated according to the percentages (in whole percentage amounts ) that you choose. We automatically will rebalance the variable subaccount portion of your contract value either quarterly, semiannually, or annually. The period you select will start to run on the date we record your request. On the first valuation date of each of these periods, we automatically will rebalance your contract value so that the value in each subaccount matches your current subaccount percentage allocations. These percentage allocations must be in whole numbers. Asset rebalancing does not apply to the fixed account. There is no charge for asset rebalancing. The contract value must be at least $2,000. You can change your percentage allocations or your rebalancing period at any time by contacting us in writing. We will restart the rebalancing period you selected as of the date we record your change. You also can ask us in writing to stop rebalancing your contract value. You must allow 30 days for us to change any instructions that currently are in place. For more information on asset rebalancing, contact your sales representative. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 31 TRANSFERRING BETWEEN ACCOUNTS You may transfer contract value from any one subaccount, or the fixed account, to another subaccount before annuity payouts begin. (Certain restrictions apply to transfers involving the fixed account.) We will process your transfer on the valuation date we receive your request. We will value your transfer at the next accumulation unit value calculated after we receive your request. There is no charge for transfers. Before making a transfer, you should consider the risks involved in changing investments. We may suspend or modify transfer privileges at any time. The contract is not designed for use by individuals, professional market timing organizations, or other entities that do "market timing," programmed transfers, frequent transfers or excessive trading, or transfers that are large in relation to the total assets of any fund underlying the contract. These and similar activities may adversely affect a fund's ability to invest effectively in accordance with its investment objectives and policies, may increase expenses and may harm other contract owners who allocated purchase payments to the fund regardless of their transfer activity. Accordingly, individuals and organizations that use market-timing investment strategies and make frequent transfers should not own this contract. We monitor the frequency of transfers, including the size of transfers in relation to fund assets in each underlying fund, and we take appropriate action as necessary. In order to prevent market timing activities that may harm or disadvantage other contract owners, we may apply modifications or restrictions (including suspending the transfer privilege) in any reasonable manner to prevent a transfer. We may also reject or restrict any specific payment or transfer request and impose specific limitations with respect to market timers, including restricting transfers by market timers to certain underlying funds. We may also apply other restrictions or modifications that could include, but not be limited to: - not accepting telephone or electronic transfer requests; - requiring a minimum time period between each transfer; - not accepting transfer requests of an agent acting under power of attorney on behalf of more than one contract owner; or - limiting the dollar amount that a contract owner may transfer at any one time. We agree to provide notice of our intent to restrict transfer privileges to contract owners who have engaged in disruptive activity. In addition, some of the underlying funds have reserved the right to temporarily or permanently refuse payments or transfer requests from us if, in the judgment of the fund's investment adviser, the fund would be unable to invest effectively in accordance with its investment objective or policies, or would otherwise potentially be adversely affected. Accordingly, we may not be in a position to effect certain allocations or transfers requested by market timers and may refuse such requests without prior notice. Subject to state law, we reserve the right to impose, without prior notice, restrictions on allocations and transfers that we determine, in our sole discretion, will disadvantage or potentially hurt the rights or interests of other contract owners. For information on transfers after annuity payouts begin, see "Transfer Policies" below. TRANSFER POLICIES - Before annuity payouts begin, you may transfer contract values between the subaccounts, or from the subaccounts to the fixed account at any time. However, if you made a transfer from the fixed account to the subaccounts, you may not make a transfer from any subaccount back to the fixed account until the next contract anniversary. - You may transfer contract values from the fixed account to the subaccounts once a year during a 31-day transfer period starting on each contract anniversary (except for automated transfers, which can be set up at any time for certain transfer periods subject to certain minimums). - If we receive your request within 30 days before the contract anniversary date, the transfer from the fixed account to the subaccounts will be effective on the anniversary. - If we receive your request on or within 30 days after the contract anniversary date, the transfer from the fixed account to the subaccounts will be effective on the valuation date we receive it. - We will not accept requests for transfers from the fixed account at any other time. - Once annuity payouts begin, you may not make transfers to or from the fixed account, but you may make transfers once per contract year among the subaccounts. During the annuity payout period, you cannot invest in more than five subaccounts at any one time unless we agree otherwise. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 32 HOW TO REQUEST A TRANSFER OR SURRENDER 1 BY LETTER Send your name, contract number, Social Security Number or Taxpayer Identification Number and signed request for a transfer or surrender to: IDS LIFE INSURANCE COMPANY 70100 AXP FINANCIAL CENTER MINNEAPOLIS, MN 55474 MINIMUM AMOUNT Transfers or surrenders: $250 or entire account balance MAXIMUM AMOUNT Transfers or surrenders: Contract value or entire account balance 2 BY AUTOMATED TRANSFERS AND AUTOMATED PARTIAL SURRENDERS Your sales representative can help you set up automated transfers among your subaccounts or fixed account or partial surrenders from the accounts. You can start or stop this service by written request or other method acceptable to us. You must allow 30 days for us to change any instructions that are currently in place. - Automated transfers from the fixed account to any one of the subaccounts may not exceed an amount that, if continued, would deplete the fixed account within 12 months. - Automated surrenders may be restricted by applicable law under some contracts. - You may not make additional purchase payments if automated partial surrenders are in effect. - Automated partial surrenders may result in IRS taxes and penalties on all or part of the amount surrendered. - The balance in any account from which you make an automated transfer or automated partial surrender must be sufficient to satisfy your instructions. If not, we will suspend your entire automated arrangement until the balance is adequate. - If we must suspend your automated transfer or automated partial surrender arrangement for six months, we reserve the right to discontinue the arrangement in its entirety. MINIMUM AMOUNT Transfers or surrenders: $50 MAXIMUM AMOUNT Transfers or surrenders: None (except for automated transfers from the fixed account) 3 BY PHONE Call between 7 a.m. and 10 p.m. Central time: (800) 862-7919 TTY service for the hearing impaired: (800) 285-8846 MINIMUM AMOUNT Transfers or surrenders: $250 or entire account balance MAXIMUM AMOUNT Transfers: Contract value or entire account balance Surrenders: $100,000 We answer telephone requests promptly, but you may experience delays when the call volume is unusually high. If you are unable to get through, use the mail procedure as an alternative. We will honor any telephone transfer or surrender requests that we believe are authentic and we will use reasonable procedures to confirm that they are. This includes asking identifying questions and tape recording calls. We will not allow a telephone surrender within 30 days of a phoned-in address change. As long as we follow the procedures, we (and our affiliates) will not be liable for any loss resulting from fraudulent requests. Telephone transfers or surrenders are automatically available. You may request that telephone transfers or surrenders NOT be authorized from your account by writing to us. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 33 SURRENDERS You may surrender all or part of your contract at any time before annuity payouts begin by sending us a written request or calling us. We will process your surrender request on the valuation date we receive it. For total surrenders, we will compute the value of your contract at the next accumulation unit value calculated after we receive your request. We may ask you to return the contract. You may have to pay MAV Death Benefit charges (see "Charges -- MAV rider fee"), EEB charges (see "Charges -- EEB rider fee"), EEP charges (see "Charges -- EEP rider fee"), and IRS taxes and penalties (see "Taxes"). You cannot make surrenders after annuity payouts begin except under Plan E (see "The Annuity Payout Period -- Annuity Payout Plans"). SURRENDER POLICIES If you have a balance in more than one account and you request a partial surrender, we will withdraw money from all your subaccounts and/or the fixed account in the same proportion as your value in each account correlates to your total contract value, unless you request otherwise. The minimum contract value after partial surrender is $600. RECEIVING PAYMENT 1 BY REGULAR OR EXPRESS MAIL - payable to you; - mailed to address of record. NOTE: We will charge you a fee if you request express mail delivery. 2 BY WIRE - request that payment be wired to your bank; - bank account must be in the same ownership as your contract; and - pre-authorization required. NOTE: We will charge you a fee if you request that payment be wired to your bank. For instructions, please contact your sales representative. Normally, we will send the payment within seven days after receiving your request. However, we may postpone the payment if: -- the surrender amount includes a purchase payment check that has not cleared; -- the NYSE is closed, except for normal holiday and weekend closings; -- trading on the NYSE is restricted, according to SEC rules; -- an emergency, as defined by SEC rules, makes it impractical to sell securities or value the net assets of the accounts; or -- the SEC permits us to delay payment for the protection of security holders. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 34 TSA -- SPECIAL SURRENDER PROVISIONS PARTICIPANTS IN TAX-SHELTERED ANNUITIES The Code imposes certain restrictions on your right to receive early distributions from a TSA: - Distributions attributable to salary reduction contributions (plus earnings) made after Dec. 31, 1988, or to transfers or rollovers from other contracts, may be made from the TSA only if: -- you are at least age 59 1/2; -- you are disabled as defined in the Code; -- you severed employment with the employer who purchased the contract; or -- the distribution is because of your death. - If you encounter a financial hardship (as provided by the Code), you may be eligible to receive a distribution of all contract values attributable to salary reduction contributions made after Dec. 31, 1988, but not the earnings on them. - Even though a distribution may be permitted under the above rules, it may be subject to IRS taxes and penalties (see "Taxes"). - The employer must comply with certain nondiscrimination requirements for certain types of contributions under a TSA contract to be excluded from taxable income. You should consult your employer to determine whether the nondiscrimination rules apply to you. - The above restrictions on distributions do not affect the availability of the amount credited to the contract as of Dec. 31, 1988. The restrictions also do not apply to transfers or exchanges of contract value within the contract, or to another registered variable annuity contract or investment vehicle available through the employer. - If the contract has a loan provision, the right to receive a loan is described in detail in your contract. CHANGING OWNERSHIP You may change ownership of your nonqualified annuity at any time by completing a change of ownership form we approve and sending it to our office. The change will become binding on us when we receive and record it. We will honor any change of ownership request that we believe is authentic and we will use reasonable procedures to confirm authenticity. If we follow these procedures, we will not take any responsibility for the validity of the change. Please consider carefully whether or not you wish to change ownership of your nonqualified annuity if you have elected the MAV, EEB or EEP. If you change ownership of your contract, we will terminate the EEP. This includes both the EEP Part I benefits and the EEP Part II benefits. (See the description of these terms in "Optional Benefits.") In addition, the terms of the EEB and the MAV will change due to a change of ownership. If either the new owner or the annuitant is older than age 75, the EEB will terminate. Otherwise, the EEB will effectively "start over." We will treat the EEB as if it is issued on the day the change of ownership is made, using the attained age of the new owner as the "issue age" to determine the benefit levels. The account value on the date of the ownership change will be treated as a "purchase payment" in determining future values of "earnings at death" under the EEB. If either the new owner or the annuitant is older than age 75, the MAV will terminate. If the MAV on the date of ownership change is greater than the account value on the date of the ownership change, we will set the MAV equal to the account value. Otherwise, the MAV value will not change due to a change in ownership. Please see the descriptions of these riders in "Optional Benefits." The rider charges described in "Charges" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force) for any rider that continues after a change of ownership. We reserve the right to assess charges for the number of days the rider was in force for any rider that is terminated due to a change of ownership. If you have a nonqualified annuity, you may incur income tax liability by transferring, assigning or pledging any part of it. (See "Taxes.") If you have a qualified annuity, you may not sell, assign, transfer, discount or pledge your contract as collateral for a loan, or as security for the performance of an obligation or for any other purpose except as required or permitted by the Code. However, if the owner is a trust or custodian, or an employer acting in similar capacity, ownership of the contract may be transferred to the annuitant. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 35 BENEFITS IN CASE OF DEATH -- STANDARD DEATH BENEFIT We will pay the death benefit to your beneficiary upon the earlier of your death or the annuitant's death. If a contract has more than one person as the owner, we will pay benefits upon the first to die of any owner or the annuitant. If you or the annuitant die before annuity payouts begin while this contract is in force, we will pay the beneficiary as follows: If both you and the annuitant are age 80 or younger on the date of death, the beneficiary receives the greatest of: - contract value; - purchase payments minus adjusted partial surrenders; or - the contract value as of the most recent sixth contract anniversary, plus purchase payments and minus adjusted partial surrenders since that anniversary. If either you or the annuitant is age 81 or older on the date of death, the beneficiary receives the greater of: - contract value; or - purchase payments minus adjusted partial surrenders. ADJUSTED PARTIAL SURRENDERS PS X DB ------- CV PS = the partial surrender. DB = the death benefit on the date of (but prior to) the partial surrender. CV = contract value on the date of (but prior to) the partial surrender. EXAMPLE OF STANDARD DEATH BENEFIT CALCULATION WHEN THE OWNER AND ANNUITANT ARE AGE 80 OR YOUNGER - You purchase the contract with a payment of $20,000 on Jan. 1, 2003. - On Jan 1, 2009 (the sixth contract anniversary) the contract value grows to $30,000. - March 1, 2009 the contract value falls to $28,000 at which point you take a $1,500 partial surrender, leaving a contract value of $26,500. We calculate the death benefit on March 1, 2009 as follows: The contract value on the most recent sixth contract anniversary: $ 30,000 plus purchase payments made since that anniversary: +0 minus adjusted partial surrenders taken since that anniversary calculated as: ($1,500 X $30,000) = -1,607 ------------------ ------- $28,000 for a death benefit of: $ 28,393
IF YOU DIE BEFORE YOUR SETTLEMENT DATE When paying the beneficiary, we will process the death claim on the valuation date our death claim requirements are fulfilled. We will determine the contract's value at the next accumulation unit value calculated after our death claim requirements are fulfilled. We pay interest, if any, at a rate no less than required by law. We will mail payment to the beneficiary within seven days after our death claim requirements are fulfilled. NONQUALIFIED ANNUITIES If your spouse is sole beneficiary and you die before the settlement date, your spouse may keep the contract as owner. To do this your spouse must, within 60 days after we receive proof of death, give us written instructions to keep the contract in force. If your beneficiary is not your spouse, we will pay the beneficiary in a single sum unless you give us other written instructions. We must fully distribute the death benefit within five years of your death. However, the beneficiary may receive payouts under any annuity payout plan available under this contract if: - the beneficiary asks us in writing within 60 days after we receive proof of death; and - payouts begin no later than one year after your death, or other date as permitted by the Code; and - the payout period does not extend beyond the beneficiary's life or life expectancy. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 36 QUALIFIED ANNUITIES - SPOUSE BENEFICIARY: If you have not elected an annuity payout plan, and if your spouse is the sole beneficiary, your spouse may either elect to treat the contract as his/her own or elect an annuity payout plan or another plan agreed to by us. If your spouse elects a payout plan, the payouts must begin no later than the year in which you would have reached age 70 1/2. If you attained age 70 1/2 at the time of death, payouts must begin no later than Dec. 31 of the year following the year of your death. - NON-SPOUSE BENEFICIARY: If you have not elected an annuity payout plan, and if death occurs prior to the year you would have attained age 70 1/2, the beneficiary may elect to receive payouts from the contract over a five year period. If your death occurs after attaining age 70 1/2, we will pay the beneficiary in a single sum unless the beneficiary elects to receive payouts under any payout plan available under this contract if: - the beneficiary asks us in writing within 60 days after we receive proof of death; and - payouts begin no later than one year following the year of your death; and - the payout period does not extend beyond the beneficiary's life or life expectancy. - ANNUITY PAYOUT PLAN: If you elect an annuity payout plan, the payouts to your beneficiary will continue pursuant to the annuity payout plan you elect. OPTIONAL BENEFITS MAXIMUM ANNIVERSARY VALUE DEATH BENEFIT The MAV is intended to provide additional death benefit protection in the event of fluctuating fund values. This is an optional benefit that you may select for an additional annual charge (see "Charges"). The MAV does not provide any additional benefit before the first contract anniversary after the rider effective date. The MAV may be of less value if you or the annuitant is older since we stop resetting the maximum anniversary value at age 81. Although we stop resetting the maximum anniversary value at age 81, the MAV rider fee continues to apply until the rider terminates. In addition, the MAV does not provide any additional benefit with respect to fixed account values during the time you have amounts allocated to the fixed account. Be sure to discuss with your sales representative whether or not the MAV is appropriate for your situation. If this MAV rider is available in your state and both you and the annuitant are age 75 or younger at contract issue, you may choose to add the MAV to your contract. Generally, you must elect the MAV at the time you purchase your contract and your rider effective date will be the contract issue date. In some instances the rider effective date for the MAV may be after we issue the contract according to terms determined by us and at our sole discretion. We reserve the right to discontinue offering the MAV for new contracts. On the first contract anniversary after the rider effective date we set the maximum anniversary value equal to the highest of your (a) current contract value, or (b) total purchase payments minus adjusted partial surrenders. Every contract anniversary after that, through age 80, we compare the previous anniversary's maximum anniversary value plus subsequent purchase payments less subsequent adjusted partial surrenders to the current contract value and we reset the maximum anniversary value if the current contract value is higher. We stop resetting the maximum anniversary value after you or the annuitant reach age 81. However, we continue to add subsequent purchase payments and subtract adjusted partial surrenders from the maximum anniversary value. When annuity payouts begin, or if you terminate the contract for any reason other than death, this rider will terminate. TERMINATING THE MAV - You may terminate the MAV rider within 30 days of the first contract anniversary after the rider effective date. - You may terminate the MAV rider within 30 days of any contract anniversary beginning with the seventh contract anniversary. - The MAV rider will terminate when you make a full surrender from the contract or when annuity payouts begin. - The MAV rider will terminate in the case of spousal continuation or ownership change if the new owner is age 76 or older. If you terminate the MAV, the standard death benefit applies. EXAMPLE - You purchase the contract (with the MAV rider) with a payment of $20,000 on Jan. 1, 2003. - On Jan. 1, 2004 (the first contract anniversary) the contract value grows to $24,000. - On March 1, 2004 the contract value falls to $22,000, at which point you take a $1,500 partial surrender, leaving a contract value of $20,500. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 37 We calculate the death benefit on March 1, 2004 as follows: The maximum anniversary value immediately preceding the date of death plus any payments made since that anniversary minus adjusted partial surrenders: Greatest of your contract anniversary contract values: $ 24,000 plus purchase payments made since that anniversary: +0 minus adjusted partial surrenders, calculated as: ($1,500 X $24,000) = -1,636 ------------------ -------- $22,000 for a death benefit of: $ 22,364
NONQUALIFIED ANNUITIES: If you die before the settlement date and your spouse is the only beneficiary, your spouse may choose to keep the contract and become the contract owner. The contract will then value equal to the death benefit that would otherwise have been paid under the MAV. To do this your spouse must, within 60 days after we receive proof of death, give us written instructions to keep the contract in force. If your spouse at the time he or she elects to continue the contract has reached age 76, the MAV rider will terminate. If your spouse at the time he or she elects to continue the contract has not yet reached age 76, he or she may choose to continue the MAV rider. In this case, the rider charges described in "Charges" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force). These charges will be based on the total contract value on the anniversary, including the additional amounts paid into the contract under the MAV rider. If, at the time he or she elects to continue the contract, your spouse has not yet reached age 76 and chooses not to continue the MAV rider, the contract value will be increased to the MAV death benefit amount if it is greater than the contract value on the death benefit valuation date. QUALIFIED ANNUITIES: If your spouse is the sole beneficiary, your spouse may keep the contract as owner until the date on which the annuitant would have reached age 70 1/2, or any other date permitted by the Code. The contract value will be equal to the death benefit that would otherwise have been paid under the MAV. To do this your spouse must within 60 days after we receive proof of death, give us written instructions to keep the contract in force. If your spouse at the time he or she elects to continue the contract has reached age 76, the MAV rider will terminate. If your spouse at the time he or she elects to continue the contract has not yet reached age 76, he or she may choose to continue the MAV rider. In this case, the rider charges described in "Charges" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force). These charges will be based on the total contract value on the anniversary, including the additional amounts paid into the contract under the MAV rider. If, at the time he or she elects to continue the contract, your spouse has not yet reached age 76 and chooses not to continue the MAV rider, the contract value will be increased to the MAV death benefit amount if it is greater than the contract value on the death benefit valuation date. ENHANCED EARNINGS DEATH BENEFIT The EEB is intended to provide an additional benefit to your beneficiary to help offset expenses after your death such as funeral expenses or federal and state taxes. This is an optional benefit that you may select for an additional annual charge (see "Charges"). The EEB provides reduced benefits if you or the annuitant is age 70 or older at the rider effective date and it does not provide any additional benefit before the first contract anniversary. The EEB also may result in reduced benefits if you take required minimum distributions from your qualified annuity or any partial surrenders during the life of your contract, both of which may reduce contract earnings. This is because the benefit paid by the EEB is determined by the amount of earnings at death. Be sure to discuss with your sales representative whether or not the EEB is appropriate for your situation. If this EEB rider is available in your state and both you and the annuitant are age 75 or younger at the rider effective date, you may choose to add the EEB to your contract. Generally, you must elect the EEB at the time you purchase your contract and your rider effective date will be the contract issue date. In some instances the rider effective date for the EEB may be after we issue the contract according to terms determined by us and at our sole discretion. You may not select this rider if you select the EEP. We reserve the right to discontinue offering the EEB for new contracts. When annuity payouts begin, or if you terminate the contract for any reason other than death, this rider will terminate. The EEB provides that if you or the annuitant dies after the first contract anniversary, but before annuity payouts begin, and while this contract is in force, we will pay the beneficiary: - the standard death benefit amount (see "Benefits in Case of Death -- Standard Death Benefit") or the MAV death benefit amount, if applicable, PLUS - 40% of your earnings at death if you and the annuitant were under age 70 on the rider effective date; or - 15% of your earnings at death if you or the annuitant were age 70 or older on the rider effective date. Additional death benefits payable under the EEB are not included in the adjusted partial surrender calculation. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 38 EARNINGS AT DEATH FOR THE EEB AND EEP: If the rider effective date for the EEB or EEP is the contract issue date, earnings at death is an amount equal to: - the standard death benefit amount or the MAV death benefit amount, if applicable (the "death benefit amount") - MINUS purchase payments not previously surrendered. The earnings at death may not be less than zero and may not be more than 250% of the purchase payments not previously surrendered that are one or more years old. If the rider effective date for the EEB is AFTER the contract issue date, earnings at death is an amount equal to the death benefit amount - MINUS the greater of: - the contract value as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that contract value since that rider effective date; or - an amount equal to the death benefit amount as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that death benefit amount since that rider effective date - PLUS any purchase payments made on or after the EEB rider effective date not previously surrendered. The earnings at death may not be less than zero and may not be more than 250% multiplied by: - the greater of: - the contract value as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that contract value since that rider effective date; or - an amount equal to the death benefit amount as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that death benefit amount since that rider effective date - PLUS any purchase payments made on or after the EEB rider effective date not previously surrendered that are one or more years old. TERMINATING THE EEB - You may terminate the EEB rider within 30 days of the first contract anniversary after the rider effective date. - You may terminate the EEB rider within 30 days of any contract anniversary beginning with the seventh contract anniversary after the rider effective date. - The EEB rider will terminate when you make a full surrender from the contract or when annuity payouts begin. - The EEB rider will terminate in the case of spousal continuation or ownership change if the new owner is age 76 or older. EXAMPLE OF THE EEB - You purchase the contract with a payment of $100,000 on Jan. 1, 2003 and both you and the annuitant are under age 70. You select the MAV and the EEB. - On July 1, 2003 the contract value grows to $105,000. The death benefit on July 1, 2003 equals the standard death benefit, which is the contract value, or $105,000. You have not reached the first contract anniversary so the EEB does not provide any additional benefit at this time. - On Jan. 1, 2004 the contract value grows to $110,000. The death benefit on Jan. 1, 2004 equals: MAV death benefit amount (contract value): $ 110,000 plus the EEB which equals 40% of earnings at death (MAV death benefit amount minus payments not previously surrendered): 0.40 X ($110,000 - $100,000) = +4,000 --------- Total death benefit of: $ 114,000
- On Jan. 1, 2005 the contract value falls to $105,000. The death benefit on Jan. 1, 2005 equals: MAV death benefit amount (maximum anniversary value): $ 110,000 plus the EEB (40% of earnings at death): 0.40 X ($110,000 - $100,000) = +4,000 --------- Total death benefit of: $ 114,000
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 39 - On Feb. 1, 2005 the contract value remains at $105, 000 and you request a partial surrender of $50,000. We calculate purchase payments not previously surrendered as $100,000 - $45,000 = $55,000 (remember that $5,000 of the partial surrender is contract earnings). The death benefit on Feb. 1, 2005 equals: MAV death benefit amount (maximum anniversary value adjusted for partial surrenders): $110,000 - ($50,000 X $110,000) = $ 57,619 ------------------- $105,000 plus the EEB (40% of earnings at death): 0.40 X ($57,619 - $55,000) = +1,048 --------- Total death benefit of: $ 58,667
- On Jan. 1, 2006 the contract value falls by $40,000. The death benefit on Jan. 1, 2006 equals the death benefit on Feb. 1, 2005. The reduction in contract value has no effect. - On Jan. 1, 2012 the contract value grows to a new high of $200,000. Earnings at death reaches its maximum of 250% of purchase payments not previously surrendered that are one or more years old. The death benefit on Jan. 1, 2012 equals: MAV death benefit amount (contract value): $ 200,000 plus the EEB (40% of earnings at death) .40 X 2.50 X ($55,000) = +55,000 --------- Total death benefit of: $ 255,000
- On July 1, 2012 you make an additional purchase payment of $50,000 and your contract value grows to $250,000. The new purchase payment is less than one year old and so it has no effect on the EEB. The death benefit on July 1, 2012 equals: MAV death benefit amount (contract value): $ 250,000 plus the EEB (40% of earnings at death, up to a maximum of 100% of purchase payments not previously surrendered that are one or more years old) .40 X 2.50 X ($55,000) = +55,000 --------- Total death benefit of: $ 305,000
- On July 1, 2013 the contract value remains $250,000 and the "new" purchase payment is one year old. The value of the EEB changes. The death benefit on July 1, 2013 equals: MAV death benefit amount (contract value): $ 250,000 plus the EEB which equals 40% of earnings at death (the standard death benefit amount minus payments not previously surrendered): 0.40 X ($250,000 - $105,000) = +58,000 --------- Total death benefit of: $ 308,000
If your spouse is the sole beneficiary and your spouse elects to continue the contract, we will pay an amount into the contract so that the contract value equals the total death benefit payable under the EEB. If the spouse is age 76 or older at the time he or she elects to continue the contract, then the EEB rider will terminate. If your spouse is less than age 76 at the time he or she elects to continue the contract, then he or she may choose to continue the EEB. In this case, the following conditions will apply: - the EEB rider will continue, but we will treat the new contract value on the date the ownership of the contract changes to your spouse (after the additional amount is paid into the contract) as if it is a purchase payment in calculating future values of "earnings at death." - the percentages of "earnings at death " payable will be based on your spouse's age at the time he or she elects to continue the contract. - the EEB rider charges described in "Charges -- Enhanced Earnings Death Benefit Rider Fee" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force). These charges will be based on the total contract value on the anniversary, including the additional amounts paid into the contract under the EEB rider. NOTE: For special tax considerations associated with the EEB, see "Taxes." AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 40 ENHANCED EARNINGS PLUS DEATH BENEFIT The EEP is intended to provide an additional benefit to your beneficiary to help offset expenses after your death such as funeral expenses or federal and state taxes. This is an optional benefit that you may select for an additional annual charge (see "Charges"). The EEP provides reduced benefits if you or the annuitant are age 70 or older at the rider effective date. It does not provide any additional benefit before the first contract anniversary and it does not provide any benefit beyond what is offered under the EEB during the second contract year. The EEP also may result in reduced benefits if you take required minimum distributions from your qualified annuity or any partial surrenders during the life of your contract, both of which may reduce contract earnings. This is because part of the benefit paid by the EEP is determined by the amount of earnings at death. Be sure to discuss with your sales representative whether or not the EEP is appropriate for your situation. If this EEP rider is available in your state and both you and the annuitant are age 75 or younger at contract issue, you may choose to add the EEP to your contract. You must elect the EEP at the time you purchase your contract and your rider effective date will be the contract issue date. THIS RIDER IS ONLY AVAILABLE UNDER ANNUITIES PURCHASED THROUGH AN EXCHANGE. You may not select this rider if you select the EEB. We reserve the right to discontinue offering the EEP for new contracts. When annuity payouts begin, or if you terminate the contract for any reason other than death, this rider will terminate. The EEP provides that if you or the annuitant dies after the first contract anniversary, but before annuity payouts begin, and while this contract is in force, we will pay the beneficiary: - EEP Part I benefits, which equal the benefits payable under the EEB described above; PLUS - EEP Part II benefits, which equal a percentage of exchange purchase payments identified at issue not previously surrendered as follows:
PERCENTAGE IF YOU AND THE ANNUITANT ARE PERCENTAGE IF YOU OR THE ANNUITANT ARE CONTRACT YEAR UNDER AGE 70 ON THE RIDER EFFECTIVE DATE 70 OR OLDER ON THE RIDER EFFECTIVE DATE One and Two 0% 0% Three and Four 10% 3.75% Five or more 20% 7.5%
Additional death benefits payable under the EEP are not included in the adjusted partial surrender calculation. If after 6 months, no exchange purchase payments have been received, we will contact you and you will have an additional 30 days to follow-up on exchange purchase payments identified at issue but not received by us. If after these 30 days we have not received any exchange purchase payments, we will convert the EEP rider into an EEB. Another way to describe the benefits payable under the EEP rider is as follows: - the standard death benefit amount (see "Benefits in Case of Death -- Standard Death Benefit") or the MAV death benefit amount, if applicable PLUS
IF YOU AND THE ANNUITANT ARE UNDER AGE 70 IF YOU OR THE ANNUITANT ARE AGE 70 CONTRACT YEAR ON THE RIDER EFFECTIVE DATE, ADD ... OR OLDER ON THE RIDER EFFECTIVE DATE, ADD ... 1 Zero Zero 2 40% X earnings at death (see above) 15% X earnings at death 3 & 4 40% X (earnings at death + 10% of exchange 15% X (earnings at death + 3.75% of exchange purchase purchase payment*) payment*) 5+ 40% X (earnings at death + 20% of exchange 15% X (earnings at death + 7.5% of exchange purchase purchase payment*) payment*)
* Exchange purchase payments are purchase payments exchanged from another contract that are identified at issue and not previously surrendered. The company is not responsible for identifying exchange purchase payments if we did not receive proper notification from the company from which the purchase payments are exchanged. TERMINATING THE EEP - You may terminate the EEP rider within 30 days of the first contract anniversary after the rider effective date. - You may terminate the EEP rider within 30 days of any contract anniversary beginning with the seventh contract anniversary. - The EEP rider will terminate when you make a full surrender from the contract or when annuity payouts begin. - The EEP rider will terminate in the case of an ownership change. - The EEP rider will terminate in the case of spousal continuation if the new owner is age 76 or older. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 41 EXAMPLE OF THE EEP - You purchase the contract with an exchanged purchase payment of $100,000 on Jan. 1, 2003 and both you and the annuitant are under age 70. You select the MAV and the EEP. - On July 1, 2003 the contract value grows to $105,000. The death benefit on July 1, 2003 equals the standard death benefit amount, which is the contract value, or $105,000. You have not reached the first contract anniversary so neither the EEP Part I nor Part II provides any additional benefit at this time. - On Jan. 1, 2004 the contract value grows to $110,000. You have not reached the second contract anniversary so the EEP Part II does not provide any additional benefit at this time. The death benefit on Jan. 1, 2004 equals: MAV death benefit amount (contract value): $ 110,000 plus the EEP Part I which equals 40% of earnings at death (the MAV death benefit amount minus purchase payments not previously surrendered): 0.40 X ($110,000 - $100,000) = +4,000 --------- Total death benefit of: $ 114,000
- On Jan. 1, 2005 the contract value falls to $105,000. The death benefit on Jan. 1, 2005 equals: MAV death benefit amount (maximum anniversary value): $ 110,000 plus the EEP Part I benefit (40% of earnings at death): 0.40 X ($110,000 - $100,000) = +4,000 plus the EEP Part II which in the third contract year equals 10% of exchange purchase payments identified at issue and not previously surrendered: 0.10 X $100,000 = +10,000 --------- Total death benefit of: $ 124,000
- On Feb. 1, 2005 the contract value remains at $105, 000 and you request a partial surrender of $50,000. We calculate purchase payments not previously surrendered as $100,000 - $45,000 = $55,000 (remember that $5,000 of the partial surrender is contract earnings). The death benefit on Feb. 1, 2005 equals: MAV death benefit amount (maximum anniversary value adjusted for partial surrenders): $110,000 - ($50,000 X $110,000) = $ 57,619 ------------------- $105,000 plus the EEP Part I (40% of earnings at death): 0.40 X ($57,619 - $55,000) = +1,048 plus the EEP Part II which in the third contract year equals 10% of exchange purchase payments identified at issue and not previously surrendered: 0.10 X $55,000 = +5,500 --------- Total death benefit of: $ 64,167
- On Jan. 1, 2006 the contract value falls by $40,000. The death benefit on Jan. 1, 2006 equals the death benefit on Feb. 1, 2005. The reduction in contract value has no effect. - On Jan. 1, 2012 the contract value grows to a new high of $200,000. Earnings at death reaches its maximum of 250% of purchase payments not previously surrendered that are one or more years old. Because we are beyond the fourth contract anniversary the EEP also reaches its maximum of 20%. The death benefit on Jan. 1, 2012 equals: MAV death benefit amount (contract value): $ 200,000 plus the EEP Part I (40% of earnings at death) .40 X (2.50 X $55,000) = +55,000 plus the EEP Part II which after the fourth contract year equals 20% of exchange purchase payments identified at issue and not previously surrendered: 0.20 X $55,000 = +11,000 --------- Total death benefit of: $ 266,000
AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 42 - On July 1, 2012 you make an additional purchase payment of $50,000 and your contract value grows to $250,000. The new purchase payment is less than one year old and so it has no effect on either the EEP Part I or EEP Part II. The death benefit on July 1, 2012 equals: MAV death benefit amount (contract value): $ 250,000 plus the EEP Part I (40% of earnings at death) .40 X (2.50 X $55,000) = +55,000 plus the EEP Part II, which after the fourth contract year equals 20% of exchange purchase payments identified at issue and not previously surrendered: 0.20 X $55,000 = +11,000 --------- Total death benefit of: $ 316,000
- On July 1, 2013 the contract value remains $250,000 and the "new" purchase payment is one year old. The value of the EEP Part I changes but the value of the EEP Part II remains constant. The death benefit on July 1, 2013 equals: MAV death benefit amount (contract value): $ 250,000 plus the EEP Part I which equals 40% of earnings at death (the MAV death benefit minus payments not previously surrendered): 0.40 X ($250,000 - $105,000) = +58,000 plus the EEP Part II, which after the fourth contract year equals 20% of exchange purchase payments identified at issue and not previously surrendered: 0.20 X $55,000 = +11,000 --------- Total death benefit of: $ 319,000
IF YOUR SPOUSE IS SOLE BENEFICIARY and your spouse elects to continue the contract, we will pay an amount into the contracts that the contract value equals the total death benefit payable under the EEP. If your spouse at the time he or she elects to continue the contract has reached age 76, the EEP rider will terminate. If your spouse at the time he or she elects to continue the contract has not yet reached age 76, he or she cannot continue the EEP. However, he or she may choose to convert the EEP rider into an EEB. In this case, the following conditions will apply: - the EEB rider will treat the new contract value on the date the ownership of the contract changes to your spouse (after the additional amount is paid into the contract) as if it is a purchase payment in calculating future of "earnings at death." - the percentages of "earnings at death" payable will be based on your spouse's age at the time he or she elects to continue the contract. - the EEB rider charges described in "Charges -- Enhanced Earnings Death Benefit Rider Fee" will be assessed at the next contract anniversary (and all future anniversaries when the EEB rider is in force). These charges will be based on the total contract value on the anniversary, including the additional amounts paid into the contract under the EEP rider. If your spouse chooses not to convert the EEP rider into an EEB, the standard death benefit amount (or the MAV death benefit amount, if applicable) will apply. NOTE: For special tax considerations associated with the EEP, see "Taxes." AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 43 THE ANNUITY PAYOUT PERIOD As owner of the contract, you have the right to decide how and to whom annuity payouts will be made starting at the settlement date. You may select one of the annuity payout plans outlined below, or we may mutually agree on other payout arrangements. We do not deduct any surrender charges under the payout plans listed below. You also decide whether we will make annuity payouts on a fixed or variable basis, or a combination of fixed and variable. The amount available to purchase payouts under the plan you select is the contract value on your settlement date (less any applicable premium tax). You may reallocate this contract value to the fixed account to provide fixed dollar payouts and/or among the subaccounts to provide variable annuity payouts. During the annuity payout period, you cannot invest in more than five subaccounts at any one time unless we agree otherwise. AMOUNTS OF FIXED AND VARIABLE PAYOUTS DEPEND ON: - the annuity payout plan you select; - the annuitant's age and, in most cases, sex; - the annuity table in the contract; and - the amounts you allocated to the accounts at settlement. In addition, for variable payouts only, amounts depend on the investment performance of the subaccounts you select. These payouts will vary from month to month because the performance of the funds will fluctuate. (Fixed annuities, payouts remain the same from month to month.) For information with respect to transfers between accounts after annuity payouts begin, see "Making the Most of Your Contract -- Transfer Policies." ANNUITY TABLES The annuity tables in your contract show the amount of the monthly payout for each $1,000 of contract value according to the age and, when applicable, the sex of the annuitant. (Where required by law, we will use a unisex table of settlement rates.) Table B shows the minimum amount of each fixed payout. Amounts in Table B are based on the guaranteed annual effective interest rate shown in your contract. We declare current payout rates that we use in determining the actual amount of your fixed payout. The current payout rates will equal or exceed the guaranteed payout rates shown in Table B. We will furnish these rates to you upon request. Table A shows the amount of the first variable payout assuming that the contract value is invested at the beginning of the annuity payout period and earns a 5% rate of return, which is reinvested and helps to support future payouts. If you ask us at least 30 days before the settlement date, we will substitute an annuity table based on an assumed 3.5% investment rate for the 5% Table A in the contract. The assumed investment rate affects both the amount of the first payout and the extent to which subsequent payouts increase or decrease. For example, annuity payouts will increase if the investment return is above the assumed investment rate and payouts will decrease if the return is below the assumed investment rate. Using the 5% Table A results in a higher initial payment, but later payouts will increase more slowly when annuity unit values rise and decrease more rapidly when they decline. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 44 ANNUITY PAYOUT PLANS You may choose any one of these annuity payout plans by giving us written instructions at least 30 days before contract values are used to purchase the payout plan: - PLAN A: LIFE ANNUITY -- NO REFUND: We make monthly payouts until the annuitant's death. Payouts end with the last payout before the annuitant's death. We will not make any further payouts. This means that if the annuitant dies after we made only one monthly payout, we will not make any more payouts. - PLAN B: LIFE ANNUITY WITH FIVE, TEN OR 15 YEARS CERTAIN: We make monthly payouts for a guaranteed payout period of five, ten or 15 years that you elect. This election will determine the length of the payout period to the beneficiary if the annuitant should die before the elected period expires. We calculate the guaranteed payout period from the settlement date. If the annuitant outlives the elected guaranteed payout period, we will continue to make payouts until the annuitant's death. - PLAN C: LIFE ANNUITY -- INSTALLMENT REFUND: We make monthly payouts until the annuitant's death, with our guarantee that payouts will continue for some period of time. We will make payouts for at least the number of months determined by dividing the amount applied under this option by the first monthly payout, whether or not the annuitant is living. - PLAN D: JOINT AND LAST SURVIVOR LIFE ANNUITY -- NO REFUND: We make monthly payouts while both the annuitant and a joint annuitant are living. If either annuitant dies, we will continue to make monthly payouts at the full amount until the death of the surviving annuitant. Payouts end with the death of the second annuitant. - PLAN E: PAYOUTS FOR A SPECIFIED PERIOD: We make monthly payouts for a specific payout period of 10 to 30 years that you elect. We will make payouts only for the number of years specified whether the annuitant is living or not. Depending on the selected time period, it is foreseeable that an annuitant can outlive the payout period selected. During the payout period, you can elect to have us determine the present value of any remaining variable payouts and pay it to you in a lump sum. We determine the present value of the remaining annuity payouts which are assumed to remain level at the initial payout. The discount rate we use in the calculation will vary between 3.50% and 5.00% depending on the applicable assumed investment rate. (see "Charges -- Surrender charge under Annuity Payout Plan E"). You can also take a portion of the discounted value once a year. If you do so, your monthly payouts will be reduced by the proportion of your surrender to the full discounted value. An IRS penalty tax could apply if you take a surrender. (See "Taxes.") ANNUITY PAYOUT PLAN REQUIREMENTS FOR QUALIFIED ANNUITIES: If you elect an annuity payout plan from your qualified annuity, it must comply with certain IRS regulations governing required minimum distributions. In general, your annuity payout plan will meet these regulations if payments are made: - in equal or substantially equal payments over a period not longer than the life of the annuitant or over the life of the annuitant and designated beneficiary; or - in equal or substantially equal payments over a period not longer than the life expectancy of the annuitant or over the life expectancy of the annuitant and designated beneficiary; or - over a period certain not longer than the life expectancy of the annuitant or over the life expectancy of the annuitant and designated beneficiary. IF WE DO NOT RECEIVE INSTRUCTIONS: You must give us written instructions for the annuity payouts at least 30 days before the annuitant's settlement date. If you do not, we will make payouts under Plan B, with 120 monthly payouts guaranteed. Contract values that you allocated to the fixed account will provide fixed dollar payouts and contract values that you allocated among the subaccounts will provide variable annuity payouts. IF MONTHLY PAYOUTS WOULD BE LESS THAN $20: We will calculate the amount of monthly payouts at the time the contract value is used to purchase a payout plan. If the calculations show that monthly payouts would be less than $20, we have the right to pay the contract value to the owner in a lump sum or to change the frequency of the payouts. DEATH AFTER ANNUITY PAYOUTS BEGIN: If you or the annuitant die after annuity payouts begin, we will pay any amount payable to the beneficiary as provided in the annuity payout plan in effect. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 45 TAXES Generally, under current law, your contract has a tax deferral feature. This means any increase in the value of the fixed account and/or subaccounts in which you invest is taxable to you only when you receive a payout or surrender (see detailed discussion below). Any portion of the annuity payouts and any surrenders you request that represent ordinary income are normally taxable. We will send you a tax information reporting form for any year in which we made a taxable distribution according to our records. Roth IRAs may grow and be distributed tax free if you meet certain distribution requirements. NONQUALIFIED ANNUITIES: Tax law requires that all nonqualified deferred annuities issued by the same company (and possibly its affiliates) to the same owner during a calendar year be taxed as a single, unified contract when you take distributions from any one of those contracts. QUALIFIED ANNUITIES: When your contract is used to fund a retirement plan that is already tax deferred under the Code, the contract will not provide any necessary or additional tax deferral for that retirement plan. If your contract is used to fund a 401(k) plan, your rights to benefits may be subject to the terms and conditions of the plan regardless of the terms of the contract. Adverse tax consequences may result if you do not ensure that contributions, distributions and other transactions under the contract comply with the law. Qualified annuities have minimum distribution rules that govern the timing and amount of distributions. You should refer to your retirement plan or adoption agreement or consult a tax advisor for more information about your distribution rules. ANNUITY PAYOUTS FROM NONQUALIFIED ANNUITIES: A portion of each payout will be ordinary income and subject to tax, and a portion of each payout will be considered a return of part of your investment and will not be taxed. Under Annuity Payout Plan A: Life annuity - no refund, where the annuitant dies before your investment in the contract is fully recovered, the remaining portion of the unrecovered investment may be available as a federal income tax deduction to the owner for the last taxable year of the annuitant. Under all other annuity payout plans, where the annuity payouts end before your investment in the contract is fully recovered, the remaining portion of the unrecovered investment may be available as a federal income tax deduction to the taxpayer for the tax year in which the payouts end. (See "Annuity Payout Plans.") All amounts you receive after your investment in the contract is fully recovered will be subject to tax. ANNUITY PAYOUTS FROM QUALIFIED ANNUITIES (EXCEPT ROTH IRAs): Under a qualified annuity, the entire payout generally is includable as ordinary income and is subject to tax unless: (1) the contract is an IRA to which you made non-deductible contributions; or (2) you rolled after-tax dollars from a retirement plan into your IRA, or (3) the contract is used to fund a retirement plan and you or your employer have contributed after-tax dollars. ANNUITY PAYOUTS FROM ROTH IRAs: In general, the entire payout from a Roth IRA can be free from income and penalty taxes if you have attained age 59 1/2 and met the five year holding period. SURRENDERS FROM NONQUALIFIED ANNUITIES: If you surrender part or all of your nonqualified contract before your annuity payouts begin, your surrender payment will be taxed to the extent that the value of your contract immediately before the surrender exceeds your investment. You also may have to pay a 10% IRS penalty for surrenders you make before reaching age 59 1/2 unless certain exceptions apply. SURRENDERS FROM QUALIFIED ANNUITIES (EXCEPT ROTH IRAs): Under a qualified annuity, the entire surrender will generally be includable as ordinary income and is subject to tax unless: (1) the contract is an IRA to which you made non-deductible contributions; or (2) you rolled after-tax dollars from a retirement plan into your IRA, or (3) the contract is used to fund a retirement plan and you or your employer have contributed after-tax dollars. SURRENDERS FROM ROTH IRAs: In general, the entire payout from a Roth IRA can be free from income and penalty taxes if you have attained age 59 1/2 and met the five year holding period. DEATH BENEFITS TO BENEFICIARIES UNDER NONQUALIFIED ANNUITIES: The death benefit under a contract is not tax exempt. Any amount your beneficiary receives that represents previously deferred earnings within the contract is taxable as ordinary income to the beneficiary in the year he or she receives the payments. DEATH BENEFITS TO BENEFICIARIES UNDER QUALIFIED ANNUITIES: The entire death benefit generally is taxable as ordinary income to the beneficiary in the year he or she receives the payments from the qualified annuity. If, under your 401(k) plan you or your employer made after-tax contributions to your contract or if you made non-deductible contributions to a traditional IRA, the portion of any distribution from the plan that represents after-tax contributions are not taxable as ordinary income to your beneficiary. Death benefits under a Roth IRA generally are not taxable as ordinary income to the beneficiary if certain distribution requirements are met. SPECIAL CONSIDERATIONS IF YOU SELECT ONE OF THE DEATH BENEFIT RIDERS (MAV, EEB OR EEP): As of the date of this prospectus, we believe that charges related to these riders are not subject to current taxation. Therefore, we will not report these charges as partial surrenders from your contract. However, the IRS may determine that these charges should be treated as partial surrenders subject to taxation to the extent of any gain as well as the 10% IRS tax penalty for surrenders before the age of 59 1/2, if applicable. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 46 We reserve the right to report charges for these riders as partial surrenders if we, as a withholding and reporting agent, believe that we are required to report them. In addition, we will report the benefits attributable to these riders on the death of you or annuitant as an annuity death benefit distribution, not as proceeds for life insurance. ANNUITIES OWNED BY CORPORATIONS, PARTNERSHIPS OR TRUSTS: For nonqualified annuities, any annual increase in the value of annuities held by such entities generally will be treated as ordinary income received during that year. This provision is effective for purchase payments made after Feb. 28, 1986. However, if the trust was set up for the benefit of a natural person only, the income will remain tax-deferred. PENALTIES: In general, if you receive amounts from your contract (or, if applicable, from the plan) before reaching age 59 1/2, you may have to pay a 10% IRS penalty on the amount includable in your ordinary income. However, if you have a SIMPLE IRA and if you receive these amounts before age 59 1/2 and within the first two years of your participation in the SIMPLE IRA plan, the IRS penalty will be assessed at a rate of 25% instead of 10%. However, this penalty will not apply to any amount received by you: - because of your death; - because you become disabled (as defined in the Code); - if the distribution is part of a series of substantially equal periodic payments, made at least annually, over your life or life expectancy (or joint lives or life expectancies of you and your beneficiary); or - if it is allocable to an investment before Aug. 14, 1982 (except for qualified annuities). For qualified annuities under 401(a), 401(k) plans or TSA's, other exceptions may apply if you surrender your contract before your plan specifies that payouts can be made. WITHHOLDING, GENERALLY: If you receive all or part of the contract value, we may deduct withholding against the taxable income portion of the payment. Any withholding represents a prepayment of your tax due for the year. You take credit for these amounts on your annual income tax return. If the payment is part of an annuity payout plan, we generally compute the amount of withholding using payroll tables. You may provide us with a statement of how many exemptions to use in calculating the withholding. As long as you've provided us with a valid Social Security Number or Taxpayer Identification Number, you can elect not to have any withholding occur. If the distribution is any other type of payment (such as a partial or full surrender), we compute withholding using 10% of the taxable portion. Similar to above, as long as you have provided us with a valid Social Security Number or Taxpayer Identification Number, you can elect not to have this withholding occur. The withholding requirements may differ if we are making payment to a non-U.S. citizen or if we deliver the payment outside the United States. Some states also impose withholding requirements similar to the federal withholding described above. If this should be the case, we may deduct state withholding from any payment from which we deduct federal withholding. WITHHOLDING FROM QUALIFIED ANNUITIES: If you receive directly all or part of the contract value from a qualified annuity (except an IRA, Roth IRA, SIMPLE IRA or SEP), mandatory 20% federal income tax withholding (and possibly state income tax withholding) generally will be imposed at the time payout is made from the plan. This mandatory withholding is in place of the elective withholding discussed above. This mandatory withholding will not be imposed if: - instead of receiving the distribution check, you elect to have the distribution rolled over directly to an IRA or another eligible plan; - the payout is one in a series of substantially equal periodic payouts, made at least annually, over your life or life expectancy (or the joint lives or life expectancies of you and your designated beneficiary) or over a specified period of 10 years or more; - the payout is a minimum distribution required under the Code; - the payout is made on account of an eligible hardship; or - the payout is a corrective distribution. Payments we make to a surviving spouse instead of being directly rolled over to an IRA also may be subject to mandatory 20% income tax withholding. State withholding also may be imposed on taxable distributions. TRANSFER OF OWNERSHIP OF A NONQUALIFIED ANNUITY: If you transfer a nonqualified annuity without receiving adequate consideration, the transfer is a gift and also may be treated as a surrender for federal income tax purposes. If the gift is a currently taxable event for income tax purposes, the original owner will be taxed on the amount of deferred earnings at the time of the transfer and also may be subject to the 10% IRS penalty discussed earlier. In this case, the new owner's investment in the contract will be the value of the contract at the time of the transfer. In general, this rule does not apply to transfers between spouses. Please consult your tax advisor for further details. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 47 COLLATERAL ASSIGNMENT OF A NONQUALIFIED ANNUITY: If you collaterally assign or pledge your contract, earnings on purchase payments you made after Aug. 13, 1982 will be taxed to you like a surrender and you may have to pay a 10% IRS penalty. You may not collaterally assign or pledge your qualified contracts. IMPORTANT: Our discussion of federal tax laws is based upon our understanding of current interpretations of these laws. Federal tax laws or current interpretations of them may change. For this reason and because tax consequences are complex and highly individual and cannot always be anticipated, you should consult a tax advisor if you have any questions about taxation of your contract. IDS LIFE'S TAX STATUS: IDS Life is taxed as a life insurance company under the Code. For federal income tax purposes, the subaccounts are considered a part of IDS Life, although their operations are treated separately in accounting and financial statements. Investment income from the subaccounts is reinvested and becomes part of the subaccounts' value. This investment income, including realized capital gains, is not taxed to IDS Life, and therefore no charge is made against the subaccounts for federal income taxes. IDS Life reserves the right to make such a charge in the future if there is a change in the tax treatment of variable annuities. TAX QUALIFICATION: We intend that the contract qualify as an annuity for federal income tax purposes. To that end, the provisions of the contract are to be interpreted to ensure or maintain such tax qualification, in spite of any other provisions of the contract. We reserve the right to amend the contract to reflect any clarifications that may be needed or are appropriate to maintain such qualification or to conform the contract to any applicable changes in the tax qualification requirements. We will send you a copy of any amendments. VOTING RIGHTS As a contract owner with investments in the subaccounts, you may vote on important fund policies until annuity payouts begin. Once they begin, the person receiving them has voting rights. We will vote fund shares according to the instructions of the person with voting rights. Before annuity payouts begin, the number of votes you have is determined by applying your percentage interest in each subaccount to the total number of votes allowed to the subaccount. After annuity payouts begin, the number of votes you have is equal to: - the reserve held in each subaccount for your contract; divided by - the net asset value of one share of the applicable fund. As we make annuity payouts, the reserve for the contract decreases; therefore, the number of votes also will decrease. We calculate votes separately for each subaccount. We will send notice of shareholders' meetings, proxy materials and a statement of the number of votes to which the voter is entitled. We will vote shares for which we have not received instructions in the same proportion as the votes for which we received instructions. We also will vote the shares for which we have voting rights in the same proportion as the votes for which we received instructions. SUBSTITUTION OF INVESTMENTS We may substitute the funds in which the subaccounts invest if: - laws or regulations change; - the existing funds become unavailable; or - in our judgment, the funds no longer are suitable for the subaccounts. If any of these situations occur, and if we believe it is in the best interest of persons having voting rights under the contract, we have the right to substitute the funds currently listed in this prospectus for other funds. We may also: - add new subaccounts; - combine any two or more subaccounts; - make additional subaccounts investing in additional funds; - transfer assets to and from the subaccounts or the variable account; and - eliminate or close any subaccounts. In the event of substitution or any of these changes, we may amend the contract and take whatever action is necessary and appropriate without your consent or approval. However, we will not make any substitution or change without the necessary approval of the SEC and state insurance departments. We will notify you of any substitution or change. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 48 ABOUT THE SERVICE PROVIDERS ISSUER AND PRINCIPAL UNDERWRITER IDS Life issues and is the principal underwriter for the contracts. IDS Life is a stock life insurance company organized in 1957 under the laws of the State of Minnesota and is located at 70100 AXP Financial Center, Minneapolis, MN 55474. IDS Life conducts a conventional life insurance business. IDS Life is a wholly-owned subsidiary of AEFC, which itself is a wholly-owned subsidiary of American Express Company, a financial services company headquartered in New York City. The AEFC family of companies offers not only insurance and annuities, but also mutual funds, investment certificates, and a broad range of financial management services. American Express Financial Advisors Inc. (AEFA) serves individuals and businesses through its nationwide network of more than 3,600 registered branch offices and more than 10,100 financial advisors. IDS Life pays commissions for sales of the contracts of up to 7% of the total purchase payments received. This revenue is used to cover distribution costs that include compensation to advisors and field leadership for the selling advisors. These commissions consist of a combination of time of sale and on-going service/trail commissions (which, when totaled, could exceed 7% of purchase payments). From time to time, IDS Life will pay or permit other promotional incentives, in cash or credit or other compensation. LEGAL PROCEEDINGS We are a party to litigation and arbitration proceedings in the ordinary course of our business, none of which is expected to have a material adverse effect on us. In recent years, life insurance companies have been named as defendants in lawsuits, including class action lawsuits, alleging improper life insurance sales practices, alleged agent misconduct, failure to properly supervise agents and other matters relating to life insurance policies and annuity contracts. We and our affiliates were named defendants in three purported class-action lawsuits alleging improper insurance and annuity sales practices including improper replacement of existing annuity contracts and insurance policies, improper use of annuities to fund tax deferred contributory retirement plans, alleged agent misconduct, failure to properly supervise agents and other matters relating to life insurance policies and annuity contracts (BENACQUISTO v. IDS LIFE INSURANCE COMPANY filed in Minnesota State Court 12/13/96; MORK, ET. AL. v. IDS LIFE INSURANCE COMPANY filed in Minnesota State Court 3/21/97; THORESEN v. IDS LIFE INSURANCE COMPANY, ET. AL. filed in Minnesota State Court 10/13/98). A fourth lawsuit was filed against us and our affiliates in federal court (BENACQUISTO, ET. AL. v. IDS LIFE INSURANCE COMPANY, ET. AL. filed in United States District Court - Minnesota 8/00). In January 2000, AEFC reached an agreement in principle to settle the four class action lawsuits described above. It is expected the settlement will provide $215 million of benefits to more than two million participants in exchange for a release by class members of all insurance and annuity state and federal market conduct claims dating back to 1985. The settlement received court approval. Implementation of the settlement commenced October 15, 2001 and is substantially complete. Claim review payments have been made. Numerous individuals opted out of the settlement described above and therefore did not release their claims against AEFC and its subsidiaries. Some of these class members who opted out were represented by counsel and presented separate claims to AEFC and us. Most of their claims have been settled. In November 2002, a suit, captioned HARITOS ET. AL. v. AMERICAN EXPRESS FINANCIAL CORPORATION AND IDS LIFE INSURANCE COMPANY, was filed in the United States District Court for the District of Arizona. The suit is filed by the plaintiffs who purport to represent a class of all persons that have purchased financial plans from AEFA advisors during an undefined class period. Plaintiffs allege that the sale of the plans violate the Investment Advisers Act of 1940. The suit seeks an unspecified amount of damages, rescission and injunctive relief. We believe that we have meritorious defenses to this suit and intend to defend this case vigorously. The outcome of any litigation or threatened litigation cannot be predicted with any certainty. However, in the aggregate, we do not consider any lawsuits in which we are named as a defendant to have a material impact on our financial position or operating results. AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 49 TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION Performance Information p. 3 Calculating Annuity Payouts p. 10 Rating Agencies p. 11 Principal Underwriter p. 11 Independent Auditors p. 11 Financial Statements AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS 50 [AMERICAN EXPRESS(R) LOGO] IDS LIFE INSURANCE COMPANY 70100 AXP FINANCIAL CENTER MINNEAPOLIS, MN 55474 (800) 862-7919 S-6407 D (5/03) STATEMENT OF ADDITIONAL INFORMATION FOR AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) IDS LIFE VARIABLE ACCOUNT 10 MAY 1, 2003 IDS Life Variable Account 10 is a separate account established and maintained by IDS Life Insurance Company (IDS Life). This Statement of Additional Information (SAI) is not a prospectus. It should be read together with the prospectus dated the same date as this SAI, which may be obtained by writing or calling us at the address and telephone number below. IDS Life Insurance Company 70100 AXP Financial Center Minneapolis, MN 55474 (800) 862-7919 TABLE OF CONTENTS Performance Information p. 3 Calculating Annuity Payouts p.30 Rating Agencies p.31 Principal Underwriter p.31 Independent Auditors p.31 Financial Statements IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 2 PERFORMANCE INFORMATION The subaccounts may quote various performance figures to illustrate past performance. We base total return and current yield quotations (if applicable) on standardized methods of computing performance as required by the Securities and Exchange Commission (SEC). An explanation of the methods used to compute performance follows below. AVERAGE ANNUAL TOTAL RETURN We will express quotations of average annual total return for the subaccounts in terms of the average annual compounded rate of return of a hypothetical investment in the contract over a period of one, five and ten years (or, if less, up to the life of the subaccounts), calculated according to the following formula: P(1+T)(TO THE POWER OF 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 the period, at the end of the period (or fractional portion thereof) We calculated the following performance figures on the basis of historical performance of each fund. We show actual performance from the date the subaccounts began investing in the funds. We also show performance from the commencement date of the funds as if the subaccounts invested in them at that time, which, in some cases, they did not. Although we base performance figures on historical earnings, past performance does not guarantee future results. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 3 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF MAV AND EEB DEATH BENEFIT RIDERS AND THE TEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC1 Blue Chip Advantage Fund (9/99; 9/99)(1) (29.20%) (15.05%) BD1 Bond Fund (9/99; 10/81) (3.50) 2.75 CR1 Capital Resource Fund (9/99; 10/81) (28.62) (16.67) CM1 Cash Management Fund (9/99; 10/81) (7.48) 0.20 DE1 Diversified Equity Income Fund (9/99; 9/99) (25.89) (7.76) EM1 Emerging Markets Fund (5/00; 5/00) (13.50) (16.88) ES1 Equity Select Fund (5/01; 5/01) (21.08) (14.28) EI1 Extra Income Fund (9/99; 5/96) (14.48) (6.28) FI1 Federal Income Fund (9/99; 9/99) (3.24) 2.93 GB1 Global Bond Fund (9/99; 5/96) 5.38 2.45 GR1 Growth Fund (9/99; 9/99) (32.33) (22.04) IE1 International Fund (9/99; 1/92) (25.17) (18.79) MF1 Managed Fund (9/99; 4/86) (20.32) (8.36) ND1 NEW DIMENSIONS FUND(R) (9/99; 5/96) (28.50) (12.63) IV1 S&P 500 Index Fund (5/00; 5/00) (28.97) (20.30) SC1 Small Cap Advantage Fund (9/99; 9/99) (24.09) (5.97) SA1 Strategy Aggressive Fund (9/99; 1/92) (37.66) (18.64) AIM V.I. 1CA Capital Appreciation Fund, Series I Shares (9/99; 5/93) (30.74) (13.76) 1CD Capital Development Fund, Series I Shares (9/99; 5/98) (28.01) (3.14) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 1IF VP International, Class I (9/99; 5/94) (27.11) (14.02) 1VA VP Value, Class I (9/99; 5/96) (20.05) (0.93) CALVERT VARIABLE SERIES, INC. 1SR Social Balanced Portfolio (5/00; 9/86) (19.66) (12.38) CREDIT SUISSE TRUST 1EG Emerging Growth Portfolio (9/99; 9/99) (35.25) (10.31) FIDELITY(R) VIP 1GI Growth & Income Portfolio Service Class (9/99; 12/96)(2) (23.76) (10.41) 1MP Mid Cap Portfolio Service Class (9/99; 12/98)(3) (17.56) 9.22 1OS Overseas Portfolio Service Class (9/99; 1/87)(3) (27.08) (16.18) FTVIPT 1RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(4) (6.66) 7.71 1SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(4) (16.99) 4.30 1TF Templeton Foreign Securities Fund - Class 2 (3/02; 5/92)(4) -- (23.26)(b) GOLDMAN SACHS VIT 1SE CORE(SM) Small Cap Equity Fund (9/99; 2/98) (22.18) (2.36) 1UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (28.50) (13.41) 1MC Mid Cap Value Fund (9/99; 5/98) (12.82) 6.10 PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC1 Blue Chip Advantage Fund (9/99; 9/99)(1) (29.20%) --% --% (15.05%) BD1 Bond Fund (9/99; 10/81) (3.50) 1.55 5.31 8.49 CR1 Capital Resource Fund (9/99; 10/81) (28.62) (6.74) 2.13 8.61 CM1 Cash Management Fund (9/99; 10/81) (7.48) 1.31 2.61 4.62 DE1 Diversified Equity Income Fund (9/99; 9/99) (25.89) -- -- (7.76) EM1 Emerging Markets Fund (5/00; 5/00) (13.50) -- -- (16.88) ES1 Equity Select Fund (5/01; 5/01) (21.08) -- -- (14.28) EI1 Extra Income Fund (9/99; 5/96) (14.48) (4.68) -- (0.94) FI1 Federal Income Fund (9/99; 9/99) (3.24) -- -- 2.93 GB1 Global Bond Fund (9/99; 5/96) 5.38 1.66 -- 2.96 GR1 Growth Fund (9/99; 9/99) (32.33) -- -- (22.04) IE1 International Fund (9/99; 1/92) (25.17) (8.46) 0.24 0.14 MF1 Managed Fund (9/99; 4/86) (20.32) (2.48) 4.89 7.11 ND1 NEW DIMENSIONS FUND(R) (9/99; 5/96) (28.50) (2.60) -- 2.98 IV1 S&P 500 Index Fund (5/00; 5/00) (28.97) -- -- (20.30) SC1 Small Cap Advantage Fund (9/99; 9/99) (24.09) -- -- (5.97) SA1 Strategy Aggressive Fund (9/99; 1/92) (37.66) (10.77) 0.05 0.90 AIM V.I. 1CA Capital Appreciation Fund, Series I Shares (9/99; 5/93) (30.74) (4.89) -- 5.66 1CD Capital Development Fund, Series I Shares (9/99; 5/98) (28.01) -- -- (4.00) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 1IF VP International, Class I (9/99; 5/94) (27.11) (5.55) -- 0.47 1VA VP Value, Class I (9/99; 5/96) (20.05) 1.10 -- 6.35 CALVERT VARIABLE SERIES, INC. 1SR Social Balanced Portfolio (5/00; 9/86) (19.66) (2.07) 4.95 6.33 CREDIT SUISSE TRUST 1EG Emerging Growth Portfolio (9/99; 9/99) (35.25) -- -- (10.86) FIDELITY(R) VIP 1GI Growth & Income Portfolio Service Class (9/99; 12/96)(2) (23.76) (2.10) -- 2.79 1MP Mid Cap Portfolio Service Class (9/99; 12/98)(3) (17.56) -- -- 12.75 1OS Overseas Portfolio Service Class (9/99; 1/87)(3) (27.08) (6.65) 2.99 2.63 FTVIPT 1RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(4) (6.66) (0.34) 8.39 8.06 1SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(4) (16.99) -- -- (2.38) 1TF Templeton Foreign Securities Fund - Class 2 (3/02; 5/92)(4) (25.46) (4.78) 6.12 5.11 GOLDMAN SACHS VIT 1SE CORE(SM) Small Cap Equity Fund (9/99; 2/98) (22.18) -- -- (3.48) 1UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (28.50) -- -- (5.13) 1MC Mid Cap Value Fund (9/99; 5/98) (12.82) -- -- 1.05
IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 4 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF MAV AND EEB DEATH BENEFIT RIDERS AND THE TEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT JANUS ASPEN SERIES 1GT Global Technology Portfolio: Service Shares (5/00; 1/00)(5) (45.85%) (43.06%) 1IG International Growth Portfolio: Service Shares (5/00; 5/94)(5) (32.02) (28.90) 1AG Mid Cap Growth Portfolio: Service Shares (5/00; 9/93)(5) (34.17) (39.47) (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) LAZARD RETIREMENT SERIES 1IP International Equity Portfolio (9/99; 9/98) (18.30) (14.85) MFS(R) 1MG Investors Growth Stock Series - Service Class (5/00; 5/99)(6) (33.80) (26.73) 1MD New Discovery Series - Service Class (5/00; 5/98)(6) (37.53) (20.65) PUTNAM VARIABLE TRUST 1IN Putnam VT International New Opportunities Fund - Class IB Shares (9/99; 1/97)(7) (20.97) (18.26) 1VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(7) (36.43) (17.08) ROYCE CAPITAL FUND 1MI Micro-Cap Portfolio (9/99; 12/96) (20.28) 10.82 THIRD AVENUE 1SV Value Portfolio (9/99; 9/99) (18.32) 10.95 WANGER 1IT International Small Cap (9/99; 5/95) (21.15) (11.67) 1SP U.S. Smaller Companies (9/99; 5/95) (23.86) (3.91) WELLS FARGO VT 1AA Asset Allocation Fund (5/01; 4/94)(8) (20.25) (15.16) 1WI International Equity Fund (5/01; 7/00) (29.43) (24.50) 1SG Small Cap Growth Fund (5/01; 5/95)(9) (43.37) (31.97) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT JANUS ASPEN SERIES 1GT Global Technology Portfolio: Service Shares (5/00; 1/00)(5) (45.85%) --% --% (40.40%) 1IG International Growth Portfolio: Service Shares (5/00; 5/94)(5) (32.02) (2.66) -- 6.44 1AG Mid Cap Growth Portfolio: Service Shares (5/00; 9/93)(5) (34.17) (4.97) -- 5.31 (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) LAZARD RETIREMENT SERIES 1IP International Equity Portfolio (9/99; 9/98) (18.30) -- -- (6.89) MFS(R) 1MG Investors Growth Stock Series - Service Class (5/00; 5/99)(6) (33.80) -- -- (11.73) 1MD New Discovery Series - Service Class (5/00; 5/98)(6) (37.53) -- -- (0.36) PUTNAM VARIABLE TRUST 1IN Putnam VT International New Opportunities Fund - Class IB Shares (9/99; 1/97)(7) (20.97) (5.08) -- (4.40) 1VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(7) (36.43) (6.76) -- (2.40) ROYCE CAPITAL FUND 1MI Micro-Cap Portfolio (9/99; 12/96) (20.28) 9.76 -- 11.67 THIRD AVENUE 1SV Value Portfolio (9/99; 9/99) (18.32) -- -- 10.95 WANGER 1IT International Small Cap (9/99; 5/95) (21.15) 2.47 -- 9.35 1SP U.S. Smaller Companies (9/99; 5/95) (23.86) 0.16 -- 11.11 WELLS FARGO VT 1AA Asset Allocation Fund (5/01; 4/94)(8) (20.25) (0.43) -- 6.35 1WI International Equity Fund (5/01; 7/00) (29.43) -- -- (23.19) 1SG Small Cap Growth Fund (5/01; 5/95)(9) (43.37) (14.79) -- (3.77)
(a) Current applicable charges deducted from fund performance include a $30 annual contract administrative charge, a 0.15% annual MAV fee, a 0.30% annual EEB fee, a 0.95% annual mortality and expense risk fee, and applicable surrender charges. Premium taxes and purchase payment credits are not reflected in these total returns. (b) Cumulative return (not annualized) since commencement date of the subaccount. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 5 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF MAV AND EEB DEATH BENEFIT RIDERS AND THE SEVEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC1 Blue Chip Advantage Fund (9/99; 9/99)(1) (28.54%) (14.80%) BD1 Bond Fund (9/99; 10/81) (2.56) 3.04 CR1 Capital Resource Fund (9/99; 10/81) (27.95) (16.43) CM1 Cash Management Fund (9/99; 10/81) (6.58) 0.49 DE1 Diversified Equity Income Fund (9/99; 9/99) (25.19) (7.49) EM1 Emerging Markets Fund (5/00; 5/00) (12.67) (16.57) ES1 Equity Select Fund (5/01; 5/01) (20.33) (13.79) EI1 Extra Income Fund (9/99; 5/96) (13.66) (6.01) FI1 Federal Income Fund (9/99; 9/99) (2.29) 3.21 GB1 Global Bond Fund (9/99; 5/96) 6.38 2.73 GR1 Growth Fund (9/99; 9/99) (31.71) (21.81) IE1 International Fund (9/99; 1/92) (24.46) (18.55) MF1 Managed Fund (9/99; 4/86) (19.56) (8.09) ND1 NEW DIMENSIONS FUND(R) (9/99; 5/96) (27.83) (12.37) IV1 S&P 500 Index Fund (5/00; 5/00) (28.31) (20.01) SC1 Small Cap Advantage Fund (9/99; 9/99) (23.37) (5.70) SA1 Strategy Aggressive Fund (9/99; 1/92) (37.09) (18.41) AIM V.I. 1CA Capital Appreciation Fund, Series I Shares (9/99; 5/93) (30.10) (13.50) 1CD Capital Development Fund, Series I Shares (9/99; 5/98) (27.33) (2.86) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 1IF VP International, Class I (9/99; 5/94) (26.43) (13.76) 1VA VP Value, Class I (9/99; 5/96) (19.29) (0.64) CALVERT VARIABLE SERIES, INC. 1SR Social Balanced Portfolio (5/00; 9/86) (18.89) (12.07) CREDIT SUISSE TRUST 1EG Emerging Growth Portfolio (9/99; 9/99) (34.65) (10.05) FIDELITY(R) VIP 1GI Growth & Income Portfolio Service Class (9/99; 12/96)(2) (23.04) (10.15) 1MP Mid Cap Portfolio Service Class (9/99; 12/98)(3) (16.78) 9.47 1OS Overseas Portfolio Service Class (9/99; 1/87)(3) (26.40) (15.94) FTVIPT 1RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(4) (5.75) 7.97 1SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(4) (16.19) 4.57 1TF Templeton Foreign Securities Fund - Class 2 (3/02; 5/92)(4) -- (22.54)(b) GOLDMAN SACHS VIT 1SE CORE(SM) Small Cap Equity Fund (9/99; 2/98) (21.45) (2.07) 1UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (27.83) (13.15) 1MC Mid Cap Value Fund (9/99; 5/98) (11.98) 6.36 PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC1 Blue Chip Advantage Fund (9/99; 9/99)(1) (28.54%) --% --% (14.80%) BD1 Bond Fund (9/99; 10/81) (2.56) 1.92 5.44 8.49 CR1 Capital Resource Fund (9/99; 10/81) (27.95) (6.40) 2.30 8.61 CM1 Cash Management Fund (9/99; 10/81) (6.58) 1.69 2.77 4.62 DE1 Diversified Equity Income Fund (9/99; 9/99) (25.19) -- -- (7.49) EM1 Emerging Markets Fund (5/00; 5/00) (12.67) -- -- (16.57) ES1 Equity Select Fund (5/01; 5/01) (20.33) -- -- (13.79) EI1 Extra Income Fund (9/99; 5/96) (13.66) (4.32) -- (0.53) FI1 Federal Income Fund (9/99; 9/99) (2.29) -- -- 3.21 GB1 Global Bond Fund (9/99; 5/96) 6.38 2.03 -- 3.34 GR1 Growth Fund (9/99; 9/99) (31.71) -- -- (21.81) IE1 International Fund (9/99; 1/92) (24.46) (8.12) 0.42 0.14 MF1 Managed Fund (9/99; 4/86) (19.56) (2.12) 5.02 7.11 ND1 NEW DIMENSIONS FUND(R) (9/99; 5/96) (27.83) (2.24) -- 3.36 IV1 S&P 500 Index Fund (5/00; 5/00) (28.31) -- -- (20.01) SC1 Small Cap Advantage Fund (9/99; 9/99) (23.37) -- -- (5.70) SA1 Strategy Aggressive Fund (9/99; 1/92) (37.09) (10.45) 0.24 0.90 AIM V.I. 1CA Capital Appreciation Fund, Series I Shares (9/99; 5/93) (30.10) (4.54) -- 5.79 1CD Capital Development Fund, Series I Shares (9/99; 5/98) (27.33) -- -- (3.62) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 1IF VP International, Class I (9/99; 5/94) (26.43) (5.20) -- 0.77 1VA VP Value, Class I (9/99; 5/96) (19.29) 1.47 -- 6.66 CALVERT VARIABLE SERIES, INC. 1SR Social Balanced Portfolio (5/00; 9/86) (18.89) (1.70) 5.08 6.33 CREDIT SUISSE TRUST 1EG Emerging Growth Portfolio (9/99; 9/99) (34.65) -- -- (10.60) FIDELITY(R) VIP 1GI Growth & Income Portfolio Service Class (9/99; 12/96)(2) (23.04) (1.74) -- 3.22 1MP Mid Cap Portfolio Service Class (9/99; 12/98)(3) (16.78) -- -- 13.09 1OS Overseas Portfolio Service Class (9/99; 1/87)(3) (26.40) (6.30) 3.14 2.63 FTVIPT 1RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(4) (5.75) 0.04 8.49 8.06 1SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(4) (16.19) -- -- (2.00) 1TF Templeton Foreign Securities Fund - Class 2 (3/02; 5/92)(4) (24.76) (4.43) 6.24 5.11 GOLDMAN SACHS VIT 1SE CORE(SM) Small Cap Equity Fund (9/99; 2/98) (21.45) -- -- (3.11) 1UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (27.83) -- -- (4.77) 1MC Mid Cap Value Fund (9/99; 5/98) (11.98) -- -- 1.45
IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 6 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF MAV AND EEB DEATH BENEFIT RIDERS AND THE SEVEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT JANUS ASPEN SERIES 1GT Global Technology Portfolio: Service Shares (5/00; 1/00)(5) (45.37%) (42.86%) 1IG International Growth Portfolio: Service Shares (5/00; 5/94)(5) (31.39) (28.66) 1AG Mid Cap Growth Portfolio: Service Shares (5/00; 9/93)(5) (33.56) (39.26) (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) LAZARD RETIREMENT SERIES 1IP International Equity Portfolio (9/99; 9/98) (17.52) (14.60) MFS(R) 1MG Investors Growth Stock Series - Service Class (5/00; 5/99)(6) (33.19) (26.47) 1MD New Discovery Series - Service Class (5/00; 5/98)(6) (36.96) (20.38) PUTNAM VARIABLE TRUST 1IN Putnam VT International New Opportunities Fund - Class IB Shares (9/99; 1/97)(7) (20.22) (18.02) 1VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(7) (35.85) (16.83) ROYCE CAPITAL FUND 1MI Micro-Cap Portfolio (9/99; 12/96) (19.52) 11.06 THIRD AVENUE 1SV Value Portfolio (9/99; 9/99) (17.54) 11.19 WANGER 1IT International Small Cap (9/99; 5/95) (20.40) (11.41) 1SP U.S. Smaller Companies (9/99; 5/95) (23.15) (3.63) WELLS FARGO VT 1AA Asset Allocation Fund (5/01; 4/94)(8) (19.50) (14.68) 1WI International Equity Fund (5/01; 7/00) (28.77) (24.08) 1SG Small Cap Growth Fund (5/01; 5/95)(9) (42.87) (31.59) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT JANUS ASPEN SERIES 1GT Global Technology Portfolio: Service Shares (5/00; 1/00)(5) (45.37%) --% --% (40.22%) 1IG International Growth Portfolio: Service Shares (5/00; 5/94)(5) (31.39) (2.31) -- 6.65 1AG Mid Cap Growth Portfolio: Service Shares (5/00; 9/93)(5) (33.56) (4.63) -- 5.45 (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) LAZARD RETIREMENT SERIES 1IP International Equity Portfolio (9/99; 9/98) (17.52) -- -- (6.48) MFS(R) 1MG Investors Growth Stock Series - Service Class (5/00; 5/99)(6) (33.19) -- -- (11.51) 1MD New Discovery Series - Service Class (5/00; 5/98)(6) (36.96) -- -- 0.04 PUTNAM VARIABLE TRUST 1IN Putnam VT International New Opportunities Fund - Class IB Shares (9/99; 1/97)(7) (20.22) (4.73) -- (4.10) 1VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(7) (35.85) (6.43) -- (2.11) ROYCE CAPITAL FUND 1MI Micro-Cap Portfolio (9/99; 12/96) (19.52) 10.03 -- 11.95 THIRD AVENUE 1SV Value Portfolio (9/99; 9/99) (17.54) -- -- 11.19 WANGER 1IT International Small Cap (9/99; 5/95) (20.40) 2.83 -- 9.63 1SP U.S. Smaller Companies (9/99; 5/95) (23.15) 0.53 -- 11.36 WELLS FARGO VT 1AA Asset Allocation Fund (5/01; 4/94)(8) (19.50) (0.06) -- 6.57 1WI International Equity Fund (5/01; 7/00) (28.77) -- -- (22.90) 1SG Small Cap Growth Fund (5/01; 5/95)(9) (42.87) (14.49) -- (3.33)
(a) Current applicable charges deducted from fund performance include a $30 annual contract administrative charge, a 0.15% annual MAV fee, a 0.30% annual EEB fee, a 0.95% annual mortality and expense risk fee, and applicable surrender charges. Premium taxes and purchase payment credits are not reflected in these total returns. (b) Cumulative return (not annualized) since commencement date of the subaccount. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 7 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES (WITHOUT PURCHASE PAYMENT CREDITS) WITHOUT SURRENDER AND SELECTION OF MAV AND EEB DEATH BENEFIT RIDERS FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC1 Blue Chip Advantage Fund (9/99; 9/99)(1) (23.92%) (13.34%) BD1 Bond Fund (9/99; 10/81) 4.02 4.71 CR1 Capital Resource Fund (9/99; 10/81) (23.28) (15.00) CM1 Cash Management Fund (9/99; 10/81) (0.30) 2.20 DE1 Diversified Equity Income Fund (9/99; 9/99) (20.31) (5.91) EM1 Emerging Markets Fund (5/00; 5/00) (6.85) (14.57) ES1 Equity Select Fund (5/01; 5/01) (15.09) (10.44) EI1 Extra Income Fund (9/99; 5/96) (7.91) (4.41) FI1 Federal Income Fund (9/99; 9/99) 4.31 4.87 GB1 Global Bond Fund (9/99; 5/96) 13.38 4.41 GR1 Growth Fund (9/99; 9/99) (27.32) (20.48) IE1 International Fund (9/99; 1/92) (19.53) (17.16) MF1 Managed Fund (9/99; 4/86) (14.26) (6.52) ND1 NEW DIMENSIONS FUND(R) (9/99; 5/96) (23.15) (10.88) IV1 S&P 500 Index Fund (5/00; 5/00) (23.66) (18.09) SC1 Small Cap Advantage Fund (9/99; 9/99) (18.36) (4.09) SA1 Strategy Aggressive Fund (9/99; 1/92) (33.11) (17.02) AIM V.I. 1CA Capital Appreciation Fund, Series I Shares (9/99; 5/93) (25.59) (12.03) 1CD Capital Development Fund, Series I Shares (9/99; 5/98) (22.62) (1.20) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 1IF VP International, Class I (9/99; 5/94) (21.64) (12.30) 1VA VP Value, Class I (9/99; 5/96) (13.96) 1.05 CALVERT VARIABLE SERIES, INC. 1SR Social Balanced Portfolio (5/00; 9/86) (13.54) (9.93) CREDIT SUISSE TRUST 1EG Emerging Growth Portfolio (9/99; 9/99) (30.49) (8.50) FIDELITY(R) VIP 1GI Growth & Income Portfolio Service Class (9/99; 12/96)(2) (18.00) (8.61) 1MP Mid Cap Portfolio Service Class (9/99; 12/98)(3) (11.26) 10.92 1OS Overseas Portfolio Service Class (9/99; 1/87)(3) (21.61) (14.51) FTVIPT 1RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(4) 0.59 9.47 1SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(4) (10.64) 6.19 1TF Templeton Foreign Securities Fund - Class 2 (3/02; 5/92)(4) -- (17.46)(b) GOLDMAN SACHS VIT 1SE CORE(SM) Small Cap Equity Fund (9/99; 2/98) (16.29) (0.40) 1UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (23.15) (11.67) 1MC Mid Cap Value Fund (9/99; 5/98) (6.11) 7.92 PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC1 Blue Chip Advantage Fund (9/99; 9/99)(1) (23.92%) --% --% (13.34%) BD1 Bond Fund (9/99; 10/81) 4.02 2.83 5.44 8.49 CR1 Capital Resource Fund (9/99; 10/81) (23.28) (5.56) 2.30 8.61 CM1 Cash Management Fund (9/99; 10/81) (0.30) 2.61 2.77 4.62 DE1 Diversified Equity Income Fund (9/99; 9/99) (20.31) -- -- (5.91) EM1 Emerging Markets Fund (5/00; 5/00) (6.85) -- -- (14.57) ES1 Equity Select Fund (5/01; 5/01) (15.09) -- -- (10.44) EI1 Extra Income Fund (9/99; 5/96) (7.91) (3.45) -- (0.26) FI1 Federal Income Fund (9/99; 9/99) 4.31 -- -- 4.87 GB1 Global Bond Fund (9/99; 5/96) 13.38 2.94 -- 3.59 GR1 Growth Fund (9/99; 9/99) (27.32) -- -- (20.48) IE1 International Fund (9/99; 1/92) (19.53) (7.29) 0.42 0.14 MF1 Managed Fund (9/99; 4/86) (14.26) (1.23) 5.02 7.11 ND1 NEW DIMENSIONS FUND(R) (9/99; 5/96) (23.15) (1.37) -- 3.61 IV1 S&P 500 Index Fund (5/00; 5/00) (23.66) -- -- (18.09) SC1 Small Cap Advantage Fund (9/99; 9/99) (18.36) -- -- (4.09) SA1 Strategy Aggressive Fund (9/99; 1/92) (33.11) (9.67) 0.24 0.90 AIM V.I. 1CA Capital Appreciation Fund, Series I Shares (9/99; 5/93) (25.59) (3.69) -- 5.79 1CD Capital Development Fund, Series I Shares (9/99; 5/98) (22.62) -- -- (2.70) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 1IF VP International, Class I (9/99; 5/94) (21.64) (4.35) -- 0.77 1VA VP Value, Class I (9/99; 5/96) (13.96) 2.39 -- 6.87 CALVERT VARIABLE SERIES, INC. 1SR Social Balanced Portfolio (5/00; 9/86) (13.54) (0.81) 5.08 6.33 CREDIT SUISSE TRUST 1EG Emerging Growth Portfolio (9/99; 9/99) (30.49) -- -- (9.08) FIDELITY(R) VIP 1GI Growth & Income Portfolio Service Class (9/99; 12/96)(2) (18.00) (0.85) -- 3.51 1MP Mid Cap Portfolio Service Class (9/99; 12/98)(3) (11.26) -- -- 13.94 1OS Overseas Portfolio Service Class (9/99; 1/87)(3) (21.61) (5.47) 3.14 2.63 FTVIPT 1RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(4) 0.59 0.96 8.49 8.06 1SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(4) (10.64) -- -- (1.05) 1TF Templeton Foreign Securities Fund - Class 2 (3/02; 5/92)(4) (19.85) (3.57) 6.24 5.11 GOLDMAN SACHS VIT 1SE CORE(SM) Small Cap Equity Fund (9/99; 2/98) (16.29) -- -- (2.22) 1UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (23.15) -- -- (3.89) 1MC Mid Cap Value Fund (9/99; 5/98) (6.11) -- -- 2.43
IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 8 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES (WITHOUT PURCHASE PAYMENT CREDITS) WITHOUT SURRENDER AND SELECTION OF MAV AND EEB DEATH BENEFIT RIDERS FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT JANUS ASPEN SERIES 1GT Global Technology Portfolio: Service Shares (5/00; 1/00)(5) (42.01%) (41.51%) 1IG International Growth Portfolio: Service Shares (5/00; 5/94)(5) (26.98) (26.95) 1AG Mid Cap Growth Portfolio: Service Shares (5/00; 9/93)(5) (29.31) (37.80) (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) LAZARD RETIREMENT SERIES 1IP International Equity Portfolio (9/99; 9/98) (12.07) (13.14) MFS(R) 1MG Investors Growth Stock Series - Service Class (5/00; 5/99)(6) (28.91) (24.71) 1MD New Discovery Series - Service Class (5/00; 5/98)(6) (32.96) (18.48) PUTNAM VARIABLE TRUST 1IN Putnam VT International New Opportunities Fund - Class IB Shares (9/99; 1/97)(7) (14.96) (16.63) 1VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(7) (31.77) (15.42) ROYCE CAPITAL FUND 1MI Micro-Cap Portfolio (9/99; 12/96) (14.22) 12.47 THIRD AVENUE 1SV Value Portfolio (9/99; 9/99) (12.08) 12.61 WANGER 1IT International Small Cap (9/99; 5/95) (15.16) (9.90) 1SP U.S. Smaller Companies (9/99; 5/95) (18.11) (1.98) WELLS FARGO VT 1AA Asset Allocation Fund (5/01; 4/94)(8) (14.19) (11.33) 1WI International Equity Fund (5/01; 7/00) (24.16) (21.16) 1SG Small Cap Growth Fund (5/01; 5/95)(9) (39.32) (28.99) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT JANUS ASPEN SERIES 1GT Global Technology Portfolio: Service Shares (5/00; 1/00)(5) (42.01%) --% --% (39.00%) 1IG International Growth Portfolio: Service Shares (5/00; 5/94)(5) (26.98) (1.45) -- 6.65 1AG Mid Cap Growth Portfolio: Service Shares (5/00; 9/93)(5) (29.31) (3.79) -- 5.45 (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) LAZARD RETIREMENT SERIES 1IP International Equity Portfolio (9/99; 9/98) (12.07) -- -- (5.47) MFS(R) 1MG Investors Growth Stock Series - Service Class (5/00; 5/99)(6) (28.91) -- -- (10.20) 1MD New Discovery Series - Service Class (5/00; 5/98)(6) (32.96) -- -- 0.99 PUTNAM VARIABLE TRUST 1IN Putnam VT International New Opportunities Fund - Class IB Shares (9/99; 1/97)(7) (14.96) (3.87) -- (3.51) 1VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(7) (31.77) (5.61) -- (1.54) ROYCE CAPITAL FUND 1MI Micro-Cap Portfolio (9/99; 12/96) (14.22) 10.71 -- 12.14 THIRD AVENUE 1SV Value Portfolio (9/99; 9/99) (12.08) -- -- 12.61 WANGER 1IT International Small Cap (9/99; 5/95) (15.16) 3.71 -- 9.63 1SP U.S. Smaller Companies (9/99; 5/95) (18.11) 1.44 -- 11.36 WELLS FARGO VT 1AA Asset Allocation Fund (5/01; 4/94)(8) (14.19) 0.85 -- 6.57 1WI International Equity Fund (5/01; 7/00) (24.16) -- -- (20.89) 1SG Small Cap Growth Fund (5/01; 5/95)(9) (39.32) (13.76) -- (3.33)
(a) Current applicable charges deducted from fund performance include a $30 annual contract administrative charge, a 0.15% annual MAV fee, a 0.30% annual EEB fee, and a 0.95% annual mortality and expense risk fee. Premium taxes and purchase payment credits are not reflected in these total returns. (b) Cumulative return (not annualized) since commencement date of the subaccount. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 9 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF A TEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC1 Blue Chip Advantage Fund (9/99; 9/99)(1) (28.79%) (14.61%) BD1 Bond Fund (9/99; 10/81) (3.09) 3.22 CR1 Capital Resource Fund (9/99; 10/81) (28.20) (16.23) CM1 Cash Management Fund (9/99; 10/81) (7.06) 0.64 DE1 Diversified Equity Income Fund (9/99; 9/99) (25.47) (7.32) EM1 Emerging Markets Fund (5/00; 5/00) (13.09) (16.44) ES1 Equity Select Fund (5/01; 5/01) (20.67) (13.85) EI1 Extra Income Fund (9/99; 5/96) (14.06) (5.84) FI1 Federal Income Fund (9/99; 9/99) (2.82) 3.39 GB1 Global Bond Fund (9/99; 5/96) 5.83 2.92 GR1 Growth Fund (9/99; 9/99) (31.92) (21.60) IE1 International Fund (9/99; 1/92) (24.75) (18.35) MF1 Managed Fund (9/99; 4/86) (19.90) (7.92) ND1 NEW DIMENSIONS FUND(R)(9/99; 5/96) (28.08) (12.19) IV1 S&P 500 Index Fund (5/00; 5/00) (28.56) (19.86) SC1 Small Cap Advantage Fund (9/99; 9/99) (23.68) (5.53) SA1 Strategy Aggressive Fund (9/99; 1/92) (37.25) (18.21) AIM V.I. 1CA Capital Appreciation Fund, Series I Shares (9/99; 5/93) (30.33) (13.32) 1CD Capital Development Fund, Series I Shares (9/99; 5/98) (27.59) (2.70) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 1IF VP International, Class I (9/99; 5/94) (26.70) (13.58) 1VA VP Value, Class I (9/99; 5/96) (19.63) (0.50) CALVERT VARIABLE SERIES, INC. 1SR Social Balanced Portfolio (5/00; 9/86) (19.25) (11.95) CREDIT SUISSE TRUST 1EG Emerging Growth Portfolio (9/99; 9/99) (34.83) (9.87) FIDELITY(R) VIP 1GI Growth & Income Portfolio Service Class (9/99; 12/96)(2) (23.34) (9.97) 1MP Mid Cap Portfolio Service Class (9/99; 12/98)(3) (17.15) 9.69 1OS Overseas Portfolio Service Class (9/99; 1/87)(3) (26.67) (15.74) FTVIPT 1RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(4) (6.24) 8.18 1SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(4) (16.57) 4.77 1TF Templeton Foreign Securities Fund - Class 2 (3/02; 5/92)(4) -- (22.85)(b) GOLDMAN SACHS VIT 1SE CORE(SM) Small Cap Equity Fund (9/99; 2/98) (21.77) (1.92) 1UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (28.08) (12.97) 1MC Mid Cap Value Fund (9/99; 5/98) (12.41) 6.57 PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC1 Blue Chip Advantage Fund (9/99; 9/99)(1) (28.79%) --% --% (14.61%) BD1 Bond Fund (9/99; 10/81) (3.09) 2.02 5.77 8.94 CR1 Capital Resource Fund (9/99; 10/81) (28.20) (6.30) 2.59 9.06 CM1 Cash Management Fund (9/99; 10/81) (7.06) 1.79 3.07 5.07 DE1 Diversified Equity Income Fund (9/99; 9/99) (25.47) -- -- (7.32) EM1 Emerging Markets Fund (5/00; 5/00) (13.09) -- -- (16.44) ES1 Equity Select Fund (5/01; 5/01) (20.67) -- -- (13.85) EI1 Extra Income Fund (9/99; 5/96) (14.06) (4.24) -- (0.50) FI1 Federal Income Fund (9/99; 9/99) (2.82) -- -- 3.39 GB1 Global Bond Fund (9/99; 5/96) 5.83 2.13 -- 3.43 GR1 Growth Fund (9/99; 9/99) (31.92) -- -- (21.60) IE1 International Fund (9/99; 1/92) (24.75) (8.02) 0.69 0.59 MF1 Managed Fund (9/99; 4/86) (19.90) (2.04) 5.34 7.56 ND1 NEW DIMENSIONS FUND(R) (9/99; 5/96) (28.08) (2.16) -- 3.45 IV1 S&P 500 Index Fund (5/00; 5/00) (28.56) -- -- (19.86) SC1 Small Cap Advantage Fund (9/99; 9/99) (23.68) -- -- (5.53) SA1 Strategy Aggressive Fund (9/99; 1/92) (37.25) (10.33) 0.51 1.35 AIM V.I. 1CA Capital Appreciation Fund, Series I Shares (9/99; 5/93) (30.33) (4.45) -- 6.11 1CD Capital Development Fund, Series I Shares (9/99; 5/98) (27.59) -- -- (3.56) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 1IF VP International, Class I (9/99; 5/94) (26.70) (5.11) -- 0.91 1VA VP Value, Class I (9/99; 5/96) (19.63) 1.56 -- 6.81 CALVERT VARIABLE SERIES, INC. 1SR Social Balanced Portfolio (5/00; 9/86) (19.25) (1.63) 5.40 6.78 CREDIT SUISSE TRUST 1EG Emerging Growth Portfolio (9/99; 9/99) (34.83) -- -- (10.42) FIDELITY(R) VIP 1GI Growth & Income Portfolio Service Class (9/99; 12/96)(2) (23.34) (1.66) -- 3.26 1MP Mid Cap Portfolio Service Class (9/99; 12/98)(3) (17.15) -- -- 13.21 1OS Overseas Portfolio Service Class (9/99; 1/87)(3) (26.67) (6.21) 3.44 3.08 FTVIPT 1RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(4) (6.24) 0.10 8.84 8.51 1SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(4) (16.57) -- -- (1.94) 1TF Templeton Foreign Securities Fund - Class 2 (3/02; 5/92)(4) (25.05) (4.34) 6.57 5.56 GOLDMAN SACHS VIT 1SE CORE(SM) Small Cap Equity Fund (9/99; 2/98) (21.77) -- -- (3.04) 1UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (28.08) -- -- (4.69) 1MC Mid Cap Value Fund (9/99; 5/98) (12.41) -- -- 1.50
IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 10 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF A TEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT JANUS ASPEN SERIES 1GT Global Technology Portfolio: Service Shares (5/00; 1/00)(5) (45.43%) (42.63%) 1IG International Growth Portfolio: Service Shares (5/00; 5/94)(5) (31.61) (28.47) 1AG Mid Cap Growth Portfolio: Service Shares (5/00; 9/93)(5) (33.75) (39.04) (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) LAZARD RETIREMENT SERIES 1IP International Equity Portfolio (9/99; 9/98) (17.89) (14.41) MFS(R) 1MG Investors Growth Stock Series - Service Class (5/00; 5/99)(6) (33.39) (26.29) 1MD New Discovery Series - Service Class (5/00; 5/98)(6) (37.11) (20.22) PUTNAM VARIABLE TRUST 1IN Putnam VT International New Opportunities Fund - Class IB Shares (9/99; 1/97)(7) (20.55) (17.83) 1VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(7) (36.02) (16.64) ROYCE CAPITAL FUND 1MI Micro-Cap Portfolio (9/99; 12/96) (19.86) 11.29 THIRD AVENUE 1SV Value Portfolio (9/99; 9/99) (17.90) 11.42 WANGER 1IT International Small Cap (9/99; 5/95) (20.74) (11.23) 1SP U.S. Smaller Companies (9/99; 5/95) (23.45) (3.47) WELLS FARGO VT 1AA Asset Allocation Fund (5/01; 4/94)(8) (19.84) (14.73) 1WI International Equity Fund (5/01; 7/00) (29.02) (24.07) 1SG Small Cap Growth Fund (5/01; 5/95)(9) (42.96) (31.54) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT JANUS ASPEN SERIES 1GT Global Technology Portfolio: Service Shares (5/00; 1/00)(5) (45.43%) --% --% (39.97%) 1IG International Growth Portfolio: Service Shares (5/00; 5/94)(5) (31.61) (2.22) -- 6.90 1AG Mid Cap Growth Portfolio: Service Shares (5/00; 9/93)(5) (33.75) (4.53) -- 5.77 (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) LAZARD RETIREMENT SERIES 1IP International Equity Portfolio (9/99; 9/98) (17.89) -- -- (6.45) MFS(R) 1MG Investors Growth Stock Series - Service Class (5/00; 5/99)(6) (33.39) -- -- (11.30) 1MD New Discovery Series - Service Class (5/00; 5/98)(6) (37.11) -- -- 0.08 PUTNAM VARIABLE TRUST 1IN Putnam VT International New Opportunities Fund - Class IB Shares (9/99; 1/97)(7) (20.55) (4.64) -- (3.96) 1VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(7) (36.02) (6.32) -- (1.96) ROYCE CAPITAL FUND 1MI Micro-Cap Portfolio (9/99; 12/96) (19.86) 10.22 -- 12.13 THIRD AVENUE 1SV Value Portfolio (9/99; 9/99) (17.90) -- -- 11.42 WANGER 1IT International Small Cap (9/99; 5/95) (20.74) 2.94 -- 9.81 1SP U.S. Smaller Companies (9/99; 5/95) (23.45) 0.60 -- 11.56 WELLS FARGO VT 1AA Asset Allocation Fund (5/01; 4/94)(8) (19.84) 0.01 -- 6.81 1WI International Equity Fund (5/01; 7/00) (29.02) -- -- (22.76) 1SG Small Cap Growth Fund (5/01; 5/95)(9) (42.96) (14.35) -- (3.32)
(a) Current applicable charges deducted from fund performance include a $30 annual contract administrative charge, a 0.95% annual mortality and expense risk fee, and applicable surrender charges. Premium taxes and purchase payment credits are not reflected in these total returns. (b) Cumulative return (not annualized) since commencement date of the subaccount. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 11 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF A SEVEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC1 Blue Chip Advantage Fund (9/99; 9/99)(1) (28.12%) (14.36%) BD1 Bond Fund (9/99; 10/81) (2.14) 3.51 CR1 Capital Resource Fund (9/99; 10/81) (27.53) (15.99) CM1 Cash Management Fund (9/99; 10/81) (6.16) 0.93 DE1 Diversified Equity Income Fund (9/99; 9/99) (24.77) (7.05) EM1 Emerging Markets Fund (5/00; 5/00) (12.25) (16.15) ES1 Equity Select Fund (5/01; 5/01) (19.91) (13.36) EI1 Extra Income Fund (9/99; 5/96) (13.24) (5.57) FI1 Federal Income Fund (9/99; 9/99) (1.87) 3.68 GB1 Global Bond Fund (9/99; 5/96) 6.83 3.20 GR1 Growth Fund (9/99; 9/99) (31.29) (21.37) IE1 International Fund (9/99; 1/92) (24.04) (18.11) MF1 Managed Fund (9/99; 4/86) (19.14) (7.65) ND1 NEW DIMENSIONS FUND(R) (9/99; 5/96) (27.41) (11.93) IV1 S&P 500 Index Fund (5/00; 5/00) (27.89) (19.58) SC1 Small Cap Advantage Fund (9/99; 9/99) (22.95) (5.26) SA1 Strategy Aggressive Fund (9/99; 1/92) (36.68) (17.97) AIM V.I. 1CA Capital Appreciation Fund, Series I Shares (9/99; 5/93) (29.68) (13.07) 1CD Capital Development Fund, Series I Shares (9/99; 5/98) (26.92) (2.42) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 1IF VP International, Class I (9/99; 5/94) (26.01) (13.33) 1VA VP Value, Class I (9/99; 5/96) (18.87) (0.20) CALVERT VARIABLE SERIES, INC. 1SR Social Balanced Portfolio (5/00; 9/86) (18.48) (11.63) CREDIT SUISSE TRUST 1EG Emerging Growth Portfolio (9/99; 9/99) (34.24) (9.61) FIDELITY(R) VIP 1GI Growth & Income Portfolio Service Class (9/99; 12/96)(2) (22.62) (9.71) 1MP Mid Cap Portfolio Service Class (9/99; 12/98)(3) (16.36) 9.93 1OS Overseas Portfolio Service Class (9/99; 1/87)(3) (25.98) (15.50) FTVIPT 1RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(4) (5.33) 8.43 1SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(4) (15.77) 5.04 1TF Templeton Foreign Securities Fund - Class 2 (3/02; 5/92)(4) -- (22.12)(b) GOLDMAN SACHS VIT 1SE CORE(SM) Small Cap Equity Fund (9/99; 2/98) (21.03) (1.63) 1UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (27.41) (12.71) 1MC Mid Cap Value Fund (9/99; 5/98) (11.56) 6.83 PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC1 Blue Chip Advantage Fund (9/99; 9/99)(1) (28.12%) --% --% (14.36%) BD1 Bond Fund (9/99; 10/81) (2.14) 2.39 5.89 8.94 CR1 Capital Resource Fund (9/99; 10/81) (27.53) (5.95) 2.75 9.06 CM1 Cash Management Fund (9/99; 10/81) (6.16) 2.16 3.22 5.07 DE1 Diversified Equity Income Fund (9/99; 9/99) (24.77) -- -- (7.05) EM1 Emerging Markets Fund (5/00; 5/00) (12.25) -- -- (16.15) ES1 Equity Select Fund (5/01; 5/01) (19.91) -- -- (13.36) EI1 Extra Income Fund (9/99; 5/96) (13.24) (3.88) -- (0.08) FI1 Federal Income Fund (9/99; 9/99) (1.87) -- -- 3.68 GB1 Global Bond Fund (9/99; 5/96) 6.83 2.50 -- 3.79 GR1 Growth Fund (9/99; 9/99) (31.29) -- -- (21.37) IE1 International Fund (9/99; 1/92) (24.04) (7.67) 0.87 0.59 MF1 Managed Fund (9/99; 4/86) (19.14) (1.68) 5.47 7.56 ND1 NEW DIMENSIONS FUND(R) (9/99; 5/96) (27.41) (1.80) -- 3.82 IV1 S&P 500 Index Fund (5/00; 5/00) (27.89) -- -- (19.58) SC1 Small Cap Advantage Fund (9/99; 9/99) (22.95) -- -- (5.26) SA1 Strategy Aggressive Fund (9/99; 1/92) (36.68) (10.01) 0.69 1.35 AIM V.I. 1CA Capital Appreciation Fund, Series I Shares (9/99; 5/93) (29.68) (4.10) -- 6.24 1CD Capital Development Fund, Series I Shares (9/99; 5/98) (26.92) -- -- (3.18) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 1IF VP International, Class I (9/99; 5/94) (26.01) (4.76) -- 1.22 1VA VP Value, Class I (9/99; 5/96) (18.87) 1.93 -- 7.12 CALVERT VARIABLE SERIES, INC. 1SR Social Balanced Portfolio (5/00; 9/86) (18.48) (1.26) 5.53 6.78 CREDIT SUISSE TRUST 1EG Emerging Growth Portfolio (9/99; 9/99) (34.24) -- -- (10.16) FIDELITY(R) VIP 1GI Growth & Income Portfolio Service Class (9/99; 12/96)(2) (22.62) (1.30) -- 3.68 1MP Mid Cap Portfolio Service Class (9/99; 12/98)(3) (16.36) -- -- 13.55 1OS Overseas Portfolio Service Class (9/99; 1/87)(3) (25.98) (5.86) 3.59 3.08 FTVIPT 1RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(4) (5.33) 0.48 8.94 8.51 1SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(4) (15.77) -- -- (1.55) 1TF Templeton Foreign Securities Fund - Class 2 (3/02; 5/92)(4) (24.34) (3.99) 6.69 5.56 GOLDMAN SACHS VIT 1SE CORE(SM) Small Cap Equity Fund (9/99; 2/98) (21.03) -- -- (2.67) 1UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (27.41) -- -- (4.32) 1MC Mid Cap Value Fund (9/99; 5/98) (11.56) -- -- 1.90
IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 12 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF A SEVEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT JANUS ASPEN SERIES 1GT Global Technology Portfolio: Service Shares (5/00; 1/00)(5) (44.95%) (42.43%) 1IG International Growth Portfolio: Service Shares (5/00; 5/94)(5) (30.97) (28.22) 1AG Mid Cap Growth Portfolio: Service Shares (5/00; 9/93)(5) (33.14) (38.82) (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) LAZARD RETIREMENT SERIES 1IP International Equity Portfolio (9/99; 9/98) (17.10) (14.16) MFS(R) 1MG Investors Growth Stock Series - Service Class (5/00; 5/99)(6) (32.77) (26.03) 1MD New Discovery Series - Service Class (5/00; 5/98)(6) (36.54) (19.94) PUTNAM VARIABLE TRUST 1IN Putnam VT International New Opportunities Fund - Class IB Shares (9/99; 1/97)(7) (19.80) (17.59) 1VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(7) (35.43) (16.39) ROYCE CAPITAL FUND 1MI Micro-Cap Portfolio (9/99; 12/96) (19.10) 11.52 THIRD AVENUE 1SV Value Portfolio (9/99; 9/99) (17.12) 11.65 WANGER 1IT International Small Cap (9/99; 5/95) (19.98) (10.97) 1SP U.S. Smaller Companies (9/99; 5/95) (22.73) (3.19) WELLS FARGO VT 1AA Asset Allocation Fund (5/01; 4/94)(8) (19.08) (14.25) 1WI International Equity Fund (5/01; 7/00) (28.35) (23.65) 1SG Small Cap Growth Fund (5/01; 5/95)(9) (42.45) (31.16) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT JANUS ASPEN SERIES 1GT Global Technology Portfolio: Service Shares (5/00; 1/00)(5) (44.95%) --% --% (39.79%) 1IG International Growth Portfolio: Service Shares (5/00; 5/94)(5) (30.97) (1.87) -- 7.10 1AG Mid Cap Growth Portfolio: Service Shares (5/00; 9/93)(5) (33.14) (4.19) -- 5.90 (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) LAZARD RETIREMENT SERIES 1IP International Equity Portfolio (9/99; 9/98) (17.10) -- -- (6.03) MFS(R) 1MG Investors Growth Stock Series - Service Class (5/00; 5/99)(6) (32.77) -- -- (11.07) 1MD New Discovery Series - Service Class (5/00; 5/98)(6) (36.54) -- -- 0.48 PUTNAM VARIABLE TRUST 1IN Putnam VT International New Opportunities Fund - Class IB Shares (9/99; 1/97)(7) (19.80) (4.28) -- (3.65) 1VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(7) (35.43) (5.98) -- (1.67) ROYCE CAPITAL FUND 1MI Micro-Cap Portfolio (9/99; 12/96) (19.10) 10.49 -- 12.41 THIRD AVENUE 1SV Value Portfolio (9/99; 9/99) (17.12) -- -- 11.65 WANGER 1IT International Small Cap (9/99; 5/95) (19.98) 3.30 -- 10.08 1SP U.S. Smaller Companies (9/99; 5/95) (22.73) 0.98 -- 11.81 WELLS FARGO VT 1AA Asset Allocation Fund (5/01; 4/94)(8) (19.08) 0.38 -- 7.02 1WI International Equity Fund (5/01; 7/00) (28.35) -- -- (22.47) 1SG Small Cap Growth Fund (5/01; 5/95)(9) (42.45) (14.05) -- (2.88)
(a) Current applicable charges deducted from fund performance include a $30 annual contract administrative charge, a 0.95% annual mortality and expense risk fee, and applicable surrender charges. Premium taxes and purchase payment credits are not reflected in these total returns. (b) Cumulative return (not annualized) since commencement date of the subaccount. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 13 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES (WITHOUT PURCHASE PAYMENT CREDITS) WITHOUT SURRENDER FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC1 Blue Chip Advantage Fund (9/99; 9/99)(1) (23.47%) (12.89%) BD1 Bond Fund (9/99; 10/81) 4.47 5.16 CR1 Capital Resource Fund (9/99; 10/81) (22.83) (14.55) CM1 Cash Management Fund (9/99; 10/81) 0.15 2.65 DE1 Diversified Equity Income Fund (9/99; 9/99) (19.86) (5.46) EM1 Emerging Markets Fund (5/00; 5/00) (6.40) (14.13) ES1 Equity Select Fund (5/01; 5/01) (14.64) (9.99) EI1 Extra Income Fund (9/99; 5/96) (7.46) (3.96) FI1 Federal Income Fund (9/99; 9/99) 4.76 5.32 GB1 Global Bond Fund (9/99; 5/96) 13.83 4.86 GR1 Growth Fund (9/99; 9/99) (26.87) (20.03) IE1 International Fund (9/99; 1/92) (19.08) (16.71) MF1 Managed Fund (9/99; 4/86) (13.81) (6.07) ND1 NEW DIMENSIONS FUND(R) (9/99; 5/96) (22.70) (10.43) IV1 S&P 500 Index Fund (5/00; 5/00) (23.21) (17.64) SC1 Small Cap Advantage Fund (9/99; 9/99) (17.91) (3.64) SA1 Strategy Aggressive Fund (9/99; 1/92) (32.66) (16.57) AIM V.I. 1CA Capital Appreciation Fund, Series I Shares (9/99; 5/93) (25.14) (11.58) 1CD Capital Development Fund, Series I Shares (9/99; 5/98) (22.17) (0.75) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 1IF VP International, Class I (9/99; 5/94) (21.19) (11.85) 1VA VP Value, Class I (9/99; 5/96) (13.51) 1.50 CALVERT VARIABLE SERIES, INC. 1SR Social Balanced Portfolio (5/00; 9/86) (13.09) (9.48) CREDIT SUISSE TRUST 1EG Emerging Growth Portfolio (9/99; 9/99) (30.04) (8.05) FIDELITY(R) VIP 1GI Growth & Income Portfolio Service Class (9/99; 12/96)(2) (17.55) (8.16) 1MP Mid Cap Portfolio Service Class (9/99; 12/98)(3) (10.81) 11.37 1OS Overseas Portfolio Service Class (9/99; 1/87)(3) (21.16) (14.06) FTVIPT 1RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(4) 1.04 9.92 1SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(4) (10.19) 6.64 1TF Templeton Foreign Securities Fund - Class 2 (3/02; 5/92)(4) -- (17.01)(b) GOLDMAN SACHS VIT 1SE CORE(SM) Small Cap Equity Fund (9/99; 2/98) (15.84) 0.05 1UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (22.70) (11.22) 1MC Mid Cap Value Fund (9/99; 5/98) (5.66) 8.37 PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC1 Blue Chip Advantage Fund (9/99; 9/99)(1) (23.47%) --% --% (12.89%) BD1 Bond Fund (9/99; 10/81) 4.47 3.28 5.89 8.94 CR1 Capital Resource Fund (9/99; 10/81) (22.83) (5.11) 2.75 9.06 CM1 Cash Management Fund (9/99; 10/81) 0.15 3.06 3.22 5.07 DE1 Diversified Equity Income Fund (9/99; 9/99) (19.86) -- -- (5.46) EM1 Emerging Markets Fund (5/00; 5/00) (6.40) -- -- (14.13) ES1 Equity Select Fund (5/01; 5/01) (14.64) -- -- (9.99) EI1 Extra Income Fund (9/99; 5/96) (7.46) (3.00) -- 0.19 FI1 Federal Income Fund (9/99; 9/99) 4.76 -- -- 5.32 GB1 Global Bond Fund (9/99; 5/96) 13.83 3.39 -- 4.04 GR1 Growth Fund (9/99; 9/99) (26.87) -- -- (20.03) IE1 International Fund (9/99; 1/92) (19.08) (6.84) 0.87 0.59 MF1 Managed Fund (9/99; 4/86) (13.81) (0.78) 5.47 7.56 ND1 NEW DIMENSIONS FUND(R) (9/99; 5/96) (22.70) (0.92) -- 4.06 IV1 S&P 500 Index Fund (5/00; 5/00) (23.21) -- -- (17.64) SC1 Small Cap Advantage Fund (9/99; 9/99) (17.91) -- -- (3.64) SA1 Strategy Aggressive Fund (9/99; 1/92) (32.66) (9.22) 0.69 1.35 AIM V.I. 1CA Capital Appreciation Fund, Series I Shares (9/99; 5/93) (25.14) (3.24) -- 6.24 1CD Capital Development Fund, Series I Shares (9/99; 5/98) (22.17) -- -- (2.25) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 1IF VP International, Class I (9/99; 5/94) (21.19) (3.90) -- 1.22 1VA VP Value, Class I (9/99; 5/96) (13.51) 2.84 -- 7.32 CALVERT VARIABLE SERIES, INC. 1SR Social Balanced Portfolio (5/00; 9/86) (13.09) (0.36) 5.53 6.78 CREDIT SUISSE TRUST 1EG Emerging Growth Portfolio (9/99; 9/99) (30.04) -- -- (8.63) FIDELITY(R) VIP 1GI Growth & Income Portfolio Service Class (9/99; 12/96)(2) (17.55) (0.40) -- 3.96 1MP Mid Cap Portfolio Service Class (9/99; 12/98)(3) (10.81) -- -- 14.39 1OS Overseas Portfolio Service Class (9/99; 1/87)(3) (21.16) (5.02) 3.59 3.08 FTVIPT 1RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(4) 1.04 1.41 8.94 8.51 1SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(4) (10.19) -- -- (0.60) 1TF Templeton Foreign Securities Fund - Class 2 (3/02; 5/92)(4) (19.40) (3.12) 6.69 5.56 GOLDMAN SACHS VIT 1SE CORE(SM) Small Cap Equity Fund (9/99; 2/98) (15.84) -- -- (1.77) 1UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (22.70) -- -- (3.44) 1MC Mid Cap Value Fund (9/99; 5/98) (5.66) -- -- 2.88
IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 14 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES (WITHOUT PURCHASE PAYMENT CREDITS) WITHOUT SURRENDER FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT JANUS ASPEN SERIES 1GT Global Technology Portfolio: Service Shares (5/00; 1/00)(5) (41.56%) (41.06%) 1IG International Growth Portfolio: Service Shares (5/00; 5/94)(5) (26.53) (26.50) 1AG Mid Cap Growth Portfolio: Service Shares (5/00; 9/93)(5) (28.86) (37.35) (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) LAZARD RETIREMENT SERIES 1IP International Equity Portfolio (9/99; 9/98) (11.62) (12.69) MFS(R) 1MG Investors Growth Stock Series - Service Class (5/00; 5/99)(6) (28.46) (24.26) 1MD New Discovery Series - Service Class (5/00; 5/98)(6) (32.51) (18.03) PUTNAM VARIABLE TRUST 1IN Putnam VT International New Opportunities Fund - Class IB Shares (9/99; 1/97)(7) (14.51) (16.18) 1VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(7) (31.32) (14.97) ROYCE CAPITAL FUND 1MI Micro-Cap Portfolio (9/99; 12/96) (13.77) 12.92 THIRD AVENUE 1SV Value Portfolio (9/99; 9/99) (11.63) 13.06 WANGER 1IT International Small Cap (9/99; 5/95) (14.71) (9.45) 1SP U.S. Smaller Companies (9/99; 5/95) (17.66) (1.53) WELLS FARGO VT 1AA Asset Allocation Fund (5/01; 4/94)(8) (13.74) (10.88) 1WI International Equity Fund (5/01; 7/00) (23.71) (20.71) 1SG Small Cap Growth Fund (5/01; 5/95)(9) (38.87) (28.54) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT JANUS ASPEN SERIES 1GT Global Technology Portfolio: Service Shares (5/00; 1/00)(5) (41.56%) --% --% (38.55%) 1IG International Growth Portfolio: Service Shares (5/00; 5/94)(5) (26.53) (1.00) -- 7.10 1AG Mid Cap Growth Portfolio: Service Shares (5/00; 9/93)(5) (28.86) (3.34) -- 5.90 (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) LAZARD RETIREMENT SERIES 1IP International Equity Portfolio (9/99; 9/98) (11.62) -- -- (5.02) MFS(R) 1MG Investors Growth Stock Series - Service Class (5/00; 5/99)(6) (28.46) -- -- (9.75) 1MD New Discovery Series - Service Class (5/00; 5/98)(6) (32.51) -- -- 1.44 PUTNAM VARIABLE TRUST 1IN Putnam VT International New Opportunities Fund - Class IB Shares (9/99; 1/97)(7) (14.51) (3.42) -- (3.06) 1VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(7) (31.32) (5.16) -- (1.09) ROYCE CAPITAL FUND 1MI Micro-Cap Portfolio (9/99; 12/96) (13.77) 11.16 -- 12.59 THIRD AVENUE 1SV Value Portfolio (9/99; 9/99) (11.63) -- -- 13.06 WANGER 1IT International Small Cap (9/99; 5/95) (14.71) 4.16 -- 10.08 1SP U.S. Smaller Companies (9/99; 5/95) (17.66) 1.89 -- 11.81 WELLS FARGO VT 1AA Asset Allocation Fund (5/01; 4/94)(8) (13.74) 1.30 -- 7.02 1WI International Equity Fund (5/01; 7/00) (23.71) -- -- (20.44) 1SG Small Cap Growth Fund (5/01; 5/95)(9) (38.87) (13.31) -- (2.88)
(a) Current applicable charges deducted from fund performance include a $30 annual contract administrative charge and a 0.95% annual mortality and expense risk fee. Premium taxes and purchase payment credits are not reflected in these total returns. (b) Cumulative return (not annualized) since commencement date of the subaccount. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 15 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF MAV AND EEB DEATH BENEFIT RIDERS AND THE TEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC2 Blue Chip Advantage Fund (9/99; 9/99)(1) (29.06%) (14.88%) BD2 Bond Fund (9/99; 10/81) (3.31) 2.97 CR2 Capital Resource Fund (9/99; 10/81) (28.48) (16.50) CM2 Cash Management Fund (9/99; 10/81) (7.30) 0.40 DE2 Diversified Equity Income Fund (9/99; 9/99) (25.74) (7.57) EM2 Emerging Markets Fund (5/00; 5/00) (13.33) (16.71) ES2 Equity Select Fund (5/01; 5/01) (20.92) (14.12) EI2 Extra Income Fund (9/99; 5/96) (14.31) (6.09) FI2 Federal Income Fund (9/99; 9/99) (3.04) 3.15 GB2 Global Bond Fund (9/99; 5/96) 5.60 2.67 GR2 Growth Fund (9/99; 9/99) (32.20) (21.88) IE2 International Fund (9/99; 1/92) (25.02) (18.62) MF2 Managed Fund (9/99; 4/86) (20.16) (8.17) ND2 NEW DIMENSIONS FUND(R) (9/99; 5/96) (28.35) (12.45) IV2 S&P 500 Index Fund (5/00; 5/00) (28.83) (20.14) SC2 Small Cap Advantage Fund (9/99; 9/99) (23.94) (5.78) SA2 Strategy Aggressive Fund (9/99; 1/92) (37.54) (18.48) AIM V.I. 2CA Capital Appreciation Fund, Series I Shares (9/99; 5/93) (30.60) (13.58) 2CD Capital Development Fund, Series I Shares (9/99; 5/98) (27.87) (2.95) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 2IF VP International, Class I (9/99; 5/94) (26.97) (13.84) 2VA VP Value, Class I (9/99; 5/96) (19.89) (0.74) CALVERT VARIABLE SERIES, INC. 2SR Social Balanced Portfolio (5/00; 9/86) (19.50) (12.21) CREDIT SUISSE TRUST 2EG Emerging Growth Portfolio (9/99; 9/99) (35.12) (10.13) FIDELITY(R) VIP 2GI Growth & Income Portfolio Service Class (9/99; 12/96)(2) (23.61) (10.23) 2MP Mid Cap Portfolio Service Class (9/99; 12/98)(3) (17.40) 9.45 2OS Overseas Portfolio Service Class (9/99; 1/87)(3) (26.94) (16.01) FTVIPT 2RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(4) (6.47) 7.94 2SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(4) (16.82) 4.56 2TF Templeton Foreign Securities Fund - Class 2(3/02; 5/92)(4) -- (23.13)(b) GOLDMAN SACHS VIT 2SE CORE(SM) Small Cap Equity Fund (9/99; 2/98) (22.03) (2.16) 2UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (28.36) (13.23) 2MC Mid Cap Value Fund (9/99; 5/98) (12.65) 6.33 PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC2 Blue Chip Advantage Fund (9/99; 9/99)(1) (29.06%) --% --% (14.88%) BD2 Bond Fund (9/99; 10/81) (3.31) 1.77 5.53 8.71 CR2 Capital Resource Fund (9/99; 10/81) (28.48) (6.55) 2.34 8.83 CM2 Cash Management Fund (9/99; 10/81) (7.30) 1.53 2.82 4.83 DE2 Diversified Equity Income Fund (9/99; 9/99) (25.74) -- -- (7.57) EM2 Emerging Markets Fund (5/00; 5/00) (13.33) -- -- (16.71) ES2 Equity Select Fund (5/01; 5/01) (20.92) -- -- (14.12) EI2 Extra Income Fund (9/99; 5/96) (14.31) (4.49) -- (0.74) FI2 Federal Income Fund (9/99; 9/99) (3.04) -- -- 3.15 GB2 Global Bond Fund (9/99; 5/96) 5.60 1.88 -- 3.18 GR2 Growth Fund (9/99; 9/99) (32.20) -- -- (21.88) IE2 International Fund (9/99; 1/92) (25.02) (8.27) 0.45 0.34 MF2 Managed Fund (9/99; 4/86) (20.16) (2.29) 5.10 7.33 ND2 NEW DIMENSIONS FUND(R) (9/99; 5/96) (28.35) (2.41) -- 3.20 IV2 S&P 500 Index Fund (5/00; 5/00) (28.83) -- -- (20.14) SC2 Small Cap Advantage Fund (9/99; 9/99) (23.94) -- -- (5.78) SA2 Strategy Aggressive Fund (9/99; 1/92) (37.54) (10.59) 0.27 1.11 AIM V.I. 2CA Capital Appreciation Fund, Series I Shares (9/99; 5/93) (30.60) (4.70) -- 5.87 2CD Capital Development Fund, Series I Shares (9/99; 5/98) (27.87) -- -- (3.81) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 2IF VP International, Class I (9/99; 5/94) (26.97) (5.36) -- 0.67 2VA VP Value, Class I (9/99; 5/96) (19.89) 1.30 -- 6.57 CALVERT VARIABLE SERIES, INC. 2SR Social Balanced Portfolio (5/00; 9/86) (19.50) (1.87) 5.16 6.54 CREDIT SUISSE TRUST 2EG Emerging Growth Portfolio (9/99; 9/99) (35.12) -- -- (10.68) FIDELITY(R) VIP 2GI Growth & Income Portfolio Service Class (9/99; 12/96)(2) (23.61) (1.90) -- 3.01 2MP Mid Cap Portfolio Service Class (9/99; 12/98)(3) (17.40) -- -- 12.98 2OS Overseas Portfolio Service Class (9/99; 1/87)(3) (26.94) (6.46) 3.20 2.84 FTVIPT 2RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(4) (6.47) (0.14) 8.61 8.28 2SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(4) (16.82) -- -- (2.19) 2TF Templeton Foreign Securities Fund - Class 2(3/02; 5/92)(4) (25.31) (4.59) 6.33 5.32 GOLDMAN SACHS VIT 2SE CORE(SM) Small Cap Equity Fund (9/99; 2/98) (22.03) -- -- (3.29) 2UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (28.36) -- -- (4.94) 2MC Mid Cap Value Fund (9/99; 5/98) (12.65) -- -- 1.25
IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 16 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF MAV AND EEB DEATH BENEFIT RIDERS AND THE TEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT JANUS ASPEN SERIES 2GT Global Technology Portfolio: Service Shares (5/00; 1/00)(5) (45.74%) (42.94%) 2IG International Growth Portfolio: Service Shares (5/00; 5/94)(5) (31.88) (28.76) 2AG Mid Cap Growth Portfolio: Service Shares (5/00; 9/93)(5) (34.04) (39.35) (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) LAZARD RETIREMENT SERIES 2IP International Equity Portfolio (9/99; 9/98) (18.14) (14.68) MFS(R) 2MG Investors Growth Stock Series - Service Class (5/00; 5/99)(6) (33.67) (26.58) 2MD New Discovery Series - Service Class (5/00; 5/98)(6) (37.40) (20.50) PUTNAM VARIABLE TRUST 2IN Putnam VT International New Opportunities Fund - Class IB Shares (9/99; 1/97)(7) (20.81) (18.10) 2VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(7) (36.30) (16.91) ROYCE CAPITAL FUND 2MI Micro-Cap Portfolio (9/99; 12/96) (20.12) 11.06 THIRD AVENUE 2SV Value Portfolio (9/99; 9/99) (18.15) 11.19 WANGER 2IT International Small Cap (9/99; 5/95) (20.99) (11.49) 2SP U.S. Smaller Companies (9/99; 5/95) (23.71) (3.71) WELLS FARGO VT 2AA Asset Allocation Fund (5/01; 4/94)(8) (20.10) (14.99) 2WI International Equity Fund (5/01; 7/00) (29.29) (24.35) 2SG Small Cap Growth Fund (5/01; 5/95)(9) (43.26) (31.83) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT JANUS ASPEN SERIES 2GT Global Technology Portfolio: Service Shares (5/00; 1/00)(5) (45.74%) --% --% (40.28%) 2IG International Growth Portfolio: Service Shares (5/00; 5/94)(5) (31.88) (2.47) -- 6.66 2AG Mid Cap Growth Portfolio: Service Shares (5/00; 9/93)(5) (34.04) (4.78) -- 5.53 (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) LAZARD RETIREMENT SERIES 2IP International Equity Portfolio (9/99; 9/98) (18.14) -- -- (6.70) MFS(R) 2MG Investors Growth Stock Series - Service Class (5/00; 5/99)(6) (33.67) -- -- (11.56) 2MD New Discovery Series - Service Class (5/00; 5/98)(6) (37.40) -- -- (0.16) PUTNAM VARIABLE TRUST 2IN Putnam VT International New Opportunities Fund - Class IB Shares (9/99; 1/97)(7) (20.81) (4.89) -- (4.21) 2VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(7) (36.30) (6.57) -- (2.21) ROYCE CAPITAL FUND 2MI Micro-Cap Portfolio (9/99; 12/96) (20.12) 9.99 -- 11.90 THIRD AVENUE 2SV Value Portfolio (9/99; 9/99) (18.15) -- -- 11.19 WANGER 2IT International Small Cap (9/99; 5/95) (20.99) 2.69 -- 9.57 2SP U.S. Smaller Companies (9/99; 5/95) (23.71) 0.36 -- 11.33 WELLS FARGO VT 2AA Asset Allocation Fund (5/01; 4/94)(8) (20.10) (0.23) -- 6.57 2WI International Equity Fund (5/01; 7/00) (29.29) -- -- (23.04) 2SG Small Cap Growth Fund (5/01; 5/95)(9) (43.26) (14.64) -- (3.61)
(a) Current applicable charges deducted from fund performance include a $30 annual contract administrative charge, a 0.15% annual MAV fee, a 0.30% annual EEB fee, a 0.75% annual mortality and expense risk fee, and applicable surrender charges. Premium taxes and purchase payment credits are not reflected in these total returns. (b) Cumulative return (not annualized) since commencement date of the subaccount. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 17 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF MAV AND EEB DEATH BENEFIT RIDER AND THE SEVEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC2 Blue Chip Advantage Fund (9/99; 9/99)(1) (28.40%) (14.63%) BD2 Bond Fund (9/99; 10/81) (2.37) 3.26 CR2 Capital Resource Fund (9/99; 10/81) (27.81) (16.26) CM2 Cash Management Fund (9/99; 10/81) (6.40) 0.69 DE2 Diversified Equity Income Fund (9/99; 9/99) (25.04) (7.30) EM2 Emerging Markets Fund (5/00; 5/00) (12.50) (16.41) ES2 Equity Select Fund (5/01; 5/01) (20.17) (13.63) EI2 Extra Income Fund (9/99; 5/96) (13.48) (5.82) FI2 Federal Income Fund (9/99; 9/99) (2.10) 3.43 GB2 Global Bond Fund (9/99; 5/96) 6.60 2.95 GR2 Growth Fund (9/99; 9/99) (31.57) (21.65) IE2 International Fund (9/99; 1/92) (24.31) (18.39) MF2 Managed Fund (9/99; 4/86) (19.40) (7.90) ND2 NEW DIMENSIONS FUND(R) (9/99; 5/96) (27.68) (12.19) IV2 S&P 500 Index Fund (5/00; 5/00) (28.16) (19.85) SC2 Small Cap Advantage Fund (9/99; 9/99) (23.22) (5.51) SA2 Strategy Aggressive Fund (9/99; 1/92) (36.97) (18.24) AIM V.I. 2CA Capital Appreciation Fund, Series I Shares (9/99; 5/93) (29.96) (13.33) 2CD Capital Development Fund, Series I Shares (9/99; 5/98) (27.19) (2.66) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 2IF VP International, Class I (9/99; 5/94) (26.28) (13.59) 2VA VP Value, Class I (9/99; 5/96) (19.12) (0.44) CALVERT VARIABLE SERIES, INC. 2SR Social Balanced Portfolio (5/00; 9/86) (18.74) (11.89) CREDIT SUISSE TRUST 2EG Emerging Growth Portfolio (9/99; 9/99) (34.52) (9.86) FIDELITY(R) VIP 2GI Growth & Income Portfolio Service Class (9/99; 12/96)(2) (22.88) (9.97) 2MP Mid Cap Portfolio Service Class (9/99; 12/98)(3) (16.61) 9.70 2OS Overseas Portfolio Service Class (9/99; 1/87)(3) (26.25) (15.77) FTVIPT 2RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(4) (5.56) 8.20 2SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(4) (16.03) 4.83 2TF Templeton Foreign Securities Fund - Class 2(3/02; 5/92)(4) -- (22.41)(b) GOLDMAN SACHS VIT 2SE CORE(SM) Small Cap Equity Fund (9/99; 2/98) (21.29) (1.88) 2UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (27.68) (12.98) 2MC Mid Cap Value Fund (9/99; 5/98) (11.81) 6.59 PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC2 Blue Chip Advantage Fund (9/99; 9/99)(1) (28.40%) --% --% (14.63%) BD2 Bond Fund (9/99; 10/81) (2.37) 2.14 5.65 8.71 CR2 Capital Resource Fund (9/99; 10/81) (27.81) (6.21) 2.50 8.83 CM2 Cash Management Fund (9/99; 10/81) (6.40) 1.90 2.98 4.83 DE2 Diversified Equity Income Fund (9/99; 9/99) (25.04) -- -- (7.30) EM2 Emerging Markets Fund (5/00; 5/00) (12.50) -- -- (16.41) ES2 Equity Select Fund (5/01; 5/01) (20.17) -- -- (13.63) EI2 Extra Income Fund (9/99; 5/96) (13.48) (4.13) -- (0.33) FI2 Federal Income Fund (9/99; 9/99) (2.10) -- -- 3.43 GB2 Global Bond Fund (9/99; 5/96) 6.60 2.25 -- 3.55 GR2 Growth Fund (9/99; 9/99) (31.57) -- -- (21.65) IE2 International Fund (9/99; 1/92) (24.31) (7.93) 0.62 0.34 MF2 Managed Fund (9/99; 4/86) (19.40) (1.92) 5.23 7.33 ND2 NEW DIMENSIONS FUND(R) (9/99; 5/96) (27.68) (2.05) -- 3.57 IV2 S&P 500 Index Fund (5/00; 5/00) (28.16) -- -- (19.85) SC2 Small Cap Advantage Fund (9/99; 9/99) (23.22) -- -- (5.51) SA2 Strategy Aggressive Fund (9/99; 1/92) (36.97) (10.27) 0.44 1.11 AIM V.I. 2CA Capital Appreciation Fund, Series I Shares (9/99; 5/93) (29.96) (4.35) -- 6.00 2CD Capital Development Fund, Series I Shares (9/99; 5/98) (27.19) -- -- (3.43) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 2IF VP International, Class I (9/99; 5/94) (26.28) (5.01) -- 0.98 2VA VP Value, Class I (9/99; 5/96) (19.12) 1.68 -- 6.88 CALVERT VARIABLE SERIES, INC. 2SR Social Balanced Portfolio (5/00; 9/86) (18.74) (1.50) 5.29 6.54 CREDIT SUISSE TRUST 2EG Emerging Growth Portfolio (9/99; 9/99) (34.52) -- -- (10.42) FIDELITY(R) VIP 2GI Growth & Income Portfolio Service Class (9/99; 12/96)(2) (22.88) (1.54) -- 3.43 2MP Mid Cap Portfolio Service Class (9/99; 12/98)(3) (16.61) -- -- 13.32 2OS Overseas Portfolio Service Class (9/99; 1/87)(3) (26.25) (6.11) 3.35 2.84 FTVIPT 2RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(4) (5.56) 0.24 8.71 8.28 2SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(4) (16.03) -- -- (1.80) 2TF Templeton Foreign Securities Fund - Class 2(3/02; 5/92)(4) (24.61) (4.24) 6.45 5.32 GOLDMAN SACHS VIT 2SE CORE(SM) Small Cap Equity Fund (9/99; 2/98) (21.29) -- -- (2.92) 2UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (27.68) -- -- (4.58) 2MC Mid Cap Value Fund (9/99; 5/98) (11.81) -- -- 1.65
IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 18 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF MAV AND EEB DEATH BENEFIT RIDER AND THE SEVEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT JANUS ASPEN SERIES 2GT Global Technology Portfolio: Service Shares (5/00; 1/00)(5) (45.26%) (42.75%) 2IG International Growth Portfolio: Service Shares (5/00; 5/94)(5) (31.25) (28.51) 2AG Mid Cap Growth Portfolio: Service Shares (5/00; 9/93)(5) (33.43) (39.13) (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) LAZARD RETIREMENT SERIES 2IP International Equity Portfolio (9/99; 9/98) (17.36) (14.43) MFS(R) 2MG Investors Growth Stock Series - Service Class (5/00; 5/99)(6) (33.06) (26.32) 2MD New Discovery Series - Service Class (5/00; 5/98)(6) (36.83) (20.22) PUTNAM VARIABLE TRUST 2IN Putnam VT International New Opportunities Fund - Class IB Shares (9/99; 1/97)(7) (20.06) (17.86) 2VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(7) (35.72) (16.67) ROYCE CAPITAL FUND 2MI Micro-Cap Portfolio (9/99; 12/96) (19.36) 11.29 THIRD AVENUE 2SV Value Portfolio (9/99; 9/99) (17.37) 11.42 WANGER 2IT International Small Cap (9/99; 5/95) (20.24) (11.23) 2SP U.S. Smaller Companies (9/99; 5/95) (22.99) (3.43) WELLS FARGO VT 2AA Asset Allocation Fund (5/01; 4/94)(8) (19.34) (14.51) 2WI International Equity Fund (5/01; 7/00) (28.63) (23.92) 2SG Small Cap Growth Fund (5/01; 5/95)(9) (42.75) (31.45) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT JANUS ASPEN SERIES 2GT Global Technology Portfolio: Service Shares (5/00; 1/00)(5) (45.26%) --% --% (40.10%) 2IG International Growth Portfolio: Service Shares (5/00; 5/94)(5) (31.25) (2.12) -- 6.86 2AG Mid Cap Growth Portfolio: Service Shares (5/00; 9/93)(5) (33.43) (4.44) -- 5.66 (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) LAZARD RETIREMENT SERIES 2IP International Equity Portfolio (9/99; 9/98) (17.36) -- -- (6.29) MFS(R) 2MG Investors Growth Stock Series - Service Class (5/00; 5/99)(6) (33.06) -- -- (11.33) 2MD New Discovery Series - Service Class (5/00; 5/98)(6) (36.83) -- -- 0.24 PUTNAM VARIABLE TRUST 2IN Putnam VT International New Opportunities Fund - Class IB Shares (9/99; 1/97)(7) (20.06) (4.54) -- (3.91) 2VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(7) (35.72) (6.23) -- (1.91) ROYCE CAPITAL FUND 2MI Micro-Cap Portfolio (9/99; 12/96) (19.36) 10.26 -- 12.18 THIRD AVENUE 2SV Value Portfolio (9/99; 9/99) (17.37) -- -- 11.42 WANGER 2IT International Small Cap (9/99; 5/95) (20.24) 3.04 -- 9.85 2SP U.S. Smaller Companies (9/99; 5/95) (22.99) 0.74 -- 11.58 WELLS FARGO VT 2AA Asset Allocation Fund (5/01; 4/94)(8) (19.34) 0.14 -- 6.78 2WI International Equity Fund (5/01; 7/00) (28.63) -- -- (22.75) 2SG Small Cap Growth Fund (5/01; 5/95)(9) (42.75) (14.34) -- (3.17)
(a) Current applicable charges deducted from fund performance include a $30 annual contract administrative charge,a 0.15% annual MAV fee, a 0.30% annual EEB fee, a 0.75% annual mortality and expense risk fee, and applicable surrender charges. Premium taxes and purchase payment credits are not reflected in these total returns. (b) Cumulative return (not annualized) since commencement date of the subaccount. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 19 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES (WITHOUT PURCHASE PAYMENT CREDITS) WITHOUT SURRENDER AND SELECTION OF MAV AND EEB BENEFIT RIDERS FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC2 Blue Chip Advantage Fund (9/99; 9/99)(1) (23.76%) (13.17%) BD2 Bond Fund (9/99; 10/81) 4.23 4.92 CR2 Capital Resource Fund (9/99; 10/81) (23.13) (14.83) CM2 Cash Management Fund (9/99; 10/81) (0.11) 2.40 DE2 Diversified Equity Income Fund (9/99; 9/99) (20.15) (5.72) EM2 Emerging Markets Fund (5/00; 5/00) (6.66) (14.39) ES2 Equity Select Fund (5/01; 5/01) (14.91) (10.27) EI2 Extra Income Fund (9/99; 5/96) (7.72) (4.21) FI2 Federal Income Fund (9/99; 9/99) 4.52 5.08 GB2 Global Bond Fund (9/99; 5/96) 13.60 4.62 GR2 Growth Fund (9/99; 9/99) (27.17) (20.32) IE2 International Fund (9/99; 1/92) (19.36) (17.00) MF2 Managed Fund (9/99; 4/86) (14.09) (6.33) ND2 NEW DIMENSIONS FUND(R) (9/99; 5/96) (22.99) (10.70) IV2 S&P 500 Index Fund (5/00; 5/00) (23.51) (17.93) SC2 Small Cap Advantage Fund (9/99; 9/99) (18.19) (3.90) SA2 Strategy Aggressive Fund (9/99; 1/92) (32.98) (16.85) AIM V.I. 2CA Capital Appreciation Fund, Series I Shares (9/99; 5/93) (25.44) (11.85) 2CD Capital Development Fund, Series I Shares (9/99; 5/98) (22.46) (1.01) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 2IF VP International, Class I (9/99; 5/94) (21.48) (12.12) 2VA VP Value, Class I (9/99; 5/96) (13.79) 1.26 CALVERT VARIABLE SERIES, INC. 2SR Social Balanced Portfolio (5/00; 9/86) (13.37) (9.75) CREDIT SUISSE TRUST 2EG Emerging Growth Portfolio (9/99; 9/99) (30.35) (8.32) FIDELITY(R) VIP 2GI Growth & Income Portfolio Service Class (9/99; 12/96)(2) (17.83) (8.43) 2MP Mid Cap Portfolio Service Class (9/99; 12/98)(3) (11.09) 11.15 2OS Overseas Portfolio Service Class (9/99; 1/87)(3) (21.45) (14.33) FTVIPT 2RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(4) 0.79 9.69 2SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(4) (10.46) 6.45 2TF Templeton Foreign Securities Fund - Class 2 (3/02; 5/92)(4) -- (17.32)(b) GOLDMAN SACHS VIT 2SE CORE(SM) Small Cap Equity Fund (9/99; 2/98) (16.12) (0.21) 2UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (22.99) (11.49) 2MC Mid Cap Value Fund (9/99; 5/98) (5.92) 8.13 PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC2 Blue Chip Advantage Fund (9/99; 9/99)(1) (23.76%) --% --% (13.17%) BD2 Bond Fund (9/99; 10/81) 4.23 3.04 5.65 8.71 CR2 Capital Resource Fund (9/99; 10/81) (23.13) (5.37) 2.50 8.83 CM2 Cash Management Fund (9/99; 10/81) (0.11) 2.81 2.98 4.83 DE2 Diversified Equity Income Fund (9/99; 9/99) (20.15) -- -- (5.72) EM2 Emerging Markets Fund (5/00; 5/00) (6.66) -- -- (14.39) ES2 Equity Select Fund (5/01; 5/01) (14.91) -- -- (10.27) EI2 Extra Income Fund (9/99; 5/96) (7.72) (3.25) -- (0.06) FI2 Federal Income Fund (9/99; 9/99) 4.52 -- -- 5.08 GB2 Global Bond Fund (9/99; 5/96) 13.60 3.15 -- 3.79 GR2 Growth Fund (9/99; 9/99) (27.17) -- -- (20.32) IE2 International Fund (9/99; 1/92) (19.36) (7.11) 0.62 0.34 MF2 Managed Fund (9/99; 4/86) (14.09) (1.04) 5.23 7.33 ND2 NEW DIMENSIONS FUND(R) (9/99; 5/96) (22.99) (1.17) -- 3.82 IV2 S&P 500 Index Fund (5/00; 5/00) (23.51) -- -- (17.93) SC2 Small Cap Advantage Fund (9/99; 9/99) (18.19) -- -- (3.90) SA2 Strategy Aggressive Fund (9/99; 1/92) (32.98) (9.49) 0.44 1.11 AIM V.I. 2CA Capital Appreciation Fund, Series I Shares (9/99; 5/93) (25.44) (3.50) -- 6.00 2CD Capital Development Fund, Series I Shares (9/99; 5/98) (22.46) -- -- (2.51) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 2IF VP International, Class I (9/99; 5/94) (21.48) (4.16) -- 0.98 2VA VP Value, Class I (9/99; 5/96) (13.79) 2.60 -- 7.08 CALVERT VARIABLE SERIES, INC. 2SR Social Balanced Portfolio (5/00; 9/86) (13.37) (0.61) 5.29 6.54 CREDIT SUISSE TRUST 2EG Emerging Growth Portfolio (9/99; 9/99) (30.35) -- -- (8.89) FIDELITY(R) VIP 2GI Growth & Income Portfolio Service Class (9/99; 12/96)(2) (17.83) (0.65) -- 3.71 2MP Mid Cap Portfolio Service Class (9/99; 12/98)(3) (11.09) -- -- 14.17 2OS Overseas Portfolio Service Class (9/99; 1/87)(3) (21.45) (5.28) 3.35 2.84 FTVIPT 2RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(4) 0.79 1.17 8.71 8.28 2SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(4) (10.46) -- -- (0.85) 2TF Templeton Foreign Securities Fund - Class 2 (3/02; 5/92)(4) (19.69) (3.38) 6.45 5.32 GOLDMAN SACHS VIT 2SE CORE(SM) Small Cap Equity Fund (9/99; 2/98) (16.12) -- -- (2.02) 2UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (22.99) -- -- (3.70) 2MC Mid Cap Value Fund (9/99; 5/98) (5.92) -- -- 2.64
IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 20 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES (WITHOUT PURCHASE PAYMENT CREDITS) WITHOUT SURRENDER AND SELECTION OF MAV AND EEB BENEFIT RIDERS FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT JANUS ASPEN SERIES 2GT Global Technology Portfolio: Service Shares (5/00; 1/00)(5) (41.89%) (41.39%) 2IG International Growth Portfolio: Service Shares (5/00; 5/94)(5) (26.83) (26.81) 2AG Mid Cap Growth Portfolio: Service Shares (5/00; 9/93)(5) (29.17) (37.67) (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) LAZARD RETIREMENT SERIES 2IP International Equity Portfolio (9/99; 9/98) (11.89) (12.97) MFS(R) 2MG Investors Growth Stock Series - Service Class (5/00; 5/99)(6) (28.77) (24.56) 2MD New Discovery Series - Service Class (5/00; 5/98)(6) (32.83) (18.32) PUTNAM VARIABLE TRUST 2IN Putnam VT International New Opportunities Fund - Class IB Shares (9/99; 1/97)(7) (14.79) (16.46) 2VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(7) (31.64) (15.25) ROYCE CAPITAL FUND 2MI Micro-Cap Portfolio (9/99; 12/96) (14.04) 12.70 THIRD AVENUE 2SV Value Portfolio (9/99; 9/99) (11.91) 12.83 WANGER 2IT International Small Cap (9/99; 5/95) (14.99) (9.72) 2SP U.S. Smaller Companies (9/99; 5/95) (17.95) (1.78) WELLS FARGO VT 2AA Asset Allocation Fund (5/01; 4/94)(8) (14.02) (11.15) 2WI International Equity Fund (5/01; 7/00) (24.01) (21.00) 2SG Small Cap Growth Fund (5/01; 5/95)(9) (39.20) (28.85) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT JANUS ASPEN SERIES 2GT Global Technology Portfolio: Service Shares (5/00; 1/00)(5) (41.89%) --% --% (38.88%) 2IG International Growth Portfolio: Service Shares (5/00; 5/94)(5) (26.83) (1.25) -- 6.86 2AG Mid Cap Growth Portfolio: Service Shares (5/00; 9/93)(5) (29.17) (3.60) -- 5.66 (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) LAZARD RETIREMENT SERIES 2IP International Equity Portfolio (9/99; 9/98) (11.89) -- -- (5.28) MFS(R) 2MG Investors Growth Stock Series - Service Class (5/00; 5/99)(6) (28.77) -- -- (10.02) 2MD New Discovery Series - Service Class (5/00; 5/98)(6) (32.83) -- -- 1.19 PUTNAM VARIABLE TRUST 2IN Putnam VT International New Opportunities Fund - Class IB Shares (9/99; 1/97)(7) (14.79) (3.67) -- (3.32) 2VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(7) (31.64) (5.42) -- (1.34) ROYCE CAPITAL FUND 2MI Micro-Cap Portfolio (9/99; 12/96) (14.04) 10.93 -- 12.37 THIRD AVENUE 2SV Value Portfolio (9/99; 9/99) (11.91) -- -- 12.83 WANGER 2IT International Small Cap (9/99; 5/95) (14.99) 3.92 -- 9.85 2SP U.S. Smaller Companies (9/99; 5/95) (17.95) 1.64 -- 11.58 WELLS FARGO VT 2AA Asset Allocation Fund (5/01; 4/94)(8) (14.02) 1.05 -- 6.78 2WI International Equity Fund (5/01; 7/00) (24.01) -- -- (20.73) 2SG Small Cap Growth Fund (5/01; 5/95)(9) (39.20) (13.61) -- (3.17)
(a) Current applicable charges deducted from fund performance include a $30 annual contract administrative charge, a 0.15% annual MAV fee, a 0.30% annual EEB fee, and a 0.75% annual mortality and expense risk fee. Premium taxes and purchase payment credits are not reflected in these total returns. (b) Cumulative return (not annualized) since commencement date of the subaccount. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 21 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF A TEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC2 Blue Chip Advantage Fund (9/99; 9/99)(1) (28.65%) (14.44%) BD2 Bond Fund (9/99; 10/81) (2.90) 3.44 CR2 Capital Resource Fund (9/99; 10/81) (28.06) (16.06) CM2 Cash Management Fund (9/99; 10/81) (6.89) 0.84 DE2 Diversified Equity Income Fund (9/99; 9/99) (25.33) (7.14) EM2 Emerging Markets Fund (5/00; 5/00) (12.91) (16.27) ES2 Equity Select Fund (5/01; 5/01) (20.51) (13.69) EI2 Extra Income Fund (9/99; 5/96) (13.89) (5.65) FI2 Federal Income Fund (9/99; 9/99) (2.63) 3.61 GB2 Global Bond Fund (9/99; 5/96) 6.05 3.14 GR2 Growth Fund (9/99; 9/99) (31.78) (21.44) IE2 International Fund (9/99; 1/92) (24.60) (18.19) MF2 Managed Fund (9/99; 4/86) (19.75) (7.73) ND2 NEW DIMENSIONS FUND(R) (9/99; 5/96) (27.94) (12.01) IV2 S&P 500 Index Fund (5/00; 5/00) (28.41) (19.70) SC2 Small Cap Advantage Fund (9/99; 9/99) (23.52) (5.34) SA2 Strategy Aggressive Fund (9/99; 1/92) (37.12) (18.04) AIM V.I. 2CA Capital Appreciation Fund, Series I Shares (9/99; 5/93) (30.19) (13.14) 2CD Capital Development Fund, Series I Shares (9/99; 5/98) (27.45) (2.51) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 2IF VP International, Class I (9/99; 5/94) (26.55) (13.40) 2VA VP Value, Class I (9/99; 5/96) (19.47) (0.30) CALVERT VARIABLE SERIES, INC. 2SR Social Balanced Portfolio (5/00; 9/86) (19.09) (11.77) CREDIT SUISSE TRUST 2EG Emerging Growth Portfolio (9/99; 9/99) (34.71) (9.69) FIDELITY(R) VIP 2GI Growth & Income Portfolio Service Class (9/99; 12/96)(2) (23.19) (9.79) 2MP Mid Cap Portfolio Service Class (9/99; 12/98)(3) (16.98) 9.92 2OS Overseas Portfolio Service Class (9/99; 1/87)(3) (26.52) (15.57) FTVIPT 2RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(4) (6.06) 8.41 2SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(4) (16.41) 5.03 2TF Templeton Foreign Securities Fund - Class 2 (3/02; 5/92)(4) -- (22.72)(b) GOLDMAN SACHS VIT 2SE CORE(SM) Small Cap Equity Fund (9/99; 2/98) (21.62) (1.72) 2UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (27.94) (12.80) 2MC Mid Cap Value Fund (9/99; 5/98) (12.23) 6.79 PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC2 Blue Chip Advantage Fund (9/99; 9/99)(1) (28.65%) --% --% (14.44%) BD2 Bond Fund (9/99; 10/81) (2.90) 2.24 5.98 9.16 CR2 Capital Resource Fund (9/99; 10/81) (28.06) (6.11) 2.80 9.28 CM2 Cash Management Fund (9/99; 10/81) (6.89) 2.00 3.28 5.28 DE2 Diversified Equity Income Fund (9/99; 9/99) (25.33) -- -- (7.14) EM2 Emerging Markets Fund (5/00; 5/00) (12.91) -- -- (16.27) ES2 Equity Select Fund (5/01; 5/01) (20.51) -- -- (13.69) EI2 Extra Income Fund (9/99; 5/96) (13.89) (4.05) -- (0.30) FI2 Federal Income Fund (9/99; 9/99) (2.63) -- -- 3.61 GB2 Global Bond Fund (9/99; 5/96) 6.05 2.35 -- 3.64 GR2 Growth Fund (9/99; 9/99) (31.78) -- -- (21.44) IE2 International Fund (9/99; 1/92) (24.60) (7.83) 0.90 0.79 MF2 Managed Fund (9/99; 4/86) (19.75) (1.85) 5.55 7.78 ND2 NEW DIMENSIONS FUND(R) (9/99; 5/96) (27.94) (1.97) -- 3.67 IV2 S&P 500 Index Fund (5/00; 5/00) (28.41) -- -- (19.70) SC2 Small Cap Advantage Fund (9/99; 9/99) (23.52) -- -- (5.34) SA2 Strategy Aggressive Fund (9/99; 1/92) (37.12) (10.15) 0.72 1.56 AIM V.I. 2CA Capital Appreciation Fund, Series I Shares (9/99; 5/93) (30.19) (4.26) -- 6.33 2CD Capital Development Fund, Series I Shares (9/99; 5/98) (27.45) -- -- (3.37) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 2IF VP International, Class I (9/99; 5/94) (26.55) (4.92) -- 1.11 2VA VP Value, Class I (9/99; 5/96) (19.47) 1.78 -- 7.03 CALVERT VARIABLE SERIES, INC. 2SR Social Balanced Portfolio (5/00; 9/86) (19.09) (1.43) 5.62 6.99 CREDIT SUISSE TRUST 2EG Emerging Growth Portfolio (9/99; 9/99) (34.71) -- -- (10.24) FIDELITY(R) VIP 2GI Growth & Income Portfolio Service Class (9/99; 12/96)(2) (23.19) (1.46) -- 3.47 2MP Mid Cap Portfolio Service Class (9/99; 12/98)(3) (16.98) -- -- 13.45 2OS Overseas Portfolio Service Class (9/99; 1/87)(3) (26.52) (6.02) 3.65 3.29 FTVIPT 2RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(4) (6.06) 0.30 9.06 8.73 2SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(4) (16.41) -- -- (1.75) 2TF Templeton Foreign Securities Fund - Class 2 (3/02; 5/92)(4) (24.90) (4.15) 6.79 5.77 GOLDMAN SACHS VIT 2SE CORE(SM) Small Cap Equity Fund (9/99; 2/98) (21.62) -- -- (2.85) 2UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (27.94) -- -- (4.50) 2MC Mid Cap Value Fund (9/99; 5/98) (12.23) -- -- 1.72
IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 22 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF A TEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT JANUS ASPEN SERIES 2GT Global Technology Portfolio: Service Shares (5/00; 1/00)(5) (45.32%) (42.51%) 2IG International Growth Portfolio: Service Shares (5/00; 5/94)(5) (31.47) (28.33) 2AG Mid Cap Growth Portfolio: Service Shares (5/00; 9/93)(5) (33.62) (38.91) (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) LAZARD RETIREMENT SERIES 2IP International Equity Portfolio (9/99; 9/98) (17.73) (14.24) MFS(R) 2MG Investors Growth Stock Series - Service Class (5/00; 5/99)(6) (33.26) (26.15) 2MD New Discovery Series - Service Class (5/00; 5/98)(6) (36.99) (20.06) PUTNAM VARIABLE TRUST 2IN Putnam VT International New Opportunities Fund - Class IB Shares (9/99; 1/97)(7) (20.40) (17.66) 2VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(7) (35.89) (16.47) ROYCE CAPITAL FUND 2MI Micro-Cap Portfolio (9/99; 12/96) (19.71) 11.52 THIRD AVENUE 2SV Value Portfolio (9/99; 9/99) (17.74) 11.65 WANGER 2IT International Small Cap (9/99; 5/95) (20.58) (11.05) 2SP U.S. Smaller Companies (9/99; 5/95) (23.30) (3.28) WELLS FARGO VT 2AA Asset Allocation Fund (5/01; 4/94)(8) (19.68) (14.56) 2WI International Equity Fund (5/01; 7/00) (28.88) (23.92) 2SG Small Cap Growth Fund (5/01; 5/95)(9) (42.85) (31.40) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT JANUS ASPEN SERIES 2GT Global Technology Portfolio: Service Shares (5/00; 1/00)(5) (45.32%) --% --% (39.85%) 2IG International Growth Portfolio: Service Shares (5/00; 5/94)(5) (31.47) (2.03) -- 7.11 2AG Mid Cap Growth Portfolio: Service Shares (5/00; 9/93)(5) (33.62) (4.34) -- 5.98 (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) LAZARD RETIREMENT SERIES 2IP International Equity Portfolio (9/99; 9/98) (17.73) -- -- (6.26) MFS(R) 2MG Investors Growth Stock Series - Service Class (5/00; 5/99)(6) (33.26) -- -- (11.12) 2MD New Discovery Series - Service Class (5/00; 5/98)(6) (36.99) -- -- 0.28 PUTNAM VARIABLE TRUST 2IN Putnam VT International New Opportunities Fund - Class IB Shares (9/99; 1/97)(7) (20.40) (4.45) -- (3.77) 2VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(7) (35.89) (6.13) -- (1.76) ROYCE CAPITAL FUND 2MI Micro-Cap Portfolio (9/99; 12/96) (19.71) 10.46 -- 12.36 THIRD AVENUE 2SV Value Portfolio (9/99; 9/99) (17.74) -- -- 11.65 WANGER 2IT International Small Cap (9/99; 5/95) (20.58) 3.16 -- 10.03 2SP U.S. Smaller Companies (9/99; 5/95) (23.30) 0.80 -- 11.79 WELLS FARGO VT 2AA Asset Allocation Fund (5/01; 4/94)(8) (19.68) 0.21 -- 7.03 2WI International Equity Fund (5/01; 7/00) (28.88) -- -- (22.61) 2SG Small Cap Growth Fund (5/01; 5/95)(9) (42.85) (14.21) -- (3.17)
(a) Current applicable charges deducted from fund performance include a $30 annual contract administrative charge, a 0.75% annual mortality and expense risk fee, and applicable surrender charges. Premium taxes and purchase payment credits are not reflected in these total returns. (b) Cumulative return (not annualized) since commencement date of the subaccount. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 23 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF A SEVEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC2 Blue Chip Advantage Fund (9/99; 9/99)(1) (27.98%) (14.19%) BD2 Bond Fund (9/99; 10/81) (1.95) 3.72 CR2 Capital Resource Fund (9/99; 10/81) (27.39) (15.82) CM2 Cash Management Fund (9/99; 10/81) (5.98) 1.13 DE2 Diversified Equity Income Fund (9/99; 9/99) (24.62) (6.86) EM2 Emerging Markets Fund (5/00; 5/00) (12.08) (15.98) ES2 Equity Select Fund (5/01; 5/01) (19.75) (13.20) EI2 Extra Income Fund (9/99; 5/96) (13.06) (5.38) FI2 Federal Income Fund (9/99; 9/99) (1.68) 3.89 GB2 Global Bond Fund (9/99; 5/96) 7.05 3.42 GR2 Growth Fund (9/99; 9/99) (31.15) (21.22) IE2 International Fund (9/99; 1/92) (23.89) (17.95) MF2 Managed Fund (9/99; 4/86) (18.98) (7.46) ND2 NEW DIMENSIONS FUND(R) (9/99; 5/96) (27.26) (11.75) IV2 S&P 500 Index Fund (5/00; 5/00) (27.75) (19.42) SC2 Small Cap Advantage Fund (9/99; 9/99) (22.80) (5.07) SA2 Strategy Aggressive Fund (9/99; 1/92) (36.55) (17.80) AIM V.I. 2CA Capital Appreciation Fund, Series I Shares (9/99; 5/93) (29.54) (12.89) 2CD Capital Development Fund, Series I Shares (9/99; 5/98) (26.77) (2.23) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 2IF VP International, Class I (9/99; 5/94) (25.86) (13.15) 2VA VP Value, Class I (9/99; 5/96) (18.71) (0.00) CALVERT VARIABLE SERIES, INC. 2SR Social Balanced Portfolio (5/00; 9/86) (18.32) (11.46) CREDIT SUISSE TRUST 2EG Emerging Growth Portfolio (9/99; 9/99) (34.11) (9.43) FIDELITY(R) VIP 2GI Growth & Income Portfolio Service Class (9/99; 12/96)(2) (22.46) (9.53) 2MP Mid Cap Portfolio Service Class (9/99; 12/98)(3) (16.19) 10.16 2OS Overseas Portfolio Service Class (9/99; 1/87)(3) (25.83) (15.33) FTVIPT 2RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(4) (5.14) 8.66 2SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(4) (15.61) 5.30 2TF Templeton Foreign Securities Fund - Class 2 (3/02; 5/92)(4) -- (21.99)(b) GOLDMAN SACHS VIT 2SE CORE(SM) Small Cap Equity Fund (9/99; 2/98) (20.87) (1.44) 2UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (27.27) (12.54) 2MC Mid Cap Value Fund (9/99; 5/98) (11.39) 7.05 PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC2 Blue Chip Advantage Fund (9/99; 9/99)(1) (27.98%) --% --% (14.19%) BD2 Bond Fund (9/99; 10/81) (1.95) 2.60 6.10 9.16 CR2 Capital Resource Fund (9/99; 10/81) (27.39) (5.77) 2.95 9.28 CM2 Cash Management Fund (9/99; 10/81) (5.98) 2.37 3.43 5.28 DE2 Diversified Equity Income Fund (9/99; 9/99) (24.62) -- -- (6.86) EM2 Emerging Markets Fund (5/00; 5/00) (12.08) -- -- (15.98) ES2 Equity Select Fund (5/01; 5/01) (19.75) -- -- (13.20) EI2 Extra Income Fund (9/99; 5/96) (13.06) (3.68) -- 0.12 FI2 Federal Income Fund (9/99; 9/99) (1.68) -- -- 3.89 GB2 Global Bond Fund (9/99; 5/96) 7.05 2.71 -- 4.01 GR2 Growth Fund (9/99; 9/99) (31.15) -- -- (21.22) IE2 International Fund (9/99; 1/92) (23.89) (7.49) 1.07 0.79 MF2 Managed Fund (9/99; 4/86) (18.98) (1.48) 5.68 7.78 ND2 NEW DIMENSIONS FUND(R) (9/99; 5/96) (27.26) (1.60) -- 4.03 IV2 S&P 500 Index Fund (5/00; 5/00) (27.75) -- -- (19.42) SC2 Small Cap Advantage Fund (9/99; 9/99) (22.80) -- -- (5.07) SA2 Strategy Aggressive Fund (9/99; 1/92) (36.55) (9.83) 0.89 1.56 AIM V.I. 2CA Capital Appreciation Fund, Series I Shares (9/99; 5/93) (29.54) (3.91) -- 6.45 2CD Capital Development Fund, Series I Shares (9/99; 5/98) (26.77) -- -- (2.99) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 2IF VP International, Class I (9/99; 5/94) (25.86) (4.57) -- 1.43 2VA VP Value, Class I (9/99; 5/96) (18.71) 2.15 -- 7.33 CALVERT VARIABLE SERIES, INC. 2SR Social Balanced Portfolio (5/00; 9/86) (18.32) (1.06) 5.74 6.99 CREDIT SUISSE TRUST 2EG Emerging Growth Portfolio (9/99; 9/99) (34.11) -- -- (9.98) FIDELITY(R) VIP 2GI Growth & Income Portfolio Service Class (9/99; 12/96)(2) (22.46) (1.10) -- 3.89 2MP Mid Cap Portfolio Service Class (9/99; 12/98)(3) (16.19) -- -- 13.79 2OS Overseas Portfolio Service Class (9/99; 1/87)(3) (25.83) (5.67) 3.80 3.29 FTVIPT 2RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(4) (5.14) 0.68 9.16 8.73 2SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(4) (15.61) -- -- (1.36) 2TF Templeton Foreign Securities Fund - Class 2 (3/02; 5/92)(4) (24.19) (3.79) 6.90 5.77 GOLDMAN SACHS VIT 2SE CORE(SM) Small Cap Equity Fund (9/99; 2/98) (20.87) -- -- (2.48) 2UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (27.27) -- -- (4.13) 2MC Mid Cap Value Fund (9/99; 5/98) (11.39) -- -- 2.12
IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 24 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF A SEVEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT JANUS ASPEN SERIES 2GT Global Technology Portfolio: Service Shares (5/00; 1/00)(5) (44.84%) (42.31%) 2IG International Growth Portfolio: Service Shares (5/00; 5/94)(5) (30.83) (28.08) 2AG Mid Cap Growth Portfolio: Service Shares (5/00; 9/93)(5) (33.01) (38.70) (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) LAZARD RETIREMENT SERIES 2IP International Equity Portfolio (9/99; 9/98) (16.94) (13.99) MFS(R) 2MG Investors Growth Stock Series - Service Class (5/00; 5/99)(6) (32.64) (25.89) 2MD New Discovery Series - Service Class (5/00; 5/98)(6) (36.41) (19.78) PUTNAM VARIABLE TRUST 2IN Putnam VT International New Opportunities Fund - Class IB Shares (9/99; 1/97)(7) (19.64) (17.42) 2VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(7) (35.30) (16.23) ROYCE CAPITAL FUND 2MI Micro-Cap Portfolio (9/99; 12/96) (18.94) 11.76 THIRD AVENUE 2SV Value Portfolio (9/99; 9/99) (16.95) 11.89 WANGER 2IT International Small Cap (9/99; 5/95) (19.82) (10.79) 2SP U.S. Smaller Companies (9/99; 5/95) (22.57) (2.99) WELLS FARGO VT 2AA Asset Allocation Fund (5/01; 4/94)(8) (18.92) (14.08) 2WI International Equity Fund (5/01; 7/00) (28.21) (23.49) 2SG Small Cap Growth Fund (5/01; 5/95)(9) (42.33) (31.02) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT JANUS ASPEN SERIES 2GT Global Technology Portfolio: Service Shares (5/00; 1/00)(5) (44.84%) --% --% (39.67%) 2IG International Growth Portfolio: Service Shares (5/00; 5/94)(5) (30.83) (1.67) -- 7.31 2AG Mid Cap Growth Portfolio: Service Shares (5/00; 9/93)(5) (33.01) (4.00) -- 6.11 (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) LAZARD RETIREMENT SERIES 2IP International Equity Portfolio (9/99; 9/98) (16.94) -- -- (5.85) MFS(R) 2MG Investors Growth Stock Series - Service Class (5/00; 5/99)(6) (32.64) -- -- (10.89) 2MD New Discovery Series - Service Class (5/00; 5/98)(6) (36.41) -- -- 0.68 PUTNAM VARIABLE TRUST 2IN Putnam VT International New Opportunities Fund - Class IB Shares (9/99; 1/97)(7) (19.64) (4.09) -- (3.46) 2VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(7) (35.30) (5.79) -- (1.47) ROYCE CAPITAL FUND 2MI Micro-Cap Portfolio (9/99; 12/96) (18.94) 10.73 -- 12.64 THIRD AVENUE 2SV Value Portfolio (9/99; 9/99) (16.95) -- -- 11.89 WANGER 2IT International Small Cap (9/99; 5/95) (19.82) 3.51 -- 10.30 2SP U.S. Smaller Companies (9/99; 5/95) (22.57) 1.18 -- 12.03 WELLS FARGO VT 2AA Asset Allocation Fund (5/01; 4/94)(8) (18.92) 0.59 -- 7.23 2WI International Equity Fund (5/01; 7/00) (28.21) -- -- (22.31) 2SG Small Cap Growth Fund (5/01; 5/95)(9) (42.33) (13.90) -- (2.72)
(a) Current applicable charges deducted from fund performance include a $30 annual contract administrative charge, a 0.75% annual mortality and expense risk fee, and applicable surrender charges. Premium taxes and purchase payment credits are not reflected in these total returns. (b) Cumulative return (not annualized) since commencement date of the subaccount. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 25 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES (WITHOUT PURCHASE PAYMENT CREDITS) WITHOUT SURRENDER FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC2 Blue Chip Advantage Fund (9/99; 9/99)(1) (23.31%) (12.72%) BD2 Bond Fund (9/99; 10/81) 4.68 5.37 CR2 Capital Resource Fund (9/99; 10/81) (22.68) (14.38) CM2 Cash Management Fund (9/99; 10/81) 0.34 2.85 DE2 Diversified Equity Income Fund (9/99; 9/99) (19.70) (5.27) EM2 Emerging Markets Fund (5/00; 5/00) (6.21) (13.94) ES2 Equity Select Fund (5/01; 5/01) (14.46) (9.82) EI2 Extra Income Fund (9/99; 5/96) (7.27) (3.76) FI2 Federal Income Fund (9/99; 9/99) 4.97 5.53 GB2 Global Bond Fund (9/99; 5/96) 14.05 5.07 GR2 Growth Fund (9/99; 9/99) (26.72) (19.87) IE2 International Fund (9/99; 1/92) (18.91) (16.55) MF2 Managed Fund (9/99; 4/86) (13.64) (5.88) ND2 NEW DIMENSIONS FUND(R) (9/99; 5/96) (22.54) (10.25) IV2 S&P 500 Index Fund (5/00; 5/00) (23.06) (17.48) SC2 Small Cap Advantage Fund (9/99; 9/99) (17.74) (3.45) SA2 Strategy Aggressive Fund (9/99; 1/92) (32.53) (16.40) AIM V.I. 2CA Capital Appreciation Fund, Series I Shares (9/99; 5/93) (24.99) (11.40) 2CD Capital Development Fund, Series I Shares (9/99; 5/98) (22.01) (0.56) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 2IF VP International, Class I (9/99; 5/94) (21.03) (11.67) 2VA VP Value, Class I (9/99; 5/96) (13.34) 1.71 CALVERT VARIABLE SERIES, INC. 2SR Social Balanced Portfolio (5/00; 9/86) (12.92) (9.30) CREDIT SUISSE TRUST 2EG Emerging Growth Portfolio (9/99; 9/99) (29.90) (7.87) FIDELITY(R) VIP 2GI Growth & Income Portfolio Service Class (9/99; 12/96)(2) (17.38) (7.98) 2MP Mid Cap Portfolio Service Class (9/99; 12/98)(3) (10.64) 11.60 2OS Overseas Portfolio Service Class (9/99; 1/87)(3) (21.00) (13.88) FTVIPT 2RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(4) 1.24 10.14 2SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(4) (10.01) 6.90 2TF Templeton Foreign Securities Fund - Class 2 (3/02; 5/92)(4) -- (16.87)(b) GOLDMAN SACHS VIT 2SE CORE(SM) Small Cap Equity Fund (9/99; 2/98) (15.67) 0.24 2UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (22.54) (11.04) 2MC Mid Cap Value Fund (9/99; 5/98) (5.47) 8.58 PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC2 Blue Chip Advantage Fund (9/99; 9/99)(1) (23.31%) --% --% (12.72%) BD2 Bond Fund (9/99; 10/81) 4.68 3.49 6.10 9.16 CR2 Capital Resource Fund (9/99; 10/81) (22.68) (4.92) 2.95 9.28 CM2 Cash Management Fund (9/99; 10/81) 0.34 3.26 3.43 5.28 DE2 Diversified Equity Income Fund (9/99; 9/99) (19.70) -- -- (5.27) EM2 Emerging Markets Fund (5/00; 5/00) (6.21) -- -- (13.94) ES2 Equity Select Fund (5/01; 5/01) (14.46) -- -- (9.82) EI2 Extra Income Fund (9/99; 5/96) (7.27) (2.80) -- 0.39 FI2 Federal Income Fund (9/99; 9/99) 4.97 -- -- 5.53 GB2 Global Bond Fund (9/99; 5/96) 14.05 3.60 -- 4.24 GR2 Growth Fund (9/99; 9/99) (26.72) -- -- (19.87) IE2 International Fund (9/99; 1/92) (18.91) (6.66) 1.07 0.79 MF2 Managed Fund (9/99; 4/86) (13.64) (0.59) 5.68 7.78 ND2 NEW DIMENSIONS FUND(R) (9/99; 5/96) (22.54) (0.72) -- 4.27 IV2 S&P 500 Index Fund (5/00; 5/00) (23.06) -- -- (17.48) SC2 Small Cap Advantage Fund (9/99; 9/99) (17.74) -- -- (3.45) SA2 Strategy Aggressive Fund (9/99; 1/92) (32.53) (9.04) 0.89 1.56 AIM V.I. 2CA Capital Appreciation Fund, Series I Shares (9/99; 5/93) (24.99) (3.05) -- 6.45 2CD Capital Development Fund, Series I Shares (9/99; 5/98) (22.01) -- -- (2.06) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 2IF VP International, Class I (9/99; 5/94) (21.03) (3.71) -- 1.43 2VA VP Value, Class I (9/99; 5/96) (13.34) 3.05 -- 7.53 CALVERT VARIABLE SERIES, INC. 2SR Social Balanced Portfolio (5/00; 9/86) (12.92) (0.16) 5.74 6.99 CREDIT SUISSE TRUST 2EG Emerging Growth Portfolio (9/99; 9/99) (29.90) -- -- (8.44) FIDELITY(R) VIP 2GI Growth & Income Portfolio Service Class (9/99; 12/96)(2) (17.38) (0.20) -- 4.16 2MP Mid Cap Portfolio Service Class (9/99; 12/98)(3) (10.64) -- -- 14.62 2OS Overseas Portfolio Service Class (9/99; 1/87)(3) (21.00) (4.83) 3.80 3.29 FTVIPT 2RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(4) 1.24 1.62 9.16 8.73 2SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(4) (10.01) -- -- (0.40) 2TF Templeton Foreign Securities Fund - Class 2 (3/02; 5/92)(4) (19.24) (2.93) 6.90 5.77 GOLDMAN SACHS VIT 2SE CORE(SM) Small Cap Equity Fund (9/99; 2/98) (15.67) -- -- (1.57) 2UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (22.54) -- -- (3.25) 2MC Mid Cap Value Fund (9/99; 5/98) (5.47) -- -- 3.09
IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 26 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES (WITHOUT PURCHASE PAYMENT CREDITS) WITHOUT SURRENDER FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT JANUS ASPEN SERIES 2GT Global Technology Portfolio: Service Shares (5/00; 1/00)(5) (41.44%) (40.94%) 2IG International Growth Portfolio: Service Shares (5/00; 5/94)(5) (26.38) (26.36) 2AG Mid Cap Growth Portfolio: Service Shares (5/00; 9/93)(5) (28.72) (37.22) (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) LAZARD RETIREMENT SERIES 2IP International Equity Portfolio (9/99; 9/98) (11.44) (12.52) MFS(R) 2MG Investors Growth Stock Series - Service Class (5/00; 5/99)(6) (28.32) (24.11) 2MD New Discovery Series - Service Class (5/00; 5/98)(6) (32.38) (17.87) PUTNAM VARIABLE TRUST 2IN Putnam VT International New Opportunities Fund - Class IB Shares (9/99; 1/97)(7) (14.34) (16.01) 2VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(7) (31.19) (14.80) ROYCE CAPITAL FUND 2MI Micro-Cap Portfolio (9/99; 12/96) (13.59) 13.15 THIRD AVENUE 2SV Value Portfolio (9/99; 9/99) (11.46) 13.28 WANGER 2IT International Small Cap (9/99; 5/95) (14.54) (9.27) 2SP U.S. Smaller Companies (9/99; 5/95) (17.50) (1.33) WELLS FARGO VT 2AA Asset Allocation Fund (5/01; 4/94)(8) (13.57) (10.70) 2WI International Equity Fund (5/01; 7/00) (23.56) (20.55) 2SG Small Cap Growth Fund (5/01; 5/95)(9) (38.75) (28.40) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT JANUS ASPEN SERIES 2GT Global Technology Portfolio: Service Shares (5/00; 1/00)(5) (41.44%) --% --% (38.43%) 2IG International Growth Portfolio: Service Shares (5/00; 5/94)(5) (26.38) (0.80) -- 7.31 2AG Mid Cap Growth Portfolio: Service Shares (5/00; 9/93)(5) (28.72) (3.15) -- 6.11 (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) LAZARD RETIREMENT SERIES 2IP International Equity Portfolio (9/99; 9/98) (11.44) -- -- (4.83) MFS(R) 2MG Investors Growth Stock Series - Service Class (5/00; 5/99)(6) (28.32) -- -- (9.57) 2MD New Discovery Series - Service Class (5/00; 5/98)(6) (32.38) -- -- 1.64 PUTNAM VARIABLE TRUST 2IN Putnam VT International New Opportunities Fund - Class IB Shares (9/99; 1/97)(7) (14.34) (3.22) -- (2.87) 2VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(7) (31.19) (4.97) -- (0.89) ROYCE CAPITAL FUND 2MI Micro-Cap Portfolio (9/99; 12/96) (13.59) 11.38 -- 12.82 THIRD AVENUE 2SV Value Portfolio (9/99; 9/99) (11.46) -- -- 13.28 WANGER 2IT International Small Cap (9/99; 5/95) (14.54) 4.37 -- 10.30 2SP U.S. Smaller Companies (9/99; 5/95) (17.50) 2.09 -- 12.03 WELLS FARGO VT 2AA Asset Allocation Fund (5/01; 4/94)(8) (13.57) 1.50 -- 7.23 2WI International Equity Fund (5/01; 7/00) (23.56) -- -- (20.28) 2SG Small Cap Growth Fund (5/01; 5/95)(9) (38.75) (13.16) -- (2.72)
(a) Current applicable charges deducted from fund performance include a $30 annual contract administrative charge and a 0.75% annual mortality and expense risk fee. Premium taxes and purchase payment credits are not reflected in these total returns. (b) Cumulative return (not annualized) since commencement date of the subaccount. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 27 NOTES TO PERFORMANCE INFORMATION (1) Commencement date of the subaccount; Commencement date of the fund. (2) Initial offering of the Service Class 2 of each fund took place on Jan. 12, 2000. Returns prior to Jan. 12, 2000 through Nov. 3, 1997 are those of the Service Class, which reflect a 12b-1 fee of 0.10%. Service Class 2 returns prior to Nov. 3, 1997 are those of the Initial Class, which has no 12b-1 fee. If Service Class 2's 12b-1 fee of 0.25% had been reflected, returns prior to Jan. 12, 2000 would have been lower. (3) Initial offering of the Service Class of each fund took place on Nov. 3, 1997 (except VIP Mid Cap which took place on Dec. 28, 1998). Returns prior to Nov. 3, 1997 (or Dec. 28, 1998 for VIP Mid Cap) are those of the Initial Class, which has no 12b-1 fee. If Service Class 2's 12b-1 fee of 0.10% had been reflected, returns prior to Nov. 3, 1997 would have been lower. (4) Ongoing stock market volatility can dramatically change the fund's short-term performance; current results may differ. Because Class 2 shares were not offered until Jan. 6, 1999, standardized Class 2 Fund performance for prior periods represents historical results of Class 1 shares. For periods beginning Jan. 6, 1999 Class 2's results reflect an additional 12b-1 fee expense, which also affects future performance. (5) In recent years returns have sustained significant gains and losses due to market volatility in the technology sector. The returns shown for Service Shares for periods prior to their inception (Dec. 31, 1999) are derived from the historical performance of the Institutional Shares, adjusted to reflect the higher operating expenses of Service Shares. (6) Service Class shares commenced operations in May 2000. Service Class shares carry a 0.25% annual Rule 12b-1 fee. Service Class share performance includes the performance of the series' Initial Class shares for periods prior to the inception of Service Class shares (blended performance). These blended performance figures have not been adjusted to take into account differences in the class-specific operating expenses (such as Rule 12b-1 fees). Because operating expenses of Service Class shares are higher than those of Initial class shares, the blended Service Class share performance is higher than it would have been had the Service Class shares been offered for the entire period. (7) Performance information for Class IB shares for periods prior to April 30, 1998 are based on the performance of the fund's Class IA shares (not offered as an investment option) adjusted to reflect the fees paid by Class IB shares, including a Rule 12b-1 fee of 0.25%.Restated to reflect an increase in 12b-1 fees effective April 30, 2001. Actual 12b-1 fees during the most recent fiscal year were 0.22%. (8) Performance for periods prior to Sept. 20, 1999 reflects performance of the Life and Annuity Trust Asset Allocation Fund, its predecessor fund. Effective at the close of business Sept. 17, 1999, the Life and Annuity Trust Funds were reorganized into the Wells Fargo Variable Trust Funds. (9) Performance for periods prior to Sept. 20, 1999 reflects performance of the Norwest Select Small Company Stock Fund (the accounting survivor of a merger of the Life and Annuity Trust Strategic Growth Fund and the Norwest Select Small Company Stock Fund), its predecessor fund. Effective at the close of business Sept. 17, 1999, the Life and Annuity Trust and Norwest Select Funds were reorganized into the Wells Fargo Variable Trust Funds. CUMULATIVE TOTAL RETURN Cumulative total return represents the cumulative change in the value of an investment for a given period (reflecting change in a subaccount's accumulation unit value). We compute cumulative total return by using 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 the period, at the end of the period (or fractional portion thereof). Total return figures reflect the deduction of the surrender charge which assumes you withdraw the entire contract value at the end of the one, five and ten year periods (or, if less, up to the life of the subaccount). We also may show performance figures without the deduction of a surrender charge. In addition, total return figures reflect the deduction of all other applicable charges including the contract administrative charge and mortality and expense risk fee. ANNUALIZED YIELD FOR A SUBACCOUNT INVESTING IN A MONEY MARKET FUND ANNUALIZED SIMPLE YIELD For a subaccount investing in a money market fund, we base quotations of simple yield on: (a) the change in the value of a hypothetical subaccount (exclusive of capital changes and income other than investment income) at the beginning of a particular seven-day period; (b) less a pro rata share of the subaccount expenses accrued over the period; (c) dividing this difference by the value of the subaccount at the beginning of the period to obtain the base period return; and (d) raising the base period return to the power of 365/7. The subaccount's value includes: - any declared dividends, - the value of any shares purchased with dividends paid during the period, and - any dividends declared for such shares. It does not include: - the effect of any applicable surrender charge, or - any realized or unrealized gains or losses. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 28 ANNUALIZED COMPOUND YIELD We calculate compound yield using the base period return described above, which we then compound according to the following formula: Compound Yield = [(Base Period Return + 1)(TO THE POWER OF 365/7)] - 1 You must consider (when comparing an investment in subaccounts investing in money market funds with fixed annuities) that fixed annuities often provide an agreed-to or guaranteed yield for a stated period of time, whereas the subaccount's yield fluctuates. In comparing the yield of the subaccount to a money market fund, you should consider the different services that the contract provides. ANNUALIZED YIELD BASED ON THE SEVEN-DAY PERIOD ENDED DEC. 31, 2002
SUBACCOUNT INVESTING IN: SIMPLE YIELD COMPOUND YIELD CM1 AXP(R) Variable Portfolio - Cash Management Fund (0.17%) (0.17%) CM2 AXP(R) Variable Portfolio - Cash Management Fund 0.01 0.01
ANNUALIZED YIELD FOR A SUBACCOUNT INVESTING IN AN INCOME FUND For the subaccounts investing in income funds, we base quotations of yield on all investment income earned during a particular 30-day period, less expenses accrued during the period (net investment income) and compute it by dividing net investment income per accumulation unit by the value of an accumulation unit on the last day of the period, according to the following formula: YIELD = 2[( a - b + 1)(TO THE POWER OF 6) - 1] ----- cd where: a = dividends and investment income earned during the period b = expenses accrued for the period (net of reimbursements) c = the average daily number of accumulation units outstanding during the period that were entitled to receive dividends d = the maximum offering price per accumulation unit on the last day of the period The subaccount earns yield from the increase in the net asset value of shares of the fund in which it invests and from dividends declared and paid by the fund, which are automatically invested in shares of the fund. ANNUALIZED YIELD BASED ON THE 30-DAY PERIOD ENDED DEC. 31, 2002
SUBACCOUNT INVESTING IN: YIELD BD1 AXP(R) Variable Portfolio - Bond Fund 5.19% BD2 AXP(R) Variable Portfolio - Bond Fund 5.19 EI1 AXP(R) Variable Portfolio - Extra Income Fund 5.07 EI2 AXP(R) Variable Portfolio - Extra Income Fund 5.08 FI1 AXP(R) Variable Portfolio - Federal Income Fund 2.96 FI2 AXP(R) Variable Portfolio - Federal Income Fund 2.97 GB1 AXP(R) Variable Portfolio - Global Bond Fund 2.48 GB2 AXP(R) Variable Portfolio - Global Bond Fund 2.48
The yield on the subaccount's accumulation unit may fluctuate daily and does not provide a basis for determining future yields. Independent rating or statistical services or publishers or publications such as those listed below may quote subaccount performance, compare it to rankings, yields or returns, or use it in variable annuity accumulation or settlement illustrations they publish or prepare. The Bank Rate Monitor National Index, Barron's, Business Week, CDA Technologies, Donoghue's Money Market Fund Report, Financial Services Week, Financial Times, Financial World, Forbes, Fortune, Global Investor, Institutional Investor, Investor's Business Daily, Kiplinger's Personal Finance, Lipper Analytical Services, Money, Morningstar, 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. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 29 CALCULATING ANNUITY PAYOUTS THE VARIABLE ACCOUNT We do the following calculations separately for each of the subaccounts of the variable account. The separate monthly payouts, added together, make up your total variable annuity payout. INITIAL PAYOUT: To compute your first monthly payment, we: - determine the dollar value of your contract on the valuation date and then deduct any applicable premium tax; then - apply the result to the annuity table contained in the contract or another table at least as favorable. The annuity table shows the amount of the first monthly payment for each $1,000 of value which depends on factors built into the table, as described below. ANNUITY UNITS: We then convert the value of your subaccount to annuity units. To compute the number of units credited to you, we divide the first monthly payment by the annuity unit value (see below) on the valuation date. The number of units in your subaccount is fixed. The value of the units fluctuates with the performance of the underlying fund. SUBSEQUENT PAYOUTS: To compute later payouts, we multiply: - the annuity unit value on the valuation date; by - the fixed number of annuity units credited to you. ANNUITY UNIT VALUES: We originally set this value at $1 for each subaccount. To calculate later values we multiply the last annuity value by the product of: - the net investment factor; and - the neutralizing factor. The purpose of the neutralizing factor is to offset the effect of the assumed rate built into the annuity table. With an assumed investment rate of 5%, the neutralizing factor is 0.999866 for a one day valuation period. NET INVESTMENT FACTOR: We determine the net investment factor by: - adding the fund's current net asset value per share plus the per share amount of any accrued income or capital gain dividends to obtain a current adjusted net asset value per share; then - dividing that sum by the previous adjusted net asset value per share; and - subtracting the percentage factor representing the mortality and expense risk fee from the result. Because the net asset value of the fund may fluctuate, the net investment factor may be greater or less than one, and the annuity unit value may increase or decrease. You bear this investment risk in a subaccount. THE FIXED ACCOUNT We guarantee your fixed annuity payout amounts. Once calculated, your payout will remain the same and never change. To calculate your annuity payouts we: - take the value of your fixed account at the settlement date or the date you selected to begin receiving your annuity payouts; then - using an annuity table, we apply the value according to the annuity payout plan you select. The annuity payout table we use will be the one in effect at the time you choose to begin your annuity payouts. The values in the table will be equal to or greater than the table in your contract. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 30 RATING AGENCIES We receive ratings from independent rating agencies. These agencies evaluate the financial soundness and claims-paying ability of insurance companies on a number of different factors. The ratings reflect each agency's estimation of our ability to meet our contractual obligations such as making annuity payouts and paying death benefits and other distributions. As such, the ratings relate to our fixed account and not to the subaccounts. This information generally does not relate to the management or performance of the subaccounts. For detailed information on the agency ratings given to IDS Life, refer to the American Express Web site at (americanexpress.com/advisors) or contact your sales representative. Or view our current ratings by visiting the agency Web sites directly at: A.M. Best www.ambest.com Fitch www.fitchratings.com Moody's www.moodys.com/insurance A.M. Best -- Rates insurance companies for their financial strength. Fitch (formerly Duff & Phelps) -- Rates insurance companies for their claims-paying ability. Moody's -- Rates insurance companies for their financial strength. PRINCIPAL UNDERWRITER IDS Life serves as principal underwriter for the contract, which it offers on a continuous basis. IDS Life is registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934 as a broker-dealer and is a member of the National Association of Securities Dealers, Inc. (NASD). Our sales representatives are licensed insurance and annuity agents that are registered with the NASD as our representatives. IDS Life is ultimately controlled by American Express Company. IDS Life currently pays underwriting commissions for its role as principal underwriter. For the past three years, the aggregate dollar amount of underwriting commissions paid in its role as principal underwriter has been: 2002: $37,418,102; 2001: $41,792,624; and 2000: $56,851,815. IDS Life retains no underwriting commission from the sale of the contract. INDEPENDENT AUDITORS The financial statements appearing in this SAI have been audited by Ernst & Young LLP (220 South Sixth Street, Suite 1400, Minneapolis, MN 55402) independent auditors, as stated in their report appearing herein. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 31 REPORT OF INDEPENDENT AUDITORS THE BOARD OF DIRECTORS IDS LIFE INSURANCE COMPANY We have audited the accompanying individual statements of assets and liabilities of the segregated asset subaccounts of IDS Life Variable Account 10 - American Express Retirement Advisor Variable Annuity(R) (comprised of subaccounts BC1, BC2, BD1, BD2, CR1, CR2, CM1, CM2, DE1, DE2, EM1, EM2, ES1, ES2, EI1, EI2, FI1, FI2, GB1, GB2, GR1, GR2, IE1, IE2, MF1, MF2, ND1, ND2, IV1, IV2, SC1, SC2, SA1, SA2, 1CA, 2CA, 1CD, 2CD, 1IF, 2IF, 1VA, 2VA, 1SR, 2SR, 1EG, 2EG, 1GI, 2GI, 1MP, 2MP, 1OS, 2OS, 1RE, 2RE, 1SI, 2SI, 1TF, 2TF, 1SE, 2SE, 1UE, 2UE, 1MC, 2MC, 1GT, 2GT, 1IG, 2IG, 1AG, 2AG, 1IP, 2IP, 1MG, 2MG, 1MD, 2MD, 1IN, 2IN, 1VS, 2VS, 1MI, 2MI, 1SV, 2SV, 1IT, 2IT, 1SP, 2SP, 1AA, 2AA, 1WI, 2WI, 1SG and 2SG) as of December 31, 2002, and the related statements of operations and changes in net assets for the periods indicated therein. These financial statements are the responsibility of the management of IDS Life Insurance Company. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned at December 31, 2002 with the affiliated and unaffiliated mutual fund managers. 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 individual financial position of the segregated asset subaccounts of IDS Life Variable Account 10 - American Express Retirement Advisor Variable Annuity(R) at December 31, 2002, and the individual results of their operations and the changes in their net assets for the periods indicated therein, in conformity with accounting principles generally accepted in the United States. /s/ Ernst & Young LLP Minneapolis, Minnesota March 21, 2003 IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 32 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ DECEMBER 31, 2002 BC1 BC2 BD1 BD2 CR1 ASSETS Investments in shares of mutual funds and portfolios: at cost $ 44,894,181 $ 38,974,238 $186,809,428 $182,366,315 $ 33,199,904 ------------------------------------------------------------------------ at market value $ 27,624,292 $ 24,643,541 $188,204,547 $183,885,714 $ 20,453,731 Dividends receivable -- -- 797,556 778,597 -- Accounts receivable from IDS Life for contract purchase payments -- -- 106,913 43,156 74,513 Receivable from mutual funds and portfolios for share redemptions -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Total assets 27,624,292 24,643,541 189,109,016 184,707,467 20,528,244 =================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 23,088 16,222 155,699 119,989 16,666 Contract terminations 481 17,153 -- -- -- Payable to mutual funds and portfolios for investments purchased -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Total liabilities 23,569 33,375 155,699 119,989 16,666 ----------------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 27,517,040 24,503,425 188,198,925 183,649,627 20,417,812 Net assets applicable to contracts in payment period 83,683 106,741 754,392 937,851 93,766 ----------------------------------------------------------------------------------------------------------------------------------- Total net assets $ 27,600,723 $ 24,610,166 $188,953,317 $184,587,478 $ 20,511,578 =================================================================================================================================== Accumulation units outstanding 44,110,404 39,018,752 159,405,103 154,529,994 34,956,260 =================================================================================================================================== Net asset value per accumulation unit $ 0.62 $ 0.63 $ 1.18 $ 1.19 $ 0.58 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ DECEMBER 31, 2002 (CONTINUED) CR2 CM1 CM2 DE1 DE2 ASSETS Investments in shares of mutual funds and portfolios: at cost $ 46,348,886 $250,201,802 $280,636,092 $ 67,334,003 $ 85,854,933 ------------------------------------------------------------------------ at market value $ 30,864,931 $250,182,254 $280,620,683 $ 55,770,767 $ 71,669,272 Dividends receivable -- 190,655 213,338 -- -- Accounts receivable from IDS Life for contract purchase payments -- -- -- 728 -- Receivable from mutual funds and portfolios for share redemptions -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Total assets 30,864,931 250,372,909 280,834,021 55,771,495 71,669,272 =================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 20,126 208,470 184,194 45,978 46,701 Contract terminations 11,464 884,039 30,430 -- 13,682 Payable to mutual funds and portfolios for investments purchased -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Total liabilities 31,590 1,092,509 214,624 45,978 60,383 ----------------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 30,647,685 249,079,091 280,380,189 55,594,588 71,185,748 Net assets applicable to contracts in payment period 185,656 201,309 239,208 130,929 423,141 ----------------------------------------------------------------------------------------------------------------------------------- Total net assets $ 30,833,341 $249,280,400 $280,619,397 $ 55,725,517 $ 71,608,889 =================================================================================================================================== Accumulation units outstanding 52,123,863 228,237,367 255,250,520 67,958,228 86,442,399 =================================================================================================================================== Net asset value per accumulation unit $ 0.59 $ 1.09 $ 1.10 $ 0.82 $ 0.82 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 33 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ DECEMBER 31, 2002 (CONTINUED) EM1 EM2 ES1 ES2 EI1 ASSETS Investments in shares of mutual funds and portfolios: at cost $ 2,838,241 $ 3,582,157 $ 10,718,199 $ 14,666,217 $131,224,012 ------------------------------------------------------------------------ at market value $ 2,621,605 $ 3,223,477 $ 10,277,832 $ 13,907,541 $107,358,600 Dividends receivable -- -- -- -- 443,446 Accounts receivable from IDS Life for contract purchase payments -- -- 39,885 59,720 35,828 Receivable from mutual funds and portfolios for share redemptions -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Total assets 2,621,605 3,223,477 10,317,717 13,967,261 107,837,874 =================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 2,123 2,086 8,097 8,750 88,463 Contract terminations 1,001 5,183 -- -- -- Payable to mutual funds and portfolios for investments purchased -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Total liabilities 3,124 7,269 8,097 8,750 88,463 ----------------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 2,618,481 3,216,208 10,309,620 13,958,511 107,380,080 Net assets applicable to contracts in payment period -- -- -- -- 369,331 ----------------------------------------------------------------------------------------------------------------------------------- Total net assets $ 2,618,481 $ 3,216,208 $ 10,309,620 $ 13,958,511 $107,749,411 =================================================================================================================================== Accumulation units outstanding 3,887,863 4,749,583 12,144,553 16,387,615 122,784,360 =================================================================================================================================== Net asset value per accumulation unit $ 0.67 $ 0.68 $ 0.85 $ 0.85 $ 0.87 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ DECEMBER 31, 2002 (CONTINUED) EI2 FI1 FI2 GB1 GB2 ASSETS Investments in shares of mutual funds and portfolios: at cost $ 98,840,641 $135,569,400 $146,954,000 $ 39,515,405 $ 33,918,086 ------------------------------------------------------------------------ at market value $ 82,528,540 $138,227,005 $149,454,247 $ 42,701,353 $ 36,564,985 Dividends receivable 341,423 334,153 361,715 86,903 74,343 Accounts receivable from IDS Life for contract purchase payments 123,401 -- 252,746 99,287 52,190 Receivable from mutual funds and portfolios for share redemptions -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Total assets 82,993,364 138,561,158 150,068,708 42,887,543 36,691,518 =================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 53,698 113,336 96,886 35,052 23,670 Contract terminations -- 42,094 -- -- -- Payable to mutual funds and portfolios for investments purchased -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Total liabilities 53,698 155,430 96,886 35,052 23,670 ----------------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 82,634,498 138,165,634 149,519,781 42,843,722 36,659,285 Net assets applicable to contracts in payment period 305,168 240,094 452,041 8,769 8,563 ----------------------------------------------------------------------------------------------------------------------------------- Total net assets $ 82,939,666 $138,405,728 $149,971,822 $ 42,852,491 $ 36,667,848 =================================================================================================================================== Accumulation units outstanding 93,845,145 116,147,349 124,866,303 36,626,392 31,132,807 =================================================================================================================================== Net asset value per accumulation unit $ 0.88 $ 1.19 $ 1.20 $ 1.17 $ 1.18 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 34 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ DECEMBER 31, 2002 (CONTINUED) GR1 GR2 IE1 IE2 MF1 ASSETS Investments in shares of mutual funds and portfolios: at cost $125,562,710 $136,449,771 $ 15,523,451 $ 17,063,636 $ 72,011,061 ------------------------------------------------------------------------ at market value $ 56,288,025 $ 64,684,853 $ 10,469,583 $ 10,981,701 $ 52,147,436 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 26,509 -- 7,658 -- 141,004 Receivable from mutual funds and portfolios for share redemptions -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Total assets 56,314,534 64,684,853 10,477,241 10,981,701 52,288,440 =================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 46,792 42,357 8,637 7,150 42,682 Contract terminations -- 9,436 -- 12,608 -- Payable to mutual funds and portfolios for investments purchased -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Total liabilities 46,792 51,793 8,637 19,758 42,682 ----------------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 56,168,373 64,478,819 10,389,582 10,906,875 51,923,400 Net assets applicable to contracts in payment period 99,369 154,241 79,022 55,068 322,358 ----------------------------------------------------------------------------------------------------------------------------------- Total net assets $ 56,267,742 $ 64,633,060 $ 10,468,604 $ 10,961,943 $ 52,245,758 =================================================================================================================================== Accumulation units outstanding 118,986,168 135,693,177 19,189,221 20,011,954 64,613,329 =================================================================================================================================== Net asset value per accumulation unit $ 0.47 $ 0.48 $ 0.54 $ 0.55 $ 0.80 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ DECEMBER 31, 2002 (CONTINUED) MF2 ND1 ND2 IV1 IV2 ASSETS Investments in shares of mutual funds and portfolios: at cost $ 68,814,828 $380,077,682 $387,500,123 $ 51,813,253 $ 50,181,514 ------------------------------------------------------------------------ at market value $ 52,522,647 $239,183,418 $258,058,792 $ 39,375,603 $ 39,381,275 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments -- 82,925 253,743 61,413 53,940 Receivable from mutual funds and portfolios for share redemptions -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Total assets 52,522,647 239,266,343 258,312,535 39,437,016 39,435,215 =================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 34,259 197,907 168,239 32,386 25,460 Contract terminations 35,532 -- -- -- -- Payable to mutual funds and portfolios for investments purchased -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Total liabilities 69,791 197,907 168,239 32,386 25,460 ----------------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 51,990,992 237,850,481 257,246,909 39,239,097 39,304,239 Net assets applicable to contracts in payment period 461,864 1,217,955 897,387 165,533 105,516 ----------------------------------------------------------------------------------------------------------------------------------- Total net assets $ 52,452,856 $239,068,436 $258,144,296 $ 39,404,630 $ 39,409,755 =================================================================================================================================== Accumulation units outstanding 64,272,980 347,841,415 373,715,274 65,010,707 64,770,944 =================================================================================================================================== Net asset value per accumulation unit $ 0.81 $ 0.68 $ 0.69 $ 0.60 $ 0.61 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 35 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ DECEMBER 31, 2002 (CONTINUED) SC1 SC2 SA1 SA2 1CA ASSETS Investments in shares of mutual funds and portfolios: at cost $ 31,848,399 $ 31,721,698 $ 92,571,548 $ 92,185,325 $ 65,990,030 ------------------------------------------------------------------------ at market value $ 25,876,974 $ 25,963,763 $ 30,137,616 $ 32,394,046 $ 32,213,534 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 42,002 5,863 2,054 -- -- Receivable from mutual funds and portfolios for share redemptions -- -- -- -- 90,954 ----------------------------------------------------------------------------------------------------------------------------------- Total assets 25,918,976 25,969,626 30,139,670 32,394,046 32,304,488 =================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 21,448 16,933 25,175 21,322 27,028 Contract terminations -- -- -- 3,615 63,926 Payable to mutual funds and portfolios for investments purchased -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Total liabilities 21,448 16,933 25,175 24,937 90,954 ----------------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 25,886,139 25,935,159 30,013,975 32,280,715 32,141,584 Net assets applicable to contracts in payment period 11,389 17,534 100,520 88,394 71,950 ----------------------------------------------------------------------------------------------------------------------------------- Total net assets $ 25,897,528 $ 25,952,693 $ 30,114,495 $ 32,369,109 $ 32,213,534 =================================================================================================================================== Accumulation units outstanding 29,341,081 29,202,084 55,182,791 58,958,487 48,704,388 =================================================================================================================================== Net asset value per accumulation unit $ 0.88 $ 0.89 $ 0.54 $ 0.55 $ 0.66 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ DECEMBER 31, 2002 (CONTINUED) 2CA 1CD 2CD 1IF 2IF ASSETS Investments in shares of mutual funds and portfolios: at cost $ 61,629,599 $ 30,283,032 $ 28,678,163 $ 37,903,913 $ 31,650,731 ------------------------------------------------------------------------ at market value $ 31,237,556 $ 22,339,872 $ 21,258,824 $ 20,659,489 $ 17,820,812 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments -- -- 5,944 -- -- Receivable from mutual funds and portfolios for share redemptions 28,882 29,924 14,031 20,463 15,024 ----------------------------------------------------------------------------------------------------------------------------------- Total assets 31,266,438 22,369,796 21,278,799 20,679,952 17,835,836 =================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 20,549 18,654 14,031 17,212 11,698 Contract terminations 8,333 11,270 -- 3,251 3,326 Payable to mutual funds and portfolios for investments purchased -- -- 5,944 -- -- ----------------------------------------------------------------------------------------------------------------------------------- Total liabilities 28,882 29,924 19,975 20,463 15,024 ----------------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 31,177,192 22,328,253 21,234,744 20,653,599 17,732,755 Net assets applicable to contracts in payment period 60,364 11,619 24,080 5,890 88,057 ----------------------------------------------------------------------------------------------------------------------------------- Total net assets $ 31,237,556 $ 22,339,872 $ 21,258,824 $ 20,659,489 $ 17,820,812 =================================================================================================================================== Accumulation units outstanding 46,932,398 23,015,401 21,744,568 31,512,150 26,877,828 =================================================================================================================================== Net asset value per accumulation unit $ 0.66 $ 0.97 $ 0.98 $ 0.66 $ 0.66 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 36 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ DECEMBER 31, 2002 (CONTINUED) 1VA 2VA 1SR 2SR 1EG ASSETS Investments in shares of mutual funds and portfolios: at cost $ 54,468,451 $ 48,755,833 $ 9,163,350 $ 8,750,071 $ 26,685,158 ------------------------------------------------------------------------ at market value $ 51,422,340 $ 45,450,469 $ 7,586,830 $ 7,427,146 $ 15,121,078 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 9,647 20,408 996 5,032 -- Receivable from mutual funds and portfolios for share redemptions 42,869 29,898 6,263 4,765 25,927 ----------------------------------------------------------------------------------------------------------------------------------- Total assets 51,474,856 45,500,775 7,594,089 7,436,943 15,147,005 =================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 42,869 29,898 6,263 4,765 12,636 Contract terminations -- -- -- -- 13,291 Payable to mutual funds and portfolios for investments purchased 9,647 20,408 996 5,032 -- ----------------------------------------------------------------------------------------------------------------------------------- Total liabilities 52,516 50,306 7,259 9,797 25,927 ----------------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 51,188,603 45,302,051 7,586,830 7,385,249 15,108,957 Net assets applicable to contracts in payment period 233,737 148,418 -- 41,897 12,121 ----------------------------------------------------------------------------------------------------------------------------------- Total net assets $ 51,422,340 $ 45,450,469 $ 7,586,830 $ 7,427,146 $ 15,121,078 =================================================================================================================================== Accumulation units outstanding 49,161,479 43,221,704 9,832,066 9,519,993 20,303,480 =================================================================================================================================== Net asset value per accumulation unit $ 1.04 $ 1.05 $ 0.77 $ 0.78 $ 0.74 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ DECEMBER 31, 2002 (CONTINUED) 2EG 1GI 2GI 1MP 2MP ASSETS Investments in shares of mutual funds and portfolios: at cost $ 23,414,241 $118,918,314 $108,839,363 $ 99,994,680 $ 93,480,899 ------------------------------------------------------------------------ at market value $ 13,358,282 $ 87,241,397 $ 80,807,747 $ 95,859,248 $ 89,541,825 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments -- 96,764 92,486 48,443 -- Receivable from mutual funds and portfolios for share redemptions 11,613 72,652 52,952 79,614 66,244 ----------------------------------------------------------------------------------------------------------------------------------- Total assets 13,369,895 87,410,813 80,953,185 95,987,305 89,608,069 =================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 8,783 72,652 52,952 79,614 58,683 Contract terminations 2,830 -- -- -- 7,561 Payable to mutual funds and portfolios for investments purchased -- 96,764 92,486 48,443 -- ----------------------------------------------------------------------------------------------------------------------------------- Total liabilities 11,613 169,416 145,438 128,057 66,244 ----------------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 13,349,933 87,016,872 80,721,774 95,717,695 89,378,345 Net assets applicable to contracts in payment period 8,349 224,525 85,973 141,553 163,480 ----------------------------------------------------------------------------------------------------------------------------------- Total net assets $ 13,358,282 $ 87,241,397 $ 80,807,747 $ 95,859,248 $ 89,541,825 =================================================================================================================================== Accumulation units outstanding 17,821,464 117,222,858 108,027,004 68,202,637 63,267,657 =================================================================================================================================== Net asset value per accumulation unit $ 0.75 $ 0.74 $ 0.75 $ 1.40 $ 1.41 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 37 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ DECEMBER 31, 2002 (CONTINUED) 1OS 2OS 1RE 2RE 1SI ASSETS Investments in shares of mutual funds and portfolios: at cost $ 36,193,961 $ 31,093,716 $ 59,985,284 $ 80,892,935 $ 30,161,937 ------------------------------------------------------------------------ at market value $ 20,030,845 $ 17,759,227 $ 60,236,914 $ 80,774,443 $ 28,428,787 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments -- 1,729 105,798 90,108 47,536 Receivable from mutual funds and portfolios for share redemptions 54,889 11,799 49,648 52,521 23,311 ----------------------------------------------------------------------------------------------------------------------------------- Total assets 20,085,734 17,772,755 60,392,360 80,917,072 28,499,634 =================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 16,829 11,799 49,648 52,521 23,311 Contract terminations 38,060 -- -- -- -- Payable to mutual funds and portfolios for investments purchased -- 1,729 105,798 90,108 47,536 ----------------------------------------------------------------------------------------------------------------------------------- Total liabilities 54,889 13,528 155,446 142,629 70,847 ----------------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 19,982,908 17,637,613 60,153,053 80,550,785 28,417,857 Net assets applicable to contracts in payment period 47,937 121,614 83,861 223,658 10,930 ----------------------------------------------------------------------------------------------------------------------------------- Total net assets $ 20,030,845 $ 17,759,227 $ 60,236,914 $ 80,774,443 $ 28,428,787 =================================================================================================================================== Accumulation units outstanding 33,063,100 28,991,255 44,591,201 59,317,320 23,552,851 =================================================================================================================================== Net asset value per accumulation unit $ 0.60 $ 0.61 $ 1.35 $ 1.36 $ 1.21 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ DECEMBER 31, 2002 (CONTINUED) 2SI 1TF 2TF 1SE 2SE ASSETS Investments in shares of mutual funds and portfolios: at cost $ 39,056,521 $ 9,962,355 $ 8,713,923 $ 20,298,140 $ 16,334,839 ------------------------------------------------------------------------ at market value $ 36,181,649 $ 8,025,667 $ 7,044,375 $ 17,719,044 $ 14,306,942 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 55,021 20,652 3,218 3,464 -- Receivable from mutual funds and portfolios for share redemptions 23,460 6,635 4,619 14,885 31,721 ----------------------------------------------------------------------------------------------------------------------------------- Total assets 36,260,130 8,052,954 7,052,212 17,737,393 14,338,663 =================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 23,460 6,635 4,619 14,885 9,482 Contract terminations -- -- -- -- 22,239 Payable to mutual funds and portfolios for investments purchased 55,021 20,652 3,218 3,464 -- ----------------------------------------------------------------------------------------------------------------------------------- Total liabilities 78,481 27,287 7,837 18,349 31,721 ----------------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 36,124,390 8,025,667 7,044,375 17,704,554 14,306,942 Net assets applicable to contracts in payment period 57,259 -- -- 14,490 -- ----------------------------------------------------------------------------------------------------------------------------------- Total net assets $ 36,181,649 $ 8,025,667 $ 7,044,375 $ 17,719,044 $ 14,306,942 =================================================================================================================================== Accumulation units outstanding 29,742,583 9,569,967 8,386,142 17,792,199 14,284,598 =================================================================================================================================== Net asset value per accumulation unit $ 1.21 $ 0.84 $ 0.84 $ 1.00 $ 1.00 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 38 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ DECEMBER 31, 2002 (CONTINUED) 1UE 2UE 1MC 2MC 1GT ASSETS Investments in shares of mutual funds and portfolios: at cost $ 75,101,887 $ 69,913,880 $ 62,803,045 $ 75,794,397 $ 23,373,212 ------------------------------------------------------------------------ at market value $ 50,351,755 $ 48,248,557 $ 61,488,264 $ 72,845,282 $ 7,821,904 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments -- -- 75,990 104,297 31,946 Receivable from mutual funds and portfolios for share redemptions 81,323 88,473 50,314 47,194 6,557 ----------------------------------------------------------------------------------------------------------------------------------- Total assets 50,433,078 48,337,030 61,614,568 72,996,773 7,860,407 =================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 41,956 31,546 50,314 47,194 6,557 Contract terminations 39,367 56,927 -- -- -- Payable to mutual funds and portfolios for investments purchased -- -- 75,990 104,297 31,946 ----------------------------------------------------------------------------------------------------------------------------------- Total liabilities 81,323 88,473 126,304 151,491 38,503 ----------------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 50,201,518 48,078,069 61,311,816 72,805,558 7,775,490 Net assets applicable to contracts in payment period 150,237 170,488 176,448 39,724 46,414 ----------------------------------------------------------------------------------------------------------------------------------- Total net assets $ 50,351,755 $ 48,248,557 $ 61,488,264 $ 72,845,282 $ 7,821,904 =================================================================================================================================== Accumulation units outstanding 75,488,735 71,819,842 47,538,674 56,079,335 31,353,669 =================================================================================================================================== Net asset value per accumulation unit $ 0.67 $ 0.67 $ 1.29 $ 1.30 $ 0.25 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ DECEMBER 31, 2002 (CONTINUED) 2GT 1IG 2IG 1AG 2AG ASSETS Investments in shares of mutual funds and portfolios: at cost $ 25,833,754 $ 55,313,155 $ 57,962,212 $ 34,022,646 $ 35,746,170 ------------------------------------------------------------------------ at market value $ 9,277,408 $ 33,095,580 $ 36,450,370 $ 12,850,476 $ 15,787,355 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments -- 2,711 10,249 -- -- Receivable from mutual funds and portfolios for share redemptions 8,394 27,525 23,872 20,696 15,076 ----------------------------------------------------------------------------------------------------------------------------------- Total assets 9,285,802 33,125,816 36,484,491 12,871,172 15,802,431 =================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 6,131 27,525 23,872 10,814 10,403 Contract terminations 2,263 -- -- 9,882 4,673 Payable to mutual funds and portfolios for investments purchased -- 2,711 10,249 -- -- ----------------------------------------------------------------------------------------------------------------------------------- Total liabilities 8,394 30,236 34,121 20,696 15,076 ----------------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 9,275,069 33,019,050 36,368,040 12,843,276 15,786,218 Net assets applicable to contracts in payment period 2,339 76,530 82,330 7,200 1,137 ----------------------------------------------------------------------------------------------------------------------------------- Total net assets $ 9,277,408 $ 33,095,580 $ 36,450,370 $ 12,850,476 $ 15,787,355 =================================================================================================================================== Accumulation units outstanding 37,199,522 74,111,345 81,189,171 42,883,252 52,428,313 =================================================================================================================================== Net asset value per accumulation unit $ 0.25 $ 0.45 $ 0.45 $ 0.30 $ 0.30 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 39 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ DECEMBER 31, 2002 (CONTINUED) 1IP 2IP 1MG 2MG 1MD ASSETS Investments in shares of mutual funds and portfolios: at cost $ 23,886,769 $ 23,721,864 $ 48,664,041 $ 52,628,771 $ 46,522,104 ------------------------------------------------------------------------ at market value $ 18,542,571 $ 19,063,340 $ 30,233,795 $ 33,834,025 $ 32,375,226 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 55,147 60,937 33,097 -- 54,940 Receivable from mutual funds and portfolios for share redemptions 15,054 12,262 25,068 77,755 26,782 ----------------------------------------------------------------------------------------------------------------------------------- Total assets 18,612,772 19,136,539 30,291,960 33,911,780 32,456,948 =================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 15,054 12,262 25,068 22,204 26,782 Contract terminations -- -- -- 55,551 -- Payable to mutual funds and portfolios for investments purchased 55,147 60,937 33,097 -- 54,940 ----------------------------------------------------------------------------------------------------------------------------------- Total liabilities 70,201 73,199 58,165 77,755 81,722 ----------------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 18,404,290 18,961,181 30,192,889 33,703,372 32,360,327 Net assets applicable to contracts in payment period 138,281 102,159 40,906 130,653 14,899 ----------------------------------------------------------------------------------------------------------------------------------- Total net assets $ 18,542,571 $ 19,063,340 $ 30,233,795 $ 33,834,025 $ 32,375,226 =================================================================================================================================== Accumulation units outstanding 28,853,362 29,531,927 62,662,560 69,576,415 53,383,319 =================================================================================================================================== Net asset value per accumulation unit $ 0.64 $ 0.64 $ 0.48 $ 0.48 $ 0.61 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ DECEMBER 31, 2002 (CONTINUED) 2MD 1IN 2IN 1VS 2VS ASSETS Investments in shares of mutual funds and portfolios: at cost $ 50,668,754 $ 89,224,346 $ 82,784,824 $104,881,721 $ 96,774,996 ------------------------------------------------------------------------ at market value $ 36,167,112 $ 41,539,876 $ 40,533,441 $ 43,207,781 $ 42,343,162 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 44,170 -- -- -- -- Receivable from mutual funds and portfolios for share redemptions 23,439 56,828 33,845 58,530 37,331 ----------------------------------------------------------------------------------------------------------------------------------- Total assets 36,234,721 41,596,704 40,567,286 43,266,311 42,380,493 =================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 23,439 34,803 26,622 36,338 27,890 Contract terminations -- 22,025 7,223 22,192 9,441 Payable to mutual funds and portfolios for investments purchased 44,170 -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Total liabilities 67,609 56,828 33,845 58,530 37,331 ----------------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 36,123,785 41,539,876 40,494,974 43,094,099 42,265,844 Net assets applicable to contracts in payment period 43,327 -- 38,467 113,682 77,318 ----------------------------------------------------------------------------------------------------------------------------------- Total net assets $ 36,167,112 $ 41,539,876 $ 40,533,441 $ 43,207,781 $ 42,343,162 =================================================================================================================================== Accumulation units outstanding 59,272,471 74,769,213 72,394,802 73,929,757 72,032,593 =================================================================================================================================== Net asset value per accumulation unit $ 0.61 $ 0.56 $ 0.56 $ 0.58 $ 0.59 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 40 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ DECEMBER 31, 2002 (CONTINUED) 1MI 2MI 1SV 2SV 1IT ASSETS Investments in shares of mutual funds and portfolios: at cost $ 42,151,857 $ 40,770,371 $ 53,356,127 $ 48,798,829 $ 56,318,783 ------------------------------------------------------------------------ at market value $ 40,649,244 $ 38,660,817 $ 52,631,185 $ 47,432,477 $ 30,548,546 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 41,040 435 19,016 -- 83,364 Receivable from mutual funds and portfolios for share redemptions 33,830 25,473 43,995 45,529 25,291 ----------------------------------------------------------------------------------------------------------------------------------- Total assets 40,724,114 38,686,725 52,694,196 47,478,006 30,657,201 =================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 33,830 25,473 43,995 31,229 25,291 Contract terminations -- -- -- 14,300 -- Payable to mutual funds and portfolios for investments purchased 41,040 435 19,016 -- 83,364 ----------------------------------------------------------------------------------------------------------------------------------- Total liabilities 74,870 25,908 63,011 45,529 108,655 ----------------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 40,607,882 38,657,908 52,596,263 47,253,323 30,456,523 Net assets applicable to contracts in payment period 41,362 2,909 34,922 179,154 92,023 ----------------------------------------------------------------------------------------------------------------------------------- Total net assets $ 40,649,244 $ 38,660,817 $ 52,631,185 $ 47,432,477 $ 30,548,546 =================================================================================================================================== Accumulation units outstanding 27,062,756 25,593,111 35,109,537 31,335,136 42,308,837 =================================================================================================================================== Net asset value per accumulation unit $ 1.50 $ 1.51 $ 1.50 $ 1.51 $ 0.72 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ DECEMBER 31, 2002 (CONTINUED) 2IT 1SP 2SP 1AA 2AA ASSETS Investments in shares of mutual funds and portfolios: at cost $ 54,627,197 $ 77,745,653 $ 83,474,024 $ 10,976,894 $ 13,868,125 ------------------------------------------------------------------------ at market value $ 31,617,592 $ 69,472,375 $ 75,035,838 $ 9,908,258 $ 12,460,852 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 95,115 43,654 20,362 13,874 26,504 Receivable from mutual funds and portfolios for share redemptions 20,560 57,328 48,787 7,988 7,902 ----------------------------------------------------------------------------------------------------------------------------------- Total assets 31,733,267 69,573,357 75,104,987 9,930,120 12,495,258 =================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 20,560 57,328 48,787 7,988 7,902 Contract terminations -- -- -- -- -- Payable to mutual funds and portfolios for investments purchased 95,115 43,654 20,362 13,874 26,504 ----------------------------------------------------------------------------------------------------------------------------------- Total liabilities 115,675 100,982 69,149 21,862 34,406 ----------------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 31,560,711 69,306,345 74,993,825 9,908,258 12,460,852 Net assets applicable to contracts in payment period 56,881 166,030 42,013 -- -- ----------------------------------------------------------------------------------------------------------------------------------- Total net assets $ 31,617,592 $ 69,472,375 $ 75,035,838 $ 9,908,258 $ 12,460,852 =================================================================================================================================== Accumulation units outstanding 43,554,002 72,852,973 78,311,083 11,859,155 14,863,809 =================================================================================================================================== Net asset value per accumulation unit $ 0.72 $ 0.95 $ 0.96 $ 0.84 $ 0.84 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 41 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS --------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 1WI 2WI 1SG 2SG ASSETS Investments in shares of mutual funds and portfolios: at cost $ 2,254,765 $ 3,811,476 $ 5,719,111 $ 7,417,602 --------------------------------------------------------- at market value $ 1,908,840 $ 3,239,317 $ 4,402,172 $ 5,765,820 Dividends receivable -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 4,998 3,029 15,180 9,042 Receivable from mutual funds and portfolios for share redemptions 1,527 2,088 3,596 3,735 ----------------------------------------------------------------------------------------------------------------------------------- Total assets 1,915,365 3,244,434 4,420,948 5,778,597 =================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 1,527 2,088 3,596 3,735 Contract terminations -- -- -- -- Payable to mutual funds and portfolios for investments purchased 4,998 3,029 15,180 9,042 ----------------------------------------------------------------------------------------------------------------------------------- Total liabilities 6,525 5,117 18,776 12,777 ----------------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 1,908,840 3,239,317 4,402,172 5,765,820 Net assets applicable to contracts in payment period -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Total net assets $ 1,908,840 $ 3,239,317 $ 4,402,172 $ 5,765,820 =================================================================================================================================== Accumulation units outstanding 2,780,513 4,702,816 7,654,643 9,992,253 =================================================================================================================================== Net asset value per accumulation unit $ 0.69 $ 0.69 $ 0.58 $ 0.58 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 42 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 BC1 BC2 BD1 BD2 CR1 INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 262,825 $ 227,440 $ 7,611,085 $ 7,090,994 $ 99,448 Variable account expenses 319,383 217,445 1,425,660 1,045,293 173,496 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (56,558) 9,995 6,185,425 6,045,701 (74,048) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 5,816,820 4,747,754 3,687,765 2,341,529 3,016,713 Cost of investments sold 8,729,093 7,086,321 3,718,827 2,361,776 5,032,404 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (2,912,273) (2,338,567) (31,062) (20,247) (2,015,691) Distributions from capital gains -- -- -- -- 1,484,998 Net change in unrealized appreciation or depreciation of investments (6,338,859) (5,733,645) 1,152,469 1,390,239 (4,059,077) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (9,251,132) (8,072,212) 1,121,407 1,369,992 (4,589,770) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (9,307,690) $ (8,062,217) $ 7,306,832 $ 7,415,693 $ (4,663,818) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) CR2 CM1 CM2 DE1 DE2 INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 138,189 $ 3,052,650 $ 3,146,596 $ 816,927 $ 983,788 Variable account expenses 180,944 2,490,223 2,043,044 486,959 454,148 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (42,755) 562,427 1,103,552 329,968 529,640 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 1,676,942 111,192,272 84,862,411 1,917,970 1,031,171 Cost of investments sold 2,587,012 111,202,553 84,868,112 2,283,918 1,230,349 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (910,070) (10,281) (5,701) (365,948) (199,178) Distributions from capital gains 1,518,493 -- -- 167,098 176,946 Net change in unrealized appreciation or depreciation of investments (6,406,494) 10,272 5,691 (12,178,448) (14,847,317) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (5,798,071) (9) (10) (12,377,298) (14,869,549) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (5,840,826) $ 562,418 $ 1,103,542 $(12,047,330) $(14,339,909) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) EM1 EM2 ES1 ES2 EI1 INVESTMENT INCOME Dividend income from mutual funds and portfolios $ -- $ -- $ -- $ -- $ 7,282,044 Variable account expenses 18,044 17,726 48,361 54,808 891,899 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (18,044) (17,726) (48,361) (54,808) 6,390,145 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 530,179 276,438 216,100 273,872 4,602,758 Cost of investments sold 546,184 292,392 233,527 288,962 5,724,752 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (16,005) (15,954) (17,427) (15,090) (1,121,994) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (166,342) (252,312) (585,605) (924,791) (12,316,535) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (182,347) (268,266) (603,032) (939,881) (13,438,529) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (200,391) $ (285,992) $ (651,393) $ (994,689) $ (7,048,384) ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 43 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) EI2 FI1 FI2 GB1 GB2 INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 5,336,390 $ 2,632,265 $ 2,768,741 $ 1,489,414 $ 1,198,530 Variable account expenses 517,492 879,121 723,504 301,042 189,495 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 4,818,898 1,753,144 2,045,237 1,188,372 1,009,035 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 2,460,506 11,226,795 5,513,936 2,797,306 1,297,101 Cost of investments sold 2,954,332 11,035,544 5,449,565 2,723,619 1,264,756 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (493,826) 191,251 64,371 73,687 32,345 Distributions from capital gains -- 627,626 664,882 -- -- Net change in unrealized appreciation or depreciation of investments (9,179,710) 1,738,654 1,933,332 3,149,519 2,629,912 ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (9,673,536) 2,557,531 2,662,585 3,223,206 2,662,257 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (4,854,638) $ 4,310,675 $ 4,707,822 $ 4,411,578 $ 3,671,292 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) GR1 GR2 IE1 IE2 MF1 INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 44,879 $ 51,256 $ 104,305 $ 106,448 $ 1,230,281 Variable account expenses 630,907 532,035 104,736 80,133 443,770 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (586,028) (480,779) (431) 26,315 786,511 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 10,680,020 5,022,777 7,961,651 6,100,175 5,426,292 Cost of investments sold 22,079,264 10,189,598 12,496,129 10,082,743 7,603,873 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (11,399,244) (5,166,821) (4,534,478) (3,982,568) (2,177,581) Distributions from capital gains -- -- 24,316 20,548 4,109,822 Net change in unrealized appreciation or depreciation of investments (10,217,973) (17,529,137) 2,327,173 1,720,801 (9,529,068) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (21,617,217) (22,695,958) (2,182,989) (2,241,219) (7,596,827) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $(22,203,245) $(23,176,737) $ (2,183,420) $ (2,214,904) $ (6,810,316) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) MF2 ND1 ND2 IV1 IV2 INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 1,168,860 $ 1,293,133 $ 1,305,279 $ 352,380 $ 340,138 Variable account expenses 318,848 2,388,563 1,878,621 337,690 252,358 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 850,012 (1,095,430) (573,342) 14,690 87,780 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 2,572,891 14,389,345 5,640,326 2,316,845 2,267,091 Cost of investments sold 3,396,909 22,268,068 8,559,585 2,986,095 3,021,641 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (824,018) (7,878,723) (2,919,259) (669,250) (754,550) Distributions from capital gains 3,229,895 249,762 229,075 -- -- Net change in unrealized appreciation or depreciation of investments (9,041,112) (57,715,115) (62,280,465) (8,957,858) (8,268,536) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (6,635,235) (65,344,076) (64,970,649) (9,627,108) (9,023,086) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (5,785,223) $(66,439,506) $(65,543,991) $ (9,612,418) $ (8,935,306) ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 44 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) SC1 SC2 SA1 SA2 1CA INVESTMENT INCOME Dividend income from mutual funds and portfolios $ -- $ -- $ -- $ -- $ -- Variable account expenses 250,290 191,218 363,565 280,565 374,953 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (250,290) (191,218) (363,565) (280,565) (374,953) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 1,367,414 1,592,620 8,804,718 4,078,767 5,807,018 Cost of investments sold 1,626,124 1,813,988 24,183,967 10,508,154 10,923,073 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (258,710) (221,368) (15,379,249) (6,429,387) (5,116,055) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (4,777,707) (4,712,134) (687,288) (8,853,948) (6,404,046) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (5,036,417) (4,933,502) (16,066,537) (15,283,335) (11,520,101) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (5,286,707) $ (5,124,720) $(16,430,102) $(15,563,900) $(11,895,054) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 2CA 1CD 2CD 1IF 2IF INVESTMENT INCOME Dividend income from mutual funds and portfolios $ -- $ -- $ -- $ 189,459 $ 152,007 Variable account expenses 276,306 261,618 193,123 225,442 146,789 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (276,306) (261,618) (193,123) (35,983) 5,218 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 4,033,122 4,295,554 3,414,308 2,632,889 1,514,069 Cost of investments sold 7,503,992 5,217,547 4,194,010 4,485,174 2,487,507 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (3,470,870) (921,993) (779,702) (1,852,285) (973,438) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (7,302,588) (5,665,562) (5,460,175) (3,839,000) (3,680,132) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (10,773,458) (6,587,555) (6,239,877) (5,691,285) (4,653,570) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $(11,049,764) $ (6,849,173) $ (6,433,000) $ (5,727,268) $ (4,648,352) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 1VA 2VA 1SR 2SR 1EG INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 442,729 $ 379,958 $ 223,683 $ 217,165 $ -- Variable account expenses 504,535 343,933 61,591 42,552 185,593 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (61,806) 36,025 162,092 174,613 (185,593) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 2,998,829 2,477,947 488,737 415,145 4,367,534 Cost of investments sold 3,201,679 2,651,366 581,622 492,084 6,800,340 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (202,850) (173,419) (92,885) (76,939) (2,432,806) Distributions from capital gains 2,864,590 2,458,442 -- -- -- Net change in unrealized appreciation or depreciation of investments (10,706,423) (9,167,229) (957,880) (853,336) (4,833,846) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (8,044,683) (6,882,206) (1,050,765) (930,275) (7,266,652) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (8,106,489) $ (6,846,181) $ (888,673) $ (755,662) $ (7,452,245) ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 45 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 2EG 1GI 2GI 1MP 2MP INVESTMENT INCOME Dividend income from mutual funds and portfolios $ -- $ 1,244,981 $ 1,091,502 $ 873,211 $ 785,658 Variable account expenses 123,961 907,414 644,297 972,598 703,014 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (123,961) 337,567 447,205 (99,387) 82,644 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 2,680,277 8,483,128 5,086,304 7,857,193 5,205,442 Cost of investments sold 4,139,619 11,378,073 6,964,984 7,983,810 5,432,825 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (1,459,342) (2,894,945) (1,878,680) (126,617) (227,383) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (4,624,800) (16,829,904) (15,818,621) (11,689,179) (10,662,040) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (6,084,142) (19,724,849) (17,697,301) (11,815,796) (10,889,423) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (6,208,103) $(19,387,282) $(17,250,096) $(11,915,183) $(10,806,779) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 1OS 2OS 1RE 2RE 1SI INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 165,380 $ 143,505 $ 1,123,492 $ 1,465,028 $ 75,164 Variable account expenses 221,529 153,003 413,878 427,762 194,633 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (56,149) (9,498) 709,614 1,037,266 (119,469) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 2,159,153 2,331,133 182,498 139,062 417,952 Cost of investments sold 3,571,247 3,817,339 180,516 139,681 417,791 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (1,412,094) (1,486,206) 1,982 (619) 161 Distributions from capital gains -- -- -- -- 525,770 Net change in unrealized appreciation or depreciation of investments (4,046,917) (3,273,672) (1,334,802) (2,049,365) (3,037,959) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (5,459,011) (4,759,878) (1,332,820) (2,049,984) (2,512,028) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (5,515,160) $ (4,769,376) $ (623,206) $ (1,012,718) $ (2,631,497) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 2SI 1TF(1) 2TF(1) 1SE 2SE INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 96,079 $ 127,915 $ 108,800 $ 53,430 $ 43,072 Variable account expenses 192,201 50,965 35,182 197,251 121,346 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (96,122) 76,950 73,618 (143,821) (78,274) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 178,634 577,480 450,132 2,729,518 1,675,067 Cost of investments sold 180,033 679,191 542,557 2,912,113 1,786,344 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (1,399) (101,711) (92,425) (182,595) (111,277) Distributions from capital gains 672,078 -- -- -- -- Net change in unrealized appreciation or depreciation of investments (4,282,792) (1,936,688) (1,669,548) (3,234,026) (2,559,452) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (3,612,113) (2,038,399) (1,761,973) (3,416,621) (2,670,729) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (3,708,235) $ (1,961,449) $ (1,688,355) $ (3,560,442) $ (2,749,003) ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 46 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 1UE 2UE 1MC 2MC 1GT INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 326,433 $ 310,361 $ 654,698 $ 776,125 $ -- Variable account expenses 524,178 373,370 475,200 412,267 98,594 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (197,745) (63,009) 179,498 363,858 (98,594) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 4,170,478 2,166,130 919,819 27,722 1,891,997 Cost of investments sold 6,046,597 3,130,085 918,723 29,613 4,917,198 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (1,876,119) (963,955) 1,096 (1,891) (3,025,201) Distributions from capital gains -- -- 191,001 226,426 -- Net change in unrealized appreciation or depreciation of investments (12,710,694) (12,166,443) (4,290,020) (5,353,378) (2,949,362) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (14,586,813) (13,130,398) (4,097,923) (5,128,843) (5,974,563) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $(14,784,558) $(13,193,407) $ (3,918,425) $ (4,764,985) $ (6,073,157) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 2GT 1IG 2IG 1AG 2AG INVESTMENT INCOME Dividend income from mutual funds and portfolios $ -- $ 245,312 $ 258,342 $ -- $ -- Variable account expenses 84,737 345,037 276,454 152,088 137,192 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (84,737) (99,725) (18,112) (152,088) (137,192) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 1,298,359 2,124,056 1,064,627 3,327,105 4,459,325 Cost of investments sold 3,099,603 3,303,495 1,570,168 8,165,065 9,340,878 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (1,801,244) (1,179,439) (505,541) (4,837,960) (4,881,553) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (4,576,884) (10,240,285) (11,019,525) (1,049,331) (1,688,852) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (6,378,128) (11,419,724) (11,525,066) (5,887,291) (6,570,405) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (6,462,865) $(11,519,449) $(11,543,178) $ (6,039,379) $ (6,707,597) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 1IP 2IP 1MG 2MG 1MD INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 13,594 $ 13,913 $ -- $ -- $ -- Variable account expenses 153,494 114,539 303,815 256,634 312,231 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (139,900) (100,626) (303,815) (256,634) (312,231) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 894,368 215,350 2,045,505 1,492,912 1,121,069 Cost of investments sold 1,155,338 267,719 3,153,835 2,286,729 1,572,666 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (260,970) (52,369) (1,108,330) (793,817) (451,597) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (1,621,411) (1,811,344) (9,711,494) (10,765,671) (12,676,865) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (1,882,381) (1,863,713) (10,819,824) (11,559,488) (13,128,462) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (2,022,281) $ (1,964,339) $(11,123,639) $(11,816,122) $(13,440,693) ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 47 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 2MD 1IN 2IN 1VS 2VS INVESTMENT INCOME Dividend income from mutual funds and portfolios $ -- $ 346,769 $ 310,796 $ -- $ -- Variable account expenses 252,889 475,819 346,314 536,834 385,531 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (252,889) (129,050) (35,518) (536,834) (385,531) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 389,264 10,346,443 5,597,253 10,645,808 5,200,829 Cost of investments sold 535,944 20,731,058 10,813,115 22,938,804 10,862,452 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (146,680) (10,384,615) (5,215,862) (12,292,996) (5,661,623) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (13,130,549) 2,691,068 (1,922,606) (9,589,578) (14,121,442) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (13,277,229) (7,693,547) (7,138,468) (21,882,574) (19,783,065) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $(13,530,118) $ (7,822,597) $ (7,173,986) $(22,419,408) $(20,168,596) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 1MI 2MI 1SV 2SV 1IT INVESTMENT INCOME Dividend income from mutual funds and portfolios $ -- $ -- $ 108,898 $ 95,837 $ -- Variable account expenses 415,394 301,487 530,206 369,335 271,063 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (415,394) (301,487) (421,308) (273,498) (271,063) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 8,891,918 3,743,955 3,718,043 3,303,998 919,591 Cost of investments sold 8,029,302 3,551,140 3,781,934 3,312,219 1,673,395 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments 862,616 192,815 (63,891) (8,221) (753,804) Distributions from capital gains 1,241,332 1,182,876 948,474 834,708 -- Net change in unrealized appreciation or depreciation of investments (8,596,433) (7,553,819) (7,788,467) (6,901,806) (3,628,072) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (6,492,485) (6,178,128) (6,903,884) (6,075,319) (4,381,876) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (6,907,879) $ (6,479,615) $ (7,325,192) $ (6,348,817) $ (4,652,939) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 2IT 1SP 2SP 1AA 2AA INVESTMENT INCOME Dividend income from mutual funds and portfolios $ -- $ -- $ -- $ 149,668 $ 190,629 Variable account expenses 208,427 595,605 463,521 61,122 60,859 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (208,427) (595,605) (463,521) 88,546 129,770 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 305,492 794,443 45,114 540,749 276,855 Cost of investments sold 510,333 914,414 50,507 600,892 317,398 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (204,841) (119,971) (5,393) (60,143) (40,543) Distributions from capital gains -- -- -- 69,604 86,201 Net change in unrealized appreciation or depreciation of investments (4,210,201) (11,893,766) (11,741,930) (1,029,825) (1,365,969) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (4,415,042) (12,013,737) (11,747,323) (1,020,364) (1,320,311) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (4,623,469) $(12,609,342) $(12,210,844) $ (931,818) $ (1,190,541) ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 48 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS --------------------------------------------------------- YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 1WI 2WI 1SG 2SG INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 3,016 $ 4,408 $ -- $ -- Variable account expenses 13,558 16,605 31,096 29,762 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (10,542) (12,197) (31,096) (29,762) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 210,292 174,954 233,870 168,749 Cost of investments sold 236,335 204,214 297,308 217,506 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (26,043) (29,260) (63,438) (48,757) Distributions from capital gains -- -- -- -- Net change in unrealized appreciation or depreciation of investments (351,155) (576,936) (1,495,003) (1,747,517) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (377,198) (606,196) (1,558,441) (1,796,274) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (387,740) $ (618,393) $ (1,589,537) $ (1,826,036) ===================================================================================================================================
(1) For the period March 1, 2002 (commencement of operations) to Dec. 31, 2002. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 49 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 BC1 BC2 BD1 BD2 CR1 OPERATIONS Investment income (loss) -- net $ (56,558) $ 9,995 $ 6,185,425 $ 6,045,701 $ (74,048) Net realized gain (loss) on sales of investments (2,912,273) (2,338,567) (31,062) (20,247) (2,015,691) Distributions from capital gains -- -- -- -- 1,484,998 Net change in unrealized appreciation or depreciation of investments (6,338,859) (5,733,645) 1,152,469 1,390,239 (4,059,077) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (9,307,690) (8,062,217) 7,306,832 7,415,693 (4,663,818) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 2,022,324 4,134,132 56,409,658 75,660,940 8,320,523 Net transfers(1) (4,366,366) (4,042,558) 10,340,498 12,043,348 (2,679,434) Transfers for policy loans -- (59,728) -- (221,836) -- Annuity payments (8,472) (9,449) (57,668) (54,429) (8,037) Contract charges (19,181) (27,515) (46,921) (45,305) (9,028) Contract terminations: Surrender benefits (852,252) (936,249) (3,832,361) (4,990,255) (497,104) Death benefits (615,570) (149,370) (2,001,884) (1,130,877) (325,548) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (3,839,517) (1,090,737) 60,811,322 81,261,586 4,801,372 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 40,747,930 33,763,120 120,835,163 95,910,199 20,374,024 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 27,600,723 $ 24,610,166 $188,953,317 $184,587,478 $ 20,511,578 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 49,897,109 41,082,633 106,759,873 83,968,345 26,778,956 Contract purchase payments 2,836,923 5,726,609 49,215,303 65,949,204 13,769,390 Net transfers(1) (6,481,578) (6,138,546) 9,065,587 10,431,099 (4,351,290) Transfers for policy loans -- (86,050) -- (192,197) -- Contract charges (27,242) (39,200) (40,930) (39,253) (13,695) Contract terminations: Surrender benefits (1,226,852) (1,321,036) (3,847,757) (4,601,230) (751,406) Death benefits (887,956) (205,658) (1,746,973) (985,974) (475,695) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 44,110,404 39,018,752 159,405,103 154,529,994 34,956,260 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 50 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) CR2 CM1 CM2 DE1 DE2 OPERATIONS Investment income (loss) -- net $ (42,755) $ 562,427 $ 1,103,552 $ 329,968 $ 529,640 Net realized gain (loss) on sales of investments (910,070) (10,281) (5,701) (365,948) (199,178) Distributions from capital gains 1,518,493 -- -- 167,098 176,946 Net change in unrealized appreciation or depreciation of investments (6,406,494) 10,272 5,691 (12,178,448) (14,847,317) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (5,840,826) 562,418 1,103,542 (12,047,330) (14,339,909) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 21,283,378 226,515,881 352,620,135 14,294,648 28,527,376 Net transfers(1) (4,104,074) (253,897,068) (322,493,178) 13,351,928 15,281,669 Transfers for policy loans (89,501) -- (246,678) -- (77,540) Annuity payments (16,107) (22,109) (6,458) (12,622) (27,858) Contract charges (14,375) (64,550) (75,696) (22,411) (34,816) Contract terminations: Surrender benefits (595,875) (9,935,594) (14,691,158) (1,052,258) (1,922,194) Death benefits (33,118) (3,607,854) (2,651,827) (967,428) (612,062) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 16,430,328 (41,011,294) 12,455,140 25,591,857 41,134,575 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 20,243,839 289,729,276 267,060,715 42,180,990 44,814,223 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 30,833,341 $249,280,400 $280,619,397 $ 55,725,517 $ 71,608,889 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 26,326,833 265,455,463 243,869,987 41,299,277 43,328,168 Contract purchase payments 33,323,720 207,643,721 321,790,962 15,632,650 30,703,004 Net transfers(1) (6,372,729) (232,372,552) (294,304,617) 13,403,888 15,440,636 Transfers for policy loans (137,173) -- (224,812) -- (77,455) Contract charges (22,061) (59,180) (69,006) (25,626) (39,949) Contract terminations: Surrender benefits (947,264) (9,122,334) (13,395,206) (1,284,475) (2,238,773) Death benefits (47,463) (3,307,751) (2,416,788) (1,067,486) (673,232) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 52,123,863 228,237,367 255,250,520 67,958,228 86,442,399 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 51 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) EM1 EM2 ES1 ES2 EI1 OPERATIONS Investment income (loss) -- net $ (18,044) $ (17,726) $ (48,361) $ (54,808) $ 6,390,145 Net realized gain (loss) on sales of investments (16,005) (15,954) (17,427) (15,090) (1,121,994) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (166,342) (252,312) (585,605) (924,791) (12,316,535) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (200,391) (285,992) (651,393) (994,689) (7,048,384) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 796,792 1,180,002 5,077,279 6,994,948 24,104,647 Net transfers(1) 981,357 1,122,588 3,937,963 5,797,628 10,170,341 Transfers for policy loans -- 188 -- (18,476) -- Annuity payments -- -- -- -- (21,189) Contract charges (1,309) (1,057) (2,471) (3,766) (28,013) Contract terminations: Surrender benefits (30,013) (64,471) (248,163) (247,633) (2,117,180) Death benefits (36,356) (26,082) (28,026) (46,062) (1,327,559) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 1,710,471 2,211,168 8,736,582 12,476,639 30,781,047 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 1,108,401 1,291,032 2,224,431 2,476,561 84,016,748 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 2,618,481 $ 3,216,208 $ 10,309,620 $ 13,958,511 $107,749,411 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 1,541,506 1,789,442 2,238,352 2,488,770 88,813,366 Contract purchase payments 1,112,376 1,605,963 5,833,099 7,855,947 27,188,267 Net transfers(1) 1,326,174 1,484,355 4,391,380 6,411,487 10,992,877 Transfers for policy loans -- 280 -- (20,716) -- Contract charges (1,885) (1,495) (2,932) (4,435) (32,023) Contract terminations: Surrender benefits (40,992) (90,669) (285,841) (284,523) (2,684,012) Death benefits (49,316) (38,293) (29,505) (58,915) (1,494,115) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 3,887,863 4,749,583 12,144,553 16,387,615 122,784,360 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 52 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) EI2 FI1 FI2 GB1 GB2 OPERATIONS Investment income (loss) -- net $ 4,818,898 $ 1,753,144 $ 2,045,237 $ 1,188,372 $ 1,009,035 Net realized gain (loss) on sales of investments (493,826) 191,251 64,371 73,687 32,345 Distributions from capital gains -- 627,626 664,882 -- -- Net change in unrealized appreciation or depreciation of investments (9,179,710) 1,738,654 1,933,332 3,149,519 2,629,912 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (4,854,638) 4,310,675 4,707,822 4,411,578 3,671,292 =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 28,574,235 51,945,608 81,760,298 8,669,594 9,630,015 Net transfers(1) 6,507,106 21,749,305 9,445,978 6,523,271 7,259,586 Transfers for policy loans (46,974) -- (104,587) -- (15,999) Annuity payments (23,113) (22,639) (32,445) (132) (1,096) Contract charges (18,012) (25,067) (23,772) (9,172) (5,478) Contract terminations: Surrender benefits (2,095,832) (3,172,722) (3,057,259) (845,127) (733,370) Death benefits (588,889) (1,205,831) (676,298) (516,936) (236,437) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 32,308,521 69,268,654 87,311,915 13,821,498 15,897,221 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 55,485,783 64,826,399 57,952,085 24,619,415 17,099,335 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 82,939,666 $138,405,728 $149,971,822 $ 42,852,491 $ 36,667,848 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 58,348,189 56,965,798 50,509,732 23,970,170 16,572,087 Contract purchase payments 31,849,578 44,235,559 69,887,068 8,001,948 8,880,448 Net transfers(1) 6,946,593 18,788,681 7,839,941 5,933,028 6,603,439 Transfers for policy loans (53,593) -- (89,693) -- (14,807) Contract charges (20,416) (21,424) (20,195) (8,416) (4,987) Contract terminations: Surrender benefits (2,551,983) (2,784,436) (2,688,557) (791,445) (685,434) Death benefits (673,223) (1,036,829) (571,993) (478,893) (217,939) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 93,845,145 116,147,349 124,866,303 36,626,392 31,132,807 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 53 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) GR1 GR2 IE1 IE2 MF1 OPERATIONS Investment income (loss) -- net $ (586,028) $ (480,779) $ (431) $ 26,315 $ 786,511 Net realized gain (loss) on sales of investments (11,399,244) (5,166,821) (4,534,478) (3,982,568) (2,177,581) Distributions from capital gains -- -- 24,316 20,548 4,109,822 Net change in unrealized appreciation or depreciation of investments (10,217,973) (17,529,137) 2,327,173 1,720,801 (9,529,068) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (22,203,245) (23,176,737) (2,183,420) (2,214,904) (6,810,316) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 6,610,895 12,949,971 2,940,285 5,059,823 15,747,009 Net transfers(1) (9,881,536) (6,891,728) (2,498,751) (2,209,704) (4,313,328) Transfers for policy loans -- (66,143) -- (20,866) -- Annuity payments (9,774) (10,942) (5,437) (4,198) (31,121) Contract charges (48,574) (87,358) (6,190) (8,327) (20,636) Contract terminations: Surrender benefits (1,839,761) (1,769,289) (243,402) (280,459) (1,155,121) Death benefits (795,604) (234,569) (85,017) (12,622) (1,095,898) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (5,964,354) 3,889,942 101,488 2,523,647 9,130,905 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 84,435,341 83,919,855 12,550,536 10,653,200 49,925,169 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 56,267,742 $ 64,633,060 $ 10,468,604 $ 10,961,943 $ 52,245,758 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 130,763,635 129,185,546 18,664,324 15,821,074 53,096,445 Contract purchase payments 12,358,946 24,140,748 5,261,904 8,291,256 19,510,292 Net transfers(1) (18,987,870) (13,595,191) (4,139,440) (3,504,710) (5,208,250) Transfers for policy loans -- (121,311) -- (36,566) -- Contract charges (91,661) (165,754) (10,240) (13,773) (24,371) Contract terminations: Surrender benefits (3,557,045) (3,336,134) (448,787) (525,497) (1,431,683) Death benefits (1,499,837) (414,727) (138,540) (19,830) (1,329,104) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 118,986,168 135,693,177 19,189,221 20,011,954 64,613,329 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 54 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) MF2 ND1 ND2 IV1 IV2 OPERATIONS Investment income (loss) -- net $ 850,012 $ (1,095,430) $ (573,342) $ 14,690 $ 87,780 Net realized gain (loss) on sales of investments (824,018) (7,878,723) (2,919,259) (669,250) (754,550) Distributions from capital gains 3,229,895 249,762 229,075 -- -- Net change in unrealized appreciation or depreciation of investments (9,041,112) (57,715,115) (62,280,465) (8,957,858) (8,268,536) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (5,785,223) (66,439,506) (65,543,991) (9,612,418) (8,935,306) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 29,272,168 43,058,058 77,762,083 9,951,423 14,733,959 Net transfers(1) (5,450,002) (152,920) 9,431,324 8,444,429 6,093,063 Transfers for policy loans (81,485) -- (370,728) -- (45,123) Annuity payments (37,898) (136,428) (72,907) (13,083) (6,961) Contract charges (28,866) (155,172) (299,746) (16,686) (24,245) Contract terminations: Surrender benefits (1,278,760) (6,603,268) (7,304,716) (1,023,927) (620,019) Death benefits (154,146) (3,383,835) (1,565,414) (337,450) (114,352) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 22,241,011 32,626,435 77,579,896 17,004,706 20,016,322 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 35,997,068 272,881,507 246,108,391 32,012,342 28,328,739 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 52,452,856 $239,068,436 $258,144,296 $ 39,404,630 $ 39,409,755 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 37,760,282 307,319,932 276,053,946 40,574,978 35,957,387 Contract purchase payments 34,836,176 56,760,406 100,818,617 14,707,250 21,767,822 Net transfers(1) (6,477,797) (2,392,297) 9,369,722 11,892,826 8,424,925 Transfers for policy loans (101,556) -- (475,357) -- (60,886) Contract charges (33,952) (202,531) (389,148) (25,356) (37,229) Contract terminations: Surrender benefits (1,527,227) (9,227,585) (9,620,229) (1,632,150) (1,116,797) Death benefits (182,946) (4,416,510) (2,042,277) (506,841) (164,278) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 64,272,980 347,841,415 373,715,274 65,010,707 64,770,944 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 55 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) SC1 SC2 SA1 SA2 1CA OPERATIONS Investment income (loss) -- net $ (250,290) $ (191,218) $ (363,565) $ (280,565) $ (374,953) Net realized gain (loss) on sales of investments (258,710) (221,368) (15,379,249) (6,429,387) (5,116,055) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (4,777,707) (4,712,134) (687,288) (8,853,948) (6,404,046) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (5,286,707) (5,124,720) (16,430,102) $(15,563,900) (11,895,054) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 4,111,489 6,345,570 4,006,638 9,244,590 1,435,150 Net transfers(1) 1,850,368 1,130,495 (9,046,635) (7,727,360) (4,507,819) Transfers for policy loans -- (23,188) -- (21,172) -- Annuity payments (2,422) (1,316) (11,563) (6,943) (21,270) Contract charges (15,189) (18,156) (29,138) (47,734) (25,472) Contract terminations: Surrender benefits (555,102) (754,461) (1,004,843) (1,107,826) (1,099,428) Death benefits (362,392) (195,255) (414,666) (165,130) (272,082) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 5,026,752 6,483,689 (6,500,207) 168,425 (4,490,921) ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 26,157,483 24,593,724 53,044,804 47,764,584 48,599,509 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 25,897,528 $ 25,952,693 $ 30,114,495 $ 32,369,109 $ 32,213,534 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 24,346,498 22,792,239 65,574,383 58,747,770 55,044,029 Contract purchase payments 4,234,064 6,442,684 6,505,504 14,721,858 1,848,875 Net transfers(1) 1,735,676 994,879 (14,563,246) (12,439,413) (6,309,953) Transfers for policy loans -- (24,316) -- (33,649) -- Contract charges (15,901) (18,946) (44,718) (73,996) (33,556) Contract terminations: Surrender benefits (581,296) (788,471) (1,642,108) (1,709,177) (1,483,425) Death benefits (377,960) (195,985) (647,024) (254,906) (361,582) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 29,341,081 29,202,084 55,182,791 58,958,487 48,704,388 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 56 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 2CA 1CD 2CD 1IF 2IF OPERATIONS Investment income (loss) -- net $ (276,306) $ (261,618) $ (193,123) $ (35,983) $ 5,218 Net realized gain (loss) on sales of investments (3,470,870) (921,993) (779,702) (1,852,285) (973,438) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (7,302,588) (5,665,562) (5,460,175) (3,839,000) (3,680,132) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (11,049,764) (6,849,173) (6,433,000) (5,727,268) (4,648,352) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 3,248,521 662,993 1,430,976 794,288 1,462,114 Net transfers(1) (3,855,510) (2,166,901) (2,136,541) (210,201) 281,821 Transfers for policy loans (36,068) -- (23,955) -- (22,063) Annuity payments (1,768) (730) (2,408) (1,529) (3,040) Contract charges (35,065) (14,144) (17,884) (10,763) (13,280) Contract terminations: Surrender benefits (817,551) (853,096) (683,905) (673,278) (423,128) Death benefits (163,450) (235,564) (89,157) (217,419) (181,665) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (1,660,891) (2,607,442) (1,522,874) (318,902) 1,100,759 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 43,948,211 31,796,487 29,214,698 26,705,659 21,368,405 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 31,237,556 $ 22,339,872 $ 21,258,824 $ 20,659,489 $ 17,820,812 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 49,574,479 25,531,321 23,323,646 32,127,131 25,459,465 Contract purchase payments 4,232,910 580,488 1,262,685 1,065,477 1,949,377 Net transfers(1) (5,486,671) (2,111,765) (2,138,168) (416,872) 324,566 Transfers for policy loans (41,617) -- (21,694) -- (28,512) Contract charges (46,334) (12,690) (16,164) (14,590) (17,966) Contract terminations: Surrender benefits (1,100,461) (769,504) (593,794) (940,006) (583,081) Death benefits (199,908) (202,449) (71,943) (308,990) (226,021) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 46,932,398 23,015,401 21,744,568 31,512,150 26,877,828 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 57 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 1VA 2VA 1SR 2SR 1EG OPERATIONS Investment income (loss) -- net $ (61,806) $ 36,025 $ 162,092 $ 174,613 $ (185,593) Net realized gain (loss) on sales of investments (202,850) (173,419) (92,885) (76,939) (2,432,806) Distributions from capital gains 2,864,590 2,458,442 -- -- -- Net change in unrealized appreciation or depreciation of investments (10,706,423) (9,167,229) (957,880) (853,336) (4,833,846) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (8,106,489) (6,846,181) (888,673) (755,662) (7,452,245) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 1,799,370 3,141,005 2,277,965 2,820,762 531,015 Net transfers(1) 9,842,604 8,155,112 997,129 1,554,841 (3,505,332) Transfers for policy loans -- (61,402) -- (5,923) -- Annuity payments (14,899) (11,441) -- (171) (2,684) Contract charges (23,516) (28,464) (3,091) (7,167) (12,102) Contract terminations: Surrender benefits (1,528,097) (1,179,137) (148,474) (149,009) (544,110) Death benefits (692,733) (500,592) (51,565) (27,160) (151,394) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 9,382,729 9,515,081 3,071,964 4,186,173 (3,684,607) ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 50,146,100 42,781,569 5,403,539 3,996,635 26,257,930 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 51,422,340 $ 45,450,469 $ 7,586,830 $ 7,427,146 $ 15,121,078 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 41,459,867 35,247,543 6,090,449 4,489,864 24,696,701 Contract purchase payments 1,573,766 2,789,500 2,814,172 3,443,325 604,152 Net transfers(1) 8,184,646 6,733,562 1,178,536 1,873,509 (4,169,892) Transfers for policy loans -- (54,950) -- (6,433) -- Contract charges (21,081) (25,233) (3,849) (8,865) (13,748) Contract terminations: Surrender benefits (1,405,078) (1,052,208) (181,124) (239,568) (632,129) Death benefits (630,641) (416,510) (66,118) (31,839) (181,604) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 49,161,479 43,221,704 9,832,066 9,519,993 20,303,480 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 58 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 2EG 1GI 2GI 1MP 2MP OPERATIONS Investment income (loss) -- net $ (123,961) $ 337,567 $ 447,205 $ (99,387) $ 82,644 Net realized gain (loss) on sales of investments (1,459,342) (2,894,945) (1,878,680) (126,617) (227,383) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (4,624,800) (16,829,904) (15,818,621) (11,689,179) (10,662,040) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (6,208,103) (19,387,282) (17,250,096) (11,915,183) (10,806,779) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 1,375,480 3,131,340 6,056,918 3,094,342 6,957,993 Net transfers(1) (2,847,253) (436,909) 813,643 2,758,357 2,454,053 Transfers for policy loans (18,033) -- (88,756) -- (114,544) Annuity payments (1,866) (17,099) (4,233) (13,253) (11,939) Contract charges (15,465) (50,371) (62,638) (55,439) (79,035) Contract terminations: Surrender benefits (376,709) (2,582,206) (2,285,229) (2,966,342) (2,379,809) Death benefits (77,317) (1,382,557) (203,777) (831,161) (492,494) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (1,961,163) (1,337,802) 4,225,928 1,986,504 6,334,225 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 21,527,548 107,966,481 93,831,915 105,787,927 94,014,379 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 13,358,282 $ 87,241,397 $ 80,807,747 $ 95,859,248 $ 89,541,825 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 20,157,745 119,735,641 103,718,607 67,131,837 59,392,864 Contract purchase payments 1,568,721 3,853,337 7,480,035 2,053,792 4,632,762 Net transfers(1) (3,341,902) (1,247,443) 144,573 1,616,501 1,283,529 Transfers for policy loans (21,417) -- (110,933) -- (75,646) Contract charges (17,651) (62,985) (78,177) (37,055) (52,863) Contract terminations: Surrender benefits (442,354) (3,297,015) (2,880,236) (1,998,340) (1,604,556) Death benefits (81,678) (1,758,677) (246,865) (564,098) (308,433) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 17,821,464 117,222,858 108,027,004 68,202,637 63,267,657 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 59 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 1OS 2OS 1RE 2RE 1SI OPERATIONS Investment income (loss) -- net $ (56,149) $ (9,498) $ 709,614 $ 1,037,266 $ (119,469) Net realized gain (loss) on sales of investments (1,412,094) (1,486,206) 1,982 (619) 161 Distributions from capital gains -- -- -- -- 525,770 Net change in unrealized appreciation or depreciation of investments (4,046,917) (3,273,672) (1,334,802) (2,049,365) (3,037,959) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (5,515,160) (4,769,376) (623,206) (1,012,718) (2,631,497) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 943,062 1,527,579 18,431,897 30,039,447 10,037,443 Net transfers(1) 196,850 (120,588) 17,779,240 20,520,794 8,828,278 Transfers for policy loans -- (18,187) -- (60,082) -- Annuity payments (3,194) (7,021) (7,920) (16,017) (2,162) Contract charges (11,198) (14,509) (17,422) (19,879) (8,688) Contract terminations: Surrender benefits (483,155) (369,638) (1,310,057) (1,459,045) (476,219) Death benefits (250,810) (59,879) (479,363) (210,302) (187,804) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 391,555 937,757 34,396,375 48,794,916 18,190,848 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 25,154,450 21,590,846 26,463,745 32,992,245 12,869,436 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 20,030,845 $ 17,759,227 $ 60,236,914 $ 80,774,443 $ 28,428,787 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 32,758,196 27,849,994 19,803,454 24,476,850 9,583,606 Contract purchase payments 1,327,347 2,168,768 13,449,716 21,491,940 7,837,429 Net transfers(1) 80,855 (370,630) 12,686,885 14,661,797 6,653,181 Transfers for policy loans -- (25,828) -- (42,735) -- Contract charges (16,125) (20,905) (12,767) (14,453) (6,884) Contract terminations: Surrender benefits (716,666) (531,356) (990,253) (1,104,613) (371,207) Death benefits (370,507) (78,788) (345,834) (151,466) (143,274) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 33,063,100 28,991,255 44,591,201 59,317,320 23,552,851 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 60 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 2SI 1TF(2) 2TF(2) 1SE 2SE OPERATIONS Investment income (loss) -- net $ (96,122) $ 76,950 $ 73,618 $ (143,821) $ (78,274) Net realized gain (loss) on sales of investments (1,399) (101,711) (92,425) (182,595) (111,277) Distributions from capital gains 672,078 -- -- -- -- Net change in unrealized appreciation or depreciation of investments (4,282,792) (1,936,688) (1,669,548) (3,234,026) (2,559,452) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (3,708,235) (1,961,449) (1,688,355) (3,560,442) (2,749,003) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 15,962,169 180,284 263,524 648,004 1,053,989 Net transfers(1) 10,052,041 10,063,880 8,613,518 (790,673) (358,870) Transfers for policy loans (51,308) -- (1,933) -- (26,844) Annuity payments (2,518) -- (263) (1,300) -- Contract charges (12,233) (2,004) (3,023) (9,344) (11,499) Contract terminations: Surrender benefits (610,575) (189,554) (139,093) (808,343) (381,895) Death benefits (55,590) (65,490) -- (187,351) (11,488) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 25,281,986 9,987,116 8,732,730 (1,149,007) 263,393 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 14,607,898 -- -- 22,428,493 16,792,552 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 36,181,649 $ 8,025,667 $ 7,044,375 $ 17,719,044 $ 14,306,942 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 10,800,259 -- -- 18,973,755 14,152,524 Contract purchase payments 12,066,957 196,103 289,969 579,157 944,397 Net transfers(1) 7,473,331 9,650,782 8,257,673 (847,291) (430,954) Transfers for policy loans (40,999) -- (2,261) -- (22,231) Contract charges (9,622) (2,228) (3,345) (8,402) (10,378) Contract terminations: Surrender benefits (502,154) (206,471) (155,894) (726,114) (338,331) Death benefits (45,189) (68,219) -- (178,906) (10,429) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 29,742,583 9,569,967 8,386,142 17,792,199 14,284,598 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 61 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 1UE 2UE 1MC 2MC 1GT OPERATIONS Investment income (loss) -- net $ (197,745) $ (63,009) $ 179,498 $ 363,858 $ (98,594) Net realized gain (loss) on sales of investments (1,876,119) (963,955) 1,096 (1,891) (3,025,201) Distributions from capital gains -- -- 191,001 226,426 -- Net change in unrealized appreciation or depreciation of investments (12,710,694) (12,166,443) (4,290,020) (5,353,378) (2,949,362) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (14,784,558) (13,193,407) (3,918,425) (4,764,985) (6,073,157) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 7,150,831 10,890,917 15,937,064 25,706,114 1,175,260 Net transfers(1) (1,161,061) (426,261) 17,645,576 20,885,550 (1,350,857) Transfers for policy loans -- (67,008) -- (35,100) -- Annuity payments (16,261) (7,182) (14,898) (3,811) (1,778) Contract charges (26,694) (32,335) (22,114) (30,266) (8,219) Contract terminations: Surrender benefits (1,430,830) (1,058,454) (1,528,386) (1,420,380) (263,473) Death benefits (740,275) (132,712) (446,497) (128,596) (92,013) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 3,775,710 9,166,965 31,570,745 44,973,511 (541,080) ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 61,360,603 52,274,999 33,835,944 32,636,756 14,436,141 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 50,351,755 $ 48,248,557 $ 61,488,264 $ 72,845,282 $ 7,821,904 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 71,184,706 60,342,746 24,711,163 23,748,152 34,050,475 Contract purchase payments 9,599,116 14,587,614 11,743,803 18,629,848 3,557,520 Net transfers(1) (2,260,621) (1,295,472) 12,652,556 14,927,262 (4,918,561) Transfers for policy loans -- (86,770) -- (24,652) -- Contract charges (36,136) (44,138) (16,502) (22,467) (27,942) Contract terminations: Surrender benefits (1,999,970) (1,515,015) (1,221,085) (1,083,441) (1,026,145) Death benefits (998,360) (169,123) (331,261) (95,367) (281,678) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 75,488,735 71,819,842 47,538,674 56,079,335 31,353,669 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 62 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 2GT 1IG 2IG 1AG 2AG OPERATIONS Investment income (loss) -- net $ (84,737) $ (99,725) $ (18,112) $ (152,088) $ (137,192) Net realized gain (loss) on sales of investments (1,801,244) (1,179,439) (505,541) (4,837,960) (4,881,553) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (4,576,884) (10,240,285) (11,019,525) (1,049,331) (1,688,852) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (6,462,865) (11,519,449) (11,543,178) (6,039,379) (6,707,597) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 2,808,789 5,968,392 10,323,865 855,244 2,595,949 Net transfers(1) (1,497,591) 798,431 1,912,320 (2,988,637) (2,570,665) Transfers for policy loans (17,518) -- (52,039) -- (39,914) Annuity payments (163) (8,166) (5,450) (534) (110) Contract charges (16,993) (20,387) (30,442) (13,305) (28,446) Contract terminations: Surrender benefits (260,800) (743,999) (713,543) (460,491) (493,236) Death benefits (59,295) (344,185) (345,633) (162,747) (84,696) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 956,429 5,650,086 11,089,078 (2,770,470) (621,118) ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 14,783,844 38,964,943 36,904,470 21,660,325 23,116,070 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 9,277,408 $ 33,095,580 $ 36,450,370 $ 12,850,476 $ 15,787,355 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 34,766,823 64,147,250 60,527,027 51,499,504 54,804,774 Contract purchase payments 8,657,280 11,320,860 19,699,535 2,487,830 7,532,843 Net transfers(1) (5,082,265) 841,163 3,145,575 (9,174,152) (8,007,272) Transfers for policy loans (63,884) -- (98,489) -- (116,495) Contract charges (58,520) (41,009) (61,668) (40,604) (87,473) Contract terminations: Surrender benefits (849,431) (1,484,235) (1,378,050) (1,419,555) (1,461,516) Death benefits (170,481) (672,684) (644,759) (469,771) (236,548) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 37,199,522 74,111,345 81,189,171 42,883,252 52,428,313 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 63 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 1IP 2IP 1MG 2MG 1MD OPERATIONS Investment income (loss) -- net $ (139,900) $ (100,626) $ (303,815) $ (256,634) $ (312,231) Net realized gain (loss) on sales of investments (260,970) (52,369) (1,108,330) (793,817) (451,597) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (1,621,411) (1,811,344) (9,711,494) (10,765,671) (12,676,865) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (2,022,281) (1,964,339) (11,123,639) (11,816,122) (13,440,693) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 3,667,889 6,418,148 6,229,638 10,417,521 8,784,803 Net transfers(1) 3,071,393 3,342,871 1,805,651 2,272,851 4,934,262 Transfers for policy loans -- (8,668) -- (32,639) -- Annuity payments (9,929) (8,020) (11,737) (8,418) (1,677) Contract charges (6,612) (8,330) (16,154) (24,920) (16,420) Contract terminations: Surrender benefits (294,712) (283,564) (817,902) (657,839) (706,502) Death benefits (155,011) (29,409) (218,845) (316,519) (222,963) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 6,273,018 9,423,028 6,970,651 11,650,037 12,771,503 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 14,291,834 11,604,651 34,386,783 34,000,110 33,044,416 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 18,542,571 $ 19,063,340 $ 30,233,795 $ 33,834,025 $ 32,375,226 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 19,727,365 15,860,418 51,051,303 50,211,519 36,822,197 Contract purchase payments 5,452,579 9,327,334 11,062,365 18,279,637 11,870,022 Net transfers(1) 4,492,775 4,850,797 2,495,971 3,012,293 6,033,466 Transfers for policy loans -- (13,405) -- (56,899) -- Contract charges (9,961) (12,425) (29,908) (45,941) (24,051) Contract terminations: Surrender benefits (577,996) (437,013) (1,535,284) (1,288,280) (1,000,783) Death benefits (231,400) (43,779) (381,887) (535,914) (317,532) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 28,853,362 29,531,927 62,662,560 69,576,415 53,383,319 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 64 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 2MD 1IN 2IN 1VS 2VS OPERATIONS Investment income (loss) -- net $ (252,889) $ (129,050) $ 35,518) $ (536,834) $ (385,531) Net realized gain (loss) on sales of investments (146,680) (10,384,615) (5,215,862) (12,292,996) (5,661,623) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (13,130,549) 2,691,068 (1,922,606) (9,589,578) (14,121,442) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (13,530,118) (7,822,597) (7,173,986) (22,419,408) (20,168,596) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 13,116,806 2,087,758 4,681,948 4,004,590 8,492,606 Net transfers(1) 6,737,157 (9,208,716) (7,097,325) (10,765,284) (8,197,615) Transfers for policy loans (40,577) -- (47,739) -- (92,203) Annuity payments (2,833) (1,291) (4,474) (22,310) (4,672) Contract charges (24,506) (37,872) (53,022) (42,622) (64,203) Contract terminations: Surrender benefits (552,847) (1,558,108) (1,105,083) (1,547,977) (1,210,509) Death benefits (217,950) (496,938) (202,149) (482,379) (264,142) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 19,015,250 (9,215,167) (3,827,844) (8,855,982) (1,340,738) ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 30,681,980 58,577,640 51,535,271 74,483,171 63,852,496 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 36,167,112 $ 41,539,876 $ 40,533,441 $ 43,207,781 $ 42,343,162 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 34,072,333 90,195,890 78,900,884 87,722,365 74,818,967 Contract purchase payments 17,942,518 3,433,310 7,671,695 5,697,185 12,021,340 Net transfers(1) 8,458,842 (15,341,961) (11,819,305) (16,396,966) (12,432,366) Transfers for policy loans (54,694) -- (79,995) -- (125,199) Contract charges (35,874) (62,381) (87,444) (61,956) (93,898) Contract terminations: Surrender benefits (829,539) (2,606,071) (1,864,830) (2,339,054) (1,789,265) Death benefits (281,115) (849,574) (326,203) (691,817) (366,986) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 59,272,471 74,769,213 72,394,802 73,929,757 72,032,593 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 65 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 1MI 2MI 1SV 2SV 1IT OPERATIONS Investment income (loss) -- net $ (415,394) $ (301,487) $ (421,308) $ (273,498) $ (271,063) Net realized gain (loss) on sales of investments 862,616 192,815 (63,891) (8,221) (753,804) Distributions from capital gains 1,241,332 1,182,876 948,474 834,708 -- Net change in unrealized appreciation or depreciation of investments (8,596,433) (7,553,819) (7,788,467) (6,901,806) (3,628,072) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (6,907,879) (6,479,615) (7,325,192) (6,348,817) (4,652,939) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 1,567,639 2,469,880 2,395,043 3,247,177 6,321,855 Net transfers(1) 6,630,215 9,005,831 5,431,425 6,092,199 4,285,898 Transfers for policy loans -- (16,903) -- (45,663) -- Annuity payments (4,562) (2,125) (3,999) (15,085) (4,475) Contract charges (17,570) (22,510) (24,268) (29,571) (14,377) Contract terminations: Surrender benefits (1,295,306) (1,234,669) (1,289,371) (1,284,982) (739,923) Death benefits (339,803) (92,249) (517,066) (417,582) (310,882) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 6,540,613 10,107,255 5,991,764 7,546,493 9,538,096 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 41,016,510 35,033,177 53,964,613 46,234,801 25,663,389 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 40,649,244 $ 38,660,817 $ 52,631,185 $ 47,432,477 $ 30,548,546 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 23,583,246 20,055,994 31,847,840 27,040,430 30,296,994 Contract purchase payments 917,440 1,473,585 1,459,568 2,024,162 8,081,187 Net transfers(1) 3,597,725 4,884,768 2,967,735 3,354,424 5,288,582 Transfers for policy loans -- (10,049) -- (28,537) -- Contract charges (10,555) (13,491) (15,059) (18,282) (18,094) Contract terminations: Surrender benefits (812,943) (742,007) (827,206) (794,374) (953,926) Death benefits (212,157) (55,689) (323,341) (242,687) (385,906) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 27,062,756 25,593,111 35,109,537 31,335,136 42,308,837 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 66 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 2IT 1SP 2SP 1AA 2AA OPERATIONS Investment income (loss) -- net $ (208,427) $ (595,605) $ (463,521) $ 88,546 $ 129,770 Net realized gain (loss) on sales of investments (204,841) (119,971) (5,393) (60,143) (40,543) Distributions from capital gains -- -- -- 69,604 86,201 Net change in unrealized appreciation or depreciation of investments (4,210,201) (11,893,766) (11,741,930) (1,029,825) (1,365,969) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (4,623,469) (12,609,342) (12,210,844) (931,818) (1,190,541) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 9,327,354 18,130,356 26,715,272 4,507,289 6,397,061 Net transfers(1) 3,973,057 12,140,991 14,825,155 3,345,301 3,745,797 Transfers for policy loans (35,902) -- (75,788) -- (5,756) Annuity payments (2,303) (12,497) (3,204) (788) (248) Contract charges (20,280) (30,181) (38,893) (2,746) (4,004) Contract terminations: Surrender benefits (543,855) (1,477,203) (1,229,699) (112,259) (163,838) Death benefits (84,527) (432,409) (310,011) (16,863) -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 12,613,544 28,319,057 39,882,832 7,719,934 9,969,012 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 23,627,517 53,762,660 47,363,850 3,120,142 3,682,381 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 31,617,592 $ 69,472,375 $ 75,035,838 $ 9,908,258 $ 12,460,852 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 27,817,713 46,456,080 40,791,482 3,223,573 3,799,139 Contract purchase payments 11,583,078 17,344,297 25,474,549 5,098,853 7,120,413 Net transfers(1) 5,032,907 11,022,673 13,657,813 3,701,708 4,148,615 Transfers for policy loans (44,915) -- (74,886) -- (6,388) Contract charges (25,558) (29,565) (38,015) (3,214) (4,680) Contract terminations: Surrender benefits (701,350) (1,512,468) (1,212,634) (142,732) (193,290) Death benefits (107,873) (428,044) (287,226) (19,033) -- ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 43,554,002 72,852,973 78,311,083 11,859,155 14,863,809 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 67 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS --------------------------------------------------------- YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 1WI 2WI 1SG 2SG OPERATIONS Investment income (loss) -- net $ (10,542) $ (12,197) $ (31,096) $ (29,762) Net realized gain (loss) on sales of investments (26,043) (29,260) (63,438) (48,757) Distributions from capital gains -- -- -- -- Net change in unrealized appreciation or depreciation of investments (351,155) (576,936) (1,495,003) (1,747,517) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (387,740) (618,393) (1,589,537) (1,826,036) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 755,416 1,629,123 2,389,913 3,805,144 Net transfers(1) 640,393 1,180,252 1,614,913 1,946,653 Transfers for policy loans -- (2,669) -- (3,846) Annuity payments -- -- -- (6) Contract charges (633) (845) (1,617) (2,168) Contract terminations: Surrender benefits (6,572) (23,129) (100,806) (72,758) Death benefits (19,619) (5,071) (6,086) (20,193) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 1,368,985 2,777,661 3,896,317 5,652,826 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 927,595 1,080,049 2,095,392 1,939,030 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 1,908,840 $ 3,239,317 $ 4,402,172 $ 5,765,820 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 1,030,776 1,199,580 2,229,738 2,060,286 Contract purchase payments 986,332 2,098,893 3,458,438 5,432,455 Net transfers(1) 797,810 1,448,936 2,121,393 2,658,636 Transfers for policy loans -- (3,707) -- (6,223) Contract charges (881) (1,173) (2,713) (3,615) Contract terminations: Surrender benefits (8,391) (32,251) (143,010) (114,585) Death benefits (25,133) (7,462) (9,203) (34,701) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 2,780,513 4,702,816 7,654,643 9,992,253 ===================================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. (2) For the period March 1, 2002 (commencement of operations) to Dec. 31, 2002. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 68 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2001 BC1 BC2 BD1 BD2 CR1 OPERATIONS Investment income (loss) -- net $ (82,542) $ (577) $ 4,472,512 $ 3,511,227 $ (130,576) Net realized gain (loss) on sales of investments (913,700) (419,447) 10,608 11,539 (1,013,877) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (7,186,847) (5,811,752) 125,819 21,829 (3,287,133) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (8,183,089) (6,231,776) 4,608,939 3,544,595 (4,431,586) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 6,713,990 6,771,370 49,725,069 42,970,829 4,389,778 Net transfers(1) 1,293,753 1,958,191 21,962,987 18,805,553 594,595 Transfers for policy loans -- (40,036) -- (70,196) -- Annuity payments (9,583) (10,278) (16,215) (29,070) (8,738) Contract charges (17,721) (23,153) (14,674) (11,523) (8,792) Contract terminations: Surrender benefits (805,610) (769,340) (1,194,952) (1,777,156) (673,922) Death benefits (884,333) (220,527) (879,328) (426,007) (292,495) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 6,290,496 7,666,227 69,582,887 59,462,430 4,000,426 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 42,640,523 32,328,669 46,643,337 32,903,174 20,805,184 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 40,747,930 $ 33,763,120 $120,835,163 $ 95,910,199 $ 20,374,024 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 43,160,879 32,624,409 43,919,764 30,783,302 22,158,834 Contract purchase payments 7,625,134 7,686,234 45,045,501 38,716,653 5,314,026 Net transfers(1) 1,058,740 2,014,717 19,675,405 16,518,832 574,720 Transfers for policy loans -- (46,285) -- (59,966) -- Contract charges (20,805) (27,391) (13,229) (10,334) (11,157) Contract terminations: Surrender benefits (929,594) (904,763) (1,077,005) (1,594,166) (874,065) Death benefits (997,245) (264,288) (790,563) (385,976) (383,402) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 49,897,109 41,082,633 106,759,873 83,968,345 26,778,956 ===================================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 69 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) CR2 CM1 CM2 DE1 DE2 OPERATIONS Investment income (loss) -- net $ (91,410) $ 6,777,254 $ 6,693,209 $ 75,573 $ 130,806 Net realized gain (loss) on sales of investments (1,446,808) (6,224) (5,115) 6,237 (18,579) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (3,108,462) (1,569) (2,181) 318,919 400,925 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (4,646,680) 6,769,461 6,685,913 400,729 513,152 =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 4,776,551 342,222,386 369,657,167 14,054,361 13,752,558 Net transfers(1) (1,587,827) (263,139,059) (281,078,216) 14,212,636 19,259,054 Transfers for policy loans (16,136) -- (646,854) -- (45,235) Annuity payments (14,795) (8,031) (10,821) (4,776) (15,001) Contract charges (11,664) (36,516) (34,717) (6,393) (7,748) Contract terminations: Surrender benefits (674,343) (8,710,090) (9,225,653) (479,935) (909,530) Death benefits (79,495) (3,529,330) (913,821) (378,637) (47,949) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 2,392,291 66,799,360 77,747,085 27,397,256 31,986,149 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 22,498,228 216,160,455 182,627,717 14,383,005 12,314,922 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 20,243,839 $289,729,276 $267,060,715 $ 42,180,990 $ 44,814,223 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 24,003,237 203,921,835 171,785,378 14,226,644 12,123,600 Contract purchase payments 5,867,959 317,770,845 341,825,045 13,856,380 13,564,035 Net transfers(1) (2,553,526) (244,865,486) (259,751,737) 14,080,483 18,634,557 Transfers for policy loans (19,854) -- (603,310) -- (44,661) Contract charges (14,838) (33,798) (31,998) (6,381) (7,724) Contract terminations: Surrender benefits (848,811) (8,070,470) (8,515,673) (485,399) (894,796) Death benefits (107,334) (3,267,463) (837,718) (372,450) (46,843) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 26,326,833 265,455,463 243,869,987 41,299,277 43,328,168 ===================================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 70 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2001 (CONTINUED) EM1 EM2 ES1(2) ES2(2) EI1 OPERATIONS Investment income (loss) -- net $ (7,822) $ (7,440) $ (5,336) $ (4,556) $ 6,782,428 Net realized gain (loss) on sales of investments (23,970) (32,388) (3,305) (755) (303,977) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments 24,439 30,375 145,238 166,115 (4,672,141) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (7,353) (9,453) 136,597 160,804 1,806,310 =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 340,551 423,682 1,223,750 1,104,678 26,521,344 Net transfers(1) 306,917 224,616 865,376 1,222,298 9,620,050 Transfers for policy loans -- 6 -- (2,271) -- Annuity payments -- -- -- -- (9,476) Contract charges (325) (388) (51) (93) (12,818) Contract terminations: Surrender benefits (38,486) (15,340) (821) (8,855) (1,051,390) Death benefits (3,324) -- (420) -- (777,077) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 605,333 632,576 2,087,834 2,315,757 34,290,633 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 510,421 667,909 -- -- 47,919,805 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 1,108,401 $ 1,291,032 $ 2,224,431 $ 2,476,561 $ 84,016,748 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 693,177 905,842 -- -- 52,654,863 Contract purchase payments 474,542 610,461 1,328,039 1,194,587 28,119,894 Net transfers(1) 437,651 296,013 911,692 1,306,648 9,999,258 Transfers for policy loans -- 8 -- (2,764) -- Contract charges (495) (585) (55) (98) (13,626) Contract terminations: Surrender benefits (58,645) (22,297) (829) (9,603) (1,120,170) Death benefits (4,724) -- (495) -- (826,853) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 1,541,506 1,789,442 2,238,352 2,488,770 88,813,366 ===================================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. (2) For the period May 1, 2001 (commencement of operations) to Dec. 31, 2001. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 71 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2001 (CONTINUED) EI2 FI1 FI2 GB1 GB2 OPERATIONS Investment income (loss) -- net $ 4,393,097 $ 1,602,320 $ 1,386,303 $ 515,000 $ 374,108 Net realized gain (loss) on sales of investments (160,883) 115,344 105,834 7,743 8,801 Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (3,021,874) 303,044 183,508 (374,661) (248,055) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 1,210,340 2,020,708 1,675,645 148,082 134,854 =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 17,068,500 41,951,942 45,451,233 6,302,051 3,913,988 Net transfers(1) 9,900,374 (3,649,829) (5,340,773) 4,226,401 4,150,291 Transfers for policy loans (18,715) -- 13,336 -- (7,782) Annuity payments (7,176) (17,845) (21,104) -- (223) Contract charges (7,504) (5,991) (4,504) (3,360) (2,027) Contract terminations: Surrender benefits (1,163,675) (1,083,884) (1,246,093) (251,279) (238,993) Death benefits (412,002) (1,132,180) (132,028) (265,966) (49,779) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 25,359,802 36,062,213 38,720,067 10,007,847 7,765,475 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 28,915,641 26,743,478 17,556,373 14,463,486 9,199,006 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 55,485,783 $ 64,826,399 $ 57,952,085 $ 24,619,415 $ 17,099,335 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 31,722,406 24,654,215 16,257,973 14,136,694 8,967,857 Contract purchase payments 18,004,587 37,617,335 40,630,026 6,194,256 3,840,138 Net transfers(1) 10,328,772 (3,318,511) (5,159,591) 4,148,142 4,053,818 Transfers for policy loans (33,737) -- 14,016 -- (6,265) Contract charges (7,970) (5,337) (4,001) (3,291) (1,972) Contract terminations: Surrender benefits (1,230,737) (970,409) (1,110,127) (245,710) (233,242) Death benefits (435,132) (1,011,495) (118,564) (259,921) (48,247) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 58,348,189 56,965,798 50,509,732 23,970,170 16,572,087 ===================================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 72 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2001 (CONTINUED) GR1 GR2 IE1 IE2 MF1 OPERATIONS Investment income (loss) -- net $ (854,224) $ (644,742) $ 37,851 $ 55,628 $ 743,187 Net realized gain (loss) on sales of investments (2,571,206) (2,056,467) (3,129,842) (1,771,542) (532,527) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (33,312,633) (31,681,624) (1,774,706) (2,564,164) (5,943,562) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (36,738,063) (34,382,833) (4,866,697) (4,280,078) (5,732,902) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 16,856,244 22,672,049 2,526,895 3,347,153 12,432,772 Net transfers(1) 6,551,337 5,300,049 322,065 (1,055,780) 2,859,791 Transfers for policy loans -- (73,853) -- (2,785) -- Annuity payments (8,261) (13,230) (5,487) (1,816) (32,558) Contract charges (50,870) (82,403) (5,833) (7,519) (16,001) Contract terminations: Surrender benefits (1,763,967) (1,542,695) (208,700) (528,184) (883,015) Death benefits (876,449) (577,553) (134,254) (79,529) (1,023,983) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 20,708,034 25,682,364 2,494,686 1,671,540 13,337,006 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 100,465,370 92,620,324 14,922,547 13,261,738 42,321,065 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 84,435,341 $ 83,919,855 $ 12,550,536 $ 10,653,200 $ 49,925,169 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 106,410,129 97,753,895 15,669,531 13,967,274 39,809,954 Contract purchase payments 21,363,294 29,129,404 3,247,058 4,307,312 12,624,783 Net transfers(1) 6,683,732 5,493,506 239,461 (1,622,539) 2,672,442 Transfers for policy loans -- (91,133) -- (4,766) -- Contract charges (71,973) (119,314) (7,867) (10,211) (16,866) Contract terminations: Surrender benefits (2,419,809) (2,109,768) (289,347) (707,757) (933,490) Death benefits (1,201,738) (871,044) (194,512) (108,239) (1,060,378) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 130,763,635 129,185,546 18,664,324 15,821,074 53,096,445 ===================================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 73 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2001 (CONTINUED) MF2 ND1 ND2 IV1 IV2 OPERATIONS Investment income (loss) -- net $ 605,079 $ (1,772,223) $ (1,077,220) $ (8,959) $ 32,791 Net realized gain (loss) on sales of investments (613,772) (1,450,035) (826,428) (266,630) (116,886) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (4,117,880) (43,582,529) (36,023,903) (2,445,276) (1,793,989) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (4,126,573) (46,804,787) (37,927,551) (2,720,865) (1,878,084) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 10,904,709 59,630,863 69,607,526 13,255,005 11,375,665 Net transfers(1) 436,226 31,815,657 30,242,168 9,098,862 10,347,928 Transfers for policy loans (62,185) -- (300,355) -- (8,382) Annuity payments (28,440) (106,582) (64,007) (12,768) (4,371) Contract charges (18,959) (122,887) (209,732) (5,261) (6,867) Contract terminations: Surrender benefits (1,016,110) (4,269,471) (4,656,885) (298,965) (302,197) Death benefits (251,211) (3,154,328) (1,242,509) (171,996) (92,554) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 9,964,030 83,793,252 93,376,206 21,864,877 21,309,222 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 30,159,611 235,893,042 190,659,736 12,868,330 8,897,601 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 35,997,068 $272,881,507 $246,108,391 $ 32,012,342 $ 28,328,739 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 28,347,806 219,315,532 177,036,037 14,083,617 9,811,519 Contract purchase payments 10,883,619 63,685,877 75,517,249 16,088,251 13,932,671 Net transfers(1) (71,035) 32,657,262 30,544,238 11,020,795 12,722,058 Transfers for policy loans (62,503) -- (327,660) -- (10,599) Contract charges (19,991) (135,276) (234,162) (6,709) (8,769) Contract terminations: Surrender benefits (1,055,709) (4,683,672) (5,097,329) (389,780) (375,218) Death benefits (261,905) (3,519,791) (1,384,427) (221,196) (114,275) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 37,760,282 307,319,932 276,053,946 40,574,978 35,957,387 ===================================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 74 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2001 (CONTINUED) SC1 SC2 SA1 SA2 1CA OPERATIONS Investment income (loss) -- net $ (209,229) $ (151,301) $ (427,976) $ (265,336) $ (472,913) Net realized gain (loss) on sales of investments (78,014) (102,425) (4,487,060) (2,587,418) (1,299,038) Distributions from capital gains -- -- -- -- 3,910,723 Net change in unrealized appreciation or depreciation of investments (950,703) (831,931) (20,948,920) (18,639,966) (16,687,993) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (1,237,946) (1,085,657) (25,863,956) (21,492,720) (14,549,221) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 5,853,998 5,837,161 9,246,850 12,570,125 7,690,204 Net transfers(1) 3,157,833 3,277,581 1,648 887,054 2,731,030 Transfers for policy loans -- (22,951) -- (42,648) -- Annuity payments (2,360) (151) (10,453) (9,925) (12,036) Contract charges (9,334) (10,559) (33,125) (48,827) (25,718) Contract terminations: Surrender benefits (385,481) (501,925) (913,800) (1,190,958) (777,703) Death benefits (199,328) (146,546) (471,176) (242,645) (431,767) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 8,415,328 8,432,610 7,819,944 11,922,176 9,174,010 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 18,980,101 17,246,771 71,088,816 57,335,128 53,974,720 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 26,157,483 $ 24,593,724 $ 53,044,804 $ 47,764,584 $ 48,599,509 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 16,348,580 14,830,157 58,413,697 46,977,698 46,419,120 Contract purchase payments 5,556,365 5,537,409 9,712,757 13,376,509 7,709,478 Net transfers(1) 3,010,893 3,075,969 (929,954) 114,697 2,267,123 Transfers for policy loans -- (22,722) -- (51,536) -- Contract charges (9,009) (10,209) (37,329) (55,627) (27,760) Contract terminations: Surrender benefits (373,745) (478,787) (1,025,427) (1,350,333) (849,736) Death benefits (186,586) (139,578) (559,361) (263,638) (474,196) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 24,346,498 22,792,239 65,574,383 58,747,770 55,044,029 ===================================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 75 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2001 (CONTINUED) 2CA 1CD 2CD 1IF 2IF OPERATIONS Investment income (loss) -- net $ (319,093) $ (286,740) $ (202,653) $ (224,510) $ (135,113) Net realized gain (loss) on sales of investments (717,517) (165,754) (118,474) (492,164) (362,777) Distributions from capital gains 3,518,641 -- -- 2,232,436 1,718,964 Net change in unrealized appreciation or depreciation of investments (14,555,868) (2,317,737) (2,074,736) (10,672,533) (8,262,861) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (12,073,837) (2,770,231) (2,395,863) (9,156,771) (7,041,787) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 10,182,621 4,877,152 6,209,574 6,841,721 6,196,555 Net transfers(1) 3,337,537 3,113,595 2,776,531 5,033,317 3,956,767 Transfers for policy loans (56,341) -- (18,364) -- (2,931) Annuity payments (2,287) (292) (1,480) (1,865) (3,157) Contract charges (31,564) (12,121) (15,272) (8,588) (10,169) Contract terminations: Surrender benefits (707,699) (428,838) (502,045) (263,832) (244,305) Death benefits (247,349) (182,651) (121,454) (144,706) (38,458) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 12,474,918 7,366,845 8,327,490 11,456,047 9,854,302 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 43,547,130 27,199,873 23,283,071 24,406,383 18,555,890 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 43,948,211 $ 31,796,487 $ 29,214,698 $ 26,705,659 $ 21,368,405 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 37,378,870 19,877,962 16,976,713 20,591,294 15,533,280 Contract purchase payments 10,282,799 3,779,002 4,825,376 6,890,407 6,235,095 Net transfers(1) 3,012,223 2,367,215 2,040,836 5,099,341 4,018,278 Transfers for policy loans (54,006) -- (12,601) -- (3,773) Contract charges (34,516) (9,871) (12,447) (9,391) (11,085) Contract terminations: Surrender benefits (753,372) (338,522) (397,070) (284,773) (266,718) Death benefits (257,519) (144,465) (97,161) (159,747) (45,612) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 49,574,479 25,531,321 23,323,646 32,127,131 25,459,465 ===================================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 76 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2001 (CONTINUED) 1VA 2VA 1SR 2SR 1EG OPERATIONS Investment income (loss) -- net $ (51,322) $ (4,376) $ 170,068 $ 131,183 $ (244,800) Net realized gain (loss) on sales of investments 13,715 1,953 (32,915) (15,222) (690,346) Distributions from capital gains -- -- 98,967 73,349 -- Net change in unrealized appreciation or depreciation of investments 4,391,063 3,617,419 (464,785) (348,450) (4,339,346) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 4,353,456 3,614,996 (228,665) (159,140) (5,274,492) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 9,373,909 8,151,214 2,027,795 1,627,761 2,784,232 Net transfers(1) 14,631,349 15,797,982 2,100,155 1,370,419 511,716 Transfers for policy loans -- (21,749) -- (15,288) -- Annuity payments (12,063) (8,386) -- -- (3,369) Contract charges (11,882) (12,727) (1,091) (2,458) (13,005) Contract terminations: Surrender benefits (764,491) (464,585) (107,149) (57,223) (531,243) Death benefits (201,368) (81,108) (14,150) (2,099) (282,676) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 23,015,454 23,360,641 4,005,560 2,921,112 2,465,655 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 22,777,190 15,805,932 1,626,644 1,234,663 29,066,767 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 50,146,100 $ 42,781,569 $ 5,403,539 $ 3,996,635 $ 26,257,930 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 21,040,614 14,535,588 1,692,742 1,282,907 22,624,259 Contract purchase payments 8,381,412 7,266,112 2,218,817 1,779,788 2,537,478 Net transfers(1) 12,914,041 13,961,417 2,315,274 1,513,134 338,353 Transfers for policy loans -- (19,521) -- (16,900) -- Contract charges (10,636) (11,312) (1,219) (2,766) (12,549) Contract terminations: Surrender benefits (687,343) (412,115) (119,334) (63,819) (514,879) Death benefits (178,221) (72,626) (15,831) (2,480) (275,961) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 41,459,867 35,247,543 6,090,449 4,489,864 24,696,701 ===================================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 77 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2001 (CONTINUED) 2EG 1GI 2GI 1MP 2MP OPERATIONS Investment income (loss) -- net $ (154,115) $ 87,389 $ 207,832 $ (868,573) $ (577,666) Net realized gain (loss) on sales of investments (419,450) (189,051) (150,607) 64,910 (1,402) Distributions from capital gains -- 3,308,903 2,707,030 -- -- Net change in unrealized appreciation or depreciation of investments (3,479,378) (11,895,140) (9,677,207) (1,608,347) (761,682) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (4,052,943) (8,687,899) (6,912,952) (2,412,010) (1,340,750) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 3,209,162 21,849,736 22,071,084 17,800,677 19,002,624 Net transfers(1) (160,835) 19,392,288 17,179,871 13,238,006 15,112,119 Transfers for policy loans (26,465) -- (106,025) -- (106,082) Annuity payments (2,379) (16,674) (5,716) (9,375) (9,316) Contract charges (15,474) (38,195) (44,174) (39,447) (52,074) Contract terminations: Surrender benefits (312,171) (1,258,842) (1,400,193) (1,422,167) (1,277,979) Death benefits (55,282) (781,638) (359,374) (830,436) (366,454) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 2,636,556 39,146,675 37,335,473 28,737,258 32,302,838 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 22,943,935 77,507,705 63,409,394 79,462,679 63,052,291 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 21,527,548 $107,966,481 $ 93,831,915 $105,787,927 $ 94,014,379 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 17,824,986 77,558,155 63,413,963 48,251,254 38,192,652 Contract purchase payments 2,979,859 23,565,185 23,874,057 11,734,699 12,501,923 Net transfers(1) (259,517) 20,913,598 18,522,930 8,657,167 9,889,187 Transfers for policy loans (22,969) -- (118,042) -- (70,653) Contract charges (15,003) (42,374) (48,930) (26,201) (34,501) Contract terminations: Surrender benefits (297,333) (1,390,052) (1,536,185) (937,092) (844,541) Death benefits (52,278) (868,871) (389,186) (547,990) (241,203) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 20,157,745 119,735,641 103,718,607 67,131,837 59,392,864 ===================================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 78 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2001 (CONTINUED) 1OS 2OS 1RE 2RE 1SI OPERATIONS Investment income (loss) -- net $ 864,842 $ 767,484 $ 438,336 $ 543,489 $ (45,755) Net realized gain (loss) on sales of investments (418,007) (469,696) 10,478 7,290 104,043 Distributions from capital gains 1,752,330 1,470,501 -- -- 160,532 Net change in unrealized appreciation or depreciation of investments (8,407,070) (6,881,035) 906,281 1,105,161 774,134 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (6,207,905) (5,112,746) 1,355,095 1,655,940 992,954 =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 5,586,708 5,331,508 8,885,161 10,446,964 4,041,752 Net transfers(1) 3,744,119 3,077,853 8,981,834 12,674,981 4,664,868 Transfers for policy loans -- (13,698) -- (27,212) -- Annuity payments (3,901) (7,819) (1,844) (3,884) (1,810) Contract charges (9,996) (11,851) (3,956) (3,675) (2,243) Contract terminations: Surrender benefits (321,025) (289,373) (213,105) (294,970) (193,616) Death benefits (191,769) (47,121) (261,009) (67,577) (82,052) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 8,804,136 8,039,499 17,387,081 22,724,627 8,426,899 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 22,558,219 18,664,093 7,721,569 8,611,678 3,449,583 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 25,154,450 $ 21,590,846 $ 26,463,745 $ 32,992,245 $ 12,869,436 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 22,910,417 18,802,071 6,181,452 6,879,005 2,896,941 Contract purchase payments 6,296,418 6,055,827 6,986,100 8,159,536 3,191,589 Net transfers(1) 4,192,235 3,414,587 7,011,251 9,745,835 3,715,737 Transfers for policy loans -- (15,380) -- (21,550) -- Contract charges (11,955) (14,238) (3,111) (2,877) (1,779) Contract terminations: Surrender benefits (394,669) (337,786) (166,798) (230,473) (151,482) Death benefits (234,250) (55,087) (205,440) (52,626) (67,400) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 32,758,196 27,849,994 19,803,454 24,476,850 9,583,606 ===================================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 79 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2001 (CONTINUED) 2SI 1IS 2IS 1SE 2SE OPERATIONS Investment income (loss) -- net $ (31,465) $ 138,298 $ 111,131 $ (124,796) $ (60,369) Net realized gain (loss) on sales of investments 51,980 (73,456) (24,576) (62,539) (43,912) Distributions from capital gains 184,139 -- -- -- -- Net change in unrealized appreciation or depreciation of investments 856,927 (290,146) (221,948) 928,975 723,121 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 1,061,581 (225,304) (135,393) 741,640 618,840 =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 4,522,531 987,533 980,296 3,296,460 3,043,608 Net transfers(1) 5,794,604 768,821 1,577,133 1,997,432 1,648,679 Transfers for policy loans (2,027) -- (7,139) -- (14,568) Annuity payments (1,529) -- (548) (537) -- Contract charges (2,860) (2,211) (2,958) (7,533) (8,902) Contract terminations: Surrender benefits (151,486) (378,557) (54,330) (286,178) (199,741) Death benefits (12,078) (16,091) (8,169) (209,537) (21,949) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 10,147,155 1,359,495 2,484,285 4,790,107 4,447,127 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 3,399,162 5,644,937 3,326,898 16,896,746 11,726,585 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 14,607,898 $ 6,779,128 $ 5,675,790 $ 22,428,493 $ 16,792,552 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 2,846,415 5,681,762 3,340,062 14,808,616 10,251,699 Contract purchase payments 3,562,029 1,018,727 1,010,628 2,907,518 2,694,624 Net transfers(1) 4,524,344 776,253 1,621,994 1,714,386 1,429,810 Transfers for policy loans (1,530) -- (6,802) -- (13,367) Contract charges (2,263) (2,331) (3,119) (6,803) (8,050) Contract terminations: Surrender benefits (119,134) (382,374) (56,800) (256,228) (181,709) Death benefits (9,602) (16,633) (8,568) (193,734) (20,483) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 10,800,259 7,075,404 5,897,395 18,973,755 14,152,524 ===================================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 80 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2001 (CONTINUED) 1UE 2UE 1MC 2MC 1AG OPERATIONS Investment income (loss) -- net $ (273,701) $ (119,452) $ 89,023 $ 141,950 $ (213,967) Net realized gain (loss) on sales of investments (413,490) (226,579) 87,648 17,660 (954,494) Distributions from capital gains -- -- 1,516,830 1,468,606 -- Net change in unrealized appreciation or depreciation of investments (7,282,490) (5,877,468) 906,258 801,503 (11,163,908) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (7,969,681) (6,223,499) 2,599,759 2,429,719 (12,332,369) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 11,247,637 11,891,552 9,032,982 9,221,589 7,070,397 Net transfers(1) 5,103,333 5,262,528 10,002,095 12,104,964 3,786,959 Transfers for policy loans -- (24,460) -- (15,381) -- Annuity payments (15,794) (7,300) (4,549) (1,322) (901) Contract charges (21,579) (25,706) (6,832) (8,207) (12,507) Contract terminations: Surrender benefits (953,975) (660,399) (232,786) (329,366) (362,811) Death benefits (656,027) (223,897) (209,063) (170,149) (182,528) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 14,703,595 16,212,318 18,581,847 20,802,128 10,298,609 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 54,626,689 42,286,180 12,654,338 9,404,909 23,694,085 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 61,360,603 $ 52,274,999 $ 33,835,944 $ 32,636,756 $ 21,660,325 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 55,239,000 42,626,277 10,264,919 7,621,857 33,689,463 Contract purchase payments 12,436,157 13,184,883 7,058,847 7,185,335 12,849,122 Net transfers(1) 5,367,228 5,578,691 7,737,981 9,348,264 6,204,542 Transfers for policy loans -- (27,757) -- (12,103) -- Contract charges (24,432) (29,269) (5,370) (6,403) (28,129) Contract terminations: Surrender benefits (1,083,166) (742,451) (180,113) (256,934) (815,876) Death benefits (750,081) (247,628) (165,101) (131,864) (399,618) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 71,184,706 60,342,746 24,711,163 23,748,152 51,499,504 ===================================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 81 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2001 (CONTINUED) 2AG 1GT 2GT 1IG 2IG OPERATIONS Investment income (loss) -- net $ (165,701) $ (38,091) $ (10,121) $ (61,998) $ 2,714 Net realized gain (loss) on sales of investments (1,012,073) (856,608) (393,454) (51,516) (10,053) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (10,418,749) (6,499,353) (6,655,709) (8,186,408) (7,319,717) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (11,596,523) (7,394,052) (7,059,284) (8,299,922) (7,327,056) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 9,595,746 4,011,029 5,730,228 14,980,212 14,291,665 Net transfers(1) 4,825,193 2,542,755 2,603,897 9,522,379 9,953,694 Transfers for policy loans (32,177) -- (23,450) -- (49,143) Annuity payments (154) (1,091) (2,178) (6,037) (3,479) Contract charges (24,701) (8,500) (16,036) (11,672) (17,536) Contract terminations: Surrender benefits (374,946) (315,933) (227,404) (409,006) (388,797) Death benefits (133,877) (81,265) (101,131) (243,905) (214,976) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 13,855,084 6,146,995 7,963,926 23,831,971 23,571,428 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 20,857,509 15,683,198 13,879,202 23,432,894 20,660,098 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 23,116,070 $ 14,436,141 $ 14,783,844 $ 38,964,943 $ 36,904,470 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 29,626,246 22,949,067 20,288,328 29,250,538 25,763,066 Contract purchase payments 17,792,852 7,706,877 10,839,841 22,128,762 21,190,994 Net transfers(1) 8,533,285 4,322,817 4,385,598 13,809,533 14,582,951 Transfers for policy loans (62,762) -- (45,348) -- (69,969) Contract charges (56,824) (19,122) (37,533) (19,189) (29,188) Contract terminations: Surrender benefits (771,506) (733,212) (469,230) (631,010) (598,637) Death benefits (256,517) (175,952) (194,833) (391,384) (312,190) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 54,804,774 34,050,475 34,766,823 64,147,250 60,527,027 ===================================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 82 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2001 (CONTINUED) 1IP 2IP 1MG 2MG 1MD OPERATIONS Investment income (loss) -- net $ (112,489) $ (70,072) $ (236,686) $ (174,581) $ (217,120) Net realized gain (loss) on sales of investments (50,200) (38,721) (163,423) (62,660) (36,363) Distributions from capital gains 40,919 32,329 202,473 193,086 641,417 Net change in unrealized appreciation or depreciation of investments (3,156,967) (2,476,219) (6,873,424) (6,415,382) (884,200) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (3,278,737) (2,552,683) (7,071,060) (6,459,537) (496,266) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 4,029,595 3,536,625 12,812,258 13,407,756 10,978,441 Net transfers(1) 3,406,698 3,104,721 9,300,911 9,808,312 8,706,484 Transfers for policy loans -- (4,243) -- (11,334) -- Annuity payments (5,591) (3,743) (2,646) (3,017) (817) Contract charges (3,291) (4,305) (8,618) (11,958) (7,125) Contract terminations: Surrender benefits (154,209) (110,735) (393,028) (308,843) (328,860) Death benefits (127,739) (38,890) (140,271) (129,532) (214,216) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 7,145,463 6,479,430 21,568,606 22,751,384 19,133,907 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 10,425,108 7,677,904 19,889,237 17,708,263 14,406,775 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 14,291,834 $ 11,604,651 $ 34,386,783 $ 34,000,110 $ 33,044,416 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 10,774,085 7,957,614 21,973,127 19,520,956 15,060,304 Contract purchase payments 5,051,786 4,394,123 17,264,583 18,104,083 12,549,526 Net transfers(1) 4,255,381 3,706,041 12,582,742 13,220,164 9,841,991 Transfers for policy loans -- (5,825) -- (16,378) -- Contract charges (4,139) (5,461) (12,803) (18,019) (8,555) Contract terminations: Surrender benefits (188,758) (135,186) (561,954) (428,241) (378,057) Death benefits (160,990) (50,888) (194,392) (171,046) (243,012) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 19,727,365 15,860,418 51,051,303 50,211,519 36,822,197 ===================================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 83 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2001 (CONTINUED) 2MD 1IN 2IN 1VS 2VS OPERATIONS Investment income (loss) -- net $ (155,358) $ (601,574) $ (396,643) $ (718,809) $ (448,604) Net realized gain (loss) on sales of investments (26,764) (3,819,710) (1,664,975) (2,011,055) (449,268) Distributions from capital gains 576,479 -- -- 8,994,193 6,840,074 Net change in unrealized appreciation or depreciation of investments (833,867) (19,249,673) (17,170,818) (40,243,494) (31,629,377) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (439,510) (23,670,957) (19,232,436) (33,979,165) (25,687,175) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 11,309,994 9,437,729 13,282,018 15,797,036 19,660,439 Net transfers(1) 8,326,647 790,471 632,344 6,556,174 6,897,008 Transfers for policy loans (21,488) -- (41,201) -- (33,928) Annuity payments (1,028) (1,783) (3,578) (11,857) (6,159) Contract charges (11,665) (39,464) (51,727) (42,306) (55,900) Contract terminations: Surrender benefits (250,725) (1,136,863) (920,580) (1,205,261) (1,021,512) Death benefits (33,747) (967,839) (215,922) (866,383) (290,696) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 19,317,988 8,082,251 12,681,354 20,227,403 25,149,252 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 11,803,502 74,166,346 58,086,353 88,234,933 64,390,419 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 30,681,980 $ 58,577,640 $ 51,535,271 $ 74,483,171 $ 63,852,496 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 12,307,954 80,679,206 62,963,558 68,406,853 49,764,177 Contract purchase payments 12,741,013 12,591,546 17,778,451 15,971,024 20,196,251 Net transfers(1) 9,389,635 (122,723) (117,182) 5,571,397 6,352,975 Transfers for policy loans (25,357) -- (57,262) -- (34,193) Contract charges (14,113) (55,754) (73,574) (47,229) (63,132) Contract terminations: Surrender benefits (289,439) (1,630,013) (1,298,380) (1,323,108) (1,112,370) Death benefits (37,360) (1,266,372) (294,727) (856,572) (284,741) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 34,072,333 90,195,890 78,900,884 87,722,365 74,818,967 ===================================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 84 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2001 (CONTINUED) 1MI 2MI 1SV 2SV 1IT OPERATIONS Investment income (loss) -- net $ (272,589) $ (167,060) $ (291,141) $ (177,572) $ (234,391) Net realized gain (loss) on sales of investments 440,008 101,639 20,174 32,855 (695,201) Distributions from capital gains 620,862 525,881 349,655 283,542 7,477,081 Net change in unrealized appreciation or depreciation of investments 5,905,089 4,691,716 3,775,980 3,093,640 (12,695,973) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 6,693,370 5,152,176 3,854,668 3,232,465 (6,148,484) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 7,432,765 6,421,377 12,826,643 11,979,830 5,516,656 Net transfers(1) 11,452,571 13,000,937 20,560,924 19,160,797 3,132,241 Transfers for policy loans -- (885) -- (30,428) -- Annuity payments (2,751) (410) (2,698) (7,767) (3,039) Contract charges (8,265) (9,370) (9,272) (9,554) (11,914) Contract terminations: Surrender benefits (327,653) (337,469) (496,806) (444,119) (284,371) Death benefits (300,678) (54,893) (110,826) (91,586) (232,447) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 18,245,989 19,019,287 32,767,965 30,557,173 8,117,126 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 16,077,151 10,861,714 17,341,980 12,445,163 23,694,747 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 41,016,510 $ 35,033,177 $ 53,964,613 $ 46,234,801 $ 25,663,389 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 11,880,279 8,005,237 11,523,873 8,231,436 21,844,002 Contract purchase payments 4,797,887 4,123,741 7,984,023 7,418,754 5,822,402 Net transfers(1) 7,308,697 8,185,514 12,726,240 11,748,836 3,201,244 Transfers for policy loans -- (889) -- (19,116) -- Contract charges (5,344) (6,049) (5,797) (5,957) (12,672) Contract terminations: Surrender benefits (208,089) (215,504) (311,879) (276,236) (305,412) Death benefits (190,184) (36,056) (68,620) (57,287) (252,570) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 23,583,246 20,055,994 31,847,840 27,040,430 30,296,994 ===================================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 85 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) 2IT 1SP 2SP 1AA(1) 2AA(1) OPERATIONS Investment income (loss) -- net $ (163,619) $ (364,004) $ (237,638) $ 10,417 $ 15,248 Net realized gain (loss) on sales of investments (260,443) (2,457) (5,616) (954) (2,140) Distributions from capital gains 6,456,348 -- -- 30,669 37,877 Net change in unrealized appreciation or depreciation of investments (11,400,356) 4,610,313 3,898,993 (38,811) (41,304) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (5,368,070) 4,243,852 3,655,739 1,321 9,681 =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 6,525,652 10,704,962 10,940,739 1,257,831 1,426,856 Net transfers(2) 3,196,285 8,497,550 8,429,669 1,871,651 2,273,572 Transfers for policy loans (22,174) -- (29,819) -- (25,507) Annuity payments (2,146) (7,788) (1,601) -- -- Contract charges (15,572) (16,721) (20,088) (51) (126) Contract terminations: Surrender benefits (385,501) (498,756) (519,636) (9,704) (2,095) Death benefits (132,811) (541,875) (112,238) (906) -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 9,163,733 18,137,372 18,687,026 3,118,821 3,672,700 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 19,831,854 31,381,436 25,021,085 -- -- ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 23,627,517 $ 53,762,660 $ 47,363,850 $ 3,120,142 $ 3,682,381 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 18,245,122 29,881,218 23,812,549 -- -- Contract purchase payments 6,894,850 9,799,940 10,053,634 1,304,764 1,475,852 Net transfers(2) 3,288,789 7,725,129 7,550,055 1,929,862 2,352,845 Transfers for policy loans (31,299) -- (28,015) -- (27,305) Contract charges (16,769) (15,497) (18,584) (53) (133) Contract terminations: Surrender benefits (416,135) (452,233) (474,882) (10,000) (2,120) Death benefits (146,845) (482,477) (103,275) (1,000) -- ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 27,817,713 46,456,080 40,791,482 3,223,573 3,799,139 ===================================================================================================================================
(1) For the period May 1, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 86 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS --------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) 1WI(1) 2WI(1) 1SG(1) 2SG(1) OPERATIONS Investment income (loss) -- net $ (2,315) $ (2,164) $ (4,217) $ (3,924) Net realized gain (loss) on sales of investments (5,716) (11,145) (1,806) (68,691) Distributions from capital gains -- -- -- -- Net change in unrealized appreciation or depreciation of investments 5,230 4,777 178,064 95,735 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (2,801) (8,532) 172,041 23,120 =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 602,610 490,980 1,068,838 856,426 Net transfers(2) 328,552 606,011 856,358 1,082,956 Transfers for policy loans -- (96) -- (113) Annuity payments -- -- -- -- Contract charges (24) (59) (75) (69) Contract terminations: Surrender benefits (641) (8,255) (1,770) (23,290) Death benefits (101) -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 930,396 1,088,581 1,923,351 1,915,910 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 927,595 $ 1,080,049 $ 2,095,392 $ 1,939,030 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- -- Contract purchase payments 668,859 550,610 1,263,608 986,305 Net transfers(2) 362,750 657,790 968,011 1,098,757 Transfers for policy loans -- (103) -- (120) Contract charges (28) (65) (87) (79) Contract terminations: Surrender benefits (687) (8,652) (1,794) (24,577) Death benefits (118) -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 1,030,776 1,199,580 2,229,738 2,060,286 ===================================================================================================================================
(1) For the period May 1, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 87 NOTES TO FINANCIAL STATEMENTS 1. ORGANIZATION IDS Life Variable Account 10 (the Account) was established under Minnesota law as a segregated asset account of IDS Life Insurance Company (IDS Life). The Account is registered as a unit investment trust under the Investment Company Act of 1940, as amended (the 1940 Act) and exists in accordance with the rules and regulations of the Insurance Division, Department of Commerce of the State of Minnesota. The Account is comprised of various subaccounts. Each subaccount invests exclusively in shares of the following funds or portfolios (collectively, the Funds), which are registered under the 1940 Act as open-end management investment companies. The subaccounts' investments in shares of the Funds as of Dec. 31, 2002 were as follows:
SUBACCOUNT INVESTS EXCLUSIVELY IN SHARES OF SHARES BC1 AXP(R) Variable Portfolio - Blue Chip Advantage Fund 4,394,767 BC2 AXP(R) Variable Portfolio - Blue Chip Advantage Fund 3,920,558 BD1 AXP(R) Variable Portfolio - Bond Fund(1) 17,922,090 BD2 AXP(R) Variable Portfolio - Bond Fund(1) 17,510,822 CR1 AXP(R) Variable Portfolio - Capital Resource Fund 1,316,219 CR2 AXP(R) Variable Portfolio - Capital Resource Fund 1,986,191 CM1 AXP(R) Variable Portfolio - Cash Management Fund 250,272,090 CM2 AXP(R) Variable Portfolio - Cash Management Fund 280,721,451 DE1 AXP(R) Variable Portfolio - Diversified Equity Income Fund 6,947,125 DE2 AXP(R) Variable Portfolio - Diversified Equity Income Fund 8,927,534 EM1 AXP(R) Variable Portfolio - Emerging Markets Fund 374,356 EM2 AXP(R) Variable Portfolio - Emerging Markets Fund 460,301 ES1 AXP(R) Variable Portfolio - Equity Select Fund 1,172,851 ES2 AXP(R) Variable Portfolio - Equity Select Fund 1,587,053 EI1 AXP(R) Variable Portfolio - Extra Income Fund(2) 18,917,902 EI2 AXP(R) Variable Portfolio - Extra Income Fund(2) 14,542,541 FI1 AXP(R) Variable Portfolio - Federal Income Fund(3) 13,072,556 FI2 AXP(R) Variable Portfolio - Federal Income Fund(3) 14,134,351 GB1 AXP(R) Variable Portfolio - Global Bond Fund 4,078,422 GB2 AXP(R) Variable Portfolio - Global Bond Fund 3,492,335 GR1 AXP(R) Variable Portfolio - Growth Fund 11,712,998 GR2 AXP(R) Variable Portfolio - Growth Fund 13,460,298 IE1 AXP(R) Variable Portfolio - International Fund 1,599,610 IE2 AXP(R) Variable Portfolio - International Fund 1,677,855 MF1 AXP(R) Variable Portfolio - Managed Fund 4,352,362 MF2 AXP(R) Variable Portfolio - Managed Fund 4,383,678 ND1 AXP(R) Variable Portfolio - NEW DIMENSIONS FUND(R) 19,292,863 ND2 AXP(R) Variable Portfolio - NEW DIMENSIONS FUND(R) 20,815,377 IV1 AXP(R) Variable Portfolio - S&P 500 Index Fund 6,554,457 IV2 AXP(R) Variable Portfolio - S&P 500 Index Fund 6,555,401 SC1 AXP(R) Variable Portfolio - Small Cap Advantage Fund 2,979,642 SC2 AXP(R) Variable Portfolio - Small Cap Advantage Fund 2,989,636 SA1 AXP(R) Variable Portfolio - Strategy Aggressive Fund 5,307,628 SA2 AXP(R) Variable Portfolio - Strategy Aggressive Fund 5,705,015 1CA AIM V.I. Capital Appreciation Fund, Series I Shares 1,960,653 2CA AIM V.I. Capital Appreciation Fund, Series I Shares 1,901,251 1CD AIM V.I. Capital Development Fund, Series I Shares 2,379,113 2CD AIM V.I. Capital Development Fund, Series I Shares 2,263,985 1IF American Century(R) VP International, Class I 3,965,353 2IF American Century(R) VP International, Class I 3,420,501 1VA American Century(R) VP Value, Class I 8,402,343 2VA American Century(R) VP Value, Class I 7,426,547 1SR Calvert Variable Series, Inc. Social Balanced Portfolio 5,057,886 2SR Calvert Variable Series, Inc. Social Balanced Portfolio 4,951,430 1EG Credit Suisse Trust - Emerging Growth Portfolio 1,989,616 2EG Credit Suisse Trust - Emerging Growth Portfolio 1,757,669 1GI Fidelity(R) VIP Growth & Income Portfolio Service Class 8,077,907 2GI Fidelity(R) VIP Growth & Income Portfolio Service Class 7,482,199
IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 88
SUBACCOUNT INVESTS EXCLUSIVELY IN SHARES OF SHARES 1MP Fidelity(R) VIP Mid Cap Portfolio Service Class 5,490,220 2MP Fidelity(R) VIP Mid Cap Portfolio Service Class 5,128,398 1OS Fidelity(R) VIP Overseas Portfolio Service Class 1,830,973 2OS Fidelity(R) VIP Overseas Portfolio Service Class 1,623,330 1RE FTVIPT Franklin Real Estate Fund - Class 2 3,368,955 2RE FTVIPT Franklin Real Estate Fund - Class 2 4,517,586 1SI FTVIPT Franklin Small Cap Value Securities Fund - Class 2 2,958,250 2SI FTVIPT Franklin Small Cap Value Securities Fund - Class 2 3,765,000 1TF FTVIPT Templeton Foreign Securities Fund - Class 2(4) 851,982 2TF FTVIPT Templeton Foreign Securities Fund - Class 2(4) 747,810 1SE Goldman Sachs VIT CORE(SM) Small Cap Equity Fund 1,928,079 2SE Goldman Sachs VIT CORE(SM) Small Cap Equity Fund 1,556,795 1UE Goldman Sachs VIT CORE(SM) U.S. Equity Fund 5,930,713 2UE Goldman Sachs VIT CORE(SM) U.S. Equity Fund 5,682,987 1MC Goldman Sachs VIT Mid Cap Value Fund 5,795,312 2MC Goldman Sachs VIT Mid Cap Value Fund 6,865,719 1GT Janus Aspen Series Global Technology Portfolio: Service Shares 3,245,604 2GT Janus Aspen Series Global Technology Portfolio: Service Shares 3,849,547 1IG Janus Aspen Series International Growth Portfolio: Service Shares 1,926,402 2IG Janus Aspen Series International Growth Portfolio: Service Shares 2,121,675 1AG Janus Aspen Series Mid Cap Growth Portfolio: Service Shares 822,694 (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) 2AG Janus Aspen Series Mid Cap Growth Portfolio: Service Shares 1,010,714 (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) 1IP Lazard Retirement International Equity Portfolio 2,286,384 2IP Lazard Retirement International Equity Portfolio 2,350,597 1MG MFS(R) Investors Growth Stock Series - Service Class 4,325,293 2MG MFS(R) Investors Growth Stock Series - Service Class 4,840,347 1MD MFS(R) New Discovery Series - Service Class 3,119,001 2MD MFS(R) New Discovery Series - Service Class 3,484,308 1IN Putnam VT International New Opportunities Fund - Class IB Shares 4,962,948 2IN Putnam VT International New Opportunities Fund - Class IB Shares 4,842,705 1VS Putnam VT Vista Fund - Class IB Shares 5,490,188 2VS Putnam VT Vista Fund - Class IB Shares 5,380,326 1MI Royce Micro-Cap Portfolio 5,348,585 2MI Royce Micro-Cap Portfolio 5,086,950 1SV Third Avenue Value Portfolio 3,511,086 2SV Third Avenue Value Portfolio 3,164,275 1IT Wanger International Small Cap 2,302,076 2IT Wanger International Small Cap 2,382,637 1SP Wanger U.S. Smaller Companies 3,753,235 2SP Wanger U.S. Smaller Companies 4,053,800 1AA Wells Fargo VT Asset Allocation Fund 951,802 2AA Wells Fargo VT Asset Allocation Fund 1,197,008 1WI Wells Fargo VT International Equity Fund 330,822 2WI Wells Fargo VT International Equity Fund 561,407 1SG Wells Fargo VT Small Cap Growth Fund 907,664 2SG Wells Fargo VT Small Cap Growth Fund 1,188,829
(1) Effective June 27, 2003, AXP(R) Variable Portfolio - Bond Fund will change its name to AXP(R) Variable Portfolio - Diversified Bond Fund. (2) Effective June 27, 2003, AXP(R) Variable Portfolio - Extra Income Fund will change its name to AXP(R) Variable Portfolio - High Yield Bond Fund. (3) Effective June 27, 2003, AXP(R) Variable Portfolio - Federal Income Fund will change its name to AXP(R) Variable Portfolio - Short Term U.S. Government Fund. (4) FTVIPT Templeton International Smaller Companies Fund - Class 2 merged into FTVIPT Templeton Foreign Securities Fund - Class 2 as of April 30, 2002. The assets of each subaccount of the Account are not chargeable with liabilities arising out of the business conducted by any other segregated asset account or by IDS Life. IDS Life serves as issuer of the contract. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 89 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES INVESTMENTS IN THE FUNDS Investments in shares of the Funds are stated at market value which is the net asset value per share as determined by the respective Funds. Investment transactions are accounted for on the date the shares are purchased and sold. Realized gains and losses on the sales of investments are computed using the average cost method. Income from dividends and gains from realized capital gain distributions are reinvested in additional shares of the Funds and are recorded as income by the subaccounts on the ex-dividend date. Unrealized appreciation or depreciation of investments in the accompanying financial statements represents the subaccounts' share of the Funds' undistributed net investment income, undistributed realized gain or loss and the unrealized appreciation or depreciation on their investment securities. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of increase and decrease in net assets from operations during the period. Actual results could differ from those estimates. VARIABLE PAYOUT Net assets allocated to contracts in the payout period are periodically compared to a computation which uses the Annuity 2000 Basic Mortality Table and which assumes future mortality improvement. The assumed investment return is 5% unless the annuitant elects otherwise, in which case the rate would be 3.5%, as regulated by the laws of the respective states. The mortality risk is fully borne by IDS Life and may result in additional amounts being transferred into the variable annuity account by IDS Life to cover greater longevity of annuitants than expected. Conversely, if amounts allocated exceed amounts required, transfers may be made to the insurance company. FEDERAL INCOME TAXES IDS Life is taxed as a life insurance company. The Account is treated as part of IDS Life for federal income tax purposes. Under existing federal income tax law, no income taxes are payable with respect to any investment income of the Account to the extent the earnings are credited under the contracts. Based on this, no charge is being made currently to the Account for federal income taxes. The Company will review periodically the status of this policy in the event of changes in the tax law. A charge may be made in future years for any federal income taxes that would be attributable to the contracts. 3. VARIABLE ACCOUNT EXPENSES IDS Life makes contractual assurances to the Account that possible future adverse changes in administrative expenses and mortality experience of the contract owners and annuitants will not affect the Account. IDS Life deducts a daily mortality and expense risk fee equal, on an annual basis, to 0.75% or 0.95% of the average daily net assets of each subaccount, depending on the contract option selected. 4. CONTRACT CHARGES IDS Life deducts a contract administrative charge of $30 per year. This charge reimburses IDS Life for expenses incurred in establishing and maintaining the annuity records. Certain products may waive this charge based upon the underlying contract value. An optional maximum anniversary value death benefit rider and enhanced earnings death benefit rider are available on certain products and if selected, the related fees are deducted annually from the contract value on the contract anniversary. Additional information can be found in the applicable product's prospectus. 5. SURRENDER CHARGES IDS Life will use a surrender charge to help it recover certain expenses related to the sale of the annuity. A surrender charge of up to 8% may be deducted for surrenders up to the first ten payment years following a purchase payment, as depicted in the surrender charge schedule included in the applicable product's prospectus. Charges by IDS Life for surrenders are not identified on an individual segregated asset account basis. Charges for all segregated asset accounts amounted to $22,560,988 in 2002 and $19,059,480 in 2001. Such charges are not treated as a separate expense of the subaccounts. They are ultimately deducted from contract surrender benefits paid by IDS Life. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 90 6. RELATED PARTY TRANSACTIONS Management fees were paid indirectly to IDS Life, in its capacity as investment manager for the American Express(R) Variable Portfolio Funds. The Fund's Investment Management Services Agreement provides for a fee at a percentage of each Fund's average daily net assets in reducing percentages, to give effect to breakpoints in fees due to assets under management within each Fund as follows:
FUND PERCENTAGE RANGE AXP(R) Variable Portfolio - Blue Chip Advantage Fund 0.560% to 0.470% AXP(R) Variable Portfolio - Bond Fund 0.610% to 0.535% AXP(R) Variable Portfolio - Capital Resource Fund 0.630% to 0.570% AXP(R) Variable Portfolio - Cash Management Fund 0.510% to 0.440% AXP(R) Variable Portfolio - Diversified Equity Income Fund 0.560% to 0.470% AXP(R) Variable Portfolio - Emerging Markets Fund 1.170% to 1.095% AXP(R) Variable Portfolio - Equity Select Fund 0.650% to 0.560% AXP(R) Variable Portfolio - Extra Income Fund 0.620% to 0.545% AXP(R) Variable Portfolio - Federal Income Fund 0.610% to 0.535% AXP(R) Variable Portfolio - Global Bond Fund 0.840% to 0.780% AXP(R) Variable Portfolio - Growth Fund 0.630% to 0.570% AXP(R) Variable Portfolio - International Fund 0.870% to 0.795% AXP(R) Variable Portfolio - Managed Fund 0.630% to 0.550% AXP(R) Variable Portfolio - NEW DIMENSIONS FUND(R) 0.630% to 0.570% AXP(R) Variable Portfolio - S&P 500 Index Fund 0.290% to 0.260% AXP(R) Variable Portfolio - Small Cap Advantage Fund 0.790% to 0.650% AXP(R) Variable Portfolio - Strategy Aggressive Fund 0.650% to 0.575%
For the following Funds the fee may be adjusted upward or downward by a performance incentive adjustment. The adjustment is based on a comparison of the performance of each Fund to an index of similar funds up to a maximum percentage of each Fund's average daily net assets. Effective Dec. 1, 2002, the performance incentive adjustment was added to some of the funds and the maximum changed for others.
MAXIMUM MAXIMUM ADJUSTMENT ADJUSTMENT FUND (PRIOR TO DEC. 1, 2002) (AFTER DEC. 1, 2002) AXP(R) Variable Portfolio - Blue Chip Advantage Fund 0.08% 0.12% AXP(R) Variable Portfolio - Capital Resource Fund N/A 0.12% AXP(R) Variable Portfolio - Diversified Equity Income Fund 0.08% 0.12% AXP(R) Variable Portfolio - Emerging Markets Fund 0.12% 0.12% AXP(R) Variable Portfolio - Equity Select Fund 0.12% 0.12% AXP(R) Variable Portfolio - Growth Fund 0.12% 0.12% AXP(R) Variable Portfolio - International Fund N/A 0.12% AXP(R) Variable Portfolio - Managed Fund N/A 0.08% AXP(R) Variable Portfolio - NEW DIMENSIONS FUND(R) N/A 0.12% AXP(R) Variable Portfolio - Small Cap Advantage Fund 0.12% 0.12% AXP(R) Variable Portfolio - Strategy Aggressive Fund N/A 0.12%
IDS Life, in turn, paid to American Express Financial Corporation (AEFC) a portion of these management fees based on a percentage of each Fund's average daily net assets for the year. This fee was equal to 0.35% for AXP(R) Variable Portfolio - International Fund and AXP(R) Variable Portfolio - S&P 500 Index Fund and 0.25% for each remaining Fund. The American Express(R) Variable Portfolio Funds also have an agreement with IDS Life for distribution services. Under a Plan and Agreement of Distribution, each Fund pays a distribution fee at an annual rate up to 0.125% of each Fund's average daily net assets. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 91 The American Express(R) Variable Portfolio Funds have an Administrative Services Agreement with AEFC. Under this agreement, each Fund pays AEFC a fee for administration and accounting services at a percentage of each Fund's average daily net assets in reducing percentages annually as follows:
FUND PERCENTAGE RANGE AXP(R) Variable Portfolio - Blue Chip Advantage Fund 0.040% to 0.020% AXP(R) Variable Portfolio - Bond Fund 0.050% to 0.025% AXP(R) Variable Portfolio - Capital Resource Fund 0.050% to 0.030% AXP(R) Variable Portfolio - Cash Management Fund 0.030% to 0.020% AXP(R) Variable Portfolio - Diversified Equity Income Fund 0.040% to 0.020% AXP(R) Variable Portfolio - Emerging Markets Fund 0.100% to 0.050% AXP(R) Variable Portfolio - Equity Select Fund 0.060% to 0.030% AXP(R) Variable Portfolio - Extra Income Fund 0.050% to 0.025% AXP(R) Variable Portfolio - Federal Income Fund 0.050% to 0.025% AXP(R) Variable Portfolio - Global Bond Fund 0.060% to 0.040% AXP(R) Variable Portfolio - Growth Fund 0.050% to 0.030% AXP(R) Variable Portfolio - International Fund 0.060% to 0.035% AXP(R) Variable Portfolio - Managed Fund 0.040% to 0.020% AXP(R) Variable Portfolio - NEW DIMENSIONS FUND(R) 0.050% to 0.030% AXP(R) Variable Portfolio - S&P 500 Index Fund 0.080% to 0.065% AXP(R) Variable Portfolio - Small Cap Advantage Fund 0.060% to 0.035% AXP(R) Variable Portfolio - Strategy Aggressive Fund 0.060% to 0.035%
The American Express(R) Variable Portfolio Funds pay custodian fees to American Express Trust Company, an affiliate of IDS Life. 7. INVESTMENT TRANSACTIONS The subaccounts' purchases of Funds' shares, including reinvestment of dividend distributions, for the year ended Dec. 31, 2002 were as follows:
SUBACCOUNT INVESTMENT PURCHASES BC1 AXP(R) Variable Portfolio - Blue Chip Advantage Fund $ 1,910,392 BC2 AXP(R) Variable Portfolio - Blue Chip Advantage Fund 3,679,726 BD1 AXP(R) Variable Portfolio - Bond Fund 70,887,576 BD2 AXP(R) Variable Portfolio - Bond Fund 89,426,814 CR1 AXP(R) Variable Portfolio - Capital Resource Fund 9,162,647 CR2 AXP(R) Variable Portfolio - Capital Resource Fund 19,607,610 CM1 AXP(R) Variable Portfolio - Cash Management Fund 74,160,902 CM2 AXP(R) Variable Portfolio - Cash Management Fund 99,262,540 DE1 AXP(R) Variable Portfolio - Diversified Equity Income Fund 28,212,409 DE2 AXP(R) Variable Portfolio - Diversified Equity Income Fund 42,979,312 EM1 AXP(R) Variable Portfolio - Emerging Markets Fund 2,227,797 EM2 AXP(R) Variable Portfolio - Emerging Markets Fund 2,476,844 ES1 AXP(R) Variable Portfolio - Equity Select Fund 8,887,413 ES2 AXP(R) Variable Portfolio - Equity Select Fund 12,647,305 EI1 AXP(R) Variable Portfolio - Extra Income Fund 41,951,298 EI2 AXP(R) Variable Portfolio - Extra Income Fund 39,700,916 FI1 AXP(R) Variable Portfolio - Federal Income Fund 82,798,262 FI2 AXP(R) Variable Portfolio - Federal Income Fund 95,767,884 GB1 AXP(R) Variable Portfolio - Global Bond Fund 17,872,512 GB2 AXP(R) Variable Portfolio - Global Bond Fund 18,257,201 GR1 AXP(R) Variable Portfolio - Growth Fund 4,117,943 GR2 AXP(R) Variable Portfolio - Growth Fund 8,496,516 IE1 AXP(R) Variable Portfolio - International Fund 8,071,636 IE2 AXP(R) Variable Portfolio - International Fund 8,688,704 MF1 AXP(R) Variable Portfolio - Managed Fund 19,322,497 MF2 AXP(R) Variable Portfolio - Managed Fund 28,961,852 ND1 AXP(R) Variable Portfolio - NEW DIMENSIONS FUND(R) 46,206,277 ND2 AXP(R) Variable Portfolio - NEW DIMENSIONS FUND(R) 82,978,941 IV1 AXP(R) Variable Portfolio - S&P 500 Index Fund 19,481,312 IV2 AXP(R) Variable Portfolio - S&P 500 Index Fund 22,482,651 SC1 AXP(R) Variable Portfolio - Small Cap Advantage Fund 6,102,141 SC2 AXP(R) Variable Portfolio - Small Cap Advantage Fund 7,891,078 SA1 AXP(R) Variable Portfolio - Strategy Aggressive Fund 1,930,970 SA2 AXP(R) Variable Portfolio - Strategy Aggressive Fund 3,983,916 1CA AIM V.I. Capital Appreciation Fund, Series I Shares 941,144 2CA AIM V.I. Capital Appreciation Fund, Series I Shares 2,095,925
IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 92
SUBACCOUNT INVESTMENT PURCHASES 1CD AIM V.I. Capital Development Fund, Series I Shares $ 1,426,494 2CD AIM V.I. Capital Development Fund, Series I Shares 1,698,311 1IF American Century(R) VP International, Class I 2,278,004 2IF American Century(R) VP International, Class I 2,620,046 1VA American Century(R) VP Value, Class I 15,184,342 2VA American Century(R) VP Value, Class I 14,487,495 1SR Calvert Variable Series, Inc. Social Balanced Portfolio 3,722,793 2SR Calvert Variable Series, Inc. Social Balanced Portfolio 4,775,931 1EG Credit Suisse Trust - Emerging Growth Portfolio 497,334 2EG Credit Suisse Trust - Emerging Growth Portfolio 595,153 1GI Fidelity(R) VIP Growth & Income Portfolio Service Class 7,482,893 2GI Fidelity(R) VIP Growth & Income Portfolio Service Class 9,759,437 1MP Fidelity(R) VIP Mid Cap Portfolio Service Class 9,744,310 2MP Fidelity(R) VIP Mid Cap Portfolio Service Class 11,622,311 1OS Fidelity(R) VIP Overseas Portfolio Service Class 2,494,559 2OS Fidelity(R) VIP Overseas Portfolio Service Class 3,259,392 1RE FTVIPT Franklin Real Estate Fund - Class 2 35,288,487 2RE FTVIPT Franklin Real Estate Fund - Class 2 49,971,244 1SI FTVIPT Franklin Small Cap Value Securities Fund - Class 2 19,015,101 2SI FTVIPT Franklin Small Cap Value Securities Fund - Class 2 26,036,576 1TF FTVIPT Templeton Foreign Securities Fund - Class 2 10,641,546 2TF FTVIPT Templeton Foreign Securities Fund - Class 2 9,256,480 1SE Goldman Sachs VIT CORE(SM) Small Cap Equity Fund 1,436,690 2SE Goldman Sachs VIT CORE(SM) Small Cap Equity Fund 1,860,186 1UE Goldman Sachs VIT CORE(SM) U.S. Equity Fund 7,748,443 2UE Goldman Sachs VIT CORE(SM) U.S. Equity Fund 11,270,086 1MC Goldman Sachs VIT Mid Cap Value Fund 32,861,063 2MC Goldman Sachs VIT Mid Cap Value Fund 45,591,517 1GT Janus Aspen Series Global Technology Portfolio: Service Shares 1,252,323 2GT Janus Aspen Series Global Technology Portfolio: Service Shares 2,170,051 1IG Janus Aspen Series International Growth Portfolio: Service Shares 7,674,417 2IG Janus Aspen Series International Growth Portfolio: Service Shares 12,135,593 1AG Janus Aspen Series Mid Cap Growth Portfolio: Service Shares 404,547 (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) 2AG Janus Aspen Series Mid Cap Growth Portfolio: Service Shares 3,701,015 (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) 1IP Lazard Retirement International Equity Portfolio 7,027,486 2IP Lazard Retirement International Equity Portfolio 9,537,752 1MG MFS(R) Investors Growth Stock Series - Service Class 8,712,341 2MG MFS(R) Investors Growth Stock Series - Service Class 12,886,315 1MD MFS(R) New Discovery Series - Service Class 13,580,341 2MD MFS(R) New Discovery Series - Service Class 19,151,625 1IN Putnam VT International New Opportunities Fund - Class IB Shares 1,002,226 2IN Putnam VT International New Opportunities Fund - Class IB Shares 1,733,891 1VS Putnam VT Vista Fund - Class IB Shares 1,252,992 2VS Putnam VT Vista Fund - Class IB Shares 3,474,560 1MI Royce Micro-Cap Portfolio 16,258,469 2MI Royce Micro-Cap Portfolio 14,732,599 1SV Third Avenue Value Portfolio 10,236,973 2SV Third Avenue Value Portfolio 11,411,701 1IT Wanger International Small Cap 10,186,624 2IT Wanger International Small Cap 12,710,609 1SP Wanger U.S. Smaller Companies 28,517,895 2SP Wanger U.S. Smaller Companies 39,464,425 1AA Wells Fargo VT Asset Allocation Fund 8,428,680 2AA Wells Fargo VT Asset Allocation Fund 10,461,838 1WI Wells Fargo VT International Equity Fund 1,568,735 2WI Wells Fargo VT International Equity Fund 2,940,418 1SG Wells Fargo VT Small Cap Growth Fund 4,099,091 2SG Wells Fargo VT Small Cap Growth Fund 5,791,813
IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 93 8. FINANCIAL HIGHLIGHTS The table below shows certain financial information regarding the subaccounts.
BC1 BC2 BD1 BD2 CR1 -------------------------------------------------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 0.98 $ 0.99 $ 1.06 $ 1.06 $ 0.93 At Dec. 31, 2001 $ 0.81 $ 0.82 $ 1.13 $ 1.13 $ 0.76 At Dec. 31, 2002 $ 0.62 $ 0.63 $ 1.18 $ 1.19 $ 0.58 -------------------------------------------------------------------------------------------------------------------- UNITS (000s) At Dec. 31, 2001 49,897 41,083 106,760 83,968 26,779 At Dec. 31, 2002 44,110 39,019 159,405 154,530 34,956 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000s) At Dec. 31, 2001 $ 40,748 $ 33,763 $ 120,835 $ 95,910 $ 20,374 At Dec. 31, 2002 $ 27,601 $ 24,610 $ 188,953 $ 184,587 $ 20,512 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 0.75% 0.75% 6.38% 6.38% 0.31% For the year ended Dec. 31, 2002 0.78% 0.78% 5.08% 5.10% 0.54% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.95% 0.75% 0.95% 0.75% 0.95% For the year ended Dec. 31, 2002 0.95% 0.75% 0.95% 0.75% 0.95% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (17.35%) (17.17%) 6.60% 6.60% (18.28%) For the year ended Dec. 31, 2002 (23.46%) (23.17%) 4.42% 5.31% (23.68%) -------------------------------------------------------------------------------------------------------------------- CR2 CM1 CM2 DE1 DE2 -------------------------------------------------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 0.93 $ 1.06 $ 1.06 $ 1.01 $ 1.01 At Dec. 31, 2001 $ 0.76 $ 1.09 $ 1.09 $ 1.02 $ 1.02 At Dec. 31, 2002 $ 0.59 $ 1.09 $ 1.10 $ 0.82 $ 0.82 -------------------------------------------------------------------------------------------------------------------- UNITS (000s) At Dec. 31, 2001 26,327 265,455 243,870 41,299 43,328 At Dec. 31, 2002 52,124 228,237 255,251 67,958 86,442 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000s) At Dec. 31, 2001 $ 20,244 $ 289,729 $ 267,061 $ 42,181 $ 44,814 At Dec. 31, 2002 $ 30,833 $ 249,280 $ 280,619 $ 55,726 $ 71,609 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 0.30% 3.57% 3.55% 1.26% 1.26% For the year ended Dec. 31, 2002 0.57% 1.17% 1.16% 1.59% 1.62% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.75% 0.95% 0.75% 0.95% 0.75% For the year ended Dec. 31, 2002 0.75% 0.95% 0.75% 0.95% 0.75% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (18.28%) 2.83% 2.83% 0.99% 0.99% For the year ended Dec. 31, 2002 (22.37%) 0.00% 0.92% (19.61%) (19.61%) --------------------------------------------------------------------------------------------------------------------
EM1 EM2 ES1(4) ES2(4) EI1 -------------------------------------------------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 0.74 $ 0.74 -- -- $ 0.91 At Dec. 31, 2001 $ 0.72 $ 0.72 $ 0.99 $ 1.00 $ 0.94 At Dec. 31, 2002 $ 0.67 $ 0.68 $ 0.85 $ 0.85 $ 0.87 -------------------------------------------------------------------------------------------------------------------- UNITS (000s) At Dec. 31, 2001 1,542 1,789 2,238 2,489 88,813 At Dec. 31, 2002 3,888 4,750 12,145 16,388 122,784 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000s) At Dec. 31, 2001 $ 1,108 $ 1,291 $ 2,224 $ 2,477 $ 84,017 At Dec. 31, 2002 $ 2,618 $ 3,216 $ 10,310 $ 13,959 $ 107,749 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 0.02% 0.02% -- -- 10.93% For the year ended Dec. 31, 2002 -- -- -- -- 7.73% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.95% 0.75% 0.95% 0.75% 0.95% For the year ended Dec. 31, 2002 0.95% 0.75% 0.95% 0.75% 0.95% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (2.70%) (2.70%) (1.00%) 0.00% 3.30% For the year ended Dec. 31, 2002 (6.94%) (5.56%) (14.14%) (15.00%) (7.45%) -------------------------------------------------------------------------------------------------------------------- EI2 FI1 FI2 GB1 GB2 -------------------------------------------------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 0.91 $ 1.08 $ 1.08 $ 1.02 $ 1.03 At Dec. 31, 2001 $ 0.95 $ 1.13 $ 1.14 $ 1.03 $ 1.03 At Dec. 31, 2002 $ 0.88 $ 1.19 $ 1.20 $ 1.17 $ 1.18 -------------------------------------------------------------------------------------------------------------------- UNITS (000s) At Dec. 31, 2001 58,348 56,966 50,510 23,970 16,572 At Dec. 31, 2002 93,845 116,147 124,866 36,626 31,133 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000s) At Dec. 31, 2001 $ 55,486 $ 64,826 $ 57,952 $ 24,619 $ 17,099 At Dec. 31, 2002 $ 82,940 $ 138,406 $ 149,972 $ 42,852 $ 36,668 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 10.92% 4.55% 4.52% 3.58% 3.62% For the year ended Dec. 31, 2002 7.71% 2.85% 2.88% 4.72% 4.77% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.75% 0.95% 0.75% 0.95% 0.75% For the year ended Dec. 31, 2002 0.75% 0.95% 0.75% 0.95% 0.75% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 4.40% 4.63% 5.56% 0.98% 0.00% For the year ended Dec. 31, 2002 (7.37%) 5.31% 5.26% 13.59% 14.56% --------------------------------------------------------------------------------------------------------------------
IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 94
GR1 GR2 IE1 IE2 MF1 -------------------------------------------------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 0.94 $ 0.95 $ 0.95 $ 0.95 $ 1.05 At Dec. 31, 2001 $ 0.64 $ 0.65 $ 0.67 $ 0.67 $ 0.93 At Dec. 31, 2002 $ 0.47 $ 0.48 $ 0.54 $ 0.55 $ 0.80 -------------------------------------------------------------------------------------------------------------------- UNITS (000s) At Dec. 31, 2001 130,764 129,186 18,664 15,821 53,096 At Dec. 31, 2002 118,986 135,693 19,189 20,012 64,613 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000s) At Dec. 31, 2001 $ 84,435 $ 83,920 $ 12,551 $ 10,653 $ 49,925 At Dec. 31, 2002 $ 56,268 $ 64,633 $ 10,469 $ 10,962 $ 52,246 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- 1.23% 1.23% 2.53% For the year ended Dec. 31, 2002 0.07% 0.07% 0.94% 0.99% 2.63% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.95% 0.75% 0.95% 0.75% 0.95% For the year ended Dec. 31, 2002 0.95% 0.75% 0.95% 0.75% 0.95% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (31.91%) (31.58%) (29.47%) (29.47%) (11.43%) For the year ended Dec. 31, 2002 (26.56%) (26.15%) (19.40%) (17.91%) (13.98%) -------------------------------------------------------------------------------------------------------------------- MF2 ND1 ND2 IV1 IV2 -------------------------------------------------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 1.05 $ 1.07 $ 1.07 $ 0.91 $ 0.91 At Dec. 31, 2001 $ 0.94 $ 0.88 $ 0.89 $ 0.79 $ 0.79 At Dec. 31, 2002 $ 0.81 $ 0.68 $ 0.69 $ 0.60 $ 0.61 -------------------------------------------------------------------------------------------------------------------- UNITS (000s) At Dec. 31, 2001 37,760 307,320 276,054 40,575 35,957 At Dec. 31, 2002 64,273 347,841 373,715 65,011 64,771 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000s) At Dec. 31, 2001 $ 35,997 $ 272,882 $ 246,108 $ 32,012 $ 28,329 At Dec. 31, 2002 $ 52,453 $ 239,068 $ 258,144 $ 39,405 $ 39,410 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 2.53% 0.23% 0.24% 0.91% 0.93% For the year ended Dec. 31, 2002 2.74% 0.51% 0.52% 0.98% 1.00% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.75% 0.95% 0.75% 0.95% 0.75% For the year ended Dec. 31, 2002 0.75% 0.95% 0.75% 0.95% 0.75% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (10.48%) (17.76%) (16.82%) (13.19%) (13.19%) For the year ended Dec. 31, 2002 (13.83%) (22.73%) (22.47%) (24.05%) (22.78%) --------------------------------------------------------------------------------------------------------------------
SC1 SC2 SA1 SA2 1CA -------------------------------------------------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 1.16 $ 1.16 $ 1.21 $ 1.22 $ 1.16 At Dec. 31, 2001 $ 1.07 $ 1.08 $ 0.81 $ 0.81 $ 0.88 At Dec. 31, 2002 $ 0.88 $ 0.89 $ 0.54 $ 0.55 $ 0.66 -------------------------------------------------------------------------------------------------------------------- UNITS (000s) At Dec. 31, 2001 24,346 22,792 65,574 58,748 55,044 At Dec. 31, 2002 29,341 29,202 55,183 58,958 48,704 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000s) At Dec. 31, 2001 $ 26,157 $ 24,594 $ 53,045 $ 47,765 $ 48,600 At Dec. 31, 2002 $ 25,898 $ 25,953 $ 30,114 $ 32,369 $ 32,214 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- 0.21% 0.21% -- For the year ended Dec. 31, 2002 -- -- -- -- -- -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.95% 0.75% 0.95% 0.75% 0.95% For the year ended Dec. 31, 2002 0.95% 0.75% 0.95% 0.75% 0.95% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (7.76%) (6.90%) (33.06%) (33.61%) (24.14%) For the year ended Dec. 31, 2002 (17.76%) (17.59%) (33.33%) (32.10%) (25.00%) -------------------------------------------------------------------------------------------------------------------- 2CA 1CD 2CD 1IF 2IF -------------------------------------------------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 1.16 $ 1.37 $ 1.37 $ 1.18 $ 1.19 At Dec. 31, 2001 $ 0.88 $ 1.25 $ 1.25 $ 0.83 $ 0.83 At Dec. 31, 2002 $ 0.66 $ 0.97 $ 0.98 $ 0.66 $ 0.66 -------------------------------------------------------------------------------------------------------------------- UNITS (000s) At Dec. 31, 2001 49,574 25,531 23,324 32,127 25,459 At Dec. 31, 2002 46,932 23,015 21,745 31,512 26,878 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000s) At Dec. 31, 2001 $ 43,948 $ 31,796 $ 29,215 $ 26,706 $ 21,368 At Dec. 31, 2002 $ 31,238 $ 22,340 $ 21,259 $ 20,659 $ 17,821 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- 0.08% 0.08% For the year ended Dec. 31, 2002 -- -- -- 0.79% 0.77% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.75% 0.95% 0.75% 0.95% 0.75% For the year ended Dec. 31, 2002 0.75% 0.95% 0.75% 0.95% 0.75% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (24.14%) (8.76%) (8.76%) (29.66%) (30.25%) For the year ended Dec. 31, 2002 (25.00%) (22.40%) (21.60%) (20.48%) (20.48%) --------------------------------------------------------------------------------------------------------------------
IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 95
1VA 2VA 1SR 2SR 1EG -------------------------------------------------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 1.08 $ 1.08 $ 0.96 $ 0.96 $ 1.28 At Dec. 31, 2001 $ 1.20 $ 1.21 $ 0.89 $ 0.89 $ 1.06 At Dec. 31, 2002 $ 1.04 $ 1.05 $ 0.77 $ 0.78 $ 0.74 -------------------------------------------------------------------------------------------------------------------- UNITS (000s) At Dec. 31, 2001 41,460 35,248 6,090 4,490 24,697 At Dec. 31, 2002 49,161 43,222 9,832 9,520 20,303 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000s) At Dec. 31, 2001 $ 50,146 $ 42,782 $ 5,404 $ 3,997 $ 26,258 At Dec. 31, 2002 $ 51,422 $ 45,450 $ 7,587 $ 7,427 $ 15,121 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 0.82% 0.74% 5.84% 5.83% -- For the year ended Dec. 31, 2002 0.83% 0.83% 3.43% 3.80% -- -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.95% 0.75% 0.95% 0.75% 0.95% For the year ended Dec. 31, 2002 0.95% 0.75% 0.95% 0.75% 0.95% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 11.11% 12.04% (7.29%) (7.29%) (17.19%) For the year ended Dec. 31, 2002 (13.33%) (13.22%) (13.48%) (12.36%) (30.19%) -------------------------------------------------------------------------------------------------------------------- 2EG 1GI 2GI 1MP 2MP -------------------------------------------------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 1.29 $ 1.00 $ 1.00 $ 1.64 $ 1.65 At Dec. 31, 2001 $ 1.07 $ 0.90 $ 0.90 $ 1.57 $ 1.58 At Dec. 31, 2002 $ 0.75 $ 0.74 $ 0.75 $ 1.40 $ 1.41 -------------------------------------------------------------------------------------------------------------------- UNITS (000s) At Dec. 31, 2001 20,158 119,736 103,719 67,132 59,393 At Dec. 31, 2002 17,821 117,223 108,027 68,203 63,268 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000s) At Dec. 31, 2001 $ 21,528 $ 107,966 $ 93,832 $ 105,788 $ 94,014 At Dec. 31, 2002 $ 13,358 $ 87,241 $ 80,808 $ 95,859 $ 89,542 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- 1.05% 1.02% -- -- For the year ended Dec. 31, 2002 -- 1.30% 1.26% 0.85% 0.84% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.75% 0.95% 0.75% 0.95% 0.75% For the year ended Dec. 31, 2002 0.75% 0.95% 0.75% 0.95% 0.75% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (17.05%) (10.00%) (10.00%) (4.27%) (4.24%) For the year ended Dec. 31, 2002 (29.91%) (17.78%) (16.67%) (10.83%) (10.76%) --------------------------------------------------------------------------------------------------------------------
1OS 2OS 1RE 2RE 1SI -------------------------------------------------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 0.98 $ 0.98 $ 1.25 $ 1.25 $ 1.19 At Dec. 31, 2001 $ 0.77 $ 0.77 $ 1.33 $ 1.34 $ 1.34 At Dec. 31, 2002 $ 0.60 $ 0.61 $ 1.35 $ 1.36 $ 1.21 -------------------------------------------------------------------------------------------------------------------- UNITS (000s) At Dec. 31, 2001 32,758 27,850 19,803 24,477 9,584 At Dec. 31, 2002 33,063 28,991 44,591 59,317 23,553 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000s) At Dec. 31, 2001 $ 25,154 $ 21,591 $ 26,464 $ 32,992 $ 12,869 At Dec. 31, 2002 $ 20,031 $ 17,759 $ 60,237 $ 80,774 $ 28,429 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 4.49% 4.51% 3.69% 3.61% 0.36% For the year ended Dec. 31, 2002 0.71% 0.70% 2.59% 2.58% 0.37% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.95% 0.75% 0.95% 0.75% 0.95% For the year ended Dec. 31, 2002 0.95% 0.75% 0.95% 0.75% 0.95% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (21.43%) (21.43%) 6.40% 7.20% 12.61% For the year ended Dec. 31, 2002 (22.08%) (20.78%) 1.50% 1.49% (9.70%) -------------------------------------------------------------------------------------------------------------------- 2SI 1TF(5) 2TF(5) 1SE 2SE -------------------------------------------------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 1.19 -- -- $ 1.14 $ 1.14 At Dec. 31, 2001 $ 1.35 -- -- $ 1.18 $ 1.19 At Dec. 31, 2002 $ 1.21 $ 0.84 $ 0.84 $ 1.00 $ 1.00 -------------------------------------------------------------------------------------------------------------------- UNITS (000s) At Dec. 31, 2001 10,800 -- -- 18,974 14,153 At Dec. 31, 2002 29,743 9,570 8,386 17,792 14,285 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000s) At Dec. 31, 2001 $ 14,608 -- -- $ 22,428 $ 16,793 At Dec. 31, 2002 $ 36,182 $ 8,026 $ 7,044 $ 17,719 $ 14,307 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 0.38% -- -- 0.32% 0.33% For the year ended Dec. 31, 2002 0.37% 2.35% 2.28% 0.26% 0.27% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.75% -- -- 0.95% 0.75% For the year ended Dec. 31, 2002 0.75% 0.95% 0.75% 0.95% 0.75% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 13.45% -- -- 3.51% 4.39% For the year ended Dec. 31, 2002 (10.37%) (16.00%) (16.00%) (15.25%) (15.97%) --------------------------------------------------------------------------------------------------------------------
IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 96
1UE 2UE 1MC 2MC 1GT -------------------------------------------------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 0.99 $ 0.99 $ 1.23 $ 1.23 $ 0.68 At Dec. 31, 2001 $ 0.86 $ 0.86 $ 1.37 $ 1.37 $ 0.42 At Dec. 31, 2002 $ 0.67 $ 0.67 $ 1.29 $ 1.30 $ 0.25 -------------------------------------------------------------------------------------------------------------------- UNITS (000s) At Dec. 31, 2001 71,185 60,343 24,711 23,748 34,050 At Dec. 31, 2002 75,489 71,820 47,539 56,079 31,354 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000s) At Dec. 31, 2001 $ 61,361 $ 52,275 $ 33,836 $ 32,637 $ 14,436 At Dec. 31, 2002 $ 50,352 $ 48,249 $ 61,488 $ 72,845 $ 7,822 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 0.48% 0.50% 1.38% 1.51% 0.67% For the year ended Dec. 31, 2002 0.59% 0.62% 1.31% 1.41% -- -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.95% 0.75% 0.95% 0.75% 0.95% For the year ended Dec. 31, 2002 0.95% 0.75% 0.95% 0.75% 0.95% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (13.13%) (13.13%) 11.38% 11.38% (38.24%) For the year ended Dec. 31, 2002 (22.09%) (22.09%) (5.84%) (5.11%) (40.48%) -------------------------------------------------------------------------------------------------------------------- 2GT 1IG 2IG 1AG 2AG -------------------------------------------------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 0.68 $ 0.80 $ 0.80 $ 0.70 $ 0.70 At Dec. 31, 2001 $ 0.43 $ 0.61 $ 0.61 $ 0.42 $ 0.42 At Dec. 31, 2002 $ 0.25 $ 0.45 $ 0.45 $ 0.30 $ 0.30 -------------------------------------------------------------------------------------------------------------------- UNITS (000s) At Dec. 31, 2001 34,767 64,147 60,527 51,500 54,805 At Dec. 31, 2002 37,200 74,111 81,189 42,883 52,428 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000s) At Dec. 31, 2001 $ 14,784 $ 38,965 $ 36,904 $ 21,660 $ 23,116 At Dec. 31, 2002 $ 9,277 $ 33,096 $ 36,450 $ 12,850 $ 15,787 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 0.67% 0.75% 0.76% -- -- For the year ended Dec. 31, 2002 -- 0.67% 0.69% -- -- -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.75% 0.95% 0.75% 0.95% 0.75% For the year ended Dec. 31, 2002 0.75% 0.95% 0.75% 0.95% 0.75% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (36.76%) (23.75%) (23.75%) (40.00%) (40.00%) For the year ended Dec. 31, 2002 (41.86%) (26.23%) (26.23%) (28.57%) (28.57%) --------------------------------------------------------------------------------------------------------------------
1IP 2IP 1MG 2MG 1MD -------------------------------------------------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 0.96 $ 0.96 $ 0.90 $ 0.91 $ 0.96 At Dec. 31, 2001 $ 0.72 $ 0.72 $ 0.67 $ 0.68 $ 0.90 At Dec. 31, 2002 $ 0.64 $ 0.64 $ 0.48 $ 0.48 $ 0.61 -------------------------------------------------------------------------------------------------------------------- UNITS (000s) At Dec. 31, 2001 19,727 15,860 51,051 50,212 36,822 At Dec. 31, 2002 28,853 29,532 62,663 69,576 53,383 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000s) At Dec. 31, 2001 $ 14,292 $ 11,605 $ 34,387 $ 34,000 $ 33,044 At Dec. 31, 2002 $ 18,543 $ 19,063 $ 30,234 $ 33,834 $ 32,375 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 0.01% 0.01% 0.06% 0.06% -- For the year ended Dec. 31, 2002 0.08% 0.09% -- -- -- -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.95% 0.75% 0.95% 0.75% 0.95% For the year ended Dec. 31, 2002 0.95% 0.75% 0.95% 0.75% 0.95% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (25.00%) (25.00%) (25.56%) (25.27%) (6.25%) For the year ended Dec. 31, 2002 (11.11%) (11.11%) (28.36%) (29.41%) (32.22%) -------------------------------------------------------------------------------------------------------------------- 2MD 1IN 2IN 1VS 2VS -------------------------------------------------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 0.96 $ 0.92 $ 0.92 $ 1.29 $ 1.29 At Dec. 31, 2001 $ 0.90 $ 0.65 $ 0.65 $ 0.85 $ 0.85 At Dec. 31, 2002 $ 0.61 $ 0.56 $ 0.56 $ 0.58 $ 0.59 -------------------------------------------------------------------------------------------------------------------- UNITS (000s) At Dec. 31, 2001 34,072 90,196 78,901 87,722 74,819 At Dec. 31, 2002 59,272 74,769 72,395 73,930 72,033 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000s) At Dec. 31, 2001 $ 30,682 $ 58,578 $ 51,535 $ 74,483 $ 63,852 At Dec. 31, 2002 $ 36,167 $ 41,540 $ 40,533 $ 43,208 $ 42,343 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 -- 0.69% 0.67% -- -- -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.75% 0.95% 0.75% 0.95% 0.75% For the year ended Dec. 31, 2002 0.75% 0.95% 0.75% 0.95% 0.75% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (6.25%) (29.35%) (29.35%) (34.11%) (34.11%) For the year ended Dec. 31, 2002 (32.22%) (13.85%) (13.85%) (31.76%) (30.59%) --------------------------------------------------------------------------------------------------------------------
IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 97
1MI 2MI 1SV 2SV 1IT -------------------------------------------------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 1.35 $ 1.36 $ 1.50 $ 1.51 $ 1.08 At Dec. 31, 2001 $ 1.74 $ 1.75 $ 1.69 $ 1.70 $ 0.84 At Dec. 31, 2002 $ 1.50 $ 1.51 $ 1.50 $ 1.51 $ 0.72 -------------------------------------------------------------------------------------------------------------------- UNITS (000s) At Dec. 31, 2001 23,583 20,056 31,848 27,040 30,297 At Dec. 31, 2002 27,063 25,593 35,110 31,335 42,309 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000s) At Dec. 31, 2001 $ 41,017 $ 35,033 $ 53,965 $ 46,235 $ 25,663 At Dec. 31, 2002 $ 40,649 $ 38,661 $ 52,631 $ 47,432 $ 30,549 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- 0.15% 0.15% -- For the year ended Dec. 31, 2002 -- -- 0.20% 0.19% -- -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.95% 0.75% 0.95% 0.75% 0.95% For the year ended Dec. 31, 2002 0.95% 0.75% 0.95% 0.75% 0.95% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 28.89% 28.68% 12.67% 12.58% (22.22%) For the year ended Dec. 31, 2002 (13.79%) (13.71%) (11.24%) (11.18%) (14.29%) -------------------------------------------------------------------------------------------------------------------- 2IT 1SP 2SP 1AA(4) 2AA(4) -------------------------------------------------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 1.08 $ 1.05 $ 1.05 -- -- At Dec. 31, 2001 $ 0.85 $ 1.15 $ 1.16 $ 0.97 $ 0.97 At Dec. 31, 2002 $ 0.72 $ 0.95 $ 0.96 $ 0.84 $ 0.84 -------------------------------------------------------------------------------------------------------------------- UNITS (000s) At Dec. 31, 2001 27,818 46,456 40,791 3,224 3,799 At Dec. 31, 2002 43,554 72,853 78,311 11,859 14,864 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000s) At Dec. 31, 2001 $ 23,628 $ 53,763 $ 47,364 $ 3,120 $ 3,682 At Dec. 31, 2002 $ 31,618 $ 69,472 $ 75,036 $ 9,908 $ 12,461 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- 0.06% 0.06% 0.94% 0.95% For the year ended Dec. 31, 2002 -- -- -- 2.31% 2.33% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.75% 0.95% 0.75% 0.95% 0.75% For the year ended Dec. 31, 2002 0.75% 0.95% 0.75% 0.95% 0.75% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (21.30%) 9.52% 10.48% 3.00% 3.00% For the year ended Dec. 31, 2002 (15.29%) (17.39%) (17.24%) (13.40%) (13.40%) --------------------------------------------------------------------------------------------------------------------
1WI(4) 2WI(4) 1SG(4) 2SG(4) -------------------------------------------------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- At Dec. 31, 2001 $ 0.90 $ 0.90 $ 0.94 $ 0.94 At Dec. 31, 2002 $ 0.69 $ 0.69 $ 0.58 $ 0.58 -------------------------------------------------------------------------------------------------------------------- UNITS (000s) At Dec. 31, 2001 1,031 1,200 2,230 2,060 At Dec. 31, 2002 2,781 4,703 7,655 9,992 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000s) At Dec. 31, 2001 $ 928 $ 1,080 $ 2,095 $ 1,939 At Dec. 31, 2002 $ 1,909 $ 3,239 $ 4,402 $ 5,766 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 0.01% 0.01% -- -- For the year ended Dec. 31, 2002 0.21% 0.20% -- -- -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.95% 0.75% 0.95% 0.75% For the year ended Dec. 31, 2002 0.95% 0.75% 0.95% 0.75% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (10.00%) (10.00%) (6.00%) (6.00%) For the year ended Dec. 31, 2002 (23.33%) (23.33%) (38.30%) (38.30%) --------------------------------------------------------------------------------------------------------------------
(1) These amounts represent the dividends, excluding distributions of capital gains, received by the subaccount from the underlying mutual fund, net of management fees assessed by the fund manager, divided by the average net assets. These ratios exclude variable account expenses that result in direct reductions in the unit values. The recognition of investment income by the subaccount is affected by the timing of the declaration of dividends by the underlying fund in which the subaccounts invest. (2) These ratios represent the annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying fund are excluded. (3) These amounts represent the total return for the periods indicated, including changes in the value of the underlying fund, and reflect deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units; inclusion of these expenses in the calculation would result in a reduction in the total return presented. Investment options with a date notation indicate the effective date of that investment option in the variable account. The total return is calculated for the period indicated or from the effective date through the end of the reporting period. (4) Operations commenced on May 1, 2001. (5) Operations commenced on March 1, 2002. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) 98 IDS Life Insurance Company ------------------------------------------------------------------------------- REPORT OF INDEPENDENT AUDITORS THE BOARD OF DIRECTORS IDS LIFE INSURANCE COMPANY We have audited the accompanying consolidated balance sheets of IDS Life Insurance Company (a wholly-owned subsidiary of American Express Financial Corporation) as of December 31, 2002 and 2001, and the related consolidated statements of income, stockholder's equity and cash flows for each of the three years in the period ended December 31, 2002. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. 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 consolidated financial position of IDS Life Insurance Company at December 31, 2002 and 2001, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States. ERNST & YOUNG LLP January 27, 2003 Minneapolis, Minnesota IDS Life Insurance Company -------------------------------------------------------------------------------
Consolidated Balance Sheets December 31, (In thousands, except share amounts) 2002 2001 Assets Investments: Available-for-sale: Fixed maturities, at fair value (amortized cost: 2002, $23,209,226; 2001, $20,022,072) $24,052,104 $20,157,137 Common stocks, at fair value (cost: 2002, $19; 2001, $805) 21 1,704 Mortgage loans on real estate 3,417,651 3,680,394 Policy loans 597,144 619,571 Other investments 752,558 621,897 ------- ------- Total investments 28,819,478 25,080,703 Cash and cash equivalents 4,424,061 1,150,251 Amounts recoverable from reinsurers 633,510 529,166 Amounts due from brokers 501 90,794 Other accounts receivable 56,245 46,349 Accrued investment income 296,595 278,199 Deferred policy acquisition costs 3,309,783 3,107,187 Deferred income taxes, net -- 156,308 Other assets 117,788 123,246 Separate account assets 21,980,674 27,333,697 ---------- ---------- Total assets $59,638,635 $57,895,900 =========== =========== Liabilities and stockholder's equity Liabilities: Future policy benefits: Fixed annuities $23,411,314 $19,592,273 Universal life-type insurance 3,515,010 3,433,904 Traditional life insurance 247,441 241,165 Disability income and long-term care insurance 1,466,171 1,227,172 Policy claims and other policyholders' funds 85,400 71,879 Amounts due to brokers 3,342,989 1,740,031 Deferred income taxes, net 182,059 -- Other liabilities 463,326 437,017 Separate account liabilities 21,980,674 27,333,697 ---------- ---------- Total liabilities 54,694,384 54,077,138 ---------- ---------- Commitments and contingencies Stockholder's equity: Capital stock, $30 par value per share; 100,000 shares authorized, issued and outstanding 3,000 3,000 Additional paid-in capital 1,088,327 688,327 Accumulated other comprehensive income, net of tax: Net unrealized securities gains 497,319 83,443 Net unrealized derivative gains (losses) 764 1,332 --- ----- Total accumulated other comprehensive income 498,083 84,775 Retained earnings 3,354,841 3,042,660 --------- --------- Total stockholder's equity 4,944,251 3,818,762 --------- --------- Total liabilities and stockholder's equity $59,638,635 $57,895,900 =========== ===========
See accompanying notes to consolidated financial statements. IDS Life Insurance Company -------------------------------------------------------------------------------
Consolidated Statements of Income Years ended December 31, (In thousands) 2002 2001 2000 Revenues Premiums: Traditional life insurance $ 67,978 $ 59,415 $ 56,187 Disability income and long-term care insurance 273,737 255,428 231,311 ------- ------- ------- Total premiums 341,715 314,843 287,498 Net investment income 1,561,856 1,485,688 1,730,605 Policyholder and contractholder charges 522,777 489,583 438,127 Management and other fees 404,787 473,406 598,168 Net realized loss on investments (4,507) (649,752) (16,975) ------ -------- ------- Total revenues 2,826,628 2,113,768 3,037,423 --------- --------- --------- Benefits and expenses Death and other benefits: Traditional life insurance 36,881 35,519 29,042 Universal life-type insurance and investment contracts 221,544 175,247 131,467 Disability income and long-term care insurance 52,962 44,725 40,246 Increase in liabilities for future policy benefits: Traditional life insurance 2,768 7,231 5,765 Disability income and long-term care insurance 134,605 123,227 113,239 Interest credited on universal life-type insurance and investment contracts 1,157,636 1,137,636 1,169,641 Amortization of deferred policy acquisition costs 312,402 371,342 362,106 Other insurance and operating expenses 437,823 407,798 378,653 ------- ------- ------- Total benefits and expenses 2,356,621 2,302,725 2,230,159 --------- --------- --------- Income (loss) before income tax expense (benefit) and cumulative effect of accounting change 470,007 (188,957) 807,264 Income tax expense (benefit) 87,826 (145,222) 221,627 ------ -------- ------- Income (loss) before cumulative effect of accounting change 382,181 (43,735) 585,637 Cumulative effect of accounting change (net of income tax benefit of $11,532) -- (21,416) -- ---------- ---------- ---------- Net income (loss) $ 382,181 $ (65,151) $ 585,637 ========== ========== ==========
See accompanying notes to consolidated financial statements. IDS Life Insurance Company -------------------------------------------------------------------------------
Consolidated Statements of Stockholder's Equity Accumulated other Additional comprehensive Total Capital paid-in income (loss), Retained stockholder's For the three years ended December 31, 2002 (In thousands) stock capital net of tax earnings equity Balance, January 1, 2000 $3,000 $ 288,327 $(411,230) $2,932,174 $2,812,271 Comprehensive income: Net income -- -- -- 585,637 585,637 Net unrealized holding gains on available-for-sale securities arising during the year, net of deferred policy acquisition costs of ($5,154) and income tax expense of ($46,921) -- -- 87,138 -- 87,138 Reclassification adjustment for gains included in net income, net of income tax expense of $5,192 -- -- (9,642) -- (9,642) ------ ----------- --------- ---------- ---------- Other comprehensive income -- -- 77,496 -- 77,496 ------ ----------- --------- ---------- ---------- Comprehensive income -- -- -- -- 663,133 Cash dividends -- -- -- (410,000) (410,000) ------ ----------- --------- ---------- ---------- Balance, December 31, 2000 3,000 288,327 (333,734) 3,107,811 3,065,404 Comprehensive income: Net loss -- -- -- (65,151) (65,151) Cumulative effect of adopting SFAS No. 133, net of income tax benefit of $626 -- -- (1,162) -- (1,162) Net unrealized holding losses on available-for-sale securities arising during the year, net of deferred policy acquisition costs of ($20,191) and income tax benefit of $6,064 -- -- (11,262) -- (11,262) Reclassification adjustment for losses on available-for-sale securities included in net loss, net of income tax benefit of $228,003 -- -- 423,434 -- 423,434 Reclassification adjustment for losses on derivatives included in net loss, net of income tax benefit of $4,038 -- -- 7,499 -- 7,499 ------ ----------- --------- ---------- ---------- Other comprehensive income -- -- 418,509 -- 418,509 ------ ----------- --------- ---------- ---------- Comprehensive income -- -- -- -- 353,358 Capital contribution -- 400,000 -- -- 400,000 ------ ----------- --------- ---------- ---------- Balance, December 31, 2001 3,000 688,327 84,775 3,042,660 3,818,762 Comprehensive income: Net income -- -- -- 382,181 382,181 Net unrealized holding gains on available-for-sale securities arising during the year, net of deferred policy acquisition costs of ($75,351) and income tax expense of ($228,502) -- -- 424,360 -- 424,360 Reclassification adjustment for gains on available-for-sale securities included in net income, net of income tax expense of $5,645 -- -- (10,484) -- (10,484) Reclassification adjustment for gains on derivatives included in net income, net of income tax expense of $305 -- -- (568) -- (568) ------ ----------- --------- ---------- ---------- Other comprehensive income -- -- 413,308 -- 413,308 ------ ----------- --------- ---------- ---------- Comprehensive income -- -- -- -- 795,489 Cash dividends -- -- -- (70,000) (70,000) Capital contribution -- 400,000 -- -- 400,000 ------ ----------- --------- ---------- ---------- Balance, December 31, 2002 $3,000 $1,088,327 $ 498,083 $3,354,841 $4,944,251 ====== ========== ========= ========== ==========
See accompanying notes to consolidated financial statements. IDS Life Insurance Company -------------------------------------------------------------------------------
Consolidated Statements of Cash Flows Years ended December 31, (In thousands) 2002 2001 2000 Cash flows from operating activities Net income (loss) $ 382,181 $ (65,151) $ 585,637 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Cumulative effect of accounting change, net of tax -- 21,416 -- Policy loans, excluding universal life-type insurance: Issuance (35,345) (43,687) (61,313) Repayment 49,256 54,004 56,088 Change in amounts recoverable from reinsurers (104,344) (112,686) (89,312) Change in other accounts receivable (9,896) (4,025) 6,254 Change in accrued investment income (5,139) 56,729 8,521 Change in deferred policy acquisition costs, net (277,947) (175,723) (291,634) Change in liabilities for future policy benefits for traditional life, disability income and long-term care insurance 245,275 223,177 206,377 Change in policy claims and other policyholder's funds 13,521 19,812 27,467 Deferred income tax provision (benefit) 116,995 (246,205) 37,704 Change in other liabilities 26,309 (24,509) (120,256) Amortization of premium, net 65,869 108,958 37,909 Net realized loss on investments 4,507 649,752 16,975 Policyholder and contractholder charges, non-cash (232,725) (217,496) (151,745) Other, net 13,820 (83,023) (9,279) ------- ------- ------- Net cash provided by operating activities 252,337 161,343 259,393 ------- ------- ------- Cash flows from investing activities Held-to-maturity securities: Purchases -- -- (4,487) Maturities, sinking fund payments and calls -- -- 589,742 Sales -- -- 50,067 Available-for-sale securities: Purchases (16,287,891) (9,477,740) (1,454,010) Maturities, sinking fund payments and calls 3,078,509 2,706,147 1,019,403 Sales 10,093,228 5,493,141 1,237,116 Other investments, excluding policy loans: Purchases (543,843) (442,876) (706,082) Sales 509,588 370,636 435,633 Change in amounts due from brokers 90,293 (75,492) (15,157) Change in amounts due to brokers 1,602,958 1,293,684 298,236 --------- --------- ------- Net cash (used in) provided by investing activities (1,457,158) (132,500) 1,450,461 ---------- -------- --------- Cash flows from financing activities Activities related to universal life-type insurance and investment contracts: Considerations received 4,638,111 2,088,114 1,842,026 Surrenders and other benefits (1,655,631) (2,810,401) (3,974,966) Interest credited to account balances 1,157,636 1,137,636 1,169,641 Universal life-type insurance policy loans: Issuance (80,831) (83,720) (134,107) Repayment 89,346 72,805 82,193 Capital contribution 400,000 400,000 -- Dividends paid (70,000) -- (410,000) --------- ------- ---------- Net cash provided by (used in) financing activities 4,478,631 804,434 (1,425,213) --------- ------- ---------- Net increase in cash and cash equivalents 3,273,810 833,277 284,641 Cash and cash equivalents at beginning of year 1,150,251 316,974 32,333 --------- ------- ---------- Cash and cash equivalents at end of year $ 4,424,061 $ 1,150,251 $ 316,974 ============ =========== =========== Supplemental disclosures: Income taxes paid $ -- $ -- $ 225,704 Interest on borrowings 7,906 23,688 3,299 --------- ------- ----------
See accompanying notes to consolidated financial statements. IDS Life Insurance Company ------------------------------------------------------------------------------- Notes to Consolidated Financial Statements (In thousands) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of business IDS Life Insurance Company (the Company) is a stock life insurance company organized under the laws of the State of Minnesota whose products are primarily distributed through branded financial advisors. The Company is a wholly-owned subsidiary of American Express Financial Corporation (AEFC), which is a wholly-owned subsidiary of American Express Company. The Company serves residents of all states except New York. IDS Life Insurance Company of New York is a wholly-owned subsidiary of the Company and serves New York State residents. The Company also wholly-owns American Enterprise Life Insurance Company, which issues fixed and variable annuity contracts for sale through insurance agencies and broker-dealers who may also be associated with financial institutions, such as banks. American Centurion Life Assurance Company is a wholly-owned subsidiary that offers fixed and variable annuities to American Express(R) Cardmembers and others in New York and through insurance agencies and broker-dealers who may also be associated with financial institutions, such as banks, in New York. American Partners Life Insurance Company is a wholly-owned subsidiary that offers fixed and variable annuities to American Express(R) Cardmembers and others who reside in states other than New York. The Company also wholly-owns IDS REO 1, LLC and American Express Corporation. These subsidiaries hold real estate, mortgage loans on real estate and/or affordable housing investments. The Company's principal products are deferred annuities and universal life insurance which are issued primarily to individuals. It offers single premium and flexible premium deferred annuities on both a fixed and variable dollar basis. Immediate annuities are offered as well. The Company's fixed deferred annuities guarantee a relatively low annual interest rate during the accumulation period (the time before annuity payments begin). However, the Company has the option of paying a higher rate set at its discretion. In addition, persons owning one type of annuity may have their interest calculated based on any increase in a broad-based stock market index. The Company also offers variable annuities, including the American Express Retirement Advisor Advantage(R) Variable Annuity and the American Express Retirement Advisor Select(R) Variable Annuity. Life insurance products currently offered by the Company include universal life (fixed and variable, single life and joint life), single premium life and term products. Waiver of premium and accidental death benefit riders are generally available with these life insurance products. The Company also markets disability income insurance. Although the Company discontinued marketing proprietary long-term care insurance at the end of 2002, long-term care insurance is available through a non-proprietary product distributed by an affiliate. Under the Company's variable life insurance and variable annuity products described above, the purchaser may choose among investment options that include the Company's "general account" as well as from a variety of portfolios including common stocks, bonds, managed assets and/or short- term securities. Basis of presentation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States which vary in certain respects from reporting practices prescribed or permitted by state insurance regulatory authorities (see Note 4). Certain prior year amounts have been reclassified to conform to the current year's presentation. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenue recognition Profits on fixed deferred annuities are the excess of contractholder charges and investment income earned from investment of contract considerations over interest credited to contract values, amortization of deferred acquisition costs, and other expenses. Profits on variable deferred annuities also include the excess of management and other fees over the costs of guaranteed benefits provided. Policyholder and contractholder charges include policy fees and surrender charges. Management and other fees include investment management fees from underlying proprietary mutual funds, certain fee revenues from underlying nonproprietary mutual funds and mortality and expense risk fees from the variable annuity separate accounts. IDS Life Insurance Company ------------------------------------------------------------------------------- Profits on fixed universal life insurance are the excess of contractholder charges and investment income earned from investment of contract considerations over interest credited to contract values, death and other benefits paid in excess of contract values, amortization of deferred acquisition costs, and other expenses. Profits on variable universal life insurance also include management and other fees. Policyholder and contractholder charges include the monthly cost of insurance charges, issue and administrative fees and surrender charges. These charges also include the minimum death benefit guarantee fees received from the variable life insurance separate accounts. Management and other fees include investment management fees from underlying proprietary mutual funds, certain fee revenues from underlying nonproprietary mutual funds and mortality and expense risk fees from the variable life insurance separate accounts. Premiums on traditional life, disability income and long-term care insurance policies are recognized as revenue when due, and related benefits and expenses are associated with premium revenue in a manner that results in recognition of profits over the lives of the insurance policies. This association is accomplished by means of the provision for future policy benefits and the deferral and subsequent amortization of policy acquisition costs. Investments -- Fixed maturity and equity securities All fixed maturity securities and marketable equity securities are classified as available-for-sale and carried at fair value. Unrealized gains and losses on securities classified as available-for-sale are carried as a separate component of accumulated other comprehensive income (loss), net of the related deferred policy acquisition costs and income taxes. Gains and losses are recognized in the results of operations upon disposition of the securities using the specific identification method. In addition, losses are also recognized when management determines that a decline in a security's fair value is other-than-temporary, which requires judgment regarding the amount and timing of recovery. Indicators of other-than-temporary impairment for fixed maturity securities include, but are not limited to, issuer downgrade, default, or bankruptcy. The Company also considers the extent to which cost exceeds fair value, the duration of time of that decline, and management's judgment about the issuer's current and prospective financial condition. The charges are reflected in net realized loss on investments within the Consolidated Statements of Income. Fair value of fixed maturity and equity securities is generally based on quoted market prices. However, the Company's investment portfolio also contains structured investments of various asset quality, including collateralized debt obligations (CDOs) and secured loan trusts (backed by high-yield bonds and bank loans), which are not readily marketable. As a result, the carrying values of these structured investments are based on estimated cash flow projections which require a significant degree of management judgment as to default and recovery rates of the underlying investments and, as such, are subject to change. The Company's CDO investments are accounted for in accordance with Emerging Issues Task Force (EITF) Issue 99-20 "Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets." The Company's secured loan trusts are accounted for in accordance with EITF Issue 96-12 "Recognition of Interest Income and Balance Sheet Classification of Structured Notes." Net investment income, which primarily consists of interest earned on fixed maturity securities, is generally accrued as earned using the effective interest method, which makes an adjustment of the yield for security premiums, discounts and anticipated prepayments on mortgage-backed securities. Prepayment estimates are based on information received from brokers who deal in mortgage-backed securities. Investments -- Mortgage loans on real estate Mortgage loans on real estate reflect principal amounts outstanding less reserves for losses. The estimated fair value of the mortgage loans is determined by discounted cash flow analyses using mortgage interest rates currently offered for mortgages of similar maturities. The reserve for losses is measured as the excess of the loan's recorded investment over its present value of expected principal and interest payments discounted at the loan's effective interest rate or the fair value of collateral. Additionally, the level of the reserve for losses considers other factors, including historical experience and current economic and political conditions. Management regularly evaluates the adequacy of the reserve for mortgage loan losses and believes it is adequate to absorb estimated losses in the portfolio. The Company generally stops accruing interest on mortgage loans for which interest payments are delinquent more than three months. Based on management's judgment as to the ultimate collectibility of principal, interest payments received are either recognized as income or applied to the recorded investment in the loan. Investments -- Policy loans Policy loans are carried at the aggregate of the unpaid loan balances, which do not exceed the cash surrender values of the related policies. IDS Life Insurance Company ------------------------------------------------------------------------------- Investments -- Other investments Included in Other investments are affordable housing investments, trading securities, syndicated loans and real estate. Affordable housing investments are carried at amortized cost as the Company has no influence over the operating or financial policies of the general partner. Trading securities are held at fair market value with changes in value recognized in the Consolidated Statements of Income within Net investment income. Syndicated loans reflect principal amounts outstanding less reserves for losses and real estate is carried at its estimated fair value. Cash and cash equivalents The Company considers investments with a maturity at the date of their acquisition of three months or less to be cash equivalents. These securities are carried principally at amortized cost, which approximates fair value. Deferred policy acquisition costs The costs of acquiring new business, including for example, direct sales commissions, related sales incentive bonuses and awards, underwriting costs, policy issue costs and other related costs, have been deferred on the sale of insurance and annuity contracts. The deferred acquisition costs (DAC) for universal life and variable universal life insurance and certain installment annuities are amortized as a percentage of the estimated gross profits expected to be realized on the policies. DAC for other annuities are amortized using the interest method. For traditional life, disability income and long-term care insurance policies, the costs are amortized in proportion to premium revenue. Amortization of DAC requires the use of certain assumptions including interest margins, mortality rates, persistency rates, maintenance expense levels and customer asset value growth rates for variable products. The customer asset value growth rate is the rate at which contract values are assumed to appreciate in the future. This rate is net of asset fees, and anticipates a blend of equity and fixed income investments. Management routinely monitors a wide variety of trends in the business, including comparisons of actual and assumed experience. Management reviews and, where appropriate, adjusts its assumptions with respect to customer asset value growth rates on a quarterly basis. Management monitors other principal DAC assumptions, such as persistency rates, mortality rate, interest margin and maintenance expense level assumptions each quarter. Unless management identifies a material deviation over the course of the quarterly monitoring, management reviews and updates these DAC assumptions annually in the third quarter of each year. When assumptions are changed, the percentage of estimated gross profits or portion of interest margins used to amortize DAC may also change. A change in the required amortization percentage is applied retrospectively; an increase in amortization percentage will result in an acceleration of DAC amortization while a decrease in amortization percentage will result in a deceleration of DAC amortization. The impact on results of operations of changing assumptions with respect to the amortization of DAC can be either positive or negative in any particular period, and is reflected in the period that such changes are made. These adjustments are collectively referred to as unlocking adjustments. Unlocking adjustments resulted in net increases in amortization of $40,000 in 2002 and $33,600 in 2001, with a net decrease in amortization of $12,300 in 2000. Guaranteed minimum death benefits The majority of the variable annuity contracts offered by the Company contain guaranteed minimum death benefit (GMDB) provisions. At time of issue, these contracts typically guarantee that the death benefit payable will not be less than the amount invested, regardless of the performance of the customer's account. Most contracts also provide for some type of periodic adjustment of the guaranteed amount based on the change in value of the contract. A large portion of the Company's contracts containing a GMDB provision adjust once every six years. The periodic adjustment of these contracts can either increase or decrease the guaranteed amount, though not below the amount invested, adjusted for withdrawals. When market values of the customer's accounts decline, the death benefit payable on a contract with a GMDB may exceed the accumulated contract value. Currently, the amount paid in excess of contract value is expensed when payable. Amounts expensed in 2002, 2001 and 2000 were $37,361, $16,202 and $835, respectively. Liabilities for future policy benefits Liabilities for fixed and variable universal life insurance and fixed and variable deferred annuities are accumulation values. Liabilities for equity indexed deferred annuities issued before 1999 are equal to the present value of guaranteed benefits and the intrinsic value of index-based benefits. Liabilities for equity indexed deferred annuities issued in 1999 or later are equal to the accumulation of host contract values covering guaranteed benefits and the market value of embedded equity options. Liabilities for fixed annuities in a benefit status are based on established industry mortality tables and interest rates ranging from 5% to 9.5%, depending on year of issue, with an average rate of approximately 6.5%. IDS Life Insurance Company ------------------------------------------------------------------------------- Liabilities for future benefits on traditional life insurance, principally term and whole life insurance, are based on the net level premium method, using anticipated mortality, policy persistency and interest earning rates. Anticipated mortality rates are based on established industry mortality tables, with modifications based on Company experience. Anticipated policy persistency rates vary by policy form, issue age and policy duration with persistency on level term and cash value plans generally anticipated to be better than persistency on yearly renewable term insurance plans. Anticipated interest rates range from 4% to 10%, depending on policy form, issue year and policy duration. Liabilities for future disability income and long-term care policy benefits include both policy reserves and claim reserves. Policy reserves are based on the net level premium method, using anticipated morbidity, mortality, policy persistency and interest earning rates. Anticipated morbidity and mortality rates are based on established industry morbidity and mortality tables. Anticipated policy persistency rates vary by policy form, issue age, policy duration and, for disability income policies, occupation class. Anticipated interest rates for disability income and long-term care policy reserves are 3% to 9.5% at policy issue and grade to ultimate rates of 5% to 7% over 5 to 10 years. Claim reserves are calculated based on claim continuance tables and anticipated interest earnings. Anticipated claim continuance rates are based on established industry tables. Anticipated interest rates for claim reserves for both disability income and long-term care range from 5% to 8%. Liabilities for reported and unpaid life insurance claims are equal to the death benefits payable. For disability income and long-term care claims, unpaid claims liabilities are equal to benefit amounts due and accrued. Liabilities for incurred but not reported claims are estimated based on periodic analysis of the actual reported claim lag. Where applicable, amounts recoverable from reinsurers are separately recorded as receivables. For life insurance, no claim adjustment expense reserve is held. The claim adjustment expense reserves for disability income and long-term care are based on the claim reserves. The Company does not issue participating insurance contracts and has no short-duration life insurance liabilities. Reinsurance Reinsurance premiums and benefits paid or provided are accounted for on a basis consistent with that used in accounting for original policies issued and with the terms of the reinsurance contracts. The maximum amount of life insurance risk retained by the Company is $750 on any policy insuring a single life and $1,500 on any policy insuring a joint-life combination. The Company generally retains 10% of the mortality risk on new life insurance policies. Risk not retained is reinsured with other life insurance companies. Risk on universal life and variable universal life policies is reinsured on a yearly renewable term basis. Risk on term insurance and long-term care policies is reinsured on a coinsurance basis. The Company retains all accidental death benefit, disability income and waiver of premium risk. Federal income taxes The Company's taxable income is included in the consolidated federal income tax return of American Express Company. The Company provides for income taxes on a separate return basis, except that, under an agreement between AEFC and American Express Company, tax benefit is recognized for losses to the extent they can be used on the consolidated tax return. It is the policy of AEFC and its subsidiaries that AEFC will reimburse subsidiaries for all tax benefits. Separate account business The separate account assets and liabilities represent funds held for the exclusive benefit of the variable annuity and variable life insurance contract owners. The Company receives investment management fees from the proprietary mutual funds used as investment options for variable annuities and variable life insurance. The Company receives mortality and expense risk fees from the separate accounts. The Company makes contractual mortality assurances to the variable annuity contract owners that the net assets of the separate accounts will not be affected by future variations in the actual life expectancy experience of the annuitants and beneficiaries from the mortality assumptions implicit in the annuity contracts. The Company makes periodic fund transfers to, or withdrawals from, the separate account assets for such actuarial adjustments for variable annuities that are in the benefit payment period. The Company also guarantees that the rates at which administrative fees are deducted from contract funds will not exceed contractual maximums. For variable life insurance, the Company guarantees that the rates at which insurance charges and administrative fees are deducted from contract funds will not exceed contractual maximums. The Company also guarantees that the death benefit will continue to be payable at the initial level regardless of investment performance so long as minimum premium payments are made. IDS Life Insurance Company ------------------------------------------------------------------------------- Accounting developments In July 2000, the Financial Accounting Standards Board's (FASB's) Emerging Issues Task Force (EITF) issued a consensus on Issue 99-20, "Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets." The Company adopted the consensus as of January 1, 2001. Issue 99-20 prescribes procedures for recording interest income and measuring impairment on retained and purchased beneficial interests. The consensus primarily affects the Company's CDO investments. Adoption of the consensus required the Company to adjust the carrying amount of these investments downward by $21,416, net of tax, which is reflected as a cumulative effect of accounting change in the Consolidated Statement of Income. Effective January 1, 2001, the Company adopted Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended (SFAS No. 133), which requires an entity to recognize all derivatives as either assets or liabilities on the balance sheet and measure those instruments at fair value. Changes in the fair value of a derivative are recorded in earnings or directly to other comprehensive income, depending on the instrument's designated use. The adoption of SFAS No. 133 resulted in a cumulative after-tax reduction to other comprehensive income of $1,162. The cumulative impact to earnings was not significant. See Note 8 for further discussion of the Company's derivative and hedging activities. SFAS No. 133 also provided a one-time opportunity to reclassify held-to-maturity security investments to available-for-sale without tainting the remaining securities in the held-to-maturity portfolio. The Company elected to take the opportunity in 2001 to reclass all its held-to-maturity investments to available-for-sale. The Company adopted SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities," which superseded SFAS No. 125. The Statement was effective for transfers and servicing of financial assets and extinguishments of liabilities occurring after March 31, 2001. The Statement was effective for recognition and reclassification of collateral and for disclosures relating to securitization transactions and collateral for fiscal years ending after December 15, 2000. The impact on the Company's financial position or results of operations of adopting the Statement was not significant. In January 2003, the FASB issued Interpretation No. 46, "Consolidation of Variable Interest Entities" (FIN 46), which addresses consolidation by business enterprises of variable interest entities (VIEs). The accounting provisions and expanded disclosure requirements for VIEs existing at December 31, 2002, are fully effective for reporting periods beginning after June 15, 2003. An entity shall be subject to consolidation according to the provisions of FIN 46, if, by design, either (i) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support from other parties, or (ii) as a group, the holders of the equity investment at risk lack: (a) direct or indirect ability to make decisions about an entity's activities; (b) the obligation to absorb the expected losses of the entity if they occur; or (c) the right to receive the expected residual return of the entity if they occur. In general, FIN 46 will require a VIE to be consolidated when an enterprise has a variable interest that will absorb a majority of the VIE's expected losses or receive a majority of the VIE's expected residual return. It is likely that the Company will consolidate or disclose information about VIEs when FIN 46 becomes effective in the third quarter of 2003. The entities primarily impacted by FIN 46 relate to structured investments, including CDOs and secured loan trusts (SLTs), which are owned by the Company. The application of FIN 46 for CDOs and SLTs will have no effect on the cash flows of the Company. The CDO entities contain debt issued to investors, which are non-recourse to the Company and are solely supported by portfolios of high-yield bonds and loans. The Company often invests in the residual and rated debt tranches of the CDO structures that are either managed by a related party or a third-party. With regards to those CDOs in which the Company owns a residual tranche and which a related party manages, the portfolios of high-yield bonds and loans have a fair value at December 31, 2002 of approximately $2.0 billion for the benefit of the $2.7 billion in CDO debt investors. Substantially all of the Company's interest in the rated debt tranches along with rated tranches owned by AEFC were placed in a securitization trust described in Note 2. The SLTs provide returns to investors primarily based on the performance of an underlying portfolio of up to $3.3 billion in high-yield loans. Currently, the underlying portfolio consists of $2.9 billion in high-yield loans with a market value of $2.6 billion, which are managed by a related party. While the potential consolidation of these entities may impact the results of operations at adoption and for each reporting period thereafter, the Company's maximum exposure to economic loss as a result of its investment in these entities is represented by the carrying values at December 31, 2002 because any further reduction in the value of the assets will be absorbed by the non-recourse debt or other unrelated entities. The CDO residual tranches have an adjusted cost basis of $13,363 and the SLTs have an adjusted cost basis of $656,565. The Company continues to evaluate other relationships and interests in entities that may be considered VIEs, including affordable housing investments. The impact of adopting FIN 46 on the Consolidated Financial Statements is still being reviewed. IDS Life Insurance Company ------------------------------------------------------------------------------- 2. INVESTMENTS Fixed maturity and equity securities
The following is a summary of securities available-for-sale at December 31, 2002: Gross Gross Amortized unrealized unrealized Fair cost gains losses value Fixed maturities: U.S. Government agency obligations $ 84,075 $ 12,015 $ 687 $ 95,403 State and municipal obligations 29,202 2,522 -- 31,724 Corporate bonds and obligations 9,614,296 611,060 116,345 10,109,011 Mortgage and other asset-backed securities 12,145,797 393,342 10,067 12,529,072 Structured investments 1,306,245 2,112 59,101 1,249,256 Foreign government bonds and obligations 29,611 8,027 -- 37,638 ----------- ---------- -------- ----------- Total fixed maturity securities $23,209,226 $1,029,078 $186,200 $24,052,104 =========== ========== ======== =========== Common stocks $ 19 $ 2 $ -- $ 21 =========== ========== ======== ===========
The amortized cost and fair value of fixed maturity securities at December 31, 2002 by contractual maturity are as follows: Amortized Fair cost value Due within one year $ 768,066 $ 779,833 Due from one to five years 2,740,513 2,887,899 Due from five to ten years 5,865,084 6,165,165 Due in more than ten years 1,689,766 1,690,135 Mortgage and other asset-backed securities 12,145,797 12,529,072 ---------- ---------- Total $23,209,226 $24,052,104 =========== =========== The timing of actual receipts may differ from contractual maturities because issuers may have the right to call or prepay obligations.
The following is a summary of securities available-for-sale at December 31, 2001: Gross Gross Amortized unrealized unrealized Fair cost gains losses value Fixed maturities: U.S. Government agency obligations $ 31,074 $ 2,190 $ 56 $ 33,208 State and municipal obligations 7,826 149 -- 7,975 Corporate bonds and obligations 10,281,693 272,539 113,061 10,441,171 Mortgage and other asset-backed securities 8,292,576 103,109 32,801 8,362,884 Structured investments 1,377,195 3,793 105,304 1,275,684 Foreign government bonds and obligations 31,708 4,507 -- 36,215 ----------- -------- -------- ----------- Total fixed maturity securities $20,022,072 $386,287 $251,222 $20,157,137 ----------- -------- -------- ----------- Common stocks $ 805 $ 899 $ -- $ 1,704 =========== ======== ========= ===========
Pursuant to the adoption of SFAS No. 133 the Company reclassified all held-to-maturity securities with a carrying value of $6,463,613 and net unrealized gains of $8,185 to available-for-sale as of January 1, 2001. At December 31, 2002 and 2001, bonds carried at $14,523 and $14,639, respectively, were on deposit with various states as required by law. IDS Life Insurance Company ------------------------------------------------------------------------------- At December 31, 2002, fixed maturity securities comprised approximately 84 percent of the Company's total investments. These securities are rated by Moody's and Standard & Poor's (S&P), except for approximately $1.4 billion of securities which are rated by AEFC's internal analysts using criteria similar to Moody's and S&P. Ratings are presented using S&P's convention and if the two agencies' ratings differ, the lower rating is used. A summary of fixed maturity securities, at fair value, by rating on December 31, is as follows: Rating 2002 2001 AAA 53% 45% AA 1 1 A 14 15 BBB 25 34 Below investment grade 7 5 --- --- Total 100% 100% === === At December 31, 2002, approximately 93% of the securities rated AAA are GNMA, FNMA and FHLMC mortgage-backed securities. No holdings of any other issuer were greater than ten percent of stockholder's equity. Available-for-sale securities were sold during 2002 with proceeds of $10,093,228 and gross realized gains and losses of $297,477 and $135,824, respectively. Available-for-sale securities were sold during 2001 with proceeds of $5,493,141 and gross realized gains and losses of $116,565 and $390,732, respectively. Available-for-sale securities were sold during 2000 with proceeds of $1,237,116 and gross realized gains and losses of $25,101 and $21,147, respectively. During the years ended December 31, 2002, 2001, and 2000, the Company also recognized losses of $145,524, $348,730, and $38,816 respectively due to other-than-temporary impairments on structured investments and corporate debt securities. These amounts are reflected in the net realized loss on investments in the Consolidated Statements of Income. The 2001 realized losses and other-than temporary impairments include the effect of the write-downs and sale of high-yield securities discussed below. The net unrealized gain on available-for-sale securities as of December 31, 2002 and 2001, was $842,880 and $135,964, respectively, with the $706,916 change, net of taxes and deferred policy acquisition costs, reflected as a separate component in accumulated other comprehensive income for the year ended December 31, 2002. For the years ended December 31, 2001 and 2000 the change in net unrealized losses on available-for-sale securities was a decrease of $667,340 and $122,196, respectively. During 2001, the Company recorded pretax losses of $828,175 to recognize the impact of higher default rate assumptions on certain structured investments; to write down lower rated securities (most of which were sold during 2001) in connection with Company's decision to lower its risk profile by reducing the level of its high-yield portfolio, allocating holdings toward stronger credits, and reducing the concentration of exposure to individual companies and industry sectors; to write down certain other investments; and, to adopt EITF Issue 99-20, as previously discussed. Within the Consolidated Statements of Income, $623,958 of these losses are included in Net realized losses on investments and $171,269 are included in Net investment income, with the remaining losses recorded as a cumulative effect of accounting change. During 2001, the Company placed a majority of its rated CDO securities and related accrued interest, (collectively referred to as transferred assets), having an aggregate book value of $675,347, into a securitization trust. In return, the Company received $89,535 in cash relating to sales to unaffiliated investors and retained interests with allocated book amounts aggregating $585,812. As of December 31, 2002, the retained interests had a carrying value of approximately $562,000, of which approximately $388,000 is considered investment grade. The book amount is determined by allocating the previous carrying value of the transferred assets between assets sold and the retained interests based on their relative fair values. Fair values are based on the estimated present value of future cash flows. The retained interests are accounted for in accordance with EITF Issue 99-20. Fair values of fixed maturity and equity securities represent quoted market prices and estimated values when quoted prices are not available. Estimated values are determined by established procedures involving, among other things, review of market indices, price levels of current offerings of comparable issues, price estimates, estimated future cash flows and market data from independent brokers. IDS Life Insurance Company ------------------------------------------------------------------------------- Mortgage loans on real estate At December 31, 2002, approximately 12% of the Company's investments were mortgage loans on real estate. Concentration of credit risk by region of the United States and by type of real estate are as follows:
December 31, 2002 December 31, 2001 On balance Funding On balance Funding Region sheet commitments sheet commitments East North Central $ 611,886 $ -- $ 670,387 $ 1,873 West North Central 493,310 25,500 549,015 -- South Atlantic 765,443 2,800 815,837 9,490 Middle Atlantic 318,699 19,100 352,821 9,363 New England 227,150 5,800 274,486 8,700 Pacific 355,622 5,250 355,945 14,618 West South Central 210,435 1,000 214,000 600 East South Central 63,859 -- 55,798 -- Mountain 406,459 -- 413,053 27 ---------- ------- ---------- ------- 3,452,863 59,450 3,701,342 44,671 Less reserves for losses 35,212 -- 20,948 -- ---------- ------- ---------- ------- Total $3,417,651 $59,450 $3,680,394 $44,671 ========== ======= ========== ======= December 31, 2002 December 31, 2001 On balance Funding On balance Funding Property type sheet commitments sheet commitments Department/retail stores $ 991,984 $20,722 $1,117,195 $13,200 Apartments 622,185 -- 694,214 11,531 Office buildings 1,178,434 25,628 1,203,090 7,650 Industrial buildings 344,604 13,100 333,713 2,263 Hotels/motels 102,184 -- 108,019 -- Medical buildings 95,189 -- 106,927 6,000 Nursing/retirement homes 35,873 -- 39,590 -- Mixed use 54,512 -- 86,972 27 Other 27,898 -- 11,622 4,000 ---------- ------- ---------- ------- 3,452,863 59,450 3,701,342 44,671 Less reserves for losses 35,212 -- 20,948 -- ---------- ------- ---------- ------- Total $3,417,651 $59,450 $3,680,394 $44,671 ========== ======= ========== =======
Mortgage loan fundings are restricted by state insurance regulatory authorities to 80 percent or less of the market value of the real estate at the time of origination of the loan. The Company holds the mortgage document, which gives it the right to take possession of the property if the borrower fails to perform according to the terms of the agreement. Commitments to fund mortgages are made in the ordinary course of business. The fair value of the mortgage commitments is $nil. At December 31, 2002, 2001 and 2000, the Company's investment in impaired loans was $33,130, $39,601 and $24,999, respectively, with related reserves of $9,100, $7,225 and $4,350, respectively. During 2002, 2001 and 2000, the average recorded investment in impaired loans was $36,583, $24,498 and $27,063, respectively. The Company recognized $1,090, $1,285 and $1,033 of interest income related to impaired loans for the years ended December 31, 2002, 2001 and 2000, respectively. IDS Life Insurance Company ------------------------------------------------------------------------------- The following table presents changes in the reserves for mortgage loan losses: 2002 2001 2000 Balance, January 1 $20,948 $11,489 $ 28,283 Provision for mortgage loan losses 14,264 14,959 (14,894) Loan payoffs -- -- (1,200) Foreclosures and write-offs -- (5,500) (700) ------- ------- -------- Balance, December 31 $35,212 $20,948 $ 11,489 ======= ======= ======== Sources of investment income and realized losses on investments Net investment income for the years ended December 31 is summarized as follows: 2002 2001 2000 Income on fixed maturities $1,331,547 $1,276,966 $1,473,560 Income on mortgage loans 274,524 290,608 286,611 Other (15,642) (41,927) 9,834 ---------- ---------- ---------- 1,590,429 1,525,647 1,770,005 Less investment expenses 28,573 39,959 39,400 ---------- ---------- ---------- Total $1,561,856 $1,485,688 $1,730,605 ========== ========== ========== Net realized losses on investments for the years ended December 31 is summarized as follows: 2002 2001 2000 Fixed maturities $ 16,129 $(622,897) $(34,862) Mortgage loans (15,586) (17,834) 16,794 Other investments (5,050) (9,321) 1,093 -------- --------- -------- Total $ (4,507) $(649,752) $(16,975) ======== ========= ======== 3. INCOME TAXES The Company qualifies as a life insurance company for federal income tax purposes. As such, the Company is subject to the Internal Revenue Code provisions applicable to life insurance companies.
The income tax expense (benefit) for the years ended December 31 consists of the following: 2002 2001 2000 Federal income taxes Current $(30,648) $ 88,121 $176,397 Deferred 116,996 (234,673) 37,704 -------- --------- -------- 86,348 (146,552) 214,101 State income taxes -- current 1,478 1,330 7,526 -------- --------- -------- Income tax expense (benefit) before cumulative effect of accounting change 87,826 (145,222) 221,627 Cumulative effect of accounting change income tax benefit -- (11,532) -- -------- --------- -------- Income tax expense (benefit) $ 87,826 $(156,754) $221,627 ======== ========= ========
Income tax expense (benefit) before the cumulative effect of accounting change differs from that computed by using the federal statutory rate of 35%. The principal causes of the difference in each year are shown below:
2002 2001 2000 Provision Rate Provision Rate Provision Rate Federal income taxes based on the statutory rate $164,502 35.0% $ (66,136) (35.0)% $282,542 35.0% Tax-exempt interest and dividend income (5,260) (1.1) (4,663) (2.5) (3,788) (0.5) State taxes, net of federal benefit 961 0.2 865 0.4 4,892 0.6 Affordable housing credits (70,000) (14.9) (73,200) (38.7) (54,569) (6.8) Other, net (2,377) (0.5) (2,088) (1.1) (7,450) (0.8) -------- ---- --------- ----- -------- ---- Total income taxes $ 87,826 18.7% $(145,222) (76.9)% $221,627 27.5% ======== ==== ========= ===== ======== ====
A portion of life insurance company income earned prior to 1984 was not subject to current taxation but was accumulated, for tax purposes, in a "policyholders' surplus account." At December 31, 2002, the Company had a policyholders' surplus account balance of $20,114. The policyholders' surplus account is only taxable if dividends to the stockholder exceed the stockholder's surplus account or if the Company is liquidated. Deferred income taxes of $7,040 have not been established because no distributions of such amounts are contemplated. IDS Life Insurance Company ------------------------------------------------------------------------------- Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred income tax assets and liabilities as of December 31 are as follows: 2002 2001 Deferred income tax assets: Policy reserves $ 683,144 $ 705,637 Other investments 319,829 333,857 Other 29,789 24,640 --------- --------- Total deferred income tax assets 1,032,762 1,064,134 --------- --------- Deferred income tax liabilities: Deferred policy acquisition costs 929,751 861,892 Net unrealized gain -- available-for-sale securities 267,787 45,934 Other 17,283 -- --------- --------- Total deferred income tax liabilities 1,214,821 907,826 --------- --------- Net deferred income tax (liability) asset $ (182,059) $ 156,308 ========== ========== The Company is required to establish a valuation allowance for any portion of the deferred income tax assets that management believes will not be realized. In the opinion of management, it is more likely than not that the Company will realize the benefit of the deferred income tax assets and, therefore, no such valuation allowance has been established. 4. STOCKHOLDER'S EQUITY Retained earnings available for distribution as dividends to AEFC are limited to the Company's surplus as determined in accordance with accounting practices prescribed by state insurance regulatory authorities. The Company's statutory unassigned surplus aggregated $1,323,324 and $1,262,335 as of December 31, 2002 and 2001, respectively (see Note 3 with respect to the income tax effect of certain distributions). In addition, any dividend distributions in 2003 in excess of $240,838 would require approval of the Department of Commerce of the State of Minnesota. Statutory net income (loss) for the years ended December 31 and capital and surplus as of December 31 are summarized as follows: 2002 2001 2000 Statutory net income (loss) $ 159,794 $ (317,973) $ 344,973 Statutory capital and surplus 2,408,379 1,947,350 1,778,306 --------- --------- --------- The National Association of Insurance Commissioners (NAIC) revised the Accounting Practices and Procedures Manual in a process referred to as Codification. The revised regulations took effect January 1, 2001. The domiciliary states of the Company and its insurance subsidiaries adopted the provisions of the revised manual, with the exception of certain provisions not adopted by its subsidiaries organized in the state of New York. The revised manual changed, to some extent, prescribed statutory accounting practices and resulted in changes to the accounting practices that the Company uses to prepare its statutory-basis financial statements. The impact of implementing these changes was a decrease of $39,997 to the Company's statutory-basis capital and surplus as of January 1, 2001. Effective January 1, 2002 the Company's subsidiaries organized in the state of New York adopted additional provisions of the manual which resulted in an increase of $5,597 to the Company's statutory-basis capital and surplus as of January 1, 2002. 5. RELATED PARTY TRANSACTIONS The Company loans funds to AEFC under a collateral loan agreement. The balance of the loan was $nil at December 31, 2002 and 2001. This loan can be increased to a maximum of $75,000 and pays interest at a rate equal to the preceding month's effective new money rate for the Company's permanent investments. Interest income on related party loans totaled $nil in 2002, 2001 and 2000. The Company participates in the American Express Company Retirement Plan which covers all permanent employees age 21 and over who have met certain employment requirements. Company contributions to the plan are based on participants' age, years of service and total compensation for the year. Funding of retirement costs for this plan complies with the applicable minimum funding requirements specified by ERISA. The Company's share of the total net periodic pension cost was $294, $263 and $250 in 2002, 2001 and 2000, respectively. The Company also participates in defined contribution pension plans of American Express Company which cover all employees who have met certain employment requirements. Company contributions to the plans are a percent of either each employee's eligible compensation or basic contributions. Costs of these plans charged to operations in 2002, 2001 and 2000 were $1,411, $662 and $1,707, respectively. IDS Life Insurance Company ------------------------------------------------------------------------------- The Company participates in defined benefit health care plans of AEFC that provide health care and life insurance benefits to retired employees and retired financial advisors. The plans include participant contributions and service related eligibility requirements. Upon retirement, such employees are considered to have been employees of AEFC. AEFC expenses these benefits and allocates the expenses to its subsidiaries. The cost of these plans charged to operations in 2002, 2001 and 2000 was $1,835, $1,011 and $1,136, respectively. Charges by AEFC for use of joint facilities, technology support, marketing services and other services aggregated $526,081, $505,526 and $582,836 for 2002, 2001 and 2000, respectively. Certain of these costs are included in DAC. Expenses allocated to the Company may not be reflective of expenses that would have been incurred by the Company on a stand-alone basis. Included in other liabilities at December 31, 2002 and 2001 are $55,602 and $68,919, respectively, payable to AEFC for federal income taxes. 6. LINES OF CREDIT The Company has available lines of credit with AEFC aggregating $200,000 ($100,000 committed and $100,000 uncommitted). The interest rate for any borrowings is established by reference to various indices plus 20 to 45 basis points, depending on the term. There were no borrowings outstanding under this agreement at December 31, 2002 and 2001. 7. COMMITMENTS AND CONTINGENCIES At December 31, 2002, 2001 and 2000, traditional life and universal life-type insurance in force aggregated $119,173,734, $108,255,014 and $98,060,472 respectively, of which $38,008,734, $25,986,706 and $17,429,851 was reinsured at the respective year ends. The Company also reinsures a portion of the risks assumed under long-term care policies. Under all reinsurance agreements, premiums ceded to reinsurers amounted to $129,345, $114,534 and $89,506 and reinsurance recovered from reinsurers amounted to $60,567, $43,388, and $32,500 for the years ended December 31, 2002, 2001 and 2000, respectively. Reinsurance contracts do not relieve the Company from its primary obligation to policyholders. At December 31, 2002, the Company had no commitments to purchase investments other than mortgage loan fundings (see Note 2). The Company is a party to litigation and arbitration proceedings in the ordinary course of its business, none of which is expected to have a material adverse affect on the Company. In recent years, life insurance companies have been named as defendants in lawsuits, including class action lawsuits, alleging improper life insurance sales practices, alleged agent misconduct, failure to properly supervise agents and other matters relating to life insurance policies and annuity contracts. The Company and its affiliates were named defendants in three purported class-action lawsuits alleging improper insurance and annuity sales practices including improper replacement of existing annuity contracts and insurance policies, improper use of annuities to fund tax deferred contributory retirement plans, alleged agent misconduct, failure to properly supervise agents and other matters relating to life insurance policies and annuity contracts. A fourth lawsuit was filed against the Company and its affiliates in federal court. In January 2000, AEFC reached an agreement in principle to settle the four class action lawsuits described above. It is expected the settlement will provide $215,000 of benefits to more than two million participants in exchange for a release by class members of all insurance and annuity state and federal market conduct claims dating back to 1985. The settlement received court approval. Implementation of the settlement commenced October 15, 2001 and is substantially complete. Claim review payments have been made. Numerous individuals opted out of the settlement described above and therefore did not release their claims against AEFC and its subsidiaries. Some of these class members who opted out were represented by counsel and presented separate claims to AEFC and the Company. Most of their claims have been settled. The outcome of any litigation or threatened litigation cannot be predicted with any certainty. However, in the aggregate, the Company does not consider any lawsuits in which it is named as a defendant to have a material impact on the Company's financial position or operating results. The IRS routinely examines the Company's federal income tax returns and is currently conducting an audit for the 1993 through 1996 tax years. Management does not believe there will be a material adverse effect on the Company's consolidated financial position as a result of these audits. IDS Life Insurance Company ------------------------------------------------------------------------------- 8. DERIVATIVE FINANCIAL INSTRUMENTS The Company maintains an overall risk management strategy that incorporates the use of derivative instruments to minimize significant unplanned fluctuations in earnings caused by interest rate and equity market volatility. The Company does not enter into derivative instruments for speculative purposes. As prescribed by SFAS No. 133, derivative instruments that are designated and qualify as hedging instruments are classified as cash flow hedges, fair value hedges, or hedges of a net investment in a foreign operation, based upon the exposure being hedged. The Company currently has economic hedges that either do not qualify or are not designated for hedge accounting treatment under SFAS No. 133. The Company enters into interest rate swaps, caps and floors to manage the Company's interest rate risk and options and futures to manage equity-based risk. The values of derivative financial instruments are based on market values, dealer quotes or pricing models. Market risk is the possibility that the value of the derivative financial instruments will change due to fluctuations in a factor from which the instrument derives its value, primarily an interest rate or equity market index. The Company is not impacted by market risk related to derivatives held for non- trading purposes beyond that inherent in cash market transactions. Derivatives held for purposes other than trading are largely used to manage risk and, therefore, the cash flow and income effects of the derivatives are inverse to the effects of the underlying transactions. Credit risk is the possibility that the counterparty will not fulfill the terms of the contract. The Company monitors credit risk related to derivative financial instruments through established approval procedures, including setting concentration limits by counterparty, and requiring collateral, where appropriate. A vast majority of the Company's counterparties are rated A or better by Moody's and Standard & Poor's. Interest rate caps, swaps and floors are primarily used to protect the margin between interest rates earned on investments and the interest rates credited to related annuity contract holders. No interest rate swaps or floors were outstanding as of December 31, 2002. The interest rate caps expire in January 2003. The fair value of the interest rate caps is included in Other assets. Changes in the value of the interest rate caps are included in Other insurance and operating expenses. A purchased (written) option conveys the right (obligation) to buy or sell an instrument at a fixed price for a set period of time or on a specific date. The Company writes and purchases index options to manage the risks related to annuity products that pay interest based upon the relative change in a major stock market index between the beginning and end of the product's term (equity-indexed annuities). The Company views this strategy as a prudent management of equity market sensitivity, such that earnings are not exposed to undue risk presented by changes in equity market levels. The equity indexed annuities contain embedded derivatives, essentially the equity based return of the product, which must be separated from the host contract and accounted for as derivative instruments per SFAS No. 133. As a result of fluctuations in equity markets, and the corresponding changes in value of the embedded derivatives, the amount of interest credited incurred by the Company related to the annuity product will positively or negatively impact reported earnings. The purchased and written options are carried at fair value and included in Other assets and Other liabilities, respectively. The fair value of the embedded options are included in Future policy benefits for fixed annuities. The changes in fair value of the options are recognized in Other insurance and operating expenses and the embedded derivatives are recognized in Interest credited on universal life-type insurance and investment contracts. The purchased and written options expire on various dates through 2009. The Company also purchases futures to hedge its obligations under equity indexed annuities. The futures purchased are marked-to-market daily and exchange traded, exposing the Company to no counterparty risk. The futures contracts mature in 2003. Index options may be used to manage the equity market risk related to the fee income that the Company receives from its separate accounts and the underlying mutual funds. The amount of the fee income received is based upon the daily market value of the separate account and mutual fund assets. As a result, the Company's fee income could be impacted significantly by fluctuations in the equity market. There are no index options outstanding as of December 31, 2002 related to this strategy. IDS Life Insurance Company ------------------------------------------------------------------------------- 9. FAIR VALUES OF FINANCIAL INSTRUMENTS The Company discloses fair value information for financial instruments for which it is practicable to estimate that value. Fair values of life insurance obligations and all non-financial instruments, such as DAC, are excluded. Off-balance sheet intangible assets, such as the value of the field force, are also excluded. Management believes the value of excluded assets and liabilities is significant. The fair value of the Company, therefore, cannot be estimated by aggregating the amounts presented.
2002 2001 Carrying Fair Carrying Fair Financial Assets value value value value Fixed maturities $24,052,104 $24,052,104 $20,157,137 $20,157,137 Common stocks 21 21 1,704 1,704 Mortgage loans on real estate 3,417,651 3,815,362 3,680,394 3,845,950 Cash and cash equivalents 4,424,061 4,424,061 1,150,251 1,150,251 Other investment 110,574 108,813 75,721 75,721 Derivatives 24,016 24,016 34,477 34,477 Separate account assets 21,980,674 21,980,674 27,333,697 27,333,697 ---------- ---------- ---------- ---------- Financial Liabilities Future policy benefits for fixed annuities $21,911,497 $21,282,750 $18,139,462 $17,671,777 Derivatives 9,099 9,099 2,506 2,506 Separate account liabilities 19,391,316 18,539,425 24,280,092 23,716,854 ---------- ---------- ---------- ----------
At December 31, 2002 and 2001, the carrying amount and fair value of future policy benefits for fixed annuities exclude life insurance-related contracts carried at $1,432,294 and $1,368,254, respectively, and policy loans of $67,523 and $84,557, respectively. The fair value of these benefits is based on the status of the annuities at December 31, 2002 and 2001. The fair value of deferred annuities is estimated as the carrying amount less any applicable surrender charges and related loans. The fair value for annuities in non-life contingent payout status is estimated as the present value of projected benefit payments at rates appropriate for contracts issued in 2002 and 2001. At December 31, 2002 and 2001, the fair value of liabilities related to separate accounts is estimated as the carrying amount less any applicable surrender charges and less variable insurance contracts carried at $2,589,358 and $3,053,605, respectively. S-6467-20 G (5/03) STATEMENT OF ADDITIONAL INFORMATION FOR AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 IDS LIFE VARIABLE ACCOUNT 10 MAY 1, 2003 IDS Life Variable Account 10 is a separate account established and maintained by IDS Life Insurance Company (IDS Life). This Statement of Additional Information (SAI) is not a prospectus. It should be read together with the prospectus dated the same date as this SAI, which may be obtained by writing or calling us at the address and telephone number below. IDS Life Insurance Company 70100 AXP Financial Center Minneapolis, MN 55474 (800) 862-7919 TABLE OF CONTENTS Performance Information p. 3 Calculating Annuity Payouts p. 10 Rating Agencies p. 11 Principal Underwriter p. 11 Independent Auditors p. 11 Financial Statements
IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 2 PERFORMANCE INFORMATION The subaccounts may quote various performance figures to illustrate past performance. We base total return and current yield quotations (if applicable) on standardized methods of computing performance as required by the Securities and Exchange Commission (SEC). An explanation of the methods used to compute performance follows below. AVERAGE ANNUAL TOTAL RETURN We will express quotations of average annual total return for the subaccounts in terms of the average annual compounded rate of return of a hypothetical investment in the contract over a period of one, five and ten years (or, if less, up to the life of the subaccounts), calculated according to the following formula: P(1 + T)(TO THE POWER OF 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 the period, at the end of the period (or fractional portion thereof) We calculated the following performance figures on the basis of historical performance of each fund. We show actual performance from the date the subaccounts began investing in the funds. We also show performance from the commencement date of the funds as if the subaccounts invested in them at that time, which, in some cases, they did not. Although we base performance figures on historical earnings, past performance does not guarantee future results. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 3 AVERAGE ANNUAL TOTAL RETURN(a) WITH SELECTION OF MAV AND EEB DEATH BENEFIT RIDERS FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC3 Blue Chip Advantage Fund (9/99; 9/99)(1) (23.61%) (12.99%) BD3 Bond Fund (9/99; 10/81) 4.44 5.13 CR3 Capital Resource Fund (9/99; 10/81) (22.97) (14.66) CM3 Cash Management Fund (9/99; 10/81) 0.10 2.61 DE3 Diversified Equity Income Fund (9/99; 9/99) (19.99) (5.53) EM3 Emerging Markets Fund (5/00; 5/00) (6.47) (14.22) ES3 Equity Select Fund (5/01; 5/01) (14.74) (10.08) EI3 Extra Income Fund (9/99; 5/96) (7.54) (4.02) FI3 Federal Income Fund (9/99; 9/99) 4.73 5.38 GB3 Global Bond Fund (9/99; 5/96) 13.82 4.81 GR3 Growth Fund (9/99; 9/99) (27.03) (20.16) IE3 International Fund (9/99; 1/92) (19.20) (16.83) MF3 Managed Fund (9/99; 4/86) (13.91) (6.14) ND3 NEW DIMENSIONS FUND(R) (9/99; 5/96) (22.84) (10.52) IV3 S&P 500 Index Fund (5/00; 5/00) (23.36) (17.76) SC3 Small Cap Advantage Fund (9/99; 9/99) (18.03) (3.70) SA3 Strategy Aggressive Fund (9/99; 1/92) (32.84) (16.68) AIM V.I. 3CA Capital Appreciation Fund, Series I Shares (9/99; 5/93) (25.29) (11.68) 3CD Capital Development Fund, Series I Shares (9/99; 5/98) (22.30) (0.81) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 3IF VP International, Class I (9/99; 5/94) (21.32) (11.94) 3VA VP Value, Class I (9/99; 5/96) (13.62) 1.46 CALVERT VARIABLE SERIES, INC. 3SR Social Balanced Portfolio (5/00; 9/86) (13.19) (9.56) CREDIT SUISSE TRUST - 3EG Emerging Growth Portfolio (9/99; 9/99) (30.21) (8.14) FIDELITY(R) VIP 3GI Growth & Income Portfolio Service Class (9/99; 12/96)(2) (17.67) (8.24) 3MP Mid Cap Portfolio Service Class (9/99; 12/98)(3) (10.91) 11.37 3OS Overseas Portfolio Service Class (9/99; 1/87)(3) (21.30) (14.16) FTVIPT 3RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(4) 1.00 9.91 3SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(4) (10.28) 6.62 3TF Templeton Foreign Securities Fund - Class 2) (3/02; 5/92)(4) -- (17.18)(b) GOLDMAN SACHS VIT 3SE CORE(SM) Small Cap Equity Fund (9/99; 2/98) (15.95) (0.00) 3UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (22.84) (11.32) 3MC Mid Cap Value Fund (9/99; 5/98) (5.73) 8.35 PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC3 Blue Chip Advantage Fund (9/99; 9/99)(1) (23.61%) --% --% (12.99%) BD3 Bond Fund (9/99; 10/81) 4.44 3.25 5.86 8.93 CR3 Capital Resource Fund (9/99; 10/81) (22.97) (5.18) 2.71 9.05 CM3 Cash Management Fund (9/99; 10/81) 0.10 3.02 3.19 5.04 DE3 Diversified Equity Income Fund (9/99; 9/99) (19.99) -- -- (5.53) EM3 Emerging Markets Fund (5/00; 5/00) (6.47) -- -- (14.22) ES3 Equity Select Fund (5/01; 5/01) (14.74) -- -- (10.08) EI3 Extra Income Fund (9/99; 5/96) (7.54) (3.06) -- 0.14 FI3 Federal Income Fund (9/99; 9/99) 4.73 -- -- 5.38 GB3 Global Bond Fund (9/99; 5/96) 13.82 3.34 -- 3.99 GR3 Growth Fund (9/99; 9/99) (27.03) -- -- (20.17) IE3 International Fund (9/99; 1/92) (19.20) (6.92) 0.83 0.54 MF3 Managed Fund (9/99; 4/86) (13.91) (0.84) 5.44 7.54 ND3 NEW DIMENSIONS FUND(R) (9/99; 5/96) (22.84) (0.98) -- 4.02 IV3 S&P 500 Index Fund (5/00; 5/00) (23.36) -- -- (17.76) SC3 Small Cap Advantage Fund (9/99; 9/99) (18.03) -- -- (3.70) SA3 Strategy Aggressive Fund (9/99; 1/92) (32.84) (9.31) 0.64 1.31 AIM V.I. 3CA Capital Appreciation Fund, Series I Shares (9/99; 5/93) (25.29) (3.31) -- 6.21 3CD Capital Development Fund, Series I Shares (9/99; 5/98) (22.30) -- -- (2.31) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 3IF VP International, Class I (9/99; 5/94) (21.32) (3.97) -- 1.18 3VA VP Value, Class I (9/99; 5/96) (13.62) 2.81 -- 7.30 CALVERT VARIABLE SERIES, INC. 3SR Social Balanced Portfolio (5/00; 9/86) (13.19) (0.38) 5.52 6.76 CREDIT SUISSE TRUST - 3EG Emerging Growth Portfolio (9/99; 9/99) (30.21) -- -- (8.71) FIDELITY(R) VIP 3GI Growth & Income Portfolio Service Class (9/99; 12/96)(2) (17.67) (0.45) -- 3.92 3MP Mid Cap Portfolio Service Class (9/99; 12/98)(3) (10.91) -- -- 14.40 3OS Overseas Portfolio Service Class (9/99; 1/87)(3) (21.30) (5.08) 3.56 3.04 FTVIPT 3RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(4) 1.00 1.37 8.92 8.49 3SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(4) (10.28) -- -- (0.65) 3TF Templeton Foreign Securities Fund - Class 2) (3/02; 5/92)(4) (19.52) (3.18) 6.66 5.53 GOLDMAN SACHS VIT 3SE CORE(SM) Small Cap Equity Fund (9/99; 2/98) (15.95) -- -- (1.82) 3UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (22.84) -- -- (3.51) 3MC Mid Cap Value Fund (9/99; 5/98) (5.73) -- -- 2.85
IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 4 AVERAGE ANNUAL TOTAL RETURN(a) WITH SELECTION OF MAV AND EEB DEATH BENEFIT RIDERS FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT JANUS ASPEN SERIES 3GT Global Technology Portfolio: Service Shares (5/00; 1/00)(5) (41.77%) (41.27%) 3IG International Growth Portfolio: Service Shares (5/00; 5/94)(5) (26.68) (26.66) 3AG Mid Cap Growth Portfolio: Service Shares (5/00; 9/93)(5) (29.03) (37.55) (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) LAZARD RETIREMENT SERIES 3IP International Equity Portfolio (9/99; 9/98) (11.71) (12.79) MFS(R) 3MG Investors Growth Stock Series - Service Class (5/00; 5/99)(6) (28.63) (24.41) 3MD New Discovery Series - Service Class (5/00; 5/98)(6) (32.69) (18.16) PUTNAM VARIABLE TRUST 3IN Putnam VT International New Opportunities Fund - Class IB Shares (9/99; 1/97)(7) (14.62) (16.29) 3VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(7) (31.50) (15.07) ROYCE CAPITAL FUND 3MI Micro-Cap Portfolio (9/99; 12/96) (13.87) 12.92 THIRD AVENUE 3SV Value Portfolio (9/99; 9/99) (11.73) 12.99 WANGER 3IT International Small Cap (9/99; 5/95) (14.82) (9.54) 3SP U.S. Smaller Companies (9/99; 5/95) (17.78) (1.58) WELLS FARGO VT 3AA Asset Allocation Fund (5/01; 4/94)(8) (13.84) (10.97) 3WI International Equity Fund (5/01; 7/00) (23.86) (20.84) 3SG Small Cap Growth Fund (5/01; 5/95)(9) (39.07) (28.70) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT JANUS ASPEN SERIES 3GT Global Technology Portfolio: Service Shares (5/00; 1/00)(5) (41.77%) --% --% (38.75%) 3IG International Growth Portfolio: Service Shares (5/00; 5/94)(5) (26.68) (1.05) -- 7.08 3AG Mid Cap Growth Portfolio: Service Shares (5/00; 9/93)(5) (29.03) (3.41) -- 5.87 (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) LAZARD RETIREMENT SERIES 3IP International Equity Portfolio (9/99; 9/98) (11.71) -- -- (5.09) MFS(R) 3MG Investors Growth Stock Series - Service Class (5/00; 5/99)(6) (28.63) -- -- (9.84) 3MD New Discovery Series - Service Class (5/00; 5/98)(6) (32.69) -- -- 1.39 PUTNAM VARIABLE TRUST 3IN Putnam VT International New Opportunities Fund - Class IB Shares (9/99; 1/97)(7) (14.62) (3.48) -- (3.12) 3VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(7) (31.50) (5.22) -- (1.14) ROYCE CAPITAL FUND 3MI Micro-Cap Portfolio (9/99; 12/96) (13.87) 11.16 -- 12.60 THIRD AVENUE 3SV Value Portfolio (9/99; 9/99) (11.73) -- -- 13.06 WANGER 3IT International Small Cap (9/99; 5/95) (14.82) 4.12 -- 10.07 3SP U.S. Smaller Companies (9/99; 5/95) (17.78) 1.85 -- 11.81 WELLS FARGO VT 3AA Asset Allocation Fund (5/01; 4/94)(8) (13.84) 1.25 -- 6.99 3WI International Equity Fund (5/01; 7/00) (23.86) -- -- (20.57) 3SG Small Cap Growth Fund (5/01; 5/95)(9) (39.07) (13.44) (2.98)
(a) Current applicable charges deducted from fund performance include a $30 annual contract administrative charge, 0.15% annual MAV fee, 0.30% annual EEB fee and a 0.55% annual mortality and expense risk fee. Premium taxes are not reflected in these total returns. (b) Cumulative return (not annualized) since commencement date of the subaccount. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 5 AVERAGE ANNUAL TOTAL RETURN(a) FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC3 Blue Chip Advantage Fund (9/99; 9/99)(1) (23.16%) (12.54%) BD3 Bond Fund (9/99; 10/81) 4.89 5.58 CR3 Capital Resource Fund (9/99; 10/81) (22.52) (14.21) CM3 Cash Management Fund (9/99; 10/81) 0.55 3.06 DE3 Diversified Equity Income Fund (9/99; 9/99) (19.54) (5.08) EM3 Emerging Markets Fund (5/00; 5/00) (6.02) (13.77) ES3 Equity Select Fund (5/01; 5/01) (14.29) (9.63) EI3 Extra Income Fund (9/99; 5/96) (7.09) (3.57) FI3 Federal Income Fund (9/99; 9/99) 5.18 5.83 GB3 Global Bond Fund (9/99; 5/96) 14.27 5.26 GR3 Growth Fund (9/99; 9/99) (26.58) (19.71) IE3 International Fund (9/99; 1/92) (18.75) (16.38) MF3 Managed Fund (9/99; 4/86) (13.46) (5.69) ND3 NEW DIMENSIONS FUND(R) (9/99; 5/96) (22.39) (10.07) IV3 S&P 500 Index Fund (5/00; 5/00) (22.91) (17.31) SC3 Small Cap Advantage Fund (9/99; 9/99) (17.58) (3.25) SA3 Strategy Aggressive Fund (9/99; 1/92) (32.39) (16.23) AIM V.I. 3CA Capital Appreciation Fund, Series I Shares (9/99; 5/93) (24.84) (11.23) 3CD Capital Development Fund, Series I Shares (9/99; 5/98) (21.85) (0.36) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 3IF VP International, Class I (9/99; 5/94) (20.87) (11.49) 3VA VP Value, Class I (9/99; 5/96) (13.17) 1.91 CALVERT VARIABLE SERIES, INC. 3SR Social Balanced Portfolio (5/00; 9/86) (12.74) (9.11) CREDIT SUISSE TRUST - 3EG Emerging Growth Portfolio (9/99; 9/99) (29.76) (7.69) FIDELITY(R) VIP 3GI Growth & Income Portfolio Service Class (9/99; 12/96)(2) (17.22) (7.79) 3MP Mid Cap Portfolio Service Class (9/99; 12/98)(3) (10.46) 11.82 3OS Overseas Portfolio Service Class (9/99; 1/87)(3) (20.85) (13.71) FTVIPT 3RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(4) 1.45 10.36 3SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(4) (9.83) 7.07 3TF Templeton Foreign Securities Fund - Class 2) (3/02; 5/92)(4) -- (16.73)(b) GOLDMAN SACHS VIT 3SE CORE(SM) Small Cap Equity Fund (9/99; 2/98) (15.50) 0.45 3UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (22.39) (10.87) 3MC Mid Cap Value Fund (9/99; 5/98) (5.28) 8.80 PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC3 Blue Chip Advantage Fund (9/99; 9/99)(1) (23.16%) --% --% (12.54%) BD3 Bond Fund (9/99; 10/81) 4.89 3.70 6.31 9.38 CR3 Capital Resource Fund (9/99; 10/81) (22.52) (4.73) 3.16 9.50 CM3 Cash Management Fund (9/99; 10/81) 0.55 3.47 3.64 5.49 DE3 Diversified Equity Income Fund (9/99; 9/99) (19.54) -- -- (5.08) EM3 Emerging Markets Fund (5/00; 5/00) (6.02) -- -- (13.77) ES3 Equity Select Fund (5/01; 5/01) (14.29) -- -- (9.63) EI3 Extra Income Fund (9/99; 5/96) (7.09) (2.61) -- 0.59 FI3 Federal Income Fund (9/99; 9/99) 5.18 -- -- 5.83 GB3 Global Bond Fund (9/99; 5/96) 14.27 3.79 -- 4.44 GR3 Growth Fund (9/99; 9/99) (26.58) -- -- (19.72) IE3 International Fund (9/99; 1/92) (18.75) (6.47) 1.28 0.99 MF3 Managed Fund (9/99; 4/86) (13.46) (0.39) 5.89 7.99 ND3 NEW DIMENSIONS FUND(R) (9/99; 5/96) (22.39) (0.53) -- 4.47 IV3 S&P 500 Index Fund (5/00; 5/00) (22.91) -- -- (17.31) SC3 Small Cap Advantage Fund (9/99; 9/99) (17.58) -- -- (3.25) SA3 Strategy Aggressive Fund (9/99; 1/92) (32.39) (8.86) 1.09 1.76 AIM V.I. 3CA Capital Appreciation Fund, Series I Shares (9/99; 5/93) (24.84) (2.86) -- 6.66 3CD Capital Development Fund, Series I Shares (9/99; 5/98) (21.85) -- -- (1.86) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 3IF VP International, Class I (9/99; 5/94) (20.87) (3.52) -- 1.63 3VA VP Value, Class I (9/99; 5/96) (13.17) 3.26 -- 7.75 CALVERT VARIABLE SERIES, INC. 3SR Social Balanced Portfolio (5/00; 9/86) (12.74) 0.07 5.97 7.21 CREDIT SUISSE TRUST - 3EG Emerging Growth Portfolio (9/99; 9/99) (29.76) -- -- (8.26) FIDELITY(R) VIP 3GI Growth & Income Portfolio Service Class (9/99; 12/96)(2) (17.22) (0.00) -- 4.37 3MP Mid Cap Portfolio Service Class (9/99; 12/98)(3) (10.46) -- -- 14.85 3OS Overseas Portfolio Service Class (9/99; 1/87)(3) (20.85) (4.63) 4.01 3.49 FTVIPT 3RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(4) 1.45 1.82 9.37 8.94 3SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(4) (9.83) -- -- (0.20) 3TF Templeton Foreign Securities Fund - Class 2) (3/02; 5/92)(4) (19.07) (2.73) 7.11 5.98 GOLDMAN SACHS VIT 3SE CORE(SM) Small Cap Equity Fund (9/99; 2/98) (15.50) -- -- (1.37) 3UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (22.39) -- -- (3.06) 3MC Mid Cap Value Fund (9/99; 5/98) (5.28) -- -- 3.30
IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 6 AVERAGE ANNUAL TOTAL RETURN(a) FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT JANUS ASPEN SERIES 3GT Global Technology Portfolio: Service Shares (5/00; 1/00)(5) (41.32%) (40.82%) 3IG International Growth Portfolio: Service Shares (5/00; 5/94)(5) (26.23) (26.21) 3AG Mid Cap Growth Portfolio: Service Shares (5/00; 9/93)(5) (28.58) (37.10) (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) LAZARD RETIREMENT SERIES 3IP International Equity Portfolio (9/99; 9/98) (11.26) (12.34) MFS(R) 3MG Investors Growth Stock Series - Service Class (5/00; 5/99)(6) (28.18) (23.96) 3MD New Discovery Series - Service Class (5/00; 5/98)(6) (32.24) (17.71) PUTNAM VARIABLE TRUST 3IN Putnam VT International New Opportunities Fund - Class IB Shares (9/99; 1/97)(7) (14.17) (15.84) 3VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(7) (31.05) (14.62) ROYCE CAPITAL FUND 3MI Micro-Cap Portfolio (9/99; 12/96) (13.42) 13.37 THIRD AVENUE 3SV Value Portfolio (9/99; 9/99) (11.28) 13.44 WANGER 3IT International Small Cap (9/99; 5/95) (14.37) (9.09) 3SP U.S. Smaller Companies (9/99; 5/95) (17.33) (1.13) WELLS FARGO VT 3AA Asset Allocation Fund (5/01; 4/94)(8) (13.39) (10.52) 3WI International Equity Fund (5/01; 7/00) (23.41) (20.39) 3SG Small Cap Growth Fund (5/01; 5/95)(9) (38.62) (28.25) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT JANUS ASPEN SERIES 3GT Global Technology Portfolio: Service Shares (5/00; 1/00)(5) (41.32%) --% --% (38.30%) 3IG International Growth Portfolio: Service Shares (5/00; 5/94)(5) (26.23) (0.60) -- 7.53 3AG Mid Cap Growth Portfolio: Service Shares (5/00; 9/93)(5) (28.58) (2.96) -- 6.32 (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) LAZARD RETIREMENT SERIES 3IP International Equity Portfolio (9/99; 9/98) (11.26) -- -- (4.64) MFS(R) 3MG Investors Growth Stock Series - Service Class (5/00; 5/99)(6) (28.18) -- -- (9.39) 3MD New Discovery Series - Service Class (5/00; 5/98)(6) (32.24) -- -- 1.84 PUTNAM VARIABLE TRUST 3IN Putnam VT International New Opportunities Fund - Class IB Shares (9/99; 1/97)(7) (14.17) (3.03) -- (2.67) 3VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(7) (31.05) (4.77) -- (0.69) ROYCE CAPITAL FUND 3MI Micro-Cap Portfolio (9/99; 12/96) (13.42) 11.61 -- 13.05 THIRD AVENUE 3SV Value Portfolio (9/99; 9/99) (11.28) -- -- 13.51 WANGER 3IT International Small Cap (9/99; 5/95) (14.37) 4.57 -- 10.52 3SP U.S. Smaller Companies (9/99; 5/95) (17.33) 2.30 -- 12.26 WELLS FARGO VT 3AA Asset Allocation Fund (5/01; 4/94)(8) (13.39) 1.70 -- 7.44 3WI International Equity Fund (5/01; 7/00) (23.41) -- -- (20.12) 3SG Small Cap Growth Fund (5/01; 5/95)(9) (38.62) (12.99) -- (2.53)
(a) Current applicable charges deducted from fund performance include a $30 annual contract administrative charge and a 0.55% annual mortality and expense risk fee. Premium taxes are not reflected in these total returns. (b) Cumulative return (not annualized) since commencement date of the subaccount. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 7 NOTES TO PERFORMANCE INFORMATION (1) Commencement date of the subaccount; Commencement date of the fund. (2) Initial offering of the Service Class 2 of each fund took place on Jan. 12, 2000. Returns prior to Jan. 12, 2000 through Nov. 3, 1997 are those of the Service Class, which reflect a 12b-1 fee of 0.10%. Service Class 2 returns prior to Nov. 3, 1997 are those of the Initial Class, which has no 12b-1 fee. If Service Class 2's 12b-1 fee of 0.25% had been reflected, returns prior to Jan. 12, 2000 would have been lower. (3) Initial offering of the Service Class of each fund took place on Nov. 3, 1997 (except VIP Mid Cap which took place on Dec. 28, 1998). Returns prior to Nov. 3, 1997 (or Dec. 28, 1998 for VIP Mid Cap) are those of the Initial Class, which has no 12b-1 fee. If Service Class 2's 12b-1 fee of 0.10% had been reflected, returns prior to Nov. 3, 1997 would have been lower. (4) Ongoing stock market volatility can dramatically change the fund's short-term performance; current results may differ. Because Class 2 shares were not offered until Jan. 6, 1999, standardized Class 2 Fund performance for prior periods represents historical results of Class 1 shares. For periods beginning Jan. 6, 1999 Class 2's results reflect an additional 12b-1 fee expense, which also affects future performance. (5) In recent years returns have sustained significant gains and losses due to market volatility in the technology sector. The returns shown for Service Shares for periods prior to their inception (Dec. 31, 1999) are derived from the historical performance of the Institutional Shares, adjusted to reflect the higher operating expenses of Service Shares. (6) Service Class shares commenced operations in May 2000. Service Class shares carry a 0.25% annual Rule 12b-1 fee. Service Class share performance includes the performance of the series' Initial Class shares for periods prior to the inception of Service Class shares (blended performance). These blended performance figures have not been adjusted to take into account differences in the class-specific operating expenses (such as Rule 12b-1 fees). Because operating expenses of Service Class shares are higher than those of Initial class shares, the blended Service Class share performance is higher than it would have been had the Service Class shares been offered for the entire period. (7) Performance information for Class IB shares for periods prior to April 30, 1998 are based on the performance of the fund's Class IA shares (not offered as an investment option) adjusted to reflect the fees paid by Class IB shares, including a Rule 12b-1 fee of 0.25%.Restated to reflect an increase in 12b-1 fees effective April 30, 2001. Actual 12b-1 fees during the most recent fiscal year were 0.22%. (8) Performance for periods prior to Sept. 20, 1999 reflects performance of the Life and Annuity Trust Asset Allocation Fund, its predecessor fund. Effective at the close of business Sept. 17, 1999, the Life and Annuity Trust Funds were reorganized into the Wells Fargo Variable Trust Funds. (9) Performance for periods prior to Sept. 20, 1999 reflects performance of the Norwest Select Small Company Stock Fund (the accounting survivor of a merger of the Life and Annuity Trust Strategic Growth Fund and the Norwest Select Small Company Stock Fund), its predecessor fund. Effective at the close of business Sept. 17, 1999, the Life and Annuity Trust and Norwest Select Funds were reorganized into the Wells Fargo Variable Trust Funds. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 8 CUMULATIVE TOTAL RETURN Cumulative total return represents the cumulative change in the value of an investment for a given period (reflecting change in a subaccount's accumulation unit value). We compute cumulative total return by using 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 the period, at the end of the period (or fractional portion thereof). All total return figures reflect the deduction of the following charges: the contract administrative charge, the Maximum Anniversary Value Death Benefit Rider fee, the Enhanced Earnings Death Benefit Rider fee and mortality and expense risk fee. ANNUALIZED YIELD FOR A SUBACCOUNT INVESTING IN A MONEY MARKET FUND ANNUALIZED SIMPLE YIELD For a subaccount investing in a money market fund, we base quotations of simple yield on: (a) the change in the value of a hypothetical subaccount (exclusive of capital changes and income other than investment income) at the beginning of a particular seven-day period; (b) less a pro rata share of the subaccount expenses accrued over the period; (c) dividing this difference by the value of the subaccount at the beginning of the period to obtain the base period return; and (d) raising the base period return to the power of 365/7. The subaccount's value includes: - any declared dividends, - the value of any shares purchased with dividends paid during the period, and - any dividends declared for such shares. It does not include any realized or unrealized gains or losses. ANNUALIZED COMPOUND YIELD We calculate compound yield using the base period return described above, which we then compound according to the following formula: Compound Yield = [(Base Period Return + 1)(TO THE POWER OF 365/7)] - 1 You must consider (when comparing an investment in subaccounts investing in money market funds with fixed annuities) that fixed annuities often provide an agreed-to or guaranteed yield for a stated period of time, whereas the subaccount's yield fluctuates. In comparing the yield of the subaccount to a money market fund, you should consider the different services that the contract provides. ANNUALIZED YIELD BASED ON THE SEVEN-DAY PERIOD ENDED DEC. 31, 2002
SUBACCOUNT INVESTING IN: SIMPLE YIELD COMPOUND YIELD CM3 AXP(R) Variable Portfolio - Cash Management Fund 0.23% 0.23%
ANNUALIZED YIELD FOR A SUBACCOUNT INVESTING IN AN INCOME FUND For the subaccounts investing in income funds, we base quotations of yield on all investment income earned during a particular 30-day period, less expenses accrued during the period (net investment income) and compute it by dividing net investment income per accumulation unit by the value of an accumulation unit on the last day of the period, according to the following formula: YIELD = 2[( a - b + 1)(TO THE POWER OF 6) - 1] ----- cd where: a = dividends and investment income earned during the period b = expenses accrued for the period (net of reimbursements) c = the average daily number of accumulation units outstanding during the period that were entitled to receive dividends d = the maximum offering price per accumulation unit on the last day of the period The subaccount earns yield from the increase in the net asset value of shares of the fund in which it invests and from dividends declared and paid by the fund, which are automatically invested in shares of the fund. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 9 ANNUALIZED YIELD BASED ON THE 30-DAY PERIOD ENDED DEC. 31, 2002
SUBACCOUNT INVESTING IN: YIELD BD3 AXP(R) Variable Portfolio - Bond Fund 5.16% EI3 AXP(R) Variable Portfolio - Extra Income Fund 4.41 FI3 AXP(R) Variable Portfolio - Federal Income Fund 2.96 GB3 AXP(R) Variable Portfolio - Global Bond Fund 3.15
The yield on the subaccount's accumulation unit may fluctuate daily and does not provide a basis for determining future yields. Independent rating or statistical services or publishers or publications such as those listed below may quote subaccount performance, compare it to rankings, yields or returns, or use it in variable annuity accumulation or settlement illustrations they publish or prepare. The Bank Rate Monitor National Index, Barron's, Business Week, CDA Technologies, Donoghue's Money Market Fund Report, Financial Services Week, Financial Times, Financial World, Forbes, Fortune, Global Investor, Institutional Investor, Investor's Business Daily, Kiplinger's Personal Finance, Lipper Analytical Services, Money, Morningstar, 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. CALCULATING ANNUITY PAYOUTS THE VARIABLE ACCOUNT We do the following calculations separately for each of the subaccounts of the variable account. The separate monthly payouts, added together, make up your total variable annuity payout. INITIAL PAYOUT: To compute your first monthly payment, we: - determine the dollar value of your contract on the valuation date and then deduct any applicable premium tax; then - apply the result to the annuity table contained in the contract or another table at least as favorable. The annuity table shows the amount of the first monthly payment for each $1,000 of value which depends on factors built into the table, as described below. ANNUITY UNITS: We then convert the value of your subaccount to annuity units. To compute the number of units credited to you, we divide the first monthly payment by the annuity unit value (see below) on the valuation date. The number of units in your subaccount is fixed. The value of the units fluctuates with the performance of the underlying fund. SUBSEQUENT PAYOUTS: To compute later payouts, we multiply: - the annuity unit value on the valuation date; by - the fixed number of annuity units credited to you. ANNUITY UNIT VALUES: We originally set this value at $1 for each subaccount. To calculate later values we multiply the last annuity value by the product of: - the net investment factor; and - the neutralizing factor. The purpose of the neutralizing factor is to offset the effect of the assumed rate built into the annuity table. With an assumed investment rate of 5%, the neutralizing factor is 0.999866 for a one day valuation period. NET INVESTMENT FACTOR: We determine the net investment factor by: - adding the fund's current net asset value per share plus the per share amount of any accrued income or capital gain dividends to obtain a current adjusted net asset value per share; then - dividing that sum by the previous adjusted net asset value per share; and - subtracting the percentage factor representing the mortality and expense risk fee from the result. Because the net asset value of the fund may fluctuate, the net investment factor may be greater or less than one, and the annuity unit value may increase or decrease. You bear this investment risk in a subaccount. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 10 THE FIXED ACCOUNT We guarantee your fixed annuity payout amounts. Once calculated, your payout will remain the same and never change. To calculate your annuity payouts we: - take the value of your fixed account at the settlement date or the date you selected to begin receiving your annuity payouts; then - using an annuity table, we apply the value according to the annuity payout plan you select. The annuity payout table we use will be the one in effect at the time you choose to begin your annuity payouts. The values in the table will be equal to or greater than the table in your contract. RATING AGENCIES We receive ratings from independent rating agencies. These agencies evaluate the financial soundness and claims-paying ability of insurance companies on a number of different factors. The ratings reflect each agency's estimation of our ability to meet our contractual obligations such as making annuity payouts and paying death benefits and other distributions. As such, the ratings relate to our fixed account and not to the subaccounts. This information generally does not relate to the management or performance of the subaccounts. For detailed information on the agency ratings given to IDS Life, refer to the American Express Web site at (americanexpress.com/advisors) or contact your sales representative. Or view our current ratings by visiting the agency Web sites directly at: A.M. Best www.ambest.com Fitch www.fitchratings.com Moody's www.moodys.com/insurance
A.M. Best -- Rates insurance companies for their financial strength. Fitch (formerly Duff & Phelps) -- Rates insurance companies for their claims-paying ability. Moody's -- Rates insurance companies for their financial strength. PRINCIPAL UNDERWRITER IDS Life serves as principal underwriter for the contract, which it offers on a continuous basis. IDS Life is registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934 as a broker-dealer and is a member of the National Association of Securities Dealers, Inc. (NASD). Our sales representatives are licensed insurance and annuity agents and are registered with the NASD as our representatives. IDS Life is ultimately controlled by American Express Company. IDS Life currently pays underwriting commissions for its role as principal underwriter. For the past three years, the aggregate dollar amount of underwriting commissions paid in its role as principal underwriter has been: 2002: $37,418,102; 2001: $41,792,624; and 2000: $56,851,815. IDS Life retains no underwriting commission from the sale of the contract. INDEPENDENT AUDITORS The financial statements appearing in this SAI have been audited by Ernst & Young LLP (220 South Sixth Street, Suite 1400, Minneapolis, MN 55402) independent auditors, as stated in their report appearing herein. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 11 REPORT OF INDEPENDENT AUDITORS THE BOARD OF DIRECTORS IDS LIFE INSURANCE COMPANY We have audited the accompanying individual statements of assets and liabilities of the segregated asset subaccounts of IDS Life Variable Account 10 - American Express Retirement Advisor Variable Annuity(R) - Band 3 (comprised of subaccounts BC3, BD3, CR3, CM3, DE3, EM3, ES3, EI3, FI3, GB3, GR3, IE3, MF3, ND3, IV3, SC3, SA3, 3CA, 3CD, 3IF, 3VA, 3SR, 3EG, 3GI, 3MP, 3OS, 3RE, 3SI, 3TF, 3SE, 3UE, 3MC, 3GT, 3IG, 3AG, 3IP, 3MG, 3MD, 3IN, 3VS, 3MI, 3SV, 3IT, 3SP, 3AA, 3WI and 3SG) as of December 31, 2002, and the related statements of operations and changes in nets assets for the periods indicated therein. These financial statements are the responsibility of the management of IDS Life Insurance Company. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned at December 31, 2002 with the affiliated and unaffiliated mutual fund managers. 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 individual financial position of the segregated asset subaccounts of IDS Life Variable Account 10 - American Express Retirement Advisor Variable Annuity(R) - Band 3 at December 31, 2002, and the individual results of their operations and the changes in their net assets for the periods indicated therein, in conformity with accounting principles generally accepted in the United States. /s/ Ernst & Young LLP Minneapolis, Minnesota March 21, 2003 IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 12 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ---------------------------------------------------------------- DECEMBER 31, 2002 BC3 BD3 CR3 CM3 DE3 ASSETS Investments in shares of mutual funds and portfolios: at cost $ 262,697 $ 885,758 $ 122,124 $ 3,241,265 $ 1,040,408 ---------------------------------------------------------------- at market value $ 197,932 $ 900,431 $ 119,810 $ 3,241,265 $ 1,040,055 Dividends receivable -- 3,667 -- 4,206 -- Accounts receivable from IDS Life for contract purchase payments -- 7,468 -- 1,081,894 -- Receivable from mutual funds and portfolios for share redemptions -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total assets 197,932 911,566 119,810 4,327,365 1,040,055 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 95 417 58 2,625 251 Contract terminations -- -- -- -- -- Payable to mutual funds and portfolios for investments purchased -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 95 417 58 2,625 251 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 197,837 911,149 119,752 4,324,740 1,039,804 Net assets applicable to contracts in payment period -- -- -- -- -- Net assets applicable to seed money -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 197,837 $ 911,149 $ 119,752 $ 4,324,740 $ 1,039,804 ------------------------------------------------------------------------------------------------------------------------------------ Accumulation units outstanding 313,942 761,704 202,292 3,911,088 1,262,412 ==================================================================================================================================== Net asset value per accumulation unit $ 0.63 $ 1.20 $ 0.59 $ 1.11 $ 0.82 ====================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ---------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) EM3 ES3 EI3 FI3 GB3 ASSETS Investments in shares of mutual funds and portfolios: at cost $ 4,281,090 $ 2,223,700 $ 2,814,753 $ 1,525,440 $ 286,141 ---------------------------------------------------------------- at market value $ 3,646,305 $ 2,021,954 $ 2,811,596 $ 1,539,965 $ 297,056 Dividends receivable -- -- 5,624 3,680 1,094 Accounts receivable from IDS Life for contract purchase payments -- -- -- -- -- Receivable from mutual funds and portfolios for share redemptions -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total assets 3,646,305 2,021,954 2,817,220 1,543,645 298,150 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 1,737 970 799 723 207 Contract terminations -- -- 1,505,278 -- -- Payable to mutual funds and portfolios for investments purchased -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 1,737 970 1,506,077 723 207 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 191,345 284,547 1,311,143 1,542,922 297,943 Net assets applicable to contracts in payment period -- -- -- -- -- Net assets applicable to seed money 3,453,223 1,736,437 -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 3,644,568 $ 2,020,984 $ 1,311,143 $ 1,542,922 $ 297,943 ------------------------------------------------------------------------------------------------------------------------------------ Accumulation units outstanding 277,030 327,689 1,479,516 1,274,641 251,492 ==================================================================================================================================== Net asset value per accumulation unit $ 0.69 $ 0.87 $ 0.89 $ 1.21 $ 1.18 ====================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 13 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ---------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) GR3 IE3 MF3 ND3 IV3 ASSETS Investments in shares of mutual funds and portfolios: at cost $ 656,791 $ 264,567 $ 104,755 $ 1,916,812 $ 672,257 ---------------------------------------------------------------- at market value $ 502,915 $ 267,600 $ 97,883 $ 1,723,204 $ 543,809 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 303 -- -- 376,428 47,065 Receivable from mutual funds and portfolios for share redemptions -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total assets 503,218 267,600 97,883 2,099,632 590,874 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 243 107 53 831 260 Contract terminations -- -- -- -- -- Payable to mutual funds and portfolios for investments purchased -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 243 107 53 831 260 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 502,975 267,493 97,830 2,098,801 590,614 Net assets applicable to contracts in payment period -- -- -- -- -- Net assets applicable to seed money -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 502,975 $ 267,493 $ 97,830 $ 2,098,801 $ 590,614 ==================================================================================================================================== Accumulation units outstanding 1,063,816 487,561 120,076 3,029,005 973,266 ==================================================================================================================================== Net asset value per accumulation unit $ 0.47 $ 0.55 $ 0.81 $ 0.69 $ 0.61 ====================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ---------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) SC3 SA3 3CA 3CD 3IF ASSETS Investments in shares of mutual funds and portfolios: at cost $ 386,254 $ 220,116 $ 1,271,949 $ 408,123 $ 564,410 ---------------------------------------------------------------- at market value $ 349,481 $ 212,666 $ 684,513 $ 296,805 $ 421,067 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments -- -- -- -- -- Receivable from mutual funds and portfolios for share redemptions -- -- 331 143 203 ------------------------------------------------------------------------------------------------------------------------------------ Total assets 349,481 212,666 684,844 296,948 421,270 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 165 120 331 143 203 Contract terminations -- -- -- -- -- Payable to mutual funds and portfolios for investments purchased -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 165 120 331 143 203 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 349,316 212,546 684,513 296,805 421,067 Net assets applicable to contracts in payment period -- -- -- -- -- Net assets applicable to seed money -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 349,316 $ 212,546 $ 684,513 $ 296,805 $ 421,067 Accumulation units outstanding 392,663 385,725 1,023,641 301,905 633,993 ==================================================================================================================================== Net asset value per accumulation unit $ 0.89 $ 0.55 $ 0.67 $ 0.98 $ 0.66 ====================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 14 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ---------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 3VA 3SR 3EG 3GI 3MP ASSETS Investments in shares of mutual funds and portfolios: at cost $ 857,979 $ 7,531 $ 508,794 $ 1,095,372 $ 1,279,906 ---------------------------------------------------------------- at market value $ 808,291 $ 6,235 $ 317,386 $ 881,563 $ 1,225,546 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 110 -- -- 81 -- Receivable from mutual funds and portfolios for share redemptions 388 3 150 425 618 ------------------------------------------------------------------------------------------------------------------------------------ Total assets 808,789 6,238 317,536 882,069 1,226,164 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 388 3 150 425 589 Contract terminations -- -- -- -- 29 Payable to mutual funds and portfolios for investments purchased 57 -- -- 81 -- ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 445 3 150 506 618 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 808,344 6,235 317,386 881,563 1,225,546 Net assets applicable to contracts in payment period -- -- -- -- -- Net assets applicable to seed money -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 808,344 $ 6,235 $ 317,386 $ 881,563 $ 1,225,546 ==================================================================================================================================== Accumulation units outstanding 766,153 8,008 420,902 1,171,903 861,790 ==================================================================================================================================== Net asset value per accumulation unit $ 1.06 $ 0.78 $ 0.75 $ 0.75 $ 1.42 ====================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ---------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 3OS 3RE 3SI 3TF 3SE ASSETS Investments in shares of mutual funds and portfolios: at cost $ 51,901 $ 281,160 $ 370,595 $ 165,088 $ 101,644 ---------------------------------------------------------------- at market value $ 50,240 $ 279,651 $ 344,449 $ 153,323 $ 87,890 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 49 7,462 -- -- -- Receivable from mutual funds and portfolios for share redemptions 26 132 159 75 43 ------------------------------------------------------------------------------------------------------------------------------------ Total assets 50,315 287,245 344,608 153,398 87,933 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 26 132 159 75 43 Contract terminations -- -- -- -- -- Payable to mutual funds and portfolios for investments purchased 49 7,462 -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 75 7,594 159 75 43 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 50,240 279,651 344,449 153,323 87,890 Net assets applicable to contracts in payment period -- -- -- -- -- Net assets applicable to seed money -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 50,240 $ 279,651 $ 344,449 $ 153,323 $ 87,890 ==================================================================================================================================== Accumulation units outstanding 82,084 204,619 281,793 182,210 87,191 ==================================================================================================================================== Net asset value per accumulation unit $ 0.61 $ 1.37 $ 1.22 $ 0.84 $ 1.01 ====================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 15 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ---------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 3UE 3MC 3GT 3IG 3AG ASSETS Investments in shares of mutual funds and portfolios: at cost $ 537,647 $ 634,944 $ 128,007 $ 396,311 $ 116,211 ---------------------------------------------------------------- at market value $ 467,842 $ 587,651 $ 85,883 $ 393,955 $ 74,468 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments -- -- -- 48 -- Receivable from mutual funds and portfolios for share redemptions 222 1,200 209 155 36 ------------------------------------------------------------------------------------------------------------------------------------ Total assets 468,064 588,851 86,092 394,158 74,504 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 222 275 40 155 36 Contract terminations -- 925 169 -- -- Payable to mutual funds and portfolios for investments purchased -- -- -- 48 -- ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 222 1,200 209 203 36 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 467,842 587,651 85,883 393,955 74,468 Net assets applicable to contracts in payment period -- -- -- -- -- Net assets applicable to seed money -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 467,842 $ 587,651 $ 85,883 $ 393,955 $ 74,468 ------------------------------------------------------------------------------------------------------------------------------------ Accumulation units outstanding 694,276 449,654 342,673 874,663 245,967 ==================================================================================================================================== Net asset value per accumulation unit $ 0.67 $ 1.31 $ 0.25 $ 0.45 $ 0.30 ====================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ---------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 3IP 3MG 3MD 3IN 3VS ASSETS Investments in shares of mutual funds and portfolios: at cost $ 417,532 $ 530,082 $ 388,228 $ 606,845 $ 641,783 ---------------------------------------------------------------- at market value $ 410,768 $ 382,341 $ 297,200 $ 514,553 $ 310,130 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments -- -- 49 -- 65 Receivable from mutual funds and portfolios for share redemptions 178 178 138 254 151 ------------------------------------------------------------------------------------------------------------------------------------ Total assets 410,946 382,519 297,387 514,807 310,346 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 178 178 138 254 151 Contract terminations -- -- -- -- -- Payable to mutual funds and portfolios for investments purchased -- -- 49 -- 65 ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 178 178 187 254 216 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 410,768 382,341 297,200 514,553 310,130 Net assets applicable to contracts in payment period -- -- -- -- -- Net assets applicable to seed money -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 410,768 $ 382,341 $ 297,200 $ 514,553 $ 310,130 ------------------------------------------------------------------------------------------------------------------------------------ Accumulation units outstanding 635,602 785,044 485,070 913,817 524,988 ==================================================================================================================================== Net asset value per accumulation unit $ 0.65 $ 0.49 $ 0.61 $ 0.56 $ 0.59 ====================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 16 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ---------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 3MI 3SV 3IT 3SP 3AA ASSETS Investments in shares of mutual funds and portfolios: at cost $ 770,441 $ 457,606 $ 1,056,488 $ 893,932 $ 26,698 ---------------------------------------------------------------- at market value $ 688,766 $ 423,219 $ 1,082,377 $ 818,631 $ 24,388 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments -- 153 -- 6,834 6,820 Receivable from mutual funds and portfolios for share redemptions 333 207 464 379 8 ------------------------------------------------------------------------------------------------------------------------------------ Total assets 689,099 423,579 1,082,841 825,844 31,216 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 333 207 464 379 8 Contract terminations -- -- -- -- -- Payable to mutual funds and portfolios for investments purchased -- 153 -- 6,834 6,820 ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 333 360 464 7,213 6,828 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 688,766 423,219 1,082,377 816,189 24,388 Net assets applicable to contracts in payment period -- -- -- 2,442 -- Net assets applicable to seed money -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 688,766 $ 423,219 $ 1,082,377 $ 818,631 $ 24,388 ==================================================================================================================================== Accumulation units outstanding 452,939 278,763 1,483,880 846,698 28,992 ==================================================================================================================================== Net asset value per accumulation unit $ 1.52 $ 1.52 $ 0.73 $ 0.96 $ 0.84 ====================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------- DECEMBER 31, 2002 (CONTINUED) 3WI 3SG ASSETS Investments in shares of mutual funds and portfolios: at cost $ 100,509 $ 3,452 ------------------------- at market value $ 99,811 $ 3,468 Dividends receivable -- -- Accounts receivable from IDS Life for contract purchase payments -- -- Receivable from mutual funds and portfolios for share redemptions 32 2 ------------------------------------------------------------------------------------------------------------------------------------ Total assets 99,843 3,470 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 32 2 Contract terminations -- -- Payable to mutual funds and portfolios for investments purchased -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 32 2 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 99,811 3,468 Net assets applicable to contracts in payment period -- -- Net assets applicable to seed money -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 99,811 $ 3,468 ==================================================================================================================================== Accumulation units outstanding 144,415 5,984 ==================================================================================================================================== Net asset value per accumulation unit $ 0.69 $ 0.58 ====================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 17 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 BC3 BD3 CR3 CM3 DE3 INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 2,923 $ 36,196 $ 784 $ 80,209 $ 10,775 Variable account expenses 2,190 3,750 1,027 37,643 2,926 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 733 32,446 (243) 42,566 7,849 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 381,143 6,675,424 3,473,104 201,164,166 14,676,397 Cost of investments sold 438,959 6,679,233 3,493,950 201,164,176 14,810,456 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (57,816) (3,809) (20,846) (10) (134,059) Distributions from capital gains -- -- 15,738 -- 1,303 Net change in unrealized appreciation or depreciation of investments (50,618) 17,554 (6,954) 9 (3,499) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (108,434) 13,745 (12,062) (1) (136,255) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (107,701) $ 46,191 $ (12,305) $ 42,565 $ (128,406) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) EM3 ES3 EI3 FI3 GB3 INVESTMENT INCOME Dividend income from mutual funds and portfolios $ -- $ -- $ 121,580 $ 23,677 $ 19,857 Variable account expenses 20,414 10,679 9,062 4,461 2,173 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (20,414) (10,679) 112,518 19,216 17,684 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 537,090 631,854 34,293,082 1,014,227 2,830,358 Cost of investments sold 641,316 633,744 34,460,817 1,013,628 2,814,930 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (104,226) (1,890) (167,735) 599 15,428 Distributions from capital gains -- -- -- 6,166 -- Net change in unrealized appreciation or depreciation of investments (85,109) (286,993) 11,888 16,060 14,834 ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (189,335) (288,883) (155,847) 22,825 30,262 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (209,749) $ (299,562) $ (43,329) $ 42,041 $ 47,946 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) GR3 IE3 MF3 ND3 IV3 INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 412 $ 4,288 $ 5,079 $ 11,439 $ 5,348 Variable account expenses 3,755 3,397 1,096 12,237 3,055 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (3,343) 891 3,983 (798) 2,293 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 977,913 87,048,601 363,319 5,748,826 401,047 Cost of investments sold 1,261,846 86,136,509 414,541 6,182,811 535,717 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (283,933) 912,092 (51,222) (433,985) (134,670) Distributions from capital gains -- 82 20,944 2,613 -- Net change in unrealized appreciation or depreciation of investments 29,442 2,013 (8,418) (148,644) (7,021) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (254,491) 914,187 (38,696) (580,016) (141,691) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (257,834) $ 915,078 $ (34,713) $ (580,814) $ (139,398) ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 18 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) SC3 SA3 3CA 3CD 3IF INVESTMENT INCOME Dividend income from mutual funds and portfolios $ -- $ -- $ -- $ -- $ 4,655 Variable account expenses 2,270 2,298 5,046 2,321 3,073 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (2,270) (2,298) (5,046) (2,321) 1,582 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 566,564 12,093,417 335,897 139,618 181,115 Cost of investments sold 628,785 12,297,015 608,356 175,149 239,877 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (62,221) (203,598) (272,459) (35,531) (58,762) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (38,976) (11,779) (12,361) (65,253) (82,598) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (101,197) (215,377) (284,820) (100,784) (141,360) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (103,467) $ (217,675) $ (289,866) $ (103,105) $ (139,778) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 3VA 3SR 3EG 3GI 3MP INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 5,201 $ 183 $ -- $ 12,137 $ 10,051 Variable account expenses 3,636 33 2,204 5,092 6,819 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 1,565 150 (2,204) 7,045 3,232 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 706,344 668 170,407 185,471 670,233 Cost of investments sold 741,115 788 274,454 211,777 697,486 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (34,771) (120) (104,047) (26,306) (27,253) Distributions from capital gains 33,650 -- -- -- -- Net change in unrealized appreciation or depreciation of investments (95,146) (839) (50,568) (156,368) (102,740) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (96,267) (959) (154,615) (182,674) (129,993) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (94,702) $ (809) $ (156,819) $ (175,629) $ (126,761) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 3OS 3RE 3SI 3TF(1) 3SE INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 546 $ 8,459 $ 812 $ 1,299 $ 264 Variable account expenses 512 1,689 1,411 333 585 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 34 6,770 (599) 966 (321) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 1,334,891 200,589 86,684 103,067 20,696 Cost of investments sold 1,369,796 195,535 99,663 109,107 21,803 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (34,905) 5,054 (12,979) (6,040) (1,107) Distributions from capital gains -- -- 5,679 -- -- Net change in unrealized appreciation or depreciation of investments 1,881 (9,803) (33,497) (11,765) (15,831) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (33,024) (4,749) (40,797) (17,805) (16,938) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (32,990) $ 2,021 $ (41,396) $ (16,839) $ (17,259) ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 19 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 3UE 3MC 3GT 3IG 3AG INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 2,962 $ 6,125 $ -- $ 1,811 $ -- Variable account expenses 3,718 2,410 379 2,642 736 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (756) 3,715 (379) (831) (736) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 1,557,749 134,802 37,112 13,009,112 113,127 Cost of investments sold 1,828,438 145,021 60,443 12,901,387 171,521 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (270,689) (10,219) (23,331) 107,725 (58,394) Distributions from capital gains -- 1,787 -- -- -- Net change in unrealized appreciation or depreciation of investments 51,197 (48,745) (11,973) (3,394) 7,018 ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (219,492) (57,177) (35,304) 104,331 (51,376) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (220,248) $ (53,462) $ (35,683) $ 103,500 $ (52,112) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 3IP 3MG 3MD 3IN 3VS INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 1,834 $ -- $ -- $ 5,489 $ -- Variable account expenses 1,850 2,685 2,109 4,097 3,636 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (16) (2,685) (2,109) 1,392 (3,636) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 8,687,211 279,316 295,291 835,383 425,328 Cost of investments sold 8,627,935 363,943 366,758 916,061 801,876 Net realized gain (loss) on sales of investments 59,276 (84,627) (71,467) (80,678) (376,548) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments 5,085 (84,925) (89,005) (40,681) 116,409 ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments 64,361 (169,552) (160,472) (121,359) (260,139) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 64,345 $ (172,237) $ (162,581) $ (119,967) $ (263,775) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 3MI 3SV 3IT 3SP 3AA INVESTMENT INCOME Dividend income from mutual funds and portfolios $ -- $ 936 $ -- $ -- $ 249 Variable account expenses 3,858 2,785 4,886 5,004 63 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (3,858) (1,849) (4,886) (5,004) 186 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 391,023 227,261 12,185,128 949,573 449 Cost of investments sold 368,592 233,953 12,299,645 979,761 509 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments 22,431 (6,692) (114,517) (30,188) (60) Distributions from capital gains 21,112 8,150 -- -- 85 Net change in unrealized appreciation or depreciation of investments (162,885) (67,998) 61,802 (152,303) (1,912) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (119,342) (66,540) (52,715) (182,491) (1,887) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (123,200) $ (68,389) $ (57,601) $ (187,495) $ (1,701) ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 20 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS --------------------------- YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 3WI 3SG INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 7 $ -- Variable account expenses 168 56 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (161) (56) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 3,145,465 130,946 Cost of investments sold 3,132,994 141,081 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments 12,471 (10,135) Distributions from capital gains -- -- Net change in unrealized appreciation or depreciation of investments (692) 35 ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments 11,779 (10,100) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 11,618 $ (10,156) ===================================================================================================================================
(1) For the period March 1, 2002 (commencement of operations) to Dec. 31, 2002. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 21 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 BC3 BD3 CR3 CM3 DE3 OPERATIONS Investment income (loss) -- net $ 733 $ 32,446 $ (243) $ 42,566 $ 7,849 Net realized gain (loss) on sales of investments (57,816) (3,809) (20,846) (10) (134,059) Distributions from capital gains -- -- 15,738 -- 1,303 Net change in unrealized appreciation or depreciation of investments (50,618) 17,554 (6,954) 9 (3,499) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (107,701) 46,191 (12,305) 42,565 (128,406) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 3,456 75,827 1,259 16,400,339 140,478 Net transfers(1) (180,736) (308,736) (87,349) (1,768,769) 859,705 Transfers for policy loans (3,030) -- 1,872 (19,135) (6,893) Contract charges (106) (80) (70) (554) (112) Contract terminations: Surrender benefits (111,290) (23,949) (5,956) (16,548,478) (112,852) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (291,706) (256,938) (90,244) (1,936,597) 880,326 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 597,244 1,121,896 222,301 6,218,772 287,884 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 197,837 $ 911,149 $ 119,752 $ 4,324,740 $ 1,039,804 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 728,975 984,546 291,207 5,658,076 281,449 Contract purchase payments 4,536 65,587 1,922 14,868,286 140,211 Net transfers(1) (271,039) (267,402) (85,555) (1,608,368) 983,310 Transfers for policy loans (3,151) -- 3,025 (17,331) (6,515) Contract charges (150) (70) (98) (502) (124) Contract terminations: Surrender benefits (145,229) (20,957) (8,209) (14,989,073) (135,919) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 313,942 761,704 202,292 3,911,088 1,262,412 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) EM3 ES3 EI3 FI3 GB3 OPERATIONS Investment income (loss) -- net $ (20,414) $ (10,679) $ 112,518 $ 19,216 $ 17,684 Net realized gain (loss) on sales of investments (104,226) (1,890) (167,735) 599 15,428 Distributions from capital gains -- -- -- 6,166 -- Net change in unrealized appreciation or depreciation of investments (85,109) (286,993) 11,888 16,060 14,834 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (209,749) (299,562) (43,329) 42,041 47,946 =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 1,687 10,954 364,032 57,819 16,488 Net transfers(1) 178,236 247,128 (102,421) 797,537 (24,917) Transfers for policy loans -- (116) -- -- -- Contract charges (4) (64) (90) (60) (11) Contract terminations: Surrender benefits -- -- (382,503) (34,766) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 179,919 257,902 (120,982) 820,530 (8,440) ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 3,674,398 2,062,644 1,475,454 680,351 258,437 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 3,644,568 $ 2,020,984 $ 1,311,143 $ 1,542,922 $ 297,943 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 3,269 37,676 1,549,237 591,528 249,453 Contract purchase payments 2,195 11,990 381,550 49,632 15,704 Net transfers(1) 271,572 278,230 (42,003) 662,666 (13,655) Transfers for policy loans -- (138) -- -- -- Contract charges (6) (69) (97) (51) (10) Contract terminations: Surrender benefits -- -- (409,171) (29,134) -- ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 277,030 327,689 1,479,516 1,274,641 251,492 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 22 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) GR3 IE3 MF3 ND3 IV3 OPERATIONS Investment income (loss) -- net $ (3,343) $ 891 $ 3,983 $ (798) $ 2,293 Net realized gain (loss) on sales of investments (283,933) 912,092 (51,222) (433,985) (134,670) Distributions from capital gains -- 82 20,944 2,613 -- Net change in unrealized appreciation or depreciation of investments 29,442 2,013 (8,418) (148,644) (7,021) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (257,834) 915,078 (34,713) (580,814) (139,398) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 90,897 34,557 1,364 142,999 19,959 Net transfers(1) (59,234) (704,499) (40,660) (112,827) 104,499 Transfers for policy loans (2,095) -- -- (7,299) -- Contract charges (318) (43) (31) (797) (50) Contract terminations: Surrender benefits (95,446) (21,397) (106,487) (243,678) (125) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (66,196) (691,382) (145,814) (221,602) 124,283 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 827,005 43,797 278,357 2,901,217 605,729 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 502,975 $ 267,493 $ 97,830 $ 2,098,801 $ 590,614 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 1,285,419 65,188 295,986 3,252,328 770,207 Contract purchase payments 153,550 59,499 1,583 177,174 30,090 Net transfers(1) (177,671) 394,472 (45,897) (77,133) 173,207 Transfers for policy loans (2,996) -- -- (8,002) -- Contract charges (583) (69) (35) (1,023) (69) Contract terminations: Surrender benefits (193,903) (31,529) (131,561) (314,339) (169) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 1,063,816 487,561 120,076 3,029,005 973,266 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) SC3 SA3 3CA 3CD 3IF OPERATIONS Investment income (loss) -- net $ (2,270) $ (2,298) $ (5,046) $ (2,321) $ 1,582 Net realized gain (loss) on sales of investments (62,221) (203,598) (272,459) (35,531) (58,762) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (38,976) (11,779) (12,361) (65,253) (82,598) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (103,467) (217,675) (289,866) (103,105) (139,778) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 36,724 27,190 16,667 14,985 6,971 Net transfers(1) 126,271 36,837 (90,554) (88,098) (83,570) Transfers for policy loans 369 (3,138) (4,050) (6,888) (3,550) Contract charges (79) (325) (138) (77) (96) Contract terminations: Surrender benefits (118,641) (124,753) (154,293) (15,227) (13,802) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 44,644 (64,189) (232,368) (95,305) (94,047) ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 408,139 494,410 1,206,747 495,215 654,892 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 349,316 $ 212,546 $ 684,513 $ 296,805 $ 421,067 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 378,441 607,048 1,357,788 393,985 781,411 Contract purchase payments 39,162 40,231 19,805 12,778 9,452 Net transfers(1) 105,489 (29,395) (134,635) (87,804) (135,718) Transfers for policy loans 390 (3,950) (4,497) (5,271) (4,268) Contract charges (84) (476) (178) (70) (128) Contract terminations: Surrender benefits (130,735) (227,733) (214,642) (11,713) (16,756) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 392,663 385,725 1,023,641 301,905 633,993 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 23 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 3VA 3SR 3EG 3GI 3MP OPERATIONS Investment income (loss) -- net $ 1,565 $ 150 $ (2,204) $ 7,045 $ 3,232 Net realized gain (loss) on sales of investments (34,771) (120) (104,047) (26,306) (27,253) Distributions from capital gains 33,650 -- -- -- -- Net change in unrealized appreciation or depreciation of investments (95,146) (839) (50,568) (156,368) (102,740) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (94,702) (809) (156,819) (175,629) (126,761) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 38,083 149 66,022 18,040 39,285 Net transfers(1) 254,370 1,370 (2,162) 180,016 115,749 Transfers for policy loans 989 -- -- 251 (435) Contract charges (152) (4) (128) (299) (513) Contract terminations: Surrender benefits (4,419) (109) (89,834) (130,675) (42,084) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 288,871 1,406 (26,102) 67,333 112,002 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 614,175 5,638 500,307 989,859 1,240,305 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 808,344 $ 6,235 $ 317,386 $ 881,563 $ 1,225,546 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 505,918 6,328 467,439 1,090,207 781,254 Contract purchase payments 32,712 172 65,186 21,752 25,556 Net transfers(1) 230,476 1,661 7,923 214,126 82,993 Transfers for policy loans 899 -- -- 321 (315) Contract charges (136) (5) (137) (380) (339) Contract terminations: Surrender benefits (3,716) (148) (119,509) (154,123) (27,359) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 766,153 8,008 420,902 1,171,903 861,790 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 3OS 3RE 3SI 3TF(2) 3SE OPERATIONS Investment income (loss) -- net $ 34 $ 6,770 $ (599) $ 966 $ (321) Net realized gain (loss) on sales of investments (34,905) 5,054 (12,979) (6,040) (1,107) Distributions from capital gains -- -- 5,679 -- -- Net change in unrealized appreciation or depreciation of investments 1,881 (9,803) (33,497) (11,765) (15,831) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (32,990) 2,021 (41,396) (16,839) (17,259) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 1,844 59,931 24,863 1,940 4,848 Net transfers(1) 4,978 (35,080) 173,726 168,276 (9,770) Transfers for policy loans -- (368) -- -- 1,922 Contract charges (59) (193) (104) (19) (76) Contract terminations: Surrender benefits (11,781) (30,646) (16,317) (35) (7,137) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (5,018) (6,356) 182,168 170,162 (10,213) ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 88,248 283,986 203,677 -- 115,362 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 50,240 $ 279,651 $ 344,449 $ 153,323 $ 87,890 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 114,204 210,936 150,319 -- 96,780 Contract purchase payments 2,718 43,076 18,008 2,134 4,296 Net transfers(1) (16,131) (26,836) 125,791 180,140 (9,010) Transfers for policy loans -- (269) -- -- 1,466 Contract charges (84) (139) (77) (23) (71) Contract terminations: Surrender benefits (18,623) (22,149) (12,248) (41) (6,270) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 82,084 204,619 281,793 182,210 87,191 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 24 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 3UE 3MC 3GT 3IG 3AG OPERATIONS Investment income (loss) -- net $ (756) $ 3,715 $ (379) $ (831) $ (736) Net realized gain (loss) on sales of investments (270,689) (10,219) (23,331) 107,725 (58,394) Distributions from capital gains -- 1,787 -- -- -- Net change in unrealized appreciation or depreciation of investments 51,197 (48,745) (11,973) (3,394) 7,018 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (220,248) (53,462) (35,683) 103,500 (52,112) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 1,206,208 36,908 10,002 64,604 66,345 Net transfers(1) (1,302,594) 351,157 35,017 (116,626) (41,177) Transfers for policy loans (2,267) 1,814 -- (698) (81) Contract charges (203) (176) (175) (157) (160) Contract terminations: Surrender benefits (31,231) (24,392) (9,400) (26,273) (16,867) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (130,087) 365,311 35,444 (79,150) 8,060 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 818,177 275,802 86,122 369,605 118,520 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 467,842 $ 587,651 $ 85,883 $ 393,955 $ 74,468 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 943,339 200,117 201,887 605,897 279,868 Contract purchase payments 19,129 26,218 29,325 129,941 171,278 Net transfers(1) (224,012) 240,159 140,499 187,163 (152,329) Transfers for policy loans (2,630) 1,188 -- (1,437) (210) Contract charges (265) (125) (581) (305) (462) Contract terminations: Surrender benefits (41,285) (17,903) (28,457) (46,596) (52,178) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 694,276 449,654 342,673 874,663 245,967 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 3IP 3MG 3MD 3IN 3VS OPERATIONS Investment income (loss) -- net $ (16) $ (2,685) $ (2,109) $ 1,392 $ (3,636) Net realized gain (loss) on sales of investments 59,276 (84,627) (71,467) (80,678) (376,548) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments 5,085 (84,925) (89,005) (40,681) 116,409 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 64,345 (172,237) (162,581) (119,967) (263,775) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 40,891 31,554 40,282 67,649 27,894 Net transfers(1) 122,639 (96,311) (10,435) (219,056) (291,386) Transfers for policy loans 368 1,990 -- (1,949) (3,812) Contract charges (66) (233) (145) (381) (303) Contract terminations: Surrender benefits (1,772) (89) (64,533) (94,875) (93,099) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 162,060 (63,089) (34,831) (248,612) (360,706) ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 184,363 617,667 494,612 883,132 934,611 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 410,768 $ 382,341 $ 297,200 $ 514,553 $ 310,130 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 253,393 913,438 547,539 1,346,750 1,092,048 Contract purchase payments 61,088 49,936 52,444 107,525 37,817 Net transfers(1) 323,069 (180,943) (27,085) (373,713) (478,596) Transfers for policy loans 553 3,200 -- (3,067) (4,546) Contract charges (97) (439) (220) (621) (447) Contract terminations: Surrender benefits (2,404) (148) (87,608) (163,057) (121,288) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 635,602 785,044 485,070 913,817 524,988 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 25 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 3MI 3SV 3IT 3SP 3AA OPERATIONS Investment income (loss) -- net $ (3,858) $ (1,849) $ (4,886) $ (5,004) $ 186 Net realized gain (loss) on sales of investments 22,431 (6,692) (114,517) (30,188) (60) Distributions from capital gains 21,112 8,150 -- -- 85 Net change in unrealized appreciation or depreciation of investments (162,885) (67,998) 61,802 (152,303) (1,912) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (123,200) (68,389) (57,601) (187,495) (1,701) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 13,790 16,436 51,418 68,244 14,318 Net transfers(1) 267,912 4,215 491,742 34,504 3,900 Transfers for policy loans (67) 106 (5,505) (3,199) -- Contract charges (317) (218) (350) (319) (5) Contract terminations: Surrender benefits (72,975) (66,341) (51,547) (51,246) -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 208,343 (45,802) 485,758 47,984 18,213 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 603,623 537,410 654,220 958,142 7,876 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 688,766 $ 423,219 $ 1,082,377 $ 818,631 $ 24,388 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 343,988 314,283 768,839 819,784 8,116 Contract purchase payments 8,115 9,978 65,599 62,318 16,350 Net transfers(1) 142,581 (7,188) 713,258 11,404 4,532 Transfers for policy loans (44) 57 (6,332) (2,805) -- Contract charges (198) (134) (434) (293) (6) Contract terminations: Surrender benefits (41,503) (38,233) (57,050) (43,710) -- ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 452,939 278,763 1,483,880 846,698 28,992 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 26 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS --------------------------- YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 3WI 3SG OPERATIONS Investment income (loss) -- net $ (161) $ (56) Net realized gain (loss) on sales of investments 12,471 (10,135) Distributions from capital gains -- -- Net change in unrealized appreciation or depreciation of investments (692) 35 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 11,618 (10,156) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 1,046 1,195 Net transfers(1) 86,708 10,055 Transfers for policy loans -- 369 Contract charges (7) (33) Contract terminations: Surrender benefits (9) (9) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 87,738 11,577 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 455 2,047 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 99,811 $ 3,468 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 506 2,169 Contract purchase payments 1,283 1,631 Net transfers(1) 142,645 1,664 Transfers for policy loans -- 572 Contract charges (9) (42) Contract terminations: Surrender benefits (10) (10) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 144,415 5,984 ===================================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. (2) For the period March 1, 2002 (commencement of operations) to Dec. 31, 2002. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 27 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2001 BC3 BD3 CR3 CM3 DE3 OPERATIONS Investment income (loss) -- net $ 784 $ 34,948 $ (727) $ 232,236 $ 1,754 Net realized gain (loss) on sales of investments (98,973) 9,785 (155,527) (180) 15,880 Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments 8,389 (5,986) 77,338 (9) (3,401) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (89,800) 38,747 (78,916) 232,047 14,233 =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 12,629 102,774 7,965 $ 12,532,302 23,747 Net transfers(1) 264,035 578,387 46,804 (4,219,613) 193,867 Transfers for policy loans -- -- -- (3,472) -- Contract charges (97) (18) (67) (422) (76) Contract terminations: Surrender benefits (36,893) (33,915) (3,000) (9,369,308) (163,632) Death benefits -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 239,674 647,228 51,702 (1,060,513) 53,906 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 447,370 435,921 249,515 7,047,238 219,745 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 597,244 $ 1,121,896 $ 222,301 $ 6,218,772 $ 287,884 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 453,558 409,536 266,218 6,615,282 218,167 Contract purchase payments 15,353 93,465 9,392 11,574,554 24,242 Net transfers(1) 303,239 511,400 19,648 (3,894,708) 198,574 Transfers for policy loans -- -- -- (3,192) -- Contract charges (113) (16) (82) (385) (77) Contract terminations: Surrender benefits (43,062) (29,839) (3,969) (8,633,475) (159,457) Death benefits -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 728,975 984,546 291,207 5,658,076 281,449 ===================================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 28 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) EM3 ES3(1) EI3 FI3 GB3 OPERATIONS Investment income (loss) -- net $ (19,606) $ (7,461) $ 151,488 $ 13,713 $ 3,420 Net realized gain (loss) on sales of investments (310,796) (47,771) (222,323) 5,365 6,523 Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments 257,738 85,247 124,421 (1,551) (3,993) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (72,664) 30,015 53,586 17,527 5,950 =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 9 2,001,788 28,149 47,030 4,415 Net transfers(2) 1,298 30,841 318,431 623,192 243,869 Transfers for policy loans -- -- -- (8,413) -- Contract charges -- -- (81) -- (6) Contract terminations: Surrender benefits -- -- (6,983) -- -- Death benefits -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 1,307 2,032,629 339,516 661,809 248,278 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 3,745,755 -- 1,082,352 1,015 4,209 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 3,674,398 $ 2,062,644 $ 1,475,454 $ 680,351 $ 258,437 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 1,252 -- 1,185,569 934 4,092 Contract purchase payments 14 1,930 30,373 41,646 4,248 Net transfers(2) 2,003 35,746 340,788 556,291 241,119 Transfers for policy loans -- -- -- (7,343) -- Contract charges -- -- (85) -- (6) Contract terminations: Surrender benefits -- -- (7,408) -- -- Death benefits -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 3,269 37,676 1,549,237 591,528 249,453 ===================================================================================================================================
(1) For the period May 1, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 29 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2001 (CONTINUED) GR3 IE3 MF3 ND3 IV3 OPERATIONS Investment income (loss) -- net $ (6,112) $ 2,231 $ 5,143 $ (11,509) $ (131) Net realized gain (loss) on sales of investments (626,041) 273,137 (34,787) (1,421,391) (1,765,553) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments 96,024 15,747 18,304 616,580 893,596 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (536,129) 291,115 (11,340) (816,320) (872,088) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 87,097 8,016 164,766 223,803 2,851 Net transfers(1) (341,843) (320,543) (18,863) (456,464) 433,418 Transfers for policy loans 383 -- -- 521 -- Contract charges (391) (43) (36) (708) (8) Contract terminations: Surrender benefits (32,568) (11,447) (9,000) (270,298) (8,248,026) Death benefits -- -- -- -- (3,318) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (287,322) (324,017) 136,867 (503,146) (7,815,083) ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 1,650,456 76,699 152,830 4,220,683 9,292,900 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 827,005 $ 43,797 $ 278,357 $ 2,901,217 $ 605,729 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 1,761,529 80,621 144,523 3,919,497 285,103 Contract purchase payments 115,884 11,347 162,392 240,350 3,071 Net transfers(1) (539,779) (12,152) (1,215) (608,454) 513,204 Transfers for policy loans 552 -- -- 588 -- Contract charges (553) (55) (36) (777) (10) Contract terminations: Surrender benefits (52,214) (14,573) (9,678) (298,876) (26,869) Death benefits -- -- -- -- (4,292) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 1,285,419 65,188 295,986 3,252,328 770,207 ===================================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 30 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2001 (CONTINUED) SC3 SA3 3CA 3CD 3IF OPERATIONS Investment income (loss) -- net $ (2,670) $ (2,764) $ (7,139) $ (2,664) $ (3,393) Net realized gain (loss) on sales of investments (30,350) (670,328) (185,077) (10,369) (181,026) Distributions from capital gains -- -- 97,097 -- 52,107 Net change in unrealized appreciation or depreciation of investments 7,734 336,284 (276,634) (28,845) (75,606) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (25,286) (336,808) (371,753) (41,878) (207,918) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 15,918 48,432 38,334 10,681 32,576 Net transfers(1) 223,978 (181,643) 514 103,092 227,902 Transfers for policy loans 64 457 64 -- 64 Contract charges (73) (370) (175) (112) (104) Contract terminations: Surrender benefits (138,514) (10,151) (24,415) (13,395) (31,728) Death benefits -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 101,373 (143,275) 14,322 100,266 228,710 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 332,052 974,493 1,564,178 436,827 634,100 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 408,139 $ 494,410 $ 1,206,747 $ 495,215 $ 654,892 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 286,198 798,425 1,342,566 317,679 532,486 Contract purchase payments 15,253 55,944 39,882 8,663 33,194 Net transfers(1) 205,147 (236,405) 1,476 79,200 251,300 Transfers for policy loans 64 539 75 -- 78 Contract charges (74) (405) (189) (92) (109) Contract terminations: Surrender benefits (128,147) (11,050) (26,022) (11,465) (35,538) Death benefits -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 378,441 607,048 1,357,788 393,985 781,411 ===================================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 31 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2001 (CONTINUED) 3VA 3SR 3EG 3GI 3MP OPERATIONS Investment income (loss) -- net $ 2,081 $ 198 $ (3,953) $ 4,511 $ (6,422) Net realized gain (loss) on sales of investments 63,282 (122) (194,881) (72,959) (42,562) Distributions from capital gains -- 104 -- 31,262 -- Net change in unrealized appreciation or depreciation of investments 19,701 (308) (31,110) (33,879) 20,869 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 85,064 (128) (229,944) (71,065) (28,115) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 23,948 830 20,773 66,658 131,248 Net transfers(1) 119,059 340 (330,950) 307,897 203,801 Transfers for policy loans 64 -- -- 64 (9,443) Contract charges (52) -- (154) (237) (515) Contract terminations: Surrender benefits (84,589) (122) (108,530) (78,226) (67,918) Death benefits -- -- -- -- (5,150) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 58,430 1,048 (418,861) 296,156 252,023 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 470,681 4,718 1,149,112 764,768 1,016,397 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 614,175 $ 5,638 $ 500,307 $ 989,859 $ 1,240,305 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 434,968 4,896 890,661 763,574 615,520 Contract purchase payments 21,946 876 19,696 71,220 86,538 Net transfers(1) 120,400 693 (341,506) 343,016 134,689 Transfers for policy loans 56 -- -- 72 (6,435) Contract charges (46) -- (150) (268) (342) Contract terminations: Surrender benefits (71,406) (137) (101,262) (87,407) (45,316) Death benefits -- -- -- -- (3,400) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 505,918 6,328 467,439 1,090,207 781,254 ===================================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 32 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2001 (CONTINUED) 3OS 3RE 3SI 3IS 3SE OPERATIONS Investment income (loss) -- net $ 4,645 $ 6,928 $ (167) $ 2,263 $ (321) Net realized gain (loss) on sales of investments (33,487) 20,183 (8,415) (8,782) (5,848) Distributions from capital gains 8,496 -- 2,370 -- -- Net change in unrealized appreciation or depreciation of investments (298) 2,232 6,700 (80) 6,702 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (20,644) 29,343 488 (6,599) 533 =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 16,021 8,238 33,993 5,317 2,005 Net transfers(1) (17,992) 68,584 164,697 56,388 27,245 Transfers for policy loans -- -- -- -- (4) Contract charges (77) (72) (20) (44) (63) Contract terminations: Surrender benefits (3,113) (1,253) (6,564) (29,199) (29,387) Death benefits -- (6,040) -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (5,161) 69,457 192,106 32,462 (204) ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 114,053 185,186 11,083 42,795 115,033 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 88,248 $ 283,986 $ 203,677 $ 68,658 $ 115,362 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 115,541 147,540 9,257 42,858 100,314 Contract purchase payments 18,365 6,495 25,689 5,745 1,803 Net transfers(1) (15,043) 62,644 120,960 52,835 20,615 Transfers for policy loans -- -- -- -- (1) Contract charges (91) (55) (15) (47) (58) Contract terminations: Surrender benefits (4,568) (1,036) (5,572) (30,349) (25,893) Death benefits -- (4,652) -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 114,204 210,936 150,319 71,042 96,780 ===================================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 33 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2001 (CONTINUED) 3UE 3MC 3AG 3GT 3IG OPERATIONS Investment income (loss) -- net $ (127) $ 1,658 $ (987) $ 211 $ (111) Net realized gain (loss) on sales of investments (23,375) (3,466) (93,759) (161,454) (47,101) Distributions from capital gains -- 12,617 -- -- -- Net change in unrealized appreciation or depreciation of investments (64,516) (676) (931) 55,614 (6,034) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (88,018) 10,133 (95,677) (105,629) (53,246) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 29,985 81,997 29,095 20,612 61,719 Net transfers(1) 328,864 227,145 (55,427) 40,583 (46,691) Transfers for policy loans (53) (4,996) -- -- -- Contract charges (200) (83) (165) (227) (93) Contract terminations: Surrender benefits (24,224) (56,438) (931) (81,420) (37,148) Death benefits -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 334,372 247,625 (27,428) (20,452) (22,213) ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 571,823 18,044 241,625 212,203 445,064 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 818,177 $ 275,802 $ 118,520 $ 86,122 $ 369,605 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 577,230 14,593 342,793 309,990 555,627 Contract purchase payments 32,330 65,228 51,822 40,841 74,737 Net transfers(1) 362,668 167,062 (112,480) 40,845 35,872 Transfers for policy loans (60) (3,853) -- -- -- Contract charges (224) (65) (362) (508) (150) Contract terminations: Surrender benefits (28,605) (42,848) (1,905) (189,281) (60,189) Death benefits -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 943,339 200,117 279,868 201,887 605,897 ===================================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 34 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2001 (CONTINUED) 3IP 3MG 3MD 3IN 3VS OPERATIONS Investment income (loss) -- net $ (713) $ (2,289) $ (2,118) $ (6,829) $ (6,355) Net realized gain (loss) on sales of investments (11,802) (107,641) (34,274) (373,869) (438,325) Distributions from capital gains 953 3,682 11,262 -- 163,984 Net change in unrealized appreciation or depreciation of investments (9,460) (25,399) 12,810 (17,056) (303,292) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (21,022) (131,647) (12,320) (397,754) (583,988) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 5,085 141,372 49,174 29,718 99,376 Net transfers(1) 148,913 125,534 127,146 (335,199) (271,807) Transfers for policy loans 64 (16) -- 383 383 Contract charges (74) (72) (98) (436) (338) Contract terminations: Surrender benefits (3,464) (123) (6,910) (76,127) (30,701) Death benefits -- -- -- (2,512) -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 150,524 266,695 169,312 (384,173) (203,087) ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 54,861 482,619 337,620 1,665,059 1,721,686 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 184,363 $ 617,667 $ 494,612 $ 883,132 $ 934,611 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 56,924 532,539 352,144 1,801,521 1,330,395 Contract purchase payments 6,709 208,754 56,265 41,032 100,690 Net transfers(1) 193,586 172,490 147,288 (377,439) (306,017) Transfers for policy loans 89 (23) -- 557 424 Contract charges (92) (104) (115) (617) (380) Contract terminations: Surrender benefits (3,823) (218) (8,043) (114,390) (33,064) Death benefits -- -- -- (3,914) -- ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 253,393 913,438 547,539 1,346,750 1,092,048 ===================================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 35 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) 3MI 3SV 3IT 3SP 3AA(1) OPERATIONS Investment income (loss) -- net $ (2,693) $ (1,604) $ (3,283) $ (4,873) $ 58 Net realized gain (loss) on sales of investments 39,685 12,385 (272,864) 36,829 (339) Distributions from capital gains 8,636 4,635 177,936 -- 210 Net change in unrealized appreciation or depreciation of investments 63,332 20,563 (26,983) 83,242 (398) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 108,960 35,979 (125,194) 115,198 (469) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 43,133 55,843 120,217 56,138 409 Net transfers(2) 243,178 394,861 23,742 (230,847) 7,936 Transfers for policy loans (6,887) (3,674) (799) -- -- Contract charges (176) (85) (382) (202) -- Contract terminations: Surrender benefits (48,271) (51,084) (13,798) (23,788) -- Death benefits -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 230,977 395,861 128,980 (198,699) 8,345 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 263,686 105,570 650,434 1,041,643 -- ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 603,623 $ 537,410 $ 654,220 $ 958,142 $ 7,876 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 192,780 69,818 599,215 990,217 -- Contract purchase payments 32,221 35,992 132,754 50,060 425 Net transfers(2) 154,369 242,084 52,731 (198,497) 7,691 Transfers for policy loans (4,429) (2,390) (1,130) -- -- Contract charges (114) (53) (415) (186) -- Contract terminations: Surrender benefits (30,839) (31,168) (14,316) (21,810) -- Death benefits -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 343,988 314,283 768,839 819,784 8,116 ===================================================================================================================================
(1) For the period May 1, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 36 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS --------------------------- PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) 3WI(1) 3SG(1) OPERATIONS Investment income (loss) -- net $ (41) $ (7) Net realized gain (loss) on sales of investments (297) (89) Distributions from capital gains -- -- Net change in unrealized appreciation or depreciation of investments (6) (19) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (344) (115) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 269 79 Net transfers(2) 535 2,025 Transfers for policy loans -- 64 Contract charges (5) (6) Contract terminations: Surrender benefits -- -- Death benefits -- -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 799 2,162 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 455 $ 2,047 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- Contract purchase payments 270 87 Net transfers(2) 242 2,016 Transfers for policy loans -- 75 Contract charges (6) (9) Contract terminations: Surrender benefits -- -- Death benefits -- -- ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 506 2,169 ===================================================================================================================================
(1) For the period May 1, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 37 NOTES TO FINANCIAL STATEMENTS 1. ORGANIZATION IDS Life Variable Account 10 (the Account) was established under Minnesota law as a segregated asset account of IDS Life Insurance Company (IDS Life). The Account is registered as a unit investment trust under the Investment Company Act of 1940, as amended (the 1940 Act) and exists in accordance with the rules and regulations of the Insurance Division, Department of Commerce of the State of Minnesota. The Account is comprised of various subaccounts. Each subaccount invests exclusively in shares of the following funds or portfolios (collectively, the Funds), which are registered under the 1940 Act as open-end management investment companies. The subaccounts' investments in shares of the Funds as of Dec. 31, 2002 were as follows:
SUBACCOUNT INVESTS EXCLUSIVELY IN SHARES OF SHARES -------------------------------------------------------------------------------------------------------------------- BC3 AXP(R) Variable Portfolio - Blue Chip Advantage Fund 31,489 BD3 AXP(R) Variable Portfolio - Bond Fund(1) 85,745 CR3 AXP(R) Variable Portfolio - Capital Resource Fund 7,710 CM3 AXP(R) Variable Portfolio - Cash Management Fund 3,242,428 DE3 AXP(R) Variable Portfolio - Diversified Equity Income Fund 129,555 EM3 AXP(R) Variable Portfolio - Emerging Markets Fund 520,679 ES3 AXP(R) Variable Portfolio - Equity Select Fund 230,734 EI3 AXP(R) Variable Portfolio - Extra Income Fund(2) 495,438 FI3 AXP(R) Variable Portfolio - Federal Income Fund(3) 145,639 GB3 AXP(R) Variable Portfolio - Global Bond Fund 28,372 GR3 AXP(R) Variable Portfolio - Growth Fund 104,652 IE3 AXP(R) Variable Portfolio - International Fund 40,886 MF3 AXP(R) Variable Portfolio - Managed Fund 8,170 ND3 AXP(R) Variable Portfolio - NEW DIMENSIONS FUND(R) 138,996 IV3 AXP(R) Variable Portfolio - S&P 500 Index Fund 90,522 SC3 AXP(R) Variable Portfolio - Small Cap Advantage Fund 40,242 SA3 AXP(R) Variable Portfolio - Strategy Aggressive Fund 37,453 3CA AIM V.I. Capital Appreciation Fund, Series I Shares 41,662 3CD AIM V.I. Capital Development Fund, Series I Shares 31,609 3IF American Century(R) VP International, Class I 80,819 3VA American Century(R) VP Value, Class I 132,074 3SR Calvert Variable Series, Inc. Social Balanced Portfolio 4,157 3EG Credit Suisse Trust - Emerging Growth Portfolio 41,761 3GI Fidelity(R) VIP Growth & Income Portfolio Service Class 81,626 3MP Fidelity(R) VIP Mid Cap Portfolio Service Class 70,192 3OS Fidelity(R) VIP Overseas Portfolio Service Class 4,592 3RE FTVIPT Franklin Real Estate Fund - Class 2 15,640 3SI FTVIPT Franklin Small Cap Value Securities Fund - Class 2 35,843 3TF FTVIPT Templeton Foreign Securities Fund - Class 2(4) 16,276 3SE Goldman Sachs VIT CORE(SM) Small Cap Equity Fund 9,564 3UE Goldman Sachs VIT CORE(SM) U.S. Equity Fund 55,105 3MC Goldman Sachs VIT Mid Cap Value Fund 55,386 3GT Janus Aspen Series Global Technology Portfolio: Service Shares 35,636 3IG Janus Aspen Series International Growth Portfolio: Service Shares 22,931 3AG Janus Aspen Series Mid Cap Growth Portfolio: Service Shares 4,767 (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) 3IP Lazard Retirement International Equity Portfolio 50,650 3MG MFS(R) Investors Growth Stock Series - Service Class 54,698 3MD MFS(R) New Discovery Series - Service Class 28,632 3IN Putnam VT International New Opportunities Fund - Class IB Shares 61,476 3VS Putnam VT Vista Fund - Class IB Shares 39,407 3MI Royce Micro-Cap Portfolio 90,627 3SV Third Avenue Value Portfolio 28,233 3IT Wanger International Small Cap 81,566 3SP Wanger U.S. Smaller Companies 44,226 3AA Wells Fargo VT Asset Allocation Fund 2,343 3WI Wells Fargo VT International Equity Fund 17,298 3SG Wells Fargo VT Small Cap Growth Fund 715
(1) Effective June 27, 2003, AXP(R) Variable Portfolio - Bond Fund will change its name to AXP(R) Variable Portfolio - Diversified Bond Fund. (2) Effective June 27, 2003, AXP(R) Variable Portfolio - Extra Income Fund will change its name to AXP(R) Variable Portfolio - High Yield Bond Fund. (3) Effective June 27, 2003, AXP(R) Variable Portfolio - Federal Income Fund will change its name to AXP(R) Variable Portfolio - Short Term U.S. Government Fund. (4) FTVIPT Templeton International Smaller Companies Fund - Class 2 merged into FTVIPT Templeton Foreign Securities Fund - Class 2 as of April 30, 2002. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 38 The assets of each subaccount of the Account are not chargeable with liabilities arising out of the business conducted by any other segregated asset account or by IDS Life. IDS Life serves as issuer of the contract. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES INVESTMENTS IN THE FUNDS Investments in shares of the Funds are stated at market value which is the net asset value per share as determined by the respective Funds. Investment transactions are accounted for on the date the shares are purchased and sold. Realized gains and losses on the sales of investments are computed using the average cost method. Income from dividends and gains from realized capital gain distributions are reinvested in additional shares of the Funds and are recorded as income by the subaccounts on the ex-dividend date. Unrealized appreciation or depreciation of investments in the accompanying financial statements represents the subaccounts' share of the Funds' undistributed net investment income, undistributed realized gain or loss and the unrealized appreciation or depreciation on their investment securities. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of increase and decrease in net assets from operations during the period. Actual results could differ from those estimates. VARIABLE PAYOUT Net assets allocated to contracts in the payout period are periodically compared to a computation which uses the Annuity 2000 Basic Mortality Table and which assumes future mortality improvement. The assumed investment return is 5% unless the annuitant elects otherwise, in which case the rate would be 3.5%, as regulated by the laws of the respective states. The mortality risk is fully borne by IDS Life and may result in additional amounts being transferred into the variable annuity account by IDS Life to cover greater longevity of annuitants than expected. Conversely, if amounts allocated exceed amounts required, transfers may be made to the insurance company. FEDERAL INCOME TAXES IDS Life is taxed as a life insurance company. The Account is treated as part of IDS Life for federal income tax purposes. Under existing federal income tax law, no income taxes are payable with respect to any investment income of the Account to the extent the earnings are credited under the contracts. Based on this, no charge is being made currently to the Account for federal income taxes. The Company will review periodically the status of this policy in the event of changes in the tax law. A charge may be made in future years for any federal income taxes that would be attributable to the contracts. 3. VARIABLE ACCOUNT EXPENSES IDS Life makes contractual assurances to the Account that possible future adverse changes in administrative expenses and mortality experience of the contract owners and annuitants will not affect the Account. IDS Life deducts a daily mortality and expense risk fee equal, on an annual basis, to 0.55% of the average daily net assets of each subaccount. 4. CONTRACT CHARGES IDS Life deducts a contract administrative charge of $30 per year. This charge reimburses IDS Life for expenses incurred in establishing and maintaining the annuity records. Certain products may waive this charge based upon the underlying contract value. An optional maximum anniversary value death benefit rider, enhanced earnings death benefit rider and enhanced earnings plus death benefit rider are available on certain products and if selected, the related fees are deducted annually from the contract value on the contract anniversary. Additional information can be found in the applicable product's prospectus. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 39 5. RELATED PARTY TRANSACTIONS Management fees were paid indirectly to IDS Life, in its capacity as investment manager for the American Express(R) Variable Portfolio Funds. The Fund's Investment Management Services Agreement provides for a fee at a percentage of each Fund's average daily net assets in reducing percentages, to give effect to breakpoints in fees due to assets under management within each Fund as follows:
FUND PERCENTAGE RANGE --------------------------------------------------------------------------------------------------------------------- AXP(R) Variable Portfolio - Blue Chip Advantage Fund 0.560% to 0.470% AXP(R) Variable Portfolio - Bond Fund 0.610% to 0.535% AXP(R) Variable Portfolio - Capital Resource Fund 0.630% to 0.570% AXP(R) Variable Portfolio - Cash Management Fund 0.510% to 0.440% AXP(R) Variable Portfolio - Diversified Equity Income Fund 0.560% to 0.470% AXP(R) Variable Portfolio - Emerging Markets Fund 1.170% to 1.095% AXP(R) Variable Portfolio - Equity Select Fund 0.650% to 0.560% AXP(R) Variable Portfolio - Extra Income Fund 0.620% to 0.545% AXP(R) Variable Portfolio - Federal Income Fund 0.610% to 0.535% AXP(R) Variable Portfolio - Global Bond Fund 0.840% to 0.780% AXP(R) Variable Portfolio - Growth Fund 0.630% to 0.570% AXP(R) Variable Portfolio - International Fund 0.870% to 0.795% AXP(R) Variable Portfolio - Managed Fund 0.630% to 0.550% AXP(R) Variable Portfolio - NEW DIMENSIONS FUND(R) 0.630% to 0.570% AXP(R) Variable Portfolio - S&P 500 Index Fund 0.290% to 0.260% AXP(R) Variable Portfolio - Small Cap Advantage Fund 0.790% to 0.650% AXP(R) Variable Portfolio - Strategy Aggressive Fund 0.650% to 0.575%
For the following Funds the fee may be adjusted upward or downward by a performance incentive adjustment. The adjustment is based on a comparison of the performance of each Fund to an index of similar funds up to a maximum percentage of each Fund's average daily net assets. Effective Dec. 1, 2002, the performance incentive adjustment was added to some of the funds and the maximum changed for others.
MAXIMUM MAXIMUM ADJUSTMENT ADJUSTMENT FUND (PRIOR TO DEC. 1, 2002) (AFTER DEC. 1, 2002) ----------------------------------------------------------------------------------------------------------------------- AXP(R) Variable Portfolio - Blue Chip Advantage Fund 0.08% 0.12% AXP(R) Variable Portfolio - Capital Resource Fund N/A 0.12% AXP(R) Variable Portfolio - Diversified Equity Income Fund 0.08% 0.12% AXP(R) Variable Portfolio - Emerging Markets Fund 0.12% 0.12% AXP(R) Variable Portfolio - Equity Select Fund 0.12% 0.12% AXP(R) Variable Portfolio - Growth Fund 0.12% 0.12% AXP(R) Variable Portfolio - International Fund N/A 0.12% AXP(R) Variable Portfolio - Managed Fund N/A 0.08% AXP(R) Variable Portfolio - NEW DIMENSIONS FUND(R) N/A 0.12% AXP(R) Variable Portfolio - Small Cap Advantage Fund 0.12% 0.12% AXP(R) Variable Portfolio - Strategy Aggressive Fund N/A 0.12%
IDS Life, in turn, paid to American Express Financial Corporation (AEFC) a portion of these management fees based on a percentage of each Fund's average daily net assets for the year. This fee was equal to 0.35% for AXP(R) Variable Portfolio - International Fund and AXP(R) Variable Portfolio - S&P 500 Index Fund and 0.25% for each remaining Fund. The American Express(R) Variable Portfolio Funds also have an agreement with IDS Life for distribution services. Under a Plan and Agreement of Distribution, each Fund pays a distribution fee at an annual rate up to 0.125% of each Fund's average daily net assets. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 40 The American Express(R) Variable Portfolio Funds have an Administrative Services Agreement with AEFC. Under this agreement, each Fund pays AEFC a fee for administration and accounting services at a percentage of each Fund's average daily net assets in reducing percentages annually as follows:
FUND PERCENTAGE RANGE --------------------------------------------------------------------------------------------------------------------- AXP(R) Variable Portfolio - Blue Chip Advantage Fund 0.040% to 0.020% AXP(R) Variable Portfolio - Bond Fund 0.050% to 0.025% AXP(R) Variable Portfolio - Capital Resource Fund 0.050% to 0.030% AXP(R) Variable Portfolio - Cash Management Fund 0.030% to 0.020% AXP(R) Variable Portfolio - Diversified Equity Income Fund 0.040% to 0.020% AXP(R) Variable Portfolio - Emerging Markets Fund 0.100% to 0.050% AXP(R) Variable Portfolio - Equity Select Fund 0.060% to 0.030% AXP(R) Variable Portfolio - Extra Income Fund 0.050% to 0.025% AXP(R) Variable Portfolio - Federal Income Fund 0.050% to 0.025% AXP(R) Variable Portfolio - Global Bond Fund 0.060% to 0.040% AXP(R) Variable Portfolio - Growth Fund 0.050% to 0.030% AXP(R) Variable Portfolio - International Fund 0.060% to 0.035% AXP(R) Variable Portfolio - Managed Fund 0.040% to 0.020% AXP(R) Variable Portfolio - NEW DIMENSIONS FUND(R) 0.050% to 0.030% AXP(R) Variable Portfolio - S&P 500 Index Fund 0.080% to 0.065% AXP(R) Variable Portfolio - Small Cap Advantage Fund 0.060% to 0.035% AXP(R) Variable Portfolio - Strategy Aggressive Fund 0.060% to 0.035%
The American Express(R) Variable Portfolio Funds pay custodian fees to American Express Trust Company, an affiliate of IDS Life. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 41 6. INVESTMENT TRANSACTIONS The subaccounts' purchases of the Funds' shares, including reinvestment of dividend distributions, for the period ended Dec. 31, 2002 were as follows:
SUBACCOUNT INVESTMENT PURCHASES --------------------------------------------------------------------------------------------------------------------- BC3 AXP(R) Variable Portfolio - Blue Chip Advantage Fund $ 89,985 BD3 AXP(R) Variable Portfolio - Bond Fund 7,199,863 CR3 AXP(R) Variable Portfolio - Capital Resource Fund 3,398,293 CM3 AXP(R) Variable Portfolio - Cash Management Fund 198,962,427 DE3 AXP(R) Variable Portfolio - Diversified Equity Income Fund 15,484,879 EM3 AXP(R) Variable Portfolio - Emerging Markets Fund 696,615 ES3 AXP(R) Variable Portfolio - Equity Select Fund 879,049 EI3 AXP(R) Variable Portfolio - Extra Income Fund 34,261,705 FI3 AXP(R) Variable Portfolio - Federal Income Fund 1,860,431 GB3 AXP(R) Variable Portfolio - Global Bond Fund 2,840,667 GR3 AXP(R) Variable Portfolio - Growth Fund 907,952 IE3 AXP(R) Variable Portfolio - International Fund 86,358,205 MF3 AXP(R) Variable Portfolio - Managed Fund 242,570 ND3 AXP(R) Variable Portfolio - NEW DIMENSIONS FUND(R) 4,991,795 IV3 AXP(R) Variable Portfolio - S&P 500 Index Fund 480,530 SC3 AXP(R) Variable Portfolio - Small Cap Advantage Fund 476,235 SA3 AXP(R) Variable Portfolio - Strategy Aggressive Fund 12,022,872 3CA AIM V.I. Capital Appreciation Fund, Series I Shares 98,483 3CD AIM V.I. Capital Development Fund, Series I Shares 41,992 3IF American Century(R) VP International, Class I 88,650 3VA American Century(R) VP Value, Class I 1,030,377 3SR Calvert Variable Series, Inc. Social Balanced Portfolio 2,224 3EG Credit Suisse Trust - Emerging Growth Portfolio 142,101 3GI Fidelity(R) VIP Growth & Income Portfolio Service Class 259,849 3MP Fidelity(R) VIP Mid Cap Portfolio Service Class 785,467 3OS Fidelity(R) VIP Overseas Portfolio Service Class 1,329,907 3RE FTVIPT Franklin Real Estate Fund - Class 2 201,003 3SI FTVIPT Franklin Small Cap Value Securities Fund - Class 2 273,932 3TF FTVIPT Templeton Foreign Securities Fund - Class 2 274,195 3SE Goldman Sachs VIT CORE(SM) Small Cap Equity Fund 10,162 3UE Goldman Sachs VIT CORE(SM) U.S. Equity Fund 1,426,906 3MC Goldman Sachs VIT Mid Cap Value Fund 505,615 3GT Janus Aspen Series Global Technology Portfolio: Service Shares 72,177 3IG Janus Aspen Series International Growth Portfolio: Service Shares 12,929,131 3AG Janus Aspen Series Mid Cap Growth Portfolio: Service Shares 120,451 (previously Janus Aspen Series Aggressive Growth Portfolio: Service Shares) 3IP Lazard Retirement International Equity Portfolio 8,849,255 3MG MFS(R) Investors Growth Stock Series - Service Class 213,542 3MD MFS(R) New Discovery Series - Service Class 258,351 3IN Putnam VT International New Opportunities Fund - Class IB Shares 588,163 3VS Putnam VT Vista Fund - Class IB Shares 60,986 3MI Royce Micro-Cap Portfolio 616,620 3SV Third Avenue Value Portfolio 187,760 3IT Wanger International Small Cap 12,666,000 3SP Wanger U.S. Smaller Companies 992,553 3AA Wells Fargo VT Asset Allocation Fund 18,933 3WI Wells Fargo VT International Equity Fund 3,233,042 3SG Wells Fargo VT Small Cap Growth Fund 142,467
IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 42 7. FINANCIAL HIGHLIGHTS The table below shows certain financial information regarding the subaccounts.
BC3 BD3 CR3 CM3 DE3 EM3 ES3(4) EI3 ------------------------------------------------------------------------------------------ ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 0.99 $ 1.06 $ 0.94 $ 1.07 $ 1.01 $ 0.75 -- $ 0.91 At Dec. 31, 2001 $ 0.82 $ 1.14 $ 0.76 $ 1.10 $ 1.02 $ 0.73 $ 1.01 $ 0.95 At Dec. 31, 2002 $ 0.63 $ 1.20 $ 0.59 $ 1.11 $ 0.82 $ 0.69 $ 0.87 $ 0.89 ----------------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 729 985 291 5,658 281 3 38 1,549 At Dec. 31, 2002 314 762 202 3,911 1,262 277 328 1,480 ----------------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 $ 597 $ 1,122 $ 222 $ 6,219 $ 288 $ 3,674 $ 2,063 $ 1,475 At Dec. 31, 2002 $ 198 $ 911 $ 120 $ 4,325 $ 1,040 $ 3,645 $ 2,021 $ 1,311 ----------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 0.70% 6.32% 0.27% 3.60% 0.98% 0.02% -- 10.89% For the year ended Dec. 31, 2002 0.73% 5.17% 0.42% 1.15% 2.07% -- -- 7.43% ----------------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% For the year ended Dec. 31, 2002 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% ----------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (17.17%) 7.55% (19.15%) 2.80% 0.99% (2.67%) 1.00% 4.40% For the year ended Dec. 31, 2002 (23.17%) 5.26% (22.37%) 0.91% (19.61%) (5.48%) (13.86%) (6.32%) ----------------------------------------------------------------------------------------------------------------------------- FI3 GB3 -------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 1.09 $ 1.03 At Dec. 31, 2001 $ 1.15 $ 1.04 At Dec. 31, 2002 $ 1.21 $ 1.18 ------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 592 249 At Dec. 31, 2002 1,275 251 ------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 $ 680 $ 258 At Dec. 31, 2002 $ 1,543 $ 298 ------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 4.22% 4.82% For the year ended Dec. 31, 2002 2.92% 4.95% ------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.55% 0.55% For the year ended Dec. 31, 2002 0.55% 0.55% ------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 5.50% 0.97% For the year ended Dec. 31, 2002 5.22% 13.46% -------------------------------------------------------
GR3 IE3 MF3 ND3 IV3 SC3 SA3 3CA ------------------------------------------------------------------------------------------ ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 0.94 $ 0.95 $ 1.06 $ 1.08 $ 0.90 $ 1.16 $ 1.22 $ 1.17 At Dec. 31, 2001 $ 0.64 $ 0.67 $ 0.94 $ 0.89 $ 0.79 $ 1.08 $ 0.81 $ 0.89 At Dec. 31, 2002 $ 0.47 $ 0.55 $ 0.81 $ 0.69 $ 0.61 $ 0.89 $ 0.55 $ 0.67 ----------------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 1,285 65 296 3,252 770 378 607 1,358 At Dec. 31, 2002 1,064 488 120 3,029 973 393 386 1,024 ----------------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 $ 827 $ 44 $ 278 $ 2,901 $ 606 $ 408 $ 494 $ 1,207 At Dec. 31, 2002 $ 503 $ 267 $ 98 $ 2,099 $ 591 $ 349 $ 213 $ 685 ----------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- 1.60% 2.50% 0.21% 0.55% -- 0.19% -- For the year ended Dec. 31, 2002 0.06% 0.75% 2.54% 0.51% 0.96% -- -- -- ----------------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% For the year ended Dec. 31, 2002 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% ----------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (31.91%) (29.47%) (11.32%) (17.59%) (12.22%) (6.90%) (33.61%) (23.93%) For the year ended Dec. 31, 2002 (26.56%) (17.91%) (13.83%) (22.47%) (22.78%) (17.59%) (32.10%) (24.72%) ----------------------------------------------------------------------------------------------------------------------------- 3CD 3IF -------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 1.38 $ 1.19 At Dec. 31, 2001 $ 1.26 $ 0.84 At Dec. 31, 2002 $ 0.98 $ 0.66 ------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 394 781 At Dec. 31, 2002 302 634 ------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 $ 495 $ 655 At Dec. 31, 2002 $ 297 $ 421 ------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- 0.07% For the year ended Dec. 31, 2002 -- 0.83% ------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.55% 0.55% For the year ended Dec. 31, 2002 0.55% 0.55% ------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (8.70%) (29.41%) For the year ended Dec. 31, 2002 (22.22%) (21.43%) -------------------------------------------------------
IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 43
3VA 3SR 3EG 3GI 3MP 3OS 3RE 3SI ------------------------------------------------------------------------------------------ ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 1.08 $ 0.96 $ 1.29 $ 1.00 $ 1.65 $ 0.99 $ 1.26 $ 1.20 At Dec. 31, 2001 $ 1.21 $ 0.89 $ 1.07 $ 0.91 $ 1.59 $ 0.77 $ 1.35 $ 1.35 At Dec. 31, 2002 $ 1.06 $ 0.78 $ 0.75 $ 0.75 $ 1.42 $ 0.61 $ 1.37 $ 1.22 ----------------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 506 6 467 1,090 781 114 211 150 At Dec. 31, 2002 766 8 421 1,172 862 82 205 282 ----------------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 $ 614 $ 6 $ 500 $ 990 $ 1,240 $ 88 $ 284 $ 204 At Dec. 31, 2002 $ 808 $ 6 $ 317 $ 882 $ 1,226 $ 50 $ 280 $ 344 ----------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 0.90% 7.75% -- 1.08% -- 4.28% 3.55% 0.39% For the year ended Dec. 31, 2002 0.79% 3.04% -- 1.30% 0.81% 0.56% 2.77% 0.32% ----------------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% For the year ended Dec. 31, 2002 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% ----------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 12.04% (7.29%) (17.05%) (9.00%) (3.64%) (22.22%) 7.14% 12.50% For the year ended Dec. 31, 2002 (12.40%) (12.36%) (29.91%) (17.58%) (10.69%) (20.78%) 1.48% (9.63%) ----------------------------------------------------------------------------------------------------------------------------- 3TF(5) 3SE -------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- $ 1.15 At Dec. 31, 2001 -- $ 1.19 At Dec. 31, 2002 $ 0.84 $ 1.01 ------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 -- 97 At Dec. 31, 2002 182 87 ------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 -- $ 115 At Dec. 31, 2002 $ 153 $ 88 ------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- 0.28% For the year ended Dec. 31, 2002 2.11% 0.25% ------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 -- 0.55% For the year ended Dec. 31, 2002 0.55% 0.55% ------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 -- 3.48% For the year ended Dec. 31, 2002 (16.00%) (15.13%) -------------------------------------------------------
3UE 3MC 3GT 3IG 3AG 3IP 3MG 3MD ------------------------------------------------------------------------------------------ ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 0.99 $ 1.24 $ 0.68 $ 0.80 $ 0.70 $ 0.96 $ 0.91 $ 0.96 At Dec. 31, 2001 $ 0.87 $ 1.38 $ 0.43 $ 0.61 $ 0.42 $ 0.73 $ 0.68 $ 0.90 At Dec. 31, 2002 $ 0.67 $ 1.31 $ 0.25 $ 0.45 $ 0.30 $ 0.65 $ 0.49 $ 0.61 ----------------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 943 200 202 606 280 253 913 548 At Dec. 31, 2002 694 450 343 875 246 636 785 485 ----------------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 $ 818 $ 276 $ 86 $ 370 $ 119 $ 184 $ 618 $ 495 At Dec. 31, 2002 $ 468 $ 588 $ 86 $ 394 $ 74 $ 411 $ 382 $ 297 ----------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 0.53% 1.73% 0.65% 0.52% -- 0.01% 0.06% -- For the year ended Dec. 31, 2002 0.43% 1.40% -- 0.37% -- 0.54% -- -- ----------------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% For the year ended Dec. 31, 2002 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% ----------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (12.12%) 11.29% (36.76%) (23.75%) (40.00%) (23.96%) (25.27%) (6.25%) For the year ended Dec. 31, 2002 (22.99%) (5.07%) (41.86%) (26.23%) (28.57%) (10.96%) (27.94%) (32.22%) ----------------------------------------------------------------------------------------------------------------------------- 3IN 3VS -------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 0.92 $ 1.29 At Dec. 31, 2001 $ 0.66 $ 0.86 At Dec. 31, 2002 $ 0.56 $ 0.59 ------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 1,347 1,092 At Dec. 31, 2002 914 525 ------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 $ 883 $ 935 At Dec. 31, 2002 $ 515 $ 310 ------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- For the year ended Dec. 31, 2002 0.73% -- ------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.55% 0.55% For the year ended Dec. 31, 2002 0.55% 0.55% ------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (28.26%) (33.33%) For the year ended Dec. 31, 2002 (15.15%) (31.40%) -------------------------------------------------------
IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 44
3MI 3SV 3IT 3SP 3AA(4) 3WI(4) 3SG(4) ------------------------------------------------------------------------------ ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 1.36 $ 1.51 $ 1.09 $ 1.05 -- -- -- At Dec. 31, 2001 $ 1.75 $ 1.71 $ 0.85 $ 1.17 $ 0.97 $ 0.90 $ 0.94 At Dec. 31, 2002 $ 1.52 $ 1.52 $ 0.73 $ 0.96 $ 0.84 $ 0.69 $ 0.58 ----------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 344 314 769 820 8 1 2 At Dec. 31, 2002 453 279 1,484 847 29 144 6 ----------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 $ 604 $ 537 $ 654 $ 958 $ 8 -- $ 2 At Dec. 31, 2002 $ 689 $ 423 $ 1,082 $ 819 $ 24 $ 100 $ 3 ----------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- 0.17% -- 0.07% 0.71% -- -- For the year ended Dec. 31, 2002 -- 0.18% -- -- 2.15% 0.02% -- ----------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% For the year ended Dec. 31, 2002 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% ----------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 28.68% 13.25% (22.02%) 11.43% (3.00%) (10.00%) (6.00%) For the year ended Dec. 31, 2002 (13.14%) (11.11%) (14.12%) (17.95%) (13.40%) (23.33%) (38.30%) -----------------------------------------------------------------------------------------------------------------
(1) These amounts represent the dividends, excluding distributions of capital gains, received by the subaccount from the underlying mutual fund, net of management fees assessed by the fund manager, divided by the average net assets. These ratios exclude variable account expenses that result in direct reductions in the unit values. The recognition of investment income by the subaccount is affected by the timing of the declaration of dividends by the underlying fund in which the subaccounts invest. (2) These ratios represent the annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying fund are excluded. (3) These amounts represent the total return for the periods indicated, including changes in the value of the underlying fund, and reflect deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units; inclusion of these expenses in the calculation would result in a reduction in the total return presented. Investment options with a date notation indicate the effective date of that investment option in the variable account. The total return is calculated for the period indicated or from the effective date through the end of the reporting period. (4) Operations commenced on May 1, 2001. (5) Operations commenced on March 1, 2002. IDS LIFE VARIABLE ACCOUNT 10 - AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITY(R) - BAND 3 45 IDS Life Insurance Company ------------------------------------------------------------------------------- REPORT OF INDEPENDENT AUDITORS THE BOARD OF DIRECTORS IDS LIFE INSURANCE COMPANY We have audited the accompanying consolidated balance sheets of IDS Life Insurance Company (a wholly-owned subsidiary of American Express Financial Corporation) as of December 31, 2002 and 2001, and the related consolidated statements of income, stockholder's equity and cash flows for each of the three years in the period ended December 31, 2002. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. 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 consolidated financial position of IDS Life Insurance Company at December 31, 2002 and 2001, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States. ERNST & YOUNG LLP January 27, 2003 Minneapolis, Minnesota IDS Life Insurance Company -------------------------------------------------------------------------------
Consolidated Balance Sheets December 31, (In thousands, except share amounts) 2002 2001 Assets Investments: Available-for-sale: Fixed maturities, at fair value (amortized cost: 2002, $23,209,226; 2001, $20,022,072) $24,052,104 $20,157,137 Common stocks, at fair value (cost: 2002, $19; 2001, $805) 21 1,704 Mortgage loans on real estate 3,417,651 3,680,394 Policy loans 597,144 619,571 Other investments 752,558 621,897 ------- ------- Total investments 28,819,478 25,080,703 Cash and cash equivalents 4,424,061 1,150,251 Amounts recoverable from reinsurers 633,510 529,166 Amounts due from brokers 501 90,794 Other accounts receivable 56,245 46,349 Accrued investment income 296,595 278,199 Deferred policy acquisition costs 3,309,783 3,107,187 Deferred income taxes, net -- 156,308 Other assets 117,788 123,246 Separate account assets 21,980,674 27,333,697 ---------- ---------- Total assets $59,638,635 $57,895,900 =========== =========== Liabilities and stockholder's equity Liabilities: Future policy benefits: Fixed annuities $23,411,314 $19,592,273 Universal life-type insurance 3,515,010 3,433,904 Traditional life insurance 247,441 241,165 Disability income and long-term care insurance 1,466,171 1,227,172 Policy claims and other policyholders' funds 85,400 71,879 Amounts due to brokers 3,342,989 1,740,031 Deferred income taxes, net 182,059 -- Other liabilities 463,326 437,017 Separate account liabilities 21,980,674 27,333,697 ---------- ---------- Total liabilities 54,694,384 54,077,138 ---------- ---------- Commitments and contingencies Stockholder's equity: Capital stock, $30 par value per share; 100,000 shares authorized, issued and outstanding 3,000 3,000 Additional paid-in capital 1,088,327 688,327 Accumulated other comprehensive income, net of tax: Net unrealized securities gains 497,319 83,443 Net unrealized derivative gains (losses) 764 1,332 --- ----- Total accumulated other comprehensive income 498,083 84,775 Retained earnings 3,354,841 3,042,660 --------- --------- Total stockholder's equity 4,944,251 3,818,762 --------- --------- Total liabilities and stockholder's equity $59,638,635 $57,895,900 =========== ===========
See accompanying notes to consolidated financial statements. IDS Life Insurance Company -------------------------------------------------------------------------------
Consolidated Statements of Income Years ended December 31, (In thousands) 2002 2001 2000 Revenues Premiums: Traditional life insurance $ 67,978 $ 59,415 $ 56,187 Disability income and long-term care insurance 273,737 255,428 231,311 ------- ------- ------- Total premiums 341,715 314,843 287,498 Net investment income 1,561,856 1,485,688 1,730,605 Policyholder and contractholder charges 522,777 489,583 438,127 Management and other fees 404,787 473,406 598,168 Net realized loss on investments (4,507) (649,752) (16,975) ------ -------- ------- Total revenues 2,826,628 2,113,768 3,037,423 --------- --------- --------- Benefits and expenses Death and other benefits: Traditional life insurance 36,881 35,519 29,042 Universal life-type insurance and investment contracts 221,544 175,247 131,467 Disability income and long-term care insurance 52,962 44,725 40,246 Increase in liabilities for future policy benefits: Traditional life insurance 2,768 7,231 5,765 Disability income and long-term care insurance 134,605 123,227 113,239 Interest credited on universal life-type insurance and investment contracts 1,157,636 1,137,636 1,169,641 Amortization of deferred policy acquisition costs 312,402 371,342 362,106 Other insurance and operating expenses 437,823 407,798 378,653 ------- ------- ------- Total benefits and expenses 2,356,621 2,302,725 2,230,159 --------- --------- --------- Income (loss) before income tax expense (benefit) and cumulative effect of accounting change 470,007 (188,957) 807,264 Income tax expense (benefit) 87,826 (145,222) 221,627 ------ -------- ------- Income (loss) before cumulative effect of accounting change 382,181 (43,735) 585,637 Cumulative effect of accounting change (net of income tax benefit of $11,532) -- (21,416) -- ---------- ---------- ---------- Net income (loss) $ 382,181 $ (65,151) $ 585,637 ========== ========== ==========
See accompanying notes to consolidated financial statements. IDS Life Insurance Company -------------------------------------------------------------------------------
Consolidated Statements of Stockholder's Equity Accumulated other Additional comprehensive Total Capital paid-in income (loss), Retained stockholder's For the three years ended December 31, 2002 (In thousands) stock capital net of tax earnings equity Balance, January 1, 2000 $3,000 $ 288,327 $(411,230) $2,932,174 $2,812,271 Comprehensive income: Net income -- -- -- 585,637 585,637 Net unrealized holding gains on available-for-sale securities arising during the year, net of deferred policy acquisition costs of ($5,154) and income tax expense of ($46,921) -- -- 87,138 -- 87,138 Reclassification adjustment for gains included in net income, net of income tax expense of $5,192 -- -- (9,642) -- (9,642) ------ ----------- --------- ---------- ---------- Other comprehensive income -- -- 77,496 -- 77,496 ------ ----------- --------- ---------- ---------- Comprehensive income -- -- -- -- 663,133 Cash dividends -- -- -- (410,000) (410,000) ------ ----------- --------- ---------- ---------- Balance, December 31, 2000 3,000 288,327 (333,734) 3,107,811 3,065,404 Comprehensive income: Net loss -- -- -- (65,151) (65,151) Cumulative effect of adopting SFAS No. 133, net of income tax benefit of $626 -- -- (1,162) -- (1,162) Net unrealized holding losses on available-for-sale securities arising during the year, net of deferred policy acquisition costs of ($20,191) and income tax benefit of $6,064 -- -- (11,262) -- (11,262) Reclassification adjustment for losses on available-for-sale securities included in net loss, net of income tax benefit of $228,003 -- -- 423,434 -- 423,434 Reclassification adjustment for losses on derivatives included in net loss, net of income tax benefit of $4,038 -- -- 7,499 -- 7,499 ------ ----------- --------- ---------- ---------- Other comprehensive income -- -- 418,509 -- 418,509 ------ ----------- --------- ---------- ---------- Comprehensive income -- -- -- -- 353,358 Capital contribution -- 400,000 -- -- 400,000 ------ ----------- --------- ---------- ---------- Balance, December 31, 2001 3,000 688,327 84,775 3,042,660 3,818,762 Comprehensive income: Net income -- -- -- 382,181 382,181 Net unrealized holding gains on available-for-sale securities arising during the year, net of deferred policy acquisition costs of ($75,351) and income tax expense of ($228,502) -- -- 424,360 -- 424,360 Reclassification adjustment for gains on available-for-sale securities included in net income, net of income tax expense of $5,645 -- -- (10,484) -- (10,484) Reclassification adjustment for gains on derivatives included in net income, net of income tax expense of $305 -- -- (568) -- (568) ------ ----------- --------- ---------- ---------- Other comprehensive income -- -- 413,308 -- 413,308 ------ ----------- --------- ---------- ---------- Comprehensive income -- -- -- -- 795,489 Cash dividends -- -- -- (70,000) (70,000) Capital contribution -- 400,000 -- -- 400,000 ------ ----------- --------- ---------- ---------- Balance, December 31, 2002 $3,000 $1,088,327 $ 498,083 $3,354,841 $4,944,251 ====== ========== ========= ========== ==========
See accompanying notes to consolidated financial statements. IDS Life Insurance Company -------------------------------------------------------------------------------
Consolidated Statements of Cash Flows Years ended December 31, (In thousands) 2002 2001 2000 Cash flows from operating activities Net income (loss) $ 382,181 $ (65,151) $ 585,637 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Cumulative effect of accounting change, net of tax -- 21,416 -- Policy loans, excluding universal life-type insurance: Issuance (35,345) (43,687) (61,313) Repayment 49,256 54,004 56,088 Change in amounts recoverable from reinsurers (104,344) (112,686) (89,312) Change in other accounts receivable (9,896) (4,025) 6,254 Change in accrued investment income (5,139) 56,729 8,521 Change in deferred policy acquisition costs, net (277,947) (175,723) (291,634) Change in liabilities for future policy benefits for traditional life, disability income and long-term care insurance 245,275 223,177 206,377 Change in policy claims and other policyholder's funds 13,521 19,812 27,467 Deferred income tax provision (benefit) 116,995 (246,205) 37,704 Change in other liabilities 26,309 (24,509) (120,256) Amortization of premium, net 65,869 108,958 37,909 Net realized loss on investments 4,507 649,752 16,975 Policyholder and contractholder charges, non-cash (232,725) (217,496) (151,745) Other, net 13,820 (83,023) (9,279) ------- ------- ------- Net cash provided by operating activities 252,337 161,343 259,393 ------- ------- ------- Cash flows from investing activities Held-to-maturity securities: Purchases -- -- (4,487) Maturities, sinking fund payments and calls -- -- 589,742 Sales -- -- 50,067 Available-for-sale securities: Purchases (16,287,891) (9,477,740) (1,454,010) Maturities, sinking fund payments and calls 3,078,509 2,706,147 1,019,403 Sales 10,093,228 5,493,141 1,237,116 Other investments, excluding policy loans: Purchases (543,843) (442,876) (706,082) Sales 509,588 370,636 435,633 Change in amounts due from brokers 90,293 (75,492) (15,157) Change in amounts due to brokers 1,602,958 1,293,684 298,236 --------- --------- ------- Net cash (used in) provided by investing activities (1,457,158) (132,500) 1,450,461 ---------- -------- --------- Cash flows from financing activities Activities related to universal life-type insurance and investment contracts: Considerations received 4,638,111 2,088,114 1,842,026 Surrenders and other benefits (1,655,631) (2,810,401) (3,974,966) Interest credited to account balances 1,157,636 1,137,636 1,169,641 Universal life-type insurance policy loans: Issuance (80,831) (83,720) (134,107) Repayment 89,346 72,805 82,193 Capital contribution 400,000 400,000 -- Dividends paid (70,000) -- (410,000) --------- ------- ---------- Net cash provided by (used in) financing activities 4,478,631 804,434 (1,425,213) --------- ------- ---------- Net increase in cash and cash equivalents 3,273,810 833,277 284,641 Cash and cash equivalents at beginning of year 1,150,251 316,974 32,333 --------- ------- ---------- Cash and cash equivalents at end of year $ 4,424,061 $ 1,150,251 $ 316,974 ============ =========== =========== Supplemental disclosures: Income taxes paid $ -- $ -- $ 225,704 Interest on borrowings 7,906 23,688 3,299 --------- ------- ----------
See accompanying notes to consolidated financial statements. IDS Life Insurance Company ------------------------------------------------------------------------------- Notes to Consolidated Financial Statements (In thousands) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of business IDS Life Insurance Company (the Company) is a stock life insurance company organized under the laws of the State of Minnesota whose products are primarily distributed through branded financial advisors. The Company is a wholly-owned subsidiary of American Express Financial Corporation (AEFC), which is a wholly-owned subsidiary of American Express Company. The Company serves residents of all states except New York. IDS Life Insurance Company of New York is a wholly-owned subsidiary of the Company and serves New York State residents. The Company also wholly-owns American Enterprise Life Insurance Company, which issues fixed and variable annuity contracts for sale through insurance agencies and broker-dealers who may also be associated with financial institutions, such as banks. American Centurion Life Assurance Company is a wholly-owned subsidiary that offers fixed and variable annuities to American Express(R) Cardmembers and others in New York and through insurance agencies and broker-dealers who may also be associated with financial institutions, such as banks, in New York. American Partners Life Insurance Company is a wholly-owned subsidiary that offers fixed and variable annuities to American Express(R) Cardmembers and others who reside in states other than New York. The Company also wholly-owns IDS REO 1, LLC and American Express Corporation. These subsidiaries hold real estate, mortgage loans on real estate and/or affordable housing investments. The Company's principal products are deferred annuities and universal life insurance which are issued primarily to individuals. It offers single premium and flexible premium deferred annuities on both a fixed and variable dollar basis. Immediate annuities are offered as well. The Company's fixed deferred annuities guarantee a relatively low annual interest rate during the accumulation period (the time before annuity payments begin). However, the Company has the option of paying a higher rate set at its discretion. In addition, persons owning one type of annuity may have their interest calculated based on any increase in a broad-based stock market index. The Company also offers variable annuities, including the American Express Retirement Advisor Advantage(R) Variable Annuity and the American Express Retirement Advisor Select(R) Variable Annuity. Life insurance products currently offered by the Company include universal life (fixed and variable, single life and joint life), single premium life and term products. Waiver of premium and accidental death benefit riders are generally available with these life insurance products. The Company also markets disability income insurance. Although the Company discontinued marketing proprietary long-term care insurance at the end of 2002, long-term care insurance is available through a non-proprietary product distributed by an affiliate. Under the Company's variable life insurance and variable annuity products described above, the purchaser may choose among investment options that include the Company's "general account" as well as from a variety of portfolios including common stocks, bonds, managed assets and/or short- term securities. Basis of presentation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States which vary in certain respects from reporting practices prescribed or permitted by state insurance regulatory authorities (see Note 4). Certain prior year amounts have been reclassified to conform to the current year's presentation. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenue recognition Profits on fixed deferred annuities are the excess of contractholder charges and investment income earned from investment of contract considerations over interest credited to contract values, amortization of deferred acquisition costs, and other expenses. Profits on variable deferred annuities also include the excess of management and other fees over the costs of guaranteed benefits provided. Policyholder and contractholder charges include policy fees and surrender charges. Management and other fees include investment management fees from underlying proprietary mutual funds, certain fee revenues from underlying nonproprietary mutual funds and mortality and expense risk fees from the variable annuity separate accounts. IDS Life Insurance Company ------------------------------------------------------------------------------- Profits on fixed universal life insurance are the excess of contractholder charges and investment income earned from investment of contract considerations over interest credited to contract values, death and other benefits paid in excess of contract values, amortization of deferred acquisition costs, and other expenses. Profits on variable universal life insurance also include management and other fees. Policyholder and contractholder charges include the monthly cost of insurance charges, issue and administrative fees and surrender charges. These charges also include the minimum death benefit guarantee fees received from the variable life insurance separate accounts. Management and other fees include investment management fees from underlying proprietary mutual funds, certain fee revenues from underlying nonproprietary mutual funds and mortality and expense risk fees from the variable life insurance separate accounts. Premiums on traditional life, disability income and long-term care insurance policies are recognized as revenue when due, and related benefits and expenses are associated with premium revenue in a manner that results in recognition of profits over the lives of the insurance policies. This association is accomplished by means of the provision for future policy benefits and the deferral and subsequent amortization of policy acquisition costs. Investments -- Fixed maturity and equity securities All fixed maturity securities and marketable equity securities are classified as available-for-sale and carried at fair value. Unrealized gains and losses on securities classified as available-for-sale are carried as a separate component of accumulated other comprehensive income (loss), net of the related deferred policy acquisition costs and income taxes. Gains and losses are recognized in the results of operations upon disposition of the securities using the specific identification method. In addition, losses are also recognized when management determines that a decline in a security's fair value is other-than-temporary, which requires judgment regarding the amount and timing of recovery. Indicators of other-than-temporary impairment for fixed maturity securities include, but are not limited to, issuer downgrade, default, or bankruptcy. The Company also considers the extent to which cost exceeds fair value, the duration of time of that decline, and management's judgment about the issuer's current and prospective financial condition. The charges are reflected in net realized loss on investments within the Consolidated Statements of Income. Fair value of fixed maturity and equity securities is generally based on quoted market prices. However, the Company's investment portfolio also contains structured investments of various asset quality, including collateralized debt obligations (CDOs) and secured loan trusts (backed by high-yield bonds and bank loans), which are not readily marketable. As a result, the carrying values of these structured investments are based on estimated cash flow projections which require a significant degree of management judgment as to default and recovery rates of the underlying investments and, as such, are subject to change. The Company's CDO investments are accounted for in accordance with Emerging Issues Task Force (EITF) Issue 99-20 "Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets." The Company's secured loan trusts are accounted for in accordance with EITF Issue 96-12 "Recognition of Interest Income and Balance Sheet Classification of Structured Notes." Net investment income, which primarily consists of interest earned on fixed maturity securities, is generally accrued as earned using the effective interest method, which makes an adjustment of the yield for security premiums, discounts and anticipated prepayments on mortgage-backed securities. Prepayment estimates are based on information received from brokers who deal in mortgage-backed securities. Investments -- Mortgage loans on real estate Mortgage loans on real estate reflect principal amounts outstanding less reserves for losses. The estimated fair value of the mortgage loans is determined by discounted cash flow analyses using mortgage interest rates currently offered for mortgages of similar maturities. The reserve for losses is measured as the excess of the loan's recorded investment over its present value of expected principal and interest payments discounted at the loan's effective interest rate or the fair value of collateral. Additionally, the level of the reserve for losses considers other factors, including historical experience and current economic and political conditions. Management regularly evaluates the adequacy of the reserve for mortgage loan losses and believes it is adequate to absorb estimated losses in the portfolio. The Company generally stops accruing interest on mortgage loans for which interest payments are delinquent more than three months. Based on management's judgment as to the ultimate collectibility of principal, interest payments received are either recognized as income or applied to the recorded investment in the loan. Investments -- Policy loans Policy loans are carried at the aggregate of the unpaid loan balances, which do not exceed the cash surrender values of the related policies. IDS Life Insurance Company ------------------------------------------------------------------------------- Investments -- Other investments Included in Other investments are affordable housing investments, trading securities, syndicated loans and real estate. Affordable housing investments are carried at amortized cost as the Company has no influence over the operating or financial policies of the general partner. Trading securities are held at fair market value with changes in value recognized in the Consolidated Statements of Income within Net investment income. Syndicated loans reflect principal amounts outstanding less reserves for losses and real estate is carried at its estimated fair value. Cash and cash equivalents The Company considers investments with a maturity at the date of their acquisition of three months or less to be cash equivalents. These securities are carried principally at amortized cost, which approximates fair value. Deferred policy acquisition costs The costs of acquiring new business, including for example, direct sales commissions, related sales incentive bonuses and awards, underwriting costs, policy issue costs and other related costs, have been deferred on the sale of insurance and annuity contracts. The deferred acquisition costs (DAC) for universal life and variable universal life insurance and certain installment annuities are amortized as a percentage of the estimated gross profits expected to be realized on the policies. DAC for other annuities are amortized using the interest method. For traditional life, disability income and long-term care insurance policies, the costs are amortized in proportion to premium revenue. Amortization of DAC requires the use of certain assumptions including interest margins, mortality rates, persistency rates, maintenance expense levels and customer asset value growth rates for variable products. The customer asset value growth rate is the rate at which contract values are assumed to appreciate in the future. This rate is net of asset fees, and anticipates a blend of equity and fixed income investments. Management routinely monitors a wide variety of trends in the business, including comparisons of actual and assumed experience. Management reviews and, where appropriate, adjusts its assumptions with respect to customer asset value growth rates on a quarterly basis. Management monitors other principal DAC assumptions, such as persistency rates, mortality rate, interest margin and maintenance expense level assumptions each quarter. Unless management identifies a material deviation over the course of the quarterly monitoring, management reviews and updates these DAC assumptions annually in the third quarter of each year. When assumptions are changed, the percentage of estimated gross profits or portion of interest margins used to amortize DAC may also change. A change in the required amortization percentage is applied retrospectively; an increase in amortization percentage will result in an acceleration of DAC amortization while a decrease in amortization percentage will result in a deceleration of DAC amortization. The impact on results of operations of changing assumptions with respect to the amortization of DAC can be either positive or negative in any particular period, and is reflected in the period that such changes are made. These adjustments are collectively referred to as unlocking adjustments. Unlocking adjustments resulted in net increases in amortization of $40,000 in 2002 and $33,600 in 2001, with a net decrease in amortization of $12,300 in 2000. Guaranteed minimum death benefits The majority of the variable annuity contracts offered by the Company contain guaranteed minimum death benefit (GMDB) provisions. At time of issue, these contracts typically guarantee that the death benefit payable will not be less than the amount invested, regardless of the performance of the customer's account. Most contracts also provide for some type of periodic adjustment of the guaranteed amount based on the change in value of the contract. A large portion of the Company's contracts containing a GMDB provision adjust once every six years. The periodic adjustment of these contracts can either increase or decrease the guaranteed amount, though not below the amount invested, adjusted for withdrawals. When market values of the customer's accounts decline, the death benefit payable on a contract with a GMDB may exceed the accumulated contract value. Currently, the amount paid in excess of contract value is expensed when payable. Amounts expensed in 2002, 2001 and 2000 were $37,361, $16,202 and $835, respectively. Liabilities for future policy benefits Liabilities for fixed and variable universal life insurance and fixed and variable deferred annuities are accumulation values. Liabilities for equity indexed deferred annuities issued before 1999 are equal to the present value of guaranteed benefits and the intrinsic value of index-based benefits. Liabilities for equity indexed deferred annuities issued in 1999 or later are equal to the accumulation of host contract values covering guaranteed benefits and the market value of embedded equity options. Liabilities for fixed annuities in a benefit status are based on established industry mortality tables and interest rates ranging from 5% to 9.5%, depending on year of issue, with an average rate of approximately 6.5%. IDS Life Insurance Company ------------------------------------------------------------------------------- Liabilities for future benefits on traditional life insurance, principally term and whole life insurance, are based on the net level premium method, using anticipated mortality, policy persistency and interest earning rates. Anticipated mortality rates are based on established industry mortality tables, with modifications based on Company experience. Anticipated policy persistency rates vary by policy form, issue age and policy duration with persistency on level term and cash value plans generally anticipated to be better than persistency on yearly renewable term insurance plans. Anticipated interest rates range from 4% to 10%, depending on policy form, issue year and policy duration. Liabilities for future disability income and long-term care policy benefits include both policy reserves and claim reserves. Policy reserves are based on the net level premium method, using anticipated morbidity, mortality, policy persistency and interest earning rates. Anticipated morbidity and mortality rates are based on established industry morbidity and mortality tables. Anticipated policy persistency rates vary by policy form, issue age, policy duration and, for disability income policies, occupation class. Anticipated interest rates for disability income and long-term care policy reserves are 3% to 9.5% at policy issue and grade to ultimate rates of 5% to 7% over 5 to 10 years. Claim reserves are calculated based on claim continuance tables and anticipated interest earnings. Anticipated claim continuance rates are based on established industry tables. Anticipated interest rates for claim reserves for both disability income and long-term care range from 5% to 8%. Liabilities for reported and unpaid life insurance claims are equal to the death benefits payable. For disability income and long-term care claims, unpaid claims liabilities are equal to benefit amounts due and accrued. Liabilities for incurred but not reported claims are estimated based on periodic analysis of the actual reported claim lag. Where applicable, amounts recoverable from reinsurers are separately recorded as receivables. For life insurance, no claim adjustment expense reserve is held. The claim adjustment expense reserves for disability income and long-term care are based on the claim reserves. The Company does not issue participating insurance contracts and has no short-duration life insurance liabilities. Reinsurance Reinsurance premiums and benefits paid or provided are accounted for on a basis consistent with that used in accounting for original policies issued and with the terms of the reinsurance contracts. The maximum amount of life insurance risk retained by the Company is $750 on any policy insuring a single life and $1,500 on any policy insuring a joint-life combination. The Company generally retains 10% of the mortality risk on new life insurance policies. Risk not retained is reinsured with other life insurance companies. Risk on universal life and variable universal life policies is reinsured on a yearly renewable term basis. Risk on term insurance and long-term care policies is reinsured on a coinsurance basis. The Company retains all accidental death benefit, disability income and waiver of premium risk. Federal income taxes The Company's taxable income is included in the consolidated federal income tax return of American Express Company. The Company provides for income taxes on a separate return basis, except that, under an agreement between AEFC and American Express Company, tax benefit is recognized for losses to the extent they can be used on the consolidated tax return. It is the policy of AEFC and its subsidiaries that AEFC will reimburse subsidiaries for all tax benefits. Separate account business The separate account assets and liabilities represent funds held for the exclusive benefit of the variable annuity and variable life insurance contract owners. The Company receives investment management fees from the proprietary mutual funds used as investment options for variable annuities and variable life insurance. The Company receives mortality and expense risk fees from the separate accounts. The Company makes contractual mortality assurances to the variable annuity contract owners that the net assets of the separate accounts will not be affected by future variations in the actual life expectancy experience of the annuitants and beneficiaries from the mortality assumptions implicit in the annuity contracts. The Company makes periodic fund transfers to, or withdrawals from, the separate account assets for such actuarial adjustments for variable annuities that are in the benefit payment period. The Company also guarantees that the rates at which administrative fees are deducted from contract funds will not exceed contractual maximums. For variable life insurance, the Company guarantees that the rates at which insurance charges and administrative fees are deducted from contract funds will not exceed contractual maximums. The Company also guarantees that the death benefit will continue to be payable at the initial level regardless of investment performance so long as minimum premium payments are made. IDS Life Insurance Company ------------------------------------------------------------------------------- Accounting developments In July 2000, the Financial Accounting Standards Board's (FASB's) Emerging Issues Task Force (EITF) issued a consensus on Issue 99-20, "Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets." The Company adopted the consensus as of January 1, 2001. Issue 99-20 prescribes procedures for recording interest income and measuring impairment on retained and purchased beneficial interests. The consensus primarily affects the Company's CDO investments. Adoption of the consensus required the Company to adjust the carrying amount of these investments downward by $21,416, net of tax, which is reflected as a cumulative effect of accounting change in the Consolidated Statement of Income. Effective January 1, 2001, the Company adopted Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended (SFAS No. 133), which requires an entity to recognize all derivatives as either assets or liabilities on the balance sheet and measure those instruments at fair value. Changes in the fair value of a derivative are recorded in earnings or directly to other comprehensive income, depending on the instrument's designated use. The adoption of SFAS No. 133 resulted in a cumulative after-tax reduction to other comprehensive income of $1,162. The cumulative impact to earnings was not significant. See Note 8 for further discussion of the Company's derivative and hedging activities. SFAS No. 133 also provided a one-time opportunity to reclassify held-to-maturity security investments to available-for-sale without tainting the remaining securities in the held-to-maturity portfolio. The Company elected to take the opportunity in 2001 to reclass all its held-to-maturity investments to available-for-sale. The Company adopted SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities," which superseded SFAS No. 125. The Statement was effective for transfers and servicing of financial assets and extinguishments of liabilities occurring after March 31, 2001. The Statement was effective for recognition and reclassification of collateral and for disclosures relating to securitization transactions and collateral for fiscal years ending after December 15, 2000. The impact on the Company's financial position or results of operations of adopting the Statement was not significant. In January 2003, the FASB issued Interpretation No. 46, "Consolidation of Variable Interest Entities" (FIN 46), which addresses consolidation by business enterprises of variable interest entities (VIEs). The accounting provisions and expanded disclosure requirements for VIEs existing at December 31, 2002, are fully effective for reporting periods beginning after June 15, 2003. An entity shall be subject to consolidation according to the provisions of FIN 46, if, by design, either (i) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support from other parties, or (ii) as a group, the holders of the equity investment at risk lack: (a) direct or indirect ability to make decisions about an entity's activities; (b) the obligation to absorb the expected losses of the entity if they occur; or (c) the right to receive the expected residual return of the entity if they occur. In general, FIN 46 will require a VIE to be consolidated when an enterprise has a variable interest that will absorb a majority of the VIE's expected losses or receive a majority of the VIE's expected residual return. It is likely that the Company will consolidate or disclose information about VIEs when FIN 46 becomes effective in the third quarter of 2003. The entities primarily impacted by FIN 46 relate to structured investments, including CDOs and secured loan trusts (SLTs), which are owned by the Company. The application of FIN 46 for CDOs and SLTs will have no effect on the cash flows of the Company. The CDO entities contain debt issued to investors, which are non-recourse to the Company and are solely supported by portfolios of high-yield bonds and loans. The Company often invests in the residual and rated debt tranches of the CDO structures that are either managed by a related party or a third-party. With regards to those CDOs in which the Company owns a residual tranche and which a related party manages, the portfolios of high-yield bonds and loans have a fair value at December 31, 2002 of approximately $2.0 billion for the benefit of the $2.7 billion in CDO debt investors. Substantially all of the Company's interest in the rated debt tranches along with rated tranches owned by AEFC were placed in a securitization trust described in Note 2. The SLTs provide returns to investors primarily based on the performance of an underlying portfolio of up to $3.3 billion in high-yield loans. Currently, the underlying portfolio consists of $2.9 billion in high-yield loans with a market value of $2.6 billion, which are managed by a related party. While the potential consolidation of these entities may impact the results of operations at adoption and for each reporting period thereafter, the Company's maximum exposure to economic loss as a result of its investment in these entities is represented by the carrying values at December 31, 2002 because any further reduction in the value of the assets will be absorbed by the non-recourse debt or other unrelated entities. The CDO residual tranches have an adjusted cost basis of $13,363 and the SLTs have an adjusted cost basis of $656,565. The Company continues to evaluate other relationships and interests in entities that may be considered VIEs, including affordable housing investments. The impact of adopting FIN 46 on the Consolidated Financial Statements is still being reviewed. IDS Life Insurance Company ------------------------------------------------------------------------------- 2. INVESTMENTS Fixed maturity and equity securities
The following is a summary of securities available-for-sale at December 31, 2002: Gross Gross Amortized unrealized unrealized Fair cost gains losses value Fixed maturities: U.S. Government agency obligations $ 84,075 $ 12,015 $ 687 $ 95,403 State and municipal obligations 29,202 2,522 -- 31,724 Corporate bonds and obligations 9,614,296 611,060 116,345 10,109,011 Mortgage and other asset-backed securities 12,145,797 393,342 10,067 12,529,072 Structured investments 1,306,245 2,112 59,101 1,249,256 Foreign government bonds and obligations 29,611 8,027 -- 37,638 ----------- ---------- -------- ----------- Total fixed maturity securities $23,209,226 $1,029,078 $186,200 $24,052,104 =========== ========== ======== =========== Common stocks $ 19 $ 2 $ -- $ 21 =========== ========== ======== ===========
The amortized cost and fair value of fixed maturity securities at December 31, 2002 by contractual maturity are as follows: Amortized Fair cost value Due within one year $ 768,066 $ 779,833 Due from one to five years 2,740,513 2,887,899 Due from five to ten years 5,865,084 6,165,165 Due in more than ten years 1,689,766 1,690,135 Mortgage and other asset-backed securities 12,145,797 12,529,072 ---------- ---------- Total $23,209,226 $24,052,104 =========== =========== The timing of actual receipts may differ from contractual maturities because issuers may have the right to call or prepay obligations.
The following is a summary of securities available-for-sale at December 31, 2001: Gross Gross Amortized unrealized unrealized Fair cost gains losses value Fixed maturities: U.S. Government agency obligations $ 31,074 $ 2,190 $ 56 $ 33,208 State and municipal obligations 7,826 149 -- 7,975 Corporate bonds and obligations 10,281,693 272,539 113,061 10,441,171 Mortgage and other asset-backed securities 8,292,576 103,109 32,801 8,362,884 Structured investments 1,377,195 3,793 105,304 1,275,684 Foreign government bonds and obligations 31,708 4,507 -- 36,215 ----------- -------- -------- ----------- Total fixed maturity securities $20,022,072 $386,287 $251,222 $20,157,137 ----------- -------- -------- ----------- Common stocks $ 805 $ 899 $ -- $ 1,704 =========== ======== ========= ===========
Pursuant to the adoption of SFAS No. 133 the Company reclassified all held-to-maturity securities with a carrying value of $6,463,613 and net unrealized gains of $8,185 to available-for-sale as of January 1, 2001. At December 31, 2002 and 2001, bonds carried at $14,523 and $14,639, respectively, were on deposit with various states as required by law. IDS Life Insurance Company ------------------------------------------------------------------------------- At December 31, 2002, fixed maturity securities comprised approximately 84 percent of the Company's total investments. These securities are rated by Moody's and Standard & Poor's (S&P), except for approximately $1.4 billion of securities which are rated by AEFC's internal analysts using criteria similar to Moody's and S&P. Ratings are presented using S&P's convention and if the two agencies' ratings differ, the lower rating is used. A summary of fixed maturity securities, at fair value, by rating on December 31, is as follows: Rating 2002 2001 AAA 53% 45% AA 1 1 A 14 15 BBB 25 34 Below investment grade 7 5 --- --- Total 100% 100% === === At December 31, 2002, approximately 93% of the securities rated AAA are GNMA, FNMA and FHLMC mortgage-backed securities. No holdings of any other issuer were greater than ten percent of stockholder's equity. Available-for-sale securities were sold during 2002 with proceeds of $10,093,228 and gross realized gains and losses of $297,477 and $135,824, respectively. Available-for-sale securities were sold during 2001 with proceeds of $5,493,141 and gross realized gains and losses of $116,565 and $390,732, respectively. Available-for-sale securities were sold during 2000 with proceeds of $1,237,116 and gross realized gains and losses of $25,101 and $21,147, respectively. During the years ended December 31, 2002, 2001, and 2000, the Company also recognized losses of $145,524, $348,730, and $38,816 respectively due to other-than-temporary impairments on structured investments and corporate debt securities. These amounts are reflected in the net realized loss on investments in the Consolidated Statements of Income. The 2001 realized losses and other-than temporary impairments include the effect of the write-downs and sale of high-yield securities discussed below. The net unrealized gain on available-for-sale securities as of December 31, 2002 and 2001, was $842,880 and $135,964, respectively, with the $706,916 change, net of taxes and deferred policy acquisition costs, reflected as a separate component in accumulated other comprehensive income for the year ended December 31, 2002. For the years ended December 31, 2001 and 2000 the change in net unrealized losses on available-for-sale securities was a decrease of $667,340 and $122,196, respectively. During 2001, the Company recorded pretax losses of $828,175 to recognize the impact of higher default rate assumptions on certain structured investments; to write down lower rated securities (most of which were sold during 2001) in connection with Company's decision to lower its risk profile by reducing the level of its high-yield portfolio, allocating holdings toward stronger credits, and reducing the concentration of exposure to individual companies and industry sectors; to write down certain other investments; and, to adopt EITF Issue 99-20, as previously discussed. Within the Consolidated Statements of Income, $623,958 of these losses are included in Net realized losses on investments and $171,269 are included in Net investment income, with the remaining losses recorded as a cumulative effect of accounting change. During 2001, the Company placed a majority of its rated CDO securities and related accrued interest, (collectively referred to as transferred assets), having an aggregate book value of $675,347, into a securitization trust. In return, the Company received $89,535 in cash relating to sales to unaffiliated investors and retained interests with allocated book amounts aggregating $585,812. As of December 31, 2002, the retained interests had a carrying value of approximately $562,000, of which approximately $388,000 is considered investment grade. The book amount is determined by allocating the previous carrying value of the transferred assets between assets sold and the retained interests based on their relative fair values. Fair values are based on the estimated present value of future cash flows. The retained interests are accounted for in accordance with EITF Issue 99-20. Fair values of fixed maturity and equity securities represent quoted market prices and estimated values when quoted prices are not available. Estimated values are determined by established procedures involving, among other things, review of market indices, price levels of current offerings of comparable issues, price estimates, estimated future cash flows and market data from independent brokers. IDS Life Insurance Company ------------------------------------------------------------------------------- Mortgage loans on real estate At December 31, 2002, approximately 12% of the Company's investments were mortgage loans on real estate. Concentration of credit risk by region of the United States and by type of real estate are as follows:
December 31, 2002 December 31, 2001 On balance Funding On balance Funding Region sheet commitments sheet commitments East North Central $ 611,886 $ -- $ 670,387 $ 1,873 West North Central 493,310 25,500 549,015 -- South Atlantic 765,443 2,800 815,837 9,490 Middle Atlantic 318,699 19,100 352,821 9,363 New England 227,150 5,800 274,486 8,700 Pacific 355,622 5,250 355,945 14,618 West South Central 210,435 1,000 214,000 600 East South Central 63,859 -- 55,798 -- Mountain 406,459 -- 413,053 27 ---------- ------- ---------- ------- 3,452,863 59,450 3,701,342 44,671 Less reserves for losses 35,212 -- 20,948 -- ---------- ------- ---------- ------- Total $3,417,651 $59,450 $3,680,394 $44,671 ========== ======= ========== ======= December 31, 2002 December 31, 2001 On balance Funding On balance Funding Property type sheet commitments sheet commitments Department/retail stores $ 991,984 $20,722 $1,117,195 $13,200 Apartments 622,185 -- 694,214 11,531 Office buildings 1,178,434 25,628 1,203,090 7,650 Industrial buildings 344,604 13,100 333,713 2,263 Hotels/motels 102,184 -- 108,019 -- Medical buildings 95,189 -- 106,927 6,000 Nursing/retirement homes 35,873 -- 39,590 -- Mixed use 54,512 -- 86,972 27 Other 27,898 -- 11,622 4,000 ---------- ------- ---------- ------- 3,452,863 59,450 3,701,342 44,671 Less reserves for losses 35,212 -- 20,948 -- ---------- ------- ---------- ------- Total $3,417,651 $59,450 $3,680,394 $44,671 ========== ======= ========== =======
Mortgage loan fundings are restricted by state insurance regulatory authorities to 80 percent or less of the market value of the real estate at the time of origination of the loan. The Company holds the mortgage document, which gives it the right to take possession of the property if the borrower fails to perform according to the terms of the agreement. Commitments to fund mortgages are made in the ordinary course of business. The fair value of the mortgage commitments is $nil. At December 31, 2002, 2001 and 2000, the Company's investment in impaired loans was $33,130, $39,601 and $24,999, respectively, with related reserves of $9,100, $7,225 and $4,350, respectively. During 2002, 2001 and 2000, the average recorded investment in impaired loans was $36,583, $24,498 and $27,063, respectively. The Company recognized $1,090, $1,285 and $1,033 of interest income related to impaired loans for the years ended December 31, 2002, 2001 and 2000, respectively. IDS Life Insurance Company ------------------------------------------------------------------------------- The following table presents changes in the reserves for mortgage loan losses: 2002 2001 2000 Balance, January 1 $20,948 $11,489 $ 28,283 Provision for mortgage loan losses 14,264 14,959 (14,894) Loan payoffs -- -- (1,200) Foreclosures and write-offs -- (5,500) (700) ------- ------- -------- Balance, December 31 $35,212 $20,948 $ 11,489 ======= ======= ======== Sources of investment income and realized losses on investments Net investment income for the years ended December 31 is summarized as follows: 2002 2001 2000 Income on fixed maturities $1,331,547 $1,276,966 $1,473,560 Income on mortgage loans 274,524 290,608 286,611 Other (15,642) (41,927) 9,834 ---------- ---------- ---------- 1,590,429 1,525,647 1,770,005 Less investment expenses 28,573 39,959 39,400 ---------- ---------- ---------- Total $1,561,856 $1,485,688 $1,730,605 ========== ========== ========== Net realized losses on investments for the years ended December 31 is summarized as follows: 2002 2001 2000 Fixed maturities $ 16,129 $(622,897) $(34,862) Mortgage loans (15,586) (17,834) 16,794 Other investments (5,050) (9,321) 1,093 -------- --------- -------- Total $ (4,507) $(649,752) $(16,975) ======== ========= ======== 3. INCOME TAXES The Company qualifies as a life insurance company for federal income tax purposes. As such, the Company is subject to the Internal Revenue Code provisions applicable to life insurance companies.
The income tax expense (benefit) for the years ended December 31 consists of the following: 2002 2001 2000 Federal income taxes Current $(30,648) $ 88,121 $176,397 Deferred 116,996 (234,673) 37,704 -------- --------- -------- 86,348 (146,552) 214,101 State income taxes -- current 1,478 1,330 7,526 -------- --------- -------- Income tax expense (benefit) before cumulative effect of accounting change 87,826 (145,222) 221,627 Cumulative effect of accounting change income tax benefit -- (11,532) -- -------- --------- -------- Income tax expense (benefit) $ 87,826 $(156,754) $221,627 ======== ========= ========
Income tax expense (benefit) before the cumulative effect of accounting change differs from that computed by using the federal statutory rate of 35%. The principal causes of the difference in each year are shown below:
2002 2001 2000 Provision Rate Provision Rate Provision Rate Federal income taxes based on the statutory rate $164,502 35.0% $ (66,136) (35.0)% $282,542 35.0% Tax-exempt interest and dividend income (5,260) (1.1) (4,663) (2.5) (3,788) (0.5) State taxes, net of federal benefit 961 0.2 865 0.4 4,892 0.6 Affordable housing credits (70,000) (14.9) (73,200) (38.7) (54,569) (6.8) Other, net (2,377) (0.5) (2,088) (1.1) (7,450) (0.8) -------- ---- --------- ----- -------- ---- Total income taxes $ 87,826 18.7% $(145,222) (76.9)% $221,627 27.5% ======== ==== ========= ===== ======== ====
A portion of life insurance company income earned prior to 1984 was not subject to current taxation but was accumulated, for tax purposes, in a "policyholders' surplus account." At December 31, 2002, the Company had a policyholders' surplus account balance of $20,114. The policyholders' surplus account is only taxable if dividends to the stockholder exceed the stockholder's surplus account or if the Company is liquidated. Deferred income taxes of $7,040 have not been established because no distributions of such amounts are contemplated. IDS Life Insurance Company ------------------------------------------------------------------------------- Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred income tax assets and liabilities as of December 31 are as follows: 2002 2001 Deferred income tax assets: Policy reserves $ 683,144 $ 705,637 Other investments 319,829 333,857 Other 29,789 24,640 --------- --------- Total deferred income tax assets 1,032,762 1,064,134 --------- --------- Deferred income tax liabilities: Deferred policy acquisition costs 929,751 861,892 Net unrealized gain -- available-for-sale securities 267,787 45,934 Other 17,283 -- --------- --------- Total deferred income tax liabilities 1,214,821 907,826 --------- --------- Net deferred income tax (liability) asset $ (182,059) $ 156,308 ========== ========== The Company is required to establish a valuation allowance for any portion of the deferred income tax assets that management believes will not be realized. In the opinion of management, it is more likely than not that the Company will realize the benefit of the deferred income tax assets and, therefore, no such valuation allowance has been established. 4. STOCKHOLDER'S EQUITY Retained earnings available for distribution as dividends to AEFC are limited to the Company's surplus as determined in accordance with accounting practices prescribed by state insurance regulatory authorities. The Company's statutory unassigned surplus aggregated $1,323,324 and $1,262,335 as of December 31, 2002 and 2001, respectively (see Note 3 with respect to the income tax effect of certain distributions). In addition, any dividend distributions in 2003 in excess of $240,838 would require approval of the Department of Commerce of the State of Minnesota. Statutory net income (loss) for the years ended December 31 and capital and surplus as of December 31 are summarized as follows: 2002 2001 2000 Statutory net income (loss) $ 159,794 $ (317,973) $ 344,973 Statutory capital and surplus 2,408,379 1,947,350 1,778,306 --------- --------- --------- The National Association of Insurance Commissioners (NAIC) revised the Accounting Practices and Procedures Manual in a process referred to as Codification. The revised regulations took effect January 1, 2001. The domiciliary states of the Company and its insurance subsidiaries adopted the provisions of the revised manual, with the exception of certain provisions not adopted by its subsidiaries organized in the state of New York. The revised manual changed, to some extent, prescribed statutory accounting practices and resulted in changes to the accounting practices that the Company uses to prepare its statutory-basis financial statements. The impact of implementing these changes was a decrease of $39,997 to the Company's statutory-basis capital and surplus as of January 1, 2001. Effective January 1, 2002 the Company's subsidiaries organized in the state of New York adopted additional provisions of the manual which resulted in an increase of $5,597 to the Company's statutory-basis capital and surplus as of January 1, 2002. 5. RELATED PARTY TRANSACTIONS The Company loans funds to AEFC under a collateral loan agreement. The balance of the loan was $nil at December 31, 2002 and 2001. This loan can be increased to a maximum of $75,000 and pays interest at a rate equal to the preceding month's effective new money rate for the Company's permanent investments. Interest income on related party loans totaled $nil in 2002, 2001 and 2000. The Company participates in the American Express Company Retirement Plan which covers all permanent employees age 21 and over who have met certain employment requirements. Company contributions to the plan are based on participants' age, years of service and total compensation for the year. Funding of retirement costs for this plan complies with the applicable minimum funding requirements specified by ERISA. The Company's share of the total net periodic pension cost was $294, $263 and $250 in 2002, 2001 and 2000, respectively. The Company also participates in defined contribution pension plans of American Express Company which cover all employees who have met certain employment requirements. Company contributions to the plans are a percent of either each employee's eligible compensation or basic contributions. Costs of these plans charged to operations in 2002, 2001 and 2000 were $1,411, $662 and $1,707, respectively. IDS Life Insurance Company ------------------------------------------------------------------------------- The Company participates in defined benefit health care plans of AEFC that provide health care and life insurance benefits to retired employees and retired financial advisors. The plans include participant contributions and service related eligibility requirements. Upon retirement, such employees are considered to have been employees of AEFC. AEFC expenses these benefits and allocates the expenses to its subsidiaries. The cost of these plans charged to operations in 2002, 2001 and 2000 was $1,835, $1,011 and $1,136, respectively. Charges by AEFC for use of joint facilities, technology support, marketing services and other services aggregated $526,081, $505,526 and $582,836 for 2002, 2001 and 2000, respectively. Certain of these costs are included in DAC. Expenses allocated to the Company may not be reflective of expenses that would have been incurred by the Company on a stand-alone basis. Included in other liabilities at December 31, 2002 and 2001 are $55,602 and $68,919, respectively, payable to AEFC for federal income taxes. 6. LINES OF CREDIT The Company has available lines of credit with AEFC aggregating $200,000 ($100,000 committed and $100,000 uncommitted). The interest rate for any borrowings is established by reference to various indices plus 20 to 45 basis points, depending on the term. There were no borrowings outstanding under this agreement at December 31, 2002 and 2001. 7. COMMITMENTS AND CONTINGENCIES At December 31, 2002, 2001 and 2000, traditional life and universal life-type insurance in force aggregated $119,173,734, $108,255,014 and $98,060,472 respectively, of which $38,008,734, $25,986,706 and $17,429,851 was reinsured at the respective year ends. The Company also reinsures a portion of the risks assumed under long-term care policies. Under all reinsurance agreements, premiums ceded to reinsurers amounted to $129,345, $114,534 and $89,506 and reinsurance recovered from reinsurers amounted to $60,567, $43,388, and $32,500 for the years ended December 31, 2002, 2001 and 2000, respectively. Reinsurance contracts do not relieve the Company from its primary obligation to policyholders. At December 31, 2002, the Company had no commitments to purchase investments other than mortgage loan fundings (see Note 2). The Company is a party to litigation and arbitration proceedings in the ordinary course of its business, none of which is expected to have a material adverse affect on the Company. In recent years, life insurance companies have been named as defendants in lawsuits, including class action lawsuits, alleging improper life insurance sales practices, alleged agent misconduct, failure to properly supervise agents and other matters relating to life insurance policies and annuity contracts. The Company and its affiliates were named defendants in three purported class-action lawsuits alleging improper insurance and annuity sales practices including improper replacement of existing annuity contracts and insurance policies, improper use of annuities to fund tax deferred contributory retirement plans, alleged agent misconduct, failure to properly supervise agents and other matters relating to life insurance policies and annuity contracts. A fourth lawsuit was filed against the Company and its affiliates in federal court. In January 2000, AEFC reached an agreement in principle to settle the four class action lawsuits described above. It is expected the settlement will provide $215,000 of benefits to more than two million participants in exchange for a release by class members of all insurance and annuity state and federal market conduct claims dating back to 1985. The settlement received court approval. Implementation of the settlement commenced October 15, 2001 and is substantially complete. Claim review payments have been made. Numerous individuals opted out of the settlement described above and therefore did not release their claims against AEFC and its subsidiaries. Some of these class members who opted out were represented by counsel and presented separate claims to AEFC and the Company. Most of their claims have been settled. The outcome of any litigation or threatened litigation cannot be predicted with any certainty. However, in the aggregate, the Company does not consider any lawsuits in which it is named as a defendant to have a material impact on the Company's financial position or operating results. The IRS routinely examines the Company's federal income tax returns and is currently conducting an audit for the 1993 through 1996 tax years. Management does not believe there will be a material adverse effect on the Company's consolidated financial position as a result of these audits. IDS Life Insurance Company ------------------------------------------------------------------------------- 8. DERIVATIVE FINANCIAL INSTRUMENTS The Company maintains an overall risk management strategy that incorporates the use of derivative instruments to minimize significant unplanned fluctuations in earnings caused by interest rate and equity market volatility. The Company does not enter into derivative instruments for speculative purposes. As prescribed by SFAS No. 133, derivative instruments that are designated and qualify as hedging instruments are classified as cash flow hedges, fair value hedges, or hedges of a net investment in a foreign operation, based upon the exposure being hedged. The Company currently has economic hedges that either do not qualify or are not designated for hedge accounting treatment under SFAS No. 133. The Company enters into interest rate swaps, caps and floors to manage the Company's interest rate risk and options and futures to manage equity-based risk. The values of derivative financial instruments are based on market values, dealer quotes or pricing models. Market risk is the possibility that the value of the derivative financial instruments will change due to fluctuations in a factor from which the instrument derives its value, primarily an interest rate or equity market index. The Company is not impacted by market risk related to derivatives held for non- trading purposes beyond that inherent in cash market transactions. Derivatives held for purposes other than trading are largely used to manage risk and, therefore, the cash flow and income effects of the derivatives are inverse to the effects of the underlying transactions. Credit risk is the possibility that the counterparty will not fulfill the terms of the contract. The Company monitors credit risk related to derivative financial instruments through established approval procedures, including setting concentration limits by counterparty, and requiring collateral, where appropriate. A vast majority of the Company's counterparties are rated A or better by Moody's and Standard & Poor's. Interest rate caps, swaps and floors are primarily used to protect the margin between interest rates earned on investments and the interest rates credited to related annuity contract holders. No interest rate swaps or floors were outstanding as of December 31, 2002. The interest rate caps expire in January 2003. The fair value of the interest rate caps is included in Other assets. Changes in the value of the interest rate caps are included in Other insurance and operating expenses. A purchased (written) option conveys the right (obligation) to buy or sell an instrument at a fixed price for a set period of time or on a specific date. The Company writes and purchases index options to manage the risks related to annuity products that pay interest based upon the relative change in a major stock market index between the beginning and end of the product's term (equity-indexed annuities). The Company views this strategy as a prudent management of equity market sensitivity, such that earnings are not exposed to undue risk presented by changes in equity market levels. The equity indexed annuities contain embedded derivatives, essentially the equity based return of the product, which must be separated from the host contract and accounted for as derivative instruments per SFAS No. 133. As a result of fluctuations in equity markets, and the corresponding changes in value of the embedded derivatives, the amount of interest credited incurred by the Company related to the annuity product will positively or negatively impact reported earnings. The purchased and written options are carried at fair value and included in Other assets and Other liabilities, respectively. The fair value of the embedded options are included in Future policy benefits for fixed annuities. The changes in fair value of the options are recognized in Other insurance and operating expenses and the embedded derivatives are recognized in Interest credited on universal life-type insurance and investment contracts. The purchased and written options expire on various dates through 2009. The Company also purchases futures to hedge its obligations under equity indexed annuities. The futures purchased are marked-to-market daily and exchange traded, exposing the Company to no counterparty risk. The futures contracts mature in 2003. Index options may be used to manage the equity market risk related to the fee income that the Company receives from its separate accounts and the underlying mutual funds. The amount of the fee income received is based upon the daily market value of the separate account and mutual fund assets. As a result, the Company's fee income could be impacted significantly by fluctuations in the equity market. There are no index options outstanding as of December 31, 2002 related to this strategy. IDS Life Insurance Company ------------------------------------------------------------------------------- 9. FAIR VALUES OF FINANCIAL INSTRUMENTS The Company discloses fair value information for financial instruments for which it is practicable to estimate that value. Fair values of life insurance obligations and all non-financial instruments, such as DAC, are excluded. Off-balance sheet intangible assets, such as the value of the field force, are also excluded. Management believes the value of excluded assets and liabilities is significant. The fair value of the Company, therefore, cannot be estimated by aggregating the amounts presented.
2002 2001 Carrying Fair Carrying Fair Financial Assets value value value value Fixed maturities $24,052,104 $24,052,104 $20,157,137 $20,157,137 Common stocks 21 21 1,704 1,704 Mortgage loans on real estate 3,417,651 3,815,362 3,680,394 3,845,950 Cash and cash equivalents 4,424,061 4,424,061 1,150,251 1,150,251 Other investment 110,574 108,813 75,721 75,721 Derivatives 24,016 24,016 34,477 34,477 Separate account assets 21,980,674 21,980,674 27,333,697 27,333,697 ---------- ---------- ---------- ---------- Financial Liabilities Future policy benefits for fixed annuities $21,911,497 $21,282,750 $18,139,462 $17,671,777 Derivatives 9,099 9,099 2,506 2,506 Separate account liabilities 19,391,316 18,539,425 24,280,092 23,716,854 ---------- ---------- ---------- ----------
At December 31, 2002 and 2001, the carrying amount and fair value of future policy benefits for fixed annuities exclude life insurance-related contracts carried at $1,432,294 and $1,368,254, respectively, and policy loans of $67,523 and $84,557, respectively. The fair value of these benefits is based on the status of the annuities at December 31, 2002 and 2001. The fair value of deferred annuities is estimated as the carrying amount less any applicable surrender charges and related loans. The fair value for annuities in non-life contingent payout status is estimated as the present value of projected benefit payments at rates appropriate for contracts issued in 2002 and 2001. At December 31, 2002 and 2001, the fair value of liabilities related to separate accounts is estimated as the carrying amount less any applicable surrender charges and less variable insurance contracts carried at $2,589,358 and $3,053,605, respectively. S-6477-20-G (5/03) STATEMENT OF ADDITIONAL INFORMATION FOR AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY/AMERICAN EXPRESS RETIREMENT ADVISOR SELECT(R) VARIABLE ANNUITY IDS LIFE VARIABLE ACCOUNT 10 MAY 1, 2003 IDS Life Variable Account 10 is a separate account established and maintained by IDS Life Insurance Company (IDS Life). This Statement of Additional Information (SAI) is not a prospectus. It should be read together with the prospectus dated the same date as this SAI, which may be obtained by writing or calling us at the address and telephone number below. IDS Life Insurance Company 70100 AXP Financial Center Minneapolis, MN 55474 (800) 862-7919 TABLE OF CONTENTS Performance Information p. 3 Calculating Annuity Payouts p. 67 Rating Agencies p. 68 Principal Underwriter p. 68 Independent Auditors p. 68 Financial Statements IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 2 PERFORMANCE INFORMATION The subaccounts may quote various performance figures to illustrate past performance. We base total return and current yield quotations (if applicable) on standardized methods of computing performance as required by the Securities and Exchange Commission (SEC). An explanation of the methods used to compute performance follows below. AVERAGE ANNUAL TOTAL RETURN We will express quotations of average annual total return for the subaccounts in terms of the average annual compounded rate of return of a hypothetical investment in the contract over a period of one, five and ten years (or, if less, up to the life of the subaccounts), calculated according to the following formula: P(1 + T)(TO THE POWER OF 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 the period, at the end of the period (or fractional portion thereof) We calculated the following performance figures on the basis of historical performance of each fund. We show actual performance from the date the subaccounts began investing in the funds. We also show performance from the commencement date of the funds as if the subaccounts invested in them at that time, which, in some cases, they did not. Although we base performance figures on historical earnings, past performance does not guarantee future results. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 3 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS AND THE TEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC1 Blue Chip Advantage Fund (9/99; 9/99)(1) (29.37%) (15.22%) BD1 Bond Fund (9/99; 10/81) (3.67) 2.57 CR1 Capital Resource Fund (9/99; 10/81) (28.78) (16.84) CM1 Cash Management Fund (9/99; 10/81) (7.64) 0.03 DE1 Diversified Equity Income Fund (9/99; 9/99) (26.05) (7.93) EM1 Emerging Markets Fund (5/00; 5/00) (13.67) (16.77) ES1 Equity Select Fund (5/01; 5/01) (21.25) (14.45) EI1 Extra Income Fund (9/99; 5/96) (14.64) (6.45) FI1 Federal Income Fund (9/99; 9/99) (3.40) 2.74 GB1 Global Bond Fund (9/99; 5/96) 5.20 2.26 GR1 Growth Fund (9/99; 9/99) (32.50) (22.21) IE1 International Fund (9/99; 1/92) (25.33) (18.96) MF1 Managed Fund (9/99; 4/86) (20.48) (8.53) ND1 NEW DIMENSIONS FUND(R) (9/99; 5/96) (28.66) (12.80) SV1 Partners Small Cap Value Fund (8/01; 8/01) (19.77) 10.88) IV1 S&P 500 Index Fund (5/00; 5/00) (29.14) (20.47) SC1 Small Cap Advantage Fund (9/99; 9/99) (24.25) (6.15) ST1 Stock Fund (8/01; 8/01) (27.76) (23.18) SA1 Strategy Aggressive Fund (9/99; 1/92) (37.83) (18.82) AIM V.I. 1AC Capital Appreciation Fund, Series II Shares (8/01; 5/93)(2) (31.05) (25.45) 1AD Capital Development Fund, Series II Shares (8/01; 5/98)(2) (28.40) (23.18) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 1AL AllianceBernstein Growth and Income Portfolio (Class B) (8/01; 1/91)(3) (29.00) (24.35) 1AB AllianceBernstein International Value Portfolio (Class B) (8/01; 5/01)(4) (13.59) (11.94) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 1AI VP International, Class II (8/01; 5/94)(5) (27.46) (25.18) 1AV VP Value, Class II (8/01; 5/96)(5) (20.39) (13.35) CALVERT VARIABLE SERIES, INC. 1SR Social Balanced Portfolio (5/00; 9/86) (19.82) (12.55) EVERGREEN VA 1CG Capital Growth Fund - Class 2 (8/01; 3/98)(6) (29.32) (25.39) FIDELITY(R) VIP 1FG Growth & Income Portfolio Service Class 2 (8/01; 12/96)(7) (24.06) (18.46) 1FM Mid Cap Portfolio Service Class 2 (8/01; 12/98)(7) (17.85) (11.25) 1FO Overseas Portfolio Service Class 2 (8/01; 1/87)(7) (27.35) (24.02) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC1 Blue Chip Advantage Fund (9/99; 9/99)(1) (29.37%) --% --% (15.22%) BD1 Bond Fund (9/99; 10/81) (3.67) 1.36 5.13 8.31 CR1 Capital Resource Fund (9/99; 10/81) (28.78) (6.91) 1.95 8.43 CM1 Cash Management Fund (9/99; 10/81) (7.64) 1.12 2.43 4.44 DE1 Diversified Equity Income Fund (9/99; 9/99) (26.05) -- -- (7.93) EM1 Emerging Markets Fund (5/00; 5/00) (13.67) -- -- (16.77) ES1 Equity Select Fund (5/01; 5/01) (21.25) -- -- (14.45) EI1 Extra Income Fund (9/99; 5/96) (14.64) (4.85) -- (1.12) FI1 Federal Income Fund (9/99; 9/99) (3.40) -- -- 2.74 GB1 Global Bond Fund (9/99; 5/96) 5.20 1.47 -- 2.78 GR1 Growth Fund (9/99; 9/99) (32.50) -- -- (22.21) IE1 International Fund (9/99; 1/92) (25.33) (8.63) 0.07 (0.04) MF1 Managed Fund (9/99; 4/86) (20.48) (2.66) 4.70 6.93 ND1 NEW DIMENSIONS FUND(R) (9/99; 5/96) (28.66) (2.78) -- 2.80 SV1 Partners Small Cap Value Fund (8/01; 8/01) (19.77) -- -- (10.88) IV1 S&P 500 Index Fund (5/00; 5/00) (29.14) -- -- (20.47) SC1 Small Cap Advantage Fund (9/99; 9/99) (24.25) -- -- (6.15) ST1 Stock Fund (8/01; 8/01) (27.76) -- -- (23.18) SA1 Strategy Aggressive Fund (9/99; 1/92) (37.83) (10.95) (0.11) 0.72 AIM V.I. 1AC Capital Appreciation Fund, Series II Shares (8/01; 5/93)(2) (31.05) (5.12) -- 5.44 1AD Capital Development Fund, Series II Shares (8/01; 5/98)(2) (28.40) -- -- (4.24) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 1AL AllianceBernstein Growth and Income Portfolio (Class B) (8/01; 1/91)(3) (29.00) 0.59 9.29 8.49 1AB AllianceBernstein International Value Portfolio (Class B) (8/01; 5/01)(4) (13.59) -- -- (9.63) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 1AI VP International, Class II (8/01; 5/94)(5) (27.46) (5.77) -- 0.26 1AV VP Value, Class II (8/01; 5/96)(5) (20.39) 0.89 -- 6.13 CALVERT VARIABLE SERIES, INC. 1SR Social Balanced Portfolio (5/00; 9/86) (19.82) (2.24) 4.77 6.15 EVERGREEN VA 1CG Capital Growth Fund - Class 2 (8/01; 3/98)(6) (29.32) -- -- (4.65) FIDELITY(R) VIP 1FG Growth & Income Portfolio Service Class 2 (8/01; 12/96)(7) (24.06) (2.37) -- 2.52 1FM Mid Cap Portfolio Service Class 2 (8/01; 12/98)(7) (17.85) -- -- 12.50 1FO Overseas Portfolio Service Class 2 (8/01; 1/87)(7) (27.35) (6.86) 2.78 2.52
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 4 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS AND THE TEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT FTVIPT 1RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(8) (6.82%) 7.53% 1SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(8) (17.15) 4.11 1MS Mutual Shares Securities Fund - Class 2 (8/01; 11/96)(8) (19.47) (17.04) GOLDMAN SACHS VIT 1UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (28.66) (13.58) 1MC Mid Cap Value Fund (9/99; 5/98) (12.99) 5.91 INVESCO VIF 1ID Dynamics Fund (8/01; 8/97) (37.78) (32.34) 1FS Financial Services Fund (8/01; 9/99) (22.03) (18.92) 1TC Technology Fund (8/01; 5/97) (51.40) (45.77) 1TL Telecommunications Fund (8/01; 9/99) (55.01) (51.48) JANUS ASPEN SERIES 1GT Global Technology Portfolio: Service Shares (5/00; 1/00)(9) (46.01) (43.23) 1IG International Growth Portfolio: Service Shares (5/00; 5/94)(9) (32.18) (29.08) LAZARD RETIREMENT SERIES 1IP International Equity Portfolio (9/99; 9/98) (18.47) (15.02) MFS(R) 1MG Investors Growth Stock Series - Service Class (5/00; 5/99)(10) (33.97) (26.90) 1MD New Discovery Series - Service Class (5/00; 5/98)(10) (37.69) (20.83) 1UT Utilities Series - Service Class (8/01; 1/95)(10) (29.58) (28.75) PIONEER VCT 1PE Pioneer Equity Income VCT Portfolio - Class II Shares (8/01; 3/95)(11) (23.34) (19.22) 1EU Pioneer Europe VCT Portfolio - Class II Shares (8/01; 10/98)(12) (26.08) (21.79) PUTNAM VARIABLE TRUST 1HS Putnam VT Health Sciences Fund - Class IB Shares (8/01; 4/98)(13) (27.25) (22.46) 1PI Putnam VT International Equity Fund - Class IB Shares (8/01; 1/97)(14) (24.81) (21.53) previously Putnam VT International Growth Fund - Class IB Shares) 1VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(14) (36.60) (17.25) STRONG FUNDS 1SO Strong Opportunity Fund II - Advisor Class (8/01; 5/92)(15) (33.27) (26.46) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT FTVIPT 1RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(8) (6.82%) (0.52%) 8.21% 7.88% 1SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(8) (17.15) -- -- (2.56) 1MS Mutual Shares Securities Fund - Class 2 (8/01; 11/96)(8) (19.47) 1.00 -- 4.06 GOLDMAN SACHS VIT 1UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (28.66) -- -- (5.30) 1MC Mid Cap Value Fund (9/99; 5/98) (12.99) -- -- 0.87 INVESCO VIF 1ID Dynamics Fund (8/01; 8/97) (37.78) (6.19) -- (5.20) 1FS Financial Services Fund (8/01; 9/99) (22.03) -- -- (1.67) 1TC Technology Fund (8/01; 5/97) (51.40) (9.06) -- (5.88) 1TL Telecommunications Fund (8/01; 9/99) (55.01) -- -- (35.21) JANUS ASPEN SERIES 1GT Global Technology Portfolio: Service Shares (5/00; 1/00)(9) (46.01) -- -- (40.57) 1IG International Growth Portfolio: Service Shares (5/00; 5/94)(9) (32.18) (2.84) -- 6.26 LAZARD RETIREMENT SERIES 1IP International Equity Portfolio (9/99; 9/98) (18.47) -- -- (7.06) MFS(R) 1MG Investors Growth Stock Series - Service Class (5/00; 5/99)(10) (33.97) -- -- (11.91) 1MD New Discovery Series - Service Class (5/00; 5/98)(10) (37.69) -- -- (0.53) 1UT Utilities Series - Service Class (8/01; 1/95)(10) (29.58) (3.55) -- 6.84 PIONEER VCT 1PE Pioneer Equity Income VCT Portfolio - Class II Shares (8/01; 3/95)(11) (23.34) (1.00) -- 8.01 1EU Pioneer Europe VCT Portfolio - Class II Shares (8/01; 10/98)(12) (26.08) -- -- (11.63) PUTNAM VARIABLE TRUST 1HS Putnam VT Health Sciences Fund - Class IB Shares (8/01; 4/98)(13) (27.25) -- -- (4.40) 1PI Putnam VT International Equity Fund - Class IB Shares (8/01; 1/97)(14) (24.81) (0.61) -- 1.91 (previously Putnam VT International Growth Fund - Class IB Shares) 1VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(14) (36.60) (6.93) -- (2.58) STRONG FUNDS 1SO Strong Opportunity Fund II - Advisor Class (8/01; 5/92)(15) (33.27) (0.40) 8.57 9.52
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 5 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS AND THE TEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT WANGER 1IT International Small Cap (9/99; 5/95) (21.31%) (11.85%) 1SP U.S. Smaller Companies (9/99; 5/95) (24.03) (4.08) WELLS FARGO VT 1AA Asset Allocation Fund (5/01; 4/94)(16) (20.42) (15.33) 1WI International Equity Fund (5/01; 7/00) (29.60) (24.67) 1SG Small Cap Growth Fund (5/01; 5/95)(17) (43.54) (32.14) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT WANGER 1IT International Small Cap (9/99; 5/95) (21.31%) 2.28% --% 9.17% 1SP U.S. Smaller Companies (9/99; 5/95) (24.03) (0.01) -- 10.92 WELLS FARGO VT 1AA Asset Allocation Fund (5/01; 4/94)(16) (20.42) (0.60) -- 6.17 1WI International Equity Fund (5/01; 7/00) (29.60) -- -- (23.37) 1SG Small Cap Growth Fund (5/01; 5/95)(17) (43.54) (14.96) -- (3.95)
(a) Current applicable charges deducted from performance include a $30 annual contract administrative charge, a 0.25% annual MAV fee, a 0.40% annual EEP fee, a 0.95% annual mortality and expense risk fee and applicable surrender charges. Premium taxes and purchase payment credits are not reflected in these total returns. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 6 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS AND THE SEVEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC1 Blue Chip Advantage Fund (9/99; 9/99)(1) (28.71%) (14.98%) BD1 Bond Fund (9/99; 10/81) (2.73) 2.85 CR1 Capital Resource Fund (9/99; 10/81) (28.12) (16.60) CM1 Cash Management Fund (9/99; 10/81) (6.75) 0.32 DE1 Diversified Equity Income Fund (9/99; 9/99) (25.36) (7.67) EM1 Emerging Markets Fund (5/00; 5/00) (12.84) (16.48) ES1 Equity Select Fund (5/01; 5/01) (20.50) (13.97) EI1 Extra Income Fund (9/99; 5/96) (13.82) (6.18) FI1 Federal Income Fund (9/99; 9/99) (2.46) 3.02 GB1 Global Bond Fund (9/99; 5/96) 6.20 2.55 GR1 Growth Fund (9/99; 9/99) (31.87) (21.99) IE1 International Fund (9/99; 1/92) (24.63) (18.73) MF1 Managed Fund (9/99; 4/86) (19.73) (8.26) ND1 NEW DIMENSIONS FUND(R) (9/99; 5/96) (28.00) (12.55) SV1 Partners Small Cap Value Fund (8/01; 8/01) (19.00) (10.26) IV1 S&P 500 Index Fund (5/00; 5/00) (28.47) (20.19) SC1 Small Cap Advantage Fund (9/99; 9/99) (23.54) (5.87) ST1 Stock Fund (8/01; 8/01) (27.08) (22.65) SA1 Strategy Aggressive Fund (9/99; 1/92) (37.26) (18.58) AIM V.I. 1AC Capital Appreciation Fund, Series II Shares (8/01; 5/93)(2) (30.41) (24.93) 1AD Capital Development Fund, Series II Shares (8/01; 5/98)(2) (27.73) (22.65) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 1AL AllianceBernstein Growth and Income Portfolio (Class B) (8/01; 1/91)(3) (28.34) (23.82) 1AB AllianceBernstein International Value Portfolio (Class B) (8/01; 5/01)(4) (12.76) (11.32) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 1AI VP International, Class II (8/01; 5/94)(5) (26.78) (24.66) 1AV VP Value, Class II (8/01; 5/96)(5) (19.63) (12.74) CALVERT VARIABLE SERIES, INC. 1SR Social Balanced Portfolio (5/00; 9/86) (19.06) (12.24) EVERGREEN VA 1CG Capital Growth Fund - Class 2 (8/01; 3/98)(6) (28.66) (24.87) FIDELITY(R) VIP 1FG Growth & Income Portfolio Service Class 2 (8/01; 12/96)(7) (23.34) (17.89) 1FM Mid Cap Portfolio Service Class 2 (8/01; 12/98)(7) (17.06) (10.64) 1FO Overseas Portfolio Service Class 2 (8/01; 1/87)(7) (26.67) (23.49) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC1 Blue Chip Advantage Fund (9/99; 9/99)(1) (28.71%) --% --% (14.98%) BD1 Bond Fund (9/99; 10/81) (2.73) 1.74 5.26 8.31 CR1 Capital Resource Fund (9/99; 10/81) (28.12) (6.57) 2.12 8.43 CM1 Cash Management Fund (9/99; 10/81) (6.75) 1.50 2.59 4.44 DE1 Diversified Equity Income Fund (9/99; 9/99) (25.36) -- -- (7.67) EM1 Emerging Markets Fund (5/00; 5/00) (12.84) -- -- (16.48) ES1 Equity Select Fund (5/01; 5/01) (20.50) -- -- (13.97) EI1 Extra Income Fund (9/99; 5/96) (13.82) (4.50) -- (0.71) FI1 Federal Income Fund (9/99; 9/99) (2.46) -- -- 3.02 GB1 Global Bond Fund (9/99; 5/96) 6.20 1.85 -- 3.16 GR1 Growth Fund (9/99; 9/99) (31.87) -- -- (21.99) IE1 International Fund (9/99; 1/92) (24.63) (8.29) 0.24 (0.04) MF1 Managed Fund (9/99; 4/86) (19.73) (2.30) 4.84 6.93 ND1 NEW DIMENSIONS FUND(R) (9/99; 5/96) (28.00) (2.42) -- 3.18 SV1 Partners Small Cap Value Fund (8/01; 8/01) (19.00) -- -- (10.26) IV1 S&P 500 Index Fund (5/00; 5/00) (28.47) -- -- (20.19) SC1 Small Cap Advantage Fund (9/99; 9/99) (23.54) -- -- (5.87) ST1 Stock Fund (8/01; 8/01) (27.08) -- -- (22.65) SA1 Strategy Aggressive Fund (9/99; 1/92) (37.26) (10.63) 0.06 0.72 AIM V.I. 1AC Capital Appreciation Fund, Series II Shares (8/01; 5/93)(2) (30.41) (4.77) -- 5.57 1AD Capital Development Fund, Series II Shares (8/01; 5/98)(2) (27.73) -- -- (3.87) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 1AL AllianceBernstein Growth and Income Portfolio (Class B) (8/01; 1/91)(3) (28.34) 0.96 9.38 8.49 1AB AllianceBernstein International Value Portfolio (Class B) (8/01; 5/01)(4) (12.76) -- -- (9.12) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 1AI VP International, Class II (8/01; 5/94)(5) (26.78) (5.43) -- 0.56 1AV VP Value, Class II (8/01; 5/96)(5) (19.63) 1.26 -- 6.45 CALVERT VARIABLE SERIES, INC. 1SR Social Balanced Portfolio (5/00; 9/86) (19.06) (1.88) 4.90 6.15 EVERGREEN VA 1CG Capital Growth Fund - Class 2 (8/01; 3/98)(6) (28.66) -- -- (4.29) FIDELITY(R) VIP 1FG Growth & Income Portfolio Service Class 2 (8/01; 12/96)(7) (23.34) (2.01) -- 2.96 1FM Mid Cap Portfolio Service Class 2 (8/01; 12/98)(7) (17.06) -- -- 12.85 1FO Overseas Portfolio Service Class 2 (8/01; 1/87)(7) (26.67) (6.52) 2.94 2.52
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 7 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS AND THE SEVEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT FTVIPT 1RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(8) (5.92%) 7.78% 1SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(8) (16.36) 4.39 1MS Mutual Shares Securities Fund - Class 2 (8/01; 11/96)(8) (18.71) (16.46) GOLDMAN SACHS VIT 1UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (28.00) (13.33) 1MC Mid Cap Value Fund (9/99; 5/98) (12.15) 6.18 INVESCO VIF 1ID Dynamics Fund (8/01; 8/97) (37.21) (31.86) 1FS Financial Services Fund (8/01; 9/99) (21.29) (18.36) 1TC Technology Fund (8/01; 5/97) (50.98) (45.40) 1TL Telecommunications Fund (8/01; 9/99) (54.63) (51.14) JANUS ASPEN SERIES 1GT Global Technology Portfolio: Service Shares (5/00; 1/00)(9) (45.53) (43.04) 1IG International Growth Portfolio: Service Shares (5/00; 5/94)(9) (31.56) (28.83) LAZARD RETIREMENT SERIES 1IP International Equity Portfolio (9/99; 9/98) (17.69) (14.77) MFS(R) 1MG Investors Growth Stock Series - Service Class (5/00; 5/99)(10) (33.36) (26.64) 1MD New Discovery Series - Service Class (5/00; 5/98)(10) (37.12) (20.55) 1UT Utilities Series - Service Class (8/01; 1/95)(10) (28.92) (28.25) PIONEER VCT 1PE Pioneer Equity Income VCT Portfolio - Class II Shares (8/01; 3/95)(11) (22.61) (18.66) 1EU Pioneer Europe VCT Portfolio - Class II Shares (8/01; 10/98)(12) (25.38) (21.25) PUTNAM VARIABLE TRUST 1HS Putnam VT Health Sciences Fund - Class IB Shares (8/01; 4/98)(13) (26.57) (21.92) 1PI Putnam VT International Equity Fund - Class IB Shares (8/01; 1/97)(14) (24.10) (20.98) (previously Putnam VT International Growth Fund - Class IB Shares) 1VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(14) (36.02) (17.01) STRONG FUNDS 1SO Strong Opportunity Fund II - Advisor Class (8/01; 5/92)(15) (32.65) (25.95) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT FTVIPT 1RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(8) (5.92%) (0.14%) 8.31% 7.88% 1SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(8) (16.36) -- -- (2.17) 1MS Mutual Shares Securities Fund - Class 2 (8/01; 11/96)(8) (18.71) 1.38 -- 4.45 GOLDMAN SACHS VIT 1UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (28.00) -- -- (4.94) 1MC Mid Cap Value Fund (9/99; 5/98) (12.15) -- -- 1.27 INVESCO VIF 1ID Dynamics Fund (8/01; 8/97) (37.21) (5.85) -- (4.86) 1FS Financial Services Fund (8/01; 9/99) (21.29) -- -- (1.38) 1TC Technology Fund (8/01; 5/97) (50.98) (8.75) -- (5.58) 1TL Telecommunications Fund (8/01; 9/99) (54.63) -- -- (35.02) JANUS ASPEN SERIES 1GT Global Technology Portfolio: Service Shares (5/00; 1/00)(9) (45.53) -- -- (40.40) 1IG International Growth Portfolio: Service Shares (5/00; 5/94)(9) (31.56) (2.49) -- 6.47 LAZARD RETIREMENT SERIES 1IP International Equity Portfolio (9/99; 9/98) (17.69) -- -- (6.65) MFS(R) 1MG Investors Growth Stock Series - Service Class (5/00; 5/99)(10) (33.36) -- -- (11.69) 1MD New Discovery Series - Service Class (5/00; 5/98)(10) (37.12) -- -- (0.14) 1UT Utilities Series - Service Class (8/01; 1/95)(10) (28.92) (3.20) -- 7.15 PIONEER VCT 1PE Pioneer Equity Income VCT Portfolio - Class II Shares (8/01; 3/95)(11) (22.61) (0.64) -- 8.31 1EU Pioneer Europe VCT Portfolio - Class II Shares (8/01; 10/98)(12) (25.38) -- -- (11.23) PUTNAM VARIABLE TRUST 1HS Putnam VT Health Sciences Fund - Class IB Shares (8/01; 4/98)(13) (26.57) -- -- (4.02) 1PI Putnam VT International Equity Fund - Class IB Shares (8/01; 1/97)(14) (24.10) (0.25) -- 2.21 (previously Putnam VT International Growth Fund - Class IB Shares) 1VS Putnam VT Vista Fund - (36.02) Class IB Shares (9/99; 1/97)(14) (6.60) -- (2.29) STRONG FUNDS 1SO Strong Opportunity Fund II - Advisor Class (8/01; 5/92)(15) (32.65) (0.04) 8.66 9.52
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 8 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS AND THE SEVEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT WANGER 1IT International Small Cap (9/99; 5/95) (20.57%) (11.59%) 1SP U.S. Smaller Companies (9/99; 5/95) (23.31) (3.80) WELLS FARGO VT 1AA Asset Allocation Fund (5/01; 4/94)(16) (19.66) (14.85) 1WI International Equity Fund (5/01; 7/00) (28.94) (24.25) 1SG Small Cap Growth Fund (5/01; 5/95)(17) (43.03) (31.76) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT WANGER 1IT International Small Cap (9/99; 5/95) (20.57%) 2.64% --% 9.46% 1SP U.S. Smaller Companies (9/99; 5/95) (23.31) 0.36 -- 11.18 WELLS FARGO VT 1AA Asset Allocation Fund (5/01; 4/94)(16) (19.66) (0.23) -- 6.39 1WI International Equity Fund (5/01; 7/00) (28.94) -- -- (23.07) 1SG Small Cap Growth Fund (5/01; 5/95)(17) (43.03) (14.66) -- (3.51)
(a) Current applicable charges deducted from performance include a $30 annual contract administrative charge, a 0.25% annual MAV fee, a 0.40% annual EEP fee, a 0.95% annual mortality and expense risk fee and applicable surrender charges. Premium taxes and purchase payment credits are not reflected in these total returns. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 9 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITHOUT SURRENDER AND SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC1 Blue Chip Advantage Fund (9/99; 9/99)(1) (24.09%) (13.52%) BD1 Bond Fund (9/99; 10/81) 3.84 4.53 CR1 Capital Resource Fund (9/99; 10/81) (23.46) (15.18) CM1 Cash Management Fund (9/99; 10/81) (0.48) 2.02 DE1 Diversified Equity Income Fund (9/99; 9/99) (20.49) (6.09) EM1 Emerging Markets Fund (5/00; 5/00) (7.03) (14.75) ES1 Equity Select Fund (5/01; 5/01) (15.27) (10.62) EI1 Extra Income Fund (9/99; 5/96) (8.09) (4.58) FI1 Federal Income Fund (9/99; 9/99) 4.13 4.69 GB1 Global Bond Fund (9/99; 5/96) 13.20 4.23 GR1 Growth Fund (9/99; 9/99) (27.50) (20.66) IE1 International Fund (9/99; 1/92) (19.71) (17.34) MF1 Managed Fund (9/99; 4/86) (14.44) (6.70) ND1 NEW DIMENSIONS FUND(R) (9/99; 5/96) (23.33) (11.06) SV1 Partners Small Cap Value Fund (8/01; 8/01) (13.66) (5.94) IV1 S&P 500 Index Fund (5/00; 5/00) (23.84) (18.27) SC1 Small Cap Advantage Fund (9/99; 9/99) (18.54) (4.27) ST1 Stock Fund (8/01; 8/01) (22.35) (18.96) SA1 Strategy Aggressive Fund (9/99; 1/92) (33.29) (17.20) AIM V.I. 1AC Capital Appreciation Fund, Series II Shares (8/01; 5/93)(2) (25.93) (21.34) 1AD Capital Development Fund, Series II Shares (8/01; 5/98)(2) (23.05) (18.96) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 1AL AllianceBernstein Growth and Income Portfolio (Class B) (8/01; 1/91)(3) (23.70) (20.18) 1AB AllianceBernstein International Value Portfolio (Class B) (8/01; 5/01)(4) (6.95) (7.08) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 1AI VP International, Class II (8/01; 5/94)(5) (22.02) (21.07) 1AV VP Value, Class II (8/01; 5/96)(5) (14.33) (8.56) CALVERT VARIABLE SERIES, INC. 1SR Social Balanced Portfolio (5/00; 9/86) (13.72) (10.11) EVERGREEN VA 1CG Capital Growth Fund - Class 2 (8/01; 3/98)(6) (24.05) (21.29) FIDELITY(R) VIP 1FG Growth & Income Portfolio Service Class 2 (8/01; 12/96)(7) (18.33) (13.96) 1FM Mid Cap Portfolio Service Class 2 (8/01; 12/98)(7) (11.57) (6.36) 1FO Overseas Portfolio Service Class 2 (8/01; 1/87)(7) (21.90) (19.85) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC1 Blue Chip Advantage Fund (9/99; 9/99)(1) (24.09%) --% --% (13.52%) BD1 Bond Fund (9/99; 10/81) 3.84 2.66 5.26 8.31 CR1 Capital Resource Fund (9/99; 10/81) (23.46) (5.74) 2.12 8.43 CM1 Cash Management Fund (9/99; 10/81) (0.48) 2.43 2.59 4.44 DE1 Diversified Equity Income Fund (9/99; 9/99) (20.49) -- -- (6.09) EM1 Emerging Markets Fund (5/00; 5/00) (7.03) -- -- (14.75) ES1 Equity Select Fund (5/01; 5/01) (15.27) -- -- (10.62) EI1 Extra Income Fund (9/99; 5/96) (8.09) (3.62) -- (0.44) FI1 Federal Income Fund (9/99; 9/99) 4.13 -- -- 4.69 GB1 Global Bond Fund (9/99; 5/96) 13.20 2.76 -- 3.41 GR1 Growth Fund (9/99; 9/99) (27.50) -- -- (20.66) IE1 International Fund (9/99; 1/92) (19.71) (7.47) 0.24 (0.04) MF1 Managed Fund (9/99; 4/86) (14.44) (1.41) 4.84 6.93 ND1 NEW DIMENSIONS FUND(R) (9/99; 5/96) (23.33) (1.55) -- 3.43 SV1 Partners Small Cap Value Fund (8/01; 8/01) (13.66) -- -- (5.94) IV1 S&P 500 Index Fund (5/00; 5/00) (23.84) -- -- (18.27) SC1 Small Cap Advantage Fund (9/99; 9/99) (18.54) -- -- (4.27) ST1 Stock Fund (8/01; 8/01) (22.35) -- -- (18.96) SA1 Strategy Aggressive Fund (9/99; 1/92) (33.29) (9.85) 0.06 0.72 AIM V.I. 1AC Capital Appreciation Fund, Series II Shares (8/01; 5/93)(2) (25.93) (3.93) -- 5.57 1AD Capital Development Fund, Series II Shares (8/01; 5/98)(2) (23.05) -- -- (2.95) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 1AL AllianceBernstein Growth and Income Portfolio (Class B) (8/01; 1/91)(3) (23.70) 1.85 9.38 8.49 1AB AllianceBernstein International Value Portfolio (Class B) (8/01; 5/01)(4) (6.95) -- -- (5.59) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 1AI VP International, Class II (8/01; 5/94)(5) (22.02) (4.58) -- 0.56 1AV VP Value, Class II (8/01; 5/96)(5) (14.33) 2.18 -- 6.66 CALVERT VARIABLE SERIES, INC. 1SR Social Balanced Portfolio (5/00; 9/86) (13.72) (0.99) 4.90 6.15 EVERGREEN VA 1CG Capital Growth Fund - Class 2 (8/01; 3/98)(6) (24.05) -- -- (3.41) FIDELITY(R) VIP 1FG Growth & Income Portfolio Service Class 2 (8/01; 12/96)(7) (18.33) (1.13) -- 3.24 1FM Mid Cap Portfolio Service Class 2 (8/01; 12/98)(7) (11.57) -- -- 13.70 1FO Overseas Portfolio Service Class 2 (8/01; 1/87)(7) (21.90) (5.68) 2.94 2.52
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 10 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITHOUT SURRENDER AND SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT FTVIPT 1RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(8) 0.41% 9.29% 1SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(8) (10.82) 6.01 1MS Mutual Shares Securities Fund - Class 2 (8/01; 11/96)(8) (13.34) (12.46) GOLDMAN SACHS VIT 1UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (23.33) (11.85) 1MC Mid Cap Value Fund (9/99; 5/98) (6.29) 7.74 INVESCO VIF 1ID Dynamics Fund (8/01; 8/97) (33.24) (28.59) 1FS Financial Services Fund (8/01; 9/99) (16.12) (14.46) 1TC Technology Fund (8/01; 5/97) (48.04) (42.79) 1TL Telecommunications Fund (8/01; 9/99) (51.97) (48.79) JANUS ASPEN SERIES 1GT Global Technology Portfolio: Service Shares (5/00; 1/00)(9) (42.19) (41.69) 1IG International Growth Portfolio: Service Shares (5/00; 5/94)(9) (27.16) (27.13) LAZARD RETIREMENT SERIES 1IP International Equity Portfolio (9/99; 9/98) (12.25) (13.32) MFS(R) 1MG Investors Growth Stock Series - Service Class (5/00; 5/99(10) (29.09) (24.89) 1MD New Discovery Series - Service Class (5/00; 5/98)(10) (33.14) (18.66) 1UT Utilities Series - Service Class (8/01; 1/95)(10) (24.32) (24.80) PIONEER VCT 1PE Pioneer Equity Income VCT Portfolio - Class II Shares (8/01; 3/95)(11) (17.54) (14.76) 1EU Pioneer Europe VCT Portfolio - Class II Shares (8/01; 10/98)(12) (20.52) (17.49) PUTNAM VARIABLE TRUST 1HS Putnam VT Health Sciences Fund - Class IB Shares (8/01; 4/98)(13) (21.79) (18.18) 1PI Putnam VT International Equity Fund - Class IB Shares (8/01; 1/97)(14) (19.14) (17.20) (previously Putnam VT International Growth Fund - Class IB Shares) 1VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(14) (31.95) (15.60) STRONG FUNDS 1SO Strong Opportunity Fund II - Advisor Class (8/01; 5/92)(15) (28.34) (22.41) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT FTVIPT 1RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(8) 0.41% 0.78% 8.31% 7.88% 1SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(8) (10.82) -- -- (1.23) 1MS Mutual Shares Securities Fund - Class 2 (8/01; 11/96)(8) (13.34) 2.29 -- 4.71 GOLDMAN SACHS VIT 1UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (23.33) -- -- (4.07) 1MC Mid Cap Value Fund (9/99; 5/98) (6.29) -- -- 2.25 INVESCO VIF 1ID Dynamics Fund (8/01; 8/97) (33.24) (5.04) -- (4.21) 1FS Financial Services Fund (8/01; 9/99) (16.12) -- -- 0.31 1TC Technology Fund (8/01; 5/97) (48.04) (8.00) -- (5.00) 1TL Telecommunications Fund (8/01; 9/99) (51.97) -- -- (33.90) JANUS ASPEN SERIES 1GT Global Technology Portfolio: Service Shares (5/00; 1/00)(9) (42.19) -- -- (39.18) 1IG International Growth Portfolio: Service Shares (5/00; 5/94)(9) (27.16) (1.63) -- 6.47 LAZARD RETIREMENT SERIES 1IP International Equity Portfolio (9/99; 9/98) (12.25) -- -- (5.65) MFS(R) 1MG Investors Growth Stock Series - Service Class (5/00; 5/99(10) (29.09) -- -- (10.38) 1MD New Discovery Series - Service Class (5/00; 5/98)(10) (33.14) -- -- 0.81 1UT Utilities Series - Service Class (8/01; 1/95)(10) (24.32) (2.34) -- 7.15 PIONEER VCT 1PE Pioneer Equity Income VCT Portfolio - Class II Shares (8/01; 3/95)(11) (17.54) 0.26 -- 8.31 1EU Pioneer Europe VCT Portfolio - Class II Shares (8/01; 10/98)(12) (20.52) -- -- (10.25) PUTNAM VARIABLE TRUST 1HS Putnam VT Health Sciences Fund - Class IB Shares (8/01; 4/98)(13) (21.79) -- -- (3.10) 1PI Putnam VT International Equity Fund - Class IB Shares (8/01; 1/97)(14) (19.14) 0.65 -- 2.80 (previously Putnam VT International Growth Fund - Class IB Shares) 1VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(14) (31.95) (5.79) -- (1.72) STRONG FUNDS 1SO Strong Opportunity Fund II - Advisor Class (8/01; 5/92)(15) (28.34) 0.84 8.66 9.52
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 11 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITHOUT SURRENDER AND SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT WANGER 1IT International Small Cap (9/99; 5/95) (15.34%) (10.08%) 1SP U.S. Smaller Companies (9/99; 5/95) (18.29) (2.15) WELLS FARGO VT 1AA Asset Allocation Fund (5/01; 4/94)(16) (14.37) (11.51) 1WI International Equity Fund (5/01; 7/00) (24.34) (21.34) 1SG Small Cap Growth Fund (5/01; 5/95)(17) (39.50) (29.17) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT WANGER 1IT International Small Cap (9/99; 5/95) (15.34%) 3.53% --% 9.46% 1SP U.S. Smaller Companies (9/99; 5/95) (18.29) 1.26 -- 11.18 WELLS FARGO VT 1AA Asset Allocation Fund (5/01; 4/94)(16) (14.37) 0.67 -- 6.39 1WI International Equity Fund (5/01; 7/00) (24.34) -- -- (21.07) 1SG Small Cap Growth Fund (5/01; 5/95)(17) (39.50) (13.94) -- (3.51)
(a) Current applicable charges deducted from performance include a $30 annual contract administrative charge, a 0.25% annual MAV fee, a 0.40% annual EEP fee and a 0.95% annual mortality and expense risk fee. Premium taxes and purchase payment credits are not reflected in these total returns. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 12 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF A TEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC1 Blue Chip Advantage Fund (9/99; 9/99)(1) (28.77%) (14.59%) BD1 Bond Fund (9/99; 10/81) (3.07) 3.25 CR1 Capital Resource Fund (9/99; 10/81) (28.19) (16.21) CM1 Cash Management Fund (9/99; 10/81) (7.04) 0.66 DE1 Diversified Equity Income Fund (9/99; 9/99) (25.45) (7.30) EM1 Emerging Markets Fund (5/00; 5/00) (13.07) (16.15) ES1 Equity Select Fund (5/01; 5/01) (20.65) (13.83) EI1 Extra Income Fund (9/99; 5/96) (14.04) (5.82) FI1 Federal Income Fund (9/99; 9/99) (2.80) 3.42 GB1 Global Bond Fund (9/99; 5/96) 5.85 2.94 GR1 Growth Fund (9/99; 9/99) (31.90) (21.58) IE1 International Fund (9/99; 1/92) (24.73) (18.33) MF1 Managed Fund (9/99; 4/86) (19.88) (7.90) ND1 NEW DIMENSIONS FUND(R) (9/99; 5/96) (28.06) (12.17) SV1 Partners Small Cap Value Fund (8/01; 8/01) (19.17) (10.27) IV1 S&P 500 Index Fund (5/00; 5/00) (28.54) (19.84) SC1 Small Cap Advantage Fund (9/99; 9/99) (23.66) (5.51) ST1 Stock Fund (8/01; 8/01) (27.16) (22.57) SA1 Strategy Aggressive Fund (9/99; 1/92) (37.23) (18.19) AIM V.I. 1AC Capital Appreciation Fund, Series II Shares (8/01; 5/93)(2) (30.45) (24.84) 1AD Capital Development Fund, Series II Shares (8/01; 5/98)(2) (27.80) (22.57) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 1AL AllianceBernstein Growth and Income Portfolio (Class B) (8/01; 1/91)(3) (28.40) (23.74) 1AB AllianceBernstein International Value Portfolio (Class B) (8/01; 5/01)(4) (13.00) (11.33) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 1AI VP International, Class II (8/01; 5/94)(5) (26.86) (24.57) 1AV VP Value, Class II (8/01; 5/96)(5) (19.79) (12.74) CALVERT VARIABLE SERIES, INC. 1SR Social Balanced Portfolio (5/00; 9/86) (19.23) (11.93) EVERGREEN VA 1CG Capital Growth Fund - Class 2 (8/01; 3/98)(6) (28.73) (24.78) FIDELITY(R) VIP 1FG Growth & Income Portfolio Service Class 2 (8/01; 12/96)(7) (23.46) (17.85) 1FM Mid Cap Portfolio Service Class 2 (8/01; 12/98)(7) (17.25) (10.64) 1FO Overseas Portfolio Service Class 2 (8/01; 1/87)(7) (26.75) (23.41) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC1 Blue Chip Advantage Fund (9/99; 9/99)(1) (28.77%) --% --% (14.59%) BD1 Bond Fund (9/99; 10/81) (3.07) 2.05 5.79 8.96 CR1 Capital Resource Fund (9/99; 10/81) (28.19) (6.28) 2.61 9.08 CM1 Cash Management Fund (9/99; 10/81) (7.04) 1.81 3.09 5.09 DE1 Diversified Equity Income Fund (9/99; 9/99) (25.45) -- -- (7.30) EM1 Emerging Markets Fund (5/00; 5/00) (13.07) -- -- (16.15) ES1 Equity Select Fund (5/01; 5/01) (20.65) -- -- (13.83) EI1 Extra Income Fund (9/99; 5/96) (14.04) (4.22) -- (0.48) FI1 Federal Income Fund (9/99; 9/99) (2.80) -- -- 3.42 GB1 Global Bond Fund (9/99; 5/96) 5.85 2.15 -- 3.45 GR1 Growth Fund (9/99; 9/99) (31.90) -- -- (21.58) IE1 International Fund (9/99; 1/92) (24.73) (7.99) 0.72 0.61 MF1 Managed Fund (9/99; 4/86) (19.88) (2.02) 5.36 7.58 ND1 NEW DIMENSIONS FUND(R) (9/99; 5/96) (28.06) (2.14) -- 3.47 SV1 Partners Small Cap Value Fund (8/01; 8/01) (19.17) -- -- (10.27) IV1 S&P 500 Index Fund (5/00; 5/00) (28.54) -- -- (19.84) SC1 Small Cap Advantage Fund (9/99; 9/99) (23.66) -- -- (5.51) ST1 Stock Fund (8/01; 8/01) (27.16) -- -- (22.57) SA1 Strategy Aggressive Fund (9/99; 1/92) (37.23) (10.31) 0.54 1.37 AIM V.I. 1AC Capital Appreciation Fund, Series II Shares (8/01; 5/93)(2) (30.45) (4.48) -- 6.10 1AD Capital Development Fund, Series II Shares (8/01; 5/98)(2) (27.80) -- -- (3.61) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 1AL AllianceBernstein Growth and Income Portfolio (Class B) (8/01; 1/91)(3) (28.40) 1.22 9.95 9.14 1AB AllianceBernstein International Value Portfolio (Class B) (8/01; 5/01)(4) (13.00) -- -- (9.01) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 1AI VP International, Class II (8/01; 5/94)(5) (26.86) (5.14) -- 0.90 1AV VP Value, Class II (8/01; 5/96)(5) (19.79) 1.54 -- 6.80 CALVERT VARIABLE SERIES, INC. 1SR Social Balanced Portfolio (5/00; 9/86) (19.23) (1.60) 5.43 6.80 EVERGREEN VA 1CG Capital Growth Fund - Class 2 (8/01; 3/98)(6) (28.73) -- -- (4.02) FIDELITY(R) VIP 1FG Growth & Income Portfolio Service Class 2 (8/01; 12/96)(7) (23.46) (1.73) -- 3.19 1FM Mid Cap Portfolio Service Class 2 (8/01; 12/98)(7) (17.25) -- -- 13.17 1FO Overseas Portfolio Service Class 2 (8/01; 1/87)(7) (26.75) (6.22) 3.44 3.17
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 13 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF A TEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT FTVIPT 1RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(8) (6.22%) 8.20% 1SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(8) (16.55) 4.79 1MS Mutual Shares Securities Fund - Class 2 (8/01; 11/96)(8) (18.88) (16.43) GOLDMAN SACHS VIT 1UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (28.07) (12.95) 1MC Mid Cap Value Fund (9/99; 5/98) (12.39) 6.59 INVESCO VIF 1ID Dynamics Fund (8/01; 8/97) (37.18) (31.73) 1FS Financial Services Fund (8/01; 9/99) (21.43) (18.31) 1TC Technology Fund (8/01; 5/97) (50.80) (45.16) 1TL Telecommunications Fund (8/01; 9/99) (54.42) (50.87) JANUS ASPEN SERIES 1GT Global Technology Portfolio: Service Shares (5/00; 1/00)(9) (45.41) (42.61) 1IG International Growth Portfolio: Service Shares (5/00; 5/94)(9) (31.59) (28.45) LAZARD RETIREMENT SERIES 1IP International Equity Portfolio (9/99; 9/98) (17.87) (14.39) MFS(R) 1MG Investors Growth Stock Series - Service Class (5/00; 5/99)(10) (33.37) (26.27) 1MD New Discovery Series - Service Class (5/00; 5/98)(10) (37.09) (20.20) 1UT Utilities Series - Service Class (8/01; 1/95)(10) (28.98) (28.14) PIONEER VCT 1PE Pioneer Equity Income VCT Portfolio - Class II Shares (8/01; 3/95)(11) (22.74) (18.61) 1EU Pioneer Europe VCT Portfolio - Class II Shares (8/01; 10/98)(12) (25.48) (21.18) PUTNAM VARIABLE TRUST 1HS Putnam VT Health Sciences Fund - Class IB Shares (8/01; 4/98)(13) (26.65) (21.85) 1PI Putnam VT International Equity Fund - Class IB Shares (8/01; 1/97)(14) (24.21) (20.92) (previously Putnam VT International Growth Fund - Class IB Shares) 1VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(14) (36.00) (16.62) STRONG FUNDS 1SO Strong Opportunity Fund II - Advisor Class (8/01; 5/92)(15) (32.67) (25.85) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT FTVIPT 1RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(8) (6.22%) 0.12% 8.87% 8.53% 1SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(8) (16.55) -- -- (1.92) 1MS Mutual Shares Securities Fund - Class 2 (8/01; 11/96)(8) (18.88) 1.67 -- 4.73 GOLDMAN SACHS VIT 1UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (28.07) -- -- (4.67) 1MC Mid Cap Value Fund (9/99; 5/98) (12.39) -- -- 1.52 INVESCO VIF 1ID Dynamics Fund (8/01; 8/97) (37.18) (5.55) -- (4.56) 1FS Financial Services Fund (8/01; 9/99) (21.43) -- -- (1.03) 1TC Technology Fund (8/01; 5/97) (50.80) (8.42) -- (5.24) 1TL Telecommunications Fund (8/01; 9/99) (54.42) -- -- (34.57) JANUS ASPEN SERIES 1GT Global Technology Portfolio: Service Shares (5/00; 1/00)(9) (45.41) -- -- (39.95) 1IG International Growth Portfolio: Service Shares (5/00; 5/94)(9) (31.59) (2.20) -- 6.92 LAZARD RETIREMENT SERIES 1IP International Equity Portfolio (9/99; 9/98) (17.87) -- -- (6.43) MFS(R) 1MG Investors Growth Stock Series - Service Class (5/00; 5/99)(10) (33.37) -- -- (11.28) 1MD New Discovery Series - Service Class (5/00; 5/98)(10) (37.09) -- -- 0.10 1UT Utilities Series - Service Class (8/01; 1/95)(10) (28.98) (2.91) -- 7.50 PIONEER VCT 1PE Pioneer Equity Income VCT Portfolio - Class II Shares (8/01; 3/95)(11) (22.74) (0.37) -- 8.67 1EU Pioneer Europe VCT Portfolio - Class II Shares (8/01; 10/98)(12) (25.48) -- -- (11.00) PUTNAM VARIABLE TRUST 1HS Putnam VT Health Sciences Fund - Class IB Shares (8/01; 4/98)(13) (26.65) -- -- (3.76) 1PI Putnam VT International Equity Fund - Class IB Shares (8/01; 1/97)(14) (24.21) 0.02 -- 2.58 (previously Putnam VT International Growth Fund - Class IB Shares) 1VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(14) (36.00) (6.30) -- (1.94) STRONG FUNDS 1SO Strong Opportunity Fund II - Advisor Class (8/01; 5/92)(15) (32.67) 0.23 9.22 10.17
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 14 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF A TEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT WANGER 1IT International Small Cap (9/99; 5/95) (20.72%) (11.21%) 1SP U.S. Smaller Companies (9/99; 5/95) (23.43) (3.45) WELLS FARGO VT 1AA Asset Allocation Fund (5/01; 4/94)(16) (19.82) (14.71) 1WI International Equity Fund (5/01; 7/00) (29.00) (24.05) 1SG Small Cap Growth Fund (5/01; 5/95)(17) (42.94) (31.52) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT WANGER 1IT International Small Cap (9/99; 5/95) (20.72%) 2.96% --% 9.83% 1SP U.S. Smaller Companies (9/99; 5/95) (23.43) 0.62 -- 11.58 WELLS FARGO VT 1AA Asset Allocation Fund (5/01; 4/94)(16) (19.82) 0.03 -- 6.83 1WI International Equity Fund (5/01; 7/00) (29.00) -- -- (22.74) 1SG Small Cap Growth Fund (5/01; 5/95)(17) (42.94) (14.33) -- (3.30)
(a) Current applicable charges deducted from performance include a $30 annual contract administrative charge, a 0.95% annual mortality and expense risk fee and applicable surrender charges. Premium taxes and purchase payment credits are not reflected in these total returns. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 15 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF A SEVEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC1 Blue Chip Advantage Fund (9/99; 9/99)(1) (28.10%) (14.34%) BD1 Bond Fund (9/99; 10/81) (2.12) 3.53 CR1 Capital Resource Fund (9/99; 10/81) (27.51) (15.97) CM1 Cash Management Fund (9/99; 10/81) (6.14) 0.95 DE1 Diversified Equity Income Fund (9/99; 9/99) (24.75) (7.03) EM1 Emerging Markets Fund (5/00; 5/00) (12.23) (15.85) ES1 Equity Select Fund (5/01; 5/01) (19.89) (13.34) EI1 Extra Income Fund (9/99; 5/96) (13.22) (5.54) FI1 Federal Income Fund (9/99; 9/99) (1.86) 3.70 GB1 Global Bond Fund (9/99; 5/96) 6.85 3.22 GR1 Growth Fund (9/99; 9/99) (31.27) (21.35) IE1 International Fund (9/99; 1/92) (24.02) (18.09) MF1 Managed Fund (9/99; 4/86) (19.12) (7.63) ND1 NEW DIMENSIONS FUND(R) (9/99; 5/96) (27.39) (11.91) SV1 Partners Small Cap Value Fund (8/01; 8/01) (18.40) (9.64) IV1 S&P 500 Index Fund (5/00; 5/00) (27.87) (19.56) SC1 Small Cap Advantage Fund (9/99; 9/99) (22.93) (5.24) ST1 Stock Fund (8/01; 8/01) (26.48) (22.03) SA1 Strategy Aggressive Fund (9/99; 1/92) (36.66) (17.95) AIM V.I. 1AC Capital Appreciation Fund, Series II Shares (8/01; 5/93)(2) (29.81) (24.32) 1AD Capital Development Fund, Series II Shares (8/01; 5/98)(2) (27.13) (22.03) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 1AL AllianceBernstein Growth and Income Portfolio (Class B) (8/01; 1/91)(3) (27.73) (23.21) 1AB AllianceBernstein International Value Portfolio (Class B) (8/01; 5/01)(4) (12.16) (10.71) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 1AI VP International, Class II (8/01; 5/94)(5) (26.17) (24.05) 1AV VP Value, Class II (8/01; 5/96)(5) (19.02) (12.13) CALVERT VARIABLE SERIES, INC. 1SR Social Balanced Portfolio (5/00; 9/86) (18.46) (11.61) EVERGREEN VA 1CG Capital Growth Fund - Class 2 (8/01; 3/98)(6) (28.06) (24.26) FIDELITY(R) VIP 1FG Growth & Income Portfolio Service Class 2 (8/01; 12/96)(7) (22.74) (17.28) 1FM Mid Cap Portfolio Service Class 2 (8/01; 12/98)(7) (16.46) (10.02) 1FO Overseas Portfolio Service Class 2 (8/01; 1/87)(7) (26.07) (22.88) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC1 Blue Chip Advantage Fund (9/99; 9/99)(1) (28.10%) --% --% (14.34%) BD1 Bond Fund (9/99; 10/81) (2.12) 2.41 5.91 8.96 CR1 Capital Resource Fund (9/99; 10/81) (27.51) (5.93) 2.77 9.08 CM1 Cash Management Fund (9/99; 10/81) (6.14) 2.18 3.24 5.09 DE1 Diversified Equity Income Fund (9/99; 9/99) (24.75) -- -- (7.03) EM1 Emerging Markets Fund (5/00; 5/00) (12.23) -- -- (15.85) ES1 Equity Select Fund (5/01; 5/01) (19.89) -- -- (13.34) EI1 Extra Income Fund (9/99; 5/96) (13.22) (3.86) -- (0.06) FI1 Federal Income Fund (9/99; 9/99) (1.86) -- -- 3.70 GB1 Global Bond Fund (9/99; 5/96) 6.85 2.52 -- 3.82 GR1 Growth Fund (9/99; 9/99) (31.27) -- -- (21.35) IE1 International Fund (9/99; 1/92) (24.02) (7.65) 0.89 0.61 MF1 Managed Fund (9/99; 4/86) (19.12) (1.66) 5.49 7.58 ND1 NEW DIMENSIONS FUND(R) (9/99; 5/96) (27.39) (1.78) -- 3.84 SV1 Partners Small Cap Value Fund (8/01; 8/01) (18.40) -- -- (9.64) IV1 S&P 500 Index Fund (5/00; 5/00) (27.87) -- -- (19.56) SC1 Small Cap Advantage Fund (9/99; 9/99) (22.93) -- -- (5.24) ST1 Stock Fund (8/01; 8/01) (26.48) -- -- (22.03) SA1 Strategy Aggressive Fund (9/99; 1/92) (36.66) (9.99) 0.71 1.37 AIM V.I. 1AC Capital Appreciation Fund, Series II Shares (8/01; 5/93)(2) (29.81) (4.13) -- 6.22 1AD Capital Development Fund, Series II Shares (8/01; 5/98)(2) (27.13) -- -- (3.23) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 1AL AllianceBernstein Growth and Income Portfolio (Class B) (8/01; 1/91)(3) (27.73) 1.60 10.03 9.14 1AB AllianceBernstein International Value Portfolio (Class B) (8/01; 5/01)(4) (12.16) -- -- (8.50) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 1AI VP International, Class II (8/01; 5/94)(5) (26.17) (4.79) -- 1.21 1AV VP Value, Class II (8/01; 5/96)(5) (19.02) 1.92 -- 7.11 CALVERT VARIABLE SERIES, INC. 1SR Social Balanced Portfolio (5/00; 9/86) (18.46) (1.24) 5.55 6.80 EVERGREEN VA 1CG Capital Growth Fund - Class 2 (8/01; 3/98)(6) (28.06) -- -- (3.65) FIDELITY(R) VIP 1FG Growth & Income Portfolio Service Class 2 (8/01; 12/96)(7) (22.74) (1.37) -- 3.62 1FM Mid Cap Portfolio Service Class 2 (8/01; 12/98)(7) (16.46) -- -- 13.51 1FO Overseas Portfolio Service Class 2 (8/01; 1/87)(7) (26.07) (5.88) 3.59 3.17
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 16 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF A SEVEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT FTVIPT 1RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(8) (5.31%) 8.45% 1SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(8) (15.76) 5.06 1MS Mutual Shares Securities Fund - Class 2 (8/01; 11/96)(8) (18.10) (15.85) GOLDMAN SACHS VIT 1UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (27.39) (12.69) 1MC Mid Cap Value Fund (9/99; 5/98) (11.54) 6.85 INVESCO VIF 1ID Dynamics Fund (8/01; 8/97) (36.61) (31.25) 1FS Financial Services Fund (8/01; 9/99) (20.69) (17.74) 1TC Technology Fund (8/01; 5/97) (50.38) (44.78) 1TL Telecommunications Fund (8/01; 9/99) (54.03) (50.52) JANUS ASPEN SERIES 1GT Global Technology Portfolio: Service Shares (5/00; 1/00)(9) (44.93) (42.41) 1IG International Growth Portfolio: Service Shares (5/00; 5/94)(9) (30.95) (28.20) LAZARD RETIREMENT SERIES 1IP International Equity Portfolio (9/99; 9/98) (17.08) (14.14) MFS(R) 1MG Investors Growth Stock Series - Service Class (5/00; 5/99)(10) (32.75) (26.01) 1MD New Discovery Series - Service Class (5/00; 5/98)(10) (36.52) (19.92) 1UT Utilities Series - Service Class (8/01; 1/95)(10) (28.32) (27.64) PIONEER VCT 1PE Pioneer Equity Income VCT Portfolio - Class II Shares (8/01; 3/95)(11) (22.01) (18.04) 1EU Pioneer Europe VCT Portfolio - Class II Shares (8/01; 10/98)(12) (24.78) (20.63) PUTNAM VARIABLE TRUST 1HS Putnam VT Health Sciences Fund - Class IB Shares (8/01; 4/98)(13) (25.96) (21.31) 1PI Putnam VT International Equity Fund - Class IB Shares (8/01; 1/97)(14) (23.50) (20.37) (previously Putnam VT International Growth Fund - Class IB Shares) 1VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(14) (35.41) (16.37) STRONG FUNDS 1SO Strong Opportunity Fund II - Advisor Class (8/01; 5/92)(15) (32.05) (25.34) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT FTVIPT 1RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(8) (5.31%) 0.50% 8.96% 8.53% 1SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(8) (15.76) -- -- (1.53) 1MS Mutual Shares Securities Fund - Class 2 (8/01; 11/96)(8) (18.10) 2.04 -- 5.11 GOLDMAN SACHS VIT 1UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (27.39) -- -- (4.30) 1MC Mid Cap Value Fund (9/99; 5/98) (11.54) -- -- 1.92 INVESCO VIF 1ID Dynamics Fund (8/01; 8/97) (36.61) (5.21) -- (4.22) 1FS Financial Services Fund (8/01; 9/99) (20.69) -- -- (0.74) 1TC Technology Fund (8/01; 5/97) (50.38) (8.11) -- (4.94) 1TL Telecommunications Fund (8/01; 9/99) (54.03) -- -- (34.38) JANUS ASPEN SERIES 1GT Global Technology Portfolio: Service Shares (5/00; 1/00)(9) (44.93) -- -- (39.77) 1IG International Growth Portfolio: Service Shares (5/00; 5/94)(9) (30.95) (1.85) -- 7.12 LAZARD RETIREMENT SERIES 1IP International Equity Portfolio (9/99; 9/98) (17.08) -- -- (6.01) MFS(R) 1MG Investors Growth Stock Series - Service Class (5/00; 5/99)(10) (32.75) -- -- (11.05) 1MD New Discovery Series - Service Class (5/00; 5/98)(10) (36.52) -- -- 0.50 1UT Utilities Series - Service Class (8/01; 1/95)(10) (28.32) (2.56) -- 7.80 PIONEER VCT 1PE Pioneer Equity Income VCT Portfolio - Class II Shares (8/01; 3/95)(11) (22.01) 0.00 -- 8.96 1EU Pioneer Europe VCT Portfolio - Class II Shares (8/01; 10/98)(12) (24.78) -- -- (10.59) PUTNAM VARIABLE TRUST 1HS Putnam VT Health Sciences Fund - Class IB Shares (8/01; 4/98)(13) (25.96) -- -- (3.38) 1PI Putnam VT International Equity Fund - Class IB Shares (8/01; 1/97)(14) (23.50) 0.39 -- 2.88 (previously Putnam VT International Growth Fund - Class IB Shares) 1VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(14) (35.41) (5.96) -- (1.65) STRONG FUNDS 1SO Strong Opportunity Fund II - Advisor Class (8/01; 5/92)(15) (32.05) 0.60 9.31 10.17
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 17 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF A SEVEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT WANGER 1IT International Small Cap (9/99; 5/95) (19.96%) (10.95%) 1SP U.S. Smaller Companies (9/99; 5/95) (22.71) (3.17) WELLS FARGO VT 1AA Asset Allocation Fund (5/01; 4/94)(16) (19.06) (14.23) 1WI International Equity Fund (5/01; 7/00) (28.33) (23.63) 1SG Small Cap Growth Fund (5/01; 5/95)(17) (42.43) (31.14) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT WANGER 1IT International Small Cap (9/99; 5/95) (19.96%) 3.32% --% 10.11% 1SP U.S. Smaller Companies (9/99; 5/95) (22.71) 1.00 -- 11.83 WELLS FARGO VT 1AA Asset Allocation Fund (5/01; 4/94)(16) (19.06) 0.41 -- 7.04 1WI International Equity Fund (5/01; 7/00) (28.33) -- -- (22.45) 1SG Small Cap Growth Fund (5/01; 5/95)(17) (42.43) (14.02) -- (2.86)
(a) Current applicable charges deducted from performance include a $30 annual contract administrative charge, a 0.95% annual mortality and expense risk fee and applicable surrender charges. Premium taxes and purchase payment credits are not reflected in these total returns. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 18 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITHOUT SURRENDER FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC1 Blue Chip Advantage Fund (9/99; 9/99)(1) (23.44%) (12.87%) BD1 Bond Fund (9/99; 10/81) 4.49 5.18 CR1 Capital Resource Fund (9/99; 10/81) (22.81) (14.53) CM1 Cash Management Fund (9/99; 10/81) 0.17 2.67 DE1 Diversified Equity Income Fund (9/99; 9/99) (19.84) (5.44) EM1 Emerging Markets Fund (5/00; 5/00) (6.38) (14.10) ES1 Equity Select Fund (5/01; 5/01) (14.62) (9.97) EI1 Extra Income Fund (9/99; 5/96) (7.44) (3.93) FI1 Federal Income Fund (9/99; 9/99) 4.78 5.34 GB1 Global Bond Fund (9/99; 5/96) 13.85 4.88 GR1 Growth Fund (9/99; 9/99) (26.85) (20.01) IE1 International Fund (9/99; 1/92) (19.06) (16.69) MF1 Managed Fund (9/99; 4/86) (13.79) (6.05) ND1 NEW DIMENSIONS FUND(R) (9/99; 5/96) (22.68) (10.41) SV1 Partners Small Cap Value Fund (8/01; 8/01) (13.01) (5.29) IV1 S&P 500 Index Fund (5/00; 5/00) (23.19) (17.62) SC1 Small Cap Advantage Fund (9/99; 9/99) (17.89) (3.62) ST1 Stock Fund (8/01; 8/01) (21.70) (18.31) SA1 Strategy Aggressive Fund (9/99; 1/92) (32.64) (16.55) AIM V.I. 1AC Capital Appreciation Fund, Series II Shares (8/01; 5/93)(2) (25.28) (20.69) 1AD Capital Development Fund, Series II Shares (8/01; 5/98)(2) (22.40) (18.31) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 1AL AllianceBernstein Growth and Income Portfolio (Class B) (8/01; 1/91)(3) (23.05) (19.53) 1AB AllianceBernstein International Value Portfolio (Class B) (8/01; 5/01)(4) (6.30) (6.43) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 1AI VP International, Class II (8/01; 5/94)(5) (21.37) (20.42) 1AV VP Value, Class II (8/01; 5/96)(5) (13.68) (7.91) CALVERT VARIABLE SERIES, INC. 1SR Social Balanced Portfolio (5/00; 9/86) (13.07) (9.46) EVERGREEN VA 1CG Capital Growth Fund - Class 2 (8/01; 3/98)(6) (23.40) (20.64) FIDELITY(R) VIP 1FG Growth & Income Portfolio Service Class 2 (8/01; 12/96)(7) (17.68) (13.31) 1FM Mid Cap Portfolio Service Class 2 (8/01; 12/98)(7) (10.92) (5.71) 1FO Overseas Portfolio Service Class 2 (8/01; 1/87)(7) (21.25) (19.20) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC1 Blue Chip Advantage Fund (9/99; 9/99)(1) (23.44%) --% --% (12.87%) BD1 Bond Fund (9/99; 10/81) 4.49 3.31 5.91 8.96 CR1 Capital Resource Fund (9/99; 10/81) (22.81) (5.09) 2.77 9.08 CM1 Cash Management Fund (9/99; 10/81) 0.17 3.08 3.24 5.09 DE1 Diversified Equity Income Fund (9/99; 9/99) (19.84) -- -- (5.44) EM1 Emerging Markets Fund (5/00; 5/00) (6.38) -- -- (14.10) ES1 Equity Select Fund (5/01; 5/01) (14.62) -- -- (9.97) EI1 Extra Income Fund (9/99; 5/96) (7.44) (2.97) -- 0.21 FI1 Federal Income Fund (9/99; 9/99) 4.78 -- -- 5.34 GB1 Global Bond Fund (9/99; 5/96) 13.85 3.41 -- 4.06 GR1 Growth Fund (9/99; 9/99) (26.85) -- -- (20.01) IE1 International Fund (9/99; 1/92) (19.06) (6.82) 0.89 0.61 MF1 Managed Fund (9/99; 4/86) (13.79) (0.76) 5.49 7.58 ND1 NEW DIMENSIONS FUND(R) (9/99; 5/96) (22.68) (0.90) -- 4.08 SV1 Partners Small Cap Value Fund (8/01; 8/01) (13.01) -- -- (5.29) IV1 S&P 500 Index Fund (5/00; 5/00) (23.19) -- -- (17.62) SC1 Small Cap Advantage Fund (9/99; 9/99) (17.89) -- -- (3.62) ST1 Stock Fund (8/01; 8/01) (21.70) -- -- (18.31) SA1 Strategy Aggressive Fund (9/99; 1/92) (32.64) (9.20) 0.71 1.37 AIM V.I. 1AC Capital Appreciation Fund, Series II Shares (8/01; 5/93)(2) (25.28) (3.28) -- 6.22 1AD Capital Development Fund, Series II Shares (8/01; 5/98)(2) (22.40) -- -- (2.30) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 1AL AllianceBernstein Growth and Income Portfolio (Class B) (8/01; 1/91)(3) (23.05) 2.50 10.03 9.14 1AB AllianceBernstein International Value Portfolio (Class B) (8/01; 5/01)(4) (6.30) -- -- (4.94) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 1AI VP International, Class II (8/01; 5/94)(5) (21.37) (3.93) -- 1.21 1AV VP Value, Class II (8/01; 5/96)(5) (13.68) 2.83 -- 7.31 CALVERT VARIABLE SERIES, INC. 1SR Social Balanced Portfolio (5/00; 9/86) (13.07) (0.34) 5.55 6.80 EVERGREEN VA 1CG Capital Growth Fund - Class 2 (8/01; 3/98)(6) (23.40) -- -- (2.76) FIDELITY(R) VIP 1FG Growth & Income Portfolio Service Class 2 (8/01; 12/96)(7) (17.68) (0.48) -- 3.89 1FM Mid Cap Portfolio Service Class 2 (8/01; 12/98)(7) (10.92) -- -- 14.35 1FO Overseas Portfolio Service Class 2 (8/01; 1/87)(7) (21.25) (5.03) 3.59 3.17
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 19 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITHOUT SURRENDER FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT FTVIPT 1RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(8) 1.06% 9.94% 1SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(8) (10.17) 6.66 1MS Mutual Shares Securities Fund - Class 2 (8/01; 11/96)(8) (12.69) (11.81) GOLDMAN SACHS VIT 1UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (22.68) (11.20) 1MC Mid Cap Value Fund (9/99; 5/98) (5.64) 8.39 INVESCO VIF 1ID Dynamics Fund (8/01; 8/97) (32.59) (27.94) 1FS Financial Services Fund (8/01; 9/99) (15.47) (13.81) 1TC Technology Fund (8/01; 5/97) (47.39) (42.14) 1TL Telecommunications Fund (8/01; 9/99) (51.32) (48.14) JANUS ASPEN SERIES 1GT Global Technology Portfolio: Service Shares (5/00; 1/00)(9) (41.54) (41.04) 1IG International Growth Portfolio: Service Shares (5/00; 5/94)(9) (26.51) (26.48) LAZARD RETIREMENT SERIES 1IP International Equity Portfolio (9/99; 9/98) (11.60) (12.67) MFS(R) 1MG Investors Growth Stock Series - Service Class (5/00; 5/99)(10) (28.44) (24.24) 1MD New Discovery Series - Service Class (5/00; 5/98)(10) (32.49) (18.01) 1UT Utilities Series - Service Class (8/01; 1/95)(10) (23.67) (24.15) PIONEER VCT 1PE Pioneer Equity Income VCT Portfolio - Class II Shares (8/01; 3/95)(11) (16.89) (14.11) 1EU Pioneer Europe VCT Portfolio - Class II Shares (8/01; 10/98)(12) (19.87) (16.84) PUTNAM VARIABLE TRUST 1HS Putnam VT Health Sciences Fund - Class IB Shares (8/01; 4/98)(13) (21.14) (17.53) 1PI Putnam VT International Equity Fund - Class IB Shares (8/01; 1/97)(14) (18.49) (16.55) (previously Putnam VT International Growth Fund - Class IB Shares) 1VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(14) (31.30) (14.95) STRONG FUNDS 1SO Strong Opportunity Fund II - Advisor Class (8/01; 5/92)(15) (27.69) (21.76) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT FTVIPT 1RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(8) 1.06% 1.43% 8.96% 8.53% 1SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(8) (10.17) -- -- (0.58) 1MS Mutual Shares Securities Fund - Class 2 (8/01; 11/96)(8) (12.69) 2.94 -- 5.36 GOLDMAN SACHS VIT 1UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (22.68) -- -- (3.42) 1MC Mid Cap Value Fund (9/99; 5/98) (5.64) -- -- 2.90 INVESCO VIF 1ID Dynamics Fund (8/01; 8/97) (32.59) (4.39) -- (3.56) 1FS Financial Services Fund (8/01; 9/99) (15.47) -- -- 0.96 1TC Technology Fund (8/01; 5/97) (47.39) (7.35) -- (4.35) 1TL Telecommunications Fund (8/01; 9/99) (51.32) -- -- (33.25) JANUS ASPEN SERIES 1GT Global Technology Portfolio: Service Shares (5/00; 1/00)(9) (41.54) -- -- (38.53) 1IG International Growth Portfolio: Service Shares (5/00; 5/94)(9) (26.51) (0.98) -- 7.12 LAZARD RETIREMENT SERIES 1IP International Equity Portfolio (9/99; 9/98) (11.60) -- -- (5.00) MFS(R) 1MG Investors Growth Stock Series - Service Class (5/00; 5/99)(10) (28.44) -- -- (9.73) 1MD New Discovery Series - Service Class (5/00; 5/98)(10) (32.49) -- -- 1.46 1UT Utilities Series - Service Class (8/01; 1/95)(10) (23.67) (1.69) -- 7.80 PIONEER VCT 1PE Pioneer Equity Income VCT Portfolio - Class II Shares (8/01; 3/95)(11) (16.89) 0.91 -- 8.96 1EU Pioneer Europe VCT Portfolio - Class II Shares (8/01; 10/98)(12) (19.87) -- -- (9.60) PUTNAM VARIABLE TRUST 1HS Putnam VT Health Sciences Fund - Class IB Shares (8/01; 4/98)(13) (21.14) -- -- (2.45) 1PI Putnam VT International Equity Fund - Class IB Shares (8/01; 1/97)(14) (18.49) 1.30 -- 3.45 (previously Putnam VT International Growth Fund - Class IB Shares) 1VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(14) (31.30) (5.14) -- (1.07) STRONG FUNDS 1SO Strong Opportunity Fund II - Advisor Class (8/01; 5/92)(15) (27.69) 1.49 9.31 10.17
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 20 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITHOUT SURRENDER FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT WANGER 1IT International Small Cap (9/99; 5/95) (14.69%) (9.43%) 1SP U.S. Smaller Companies (9/99; 5/95) (17.64) (1.50) WELLS FARGO VT 1AA Asset Allocation Fund (5/01; 4/94)(16) (13.72) (10.86) 1WI International Equity Fund (5/01; 7/00) (23.69) (20.69) 1SG Small Cap Growth Fund (5/01; 5/95)(17) (38.85) (28.52) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT WANGER 1IT International Small Cap (9/99; 5/95) (14.69%) 4.18% --% 10.11% 1SP U.S. Smaller Companies (9/99; 5/95) (17.64) 1.91 -- 11.83 WELLS FARGO VT 1AA Asset Allocation Fund (5/01; 4/94)(16) (13.72) 1.32 -- 7.04 1WI International Equity Fund (5/01; 7/00) (23.69) -- -- (20.42) 1SG Small Cap Growth Fund (5/01; 5/95)(17) (38.85) (13.29) -- (2.86)
(a) Current applicable charges deducted from performance include a $30 annual contract administrative charge and a 0.95% annual mortality and expense risk fee. Premium taxes and purchase payment credits are not reflected in these total returns. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 21 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS AND THE TEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC2 Blue Chip Advantage Fund (9/99; 9/99)(1) (29.23%) (15.05%) BD2 Bond Fund (9/99; 10/81) (3.47) 2.79 CR2 Capital Resource Fund (9/99; 10/81) (28.64) (16.68) CM2 Cash Management Fund (9/99; 10/81) (7.46) 0.23 DE2 Diversified Equity Income Fund (9/99; 9/99) (25.90) (7.75) EM2 Emerging Markets Fund (5/00; 5/00) (13.49) (16.88) ES2 Equity Select Fund (5/01; 5/01) (21.09) (14.29) EI2 Extra Income Fund (9/99; 5/96) (14.47) (6.26) FI2 Federal Income Fund (9/99; 9/99) (3.21) 2.96 GB2 Global Bond Fund (9/99; 5/96) 5.42 2.48 GR2 Growth Fund (9/99; 9/99) (32.36) (22.06) IE2 International Fund (9/99; 1/92) (25.18) (18.80) MF2 Managed Fund (9/99; 4/86) (20.32) (8.35) ND2 NEW DIMENSIONS FUND(R) (9/99; 5/96) (28.52) (12.62) SV2 Partners Small Cap Value Fund (8/01; 8/01) (19.61) (10.70) IV2 S&P 500 Index Fund (5/00; 5/00) (28.99) (20.31) SC2 Small Cap Advantage Fund (9/99; 9/99) (24.10) (5.96) ST2 Stock Fund (8/01; 8/01) (27.62) (23.03) SA2 Strategy Aggressive Fund (9/99; 1/92) (37.70) (18.65) AIM V.I. 2AC Capital Appreciation Fund, Series II Shares (8/01; 5/93)(2) (30.91) (25.30) 2AD Capital Development Fund, Series II Shares (8/01; 5/98)(2) (28.26) (23.03) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 2AL AllianceBernstein Growth and Income Portfolio (Class B) (8/01; 1/91)(3) (28.86) (24.19) 2AB AllianceBernstein International Value Portfolio (Class B) (8/01; 5/01)(4) (13.42) (11.76) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 2AI VP International, Class II (8/01; 5/94)(5) (27.31) (25.03) 2AV VP Value, Class II (8/01; 5/96)(5) (20.23) (13.17) CALVERT VARIABLE SERIES, INC. 2SR Social Balanced Portfolio (5/00; 9/86) (19.67) (12.38) EVERGREEN VA 2CG Capital Growth Fund - Class 2 (8/01; 3/98)(6) (29.18) (25.24) FIDELITY(R) VIP 2FG Growth & Income Portfolio Service Class 2 (8/01; 12/96)(7) (23.91) (18.30) 2FM Mid Cap Portfolio Service Class 2 (8/01; 12/98)(7) (17.68) (11.07) 2FO Overseas Portfolio Service Class 2 (8/01; 1/87)(7) (27.21) (23.86) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC2 Blue Chip Advantage Fund (9/99; 9/99)(1) (29.23%) --% --% (15.05%) BD2 Bond Fund (9/99; 10/81) (3.47) 1.58 5.35 8.53 CR2 Capital Resource Fund (9/99; 10/81) (28.64) (6.73) 2.16 8.65 CM2 Cash Management Fund (9/99; 10/81) (7.46) 1.34 2.64 4.65 DE2 Diversified Equity Income Fund (9/99; 9/99) (25.90) -- -- (7.75) EM2 Emerging Markets Fund (5/00; 5/00) (13.49) -- -- (16.88) ES2 Equity Select Fund (5/01; 5/01) (21.09) -- -- (14.29) EI2 Extra Income Fund (9/99; 5/96) (14.47) (4.66) -- (0.92) FI2 Federal Income Fund (9/99; 9/99) (3.21) -- -- 2.96 GB2 Global Bond Fund (9/99; 5/96) 5.42 1.69 -- 2.99 GR2 Growth Fund (9/99; 9/99) (32.36) -- -- (22.06) IE2 International Fund (9/99; 1/92) (25.18) (8.45) 0.27 0.16 MF2 Managed Fund (9/99; 4/86) (20.32) (2.46) 4.92 7.15 ND2 NEW DIMENSIONS FUND(R) (9/99; 5/96) (28.52) (2.58) -- 3.01 SV2 Partners Small Cap Value Fund (8/01; 8/01) (19.61) -- -- (10.70) IV2 S&P 500 Index Fund (5/00; 5/00) (28.99) -- -- (20.31) SC2 Small Cap Advantage Fund (9/99; 9/99) (24.10) -- -- (5.96) ST2 Stock Fund (8/01; 8/01) (27.62) -- -- (23.03) SA2 Strategy Aggressive Fund (9/99; 1/92) (37.70) (10.77) 0.09 0.93 AIM V.I. 2AC Capital Appreciation Fund, Series II Shares (8/01; 5/93)(2) (30.91) (4.94) -- 5.65 2AD Capital Development Fund, Series II Shares (8/01; 5/98)(2) (28.26) -- -- (4.05) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 2AL AllianceBernstein Growth and Income Portfolio (Class B) (8/01; 1/91)(3) (28.86) 0.79 9.51 8.70 2AB AllianceBernstein International Value Portfolio (Class B) (8/01; 5/01)(4) (13.42) -- -- (9.45) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 2AI VP International, Class II (8/01; 5/94)(5) (27.31) (5.59) -- 0.45 2AV VP Value, Class II (8/01; 5/96)(5) (20.23) 1.08 -- 6.35 CALVERT VARIABLE SERIES, INC. 2SR Social Balanced Portfolio (5/00; 9/86) (19.67) (2.05) 4.98 6.36 EVERGREEN VA 2CG Capital Growth Fund - Class 2 (8/01; 3/98)(6) (29.18) -- -- (4.46) FIDELITY(R) VIP 2FG Growth & Income Portfolio Service Class 2 (8/01; 12/96)(7) (23.91) (2.17) -- 2.74 2FM Mid Cap Portfolio Service Class 2 (8/01; 12/98)(7) (17.68) -- -- 12.74 2FO Overseas Portfolio Service Class 2 (8/01; 1/87)(7) (27.21) (6.67) 2.99 2.72
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 22 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS AND THE TEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT FTVIPT 2RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(8) (6.64%) 7.76% 2SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(8) (16.99) 4.34 2MS Mutual Shares Securities Fund - Class 2 (8/01; 11/96)(8) (19.31) (16.87) GOLDMAN SACHS VIT 2UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (28.52) (13.41) 2MC Mid Cap Value Fund (9/99; 5/98) (12.81) 6.14 INVESCO VIF 2ID Dynamics Fund (8/01; 8/97) (37.65) (32.20) 2FS Financial Services Fund (8/01; 9/99) (21.88) (18.76) 2TC Technology Fund (8/01; 5/97) (51.30) (45.66) 2TL Telecommunications Fund (8/01; 9/99) (54.92) (51.38) JANUS ASPEN SERIES 2GT Global Technology Portfolio: Service Shares (5/00; 1/00)(9) (45.90) (43.12) 2IG International Growth Portfolio: Service Shares (5/00; 5/94)(9) (32.05) (28.93) LAZARD RETIREMENT SERIES 2IP International Equity Portfolio (9/99; 9/98) (18.30) (14.85) MFS(R) 2MG Investors Growth Stock Series - Service Class (5/00; 5/99)(10) (33.84) (26.75) 2MD New Discovery Series - Service Class (5/00; 5/98)(10) (37.56) (20.67) 2UT Utilities Series - Service Class (8/01; 1/95)(10) (29.44) (28.61) PIONEER VCT 2PE Pioneer Equity Income VCT Portfolio - Class II Shares (8/01; 3/95)(11) (23.18) (19.06) 2EU Pioneer Europe VCT Portfolio - Class II Shares (8/01; 10/98)(12) (25.93) (21.63) PUTNAM VARIABLE TRUST 2HS Putnam VT Health Sciences Fund - Class IB Shares (8/01; 4/98)(13) (27.10) (22.31) 2PI Putnam VT International Equity Fund - Class IB Shares (8/01; 1/97)(14) (24.66) (21.37) (previously Putnam VT International Growth Fund - Class IB Shares) 2VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(14) (36.47) (17.08) STRONG FUNDS 2SO Strong Opportunity Fund II - Advisor Class (8/01; 5/92)(15) (33.14) (26.32) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT FTVIPT 2RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(8) (6.64%) (0.31%) 8.43% 8.10% 2SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(8) (16.99) -- -- (2.36) 2MS Mutual Shares Securities Fund - Class 2 (8/01; 11/96)(8) (19.31) 1.20 -- 4.27 GOLDMAN SACHS VIT 2UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (28.52) -- -- (5.11) 2MC Mid Cap Value Fund (9/99; 5/98) (12.81) -- -- 1.08 INVESCO VIF 2ID Dynamics Fund (8/01; 8/97) (37.65) (6.00) -- (5.01) 2FS Financial Services Fund (8/01; 9/99) (21.88) -- -- (1.47) 2TC Technology Fund (8/01; 5/97) (51.30) (8.87) -- (5.69) 2TL Telecommunications Fund (8/01; 9/99) (54.92) -- -- (35.07) JANUS ASPEN SERIES 2GT Global Technology Portfolio: Service Shares (5/00; 1/00)(9) (45.90) -- -- (40.45) 2IG International Growth Portfolio: Service Shares (5/00; 5/94)(9) (32.05) (2.64) -- 6.47 LAZARD RETIREMENT SERIES 2IP International Equity Portfolio (9/99; 9/98) (18.30) -- -- (6.88) MFS(R) 2MG Investors Growth Stock Series - Service Class (5/00; 5/99)(10) (33.84) -- -- (11.73) 2MD New Discovery Series - Service Class (5/00; 5/98)(10) (37.56) -- -- (0.33) 2UT Utilities Series - Service Class (8/01; 1/95)(10) (29.44) (3.35) -- 7.05 PIONEER VCT 2PE Pioneer Equity Income VCT Portfolio - Class II Shares (8/01; 3/95)(11) (23.18) (0.81) -- 8.23 2EU Pioneer Europe VCT Portfolio - Class II Shares (8/01; 10/98)(12) (25.93) -- -- (11.45) PUTNAM VARIABLE TRUST 2HS Putnam VT Health Sciences Fund - Class IB Shares (8/01; 4/98)(13) (27.10) -- -- (4.21) 2PI Putnam VT International Equity Fund - Class IB Shares (8/01; 1/97)(14) (24.66) (0.41) -- 2.12 (previously Putnam VT International Growth Fund - Class IB Shares) 2VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(14) (36.47) (6.74) -- (2.38) STRONG FUNDS 2SO Strong Opportunity Fund II - Advisor Class (8/01; 5/92)(15) (33.14) (0.20) 8.79 9.74
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 23 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS AND THE TEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT WANGER 2IT International Small Cap (9/99; 5/95) (21.16%) (11.67%) 2SP U.S. Smaller Companies (9/99; 5/95) (23.88) (3.89) WELLS FARGO VT 2AA Asset Allocation Fund (5/01; 4/94)(16) (20.26) (15.16) 2WI International Equity Fund (5/01; 7/00) (29.45) (24.52) 2SG Small Cap Growth Fund (5/01; 5/95)(17) (43.43) (32.00) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT WANGER 2IT International Small Cap (9/99; 5/95) (21.16%) 2.50% --% 9.39% 2SP U.S. Smaller Companies (9/99; 5/95) (23.88) 0.19 -- 11.15 WELLS FARGO VT 2AA Asset Allocation Fund (5/01; 4/94)(16) (20.26) (0.40) -- 6.39 2WI International Equity Fund (5/01; 7/00) (29.45) -- -- (23.21) 2SG Small Cap Growth Fund (5/01; 5/95)(17) (43.43) (14.82) -- (3.79)
(a) Current applicable charges deducted from performance include a $30 annual contract administrative charge, a 0.25% annual MAV fee, a 0.40% annual EEP fee, a 0.75% annual mortality and expense risk fee and applicable surrender charges. Premium taxes and purchase payment credits are not reflected in these total returns. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 24 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS AND THE SEVEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC2 Blue Chip Advantage Fund (9/99; 9/99)(1) (28.56%) (14.80%) BD2 Bond Fund (9/99; 10/81) (2.53) 3.07 CR2 Capital Resource Fund (9/99; 10/81) (27.98) (16.43) CM2 Cash Management Fund (9/99; 10/81) (6.57) 0.52 DE2 Diversified Equity Income Fund (9/99; 9/99) (25.21) (7.48) EM2 Emerging Markets Fund (5/00; 5/00) (12.66) (16.58) ES2 Equity Select Fund (5/01; 5/01) (20.34) (13.80) EI2 Extra Income Fund (9/99; 5/96) (13.65) (5.99) FI2 Federal Income Fund (9/99; 9/99) (2.26) 3.24 GB2 Global Bond Fund (9/99; 5/96) 6.42 2.77 GR2 Growth Fund (9/99; 9/99) (31.74) (21.83) IE2 International Fund (9/99; 1/92) (24.48) (18.56) MF2 Managed Fund (9/99; 4/86) (19.57) (8.08) ND2 NEW DIMENSIONS FUND(R) (9/99; 5/96) (27.85) (12.37) SV2 Partners Small Cap Value Fund (8/01; 8/01) (18.84) (10.08) IV2 S&P 500 Index Fund (5/00; 5/00) (28.33) (20.03) SC2 Small Cap Advantage Fund (9/99; 9/99) (23.39) (5.68) ST2 Stock Fund (8/01; 8/01) (26.94) (22.49) SA2 Strategy Aggressive Fund (9/99; 1/92) (37.14) (18.42) AIM V.I. 2AC Capital Appreciation Fund, Series II Shares (8/01; 5/93)(2) (30.27) (24.78) 2AD Capital Development Fund, Series II Shares (8/01; 5/98)(2) (27.59) (22.49) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 2AL AllianceBernstein Growth and Income Portfolio (Class B) (8/01; 1/91)(3) (28.19) (23.67) 2AB AllianceBernstein International Value Portfolio (Class B) (8/01; 5/01)(4) (12.59) (11.15) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 2AI VP International, Class II (8/01; 5/94)(5) (26.63) (24.51) 2AV VP Value, Class II (8/01; 5/96)(5) (19.47) (12.57) CALVERT VARIABLE SERIES, INC. 2SR Social Balanced Portfolio (5/00; 9/86) (18.90) (12.07) EVERGREEN VA 2CG Capital Growth Fund - Class 2 (8/01; 3/98)(6) (28.52) (24.72) FIDELITY(R) VIP 2FG Growth & Income Portfolio Service Class 2 (8/01; 12/96)(7) (23.19) (17.73) 2FM Mid Cap Portfolio Service Class 2 (8/01; 12/98)(7) (16.89) (10.46) 2FO Overseas Portfolio Service Class 2 (8/01; 1/87)(7) (26.52) (23.34) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC2 Blue Chip Advantage Fund (9/99; 9/99)(1) (28.56%) --% --% (14.80%) BD2 Bond Fund (9/99; 10/81) (2.53) 1.95 5.47 8.53 CR2 Capital Resource Fund (9/99; 10/81) (27.98) (6.38) 2.32 8.65 CM2 Cash Management Fund (9/99; 10/81) (6.57) 1.72 2.80 4.65 DE2 Diversified Equity Income Fund (9/99; 9/99) (25.21) -- -- (7.48) EM2 Emerging Markets Fund (5/00; 5/00) (12.66) -- -- (16.58) ES2 Equity Select Fund (5/01; 5/01) (20.34) -- -- (13.80) EI2 Extra Income Fund (9/99; 5/96) (13.65) (4.30) -- (0.51) FI2 Federal Income Fund (9/99; 9/99) (2.26) -- -- 3.24 GB2 Global Bond Fund (9/99; 5/96) 6.42 2.06 -- 3.37 GR2 Growth Fund (9/99; 9/99) (31.74) -- -- (21.83) IE2 International Fund (9/99; 1/92) (24.48) (8.11) 0.45 0.16 MF2 Managed Fund (9/99; 4/86) (19.57) (2.10) 5.05 7.15 ND2 NEW DIMENSIONS FUND(R) (9/99; 5/96) (27.85) (2.22) -- 3.39 SV2 Partners Small Cap Value Fund (8/01; 8/01) (18.84) -- -- (10.08) IV2 S&P 500 Index Fund (5/00; 5/00) (28.33) -- -- (20.03) SC2 Small Cap Advantage Fund (9/99; 9/99) (23.39) -- -- (5.68) ST2 Stock Fund (8/01; 8/01) (26.94) -- -- (22.49) SA2 Strategy Aggressive Fund (9/99; 1/92) (37.14) (10.45) 0.26 0.93 AIM V.I. 2AC Capital Appreciation Fund, Series II Shares (8/01; 5/93)(2) (30.27) (4.59) -- 5.78 2AD Capital Development Fund, Series II Shares (8/01; 5/98)(2) (27.59) -- -- (3.67) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 2AL AllianceBernstein Growth and Income Portfolio (Class B) (8/01; 1/91)(3) (28.19) 1.16 9.60 8.70 2AB AllianceBernstein International Value Portfolio (Class B) (8/01; 5/01)(4) (12.59) -- -- (8.94) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 2AI VP International, Class II (8/01; 5/94)(5) (26.63) (5.24) -- 0.76 2AV VP Value, Class II (8/01; 5/96)(5) (19.47) 1.46 -- 6.66 CALVERT VARIABLE SERIES, INC. 2SR Social Balanced Portfolio (5/00; 9/86) (18.90) (1.68) 5.11 6.36 EVERGREEN VA 2CG Capital Growth Fund - Class 2 (8/01; 3/98)(6) (28.52) -- -- (4.10) FIDELITY(R) VIP 2FG Growth & Income Portfolio Service Class 2 (8/01; 12/96)(7) (23.19) (1.81) -- 3.17 2FM Mid Cap Portfolio Service Class 2 (8/01; 12/98)(7) (16.89) -- -- 13.08 2FO Overseas Portfolio Service Class 2 (8/01; 1/87)(7) (26.52) (6.33) 3.15 2.72
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 25 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS AND THE SEVEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT FTVIPT 2RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(8) (5.73%) 8.01% 2SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(8) (16.19) 4.61 2MS Mutual Shares Securities Fund - Class 2 (8/01; 11/96)(8) (18.54) (16.29) GOLDMAN SACHS VIT 2UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (27.85) (13.15) 2MC Mid Cap Value Fund (9/99; 5/98) (11.97) 6.40 INVESCO VIF 2ID Dynamics Fund (8/01; 8/97) (37.09) (31.73) 2FS Financial Services Fund (8/01; 9/99) (21.14) (18.20) 2TC Technology Fund (8/01; 5/97) (50.88) (45.29) 2TL Telecommunications Fund (8/01; 9/99) (54.54) (51.04) JANUS ASPEN SERIES 2GT Global Technology Portfolio: Service Shares (5/00; 1/00)(9) (45.42) (42.92) 2IG International Growth Portfolio: Service Shares (5/00; 5/94)(9) (31.42) (28.68) LAZARD RETIREMENT SERIES 2IP International Equity Portfolio (9/99; 9/98) (17.52) (14.60) MFS(R) 2MG Investors Growth Stock Series - Service Class (5/00; 5/99)(10) (33.23) (26.50) 2MD New Discovery Series - Service Class (5/00; 5/98)(10) (36.99) (20.39) 2UT Utilities Series - Service Class (8/01; 1/95)(10) (28.78) (28.11) PIONEER VCT 2PE Pioneer Equity Income VCT Portfolio - Class II Shares (8/01; 3/95)(11) (22.46) (18.49) 2EU Pioneer Europe VCT Portfolio - Class II Shares (8/01; 10/98)(12) (25.24) (21.09) PUTNAM VARIABLE TRUST 2HS Putnam VT Health Sciences Fund - Class IB Shares (8/01; 4/98)(13) (26.42) (21.77) 2PI Putnam VT International Equity Fund - Class IB Shares (8/01; 1/97)(14) (23.95) (20.82) (previously Putnam VT International Growth Fund - Class IB Shares) 2VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(14) (35.89) (16.84) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT FTVIPT 2RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(8) (5.73%) 0.07% 8.53% 8.10% 2SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(8) (16.19) -- -- (1.97) 2MS Mutual Shares Securities Fund - Class 2 (8/01; 11/96)(8) (18.54) 1.58 -- 4.66 GOLDMAN SACHS VIT 2UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (27.85) -- -- (4.75) 2MC Mid Cap Value Fund (9/99; 5/98) (11.97) -- -- 1.48 INVESCO VIF 2ID Dynamics Fund (8/01; 8/97) (37.09) (5.66) -- (4.67) 2FS Financial Services Fund (8/01; 9/99) (21.14) -- -- (1.18) 2TC Technology Fund (8/01; 5/97) (50.88) (8.57) -- (5.39) 2TL Telecommunications Fund (8/01; 9/99) (54.54) -- -- (34.88) JANUS ASPEN SERIES 2GT Global Technology Portfolio: Service Shares (5/00; 1/00)(9) (45.42) -- -- (40.27) 2IG International Growth Portfolio: Service Shares (5/00; 5/94)(9) (31.42) (2.29) -- 6.69 LAZARD RETIREMENT SERIES 2IP International Equity Portfolio (9/99; 9/98) (17.52) -- -- (6.47) MFS(R) 2MG Investors Growth Stock Series - Service Class (5/00; 5/99)(10) (33.23) -- -- (11.51) 2MD New Discovery Series - Service Class (5/00; 5/98)(10) (36.99) -- -- 0.06 2UT Utilities Series - Service Class (8/01; 1/95)(10) (28.78) (3.00) -- 7.36 PIONEER VCT 2PE Pioneer Equity Income VCT Portfolio - Class II Shares (8/01; 3/95)(11) (22.46) (0.44) -- 8.52 2EU Pioneer Europe VCT Portfolio - Class II Shares (8/01; 10/98)(12) (25.24) -- -- (11.05) PUTNAM VARIABLE TRUST 2HS Putnam VT Health Sciences Fund - Class IB Shares (8/01; 4/98)(13) (26.42) -- -- (3.83) 2PI Putnam VT International Equity Fund - Class IB Shares (8/01; 1/97)(14) (23.95) (0.04) -- 2.42 (previously Putnam VT International Growth Fund - Class IB Shares) 2VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(14) (35.89) (6.41) -- (2.09)
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 26 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS AND THE SEVEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT STRONG FUNDS 2SO Strong Opportunity Fund II - Advisor Class (8/01; 5/92)(15) (32.52%) (25.80%) WANGER 2IT International Small Cap (9/99; 5/95) (20.41) (11.41) 2SP U.S. Smaller Companies (9/99; 5/95) (23.16) (3.61) WELLS FARGO VT 2AA Asset Allocation Fund (5/01; 4/94)(16) (19.50) (14.68) 2WI International Equity Fund (5/01; 7/00) (28.80) (24.09) 2SG Small Cap Growth Fund (5/01; 5/95)(17) (42.92) (31.62) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT STRONG FUNDS 2SO Strong Opportunity Fund II - Advisor Class (8/01; 5/92)(15) (32.52%) 0.16% 8.88% 9.74% WANGER 2IT International Small Cap (9/99; 5/95) (20.41) 2.86 -- 9.67 2SP U.S. Smaller Companies (9/99; 5/95) (23.16) 0.56 -- 11.41 WELLS FARGO VT 2AA Asset Allocation Fund (5/01; 4/94)(16) (19.50) (0.03) -- 6.60 2WI International Equity Fund (5/01; 7/00) (28.80) -- -- (22.92) 2SG Small Cap Growth Fund (5/01; 5/95)(17) (42.92) (14.52) -- (3.35)
(a) Current applicable charges deducted from performance include a $30 annual contract administrative charge, a 0.25% annual MAV fee, a 0.40% annual EEP fee, a 0.75% annual mortality and expense risk fee and applicable surrender charges. Premium taxes and purchase payment credits are not reflected in these total returns. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 27 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITHOUT SURRENDER AND SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC2 Blue Chip Advantage Fund (9/99; 9/99)(1) (23.94%) (13.35%) BD2 Bond Fund (9/99; 10/81) 4.05 4.74 CR2 Capital Resource Fund (9/99; 10/81) (23.31) (15.01) CM2 Cash Management Fund (9/99; 10/81) (0.29) 2.22 DE2 Diversified Equity Income Fund (9/99; 9/99) (20.33) (5.90) EM2 Emerging Markets Fund (5/00; 5/00) (6.84) (14.57) ES2 Equity Select Fund (5/01; 5/01) (15.09) (10.45) EI2 Extra Income Fund (9/99; 5/96) (7.90) (4.39) FI2 Federal Income Fund (9/99; 9/99) 4.34 4.90 GB2 Global Bond Fund (9/99; 5/96) 13.42 4.44 GR2 Growth Fund (9/99; 9/99) (27.35) (20.50) IE2 International Fund (9/99; 1/92) (19.54) (17.18) MF2 Managed Fund (9/99; 4/86) (14.27) (6.51) ND2 NEW DIMENSIONS FUND(R) (9/99; 5/96) (23.17) (10.88) SV2 Partners Small Cap Value Fund (8/01; 8/01) (13.49) (5.75) IV2 S&P 500 Index Fund (5/00; 5/00) (23.69) (18.11) SC2 Small Cap Advantage Fund (9/99; 9/99) (18.37) (4.08) ST2 Stock Fund (8/01; 8/01) (22.19) (18.80) SA2 Strategy Aggressive Fund (9/99; 1/92) (33.16) (17.03) AIM V.I. 2AC Capital Appreciation Fund, Series II Shares (8/01; 5/93)(2) (25.78) (21.18) 2AD Capital Development Fund, Series II Shares (8/01; 5/98)(2) (22.89) (18.79) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 2AL AllianceBernstein Growth and Income Portfolio (Class B) (8/01; 1/91)(3) (23.54) (20.02) 2AB AllianceBernstein International Value Portfolio (Class B) (8/01; 5/01)(4) (6.76) (6.89) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 2AI VP International, Class II (8/01; 5/94)(5) (21.86) (20.91) 2AV VP Value, Class II (8/01; 5/96)(5) (14.16) (8.37) CALVERT VARIABLE SERIES, INC. 2SR Social Balanced Portfolio (5/00; 9/86) (13.55) (9.93) EVERGREEN VA 2CG Capital Growth Fund - Class 2 (8/01; 3/98)(6) (23.89) (21.13) FIDELITY(R) VIP 2FG Growth & Income Portfolio Service Class 2 (8/01; 12/96)(7) (18.16) (13.78) 2FM Mid Cap Portfolio Service Class 2 (8/01; 12/98)(7) (11.39) (6.17) 2FO Overseas Portfolio Service Class 2 (8/01; 1/87)(7) (21.75) (19.69) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC2 Blue Chip Advantage Fund (9/99; 9/99)(1) (23.94%) --% --% (13.35%) BD2 Bond Fund (9/99; 10/81) 4.05 2.86 5.47 8.53 CR2 Capital Resource Fund (9/99; 10/81) (23.31) (5.55) 2.32 8.65 CM2 Cash Management Fund (9/99; 10/81) (0.29) 2.63 2.80 4.65 DE2 Diversified Equity Income Fund (9/99; 9/99) (20.33) -- -- (5.90) EM2 Emerging Markets Fund (5/00; 5/00) (6.84) -- -- (14.57) ES2 Equity Select Fund (5/01; 5/01) (15.09) -- -- (10.45) EI2 Extra Income Fund (9/99; 5/96) (7.90) (3.43) -- (0.24) FI2 Federal Income Fund (9/99; 9/99) 4.34 -- -- 4.90 GB2 Global Bond Fund (9/99; 5/96) 13.42 2.97 -- 3.61 GR2 Growth Fund (9/99; 9/99) (27.35) -- -- (20.50) IE2 International Fund (9/99; 1/92) (19.54) (7.29) 0.45 0.16 MF2 Managed Fund (9/99; 4/86) (14.27) (1.22) 5.05 7.15 ND2 NEW DIMENSIONS FUND(R) (9/99; 5/96) (23.17) (1.35) -- 3.64 SV2 Partners Small Cap Value Fund (8/01; 8/01) (13.49) -- -- (5.75) IV2 S&P 500 Index Fund (5/00; 5/00) (23.69) -- -- (18.11) SC2 Small Cap Advantage Fund (9/99; 9/99) (18.37) -- -- (4.08) ST2 Stock Fund (8/01; 8/01) (22.19) -- -- (18.80) SA2 Strategy Aggressive Fund (9/99; 1/92) (33.16) (9.67) 0.26 0.93 AIM V.I. 2AC Capital Appreciation Fund, Series II Shares (8/01; 5/93)(2) (25.78) (3.75) -- 5.78 2AD Capital Development Fund, Series II Shares (8/01; 5/98)(2) (22.89) -- -- (2.76) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 2AL AllianceBernstein Growth and Income Portfolio (Class B) (8/01; 1/91)(3) (23.54) 2.06 9.60 8.70 2AB AllianceBernstein International Value Portfolio (Class B) (8/01; 5/01)(4) (6.76) -- -- (5.41) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 2AI VP International, Class II (8/01; 5/94)(5) (21.86) (4.40) -- 0.76 2AV VP Value, Class II (8/01; 5/96)(5) (14.16) 2.37 -- 6.87 CALVERT VARIABLE SERIES, INC. 2SR Social Balanced Portfolio (5/00; 9/86) (13.55) (0.79) 5.11 6.36 EVERGREEN VA 2CG Capital Growth Fund - Class 2 (8/01; 3/98)(6) (23.89) -- -- (3.21) FIDELITY(R) VIP 2FG Growth & Income Portfolio Service Class 2 (8/01; 12/96)(7) (18.16) (0.93) -- 3.45 2FM Mid Cap Portfolio Service Class 2 (8/01; 12/98)(7) (11.39) -- -- 13.93 2FO Overseas Portfolio Service Class 2 (8/01; 1/87)(7) (21.75) (5.49) 3.15 2.72
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 28 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITHOUT SURRENDER AND SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT FTVIPT 2RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(8) 0.61% 9.51% 2SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(8) (10.64) 6.22 2MS Mutual Shares Securities Fund - Class 2 (8/01; 11/96)(8) (13.17) (12.28) GOLDMAN SACHS VIT 2UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (23.17) (11.67) 2MC Mid Cap Value Fund (9/99; 5/98) (6.10) 7.96 INVESCO VIF 2ID Dynamics Fund (8/01; 8/97) (33.10) (28.44) 2FS Financial Services Fund (8/01; 9/99) (15.95) (14.29) 2TC Technology Fund (8/01; 5/97) (47.94) (42.67) 2TL Telecommunications Fund (8/01; 9/99) (51.87) (48.69) JANUS ASPEN SERIES 2GT Global Technology Portfolio: Service Shares (5/00; 1/00)(9) (42.07) (41.57) 2IG International Growth Portfolio: Service Shares (5/00; 5/94)(9) (27.01) (26.99) LAZARD RETIREMENT SERIES 2IP International Equity Portfolio (9/99; 9/98) (12.07) (13.15) MFS(R) 2MG Investors Growth Stock Series - Service Class (5/00; 5/99)(10) (28.95) (24.74) 2MD New Discovery Series - Service Class (5/00; 5/98)(10) (33.01) (18.50) 2UT Utilities Series - Service Class (8/01; 1/95)(10) (24.17) (24.65) PIONEER VCT 2PE Pioneer Equity Income VCT Portfolio - Class II Shares (8/01; 3/95)(11) (17.37) (14.59) 2EU Pioneer Europe VCT Portfolio - Class II Shares (8/01; 10/98)(12) (20.36) (17.32) PUTNAM VARIABLE TRUST 2HS Putnam VT Health Sciences Fund - Class IB Shares (8/01; 4/98)(13) (21.63) (18.01) 2PI Putnam VT International Equity Fund - Class IB Shares (8/01; 1/97)(14) (18.98) (17.03) (previously Putnam VT International Growth Fund - Class IB Shares) 2VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(14) (31.81) (15.43) STRONG FUNDS 2SO Strong Opportunity Fund II - Advisor Class (8/01; 5/92)(15) (28.19) (22.25) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT FTVIPT 2RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(8) 0.61% 0.99% 8.53% 8.10% 2SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(8) (10.64) -- -- (1.03) 2MS Mutual Shares Securities Fund - Class 2 (8/01; 11/96)(8) (13.17) 2.50 -- 4.92 GOLDMAN SACHS VIT 2UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (23.17) -- -- (3.88) 2MC Mid Cap Value Fund (9/99; 5/98) (6.10) -- -- 2.46 INVESCO VIF 2ID Dynamics Fund (8/01; 8/97) (33.10) (4.84) -- (4.02) 2FS Financial Services Fund (8/01; 9/99) (15.95) -- -- 0.51 2TC Technology Fund (8/01; 5/97) (47.94) (7.81) -- (4.81) 2TL Telecommunications Fund (8/01; 9/99) (51.87) -- -- (33.76) JANUS ASPEN SERIES 2GT Global Technology Portfolio: Service Shares (5/00; 1/00)(9) (42.07) -- -- (39.05) 2IG International Growth Portfolio: Service Shares (5/00; 5/94)(9) (27.01) (1.43) -- 6.69 LAZARD RETIREMENT SERIES 2IP International Equity Portfolio (9/99; 9/98) (12.07) -- -- (5.46) MFS(R) 2MG Investors Growth Stock Series - Service Class (5/00; 5/99)(10) (28.95) -- -- (10.20) 2MD New Discovery Series - Service Class (5/00; 5/98)(10) (33.01) -- -- 1.01 2UT Utilities Series - Service Class (8/01; 1/95)(10) (24.17) (2.14) -- 7.36 PIONEER VCT 2PE Pioneer Equity Income VCT Portfolio - Class II Shares (8/01; 3/95)(11) (17.37) 0.46 -- 8.52 2EU Pioneer Europe VCT Portfolio - Class II Shares (8/01; 10/98)(12) (20.36) -- -- (10.07) PUTNAM VARIABLE TRUST 2HS Putnam VT Health Sciences Fund - Class IB Shares (8/01; 4/98)(13) (21.63) -- -- (2.90) 2PI Putnam VT International Equity Fund - Class IB Shares (8/01; 1/97)(14) (18.98) 0.85 -- 3.00 (previously Putnam VT International Growth Fund - Class IB Shares) 2VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(14) (31.81) (5.59) -- (1.52) STRONG FUNDS 2SO Strong Opportunity Fund II - Advisor Class (8/01; 5/92)(15) (28.19) 1.04 8.88 9.74
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 29 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITHOUT SURRENDER AND SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT WANGER 2IT International Small Cap (9/99; 5/95) (15.17%) (9.90%) 2SP U.S. Smaller Companies (9/99; 5/95) (18.13) (1.96) WELLS FARGO VT 2AA Asset Allocation Fund (5/01; 4/94)(16) (14.20) (11.33) 2WI International Equity Fund (5/01; 7/00) (24.19) (21.18) 2SG Small Cap Growth Fund (5/01; 5/95)(17) (39.38) (29.03) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT WANGER 2IT International Small Cap (9/99; 5/95) (15.17%) 3.74% --% 9.67% 2SP U.S. Smaller Companies (9/99; 5/95) (18.13) 1.46 -- 11.41 WELLS FARGO VT 2AA Asset Allocation Fund (5/01; 4/94)(16) (14.20) 0.87 -- 6.60 2WI International Equity Fund (5/01; 7/00) (24.19) -- -- (20.91) 2SG Small Cap Growth Fund (5/01; 5/95)(17) (39.38) (13.79) -- (3.35)
(a) Current applicable charges deducted from performance include a $30 annual contract administrative charge, a 0.25% annual MAV fee, a 0.40% annual EEP fee and a 0.75% annual mortality and expense risk fee. Premium taxes and purchase payment credits are not reflected in these total returns. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 30 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF A TEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC2 Blue Chip Advantage Fund (9/99; 9/99)(1) (28.63%) (14.42%) BD2 Bond Fund (9/99; 10/81) (2.88) 3.47 CR2 Capital Resource Fund (9/99; 10/81) (28.05) (16.04) CM2 Cash Management Fund (9/99; 10/81) (6.87) 0.86 DE2 Diversified Equity Income Fund (9/99; 9/99) (25.31) (7.12) EM2 Emerging Markets Fund (5/00; 5/00) (12.90) (16.25) ES2 Equity Select Fund (5/01; 5/01) (20.49) (13.67) EI2 Extra Income Fund (9/99; 5/96) (13.87) (5.63) FI2 Federal Income Fund (9/99; 9/99) (2.61) 3.64 GB2 Global Bond Fund (9/99; 5/96) 6.07 3.16 GR2 Growth Fund (9/99; 9/99) (31.76) (21.42) IE2 International Fund (9/99; 1/92) (24.58) (18.17) MF2 Managed Fund (9/99; 4/86) (19.73) (7.71) ND2 NEW DIMENSIONS FUND(R) (9/99; 5/96) (27.92) (11.99) SV2 Partners Small Cap Value Fund (8/01; 8/01) (19.01) (10.09) IV2 S&P 500 Index Fund (5/00; 5/00) (28.40) (19.68) SC2 Small Cap Advantage Fund (9/99; 9/99) (23.50) (5.32) ST2 Stock Fund (8/01; 8/01) (27.02) (22.42) SA2 Strategy Aggressive Fund (9/99; 1/92) (37.11) (18.02) AIM V.I. 2AC Capital Appreciation Fund, Series II Shares (8/01; 5/93)(2) (30.32) (24.69) 2AD Capital Development Fund, Series II Shares (8/01; 5/98)(2) (27.66) (22.42) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 2AL AllianceBernstein Growth and Income Portfolio (Class B) (8/01; 1/91)(3) (28.26) (23.58) 2AB AllianceBernstein International Value Portfolio (Class B) (8/01; 5/01)(4) (12.82) (11.15) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 2AI VP International, Class II (8/01; 5/94)(5) (26.71) (24.42) 2AV VP Value, Class II (8/01; 5/96)(5) (19.63) (12.56) CALVERT VARIABLE SERIES, INC. 2SR Social Balanced Portfolio (5/00; 9/86) (19.07) (11.75) EVERGREEN VA 2CG Capital Growth Fund - Class 2 (8/01; 3/98)(6) (28.58) (24.63) FIDELITY(R) VIP 2FG Growth & Income Portfolio Service Class 2 (8/01; 12/96)(7) (23.31) (17.69) 2FM Mid Cap Portfolio Service Class 2 (8/01; 12/98)(7) (17.08) (10.46) 2FO Overseas Portfolio Service Class 2 (8/01; 1/87)(7) (26.61) (23.25) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC2 Blue Chip Advantage Fund (9/99; 9/99)(1) (28.63%) --% --% (14.42%) BD2 Bond Fund (9/99; 10/81) (2.88) 2.26 6.00 9.18 CR2 Capital Resource Fund (9/99; 10/81) (28.05) (6.09) 2.82 9.30 CM2 Cash Management Fund (9/99; 10/81) (6.87) 2.02 3.30 5.30 DE2 Diversified Equity Income Fund (9/99; 9/99) (25.31) -- -- (7.12) EM2 Emerging Markets Fund (5/00; 5/00) (12.90) -- -- (16.25) ES2 Equity Select Fund (5/01; 5/01) (20.49) -- -- (13.67) EI2 Extra Income Fund (9/99; 5/96) (13.87) (4.03) -- (0.28) FI2 Federal Income Fund (9/99; 9/99) (2.61) -- -- 3.64 GB2 Global Bond Fund (9/99; 5/96) 6.07 2.37 -- 3.66 GR2 Growth Fund (9/99; 9/99) (31.76) -- -- (21.42) IE2 International Fund (9/99; 1/92) (24.58) (7.81) 0.92 0.81 MF2 Managed Fund (9/99; 4/86) (19.73) (1.83) 5.58 7.80 ND2 NEW DIMENSIONS FUND(R) (9/99; 5/96) (27.92) (1.94) -- 3.69 SV2 Partners Small Cap Value Fund (8/01; 8/01) (19.01) -- -- (10.09) IV2 S&P 500 Index Fund (5/00; 5/00) (28.40) -- -- (19.68) SC2 Small Cap Advantage Fund (9/99; 9/99) (23.50) -- -- (5.32) ST2 Stock Fund (8/01; 8/01) (27.02) -- -- (22.42) SA2 Strategy Aggressive Fund (9/99; 1/92) (37.11) (10.13) 0.74 1.58 AIM V.I. 2AC Capital Appreciation Fund, Series II Shares (8/01; 5/93)(2) (30.32) (4.30) -- 6.31 2AD Capital Development Fund, Series II Shares (8/01; 5/98)(2) (27.66) -- -- (3.41) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 2AL AllianceBernstein Growth and Income Portfolio (Class B) (8/01; 1/91)(3) (28.26) 1.43 10.17 9.35 2AB AllianceBernstein International Value Portfolio (Class B) (8/01; 5/01)(4) (12.82) -- -- (8.83) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 2AI VP International, Class II (8/01; 5/94)(5) (26.71) (4.95) -- 1.10 2AV VP Value, Class II (8/01; 5/96)(5) (19.63) 1.75 -- 7.01 CALVERT VARIABLE SERIES, INC. 2SR Social Balanced Portfolio (5/00; 9/86) (19.07) (1.41) 5.64 7.01 EVERGREEN VA 2CG Capital Growth Fund - Class 2 (8/01; 3/98)(6) (28.58) -- -- (3.83) FIDELITY(R) VIP 2FG Growth & Income Portfolio Service Class 2 (8/01; 12/96)(7) (23.31) (1.54) -- 3.41 2FM Mid Cap Portfolio Service Class 2 (8/01; 12/98)(7) (17.08) -- -- 13.41 2FO Overseas Portfolio Service Class 2 (8/01; 1/87)(7) (26.61) (6.03) 3.65 3.37
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 31 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF A TEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT FTVIPT 2RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(8) (6.04%) 8.43% 2SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(8) (16.39) 5.01 2MS Mutual Shares Securities Fund - Class 2 (8/01; 11/96)(8) (18.71) (16.26) GOLDMAN SACHS VIT 2UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (27.92) (12.78) 2MC Mid Cap Value Fund (9/99; 5/98) (12.21) 6.82 INVESCO VIF 2ID Dynamics Fund (8/01; 8/97) (37.06) (31.59) 2FS Financial Services Fund (8/01; 9/99) (21.28) (18.15) 2TC Technology Fund (8/01; 5/97) (50.71) (45.05) 2TL Telecommunications Fund (8/01; 9/99) (54.32) (50.77) JANUS ASPEN SERIES 2GT Global Technology Portfolio: Service Shares (5/00; 1/00)(9) (45.31) (42.49) 2IG International Growth Portfolio: Service Shares (5/00; 5/94)(9) (31.45) (28.31) LAZARD RETIREMENT SERIES 2IP International Equity Portfolio (9/99; 9/98) (17.71) (14.22) MFS(R) 2MG Investors Growth Stock Series - Service Class (5/00; 5/99)(10) (33.24) (26.13) 2MD New Discovery Series - Service Class (5/00; 5/98)(10) (36.97) (20.04) 2UT Utilities Series - Service Class (8/01; 1/95)(10) (28.84) (28.00) PIONEER VCT 2PE Pioneer Equity Income VCT Portfolio - Class II Shares (8/01; 3/95)(11) (22.58) (18.45) 2EU Pioneer Europe VCT Portfolio - Class II Shares (8/01; 10/98)(12) (25.33) (21.02) PUTNAM VARIABLE TRUST 2HS Putnam VT Health Sciences Fund - Class IB Shares (8/01; 4/98)(13) (26.50) (21.70) 2PI Putnam VT International Equity Fund - Class IB Shares (8/01; 1/97)(14) (24.06) (20.76) (previously Putnam VT International Growth Fund - Class IB Shares) 2VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(14) (35.87) (16.45) STRONG FUNDS 2SO Strong Opportunity Fund II - Advisor Class (8/01; 5/92)(15) (32.54) (25.71) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT FTVIPT 2RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(8) (6.04%) 0.32% 9.09% 8.75% 2SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(8) (16.39) -- -- (1.73) 2MS Mutual Shares Securities Fund - Class 2 (8/01; 11/96)(8) (18.71) 1.88 -- 4.94 GOLDMAN SACHS VIT 2UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (27.92) -- -- (4.47) 2MC Mid Cap Value Fund (9/99; 5/98) (12.21) -- -- 1.74 INVESCO VIF 2ID Dynamics Fund (8/01; 8/97) (37.06) (5.36) -- (4.37) 2FS Financial Services Fund (8/01; 9/99) (21.28) -- -- (0.84) 2TC Technology Fund (8/01; 5/97) (50.71) (8.24) -- (5.05) 2TL Telecommunications Fund (8/01; 9/99) (54.32) -- -- (34.44) JANUS ASPEN SERIES 2GT Global Technology Portfolio: Service Shares (5/00; 1/00)(9) (45.31) -- -- (39.83) 2IG International Growth Portfolio: Service Shares (5/00; 5/94)(9) (31.45) (2.01) -- 7.13 LAZARD RETIREMENT SERIES 2IP International Equity Portfolio (9/99; 9/98) (17.71) -- -- (6.24) MFS(R) 2MG Investors Growth Stock Series - Service Class (5/00; 5/99)(10) (33.24) -- -- (11.10) 2MD New Discovery Series - Service Class (5/00; 5/98)(10) (36.97) -- -- 0.30 2UT Utilities Series - Service Class (8/01; 1/95)(10) (28.84) (2.72) -- 7.72 PIONEER VCT 2PE Pioneer Equity Income VCT Portfolio - Class II Shares (8/01; 3/95)(11) (22.58) (0.17) -- 8.89 2EU Pioneer Europe VCT Portfolio - Class II Shares (8/01; 10/98)(12) (25.33) -- -- (10.82) PUTNAM VARIABLE TRUST 2HS Putnam VT Health Sciences Fund - Class IB Shares (8/01; 4/98)(13) (26.50) -- -- (3.57) 2PI Putnam VT International Equity Fund - Class IB Shares (8/01; 1/97)(14) (24.06) 0.22 -- 2.80 (previously Putnam VT International Growth Fund - Class IB Shares) 2VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(14) (35.87) (6.11) -- (1.74) STRONG FUNDS 2SO Strong Opportunity Fund II - Advisor Class (8/01; 5/92)(15) (32.54) 0.43 9.44 10.39
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 32 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF A TEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT WANGER 2IT International Small Cap (9/99; 5/95) (20.56%) (11.03%) 2SP U.S. Smaller Companies (9/99; 5/95) (23.28) (3.25) WELLS FARGO VT 2AA Asset Allocation Fund (5/01; 4/94)(16) (19.66) (14.54) 2WI International Equity Fund (5/01; 7/00) (28.86) (23.90) 2SG Small Cap Growth Fund (5/01; 5/95)(17) (42.83) (31.38) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT WANGER 2IT International Small Cap (9/99; 5/95) (20.56%) 3.18% --% 10.05% 2SP U.S. Smaller Companies (9/99; 5/95) (23.28) 0.83 -- 11.81 WELLS FARGO VT 2AA Asset Allocation Fund (5/01; 4/94)(16) (19.66) 0.23 -- 7.05 2WI International Equity Fund (5/01; 7/00) (28.86) -- -- (22.59) 2SG Small Cap Growth Fund (5/01; 5/95)(17) (42.83) (14.18) -- (3.15)
(a) Current applicable charges deducted from performance include a $30 annual contract administrative charge, a 0.75% annual mortality and expense risk fee and applicable surrender charges. Premium taxes and purchase payment credits are not reflected in these total returns. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 33 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF A SEVEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC2 Blue Chip Advantage Fund (9/99; 9/99)(1) (27.96%) (14.17%) BD2 Bond Fund (9/99; 10/81) (1.93) 3.74 CR2 Capital Resource Fund (9/99; 10/81) (27.37) (15.80) CM2 Cash Management Fund (9/99; 10/81) (5.96) 1.15 DE2 Diversified Equity Income Fund (9/99; 9/99) (24.60) (6.84) EM2 Emerging Markets Fund (5/00; 5/00) (12.06) (15.96) ES2 Equity Select Fund (5/01; 5/01) (19.73) (13.18) EI2 Extra Income Fund (9/99; 5/96) (13.04) (5.36) FI2 Federal Income Fund (9/99; 9/99) (1.66) 3.92 GB2 Global Bond Fund (9/99; 5/96) 7.07 3.44 GR2 Growth Fund (9/99; 9/99) (31.13) (21.19) IE2 International Fund (9/99; 1/92) (23.87) (17.93) MF2 Managed Fund (9/99; 4/86) (18.96) (7.44) ND2 NEW DIMENSIONS FUND(R) (9/99; 5/96) (27.24) (11.73) SV2 Partners Small Cap Value Fund (8/01; 8/01) (18.24) (9.46) IV2 S&P 500 Index Fund (5/00; 5/00) (27.73) (19.40) SC2 Small Cap Advantage Fund (9/99; 9/99) (22.78) (5.05) ST2 Stock Fund (8/01; 8/01) (26.33) (21.88) SA2 Strategy Aggressive Fund (9/99; 1/92) (36.53) (17.78) AIM V.I. 2AC Capital Appreciation Fund, Series II Shares (8/01; 5/93)(2) (29.67) (24.17) 2AD Capital Development Fund, Series II Shares (8/01; 5/98)(2) (26.98) (21.88) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 2AL AllianceBernstein Growth and Income Portfolio (Class B) (8/01; 1/91)(3) (27.59) (23.05) 2AB AllianceBernstein International Value Portfolio (Class B) (8/01; 5/01)(4) (11.98) (10.53) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 2AI VP International, Class II (8/01; 5/94)(5) (26.03) (23.89) 2AV VP Value, Class II (8/01; 5/96)(5) (18.86) (11.95) CALVERT VARIABLE SERIES, INC. 2SR Social Balanced Portfolio (5/00; 9/86) (18.30) (11.44) EVERGREEN VA 2CG Capital Growth Fund - Class 2 (8/01; 3/98)(6) (27.92) (24.10) FIDELITY(R) VIP 2FG Growth & Income Portfolio Service Class 2 (8/01; 12/96)(7) (22.59) (17.11) 2FM Mid Cap Portfolio Service Class 2 (8/01; 12/98)(7) (16.29) (9.84) 2FO Overseas Portfolio Service Class 2 (8/01; 1/87)(7) (25.92) (22.72) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC2 Blue Chip Advantage Fund (9/99; 9/99)(1) (27.96%) --% --% (14.17%) BD2 Bond Fund (9/99; 10/81) (1.93) 2.63 6.12 9.18 CR2 Capital Resource Fund (9/99; 10/81) (27.37) (5.75) 2.97 9.30 CM2 Cash Management Fund (9/99; 10/81) (5.96) 2.39 3.45 5.30 DE2 Diversified Equity Income Fund (9/99; 9/99) (24.60) -- -- (6.84) EM2 Emerging Markets Fund (5/00; 5/00) (12.06) -- -- (15.96) ES2 Equity Select Fund (5/01; 5/01) (19.73) -- -- (13.18) EI2 Extra Income Fund (9/99; 5/96) (13.04) (3.66) -- 0.14 FI2 Federal Income Fund (9/99; 9/99) (1.66) -- -- 3.92 GB2 Global Bond Fund (9/99; 5/96) 7.07 2.73 -- 4.03 GR2 Growth Fund (9/99; 9/99) (31.13) -- -- (21.19) IE2 International Fund (9/99; 1/92) (23.87) (7.47) 1.10 0.81 MF2 Managed Fund (9/99; 4/86) (18.96) (1.46) 5.70 7.80 ND2 NEW DIMENSIONS FUND(R) (9/99; 5/96) (27.24) (1.58) -- 4.05 SV2 Partners Small Cap Value Fund (8/01; 8/01) (18.24) -- -- (9.46) IV2 S&P 500 Index Fund (5/00; 5/00) (27.73) -- -- (19.40) SC2 Small Cap Advantage Fund (9/99; 9/99) (22.78) -- -- (5.05) ST2 Stock Fund (8/01; 8/01) (26.33) -- -- (21.88) SA2 Strategy Aggressive Fund (9/99; 1/92) (36.53) (9.81) 0.91 1.58 AIM V.I. 2AC Capital Appreciation Fund, Series II Shares (8/01; 5/93)(2) (29.67) (3.95) -- 6.43 2AD Capital Development Fund, Series II Shares (8/01; 5/98)(2) (26.98) -- -- (3.03) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 2AL AllianceBernstein Growth and Income Portfolio (Class B) (8/01; 1/91)(3) (27.59) 1.80 10.25 9.35 2AB AllianceBernstein International Value Portfolio (Class B) (8/01; 5/01)(4) (11.98) -- -- (8.32) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 2AI VP International, Class II (8/01; 5/94)(5) (26.03) (4.60) -- 1.41 2AV VP Value, Class II (8/01; 5/96)(5) (18.86) 2.12 -- 7.32 CALVERT VARIABLE SERIES, INC. 2SR Social Balanced Portfolio (5/00; 9/86) (18.30) (1.04) 5.76 7.01 EVERGREEN VA 2CG Capital Growth Fund - Class 2 (8/01; 3/98)(6) (27.92) -- -- (3.46) FIDELITY(R) VIP 2FG Growth & Income Portfolio Service Class 2 (8/01; 12/96)(7) (22.59) (1.17) -- 3.83 2FM Mid Cap Portfolio Service Class 2 (8/01; 12/98)(7) (16.29) -- -- 13.75 2FO Overseas Portfolio Service Class 2 (8/01; 1/87)(7) (25.92) (5.69) 3.80 3.37
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 34 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF A SEVEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT FTVIPT 2RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(8) (5.13%) 8.68% 2SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(8) (15.59) 5.28 2MS Mutual Shares Securities Fund - Class 2 (8/01; 11/96)(8) (17.94) (15.68) GOLDMAN SACHS VIT 2UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (27.25) (12.52) 2MC Mid Cap Value Fund (9/99; 5/98) (11.37) 7.08 INVESCO VIF 2ID Dynamics Fund (8/01; 8/97) (36.48) (31.11) 2FS Financial Services Fund (8/01; 9/99) (20.53) (17.58) 2TC Technology Fund (8/01; 5/97) (50.28) (44.67) 2TL Telecommunications Fund (8/01; 9/99) (53.94) (50.42) JANUS ASPEN SERIES 2GT Global Technology Portfolio: Service Shares (5/00; 1/00)(9) (44.82) (42.29) 2IG International Growth Portfolio: Service Shares (5/00; 5/94)(9) (30.81) (28.06) LAZARD RETIREMENT SERIES 2IP International Equity Portfolio (9/99; 9/98) (16.92) (13.97) MFS(R) 2MG Investors Growth Stock Series - Service Class (5/00; 5/99)(10) (32.62) (25.87) 2MD New Discovery Series - Service Class (5/00; 5/98)(10) (36.39) (19.76) 2UT Utilities Series - Service Class (8/01; 1/95)(10) (28.17) (27.49) PIONEER VCT 2PE Pioneer Equity Income VCT Portfolio - Class II Shares (8/01; 3/95)(11) (21.85) (17.88) 2EU Pioneer Europe VCT Portfolio - Class II Shares (8/01; 10/98)(12) (24.63) (20.47) PUTNAM VARIABLE TRUST 2HS Putnam VT Health Sciences Fund - Class IB Shares (8/01; 4/98)(13) (25.81) (21.15) 2PI Putnam VT International Equity Fund - Class IB Shares (8/01; 1/97)(14) (23.35) (20.21) (previously Putnam VT International Growth Fund - Class IB Shares) 2VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(14) (35.28) (16.21) STRONG FUNDS 2SO Strong Opportunity Fund II - Advisor Class (8/01; 5/92)(15) (31.91) (25.19) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT FTVIPT 2RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(8) (5.13%) 0.71% 9.18% 8.75% 2SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(8) (15.59) -- -- (1.34) 2MS Mutual Shares Securities Fund - Class 2 (8/01; 11/96)(8) (17.94) 2.25 -- 5.32 GOLDMAN SACHS VIT 2UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (27.25) -- -- (4.11) 2MC Mid Cap Value Fund (9/99; 5/98) (11.37) -- -- 2.14 INVESCO VIF 2ID Dynamics Fund (8/01; 8/97) (36.48) (5.02) -- (4.03) 2FS Financial Services Fund (8/01; 9/99) (20.53) -- -- (0.55) 2TC Technology Fund (8/01; 5/97) (50.28) (7.93) -- (4.75) 2TL Telecommunications Fund (8/01; 9/99) (53.94) -- -- (34.25) JANUS ASPEN SERIES 2GT Global Technology Portfolio: Service Shares (5/00; 1/00)(9) (44.82) -- -- (39.65) 2IG International Growth Portfolio: Service Shares (5/00; 5/94)(9) (30.81) (1.65) -- 7.34 LAZARD RETIREMENT SERIES 2IP International Equity Portfolio (9/99; 9/98) (16.92) -- -- (5.83) MFS(R) 2MG Investors Growth Stock Series - Service Class (5/00; 5/99)(10) (32.62) -- -- (10.87) 2MD New Discovery Series - Service Class (5/00; 5/98)(10) (36.39) -- -- 0.70 2UT Utilities Series - Service Class (8/01; 1/95)(10) (28.17) (2.36) -- 8.01 PIONEER VCT 2PE Pioneer Equity Income VCT Portfolio - Class II Shares (8/01; 3/95)(11) (21.85) 0.20 -- 9.17 2EU Pioneer Europe VCT Portfolio - Class II Shares (8/01; 10/98)(12) (24.63) -- -- (10.41) PUTNAM VARIABLE TRUST 2HS Putnam VT Health Sciences Fund - Class IB Shares (8/01; 4/98)(13) (25.81) -- -- (3.19) 2PI Putnam VT International Equity Fund - Class IB Shares (8/01; 1/97)(14) (23.35) 0.60 -- 3.09 (previously Putnam VT International Growth Fund - Class IB Shares) 2VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(14) (35.28) (5.77) -- (1.45) STRONG FUNDS 2SO Strong Opportunity Fund II - Advisor Class (8/01; 5/92)(15) (31.91) 0.80 9.53 10.39
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 35 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF A SEVEN-YEAR SURRENDER CHARGE SCHEDULE FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT WANGER 2IT International Small Cap (9/99; 5/95) (19.80%) (10.77%) 2SP U.S. Smaller Companies (9/99; 5/95) (22.55) (2.97) WELLS FARGO VT 2AA Asset Allocation Fund (5/01; 4/94)(16) (18.90) (14.06) 2WI International Equity Fund (5/01; 7/00) (28.19) (23.47) 2SG Small Cap Growth Fund (5/01; 5/95)(17) (42.31) (31.00) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT WANGER 2IT International Small Cap (9/99; 5/95) (19.80%) 3.53% --% 10.32% 2SP U.S. Smaller Companies (9/99; 5/95) (22.55) 1.20 -- 12.06 WELLS FARGO VT 2AA Asset Allocation Fund (5/01; 4/94)(16) (18.90) 0.61 -- 7.25 2WI International Equity Fund (5/01; 7/00) (28.19) -- -- (22.29) 2SG Small Cap Growth Fund (5/01; 5/95)(17) (42.31) (13.88) -- (2.70)
(a) Current applicable charges deducted from performance include a $30 annual contract administrative charge, a 0.75% annual mortality and expense risk fee and applicable surrender charges. Premium taxes and purchase payment credits are not reflected in these total returns. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 36 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITHOUT SURRENDER FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC2 Blue Chip Advantage Fund (9/99; 9/99)(1) (23.29%) (12.70%) BD2 Bond Fund (9/99; 10/81) 4.70 5.39 CR2 Capital Resource Fund (9/99; 10/81) (22.66) (14.36) CM2 Cash Management Fund (9/99; 10/81) 0.36 2.87 DE2 Diversified Equity Income Fund (9/99; 9/99) (19.68) (5.25) EM2 Emerging Markets Fund (5/00; 5/00) (6.19) (13.92) ES2 Equity Select Fund (5/01; 5/01) (14.44) (9.80) EI2 Extra Income Fund (9/99; 5/96) (7.25) (3.74) FI2 Federal Income Fund (9/99; 9/99) 4.99 5.55 GB2 Global Bond Fund (9/99; 5/96) 14.07 5.09 GR2 Growth Fund (9/99; 9/99) (26.70) (19.85) IE2 International Fund (9/99; 1/92) (18.89) (16.53) MF2 Managed Fund (9/99; 4/86) (13.62) (5.86) ND2 NEW DIMENSIONS FUND(R) (9/99; 5/96) (22.52) (10.23) SV2 Partners Small Cap Value Fund (8/01; 8/01) (12.84) (5.10) IV2 S&P 500 Index Fund (5/00; 5/00) (23.04) (17.46) SC2 Small Cap Advantage Fund (9/99; 9/99) (17.72) (3.43) ST2 Stock Fund (8/01; 8/01) (21.54) (18.15) SA2 Strategy Aggressive Fund (9/99; 1/92) (32.51) (16.38) AIM V.I. 2AC Capital Appreciation Fund, Series II Shares (8/01; 5/93)(2) (25.13) (20.53) 2AD Capital Development Fund, Series II Shares (8/01; 5/98)(2) (22.24) (18.14) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 2AL AllianceBernstein Growth and Income Portfolio (Class B) (8/01; 1/91)(3) (22.89) (19.37) 2AB AllianceBernstein International Value Portfolio (Class B) (8/01; 5/01)(4) (6.11) (6.24) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 2AI VP International, Class II (8/01; 5/94)(5) (21.21) (20.26) 2AV VP Value, Class II (8/01; 5/96)(5) (13.51) (7.72) CALVERT VARIABLE SERIES, INC. 2SR Social Balanced Portfolio (5/00; 9/86) (12.90) (9.28) EVERGREEN VA 2CG Capital Growth Fund - Class 2 (8/01; 3/98)(6) (23.24) (20.48) FIDELITY(R) VIP 2FG Growth & Income Portfolio Service Class 2 (8/01; 12/96)(7) (17.51) (13.13) 2FM Mid Cap Portfolio Service Class 2 (8/01; 12/98)(7) (10.74) (5.52) 2FO Overseas Portfolio Service Class 2 (8/01; 1/87)(7) (21.10) (19.04) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC2 Blue Chip Advantage Fund (9/99; 9/99)(1) (23.29%) --% --% (12.70%) BD2 Bond Fund (9/99; 10/81) 4.70 3.51 6.12 9.18 CR2 Capital Resource Fund (9/99; 10/81) (22.66) (4.90) 2.97 9.30 CM2 Cash Management Fund (9/99; 10/81) 0.36 3.28 3.45 5.30 DE2 Diversified Equity Income Fund (9/99; 9/99) (19.68) -- -- (5.25) EM2 Emerging Markets Fund (5/00; 5/00) (6.19) -- -- (13.92) ES2 Equity Select Fund (5/01; 5/01) (14.44) -- -- (9.80) EI2 Extra Income Fund (9/99; 5/96) (7.25) (2.78) -- 0.41 FI2 Federal Income Fund (9/99; 9/99) 4.99 -- -- 5.55 GB2 Global Bond Fund (9/99; 5/96) 14.07 3.62 -- 4.26 GR2 Growth Fund (9/99; 9/99) (26.70) -- -- (19.85) IE2 International Fund (9/99; 1/92) (18.89) (6.64) 1.10 0.81 MF2 Managed Fund (9/99; 4/86) (13.62) (0.57) 5.70 7.80 ND2 NEW DIMENSIONS FUND(R) (9/99; 5/96) (22.52) (0.70) -- 4.29 SV2 Partners Small Cap Value Fund (8/01; 8/01) (12.84) -- -- (5.10) IV2 S&P 500 Index Fund (5/00; 5/00) (23.04) -- -- (17.46) SC2 Small Cap Advantage Fund (9/99; 9/99) (17.72) -- -- (3.43) ST2 Stock Fund (8/01; 8/01) (21.54) -- -- (18.15) SA2 Strategy Aggressive Fund (9/99; 1/92) (32.51) (9.02) 0.91 1.58 AIM V.I. 2AC Capital Appreciation Fund, Series II Shares (8/01; 5/93)(2) (25.13) (3.10) -- 6.43 2AD Capital Development Fund, Series II Shares (8/01; 5/98)(2) (22.24) -- -- (2.11) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 2AL AllianceBernstein Growth and Income Portfolio (Class B) (8/01; 1/91)(3) (22.89) 2.71 10.25 9.35 2AB AllianceBernstein International Value Portfolio (Class B) (8/01; 5/01)(4) (6.11) -- -- (4.76) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 2AI VP International, Class II (8/01; 5/94)(5) (21.21) (3.75) -- 1.41 2AV VP Value, Class II (8/01; 5/96)(5) (13.51) 3.02 -- 7.52 CALVERT VARIABLE SERIES, INC. 2SR Social Balanced Portfolio (5/00; 9/86) (12.90) (0.14) 5.76 7.01 EVERGREEN VA 2CG Capital Growth Fund - Class 2 (8/01; 3/98)(6) (23.24) -- -- (2.56) FIDELITY(R) VIP 2FG Growth & Income Portfolio Service Class 2 (8/01; 12/96)(7) (17.51) (0.28) -- 4.10 2FM Mid Cap Portfolio Service Class 2 (8/01; 12/98)(7) (10.74) -- -- 14.58 2FO Overseas Portfolio Service Class 2 (8/01; 1/87)(7) (21.10) (4.84) 3.80 3.37
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 37 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITHOUT SURRENDER FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT FTVIPT 2RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(8) 1.26% 10.16% 2SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(8) (9.99) 6.87 2MS Mutual Shares Securities Fund - Class 2 (8/01; 11/96)(8) (12.52) (11.63) GOLDMAN SACHS VIT 2UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (22.52) (11.02) 2MC Mid Cap Value Fund (9/99; 5/98) (5.45) 8.61 INVESCO VIF 2ID Dynamics Fund (8/01; 8/97) (32.45) (27.79) 2FS Financial Services Fund (8/01; 9/99) (15.30) (13.64) 2TC Technology Fund (8/01; 5/97) (47.29) (42.02) 2TL Telecommunications Fund (8/01; 9/99) (51.22) (48.04) JANUS ASPEN SERIES 2GT Global Technology Portfolio: Service Shares (5/00; 1/00)(9) (41.42) (40.92) 2IG International Growth Portfolio: Service Shares (5/00; 5/94)(9) (26.36) (26.34) LAZARD RETIREMENT SERIES 2IP International Equity Portfolio (9/99; 9/98) (11.42) (12.50) MFS(R) 2MG Investors Growth Stock Series - Service Class (5/00; 5/99)(10) (28.30) (24.09) 2MD New Discovery Series - Service Class (5/00; 5/98)(10) (32.36) (17.85) 2UT Utilities Series - Service Class (8/01; 1/95)(10) (23.52) (24.00) PIONEER VCT 2PE Pioneer Equity Income VCT Portfolio - Class II Shares (8/01; 3/95)(11) (16.72) (13.94) 2EU Pioneer Europe VCT Portfolio - Class II Shares (8/01; 10/98)(12) (19.71) (16.67) PUTNAM VARIABLE TRUST 2HS Putnam VT Health Sciences Fund - Class IB Shares (8/01; 4/98)(13) (20.98) (17.36) 2PI Putnam VT International Equity Fund - Class IB Shares (8/01; 1/97)(14) (18.33) (16.38) (previously Putnam VT International Growth Fund - Class IB Shares) 2VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(14) (31.16) (14.78) STRONG FUNDS 2SO Strong Opportunity Fund II - Advisor Class (8/01; 5/92)(15) (27.54) (21.60) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT FTVIPT 2RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(8) 1.26% 1.64% 9.18% 8.75% 2SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(8) (9.99) -- -- (0.38) 2MS Mutual Shares Securities Fund - Class 2 (8/01; 11/96)(8) (12.52) 3.15 -- 5.57 GOLDMAN SACHS VIT 2UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (22.52) -- -- (3.23) 2MC Mid Cap Value Fund (9/99; 5/98) (5.45) -- -- 3.11 INVESCO VIF 2ID Dynamics Fund (8/01; 8/97) (32.45) (4.19) -- (3.37) 2FS Financial Services Fund (8/01; 9/99) (15.30) -- -- 1.16 2TC Technology Fund (8/01; 5/97) (47.29) (7.16) -- (4.16) 2TL Telecommunications Fund (8/01; 9/99) (51.22) -- -- (33.11) JANUS ASPEN SERIES 2GT Global Technology Portfolio: Service Shares (5/00; 1/00)(9) (41.42) -- -- (38.40) 2IG International Growth Portfolio: Service Shares (5/00; 5/94)(9) (26.36) (0.78) -- 7.34 LAZARD RETIREMENT SERIES 2IP International Equity Portfolio (9/99; 9/98) (11.42) -- -- (4.81) MFS(R) 2MG Investors Growth Stock Series - Service Class (5/00; 5/99)(10) (28.30) -- -- (9.55) 2MD New Discovery Series - Service Class (5/00; 5/98)(10) (32.36) -- -- 1.66 2UT Utilities Series - Service Class (8/01; 1/95)(10) (23.52) (1.49) -- 8.01 PIONEER VCT 2PE Pioneer Equity Income VCT Portfolio - Class II Shares (8/01; 3/95)(11) (16.72) 1.11 -- 9.17 2EU Pioneer Europe VCT Portfolio - Class II Shares (8/01; 10/98)(12) (19.71) -- -- (9.42) PUTNAM VARIABLE TRUST 2HS Putnam VT Health Sciences Fund - Class IB Shares (8/01; 4/98)(13) (20.98) -- -- (2.25) 2PI Putnam VT International Equity Fund - Class IB Shares (8/01; 1/97)(14) (18.33) 1.50 -- 3.65 (previously Putnam VT International Growth Fund - Class IB Shares) 2VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(14) (31.16) (4.94) -- (0.87) STRONG FUNDS 2SO Strong Opportunity Fund II - Advisor Class (8/01; 5/92)(15) (27.54) 1.69 9.53 10.39
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 38 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES UNDER RAVA ADVANTAGE (WITHOUT PURCHASE PAYMENT CREDITS) WITHOUT SURRENDER FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT WANGER 2IT International Small Cap (9/99; 5/95) (14.52%) (9.25%) 2SP U.S. Smaller Companies (9/99; 5/95) (17.48) (1.31) WELLS FARGO VT 2AA Asset Allocation Fund (5/01; 4/94)(16) (13.55) (10.68) 2WI International Equity Fund (5/01; 7/00) (23.54) (20.53) 2SG Small Cap Growth Fund (5/01; 5/95)(17) (38.73) (28.38) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT WANGER 2IT International Small Cap (9/99; 5/95) (14.52%) 4.39% --% 10.32% 2SP U.S. Smaller Companies (9/99; 5/95) (17.48) 2.11 -- 12.06 WELLS FARGO VT 2AA Asset Allocation Fund (5/01; 4/94)(16) (13.55) 1.52 -- 7.25 2WI International Equity Fund (5/01; 7/00) (23.54) -- -- (20.26) 2SG Small Cap Growth Fund (5/01; 5/95)(17) (38.73) (13.14) -- (2.70)
(a) Current applicable charges deducted from performance include a $30 annual contract administrative charge and a 0.75% annual mortality and expense risk fee. Premium taxes and purchase payment credits are not reflected in these total returns. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 39 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES UNDER RAVA SELECT (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: COMMENCEMENT(b) AXP(R) VARIABLE PORTFOLIO - BC4 Blue Chip Advantage Fund (2/02; 9/99)(1) (27.32%) BD4 Bond Fund (2/02; 10/81) (3.45) CR4 Capital Resource Fund (2/02; 10/81) (25.72) CM4 Cash Management Fund (2/02; 10/81) (7.07) DE4 Diversified Equity Income Fund (2/02; 9/99) (23.79) EM4 Emerging Markets Fund (2/02; 5/00) (16.99) ES4 Equity Select Fund (2/02; 5/01) (19.09) EI4 Extra Income Fund (2/02; 5/96) (13.17) FI4 Federal Income Fund (2/02; 9/99) (3.25) GB4 Global Bond Fund (2/02; 5/96) 6.56 GR4 Growth Fund (2/02; 9/99) (29.63) IE4 International Fund (2/02; 1/92) (21.14) MF4 Managed Fund (2/02; 4/86) (17.12) ND4 NEW DIMENSIONS FUND(R) (2/02; 5/96) (26.48) SV4 Partners Small Cap Value Fund (2/02; 8/01) (19.06) IV4 S&P 500 Index Fund (2/02; 5/00) (26.75) SC4 Small Cap Advantage Fund (2/02; 9/99) (21.59) ST4 Stock Fund (2/02; 8/01) (26.25) SA4 Strategy Aggressive Fund (2/02; 1/92) (38.23) AIM V.I. 4AC Capital Appreciation Fund, Series II Shares (2/02; 5/93)(2) (28.82) 4AD Capital Development Fund, Series II Shares (2/02; 5/98)(2) (25.96) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 4AL AllianceBernstein Growth and Income Portfolio (Class B) (2/02; 1/91)(3) (25.38) 4AB AllianceBernstein International Value Portfolio (Class B) (2/02; 5/01)(4) (11.70) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 4AI VP International, Class II (2/02; 5/94)(5) (21.51) 4AV VP Value, Class II (2/02; 5/96)(5) (18.07) CALVERT VARIABLE SERIES, INC. 4SR Social Balanced Portfolio (2/02; 9/86) (18.70) EVERGREEN VA 4CG Capital Growth Fund - Class 2 (2/02; 3/98)(6) (25.29) FIDELITY(R) VIP 4FG Growth & Income Portfolio Service Class 2 (2/02; 12/96)(7) (21.03) 4FM Mid Cap Portfolio Service Class 2 (2/02; 12/98)(7) (17.04) 4FO Overseas Portfolio Service Class 2 (2/02; 1/87)(7) (23.39) FTVIPT 4RE Franklin Real Estate Fund - Class 2 (2/02; 1/89)(8) (6.85) 4SI Franklin Small Cap Value Securities Fund - Class 2 (2/02; 5/98)(8) (15.53) 4MS Mutual Shares Securities Fund - Class 2 (2/02; 11/96)(8) (17.63) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC4 Blue Chip Advantage Fund (2/02; 9/99)(1) (29.03%) --% --% (13.80%) BD4 Bond Fund (2/02; 10/81) (3.05) 2.37 4.98 8.02 CR4 Capital Resource Fund (2/02; 10/81) (28.30) (5.99) 1.85 8.15 CM4 Cash Management Fund (2/02; 10/81) (7.04) 2.15 2.32 4.17 DE4 Diversified Equity Income Fund (2/02; 9/99) (26.04) -- -- (6.52) EM4 Emerging Markets Fund (2/02; 5/00) (13.06) -- -- (16.70) ES4 Equity Select Fund (2/02; 5/01) (20.70) -- -- (14.19) EI4 Extra Income Fund (2/02; 5/96) (14.40) (3.96) -- (0.76) FI4 Federal Income Fund (2/02; 9/99) (2.77) -- -- 4.40 GB4 Global Bond Fund (2/02; 5/96) 5.71 2.45 -- 3.11 GR4 Growth Fund (2/02; 9/99) (32.05) -- -- (20.87) IE4 International Fund (2/02; 1/92) (24.82) (7.72) (0.02) (0.30) MF4 Managed Fund (2/02; 4/86) (19.94) (1.67) 4.56 6.65 ND4 NEW DIMENSIONS FUND(R) (2/02; 5/96) (28.19) (1.81) -- 3.16 SV4 Partners Small Cap Value Fund (2/02; 8/01) (19.22) -- -- (10.49) IV4 S&P 500 Index Fund (2/02; 5/00) (28.66) -- -- (20.40) SC4 Small Cap Advantage Fund (2/02; 9/99) (23.74) -- -- (4.52) ST4 Stock Fund (2/02; 8/01) (27.35) -- -- (22.92) SA4 Strategy Aggressive Fund (2/02; 1/92) (37.43) (10.09) (0.20) 0.46 AIM V.I. 4AC Capital Appreciation Fund, Series II Shares (2/02; 5/93)(2) (30.60) (4.18) -- 5.30 4AD Capital Development Fund, Series II Shares (2/02; 5/98)(2) (27.92) -- -- (3.21) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 4AL AllianceBernstein Growth and Income Portfolio (Class B) (2/02; 1/91)(3) (28.53) 1.59 9.09 8.20 4AB AllianceBernstein International Value Portfolio (Class B) (2/02; 5/01)(4) (12.99) -- -- (9.35) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 4AI VP International, Class II (2/02; 5/94)(5) (26.97) (4.83) -- 0.30 4AV VP Value, Class II (2/02; 5/96)(5) (19.84) 1.91 -- 6.38 CALVERT VARIABLE SERIES, INC. 4SR Social Balanced Portfolio (2/02; 9/86) (19.27) (1.25) 4.62 5.87 EVERGREEN VA 4CG Capital Growth Fund - Class 2 (2/02; 3/98)(6) (28.85) -- -- (3.66) FIDELITY(R) VIP 4FG Growth & Income Portfolio Service Class 2 (2/02; 12/96)(7) (23.55) (1.39) -- 2.97 4FM Mid Cap Portfolio Service Class 2 (2/02; 12/98)(7) (17.28) -- -- 13.41 4FO Overseas Portfolio Service Class 2 (2/02; 1/87)(7) (26.86) (5.93) 2.67 2.25 FTVIPT 4RE Franklin Real Estate Fund - Class 2 (2/02; 1/89)(8) (6.16) 0.52 8.02 7.60 4SI Franklin Small Cap Value Securities Fund - Class 2 (2/02; 5/98)(8) (16.58) -- -- (1.49) 4MS Mutual Shares Securities Fund - Class 2 (2/02; 11/96)(8) (18.92) 2.02 -- 4.44
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 40 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES UNDER RAVA SELECT (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: COMMENCEMENT(b) GOLDMAN SACHS VIT 4UE CORE(SM) U.S. Equity Fund (2/02; 2/98) (26.06%) 4MC Mid Cap Value Fund (2/02; 5/98) (12.25) INVESCO VIF 4ID Dynamics Fund (2/02; 8/97) (34.63) 4FS Financial Services Fund (2/02; 9/99) (20.56) 4TC Technology Fund (2/02; 5/97) (48.60) 4TL Telecommunications Fund (2/02; 9/99) (44.17) JANUS ASPEN SERIES 4GT Global Technology Portfolio: Service Shares (2/02; 1/00)(9) (41.44) 4IG International Growth Portfolio: Service Shares (2/02; 5/94)(9) (27.07) LAZARD RETIREMENT SERIES 4IP International Equity Portfolio (2/02; 9/98) (14.88) MFS(R) 4MG Investors Growth Stock Series - Service Class (2/02; 5/99)(10) (30.42) 4MD New Discovery Series - Service Class (2/02; 5/98)(10) (33.25) 4UT Utilities Series - Service Class (2/02; 1/95)(10) (20.96) PIONEER VCT 4PE Pioneer Equity Income VCT Portfolio - Class II Shares (2/02; 3/95)(11) (21.73) 4EU Pioneer Europe VCT Portfolio - Class II Shares (2/02; 10/98)(12) (21.30) PUTNAM VARIABLE TRUST 4HS Putnam VT Health Sciences Fund - Class IB Shares (2/02; 4/98)(13) (25.31) 4PI Putnam VT International Equity Fund - Class IB Shares (2/02; 1/97)(14) (20.33) (previously Putnam VT International Growth Fund - Class IB Shares) 4VS Putnam VT Vista Fund - Class IB Shares (2/02; 1/97)(14) (32.84) STRONG FUNDS 4SO Strong Opportunity Fund II - Advisor Class (2/02; 5/92)(15) (31.06) WANGER 4IT International Small Cap (2/02; 5/95) (18.87) 4SP U.S. Smaller Companies (2/02; 5/95) (21.68) WELLS FARGO VT 4AA Asset Allocation Fund (2/02; 4/94)(16) (18.50) 4WI International Equity Fund (2/02; 7/00) (25.34) 4SG Small Cap Growth Fund (2/02; 5/95)(17) (38.65) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT GOLDMAN SACHS VIT 4UE CORE(SM) U.S. Equity Fund (2/02; 2/98) (28.19%) --% --% (4.32%) 4MC Mid Cap Value Fund (2/02; 5/98) (12.38) -- -- 1.99 INVESCO VIF 4ID Dynamics Fund (2/02; 8/97) (37.38) (5.29) -- (4.47) 4FS Financial Services Fund (2/02; 9/99) (21.50) -- -- 0.05 4TC Technology Fund (2/02; 5/97) (51.11) (8.24) -- (5.25) 4TL Telecommunications Fund (2/02; 9/99) (54.76) -- -- (34.08) JANUS ASPEN SERIES 4GT Global Technology Portfolio: Service Shares (2/02; 1/00)(9) (45.68) -- -- (40.56) 4IG International Growth Portfolio: Service Shares (2/02; 5/94)(9) (31.74) (1.88) -- 6.19 LAZARD RETIREMENT SERIES 4IP International Equity Portfolio (2/02; 9/98) (17.90) -- -- (5.90) MFS(R) 4MG Investors Growth Stock Series - Service Class (2/02; 5/99)(10) (33.53) -- -- (10.62) 4MD New Discovery Series - Service Class (2/02; 5/98)(10) (37.29) -- -- 0.55 4UT Utilities Series - Service Class (2/02; 1/95)(10) (29.11) (2.59) -- 6.87 PIONEER VCT 4PE Pioneer Equity Income VCT Portfolio - Class II Shares (2/02; 3/95)(11) (22.81) (0.01) -- 8.02 4EU Pioneer Europe VCT Portfolio - Class II Shares (2/02; 10/98)(12) (25.58) -- -- (10.49) PUTNAM VARIABLE TRUST 4HS Putnam VT Health Sciences Fund - Class IB Shares (2/02; 4/98)(13) (26.76) -- -- (3.35) 4PI Putnam VT International Equity Fund - Class IB Shares (2/02; 1/97)(14) (24.30) 0.38 -- 2.53 (previously Putnam VT International Growth Fund - Class IB Shares) 4VS Putnam VT Vista Fund - Class IB Shares (2/02; 1/97)(14) (36.19) (6.04) -- (1.98) STRONG FUNDS 4SO Strong Opportunity Fund II - Advisor Class (2/02; 5/92)(15) (32.83) 0.57 8.38 9.23 WANGER 4IT International Small Cap (2/02; 5/95) (20.78) 3.26 -- 9.17 4SP U.S. Smaller Companies (2/02; 5/95) (23.51) 0.99 -- 10.89 WELLS FARGO VT 4AA Asset Allocation Fund (2/02; 4/94)(16) (19.87) 0.40 -- 6.11 4WI International Equity Fund (2/02; 7/00) (29.13) -- -- (23.28) 4SG Small Cap Growth Fund (2/02; 5/95)(17) (43.19) (14.17) -- (3.77)
(a) Current applicable charges deducted from performance include a $30 annual contract administrative charge, a 0.25% annual MAV fee, a 0.40% annual EEP fee, a 1.20% annual mortality and expense risk fee and applicable surrender charges. Premium taxes and purchase payment credits are not reflected in these total returns. (b) Cumulative return (not annualized) since commencement date of the subaccount. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 41 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES UNDER RAVA SELECT IN TEXAS (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: COMMENCEMENT(b) AXP(R) VARIABLE PORTFOLIO - BC4 Blue Chip Advantage Fund (2/02; 9/99)(1) (28.00%) BD4 Bond Fund (2/02; 10/81) (4.38) CR4 Capital Resource Fund (2/02; 10/81) (26.41) CM4 Cash Management Fund (2/02; 10/81) (7.96) DE4 Diversified Equity Income Fund (2/02; 9/99) (24.50) EM4 Emerging Markets Fund (2/02; 5/00) (17.78) ES4 Equity Select Fund (2/02; 5/01) (19.85) EI4 Extra Income Fund (2/02; 5/96) (13.99) FI4 Federal Income Fund (2/02; 9/99) (4.18) GB4 Global Bond Fund (2/02; 5/96) 5.56 GR4 Growth Fund (2/02; 9/99) (30.28) IE4 International Fund (2/02; 1/92) (21.88) MF4 Managed Fund (2/02; 4/86) (17.91) ND4 NEW DIMENSIONS FUND(R) (2/02; 5/96) (27.16) SV4 Partners Small Cap Value Fund (2/02; 8/01) (19.82) IV4 S&P 500 Index Fund (2/02; 5/00) (27.43) SC4 Small Cap Advantage Fund (2/02; 9/99) (22.32) ST4 Stock Fund (2/02; 8/01) (26.93) SA4 Strategy Aggressive Fund (2/02; 1/92) (38.79) AIM V.I. 4AC Capital Appreciation Fund, Series II Shares (2/02; 5/93)(2) (29.48) 4AD Capital Development Fund, Series II Shares (2/02; 5/98)(2) (26.65) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 4AL AllianceBernstein Growth and Income Portfolio (Class B) (2/02; 1/91)(3) (26.07) 4AB AllianceBernstein International Value Portfolio (Class B) (2/02; 5/01)(4) (12.55) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 4AI VP International, Class II (2/02; 5/94)(5) (22.24) 4AV VP Value, Class II (2/02; 5/96)(5) (18.85) CALVERT VARIABLE SERIES, INC. 4SR Social Balanced Portfolio (2/02; 9/86) (19.46) EVERGREEN VA 4CG Capital Growth Fund - Class 2 (2/02; 3/98)(6) (25.99) FIDELITY(R) VIP 4FG Growth & Income Portfolio Service Class 2 (2/02; 12/96)(7) (21.77) 4FM Mid Cap Portfolio Service Class 2 (2/02; 12/98)(7) (17.82) 4FO Overseas Portfolio Service Class 2 (2/02; 1/87)(7) (24.11) FTVIPT 4RE Franklin Real Estate Fund - Class 2 (2/02; 1/89)(8) (7.75) 4SI Franklin Small Cap Value Securities Fund - Class 2 (2/02; 5/98)(8) (16.33) 4MS Mutual Shares Securities Fund - Class 2 (2/02; 11/96)(8) (18.41) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC4 Blue Chip Advantage Fund (2/02; 9/99)(1) (29.69%) --% --% (13.80%) BD4 Bond Fund (2/02; 10/81) (3.99) 2.37 4.98 8.02 CR4 Capital Resource Fund (2/02; 10/81) (28.97) (5.99) 1.85 8.15 CM4 Cash Management Fund (2/02; 10/81) (7.93) 2.15 2.32 4.17 DE4 Diversified Equity Income Fund (2/02; 9/99) (26.73) -- -- (6.52) EM4 Emerging Markets Fund (2/02; 5/00) (13.89) -- -- (16.41) ES4 Equity Select Fund (2/02; 5/01) (21.45) -- -- (14.19) EI4 Extra Income Fund (2/02; 5/96) (15.22) (3.96) -- (0.76) FI4 Federal Income Fund (2/02; 9/99) (3.71) -- -- 4.40 GB4 Global Bond Fund (2/02; 5/96) 4.71 2.45 -- 3.11 GR4 Growth Fund (2/02; 9/99) (32.68) -- -- (20.87) IE4 International Fund (2/02; 1/92) (25.52) (7.72) (0.02) (0.30) MF4 Managed Fund (2/02; 4/86) (20.69) (1.67) 4.56 6.65 ND4 NEW DIMENSIONS FUND(R) (2/02; 5/96) (28.85) (1.81) -- 3.16 SV4 Partners Small Cap Value Fund (2/02; 8/01) (19.98) -- -- (10.49) IV4 S&P 500 Index Fund (2/02; 5/00) (29.32) -- -- (20.12) SC4 Small Cap Advantage Fund (2/02; 9/99) (24.45) -- -- (4.52) ST4 Stock Fund (2/02; 8/01) (28.03) -- -- (22.92) SA4 Strategy Aggressive Fund (2/02; 1/92) (37.99) (10.09) (0.20) 0.46 AIM V.I. 4AC Capital Appreciation Fund, Series II Shares (2/02; 5/93)(2) (31.23) (4.18) -- 5.30 4AD Capital Development Fund, Series II Shares (2/02; 5/98)(2) (28.59) -- -- (3.21) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 4AL AllianceBernstein Growth and Income Portfolio (Class B) (2/02; 1/91)(3) (29.19) 1.59 9.09 8.20 4AB AllianceBernstein International Value Portfolio (Class B) (2/02; 5/01)(4) (13.82) -- -- (9.35) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 4AI VP International, Class II (2/02; 5/94)(5) (27.65) (4.83) -- 0.30 4AV VP Value, Class II (2/02; 5/96)(5) (20.59) 1.91 -- 6.38 CALVERT VARIABLE SERIES, INC. 4SR Social Balanced Portfolio (2/02; 9/86) (20.04) (1.25) 4.62 5.87 EVERGREEN VA 4CG Capital Growth Fund - Class 2 (2/02; 3/98)(6) (29.51) -- -- (3.66) FIDELITY(R) VIP 4FG Growth & Income Portfolio Service Class 2 (2/02; 12/96)(7) (24.26) (1.39) -- 2.97 4FM Mid Cap Portfolio Service Class 2 (2/02; 12/98)(7) (18.06) -- -- 13.41 4FO Overseas Portfolio Service Class 2 (2/02; 1/87)(7) (27.54) (5.93) 2.67 2.25 FTVIPT 4RE Franklin Real Estate Fund - Class 2 (2/02; 1/89)(8) (7.06) 0.52 8.02 7.60 4SI Franklin Small Cap Value Securities Fund - Class 2 (2/02; 5/98)(8) (17.37) -- -- (1.49) 4MS Mutual Shares Securities Fund - Class 2 (2/02; 11/96)(8) (19.69) 2.02 -- 4.44
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 42 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES UNDER RAVA SELECT IN TEXAS (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: COMMENCEMENT(b) GOLDMAN SACHS VIT 4UE CORE(SM) U.S. Equity Fund (2/02; 2/98) (26.74%) 4MC Mid Cap Value Fund (2/02; 5/98) (13.09) INVESCO VIF 4ID Dynamics Fund (2/02; 8/97) (35.23) 4FS Financial Services Fund (2/02; 9/99) (21.30) 4TC Technology Fund (2/02; 5/97) (49.05) 4TL Telecommunications Fund (2/02; 9/99) (44.67) JANUS ASPEN SERIES 4GT Global Technology Portfolio: Service Shares (2/02; 1/00)(9) (41.96) 4IG International Growth Portfolio: Service Shares (2/02; 5/94)(9) (27.75) LAZARD RETIREMENT SERIES 4IP International Equity Portfolio (2/02; 9/98) (15.69) MFS(R) 4MG Investors Growth Stock Series - Service Class (2/02; 5/99)(10) (31.06) 4MD New Discovery Series - Service Class (2/02; 5/98)(10) (33.86) 4UT Utilities Series - Service Class (2/02; 1/95)(10) (21.70) PIONEER VCT 4PE Pioneer Equity Income VCT Portfolio - Class II Shares (2/02; 3/95)(11) (22.46) 4EU Pioneer Europe VCT Portfolio - Class II Shares (2/02; 10/98)(12) (22.04) PUTNAM VARIABLE TRUST 4HS Putnam VT Health Sciences Fund - Class IB Shares (2/02; 4/98)(13) (26.01) 4PI Putnam VT International Equity Fund - Class IB Shares (2/02; 1/97)(14) (21.08) (previously Putnam VT International Growth Fund - Class IB Shares) 4VS Putnam VT Vista Fund - Class IB Shares (2/02; 1/97)(14) (33.45) STRONG FUNDS 4SO Strong Opportunity Fund II - Advisor Class (2/02; 5/92)(15) (31.70) WANGER 4IT International Small Cap (2/02; 5/95) (19.64) 4SP U.S. Smaller Companies (2/02; 5/95) (22.41) WELLS FARGO VT 4AA Asset Allocation Fund (2/02; 4/94)(16) (19.27) 4WI International Equity Fund (2/02; 7/00) (26.04) 4SG Small Cap Growth Fund (2/02; 5/95)(17) (39.20) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT GOLDMAN SACHS VIT 4UE CORE(SM) U.S. Equity Fund (2/02; 2/98) (28.85%) --% --% (4.32%) 4MC Mid Cap Value Fund (2/02; 5/98) (13.21) -- -- 1.99 INVESCO VIF 4ID Dynamics Fund (2/02; 8/97) (37.94) (5.29) -- (4.47) 4FS Financial Services Fund (2/02; 9/99) (22.24) -- -- 0.05 4TC Technology Fund (2/02; 5/97) (51.53) (8.24) -- (5.25) 4TL Telecommunications Fund (2/02; 9/99) (55.14) -- -- (34.08) JANUS ASPEN SERIES 4GT Global Technology Portfolio: Service Shares (2/02; 1/00)(9) (46.16) -- -- (40.38) 4IG International Growth Portfolio: Service Shares (2/02; 5/94)(9) (32.36) (1.88) -- 6.19 LAZARD RETIREMENT SERIES 4IP International Equity Portfolio (2/02; 9/98) (18.68) -- -- (5.90) MFS(R) 4MG Investors Growth Stock Series - Service Class (2/02; 5/99)(10) (34.14) -- -- (10.62) 4MD New Discovery Series - Service Class (2/02; 5/98)(10) (37.86) -- -- 0.55 4UT Utilities Series - Service Class (2/02; 1/95)(10) (29.76) (2.59) -- 6.87 PIONEER VCT 4PE Pioneer Equity Income VCT Portfolio - Class II Shares (2/02; 3/95)(11) (23.54) (0.01) -- 8.02 4EU Pioneer Europe VCT Portfolio - Class II Shares (2/02; 10/98)(12) (26.27) -- -- (10.49) PUTNAM VARIABLE TRUST 4HS Putnam VT Health Sciences Fund - Class IB Shares (2/02; 4/98)(13) (27.44) -- -- (3.35) 4PI Putnam VT International Equity Fund - Class IB Shares (2/02; 1/97)(14) (25.01) 0.38 -- 2.53 (previously Putnam VT International Growth Fund - Class IB Shares) 4VS Putnam VT Vista Fund - Class IB Shares (2/02; 1/97)(14) (36.77) (6.04) -- (1.98) STRONG FUNDS 4SO Strong Opportunity Fund II - Advisor Class (2/02; 5/92)(15) (33.45) 0.57 8.38 9.23 WANGER 4IT International Small Cap (2/02; 5/95) (21.52) 3.26 -- 9.17 4SP U.S. Smaller Companies (2/02; 5/95) (24.23) 0.99 -- 10.89 WELLS FARGO VT 4AA Asset Allocation Fund (2/02; 4/94)(16) (20.63) 0.40 -- 6.11 4WI International Equity Fund (2/02; 7/00) (29.78) -- -- (22.99) 4SG Small Cap Growth Fund (2/02; 5/95)(17) (43.69) (14.17) -- (3.77)
(a) Current applicable charges deducted from performance include a $30 annual contract administrative charge, a 0.25% annual MAV fee, a 0.40% annual EEP fee, a 1.20% annual mortality and expense risk fee and applicable surrender charges. Premium taxes and purchase payment credits are not reflected in these total returns. (b) Cumulative return (not annualized) since commencement date of the subaccount. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 43 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES UNDER RAVA SELECT AND RAVA SELECT IN TEXAS (WITHOUT PURCHASE PAYMENT CREDITS) WITHOUT SURRENDER AND SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: COMMENCEMENT(b) AXP(R) VARIABLE PORTFOLIO - BC4 Blue Chip Advantage Fund (2/02; 9/99)(1) (22.61%) BD4 Bond Fund (2/02; 10/81) 3.06 CR4 Capital Resource Fund (2/02; 10/81) (20.88) CM4 Cash Management Fund (2/02; 10/81) (0.83) DE4 Diversified Equity Income Fund (2/02; 9/99) (18.81) EM4 Emerging Markets Fund (2/02; 5/00) (11.50) ES4 Equity Select Fund (2/02; 5/01) (13.75) EI4 Extra Income Fund (2/02; 5/96) (7.38) FI4 Federal Income Fund (2/02; 9/99) 3.28 GB4 Global Bond Fund (2/02; 5/96) 13.56 GR4 Growth Fund (2/02; 9/99) (25.08) IE4 International Fund (2/02; 1/92) (15.96) MF4 Managed Fund (2/02; 4/86) (11.64) ND4 NEW DIMENSIONS FUND(R) (2/02; 5/96) (21.70) SV4 Partners Small Cap Value Fund (2/02; 8/01) (13.72) IV4 S&P 500 Index Fund (2/02; 5/00) (21.99) SC4 Small Cap Advantage Fund (2/02; 9/99) (16.44) ST4 Stock Fund (2/02; 8/01) (21.45) SA4 Strategy Aggressive Fund (2/02; 1/92) (34.33) AIM V.I. 4AC Capital Appreciation Fund, Series II Shares (2/02; 5/93)(2) (24.22) 4AD Capital Development Fund, Series II Shares (2/02; 5/98)(2) (21.14) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 4AL AllianceBernstein Growth and Income Portfolio (Class B) (2/02; 1/91)(3) (20.51) 4AB AllianceBernstein International Value Portfolio (Class B) (2/02; 5/01)(4) (5.81) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 4AI VP International, Class II (2/02; 5/94)(5) (16.35) 4AV VP Value, Class II (2/02; 5/96)(5) (12.66) CALVERT VARIABLE SERIES, INC. 4SR Social Balanced Portfolio (2/02; 9/86) (13.33) EVERGREEN VA 4CG Capital Growth Fund - Class 2 (2/02; 3/98)(6) (20.42) FIDELITY(R) VIP 4FG Growth & Income Portfolio Service Class 2 (2/02; 12/96)(7) (15.84) 4FM Mid Cap Portfolio Service Class 2 (2/02; 12/98)(7) (11.55) 4FO Overseas Portfolio Service Class 2 (2/02; 1/87)(7) (18.38) FTVIPT 4RE Franklin Real Estate Fund - Class 2 (2/02; 1/89)(8) (0.60) 4SI Franklin Small Cap Value Securities Fund - Class 2 (2/02; 5/98)(8) (9.92) 4MS Mutual Shares Securities Fund - Class 2 (2/02; 11/96)(8) (12.18) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC4 Blue Chip Advantage Fund (2/02; 9/99)(1) (24.44%) --% --% (13.80%) BD4 Bond Fund (2/02; 10/81) 3.49 2.37 4.98 8.02 CR4 Capital Resource Fund (2/02; 10/81) (23.66) (5.99) 1.85 8.15 CM4 Cash Management Fund (2/02; 10/81) (0.79) 2.15 2.32 4.17 DE4 Diversified Equity Income Fund (2/02; 9/99) (21.23) -- -- (6.52) EM4 Emerging Markets Fund (2/02; 5/00) (7.27) -- -- (14.69) ES4 Equity Select Fund (2/02; 5/01) (15.49) -- -- (10.85) EI4 Extra Income Fund (2/02; 5/96) (8.71) (3.96) -- (0.76) FI4 Federal Income Fund (2/02; 9/99) 3.80 -- -- 4.40 GB4 Global Bond Fund (2/02; 5/96) 12.71 2.45 -- 3.11 GR4 Growth Fund (2/02; 9/99) (27.69) -- -- (20.87) IE4 International Fund (2/02; 1/92) (19.92) (7.72) (0.02) (0.30) MF4 Managed Fund (2/02; 4/86) (14.66) (1.67) 4.56 6.65 ND4 NEW DIMENSIONS FUND(R) (2/02; 5/96) (23.53) (1.81) -- 3.16 SV4 Partners Small Cap Value Fund (2/02; 8/01) (13.89) -- -- (6.19) IV4 S&P 500 Index Fund (2/02; 5/00) (24.05) -- -- (18.49) SC4 Small Cap Advantage Fund (2/02; 9/99) (18.75) -- -- (4.52) ST4 Stock Fund (2/02; 8/01) (22.64) -- -- (19.24) SA4 Strategy Aggressive Fund (2/02; 1/92) (33.47) (10.09) (0.20) 0.46 AIM V.I. 4AC Capital Appreciation Fund, Series II Shares (2/02; 5/93)(2) (26.12) (4.18) -- 5.30 4AD Capital Development Fund, Series II Shares (2/02; 5/98)(2) (23.25) -- -- (3.21) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 4AL AllianceBernstein Growth and Income Portfolio (Class B) (2/02; 1/91)(3) (23.90) 1.59 9.09 8.20 4AB AllianceBernstein International Value Portfolio (Class B) (2/02; 5/01)(4) (7.20) -- -- (5.84) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 4AI VP International, Class II (2/02; 5/94)(5) (22.23) (4.83) -- 0.30 4AV VP Value, Class II (2/02; 5/96)(5) (14.56) 1.91 -- 6.38 CALVERT VARIABLE SERIES, INC. 4SR Social Balanced Portfolio (2/02; 9/86) (13.95) (1.25) 4.62 5.87 EVERGREEN VA 4CG Capital Growth Fund - Class 2 (2/02; 3/98)(6) (24.25) -- -- (3.66) FIDELITY(R) VIP 4FG Growth & Income Portfolio Service Class 2 (2/02; 12/96)(7) (18.54) (1.39) -- 2.97 4FM Mid Cap Portfolio Service Class 2 (2/02; 12/98)(7) (11.80) -- -- 13.41 4FO Overseas Portfolio Service Class 2 (2/02; 1/87)(7) (22.11) (5.93) 2.67 2.25 FTVIPT 4RE Franklin Real Estate Fund - Class 2 (2/02; 1/89)(8) 0.15 0.52 8.02 7.60 4SI Franklin Small Cap Value Securities Fund - Class 2 (2/02; 5/98)(8) (11.05) -- -- (1.49) 4MS Mutual Shares Securities Fund - Class 2 (2/02; 11/96)(8) (13.57) 2.02 -- 4.44
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 44 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES UNDER RAVA SELECT AND RAVA SELECT IN TEXAS (WITHOUT PURCHASE PAYMENT CREDITS) WITHOUT SURRENDER AND SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: COMMENCEMENT(b) GOLDMAN SACHS VIT 4UE CORE(SM) U.S. Equity Fund (2/02; 2/98) (21.24%) 4MC Mid Cap Value Fund (2/02; 5/98) (6.40) INVESCO VIF 4ID Dynamics Fund (2/02; 8/97) (30.46) 4FS Financial Services Fund (2/02; 9/99) (15.33) 4TC Technology Fund (2/02; 5/97) (45.49) 4TL Telecommunications Fund (2/02; 9/99) (40.73) JANUS ASPEN SERIES 4GT Global Technology Portfolio: Service Shares (2/02; 1/00)(9) (37.79) 4IG International Growth Portfolio: Service Shares (2/02; 5/94)(9) (22.33) LAZARD RETIREMENT SERIES 4IP International Equity Portfolio (2/02; 9/98) (9.23) MFS(R) 4MG Investors Growth Stock Series - Service Class (2/02; 5/99)(10) (25.93) 4MD New Discovery Series - Service Class (2/02; 5/98)(10) (28.98) 4UT Utilities Series - Service Class (2/02; 1/95)(10) (15.76) PIONEER VCT 4PE Pioneer Equity Income VCT Portfolio - Class II Shares (2/02; 3/95)(11) (16.59) 4EU Pioneer Europe VCT Portfolio - Class II Shares (2/02; 10/98)(12) (16.13) PUTNAM VARIABLE TRUST 4HS Putnam VT Health Sciences Fund - Class IB Shares (2/02; 4/98)(13) (20.45) 4PI Putnam VT International Equity Fund - Class IB Shares (2/02; 1/97)(14) (15.08) (previously Putnam VT International Growth Fund - Class IB Shares) 4VS Putnam VT Vista Fund - Class IB Shares (2/02; 1/97)(14) (28.54) STRONG FUNDS 4SO Strong Opportunity Fund II - Advisor Class (2/02; 5/92)(15) (26.63) WANGER 4IT International Small Cap (2/02; 5/95) (13.52) 4SP U.S. Smaller Companies (2/02; 5/95) (16.54) WELLS FARGO VT 4AA Asset Allocation Fund (2/02; 4/94)(16) (13.12) 4WI International Equity Fund (2/02; 7/00) (20.48) 4SG Small Cap Growth Fund (2/02; 5/95)(17) (34.79) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT GOLDMAN SACHS VIT 4UE CORE(SM) U.S. Equity Fund (2/02; 2/98) (23.53%) --% --% (4.32%) 4MC Mid Cap Value Fund (2/02; 5/98) (6.54) -- -- 1.99 INVESCO VIF 4ID Dynamics Fund (2/02; 8/97) (33.42) (5.29) -- (4.47) 4FS Financial Services Fund (2/02; 9/99) (16.35) -- -- 0.05 4TC Technology Fund (2/02; 5/97) (48.19) (8.24) -- (5.25) 4TL Telecommunications Fund (2/02; 9/99) (52.10) -- -- (34.08) JANUS ASPEN SERIES 4GT Global Technology Portfolio: Service Shares (2/02; 1/00)(9) (42.34) -- -- (39.34) 4IG International Growth Portfolio: Service Shares (2/02; 5/94)(9) (27.35) (1.88) -- 6.19 LAZARD RETIREMENT SERIES 4IP International Equity Portfolio (2/02; 9/98) (12.48) -- -- (5.90) MFS(R) 4MG Investors Growth Stock Series - Service Class (2/02; 5/99)(10) (29.28) -- -- (10.62) 4MD New Discovery Series - Service Class (2/02; 5/98)(10) (33.32) -- -- 0.55 4UT Utilities Series - Service Class (2/02; 1/95)(10) (24.52) (2.59) -- 6.87 PIONEER VCT 4PE Pioneer Equity Income VCT Portfolio - Class II Shares (2/02; 3/95)(11) (17.76) (0.01) -- 8.02 4EU Pioneer Europe VCT Portfolio - Class II Shares (2/02; 10/98)(12) (20.73) -- -- (10.49) PUTNAM VARIABLE TRUST 4HS Putnam VT Health Sciences Fund - Class IB Shares (2/02; 4/98)(13) (22.00) -- -- (3.35) 4PI Putnam VT International Equity Fund - Class IB Shares (2/02; 1/97)(14) (19.36) 0.38 -- 2.53 (previously Putnam VT International Growth Fund - Class IB Shares) 4VS Putnam VT Vista Fund - Class IB Shares (2/02; 1/97)(14) (32.14) (6.04) -- (1.98) STRONG FUNDS 4SO Strong Opportunity Fund II - Advisor Class (2/02; 5/92)(15) (28.53) 0.57 8.38 9.23 WANGER 4IT International Small Cap (2/02; 5/95) (15.57) 3.26 -- 9.17 4SP U.S. Smaller Companies (2/02; 5/95) (18.51) 0.99 -- 10.89 WELLS FARGO VT 4AA Asset Allocation Fund (2/02; 4/94)(16) (14.60) 0.40 -- 6.11 4WI International Equity Fund (2/02; 7/00) (24.54) -- -- (21.28) 4SG Small Cap Growth Fund (2/02; 5/95)(17) (39.66) (14.17) -- (3.77)
(a) Current applicable charges deducted from performance include a $30 annual contract administrative charge, a 0.25% annual MAV fee, a 0.40% annual EEP fee and a 1.20% annual mortality and expense risk fee. Premium taxes and purchase payment credits are not reflected in these total returns. (b) Cumulative return (not annualized) since commencement date of the subaccount. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 45 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES UNDER RAVA SELECT (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: COMMENCEMENT(b) AXP(R) VARIABLE PORTFOLIO - BC4 Blue Chip Advantage Fund (2/02; 9/99)(1) (26.72%) BD4 Bond Fund (2/02; 10/81) (2.85) CR4 Capital Resource Fund (2/02; 10/81) (25.12) CM4 Cash Management Fund (2/02; 10/81) (6.47) DE4 Diversified Equity Income Fund (2/02; 9/99) (23.19) EM4 Emerging Markets Fund (2/02; 5/00) (16.39) ES4 Equity Select Fund (2/02; 5/01) (18.49) EI4 Extra Income Fund (2/02; 5/96) (12.56) FI4 Federal Income Fund (2/02; 9/99) (2.64) GB4 Global Bond Fund (2/02; 5/96) 7.21 GR4 Growth Fund (2/02; 9/99) (29.02) IE4 International Fund (2/02; 1/92) (20.54) MF4 Managed Fund (2/02; 4/86) (16.52) ND4 NEW DIMENSIONS FUND(R) (2/02; 5/96) (25.87) SV4 Partners Small Cap Value Fund (2/02; 8/01) (18.45) IV4 S&P 500 Index Fund (2/02; 5/00) (26.14) SC4 Small Cap Advantage Fund (2/02; 9/99) (20.98) ST4 Stock Fund (2/02; 8/01) (25.64) SA4 Strategy Aggressive Fund (2/02; 1/92) (37.63) AIM V.I. 4AC Capital Appreciation Fund, Series II Shares (2/02; 5/93)(2) (28.22) 4AD Capital Development Fund, Series II Shares (2/02; 5/98)(2) (25.36) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 4AL AllianceBernstein Growth and Income Portfolio (Class B) (2/02; 1/91)(3) (24.77) 4AB AllianceBernstein International Value Portfolio (Class B) (2/02; 5/01)(4) (11.10) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 4AI VP International, Class II (2/02; 5/94)(5) (20.90) 4AV VP Value, Class II (2/02; 5/96)(5) (17.47) CALVERT VARIABLE SERIES, INC. 4SR Social Balanced Portfolio (2/02; 9/86) (18.09) EVERGREEN VA 4CG Capital Growth Fund - Class 2 (2/02; 3/98)(6) (24.69) FIDELITY(R) VIP 4FG Growth & Income Portfolio Service Class 2 (2/02; 12/96)(7) (20.42) 4FM Mid Cap Portfolio Service Class 2 (2/02; 12/98)(7) (16.44) 4FO Overseas Portfolio Service Class 2 (2/02; 1/87)(7) (22.78) FTVIPT 4RE Franklin Real Estate Fund - Class 2 (2/02; 1/89)(8) (6.25) 4SI Franklin Small Cap Value Securities Fund - Class 2 (2/02; 5/98)(8) (14.92) 4MS Mutual Shares Securities Fund - Class 2 (2/02; 11/96)(8) (17.03) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC4 Blue Chip Advantage Fund (2/02; 9/99)(1) (28.43%) --% --% (13.15%) BD4 Bond Fund (2/02; 10/81) (2.45) 3.02 5.63 8.67 CR4 Capital Resource Fund (2/02; 10/81) (27.70) (5.34) 2.50 8.80 CM4 Cash Management Fund (2/02; 10/81) (6.43) 2.80 2.97 4.82 DE4 Diversified Equity Income Fund (2/02; 9/99) (25.44) -- -- (5.87) EM4 Emerging Markets Fund (2/02; 5/00) (12.46) -- -- (16.07) ES4 Equity Select Fund (2/02; 5/01) (20.10) -- -- (13.57) EI4 Extra Income Fund (2/02; 5/96) (13.80) (3.31) -- (0.11) FI4 Federal Income Fund (2/02; 9/99) (2.17) -- -- 5.05 GB4 Global Bond Fund (2/02; 5/96) 6.36 3.10 -- 3.76 GR4 Growth Fund (2/02; 9/99) (31.45) -- -- (20.22) IE4 International Fund (2/02; 1/92) (24.22) (7.07) 0.63 0.35 MF4 Managed Fund (2/02; 4/86) (19.33) (1.02) 5.21 7.30 ND4 NEW DIMENSIONS FUND(R) (2/02; 5/96) (27.58) (1.16) -- 3.81 SV4 Partners Small Cap Value Fund (2/02; 8/01) (18.61) -- -- (9.88) IV4 S&P 500 Index Fund (2/02; 5/00) (28.06) -- -- (19.77) SC4 Small Cap Advantage Fund (2/02; 9/99) (23.14) -- -- (3.87) ST4 Stock Fund (2/02; 8/01) (26.75) -- -- (22.30) SA4 Strategy Aggressive Fund (2/02; 1/92) (36.82) (9.44) 0.45 1.11 AIM V.I. 4AC Capital Appreciation Fund, Series II Shares (2/02; 5/93)(2) (29.99) (3.53) -- 5.95 4AD Capital Development Fund, Series II Shares (2/02; 5/98)(2) (27.32) -- -- (2.56) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 4AL AllianceBernstein Growth and Income Portfolio (Class B) (2/02; 1/91)(3) (27.92) 2.24 9.74 8.85 4AB AllianceBernstein International Value Portfolio (Class B) (2/02; 5/01)(4) (12.39) -- -- (8.73) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 4AI VP International, Class II (2/02; 5/94)(5) (26.37) (4.18) -- 0.95 4AV VP Value, Class II (2/02; 5/96)(5) (19.24) 2.56 -- 7.03 CALVERT VARIABLE SERIES, INC. 4SR Social Balanced Portfolio (2/02; 9/86) (18.67) (0.60) 5.27 6.52 EVERGREEN VA 4CG Capital Growth Fund - Class 2 (2/02; 3/98)(6) (28.25) -- -- (3.01) FIDELITY(R) VIP 4FG Growth & Income Portfolio Service Class 2 (2/02; 12/96)(7) (22.94) (0.74) -- 3.62 4FM Mid Cap Portfolio Service Class 2 (2/02; 12/98)(7) (16.67) -- -- 14.06 4FO Overseas Portfolio Service Class 2 (2/02; 1/87)(7) (26.26) (5.28) 3.32 2.90 FTVIPT 4RE Franklin Real Estate Fund - Class 2 (2/02; 1/89)(8) (5.56) 1.17 8.67 8.25 4SI Franklin Small Cap Value Securities Fund - Class 2 (2/02; 5/98)(8) (15.98) -- -- (0.84) 4MS Mutual Shares Securities Fund - Class 2 (2/02; 11/96)(8) (18.32) 2.67 -- 5.09
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 46 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES UNDER RAVA SELECT (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: COMMENCEMENT(b) GOLDMAN SACHS VIT 4UE CORE(SM) U.S. Equity Fund (2/02; 2/98) (25.45%) 4MC Mid Cap Value Fund (2/02; 5/98) (11.65) INVESCO VIF 4ID Dynamics Fund (2/02; 8/97) (34.03) 4FS Financial Services Fund (2/02; 9/99) (19.95) 4TC Technology Fund (2/02; 5/97) (48.00) 4TL Telecommunications Fund (2/02; 9/99) (43.57) JANUS ASPEN SERIES 4GT Global Technology Portfolio: Service Shares (2/02; 1/00)(9) (40.84) 4IG International Growth Portfolio: Service Shares (2/02; 5/94)(9) (26.47) LAZARD RETIREMENT SERIES 4IP International Equity Portfolio (2/02; 9/98) (14.28) MFS(R) 4MG Investors Growth Stock Series - Service Class (2/02; 5/99)(10) (29.81) 4MD New Discovery Series - Service Class (2/02; 5/98)(10) (32.65) 4UT Utilities Series - Service Class (2/02; 1/95)(10) (20.35) PIONEER VCT 4PE Pioneer Equity Income VCT Portfolio - Class II Shares (2/02; 3/95)(11) (21.12) 4EU Pioneer Europe VCT Portfolio - Class II Shares (2/02; 10/98)(12) (20.69) PUTNAM VARIABLE TRUST 4HS Putnam VT Health Sciences Fund - Class IB Shares (2/02; 4/98)(13) (24.71) 4PI Putnam VT International Equity Fund - Class IB Shares (2/02; 1/97)(14) (19.72) (previously Putnam VT International Growth Fund - Class IB Shares) 4VS Putnam VT Vista Fund - Class IB Shares (2/02; 1/97)(14) (32.23) STRONG FUNDS 4SO Strong Opportunity Fund II - Advisor Class (2/02; 5/92)(15) (30.46) WANGER 4IT International Small Cap (2/02; 5/95) (18.27) 4SP U.S. Smaller Companies (2/02; 5/95) (21.07) WELLS FARGO VT 4AA Asset Allocation Fund (2/02; 4/94)(16) (17.90) 4WI International Equity Fund (2/02; 7/00) (24.74) 4SG Small Cap Growth Fund (2/02; 5/95)(17) (38.05) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT GOLDMAN SACHS VIT 4UE CORE(SM) U.S. Equity Fund (2/02; 2/98) (27.58%) --% --% (3.67%) 4MC Mid Cap Value Fund (2/02; 5/98) (11.77) -- -- 2.64 INVESCO VIF 4ID Dynamics Fund (2/02; 8/97) (36.77) (4.64) -- (3.82) 4FS Financial Services Fund (2/02; 9/99) (20.90) -- -- 0.70 4TC Technology Fund (2/02; 5/97) (50.51) (7.59) -- (4.60) 4TL Telecommunications Fund (2/02; 9/99) (54.15) -- -- (33.43) JANUS ASPEN SERIES 4GT Global Technology Portfolio: Service Shares (2/02; 1/00)(9) (45.08) -- -- (39.93) 4IG International Growth Portfolio: Service Shares (2/02; 5/94)(9) (31.13) (1.23) -- 6.84 LAZARD RETIREMENT SERIES 4IP International Equity Portfolio (2/02; 9/98) (17.30) -- -- (5.25) MFS(R) 4MG Investors Growth Stock Series - Service Class (2/02; 5/99) (32.93) -- -- (9.97) 4MD New Discovery Series - Service Class (2/02; 5/98) (36.68) -- -- 1.20 4UT Utilities Series - Service Class (2/02; 1/95)(10) 28.50 (1.94) -- 7.52 PIONEER VCT 4PE Pioneer Equity Income VCT Portfolio - Class II Shares (2/02; 3/95) (22.21) 0.64 -- 8.67 4EU Pioneer Europe VCT Portfolio - Class II Shares (2/02; 10/98) (24.98) -- -- (9.84) PUTNAM VARIABLE TRUST 4HS Putnam VT Health Sciences Fund - Class IB Shares (2/02; 4/98) (26.16) -- -- (2.70) 4PI Putnam VT International Equity Fund - Class IB Shares (2/02; 1/97) (23.70) 1.03 -- 3.18 (previously Putnam VT International Growth Fund - Class IB Shares) 4VS Putnam VT Vista Fund - Class IB Shares (2/02; 1/97) (35.58) (5.39) -- (1.33) STRONG FUNDS 4SO Strong Opportunity Fund II - Advisor Class (2/02; 5/92) (32.23) 1.22 9.03 9.88 WANGER 4IT International Small Cap (2/02; 5/95) (20.17) 3.91 -- 9.82 4SP U.S. Smaller Companies (2/02; 5/95) (22.91) 1.64 -- 11.54 WELLS FARGO VT 4AA Asset Allocation Fund (2/02; 4/94)(16) (19.27) 1.05 -- 6.76 4WI International Equity Fund (2/02; 7/00) (28.52) -- -- (22.65) 4SG Small Cap Growth Fund (2/02; 5/95)(17) (42.58) (13.52) -- (3.12)
(a) Current applicable charges deducted from performance include a $30 annual contract administrative charge, a 1.20% annual mortality and expense risk fee and applicable surrender charges. Premium taxes and purchase payment credits are not reflected in these total returns. (b) Cumulative return (not annualized) since commencement date of the subaccount. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 47 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES UNDER RAVA SELECT IN TEXAS (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: COMMENCEMENT(b) AXP(R) VARIABLE PORTFOLIO - BC4 Blue Chip Advantage Fund (2/02; 9/99)(1) (27.40%) BD4 Bond Fund (2/02; 10/81) (3.79) CR4 Capital Resource Fund (2/02; 10/81) (25.82) CM4 Cash Management Fund (2/02; 10/81) (7.36) DE4 Diversified Equity Income Fund (2/02; 9/99) (23.90) EM4 Emerging Markets Fund (2/02; 5/00) (17.18) ES4 Equity Select Fund (2/02; 5/01) (19.25) EI4 Extra Income Fund (2/02; 5/96) (13.39) FI4 Federal Income Fund (2/02; 9/99) (3.58) GB4 Global Bond Fund (2/02; 5/96) 6.21 GR4 Growth Fund (2/02; 9/99) (29.68) IE4 International Fund (2/02; 1/92) (21.28) MF4 Managed Fund (2/02; 4/86) (17.31) ND4 NEW DIMENSIONS FUND(R) (2/02; 5/96) (26.56) SV4 Partners Small Cap Value Fund (2/02; 8/01) (19.22) IV4 S&P 500 Index Fund (2/02; 5/00) (26.83) SC4 Small Cap Advantage Fund (2/02; 9/99) (21.72) ST4 Stock Fund (2/02; 8/01) (26.34) SA4 Strategy Aggressive Fund (2/02; 1/92) (38.19) AIM V.I. 4AC Capital Appreciation Fund, Series II Shares (2/02; 5/93)(2) (28.88) 4AD Capital Development Fund, Series II Shares (2/02; 5/98)(2) (26.05) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 4AL AllianceBernstein Growth and Income Portfolio (Class B) (2/02; 1/91)(3) (25.47) 4AB AllianceBernstein International Value Portfolio (Class B) (2/02; 5/01)(4) (11.95) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 4AI VP International, Class II (2/02; 5/94)(5) (21.65) 4AV VP Value, Class II (2/02; 5/96)(5) (18.25) CALVERT VARIABLE SERIES, INC. 4SR Social Balanced Portfolio (2/02; 9/86) (18.86) EVERGREEN VA 4CG Capital Growth Fund - Class 2 (2/02; 3/98)(6) (25.39) FIDELITY(R) VIP 4FG Growth & Income Portfolio Service Class 2 (2/02; 12/96)(7) (21.17) 4FM Mid Cap Portfolio Service Class 2 (2/02; 12/98)(7) (17.23) 4FO Overseas Portfolio Service Class 2 (2/02; 1/87)(7) (23.51) FTVIPT 4RE Franklin Real Estate Fund - Class 2 (2/02; 1/89)(8) (7.15) 4SI Franklin Small Cap Value Securities Fund - Class 2 (2/02; 5/98)(8) (15.73) 4MS Mutual Shares Securities Fund - Class 2 (2/02; 11/96)(8) (17.81) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC4 Blue Chip Advantage Fund (2/02; 9/99)(1) (29.09%) --% --% (13.15%) BD4 Bond Fund (2/02; 10/81) (3.39) 3.02 5.63 8.67 CR4 Capital Resource Fund (2/02; 10/81) (28.37) (5.34) 2.50 8.80 CM4 Cash Management Fund (2/02; 10/81) (7.33) 2.80 2.97 4.82 DE4 Diversified Equity Income Fund (2/02; 9/99) (26.13) -- -- (5.87) EM4 Emerging Markets Fund (2/02; 5/00) (13.29) -- -- (15.78) ES4 Equity Select Fund (2/02; 5/01) (20.85) -- -- (13.57) EI4 Extra Income Fund (2/02; 5/96) (14.62) (3.31) -- (0.11) FI4 Federal Income Fund (2/02; 9/99) (3.11) -- -- 5.05 GB4 Global Bond Fund (2/02; 5/96) 5.36 3.10 -- 3.76 GR4 Growth Fund (2/02; 9/99) (32.08) -- -- (20.22) IE4 International Fund (2/02; 1/92) (24.93) (7.07) 0.63 0.35 MF4 Managed Fund (2/02; 4/86) (20.09) (1.02) 5.21 7.30 ND4 NEW DIMENSIONS FUND(R) (2/02; 5/96) (28.25) (1.16) -- 3.81 SV4 Partners Small Cap Value Fund (2/02; 8/01) (19.38) -- -- (9.88) IV4 S&P 500 Index Fund (2/02; 5/00) (28.72) -- -- (19.49) SC4 Small Cap Advantage Fund (2/02; 9/99) (23.85) -- -- (3.87) ST4 Stock Fund (2/02; 8/01) (27.43) -- -- (22.30) SA4 Strategy Aggressive Fund (2/02; 1/92) (37.40) (9.44) 0.45 1.11 AIM V.I. 4AC Capital Appreciation Fund, Series II Shares (2/02; 5/93)(2) (30.64) (3.53) -- 5.95 4AD Capital Development Fund, Series II Shares (2/02; 5/98)(2) (27.99) -- -- (2.56) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 4AL AllianceBernstein Growth and Income Portfolio (Class B) (2/02; 1/91)(3) (28.59) 2.24 9.74 8.85 4AB AllianceBernstein International Value Portfolio (Class B) (2/02; 5/01)(4) (13.22) -- -- (8.73) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 4AI VP International, Class II (2/02; 5/94)(5) (27.05) (4.18) -- 0.95 4AV VP Value, Class II (2/02; 5/96)(5) (20.00) 2.56 -- 7.03 CALVERT VARIABLE SERIES, INC. 4SR Social Balanced Portfolio (2/02; 9/86) (19.44) (0.60) 5.27 6.52 EVERGREEN VA 4CG Capital Growth Fund - Class 2 (2/02; 3/98)(6) (28.91) -- -- (3.01) FIDELITY(R) VIP 4FG Growth & Income Portfolio Service Class 2 (2/02; 12/96)(7) (23.66) (0.74) -- 3.62 4FM Mid Cap Portfolio Service Class 2 (2/02; 12/98)(7) (17.46) -- -- 14.06 4FO Overseas Portfolio Service Class 2 (2/02; 1/87)(7) (26.95) (5.28) 3.32 2.90 FTVIPT 4RE Franklin Real Estate Fund - Class 2 (2/02; 1/89)(8) (6.47) 1.17 8.67 8.25 4SI Franklin Small Cap Value Securities Fund - Class 2 (2/02; 5/98)(8) (16.77) -- -- (0.84) 4MS Mutual Shares Securities Fund - Class 2 (2/02; 11/96)(8) (19.09) 2.67 -- 5.09
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 48 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES UNDER RAVA SELECT IN TEXAS (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: COMMENCEMENT(b) GOLDMAN SACHS VIT 4UE CORE(SM) U.S. Equity Fund (2/02; 2/98) (26.14%) 4MC Mid Cap Value Fund (2/02; 5/98) (12.49) INVESCO VIF 4ID Dynamics Fund (2/02; 8/97) (34.63) 4FS Financial Services Fund (2/02; 9/99) (20.70) 4TC Technology Fund (2/02; 5/97) (48.45) 4TL Telecommunications Fund (2/02; 9/99) (44.07) JANUS ASPEN SERIES 4GT Global Technology Portfolio: Service Shares (2/02; 1/00)(9) (41.37) 4IG International Growth Portfolio: Service Shares (2/02; 5/94)(9) (27.15) LAZARD RETIREMENT SERIES 4IP International Equity Portfolio (2/02; 9/98) (15.09) MFS(R) 4MG Investors Growth Stock Series - Service Class (2/02; 5/99)(10) (30.46) 4MD New Discovery Series - Service Class (2/02; 5/98)(10) (33.27) 4UT Utilities Series - Service Class (2/02; 1/95)(10) (21.10) PIONEER VCT 4PE Pioneer Equity Income VCT Portfolio - Class II Shares (2/02; 3/95)(11) (21.86) 4EU Pioneer Europe VCT Portfolio - Class II Shares (2/02; 10/98)(12) (21.44) PUTNAM VARIABLE TRUST 4HS Putnam VT Health Sciences Fund - Class IB Shares (2/02; 4/98)(13) (25.41) 4PI Putnam VT International Equity Fund - Class IB Shares (2/02; 1/97)(14) (20.48) (previously Putnam VT International Growth Fund - Class IB Shares) 4VS Putnam VT Vista Fund - Class IB Shares (2/02; 1/97)(14) (32.86) STRONG FUNDS 4SO Strong Opportunity Fund II - Advisor Class (2/02; 5/92)(15) (31.10) WANGER 4IT International Small Cap (2/02; 5/95) (19.04) 4SP U.S. Smaller Companies (2/02; 5/95) (21.82) WELLS FARGO VT 4AA Asset Allocation Fund (2/02; 4/94)(16) (18.67) 4WI International Equity Fund (2/02; 7/00) (25.44) 4SG Small Cap Growth Fund (2/02; 5/95)(17) (38.61) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT GOLDMAN SACHS VIT 4UE CORE(SM) U.S. Equity Fund (2/02; 2/98) (28.25%) --% --% (3.67%) 4MC Mid Cap Value Fund (2/02; 5/98) (12.62) -- -- 2.64 INVESCO VIF 4ID Dynamics Fund (2/02; 8/97) (37.35) (4.64) -- (3.82) 4FS Financial Services Fund (2/02; 9/99) (21.64) -- -- 0.70 4TC Technology Fund (2/02; 5/97) (50.93) (7.59) -- (4.60) 4TL Telecommunications Fund (2/02; 9/99) (54.54) -- -- (33.43) JANUS ASPEN SERIES 4GT Global Technology Portfolio: Service Shares (2/02; 1/00)(9) (45.56) -- -- (39.75) 4IG International Growth Portfolio: Service Shares (2/02; 5/94)(9) (31.76) (1.23) -- 6.84 LAZARD RETIREMENT SERIES 4IP International Equity Portfolio (2/02; 9/98) (18.08) -- -- (5.25) MFS(R) 4MG Investors Growth Stock Series - Service Class (2/02; 5/99)(10) (33.54) -- -- (9.97) 4MD New Discovery Series - Service Class (2/02; 5/98)(10) (37.26) -- -- 1.20 4UT Utilities Series - Service Class (2/02; 1/95)(10) (29.16) (1.94) -- 7.52 PIONEER VCT 4PE Pioneer Equity Income VCT Portfolio - Class II Shares (2/02; 3/95)(11) (22.94) 0.64 -- 8.67 4EU Pioneer Europe VCT Portfolio - Class II Shares (2/02; 10/98)(12) (25.68) -- -- (9.84) PUTNAM VARIABLE TRUST 4HS Putnam VT Health Sciences Fund - Class IB Shares (2/02; 4/98)(13) (26.84) -- -- (2.70) 4PI Putnam VT International Equity Fund - Class IB Shares (2/02; 1/97)(14) (24.41) 1.03 -- 3.18 (previously Putnam VT International Growth Fund - Class IB Shares) 4VS Putnam VT Vista Fund - Class IB Shares (2/02; 1/97)(14) (36.17) (5.39) -- (1.33) STRONG FUNDS 4SO Strong Opportunity Fund II - Advisor Class (2/02; 5/92)(15) (32.85) 1.22 9.03 9.88 WANGER 4IT International Small Cap (2/02; 5/95) (20.92) 3.91 -- 9.82 4SP U.S. Smaller Companies (2/02; 5/95) (23.63) 1.64 -- 11.54 WELLS FARGO VT 4AA Asset Allocation Fund (2/02; 4/94)(16) (20.03) 1.05 -- 6.76 4WI International Equity Fund (2/02; 7/00) (29.18) -- -- (22.36) 4SG Small Cap Growth Fund (2/02; 5/95)(17) (43.09) (13.52) -- (3.12)
(a) Current applicable charges deducted from performance include a $30 annual contract administrative charge, a 1.20% annual mortality and expense risk fee and applicable surrender charges. Premium taxes and purchase payment credits are not reflected in these total returns. (b) Cumulative return (not annualized) since commencement date of the subaccount. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 49 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES UNDER RAVA SELECT AND RAVA SELECT IN TEXAS (WITHOUT PURCHASE PAYMENT CREDITS) WITHOUT SURRENDER FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: COMMENCEMENT(b) AXP(R) VARIABLE PORTFOLIO - BC4 Blue Chip Advantage Fund (2/02; 9/99)(1) (21.96%) BD4 Bond Fund (2/02; 10/81) 3.71 CR4 Capital Resource Fund (2/02; 10/81) (20.23) CM4 Cash Management Fund (2/02; 10/81) (0.18) DE4 Diversified Equity Income Fund (2/02; 9/99) (18.16) EM4 Emerging Markets Fund (2/02; 5/00) (10.85) ES4 Equity Select Fund (2/02; 5/01) (13.10) EI4 Extra Income Fund (2/02; 5/96) (6.73) FI4 Federal Income Fund (2/02; 9/99) 3.93 GB4 Global Bond Fund (2/02; 5/96) 14.21 GR4 Growth Fund (2/02; 9/99) (24.43) IE4 International Fund (2/02; 1/92) (15.31) MF4 Managed Fund (2/02; 4/86) (10.99) ND4 NEW DIMENSIONS FUND(R) (2/02; 5/96) (21.05) SV4 Partners Small Cap Value Fund (2/02; 8/01) (13.07) IV4 S&P 500 Index Fund (2/02; 5/00) (21.34) SC4 Small Cap Advantage Fund (2/02; 9/99) (15.79) ST4 Stock Fund (2/02; 8/01) (20.80) SA4 Strategy Aggressive Fund (2/02; 1/92) (33.68) AIM V.I. 4AC Capital Appreciation Fund, Series II Shares (2/02; 5/93)(2) (23.57) 4AD Capital Development Fund, Series II Shares (2/02; 5/98)(2) (20.49) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 4AL AllianceBernstein Growth and Income Portfolio (Class B) (2/02; 1/91)(3) (19.86) 4AB AllianceBernstein International Value Portfolio (Class B) (2/02; 5/01)(4) (5.16) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 4AI VP International, Class II (2/02; 5/94)(5) (15.70) 4AV VP Value, Class II (2/02; 5/96)(5) (12.01) CALVERT VARIABLE SERIES, INC. 4SR Social Balanced Portfolio (2/02; 9/86) (12.68) EVERGREEN VA 4CG Capital Growth Fund - Class 2 (2/02; 3/98)(6) (19.77) FIDELITY(R) VIP 4FG Growth & Income Portfolio Service Class 2 (2/02; 12/96)(7) (15.19) 4FM Mid Cap Portfolio Service Class 2 (2/02; 12/98)(7) (10.90) 4FO Overseas Portfolio Service Class 2 (2/02; 1/87)(7) (17.73) FTVIPT 4RE Franklin Real Estate Fund - Class 2 (2/02; 1/89)(8) 0.05 4SI Franklin Small Cap Value Securities Fund - Class 2 (2/02; 5/98)(8) (9.27) 4MS Mutual Shares Securities Fund - Class 2 (2/02; 11/96)(8) (11.53) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC4 Blue Chip Advantage Fund (2/02; 9/99)(1) (23.79%) --% --% (13.15%) BD4 Bond Fund (2/02; 10/81) 4.14 3.02 5.63 8.67 CR4 Capital Resource Fund (2/02; 10/81) (23.01) (5.34) 2.50 8.80 CM4 Cash Management Fund (2/02; 10/81) (0.14) 2.80 2.97 4.82 DE4 Diversified Equity Income Fund (2/02; 9/99) (20.58) -- -- (5.87) EM4 Emerging Markets Fund (2/02; 5/00) (6.62) -- -- (14.04) ES4 Equity Select Fund (2/02; 5/01) (14.84) -- -- (10.20) EI4 Extra Income Fund (2/02; 5/96) (8.06) (3.31) -- (0.11) FI4 Federal Income Fund (2/02; 9/99) 4.45 -- -- 5.05 GB4 Global Bond Fund (2/02; 5/96) 13.36 3.10 -- 3.76 GR4 Growth Fund (2/02; 9/99) (27.04) -- -- (20.22) IE4 International Fund (2/02; 1/92) (19.27) (7.07) 0.63 0.35 MF4 Managed Fund (2/02; 4/86) (14.01) (1.02) 5.21 7.30 ND4 NEW DIMENSIONS FUND(R) (2/02; 5/96) (22.88) (1.16) -- 3.81 SV4 Partners Small Cap Value Fund (2/02; 8/01) (13.24) -- -- (5.54) IV4 S&P 500 Index Fund (2/02; 5/00) (23.40) -- -- (17.84) SC4 Small Cap Advantage Fund (2/02; 9/99) (18.10) -- -- (3.87) ST4 Stock Fund (2/02; 8/01) (21.99) -- -- (18.59) SA4 Strategy Aggressive Fund (2/02; 1/92) (32.82) (9.44) 0.45 1.11 AIM V.I. 4AC Capital Appreciation Fund, Series II Shares (2/02; 5/93)(2) (25.47) (3.53) -- 5.95 4AD Capital Development Fund, Series II Shares (2/02; 5/98)(2) (22.60) -- -- (2.56) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 4AL AllianceBernstein Growth and Income Portfolio (Class B) (2/02; 1/91)(3) (23.25) 2.24 9.74 8.85 4AB AllianceBernstein International Value Portfolio (Class B) (2/02; 5/01)(4) (6.55) -- -- (5.19) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 4AI VP International, Class II (2/02; 5/94)(5) (21.58) (4.18) -- 0.95 4AV VP Value, Class II (2/02; 5/96)(5) (13.91) 2.56 -- 7.03 CALVERT VARIABLE SERIES, INC. 4SR Social Balanced Portfolio (2/02; 9/86) (13.30) (0.60) 5.27 6.52 EVERGREEN VA 4CG Capital Growth Fund - Class 2 (2/02; 3/98)(6) (23.60) -- -- (3.01) FIDELITY(R) VIP 4FG Growth & Income Portfolio Service Class 2 (2/02; 12/96)(7) (17.89) (0.74) -- 3.62 4FM Mid Cap Portfolio Service Class 2 (2/02; 12/98)(7) (11.15) -- -- 14.06 4FO Overseas Portfolio Service Class 2 (2/02; 1/87)(7) (21.46) (5.28) 3.32 2.90 FTVIPT 4RE Franklin Real Estate Fund - Class 2 (2/02; 1/89)(8) 0.80 1.17 8.67 8.25 4SI Franklin Small Cap Value Securities Fund - Class 2 (2/02; 5/98)(8) (10.40) -- -- (0.84) 4MS Mutual Shares Securities Fund - Class 2 (2/02; 11/96)(8) (12.92) 2.67 -- 5.09
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 50 AVERAGE ANNUAL TOTAL RETURN(a) FOR NONQUALIFIED ANNUITIES UNDER RAVA SELECT AND RAVA SELECT IN TEXAS (WITHOUT PURCHASE PAYMENT CREDITS) WITHOUT SURRENDER FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: COMMENCEMENT(b) GOLDMAN SACHS VIT 4UE CORE(SM) U.S. Equity Fund (2/02; 2/98) (20.59%) 4MC Mid Cap Value Fund (2/02; 5/98) (5.75) INVESCO VIF 4ID Dynamics Fund (2/02; 8/97) (29.81) 4FS Financial Services Fund (2/02; 9/99) (14.68) 4TC Technology Fund (2/02; 5/97) (44.84) 4TL Telecommunications Fund (2/02; 9/99) (40.08) JANUS ASPEN SERIES 4GT Global Technology Portfolio: Service Shares (2/02; 1/00)(9) (37.14) 4IG International Growth Portfolio: Service Shares (2/02; 5/94)(9) (21.68) LAZARD RETIREMENT SERIES 4IP International Equity Portfolio (2/02; 9/98) (8.58) MFS(R) 4MG Investors Growth Stock Series - Service Class (2/02; 5/99)(10) (25.28) 4MD New Discovery Series - Service Class (2/02; 5/98)(10) (28.33) 4UT Utilities Series - Service Class (2/02; 1/95)(10) (15.11) PIONEER VCT 4PE Pioneer Equity Income VCT Portfolio - Class II Shares (2/02; 3/95)(11) (15.94) 4EU Pioneer Europe VCT Portfolio - Class II Shares (2/02; 10/98)(12) (15.48) PUTNAM VARIABLE TRUST 4HS Putnam VT Health Sciences Fund - Class IB Shares (2/02; 4/98)(13) (19.80) 4PI Putnam VT International Equity Fund - Class IB Shares (2/02; 1/97)(14) (14.43) (previously Putnam VT International Growth Fund - Class IB Shares) 4VS Putnam VT Vista Fund - Class IB Shares (2/02; 1/97)(14) (27.89) STRONG FUNDS 4SO Strong Opportunity Fund II - Advisor Class (2/02; 5/92)(15) (25.98) WANGER 4IT International Small Cap (2/02; 5/95) (12.87) 4SP U.S. Smaller Companies (2/02; 5/95) (15.89) WELLS FARGO VT 4AA Asset Allocation Fund (2/02; 4/94)(16) (12.47) 4WI International Equity Fund (2/02; 7/00) (19.83) 4SG Small Cap Growth Fund (2/02; 5/95)(17) (34.14) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT GOLDMAN SACHS VIT 4UE CORE(SM) U.S. Equity Fund (2/02; 2/98) (22.88%) --% --% (3.67%) 4MC Mid Cap Value Fund (2/02; 5/98) (5.89) -- -- 2.64 INVESCO VIF 4ID Dynamics Fund (2/02; 8/97) (32.77) (4.64) -- (3.82) 4FS Financial Services Fund (2/02; 9/99) (15.70) -- -- 0.70 4TC Technology Fund (2/02; 5/97) (47.54) (7.59) -- (4.60) 4TL Telecommunications Fund (2/02; 9/99) (51.45) -- -- (33.43) JANUS ASPEN SERIES 4GT Global Technology Portfolio: Service Shares (2/02; 1/00)(9) (41.69) -- -- (38.69) 4IG International Growth Portfolio: Service Shares (2/02; 5/94)(9) (26.70) (1.23) -- 6.84 LAZARD RETIREMENT SERIES 4IP International Equity Portfolio (2/02; 9/98) (11.83) -- -- (5.25) MFS(R) 4MG Investors Growth Stock Series - Service Class (2/02; 5/99)(10) (28.63) -- -- (9.97) 4MD New Discovery Series - Service Class (2/02; 5/98)(10) (32.67) -- -- 1.20 4UT Utilities Series - Service Class (2/02; 1/95)(10) (23.87) (1.94) -- 7.52 PIONEER VCT 4PE Pioneer Equity Income VCT Portfolio - Class II Shares (2/02; 3/95)(11) (17.11) 0.64 -- 8.67 4EU Pioneer Europe VCT Portfolio - Class II Shares (2/02; 10/98)(12) (20.08) -- -- (9.84) PUTNAM VARIABLE TRUST 4HS Putnam VT Health Sciences Fund - Class IB Shares (2/02; 4/98)(13) (21.35) -- -- (2.70) 4PI Putnam VT International Equity Fund - Class IB Shares (2/02; 1/97)(14) (18.71) 1.03 -- 3.18 (previously Putnam VT International Growth Fund - Class IB Shares) 4VS Putnam VT Vista Fund - Class IB Shares (2/02; 1/97)(14) (31.49) (5.39) -- (1.33) STRONG FUNDS 4SO Strong Opportunity Fund II - Advisor Class (2/02; 5/92)(15) (27.88) 1.22 9.03 9.88 WANGER 4IT International Small Cap (2/02; 5/95) (14.92) 3.91 -- 9.82 4SP U.S. Smaller Companies (2/02; 5/95) (17.86) 1.64 -- 11.54 WELLS FARGO VT 4AA Asset Allocation Fund (2/02; 4/94)(16) (13.95) 1.05 -- 6.76 4WI International Equity Fund (2/02; 7/00) (23.89) -- -- (20.63) 4SG Small Cap Growth Fund (2/02; 5/95)(17) (39.01) (13.52) -- (3.12)
(a) Current applicable charges deducted from performance include a $30 annual contract administrative charge and a 1.20% annual mortality and expense risk fee. Premium taxes and purchase payment credits are not reflected in these total returns. (b) Cumulative return (not annualized) since commencement date of the subaccount. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 51 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES UNDER RAVA SELECT (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: COMMENCEMENT(b) AXP(R) VARIABLE PORTFOLIO - BC5 Blue Chip Advantage Fund (2/02; 9/99)(1) (27.20%) BD5 Bond Fund (2/02; 10/81) (3.28) CR5 Capital Resource Fund (2/02; 10/81) (31.38) CM5 Cash Management Fund (2/02; 10/81) (6.91) DE5 Diversified Equity Income Fund (2/02; 9/99) (23.15) EM5 Emerging Markets Fund (2/02; 5/00) (16.85) ES5 Equity Select Fund (2/02; 5/01) (18.95) EI5 Extra Income Fund (2/02; 5/96) (13.01) FI5 Federal Income Fund (2/02; 9/99) (3.09) GB5 Global Bond Fund (2/02; 5/96) 6.82 GR5 Growth Fund (2/02; 9/99) (29.50) IE5 International Fund (2/02; 1/92) (21.00) MF5 Managed Fund (2/02; 4/86) (16.98) ND5 NEW DIMENSIONS FUND(R) (2/02; 5/96) (26.35) SV5 Partners Small Cap Value Fund (2/02; 8/01) (18.92) IV5 S&P 500 Index Fund (2/02; 5/00) (26.62) SC5 Small Cap Advantage Fund (2/02; 9/99) (21.45) ST5 Stock Fund (2/02; 8/01) (26.12) SA5 Strategy Aggressive Fund (2/02; 1/92) (38.12) AIM V.I. 5AC Capital Appreciation Fund, Series II Shares (2/02; 5/93)(2) (28.70) 5AD Capital Development Fund, Series II Shares (2/02; 5/98)(2) (25.83) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 5AL AllianceBernstein Growth and Income Portfolio (Class B) (2/02; 1/91)(3) (25.24) 5AB AllianceBernstein International Value Portfolio (Class B) (2/02; 5/01)(4) (11.55) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 5AI VP International, Class II (2/02; 5/94)(5) (21.37) 5AV VP Value, Class II (2/02; 5/96)(5) (17.93) CALVERT VARIABLE SERIES, INC. 5SR Social Balanced Portfolio (2/02; 9/86) (18.55) EVERGREEN VA 5CG Capital Growth Fund - Class 2 (2/02; 3/98)(6) (25.16) FIDELITY(R) VIP 5FG Growth & Income Portfolio Service Class 2 (2/02; 12/96)(7) (20.89) 5FM Mid Cap Portfolio Service Class 2 (2/02; 12/98)(7) (16.89) 5FO Overseas Portfolio Service Class 2 (2/02; 1/87)(7) (23.25) FTVIPT 5RE Franklin Real Estate Fund - Class 2 (2/02; 1/89)(8) (6.69) 5SI Franklin Small Cap Value Securities Fund - Class 2 (2/02; 5/98)(8) (15.38) 5MS Mutual Shares Securities Fund - Class 2 (2/02; 11/96)(8) (17.48) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC5 Blue Chip Advantage Fund (2/02; 9/99)(1) (28.89%) --% --% (13.63%) BD5 Bond Fund (2/02; 10/81) (2.86) 2.58 5.19 8.24 CR5 Capital Resource Fund (2/02; 10/81) (33.75) (7.33) 1.23 7.95 CM5 Cash Management Fund (2/02; 10/81) (6.85) 2.36 2.52 4.38 DE5 Diversified Equity Income Fund (2/02; 9/99) (25.40) -- -- (6.14) EM5 Emerging Markets Fund (2/02; 5/00) (12.89) -- -- (16.53) ES5 Equity Select Fund (2/02; 5/01) (20.55) -- -- (14.02) EI5 Extra Income Fund (2/02; 5/96) (14.23) (3.77) -- (0.56) FI5 Federal Income Fund (2/02; 9/99) (2.58) -- -- 4.61 GB5 Global Bond Fund (2/02; 5/96) 6.00 2.67 -- 3.33 GR5 Growth Fund (2/02; 9/99) (31.92) -- -- (20.71) IE5 International Fund (2/02; 1/92) (24.67) (7.53) 0.18 (0.10) MF5 Managed Fund (2/02; 4/86) (19.78) (1.47) 4.77 6.87 ND5 NEW DIMENSIONS FUND(R) (2/02; 5/96) (28.04) (1.61) -- 3.37 SV5 Partners Small Cap Value Fund (2/02; 8/01) (19.05) -- -- (10.31) IV5 S&P 500 Index Fund (2/02; 5/00) (28.52) -- -- (20.24) SC5 Small Cap Advantage Fund (2/02; 9/99) (23.59) -- -- (4.33) ST5 Stock Fund (2/02; 8/01) (27.21) -- -- (22.76) SA5 Strategy Aggressive Fund (2/02; 1/92) (37.30) (9.91) (0.00) 0.66 AIM V.I. 5AC Capital Appreciation Fund, Series II Shares (2/02; 5/93)(2) (30.46) (3.99) -- 5.51 5AD Capital Development Fund, Series II Shares (2/02; 5/98)(2) (27.78) -- -- (3.01) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 5AL AllianceBernstein Growth and Income Portfolio (Class B) (2/02; 1/91)(3) (28.38) 1.79 9.31 8.42 5AB AllianceBernstein International Value Portfolio (Class B) (2/02; 5/01)(4) (12.82) -- -- (9.17) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 5AI VP International, Class II (2/02; 5/94)(5) (26.82) (4.64) -- 0.50 5AV VP Value, Class II (2/02; 5/96)(5) (19.68) 2.11 -- 6.59 CALVERT VARIABLE SERIES, INC. 5SR Social Balanced Portfolio (2/02; 9/86) (19.11) (1.05) 4.84 6.08 EVERGREEN VA 5CG Capital Growth Fund - Class 2 (2/02; 3/98)(6) (28.71) -- -- (3.47) FIDELITY(R) VIP 5FG Growth & Income Portfolio Service Class 2 (2/02; 12/96)(7) (23.39) (1.19) -- 3.18 5FM Mid Cap Portfolio Service Class 2 (2/02; 12/98)(7) (17.11) -- -- 13.64 5FO Overseas Portfolio Service Class 2 (2/02; 1/87)(7) (26.72) (5.74) 2.88 2.45 FTVIPT 5RE Franklin Real Estate Fund - Class 2 (2/02; 1/89)(8) (5.97) 0.72 8.24 7.82 5SI Franklin Small Cap Value Securities Fund - Class 2 (2/02; 5/98)(8) (16.41) -- -- (1.29) 5MS Mutual Shares Securities Fund - Class 2 (2/02; 11/96)(8) (18.76) 2.23 -- 4.65
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 52 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES UNDER RAVA SELECT (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: COMMENCEMENT(b) GOLDMAN SACHS VIT 5UE CORE(SM) U.S. Equity Fund (2/02; 2/98) (25.93%) 5MC Mid Cap Value Fund (2/02; 5/98) (12.10) INVESCO VIF 5ID Dynamics Fund (2/02; 8/97) (34.52) 5FS Financial Services Fund (2/02; 9/99) (20.42) 5TC Technology Fund (2/02; 5/97) (48.51) 5TL Telecommunications Fund (2/02; 9/99) (44.08) JANUS ASPEN SERIES 5GT Global Technology Portfolio: Service Shares (2/02; 1/00)(9) (41.34) 5IG International Growth Portfolio: Service Shares (2/02; 5/94)(9) (26.94) LAZARD RETIREMENT SERIES 5IP International Equity Portfolio (2/02; 9/98) (14.74) MFS(R) 5MG Investors Growth Stock Series - Service Class (2/02; 5/99)(10) (30.30) 5MD New Discovery Series - Service Class (2/02; 5/98)(10) (33.14) 5UT Utilities Series - Service Class (2/02; 1/95)(10) (20.82) PIONEER VCT 5PE Pioneer Equity Income VCT Portfolio - Class II Shares (2/02; 3/95)(11) (21.59) 5EU Pioneer Europe VCT Portfolio - Class II Shares (2/02; 10/98)(12) (21.16) PUTNAM VARIABLE TRUST 5HS Putnam VT Health Sciences Fund - Class IB Shares (2/02; 4/98)(13) (25.18) 5PI Putnam VT International Equity Fund - Class IB Shares (2/02; 1/97)(14) (20.19) (previously Putnam VT International Growth Fund - Class IB Shares) 5VS Putnam VT Vista Fund - Class IB Shares (2/02; 1/97)(14) (32.72) STRONG FUNDS 5SO Strong Opportunity Fund II - Advisor Class (2/02; 5/92)(15) (30.94) WANGER 5IT International Small Cap (2/02; 5/95) (18.73) 5SP U.S. Smaller Companies (2/02; 5/95) (21.54) WELLS FARGO VT 5AA Asset Allocation Fund (2/02; 4/94)(16) (18.36) 5WI International Equity Fund (2/02; 7/00) (25.21) 5SG Small Cap Growth Fund (2/02; 5/95)(17) (38.54) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT GOLDMAN SACHS VIT 5UE CORE(SM) U.S. Equity Fund (2/02; 2/98) (28.04%) --% --% (4.13%) 5MC Mid Cap Value Fund (2/02; 5/98) (12.20) -- -- 2.19 INVESCO VIF 5ID Dynamics Fund (2/02; 8/97) (37.25) (5.09) -- (4.27) 5FS Financial Services Fund (2/02; 9/99) (21.34) -- -- 0.25 5TC Technology Fund (2/02; 5/97) (51.01) (8.06) -- (5.05) 5TL Telecommunications Fund (2/02; 9/99) (54.66) -- -- (33.94) JANUS ASPEN SERIES 5GT Global Technology Portfolio: Service Shares (2/02; 1/00)(9) (45.57) -- -- (40.44) 5IG International Growth Portfolio: Service Shares (2/02; 5/94)(9) (31.60) (1.69) -- 6.41 LAZARD RETIREMENT SERIES 5IP International Equity Portfolio (2/02; 9/98) (17.74) -- -- (5.71) MFS(R) 5MG Investors Growth Stock Series - Service Class (2/02; 5/99)(10) (33.40) -- -- (10.44) 5MD New Discovery Series - Service Class (2/02; 5/98)(10) (37.16) -- -- 0.75 5UT Utilities Series - Service Class (2/02; 1/95)(10) (28.97) (2.40) -- 7.08 PIONEER VCT 5PE Pioneer Equity Income VCT Portfolio - Class II Shares (2/02; 3/95)(11) (22.66) 0.19 -- 8.24 5EU Pioneer Europe VCT Portfolio - Class II Shares (2/02; 10/98)(12) (25.43) -- -- (10.30) PUTNAM VARIABLE TRUST 5HS Putnam VT Health Sciences Fund - Class IB Shares (2/02; 4/98)(13) (26.61) -- -- (3.16) 5PI Putnam VT International Equity Fund - Class IB Shares (2/02; 1/97)(14) (24.15) 0.59 -- 2.73 (previously Putnam VT International Growth Fund - Class IB Shares) 5VS Putnam VT Vista Fund - Class IB Shares (2/02; 1/97)(14) (36.06) (5.85) -- (1.78) STRONG FUNDS 5SO Strong Opportunity Fund II - Advisor Class (2/02; 5/92)(15) (32.70) 0.78 8.60 9.45 WANGER 5IT International Small Cap (2/02; 5/95) (20.62) 3.47 -- 9.39 5SP U.S. Smaller Companies (2/02; 5/95) (23.36) 1.20 -- 11.12 WELLS FARGO VT 5AA Asset Allocation Fund (2/02; 4/94)(16) (19.71) 0.61 -- 6.32 5WI International Equity Fund (2/02; 7/00) (28.98) -- -- (23.12) 5SG Small Cap Growth Fund (2/02; 5/95)(17) (43.07) (13.99) -- (3.58)
(a) Current applicable charges deducted from performance include a $30 annual contract administrative charge, a 0.25% annual MAV fee, a 0.40% annual EEP fee, a 1.00% annual mortality and expense risk fee and applicable surrender charges. Premium taxes and purchase payment credits are not reflected in these total returns. (b) Cumulative return (not annualized) since commencement date of the subaccount. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 53 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES UNDER RAVA SELECT IN TEXAS (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: COMMENCEMENT(b) AXP(R) VARIABLE PORTFOLIO - BC5 Blue Chip Advantage Fund (2/02; 9/99)(1) (27.87%) BD5 Bond Fund (2/02; 10/81) (4.22) CR5 Capital Resource Fund (2/02; 10/81) (32.01) CM5 Cash Management Fund (2/02; 10/81) (7.80) DE5 Diversified Equity Income Fund (2/02; 9/99) (23.87) EM5 Emerging Markets Fund (2/02; 5/00) (17.63) ES5 Equity Select Fund (2/02; 5/01) (19.71) EI5 Extra Income Fund (2/02; 5/96) (13.84) FI5 Federal Income Fund (2/02; 9/99) (4.02) GB5 Global Bond Fund (2/02; 5/96) 5.82 GR5 Growth Fund (2/02; 9/99) (30.15) IE5 International Fund (2/02; 1/92) (21.74) MF5 Managed Fund (2/02; 4/86) (17.76) ND5 NEW DIMENSIONS FUND(R) (2/02; 5/96) (27.03) SV5 Partners Small Cap Value Fund (2/02; 8/01) (19.68) IV5 S&P 500 Index Fund (2/02; 5/00) (27.30) SC5 Small Cap Advantage Fund (2/02; 9/99) (22.19) ST5 Stock Fund (2/02; 8/01) (26.81) SA5 Strategy Aggressive Fund (2/02; 1/92) (38.68) AIM V.I. 5AC Capital Appreciation Fund, Series II Shares (2/02; 5/93)(2) (29.36) 5AD Capital Development Fund, Series II Shares (2/02; 5/98)(2) (26.52) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 5AL AllianceBernstein Growth and Income Portfolio (Class B) (2/02; 1/91)(3) (25.94) 5AB AllianceBernstein International Value Portfolio (Class B) (2/02; 5/01)(4) (12.39) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 5AI VP International, Class II (2/02; 5/94)(5) (22.11) 5AV VP Value, Class II (2/02; 5/96)(5) (18.70) CALVERT VARIABLE SERIES, INC. 5SR Social Balanced Portfolio (2/02; 9/86) (19.32) EVERGREEN VA 5CG Capital Growth Fund - Class 2 (2/02; 3/98)(6) (25.86) FIDELITY(R) VIP 5FG Growth & Income Portfolio Service Class 2 (2/02; 12/96)(7) (21.63) 5FM Mid Cap Portfolio Service Class 2 (2/02; 12/98)(7) (17.68) 5FO Overseas Portfolio Service Class 2 (2/02; 1/87)(7) (23.97) FTVIPT 5RE Franklin Real Estate Fund - Class 2 (2/02; 1/89)(8) (7.59) 5SI Franklin Small Cap Value Securities Fund - Class 2 (2/02; 5/98)(8) (16.18) 5MS Mutual Shares Securities Fund - Class 2 (2/02; 11/96)(8) (18.26) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC5 Blue Chip Advantage Fund (2/02; 9/99)(1) (29.55%) --% --% (13.63%) BD5 Bond Fund (2/02; 10/81) (3.80) 2.58 5.19 8.24 CR5 Capital Resource Fund (2/02; 10/81) (34.36) (7.33) 1.23 7.95 CM5 Cash Management Fund (2/02; 10/81) (7.75) 2.36 2.52 4.38 DE5 Diversified Equity Income Fund (2/02; 9/99) (26.10) -- -- (6.14) EM5 Emerging Markets Fund (2/02; 5/00) (13.72) -- -- (16.24) ES5 Equity Select Fund (2/02; 5/01) (21.29) -- -- (14.02) EI5 Extra Income Fund (2/02; 5/96) (15.05) (3.77) -- (0.56) FI5 Federal Income Fund (2/02; 9/99) (3.52) -- -- 4.61 GB5 Global Bond Fund (2/02; 5/96) 5.00 2.67 -- 3.33 GR5 Growth Fund (2/02; 9/99) (32.54) -- -- (20.71) IE5 International Fund (2/02; 1/92) (25.37) (7.53) 0.18 (0.10) MF5 Managed Fund (2/02; 4/86) (20.53) (1.47) 4.77 6.87 ND5 NEW DIMENSIONS FUND(R) (2/02; 5/96) (28.71) (1.61) -- 3.37 SV5 Partners Small Cap Value Fund (2/02; 8/01) (19.82) -- -- (10.31) IV5 S&P 500 Index Fund (2/02; 5/00) (29.18) -- -- (19.96) SC5 Small Cap Advantage Fund (2/02; 9/99) (24.30) -- -- (4.33) ST5 Stock Fund (2/02; 8/01) (27.89) -- -- (22.76) SA5 Strategy Aggressive Fund (2/02; 1/92) (37.87) (9.91) (0.00) 0.66 AIM V.I. 5AC Capital Appreciation Fund, Series II Shares (2/02; 5/93)(2) (31.10) (3.99) -- 5.51 5AD Capital Development Fund, Series II Shares (2/02; 5/98)(2) (28.45) -- -- (3.01) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 5AL AllianceBernstein Growth and Income Portfolio (Class B) (2/02; 1/91)(3) (29.05) 1.79 9.31 8.42 5AB AllianceBernstein International Value Portfolio (Class B) (2/02; 5/01)(4) (13.65) -- -- (9.17) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 5AI VP International, Class II (2/02; 5/94)(5) (27.50) (4.64) -- 0.50 5AV VP Value, Class II (2/02; 5/96)(5) (20.44) 2.11 -- 6.59 CALVERT VARIABLE SERIES, INC. 5SR Social Balanced Portfolio (2/02; 9/86) (19.87) (1.05) 4.84 6.08 EVERGREEN VA 5CG Capital Growth Fund - Class 2 (2/02; 3/98)(6) (29.37) -- -- (3.47) FIDELITY(R) VIP 5FG Growth & Income Portfolio Service Class 2 (2/02; 12/96)(7) (24.11) (1.19) -- 3.18 5FM Mid Cap Portfolio Service Class 2 (2/02; 12/98)(7) (17.90) -- -- 13.64 5FO Overseas Portfolio Service Class 2 (2/02; 1/87)(7) (27.40) (5.74) 2.88 2.45 FTVIPT 5RE Franklin Real Estate Fund - Class 2 (2/02; 1/89)(8) (6.88) 0.72 8.24 7.82 5SI Franklin Small Cap Value Securities Fund - Class 2 (2/02; 5/98)(8) (17.20) -- -- (1.29) 5MS Mutual Shares Securities Fund - Class 2 (2/02; 11/96)(8) (19.52) 2.23 -- 4.65
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 54 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES UNDER RAVA SELECT IN TEXAS (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER AND SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: COMMENCEMENT(b) GOLDMAN SACHS VIT 5UE CORE(SM) U.S. Equity Fund (2/02; 2/98) (26.61%) 5MC Mid Cap Value Fund (2/02; 5/98) (12.93) INVESCO VIF 5ID Dynamics Fund (2/02; 8/97) (35.11) 5FS Financial Services Fund (2/02; 9/99) (21.16) 5TC Technology Fund (2/02; 5/97) (48.96) 5TL Telecommunications Fund (2/02; 9/99) (44.57) JANUS ASPEN SERIES 5GT Global Technology Portfolio: Service Shares (2/02; 1/00)(9) (41.86) 5IG International Growth Portfolio: Service Shares (2/02; 5/94)(9) (27.62) LAZARD RETIREMENT SERIES 5IP International Equity Portfolio (2/02; 9/98) (15.54) MFS(R) 5MG Investors Growth Stock Series - Service Class (2/02; 5/99)(10) (30.94) 5MD New Discovery Series - Service Class (2/02; 5/98)(10) (33.75) 5UT Utilities Series - Service Class (2/02; 1/95)(10) (21.56) PIONEER VCT 5PE Pioneer Equity Income VCT Portfolio - Class II Shares (2/02; 3/95)(11) (22.33) 5EU Pioneer Europe VCT Portfolio - Class II Shares (2/02; 10/98)(12) (21.90) PUTNAM VARIABLE TRUST 5HS Putnam VT Health Sciences Fund - Class IB Shares (2/02; 4/98)(13) (25.88) 5PI Putnam VT International Equity Fund - Class IB Shares (2/02; 1/97)(14) (20.94) (previously Putnam VT International Growth Fund - Class IB Shares) 5VS Putnam VT Vista Fund - Class IB Shares (2/02; 1/97)(14) (33.34) STRONG FUNDS 5SO Strong Opportunity Fund II - Advisor Class (2/02; 5/92)(15) (31.58) WANGER 5IT International Small Cap (2/02; 5/95) (19.50) 5SP U.S. Smaller Companies (2/02; 5/95) (22.28) WELLS FARGO VT 5AA Asset Allocation Fund (2/02; 4/94)(16) (19.13) 5WI International Equity Fund (2/02; 7/00) (25.91) 5SG Small Cap Growth Fund (2/02; 5/95)(17) (39.10) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT GOLDMAN SACHS VIT 5UE CORE(SM) U.S. Equity Fund (2/02; 2/98) (28.71%) --% --% (4.13%) 5MC Mid Cap Value Fund (2/02; 5/98) (13.04) -- -- 2.19 INVESCO VIF 5ID Dynamics Fund (2/02; 8/97) (37.82) (5.09) -- (4.27) 5FS Financial Services Fund (2/02; 9/99) (22.08) -- -- 0.25 5TC Technology Fund (2/02; 5/97) (51.43) (8.06) -- (5.05) 5TL Telecommunications Fund (2/02; 9/99) (55.04) -- -- (33.94) JANUS ASPEN SERIES 5GT Global Technology Portfolio: Service Shares (2/02; 1/00)(9) (46.05) -- -- (40.26) 5IG International Growth Portfolio: Service Shares (2/02; 5/94)(9) (32.23) (1.69) -- 6.41 LAZARD RETIREMENT SERIES 5IP International Equity Portfolio (2/02; 9/98) (18.52) -- -- (5.71) MFS(R) 5MG Investors Growth Stock Series - Service Class (2/02; 5/99)(10) (34.01) -- -- (10.44) 5MD New Discovery Series - Service Class (2/02; 5/98)(10) (37.73) -- -- 0.75 5UT Utilities Series - Service Class (2/02; 1/95)(10) (29.62) (2.40) -- 7.08 PIONEER VCT 5PE Pioneer Equity Income VCT Portfolio - Class II Shares (2/02; 3/95)(11) (23.38) 0.19 -- 8.24 5EU Pioneer Europe VCT Portfolio - Class II Shares (2/02; 10/98)(12) (26.12) -- -- (10.30) PUTNAM VARIABLE TRUST 5HS Putnam VT Health Sciences Fund - Class IB Shares (2/02; 4/98)(13) (27.29) -- -- (3.16) 5PI Putnam VT International Equity Fund - Class IB Shares (2/02; 1/97)(14) (24.86) 0.59 -- 2.73 (previously Putnam VT International Growth Fund - Class IB Shares) 5VS Putnam VT Vista Fund - Class IB Shares (2/02; 1/97)(14) (36.64) (5.85) -- (1.78) STRONG FUNDS 5SO Strong Opportunity Fund II - Advisor Class (2/02; 5/92)(15) (33.31) 0.78 8.60 9.45 WANGER 5IT International Small Cap (2/02; 5/95) (21.36) 3.47 -- 9.39 5SP U.S. Smaller Companies (2/02; 5/95) (24.08) 1.20 -- 11.12 WELLS FARGO VT 5AA Asset Allocation Fund (2/02; 4/94)(16) (20.47) 0.61 -- 6.32 5WI International Equity Fund (2/02; 7/00) (29.64) -- -- (22.83) 5SG Small Cap Growth Fund (2/02; 5/95)(17) (43.58) (13.99) -- (3.58)
(a) Current applicable charges deducted from performance include a $30 annual contract administrative charge, a 0.25% annual MAV fee, a 0.40% annual EEP fee, a 1.00% annual mortality and expense risk fee and applicable surrender charges. Premium taxes and purchase payment credits are not reflected in these total returns. (b) Cumulative return (not annualized) since commencement date of the subaccount. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 55 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES UNDER RAVA SELECT AND RAVA SELECT IN TEXAS (WITHOUT PURCHASE PAYMENT CREDITS) WITHOUT SURRENDER AND SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: COMMENCEMENT(b) AXP(R) VARIABLE PORTFOLIO - BC5 Blue Chip Advantage Fund (2/02; 9/99)(1) (22.47%) BD5 Bond Fund (2/02; 10/81) 3.24 CR5 Capital Resource Fund (2/02; 10/81) (26.97) CM5 Cash Management Fund (2/02; 10/81) (0.65) DE5 Diversified Equity Income Fund (2/02; 9/99) (18.12) EM5 Emerging Markets Fund (2/02; 5/00) (11.34) ES5 Equity Select Fund (2/02; 5/01) (13.60) EI5 Extra Income Fund (2/02; 5/96) (7.22) FI5 Federal Income Fund (2/02; 9/99) 3.46 GB5 Global Bond Fund (2/02; 5/96) 13.82 GR5 Growth Fund (2/02; 9/99) (24.95) IE5 International Fund (2/02; 1/92) (15.81) MF5 Managed Fund (2/02; 4/86) (11.48) ND5 NEW DIMENSIONS FUND(R) (2/02; 5/96) (21.56) SV5 Partners Small Cap Value Fund (2/02; 8/01) (13.57) IV5 S&P 500 Index Fund (2/02; 5/00) (21.85) SC5 Small Cap Advantage Fund (2/02; 9/99) (16.29) ST5 Stock Fund (2/02; 8/01) (21.31) SA5 Strategy Aggressive Fund (2/02; 1/92) (34.22) AIM V.I. 5AC Capital Appreciation Fund, Series II Shares (2/02; 5/93)(2) (24.08) 5AD Capital Development Fund, Series II Shares (2/02; 5/98)(2) (21.00) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 5AL AllianceBernstein Growth and Income Portfolio (Class B) (2/02; 1/91)(3) (20.37) 5AB AllianceBernstein International Value Portfolio (Class B) (2/02; 5/01)(4) (5.64) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 5AI VP International, Class II (2/02; 5/94)(5) (16.20) 5AV VP Value, Class II (2/02; 5/96)(5) (12.50) CALVERT VARIABLE SERIES, INC. 5SR Social Balanced Portfolio (2/02; 9/86) (13.17) EVERGREEN VA 5CG Capital Growth Fund - Class 2 (2/02; 3/98)(6) (20.28) FIDELITY(R) VIP 5FG Growth & Income Portfolio Service Class 2 (2/02; 12/96)(7) (15.69) 5FM Mid Cap Portfolio Service Class 2 (2/02; 12/98)(7) (11.39) 5FO Overseas Portfolio Service Class 2 (2/02; 1/87)(7) (18.23) FTVIPT 5RE Franklin Real Estate Fund - Class 2 (2/02; 1/89)(8) (0.42) 5SI Franklin Small Cap Value Securities Fund - Class 2 (2/02; 5/98)(8) (9.76) 5MS Mutual Shares Securities Fund - Class 2 (2/02; 11/96)(8) (12.03) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC5 Blue Chip Advantage Fund (2/02; 9/99)(1) (24.29%) --% --% (13.63%) BD5 Bond Fund (2/02; 10/81) 3.70 2.58 5.19 8.24 CR5 Capital Resource Fund (2/02; 10/81) (29.52) (7.33) 1.23 7.95 CM5 Cash Management Fund (2/02; 10/81) (0.59) 2.36 2.52 4.38 DE5 Diversified Equity Income Fund (2/02; 9/99) (20.54) -- -- (6.14) EM5 Emerging Markets Fund (2/02; 5/00) (7.08) -- -- (14.52) ES5 Equity Select Fund (2/02; 5/01) (15.32) -- -- (10.67) EI5 Extra Income Fund (2/02; 5/96) (8.53) (3.77) -- (0.56) FI5 Federal Income Fund (2/02; 9/99) 4.00 -- -- 4.61 GB5 Global Bond Fund (2/02; 5/96) 13.00 2.67 -- 3.33 GR5 Growth Fund (2/02; 9/99) (27.54) -- -- (20.71) IE5 International Fund (2/02; 1/92) (19.76) (7.53) 0.18 (0.10) MF5 Managed Fund (2/02; 4/86) (14.49) (1.47) 4.77 6.87 ND5 NEW DIMENSIONS FUND(R) (2/02; 5/96) (23.38) (1.61) -- 3.37 SV5 Partners Small Cap Value Fund (2/02; 8/01) (13.71) -- -- (6.00) IV5 S&P 500 Index Fund (2/02; 5/00) (23.89) -- -- (18.32) SC5 Small Cap Advantage Fund (2/02; 9/99) (18.59) -- -- (4.33) ST5 Stock Fund (2/02; 8/01) (22.48) -- -- (19.08) SA5 Strategy Aggressive Fund (2/02; 1/92) (33.34) (9.91) (0.00) 0.66 AIM V.I. 5AC Capital Appreciation Fund, Series II Shares (2/02; 5/93)(2) (25.97) (3.99) -- 5.51 5AD Capital Development Fund, Series II Shares (2/02; 5/98)(2) (23.10) -- -- (3.01) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 5AL AllianceBernstein Growth and Income Portfolio (Class B) (2/02; 1/91)(3) (23.75) 1.79 9.31 8.42 5AB AllianceBernstein International Value Portfolio (Class B) (2/02; 5/01)(4) (7.01) -- -- (5.65) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 5AI VP International, Class II (2/02; 5/94)(5) (22.07) (4.64) -- 0.50 5AV VP Value, Class II (2/02; 5/96)(5) (14.39) 2.11 -- 6.59 CALVERT VARIABLE SERIES, INC. 5SR Social Balanced Portfolio (2/02; 9/86) (13.78) (1.05) 4.84 6.08 EVERGREEN VA 5CG Capital Growth Fund - Class 2 (2/02; 3/98)(6) (24.10) -- -- (3.47) FIDELITY(R) VIP 5FG Growth & Income Portfolio Service Class 2 (2/02; 12/96)(7) (18.38) (1.19) -- 3.18 5FM Mid Cap Portfolio Service Class 2 (2/02; 12/98)(7) (11.63) -- -- 13.64 5FO Overseas Portfolio Service Class 2 (2/02; 1/87)(7) (21.95) (5.74) 2.88 2.45 FTVIPT 5RE Franklin Real Estate Fund - Class 2 (2/02; 1/89)(8) 0.35 0.72 8.24 7.82 5SI Franklin Small Cap Value Securities Fund - Class 2 (2/02; 5/98)(8) (10.87) -- -- (1.29) 5MS Mutual Shares Securities Fund - Class 2 (2/02; 11/96)(8) (13.40) 2.23 -- 4.65
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 56 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES UNDER RAVA SELECT AND RAVA SELECT IN TEXAS (WITHOUT PURCHASE PAYMENT CREDITS) WITHOUT SURRENDER AND SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: COMMENCEMENT(b) GOLDMAN SACHS VIT 5UE CORE(SM) U.S. Equity Fund (2/02; 2/98) (21.10%) 5MC Mid Cap Value Fund (2/02; 5/98) (6.23) INVESCO VIF 5ID Dynamics Fund (2/02; 8/97) (30.34) 5FS Financial Services Fund (2/02; 9/99) (15.18) 5TC Technology Fund (2/02; 5/97) (45.39) 5TL Telecommunications Fund (2/02; 9/99) (40.62) JANUS ASPEN SERIES 5GT Global Technology Portfolio: Service Shares (2/02; 1/00)(9) (37.68) 5IG International Growth Portfolio: Service Shares (2/02; 5/94)(9) (22.20) LAZARD RETIREMENT SERIES 5IP International Equity Portfolio (2/02; 9/98) (9.07) MFS(R) 5MG Investors Growth Stock Series - Service Class (2/02; 5/99)(10) (25.80) 5MD New Discovery Series - Service Class (2/02; 5/98)(10) (28.86) 5UT Utilities Series - Service Class (2/02; 1/95)(10)(15.61) (24.37) PIONEER VCT 5PE Pioneer Equity Income VCT Portfolio - Class II Shares (2/02; 3/95)(11) (16.44) 5EU Pioneer Europe VCT Portfolio - Class II Shares (2/02; 10/98)(12) (15.98) PUTNAM VARIABLE TRUST 5HS Putnam VT Health Sciences Fund - Class IB Shares (2/02; 4/98)(13) (20.30) 5PI Putnam VT International Equity Fund - Class IB Shares (2/02; 1/97)(14) (14.93) (previously Putnam VT International Growth Fund - Class IB Shares) 5VS Putnam VT Vista Fund - Class IB Shares (2/02; 1/97)(14) (28.41) STRONG FUNDS 5SO Strong Opportunity Fund II - Advisor Class (2/02; 5/92)(15) (26.50) WANGER 5IT International Small Cap (2/02; 5/95) (13.36) 5SP U.S. Smaller Companies (2/02; 5/95) (16.39) WELLS FARGO VT 5AA Asset Allocation Fund (2/02; 4/94)(16) (12.97) 5WI International Equity Fund (2/02; 7/00) (20.33) 5SG Small Cap Growth Fund (2/02; 5/95)(17) (34.67) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT GOLDMAN SACHS VIT 5UE CORE(SM) U.S. Equity Fund (2/02; 2/98) (23.38%) --% --% (4.13%) 5MC Mid Cap Value Fund (2/02; 5/98) (6.35) -- -- 2.19 INVESCO VIF 5ID Dynamics Fund (2/02; 8/97) (33.28) (5.09) -- (4.27) 5FS Financial Services Fund (2/02; 9/99) (16.18) -- -- 0.25 5TC Technology Fund (2/02; 5/97) (48.08) (8.06) -- (5.05) 5TL Telecommunications Fund (2/02; 9/99) (52.00) -- -- (33.94) JANUS ASPEN SERIES 5GT Global Technology Portfolio: Service Shares (2/02; 1/00)(9) (42.23) -- -- (39.22) 5IG International Growth Portfolio: Service Shares (2/02; 5/94)(9) (27.20) (1.69) -- 6.41 LAZARD RETIREMENT SERIES 5IP International Equity Portfolio (2/02; 9/98) (12.30) -- -- (5.71) MFS(R) 5MG Investors Growth Stock Series - Service Class (2/02; 5/99)(10) (29.14) -- -- (10.44) 5MD New Discovery Series - Service Class (2/02; 5/98)(10) (33.19) -- -- 0.75 5UT Utilities Series - Service Class (2/02; 1/95)(10) (15.61) (2.40) -- 7.08 PIONEER VCT 5PE Pioneer Equity Income VCT Portfolio - Class II Shares (2/02; 3/95)(11) (17.59) 0.19 -- 8.24 5EU Pioneer Europe VCT Portfolio - Class II Shares (2/02; 10/98)(12) (20.57) -- -- (10.30) PUTNAM VARIABLE TRUST 5HS Putnam VT Health Sciences Fund - Class IB Shares (2/02; 4/98)(13) (21.84) -- -- (3.16) 5PI Putnam VT International Equity Fund - Class IB Shares (2/02; 1/97)(14) (19.19) 0.59 -- 2.73 (previously Putnam VT International Growth Fund - Class IB Shares) 5VS Putnam VT Vista Fund - Class IB Shares (2/02; 1/97)(14) (32.00) (5.85) -- (1.78) STRONG FUNDS 5SO Strong Opportunity Fund II - Advisor Class (2/02; 5/92)(15) (28.38) 0.78 8.60 9.45 WANGER 5IT International Small Cap (2/02; 5/95) (15.40) 3.47 -- 9.39 5SP U.S. Smaller Companies (2/02; 5/95) (18.34) 1.20 -- 11.12 WELLS FARGO VT 5AA Asset Allocation Fund (2/02; 4/94)(16) (14.42) 0.61 -- 6.32 5WI International Equity Fund (2/02; 7/00) (24.39) -- -- (21.12) 5SG Small Cap Growth Fund (2/02; 5/95)(17) (39.54) (13.99) -- (3.58)
(a) Current applicable charges deducted from performance include a $30 annual contract administrative charge, a 0.25% annual MAV fee, a 0.40% annual EEP fee and a 1.00% annual mortality and expense risk fee. Premium taxes and purchase payment credits are not reflected in these total returns. (b) Cumulative return (not annualized) since commencement date of the subaccount. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 57 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES UNDER RAVA SELECT (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: COMMENCEMENT(b) AXP(R) VARIABLE PORTFOLIO - BC5 Blue Chip Advantage Fund (2/02; 9/99)(1) (26.59%) BD5 Bond Fund (2/02; 10/81) (2.68) CR5 Capital Resource Fund (2/02; 10/81) (30.78) CM5 Cash Management Fund (2/02; 10/81) (6.30) DE5 Diversified Equity Income Fund (2/02; 9/99) (22.54) EM5 Emerging Markets Fund (2/02; 5/00) (16.24) ES5 Equity Select Fund (2/02; 5/01) (18.34) EI5 Extra Income Fund (2/02; 5/96) (12.41) FI5 Federal Income Fund (2/02; 9/99) (2.48) GB5 Global Bond Fund (2/02; 5/96) 7.47 GR5 Growth Fund (2/02; 9/99) (28.90) IE5 International Fund (2/02; 1/92) (20.40) MF5 Managed Fund (2/02; 4/86) (16.37) ND5 NEW DIMENSIONS FUND(R) (2/02; 5/96) (25.74) SV5 Partners Small Cap Value Fund (2/02; 8/01) (18.31) IV5 S&P 500 Index Fund (2/02; 5/00) (26.01) SC5 Small Cap Advantage Fund (2/02; 9/99) (20.84) ST5 Stock Fund (2/02; 8/01) (25.52) SA5 Strategy Aggressive Fund (2/02; 1/92) (37.52) AIM V.I. 5AC Capital Appreciation Fund, Series II Shares (2/02; 5/93)(2) (28.09) 5AD Capital Development Fund, Series II Shares (2/02; 5/98)(2) (25.22) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 5AL AllianceBernstein Growth and Income Portfolio (Class B) (2/02; 1/91)(3) (24.64) 5AB AllianceBernstein International Value Portfolio (Class B) (2/02; 5/01)(4) (10.94) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 5AI VP International, Class II (2/02; 5/94)(5) (20.76) 5AV VP Value, Class II (2/02; 5/96)(5) (17.32) CALVERT VARIABLE SERIES, INC. 5SR Social Balanced Portfolio (2/02; 9/86) (17.95) EVERGREEN VA 5CG Capital Growth Fund - Class 2 (2/02; 3/98)(6) (24.56) FIDELITY(R) VIP 5FG Growth & Income Portfolio Service Class 2 (2/02; 12/96)(7) (20.28) 5FM Mid Cap Portfolio Service Class 2 (2/02; 12/98)(7) (16.29) 5FO Overseas Portfolio Service Class 2 (2/02; 1/87)(7) (22.65) FTVIPT 5RE Franklin Real Estate Fund - Class 2 (2/02; 1/89)(8) (6.09) 5SI Franklin Small Cap Value Securities Fund - Class 2 (2/02; 5/98)(8) (14.77) 5MS Mutual Shares Securities Fund - Class 2 (2/02; 11/96)(8) (16.88) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC5 Blue Chip Advantage Fund (2/02; 9/99)(1) (28.28%) --% --% (12.98%) BD5 Bond Fund (2/02; 10/81) (2.26) 3.23 5.84 8.89 CR5 Capital Resource Fund (2/02; 10/81) (33.15) (6.68) 1.88 8.60 CM5 Cash Management Fund (2/02; 10/81) (6.25) 3.01 3.17 5.03 DE5 Diversified Equity Income Fund (2/02; 9/99) (24.80) -- -- (5.49) EM5 Emerging Markets Fund (2/02; 5/00) (12.28) -- -- (15.90) ES5 Equity Select Fund (2/02; 5/01) (19.94) -- -- (13.40) EI5 Extra Income Fund (2/02; 5/96) (13.63) (3.12) -- 0.09 FI5 Federal Income Fund (2/02; 9/99) (1.98) -- -- 5.26 GB5 Global Bond Fund (2/02; 5/96) 6.65 3.32 -- 3.98 GR5 Growth Fund (2/02; 9/99) (31.31) -- -- (20.06) IE5 International Fund (2/02; 1/92) (24.07) (6.88) 0.83 0.55 MF5 Managed Fund (2/02; 4/86) (19.17) (0.82) 5.42 7.52 ND5 NEW DIMENSIONS FUND(R) (2/02; 5/96) (27.44) (0.96) -- 4.02 SV5 Partners Small Cap Value Fund (2/02; 8/01) (18.45) -- -- (9.70) IV5 S&P 500 Index Fund (2/02; 5/00) (27.92) -- -- (19.61) SC5 Small Cap Advantage Fund (2/02; 9/99) (22.98) -- -- (3.68) ST5 Stock Fund (2/02; 8/01) (26.61) -- -- (22.15) SA5 Strategy Aggressive Fund (2/02; 1/92) (36.70) (9.26) 0.65 1.31 AIM V.I. 5AC Capital Appreciation Fund, Series II Shares (2/02; 5/93)(2) (29.85) (3.34) -- 6.16 5AD Capital Development Fund, Series II Shares (2/02; 5/98)(2) (27.17) -- -- (2.36) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 5AL AllianceBernstein Growth and Income Portfolio (Class B) (2/02; 1/91)(3) (27.78) 2.44 9.96 9.07 5AB AllianceBernstein International Value Portfolio (Class B) (2/02; 5/01)(4) (12.21) -- -- (8.55) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 5AI VP International, Class II (2/02; 5/94)(5) (26.22) (3.99) -- 1.15 5AV VP Value, Class II (2/02; 5/96)(5) (19.07) 2.76 -- 7.24 CALVERT VARIABLE SERIES, INC. 5SR Social Balanced Portfolio (2/02; 9/86) (18.51) (0.40) 5.49 6.73 EVERGREEN VA 5CG Capital Growth Fund - Class 2 (2/02; 3/98)(6) (28.11) -- -- (2.82) FIDELITY(R) VIP 5FG Growth & Income Portfolio Service Class 2 (2/02; 12/96)(7) (22.79) (0.54) -- 3.83 5FM Mid Cap Portfolio Service Class 2 (2/02; 12/98)(7) (16.51) -- -- 14.29 5FO Overseas Portfolio Service Class 2 (2/02; 1/87)(7) (26.11) (5.09) 3.53 3.10 FTVIPT 5RE Franklin Real Estate Fund - Class 2 (2/02; 1/89)(8) (5.37) 1.37 8.89 8.47 5SI Franklin Small Cap Value Securities Fund - Class 2 (2/02; 5/98)(8) (15.81) -- -- (0.64) 5MS Mutual Shares Securities Fund - Class 2 (2/02; 11/96)(8) (18.15) 2.88 -- 5.30
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 58 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES UNDER RAVA SELECT (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: COMMENCEMENT(b) GOLDMAN SACHS VIT 5UE CORE(SM) U.S. Equity Fund (2/02; 2/98) (25.32%) 5MC Mid Cap Value Fund (2/02; 5/98) (11.49) INVESCO VIF 5ID Dynamics Fund (2/02; 8/97) (33.91) 5FS Financial Services Fund (2/02; 9/99) (19.81) 5TC Technology Fund (2/02; 5/97) (47.91) 5TL Telecommunications Fund (2/02; 9/99) (43.47) JANUS ASPEN SERIES 5GT Global Technology Portfolio: Service Shares (2/02; 1/00)(9) (40.73) 5IG International Growth Portfolio: Service Shares (2/02; 5/94)(9) (26.34) LAZARD RETIREMENT SERIES 5IP International Equity Portfolio (2/02; 9/98) (14.13) MFS(R) 5MG Investors Growth Stock Series - Service Class (2/02; 5/99)(10) (29.69) 5MD New Discovery Series - Service Class (2/02; 5/98)(10) (32.53) 5UT Utilities Series - Service Class (2/02; 1/95)(10) (20.21) PIONEER VCT 5PE Pioneer Equity Income VCT Portfolio - Class II Shares (2/02; 3/95)(11) (20.99) 5EU Pioneer Europe VCT Portfolio - Class II Shares (2/02; 10/98)(12) (20.55) PUTNAM VARIABLE TRUST 5HS Putnam VT Health Sciences Fund - Class IB Shares (2/02; 4/98)(13) (24.58) 5PI Putnam VT International Equity Fund - Class IB Shares (2/02; 1/97)(14) (19.58) (previously Putnam VT International Growth Fund - Class IB Shares) 5VS Putnam VT Vista Fund - Class IB Shares (2/02; 1/97)(14) (32.11) STRONG FUNDS 5SO Strong Opportunity Fund II - Advisor Class (2/02; 5/92)(15) (30.34) WANGER 5IT International Small Cap (2/02; 5/95) (18.12) 5SP U.S. Smaller Companies (2/02; 5/95) (20.94) WELLS FARGO VT 5AA Asset Allocation Fund (2/02; 4/94)(16) (17.75) 5WI International Equity Fund (2/02; 7/00) (24.61) 5SG Small Cap Growth Fund (2/02; 5/95)(17) (37.94) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT GOLDMAN SACHS VIT 5UE CORE(SM) U.S. Equity Fund (2/02; 2/98) (27.44%) --% --% (3.48%) 5MC Mid Cap Value Fund (2/02; 5/98) (11.60) -- -- 2.84 INVESCO VIF 5ID Dynamics Fund (2/02; 8/97) (36.65) (4.44) -- (3.62) 5FS Financial Services Fund (2/02; 9/99) (20.74) -- -- 0.90 5TC Technology Fund (2/02; 5/97) (50.41) (7.41) -- (4.40) 5TL Telecommunications Fund (2/02; 9/99) (54.06) -- -- (33.29) JANUS ASPEN SERIES 5GT Global Technology Portfolio: Service Shares (2/02; 1/00)(9) (44.97) -- -- (39.81) 5IG International Growth Portfolio: Service Shares (2/02; 5/94)(9) (30.99) (1.04) -- 7.06 LAZARD RETIREMENT SERIES 5IP International Equity Portfolio (2/02; 9/98) (17.14) -- -- (5.06) MFS(R) 5MG Investors Growth Stock Series - Service Class (2/02; 5/99)(10) (32.80) -- -- (9.79) 5MD New Discovery Series - Service Class (2/02; 5/98)(10) (36.56) -- -- 1.40 5UT Utilities Series - Service Class (2/02; 1/95)(10) (28.36) (1.75) -- 7.73 PIONEER VCT 5PE Pioneer Equity Income VCT Portfolio - Class II Shares (2/02; 3/95)(11) (22.05) 0.84 -- 8.89 5EU Pioneer Europe VCT Portfolio - Class II Shares (2/02; 10/98)(12) (24.83) -- -- (9.65) PUTNAM VARIABLE TRUST 5HS Putnam VT Health Sciences Fund - Class IB Shares (2/02; 4/98)(13) (26.01) -- -- (2.51) 5PI Putnam VT International Equity Fund - Class IB Shares (2/02; 1/97)(14) (23.55) 1.24 -- 3.38 (previously Putnam VT International Growth Fund - Class IB Shares) 5VS Putnam VT Vista Fund - Class IB Shares (2/02; 1/97)(14) (35.45) (5.20) -- (1.13) STRONG FUNDS 5SO Strong Opportunity Fund II - Advisor Class (2/02; 5/92)(15) (32.09) 1.43 9.25 10.10 WANGER 5IT International Small Cap (2/02; 5/95) (20.01) 4.12 -- 10.04 5SP U.S. Smaller Companies (2/02; 5/95) (22.76) 1.85 -- 11.77 WELLS FARGO VT 5AA Asset Allocation Fund (2/02; 4/94)(16) (19.11) 1.26 -- 6.97 5WI International Equity Fund (2/02; 7/00) (28.38) -- -- (22.49) 5SG Small Cap Growth Fund (2/02; 5/95)(17) (42.47) (13.34) -- (2.93)
(a) Current applicable charges deducted from performance include a $30 annual contract administrative charge, a 1.00% annual mortality and expense risk fee and applicable surrender charges. Premium taxes and purchase payment credits are not reflected in these total returns. (b) Cumulative return (not annualized) since commencement date of the subaccount. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 59 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES UNDER RAVA SELECT IN TEXAS (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: COMMENCEMENT(b) AXP(R) VARIABLE PORTFOLIO - BC5 Blue Chip Advantage Fund (2/02; 9/99)(1) (27.27%) BD5 Bond Fund (2/02; 10/81) (3.62) CR5 Capital Resource Fund (2/02; 10/81) (31.42) CM5 Cash Management Fund (2/02; 10/81) (7.20) DE5 Diversified Equity Income Fund (2/02; 9/99) (23.27) EM5 Emerging Markets Fund (2/02; 5/00) (17.03) ES5 Equity Select Fund (2/02; 5/01) (19.12) EI5 Extra Income Fund (2/02; 5/96) (13.24) FI5 Federal Income Fund (2/02; 9/99) (3.42) GB5 Global Bond Fund (2/02; 5/96) 6.47 GR5 Growth Fund (2/02; 9/99) (29.56) IE5 International Fund (2/02; 1/92) (21.14) MF5 Managed Fund (2/02; 4/86) (17.17) ND5 NEW DIMENSIONS FUND(R) (2/02; 5/96) (26.44) SV5 Partners Small Cap Value Fund (2/02; 8/01) (19.08) IV5 S&P 500 Index Fund (2/02; 5/00) (26.70) SC5 Small Cap Advantage Fund (2/02; 9/99) (21.59) ST5 Stock Fund (2/02; 8/01) (26.21) SA5 Strategy Aggressive Fund (2/02; 1/92) (38.08) AIM V.I. 5AC Capital Appreciation Fund, Series II Shares (2/02; 5/93)(2) (28.76) 5AD Capital Development Fund, Series II Shares (2/02; 5/98)(2) (25.92) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 5AL AllianceBernstein Growth and Income Portfolio (Class B) (2/02; 1/91)(3) (25.34) 5AB AllianceBernstein International Value Portfolio (Class B) (2/02; 5/01)(4) (11.79) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 5AI VP International, Class II (2/02; 5/94)(5) (21.51) 5AV VP Value, Class II (2/02; 5/96)(5) (18.11) CALVERT VARIABLE SERIES, INC. 5SR Social Balanced Portfolio (2/02; 9/86) (18.72) EVERGREEN VA 5CG Capital Growth Fund - Class 2 (2/02; 3/98)(6) (25.26) FIDELITY(R) VIP 5FG Growth & Income Portfolio Service Class 2 (2/02; 12/96)(7) (21.03) 5FM Mid Cap Portfolio Service Class 2 (2/02; 12/98)(7) (17.08) 5FO Overseas Portfolio Service Class 2 (2/02; 1/87)(7) (23.37) FTVIPT 5RE Franklin Real Estate Fund - Class 2 (2/02; 1/89)(8) (6.99) 5SI Franklin Small Cap Value Securities Fund - Class 2 (2/02; 5/98)(8) (15.58) 5MS Mutual Shares Securities Fund - Class 2 (2/02; 11/96)(8) (17.67) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC5 Blue Chip Advantage Fund (2/02; 9/99)(1) (28.95%) --% --% (12.98%) BD5 Bond Fund (2/02; 10/81) (3.20) 3.23 5.84 8.89 CR5 Capital Resource Fund (2/02; 10/81) (33.76) (6.68) 1.88 8.60 CM5 Cash Management Fund (2/02; 10/81) (7.15) 3.01 3.17 5.03 DE5 Diversified Equity Income Fund (2/02; 9/99) (25.50) -- -- (5.49) EM5 Emerging Markets Fund (2/02; 5/00) (13.12) -- -- (15.61) ES5 Equity Select Fund (2/02; 5/01) (20.70) -- -- (13.40) EI5 Extra Income Fund (2/02; 5/96) (14.45) (3.12) -- 0.09 FI5 Federal Income Fund (2/02; 9/99) (2.93) -- -- 5.26 GB5 Global Bond Fund (2/02; 5/96) 5.65 3.32 -- 3.98 GR5 Growth Fund (2/02; 9/99) (31.94) -- -- (20.06) IE5 International Fund (2/02; 1/92) (24.78) (6.88) 0.83 0.55 MF5 Managed Fund (2/02; 4/86) (19.93) (0.82) 5.42 7.52 ND5 NEW DIMENSIONS FUND(R) (2/02; 5/96) (28.11) (0.96) -- 4.02 SV5 Partners Small Cap Value Fund (2/02; 8/01) (19.22) -- -- (9.70) IV5 S&P 500 Index Fund (2/02; 5/00) (28.58) -- -- (19.33) SC5 Small Cap Advantage Fund (2/02; 9/99) (23.70) -- -- (3.68) ST5 Stock Fund (2/02; 8/01) (27.29) -- -- (22.15) SA5 Strategy Aggressive Fund (2/02; 1/92) (37.27) (9.26) 0.65 1.31 AIM V.I. 5AC Capital Appreciation Fund, Series II Shares (2/02; 5/93)(2) (30.50) (3.34) -- 6.16 5AD Capital Development Fund, Series II Shares (2/02; 5/98)(2) (27.85) -- -- (2.36) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 5AL AllianceBernstein Growth and Income Portfolio (Class B) (2/02; 1/91)(3) (28.45) 2.44 9.96 9.07 5AB AllianceBernstein International Value Portfolio (Class B) (2/02; 5/01)(4) (13.05) -- -- (8.55) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 5AI VP International, Class II (2/02; 5/94)(5) (26.90) (3.99) -- 1.15 5AV VP Value, Class II (2/02; 5/96)(5) (19.84) 2.76 -- 7.24 CALVERT VARIABLE SERIES, INC. 5SR Social Balanced Portfolio (2/02; 9/86) (19.28) (0.40) 5.49 6.73 EVERGREEN VA 5CG Capital Growth Fund - Class 2 (2/02; 3/98)(6) (28.77) -- -- (2.82) FIDELITY(R) VIP 5FG Growth & Income Portfolio Service Class 2 (2/02; 12/96)(7) (23.51) (0.54) -- 3.83 5FM Mid Cap Portfolio Service Class 2 (2/02; 12/98)(7) (17.30) -- -- 14.29 5FO Overseas Portfolio Service Class 2 (2/02; 1/87)(7) (26.80) (5.09) 3.53 3.10 FTVIPT 5RE Franklin Real Estate Fund - Class 2 (2/02; 1/89)(8) (6.28) 1.37 8.89 8.47 5SI Franklin Small Cap Value Securities Fund - Class 2 (2/02; 5/98)(8) (16.61) -- -- (0.64) 5MS Mutual Shares Securities Fund - Class 2 (2/02; 11/96)(8) (18.93) 2.88 -- 5.30
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 60 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES UNDER RAVA SELECT IN TEXAS (WITHOUT PURCHASE PAYMENT CREDITS) WITH SURRENDER FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: COMMENCEMENT(b) GOLDMAN SACHS VIT 5UE CORE(SM) U.S. Equity Fund (2/02; 2/98) (26.02%) 5MC Mid Cap Value Fund (2/02; 5/98) (12.34) INVESCO VIF 5ID Dynamics Fund (2/02; 8/97) (34.51) 5FS Financial Services Fund (2/02; 9/99) (20.57) 5TC Technology Fund (2/02; 5/97) (48.36) 5TL Telecommunications Fund (2/02; 9/99) (43.97) JANUS ASPEN SERIES 5GT Global Technology Portfolio: Service Shares (2/02; 1/00)(9) (41.26) 5IG International Growth Portfolio: Service Shares (2/02; 5/94)(9) (27.02) LAZARD RETIREMENT SERIES 5IP International Equity Portfolio (2/02; 9/98) (14.95) MFS(R) 5MG Investors Growth Stock Series - Service Class (2/02; 5/99)(10) (30.34) 5MD New Discovery Series - Service Class (2/02; 5/98)(10) (33.15) 5UT Utilities Series - Service Class (2/02; 1/95)(10) (20.96) PIONEER VCT 5PE Pioneer Equity Income VCT Portfolio - Class II Shares (2/02; 3/95)(11) (21.73) 5EU Pioneer Europe VCT Portfolio - Class II Shares (2/02; 10/98)(12) (21.30) PUTNAM VARIABLE TRUST 5HS Putnam VT Health Sciences Fund - Class IB Shares (2/02; 4/98)(13) (25.28) 5PI Putnam VT International Equity Fund - Class IB Shares (2/02; 1/97)(14) (20.34) (previously Putnam VT International Growth Fund - Class IB Shares) 5VS Putnam VT Vista Fund - Class IB Shares (2/02; 1/97)(14) (32.74) STRONG FUNDS 5SO Strong Opportunity Fund II - Advisor Class (2/02; 5/92)(15) (30.98) WANGER 5IT International Small Cap (2/02; 5/95) (18.90) 5SP U.S. Smaller Companies (2/02; 5/95) (21.68) WELLS FARGO VT 5AA Asset Allocation Fund (2/02; 4/94)(16) (18.53) 5WI International Equity Fund (2/02; 7/00) (25.31) 5SG Small Cap Growth Fund (2/02; 5/95)(17) (38.50) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT GOLDMAN SACHS VIT 5UE CORE(SM) U.S. Equity Fund (2/02; 2/98) (28.11%) --% --% (3.48%) 5MC Mid Cap Value Fund (2/02; 5/98) (12.44) -- -- 2.84 INVESCO VIF 5ID Dynamics Fund (2/02; 8/97) (37.22) (4.44) -- (3.62) 5FS Financial Services Fund (2/02; 9/99) (21.48) -- -- 0.90 5TC Technology Fund (2/02; 5/97) (50.84) (7.41) -- (4.40) 5TL Telecommunications Fund (2/02; 9/99) (54.45) -- -- (33.29) JANUS ASPEN SERIES 5GT Global Technology Portfolio: Service Shares (2/02; 1/00)(9) (45.45) -- -- (39.63) 5IG International Growth Portfolio: Service Shares (2/02; 5/94)(9) (31.63) (1.04) -- 7.06 LAZARD RETIREMENT SERIES 5IP International Equity Portfolio (2/02; 9/98) (17.92) -- -- (5.06) MFS(R) 5MG Investors Growth Stock Series - Service Class (2/02; 5/99)(10) (33.41) -- -- (9.79) 5MD New Discovery Series - Service Class (2/02; 5/98)(10) (37.13) -- -- 1.40 5UT Utilities Series - Service Class (2/02; 1/95)(10) (29.02) (1.75) -- 7.73 PIONEER VCT 5PE Pioneer Equity Income VCT Portfolio - Class II Shares (2/02; 3/95)(11) (22.78) 0.84 -- 8.89 5EU Pioneer Europe VCT Portfolio - Class II Shares (2/02; 10/98)(12) (25.53) -- -- (9.65) PUTNAM VARIABLE TRUST 5HS Putnam VT Health Sciences Fund - Class IB Shares (2/02; 4/98)(13) (26.70) -- -- (2.51) 5PI Putnam VT International Equity Fund - Class IB Shares (2/02; 1/97)(14) (24.26) 1.24 -- 3.38 (previously Putnam VT International Growth Fund - Class IB Shares) 5VS Putnam VT Vista Fund - Class IB Shares (2/02; 1/97)(14) (36.04) (5.20) -- (1.13) STRONG FUNDS 5SO Strong Opportunity Fund II - Advisor Class (2/02; 5/92)(15) (32.71) 1.43 9.25 10.10 WANGER 5IT International Small Cap (2/02; 5/95) (20.77) 4.12 -- 10.04 5SP U.S. Smaller Companies (2/02; 5/95) (23.48) 1.85 -- 11.77 WELLS FARGO VT 5AA Asset Allocation Fund (2/02; 4/94)(16) (19.87) 1.26 -- 6.97 5WI International Equity Fund (2/02; 7/00) (29.04) -- -- (22.20) 5SG Small Cap Growth Fund (2/02; 5/95)(17) (42.98) (13.34) -- (2.93)
(a) Current applicable charges deducted from performance include a $30 annual contract administrative charge, a 1.00% annual mortality and expense risk fee and applicable surrender charges. Premium taxes and purchase payment credits are not reflected in these total returns. (b) Cumulative return (not annualized) since commencement date of the subaccount. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 61 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES UNDER RAVA SELECT AND RAVA SELECT IN TEXAS (WITHOUT PURCHASE PAYMENT CREDITS) WITHOUT SURRENDER FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: COMMENCEMENT(b) AXP(R) VARIABLE PORTFOLIO - BC5 Blue Chip Advantage Fund (2/02; 9/99)(1) (21.82%) BD5 Bond Fund (2/02; 10/81) 3.89 CR5 Capital Resource Fund (2/02; 10/81) (26.32) CM5 Cash Management Fund (2/02; 10/81) (0.00) DE5 Diversified Equity Income Fund (2/02; 9/99) (17.47) EM5 Emerging Markets Fund (2/02; 5/00) (10.69) ES5 Equity Select Fund (2/02; 5/01) (12.95) EI5 Extra Income Fund (2/02; 5/96) (6.57) FI5 Federal Income Fund (2/02; 9/99) 4.11 GB5 Global Bond Fund (2/02; 5/96) 14.47 GR5 Growth Fund (2/02; 9/99) (24.30) IE5 International Fund (2/02; 1/92) (15.16) MF5 Managed Fund (2/02; 4/86) (10.83) ND5 NEW DIMENSIONS FUND(R) (2/02; 5/96) (20.91) SV5 Partners Small Cap Value Fund (2/02; 8/01) (12.92) IV5 S&P 500 Index Fund (2/02; 5/00) (21.20) SC5 Small Cap Advantage Fund (2/02; 9/99) (15.64) ST5 Stock Fund (2/02; 8/01) (20.66) SA5 Strategy Aggressive Fund (2/02; 1/92) (33.57) AIM V.I. 5AC Capital Appreciation Fund, Series II Shares (2/02; 5/93)(2) (23.43) 5AD Capital Development Fund, Series II Shares (2/02; 5/98)(2) (20.35) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 5AL AllianceBernstein Growth and Income Portfolio (Class B) (2/02; 1/91)(3) (19.72) 5AB AllianceBernstein International Value Portfolio (Class B) (2/02; 5/01)(4) (4.99) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 5AI VP International, Class II (2/02; 5/94)(5) (15.55) 5AV VP Value, Class II (2/02; 5/96)(5) (11.85) CALVERT VARIABLE SERIES, INC. 5SR Social Balanced Portfolio (2/02; 9/86) (12.52) EVERGREEN VA 5CG Capital Growth Fund - Class 2 (2/02; 3/98)(6) (19.63) FIDELITY(R) VIP 5FG Growth & Income Portfolio Service Class 2 (2/02; 12/96)(7) (15.04) 5FM Mid Cap Portfolio Service Class 2 (2/02; 12/98)(7) (10.74) 5FO Overseas Portfolio Service Class 2 (2/02; 1/87)(7) (17.58) FTVIPT 5RE Franklin Real Estate Fund - Class 2 (2/02; 1/89)(8) 0.23 5SI Franklin Small Cap Value Securities Fund - Class 2 (2/02; 5/98)(8) (9.11) 5MS Mutual Shares Securities Fund - Class 2 (2/02; 11/96)(8) (11.38) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC5 Blue Chip Advantage Fund (2/02; 9/99)(1) (23.64%) --% --% (12.98%) BD5 Bond Fund (2/02; 10/81) 4.35 3.23 5.84 8.89 CR5 Capital Resource Fund (2/02; 10/81) (28.87) (6.68) 1.88 8.60 CM5 Cash Management Fund (2/02; 10/81) 0.06 3.01 3.17 5.03 DE5 Diversified Equity Income Fund (2/02; 9/99) (19.89) -- -- (5.49) EM5 Emerging Markets Fund (2/02; 5/00) (6.43) -- -- (13.87) ES5 Equity Select Fund (2/02; 5/01) (14.67) -- -- (10.02) EI5 Extra Income Fund (2/02; 5/96) (7.88) (3.12) -- 0.09 FI5 Federal Income Fund (2/02; 9/99) 4.65 -- -- 5.26 GB5 Global Bond Fund (2/02; 5/96) 13.65 3.32 -- 3.98 GR5 Growth Fund (2/02; 9/99) (26.89) -- -- (20.06) IE5 International Fund (2/02; 1/92) (19.11) (6.88) 0.83 0.55 MF5 Managed Fund (2/02; 4/86) (13.84) (0.82) 5.42 7.52 ND5 NEW DIMENSIONS FUND(R) (2/02; 5/96) (22.73) (0.96) -- 4.02 SV5 Partners Small Cap Value Fund (2/02; 8/01) (13.06) -- -- (5.35) IV5 S&P 500 Index Fund (2/02; 5/00) (23.24) -- -- (17.67) SC5 Small Cap Advantage Fund (2/02; 9/99) (17.94) -- -- (3.68) ST5 Stock Fund (2/02; 8/01) (21.83) -- -- (18.43) SA5 Strategy Aggressive Fund (2/02; 1/92) (32.69) (9.26) 0.65 1.31 AIM V.I. 5AC Capital Appreciation Fund, Series II Shares (2/02; 5/93)(2) (25.32) (3.34) -- 6.16 5AD Capital Development Fund, Series II Shares (2/02; 5/98)(2) (22.45) -- -- (2.36) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 5AL AllianceBernstein Growth and Income Portfolio (Class B) (2/02; 1/91)(3) (23.10) 2.44 9.96 9.07 5AB AllianceBernstein International Value Portfolio (Class B) (2/02; 5/01)(4) (6.36) -- -- (5.00) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 5AI VP International, Class II (2/02; 5/94)(5) (21.42) (3.99) -- 1.15 5AV VP Value, Class II (2/02; 5/96)(5) (13.74) 2.76 -- 7.24 CALVERT VARIABLE SERIES, INC. 5SR Social Balanced Portfolio (2/02; 9/86) (13.13) (0.40) 5.49 6.73 EVERGREEN VA 5CG Capital Growth Fund - Class 2 (2/02; 3/98)(6) (23.45) -- -- (2.82) FIDELITY(R) VIP 5FG Growth & Income Portfolio Service Class 2 (2/02; 12/96)(7) (17.73) (0.54) -- 3.83 5FM Mid Cap Portfolio Service Class 2 (2/02; 12/98)(7) (10.98) -- -- 14.29 5FO Overseas Portfolio Service Class 2 (2/02; 1/87)(7) (21.30) (5.09) 3.53 3.10 FTVIPT 5RE Franklin Real Estate Fund - Class 2 (2/02; 1/89)(8) 1.00 1.37 8.89 8.47 5SI Franklin Small Cap Value Securities Fund - Class 2 (2/02; 5/98)(8) (10.22) -- -- (0.64) 5MS Mutual Shares Securities Fund - Class 2 (2/02; 11/96)(8) (12.75) 2.88 -- 5.30
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 62 AVERAGE ANNUAL TOTAL RETURN(a) FOR QUALIFIED ANNUITIES UNDER RAVA SELECT AND RAVA SELECT IN TEXAS (WITHOUT PURCHASE PAYMENT CREDITS) WITHOUT SURRENDER FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: COMMENCEMENT(b) GOLDMAN SACHS VIT 5UE CORE(SM) U.S. Equity Fund (2/02; 2/98) (20.45%) 5MC Mid Cap Value Fund (2/02; 5/98) (5.58) INVESCO VIF 5ID Dynamics Fund (2/02; 8/97) (29.69) 5FS Financial Services Fund (2/02; 9/99) (14.53) 5TC Technology Fund (2/02; 5/97) (44.74) 5TL Telecommunications Fund (2/02; 9/99) (39.97) JANUS ASPEN SERIES 5GT Global Technology Portfolio: Service Shares (2/02; 1/00)(9) (37.03) 5IG International Growth Portfolio: Service Shares (2/02; 5/94)(9) (21.55) LAZARD RETIREMENT SERIES 5IP International Equity Portfolio (2/02; 9/98) (8.42) MFS(R) 5MG Investors Growth Stock Series - Service Class (2/02; 5/99)(10) (25.15) 5MD New Discovery Series - Service Class (2/02; 5/98)(10) (28.21) 5UT Utilities Series - Service Class (2/02; 1/95)(10) (14.96) PIONEER VCT 5PE Pioneer Equity Income VCT Portfolio - Class II Shares (2/02; 3/95)(11) (15.79) 5EU Pioneer Europe VCT Portfolio - Class II Shares (2/02; 10/98)(12) (15.33) PUTNAM VARIABLE TRUST 5HS Putnam VT Health Sciences Fund - Class IB Shares (2/02; 4/98)(13) (19.65) 5PI Putnam VT International Equity Fund - Class IB Shares (2/02; 1/97)(14) (14.28) (previously Putnam VT International Growth Fund - Class IB Shares) 5VS Putnam VT Vista Fund - Class IB Shares (2/02; 1/97)(14) (27.76) STRONG FUNDS 5SO Strong Opportunity Fund II - Advisor Class (2/02; 5/92)(15) (25.85) WANGER 5IT International Small Cap (2/02; 5/95) (12.71) 5SP U.S. Smaller Companies (2/02; 5/95) (15.74) WELLS FARGO VT 5AA Asset Allocation Fund (2/02; 4/94)(16) (12.32) 5WI International Equity Fund (2/02; 7/00) (19.68) 5SG Small Cap Growth Fund (2/02; 5/95)(17) (34.02) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT GOLDMAN SACHS VIT 5UE CORE(SM) U.S. Equity Fund (2/02; 2/98) (22.73%) --% --% (3.48%) 5MC Mid Cap Value Fund (2/02; 5/98) (5.70) -- -- 2.84 INVESCO VIF 5ID Dynamics Fund (2/02; 8/97) (32.63) (4.44) -- (3.62) 5FS Financial Services Fund (2/02; 9/99) (15.53) -- -- 0.90 5TC Technology Fund (2/02; 5/97) (47.43) (7.41) -- (4.40) 5TL Telecommunications Fund (2/02; 9/99) (51.35) -- -- (33.29) JANUS ASPEN SERIES 5GT Global Technology Portfolio: Service Shares (2/02; 1/00)(9) (41.58) -- -- (38.57) 5IG International Growth Portfolio: Service Shares (2/02; 5/94)(9) (26.55) (1.04) -- 7.06 LAZARD RETIREMENT SERIES 5IP International Equity Portfolio (2/02; 9/98) (11.65) -- -- (5.06) MFS(R) 5MG Investors Growth Stock Series - Service Class (2/02; 5/99)(10) (28.49) -- -- (9.79) 5MD New Discovery Series - Service Class (2/02; 5/98)(10) (32.54) -- -- 1.40 5UT Utilities Series - Service Class (2/02; 1/95)(10) (23.72) (1.75) -- 7.73 PIONEER VCT 5PE Pioneer Equity Income VCT Portfolio - Class II Shares (2/02; 3/95)(11) (16.94) 0.84 -- 8.89 5EU Pioneer Europe VCT Portfolio - Class II Shares (2/02; 10/98)(12) (19.92) -- -- (9.65) PUTNAM VARIABLE TRUST 5HS Putnam VT Health Sciences Fund - Class IB Shares (2/02; 4/98)(13) (21.19) -- -- (2.51) 5PI Putnam VT International Equity Fund - Class IB Shares (2/02; 1/97)(14) (18.54) 1.24 -- 3.38 (previously Putnam VT International Growth Fund - Class IB Shares) 5VS Putnam VT Vista Fund - Class IB Shares (2/02; 1/97)(14) (31.35) (5.20) -- (1.13) STRONG FUNDS 5SO Strong Opportunity Fund II - Advisor Class (2/02; 5/92)(15) (27.73) 1.43 9.25 10.10 WANGER 5IT International Small Cap (2/02; 5/95) (14.75) 4.12 -- 10.04 5SP U.S. Smaller Companies (2/02; 5/95) (17.69) 1.85 -- 11.77 WELLS FARGO VT 5AA Asset Allocation Fund (2/02; 4/94)(16) (13.77) 1.26 -- 6.97 5WI International Equity Fund (2/02; 7/00) (23.74) -- -- (20.47) 5SG Small Cap Growth Fund (2/02; 5/95)(17) (38.89) (13.34) -- (2.93)
(a) Current applicable charges deducted from performance include a $30 annual contract administrative charge and a 1.00% annual mortality and expense risk fee. Premium taxes and purchase payment credits are not reflected in these total returns. (b) Cumulative return (not annualized) since commencement date of the subaccount. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 63 NOTES TO PERFORMANCE INFORMATION (1) Commencement date of the subaccount; Commencement date of the fund. (2) Performance shown for periods prior to the inception date of the Series II class of shares reflect the historical results of the Series I class, adjusted to reflect the impact that the Series II class Rule 12b-1 plan would have had if the Series II class had then existed. The Series I and Series II share classes invest in the same portfolio of securities and will have substantially similar performance, except to the extent that expenses borne by each class differ. (3) Because Class B shares were not offered until June 1, 1999, standardized Class A fund performance for prior periods represents historical results of Class A shares. For periods beginning June 1, 1999, Class B's results reflect an additional 12b-1 fee expense, which also affects future performance. (4) Because Class B shares were not offered until Aug. 15, 2001, standardized Class A fund performance for prior periods represents historical results of Class A shares. For periods beginning Aug. 15, 2001, Class B's results reflect an additional 12b-1 fee expense, which also affects future performance. (5) If Class II had existed during the periods presented, its performance would have been substantially similar to that of the existing class of the fund because each represents an investment in the same portfolio of securities. However, performance of Class II would have been lower because of its higher expense ratio. (6) Historical performance shown for Class 2 prior to its inception is based on the performance of Class I, the original class offered. These historical returns have not been adjusted to reflect the effect of the 0.25% 12b-1 fees applicable to Class 2 shares. Class 1 does not pay 12b-1 fees. If these fees had been reflected, returns would have been lower. The investment return and principal value of an investment will fluctuate so that investors' shares, when redeemed, may be worth more or less than their original cost. Performance includes the reinvestment of income dividends and capital gain distributions. (7) Initial offering of the Service Class 2 of each fund took place on Jan. 12, 2000. Returns prior to Jan. 12, 2000 through Nov. 3, 1997 (Jan. 12, 2000 through Dec. 28, 1998 for VIP Mid Cap) are those of the Service Class, which reflect a 12b-1 fee of 0.10%. Service Class 2 returns prior to Nov. 3, 1997 are those of the Initial Class, which has no 12b-1 fee. If Service Class 2's 12b-1 fee of 0.25% had been reflected, returns prior to Jan. 12, 2000 would have been lower. (8) Ongoing stock market volatility can dramatically change the fund's short-term performance; current results may differ. Because Class 2 shares were not offered until Jan. 6, 1999, standardized Class 2 Fund performance for prior periods represents historical results of Class 1 shares. For periods beginning Jan. 6, 1999 Class 2's results reflect an additional 12b-1 fee expense, which also affects future performance. (9) In recent years returns have sustained significant gains and losses due to market volatility in the technology sector. The returns shown for Service Shares for periods prior to their inception (Dec. 31, 1999) are derived from the historical performance of the Institutional Shares, adjusted to reflect the higher operating expenses of Service Shares. (10) Service Class shares commenced operations in May 2000. Service Class shares carry a 0.25% annual Rule 12b-1 fee. Service Class share performance includes the performance of the series' Initial Class shares for periods prior to the inception of Service Class shares (blended performance). These blended performance figures have not been adjusted to take into account differences in the class-specific operating expenses (such as Rule 12b-1 fees). Because operating expenses of Service Class shares are higher than those of Initial class shares, the blended Service Class share performance is higher than it would have been had the Service Class shares been offered for the entire period. (11) Performance of the portfolio's Class I shares are from inception date of March 1, 1995. Although Class II shares invest in the same portfolio investments as Class I shares, Class II shares would have the same investment results except for the difference in class expense. Class II shares are subject to a 0.25% distribution fee, which Class I shares do not pay. Consequently, the performance of Class II shares will be lower. (12) Performance of the portfolio's Class I shares are from inception date of Oct. 30, 1998. Although Class II shares invest in the same portfolio investments as Class I shares, Class II shares would have the same investment results except for the difference in class expense. Class II shares are subject to a 0.25% distribution fee, which Class I shares do not pay. Consequently, the performance of Class II shares will be lower. (13) The Trustees of Putnam Variable Trust currently limit 12b-1 fee payments on Class IB Shares to 0.25% of average net assets. (14) Performance information for Class IB shares for periods prior to April 30, 1998 are based on the performance of the fund's Class IA shares (not offered as an investment option) adjusted to reflect the fees paid by Class IB shares, including a Rule 12b-1 fee of 0.25%. Restated to reflect an increase in 12b-1 fees effective April 30, 2001. Actual 12b-1 fees during the most recent fiscal year were 0.22%. (15) Performance is historical and does not represent future results. Investment returns and principal value vary, and you may have a gain or loss when you sell shares. The performance of the Advisor Class shares prior to 7/12/01 is based on the Fund's Investor Class shares' performance, restated for the higher expense ratio of the Advisor Class shares. (16) Performance for periods prior to Sept. 20, 1999 reflects performance of the Life and Annuity Trust Asset Allocation Fund, its predecessor fund. Effective at the close of business Sept. 17, 1999, the Life and Annuity Trust Funds were reorganized into the Wells Fargo Variable Trust Funds. (17) Performance for periods prior to Sept. 20, 1999 reflects performance of the Norwest Select Small Company Stock Fund (the accounting survivor of a merger of the Life and Annuity Trust Strategic Growth Fund and the Norwest Select Small Company Stock Fund), its predecessor fund. Effective at the close of business Sept. 17, 1999, the Life and Annuity Trust and Norwest Select Funds were reorganized into the Wells Fargo Variable Trust Funds. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 64 CUMULATIVE TOTAL RETURN Cumulative total return represents the cumulative change in the value of an investment for a given period (reflecting change in a subaccount's accumulation unit value). We compute cumulative total return by using 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 the period, at the end of the period (or fractional portion thereof). Total return figures reflect the deduction of the surrender charge which assumes you withdraw the entire contract value at the end of the one, five and ten year periods (or, if less, up to the life of the subaccount). We also may show performance figures without the deduction of a surrender charge. In addition, total return figures reflect the deduction of the following charges: the contract administrative charge, the Maximum Anniversary Value Death Benefit Rider fee, the Enhanced Earnings Death Benefit Rider fee, the Enhanced Earnings Plus Death Benefit Rider fee and mortality and expense risk fee. We also show return figures without deduction of the Maximum Anniversary Value Death Benefit Rider fee, the Enhanced Earnings Death Benefit Value Rider fee and the Enhanced Earnings Plus Death Benefit Rider fee. ANNUALIZED YIELD FOR A SUBACCOUNT INVESTING IN A MONEY MARKET FUND ANNUALIZED SIMPLE YIELD For a subaccount investing in a money market fund, we base quotations of simple yield on: (a) the change in the value of a hypothetical subaccount (exclusive of capital changes and income other than investment income) at the beginning of a particular seven-day period; (b) less a pro rata share of the subaccount expenses accrued over the period; (c) dividing this difference by the value of the subaccount at the beginning of the period to obtain the base period return; and (d) multiplying the base period return by 365/7. The subaccount's value includes: - any declared dividends, - the value of any shares purchased with dividends paid during the period, and - any dividends declared for such shares. It does not include: - the effect of any applicable surrender charge, or - any realized or unrealized gains or losses. ANNUALIZED COMPOUND YIELD We calculate compound yield using the base period return described above, which we then compound according to the following formula: Compound Yield = [(Base Period Return + 1)(TO THE POWER OF 365/7)] - 1 You must consider (when comparing an investment in subaccounts investing in money market funds with fixed annuities) that fixed annuities often provide an agreed-to or guaranteed yield for a stated period of time, whereas the subaccount's yield fluctuates. In comparing the yield of the subaccount to a money market fund, you should consider the different services that the contract provides. ANNUALIZED YIELD BASED ON THE SEVEN-DAY PERIOD ENDED DEC. 31, 2002
SUBACCOUNT INVESTING IN: SIMPLE YIELD COMPOUND YIELD CM1 AXP(R) Variable Portfolio - Cash Management Fund (0.15%) (0.15%) CM2 AXP(R) Variable Portfolio - Cash Management Fund 0.03 0.03 CM4 AXP(R) Variable Portfolio - Cash Management Fund (0.42) (0.42) CM5 AXP(R) Variable Portfolio - Cash Management Fund (0.24) (0.24)
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 65 ANNUALIZED YIELD FOR A SUBACCOUNT INVESTING IN AN INCOME FUND For the subaccounts investing in income funds, we base quotations of yield on all investment income earned during a particular 30-day period, less expenses accrued during the period (net investment income) and compute it by dividing net investment income per accumulation unit by the value of an accumulation unit on the last day of the period, according to the following formula: YIELD = 2[( a - b + 1)(TO THE POWER OF 6) - 1] ----- cd where: a = dividends and investment income earned during the period b = expenses accrued for the period (net of reimbursements) c = the average daily number of accumulation units outstanding during the period that were entitled to receive dividends d = the maximum offering price per accumulation unit on the last day of the period The subaccount earns yield from the increase in the net asset value of shares of the fund in which it invests and from dividends declared and paid by the fund, which are automatically invested in shares of the fund. ANNUALIZED YIELD BASED ON THE 30-DAY PERIOD ENDED DEC. 31, 2002
SUBACCOUNT INVESTING IN: YIELD BD1 AXP(R) Variable Portfolio - Bond Fund 5.19% BD2 AXP(R) Variable Portfolio - Bond Fund 5.19 BD4 AXP(R) Variable Portfolio - Bond Fund 5.15 BD5 AXP(R) Variable Portfolio - Bond Fund 5.15 EI1 AXP(R) Variable Portfolio - Extra Income Fund 5.07 EI2 AXP(R) Variable Portfolio - Extra Income Fund 5.08 EI4 AXP(R) Variable Portfolio - Extra Income Fund 5.12 EI5 AXP(R) Variable Portfolio - Extra Income Fund 5.19 FI1 AXP(R) Variable Portfolio - Federal Income Fund 2.96 FI2 AXP(R) Variable Portfolio - Federal Income Fund 2.97 F14 AXP(R) Variable Portfolio - Federal Income Fund 2.96 F15 AXP(R) Variable Portfolio - Federal Income Fund 2.90 GB1 AXP(R) Variable Portfolio - Global Bond Fund 2.48 GB2 AXP(R) Variable Portfolio - Global Bond Fund 2.48 GB4 AXP(R) Variable Portfolio - Global Bond Fund 2.46 GB5 AXP(R) Variable Portfolio - Global Bond Fund 2.45
The yield on the subaccount's accumulation unit may fluctuate daily and does not provide a basis for determining future yields. Independent rating or statistical services or publishers or publications such as those listed below may quote subaccount performance, compare it to rankings, yields or returns, or use it in variable annuity accumulation or settlement illustrations they publish or prepare. The Bank Rate Monitor National Index, Barron's, Business Week, CDA Technologies, Donoghue's Money Market Fund Report, Financial Services Week, Financial Times, Financial World, Forbes, Fortune, Global Investor, Institutional Investor, Investor's Business Daily, Kiplinger's Personal Finance, Lipper Analytical Services, Money, Morningstar, 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. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 66 CALCULATING ANNUITY PAYOUTS THE VARIABLE ACCOUNT We do the following calculations separately for each of the subaccounts of the variable account. The separate monthly payouts, added together, make up your total variable annuity payout. INITIAL PAYOUT: To compute your first monthly payment, we: - determine the dollar value of your contract on the valuation date and then deduct any applicable premium tax; then - apply the result to the annuity table contained in the contract or another table at least as favorable. The annuity table shows the amount of the first monthly payment for each $1,000 of value which depends on factors built into the table, as described below. ANNUITY UNITS: We then convert the value of your subaccount to annuity units. To compute the number of units credited to you, we divide the first monthly payment by the annuity unit value (see below) on the valuation date. The number of units in your subaccount is fixed. The value of the units fluctuates with the performance of the underlying fund. SUBSEQUENT PAYOUTS: To compute later payouts, we multiply: - the annuity unit value on the valuation date; by - the fixed number of annuity units credited to you. ANNUITY UNIT VALUES: We originally set this value at $1 for each subaccount. To calculate later values we multiply the last annuity value by the product of: - the net investment factor; and - the neutralizing factor. The purpose of the neutralizing factor is to offset the effect of the assumed rate built into the annuity table. With an assumed investment rate of 5%, the neutralizing factor is 0.999866 for a one day valuation period. NET INVESTMENT FACTOR: We determine the net investment factor by: - adding the fund's current net asset value per share plus the per share amount of any accrued income or capital gain dividends to obtain a current adjusted net asset value per share; then - dividing that sum by the previous adjusted net asset value per share; and - subtracting the percentage factor representing the mortality and expense risk fee from the result. Because the net asset value of the fund may fluctuate, the net investment factor may be greater or less than one, and the annuity unit value may increase or decrease. You bear this investment risk in a subaccount. THE FIXED ACCOUNT We guarantee your fixed annuity payout amounts. Once calculated, your payout will remain the same and never change. To calculate your annuity payouts we: - take the value of your fixed account at the settlement date or the date you selected to begin receiving your annuity payouts; then - using an annuity table, we apply the value according to the annuity payout plan you select. The annuity payout table we use will be the one in effect at the time you choose to begin your annuity payouts. The values in the table will be equal to or greater than the table in your contract. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 67 RATING AGENCIES We receive ratings from independent rating agencies. These agencies evaluate the financial soundness and claims-paying ability of insurance companies on a number of different factors. The ratings reflect each agency's estimation of our ability to meet our contractual obligations such as making annuity payouts and paying death benefits and other distributions. As such, the ratings relate to our fixed account and not to the subaccounts. This information generally does not relate to the management or performance of the subaccounts. For detailed information on the agency ratings given to IDS Life, refer to the American Express Web site at americanexpress.com/advisors or contact your sales representative. Or view our current ratings by visiting the agency Web sites directly at: A.M. Best www.ambest.com Fitch (formerly Duff and Phelps) www.fitchratings.com Moody's www.moodys.com/insurance A.M. Best -- Rates insurance companies for their financial strength. Fitch -- Rates insurance companies for their claims-paying ability. Moody's -- Rates insurance companies for their financial strength. PRINCIPAL UNDERWRITER IDS Life serves as principal underwriter for the contract, which it offers on a continuous basis. IDS Life is registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934 as a broker-dealer and is a member of the National Association of Securities Dealers, Inc. (NASD). Our sales representatives are licensed insurance and annuity agents and are registered with the NASD as our representatives. IDS Life is ultimately controlled by American Express Company. IDS Life currently pays underwriting commissions for its role as principal underwriter. For the past three years, the aggregate dollar amount of underwriting commissions paid in its role as principal underwriter has been: 2002: $37,418,102; 2001: $41,792,624; and 2000: $56,851,815. IDS Life retains no underwriting commission from the sale of the contract. INDEPENDENT AUDITORS The financial statements appearing in this SAI have been audited by Ernst &Young LLP (220 South Sixth Street, Suite 1400, Minneapolis, MN 55402) independent auditors, as stated in their report appearing herein. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 68 REPORT OF INDEPENDENT AUDITORS THE BOARD OF DIRECTORS IDS LIFE INSURANCE COMPANY We have audited the accompanying individual statements of assets and liabilities of the segregated asset subaccounts of IDS Life Variable Account 10 - American Express Retirement Advisor Advantage(R) Variable Annuity/American Express Retirement Advisor Select(SM) Variable Annuity (comprised of subaccounts BC1, BC2, BD1, BD2, CR1, CR2, CM1, CM2, DE1, DE2, EM1, EM2, ES1, ES2, EI1, EI2, FI1, FI2, GB1, GB2, GR1, GR2, IE1, IE2, MF1, MF2, ND1, ND2, SV1, SV2, IV1, IV2, SC1, SC2, ST1, ST2, SA1, SA2, 1AC, 2AC, 1AD, 2AD, 1AB, 2AB, 1AL, 2AL, 1AI, 2AI, 1AV, 2AV, 1SR, 2SR, 1CG, 2CG, 1FG, 2FG, 1FM, 2FM, 1FO, 2FO, 1RE, 2RE, 1SI, 2SI, 1MS, 2MS, 1UE, 2UE, 1MC, 2MC, 1ID, 2ID, 1FS, 2FS, 1TC, 2TC, 1TL, 2TL, 1GT, 2GT, 1IG, 2IG, 1IP, 2IP, 1MG, 2MG, 1MD, 2MD, 1UT, 2UT, 1PE, 2PE, 1EU, 2EU, 1HS, 2HS, 1PI, 2PI, 1VS, 2VS, 1SO, 2SO, 1IT, 2IT, 1SP, 2SP, 1AA, 2AA, 1WI, 2WI, 1SG, 2SG, BC4, BC5, BD4, BD5, CR4, CR5, CM4, CM5, DE4, DE5, EM4, EM5, ES4, ES5, EI4, EI5, FI4, FI5, GB4, GB5, GR4, GR5, IE4, IE5, MF4, MF5, ND4, ND5, SV4, SV5, IV4, IV5, SC4, SC5, ST4, ST5, SA4, SA5, 4AC, 5AC, 4AD, 5AD, 4AB, 5AB, 4AL, 5AL, 4AI, 5AI, 4AV, 5AV, 4SR, 5SR, 4CG, 5CG, 4FG, 5FG, 4FM, 5FM, 4FO, 5FO, 4RE, 5RE, 4SI, 5SI, 4MS, 5MS, 4UE, 5UE, 4MC, 5MC, 4ID, 5ID, 4FS, 5FS, 4TC, 5TC, 4TL, 5TL, 4GT, 5GT, 4IG, 5IG, 4IP, 5IP, 4MG, 5MG, 4MD, 5MD, 4UT, 5UT, 4PE, 5PE, 4EU, 5EU, 4HS, 5HS, 4PI, 5PI, 4VS, 5VS, 4SO, 5SO, 4IT, 5IT, 4SP, 5SP, 4AA, 5AA, 4WI, 5WI, 4SG and 5SG) as of December 31, 2002, and the related statements of operations and changes in net assets for the periods indicated therein. These financial statements are the responsibility of the management of IDS Life Insurance Company. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned at December 31, 2002 with the affiliated and unaffiliated mutual fund managers. 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 individual financial position of the segregated asset subaccounts of IDS Life Variable Account 10 - American Express Retirement Advisor Advantage(R) Variable Annuity/American Express Retirement Advisor Select(SM) Variable Annuity at December 31, 2002, and the individual results of their operations and the changes in their net assets for the periods indicated therein, in conformity with accounting principles generally accepted in the United States. /s/ Ernst & Young LLP Minneapolis, Minnesota March 21, 2003 IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 69 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 BC1 BC2 BD1 BD2 CR1 ASSETS Investments in shares of mutual funds and portfolios: at cost $ 44,894,181 $ 38,974,238 $ 186,809,428 $ 182,366,315 $ 33,199,904 ----------------------------------------------------------------------------- at market value $ 27,624,292 $ 24,643,541 $ 188,204,547 $ 183,885,714 $ 20,453,731 Dividends receivable -- -- 797,556 778,597 -- Accounts receivable from IDS Life for contract purchase payments -- -- 106,913 43,156 74,513 Receivable from mutual funds and portfolios for share redemptions -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total assets 27,624,292 24,643,541 189,109,016 184,707,467 20,528,244 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 23,088 16,222 155,699 119,989 16,666 Contract terminations 481 17,153 -- -- -- Payable to mutual funds and portfolios for investments purchased -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total liabilities 23,569 33,375 155,699 119,989 16,666 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 27,517,040 24,503,425 188,198,925 183,649,627 20,417,812 Net assets applicable to contracts in payment period 83,683 106,741 754,392 937,851 93,766 --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 27,600,723 $ 24,610,166 $ 188,953,317 $ 184,587,478 $ 20,511,578 =========================================================================================================================== Accumulation units outstanding 44,110,404 39,018,752 159,405,103 154,529,994 34,956,260 =========================================================================================================================== Net asset value per accumulation unit $ 0.62 $ 0.63 $ 1.18 $ 1.19 $ 0.58 ===========================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) CR2 CM1 CM2 DE1 DE2 ASSETS Investments in shares of mutual funds and portfolios: at cost $ 46,348,886 $ 250,201,802 $ 280,636,092 $ 67,334,003 $ 85,854,933 ----------------------------------------------------------------------------- at market value $ 30,864,931 $ 250,182,254 $ 280,620,683 $ 55,770,767 $ 71,669,272 Dividends receivable -- 190,655 213,338 -- -- Accounts receivable from IDS Life for contract purchase payments -- -- -- 728 -- Receivable from mutual funds and portfolios for share redemptions -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total assets 30,864,931 250,372,909 280,834,021 55,771,495 71,669,272 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 20,126 208,470 184,194 45,978 46,701 Contract terminations 11,464 884,039 30,430 -- 13,682 Payable to mutual funds and portfolios for investments purchased -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total liabilities 31,590 1,092,509 214,624 45,978 60,383 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 30,647,685 249,079,091 280,380,189 55,594,588 71,185,748 Net assets applicable to contracts in payment period 185,656 201,309 239,208 130,929 423,141 --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 30,833,341 $ 249,280,400 $ 280,619,397 $ 55,725,517 $ 71,608,889 =========================================================================================================================== Accumulation units outstanding 52,123,863 228,237,367 255,250,520 67,958,228 86,442,399 =========================================================================================================================== Net asset value per accumulation unit $ 0.59 $ 1.09 $ 1.10 $ 0.82 $ 0.82 ===========================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 70 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) EM1 EM2 ES1 ES2 EI1 Assets Investments in shares of mutual funds and portfolios: at cost $ 2,838,241 $ 3,582,157 $ 10,718,199 $ 14,666,217 $ 131,224,012 ----------------------------------------------------------------------------- at market value $ 2,621,605 $ 3,223,477 $ 10,277,832 $ 13,907,541 $ 107,358,600 Dividends receivable -- -- -- -- 443,446 Accounts receivable from IDS Life for contract purchase payments -- -- 39,885 59,720 35,828 Receivable from mutual funds and portfolios for share redemptions -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total assets 2,621,605 3,223,477 10,317,717 13,967,261 107,837,874 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 2,123 2,086 8,097 8,750 88,463 Contract terminations 1,001 5,183 -- -- -- Payable to mutual funds and portfolios for investments purchased -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total liabilities 3,124 7,269 8,097 8,750 88,463 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 2,618,481 3,216,208 10,309,620 13,958,511 107,380,080 Net assets applicable to contracts in payment period -- -- -- -- 369,331 --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 2,618,481 $ 3,216,208 $ 10,309,620 $ 13,958,511 $ 107,749,411 =========================================================================================================================== Accumulation units outstanding 3,887,863 4,749,583 12,144,553 16,387,615 122,784,360 =========================================================================================================================== Net asset value per accumulation unit $ 0.67 $ 0.68 $ 0.85 $ 0.85 $ 0.87 ===========================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) EI2 FI1 FI2 GB1 GB2 Assets Investments in shares of mutual funds and portfolios: at cost $ 98,840,641 $ 135,569,400 $ 146,954,000 $ 39,515,405 $ 33,918,086 ----------------------------------------------------------------------------- at market value $ 82,528,540 $ 138,227,005 $ 149,454,247 $ 42,701,353 $ 36,564,985 Dividends receivable 341,423 334,153 361,715 86,903 74,343 Accounts receivable from IDS Life for contract purchase payments 123,401 -- 252,746 99,287 52,190 Receivable from mutual funds and portfolios for share redemptions -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total assets 82,993,364 138,561,158 150,068,708 42,887,543 36,691,518 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 53,698 113,336 96,886 35,052 23,670 Contract terminations -- 42,094 -- -- -- Payable to mutual funds and portfolios for investments purchased -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total liabilities 53,698 155,430 96,886 35,052 23,670 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 82,634,498 138,165,634 149,519,781 42,843,722 36,659,285 Net assets applicable to contracts in payment period 305,168 240,094 452,041 8,769 8,563 --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 82,939,666 $ 138,405,728 $ 149,971,822 $ 42,852,491 $ 36,667,848 =========================================================================================================================== Accumulation units outstanding 93,845,145 116,147,349 124,866,303 36,626,392 31,132,807 =========================================================================================================================== Net asset value per accumulation unit $ 0.88 $ 1.19 $ 1.20 $ 1.17 $ 1.18 ===========================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 71 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) GR1 GR2 IE1 IE2 MF1 ASSETS Investments in shares of mutual funds and portfolios: at cost $ 125,562,710 $ 136,449,771 $ 15,523,451 $ 17,063,636 $ 72,011,061 ----------------------------------------------------------------------------- at market value $ 56,288,025 $ 64,684,853 $ 10,469,583 $ 10,981,701 $ 52,147,436 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 26,509 -- 7,658 -- 141,004 Receivable from mutual funds and portfolios for share redemptions -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total assets 56,314,534 64,684,853 10,477,241 10,981,701 52,288,440 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 46,792 42,357 8,637 7,150 42,682 Contract terminations -- 9,436 -- 12,608 -- Payable to mutual funds and portfolios for investments purchased -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total liabilities 46,792 51,793 8,637 19,758 42,682 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 56,168,373 64,478,819 10,389,582 10,906,875 51,923,400 Net assets applicable to contracts in payment period 99,369 154,241 79,022 55,068 322,358 --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 56,267,742 $ 64,633,060 $ 10,468,604 $ 10,961,943 $ 52,245,758 =========================================================================================================================== Accumulation units outstanding 118,986,168 135,693,177 19,189,221 20,011,954 64,613,329 =========================================================================================================================== Net asset value per accumulation unit $ 0.47 $ 0.48 $ 0.54 $ 0.55 $ 0.80 ===========================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) MF2 ND1 ND2 SV1 SV2 ASSETS Investments in shares of mutual funds and portfolios: at cost $ 68,814,828 $ 380,077,682 $ 387,500,123 $ 28,514,825 $ 44,594,930 ----------------------------------------------------------------------------- at market value $ 52,522,647 $ 239,183,418 $ 258,058,792 $ 26,256,785 $ 40,431,530 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments -- 82,925 253,743 56,820 59,485 Receivable from mutual funds and portfolios for share redemptions -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total assets 52,522,647 239,266,343 258,312,535 26,313,605 40,491,015 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 34,259 197,907 168,239 21,113 26,066 Contract terminations 35,532 -- -- -- -- Payable to mutual funds and portfolios for investments purchased -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total liabilities 69,791 197,907 168,239 21,113 26,066 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 51,990,992 237,850,481 257,246,909 26,194,197 40,381,930 Net assets applicable to contracts in payment period 461,864 1,217,955 897,387 98,295 83,019 --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 52,452,856 $ 239,068,436 $ 258,144,296 $ 26,292,492 $ 40,464,949 =========================================================================================================================== Accumulation units outstanding 64,272,980 347,841,415 373,715,274 28,099,482 43,198,794 =========================================================================================================================== Net asset value per accumulation unit $ 0.81 $ 0.68 $ 0.69 $ 0.93 $ 0.93 ===========================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 72 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) IV1 IV2 SC1 SC2 ST1 ASSETS Investments in shares of mutual funds and portfolios: at cost $ 51,813,253 $ 50,181,514 $ 31,848,399 $ 31,721,698 $ 2,492,466 ----------------------------------------------------------------------------- at market value $ 39,375,603 $ 39,381,275 $ 25,876,974 $ 25,963,763 $ 2,212,313 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 61,413 53,940 42,002 5,863 183 Receivable from mutual funds and portfolios for share redemptions -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total assets 39,437,016 39,435,215 25,918,976 25,969,626 2,212,496 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 32,386 25,460 21,448 16,933 1,767 Contract terminations -- -- -- -- -- Payable to mutual funds and portfolios for investments purchased -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total liabilities 32,386 25,460 21,448 16,933 1,767 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 39,239,097 39,304,239 25,886,139 25,935,159 2,207,120 Net assets applicable to contracts in payment period 165,533 105,516 11,389 17,534 3,609 --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 39,404,630 $ 39,409,755 $ 25,897,528 $ 25,952,693 $ 2,210,729 =========================================================================================================================== Accumulation units outstanding 65,010,707 64,770,944 29,341,081 29,202,084 2,921,226 =========================================================================================================================== Net asset value per accumulation unit $ 0.60 $ 0.61 $ 0.88 $ 0.89 $ 0.76 ===========================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) ST2 SA1 SA2 1AC 2AC ASSETS Investments in shares of mutual funds and portfolios: at cost $ 2,810,174 $ 92,571,548 $ 92,185,325 $ 6,653,399 $ 9,695,267 ----------------------------------------------------------------------------- at market value $ 2,493,076 $ 30,137,616 $ 32,394,046 $ 5,561,808 $ 8,275,892 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments -- 2,054 -- 17,678 23,756 Receivable from mutual funds and portfolios for share redemptions -- -- -- 4,428 5,251 --------------------------------------------------------------------------------------------------------------------------- Total assets 2,493,076 30,139,670 32,394,046 5,583,914 8,304,899 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 1,572 25,175 21,322 4,428 5,251 Contract terminations 639 -- 3,615 -- -- Payable to mutual funds and portfolios for investments purchased -- -- -- 17,678 23,756 --------------------------------------------------------------------------------------------------------------------------- Total liabilities 2,211 25,175 24,937 22,106 29,007 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 2,490,865 30,013,975 32,280,715 5,561,808 8,275,892 Net assets applicable to contracts in payment period -- 100,520 88,394 -- -- --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 2,490,865 $ 30,114,495 $ 32,369,109 $ 5,561,808 $ 8,275,892 =========================================================================================================================== Accumulation units outstanding 3,287,672 55,182,791 58,958,487 7,624,114 11,313,117 =========================================================================================================================== Net asset value per accumulation unit $ 0.76 $ 0.54 $ 0.55 $ 0.73 $ 0.73 ===========================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 73 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 1AD 2AD 1AB 2AB 1AL ASSETS Investments in shares of mutual funds and portfolios: at cost $ 4,247,387 $ 6,231,600 $ 8,698,310 $ 11,916,496 $ 25,779,034 ----------------------------------------------------------------------------- at market value $ 3,686,899 $ 5,335,521 $ 8,490,407 $ 11,302,907 $ 22,175,676 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 1,064 2,157 35,556 13,736 33,576 Receivable from mutual funds and portfolios for share redemptions 2,973 3,450 6,787 7,110 17,813 --------------------------------------------------------------------------------------------------------------------------- Total assets 3,690,936 5,341,128 8,532,750 11,323,753 22,227,065 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 2,973 3,450 6,787 7,110 17,813 Contract terminations -- -- -- -- -- Payable to mutual funds and portfolios for investments purchased 1,064 2,157 35,556 13,736 33,576 --------------------------------------------------------------------------------------------------------------------------- Total liabilities 4,037 5,607 42,343 20,846 51,389 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 3,664,297 5,335,521 8,485,789 11,302,907 22,106,301 Net assets applicable to contracts in payment period 22,602 -- 4,618 -- 69,375 --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 3,686,899 $ 5,335,521 $ 8,490,407 $ 11,302,907 $ 22,175,676 =========================================================================================================================== Accumulation units outstanding 4,808,019 6,981,444 9,269,912 12,313,462 29,770,134 =========================================================================================================================== Net asset value per accumulation unit $ 0.76 $ 0.76 $ 0.92 $ 0.92 $ 0.74 ===========================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 2AL 1AI 2AI 1AV 2AV ASSETS Investments in shares of mutual funds and portfolios: at cost $ 37,415,566 $ 6,903,901 $ 9,616,957 $ 30,149,995 $ 41,713,776 ----------------------------------------------------------------------------- at market value $ 32,201,389 $ 6,016,733 $ 8,359,833 $ 27,549,269 $ 38,114,493 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 93,926 40,005 6,357 64,213 54,282 Receivable from mutual funds and portfolios for share redemptions 20,578 4,769 5,356 22,244 24,470 --------------------------------------------------------------------------------------------------------------------------- Total assets 32,315,893 6,061,507 8,371,546 27,635,726 38,193,245 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 20,578 4,769 5,356 22,244 24,470 Contract terminations -- -- -- -- -- Payable to mutual funds and portfolios for investments purchased 93,926 40,005 6,357 64,213 54,282 --------------------------------------------------------------------------------------------------------------------------- Total liabilities 114,504 44,774 11,713 86,457 78,752 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 32,144,038 6,008,102 8,359,833 27,289,194 38,100,718 Net assets applicable to contracts in payment period 57,351 8,631 -- 260,075 13,775 --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 32,201,389 $ 6,016,733 $ 8,359,833 $ 27,549,269 $ 38,114,493 =========================================================================================================================== Accumulation units outstanding 43,189,143 8,200,172 11,378,093 30,522,982 42,497,368 =========================================================================================================================== Net asset value per accumulation unit $ 0.74 $ 0.73 $ 0.73 $ 0.89 $ 0.90 ===========================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 74 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 1SR 2SR 1CG 2CG 1FG ASSETS Investments in shares of mutual funds and portfolios: at cost $ 9,163,350 $ 8,750,071 $ 3,764,970 $ 5,450,692 $ 33,079,310 ----------------------------------------------------------------------------- at market value $ 7,586,830 $ 7,427,146 $ 3,277,595 $ 4,743,213 $ 30,006,142 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 996 5,032 17 37,045 86,017 Receivable from mutual funds and portfolios for share redemptions 6,263 4,765 2,686 3,030 24,145 --------------------------------------------------------------------------------------------------------------------------- Total assets 7,594,089 7,436,943 3,280,298 4,783,288 30,116,304 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 6,263 4,765 2,686 3,030 24,145 Contract terminations -- -- -- -- -- Payable to mutual funds and portfolios for investments purchased 996 5,032 17 37,045 86,017 --------------------------------------------------------------------------------------------------------------------------- Total liabilities 7,259 9,797 2,703 40,075 110,162 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 7,586,830 7,385,249 3,233,983 4,743,213 29,850,379 Net assets applicable to contracts in payment period -- 41,897 43,612 -- 155,763 --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 7,586,830 $ 7,427,146 $ 3,277,595 $ 4,743,213 $ 30,006,142 =========================================================================================================================== Accumulation units outstanding 9,832,066 9,519,993 4,440,345 6,494,446 36,319,587 =========================================================================================================================== Net asset value per accumulation unit $ 0.77 $ 0.78 $ 0.73 $ 0.73 $ 0.82 ===========================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 2FG 1FM 2FM 1FO 2FO ASSETS Investments in shares of mutual funds and portfolios: at cost $ 43,532,647 $ 34,833,838 $ 49,869,334 $ 8,851,728 $ 11,356,972 ----------------------------------------------------------------------------- at market value $ 40,221,927 $ 32,954,935 $ 46,915,811 $ 7,632,288 $ 9,829,072 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 60,825 94,541 128,841 28,992 3,852 Receivable from mutual funds and portfolios for share redemptions 25,548 26,383 29,816 6,127 6,345 --------------------------------------------------------------------------------------------------------------------------- Total assets 40,308,300 33,075,859 47,074,468 7,667,407 9,839,269 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 25,548 26,383 29,816 6,127 6,345 Contract terminations -- -- -- -- -- Payable to mutual funds and portfolios for investments purchased 60,825 94,541 128,841 28,992 3,852 --------------------------------------------------------------------------------------------------------------------------- Total liabilities 86,373 120,924 158,657 35,119 10,197 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 40,125,330 32,908,339 46,850,864 7,531,856 9,816,231 Net assets applicable to contracts in payment period 96,597 46,596 64,947 100,432 12,841 --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 40,221,927 $ 32,954,935 $ 46,915,811 $ 7,632,288 $ 9,829,072 =========================================================================================================================== Accumulation units outstanding 48,686,158 35,541,388 50,457,516 10,123,150 13,156,775 =========================================================================================================================== Net asset value per accumulation unit $ 0.82 $ 0.93 $ 0.93 $ 0.74 $ 0.75 ===========================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 75 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 1RE 2RE 1SI 2SI 1MS ASSETS Investments in shares of mutual funds and portfolios: at cost $ 59,985,284 $ 80,892,935 $ 30,161,937 $ 39,056,521 $ 8,268,164 ----------------------------------------------------------------------------- at market value $ 60,236,914 $ 80,774,443 $ 28,428,787 $ 36,181,649 $ 7,710,925 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 105,798 90,108 47,536 55,021 31,468 Receivable from mutual funds and portfolios for share redemptions 49,648 52,521 23,311 23,460 6,124 --------------------------------------------------------------------------------------------------------------------------- Total assets 60,392,360 80,917,072 28,499,634 36,260,130 7,748,517 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 49,648 52,521 23,311 23,460 6,124 Contract terminations -- -- -- -- -- Payable to mutual funds and portfolios for investments purchased 105,798 90,108 47,536 55,021 31,468 --------------------------------------------------------------------------------------------------------------------------- Total liabilities 155,446 142,629 70,847 78,481 37,592 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 60,153,053 80,550,785 28,417,857 36,124,390 7,710,925 Net assets applicable to contracts in payment period 83,861 223,658 10,930 57,259 -- --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 60,236,914 $ 80,774,443 $ 28,428,787 $ 36,181,649 $ 7,710,925 =========================================================================================================================== Accumulation units outstanding 44,591,201 59,317,320 23,552,851 29,742,583 9,150,582 =========================================================================================================================== Net asset value per accumulation unit $ 1.35 $ 1.36 $ 1.21 $ 1.21 $ 0.84 ===========================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 2MS 1UE 2UE 1MC 2MC ASSETS Investments in shares of mutual funds and portfolios: at cost $ 9,937,516 $ 75,101,887 $ 69,913,880 $ 62,803,045 $ 75,794,397 ----------------------------------------------------------------------------- at market value $ 9,246,262 $ 50,351,755 $ 48,248,557 $ 61,488,264 $ 72,845,282 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 13,074 -- -- 75,990 104,297 Receivable from mutual funds and portfolios for share redemptions 5,832 81,323 88,473 50,314 47,194 --------------------------------------------------------------------------------------------------------------------------- Total assets 9,265,168 50,433,078 48,337,030 61,614,568 72,996,773 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 5,832 41,956 31,546 50,314 47,194 Contract terminations -- 39,367 56,927 -- -- Payable to mutual funds and portfolios for investments purchased 13,074 -- -- 75,990 104,297 --------------------------------------------------------------------------------------------------------------------------- Total liabilities 18,906 81,323 88,473 126,304 151,491 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 9,246,262 50,201,518 48,078,069 61,311,816 72,805,558 Net assets applicable to contracts in payment period -- 150,237 170,488 176,448 39,724 --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 9,246,262 $ 50,351,755 $ 48,248,557 $ 61,488,264 $ 72,845,282 =========================================================================================================================== Accumulation units outstanding 10,942,213 75,488,735 71,819,842 47,538,674 56,079,335 =========================================================================================================================== Net asset value per accumulation unit $ 0.85 $ 0.67 $ 0.67 $ 1.29 $ 1.30 ===========================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 76 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 1ID 2ID 1FS 2FS 1TC ASSETS Investments in shares of mutual funds and portfolios: at cost $ 3,886,350 $ 5,593,896 $ 3,397,616 $ 5,120,695 $ 2,031,919 ----------------------------------------------------------------------------- at market value $ 3,135,201 $ 4,478,964 $ 3,026,234 $ 4,558,713 $ 1,360,238 Dividends receivable -- -- 19,900 29,918 -- Accounts receivable from IDS Life for contract purchase payments 3,438 2,115 -- 5,188 198 Receivable from mutual funds and portfolios for share redemptions 2,573 2,901 4,444 2,934 1,113 --------------------------------------------------------------------------------------------------------------------------- Total assets 3,141,212 4,483,980 3,050,578 4,596,753 1,361,549 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 2,573 2,901 2,433 2,934 1,113 Contract terminations -- -- 2,011 -- -- Payable to mutual funds and portfolios for investments purchased 3,438 2,115 19,900 35,106 198 --------------------------------------------------------------------------------------------------------------------------- Total liabilities 6,011 5,016 24,344 38,040 1,311 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 3,135,201 4,469,914 3,026,234 4,558,713 1,360,238 Net assets applicable to contracts in payment period -- 9,050 -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 3,135,201 $ 4,478,964 $ 3,026,234 $ 4,558,713 $ 1,360,238 =========================================================================================================================== Accumulation units outstanding 4,844,768 6,886,517 3,709,075 5,571,814 2,844,559 =========================================================================================================================== Net asset value per accumulation unit $ 0.65 $ 0.65 $ 0.82 $ 0.82 $ 0.48 ===========================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 2TC 1TL 2TL 1GT 2GT ASSETS Investments in shares of mutual funds and portfolios: at cost $ 2,496,585 $ 979,229 $ 1,049,299 $ 23,373,212 $ 25,833,754 ----------------------------------------------------------------------------- at market value $ 1,807,238 $ 657,275 $ 796,289 $ 7,821,904 $ 9,277,408 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 2,683 932 -- 31,946 -- Receivable from mutual funds and portfolios for share redemptions 1,175 517 829 6,557 8,394 --------------------------------------------------------------------------------------------------------------------------- Total assets 1,811,096 658,724 797,118 7,860,407 9,285,802 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 1,175 517 509 6,557 6,131 Contract terminations -- -- 320 -- 2,263 Payable to mutual funds and portfolios for investments purchased 2,683 932 -- 31,946 -- --------------------------------------------------------------------------------------------------------------------------- Total liabilities 3,858 1,449 829 38,503 8,394 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 1,807,238 657,275 796,289 7,775,490 9,275,069 Net assets applicable to contracts in payment period -- -- -- 46,414 2,339 --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 1,807,238 $ 657,275 $ 796,289 $ 7,821,904 $ 9,277,408 =========================================================================================================================== Accumulation units outstanding 3,768,877 1,604,429 1,938,204 31,353,669 37,199,522 =========================================================================================================================== Net asset value per accumulation unit $ 0.48 $ 0.41 $ 0.41 $ 0.25 $ 0.25 ===========================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 77 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 1IG 2IG 1IP 2IP 1MG ASSETS Investments in shares of mutual funds and portfolios: at cost $ 55,313,155 $ 57,962,212 $ 23,886,769 $ 23,721,864 $ 48,664,041 ----------------------------------------------------------------------------- at market value $ 33,095,580 $ 36,450,370 $ 18,542,571 $ 19,063,340 $ 30,233,795 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 2,711 10,249 55,147 60,937 33,097 Receivable from mutual funds and portfolios for share redemptions 27,525 23,872 15,054 12,262 25,068 --------------------------------------------------------------------------------------------------------------------------- Total assets 33,125,816 36,484,491 18,612,772 19,136,539 30,291,960 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 27,525 23,872 15,054 12,262 25,068 Contract terminations -- -- -- -- -- Payable to mutual funds and portfolios for investments purchased 2,711 10,249 55,147 60,937 33,097 --------------------------------------------------------------------------------------------------------------------------- Total liabilities 30,236 34,121 70,201 73,199 58,165 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 33,019,050 36,368,040 18,404,290 18,961,181 30,192,889 Net assets applicable to contracts in payment period 76,530 82,330 138,281 102,159 40,906 --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 33,095,580 $ 36,450,370 $ 18,542,571 $ 19,063,340 $ 30,233,795 =========================================================================================================================== Accumulation units outstanding 74,111,345 81,189,171 28,853,362 29,531,927 62,662,560 =========================================================================================================================== Net asset value per accumulation unit $ 0.45 $ 0.45 $ 0.64 $ 0.64 $ 0.48 ===========================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 2MG 1MD 2MD 1UT 2UT ASSETS Investments in shares of mutual funds and portfolios: at cost $ 52,628,771 $ 46,522,104 $ 50,668,754 $ 5,700,977 $ 8,287,983 ----------------------------------------------------------------------------- at market value $ 33,834,025 $ 32,375,226 $ 36,167,112 $ 4,853,128 $ 7,194,077 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments -- 54,940 44,170 -- 6,916 Receivable from mutual funds and portfolios for share redemptions 77,755 26,782 23,439 4,141 4,637 --------------------------------------------------------------------------------------------------------------------------- Total assets 33,911,780 32,456,948 36,234,721 4,857,269 7,205,630 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 22,204 26,782 23,439 3,910 4,637 Contract terminations 55,551 -- -- 231 -- Payable to mutual funds and portfolios for investments purchased -- 54,940 44,170 -- 6,916 --------------------------------------------------------------------------------------------------------------------------- Total liabilities 77,755 81,722 67,609 4,141 11,553 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 33,703,372 32,360,327 36,123,785 4,826,458 7,194,077 Net assets applicable to contracts in payment period 130,653 14,899 43,327 26,670 -- --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 33,834,025 $ 32,375,226 $ 36,167,112 $ 4,853,128 $ 7,194,077 =========================================================================================================================== Accumulation units outstanding 69,576,415 53,383,319 59,272,471 7,093,279 10,543,457 =========================================================================================================================== Net asset value per accumulation unit $ 0.48 $ 0.61 $ 0.61 $ 0.68 $ 0.68 ===========================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 78 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 1PE 2PE 1EU 2EU 1HS ASSETS Investments in shares of mutual funds and portfolios: at cost $ 6,435,296 $ 10,606,380 $ 605,083 $ 1,150,117 $ 5,842,745 ----------------------------------------------------------------------------- at market value $ 5,839,598 $ 9,586,813 $ 546,622 $ 1,029,862 $ 5,089,749 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 73,813 28,650 -- 25,742 -- Receivable from mutual funds and portfolios for share redemptions 4,592 6,038 413 628 9,007 --------------------------------------------------------------------------------------------------------------------------- Total assets 5,918,003 9,621,501 547,035 1,056,232 5,098,756 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 4,592 6,038 413 628 4,072 Contract terminations -- -- -- -- 4,935 Payable to mutual funds and portfolios for investments purchased 73,813 28,650 -- 25,742 -- --------------------------------------------------------------------------------------------------------------------------- Total liabilities 78,405 34,688 413 26,370 9,007 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 5,828,739 9,467,630 546,622 1,029,862 5,089,749 Net assets applicable to contracts in payment period 10,859 119,183 -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 5,839,598 $ 9,586,813 $ 546,622 $ 1,029,862 $ 5,089,749 =========================================================================================================================== Accumulation units outstanding 7,193,177 11,651,377 698,369 1,312,050 6,574,222 =========================================================================================================================== Net asset value per accumulation unit $ 0.81 $ 0.81 $ 0.78 $ 0.78 $ 0.77 ===========================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 2HS 1PI 2PI 1VS 2VS ASSETS Investments in shares of mutual funds and portfolios: at cost $ 9,982,943 $ 13,100,472 $ 18,098,750 $ 104,881,721 $ 96,774,996 ----------------------------------------------------------------------------- at market value $ 8,862,644 $ 11,848,515 $ 16,304,433 $ 43,207,781 $ 42,343,162 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 29,618 36,363 50,960 -- -- Receivable from mutual funds and portfolios for share redemptions 5,665 9,397 10,269 58,530 37,331 --------------------------------------------------------------------------------------------------------------------------- Total assets 8,897,927 11,894,275 16,365,662 43,266,311 42,380,493 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 5,665 9,397 10,269 36,338 27,890 Contract terminations -- -- -- 22,192 9,441 Payable to mutual funds and portfolios for investments purchased 29,618 36,363 50,960 -- -- --------------------------------------------------------------------------------------------------------------------------- Total liabilities 35,283 45,760 61,229 58,530 37,331 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 8,862,644 11,848,515 16,304,433 43,094,099 42,265,844 Net assets applicable to contracts in payment period -- -- -- 113,682 77,318 --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 8,862,644 $ 11,848,515 $ 16,304,433 $ 43,207,781 $ 42,343,162 =========================================================================================================================== Accumulation units outstanding 11,415,725 15,137,852 20,772,705 73,929,757 72,032,593 =========================================================================================================================== Net asset value per accumulation unit $ 0.78 $ 0.78 $ 0.78 $ 0.58 $ 0.59 ===========================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 79 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 1SO 2SO 1IT 2IT 1SP ASSETS Investments in shares of mutual funds and portfolios: at cost $ 15,655,996 $ 22,592,562 $ 56,318,783 $ 54,627,197 $ 77,745,653 ----------------------------------------------------------------------------- at market value $ 12,297,078 $ 18,291,026 $ 30,548,546 $ 31,617,592 $ 69,472,375 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 22,576 15,060 83,364 95,115 43,654 Receivable from mutual funds and portfolios for share redemptions 10,096 11,863 25,291 20,560 57,328 --------------------------------------------------------------------------------------------------------------------------- Total assets 12,329,750 18,317,949 30,657,201 31,733,267 69,573,357 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 10,096 11,863 25,291 20,560 57,328 Contract terminations -- -- -- -- -- Payable to mutual funds and portfolios for investments purchased 22,576 15,060 83,364 95,115 43,654 --------------------------------------------------------------------------------------------------------------------------- Total liabilities 32,672 26,923 108,655 115,675 100,982 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 12,276,822 18,252,232 30,456,523 31,560,711 69,306,345 Net assets applicable to contracts in payment period 20,256 38,794 92,023 56,881 166,030 --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 12,297,078 $ 18,291,026 $ 30,548,546 $ 31,617,592 $ 69,472,375 =========================================================================================================================== Accumulation units outstanding 17,129,844 25,396,635 42,308,837 43,554,002 72,852,973 =========================================================================================================================== Net asset value per accumulation unit $ 0.72 $ 0.72 $ 0.72 $ 0.72 $ 0.95 ===========================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 2SP 1AA 2AA 1WI 2WI ASSETS Investments in shares of mutual funds and portfolios: at cost $ 83,474,024 $ 10,976,894 $ 13,868,125 $ 2,254,765 $ 3,811,476 ----------------------------------------------------------------------------- at market value $ 75,035,838 $ 9,908,258 $ 12,460,852 $ 1,908,840 $ 3,239,317 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 20,362 13,874 26,504 4,998 3,029 Receivable from mutual funds and portfolios for share redemptions 48,787 7,988 7,902 1,527 2,088 --------------------------------------------------------------------------------------------------------------------------- Total assets 75,104,987 9,930,120 12,495,258 1,915,365 3,244,434 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 48,787 7,988 7,902 1,527 2,088 Contract terminations -- -- -- -- -- Payable to mutual funds and portfolios for investments purchased 20,362 13,874 26,504 4,998 3,029 --------------------------------------------------------------------------------------------------------------------------- Total liabilities 69,149 21,862 34,406 6,525 5,117 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 74,993,825 9,908,258 12,460,852 1,908,840 3,239,317 Net assets applicable to contracts in payment period 42,013 -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 75,035,838 $ 9,908,258 $ 12,460,852 $ 1,908,840 $ 3,239,317 =========================================================================================================================== Accumulation units outstanding 78,311,083 11,859,155 14,863,809 2,780,513 4,702,816 =========================================================================================================================== Net asset value per accumulation unit $ 0.96 $ 0.84 $ 0.84 $ 0.69 $ 0.69 ===========================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 80 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 1SG 2SG BC4 BC5 BD4 ASSETS Investments in shares of mutual funds and portfolios: at cost $ 5,719,111 $ 7,417,602 $ 44,418 $ 108,169 $ 6,076,146 ----------------------------------------------------------------------------- at market value $ 4,402,172 $ 5,765,820 $ 40,289 $ 99,471 $ 6,165,877 Dividends receivable -- -- -- -- 25,479 Accounts receivable from IDS Life for contract purchase payments 15,180 9,042 -- -- 4,725 Receivable from mutual funds and portfolios for share redemptions 3,596 3,735 -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total assets 4,420,948 5,778,597 40,289 99,471 6,196,081 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 3,596 3,735 41 80 6,290 Contract terminations -- -- 9,381 -- -- Payable to mutual funds and portfolios for investments purchased 15,180 9,042 -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total liabilities 18,776 12,777 9,422 80 6,290 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 4,402,172 5,765,820 30,867 99,391 6,189,791 Net assets applicable to contracts in payment period -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 4,402,172 $ 5,765,820 $ 30,867 $ 99,391 $ 6,189,791 =========================================================================================================================== Accumulation units outstanding 7,654,643 9,992,253 39,130 125,862 5,970,662 =========================================================================================================================== Net asset value per accumulation unit $ 0.58 $ 0.58 $ 0.79 $ 0.79 $ 1.04 ===========================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) BD5 CR4 CR5 CM4 CM5 ASSETS Investments in shares of mutual funds and portfolios: at cost $ 6,598,180 $ 82,279 $ 232,444 $ 12,161,192 $ 12,331,021 ----------------------------------------------------------------------------- at market value $ 6,700,438 $ 77,529 $ 217,579 $ 12,161,192 $ 12,331,021 Dividends receivable 28,024 -- -- 8,569 8,962 Accounts receivable from IDS Life for contract purchase payments 7,783 -- -- -- 129,062 Receivable from mutual funds and portfolios for share redemptions -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total assets 6,736,245 77,529 217,579 12,169,761 12,469,045 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 5,757 77 191 11,853 10,299 Contract terminations -- -- -- 24,867 -- Payable to mutual funds and portfolios for investments purchased -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total liabilities 5,757 77 191 36,720 10,299 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 6,730,488 77,452 217,388 12,133,041 12,458,746 Net assets applicable to contracts in payment period -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 6,730,488 $ 77,452 $ 217,388 $ 12,133,041 $ 12,458,746 =========================================================================================================================== Accumulation units outstanding 6,480,849 95,879 291,408 12,148,193 12,452,405 =========================================================================================================================== Net asset value per accumulation unit $ 1.04 $ 0.81 $ 0.75 $ 1.00 $ 1.00 ===========================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 81 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) DE4 DE5 EM4 EM5 ES4 ASSETS Investments in shares of mutual funds and portfolios: at cost $ 1,963,495 $ 2,848,038 $ 118,103 $ 201,724 $ 808,771 ----------------------------------------------------------------------------- at market value $ 1,703,074 $ 2,580,130 $ 108,744 $ 193,835 $ 780,439 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 81 6,897 -- 4,463 -- Receivable from mutual funds and portfolios for share redemptions -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total assets 1,703,155 2,587,027 108,744 198,298 780,439 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 1,728 2,201 110 164 755 Contract terminations -- -- -- -- -- Payable to mutual funds and portfolios for investments purchased -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total liabilities 1,728 2,201 110 164 755 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 1,701,427 2,584,826 108,634 198,134 779,684 Net assets applicable to contracts in payment period -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 1,701,427 $ 2,584,826 $ 108,634 $ 198,134 $ 779,684 =========================================================================================================================== Accumulation units outstanding 2,058,283 3,100,817 120,719 219,785 888,768 =========================================================================================================================== Net asset value per accumulation unit $ 0.83 $ 0.83 $ 0.90 $ 0.90 $ 0.88 ===========================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) ES5 EI4 EI5 FI4 FI5 ASSETS Investments in shares of mutual funds and portfolios: at cost $ 1,042,718 $ 4,098,535 $ 3,811,173 $ 7,884,136 $ 6,300,038 ----------------------------------------------------------------------------- at market value $ 1,013,785 $ 3,968,843 $ 3,684,086 $ 7,942,833 $ 6,337,627 Dividends receivable -- 16,124 15,097 19,209 14,867 Accounts receivable from IDS Life for contract purchase payments 507 5,605 4,767 -- 10,467 Receivable from mutual funds and portfolios for share redemptions -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total assets 1,014,292 3,990,572 3,703,950 7,962,042 6,362,961 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 808 4,001 3,056 8,228 5,317 Contract terminations -- -- -- 7,723 -- Payable to mutual funds and portfolios for investments purchased -- -- -- -- -- Total liabilities 808 4,001 3,056 15,951 5,317 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 1,013,484 3,986,571 3,700,894 7,946,091 6,357,644 Net assets applicable to contracts in payment period -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 1,013,484 $ 3,986,571 $ 3,700,894 $ 7,946,091 $ 6,357,644 =========================================================================================================================== Accumulation units outstanding 1,153,261 4,269,455 3,956,584 7,645,777 6,107,066 =========================================================================================================================== Net asset value per accumulation unit $ 0.88 $ 0.93 $ 0.94 $ 1.04 $ 1.04 ===========================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 82 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) GB4 GB5 GR4 GR5 IE4 ASSETS Investments in shares of mutual funds and portfolios: at cost $ 1,650,153 $ 1,145,279 $ 328,256 $ 787,713 $ 93,898 ----------------------------------------------------------------------------- at market value $ 1,750,138 $ 1,202,388 $ 299,756 $ 742,955 $ 89,510 Dividends receivable 3,499 2,367 -- -- -- Accounts receivable from IDS Life for contract purchase payments -- 7,023 150 2,731 -- Receivable from mutual funds and portfolios for share redemptions -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total assets 1,753,637 1,211,778 299,906 745,686 89,510 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 1,796 1,016 290 581 92 Contract terminations 10,308 -- -- -- -- Payable to mutual funds and portfolios for investments purchased -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total liabilities 12,104 1,016 290 581 92 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 1,741,533 1,210,762 299,616 745,105 89,418 Net assets applicable to contracts in payment period -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 1,741,533 $ 1,210,762 $ 299,616 $ 745,105 $ 89,418 =========================================================================================================================== Accumulation units outstanding 1,528,873 1,060,493 391,907 972,984 $ 105,028 =========================================================================================================================== Net asset value per accumulation unit $ 1.14 $ 1.14 $ 0.76 $ 0.77 $ 0.85 ===========================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) IE5 MF4 MF5 ND4 ND5 ASSETS Investments in shares of mutual funds and portfolios: at cost $ 50,649 $ 438,212 $ 499,161 $ 4,572,762 $ 5,731,374 ----------------------------------------------------------------------------- at market value $ 47,197 $ 414,396 $ 477,052 $ 4,048,774 $ 5,209,759 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments -- -- -- -- 49,924 Receivable from mutual funds and portfolios for share redemptions -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total assets 47,197 414,396 477,052 4,048,774 5,259,683 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 41 427 378 4,059 4,341 Contract terminations -- -- -- 9,773 -- Payable to mutual funds and portfolios for investments purchased -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total liabilities 41 427 378 13,832 4,341 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 47,156 413,969 476,674 4,034,942 5,255,342 Net assets applicable to contracts in payment period -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 47,156 $ 413,969 $ 476,674 $ 4,034,942 $ 5,255,342 =========================================================================================================================== Accumulation units outstanding 55,372 461,790 530,719 5,049,205 6,564,582 =========================================================================================================================== Net asset value per accumulation unit $ 0.85 $ 0.90 $ 0.90 $ 0.80 $ 0.80 ===========================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 83 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) SV4 SV5 IV4 IV5 SC4 ASSETS Investments in shares of mutual funds and portfolios: at cost $ 2,665,438 $ 3,176,301 $ 1,444,395 $ 1,564,389 $ 464,658 ----------------------------------------------------------------------------- at market value $ 2,360,419 $ 2,921,688 $ 1,311,659 $ 1,447,396 $ 433,638 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments -- 8,320 -- 58,883 5,663 Receivable from mutual funds and portfolios for share redemptions -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total assets 2,360,419 2,930,008 1,311,659 1,506,279 439,301 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 2,418 2,453 1,344 1,230 395 Contract terminations 9,137 -- -- -- -- Payable to mutual funds and portfolios for investments purchased -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total liabilities 11,555 2,453 1,344 1,230 395 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 2,348,864 2,927,555 1,310,315 1,505,049 438,906 Net assets applicable to contracts in payment period -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 2,348,864 $ 2,927,555 $ 1,310,315 $ 1,505,049 $ 438,906 =========================================================================================================================== Accumulation units outstanding 2,664,887 3,315,597 1,647,721 1,889,437 516,328 =========================================================================================================================== Net asset value per accumulation unit $ 0.88 $ 0.88 $ 0.80 $ 0.80 $ 0.85 ===========================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) SC5 ST4 ST5 SA4 SA5 ASSETS Investments in shares of mutual funds and portfolios: at cost $ 811,322 $ 113,556 $ 168,535 $ 135,093 $ 92,939 ----------------------------------------------------------------------------- at market value $ 767,701 $ 100,169 $ 156,775 $ 115,788 $ 82,316 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments -- -- -- -- 56 Receivable from mutual funds and portfolios for share redemptions -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total assets 767,701 100,169 156,775 115,788 82,372 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 621 96 128 123 67 Contract terminations 369 -- -- -- -- Payable to mutual funds and portfolios for investments purchased -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total liabilities 990 96 128 123 67 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 766,711 100,073 156,647 115,665 82,305 Net assets applicable to contracts in payment period -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 766,711 $ 100,073 $ 156,647 $ 115,665 $ 82,305 =========================================================================================================================== Accumulation units outstanding 900,351 125,344 195,862 160,658 114,119 =========================================================================================================================== Net asset value per accumulation unit $ 0.85 $ 0.80 $ 0.80 $ 0.72 $ 0.72 ===========================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 84 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 4AC 5AC 4AD 5AD 4AB ASSETS Investments in shares of mutual funds and portfolios: at cost $ 383,844 $ 325,633 $ 420,235 $ 479,472 $ 1,391,549 ----------------------------------------------------------------------------- at market value $ 347,402 $ 295,635 $ 371,618 $ 444,030 $ 1,303,572 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 5,285 336 -- 86 -- Receivable from mutual funds and portfolios for share redemptions 314 235 373 373 1,440 --------------------------------------------------------------------------------------------------------------------------- Total assets 353,001 296,206 371,991 444,489 1,305,012 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 314 235 373 373 1,306 Contract terminations -- -- -- -- 134 Payable to mutual funds and portfolios for investments purchased 5,285 336 -- 86 -- --------------------------------------------------------------------------------------------------------------------------- Total liabilities 5,599 571 373 459 1,440 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 347,402 295,635 371,618 444,030 1,303,572 Net assets applicable to contracts in payment period -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 347,402 $ 295,635 $ 371,618 $ 444,030 $ 1,303,572 =========================================================================================================================== Accumulation units outstanding 446,713 379,463 463,048 552,297 1,370,961 =========================================================================================================================== Net asset value per accumulation unit $ 0.78 $ 0.78 $ 0.80 $ 0.80 $ 0.95 ===========================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 5AB 4AL 5AL 4AI 5AI ASSETS Investments in shares of mutual funds and portfolios: at cost $ 1,395,991 $ 3,772,848 $ 3,153,427 $ 426,280 $ 876,656 ----------------------------------------------------------------------------- at market value $ 1,349,934 $ 3,285,211 $ 2,831,362 $ 379,813 $ 802,043 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 3,229 264 5,064 -- 338 Receivable from mutual funds and portfolios for share redemptions 1,144 3,387 2,390 9,919 641 --------------------------------------------------------------------------------------------------------------------------- Total assets 1,354,307 3,288,862 2,838,816 389,732 803,022 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 1,144 3,387 2,390 396 641 Contract terminations -- -- -- 9,523 -- Payable to mutual funds and portfolios for investments purchased 3,229 264 5,064 -- 338 --------------------------------------------------------------------------------------------------------------------------- Total liabilities 4,373 3,651 7,454 9,919 979 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 1,349,934 3,285,211 2,831,362 379,813 802,043 Net assets applicable to contracts in payment period -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 1,349,934 $ 3,285,211 $ 2,831,362 $ 379,813 $ 802,043 =========================================================================================================================== Accumulation units outstanding 1,417,103 4,071,558 3,502,781 448,082 944,495 =========================================================================================================================== Net asset value per accumulation unit $ 0.95 $ 0.81 $ 0.81 $ 0.85 $ 0.85 ===========================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 85 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 4AV 5AV 4SR 5SR 4CG ASSETS Investments in shares of mutual funds and portfolios: at cost $ 2,307,842 $ 2,674,192 $ 196,096 $ 194,578 $ 479,377 ----------------------------------------------------------------------------- at market value $ 2,126,714 $ 2,522,546 $ 183,196 $ 185,796 $ 421,860 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments -- 10,099 -- -- 6,245 Receivable from mutual funds and portfolios for share redemptions 6,389 2,140 188 150 432 --------------------------------------------------------------------------------------------------------------------------- Total assets 2,133,103 2,534,785 183,384 185,946 428,537 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 2,192 2,140 188 150 432 Contract terminations 4,197 -- -- -- -- Payable to mutual funds and portfolios for investments purchased -- 10,099 -- -- 6,245 --------------------------------------------------------------------------------------------------------------------------- Total liabilities 6,389 12,239 188 150 6,677 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 2,126,714 2,522,546 183,196 185,796 421,860 Net assets applicable to contracts in payment period -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 2,126,714 $ 2,522,546 $ 183,196 $ 185,796 $ 421,860 =========================================================================================================================== Accumulation units outstanding 2,395,632 2,836,507 208,474 211,143 521,524 =========================================================================================================================== Net asset value per accumulation unit $ 0.89 $ 0.89 $ 0.88 $ 0.88 $ 0.81 ===========================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 5CG 4FG 5FG 4FM 5FM ASSETS Investments in shares of mutual funds and portfolios: at cost $ 348,091 $ 3,226,176 $ 3,178,377 $ 3,406,627 $ 3,954,272 ----------------------------------------------------------------------------- at market value $ 310,071 $ 2,994,291 $ 3,070,730 $ 3,177,016 $ 3,758,714 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 105 8,710 12,117 16,468 17,474 Receivable from mutual funds and portfolios for share redemptions 266 3,059 2,560 3,195 3,183 --------------------------------------------------------------------------------------------------------------------------- Total assets 310,442 3,006,060 3,085,407 3,196,679 3,779,371 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 266 3,059 2,560 3,195 3,183 Contract terminations -- -- -- -- -- Payable to mutual funds and portfolios for investments purchased 105 8,710 12,117 16,468 17,474 --------------------------------------------------------------------------------------------------------------------------- Total liabilities 371 11,769 14,677 19,663 20,657 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 310,071 2,994,291 3,070,730 3,177,016 3,758,714 Net assets applicable to contracts in payment period -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 310,071 $ 2,994,291 $ 3,070,730 $ 3,177,016 $ 3,758,714 =========================================================================================================================== Accumulation units outstanding 382,653 3,508,493 3,591,656 3,541,343 4,182,372 =========================================================================================================================== Net asset value per accumulation unit $ 0.81 $ 0.85 $ 0.85 $ 0.90 $ 0.90 ===========================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 86 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 4FO 5FO 4RE 5RE 4SI ASSETS Investments in shares of mutual funds and portfolios: at cost $ 571,747 $ 511,534 $ 3,134,925 $ 3,007,305 $ 1,587,819 ----------------------------------------------------------------------------- at market value $ 504,211 $ 457,588 $ 3,011,866 $ 2,914,704 $ 1,476,557 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments -- 1,567 -- 8,857 5,179 Receivable from mutual funds and portfolios for share redemptions 525 385 13,454 2,444 1,465 --------------------------------------------------------------------------------------------------------------------------- Total assets 504,736 459,540 3,025,320 2,926,005 1,483,201 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 525 385 3,087 2,444 1,465 Contract terminations -- -- 10,367 -- -- Payable to mutual funds and portfolios for investments purchased -- 1,567 -- 8,857 5,179 --------------------------------------------------------------------------------------------------------------------------- Total liabilities 525 1,952 13,454 11,301 6,644 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 504,211 457,588 3,011,866 2,914,704 1,476,557 Net assets applicable to contracts in payment period -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 504,211 $ 457,588 $ 3,011,866 $ 2,914,704 $ 1,476,557 =========================================================================================================================== Accumulation units outstanding 610,117 552,700 2,988,751 2,887,240 1,609,875 =========================================================================================================================== Net asset value per accumulation unit $ 0.83 $ 0.83 $ 1.01 $ 1.01 $ 0.92 ===========================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 5SI 4MS 5MS 4UE 5UE ASSETS Investments in shares of mutual funds and portfolios: at cost $ 2,004,713 $ 1,358,298 $ 1,611,893 $ 1,367,884 $ 893,322 ----------------------------------------------------------------------------- at market value $ 1,906,023 $ 1,260,071 $ 1,543,986 $ 1,189,608 $ 842,294 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 6,598 36 43,537 10,293 -- Receivable from mutual funds and portfolios for share redemptions 1,612 1,233 1,242 1,217 54,543 --------------------------------------------------------------------------------------------------------------------------- Total assets 1,914,233 1,261,340 1,588,765 1,201,118 896,837 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 1,612 1,233 1,242 1,217 767 Contract terminations -- -- -- -- 53,776 Payable to mutual funds and portfolios for investments purchased 6,598 36 43,537 10,293 -- --------------------------------------------------------------------------------------------------------------------------- Total liabilities 8,210 1,269 44,779 11,510 54,543 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 1,906,023 1,260,071 1,543,986 1,189,608 842,294 Net assets applicable to contracts in payment period -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 1,906,023 $ 1,260,071 $ 1,543,986 $ 1,189,608 $ 842,294 =========================================================================================================================== Accumulation units outstanding 2,074,525 1,418,309 1,734,761 1,483,019 1,048,190 =========================================================================================================================== Net asset value per accumulation unit $ 0.92 $ 0.89 $ 0.89 $ 0.80 $ 0.80 ===========================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 87 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 4MC 5MC 4ID 5ID 4FS ASSETS Investments in shares of mutual funds and portfolios: at cost $ 2,860,322 $ 2,607,739 $ 246,459 $ 207,548 $ 425,272 ----------------------------------------------------------------------------- at market value $ 2,644,281 $ 2,464,248 $ 203,260 $ 172,449 $ 386,610 Dividends receivable -- -- -- -- 2,541 Accounts receivable from IDS Life for contract purchase payments -- 35,043 136 12 85 Receivable from mutual funds and portfolios for share redemptions 3,044 2,056 209 154 399 --------------------------------------------------------------------------------------------------------------------------- Total assets 2,647,325 2,501,347 203,605 172,615 389,635 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 2,703 2,056 209 154 400 Contract terminations 341 -- -- -- -- Payable to mutual funds and portfolios for investments purchased -- 35,043 136 12 2,625 --------------------------------------------------------------------------------------------------------------------------- Total liabilities 3,044 37,099 345 166 3,025 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 2,644,281 2,464,248 203,260 172,449 386,610 Net assets applicable to contracts in payment period -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 2,644,281 $ 2,464,248 $ 203,260 $ 172,449 $ 386,610 =========================================================================================================================== Accumulation units outstanding 2,776,737 2,583,087 285,998 242,218 446,207 =========================================================================================================================== Net asset value per accumulation unit $ 0.95 $ 0.95 $ 0.71 $ 0.71 $ 0.87 ===========================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 5FS 4TC 5TC 4TL 5TL ASSETS Investments in shares of mutual funds and portfolios: at cost $ 466,228 $ 114,374 $ 138,761 $ 50,565 $ 37,240 ----------------------------------------------------------------------------- at market value $ 456,777 $ 87,727 $ 107,569 $ 41,059 $ 33,509 Dividends receivable 2,972 -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 4,582 148 6,972 84 -- Receivable from mutual funds and portfolios for share redemptions 392 89 87 42 30 --------------------------------------------------------------------------------------------------------------------------- Total assets 464,723 87,964 114,628 41,185 33,539 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 392 89 87 42 30 Contract terminations -- -- -- -- -- Payable to mutual funds and portfolios for investments purchased 7,554 148 6,972 84 -- --------------------------------------------------------------------------------------------------------------------------- Total liabilities 7,946 237 7,059 126 30 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 456,777 87,727 107,569 41,059 33,509 Net assets applicable to contracts in payment period -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 456,777 $ 87,727 $ 107,569 $ 41,059 $ 33,509 =========================================================================================================================== Accumulation units outstanding 526,263 156,591 191,673 68,657 55,892 =========================================================================================================================== Net asset value per accumulation unit $ 0.87 $ 0.56 $ 0.56 $ 0.60 $ 0.60 ===========================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 88 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 4GT 5GT 4IG 5IG 4IP ASSETS Investments in shares of mutual funds and portfolios: at cost $ 94,434 $ 55,652 $ 601,199 $ 604,192 $ 552,625 ----------------------------------------------------------------------------- at market value $ 71,025 $ 42,998 $ 508,124 $ 537,047 $ 520,526 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments -- 5 -- 879 2,647 Receivable from mutual funds and portfolios for share redemptions 75 37 523 460 520 --------------------------------------------------------------------------------------------------------------------------- Total assets 71,100 43,040 508,647 538,386 523,693 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 75 37 523 460 520 Contract terminations -- -- -- -- -- Payable to mutual funds and portfolios for investments purchased -- 5 -- 879 2,647 --------------------------------------------------------------------------------------------------------------------------- Total liabilities 75 42 523 1,339 3,167 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 71,025 42,998 508,124 537,047 520,526 Net assets applicable to contracts in payment period -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 71,025 $ 42,998 $ 508,124 $ 537,047 $ 520,526 =========================================================================================================================== Accumulation units outstanding 111,987 67,677 645,673 681,181 566,444 =========================================================================================================================== Net asset value per accumulation unit $ 0.63 $ 0.64 $ 0.79 $ 0.79 $ 0.92 ===========================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 5IP 4MG 5MG 4MD 5MD ASSETS Investments in shares of mutual funds and portfolios: at cost $ 472,311 $ 614,319 $ 951,631 $ 1,537,646 $ 1,776,200 ----------------------------------------------------------------------------- at market value $ 459,707 $ 539,102 $ 825,560 $ 1,287,511 $ 1,526,747 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 5,278 7,273 5,109 5,246 -- Receivable from mutual funds and portfolios for share redemptions 369 551 687 1,327 16,840 --------------------------------------------------------------------------------------------------------------------------- Total assets 465,354 546,926 831,356 1,294,084 1,543,587 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 369 551 687 1,327 1,315 Contract terminations -- -- -- -- 15,525 Payable to mutual funds and portfolios for investments purchased 5,278 7,273 5,109 5,246 -- --------------------------------------------------------------------------------------------------------------------------- Total liabilities 5,647 7,824 5,796 6,573 16,840 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 459,707 539,102 825,560 1,287,511 1,526,747 Net assets applicable to contracts in payment period -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 459,707 $ 539,102 $ 825,560 $ 1,287,511 $ 1,526,747 =========================================================================================================================== Accumulation units outstanding 499,387 711,527 1,087,891 1,783,862 2,111,723 =========================================================================================================================== Net asset value per accumulation unit $ 0.92 $ 0.76 $ 0.76 $ 0.72 $ 0.72 ===========================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 89 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 4UT 5UT 4PE 5PE 4EU ASSETS Investments in shares of mutual funds and portfolios: at cost $ 406,030 $ 246,032 $ 1,087,945 $ 1,285,630 $ 48,669 ----------------------------------------------------------------------------- at market value $ 365,983 $ 234,603 $ 1,009,921 $ 1,223,851 $ 42,503 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 24 20 249 6,209 -- Receivable from mutual funds and portfolios for share redemptions 371 204 1,008 1,027 44 --------------------------------------------------------------------------------------------------------------------------- Total assets 366,378 234,827 1,011,178 1,231,087 42,547 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 371 204 1,008 1,027 44 Contract terminations -- -- -- -- -- Payable to mutual funds and portfolios for investments purchased 24 20 249 6,209 -- --------------------------------------------------------------------------------------------------------------------------- Total liabilities 395 224 1,257 7,236 44 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 365,983 234,603 1,009,921 1,223,851 42,503 Net assets applicable to contracts in payment period -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 365,983 $ 234,603 $ 1,009,921 $ 1,223,851 $ 42,503 =========================================================================================================================== Accumulation units outstanding 430,620 275,519 1,189,477 1,438,904 49,932 =========================================================================================================================== Net asset value per accumulation unit $ 0.85 $ 0.85 $ 0.85 $ 0.85 $ 0.85 ===========================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 5EU 4HS 5HS 4PI 5PI ASSETS Investments in shares of mutual funds and portfolios: at cost $ 45,357 $ 525,055 $ 546,437 $ 1,307,824 $ 1,931,507 ----------------------------------------------------------------------------- at market value $ 42,793 $ 468,927 $ 497,167 $ 1,194,995 $ 1,793,791 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 7 63 5,539 17,689 10,906 Receivable from mutual funds and portfolios for share redemptions 35 483 417 1,201 1,493 --------------------------------------------------------------------------------------------------------------------------- Total assets 42,835 469,473 503,123 1,213,885 1,806,190 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 35 483 417 1,201 1,493 Contract terminations -- -- -- -- -- Payable to mutual funds and portfolios for investments purchased 7 63 5,539 17,689 10,906 --------------------------------------------------------------------------------------------------------------------------- Total liabilities 42 546 5,956 18,890 12,399 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 42,793 468,927 497,167 1,194,995 1,793,791 Net assets applicable to contracts in payment period -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 42,793 $ 468,927 $ 497,167 $ 1,194,995 $ 1,793,791 =========================================================================================================================== Accumulation units outstanding 50,183 583,153 617,256 1,392,095 2,086,004 =========================================================================================================================== Net asset value per accumulation unit $ 0.85 $ 0.80 $ 0.81 $ 0.86 $ 0.86 ===========================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 90 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 4VS 5VS 4SO 5SO 4IT ASSETS Investments in shares of mutual funds and portfolios: at cost $ 152,839 $ 224,461 $ 1,834,108 $ 2,033,015 $ 977,184 ----------------------------------------------------------------------------- at market value $ 140,170 $ 194,920 $ 1,483,667 $ 1,752,418 $ 917,352 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 92 6,653 8,917 871 592 Receivable from mutual funds and portfolios for share redemptions 146 159 1,567 1,493 906 --------------------------------------------------------------------------------------------------------------------------- Total assets 140,408 201,732 1,494,151 1,754,782 918,850 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 146 159 1,567 1,493 906 Contract terminations -- -- -- -- -- Payable to mutual funds and portfolios for investments purchased 92 6,653 8,917 871 592 --------------------------------------------------------------------------------------------------------------------------- Total liabilities 238 6,812 10,484 2,364 1,498 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 140,170 194,920 1,483,667 1,752,418 917,352 Net assets applicable to contracts in payment period -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 140,170 $ 194,920 $ 1,483,667 $ 1,752,418 $ 917,352 =========================================================================================================================== Accumulation units outstanding 192,412 267,112 1,984,910 2,340,277 1,054,991 =========================================================================================================================== Net asset value per accumulation unit $ 0.73 $ 0.73 $ 0.75 $ 0.75 $ 0.87 ===========================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 5IT 4SP 5SP 4AA 5AA ASSETS Investments in shares of mutual funds and portfolios: at cost $ 1,371,988 $ 2,920,626 $ 3,331,376 $ 731,363 $ 1,162,601 ----------------------------------------------------------------------------- at market value $ 1,326,843 $ 2,655,756 $ 3,171,726 $ 679,178 $ 1,129,834 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 14,019 15,376 20,407 -- 513 Receivable from mutual funds and portfolios for share redemptions 1,088 2,715 2,660 755 967 --------------------------------------------------------------------------------------------------------------------------- Total assets 1,341,950 2,673,847 3,194,793 679,933 1,131,314 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 1,088 2,715 2,660 704 967 Contract terminations -- -- -- 51 -- Payable to mutual funds and portfolios for investments purchased 14,019 15,376 20,407 -- 513 --------------------------------------------------------------------------------------------------------------------------- Total liabilities 15,107 18,091 23,067 755 1,480 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 1,326,843 2,655,756 3,171,726 679,178 1,129,834 Net assets applicable to contracts in payment period -- -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 1,326,843 $ 2,655,756 $ 3,171,726 $ 679,178 $ 1,129,834 =========================================================================================================================== Accumulation units outstanding 1,523,249 3,130,677 3,732,304 770,338 1,279,247 =========================================================================================================================== Net asset value per accumulation unit $ 0.87 $ 0.85 $ 0.85 $ 0.88 $ 0.88 ===========================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 91 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 4WI 5WI 4SG 5SG ASSETS Investments in shares of mutual funds and portfolios: at cost $ 73,043 $ 72,227 $ 336,413 $ 501,890 ------------------------------------------------------------- at market value $ 64,841 $ 65,461 $ 257,541 $ 441,409 Dividends receivable -- -- -- -- Accounts receivable from IDS Life for contract purchase payments -- -- -- 3,520 Receivable from mutual funds and portfolios for share redemptions 65 56 270 382 --------------------------------------------------------------------------------------------------------------------------- Total assets 64,906 65,517 257,811 445,311 =========================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 65 56 270 382 Contract terminations -- -- -- -- Payable to mutual funds and portfolios for investments purchased -- -- -- 3,520 --------------------------------------------------------------------------------------------------------------------------- Total liabilities 65 56 270 3,902 --------------------------------------------------------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 64,841 65,461 257,541 441,409 Net assets applicable to contracts in payment period -- -- -- -- --------------------------------------------------------------------------------------------------------------------------- Total net assets $ 64,841 $ 65,461 $ 257,541 $ 441,409 =========================================================================================================================== Accumulation units outstanding 80,480 81,106 386,948 662,018 =========================================================================================================================== Net asset value per accumulation unit $ 0.81 $ 0.81 $ 0.67 $ 0.67 ===========================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 92 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 BC1 BC2 BD1 BD2 CR1 INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 262,825 $ 227,440 $ 7,611,085 $ 7,090,994 $ 99,448 Variable account expenses 319,383 217,445 1,425,660 1,045,293 173,496 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (56,558) 9,995 6,185,425 6,045,701 (74,048) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 5,816,820 4,747,754 3,687,765 2,341,529 3,016,713 Cost of investments sold 8,729,093 7,086,321 3,718,827 2,361,776 5,032,404 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (2,912,273) (2,338,567) (31,062) (20,247) (2,015,691) Distributions from capital gains -- -- -- -- 1,484,998 Net change in unrealized appreciation or depreciation of investments (6,338,859) (5,733,645) 1,152,469 1,390,239 (4,059,077) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (9,251,132) (8,072,212) 1,121,407 1,369,992 (4,589,770) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (9,307,690) $ (8,062,217) $ 7,306,832 $ 7,415,693 $ (4,663,818) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) CR2 CM1 CM2 DE1 DE2 INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 138,189 $ 3,052,650 $ 3,146,596 $ 816,927 $ 983,788 Variable account expenses 180,944 2,490,223 2,043,044 486,959 454,148 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (42,755) 562,427 1,103,552 329,968 529,640 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 1,676,941 111,192,272 84,862,411 1,917,970 1,031,171 Cost of investments sold 2,587,011 111,202,553 84,868,112 2,283,918 1,230,349 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (910,070) (10,281) (5,701) (365,948) (199,178) Distributions from capital gains 1,518,493 -- -- 167,098 176,946 Net change in unrealized appreciation or depreciation of investments (6,406,494) 10,272 5,691 (12,178,448) (14,847,317) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (5,798,071) (9) (10) (12,377,298) (14,869,549) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (5,840,826) $ 562,418 $ 1,103,542 $(12,047,330) $(14,339,909) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) EM1 EM2 ES1 ES2 EI1 INVESTMENT INCOME Dividend income from mutual funds and portfolios $ -- $ -- $ -- $ -- $ 7,282,044 Variable account expenses 18,044 17,726 48,361 54,808 891,899 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (18,044) (17,726) (48,361) (54,808) 6,390,145 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 530,179 276,438 216,100 273,872 4,602,758 Cost of investments sold 546,184 292,392 233,527 288,962 5,724,752 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (16,005) (15,954) (17,427) (15,090) (1,121,994) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (166,342) (252,312) (585,605) (924,791) (12,316,535) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (182,347) (268,266) (603,032) (939,881) (13,438,529) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (200,391) $ (285,992) $ (651,393) $ (994,689) $ (7,048,384) ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 93 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) EI2 FI1 FI2 GB1 GB2 INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 5,336,390 $ 2,632,265 $ 2,768,741 $ 1,489,414 $ 1,198,530 Variable account expenses 517,492 879,121 723,504 301,042 189,495 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 4,818,898 1,753,144 2,045,237 1,188,372 1,009,035 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 2,460,506 11,226,795 5,513,936 2,797,306 1,297,101 Cost of investments sold 2,954,332 11,035,544 5,449,565 2,723,619 1,264,756 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (493,826) 191,251 64,371 73,687 32,345 Distributions from capital gains -- 627,626 664,882 -- -- Net change in unrealized appreciation or depreciation of investments (9,179,710) 1,738,654 1,933,332 3,149,519 2,629,912 ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (9,673,536) 2,557,531 2,662,585 3,223,206 2,662,257 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (4,854,638) $ 4,310,675 $ 4,707,822 $ 4,411,578 $ 3,671,292 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) GR1 GR2 IE1 IE2 MF1 INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 44,879 $ 51,256 $ 104,305 $ 106,448 $ 1,230,281 Variable account expenses 630,907 532,035 104,736 80,133 443,770 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (586,028) (480,779) (431) 26,315 786,511 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 10,680,020 5,022,777 7,961,650 6,100,176 5,426,292 Cost of investments sold 22,079,264 10,189,598 12,496,128 10,082,744 7,603,873 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (11,399,244) (5,166,821) (4,534,478) (3,982,568) (2,177,581) Distributions from capital gains -- -- 24,316 20,548 4,109,822 Net change in unrealized appreciation or depreciation of investments (10,217,973) (17,529,137) 2,327,173 1,720,801 (9,529,068) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (21,617,217) (22,695,958) (2,182,989) (2,241,219) (7,596,827) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $(22,203,245) $(23,176,737) $ (2,183,420) $ (2,214,904) $ (6,810,316) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) MF2 ND1 ND2 SV1 SV2 INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 1,168,860 $ 1,293,133 $ 1,305,279 $ 28,367 $ 45,293 Variable account expenses 318,848 2,388,563 1,878,621 164,183 187,615 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 850,012 (1,095,430) (573,342) (135,816) (142,322) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 2,572,891 14,389,345 5,640,326 1,342,323 198,316 Cost of investments sold 3,396,909 22,268,068 8,559,585 1,404,846 211,675 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (824,018) (7,878,723) (2,919,259) (62,523) (13,359) Distributions from capital gains 3,229,895 249,762 229,075 101,010 159,932 Net change in unrealized appreciation or depreciation of investments (9,041,112) (57,715,115) (62,280,465) (2,894,370) (4,882,493) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (6,635,235) (65,344,076) (64,970,649) (2,855,883) (4,735,920) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (5,785,223) $(66,439,506) $(65,543,991) $ (2,991,699) $ (4,878,242) ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 94 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) IV1 IV2 SC1 SC2 ST1 INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 352,380 $ 340,138 $ -- $ -- $ 9,307 Variable account expenses 337,690 252,358 250,290 191,218 12,152 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 14,690 87,780 (250,290) (191,218) (2,845) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 2,316,845 2,267,091 1,367,414 1,592,620 112,773 Cost of investments sold 2,986,095 3,021,641 1,626,124 1,813,988 127,304 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (669,250) (754,550) (258,710) (221,368) (14,531) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (8,957,858) (8,268,536) (4,777,707) (4,712,134) (298,088) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (9,627,108) (9,023,086) (5,036,417) (4,933,502) (312,619) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (9,612,418) $ (8,935,306) $ (5,286,707) $ (5,124,720) $ (315,464) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) ST2 SA1 SA2 1AC 2AC INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 10,087 $ -- $ -- $ -- $ -- Variable account expenses 10,436 363,565 280,565 35,916 38,996 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (349) (363,565) (280,565) (35,916) (38,996) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 100,107 8,804,718 4,078,767 197,716 89,548 Cost of investments sold 107,295 24,183,967 10,508,154 227,690 103,972 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (7,188) (15,379,249) (6,429,387) (29,974) (14,424) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (330,149) (687,288) (8,853,948) (1,090,574) (1,397,621) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (337,337) (16,066,537) (15,283,335) (1,120,548) (1,412,045) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (337,686) $(16,430,102) $(15,563,900) $ (1,156,464) $ (1,451,041) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 1AD 2AD 1AB 2AB 1AL INVESTMENT INCOME Dividend income from mutual funds and portfolios $ -- $ -- $ 3,729 $ 5,671 $ 68,911 Variable account expenses 23,874 26,625 35,222 40,070 125,392 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (23,874) (26,625) (31,493) (34,399) (56,481) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 218,972 162,222 41,597 22,190 281,298 Cost of investments sold 240,622 188,593 41,746 20,383 309,523 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (21,650) (26,371) (149) 1,807 (28,225) Distributions from capital gains -- -- -- -- 423,602 Net change in unrealized appreciation or depreciation of investments (645,931) (996,364) (243,997) (645,989) (3,733,546) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (667,581) (1,022,735) (244,146) (644,182) (3,338,169) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (691,455) $ (1,049,360) $ (275,639) $ (678,581) $ (3,394,650) ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 95 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 2AL 1AI 2AI 1AV 2AV INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 96,111 $ 18,529 $ 21,033 $ 89,786 $ 96,291 Variable account expenses 142,478 37,961 40,528 165,847 176,382 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (46,367) (19,432) (19,495) (76,061) (80,091) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 39,832 133,471 41,180 179,786 21,357 Cost of investments sold 47,658 155,166 45,425 204,225 23,843 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (7,826) (21,695) (4,245) (24,439) (2,486) Distributions from capital gains 590,804 -- -- 626,430 671,809 Net change in unrealized appreciation or depreciation of investments (5,364,132) (907,389) (1,277,854) (3,071,603) (4,106,385) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (4,781,154) (929,084) (1,282,099) (2,469,612) (3,437,062) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (4,827,521) $ (948,516) $ (1,301,594) $ (2,545,673) $ (3,517,153) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 1SR 2SR 1CG 2CG 1FG INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 223,683 $ 217,165 $ 2,261 $ 3,163 $ 141,081 Variable account expenses 61,591 42,552 20,963 23,539 179,698 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 162,092 174,613 (18,702) (20,376) (38,617) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 488,737 415,145 338,510 339,067 170,874 Cost of investments sold 581,622 492,084 387,574 376,094 194,090 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (92,885) (76,939) (49,064) (37,027) (23,216) Distributions from capital gains -- -- 6,416 8,980 -- Net change in unrealized appreciation or depreciation of investments (957,880) (853,336) (512,425) (729,570) (3,356,075) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (1,050,765) (930,275) (555,073) (757,617) (3,379,291) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (888,673) $ (755,662) $ (573,775) $ (777,993) $ (3,417,908) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 2FG 1FM 2FM 1FO 2FO INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 112,618 $ 81,028 $ 84,572 $ 22,242 $ 20,178 Variable account expenses 169,058 185,636 199,663 48,210 46,977 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (56,440) (104,608) (115,091) (25,968) (26,799) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales -- 909,798 -- 241,932 663,062 Cost of investments sold -- 982,555 -- 265,411 751,311 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments -- (72,757) -- (23,479) (88,249) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (3,535,427) (2,234,071) (3,304,662) (1,248,421) (1,573,298) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (3,535,427) (2,306,828) (3,304,662) (1,271,900) (1,661,547) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (3,591,867) $ (2,411,436) $ (3,419,753) $ (1,297,868) $ (1,688,346) ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 96 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 1RE 2RE 1SI 2SI 1MS INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 1,123,492 $ 1,465,028 $ 75,164 $ 96,079 $ 30,205 Variable account expenses 413,878 427,762 194,633 192,201 35,673 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 709,614 1,037,266 (119,469) (96,122) (5,468) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 182,498 139,063 417,952 178,634 190,755 Cost of investments sold 180,516 139,682 417,791 180,033 207,055 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments 1,982 (619) 161 (1,399) (16,300) Distributions from capital gains -- -- 525,770 672,078 74,894 Net change in unrealized appreciation or depreciation of investments (1,334,802) (2,049,365) (3,037,959) (4,282,792) (591,167) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (1,332,820) (2,049,984) (2,512,028) (3,612,113) (532,573) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (623,206) $ (1,012,718) $ (2,631,497) $ (3,708,235) $ (538,041) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 2MS 1UE 2UE 1MC 2MC INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 33,119 $ 326,433 $ 310,361 $ 654,698 $ 776,125 Variable account expenses 33,455 524,178 373,370 475,200 412,267 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (336) (197,745) (63,009) 179,498 363,858 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 331,420 4,170,478 2,166,130 919,819 27,721 Cost of investments sold 344,576 6,046,597 3,130,085 918,723 29,613 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (13,156) (1,876,119) (963,955) 1,096 (1,892) Distributions from capital gains 82,117 -- -- 191,001 226,426 Net change in unrealized appreciation or depreciation of investments (722,518) (12,710,694) (12,166,443) (4,290,020) (5,353,378) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (653,557) (14,586,813) (13,130,398) (4,097,923) (5,128,844) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (653,893) $(14,784,558) $(13,193,407) $ (3,918,425) $ (4,764,986) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 1ID 2ID 1FS 2FS 1TC INVESTMENT INCOME Dividend income from mutual funds and portfolios $ -- $ -- $ 19,899 $ 29,919 $ -- Variable account expenses 22,225 24,329 19,769 22,656 11,128 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (22,225) (24,329) 130 7,263 (11,128) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 84,192 97,093 269,162 133,608 180,383 Cost of investments sold 99,176 110,947 281,368 135,197 254,279 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (14,984) (13,854) (12,206) (1,589) (73,896) Distributions from capital gains -- -- 9,639 14,836 -- Net change in unrealized appreciation or depreciation of investments (863,696) (1,217,034) (398,526) (608,683) (720,545) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (878,680) (1,230,888) (401,093) (595,436) (794,441) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (900,905) $ (1,255,217) $ (400,963) $ (588,173) $ (805,569) ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 97 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 2TC 1TL 2TL 1GT 2GT INVESTMENT INCOME Dividend income from mutual funds and portfolios $ -- $ -- $ -- $ -- $ -- Variable account expenses 9,060 5,087 4,051 98,594 84,737 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (9,060) (5,087) (4,051) (98,594) (84,737) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 108,636 103,042 134,572 1,891,997 1,298,359 Cost of investments sold 137,918 142,844 183,836 4,917,198 3,099,603 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (29,282) (39,802) (49,264) (3,025,201) (1,801,244) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (716,596) (341,752) (266,609) (2,949,362) (4,576,884) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (745,878) (381,554) (315,873) (5,974,563) (6,378,128) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (754,938) $ (386,641) $ (319,924) $ (6,073,157) $ (6,462,865) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 1IG 2IG 1IP 2IP 1MG INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 245,312 $ 258,342 $ 13,594 $ 13,913 $ -- Variable account expenses 345,037 276,454 153,494 114,539 303,815 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (99,725) (18,112) (139,900) (100,626) (303,815) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 2,124,056 1,064,627 894,368 215,350 2,045,505 Cost of investments sold 3,303,495 1,570,168 1,155,338 267,719 3,153,835 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (1,179,439) (505,541) (260,970) (52,369) (1,108,330) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (10,240,285) (11,019,525) (1,621,411) (1,811,344) (9,711,494) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (11,419,724) (11,525,066) (1,882,381) (1,863,713) (10,819,824) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $(11,519,449) $(11,543,178) $ (2,022,281) $ (1,964,339) $(11,123,639) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 2MG 1MD 2MD 1UT 2UT INVESTMENT INCOME Dividend income from mutual funds and portfolios $ -- $ -- $ -- $ 84,542 $ 91,952 Variable account expenses 256,634 312,231 252,889 34,573 36,996 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (256,634) (312,231) (252,889) 49,969 54,956 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 1,492,912 1,121,069 389,263 497,212 172,180 Cost of investments sold 2,286,729 1,572,666 535,943 623,178 199,746 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (793,817) (451,597) (146,680) (125,966) (27,566) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (10,765,671) (12,676,865) (13,130,549) (813,369) (1,058,976) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (11,559,488) (13,128,462) (13,277,229) (939,335) (1,086,542) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $(11,816,122) $(13,440,693) $(13,530,118) $ (889,366) $ (1,031,586) ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 98 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 1PE 2PE 1EU 2EU 1HS INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 88,045 $ 143,074 $ -- $ -- $ -- Variable account expenses 30,726 38,521 3,265 4,406 33,448 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 57,319 104,553 (3,265) (4,406) (33,448) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 304,645 161,562 82,341 43,750 297,188 Cost of investments sold 327,626 174,257 97,671 48,253 346,689 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (22,981) (12,695) (15,330) (4,503) (49,501) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (613,584) (1,042,503) (64,057) (123,124) (758,201) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (636,565) (1,055,198) (79,387) (127,627) (807,702) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (579,246) $ (950,645) $ (82,652) $ (132,033) $ (841,150) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 2HS 1PI 2PI 1VS 2VS INVESTMENT INCOME Dividend income from mutual funds and portfolios $ -- $ 34,074 $ 35,934 $ -- $ -- Variable account expenses 42,173 63,080 66,086 536,834 385,531 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (42,173) (29,006) (30,152) (536,834) (385,531) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 89,284 55,694 32,305 10,645,808 5,200,829 Cost of investments sold 106,455 61,760 34,776 22,938,804 10,862,452 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (17,171) (6,066) (2,471) (12,292,996) (5,661,623) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (1,122,822) (1,304,489) (1,844,441) (9,589,578) (14,121,442) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (1,139,993) (1,310,555) (1,846,912) (21,882,574) (19,783,065) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (1,182,166) $ (1,339,561) $ (1,877,064) $(22,419,408) $(20,168,596) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 1SO 2SO 1IT 2IT 1SP INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 58,820 $ 87,277 $ -- $ -- $ -- Variable account expenses 81,955 86,184 271,063 208,427 595,605 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (23,135) 1,093 (271,063) (208,427) (595,605) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 72,101 24,983 919,591 305,493 794,443 Cost of investments sold 103,735 31,217 1,673,395 510,334 914,414 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (31,634) (6,234) (753,804) (204,841) (119,971) Distributions from capital gains 258,468 385,946 -- -- -- Net change in unrealized appreciation or depreciation of investments (3,135,858) (4,121,068) (3,628,072) (4,210,201) (11,893,766) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (2,909,024) (3,741,356) (4,381,876) (4,415,042) (12,013,737) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (2,932,159) $ (3,740,263) $ (4,652,939) $ (4,623,469) $(12,609,342) ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 99 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 2SP 1AA 2AA 1WI 2WI INVESTMENT INCOME Dividend income from mutual funds and portfolios $ -- $ 149,668 $ 190,629 $ 3,016 $ 4,408 Variable account expenses 463,521 61,122 60,859 13,558 16,605 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (463,521) 88,546 129,770 (10,542) (12,197) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 45,114 540,749 276,855 210,292 174,954 Cost of investments sold 50,507 600,892 317,398 236,336 204,214 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (5,393) (60,143) (40,543) (26,044) (29,260) Distributions from capital gains -- 69,604 86,201 -- -- Net change in unrealized appreciation or depreciation of investments (11,741,930) (1,029,825) (1,365,969) (351,155) (576,936) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (11,747,323) (1,020,364) (1,320,311) (377,199) (606,196) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $(12,210,844) $ (931,818) $ (1,190,541) $ (387,741) $ (618,393) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 1SG 2SG BC4(1) BC5(1) BD4(1) INVESTMENT INCOME Dividend income from mutual funds and portfolios $ -- $ -- $ 171 $ 384 $ 133,126 Variable account expenses 31,096 29,762 270 387 30,825 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (31,096) (29,762) (99) (3) 102,301 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 233,870 168,750 24,041 10,149 339,801 Cost of investments sold 297,308 217,507 26,571 13,667 339,360 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (63,438) (48,757) (2,530) (3,518) 441 Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (1,495,003) (1,747,517) (4,129) (8,698) 89,731 ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (1,558,441) (1,796,274) (6,659) (12,216) 90,172 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (1,589,537) $ (1,826,036) $ (6,758) $ (12,219) $ 192,473 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) BD5(1) CR4(1) CR5(1) CM4(1) CM5(1) INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 137,056 $ 163 $ 713 $ 73,441 $ 63,422 Variable account expenses 26,152 309 1,148 81,696 59,602 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 110,904 (146) (435) (8,255) 3,820 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 1,401,527 70,320 62,378 9,746,495 6,484,989 Cost of investments sold 1,398,076 73,612 66,673 9,746,503 6,484,989 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments 3,451 (3,292) (4,295) (8) -- Distributions from capital gains -- 2 -- -- -- Net change in unrealized appreciation or depreciation of investments 102,258 (4,750) (14,865) -- -- ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments 105,709 (8,040) (19,160) (8) -- ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 216,613 $ (8,186) $ (19,595) $ (8,263) $ 3,820 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 100 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) DE4(1) DE5(1) EM4(1) EM5(1) ES4(1) INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 16,438 $ 21,129 $ -- $ -- $ -- Variable account expenses 11,001 11,187 811 830 3,752 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 5,437 9,942 (811) (830) (3,752) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 179,391 102,153 22,891 34,682 117,308 Cost of investments sold 221,271 112,304 26,185 37,466 126,300 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (41,880) (10,151) (3,294) (2,784) (8,992) Distributions from capital gains -- 2 -- -- -- Net change in unrealized appreciation or depreciation of investments (260,421) (267,908) (9,359) (7,889) (28,332) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (302,301) (278,057) (12,653) (10,673) (37,324) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (296,864) $ (268,115) $ (13,464) $ (11,503) $ (41,076) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) ES5(1) EI4(1) EI5(1) FI4(1) FI5(1) INVESTMENT INCOME Dividend income from mutual funds and portfolios $ -- $ 129,342 $ 119,165 $ 95,918 $ 67,258 Variable account expenses 3,597 21,084 16,243 38,563 22,758 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (3,597) 108,258 102,922 57,355 44,500 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 24,848 177,201 223,097 1,035,422 473,078 Cost of investments sold 25,850 186,042 237,998 1,027,948 470,159 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (1,002) (8,841) (14,901) 7,474 2,919 Distributions from capital gains -- -- -- 29,490 21,659 Net change in unrealized appreciation or depreciation of investments (28,933) (129,692) (127,087) 58,697 37,589 ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (29,935) (138,533) (141,988) 95,661 62,167 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (33,532) $ (30,275) $ (39,066) $ 153,016 $ 106,667 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) GB4(1) GB5(1) GR4(1) GR5(1) IE4(1) INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 36,136 $ 18,698 $ 203 $ 465 $ 323 Variable account expenses 8,890 3,956 1,462 2,522 413 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 27,246 14,742 (1,259) (2,057) (90) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 60,455 96,060 4,552 52,222 49,658 Cost of investments sold 58,685 94,660 4,930 55,078 52,759 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments 1,770 1,400 (378) (2,856) (3,101) Distributions from capital gains -- -- -- -- 1 Net change in unrealized appreciation or depreciation of investments 99,985 57,109 (28,500) (44,758) (4,388) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments 101,755 58,509 (28,878) (47,614) (7,488) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 129,001 $ 73,251 $ (30,137) $ (49,671) $ (7,578) ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 101 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) IE5(1) MF4(1) MF5(1) ND4(1) ND5(1) INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 275 $ 6,267 $ 5,830 $ 11,342 $ 13,022 Variable account expenses 237 2,318 1,931 23,825 21,763 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 38 3,949 3,899 (12,483) (8,741) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 19,142 111,676 141,173 184,073 185,566 Cost of investments sold 20,768 115,364 147,509 208,722 191,333 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (1,626) (3,688) (6,336) (24,649) (5,767) Distributions from capital gains -- 4,462 4,877 48 48 Net change in unrealized appreciation or depreciation of investments (3,452) (23,816) (22,109) (523,988) (521,615) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (5,078) (23,042) (23,568) (548,589) (527,334) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (5,040) $ (19,093) $ (19,669) $ (561,072) $ (536,075) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) SV4(1) SV5(1) IV4(1) IV5(1) SC4(1) INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 2,603 $ 3,094 $ 7,128 $ 7,545 $ -- Variable account expenses 14,484 12,653 7,022 5,852 1,839 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (11,881) (9,559) 106 1,693 (1,839) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 93,470 167,846 59,148 55,720 21,004 Cost of investments sold 104,254 181,889 68,390 60,597 21,854 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (10,784) (14,043) (9,242) (4,877) (850) Distributions from capital gains 9,064 11,051 -- -- -- Net change in unrealized appreciation or depreciation of investments (305,019) (254,613) (132,736) (116,993) (31,020) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (306,739) (257,605) (141,978) (121,870) (31,870) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (318,620) $ (267,164) $ (141,872) $ (120,177) $ (33,709) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) SC5(1) ST4(1) ST5(1) SA4(1) SA5(1) INVESTMENT INCOME Dividend income from mutual funds and portfolios $ -- $ 342 $ 458 $ -- $ -- Variable account expenses 2,808 581 516 855 448 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (2,808) (239) (58) (855) (448) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 30,437 4,868 388 25,987 24,589 Cost of investments sold 32,513 5,652 421 31,499 28,164 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (2,076) (784) (33) (5,512) (3,575) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (43,621) (13,387) (11,760) (19,305) (10,623) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (45,697) (14,171) (11,793) (24,817) (14,198) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (48,505) $ (14,410) $ (11,851) $ (25,672) $ (14,646) ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 102 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 4AC(1) 5AC(1) 4AD(1) 5AD(1) 4AB(1) INVESTMENT INCOME Dividend income from mutual funds and portfolios $ -- $ -- $ -- $ -- $ 560 Variable account expenses 1,554 1,288 2,170 1,786 6,782 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (1,554) (1,288) (2,170) (1,786) (6,222) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 9,029 36,403 32,563 22,511 78,010 Cost of investments sold 10,516 39,353 37,238 23,831 89,734 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (1,487) (2,950) (4,675) (1,320) (11,724) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (36,442) (29,998) (48,617) (35,442) (87,977) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (37,929) (32,948) (53,292) (36,762) (99,701) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (39,483) $ (34,236) $ (55,462) $ (38,548) $ (105,923) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 5AB(1) 4AL(1) 5AL(1) 4AI(1) 5AI(1) INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 329 $ 9,032 $ 6,001 $ 245 $ 160 Variable account expenses 5,019 20,747 13,177 2,398 3,285 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (4,690) (11,715) (7,176) (2,153) (3,125) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 50,665 124,629 87,988 46,150 49,607 Cost of investments sold 54,232 146,149 103,827 53,112 54,907 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (3,567) (21,520) (15,839) (6,962) (5,300) Distributions from capital gains -- 55,519 36,888 -- -- Net change in unrealized appreciation or depreciation of investments (46,057) (487,637) (322,065) (46,467) (74,613) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (49,624) (453,638) (301,016) (53,429) (79,913) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (54,314) $ (465,353) $ (308,192) $ (55,582) $ (83,038) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 4AV(1) 5AV(1) 4SR(1) 5SR(1) 4CG(1) INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 699 $ 776 $ 5,382 $ 5,434 $ 31 Variable account expenses 13,168 11,684 873 595 2,728 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (12,469) (10,908) 4,509 4,839 (2,697) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 72,303 108,478 29,343 7,361 3,714 Cost of investments sold 78,594 117,936 29,991 7,790 4,277 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (6,291) (9,458) (648) (429) (563) Distributions from capital gains 4,879 5,413 -- -- 88 Net change in unrealized appreciation or depreciation of investments (181,128) (151,646) (12,900) (8,782) (57,517) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (182,540) (155,691) (13,548) (9,211) (57,992) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (195,009) $ (166,599) $ (9,039) $ (4,372) $ (60,689) ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 103 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 5CG(1) 4FG(1) 5FG(1) 4FM(1) 5FM(1) INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 65 $ -- $ -- $ -- $ -- Variable account expenses 1,598 17,453 12,565 19,080 16,339 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 1,533) (17,453) (12,565) (19,080) (16,339) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 16,619 130,768 210,425 113,766 101,610 Cost of investments sold 18,646 142,070 237,961 118,173 114,140 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (2,027) (11,302) (27,536) (4,407) (12,530) Distributions from capital gains 185 -- -- -- -- Net change in unrealized appreciation or depreciation of investments (38,020) (231,885) (107,647) (229,611) (195,558) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (39,862) (243,187) (135,183) (234,018) (208,088) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (41,395) $ (260,640) $ (147,748) $ (253,098) $ (224,427) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 4FO(1) 5FO(1) 4RE(1) 5RE(1) 4SI(1) INVESTMENT INCOME Dividend income from mutual funds and portfolios $ -- $ -- $ 33,618 $ 23,578 $ 1,773 Variable account expenses 2,772 1,949 16,382 11,970 7,131 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (2,772) (1,949) 17,236 11,608 (5,358) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 9,272 88,675 140,018 411,922 97,147 Cost of investments sold 10,388 97,673 147,196 437,963 109,576 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (1,116) (8,998) (7,178) (26,041) (12,429) Distributions from capital gains -- -- -- -- 12,398 Net change in unrealized appreciation or depreciation of investments (67,536) (53,946) (123,059) (92,601) (111,262) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (68,652) (62,944) (130,237) (118,642) (111,293) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (71,424) $ (64,893) $ (113,001) $ (107,034) $ (116,651) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 5SI(1) 4MS(1) 5MS(1) 4UE(1) 5UE(1) INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 1,745 $ 4,710 $ 2,846 $ 7,565 $ 5,776 Variable account expenses 6,882 6,753 5,300 7,935 3,548 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (5,137) (2,043) (2,454) (370) 2,228 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 40,637 78,350 38,683 60,183 114,249 Cost of investments sold 44,304 83,229 41,871 70,214 123,143 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (3,667) (4,879) (3,188) (10,031) (8,894) Distributions from capital gains 12,206 11,680 7,057 -- -- Net change in unrealized appreciation or depreciation of investments (98,690) (98,227) (67,907) (178,276) (51,028) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (90,151) (91,426) (64,038) (188,307) (59,922) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (95,288) $ (93,469) $ (66,492) $ (188,677) $ (57,694) ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 104 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 4MC(1) 5MC(1) 4ID(1) 5ID(1) 4FS(1) INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 27,982 $ 25,487 $ -- $ -- $ 2,540 Variable account expenses 15,787 10,506 1,465 989 2,248 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 12,195 14,981 (1,465) (989) 292 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 53,252 141,337 13,011 17,242 15,505 Cost of investments sold 58,639 153,343 15,341 20,997 18,366 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (5,387) (12,006) (2,330) (3,755) (2,861) Distributions from capital gains 8,164 7,436 -- -- 1,259 Net change in unrealized appreciation or depreciation of investments (216,041) (143,491) (43,199) (35,099) (38,662) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (213,264) (148,061) (45,529) (38,854) (40,264) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (201,069) $ (133,080) $ (46,994) $ (39,843) $ (39,972) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 5FS(1) 4TC(1) 5TC(1) 4TL(1) 5TL(1) INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 2,971 $ -- $ -- $ -- $ -- Variable account expenses 1,713 604 551 272 152 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 1,258 (604) (551) (272) (152) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 28,975 14,001 30,710 760 11,998 Cost of investments sold 28,219 21,033 30,281 899 12,760 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments 756 (7,032) 429 (139) (762) Distributions from capital gains 1,484 -- -- -- -- Net change in unrealized appreciation or depreciation of investments (9,451) (26,647) (31,192) (9,506) (3,731) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (7,211) (33,679) (30,763) (9,645) (4,493) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (5,953) $ (34,283) $ (31,314) $ (9,917) $ (4,645) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 4GT(1) 5GT(1) 4IG(1) 5IG(1) 4IP(1) INVESTMENT INCOME Dividend income from mutual funds and portfolios $ -- $ -- $ 2,920 $ 2,477 $ 323 Variable account expenses 612 246 3,296 2,490 2,849 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (612) (246) (376) (13) (2,526) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 3,898 6,090 23,352 40,326 29,628 Cost of investments sold 4,682 6,525 28,968 45,205 31,537 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (784) (435) (5,616) (4,879) (1,909) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (23,409) (12,654) (93,075) (67,145) (32,099) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (24,193) (13,089) (98,691) (72,024) (34,008) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (24,805) $ (13,335) $ (99,067) $ (72,037) $ (36,534) ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 105 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 5IP(1) 4MG(1) 5MG(1) 4MD(1) 5MD(1) INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 190 $ -- $ -- $ -- $ -- Variable account expenses 1,608 3,333 3,935 8,103 7,651 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (1,418) (3,333) (3,935) (8,103) (7,651) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 51,035 31,177 25,594 29,172 41,002 Cost of investments sold 53,073 36,091 27,843 36,892 48,927 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (2,038) (4,914) (2,249) (7,720) (7,925) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (12,604) (75,217) (126,071) (250,135) (249,453) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (14,642) (80,131) (128,320) (257,855) (257,378) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (16,060) $ (83,464) $ (132,255) $ (265,958) $ (265,029) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 4UT(1) 5UT(1) 4PE(1) 5PE(1) 4EU(1) INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 4,273 $ 2,098 $ 12,692 $ 13,765 $ -- Variable account expenses 2,462 1,271 5,123 4,486 287 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 1,811 827 7,569 9,279 (287) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 43,489 44,459 40,601 51,884 201 Cost of investments sold 51,566 49,415 42,281 59,419 232 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (8,077) (4,956) (1,680) (7,535) (31) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (40,047) (11,429) (78,024) (61,779) (6,166) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (48,124) (16,385) (79,704) (69,314) (6,197) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (46,313) $ (15,558) $ (72,135) $ (60,035) $ (6,484) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 5EU(1) 4HS(1) 5HS(1) 4PI(1) 5PI(1) INVESTMENT INCOME Dividend income from mutual funds and portfolios $ -- $ -- $ -- $ 1,687 $ 1,046 Variable account expenses 155 3,186 2,497 6,441 7,416 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (155) (3,186) (2,497) (4,754) (6,370) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 1,532 65,788 24,138 89,691 67,173 Cost of investments sold 1,815 71,717 25,484 96,155 73,649 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (283) (5,929) (1,346) (6,464) (6,476) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (2,564) (56,128) (49,270) (112,829) (137,716) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (2,847) (62,057) (50,616) (119,293) (144,192) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (3,002) $ (65,243) $ (53,113) $ (124,047) $ (150,562) ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 106 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 4VS(1) 5VS(1) 4SO(1) 5SO(1) 4IT(1) INVESTMENT INCOME Dividend income from mutual funds and portfolios $ -- $ -- $ 7,070 $ 8,272 $ -- Variable account expenses 696 1,009 10,779 8,353 3,891 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (696) (1,009) (3,709) (81) (3,891) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 7,439 7,101 177,546 141,960 42,405 Cost of investments sold 8,005 7,645 222,883 169,156 47,660 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (566) (544) (45,337) (27,196) (5,255) Distributions from capital gains -- -- 31,934 36,278 -- Net change in unrealized appreciation or depreciation of investments (12,669) (29,541) (350,441) (280,597) (59,832) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (13,235) (30,085) (363,844) (271,515) (65,087) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (13,931) $ (31,094) $ (367,553) $ (271,596) $ (68,978) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 5IT(1) 4SP(1) 5SP(1) 4AA(1) 5AA(1) INVESTMENT INCOME Dividend income from mutual funds and portfolios $ -- $ -- $ -- $ 8,610 $ 11,041 Variable account expenses 4,004 15,328 12,148 3,911 4,304 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (4,004) (15,328) (12,148) 4,699 6,737 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 72,752 229,461 47,200 122,916 25,733 Cost of investments sold 76,038 265,838 56,659 138,631 25,851 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (3,286) (36,377) (9,459) (15,715) (118) Distributions from capital gains -- -- -- 3,773 2,855 Net change in unrealized appreciation or depreciation of investments (45,145) (264,870) (159,650) (52,185) (32,767) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (48,431) (301,247) (169,109) (64,127) (30,030) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (52,435) $ (316,575) $ (181,257) $ (59,428) $ (23,293) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 4WI(1) 5WI(1) 4SG(1) 5SG(1) INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 63 $ 65 $ -- $ -- Variable account expenses 343 313 1,914 2,012 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (280) (248) (1,914) (2,012) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 7,268 16,056 22,205 39,272 Cost of investments sold 7,899 18,339 28,283 47,093 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (631) (2,283) (6,078) (7,821) Distributions from capital gains -- -- -- -- Net change in unrealized appreciation or depreciation of investments (8,202) (6,766) (78,872) (60,481) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (8,833) (9,049) (84,950) (68,302) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (9,113) $ (9,297) $ (86,864) $ (70,314) ===================================================================================================================================
(1) For the period Feb. 13, 2002 (commencement of operations) to Dec. 31, 2002. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 107 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2002 BC1 BC2 BD1 BD2 CR1 OPERATIONS Investment income (loss) -- net $ (56,558) $ 9,995 $ 6,185,425 $ 6,045,701 $ (74,048) Net realized gain (loss) on sales of investments (2,912,273) (2,338,567) (31,062) (20,247) (2,015,691) Distributions from capital gains -- -- -- -- 1,484,998 Net change in unrealized appreciation or depreciation of investments (6,338,859) (5,733,645) 1,152,469 1,390,239 (4,059,077) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (9,307,690) (8,062,217) 7,306,832 7,415,693 (4,663,818) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 2,022,324 4,134,132 56,409,658 75,660,940 8,320,523 Net transfers(2) (4,366,366) (4,042,558) 10,340,498 12,043,348 (2,679,434) Transfers for policy loans -- (59,728) -- (221,836) -- Annuity payments (8,472) (9,449) (57,668) (54,429) (8,037) Contact charges (19,181) (27,515) (46,921) (45,305) (9,028) Contract terminations: Surrender benefits (852,252) (936,249) (3,832,361) (4,990,255) (497,104) Death benefits (615,570) (149,370) (2,001,884) (1,130,877) (325,548) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (3,839,517) (1,090,737) 60,811,322 81,261,586 4,801,372 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 40,747,930 33,763,120 120,835,163 95,910,199 20,374,024 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 27,600,723 $ 24,610,166 $ 188,953,317 $ 184,587,478 $ 20,511,578 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 49,897,109 41,082,633 106,759,873 83,968,345 26,778,956 Contract purchase payments 2,836,923 5,726,609 49,215,303 65,949,204 13,769,390 Net transfers(2) (6,481,578) (6,138,546) 9,065,587 10,431,099 (4,351,290) Transfers for policy loans -- (86,050) -- (192,197) -- Contract charges (27,242) (39,200) (40,930) (39,253) (13,695) Contract terminations: Surrender benefits (1,226,852) (1,321,036) (3,847,757) (4,601,230) (751,406) Death benefits (887,956) (205,658) (1,746,973) (985,974) (475,695) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 44,110,404 39,018,752 159,405,103 154,529,994 34,956,260 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 108 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2002 (CONTINUED) CR2 CM1 CM2 DE1 DE2 OPERATIONS Investment income (loss) -- net $ (42,755) $ 562,427 $ 1,103,552 $ 329,968 $ 529,640 Net realized gain (loss) on sales of investments (910,070) (10,281) (5,701) (365,948) (199,178) Distributions from capital gains 1,518,493 -- -- 167,098 176,946 Net change in unrealized appreciation or depreciation of investments (6,406,494) 10,272 5,691 (12,178,448) (14,847,317) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (5,840,826) 562,418 1,103,542 (12,047,330) (14,339,909) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 21,283,378 226,515,881 352,620,135 14,294,648 28,527,376 Net transfers(2) (4,104,074) (253,897,068) (322,493,178) 13,351,928 15,281,669 Transfers for policy loans (89,501) -- (246,678) -- (77,540) Annuity payments (16,107) (22,109) (6,458) (12,622) (27,858) Contact charges (14,375) (64,550) (75,696) (22,411) (34,816) Contract terminations: Surrender benefits (595,875) (9,935,594) (14,691,158) (1,052,258) (1,922,194) Death benefits (33,118) (3,607,854) (2,651,827) (967,428) (612,062) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 16,430,328 (41,011,294) 12,455,140 25,591,857 41,134,575 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 20,243,839 289,729,276 267,060,715 42,180,990 44,814,223 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 30,833,341 $ 249,280,400 $ 280,619,397 $ 55,725,517 $ 71,608,889 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 26,326,833 265,455,463 243,869,987 41,299,277 43,328,168 Contract purchase payments 33,323,720 207,643,721 321,790,962 15,632,650 30,703,004 Net transfers(2) (6,372,729) 232,372,552) (294,304,617) 13,403,888 15,440,636 Transfers for policy loans (137,173) -- (224,812) -- (77,455) Contract charges (22,061) (59,180) (69,006) (25,626) (39,949) Contract terminations: Surrender benefits (947,264) (9,122,334) (13,395,206) (1,284,475) (2,238,773) Death benefits (47,463) (3,307,751) (2,416,788) (1,067,486) (673,232) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 52,123,863 228,237,367 255,250,520 67,958,228 86,442,399 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 109 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2002 (CONTINUED) EM1 EM2 ES1 ES2 EI1 OPERATIONS Investment income (loss) -- net $ (18,044) $ (17,726) $ (48,361) $ (54,808) $ 6,390,145 Net realized gain (loss) on sales of investments (16,005) (15,954) (17,427) (15,090) (1,121,994) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (166,342) (252,312) (585,605) (924,791) (12,316,535) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (200,391) (285,992) (651,393) (994,689) (7,048,384) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 796,792 1,180,002 5,077,279 6,994,948 24,104,647 Net transfers(2) 981,357 1,122,588 3,937,963 5,797,628 10,170,341 Transfers for policy loans -- 188 -- (18,476) -- Annuity payments -- -- -- -- (21,189) Contact charges (1,309) (1,057) (2,471) (3,766) (28,013) Contract terminations: Surrender benefits (30,013) (64,471) (248,163) (247,633) (2,117,180) Death benefits (36,356) (26,082) (28,026) (46,062) (1,327,559) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 1,710,471 2,211,168 8,736,582 12,476,639 30,781,047 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 1,108,401 1,291,032 2,224,431 2,476,561 84,016,748 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 2,618,481 $ 3,216,208 $ 10,309,620 $ 13,958,511 $ 107,749,411 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 1,541,506 1,789,442 2,238,352 2,488,770 88,813,366 Contract purchase payments 1,112,376 1,605,963 5,833,099 7,855,947 27,188,267 Net transfers(2) 1,326,174 1,484,355 4,391,380 6,411,487 10,992,877 Transfers for policy loans -- 280 -- (20,716) -- Contract charges (1,885) (1,495) (2,932) (4,435) (32,023) Contract terminations: Surrender benefits (40,992) (90,669) (285,841) (284,523) (2,684,012) Death benefits (49,316) (38,293) (29,505) (58,915) (1,494,115) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 3,887,863 4,749,583 12,144,553 16,387,615 122,784,360 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 110 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2002 (CONTINUED) EI2 FI1 FI2 GB1 GB2 OPERATIONS Investment income (loss) -- net $ 4,818,898 $ 1,753,144 $ 2,045,237 $ 1,188,372 $ 1,009,035 Net realized gain (loss) on sales of investments (493,826) 191,251 64,371 73,687 32,345 Distributions from capital gains -- 627,626 664,882 -- -- Net change in unrealized appreciation or depreciation of investments (9,179,710) 1,738,654 1,933,332 3,149,519 2,629,912 ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (4,854,638) 4,310,675 4,707,822 4,411,578 3,671,292 =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 28,574,235 51,945,608 81,760,298 8,669,594 9,630,015 Net transfers(2) 6,507,106 21,749,305 9,445,978 6,523,271 7,259,586 Transfers for policy loans (46,974) -- (104,587) -- (15,999) Annuity payments (23,113) (22,639) (32,445) (132) (1,096) Contact charges (18,012) (25,067) (23,772) (9,172) (5,478) Contract terminations: Surrender benefits (2,095,832) (3,172,722) (3,057,259) (845,127) (733,370) Death benefits (588,889) (1,205,831) (676,298) (516,936) (236,437) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 32,308,521 69,268,654 87,311,915 13,821,498 15,897,221 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 55,485,783 64,826,399 57,952,085 24,619,415 17,099,335 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 82,939,666 $ 138,405,728 $ 149,971,822 $ 42,852,491 $ 36,667,848 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 58,348,189 56,965,798 50,509,732 23,970,170 16,572,087 Contract purchase payments 31,849,578 44,235,559 69,887,068 8,001,948 8,880,448 Net transfers(2) 6,946,593 18,788,681 7,839,941 5,933,028 6,603,439 Transfers for policy loans (53,593) -- (89,693) -- (14,807) Contract charges (20,416) (21,424) (20,195) (8,416) (4,987) Contract terminations: Surrender benefits (2,551,983) (2,784,436) (2,688,557) (791,445) (685,434) Death benefits (673,223) (1,036,829) (571,993) (478,893) (217,939) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 93,845,145 116,147,349 124,866,303 36,626,392 31,132,807 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 111 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2002 (CONTINUED) GR1 GR2 IE1 IE2 MF1 OPERATIONS Investment income (loss) -- net $ (586,028) $ (480,779) $ (431) $ 26,315 $ 786,511 Net realized gain (loss) on sales of investments (11,399,244) (5,166,821) (4,534,478) (3,982,568) (2,177,581) Distributions from capital gains -- -- 24,316 20,548 4,109,822 Net change in unrealized appreciation or depreciation of investments (10,217,973) (17,529,137) 2,327,173 1,720,801 (9,529,068) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (22,203,245) (23,176,737) (2,183,420) (2,214,904) (6,810,316) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 6,610,895 12,949,971 2,940,285 5,059,823 15,747,009 Net transfers(2) (9,881,536) (6,891,728) (2,498,751) (2,209,704) (4,313,328) Transfers for policy loans -- (66,143) -- (20,866) -- Annuity payments (9,774) (10,942) (5,437) (4,198) (31,121) Contact charges (48,574) (87,358) (6,190) (8,327) (20,636) Contract terminations: Surrender benefits (1,839,761) (1,769,289) (243,402) (280,459) (1,155,121) Death benefits (795,604) (234,569) (85,017) (12,622) (1,095,898) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (5,964,354) 3,889,942 101,488 2,523,647 9,130,905 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 84,435,341 83,919,855 12,550,536 10,653,200 49,925,169 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 56,267,742 $ 64,633,060 $ 10,468,604 $ 10,961,943 $ 52,245,758 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 130,763,635 129,185,546 18,664,324 15,821,074 53,096,445 Contract purchase payments 12,358,946 24,140,748 5,261,904 8,291,256 19,510,292 Net transfers(2) (18,987,870) (13,595,191) (4,139,440) (3,504,710) (5,208,250) Transfers for policy loans -- (121,311) -- (36,566) -- Contract charges (91,661) (165,754) (10,240) (13,773) (24,371) Contract terminations: Surrender benefits (3,557,045) (3,336,134) (448,787) (525,497) (1,431,683) Death benefits (1,499,837) (414,727) (138,540) (19,830) (1,329,104) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 118,986,168 135,693,177 19,189,221 20,011,954 64,613,329 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 112 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2002 (CONTINUED) MF2 ND1 ND2 SV1 SV2 OPERATIONS Investment income (loss) -- net $ 850,012 $ (1,095,430) $ (573,342) $ (135,816) $ (142,322) Net realized gain (loss) on sales of investments (824,018) (7,878,723) (2,919,259) (62,523) (13,359) Distributions from capital gains 3,229,895 249,762 229,075 101,010 159,932 Net change in unrealized appreciation or depreciation of investments (9,041,112) (57,715,115) (62,280,465) (2,894,370) (4,882,493) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (5,785,223) (66,439,506) (65,543,991) (2,991,699) (4,878,242) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 29,272,168 43,058,058 77,762,083 15,186,765 26,379,690 Net transfers(2) (5,450,002) (152,920) 9,431,324 7,708,199 12,091,017 Transfers for policy loans (81,485) -- (370,728) -- (42,677) Annuity payments (37,898) (136,428) (72,907) (4,475) (2,285) Contact charges (28,866) (155,172) (299,746) (8,322) (12,546) Contract terminations: Surrender benefits (1,278,760) (6,603,268) (7,304,716) (249,980) (350,541) Death benefits (154,146) (3,383,835) (1,565,414) (110,824) (99,878) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 22,241,011 32,626,435 77,579,896 22,521,363 37,962,780 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 35,997,068 272,881,507 246,108,391 6,762,828 7,380,411 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 52,452,856 $ 239,068,436 $ 258,144,296 $ 26,292,492 $ 40,464,949 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 37,760,282 307,319,932 276,053,946 6,314,047 6,885,287 Contract purchase payments 34,836,176 56,760,406 100,818,617 14,851,259 25,298,820 Net transfers(2) (6,477,797) (2,392,297) 9,369,722 7,420,899 11,630,922 Transfers for policy loans (101,556) -- (475,357) -- (42,778) Contract charges (33,952) (202,531) (389,148) (9,114) (13,811) Contract terminations: Surrender benefits (1,527,227) (9,227,585) (9,620,229) (355,449) (455,275) Death benefits (182,946) (4,416,510) (2,042,277) (122,160) (104,371) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 64,272,980 347,841,415 373,715,274 28,099,482 43,198,794 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 113 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2002 (CONTINUED) IV1 IV2 SC1 SC2 ST1 OPERATIONS Investment income (loss) -- net $ 14,690 $ 87,780 $ (250,290) $ (191,218) $ (2,845) Net realized gain (loss) on sales of investments (669,250) (754,550) (258,710) (221,368) (14,531) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (8,957,858) (8,268,536) (4,777,707) (4,712,134) (298,088) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (9,612,418) (8,935,306) (5,286,707) (5,124,720) (315,464) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 9,951,423 14,733,959 4,111,489 6,345,570 1,644,032 Net transfers(2) 8,444,429 6,093,063 1,850,368 1,130,495 434,293 Transfers for policy loans -- (45,123) -- (23,188) -- Annuity payments (13,083) (6,961) (2,422) (1,316) (424) Contact charges (16,686) (24,245) (15,189) (18,156) (335) Contract terminations: Surrender benefits (1,023,927) (620,019) (555,102) (754,461) (21,776) Death benefits (337,450) (114,352) (362,392) (195,255) (28,718) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 17,004,706 20,016,322 5,026,752 6,483,689 2,027,072 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 32,012,342 28,328,739 26,157,483 24,593,724 499,121 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 39,404,630 $ 39,409,755 $ 25,897,528 $ 25,952,693 $ 2,210,729 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 40,574,978 35,957,387 24,346,498 22,792,239 517,488 Contract purchase payments 14,707,250 21,767,822 4,234,064 6,442,684 1,966,026 Net transfers(2) 11,892,826 8,424,925 1,735,676 994,879 506,254 Transfers for policy loans -- (60,886) -- (24,316) -- Contract charges (25,356) (37,229) (15,901) (18,946) (442) Contract terminations: Surrender benefits (1,632,150) (1,116,797) (581,296) (788,471) (32,064) Death benefits (506,841) (164,278) (377,960) (195,985) (36,036) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 65,010,707 64,770,944 29,341,081 29,202,084 2,921,226 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 114 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2002 (CONTINUED) ST2 SA1 SA2 1AC 2AC OPERATIONS Investment income (loss) -- net $ (349) $ (363,565) $ (280,565) $ (35,916) $ (38,996) Net realized gain (loss) on sales of investments (7,188) (15,379,249) (6,429,387) (29,974) (14,424) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (330,149) (687,288) (8,853,948) (1,090,574) (1,397,621) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (337,686) (16,430,102) (15,563,900) (1,156,464) (1,451,041) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 1,611,504 4,006,638 9,244,590 3,252,867 5,681,759 Net transfers(2) 630,297 (9,046,635) (7,727,360) 1,872,367 2,505,265 Transfers for policy loans (1,463) -- (21,172) -- (7,896) Annuity payments -- (11,563) (6,943) -- -- Contact charges (725) (29,138) (47,734) (2,057) (2,585) Contract terminations: Surrender benefits (17,417) (1,004,843) (1,107,826) (74,664) (105,411) Death benefits -- (414,666) (165,130) -- (13,995) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 2,222,196 (6,500,207) 168,425 5,048,513 8,057,137 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 606,355 53,044,804 47,764,584 1,669,759 1,669,796 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 2,490,865 $ 30,114,495 $ 32,369,109 $ 5,561,808 $ 8,275,892 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 628,289 65,574,383 58,747,770 1,711,418 1,710,005 Contract purchase payments 1,948,565 6,505,504 14,721,858 3,850,087 6,787,600 Net transfers(2) 735,964 (14,563,246) (12,439,413) 2,157,649 2,973,776 Transfers for policy loans (1,892) -- (33,649) -- (9,625) Contract charges (934) (44,718) (73,996) (2,762) (3,462) Contract terminations: Surrender benefits (22,320) (1,642,108) (1,709,177) (92,278) (130,160) Death benefits -- (647,024) (254,906) -- (15,017) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 3,287,672 55,182,791 58,958,487 7,624,114 11,313,117 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 115 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 1AD 2AD 1AB 2AB 1AL OPERATIONS Investment income (loss) -- net $ (23,874) $ (26,625) $ (31,493) $ (34,399) $ (56,481) Net realized gain (loss) on sales of investments (21,650) (26,371) (149) 1,807 (28,225) Distributions from capital gains -- -- -- -- 423,602 Net change in unrealized appreciation or depreciation of investments (645,931) (996,364) (243,997) (645,989) (3,733,546) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (691,455) (1,049,360) (275,639) (678,581) (3,394,650) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 2,114,267 3,285,832 5,391,597 7,690,125 14,859,137 Net transfers(2) 1,166,844 1,719,852 2,628,912 3,581,900 6,722,768 Transfers for policy loans -- (4,393) -- (7,562) -- Annuity payments (2,899) -- (235) -- (4,562) Contact charges (1,350) (1,684) (1,382) (1,351) (4,737) Contract terminations: Surrender benefits (65,243) (44,529) (20,618) (62,272) (138,018) Death benefits (34,979) (3,479) (3,440) (5,941) (89,466) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 3,176,640 4,951,599 7,994,834 11,194,899 21,345,122 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 1,201,714 1,433,282 771,212 786,589 4,225,204 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 3,686,899 $ 5,335,521 $ 8,490,407 $ 11,302,907 $ 22,175,676 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 1,224,392 1,459,193 790,198 804,909 4,363,102 Contract purchase payments 2,420,731 3,619,791 5,753,004 7,880,684 17,865,965 Net transfers(2) 1,314,459 1,963,655 2,759,063 3,713,042 7,913,134 Transfers for policy loans -- (3,839) -- (7,890) -- Contract charges (1,751) (2,181) (1,551) (1,505) (6,303) Contract terminations: Surrender benefits (105,065) (51,361) (27,088) (69,108) (252,129) Death benefits (44,747) (3,814) (3,714) (6,670) (113,635) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 4,808,019 6,981,444 9,269,912 12,313,462 29,770,134 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 116 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 2AL 1AI 2AI 1AV 2AV OPERATIONS Investment income (loss) -- net $ (46,367) $ (19,432) $ (19,495) $ (76,061) $ (80,091) Net realized gain (loss) on sales of investments (7,826) (21,695) (4,245) (24,439) (2,486) Distributions from capital gains 590,804 -- -- 626,430 671,809 Net change in unrealized appreciation or depreciation of investments (5,364,132) (907,389) (1,277,854) (3,071,603) (4,106,385) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (4,827,521) (948,516) (1,301,594) (2,545,673) (3,517,153) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 21,174,367 3,258,496 5,409,253 15,214,310 24,806,670 Net transfers(2) 10,866,124 2,016,223 2,498,827 7,590,600 9,715,110 Transfers for policy loans (27,102) -- (7,474) -- (47,183) Annuity payments (4,211) (1,280) -- (14,209) (995) Contact charges (7,820) (1,792) (2,365) (9,135) (12,993) Contract terminations: Surrender benefits (232,752) (72,101) (42,994) (247,006) (348,898) Death benefits (105,471) (31,092) (11,304) (179,919) (111,802) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 31,663,135 5,168,454 7,843,943 22,354,641 33,999,909 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 5,365,775 1,796,795 1,817,484 7,740,301 7,631,737 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 32,201,389 $ 6,016,733 $ 8,359,833 $ 27,549,269 $ 38,114,493 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 5,550,035 1,926,552 1,950,094 7,297,887 7,356,170 Contract purchase payments 25,268,621 3,959,722 6,468,421 15,988,379 25,702,004 Net transfers(2) 12,934,549 2,458,533 3,040,704 7,835,930 10,007,752 Transfers for policy loans (32,852) -- (8,846) -- (49,957) Contract charges (10,513) (2,402) (3,176) (10,333) (14,709) Contract terminations: Surrender benefits (385,192) (102,171) (55,096) (393,033) (381,076) Death benefits (135,505) (40,062) (14,008) (195,848) (122,816) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 43,189,143 8,200,172 11,378,093 30,522,982 42,497,368 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 117 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 1SR 2SR 1CG 2CG 1FG OPERATIONS Investment income (loss) -- net $ 162,092 $ 174,613 $ (18,702) $ (20,376) $ (38,617) Net realized gain (loss) on sales of investments (92,885) (76,939) (49,064) (37,027) (23,216) Distributions from capital gains -- -- 6,416 8,980 -- Net change in unrealized appreciation or depreciation of investments (957,880) (853,336) (512,425) (729,570) (3,356,075) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (888,673) (755,662) (573,775) (777,993) (3,417,908) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 2,277,965 2,820,762 1,928,259 2,851,080 17,335,094 Net transfers(2) 997,129 1,554,841 986,308 1,292,488 8,169,496 Transfers for policy loans -- (5,923) -- (8,189) -- Annuity payments -- (171) (1,242) -- (11,199) Contact charges (3,091) (7,167) (1,232) (1,524) (8,717) Contract terminations: Surrender benefits (148,474) (149,009) (25,181) (63,455) (272,241) Death benefits (51,565) (27,160) -- (42,076) (111,343) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 3,071,964 4,186,173 2,886,912 4,028,324 25,101,090 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 5,403,539 3,996,635 964,458 1,492,882 8,322,960 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 7,586,830 $ 7,427,146 $ 3,277,595 $ 4,743,213 $ 30,006,142 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 6,090,449 4,489,864 1,014,962 1,569,856 8,177,315 Contract purchase payments 2,814,172 3,443,325 2,386,142 3,480,573 19,577,536 Net transfers(2) 1,178,536 1,873,509 1,132,969 1,593,755 9,068,792 Transfers for policy loans -- (6,433) -- (9,816) -- Contract charges (3,849) (8,865) (1,670) (2,076) (10,527) Contract terminations: Surrender benefits (181,124) (239,568) (92,058) (82,334) (360,140) Death benefits (66,118) (31,839) -- (55,512) (133,389) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 9,832,066 9,519,993 4,440,345 6,494,446 36,319,587 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 118 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 2FG 1FM 2FM 1FO 2FO OPERATIONS Investment income (loss) -- net $ (56,440) $ (104,608) $ (115,091) $ (25,968) $ (26,799) Net realized gain (loss) on sales of investments -- (72,757) -- (23,479) (88,249) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (3,535,427) (2,234,071) (3,304,662) (1,248,421) (1,573,298) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (3,591,867) (2,411,436) (3,419,753) (1,297,868) (1,688,346) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 26,242,377 20,191,999 31,357,349 4,647,300 5,704,940 Net transfers(2) 11,743,411 8,528,618 12,293,441 2,317,123 3,924,365 Transfers for policy loans (36,885) -- (60,667) -- (7,638) Annuity payments (4,762) (1,247) (4,578) (2,834) (554) Contact charges (11,669) (9,882) (15,672) (2,277) (2,400) Contract terminations: Surrender benefits (326,723) (230,161) (319,868) (38,917) (91,034) Death benefits (145,557) (62,456) (160,084) (26,589) (39,094) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 37,460,192 28,416,871 43,089,921 6,893,806 9,488,585 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 6,353,602 6,949,500 7,245,643 2,036,350 2,028,833 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 40,221,927 $ 32,954,935 $ 46,915,811 $ 7,632,288 $ 9,829,072 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 6,362,646 6,689,131 6,903,484 2,156,704 2,146,868 Contract purchase payments 29,790,636 20,629,517 31,664,963 5,518,216 6,670,545 Net transfers(2) 13,302,503 8,591,468 12,482,447 2,601,433 4,535,758 Transfers for policy loans (42,731) -- (64,722) -- (8,860) Contract charges (14,131) (10,747) (16,996) (2,972) (3,154) Contract terminations: Surrender benefits (542,044) (292,835) (342,967) (117,307) (132,784) Death benefits (170,721) (65,146) (168,693) (32,924) (51,598) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 48,686,158 35,541,388 50,457,516 10,123,150 13,156,775 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 119 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 1RE 2RE 1SI 2SI 1MS OPERATIONS Investment income (loss) -- net $ 709,614 $ 1,037,266 $ (119,469) $ (96,122) $ (5,468) Net realized gain (loss) on sales of investments 1,982 (619) 161 (1,399) (16,300) Distributions from capital gains -- -- 525,770 672,078 74,894 Net change in unrealized appreciation or depreciation of investments (1,334,802) (2,049,365) (3,037,959) (4,282,792) (591,167) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (623,206) (1,012,718) (2,631,497) (3,708,235) (538,041) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 18,431,897 30,039,447 10,037,443 15,962,169 5,137,777 Net transfers(2) 17,779,240 20,520,794 8,828,278 10,052,041 2,069,471 Transfers for policy loans -- (60,082) -- (51,308) -- Annuity payments (7,920) (16,017) (2,162) (2,518) -- Contact charges (17,422) (19,879) (8,688) (12,233) (1,128) Contract terminations: Surrender benefits (1,310,057) (1,459,045) (476,219) (610,575) (31,104) Death benefits (479,363) (210,302) (187,804) (55,590) (849) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 34,396,375 48,794,916 18,190,848 25,281,986 7,174,167 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 26,463,745 32,992,245 12,869,436 14,607,898 1,074,799 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 60,236,914 $ 80,774,443 $ 28,428,787 $ 36,181,649 $ 7,710,925 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 19,803,454 24,476,850 9,583,606 10,800,259 1,114,064 Contract purchase payments 13,449,716 21,491,940 7,837,429 12,066,957 5,802,100 Net transfers(2) 12,686,885 14,661,797 6,653,181 7,473,331 2,272,671 Transfers for policy loans -- (42,735) -- (40,999) -- Contract charges (12,767) (14,453) (6,884) (9,622) (1,339) Contract terminations: Surrender benefits (990,253) (1,104,613) (371,207) (502,154) (35,909) Death benefits (345,834) (151,466) (143,274) (45,189) (1,005) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 44,591,201 59,317,320 23,552,851 29,742,583 9,150,582 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 120 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 2MS 1UE 2UE 1MC 2MC OPERATIONS Investment income (loss) -- net $ (336) $ (197,745) $ (63,009) $ 179,498 $ 363,858 Net realized gain (loss) on sales of investments (13,156) (1,876,119) (963,955) 1,096 (1,892) Distributions from capital gains 82,117 -- -- 191,001 226,426 Net change in unrealized appreciation or depreciation of investments (722,518) (12,710,694) (12,166,443) (4,290,020) (5,353,378) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (653,893) (14,784,558) (13,193,407) (3,918,425) (4,764,986) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 6,346,151 7,150,831 10,890,917 15,937,064 25,706,114 Net transfers(2) 2,713,369 (1,161,061) (426,261) 17,645,576 20,885,551 Transfers for policy loans (4,684) -- (67,008) -- (35,100) Annuity payments -- (16,261) (7,182) (14,898) (3,811) Contact charges (1,555) (26,694) (32,335) (22,114) (30,266) Contract terminations: Surrender benefits (62,924) (1,430,830) (1,058,454) (1,528,386) (1,420,380) Death benefits -- (740,275) (132,712) (446,497) (128,596) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 8,990,357 3,775,710 9,166,965 31,570,745 44,973,512 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 909,798 61,360,603 52,274,999 33,835,944 32,636,756 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 9,246,262 $ 50,351,755 $ 48,248,557 $ 61,488,264 $ 72,845,282 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 942,403 71,184,706 60,342,746 24,711,163 23,748,152 Contract purchase payments 7,049,451 9,599,116 14,587,614 11,743,803 18,629,848 Net transfers(2) 3,028,916 (2,260,621) (1,295,472) 12,652,556 14,927,262 Transfers for policy loans (4,852) -- (86,770) -- (24,652) Contract charges (1,843) (36,136) (44,138) (16,502) (22,467) Contract terminations: Surrender benefits (71,862) (1,999,970) (1,515,015) (1,221,085) (1,083,441) Death benefits -- (998,360) (169,123) (331,261) (95,367) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 10,942,213 75,488,735 71,819,842 47,538,674 56,079,335 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 121 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 1ID 2ID 1FS 2FS 1TC OPERATIONS Investment income (loss) -- net $ (22,225) $ (24,329) $ 130 $ 7,263 $ (11,128) Net realized gain (loss) on sales of investments (14,984) (13,854) (12,206) (1,589) (73,896) Distributions from capital gains -- -- 9,639 14,836 -- Net change in unrealized appreciation or depreciation of investments (863,696) (1,217,034) (398,526) (608,683) (720,545) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (900,905) (1,255,217) (400,963) (588,173) (805,569) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 1,797,212 2,674,267 1,983,738 2,811,344 889,647 Net transfers(2) 916,067 1,640,173 621,874 1,328,077 502,896 Transfers for policy loans -- (4,921) -- (6,882) -- Annuity payments (767) (797) -- -- -- Contact charges (1,619) (2,605) (1,502) (1,717) (779) Contract terminations: Surrender benefits (35,064) (56,389) (36,632) (27,762) (30,204) Death benefits (8,676) (18,169) (9,421) -- (23,472) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 2,667,153 4,231,559 2,558,057 4,103,060 1,338,088 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 1,368,953 1,502,622 869,140 1,043,826 827,719 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 3,135,201 $ 4,478,964 $ 3,026,234 $ 4,558,713 $ 1,360,238 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 1,426,478 1,549,777 900,903 1,081,186 911,194 Contract purchase payments 2,327,985 3,401,272 2,170,616 3,062,073 1,343,681 Net transfers(2) 1,172,766 2,054,883 692,619 1,470,576 669,149 Transfers for policy loans -- (6,969) -- (7,626) -- Contract charges (2,476) (4,056) (1,801) (2,113) (1,582) Contract terminations: Surrender benefits (66,472) (83,895) (43,471) (32,282) (47,757) Death benefits (13,513) (24,495) (9,791) -- (30,126) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 4,844,768 6,886,517 3,709,075 5,571,814 2,844,559 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 122 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 2TC 1TL 2TL 1GT 2GT OPERATIONS Investment income (loss) -- net $ (9,060) $ (5,087) $ (4,051) $ (98,594) $ (84,737) Net realized gain (loss) on sales of investments (29,282) (39,802) (49,264) (3,025,201) (1,801,244) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (716,596) (341,752) (266,609) (2,949,362) (4,576,884) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (754,938) (386,641) (319,924) (6,073,157) (6,462,865) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 1,445,708 418,337 648,498 1,175,260 2,808,789 Net transfers(2) 700,575 118,573 145,054 (1,350,857) (1,497,591) Transfers for policy loans (1,965) -- 1,686 -- (17,518) Annuity payments -- -- -- (1,778) (163) Contact charges (995) (332) (354) (8,219) (16,993) Contract terminations: Surrender benefits (20,127) (8,740) (13,113) (263,473) (260,800) Death benefits (6,069) -- (5,131) (92,013) (59,295) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 2,117,127 527,838 776,640 (541,080) 956,429 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 445,049 516,078 339,573 14,436,141 14,783,844 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 1,807,238 $ 657,275 $ 796,289 $ 7,821,904 $ 9,277,408 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 489,634 613,528 403,548 34,050,475 34,766,823 Contract purchase payments 2,277,851 789,648 1,280,820 3,557,520 8,657,280 Net transfers(2) 1,056,896 221,722 290,392 (4,918,561) (5,082,265) Transfers for policy loans (3,157) -- 3,471 -- (63,884) Contract charges (2,039) (802) (851) (27,942) (58,520) Contract terminations: Surrender benefits (37,668) (19,667) (26,688) (1,026,145) (849,431) Death benefits (12,640) -- (12,488) (281,678) (170,481) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 3,768,877 1,604,429 1,938,204 31,353,669 37,199,522 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 123 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 1IG 2IG 1IP 2IP 1MG OPERATIONS Investment income (loss) -- net $ (99,725) $ (18,112) $ (139,900) $ (100,626) $ (303,815) Net realized gain (loss) on sales of investments (1,179,439) (505,541) (260,970) (52,369) (1,108,330) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (10,240,285) (11,019,525) (1,621,411) (1,811,344) (9,711,494) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (11,519,449) (11,543,178) (2,022,281) (1,964,339) (11,123,639) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 5,968,392 10,323,865 3,667,889 6,418,148 6,229,638 Net transfers(2) 798,431 1,912,320 3,071,393 3,342,871 1,805,651 Transfers for policy loans -- (52,039) -- (8,668) -- Annuity payments (8,166) (5,450) (9,929) (8,020) (11,737) Contact charges (20,387) (30,442) (6,612) (8,330) (16,154) Contract terminations: Surrender benefits (743,999) (713,543) (294,712) (283,564) (817,902) Death benefits (344,185) (345,633) (155,011) (29,409) (218,845) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 5,650,086 11,089,078 6,273,018 9,423,028 6,970,651 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 38,964,943 36,904,470 14,291,834 11,604,651 34,386,783 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 33,095,580 $ 36,450,370 $ 18,542,571 $ 19,063,340 $ 30,233,795 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 64,147,250 60,527,027 19,727,365 15,860,418 51,051,303 Contract purchase payments 11,320,860 19,699,535 5,452,579 9,327,334 11,062,365 Net transfers(2) 841,163 3,145,575 4,492,775 4,850,797 2,495,971 Transfers for policy loans -- (98,489) -- (13,405) -- Contract charges (41,009) (61,668) (9,961) (12,425) (29,908) Contract terminations: Surrender benefits (1,484,235) (1,378,050) (577,996) (437,013) (1,535,284) Death benefits (672,684) (644,759) (231,400) (43,779) (381,887) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 74,111,345 81,189,171 28,853,362 29,531,927 62,662,560 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 124 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 2MG 1MD 2MD 1UT 2UT OPERATIONS Investment income (loss) -- net $ (256,634) $ (312,231) $ (252,889) $ 49,969 $ 54,956 Net realized gain (loss) on sales of investments (793,817) (451,597) (146,680) (125,966) (27,566) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (10,765,671) (12,676,865) (13,130,549) (813,369) (1,058,976) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (11,816,122) (13,440,693) (13,530,118) (889,366) (1,031,586) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 10,417,521 8,784,803 13,116,806 2,280,914 4,182,357 Net transfers(2) 2,272,851 4,934,262 6,737,157 1,197,847 1,515,571 Transfers for policy loans (32,639) -- (40,577) -- (13,399) Annuity payments (8,418) (1,677) (2,833) (2,706) -- Contact charges (24,920) (16,420) (24,506) (2,351) (2,993) Contract terminations: Surrender benefits (657,839) (706,502) (552,847) (190,723) (104,789) Death benefits (316,519) (222,963) (217,950) (53,790) (23,088) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 11,650,037 12,771,503 19,015,250 3,229,191 5,553,659 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 34,000,110 33,044,416 30,681,980 2,513,303 2,672,004 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 33,834,025 $ 32,375,226 $ 36,167,112 $ 4,853,128 $ 7,194,077 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 50,211,519 36,822,197 34,072,333 2,777,731 2,996,710 Contract purchase payments 18,279,637 11,870,022 17,942,518 3,128,074 5,729,510 Net transfers(2) 3,012,293 6,033,466 8,458,842 1,550,103 2,032,292 Transfers for policy loans (56,899) -- (54,694) -- (18,926) Contract charges (45,941) (24,051) (35,874) (3,600) (4,601) Contract terminations: Surrender benefits (1,288,280) (1,000,783) (829,539) (280,952) (157,252) Death benefits (535,914) (317,532) (281,115) (78,077) (34,276) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 69,576,415 53,383,319 59,272,471 7,093,279 10,543,457 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 125 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 1PE 2PE 1EU 2EU 1HS OPERATIONS Investment income (loss) -- net $ 57,319 $ 104,553 $ (3,265) $ (4,406) $ (33,448) Net realized gain (loss) on sales of investments (22,981) (12,695) (15,330) (4,503) (49,501) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (613,584 (1,042,503) (64,057) (123,124) (758,201) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (579,246) (950,645) (82,652) (132,033) (841,150) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 3,562,232 5,713,774 310,130 594,960 3,107,073 Net transfers(2) 1,811,797 3,635,426 210,931 457,671 1,179,650 Transfers for policy loans -- (2,648) -- (4,242) -- Annuity payments (892) (3,448) -- -- -- Contact charges (1,147) (1,447) (107) (235) (2,292) Contract terminations: Surrender benefits (31,358) (78,435) (31,616) (4,679) (57,239) Death benefits -- (9,422) -- -- (6,742) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 5,340,632 9,253,800 489,338 1,043,475 4,220,450 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 1,078,212 1,283,658 139,936 118,420 1,710,449 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 5,839,598 $ 9,586,813 $ 546,622 $ 1,029,862 $ 5,089,749 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 1,106,491 1,316,285 143,349 121,209 1,743,428 Contract purchase payments 4,090,595 6,448,296 357,119 679,598 3,600,002 Net transfers(2) 2,050,283 4,139,177 236,579 521,496 1,309,278 Transfers for policy loans -- (2,710) -- (4,592) -- Contract charges (1,443) (1,801) (139) (298) (2,922) Contract terminations: Surrender benefits (52,749) (236,463) (38,539) (5,363) (68,112) Death benefits -- (11,407) -- -- (7,452) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 7,193,177 11,651,377 698,369 1,312,050 6,574,222 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 126 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 2HS 1PI 2PI 1VS 2VS OPERATIONS Investment income (loss) -- net $ (42,173) $ (29,006) $ (30,152) $ (536,834) $ (385,531) Net realized gain (loss) on sales of investments (17,171) (6,066) (2,471) (12,292,996) (5,661,623) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (1,122,822) (1,304,489) (1,844,441) (9,589,578) (14,121,442) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (1,182,166) (1,339,561) (1,877,064) (22,419,408) (20,168,596) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 5,850,268 7,375,041 10,519,460 4,004,590 8,492,606 Net transfers(2) 2,223,581 3,825,599 5,479,955 (10,765,284) (8,197,615) Transfers for policy loans (12,920) -- (20,759) -- (92,203) Annuity payments (12) -- (20) (22,310) (4,672) Contact charges (3,660) (2,589) (3,327) (42,622) (64,203) Contract terminations: Surrender benefits (72,617) (67,207) (113,591) (1,547,977) (1,210,509) Death benefits (38,055) (34,903) (43,467) (482,379) (264,142) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 7,946,585 11,095,941 15,818,251 (8,855,982) (1,340,738) ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 2,098,225 2,092,135 2,363,246 74,483,171 63,852,496 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 8,862,644 $ 11,848,515 $ 16,304,433 $ 43,207,781 $ 42,343,162 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 2,136,818 2,180,274 2,460,406 87,722,365 74,818,967 Contract purchase payments 6,855,015 8,647,322 12,139,721 5,697,185 12,021,340 Net transfers(2) 2,581,647 4,437,292 6,392,363 (16,396,966) (12,432,366) Transfers for policy loans (15,629) -- (23,498) -- (125,199) Contract charges (4,657) (3,291) (4,278) (61,956) (93,898) Contract terminations: -- Surrender benefits (89,519) (78,177) (139,309) (2,339,054) (1,789,265) Death benefits (47,950) (45,568) (52,700) (691,817) (366,986) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 11,415,725 15,137,852 20,772,705 73,929,757 72,032,593 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 127 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 1SO 2SO 1IT 2IT 1SP OPERATIONS Investment income (loss) -- net $ (23,135) $ 1,093 $ (271,063) $ (208,427) $ (595,605) Net realized gain (loss) on sales of investments (31,634) (6,234) (753,804) (204,841) (119,971) Distributions from capital gains 258,468 385,946 -- -- -- Net change in unrealized appreciation or depreciation of investments (3,135,858) (4,121,068) (3,628,072) (4,210,201) (11,893,766) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (2,932,159) (3,740,263) (4,652,939) (4,623,469) (12,609,342) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 7,749,316 13,250,420 6,321,855 9,327,354 18,130,356 Net transfers(2) 3,912,352 5,336,892 4,285,898 3,973,057 12,140,991 Transfers for policy loans -- (11,837) -- (35,902) -- Annuity payments (1,122) (2,052) (4,475) (2,303) (12,497) Contact charges (4,551) (5,374) (14,377) (20,280) (30,181) Contract terminations: Surrender benefits (114,206) (178,643) (739,923) (543,855) (1,477,203) Death benefits (24,085) (29,655) (310,882) (84,527) (432,409) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 11,517,704 18,359,751 9,538,096 12,613,544 28,319,057 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 3,711,533 3,671,538 25,663,389 23,627,517 53,762,660 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 12,297,078 $ 18,291,026 $ 30,548,546 $ 31,617,592 $ 69,472,375 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 3,747,064 3,700,618 30,296,994 27,817,713 46,456,080 Contract purchase payments 9,086,671 15,766,810 8,081,187 11,583,078 17,344,297 Net transfers(2) 4,515,474 6,267,410 5,288,582 5,032,907 11,022,673 Transfers for policy loans -- (14,070) -- (44,915) -- Contract charges (6,323) (7,531) (18,094) (25,558) (29,565) Contract terminations: Surrender benefits (180,687) (275,225) (953,926) (701,350) (1,512,468) Death benefits (32,355) (41,377) (385,906) (107,873) (428,044) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 17,129,844 25,396,635 42,308,837 43,554,002 72,852,973 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 128 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 2SP 1AA 2AA 1WI 2WI OPERATIONS Investment income (loss) -- net $ (463,521) $ 88,546 $ 129,770 $ (10,542) $ (12,197) Net realized gain (loss) on sales of investments (5,393) (60,143) (40,543) (26,044) (29,260) Distributions from capital gains -- 69,604 86,201 -- -- Net change in unrealized appreciation or depreciation of investments (11,741,930) (1,029,825) (1,365,969) (351,155) (576,936) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (12,210,844) (931,818) (1,190,541) (387,741) (618,393) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 26,715,272 4,507,289 6,397,061 755,416 1,629,123 Net transfers(2) 14,825,155 3,345,301 3,745,797 640,394 1,180,252 Transfers for policy loans (75,788) -- (5,756) -- (2,669) Annuity payments (3,204) (788) (248) -- -- Contact charges (38,893) (2,746) (4,004) (633) (845) Contract terminations: Surrender benefits (1,229,699) (112,259) (163,838) (6,572) (23,129) Death benefits (310,011) (16,863) -- (19,619) (5,071) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 39,882,832 7,719,934 9,969,012 1,368,986 2,777,661 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 47,363,850 3,120,142 3,682,381 927,595 1,080,049 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 75,035,838 $ 9,908,258 $ 12,460,852 $ 1,908,840 $ 3,239,317 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 40,791,482 3,223,573 3,799,139 1,030,776 1,199,580 Contract purchase payments 25,474,549 5,098,853 7,120,413 986,332 2,098,893 Net transfers(2) 13,657,813 3,701,708 4,148,615 797,810 1,448,936 Transfers for policy loans (74,886) -- (6,388) -- (3,707) Contract charges (38,015) (3,214) (4,680) (881) (1,173) Contract terminations: Surrender benefits (1,212,634) (142,732) (193,290) (8,391) (32,251) Death benefits (287,226) (19,033) -- (25,133) (7,462) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 78,311,083 11,859,155 14,863,809 2,780,513 4,702,816 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 129 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 1SG 2SG BC4(1) BC5(1) BD4(1) OPERATIONS Investment income (loss) -- net $ (31,096) $ (29,762) $ (99) $ (3) $ 102,301 Net realized gain (loss) on sales of investments (63,438) (48,757) (2,530) (3,518) 441 Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (1,495,003) (1,747,517) (4,129) (8,698) 89,731 ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (1,589,537) (1,826,036) (6,758) (12,219) 192,473 =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 2,389,913 3,805,144 47,332 101,111 5,048,685 Net transfers(2) 1,614,913 1,946,653 (9,707) 10,613 990,704 Transfers for policy loans -- (3,846) -- (114) -- Annuity payments -- (6) -- -- -- Contact charges (1,617) (2,168) -- -- -- Contract terminations: Surrender benefits (100,806) (72,758) -- -- (24,633) Death benefits (6,086) (20,193) -- -- (17,438) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 3,896,317 5,652,826 37,625 111,610 5,997,318 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 2,095,392 1,939,030 -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 4,402,172 $ 5,765,820 $ 30,867 $ 99,391 $ 6,189,791 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 2,229,738 2,060,286 -- -- -- Contract purchase payments 3,458,438 5,432,455 51,902 116,317 5,024,503 Net transfers(2) 2,121,393 2,658,636 (12,772) 9,694 987,596 Transfers for policy loans -- (6,223) -- (149) -- Contract charges (2,713) (3,615) -- -- -- Contract terminations: Surrender benefits (143,010) (114,585) -- -- (24,382) Death benefits (9,203) (34,701) -- -- (17,055) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 7,654,643 9,992,253 39,130 125,862 5,970,662 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 130 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) BD5(1) CR4(1) CR5(1) CM4(1) CM5(1) OPERATIONS Investment income (loss) -- net $ 110,904 $ (146) $ (435) $ (8,255) $ 3,820 Net realized gain (loss) on sales of investments 3,451 (3,292) (4,295) (8) -- Distributions from capital gains -- 2 -- -- -- Net change in unrealized appreciation or depreciation of investments 102,258 (4,750) (14,865) -- -- ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 216,613 (8,186) (19,595) (8,263) 3,820 =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 6,006,171 54,601 247,183 29,659,364 27,036,148 Net transfers(2) 552,973 31,037 (8,756) (17,290,614) (14,422,833) Transfers for policy loans (3,498) -- -- -- (83,850) Annuity payments -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (21,182) -- (1,444) (227,446) (74,523) Death benefits (20,589) -- -- -- (16) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 6,513,875 85,638 236,983 12,141,304 12,454,926 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 6,730,488 $ 77,452 $ 217,388 $ 12,133,041 $ 12,458,746 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- -- -- Contract purchase payments 5,980,029 59,081 307,772 29,671,166 27,027,854 Net transfers(2) 545,339 36,798 (14,526) (17,295,362) (14,417,129) Transfers for policy loans (3,482) -- -- -- (83,818) Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (21,103) -- (1,838) (227,611) (74,486) Death benefits (19,934) -- -- -- (16) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 6,480,849 95,879 291,408 12,148,193 12,452,405 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 131 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) DE4(1) DE5(1) EM4(1) EM5(1) ES4(1) OPERATIONS Investment income (loss) -- net $ 5,437 $ 9,942 $ (811) $ (830) $ (3,752) Net realized gain (loss) on sales of investments (41,880) (10,151) (3,294) (2,784) (8,992) Distributions from capital gains -- 2 -- -- -- Net change in unrealized appreciation or depreciation of investments (260,421) (267,908) (9,359) (7,889) (28,332) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (296,864) (268,115) (13,464) (11,503) (41,076) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 1,561,433 2,326,663 54,887 182,387 710,007 Net transfers(2) 477,738 545,728 67,211 27,250 110,753 Transfers for policy loans -- (412) -- -- -- Annuity payments -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (38,087) (9,627) -- -- -- Death benefits (2,793) (9,411) -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 1,998,291 2,852,941 122,098 209,637 820,760 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 1,701,427 $ 2,584,826 $ 108,634 $ 198,134 $ 779,684 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- -- -- Contract purchase payments 1,615,763 2,524,209 57,166 195,357 780,228 Net transfers(2) 493,625 598,753 63,553 24,428 108,540 Transfers for policy loans -- (493) -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (47,561) (10,376) -- -- -- Death benefits (3,544) (11,276) -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 2,058,283 3,100,817 120,719 219,785 888,768 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 132 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) ES5(1) EI4(1) EI5(1) FI4(1) FI5(1) OPERATIONS Investment income (loss) -- net $ (3,597) $ 108,258 $ 102,922 $ 57,355 $ 44,500 Net realized gain (loss) on sales of investments (1,002) (8,841) (14,901) 7,474 2,919 Distributions from capital gains -- -- -- 29,490 21,659 Net change in unrealized appreciation or depreciation of investments (28,933) (129,692) (127,087) 58,697 37,589 ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (33,532) (30,275) (39,066) 153,016 106,667 =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 831,820 3,148,594 3,256,958 7,519,444 5,570,686 Net transfers(2) 219,050 872,880 497,017 401,496 717,229 Transfers for policy loans -- -- (2,087) -- (1,198) Annuity payments -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (3,854) (2,915) (11,928) (8,616) (35,740) Death benefits -- (1,713) -- (119,249) -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 1,047,016 4,016,846 3,739,960 7,793,075 6,250,977 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 1,013,484 $ 3,986,571 $ 3,700,894 $ 7,946,091 $ 6,357,644 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- -- -- Contract purchase payments 913,006 3,325,246 3,432,651 7,364,242 5,447,876 Net transfers(2) 244,703 949,252 539,108 405,206 695,143 Transfers for policy loans -- -- (2,224) -- (1,186) Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (4,448) (3,163) (12,951) (8,384) (34,767) Death benefits -- (1,880) -- (115,287) -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 1,153,261 4,269,455 3,956,584 7,645,777 6,107,066 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 133 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) GB4(1) GB5(1) GR4(1) GR5(1) IE4(1) OPERATIONS Investment income (loss) -- net $ 27,246 $ 14,742 $ (1,259) $ (2,057) $ (90) Net realized gain (loss) on sales of investments 1,770 1,400 (378) (2,856) (3,101) Distributions from capital gains -- -- -- -- 1 Net change in unrealized appreciation or depreciation of investments 99,985 57,109 (28,500) (44,758) (4,388) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 129,001 73,251 (30,137) (49,671) (7,578) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 979,709 778,812 237,212 632,485 65,710 Net transfers(2) 633,154 361,711 92,541 168,667 31,286 Transfers for policy loans -- -- -- (5,109) -- Annuity payments -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (331) (3,012) -- (1,267) -- Death benefits -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 1,612,532 1,137,511 329,753 794,776 96,996 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 1,741,533 $ 1,210,762 $ 299,616 $ 745,105 $ 89,418 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- -- -- Contract purchase payments 927,453 727,585 278,544 772,413 71,722 Net transfers(2) 601,721 335,624 113,363 208,619 33,306 Transfers for policy loans -- -- -- (6,457) -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (301) (2,716) -- (1,591) -- Death benefits -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 1,528,873 1,060,493 391,907 972,984 105,028 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 134 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) IE5(1) MF4(1) MF5(1) ND4(1) ND5(1) OPERATIONS Investment income (loss) -- net $ 38 $ 3,949 $ 3,899 $ (12,483) $ (8,741) Net realized gain (loss) on sales of investments (1,626) (3,688) (6,336) (24,649) (5,767) Distributions from capital gains -- 4,462 4,877 48 48 Net change in unrealized appreciation or depreciation of investments (3,452) (23,816) (22,109) (523,988) (521,615) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (5,040) (19,093) (19,669) (561,072) (536,075) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 50,346 436,050 490,049 3,734,594 4,815,164 Net transfers(2) 2,273 (2,988) 6,294 876,737 1,015,277 Transfers for policy loans -- -- -- -- (11,940) Annuity payments -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (423) -- -- (14,296) (27,084) Death benefits -- -- -- (1,021) -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 52,196 433,062 496,343 4,596,014 5,791,417 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 47,156 $ 413,969 $ 476,674 $ 4,034,942 $ 5,255,342 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- -- -- Contract purchase payments 53,518 461,983 522,557 4,101,520 5,433,353 Net transfers(2) 2,303 (193) 8,162 966,183 1,176,049 Transfers for policy loans -- -- -- -- (14,390) Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (449) -- -- (17,282) (30,430) Death benefits -- -- -- (1,216) -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 55,372 461,790 530,719 5,049,205 6,564,582 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 135 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) SV4(1) SV5(1) IV4(1) IV5(1) SC4(1) OPERATIONS Investment income (loss) -- net $ (11,881) $ (9,559) $ 106 $ 1,693 $ (1,839) Net realized gain (loss) on sales of investments (10,784) (14,043) (9,242) (4,877) (850) Distributions from capital gains 9,064 11,051 -- -- -- Net change in unrealized appreciation or depreciation of investments (305,019) (254,613) (132,736) (116,993) (31,020) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (318,620) (267,164) (141,872) (120,177) (33,709) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 2,182,749 2,570,076 1,252,259 1,284,612 347,330 Net transfers(2) 500,420 631,437 201,686 355,600 126,854 Transfers for policy loans -- (2,242) -- (1,236) -- Annuity payments -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (15,685) (4,552) (1,758) (13,750) (1,569) Death benefits -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 2,667,484 3,194,719 1,452,187 1,625,226 472,615 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 2,348,864 $ 2,927,555 $ 1,310,315 $ 1,505,049 $ 438,906 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- -- -- Contract purchase payments 2,169,600 2,644,769 1,427,906 1,476,669 376,372 Net transfers(2) 512,987 678,005 221,741 430,840 141,807 Transfers for policy loans -- (2,065) -- (1,298) -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (17,700) (5,112) (1,926) (16,774) (1,851) Death benefits -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 2,664,887 3,315,597 1,647,721 1,889,437 516,328 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 136 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) SC5(1) ST4(1) ST5(1) SA4(1) SA5(1) OPERATIONS Investment income (loss) -- net $ (2,808) $ (239) $ (58) $ (855) $ (448) Net realized gain (loss) on sales of investments (2,076) (784) (33) (5,512) (3,575) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (43,621) (13,387) (11,760) (19,305) (10,623) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (48,505) (14,410) (11,851) (25,672) (14,646) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 676,596 101,737 115,944 137,171 98,588 Net transfers(2) 141,308 12,829 52,696 7,488 (1,475) Transfers for policy loans -- -- -- -- -- Annuity payments -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (2,688) (83) (142) (3,322) (162) Death benefits -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 815,216 114,483 168,498 141,337 96,951 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 766,711 $ 100,073 $ 156,647 $ 115,665 $ 82,305 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- -- -- Contract purchase payments 740,787 109,629 135,274 157,351 116,390 Net transfers(2) 162,652 15,823 60,762 7,912 (2,054) Transfers for policy loans -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (3,088) (108) (174) (4,605) (217) Death benefits -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 900,351 125,344 195,862 160,658 114,119 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 137 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 4AC(1) 5AC(1) 4AD(1) 5AD(1) 4AB(1) OPERATIONS Investment income (loss) -- net $ (1,554) $ (1,288) $ (2,170) $ (1,786) $ (6,222) Net realized gain (loss) on sales of investments (1,487) (2,950) (4,675) (1,320) (11,724) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (36,442) (29,998) (48,617) (35,442) (87,977) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (39,483) (34,236) (55,462) (38,548) (105,923) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 282,240 282,813 347,872 359,645 1,201,124 Net transfers(2) 104,645 48,392 79,934 126,530 217,289 Transfers for policy loans -- -- -- -- -- Annuity payments -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits -- (1,334) (726) (3,597) (8,918) Death benefits -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 386,885 329,871 427,080 482,578 1,409,495 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 347,402 $ 295,635 $ 371,618 $ 444,030 $ 1,303,572 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- -- -- Contract purchase payments 322,161 328,278 378,758 411,494 1,167,044 Net transfers(2) 124,552 52,760 85,152 145,195 213,675 Transfers for policy loans -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits -- (1,575) (862) (4,392) (9,758) Death benefits -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 446,713 379,463 463,048 552,297 1,370,961 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 138 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 5AB(1) 4AL(1) 5AL(1) 4AI(1) 5AI(1) OPERATIONS Investment income (loss) -- net $ (4,690) $ (11,715) $ (7,176) $ (2,153) $ (3,125) Net realized gain (loss) on sales of investments (3,567) (21,520) (15,839) (6,962) (5,300) Distributions from capital gains -- 55,519 36,888 -- -- Net change in unrealized appreciation or depreciation of investments (46,057) (487,637) (322,065) (46,467) (74,613) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (54,314) (465,353) (308,192) (55,582) (83,038) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 1,090,404 2,726,916 2,761,387 326,849 720,339 Net transfers(2) 319,111 1,026,961 396,887 108,546 169,780 Transfers for policy loans (953) -- (6,196) -- -- Annuity payments -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (4,314) (3,313) (12,524) -- (5,038) Death benefits -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 1,404,248 3,750,564 3,139,554 435,395 885,081 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 1,349,934 $ 3,285,211 $ 2,831,362 $ 379,813 $ 802,043 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- -- -- Contract purchase payments 1,099,322 2,968,314 3,095,275 336,365 766,391 Net transfers(2) 322,952 1,107,214 428,424 111,717 183,783 Transfers for policy loans (808) -- (7,058) -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (4,363) (3,970) (13,860) -- (5,679) Death benefits -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 1,417,103 4,071,558 3,502,781 448,082 944,495 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 139 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 4AV(1) 5AV(1) 4SR(1) 5SR(1) 4CG(1) OPERATIONS Investment income (loss) -- net $ (12,469) $ (10,908) $ 4,509 $ 4,839 $ (2,697) Net realized gain (loss) on sales of investments (6,291) (9,458) (648) (429) (563) Distributions from capital gains 4,879 5,413 -- -- 88 Net change in unrealized appreciation or depreciation of investments (181,128) (151,646) (12,900) (8,782) (57,517) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (195,009) (166,599) (9,039) (4,372) (60,689) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 1,809,398 2,202,493 132,602 148,734 152,627 Net transfers(2) 517,668 507,108 69,867 44,400 329,922 Transfers for policy loans -- (1,784) -- -- -- Annuity payments -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (4,352) (9,056) -- (2,966) -- Death benefits (991) (9,616) (10,234) -- -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 2,321,723 2,689,145 192,235 190,168 482,549 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 2,126,714 $ 2,522,546 $ 183,196 $ 185,796 $ 421,860 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- -- -- Contract purchase payments 1,852,546 2,320,756 140,290 166,858 166,413 Net transfers(2) 548,979 537,954 79,770 47,660 355,111 Transfers for policy loans -- (2,005) -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (4,755) (9,353) -- (3,375) -- Death benefits (1,138) (10,845) (11,586) -- -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 2,395,632 2,836,507 208,474 211,143 521,524 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 140 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 5CG(1) 4FG(1) 5FG(1) 4FM(1) 5FM(1) OPERATIONS Investment income (loss) -- net $ (1,533) $ (17,453) $ (12,565) $ (19,080) $ (16,339) Net realized gain (loss) on sales of investments (2,027) (11,302) (27,536) (4,407) (12,530) Distributions from capital gains 185 -- -- -- -- Net change in unrealized appreciation or depreciation of investments (38,020) (231,885) (107,647) (229,611) (195,558) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (41,395) (260,640) (147,748) (253,098) (224,427) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 244,884 2,352,879 2,659,978 2,873,437 3,255,125 Net transfers(2) 107,339 909,216 585,103 566,110 744,513 Transfers for policy loans -- -- (3,863) -- -- Annuity payments -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (757) (7,164) (12,845) (8,453) (16,497) Death benefits -- -- (9,895) (980) -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 351,466 3,254,931 3,218,478 3,430,114 3,983,141 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 310,071 $ 2,994,291 $ 3,070,730 $ 3,177,016 $ 3,758,714 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- -- -- Contract purchase payments 259,203 2,528,602 2,990,987 2,951,794 3,417,303 Net transfers(2) 124,332 988,309 631,591 599,852 783,392 Transfers for policy loans -- -- (4,465) -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (882) (8,418) (14,962) (9,191) (18,323) Death benefits -- -- (11,495) (1,112) -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 382,653 3,508,493 3,591,656 3,541,343 4,182,372 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 141 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 4FO(1) 5FO(1) 4RE(1) 5RE(1) 4SI(1) OPERATIONS Investment income (loss) -- net $ (2,772) $ (1,949) $ 17,236 $ 11,608 $ (5,358) Net realized gain (loss) on sales of investments (1,116) (8,998) (7,178) (26,041) (12,429) Distributions from capital gains -- -- -- -- 12,398 Net change in unrealized appreciation or depreciation of investments (67,536) (53,946) (123,059) (92,601) (111,262) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (71,424) (64,893) (113,001) (107,034) (116,651) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 404,122 468,929 2,521,281 2,721,456 1,223,343 Net transfers(2) 171,513 54,151 605,996 326,632 373,380 Transfers for policy loans -- -- -- (1,591) -- Annuity payments -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits -- (599) (2,410) (24,759) (3,515) Death benefits -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 575,635 522,481 3,124,867 3,021,738 1,593,208 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 504,211 $ 457,588 $ 3,011,866 $ 2,914,704 $ 1,476,557 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- -- -- Contract purchase payments 417,687 492,092 2,410,057 2,599,839 1,229,627 Net transfers(2) 192,430 61,289 581,025 312,956 384,113 Transfers for policy loans -- -- -- (1,582) -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits -- (681) (2,331) (23,973) (3,865) Death benefits -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 610,117 552,700 2,988,751 2,887,240 1,609,875 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 142 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 5SI(1) 4MS(1) 5MS(1) 4UE(1) 5UE(1) OPERATIONS Investment income (loss) -- net $ (5,137) $ (2,043) $ (2,454) $ (370) $ 2,228 Net realized gain (loss) on sales of investments (3,667) (4,879) (3,188) (10,031) (8,894) Distributions from capital gains 12,206 11,680 7,057 -- -- Net change in unrealized appreciation or depreciation of investments (98,690) (98,227) (67,907) (178,276) (51,028) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (95,288) (93,469) (66,492) (188,677) (57,694) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 1,672,768 1,119,696 1,302,356 1,033,928 652,283 Net transfers(2) 345,024 241,940 311,996 362,206 249,235 Transfers for policy loans -- -- (950) -- -- Annuity payments -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (16,481) (8,096) (2,924) (17,849) (1,530) Death benefits -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 2,001,311 1,353,540 1,610,478 1,378,285 899,988 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 1,906,023 $ 1,260,071 $ 1,543,986 $ 1,189,608 $ 842,294 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- -- -- Contract purchase payments 1,744,618 1,171,050 1,402,118 1,104,149 748,262 Net transfers() 347,357 256,239 336,793 402,306 301,816 Transfers for policy loans -- -- (883) -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (17,450) (8,980) (3,267) (23,436) (1,888) Death benefits -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 2,074,525 1,418,309 1,734,761 1,483,019 1,048,190 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 143 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 4MC(1) 5MC(1) 4ID(1) 5ID(1) 4FS(1) OPERATIONS Investment income (loss) -- net $ 12,195 $ 14,981 $ (1,465) $ (989) $ 292 Net realized gain (loss) on sales of investments (5,387) (12,006) (2,330) (3,755) (2,861) Distributions from capital gains 8,164 7,436 -- -- 1,259 Net change in unrealized appreciation or depreciation of investments (216,041) (143,491) (43,199) (35,099) (38,662) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (201,069) (133,080) (46,994) (39,843) (39,972) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 2,033,410 2,108,887 169,655 155,815 262,165 Net transfers(2) 818,992 494,368 80,599 56,477 164,573 Transfers for policy loans -- -- -- -- -- Annuity payments -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (7,052) (5,927) -- -- (156) Death benefits -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 2,845,350 2,597,328 250,254 212,292 426,582 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 2,644,281 $ 2,464,248 $ 203,260 $ 172,449 $ 386,610 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- -- -- Contract purchase payments 1,977,213 2,094,147 190,672 175,503 269,224 Net transfers(2) 806,850 495,037 95,326 66,715 177,155 Transfers for policy loans -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (7,326) (6,097) -- -- (172) Death benefits -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 2,776,737 2,583,087 285,998 242,218 446,207 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 144 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 5FS(1) 4TC(1) 5TC(1) 4TL(1) 5TL(1) OPERATIONS Investment income (loss) -- net $ 1,258 $ (604) $ (551) $ (272) $ (152) Net realized gain (loss) on sales of investments 756 (7,032) 429 (139) (762) Distributions from capital gains 1,484 -- -- -- -- Net change in unrealized appreciation or depreciation of investments (9,451) (26,647) (31,192) (9,506) (3,731) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (5,953) (34,283) (31,314) (9,917) (4,645) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 204,306 70,366 114,702 14,375 34,232 Net transfers(2) 258,736 51,672 25,473 36,631 4,412 Transfers for policy loans -- -- -- -- -- Annuity payments -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (312) (28) (1,292) (30) (490) Death benefits -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 462,730 122,010 138,883 50,976 38,154 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 456,777 $ 87,727 $ 107,569 $ 41,059 $ 33,509 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- -- -- Contract purchase payments 218,518 82,162 152,836 18,960 50,848 Net transfers(2) 308,061 74,472 40,805 49,743 5,774 Transfers for policy loans -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (316) (43) (1,968) (46) (730) Death benefits -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 526,263 156,591 191,673 68,657 55,892 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 145 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 4GT(1) 5GT(1) 4IG(1) 5IG(1) 4IP(1) OPERATIONS Investment income (loss) -- net $ (612) $ (246) $ (376) $ (13) $ (2,526) Net realized gain (loss) on sales of investments (784) (435) (5,616) (4,879) (1,909) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (23,409) (12,654) (93,075) (67,145) (32,099) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (24,805) (13,335) (99,067) (72,037) (36,534) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 54,916 48,850 388,168 523,688 415,680 Net transfers(2) 40,914 7,852 220,335 88,881 141,412 Transfers for policy loans -- -- -- -- -- Annuity payments -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits -- (369) (1,312) (3,485) (32) Death benefits -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 95,830 56,333 607,191 609,084 557,060 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 71,025 $ 42,998 $ 508,124 $ 537,047 $ 520,526 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- -- -- Contract purchase payments 66,072 57,626 414,656 583,410 428,022 Net transfers(2) 45,915 10,518 232,618 101,263 138,457 Transfers for policy loans -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits -- (467) (1,601) (3,492) (35) Death benefits -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 111,987 67,677 645,673 681,181 566,444 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 146 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 5IP(1) 4MG(1) 5MG(1) 4MD(1) 5MD(1) OPERATIONS Investment income (loss) -- net $ (1,418) $ (3,333) $ (3,935) $ (8,103) $ (7,651) Net realized gain (loss) on sales of investments (2,038) (4,914) (2,249) (7,720) (7,925) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (12,604) (75,217) (126,071) (250,135) (249,453) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (16,060) (83,464) (132,255) (265,958) (265,029) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 368,669 451,282 884,800 1,145,203 1,479,196 Net transfers(2) 111,040 172,365 74,065 409,842 318,433 Transfers for policy loans -- -- -- -- -- Annuity payments -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (3,942) (1,081) (1,050) (1,576) (5,853) Death benefits -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 475,767 622,566 957,815 1,553,469 1,791,776 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 459,707 $ 539,102 $ 825,560 $ 1,287,511 $ 1,526,747 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- -- -- Contract purchase payments 386,442 519,054 1,007,998 1,293,996 1,745,497 Net transfers(2) 117,278 193,764 81,215 491,967 373,579 Transfers for policy loans -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (4,333) (1,291) (1,322) (2,101) (7,353) Death benefits -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 499,387 711,527 1,087,891 1,783,862 2,111,723 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 147 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 4UT(1) 5UT(1) 4PE(1) 5PE(1) 4EU(1) OPERATIONS Investment income (loss) -- net $ 1,811 $ 827 $ 7,569 $ 9,279 $ (287) Net realized gain (loss) on sales of investments (8,077) (4,956) (1,680) (7,535) (31) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (40,047) (11,429) (78,024) (61,779) (6,166) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (46,313) (15,558) (72,135) (60,035) (6,484) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 334,547 186,408 768,672 1,085,750 36,558 Net transfers(2) 78,690 66,214 313,902 205,549 12,429 Transfers for policy loans -- -- -- (297) -- Annuity payments -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (941) (2,461) (518) (7,116) -- Death benefits -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 412,296 250,161 1,082,056 1,283,886 48,987 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 365,983 $ 234,603 $ 1,009,921 $ 1,223,851 $ 42,503 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- -- -- Contract purchase payments 352,527 207,301 854,977 1,217,308 36,209 Net transfers(2) 79,232 71,097 335,063 230,366 13,723 Transfers for policy loans -- -- -- (346) -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (1,139) (2,879) (563) (8,424) -- Death benefits -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 430,620 275,519 1,189,477 1,438,904 49,932 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 148 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 5EU(1) 4HS(1) 5HS(1) 4PI(1) 5PI(1) OPERATIONS Investment income (loss) -- net $ (155) $ (3,186) $ (2,497) $ (4,754) $ (6,370) Net realized gain (loss) on sales of investments (283) (5,929) (1,346) (6,464) (6,476) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (2,564) (56,128) (49,270) (112,829) (137,716) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (3,002) (65,243) (53,113) (124,047) (150,562) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 20,868 456,767 393,032 974,738 1,598,971 Net transfers(2) 24,927 77,675 158,571 345,682 348,740 Transfers for policy loans -- -- -- -- (1,278) Annuity payments -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits -- (272) (1,323) (699) (2,080) Death benefits -- -- -- (679) -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 45,795 534,170 550,280 1,319,042 1,944,353 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 42,793 $ 468,927 $ 497,167 $ 1,194,995 $ 1,793,791 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- -- -- Contract purchase payments 23,299 492,017 436,101 1,016,413 1,709,305 Net transfers(2) 26,884 91,458 182,694 377,257 380,270 Transfers for policy loans -- -- -- -- (1,255) Contract charges -- -- -- -- -- Contract terminations: Surrender benefits -- (322) (1,539) (751) (2,316) Death benefits -- -- -- (824) -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 50,183 583,153 617,256 1,392,095 2,086,004 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 149 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 4VS(1) 5VS(1) 4SO(1) 5SO(1) 4IT(1) OPERATIONS Investment income (loss) -- net $ (696) $ (1,009) $ (3,709) $ (81) $ (3,891) Net realized gain (loss) on sales of investments (566) (544) (45,337) (27,196) (5,255) Distributions from capital gains -- -- 31,934 36,278 -- Net change in unrealized appreciation or depreciation of investments (12,669) (29,541) (350,441) (280,597) (59,832) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (13,931) (31,094) (367,553) (271,596) (68,978) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 126,808 202,082 1,687,406 1,584,132 774,284 Net transfers(2) 27,293 25,098 177,536 443,313 212,173 Transfers for policy loans -- -- -- -- -- Annuity payments -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits -- (1,166) (13,722) (3,431) (127) Death benefits -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 154,101 226,014 1,851,220 2,024,014 986,330 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 140,170 $ 194,920 $ 1,483,667 $ 1,752,418 $ 917,352 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- -- -- Contract purchase payments 158,308 235,761 1,827,717 1,822,128 824,627 Net transfers(2) 34,104 32,541 175,474 522,485 230,513 Transfers for policy loans -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits -- (1,190) (18,281) (4,336) (149) Death benefits -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 192,412 267,112 1,984,910 2,340,277 1,054,991 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 150 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 5IT(1) 4SP(1) 5SP(1) 4AA(1) 5AA(1) OPERATIONS Investment income (loss) -- net $ (4,004) $ (15,328) $ (12,148) $ 4,699 $ 6,737 Net realized gain (loss) on sales of investments (3,286) (36,377) (9,459) (15,715) (118) Distributions from capital gains -- -- -- 3,773 2,855 Net change in unrealized appreciation or depreciation of investments (45,145) (264,870) (159,650) (52,185) (32,767) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (52,435) (316,575) (181,257) (59,428) (23,293) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 1,172,857 2,488,759 2,790,294 669,993 783,858 Net transfers(2) 214,314 497,034 584,723 68,914 391,677 Transfers for policy loans (962) -- (1,629) -- (12,492) Annuity payments -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (6,931) (12,056) (20,405) -- (9,916) Death benefits -- (1,406) -- (301) -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 1,379,278 2,972,331 3,352,983 738,606 1,153,127 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 1,326,843 $ 2,655,756 $ 3,171,726 $ 679,178 $ 1,129,834 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- -- -- Contract purchase payments 1,306,733 2,604,506 3,109,491 705,387 863,808 Net transfers(2) 225,488 542,206 648,350 65,290 441,922 Transfers for policy loans (1,120) -- (1,905) -- (15,659) Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (7,852) (14,308) (23,632) -- (10,824) Death benefits -- (1,727) -- (339) -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 1,523,249 3,130,677 3,732,304 770,338 1,279,247 ===============================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 151 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2002 (CONTINUED) 4WI(1) 5WI(1) 4SG(1) 5SG(1) OPERATIONS Investment income (loss) -- net $ (280) $ (248) $ (1,914) $ (2,012) Net realized gain (loss) on sales of investments (631) (2,283) (6,078) (7,821) Distributions from capital gains -- -- -- -- Net change in unrealized appreciation or depreciation of investments (8,202) (6,766) (78,872) (60,481) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (9,113) (9,297) (86,864) (70,314) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 39,505 61,346 324,028 404,673 Net transfers(2) 34,449 14,669 20,438 109,910 Transfers for policy loans -- -- -- -- Annuity payments -- -- -- -- Contract charges -- -- -- -- Contract terminations: Surrender benefits -- (1,257) (61) (2,860) Death benefits -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 73,954 74,758 344,405 511,723 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 64,841 $ 65,461 $ 257,541 $ 441,409 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- -- Contract purchase payments 40,855 67,743 363,645 532,986 Net transfers(2) 39,625 14,641 23,392 133,378 Transfers for policy loans -- -- -- -- Contract charges -- -- -- -- Contract terminations: Surrender benefits -- (1,278) (89) (4,346) Death benefits -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 80,480 81,106 386,948 662,018 ===============================================================================================================================
(1) For the period Feb. 13, 2002 (commencement of operations) to Dec. 31, 2002. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 152 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2001 BC1 BC2 BD1 BD2 CR1 OPERATIONS Investment income (loss) -- net $ (82,542) $ (577) $ 4,472,512 $ 3,511,227 $ (130,576) Net realized gain (loss) on sale of investments (913,700) (419,447) 10,608 11,539 (1,013,877) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (7,186,847) (5,811,752) 125,819 21,829 (3,287,133) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (8,183,089) (6,231,776) 4,608,939 3,544,595 (4,431,586) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 6,713,990 6,771,370 49,725,069 42,970,829 4,389,778 Net transfers(1) 1,293,753 1,958,191 21,962,987 18,805,553 594,595 Transfers for policy loans -- (40,036) -- (70,196) -- Annuity payments (9,583) (10,278) (16,215) (29,070) (8,738) Contract charges (17,721) (23,153) (14,674) (11,523) (8,792) Contract terminations: Surrender benefits (805,610) (769,340) (1,194,952) (1,777,156) (673,922) Death benefits (884,333) (220,527) (879,328) (426,007) (292,495) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 6,290,496 7,666,227 69,582,887 59,462,430 4,000,426 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 42,640,523 32,328,669 46,643,337 32,903,174 20,805,184 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 40,747,930 $ 33,763,120 $ 120,835,163 $ 95,910,199 $ 20,374,024 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 43,160,879 32,624,409 43,919,764 30,783,302 22,158,834 Contract purchase payments 7,625,134 7,686,234 45,045,501 38,716,653 5,314,026 Net transfers(1) 1,058,740 2,014,717 19,675,405 16,518,832 574,720 Transfers for policy loans -- (46,285) -- (59,966) -- Contract charges (20,805) (27,391) (13,229) (10,334) (11,157) Contract terminations: Surrender benefits (929,594) (904,763) (1,077,005) (1,594,166) (874,065) Death benefits (997,245) (264,288) (790,563) (385,976) (383,402) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 49,897,109 41,082,633 106,759,873 83,968,345 26,778,956 ===============================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 153 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2001 (CONTINUED) CR2 CM1 CM2 DE1 DE2 OPERATIONS Investment income (loss) -- net $ (91,410) $ 6,777,254 $ 6,693,209 $ 75,573 $ 130,806 Net realized gain (loss) on sale of investments (1,446,808) (6,224) (5,115) 6,237 (18,579) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (3,108,462) (1,569) (2,181) 318,919 400,925 ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (4,646,680) 6,769,461 6,685,913 400,729 513,152 =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 4,776,551 342,222,386 369,657,167 14,054,361 13,752,558 Net transfers(1) (1,587,827) (263,139,059) (281,078,216) 14,212,636 19,259,054 Transfers for policy loans (16,136) -- (646,854) -- (45,235) Annuity payments (14,795) (8,031) (10,821) (4,776) (15,001) Contract charges (11,664) (36,516) (34,717) (6,393) (7,748) Contract terminations: Surrender benefits (674,343) (8,710,090) (9,225,653) (479,935) (909,530) Death benefits (79,495) (3,529,330) (913,821) (378,637) (47,949) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 2,392,291 66,799,360 77,747,085 27,397,256 31,986,149 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 22,498,228 216,160,455 182,627,717 14,383,005 12,314,922 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 20,243,839 $ 289,729,276 $ 267,060,715 $ 42,180,990 $ 44,814,223 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 24,003,237 203,921,835 171,785,378 14,226,644 12,123,600 Contract purchase payments 5,867,959 317,770,845 341,825,045 13,856,380 13,564,035 Net transfers(1) (2,553,526) (244,865,486) (259,751,737) 14,080,483 18,634,557 Transfers for policy loans (19,854) -- (603,310) -- (44,661) Contract charges (14,838) (33,798) (31,998) (6,381) (7,724) Contract terminations: Surrender benefits (848,811) (8,070,470) (8,515,673) (485,399) (894,796) Death benefits (107,334) (3,267,463) (837,718) (372,450) (46,843) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 26,326,833 265,455,463 243,869,987 41,299,277 43,328,168 ===============================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 154 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) EM1 EM2 ES1(1) ES2(1) EI1 OPERATIONS Investment income (loss) -- net $ (7,822) $ (7,440) $ (5,336) $ (4,556) $ 6,782,428 Net realized gain (loss) on sale of investments (23,970) (32,388) (3,305) (755) (303,977) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments 24,439 30,375 145,238 166,115 (4,672,141) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (7,353) (9,453) 136,597 160,804 1,806,310 =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 340,551 423,682 1,223,750 1,104,678 26,521,344 Net transfers(2) 306,917 224,616 865,376 1,222,298 9,620,050 Transfers for policy loans -- 6 -- (2,271) -- Annuity payments -- -- -- -- (9,476) Contract charges (325) (388) (51) (93) (12,818) Contract terminations: Surrender benefits (38,486) (15,340) (821) (8,855) (1,051,390) Death benefits (3,324) -- (420) -- (777,077) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 605,333 632,576 2,087,834 2,315,757 34,290,633 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 510,421 667,909 -- -- 47,919,805 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 1,108,401 $ 1,291,032 $ 2,224,431 $ 2,476,561 $ 84,016,748 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 693,177 905,842 -- -- 52,654,863 Contract purchase payments 474,542 610,461 1,328,039 1,194,587 28,119,894 Net transfers(2) 437,651 296,013 911,692 1,306,648 9,999,258 Transfers for policy loans -- 8 -- (2,764) -- Contract charges (495) (585) (55) (98) (13,626) Contract terminations: Surrender benefits (58,645) (22,297) (829) (9,603) Death benefits (4,724) -- (495) -- (826,853) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 1,541,506 1,789,442 2,238,352 2,488,770 88,813,366 ===============================================================================================================================
(1) For the period May 1, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 155 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) EI2 FI1 FI2 GB1 GB2 OPERATIONS Investment income (loss) -- net $ 4,393,097 $ 1,602,320 $ 1,386,303 $ 515,000 $ 374,108 Net realized gain (loss) on sale of investments (160,883) 115,344 105,834 7,743 8,801 Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (3,021,874) 303,044 183,508 (374,661) (248,055) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 1,210,340 2,020,708 1,675,645 148,082 134,854 =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 17,068,500 41,951,942 45,451,233 6,302,051 3,913,988 Net transfers(1) 9,900,374 (3,649,829) (5,340,773) 4,226,401 4,150,291 Transfers for policy loans (18,715) -- 13,336 -- (7,782) Annuity payments (7,176) (17,845) (21,104) -- (223) Contract charges (7,504) (5,991) (4,504) (3,360) (2,027) Contract terminations: Surrender benefits (1,163,675) (1,083,884) (1,246,093) (251,279) (238,993) Death benefits (412,002) (1,132,180) (132,028) (265,966) (49,779) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 25,359,802 36,062,213 38,720,067 10,007,847 7,765,475 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 28,915,641 26,743,478 17,556,373 14,463,486 9,199,006 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 55,485,783 $ 64,826,399 $ 57,952,085 $ 24,619,415 $ 17,099,335 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 31,722,406 24,654,215 16,257,973 14,136,694 8,967,857 Contract purchase payments 18,004,587 37,617,335 40,630,026 6,194,256 3,840,138 Net transfers(1) 10,328,772 (3,318,511) (5,159,591) 4,148,142 4,053,818 Transfers for policy loans (33,737) -- 14,016 -- (6,265) Contract charges (7,970) (5,337) (4,001) (3,291) (1,972) Contract terminations: Surrender benefits (1,230,737) (970,409) (1,110,127) (245,710) (233,242) Death benefits (435,132) (1,011,495) (118,564) (259,921) (48,247) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 58,348,189 56,965,798 50,509,732 23,970,170 16,572,087 ===============================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 156 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2001 (CONTINUED) GR1 GR2 IE1 IE2 MF1 OPERATIONS Investment income (loss) -- net $ (854,224) $ (644,742) $ 37,851 $ 55,628 $ 743,187 Net realized gain (loss) on sale of investments (2,571,206) (2,056,467) (3,129,842) (1,771,542) (532,527) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (33,312,633) (31,681,624) (1,774,706) (2,564,164) (5,943,562) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (36,738,063) (34,382,833) (4,866,697) (4,280,078) (5,732,902) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 16,856,244 22,672,049 2,526,895 3,347,153 12,432,772 Net transfers(1) 6,551,337 5,300,049 322,065 (1,055,780) 2,859,791 Transfers for policy loans -- (73,853) -- (2,785) -- Annuity payments (8,261) (13,230) (5,487) (1,816) (32,558) Contract charges (50,870) (82,403) (5,833) (7,519) (16,001) Contract terminations: Surrender benefits (1,763,967) (1,542,695) (208,700) (528,184) (883,015) Death benefits (876,449) (577,553) (134,254) (79,529 (1,023,983) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 20,708,034 25,682,364 2,494,686 1,671,540 13,337,006 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 100,465,370 92,620,324 14,922,547 13,261,738 42,321,065 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 84,435,341 $ 83,919,855 $ 12,550,536 $ 10,653,200 $ 49,925,169 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 106,410,129 97,753,895 15,669,531 13,967,274 39,809,954 Contract purchase payments 21,363,294 29,129,404 3,247,058 4,307,312 12,624,783 Net transfers(1) 6,683,732 5,493,506 239,461 (1,622,539) 2,672,442 Transfers for policy loans -- (91,133) -- (4,766) -- Contract charges (71,973) (119,314) (7,867) (10,211) (16,866) Contract terminations: Surrender benefits (2,419,809) (2,109,768) (289,347) (707,757) (933,490) Death benefits (1,201,738) (871,044) (194,512) (108,239) (1,060,3778) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 130,763,635 129,185,546 18,664,324 15,821,074 53,096,445 ===============================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 157 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) MF2 ND1 ND2 SV1(1) SV2(1) OPERATIONS Investment income (loss) -- net $ 605,079 $ (1,772,223) $ (1,077,220) $ (9,562) $ (8,569) Net realized gain (loss) on sale of investments (613,772) (1,450,035) (826,428) 134 122 Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (4,117,880) (43,582,529) (36,023,903) 636,330 719,093 ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (4,126,573) (46,804,787) (37,927,551) 626,902 710,646 =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 10,904,709 59,630,863 69,607,526 4,132,831 4,402,590 Net transfers(2) 436,226 31,815,657 30,242,168 2,005,237 2,286,137 Transfers for policy loans (62,185) -- (300,355) -- (822) Annuity payments (28,440) (106,582) (64,007) -- -- Contract charges (18,959) (122,887) (209,732) -- -- Contract terminations: Surrender benefits (1,016,110) (4,269,471) (4,656,885) (2,142) (6,910) Death benefits (251,211) (3,154,328) (1,242,509) -- (11,230) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 9,964,030 83,793,252 93,376,206 6,135,926 6,669,765 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 30,159,611 235,893,042 190,659,736 -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 35,997,068 $ 272,881,507 $ 246,108,391 $ 6,762,828 $ 7,380,411 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 28,347,806 219,315,532 177,036,037 -- -- Contract purchase payments 10,883,619 63,685,877 75,517,249 4,265,176 4,576,323 Net transfers(2) (71,035) 32,657,262 30,544,238 2,050,945 2,327,936 Transfers for policy loans (62,503) -- (327,660) -- (891) Contract charges (19,991) (135,276) (234,162) -- -- Contract terminations: Surrender benefits (1,055,709) (4,683,672) (5,097,329) (2,074) (6,804) Death benefits (261,905) (3,519,791) (1,384,427) -- (11,277) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 37,760,282 307,319,932 276,053,946 6,314,047 6,885,287 ===============================================================================================================================
(1) For the period Aug. 14, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 158 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) IV1 IV2 SC1 SC2 ST1(1) OPERATIONS Investment income (loss) -- net $ (8,959) $ 32,791 $ (209,229) $ (151,301) $ 79 Net realized gain (loss) on sale of investments (266,630) (116,886) (78,014) (102,425) 396 Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (2,445,276) (1,793,989) (950,703) (831,931) 17,935 ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (2,720,865) (1,878,084) (1,237,946) (1,085,657) 18,410 =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 13,255,005 11,375,665 5,853,998 5,837,161 417,797 Net transfers(2) 9,098,862 10,347,928 3,157,833 3,277,581 62,954 Transfers for policy loans -- (8,382) -- (22,951) -- Annuity payments (12,768) (4,371) (2,360) (151) -- Contract charges (5,261) (6,867) (9,334) (10,559) -- Contract terminations: Surrender benefits (298,965) (302,197) (385,481) (501,925) (40) Death benefits (171,996) (92,554) (199,328) (146,546) -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 21,864,877 21,309,222 8,415,328 8,432,610 480,711 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 12,868,330 8,897,601 18,980,101 17,246,771 -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 32,012,342 $ 28,328,739 $ 26,157,483 $ 24,593,724 $ 499,121 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 14,083,617 9,811,519 16,348,580 14,830,157 -- Contract purchase payments 16,088,251 13,932,671 5,556,365 5,537,409 452,721 Net transfers(2) 11,020,795 12,722,058 3,010,893 3,075,969 64,809 Transfers for policy loans -- (10,599) -- (22,722) -- Contract charges (6,709) (8,769) (9,009) (10,209) -- Contract terminations: Surrender benefits (389,780) (375,218) (373,745) (478,787) (42) Death benefits (221,196) (114,275) (186,586) (139,578) -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 40,574,978 35,957,387 24,346,498 22,792,239 517,488 ===============================================================================================================================
(1) For the period Aug. 13, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 159 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) ST2(1) SA1 SA2 1AC(1) 2AC(1) OPERATIONS Investment income (loss) -- net $ 76 $ (427,976) $ (265,336) $ (2,608) $ (1,721) Net realized gain (loss) on sale of investments (1,765) (4,487,060) (2,587,418) (7,432) -- Distributions from capital gains -- -- -- 113,227 108,945 Net change in unrealized appreciation or depreciation of investments 13,051 (20,948,920) (18,639,966) (1,017) (21,754) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 11,362 (25,863,956) (21,492,720) 102,170 85,470 =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 530,726 9,246,850 12,570,125 1,272,672 998,022 Net transfers(2) 64,267 1,648 887,054 295,221 586,627 Transfers for policy loans -- -- (42,648) -- -- Annuity payments -- (10,453) (9,925) -- -- Contract charges -- (33,125) (48,827) -- -- Contract terminations: Surrender benefits -- (913,800) (1,190,958) (304) (323) Death benefits -- (471,176) (242,645) -- -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 594,993 7,819,944 11,922,176 1,567,589 1,584,326 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- 71,088,816 57,335,128 -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 606,355 $ 53,044,804 $ 47,764,584 $ 1,669,759 $ 1,669,796 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- 58,413,697 46,977,698 -- -- Contract purchase payments 563,788 9,712,757 13,376,509 1,389,052 1,087,142 Net transfers(2) 64,501 (929,954) 114,697 322,693 623,218 Transfers for policy loans -- -- (51,536) -- -- Contract charges -- (37,329) (55,627) -- -- Contract terminations: Surrender benefits -- (1,025,427) (1,350,333) (327) (355) Death benefits -- (559,361) (263,638) -- -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 628,289 65,574,383 58,747,770 1,711,418 1,710,005 ===============================================================================================================================
(1) For the period Aug. 13, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 160 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) 1AD(1) 2AD(1) 1AB(1) 2AB(1) 1AL(1) OPERATIONS Investment income (loss) -- net $ (1,907) $ (1,641) $ (1,028) $ (740) $ (6,103) Net realized gain (loss) on sale of investments -- (6,225) 3 (381) (3) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments 85,443 100,285 36,094 32,400 130,188 ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 83,536 92,419 35,069 31,279 124,082 =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 837,295 1,026,467 574,902 571,388 3,116,862 Net transfers(2) 280,883 317,468 161,241 184,088 985,097 Transfers for policy loans -- (1,038) -- -- -- Annuity payments -- -- -- -- (289) Contract charges -- -- -- -- -- Contract terminations: Surrender benefits -- (2,034) -- (166) (548) Death benefits -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 1,118,178 1,340,863 736,143 755,310 4,101,122 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 1,201,714 $ 1,433,282 $ 771,212 $ 786,589 $ 4,225,204 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- -- -- Contract purchase payments 919,601 1,120,921 618,416 608,110 3,331,999 Net transfers(2) 304,791 341,550 171,782 196,975 1,031,695 Transfers for policy loans -- (1,060) -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits -- (2,218) -- (176) (592) Death benefits -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 1,224,392 1,459,193 790,198 804,909 4,363,102 ===============================================================================================================================
(1) For the period Aug. 13, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 161 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) 2AL(1) 1AI(1) 2AI(1) 1AV(1) 2AV(1) OPERATIONS Investment income (loss) -- net $ (5,751) $ (2,701) $ (2,098) $ (11,475) $ (9,729) Net realized gain (loss) on sale of investments (310) -- (268) (3,473) -- Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments 149,955 20,221 20,730 470,877 507,102 ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 143,894 17,520 18,364 455,929 497,373 =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 3,677,719 1,267,311 1,227,141 5,828,858 5,344,703 Net transfers(2) 1,550,983 512,649 573,507 1,457,582 1,868,268 Transfers for policy loans (1,703) -- -- -- (732) Annuity payments (164) (35) -- (819) (63) Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (4,954) (277) (1,528) (1,249) (12,707) Death benefits -- (373) -- -- (65,105) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 5,221,881 1,779,275 1,799,120 7,284,372 7,134,364 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 5,365,775 $ 1,796,795 $ 1,817,484 $ 7,740,301 $ 7,631,737 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- -- -- Contract purchase payments 3,920,141 1,372,449 1,328,329 5,997,971 5,522,293 Net transfers(2) 1,636,834 554,816 623,429 1,301,188 1,912,474 Transfers for policy loans (1,783) -- -- -- (705) Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (5,157) (304) (1,664) (1,272) (12,833) Death benefits -- (409) -- -- (65,059) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 5,550,035 1,926,552 1,950,094 7,297,887 7,356,170 ===============================================================================================================================
(1) For the period Aug. 13, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 162 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) 1SR 2SR 1CG(1) 2CG(1) 1FG(1) OPERATIONS Investment income (loss) -- net $ 170,068 $ 131,183 $ (1,396) $ (2,018) $ (12,618) Net realized gain (loss) on sale of investments (32,915) (15,222) 1,554 (9) -- Distributions from capital gains 98,967 73,349 -- -- -- Net change in unrealized appreciation or depreciation of investments (464,785) (348,450) 25,050 22,091 282,907 ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (228,665) (159,140) 25,208 20,064 270,289 =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 2,027,795 1,627,761 660,262 1,077,535 5,965,121 Net transfers(2) 2,100,155 1,370,419 279,284 395,527 2,091,085 Transfers for policy loans -- (15,288) -- -- -- Annuity payments -- -- -- -- (726) Contract charges (1,091) (2,458) -- -- -- Contract terminations: Surrender benefits (107,149) (57,223) (296) (244) (2,809) Death benefits (14,150) (2,099) -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 4,005,560 2,921,112 939,250 1,472,818 8,052,671 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 1,626,644 1,234,663 -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 5,403,539 $ 3,996,635 $ 964,458 $ 1,492,882 $ 8,322,960 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 1,692,742 1,282,907 -- -- -- Contract purchase payments 2,218,817 1,779,788 709,008 1,144,758 6,188,074 Net transfers(2) 2,315,274 1,513,134 306,275 425,359 1,992,080 Transfers for policy loans -- (16,900) -- -- -- Contract charges (1,219) (2,766) -- -- -- Contract terminations: Surrender benefits (119,334) (63,819) (321) (261) (2,839) Death benefits (15,831) (2,480) -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 6,090,449 4,489,864 1,014,962 1,569,856 8,177,315 ===============================================================================================================================
(1) For the period Aug. 13, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 163 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) 2FG(1) 1FM(1) 2FM(1) 1FO(1) 2FO(1) OPERATIONS Investment income (loss) -- net $ (7,836) $ (10,706) $ (8,449) $ (3,354) $ (2,672) Net realized gain (loss) on sale of investments -- -- -- 118 (130) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments 224,707 355,168 351,139 28,981 45,398 ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 216,871 344,462 342,690 25,745 42,596 =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 4,338,296 5,128,614 5,165,530 1,566,086 1,262,715 Net transfers(2) 1,823,373 1,477,269 1,782,687 444,528 724,187 Transfers for policy loans (715) -- (2,340) -- -- Annuity payments -- -- (427) -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (24,223) (443) (5,687) (9) (665) Death benefits -- (402) (36,810) -- -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 6,136,731 6,605,038 6,902,953 2,010,605 1,986,237 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 6,353,602 $ 6,949,500 $ 7,245,643 $ 2,036,350 $ 2,028,833 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- -- -- Contract purchase payments 4,505,678 5,194,892 5,216,209 1,683,221 1,369,471 Net transfers(2) 1,882,174 1,495,095 1,732,488 473,492 778,105 Transfers for policy loans (729) -- (2,332) -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (24,477) (450) (5,595) (9) (708) Death benefits -- (406) (37,286) -- -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 6,362,646 6,689,131 6,903,484 2,156,704 2,146,868 ===============================================================================================================================
(1) For the period Aug. 13, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 164 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) 1RE 2RE 1SI 2SI 1MS(1) OPERATIONS Investment income (loss) -- net $ 438,336 $ 543,489 $ (45,755) $ (31,465) $ (1,361) Net realized gain (loss) on sale of investments 10,478 7,290 104,043 51,980 30 Distributions from capital gains -- -- 160,532 184,139 -- Net change in unrealized appreciation or depreciation of investments 906,281 1,105,161 774,134 856,927 33,928 ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 1,355,095 1,655,940 992,954 1,061,581 32,597 =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 8,885,161 10,446,964 4,041,752 4,522,531 837,177 Net transfers(2) 8,981,834 12,674,981 4,664,868 5,794,604 205,025 Transfers for policy loans -- (27,212) -- (2,027) -- Annuity payments (1,844) (3,884) (1,810) (1,529) -- Contract charges (3,956) (3,675) (2,243) (2,860) -- Contract terminations: Surrender benefits (213,105) (294,970) (193,616) (151,486) -- Death benefits (261,009) (67,577) (82,052) (12,078) -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 17,387,081 22,724,627 8,426,899 10,147,155 1,042,202 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 7,721,569 8,611,678 3,449,583 3,399,162 -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 26,463,745 $ 32,992,245 $ 12,869,436 $ 14,607,898 $ 1,074,799 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 6,181,452 6,879,005 2,896,941 2,846,415 -- Contract purchase payments 6,986,100 8,159,536 3,191,589 3,562,029 895,612 Net transfers(2) 7,011,251 9,745,835 3,715,737 4,524,344 218,452 Transfers for policy loans -- (21,550) -- (1,530) -- Contract charges (3,111) (2,877) (1,779) (2,263) -- Contract terminations: Surrender benefits (166,798) (230,473) (151,482) (119,134) -- Death benefits (205,440) (52,626) (67,400) (9,602) -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 19,803,454 24,476,850 9,583,606 10,800,259 1,114,064 ===============================================================================================================================
(1) For the period Aug. 13, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 165 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) 2MS(1) 1UE 2UE 1MC 2MC OPERATIONS Investment income (loss) -- net $ (1,015) $ (273,701) $ (119,452) $ 89,023 $ 141,950 Net realized gain (loss) on sale of investments (4,175) (413,490) (226,579) 87,648 17,660 Distributions from capital gains -- -- -- 1,516,830 1,468,606 Net change in unrealized appreciation or depreciation of investments 31,264 (7,282,490) (5,877,468) 906,258 801,503 ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 26,074 (7,969,681) (6,223,499) 2,599,759 2,429,719 =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 649,697 11,247,637 11,891,552 9,032,982 9,221,589 Net transfers(2) 235,110 5,103,333 5,262,528 10,002,095 12,104,964 Transfers for policy loans -- -- (24,460) -- (15,381) Annuity payments -- (15,794) (7,300) (4,549) (1,322) Contract charges -- (21,579) (25,706) (6,832) (8,207) Contract terminations: Surrender benefits (1,083) (953,975) (660,399) (232,786) (329,366) Death benefits -- (656,027) (223,897) (209,063) (170,149) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 883,724 14,703,595 16,212,318 18,581,847 20,802,128 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- 54,626,689 42,286,180 12,654,338 9,404,909 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 909,798 $ 61,360,603 $ 52,274,999 $ 33,835,944 $ 32,636,756 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- 55,239,000 42,626,277 10,264,919 7,621,857 Contract purchase payments 694,027 12,436,157 13,184,883 7,058,847 7,185,335 Net transfers(2) 249,528 5,367,228 5,578,691 7,737,981 9,348,264 Transfers for policy loans -- -- (27,757) -- (12,103) Contract charges -- (24,432) (29,269) (5,370) (6,403) Contract terminations: Surrender benefits (1,152) (1,083,166) (742,451) (180,113) (256,934) Death benefits -- (750,081) (247,628) (165,101) (131,864) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 942,403 71,184,706 60,342,746 24,711,163 23,748,152 ===============================================================================================================================
(1) For the period Aug. 13, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 166 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) 1ID(1) 2ID(1) 1FS(1) 2FS(1) 1TC(1) OPERATIONS Investment income (loss) -- net $ (2,084) $ (1,578) $ (1,459) $ (1,348) $ (1,183) Net realized gain (loss) on sale of investments 654 (535) 8 (224) (33) Distributions from capital gains -- -- 3,430 4,132 -- Net change in unrealized appreciation or depreciation of investments 112,547 102,102 27,144 46,701 48,864 ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 111,117 99,989 29,123 49,261 47,648 =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 905,790 1,015,710 615,076 740,869 620,220 Net transfers(2) 352,662 388,587 230,715 253,940 160,253 Transfers for policy loans -- -- -- -- -- Annuity payments -- (163) -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (616) (1,501) (5,774) (244) (402) Death benefits -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 1,257,836 1,402,633 840,017 994,565 780,071 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 1,368,953 $ 1,502,622 $ 869,140 $ 1,043,826 $ 827,719 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- -- -- Contract purchase payments 1,027,741 1,136,672 660,567 805,555 732,687 Net transfers(2) 399,410 414,729 246,490 275,889 178,929 Transfers for policy loans -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (673) (1,624) (6,154) (258) (422) Death benefits -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 1,426,478 1,549,777 900,903 1,081,186 911,194 ===============================================================================================================================
(1) For the period Aug. 13, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 167 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2001 (CONTINUED) 2TC(1) 1TL(1) 2TL(1) 1GT 2GT OPERATIONS Investment income (loss) -- net $ (459) $ (916) $ (414) $ (38,091) $ (10,121) Net realized gain (loss) on sale of investments -- 14 (15) (856,608) (393,454) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments 27,249 19,798 13,599 (6,499,353) (6,655,709) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 26,790 18,896 13,170 (7,394,052) (7,059,284) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 272,604 375,609 233,348 4,011,029 5,730,228 Net transfers(2) 146,055 121,573 97,036 2,542,755 2,603,897 Transfers for policy loans (40) -- (917) -- (23,450) Annuity payments -- -- -- (1,091) (2,178) Contract charges -- -- -- (8,500) (16,036) Contract terminations: Surrender benefits (360) -- (3,064) (315,933) (227,404) Death benefits -- -- -- (81,265) (101,131) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 418,259 497,182 326,403 6,146,995 7,963,926 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- 15,683,198 13,879,202 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 445,049 $ 516,078 $ 339,573 $ 14,436,141 $ 14,783,844 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- 22,949,067 20,288,328 Contract purchase payments 322,446 467,676 282,524 7,706,877 10,839,841 Net transfers(2) 167,632 145,852 125,858 4,322,817 4,385,598 Transfers for policy loans (44) -- (1,082) -- (45,348) Contract charges -- -- -- (19,122) (37,533) Contract terminations: Surrender benefits (400) -- (3,752) (733,212) (469,230) Death benefits -- -- -- (175,952) (194,833) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 489,634 613,528 403,548 34,050,475 34,766,823 ===============================================================================================================================
(1) For the period Aug. 13, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 168 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2001 (CONTINUED) 1IG 2IG 1IP 2IP 1MG OPERATIONS Investment income (loss) -- net $ (61,998) $ 2,714 $ (112,489) $ (70,072) $ (236,686) Net realized gain (loss) on sale of investments (51,516) (10,053) (50,200) (38,721) (163,423) Distributions from capital gains -- -- 40,919 32,329 202,473 Net change in unrealized appreciation or depreciation of investments (8,186,408) (7,319,717) (3,156,967) (2,476,219) (6,873,424) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (8,299,922) (7,327,056) (3,278,737) (2,552,683) (7,071,060) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 14,980,212 14,291,665 4,029,595 3,536,625 12,812,258 Net transfers(1) 9,522,379 9,953,694 3,406,698 3,104,721 9,300,911 Transfers for policy loans -- (49,143) -- (4,243) -- Annuity payments (6,037) (3,479) (5,591) (3,743) (2,646) Contract charges (11,672) (17,536) (3,291) (4,305) (8,618) Contract terminations: Surrender benefits (409,006) (388,797) (154,209) (110,735) (393,028) Death benefits (243,905) (214,976) (127,739) (38,890) (140,271) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 23,831,971 23,571,428 7,145,463 6,479,430 21,568,606 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 23,432,894 20,660,098 10,425,108 7,677,904 19,889,237 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 38,964,943 $ 36,904,470 $ 14,291,834 $ 11,604,651 $ 34,386,783 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 29,250,538 25,763,066 10,774,085 7,957,614 21,973,127 Contract purchase payments 22,128,762 21,190,994 5,051,786 4,394,123 17,264,583 Net transfers(1) 13,809,533 14,582,951 4,255,381 3,706,041 12,582,742 Transfers for policy loans -- (69,969) -- (5,825) -- Contract charges (19,189) (29,188) (4,139) (5,461) (12,803) Contract terminations: Surrender benefits (631,010) (598,637) (188,758) (135,186) (561,954) Death benefits (391,384) (312,190) (160,990) (50,888) (194,392) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 64,147,250 60,527,027 19,727,365 15,860,418 51,051,303 ===============================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 169 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) 2MG 1MD 2MD 1UT(1) 2UT(1) OPERATIONS Investment income (loss) -- net $ (174,581) $ (217,120) $ (155,358) $ (4,238) $ (3,369) Net realized gain (loss) on sale of investments (62,660) (36,363) (26,764) (10,225) (681) Distributions from capital gains 193,086 641,417 576,479 -- -- Net change in unrealized appreciation or depreciation of investments (6,415,382) (884,200) (833,867) (34,480) (34,930) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (6,459,537) (496,266) (439,510) (48,943) (38,980) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 13,407,756 10,978,441 11,309,994 2,124,621 2,173,364 Net transfers(2) 9,808,312 8,706,484 8,326,647 439,371 542,525 Transfers for policy loans (11,334) -- (21,488) -- (516) Annuity payments (3,017) (817) (1,028) (268) -- Contract charges (11,958) (7,125) (11,665) -- -- Contract terminations: Surrender benefits (308,843) (328,860) (250,725) (1,478) (4,389) Death benefits (129,532) (214,216) (33,747) -- -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 22,751,384 19,133,907 19,317,988 2,562,246 2,710,984 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 17,708,263 14,406,775 11,803,502 -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 34,000,110 $ 33,044,416 $ 30,681,980 $ 2,513,303 $ 2,672,004 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 19,520,956 15,060,304 12,307,954 -- -- Contract purchase payments 18,104,083 12,549,526 12,741,013 2,344,463 2,393,768 Net transfers(2) 13,220,164 9,841,991 9,389,635 434,984 608,446 Transfers for policy loans (16,378) -- (25,357) -- (568) Contract charges (18,019) (8,555) (14,113) -- -- Contract terminations: Surrender benefits (428,241) (378,057) (289,439) (1,716) (4,936) Death benefits (171,046) (243,012) (37,360) -- -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 50,211,519 36,822,197 34,072,333 2,777,731 2,996,710 ===============================================================================================================================
(1) For the period Aug. 13, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 170 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) 1PE(1) 2PE(1) 1EU(1) 2EU(1) 1HS(1) OPERATIONS Investment income (loss) -- net $ 2,061 $ 2,808 $ (250) $ (133) $ (2,478) Net realized gain (loss) on sale of investments (24) 364 493 -- 151 Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments 17,886 22,936 5,596 2,869 5,205 ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 19,923 26,108 5,839 2,736 2,878 =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 898,095 714,994 96,006 61,751 1,390,896 Net transfers(2) 160,546 543,582 38,091 53,933 321,405 Transfers for policy loans -- -- -- -- -- Annuity payments -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (352) (1,026) -- -- (4,730) Death benefits -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 1,058,289 1,257,550 134,097 115,684 1,707,571 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 1,078,212 $ 1,283,658 $ 139,936 $ 118,420 $ 1,710,449 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- -- -- Contract purchase payments 938,839 745,187 102,794 64,670 1,420,572 Net transfers(2) 168,020 572,167 40,555 56,539 327,778 Transfers for policy loans -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (368) (1,069) -- -- (4,922) Death benefits -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 1,106,491 1,316,285 143,349 121,209 1,743,428 ===============================================================================================================================
(1) For the period Aug. 13, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 171 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) 2HS(1) 1PI(1) 2PI(1) 1VS 2VS OPERATIONS Investment income (loss) -- net $ (2,632) $ (3,052) $ (2,691) $ (718,809) $ (448,604) Net realized gain (loss) on sale of investments 159 84 (471) (2,011,055) (449,268) Distributions from capital gains -- -- -- 8,994,193 6,840,074 Net change in unrealized appreciation or depreciation of investments 2,523 52,532 50,124 (40,243,494) (31,629,377) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 50 49,564 46,962 (33,979,165) (25,687,175) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 1,650,070 1,534,262 1,525,823 15,797,036 19,660,439 Net transfers(2) 450,753 508,344 790,874 6,556,174 6,897,008 Transfers for policy loans (807) -- -- -- (33,928) Annuity payments -- -- -- (11,857) (6,159) Contract charges -- -- -- (42,306) (55,900) Contract terminations: Surrender benefits (1,841) (35) (413) (1,205,261) (1,021,512) Death benefits -- -- -- (866,383) (290,696) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 2,098,175 2,042,571 2,316,284 20,227,403 25,149,252 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- 88,234,933 64,390,419 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 2,098,225 $ 2,092,135 $ 2,363,246 $ 74,483,171 $ 63,852,496 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- 68,406,853 49,764,177 Contract purchase payments 1,681,017 1,640,626 1,623,905 15,971,024 20,196,251 Net transfers(2) 458,508 539,684 836,932 5,571,397 6,352,975 Transfers for policy loans (835) -- -- -- (34,193) Contract charges -- -- -- (47,229) (63,132) Contract terminations: Surrender benefits (1,872) (36) (431) (1,323,108) (1,112,370) Death benefits -- -- -- (856,572) (284,741) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 2,136,818 2,180,274 2,460,406 87,722,365 74,818,967 ===============================================================================================================================
(1) For the period Aug. 13, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 172 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) 1SO(1) 2SO(1) 1IT 2IT 1SP OPERATIONS Investment income (loss) -- net $ 7,835 $ 9,349 $ (234,391) $ (163,619) $ (364,004) Net realized gain (loss) on sale of investments (1,524) (1,277) (695,201) (260,443) (2,457) Distributions from capital gains 454,410 408,628 7,477,081 6,456,348 -- Net change in unrealized appreciation or depreciation of investments (223,060) (180,468) (12,695,973) (11,400,356) 4,610,313 ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 237,661 236,232 (6,148,484) (5,368,070) 4,243,852 =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 2,560,919 2,364,635 5,516,656 6,525,652 10,704,962 Net transfers(2) 913,494 1,074,013 3,132,241 3,196,285 8,497,550 Transfers for policy loans -- -- -- (22,174) -- Annuity payments -- (71) (3,039) (2,146) (7,788) Contract charges -- -- (11,914) (15,572) (16,721) Contract terminations: Surrender benefits (541) (3,271) (284,371) (385,501) (498,756) Death benefits -- -- (232,447) (132,811) (541,875) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 3,473,872 3,435,306 8,117,126 9,163,733 18,137,372 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- 23,694,747 19,831,854 31,381,436 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 3,711,533 $ 3,671,538 $ 25,663,389 $ 23,627,517 $ 53,762,660 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- 21,844,002 18,245,122 29,881,218 Contract purchase payments 2,769,914 2,559,785 5,822,402 6,894,850 9,799,940 Net transfers(2) 977,748 1,144,282 3,201,244 3,288,789 7,725,129 Transfers for policy loans -- -- -- (31,299) -- Contract charges -- -- (12,672) (16,769) (15,497) Contract terminations: Surrender benefits (598) (3,449) (305,412) (416,135) (452,233) Death benefits -- -- (252,570) (146,845) (482,477) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 3,747,064 3,700,618 30,296,994 27,817,713 46,456,080 ===============================================================================================================================
(1) For the period Aug, 13, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 173 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) 2SP 1AA(1) 2AA(1) 1WI(1) 2WI(1) OPERATIONS Investment income (loss) -- net $ (237,638) $ 10,417 $ 15,248 $ (2,315) $ (2,164) Net realized gain (loss) on sale of investments (5,616) (954) (2,140) (5,716) (11,145) Distributions from capital gains -- 30,669 37,877 -- -- Net change in unrealized appreciation or depreciation of investments 3,898,993 (38,811) (41,304) 5,230 4,777 ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 3,655,739 1,321 9,681 (2,801) (8,532) =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 10,940,739 1,257,831 1,426,856 602,610 490,980 Net transfers(2) 8,429,669 1,871,651 2,273,572 328,552 606,011 Transfers for policy loans (29,819) -- (25,507) -- (96) Annuity payments (1,601) -- -- -- -- Contract charges (20,088) (51) (126) (24) (59) Contract terminations: Surrender benefits (519,636) (9,704) (2,095) (641) (8,255) Death benefits (112,238) (906) -- (101) -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 18,687,026 3,118,821 3,672,700 930,396 1,088,581 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 25,021,085 -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 47,363,850 $ 3,120,142 $ 3,682,381 $ 927,595 $ 1,080,049 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 23,812,549 -- -- -- -- Contract purchase payments 10,053,634 1,304,764 1,475,852 668,859 550,610 Net transfers(2) 7,550,055 1,929,862 2,352,845 362,750 657,790 Transfers for policy loans (28,015) -- (27,305) -- (103) Contract charges (18,584) (53) (133) (28) (65) Contract terminations: Surrender benefits (474,882) (10,000) (2,120) (687) (8,652) Death benefits (103,275) (1,000) -- (118) -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 40,791,482 3,223,573 3,799,139 1,030,776 1,199,580 ===============================================================================================================================
(1) For the period May 1, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 174 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------- PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) 1SG(1) 2SG(1) OPERATIONS Investment income (loss) -- net $ (4,217) $ (3,924) Net realized gain (loss) on sale of investments (1,806) (68,691) Distributions from capital gains -- -- Net change in unrealized appreciation or depreciation of investments 178,064 95,735 ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 172,041 23,120 =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 1,068,838 856,426 Net transfers(2) 856,358 1,082,956 Transfers for policy loans -- (113) Annuity payments -- -- Contract charges (75) (69) Contract terminations: Surrender benefits (1,770) (23,290) Death benefits -- -- ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 1,923,351 1,915,910 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 2,095,392 $ 1,939,030 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- Contract purchase payments 1,263,608 986,305 Net transfers(2) 968,011 1,098,757 Transfers for policy loans -- (120) Contract charges (87) (79) Contract terminations: Surrender benefits (1,794) (24,577) Death benefits -- -- ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 2,229,738 2,060,286 ===============================================================================================================================
(1) For the period May 1, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 175 NOTES TO FINANCIAL STATEMENTS 1. ORGANIZATION IDS Life Variable Account 10 (the Account) was established under Minnesota law as a segregated asset account of IDS Life Insurance Company (IDS Life). The Account is registered as a unit investment trust under the Investment Company Act of 1940, as amended (the 1940 Act) and exists in accordance with the rules and regulations of the Insurance Division, Department of Commerce of the State of Minnesota. The Account is comprised of various subaccounts. Each subaccount invests exclusively in shares of the following funds or portfolios (collectively, the Funds), which are registered under the 1940 Act as open-end management investment companies. The subaccounts' investments in shares of the Funds as of Dec. 31, 2002 were as follows:
SUBACCOUNT INVESTS EXCLUSIVELY IN SHARES OF SHARES ---------------------------------------------------------------------------------------------------------------------------- BC1 AXP(R) Variable Portfolio - Blue Chip Advantage Fund 4,394,767 BC2 AXP(R) Variable Portfolio - Blue Chip Advantage Fund 3,920,558 BD1 AXP(R) Variable Portfolio - Bond Fund(1) 17,922,090 BD2 AXP(R) Variable Portfolio - Bond Fund(1) 17,510,822 CR1 AXP(R) Variable Portfolio - Capital ResourceFund 1,316,219 CR2 AXP(R) Variable Portfolio - Capital ResourceFund 1,986,191 CM1 AXP(R) Variable Portfolio - Cash Management Fund 250,272,090 CM2 AXP(R) Variable Portfolio - Cash Management Fund 280,721,451 DE1 AXP(R) Variable Portfolio - Diversified Equity Income Fund 6,947,125 DE2 AXP(R) Variable Portfolio - Diversified Equity Income Fund 8,927,534 EM1 AXP(R) Variable Portfolio - Emerging Markets Fund 374,356 EM2 AXP(R) Variable Portfolio - Emerging Markets Fund 460,301 ES1 AXP(R) Variable Portfolio - Equity Select Fund 1,172,851 ES2 AXP(R) Variable Portfolio - Equity Select Fund 1,587,053 EI1 AXP(R) Variable Portfolio - Extra Income Fund(2) 18,917,902 EI2 AXP(R) Variable Portfolio - Extra Income Fund(2) 14,542,541 FI1 AXP(R) Variable Portfolio - Federal Income Fund(3) 13,072,556 FI2 AXP(R) Variable Portfolio - Federal Income Fund(3) 14,134,351 GB1 AXP(R) Variable Portfolio - Global Bond Fund 4,078,422 GB2 AXP(R) Variable Portfolio - Global Bond Fund 3,492,335 GR1 AXP(R) Variable Portfolio - Growth Fund 11,712,998 GR2 AXP(R) Variable Portfolio - Growth Fund 13,460,298 IE1 AXP(R) Variable Portfolio - International Fund 1,599,610 IE2 AXP(R) Variable Portfolio - International Fund 1,677,855 MF1 AXP(R) Variable Portfolio - Managed Fund 4,352,362 MF2 AXP(R) Variable Portfolio - Managed Fund 4,383,678 ND1 AXP(R) Variable Portfolio - NEW DIMENSIONS FUND(R) 19,292,863 ND2 AXP(R) Variable Portfolio - NEW DIMENSIONS FUND(R) 20,815,377 SV1 AXP(R) Variable Portfolio - Partners Small Cap Value Fund 2,802,176 SV2 AXP(R) Variable Portfolio - Partners Small Cap Value Fund 4,314,932 IV1 AXP(R) Variable Portfolio - S&P 500 Index Fund 6,554,457 IV2 AXP(R) Variable Portfolio - S&P 500 Index Fund 6,555,401 SC1 AXP(R) Variable Portfolio - Small Cap Advantage Fund 2,979,642 SC2 AXP(R) Variable Portfolio - Small Cap Advantage Fund 2,989,636 ST1 AXP(R) Variable Portfolio - Stock Fund 296,434 ST2 AXP(R) Variable Portfolio - Stock Fund 334,055 SA1 AXP(R) Variable Portfolio - Strategy Aggressive Fund 5,307,628 SA2 AXP(R) Variable Portfolio - Strategy Aggressive Fund 5,705,015 1AC AIM V.I. Capital Appreciation Fund, Series II Shares 339,549 2AC AIM V.I. Capital Appreciation Fund, Series II Shares 505,244 1AD AIM V.I. Capital Development Fund, Series II Shares 393,899 2AD AIM V.I. Capital Development Fund, Series II Shares 570,034 1AB AllianceBernstein VP International Value Portfolio (Class B) 910,011 2AB AllianceBernstein VP International Value Portfolio (Class B) 1,211,458 1AL AllianceBernstein VP Growth and Income Portfolio (Class B) 1,344,795 2AL AllianceBernstein VP Growth and Income Portfolio (Class B) 1,952,783 1AI American Century(R) VP International, Class II 1,157,064 2AI American Century(R) VP International, Class II 1,607,660
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 176
SUBACCOUNT INVESTS EXCLUSIVELY IN SHARES OF SHARES ---------------------------------------------------------------------------------------------------------------------------- 1AV American Century(R) VP Value, Class II 4,508,882 2AV American Century(R) VP Value, Class II 6,238,051 1SR Calvert Variable Series, Inc. Social Balanced Portfolio 5,057,886 2SR Calvert Variable Series, Inc. Social Balanced Portfolio 4,951,430 1CG Evergreen VA Capital Growth Fund - Class 2 303,481 2CG Evergreen VA Capital Growth Fund - Class 2 439,186 1FG Fidelity(R) VIP Growth & Income Portfolio Service Class 2 2,796,472 2FG Fidelity(R) VIP Growth & Income Portfolio Service Class 2 3,748,549 1FM Fidelity(R) VIP Mid Cap Portfolio Service Class 2 1,895,051 2FM Fidelity(R) VIP Mid Cap Portfolio Service Class 2 2,697,861 1FO Fidelity(R) VIP Overseas Portfolio Service Class 2 700,210 2FO Fidelity(R) VIP Overseas Portfolio Service Class 2 901,750 1RE FTVIPT Franklin Real Estate Fund - Class 2 3,368,955 2RE FTVIPT Franklin Real Estate Fund - Class 2 4,517,586 1SI FTVIPT Franklin Small Cap Value Securities Fund - Class 2 2,958,250 2SI FTVIPT Franklin Small Cap Value Securities Fund - Class 2 3,765,000 1MS FTVIPT Mutual Shares Securities Fund - Class 2 641,508 2MS FTVIPT Mutual Shares Securities Fund - Class 2 769,240 1UE Goldman Sachs VIT CORE(SM) U.S. Equity Fund 5,930,713 2UE Goldman Sachs VIT CORE(SM) U.S. Equity Fund 5,682,987 1MC Goldman Sachs VIT Mid Cap Value Fund 5,795,312 2MC Goldman Sachs VIT Mid Cap Value Fund 6,865,719 1ID INVESCO VIF - Dynamics Fund 367,120 2ID INVESCO VIF - Dynamics Fund 524,469 1FS INVESCO VIF - Financial Services Fund 288,213 2FS INVESCO VIF - Financial Services Fund 434,163 1TC INVESCO VIF - Technology Fund 166,492 2TC INVESCO VIF - Technology Fund 221,204 1TL INVESCO VIF - Telecommunications Fund 239,881 2TL INVESCO VIF - Telecommunications Fund 290,616 1GT Janus Aspen Series Global Technology Portfolio: Service Shares 3,245,604 2GT Janus Aspen Series Global Technology Portfolio: Service Shares 3,849,547 1IG Janus Aspen Series International Growth Portfolio: Service Shares 1,926,402 2IG Janus Aspen Series International Growth Portfolio: Service Shares 2,121,675 1IP Lazard Retirement International Equity Portfolio 2,286,384 2IP Lazard Retirement International Equity Portfolio 2,350,597 1MG MFS(R) Investors Growth Stock Series - Service Class 4,325,293 2MG MFS(R) Investors Growth Stock Series - Service Class 4,840,347 1MD MFS(R) New Discovery Series - Service Class 3,119,001 2MD MFS(R) New Discovery Series - Service Class 3,484,308 1UT MFS(R) Utilities Series - Service Class 405,103 2UT MFS(R) Utilities Series - Service Class 600,507 1PE Pioneer Equity Income VCT Portfolio - Class II Shares 384,690 2PE Pioneer Equity Income VCT Portfolio - Class II Shares 631,542 1EU Pioneer Europe VCT Portfolio - Class II Shares 81,464 2EU Pioneer Europe VCT Portfolio - Class II Shares 153,482 1HS Putnam VT Health Sciences Fund - Class IB Shares 546,110 2HS Putnam VT Health Sciences Fund - Class IB Shares 950,927 1PI Putnam VT International Equity Fund - Class IB Shares 1,173,120 (previously Putnam VT International Growth Fund - Class IB Shares) 2PI Putnam VT International Equity Fund - Class IB Shares 1,614,300 (previously Putnam VT International Growth Fund - Class IB Shares) 1VS Putnam VT Vista Fund - Class IB Shares 5,490,188 2VS Putnam VT Vista Fund - Class IB Shares 5,380,326 1SO Strong Opportunity Fund II - Advisor Class 891,093 2SO Strong Opportunity Fund II - Advisor Class 1,325,437 1IT Wanger International Small Cap 2,302,076 2IT Wanger International Small Cap 2,382,637 1SP Wanger U.S. Smaller Companies 3,753,235 2SP Wanger U.S. Smaller Companies 4,053,800
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 177
SUBACCOUNT INVESTS EXCLUSIVELY IN SHARES OF SHARES ---------------------------------------------------------------------------------------------------------------------------- 1AA Wells Fargo VT Asset Allocation Fund 951,802 2AA Wells Fargo VT Asset Allocation Fund 1,197,008 1WI Wells Fargo VT International Equity Fund 330,822 2WI Wells Fargo VT International Equity Fund 561,407 1SG Wells Fargo VT Small Cap Growth Fund 907,664 2SG Wells Fargo VT Small Cap Growth Fund 1,188,829 BC4 AXP(R) Variable Portfolio - Blue Chip Advantage Fund 6,410 BC5 AXP(R) Variable Portfolio - Blue Chip Advantage Fund 15,825 BD4 AXP(R) Variable Portfolio - Bond Fund(1) 587,156 BD5 AXP(R) Variable Portfolio - Bond Fund(1) 638,060 CR4 AXP(R) Variable Portfolio - Capital Resource Fund 4,989 CR5 AXP(R) Variable Portfolio - Capital Resource Fund 14,001 CM4 AXP(R) Variable Portfolio - Cash Management Fund 12,165,559 CM5 AXP(R) Variable Portfolio - Cash Management Fund 12,335,449 DE4 AXP(R) Variable Portfolio - Diversified Equity Income Fund 212,145 DE5 AXP(R) Variable Portfolio - Diversified Equity Income Fund 321,396 EM4 AXP(R) Variable Portfolio - Emerging Markets Fund 15,528 EM5 AXP(R) Variable Portfolio - Emerging Markets Fund 27,679 ES4 AXP(R) Variable Portfolio - Equity Select Fund 89,059 ES5 AXP(R) Variable Portfolio - Equity Select Fund 115,688 EI4 AXP(R) Variable Portfolio - Extra Income Fund(2) 699,359 EI5 AXP(R) Variable Portfolio - Extra Income Fund(2) 649,181 FI4 AXP(R) Variable Portfolio - Federal Income Fund(3) 751,178 FI5 AXP(R) Variable Portfolio - Federal Income Fund(3) 599,369 GB4 AXP(R) Variable Portfolio - Global Bond Fund 167,156 GB5 AXP(R) Variable Portfolio - Global Bond Fund 114,841 GR4 AXP(R) Variable Portfolio - Growth Fund 62,376 GR5 AXP(R) Variable Portfolio - Growth Fund 154,602 IE4 AXP(R) Variable Portfolio - International Fund 13,676 IE5 AXP(R) Variable Portfolio - International Fund 7,211 MF4 AXP(R) Variable Portfolio - Managed Fund 34,587 MF5 AXP(R) Variable Portfolio - Managed Fund 39,816 ND4 AXP(R) Variable Portfolio - NEW DIMENSIONS FUND(R) 326,580 ND5 AXP(R) Variable Portfolio - NEW DIMENSIONS FUND(R) 420,226 SV4 AXP(R) Variable Portfolio - Partners Small Cap Value Fund 251,909 SV5 AXP(R) Variable Portfolio - Partners Small Cap Value Fund 311,808 IV4 AXP(R) Variable Portfolio - S&P 500 Index Fund 218,339 IV5 AXP(R) Variable Portfolio - S&P 500 Index Fund 240,933 SC4 AXP(R) Variable Portfolio - Small Cap Advantage Fund 49,932 SC5 AXP(R) Variable Portfolio - Small Cap Advantage Fund 88,398 ST4 AXP(R) Variable Portfolio - Stock Fund 13,422 ST5 AXP(R) Variable Portfolio - Stock Fund 21,007 SA4 AXP(R) Variable Portfolio - Strategy Aggressive Fund 20,392 SA5 AXP(R) Variable Portfolio - Strategy Aggressive Fund 14,497 4AC AIM V.I. Capital Appreciation Fund, Series II Shares 21,209 5AC AIM V.I. Capital Appreciation Fund, Series II Shares 18,049 4AD AIM V.I. Capital Development Fund, Series II Shares 39,703 5AD AIM V.I. Capital Development Fund, Series II Shares 47,439 4AB AllianceBernstein VP International Value Portfolio (Class B) 139,718 5AB AllianceBernstein VP International Value Portfolio (Class B) 144,687 4AL AllianceBernstein VP Growth and Income Portfolio (Class B) 199,224 5AL AllianceBernstein VP Growth and Income Portfolio (Class B) 171,702 4AI American Century(R) VP International, Class II 73,041 5AI American Century(R) VP International, Class II 154,239 4AV American Century(R) VP Value, Class II 348,071 5AV American Century(R) VP Value, Class II 412,855 4SR Calvert Variable Series, Inc. Social Balanced Portfolio 122,131 5SR Calvert Variable Series, Inc. Social Balanced Portfolio 123,864 4CG Evergreen VA Capital Growth Fund - Class 2 39,061 5CG Evergreen VA Capital Growth Fund - Class 2 28,710
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 178
SUBACCOUNT INVESTS EXCLUSIVELY IN SHARES OF SHARES ---------------------------------------------------------------------------------------------------------------------------- 4FG Fidelity(R) VIP Growth & Income Portfolio Service Class 2 279,058 5FG Fidelity(R) VIP Growth & Income Portfolio Service Class 2 286,182 4FM Fidelity(R) VIP Mid Cap Portfolio Service Class 2 182,692 5FM Fidelity(R) VIP Mid Cap Portfolio Service Class 2 216,142 4FO Fidelity(R) VIP Overseas Portfolio Service Class 2 46,258 5FO Fidelity(R) VIP Overseas Portfolio Service Class 2 41,981 4RE FTVIPT Franklin Real Estate Fund - Class 2 168,449 5RE FTVIPT Franklin Real Estate Fund - Class 2 163,015 4SI FTVIPT Franklin Small Cap Value Securities Fund - Class 2 153,648 5SI FTVIPT Franklin Small Cap Value Securities Fund - Class 2 198,337 4MS FTVIPT Mutual Shares Securities Fund - Class 2 104,831 5MS FTVIPT Mutual Shares Securities Fund - Class 2 128,451 4UE Goldman Sachs VIT CORE(SM) U.S. Equity Fund 140,119 5UE Goldman Sachs VIT CORE(SM) U.S. Equity Fund 99,210 4MC Goldman Sachs VIT Mid Cap Value Fund 249,225 5MC Goldman Sachs VIT Mid Cap Value Fund 232,257 4ID INVESCO VIF - Dynamics Fund 23,801 5ID INVESCO VIF - Dynamics Fund 20,193 4FS INVESCO VIF - Financial Services Fund 36,820 5FS INVESCO VIF - Financial Services Fund 43,503 4TC INVESCO VIF - Technology Fund 10,738 5TC INVESCO VIF - Technology Fund 13,166 4TL INVESCO VIF - Telecommunications Fund 14,985 5TL INVESCO VIF - Telecommunications Fund 12,230 4GT Janus Aspen Series Global Technology Portfolio: Service Shares 29,471 5GT Janus Aspen Series Global Technology Portfolio: Service Shares 17,841 4IG Janus Aspen Series International Growth Portfolio: Service Shares 29,576 5IG Janus Aspen Series International Growth Portfolio: Service Shares 31,260 4IP Lazard Retirement International Equity Portfolio 64,183 5IP Lazard Retirement International Equity Portfolio 56,684 4MG MFS(R) Investors Growth Stock Series - Service Class 77,125 5MG MFS(R) Investors Growth Stock Series - Service Class 118,106 4MD MFS(R) New Discovery Series - Service Class 124,038 5MD MFS(R) New Discovery Series - Service Class 147,085 4UT MFS(R) Utilities Series - Service Class 30,550 5UT MFS(R) Utilities Series - Service Class 19,583 4PE Pioneer Equity Income VCT Portfolio - Class II Shares 66,530 5PE Pioneer Equity Income VCT Portfolio - Class II Shares 80,623 4EU Pioneer Europe VCT Portfolio - Class II Shares 6,334 5EU Pioneer Europe VCT Portfolio - Class II Shares 6,378 4HS Putnam VT Health Sciences Fund - Class IB Shares 50,314 5HS Putnam VT Health Sciences Fund - Class IB Shares 53,344 4PI Putnam VT International Equity Fund - Class IB Shares 118,316 (previously Putnam VT International Growth Fund - Class IB Shares) 5PI Putnam VT International Equity Fund - Class IB Shares 177,603 (previously Putnam VT International Growth Fund - Class IB Shares) 4VS Putnam VT Vista Fund - Class IB Shares 17,811 5VS Putnam VT Vista Fund - Class IB Shares 24,767 4SO Strong Opportunity Fund II - Advisor Class 107,512 5SO Strong Opportunity Fund II - Advisor Class 126,987 4IT Wanger International Small Cap 69,130 5IT Wanger International Small Cap 99,988 4SP Wanger U.S. Smaller Companies 143,477 5SP Wanger U.S. Smaller Companies 171,352 4AA Wells Fargo VT Asset Allocation Fund 65,243 5AA Wells Fargo VT Asset Allocation Fund 108,534 4WI Wells Fargo VT International Equity Fund 11,238 5WI Wells Fargo VT International Equity Fund 11,345 4SG Wells Fargo VT Small Cap Growth Fund 53,101 5SG Wells Fargo VT Small Cap Growth Fund 91,012
(1) Effective June 27, 2003, AXP(R) Variable Portfolio - Bond Fund will change its name to AXP(R) Variable Portfolio - Diversified Bond Fund. (2) Effective June 27, 2003, AXP(R) Variable Portfolio - Extra Income Fund will change its name to AXP(R) Variable Portfolio - High Yield Bond Fund. (3) Effective June 27, 2003, AXP(R) Variable Portfolio - Federal Income Fund will change its name to AXP(R) Variable Portfolio - Short Term U.S. Government Fund. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 179 The assets of each subaccount of the Account are not chargeable with liabilities arising out of the business conducted by any other segregated asset account or by IDS Life. IDS Life serves as issuer of the contract. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES INVESTMENTS IN THE FUNDS Investments in shares of the Funds are stated at market value which is the net asset value per share as determined by the respective Funds. Investment transactions are accounted for on the date the shares are purchased and sold. Realized gains and losses on the sales of investments are computed using the average cost method. Income from dividends and gains from realized capital gain distributions are reinvested in additional shares of the Funds and are recorded as income by the subaccounts on the ex-dividend date. Unrealized appreciation or depreciation of investments in the accompanying financial statements represents the subaccounts' share of the Funds' undistributed net investment income, undistributed realized gain or loss and the unrealized appreciation or depreciation on their investment securities. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of increase and decrease in net assets from operations during the period. Actual results could differ from those estimates. VARIABLE PAYOUT Net assets allocated to contracts in the payout period are periodically compared to a computation which uses the Annuity 2000 Basic Mortality Table and which assumes future mortality improvement. The assumed investment return is 5% unless the annuitant elects otherwise, in which case the rate would be 3.5%, as regulated by the laws of the respective states. The mortality risk is fully borne by IDS Life and may result in additional amounts being transferred into the variable annuity account by IDS Life to cover greater longevity of annuitants than expected. Conversely, if amounts allocated exceed amounts required, transfers may be made to the insurance company. FEDERAL INCOME TAXES IDS Life is taxed as a life insurance company. The Account is treated as part of IDS Life for federal income tax purposes. Under existing federal income tax law, no income taxes are payable with respect to any investment income of the Account to the extent the earnings are credited under the contracts. Based on this, no charge is being made currently to the Account for federal income taxes. The Company will review periodically the status of this policy in the event of changes in the tax law. A charge may be made in future years for any federal income taxes that would be attributable to the contracts. 3. VARIABLE ACCOUNT EXPENSES IDS Life makes contractual assurances to the Account that possible future adverse changes in administrative expenses and mortality experience of the contract owners and annuitants will not affect the Account. IDS Life deducts a daily mortality and expense risk fee equal, on an annual basis, to 0.75% to 1.20% of the average daily net assets of each subaccount, depending on the contract option selected. 4. CONTRACT CHARGES IDS Life deducts a contract administrative charge of $30 per year. This charge reimburses IDS Life for expenses incurred in establishing and maintaining the annuity records. Certain products may waive this charge based upon the underlying contract value. An optional maximum anniversary value death benefit rider, enhanced earnings death benefit rider and enhanced earnings plus death benefit rider are available on certain products and if selected, the related fees are deducted annually from the contract value on the contract anniversary. Additional information can be found in the applicable product's prospectus. 5. SURRENDER CHARGES IDS Life will use a surrender charge to help it recover certain expenses related to the sale of the annuity. A surrender charge of up to 8% may be deducted for surrenders up to the first ten payment years following a purchase payment, as depicted in the surrender charge schedule included in the applicable product's prospectus. Charges by IDS Life for surrenders are not identified on an individual segregated asset account basis. Charges for all segregated asset accounts amounted to $22,560,988 in 2002 and $19,059,480 in 2001. Such charges are not treated as a separate expense of the subaccounts. They are ultimately deducted from contract surrender benefits paid by IDS Life. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 180 6. RELATED PARTY TRANSACTIONS Management fees were paid indirectly to IDS Life, in its capacity as investment manager for the American Express(R) Variable Portfolio Funds. The Fund's Investment Management Services Agreement provides for a fee at a percentage of each Fund's average daily net assets in reducing percentages, to give effect to breakpoints in fees due to assets under management within each Fund as follows:
FUND PERCENTAGE RANGE ---------------------------------------------------------------------------------------------------------------------------- AXP(R) Variable Portfolio - Blue Chip Advantage Fund 0.560% to 0.470% AXP(R) Variable Portfolio - Bond Fund 0.610% to 0.535% AXP(R) Variable Portfolio - Capital Resource Fund 0.630% to 0.570% AXP(R) Variable Portfolio - Cash Management Fund 0.510% to 0.440% AXP(R) Variable Portfolio - Diversified Equity Income Fund 0.560% to 0.470% AXP(R) Variable Portfolio - Emerging Markets Fund 1.170% to 1.095% AXP(R) Variable Portfolio - Equity Select Fund 0.650% to 0.560% AXP(R) Variable Portfolio - Extra Income Fund 0.620% to 0.545% AXP(R) Variable Portfolio - Federal Income Fund 0.610% to 0.535% AXP(R) Variable Portfolio - Global Bond Fund 0.840% to 0.780% AXP(R) Variable Portfolio - Growth Fund 0.630% to 0.570% AXP(R) Variable Portfolio - International Fund 0.870% to 0.795% AXP(R) Variable Portfolio - Managed Fund 0.630% to 0.550% AXP(R) Variable Portfolio - NEW DIMENSIONS FUND(R) 0.630% to 0.570% AXP(R) Variable Portfolio - Partners Small Cap Value Fund 1.020% to 0.920% AXP(R) Variable Portfolio - S&P 500 Index Fund 0.290% to 0.260% AXP(R) Variable Portfolio - Small Cap Advantage Fund 0.790% to 0.650% AXP(R) Variable Portfolio - Stock Fund 0.560% to 0.470% AXP(R) Variable Portfolio - Strategy Aggressive Fund 0.650% to 0.575%
For the following Funds the fee may be adjusted upward or downward by a performance incentive adjustment. The adjustment is based on a comparison of the performance of each Fund to an index of similar funds up to a maximum percentage of each Fund's average daily net assets. Effective Dec. 1, 2002, the performance incentive adjustment was added to some of the funds and the maximum changed for others.
MAXIMUM MAXIMUM ADJUSTMENT ADJUSTMENT FUND (PRIOR TO DEC. 1, 2002) (AFTER DEC. 1, 2002) ---------------------------------------------------------------------------------------------------------------------------- AXP(R) Variable Portfolio - Blue Chip Advantage Fund 0.08% 0.12% AXP(R) Variable Portfolio - Capital Resource Fund N/A 0.12% AXP(R) Variable Portfolio - Diversified Equity Income Fund 0.08% 0.12% AXP(R) Variable Portfolio - Emerging Markets Fund 0.12% 0.12% AXP(R) Variable Portfolio - Equity Select Fund 0.12% 0.12% AXP(R) Variable Portfolio - Growth Fund 0.12% 0.12% AXP(R) Variable Portfolio - International Fund N/A 0.12% AXP(R) Variable Portfolio - Managed Fund N/A 0.08% AXP(R) Variable Portfolio - NEW DIMENSIONS FUND(R) N/A 0.12% AXP(R) Variable Portfolio - Partners Small Cap Value Fund 0.12% 0.12% AXP(R) Variable Portfolio - Small Cap Advantage Fund 0.12% 0.12% AXP(R) Variable Portfolio - Stock Fund 0.08% 0.12% AXP(R) Variable Portfolio - Strategy Aggressive Fund N/A 0.12%
IDS Life, in turn, paid to American Express Financial Corporation (AEFC) a portion of these management fees based on a percentage of each Fund's average daily net assets for the year. This fee was equal to 0.35% for AXP(R) Variable Portfolio - International Fund and AXP(R) Variable Portfolio - S&P 500 Index Fund and 0.25% for each remaining Fund. The American Express(R) Variable Portfolio Funds also have an agreement with IDS Life for distribution services. Under a Plan and Agreement of Distribution, each Fund pays a distribution fee at an annual rate up to 0.125% of each Fund's average daily net assets. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 181 The American Express(R) Variable Portfolio Funds have an Administrative Services Agreement with AEFC. Under this agreement, each Fund pays AEFC a fee for administration and accounting services at a percentage of each Fund's average daily net assets in reducing percentages annually as follows:
FUND PERCENTAGE RANGE ---------------------------------------------------------------------------------------------------------------------------- AXP(R) Variable Portfolio - Blue Chip Advantage Fund 0.040% to 0.020% AXP(R) Variable Portfolio - Bond Fund 0.050% to 0.025% AXP(R) Variable Portfolio - Capital Resource Fund 0.050% to 0.030% AXP(R) Variable Portfolio - Cash Management Fund 0.030% to 0.020% AXP(R) Variable Portfolio - Diversified Equity Income Fund 0.040% to 0.020% AXP(R) Variable Portfolio - Emerging Markets Fund 0.100% to 0.050% AXP(R) Variable Portfolio - Equity Select Fund 0.060% to 0.030% AXP(R) Variable Portfolio - Extra Income Fund 0.050% to 0.025% AXP(R) Variable Portfolio - Federal Income Fund 0.050% to 0.025% AXP(R) Variable Portfolio - Global Bond Fund 0.060% to 0.040% AXP(R) Variable Portfolio - Growth Fund 0.050% to 0.030% AXP(R) Variable Portfolio - International Fund 0.060% to 0.035% AXP(R) Variable Portfolio - Managed Fund 0.040% to 0.020% AXP(R) Variable Portfolio - NEW DIMENSIONS FUND(R) 0.050% to 0.030% AXP(R) Variable Portfolio - Partners Small Cap Value Fund 0.080% to 0.055% AXP(R) Variable Portfolio - S&P 500 Index Fund 0.080% to 0.065% AXP(R) Variable Portfolio - Small Cap Advantage Fund 0.060% to 0.035% AXP(R) Variable Portfolio - Stock Fund 0.040% to 0.020% AXP(R) Variable Portfolio - Strategy Aggressive Fund 0.060% to 0.035%
The American Express(R) Variable Portfolio Funds pay custodian fees to American Express Trust Company, an affiliate of IDS Life. 7. INVESTMENT TRANSACTIONS The subaccounts' purchases of the Funds' shares, including reinvestment of dividend distributions, for the year ended Dec. 31, 2002 were as follows:
SUBACCOUNT INVESTMENT PURCHASES ---------------------------------------------------------------------------------------------------------------------------- BC1 AXP(R) Variable Portfolio - Blue Chip Advantage Fund $ 1,910,392 BC2 AXP(R) Variable Portfolio - Blue Chip Advantage Fund 3,679,726 BD1 AXP(R) Variable Portfolio - Bond Fund 70,887,576 BD2 AXP(R) Variable Portfolio - Bond Fund 89,426,814 CR1 AXP(R) Variable Portfolio - Capital Resource Fund 9,162,647 CR2 AXP(R) Variable Portfolio - Capital Resource Fund 19,607,609 CM1 AXP(R) Variable Portfolio - Cash Management Fund 74,160,902 CM2 AXP(R) Variable Portfolio - Cash Management Fund 99,262,540 DE1 AXP(R) Variable Portfolio - Diversified Equity Income Fund 28,212,409 DE2 AXP(R) Variable Portfolio - Diversified Equity Income Fund 42,979,312 EM1 AXP(R) Variable Portfolio - Emerging Markets Fund 2,227,797 EM2 AXP(R) Variable Portfolio - Emerging Markets Fund 2,476,844 ES1 AXP(R) Variable Portfolio - Equity Select Fund 8,887,413 ES2 AXP(R) Variable Portfolio - Equity Select Fund 12,647,305 EI1 AXP(R) Variable Portfolio - Extra Income Fund 41,951,298 EI2 AXP(R) Variable Portfolio - Extra Income Fund 39,700,916 FI1 AXP(R) Variable Portfolio - Federal Income Fund 82,798,262 FI2 AXP(R) Variable Portfolio - Federal Income Fund 95,767,884 GB1 AXP(R) Variable Portfolio - Global Bond Fund 17,872,512 GB2 AXP(R) Variable Portfolio - Global Bond Fund 18,257,201 GR1 AXP(R) Variable Portfolio - Growth Fund 4,117,943 GR2 AXP(R) Variable Portfolio - Growth Fund 8,496,516 IE1 AXP(R) Variable Portfolio - International Fund 8,071,635 IE2 AXP(R) Variable Portfolio - International Fund 8,688,705 MF1 AXP(R) Variable Portfolio - Managed Fund 19,322,497 MF2 AXP(R) Variable Portfolio - Managed Fund 28,961,852 ND1 AXP(R) Variable Portfolio - NEW DIMENSIONS FUND(R) 46,206,277 ND2 AXP(R) Variable Portfolio - NEW DIMENSIONS FUND(R) 82,978,941 SV1 AXP(R) Variable Portfolio - Partners Small Cap Value Fund 23,940,246 SV2 AXP(R) Variable Portfolio - Partners Small Cap Value Fund 38,199,750
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 182
SUBACCOUNT INVESTMENT PURCHASES ---------------------------------------------------------------------------------------------------------------------------- IV1 AXP(R) Variable Portfolio - S&P 500 Index Fund $ 19,481,312 IV2 AXP(R) Variable Portfolio - S&P 500 Index Fund 22,482,651 SC1 AXP(R) Variable Portfolio - Small Cap Advantage Fund 6,102,141 SC2 AXP(R) Variable Portfolio - Small Cap Advantage Fund 7,891,078 ST1 AXP(R) Variable Portfolio - Stock Fund 2,140,855 ST2 AXP(R) Variable Portfolio - Stock Fund 2,324,309 SA1 AXP(R) Variable Portfolio - Strategy Aggressive Fund 1,930,970 SA2 AXP(R) Variable Portfolio - Strategy Aggressive Fund 3,983,916 1AC AIM V.I. Capital Appreciation Fund, Series II Shares 5,210,313 2AC AIM V.I. Capital Appreciation Fund, Series II Shares 8,107,689 1AD AIM V.I. Capital Development Fund, Series II Shares 3,371,738 2AD AIM V.I. Capital Development Fund, Series II Shares 5,087,196 1AB AllianceBernstein VP International Value Portfolio (Class B) 8,004,938 2AB AllianceBernstein VP International Value Portfolio (Class B) 11,182,690 1AL AllianceBernstein VP Growth and Income Portfolio (Class B) 21,993,541 2AL AllianceBernstein VP Growth and Income Portfolio (Class B) 32,247,404 1AI American Century(R) VP International, Class II 5,282,493 2AI American Century(R) VP International, Class II 7,865,628 1AV American Century(R) VP Value, Class II 23,084,796 2AV American Century(R) VP Value, Class II 34,612,984 1SR Calvert Variable Series, Inc. Social Balanced Portfolio 3,722,793 2SR Calvert Variable Series, Inc. Social Balanced Portfolio 4,775,931 1CG Evergreen VA Capital Growth Fund - Class 2 3,213,136 2CG Evergreen VA Capital Growth Fund - Class 2 4,355,995 1FG Fidelity(R) VIP Growth & Income Portfolio Service Class 2 25,233,347 2FG Fidelity(R) VIP Growth & Income Portfolio Service Class 2 37,403,752 1FM Fidelity(R) VIP Mid Cap Portfolio Service Class 2 29,222,061 2FM Fidelity(R) VIP Mid Cap Portfolio Service Class 2 42,974,830 1FO Fidelity(R) VIP Overseas Portfolio Service Class 2 7,109,770 2FO Fidelity(R) VIP Overseas Portfolio Service Class 2 10,124,848 1RE FTVIPT Franklin Real Estate Fund - Class 2 35,288,487 2RE FTVIPT Franklin Real Estate Fund - Class 2 49,971,245 1SI FTVIPT Franklin Small Cap Value Securities Fund - Class 2 19,015,101 2SI FTVIPT Franklin Small Cap Value Securities Fund - Class 2 26,036,576 1MS FTVIPT Mutual Shares Securities Fund - Class 2 7,434,348 2MS FTVIPT Mutual Shares Securities Fund - Class 2 9,403,558 1UE Goldman Sachs VIT CORE(SM) U.S. Equity Fund 7,748,443 2UE Goldman Sachs VIT CORE(SM) U.S. Equity Fund 11,270,086 1MC Goldman Sachs VIT Mid Cap Value Fund 32,861,063 2MC Goldman Sachs VIT Mid Cap Value Fund 45,591,517 1ID INVESCO VIF - Dynamics Fund 2,729,120 2ID INVESCO VIF - Dynamics Fund 4,304,323 1FS INVESCO VIF - Financial Services Fund 2,836,988 2FS INVESCO VIF - Financial Services Fund 4,258,767 1TC INVESCO VIF - Technology Fund 1,507,343 2TC INVESCO VIF - Technology Fund 2,216,703 1TL INVESCO VIF - Telecommunications Fund 625,793 2TL INVESCO VIF - Telecommunications Fund 907,161 1GT Janus Aspen Series Global Technology Portfolio: Service Shares 1,252,323 2GT Janus Aspen Series Global Technology Portfolio: Service Shares 2,170,051 1IG Janus Aspen Series International Growth Portfolio: Service Shares 7,674,417 2IG Janus Aspen Series International Growth Portfolio: Service Shares 12,135,593 1IP Lazard Retirement International Equity Portfolio 7,027,486 2IP Lazard Retirement International Equity Portfolio 9,537,752 1MG MFS(R) Investors Growth Stock Series - Service Class 8,712,341 2MG MFS(R) Investors Growth Stock Series - Service Class 12,886,315 1MD MFS(R) New Discovery Series - Service Class 13,580,341 2MD MFS(R) New Discovery Series - Service Class 19,151,624 1UT MFS(R) Utilities Series - Service Class 3,776,372 2UT MFS(R) Utilities Series - Service Class 5,780,795
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 183
SUBACCOUNT INVESTMENT PURCHASES ---------------------------------------------------------------------------------------------------------------------------- 1PE Pioneer Equity Income VCT Portfolio - Class II Shares $ 5,702,596 2PE Pioneer Equity Income VCT Portfolio - Class II Shares 9,519,915 1EU Pioneer Europe VCT Portfolio - Class II Shares 568,414 2EU Pioneer Europe VCT Portfolio - Class II Shares 1,082,819 1HS Putnam VT Health Sciences Fund - Class IB Shares 4,484,190 2HS Putnam VT Health Sciences Fund - Class IB Shares 7,993,696 1PI Putnam VT International Equity Fund - Class IB Shares 11,122,629 (previously Putnam VT International Growth Fund - Class IB Shares) 2PI Putnam VT International Equity Fund - Class IB Shares 15,820,404 (previously Putnam VT International Growth Fund - Class IB Shares) 1VS Putnam VT Vista Fund - Class IB Shares 1,252,992 2VS Putnam VT Vista Fund - Class IB Shares 3,474,560 1SO Strong Opportunity Fund II - Advisor Class 11,825,138 2SO Strong Opportunity Fund II - Advisor Class 18,771,773 1IT Wanger International Small Cap 10,186,624 2IT Wanger International Small Cap 12,710,610 1SP Wanger U.S. Smaller Companies 28,517,895 2SP Wanger U.S. Smaller Companies 39,464,425 1AA Wells Fargo VT Asset Allocation Fund 8,428,680 2AA Wells Fargo VT Asset Allocation Fund 10,461,838 1WI Wells Fargo VT International Equity Fund 1,568,736 2WI Wells Fargo VT International Equity Fund 2,940,418 1SG Wells Fargo VT Small Cap Growth Fund 4,099,091 2SG Wells Fargo VT Small Cap Growth Fund 5,791,814 BC4 AXP(R) Variable Portfolio - Blue Chip Advantage Fund 70,989 BC5 AXP(R) Variable Portfolio - Blue Chip Advantage Fund 121,836 BD4 AXP(R) Variable Portfolio - Bond Fund 6,415,506 BD5 AXP(R) Variable Portfolio - Bond Fund 7,996,256 CR4 AXP(R) Variable Portfolio - Capital Resource Fund 155,891 CR5 AXP(R) Variable Portfolio - Capital Resource Fund 299,117 CM4 AXP(R) Variable Portfolio - Cash Management Fund 21,907,695 CM5 AXP(R) Variable Portfolio - Cash Management Fund 18,816,010 DE4 AXP(R) Variable Portfolio - Diversified Equity Income Fund 2,184,766 DE5 AXP(R) Variable Portfolio - Diversified Equity Income Fund 2,960,342 EM4 AXP(R) Variable Portfolio - Emerging Markets Fund 144,288 EM5 AXP(R) Variable Portfolio - Emerging Markets Fund 239,190 ES4 AXP(R) Variable Portfolio - Equity Select Fund 935,071 ES5 AXP(R) Variable Portfolio - Equity Select Fund 1,068,568 EI4 AXP(R) Variable Portfolio - Extra Income Fund 4,284,577 EI5 AXP(R) Variable Portfolio - Extra Income Fund 4,049,171 FI4 AXP(R) Variable Portfolio - Federal Income Fund 8,912,084 FI5 AXP(R) Variable Portfolio - Federal Income Fund 6,770,197 GB4 AXP(R) Variable Portfolio - Global Bond Fund 1,708,838 GB5 AXP(R) Variable Portfolio - Global Bond Fund 1,239,939 GR4 AXP(R) Variable Portfolio - Growth Fund 333,186 GR5 AXP(R) Variable Portfolio - Growth Fund 842,791 IE4 AXP(R) Variable Portfolio - International Fund 146,657 IE5 AXP(R) Variable Portfolio - International Fund 71,417 MF4 AXP(R) Variable Portfolio - Managed Fund 553,576 MF5 AXP(R) Variable Portfolio - Managed Fund 646,670 ND4 AXP(R) Variable Portfolio - NEW DIMENSIONS FUND(R) 4,781,484 ND5 AXP(R) Variable Portfolio - NEW DIMENSIONS FUND(R) 5,922,707 SV4 AXP(R) Variable Portfolio - Partners Small Cap Value Fund 2,769,692 SV5 AXP(R) Variable Portfolio - Partners Small Cap Value Fund 3,358,190 IV4 AXP(R) Variable Portfolio - S&P 500 Index Fund 1,512,785 IV5 AXP(R) Variable Portfolio - S&P 500 Index Fund 1,624,986 SC4 AXP(R) Variable Portfolio - Small Cap Advantage Fund 486,512 SC5 AXP(R) Variable Portfolio - Small Cap Advantage Fund 843,835 ST4 AXP(R) Variable Portfolio - Stock Fund 119,208 ST5 AXP(R) Variable Portfolio - Stock Fund 168,956
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 184
SUBACCOUNT INVESTMENT PURCHASES ---------------------------------------------------------------------------------------------------------------------------- SA4 AXP(R) Variable Portfolio - Strategy Aggressive Fund $ 166,592 SA5 AXP(R) Variable Portfolio - Strategy Aggressive Fund 121,103 4AC AIM V.I. Capital Appreciation Fund, Series II Shares 394,360 5AC AIM V.I. Capital Appreciation Fund, Series II Shares 364,986 4AD AIM V.I. Capital Development Fund, Series II Shares 457,473 5AD AIM V.I. Capital Development Fund, Series II Shares 503,303 4AB AllianceBernstein VP International Value Portfolio (Class B) 1,481,283 5AB AllianceBernstein VP International Value Portfolio (Class B) 1,450,223 4AL AllianceBernstein VP Growth and Income Portfolio (Class B) 3,918,997 5AL AllianceBernstein VP Growth and Income Portfolio (Class B) 3,257,254 4AI American Century(R) VP International, Class II 479,392 5AI American Century(R) VP International, Class II 931,563 4AV American Century(R) VP Value, Class II 2,386,436 5AV American Century(R) VP Value, Class II 2,792,128 4SR Calvert Variable Series, Inc. Social Balanced Portfolio 226,087 5SR Calvert Variable Series, Inc. Social Balanced Portfolio 202,368 4CG Evergreen VA Capital Growth Fund - Class 2 483,654 5CG Evergreen VA Capital Growth Fund - Class 2 366,737 4FG Fidelity(R) VIP Growth & Income Portfolio Service Class 2 3,368,246 5FG Fidelity(R) VIP Growth & Income Portfolio Service Class 2 3,416,338 4FM Fidelity(R) VIP Mid Cap Portfolio Service Class 2 3,524,800 5FM Fidelity(R) VIP Mid Cap Portfolio Service Class 2 4,068,412 4FO Fidelity(R) VIP Overseas Portfolio Service Class 2 582,135 5FO Fidelity(R) VIP Overseas Portfolio Service Class 2 609,207 4RE FTVIPT Franklin Real Estate Fund - Class 2 3,282,121 5RE FTVIPT Franklin Real Estate Fund - Class 2 3,445,268 4SI FTVIPT Franklin Small Cap Value Securities Fund - Class 2 1,697,395 5SI FTVIPT Franklin Small Cap Value Securities Fund - Class 2 2,049,017 4MS FTVIPT Mutual Shares Securities Fund - Class 2 1,441,527 5MS FTVIPT Mutual Shares Securities Fund - Class 2 1,653,764 4UE Goldman Sachs VIT CORE(SM) U.S. Equity Fund 1,438,098 5UE Goldman Sachs VIT CORE(SM) U.S. Equity Fund 1,016,465 4MC Goldman Sachs VIT Mid Cap Value Fund 2,918,961 5MC Goldman Sachs VIT Mid Cap Value Fund 2,761,082 4ID INVESCO VIF - Dynamics Fund 261,800 5ID INVESCO VIF - Dynamics Fund 228,545 4FS INVESCO VIF - Financial Services Fund 443,638 5FS INVESCO VIF - Financial Services Fund 494,447 4TC INVESCO VIF - Technology Fund 135,407 5TC INVESCO VIF - Technology Fund 169,042 4TL INVESCO VIF - Telecommunications Fund 51,464 5TL INVESCO VIF - Telecommunications Fund 50,000 4GT Janus Aspen Series Global Technology Portfolio: Service Shares 99,116 5GT Janus Aspen Series Global Technology Portfolio: Service Shares 62,177 4IG Janus Aspen Series International Growth Portfolio: Service Shares 630,167 5IG Janus Aspen Series International Growth Portfolio: Service Shares 649,397 4IP Lazard Retirement International Equity Portfolio 584,162 5IP Lazard Retirement International Equity Portfolio 525,384 4MG MFS(R) Investors Growth Stock Series - Service Class 650,410 5MG MFS(R) Investors Growth Stock Series - Service Class 979,474 4MD MFS(R) New Discovery Series - Service Class 1,574,538 5MD MFS(R) New Discovery Series - Service Class 1,825,127 4UT MFS(R) Utilities Series - Service Class 457,596 5UT MFS(R) Utilities Series - Service Class 295,447 4PE Pioneer Equity Income VCT Portfolio - Class II Shares 1,130,226 5PE Pioneer Equity Income VCT Portfolio - Class II Shares 1,345,049 4EU Pioneer Europe VCT Portfolio - Class II Shares 48,901 5EU Pioneer Europe VCT Portfolio - Class II Shares 47,172 4HS Putnam VT Health Sciences Fund - Class IB Shares 596,772 5HS Putnam VT Health Sciences Fund - Class IB Shares 571,921
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 185
SUBACCOUNT INVESTMENT PURCHASES ---------------------------------------------------------------------------------------------------------------------------- 4PI Putnam VT International Equity Fund - Class IB Shares $ 1,403,979 (previously Putnam VT International Growth Fund - Class IB Shares) 5PI Putnam VT International Equity Fund - Class IB Shares 2,005,156 (previously Putnam VT International Growth Fund - Class IB Shares) 4VS Putnam VT Vista Fund - Class IB Shares 160,844 5VS Putnam VT Vista Fund - Class IB Shares 232,106 4SO Strong Opportunity Fund II - Advisor Class 2,056,991 5SO Strong Opportunity Fund II - Advisor Class 2,202,171 4IT Wanger International Small Cap 1,024,844 5IT Wanger International Small Cap 1,448,026 4SP Wanger U.S. Smaller Companies 3,186,464 5SP Wanger U.S. Smaller Companies 3,388,035 4AA Wells Fargo VT Asset Allocation Fund 869,994 5AA Wells Fargo VT Asset Allocation Fund 1,188,452 4WI Wells Fargo VT International Equity Fund 80,942 5WI Wells Fargo VT International Equity Fund 90,566 4SG Wells Fargo VT Small Cap Growth Fund 364,696 5SG Wells Fargo VT Small Cap Growth Fund 548,983
8. FINANCIAL HIGHLIGHTS The table below shows certain financial information regarding the subaccounts.
BC1 BC2 BD1 BD2 CR1 ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 0.98 $ 0.99 $ 1.06 $ 1.06 $ 0.93 At Dec. 31, 2001 $ 0.81 $ 0.82 $ 1.13 $ 1.13 $ 0.76 At Dec. 31, 2002 $ 0.62 $ 0.63 $ 1.18 $ 1.19 $ 0.58 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 49,897 41,083 106,760 83,968 26,779 At Dec. 31, 2002 44,110 39,019 159,405 154,530 34,956 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 $ 40,748 $ 33,763 $ 120,835 $ 95,910 $ 20,374 At Dec. 31, 2002 $ 27,601 $ 24,610 $ 188,953 $ 184,587 $ 20,512 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 0.75% 0.75% 6.38% 6.38% 0.31% For the year ended Dec. 31, 2002 0.78% 0.78% 5.08% 5.10% 0.54% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.95% 0.75% 0.95% 0.75% 0.95% For the year ended Dec. 31, 2002 0.95% 0.75% 0.95% 0.75% 0.95% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (17.35%) (17.17%) 6.60% 6.60% (18.28%) For the year ended Dec. 31, 2002 (23.46%) (23.17%) 4.42% 5.31% (23.68%) -------------------------------------------------------------------------------------------------------------------- CR2 CM1 CM2 DE1 DE2 ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 0.93 $ 1.06 $ 1.06 $ 1.01 $ 1.01 At Dec. 31, 2001 $ 0.76 $ 1.09 $ 1.09 $ 1.02 $ 1.02 At Dec. 31, 2002 $ 0.59 $ 1.09 $ 1.10 $ 0.82 $ 0.82 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 26,327 265,455 243,870 41,299 43,328 At Dec. 31, 2002 52,124 228,237 255,251 67,958 86,442 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 $ 20,244 $ 289,729 $ 267,061 $ 42,181 $ 44,814 At Dec. 31, 2002 $ 30,833 $ 249,280 $ 280,619 $ 55,726 $ 71,609 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 0.30% 3.57% 3.55% 1.26% 1.26% For the year ended Dec. 31, 2002 0.57% 1.17% 1.16% 1.59% 1.62% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.75% 0.95% 0.75% 0.95% 0.75% For the year ended Dec. 31, 2002 0.75% 0.95% 0.75% 0.95% 0.75% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (18.28%) 2.83% 2.83% 0.99% 0.99% For the year ended Dec. 31, 2002 (22.37%) 0.00% 0.92% (19.61%) (19.61%) --------------------------------------------------------------------------------------------------------------------
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 186
EM1 EM2 ES1(4) ES2(4) EI1 ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 0.74 $ 0.74 -- -- $ 0.91 At Dec. 31, 2001 $ 0.72 $ 0.72 $ 0.99 $ 1.00 $ 0.94 At Dec. 31, 2002 $ 0.67 $ 0.68 $ 0.85 $ 0.85 $ 0.87 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 1,542 1,789 2,238 2,489 88,813 At Dec. 31, 2002 3,888 4,750 12,145 16,388 122,784 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 $ 1,108 $ 1,291 $ 2,224 $ 2,477 $ 84,017 At Dec. 31, 2002 $ 2,618 $ 3,216 $ 10,310 $ 13,959 $ 107,749 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 0.02% 0.02% -- -- 10.93% For the year ended Dec. 31, 2002 -- -- -- -- 7.73% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.95% 0.75% 0.95% 0.75% 0.95% For the year ended Dec. 31, 2002 0.95% 0.75% 0.95% 0.75% 0.95% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (2.70%) (2.70%) (1.00%) 0.00% 3.30% For the year ended Dec. 31, 2002 (6.94%) (5.56%) (14.14%) (15.00%) (7.45%) -------------------------------------------------------------------------------------------------------------------- EI2 FI1 FI2 GB1 GB2 ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 0.91 $ 1.08 $ 1.08 $ 1.02 $ 1.03 At Dec. 31, 2001 $ 0.95 $ 1.13 $ 1.14 $ 1.03 $ 1.03 At Dec. 31, 2002 $ 0.88 $ 1.19 $ 1.20 $ 1.17 $ 1.18 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 58,348 56,966 50,510 23,970 16,572 At Dec. 31, 2002 93,845 116,147 124,866 36,626 31,133 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 $ 55,486 $ 64,826 $ 57,952 $ 24,619 $ 17,099 At Dec. 31, 2002 $ 82,940 $ 138,406 $ 149,972 $ 42,852 $ 36,668 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 10.92% 4.55% 4.52% 3.58% 3.62% For the year ended Dec. 31, 2002 7.71% 2.85% 2.88% 4.72% 4.77% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.75% 0.95% 0.75% 0.95% 0.75% For the year ended Dec. 31, 2002 0.75% 0.95% 0.75% 0.95% 0.75% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 4.40% 4.63% 5.56% 0.98% 0.00% For the year ended Dec. 31, 2002 (7.37%) 5.31% 5.26% 13.59% 14.56% --------------------------------------------------------------------------------------------------------------------
GR1 GR2 IE1 IE2 MF1 ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 0.94 $ 0.95 $ 0.95 $ 0.95 $ 1.05 At Dec. 31, 2001 $ 0.64 $ 0.65 $ 0.67 $ 0.67 $ 0.93 At Dec. 31, 2002 $ 0.47 $ 0.48 $ 0.54 $ 0.55 $ 0.80 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 130,764 129,186 18,664 15,821 53,096 At Dec. 31, 2002 118,986 135,693 19,189 20,012 64,613 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 $ 84,435 $ 83,920 $ 12,551 $ 10,653 $ 49,925 At Dec. 31, 2002 $ 56,268 $ 64,633 $ 10,469 $ 10,962 $ 52,246 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- 1.23% 1.23% 2.53% For the year ended Dec. 31, 2002 0.07% 0.07% 0.94% 0.99% 2.63% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.95% 0.75% 0.95% 0.75% 0.95% For the year ended Dec. 31, 2002 0.95% 0.75% 0.95% 0.75% 0.95% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (31.91%) (31.58%) (29.47%) (29.47%) (11.43%) For the year ended Dec. 31, 2002 (26.56%) (26.15%) (19.40%) (17.91%) (13.98%) -------------------------------------------------------------------------------------------------------------------- MF2 ND1 ND2 SV1(5) SV2(5) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 1.05 $ 1.07 $ 1.07 -- -- At Dec. 31, 2001 $ 0.94 $ 0.88 $ 0.89 $ 1.07 $ 1.07 At Dec. 31, 2002 $ 0.81 $ 0.68 $ 0.69 $ 0.93 $ 0.93 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 37,760 307,320 276,054 6,314 6,885 At Dec. 31, 2002 64,273 347,841 373,715 28,099 43,199 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 $ 35,997 $ 272,882 $ 246,108 $ 6,763 $ 7,380 At Dec. 31, 2002 $ 52,453 $ 239,068 $ 258,144 $ 26,292 $ 40,465 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 2.53% 0.23% 0.24% -- -- For the year ended Dec. 31, 2002 2.74% 0.51% 0.52% 0.16% 0.18% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.75% 0.95% 0.75% 0.95% 0.75% For the year ended Dec. 31, 2002 0.75% 0.95% 0.75% 0.95% 0.75% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (10.48%) (17.76%) (16.82%) 7.00% 7.00% For the year ended Dec. 31, 2002 (13.83%) (22.73%) (22.47%) (13.08%) (13.08%) --------------------------------------------------------------------------------------------------------------------
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 187
IV1 IV2 SC1 SC2 ST1(6) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 0.91 $ 0.91 $ 1.16 $ 1.16 -- At Dec. 31, 2001 $ 0.79 $ 0.79 $ 1.07 $ 1.08 $ 0.96 At Dec. 31, 2002 $ 0.60 $ 0.61 $ 0.88 $ 0.89 $ 0.76 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 40,575 35,957 24,346 22,792 517 At Dec. 31, 2002 65,011 64,771 29,341 29,202 2,921 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 $ 32,012 $ 28,329 $ 26,157 $ 24,594 $ 499 At Dec. 31, 2002 $ 39,405 $ 39,410 $ 25,898 $ 25,953 $ 2,211 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 0.91% 0.93% -- -- 0.16% For the year ended Dec. 31, 2002 0.98% 1.00% -- -- 0.72% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.95% 0.75% 0.95% 0.75% 0.95% For the year ended Dec. 31, 2002 0.95% 0.75% 0.95% 0.75% 0.95% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (13.19%) (13.19%) (7.76%) (6.90%) (4.00%) For the year ended Dec. 31, 2002 (24.05%) (22.78%) (17.76%) (17.59%) (20.83%) -------------------------------------------------------------------------------------------------------------------- ST2(6) SA1 SA2 1AC(6) 2AC(6) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- $ 1.21 $ 1.22 -- -- At Dec. 31, 2001 $ 0.97 $ 0.81 $ 0.81 $ 0.98 $ 0.98 At Dec. 31, 2002 $ 0.76 $ 0.54 $ 0.55 $ 0.73 $ 0.73 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 628 65,574 58,748 1,711 1,710 At Dec. 31, 2002 3,288 55,183 58,958 7,624 11,313 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 $ 606 $ 53,045 $ 47,765 $ 1,670 $ 1,670 At Dec. 31, 2002 $ 2,491 $ 30,114 $ 32,369 $ 5,562 $ 8,276 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 0.13% 0.21% 0.21% -- -- For the year ended Dec. 31, 2002 0.72% -- -- -- -- -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.75% 0.95% 0.75% 0.95% 0.75% For the year ended Dec. 31, 2002 0.75% 0.95% 0.75% 0.95% 0.75% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (3.00%) (33.06%) (33.61%) (2.00%) (2.00%) For the year ended Dec. 31, 2002 (21.65%) (33.33%) (32.10%) (25.51%) (25.51%) --------------------------------------------------------------------------------------------------------------------
1AD(6) 2AD(6) 1AB(6) 2AB(6) 1AL(6) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- -- At Dec. 31, 2001 $ 0.98 $ 0.98 $ 0.98 $ 0.98 $ 0.96 At Dec. 31, 2002 $ 0.76 $ 0.76 $ 0.92 $ 0.92 $ 0.74 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 1,224 1,459 790 805 4,363 At Dec. 31, 2002 4,808 6,981 9,270 12,313 29,770 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 $ 1,202 $ 1,433 $ 771 $ 787 $ 4,225 At Dec. 31, 2002 $ 3,687 $ 5,336 $ 8,490 $ 11,303 $ 22,176 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 -- -- 0.10% 0.11% 0.51% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.95% 0.75% 0.95% 0.75% 0.95% For the year ended Dec. 31, 2002 0.95% 0.75% 0.95% 0.75% 0.95% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (2.00%) (2.00%) (2.00%) (2.00%) (4.00%) For the year ended Dec. 31, 2002 (22.45%) (22.45%) (6.12%) (6.12%) (22.92%) -------------------------------------------------------------------------------------------------------------------- 2AL(6) 1AI(6) 2AI(6) 1AV(6) 2AV(6) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- -- At Dec. 31, 2001 $ 0.96 $ 0.93 $ 0.93 $ 1.04 $ 1.04 At Dec. 31, 2002 $ 0.74 $ 0.73 $ 0.73 $ 0.89 $ 0.90 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 5,550 1,927 1,950 7,298 7,356 At Dec. 31, 2002 43,189 8,200 11,378 30,523 42,497 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 $ 5,366 $ 1,797 $ 1,817 $ 7,740 $ 7,632 At Dec. 31, 2002 $ 32,201 $ 6,017 $ 8,360 $ 27,549 $ 38,114 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 0.50% 0.46% 0.38% 0.51% 0.41% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.75% 0.95% 0.75% 0.95% 0.75% For the year ended Dec. 31, 2002 0.75% 0.95% 0.75% 0.95% 0.75% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (4.00%) (7.00%) (7.00%) 4.00% 4.00% For the year ended Dec. 31, 2002 (22.92%) (21.51%) (21.51%) (14.42%) (13.46%) --------------------------------------------------------------------------------------------------------------------
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 188
1SR 2SR 1CG(6) 2CG(6) 1FG(6) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 0.96 $ 0.96 -- -- -- At Dec. 31, 2001 $ 0.89 $ 0.89 $ 0.95 $ 0.95 $ 1.00 At Dec. 31, 2002 $ 0.77 $ 0.78 $ 0.73 $ 0.73 $ 0.82 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 6,090 4,490 1,015 1,570 8,177 At Dec. 31, 2002 9,832 9,520 4,440 6,494 36,320 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 $ 5,404 $ 3,997 $ 964 $ 1,493 $ 8,323 At Dec. 31, 2002 $ 7,587 $ 7,427 $ 3,278 $ 4,743 $ 30,006 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 5.84% 5.83% -- -- -- For the year ended Dec. 31, 2002 3.43% 3.80% 0.10% 0.10% 0.74% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.95% 0.75% 0.95% 0.75% 0.95% For the year ended Dec. 31, 2002 0.95% 0.75% 0.95% 0.75% 0.95% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (7.29%) (7.29%) (5.00%) (5.00%) 0.00% For the year ended Dec. 31, 2002 (13.48%) (12.36%) (23.16%) (23.16%) (18.00%) -------------------------------------------------------------------------------------------------------------------- 2FG(6) 1FM(6) 2FM(6) 1FO(6) 2FO(6) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- -- At Dec. 31, 2001 $ 1.00 $ 1.04 $ 1.04 $ 0.94 $ 0.95 At Dec. 31, 2002 $ 0.82 $ 0.93 $ 0.93 $ 0.74 $ 0.75 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 6,363 6,689 6,903 2,157 2,147 At Dec. 31, 2002 48,686 35,541 50,458 10,123 13,157 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 $ 6,354 $ 6,950 $ 7,246 $ 2,036 $ 2,029 At Dec. 31, 2002 $ 40,222 $ 32,955 $ 46,916 $ 7,632 $ 9,829 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 0.49% 0.41% 0.32% 0.43% 0.32% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.75% 0.95% 0.75% 0.95% 0.75% For the year ended Dec. 31, 2002 0.75% 0.95% 0.75% 0.95% 0.75% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 0.00% 4.00% 4.00% (6.00%) (5.00%) For the year ended Dec. 31, 2002 (18.00%) (10.58%) (10.58%) (21.28%) (21.05%) --------------------------------------------------------------------------------------------------------------------
1RE 2RE 1SI 2SI 1MS(6) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 1.25 $ 1.25 $ 1.19 $ 1.19 -- At Dec. 31, 2001 $ 1.33 $ 1.34 $ 1.34 $ 1.35 $ 0.96 At Dec. 31, 2002 $ 1.35 $ 1.36 $ 1.21 $ 1.21 $ 0.84 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 19,803 24,477 9,584 10,800 1,114 At Dec. 31, 2002 44,591 59,317 23,553 29,743 9,151 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 $ 26,464 $ 32,992 $ 12,869 $ 14,608 $ 1,075 At Dec. 31, 2002 $ 60,237 $ 80,774 $ 28,429 $ 36,182 $ 7,711 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 3.69% 3.61% 0.36% 0.38% -- For the year ended Dec. 31, 2002 2.59% 2.58% 0.37% 0.37% 0.80% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.95% 0.75% 0.95% 0.75% 0.95% For the year ended Dec. 31, 2002 0.95% 0.75% 0.95% 0.75% 0.95% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 6.40% 7.20% 12.61% 13.45% (4.00%) For the year ended Dec. 31, 2002 1.50% 1.49% (9.70%) (10.37%) (12.50%) -------------------------------------------------------------------------------------------------------------------- 2MS(6) 1UE 2UE 1MC 2MC ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- $ 0.99 $ 0.99 $ 1.23 $ 1.23 At Dec. 31, 2001 $ 0.97 $ 0.86 $ 0.86 $ 1.37 $ 1.37 At Dec. 31, 2002 $ 0.85 $ 0.67 $ 0.67 $ 1.29 $ 1.30 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 942 71,185 60,343 24,711 23,748 At Dec. 31, 2002 10,942 75,489 71,820 47,539 56,079 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 $ 910 $ 61,361 $ 52,275 $ 33,836 $ 32,637 At Dec. 31, 2002 $ 9,246 $ 50,352 $ 48,249 $ 61,488 $ 72,845 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- 0.48% 0.50% 1.38% 1.51% For the year ended Dec. 31, 2002 0.73% 0.59% 0.62% 1.31% 1.41% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.75% 0.95% 0.75% 0.95% 0.75% For the year ended Dec. 31, 2002 0.75% 0.95% 0.75% 0.95% 0.75% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (3.00%) (13.13%) (13.13%) 11.38% 11.38% For the year ended Dec. 31, 2002 (12.37%) (22.09%) (22.09%) (5.84%) (5.11%)
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 189
1ID(6) 2ID(6) 1FS(6) 2FS(6) 1TC(6) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- -- At Dec. 31, 2001 $ 0.96 $ 0.96 $ 0.96 $ 0.97 $ 0.91 At Dec. 31, 2002 $ 0.65 $ 0.65 $ 0.82 $ 0.82 $ 0.48 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 1,426 1,550 901 1,081 911 At Dec. 31, 2002 4,845 6,887 3,709 5,572 2,845 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 $ 1,369 $ 1,503 $ 869 $ 1,044 $ 828 At Dec. 31, 2002 $ 3,135 $ 4,479 $ 3,026 $ 4,559 $ 1,360 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 -- -- 0.95% 0.98% -- -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.95% 0.75% 0.95% 0.75% 0.95% For the year ended Dec. 31, 2002 0.95% 0.75% 0.95% 0.75% 0.95% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (4.00%) (4.00%) (4.00%) (3.00%) (9.00%) For the year ended Dec. 31, 2002 (32.29%) (32.29%) (14.58%) (15.46%) (47.25%) -------------------------------------------------------------------------------------------------------------------- 2TC(6) 1TL(6) 2TL(6) 1GT 2GT ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- $ 0.68 $ 0.68 At Dec. 31, 2001 $ 0.91 $ 0.84 $ 0.84 $ 0.42 $ 0.43 At Dec. 31, 2002 $ 0.48 $ 0.41 $ 0.41 $ 0.25 $ 0.25 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 490 614 404 34,050 34,767 At Dec. 31, 2002 3,769 1,604 1,938 31,354 37,200 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 $ 445 $ 516 $ 340 $ 14,436 $ 14,784 At Dec. 31, 2002 $ 1,807 $ 657 $ 796 $ 7,822 $ 9,277 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- 0.67% 0.67% For the year ended Dec. 31, 2002 -- -- -- -- -- -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.75% 0.95% 0.75% 0.95% 0.75% For the year ended Dec. 31, 2002 0.75% 0.95% 0.75% 0.95% 0.75% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (9.00%) (16.00%) (16.00%) (38.24%) (36.76%) For the year ended Dec. 31, 2002 (47.25%) (51.19%) (51.19%) (40.48%) (41.86%) --------------------------------------------------------------------------------------------------------------------
1IG 2IG 1IP 2IP 1MG ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 0.80 $ 0.80 $ 0.96 $ 0.96 $ 0.90 At Dec. 31, 2001 $ 0.61 $ 0.61 $ 0.72 $ 0.72 $ 0.67 At Dec. 31, 2002 $ 0.45 $ 0.45 $ 0.64 $ 0.64 $ 0.48 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 64,147 60,527 19,727 15,860 51,051 At Dec. 31, 2002 74,111 81,189 28,853 29,532 62,663 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 $ 38,965 $ 36,904 $ 14,292 $ 11,605 $ 34,387 At Dec. 31, 2002 $ 33,096 $ 36,450 $ 18,543 $ 19,063 $ 30,234 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 0.75% 0.76% 0.01% 0.01% 0.06% For the year ended Dec. 31, 2002 0.67% 0.69% 0.08% 0.09% -- -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.95% 0.75% 0.95% 0.75% 0.95% For the year ended Dec. 31, 2002 0.95% 0.75% 0.95% 0.75% 0.95% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (23.75%) (23.75%) (25.00%) (25.00%) (25.56%) For the year ended Dec. 31, 2002 (26.23%) (26.23%) (11.11%) (11.11%) (28.36%) -------------------------------------------------------------------------------------------------------------------- 2MG 1MD 2MD 1UT(6) 2UT(6) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 0.91 $ 0.96 $ 0.96 -- -- At Dec. 31, 2001 $ 0.68 $ 0.90 $ 0.90 $ 0.89 $ 0.89 At Dec. 31, 2002 $ 0.48 $ 0.61 $ 0.61 $ 0.68 $ 0.68 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 50,212 36,822 34,072 2,778 2,997 At Dec. 31, 2002 69,576 53,383 59,272 7,093 10,543 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 $ 34,000 $ 33,044 $ 30,682 $ 2,513 $ 2,672 At Dec. 31, 2002 $ 33,834 $ 32,375 $ 36,167 $ 4,853 $ 7,194 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 0.06% -- -- -- -- For the year ended Dec. 31, 2002 -- -- -- 2.31% 1.85% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.75% 0.95% 0.75% 0.95% 0.75% For the year ended Dec. 31, 2002 0.75% 0.95% 0.75% 0.95% 0.75% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (25.27%) (6.25%) (6.25%) (11.00%) (11.00%) For the year ended Dec. 31, 2002 (29.41%) (32.22%) (32.22%) (23.60%) (23.60%) --------------------------------------------------------------------------------------------------------------------
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 190
1PE(6) 2PE(6) 1EU(6) 2EU(6) 1HS(6) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- -- At Dec. 31, 2001 $ 0.97 $ 0.98 $ 0.98 $ 0.98 $ 0.98 At Dec. 31, 2002 $ 0.81 $ 0.81 $ 0.78 $ 0.78 $ 0.77 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 1,106 1,316 143 121 1,743 At Dec. 31, 2002 7,193 11,651 698 1,312 6,574 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 $ 1,078 $ 1,284 $ 140 $ 118 $ 1,710 At Dec. 31, 2002 $ 5,840 $ 9,587 $ 547 $ 1,030 $ 5,090 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 0.36% 0.34% -- -- -- For the year ended Dec. 31, 2002 2.70% 2.76% -- -- -- -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.95% 0.75% 0.95% 0.75% 0.95% For the year ended Dec. 31, 2002 0.95% 0.75% 0.95% 0.75% 0.95% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (3.00%) (2.00%) (2.00%) (2.00%) (2.00%) For the year ended Dec. 31, 2002 (16.49%) (17.35%) (20.41%) (20.41%) (21.43%) -------------------------------------------------------------------------------------------------------------------- 2HS(6) 1PI(6) 2PI(6) 1VS 2VS ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- $ 1.29 $ 1.29 At Dec. 31, 2001 $ 0.98 $ 0.96 $ 0.96 $ 0.85 $ 0.85 At Dec. 31, 2002 $ 0.78 $ 0.78 $ 0.78 $ 0.58 $ 0.59 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 2,137 2,180 2,460 87,722 74,819 At Dec. 31, 2002 11,416 15,138 20,773 73,930 72,033 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 $ 2,098 $ 2,092 $ 2,363 $ 74,483 $ 63,852 At Dec. 31, 2002 $ 8,863 $ 11,849 $ 16,304 $ 43,208 $ 42,343 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 -- 0.51% 0.40% -- -- -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.75% 0.95% 0.75% 0.95% 0.75% For the year ended Dec. 31, 2002 0.75% 0.95% 0.75% 0.95% 0.75% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (2.00%) (4.00%) (4.00%) (34.11%) (34.11%) For the year ended Dec. 31, 2002 (20.41%) (18.75%) (18.75%) (31.76%) (30.59%) --------------------------------------------------------------------------------------------------------------------
1SO(6) 2SO(6) 1IT 2IT 1SP ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- $ 1.08 $ 1.08 $ 1.05 At Dec. 31, 2001 $ 0.99 $ 0.99 $ 0.84 $ 0.85 $ 1.15 At Dec. 31, 2002 $ 0.72 $ 0.72 $ 0.72 $ 0.72 $ 0.95 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 3,747 3,701 30,297 27,818 46,456 At Dec. 31, 2002 17,130 25,397 42,309 43,554 72,853 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 $ 3,712 $ 3,672 $ 25,663 $ 23,628 $ 53,763 At Dec. 31, 2002 $ 12,297 $ 18,291 $ 30,549 $ 31,618 $ 69,472 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 0.34% 0.38% -- -- 0.06% For the year ended Dec. 31, 2002 0.67% 0.75% -- -- -- -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.95% 0.75% 0.95% 0.75% 0.95% For the year ended Dec. 31, 2002 0.95% 0.75% 0.95% 0.75% 0.95% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (1.00%) (1.00%) (22.22%) (21.30%) 9.52% For the year ended Dec. 31, 2002 (27.27%) (27.27%) (14.29%) (15.29%) (17.39%) -------------------------------------------------------------------------------------------------------------------- 2SP 1AA(4) 2AA(4) 1WI(4) 2WI(4) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 1.05 -- -- -- -- At Dec. 31, 2001 $ 1.16 $ 0.97 $ 0.97 $ 0.90 $ 0.90 At Dec. 31, 2002 $ 0.96 $ 0.84 $ 0.84 $ 0.69 $ 0.69 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 40,791 3,224 3,799 1,031 1,200 At Dec. 31, 2002 78,311 11,859 14,864 2,781 4,703 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 $ 47,364 $ 3,120 $ 3,682 $ 928 $ 1,080 At Dec. 31, 2002 $ 75,036 $ 9,908 $ 12,461 $ 1,909 $ 3,239 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 0.06% 0.94% 0.95% 0.01% 0.01% For the year ended Dec. 31, 2002 -- 2.31% 2.33% 0.21% 0.20% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.75% 0.95% 0.75% 0.95% 0.75% For the year ended Dec. 31, 2002 0.75% 0.95% 0.75% 0.95% 0.75% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 10.48% (3.00%) (3.00%) (10.00%) (10.00%) For the year ended Dec. 31, 2002 (17.24%) (13.40%) (13.40%) (23.33%) (23.33%) --------------------------------------------------------------------------------------------------------------------
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 191
1SG(4) 2SG(4) BC4(7) BC5(7) BD4(7) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- -- At Dec. 31, 2001 $ 0.94 $ 0.94 -- -- -- At Dec. 31, 2002 $ 0.58 $ 0.58 $ 0.79 $ 0.79 $ 1.04 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 2,230 2,060 -- -- -- At Dec. 31, 2002 7,655 9,992 39 126 5,971 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 $ 2,095 $ 1,939 -- -- -- At Dec. 31, 2002 $ 4,402 $ 5,766 $ 31 $ 99 $ 6,190 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 -- -- 0.76% 0.98% 5.19% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.95% 0.75% -- -- -- For the year ended Dec. 31, 2002 0.95% 0.75% 1.20% 1.00% 1.20% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (6.00%) (6.00%) -- -- -- For the year ended Dec. 31, 2002 (38.30%) (38.30%) (21.00%) (21.00%) 4.00% -------------------------------------------------------------------------------------------------------------------- BD5(7) CR4(7) CR5(7) CM4(7) CM5(7) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- -- At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 1.04 $ 0.81 $ 0.75 $ 1.00 $ 1.00 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 6,481 96 291 12,148 12,452 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 6,730 $ 77 $ 217 $ 12,133 $ 12,459 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 5.25% 0.63% 0.62% 1.08% 1.06% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 1.00% 1.20% 1.00% 1.20% 1.00% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 4.00% (19.00%) (25.00%) 0.00% 0.00% --------------------------------------------------------------------------------------------------------------------
DE4(7) DE5(7) EM4(7) EM5(7) ES4(7) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- -- At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 0.83 $ 0.83 $ 0.90 $ 0.90 $ 0.88 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 2,058 3,101 121 220 889 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 1,701 $ 2,585 $ 109 $ 198 $ 780 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 1.78% 1.88% -- -- -- -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 1.20% 1.00% 1.20% 1.00% 1.20% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 (17.00%) (17.00%) (10.00%) (10.00%) (12.00%) -------------------------------------------------------------------------------------------------------------------- ES5(7) EI4(7) EI5(7) FI4(7) FI5(7) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- -- At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 0.88 $ 0.93 $ 0.94 $ 1.04 $ 1.04 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 1,153 4,269 3,957 7,646 6,107 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 1,013 $ 3,987 $ 3,701 $ 7,946 $ 6,358 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 -- 7.35% 7.31% 2.98% 2.96% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 1.00% 1.20% 1.00% 1.20% 1.00% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 (12.00%) (7.00%) (6.00%) 4.00% 4.00% --------------------------------------------------------------------------------------------------------------------
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 192
GB4(7) GB5(7) GR4(7) GR5(7) IE4(7) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- -- At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 1.14 $ 1.14 $ 0.76 $ 0.77 $ 0.85 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 1,529 1,060 392 973 105 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 1,742 $ 1,211 $ 300 $ 745 $ 89 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 4.90% 4.75% 0.17% 0.18% 0.94% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 1.20% 1.00% 1.20% 1.00% 1.20% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 14.00% 14.00% (24.00%) (23.00%) (15.00%) -------------------------------------------------------------------------------------------------------------------- IE5(7) MF4(7) MF5(7) ND4(7) ND5(7) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- -- At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 0.85 $ 0.90 $ 0.90 $ 0.80 $ 0.80 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 55 462 531 5,049 6,565 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 47 $ 414 $ 477 $ 4,035 $ 5,255 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 1.16% 3.24% 3.02% 0.57% 0.59% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 1.00% 1.20% 1.00% 1.20% 1.00% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 (15.00%) (10.00%) (10.00%) (20.00%) (20.00%) --------------------------------------------------------------------------------------------------------------------
SV4(7) SV5(7) IV4(7) IV5(7) SC4(7) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- -- At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 0.88 $ 0.88 $ 0.80 $ 0.80 $ 0.85 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 2,665 3,316 1,648 1,889 516 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 2,349 $ 2,928 $ 1,310 $ 1,505 $ 439 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 0.21% 0.24% 1.21% 1.28% -- -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 1.20% 1.00% 1.20% 1.00% 1.20% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 (12.00%) (12.00%) (20.00%) (20.00%) (15.00%) -------------------------------------------------------------------------------------------------------------------- SC5(7) ST4(7) ST5(7) SA4(7) SA5(7) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- -- At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 0.85 $ 0.80 $ 0.80 $ 0.72 $ 0.72 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 900 125 196 161 114 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 767 $ 100 $ 157 $ 116 $ 82 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 -- 0.70% 0.88% -- -- -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 1.00% 1.20% 1.00% 1.20% 1.00% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 (15.00%) (20.00%) (20.00%) (28.00%) (28.00%) --------------------------------------------------------------------------------------------------------------------
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 193
4AC(7) 5AC(7) 4AD(7) 5AD(7) 4AB(7) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- -- At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 0.78 $ 0.78 $ 0.80 $ 0.80 $ 0.95 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 447 379 463 552 1,371 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 347 $ 296 $ 372 $ 444 $ 1,304 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 -- -- -- -- 0.10% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 1.20% 1.00% 1.20% 1.00% 1.20% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 (22.00%) (22.00%) (20.00%) (20.00%) (5.00%) -------------------------------------------------------------------------------------------------------------------- 5AB(7) 4AL(7) 5AL(7) 4AI(7) 5AI(7) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- -- At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 0.95 $ 0.81 $ 0.81 $ 0.85 $ 0.85 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 1,417 4,072 3,503 448 944 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 1,350 $ 3,285 $ 2,831 $ 380 $ 802 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 0.06% 0.51% 0.45% 0.12% 0.05% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 1.00% 1.20% 1.00% 1.20% 1.00% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 (5.00%) (19.00%) (19.00%) (15.00%) (15.00%) --------------------------------------------------------------------------------------------------------------------
4AV(7) 5AV(7) 4SR(7) 5SR(7) 4CG(7) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- -- At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 0.89 $ 0.89 $ 0.88 $ 0.88 $ 0.81 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 2,396 2,837 208 211 522 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 2,127 $ 2,523 $ 183 $ 186 $ 422 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 0.06% 0.07% 7.28% 9.05% 0.01% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 1.20% 1.00% 1.20% 1.00% 1.20% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 (11.00%) (11.00%) (12.00%) (12.00%) (19.00%) -------------------------------------------------------------------------------------------------------------------- 5CG(7) 4FG(7) 5FG(7) 4FM(7) 5FM(7) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- -- At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 0.81 $ 0.85 $ 0.85 $ 0.90 $ 0.90 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 383 3,508 3,592 3,541 4,182 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 310 $ 2,994 $ 3,071 $ 3,177 $ 3,759 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 0.04% -- -- -- -- -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 1.00% 1.20% 1.00% 1.20% 1.00% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 (19.00%) (15.00%) (15.00%) (10.00%) (10.00%) --------------------------------------------------------------------------------------------------------------------
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 194
4FO(7) 5FO(7) 4RE(7) 5RE(7) 4SI(7) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- -- At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 0.83 $ 0.83 $ 1.01 $ 1.01 $ 0.92 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 610 553 2,989 2,887 1,610 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 504 $ 458 $ 3,012 $ 2,915 $ 1,477 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 -- -- 2.45% 1.96% 0.30% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 1.20% 1.00% 1.20% 1.00% 1.20% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 (17.00%) (17.00%) 1.00% 1.00% (8.00%) -------------------------------------------------------------------------------------------------------------------- 5SI(7) 4MS(7) 5MS(7) 4UE(7) 5UE(7) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- -- At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 0.92 $ 0.89 $ 0.89 $ 0.80 $ 0.80 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 2,075 1,418 1,735 1,483 1,048 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 1,906 $ 1,260 $ 1,544 $ 1,190 $ 842 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 0.25% 0.83% 0.53% 1.12% 1.60% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 1.00% 1.20% 1.00% 1.20% 1.00% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 (8.00%) (11.00%) (11.00%) (20.00%) (20.00%) --------------------------------------------------------------------------------------------------------------------
4MC(7) 5MC(7) 4ID(7) 5ID(7) 4FS(7) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- -- At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 0.95 $ 0.95 $ 0.71 $ 0.71 $ 0.87 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 2,777 2,583 286 242 446 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 2,644 $ 2,464 $ 203 $ 172 $ 387 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 2.11% 2.41% -- -- 1.35% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 1.20% 1.00% 1.20% 1.00% 1.20% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 (5.00%) (5.00%) (29.00%) (29.00%) (13.00%) -------------------------------------------------------------------------------------------------------------------- 5FS(7) 4TC(7) 5TC(7) 4TL(7) 5TL(7) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- -- At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 0.87 $ 0.56 $ 0.56 $ 0.60 $ 0.60 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 526 157 192 69 56 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 457 $ 88 $ 108 $ 41 $ 34 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 1.73% -- -- -- -- -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 1.00% 1.20% 1.00% 1.20% 1.00% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 (13.00%) (44.00%) (44.00%) (40.00%) (40.00%) --------------------------------------------------------------------------------------------------------------------
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 195
4GT(7) 5GT(7) 4IG(7) 5IG(7) 4IP(7) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- -- At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 0.63 $ 0.64 $ 0.79 $ 0.79 $ 0.92 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 112 68 646 681 566 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 71 $ 43 $ 508 $ 537 $ 521 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 -- -- 1.04% 0.98% 0.13% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 1.20% 1.00% 1.20% 1.00% 1.20% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 (37.00%) (36.00%) (21.00%) (21.00%) (8.00%) -------------------------------------------------------------------------------------------------------------------- 5IP(7) 4MG(7) 5MG(7) 4MD(7) 5MD(7) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- -- At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 0.92 $ 0.76 $ 0.76 $ 0.72 $ 0.72 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 499 712 1,088 1,784 2,112 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 460 $ 539 $ 826 $ 1,288 $ 1,527 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 0.12% -- -- -- -- -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 1.00% 1.20% 1.00% 1.20% 1.00% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 (8.00%) (24.00%) (24.00%) (28.00%) (28.00%) --------------------------------------------------------------------------------------------------------------------
4UT(7) 5UT(7) 4PE(7) 5PE(7) 4EU(7) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- -- At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 0.85 $ 0.85 $ 0.85 $ 0.85 $ 0.85 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 431 276 1,189 1,439 50 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 366 $ 235 $ 1,010 $ 1,224 $ 43 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 2.06% 1.64% 2.94% 3.04% -- -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 1.20% 1.00% 1.20% 1.00% 1.20% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 (15.00%) (15.00%) (15.00%) (15.00%) (15.00%) -------------------------------------------------------------------------------------------------------------------- 5EU(7) 4HS(7) 5HS(7) 4PI(7) 5PI(7) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- -- At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 0.85 $ 0.80 $ 0.81 $ 0.86 $ 0.86 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 50 583 617 1,392 2,086 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 43 $ 469 $ 497 $ 1,195 $ 1,794 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 -- -- -- 0.31% 0.14% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 1.00% 1.20% 1.00% 1.20% 1.00% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 (15.00%) (20.00%) (19.00%) (14.00%) (14.00%) --------------------------------------------------------------------------------------------------------------------
IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 196
4VS(7) 5VS(7) 4SO(7) 5SO(7) 4IT(7) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- -- At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 0.73 $ 0.73 $ 0.75 $ 0.75 $ 0.87 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 192 267 1,985 2,340 1,055 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 140 $ 195 $ 1,484 $ 1,752 $ 917 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 -- -- 0.77% 0.97% -- -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 1.20% 1.00% 1.20% 1.00% 1.20% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 (27.00%) (27.00%) (25.00%) (25.00%) (13.00%) -------------------------------------------------------------------------------------------------------------------- 5IT(7) 4SP(7) 5SP(7) 4AA(7) 5AA(7) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- -- At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 0.87 $ 0.85 $ 0.85 $ 0.88 $ 0.88 -------------------------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 1,523 3,131 3,732 770 1,279 -------------------------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 -- -- -- -- -- At Dec. 31, 2002 $ 1,327 $ 2,656 $ 3,172 $ 679 $ 1,130 -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 -- -- -- 2.61% 2.54% -------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 1.00% 1.20% 1.00% 1.20% 1.00% -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 (13.00%) (15.00%) (15.00%) (12.00%) (12.00%) --------------------------------------------------------------------------------------------------------------------
4WI(7) 5WI(7) 4SG(7) 5SG(7) ---------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- At Dec. 31, 2001 -- -- -- -- At Dec. 31, 2002 $ 0.81 $ 0.81 $ 0.67 $ 0.67 ----------------------------------------------------------------------------------------------------- UNITS (000S) At Dec. 31, 2001 -- -- -- -- At Dec. 31, 2002 80 81 387 662 ----------------------------------------------------------------------------------------------------- NET ASSETS (000S) At Dec. 31, 2001 -- -- -- -- At Dec. 31, 2002 $ 65 $ 65 $ 258 $ 441 ----------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- ----------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 -- -- -- -- For the year ended Dec. 31, 2002 1.20% 1.00% 1.20% 1.00% ----------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 -- -- -- -- For the year ended Dec. 31, 2002 (19.00%) (19.00%) (33.00%) (33.00%) -----------------------------------------------------------------------------------------------------
(1) These amounts represent the dividends, excluding distributions of capital gains, received by the subaccount from the underlying mutual fund, net of management fees assessed by the fund manager, divided by the average net assets. These ratios exclude Variable account expenses that result in direct reductions in the unit values. The recognition of investment income by the subaccount is affected by the timing of the declaration of dividends by the underlying fund in which the subaccounts invest. (2) These ratios represent the annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying fund are excluded. (3) These amounts represent the total return for the periods indicated, including changes in the value of the underlying fund, and reflect deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units; inclusion of these expenses in the calculation would result in a reduction in the total return presented. Investment options with a date notation indicate the effective date of that investment option in the variable account. The total return is calculated for the period indicated or from the effective date through the end of the reporting period. (4) Operations commenced on May 1, 2001. (5) Operations commenced on Aug. 14, 2001. (6) Operations commenced on Aug. 13, 2001. (7) Operations commenced on Feb. 13, 2002. IDS LIFE VARIABLE ACCOUINT 10 -- RAVA ADVANTAGE / RAVA SELECT 197 IDS Life Insurance Company ------------------------------------------------------------------------------- REPORT OF INDEPENDENT AUDITORS THE BOARD OF DIRECTORS IDS LIFE INSURANCE COMPANY We have audited the accompanying consolidated balance sheets of IDS Life Insurance Company (a wholly-owned subsidiary of American Express Financial Corporation) as of December 31, 2002 and 2001, and the related consolidated statements of income, stockholder's equity and cash flows for each of the three years in the period ended December 31, 2002. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. 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 consolidated financial position of IDS Life Insurance Company at December 31, 2002 and 2001, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States. ERNST & YOUNG LLP January 27, 2003 Minneapolis, Minnesota IDS Life Insurance Company -------------------------------------------------------------------------------
Consolidated Balance Sheets December 31, (In thousands, except share amounts) 2002 2001 Assets Investments: Available-for-sale: Fixed maturities, at fair value (amortized cost: 2002, $23,209,226; 2001, $20,022,072) $24,052,104 $20,157,137 Common stocks, at fair value (cost: 2002, $19; 2001, $805) 21 1,704 Mortgage loans on real estate 3,417,651 3,680,394 Policy loans 597,144 619,571 Other investments 752,558 621,897 ------- ------- Total investments 28,819,478 25,080,703 Cash and cash equivalents 4,424,061 1,150,251 Amounts recoverable from reinsurers 633,510 529,166 Amounts due from brokers 501 90,794 Other accounts receivable 56,245 46,349 Accrued investment income 296,595 278,199 Deferred policy acquisition costs 3,309,783 3,107,187 Deferred income taxes, net -- 156,308 Other assets 117,788 123,246 Separate account assets 21,980,674 27,333,697 ---------- ---------- Total assets $59,638,635 $57,895,900 =========== =========== Liabilities and stockholder's equity Liabilities: Future policy benefits: Fixed annuities $23,411,314 $19,592,273 Universal life-type insurance 3,515,010 3,433,904 Traditional life insurance 247,441 241,165 Disability income and long-term care insurance 1,466,171 1,227,172 Policy claims and other policyholders' funds 85,400 71,879 Amounts due to brokers 3,342,989 1,740,031 Deferred income taxes, net 182,059 -- Other liabilities 463,326 437,017 Separate account liabilities 21,980,674 27,333,697 ---------- ---------- Total liabilities 54,694,384 54,077,138 ---------- ---------- Commitments and contingencies Stockholder's equity: Capital stock, $30 par value per share; 100,000 shares authorized, issued and outstanding 3,000 3,000 Additional paid-in capital 1,088,327 688,327 Accumulated other comprehensive income, net of tax: Net unrealized securities gains 497,319 83,443 Net unrealized derivative gains (losses) 764 1,332 --- ----- Total accumulated other comprehensive income 498,083 84,775 Retained earnings 3,354,841 3,042,660 --------- --------- Total stockholder's equity 4,944,251 3,818,762 --------- --------- Total liabilities and stockholder's equity $59,638,635 $57,895,900 =========== ===========
See accompanying notes to consolidated financial statements. IDS Life Insurance Company -------------------------------------------------------------------------------
Consolidated Statements of Income Years ended December 31, (In thousands) 2002 2001 2000 Revenues Premiums: Traditional life insurance $ 67,978 $ 59,415 $ 56,187 Disability income and long-term care insurance 273,737 255,428 231,311 ------- ------- ------- Total premiums 341,715 314,843 287,498 Net investment income 1,561,856 1,485,688 1,730,605 Policyholder and contractholder charges 522,777 489,583 438,127 Management and other fees 404,787 473,406 598,168 Net realized loss on investments (4,507) (649,752) (16,975) ------ -------- ------- Total revenues 2,826,628 2,113,768 3,037,423 --------- --------- --------- Benefits and expenses Death and other benefits: Traditional life insurance 36,881 35,519 29,042 Universal life-type insurance and investment contracts 221,544 175,247 131,467 Disability income and long-term care insurance 52,962 44,725 40,246 Increase in liabilities for future policy benefits: Traditional life insurance 2,768 7,231 5,765 Disability income and long-term care insurance 134,605 123,227 113,239 Interest credited on universal life-type insurance and investment contracts 1,157,636 1,137,636 1,169,641 Amortization of deferred policy acquisition costs 312,402 371,342 362,106 Other insurance and operating expenses 437,823 407,798 378,653 ------- ------- ------- Total benefits and expenses 2,356,621 2,302,725 2,230,159 --------- --------- --------- Income (loss) before income tax expense (benefit) and cumulative effect of accounting change 470,007 (188,957) 807,264 Income tax expense (benefit) 87,826 (145,222) 221,627 ------ -------- ------- Income (loss) before cumulative effect of accounting change 382,181 (43,735) 585,637 Cumulative effect of accounting change (net of income tax benefit of $11,532) -- (21,416) -- ---------- ---------- ---------- Net income (loss) $ 382,181 $ (65,151) $ 585,637 ========== ========== ==========
See accompanying notes to consolidated financial statements. IDS Life Insurance Company -------------------------------------------------------------------------------
Consolidated Statements of Stockholder's Equity Accumulated other Additional comprehensive Total Capital paid-in income (loss), Retained stockholder's For the three years ended December 31, 2002 (In thousands) stock capital net of tax earnings equity Balance, January 1, 2000 $3,000 $ 288,327 $(411,230) $2,932,174 $2,812,271 Comprehensive income: Net income -- -- -- 585,637 585,637 Net unrealized holding gains on available-for-sale securities arising during the year, net of deferred policy acquisition costs of ($5,154) and income tax expense of ($46,921) -- -- 87,138 -- 87,138 Reclassification adjustment for gains included in net income, net of income tax expense of $5,192 -- -- (9,642) -- (9,642) ------ ----------- --------- ---------- ---------- Other comprehensive income -- -- 77,496 -- 77,496 ------ ----------- --------- ---------- ---------- Comprehensive income -- -- -- -- 663,133 Cash dividends -- -- -- (410,000) (410,000) ------ ----------- --------- ---------- ---------- Balance, December 31, 2000 3,000 288,327 (333,734) 3,107,811 3,065,404 Comprehensive income: Net loss -- -- -- (65,151) (65,151) Cumulative effect of adopting SFAS No. 133, net of income tax benefit of $626 -- -- (1,162) -- (1,162) Net unrealized holding losses on available-for-sale securities arising during the year, net of deferred policy acquisition costs of ($20,191) and income tax benefit of $6,064 -- -- (11,262) -- (11,262) Reclassification adjustment for losses on available-for-sale securities included in net loss, net of income tax benefit of $228,003 -- -- 423,434 -- 423,434 Reclassification adjustment for losses on derivatives included in net loss, net of income tax benefit of $4,038 -- -- 7,499 -- 7,499 ------ ----------- --------- ---------- ---------- Other comprehensive income -- -- 418,509 -- 418,509 ------ ----------- --------- ---------- ---------- Comprehensive income -- -- -- -- 353,358 Capital contribution -- 400,000 -- -- 400,000 ------ ----------- --------- ---------- ---------- Balance, December 31, 2001 3,000 688,327 84,775 3,042,660 3,818,762 Comprehensive income: Net income -- -- -- 382,181 382,181 Net unrealized holding gains on available-for-sale securities arising during the year, net of deferred policy acquisition costs of ($75,351) and income tax expense of ($228,502) -- -- 424,360 -- 424,360 Reclassification adjustment for gains on available-for-sale securities included in net income, net of income tax expense of $5,645 -- -- (10,484) -- (10,484) Reclassification adjustment for gains on derivatives included in net income, net of income tax expense of $305 -- -- (568) -- (568) ------ ----------- --------- ---------- ---------- Other comprehensive income -- -- 413,308 -- 413,308 ------ ----------- --------- ---------- ---------- Comprehensive income -- -- -- -- 795,489 Cash dividends -- -- -- (70,000) (70,000) Capital contribution -- 400,000 -- -- 400,000 ------ ----------- --------- ---------- ---------- Balance, December 31, 2002 $3,000 $1,088,327 $ 498,083 $3,354,841 $4,944,251 ====== ========== ========= ========== ==========
See accompanying notes to consolidated financial statements. IDS Life Insurance Company -------------------------------------------------------------------------------
Consolidated Statements of Cash Flows Years ended December 31, (In thousands) 2002 2001 2000 Cash flows from operating activities Net income (loss) $ 382,181 $ (65,151) $ 585,637 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Cumulative effect of accounting change, net of tax -- 21,416 -- Policy loans, excluding universal life-type insurance: Issuance (35,345) (43,687) (61,313) Repayment 49,256 54,004 56,088 Change in amounts recoverable from reinsurers (104,344) (112,686) (89,312) Change in other accounts receivable (9,896) (4,025) 6,254 Change in accrued investment income (5,139) 56,729 8,521 Change in deferred policy acquisition costs, net (277,947) (175,723) (291,634) Change in liabilities for future policy benefits for traditional life, disability income and long-term care insurance 245,275 223,177 206,377 Change in policy claims and other policyholder's funds 13,521 19,812 27,467 Deferred income tax provision (benefit) 116,995 (246,205) 37,704 Change in other liabilities 26,309 (24,509) (120,256) Amortization of premium, net 65,869 108,958 37,909 Net realized loss on investments 4,507 649,752 16,975 Policyholder and contractholder charges, non-cash (232,725) (217,496) (151,745) Other, net 13,820 (83,023) (9,279) ------- ------- ------- Net cash provided by operating activities 252,337 161,343 259,393 ------- ------- ------- Cash flows from investing activities Held-to-maturity securities: Purchases -- -- (4,487) Maturities, sinking fund payments and calls -- -- 589,742 Sales -- -- 50,067 Available-for-sale securities: Purchases (16,287,891) (9,477,740) (1,454,010) Maturities, sinking fund payments and calls 3,078,509 2,706,147 1,019,403 Sales 10,093,228 5,493,141 1,237,116 Other investments, excluding policy loans: Purchases (543,843) (442,876) (706,082) Sales 509,588 370,636 435,633 Change in amounts due from brokers 90,293 (75,492) (15,157) Change in amounts due to brokers 1,602,958 1,293,684 298,236 --------- --------- ------- Net cash (used in) provided by investing activities (1,457,158) (132,500) 1,450,461 ---------- -------- --------- Cash flows from financing activities Activities related to universal life-type insurance and investment contracts: Considerations received 4,638,111 2,088,114 1,842,026 Surrenders and other benefits (1,655,631) (2,810,401) (3,974,966) Interest credited to account balances 1,157,636 1,137,636 1,169,641 Universal life-type insurance policy loans: Issuance (80,831) (83,720) (134,107) Repayment 89,346 72,805 82,193 Capital contribution 400,000 400,000 -- Dividends paid (70,000) -- (410,000) --------- ------- ---------- Net cash provided by (used in) financing activities 4,478,631 804,434 (1,425,213) --------- ------- ---------- Net increase in cash and cash equivalents 3,273,810 833,277 284,641 Cash and cash equivalents at beginning of year 1,150,251 316,974 32,333 --------- ------- ---------- Cash and cash equivalents at end of year $ 4,424,061 $ 1,150,251 $ 316,974 ============ =========== =========== Supplemental disclosures: Income taxes paid $ -- $ -- $ 225,704 Interest on borrowings 7,906 23,688 3,299 --------- ------- ----------
See accompanying notes to consolidated financial statements. IDS Life Insurance Company ------------------------------------------------------------------------------- Notes to Consolidated Financial Statements (In thousands) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of business IDS Life Insurance Company (the Company) is a stock life insurance company organized under the laws of the State of Minnesota whose products are primarily distributed through branded financial advisors. The Company is a wholly-owned subsidiary of American Express Financial Corporation (AEFC), which is a wholly-owned subsidiary of American Express Company. The Company serves residents of all states except New York. IDS Life Insurance Company of New York is a wholly-owned subsidiary of the Company and serves New York State residents. The Company also wholly-owns American Enterprise Life Insurance Company, which issues fixed and variable annuity contracts for sale through insurance agencies and broker-dealers who may also be associated with financial institutions, such as banks. American Centurion Life Assurance Company is a wholly-owned subsidiary that offers fixed and variable annuities to American Express(R) Cardmembers and others in New York and through insurance agencies and broker-dealers who may also be associated with financial institutions, such as banks, in New York. American Partners Life Insurance Company is a wholly-owned subsidiary that offers fixed and variable annuities to American Express(R) Cardmembers and others who reside in states other than New York. The Company also wholly-owns IDS REO 1, LLC and American Express Corporation. These subsidiaries hold real estate, mortgage loans on real estate and/or affordable housing investments. The Company's principal products are deferred annuities and universal life insurance which are issued primarily to individuals. It offers single premium and flexible premium deferred annuities on both a fixed and variable dollar basis. Immediate annuities are offered as well. The Company's fixed deferred annuities guarantee a relatively low annual interest rate during the accumulation period (the time before annuity payments begin). However, the Company has the option of paying a higher rate set at its discretion. In addition, persons owning one type of annuity may have their interest calculated based on any increase in a broad-based stock market index. The Company also offers variable annuities, including the American Express Retirement Advisor Advantage(R) Variable Annuity and the American Express Retirement Advisor Select(R) Variable Annuity. Life insurance products currently offered by the Company include universal life (fixed and variable, single life and joint life), single premium life and term products. Waiver of premium and accidental death benefit riders are generally available with these life insurance products. The Company also markets disability income insurance. Although the Company discontinued marketing proprietary long-term care insurance at the end of 2002, long-term care insurance is available through a non-proprietary product distributed by an affiliate. Under the Company's variable life insurance and variable annuity products described above, the purchaser may choose among investment options that include the Company's "general account" as well as from a variety of portfolios including common stocks, bonds, managed assets and/or short- term securities. Basis of presentation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States which vary in certain respects from reporting practices prescribed or permitted by state insurance regulatory authorities (see Note 4). Certain prior year amounts have been reclassified to conform to the current year's presentation. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenue recognition Profits on fixed deferred annuities are the excess of contractholder charges and investment income earned from investment of contract considerations over interest credited to contract values, amortization of deferred acquisition costs, and other expenses. Profits on variable deferred annuities also include the excess of management and other fees over the costs of guaranteed benefits provided. Policyholder and contractholder charges include policy fees and surrender charges. Management and other fees include investment management fees from underlying proprietary mutual funds, certain fee revenues from underlying nonproprietary mutual funds and mortality and expense risk fees from the variable annuity separate accounts. IDS Life Insurance Company ------------------------------------------------------------------------------- Profits on fixed universal life insurance are the excess of contractholder charges and investment income earned from investment of contract considerations over interest credited to contract values, death and other benefits paid in excess of contract values, amortization of deferred acquisition costs, and other expenses. Profits on variable universal life insurance also include management and other fees. Policyholder and contractholder charges include the monthly cost of insurance charges, issue and administrative fees and surrender charges. These charges also include the minimum death benefit guarantee fees received from the variable life insurance separate accounts. Management and other fees include investment management fees from underlying proprietary mutual funds, certain fee revenues from underlying nonproprietary mutual funds and mortality and expense risk fees from the variable life insurance separate accounts. Premiums on traditional life, disability income and long-term care insurance policies are recognized as revenue when due, and related benefits and expenses are associated with premium revenue in a manner that results in recognition of profits over the lives of the insurance policies. This association is accomplished by means of the provision for future policy benefits and the deferral and subsequent amortization of policy acquisition costs. Investments -- Fixed maturity and equity securities All fixed maturity securities and marketable equity securities are classified as available-for-sale and carried at fair value. Unrealized gains and losses on securities classified as available-for-sale are carried as a separate component of accumulated other comprehensive income (loss), net of the related deferred policy acquisition costs and income taxes. Gains and losses are recognized in the results of operations upon disposition of the securities using the specific identification method. In addition, losses are also recognized when management determines that a decline in a security's fair value is other-than-temporary, which requires judgment regarding the amount and timing of recovery. Indicators of other-than-temporary impairment for fixed maturity securities include, but are not limited to, issuer downgrade, default, or bankruptcy. The Company also considers the extent to which cost exceeds fair value, the duration of time of that decline, and management's judgment about the issuer's current and prospective financial condition. The charges are reflected in net realized loss on investments within the Consolidated Statements of Income. Fair value of fixed maturity and equity securities is generally based on quoted market prices. However, the Company's investment portfolio also contains structured investments of various asset quality, including collateralized debt obligations (CDOs) and secured loan trusts (backed by high-yield bonds and bank loans), which are not readily marketable. As a result, the carrying values of these structured investments are based on estimated cash flow projections which require a significant degree of management judgment as to default and recovery rates of the underlying investments and, as such, are subject to change. The Company's CDO investments are accounted for in accordance with Emerging Issues Task Force (EITF) Issue 99-20 "Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets." The Company's secured loan trusts are accounted for in accordance with EITF Issue 96-12 "Recognition of Interest Income and Balance Sheet Classification of Structured Notes." Net investment income, which primarily consists of interest earned on fixed maturity securities, is generally accrued as earned using the effective interest method, which makes an adjustment of the yield for security premiums, discounts and anticipated prepayments on mortgage-backed securities. Prepayment estimates are based on information received from brokers who deal in mortgage-backed securities. Investments -- Mortgage loans on real estate Mortgage loans on real estate reflect principal amounts outstanding less reserves for losses. The estimated fair value of the mortgage loans is determined by discounted cash flow analyses using mortgage interest rates currently offered for mortgages of similar maturities. The reserve for losses is measured as the excess of the loan's recorded investment over its present value of expected principal and interest payments discounted at the loan's effective interest rate or the fair value of collateral. Additionally, the level of the reserve for losses considers other factors, including historical experience and current economic and political conditions. Management regularly evaluates the adequacy of the reserve for mortgage loan losses and believes it is adequate to absorb estimated losses in the portfolio. The Company generally stops accruing interest on mortgage loans for which interest payments are delinquent more than three months. Based on management's judgment as to the ultimate collectibility of principal, interest payments received are either recognized as income or applied to the recorded investment in the loan. Investments -- Policy loans Policy loans are carried at the aggregate of the unpaid loan balances, which do not exceed the cash surrender values of the related policies. IDS Life Insurance Company ------------------------------------------------------------------------------- Investments -- Other investments Included in Other investments are affordable housing investments, trading securities, syndicated loans and real estate. Affordable housing investments are carried at amortized cost as the Company has no influence over the operating or financial policies of the general partner. Trading securities are held at fair market value with changes in value recognized in the Consolidated Statements of Income within Net investment income. Syndicated loans reflect principal amounts outstanding less reserves for losses and real estate is carried at its estimated fair value. Cash and cash equivalents The Company considers investments with a maturity at the date of their acquisition of three months or less to be cash equivalents. These securities are carried principally at amortized cost, which approximates fair value. Deferred policy acquisition costs The costs of acquiring new business, including for example, direct sales commissions, related sales incentive bonuses and awards, underwriting costs, policy issue costs and other related costs, have been deferred on the sale of insurance and annuity contracts. The deferred acquisition costs (DAC) for universal life and variable universal life insurance and certain installment annuities are amortized as a percentage of the estimated gross profits expected to be realized on the policies. DAC for other annuities are amortized using the interest method. For traditional life, disability income and long-term care insurance policies, the costs are amortized in proportion to premium revenue. Amortization of DAC requires the use of certain assumptions including interest margins, mortality rates, persistency rates, maintenance expense levels and customer asset value growth rates for variable products. The customer asset value growth rate is the rate at which contract values are assumed to appreciate in the future. This rate is net of asset fees, and anticipates a blend of equity and fixed income investments. Management routinely monitors a wide variety of trends in the business, including comparisons of actual and assumed experience. Management reviews and, where appropriate, adjusts its assumptions with respect to customer asset value growth rates on a quarterly basis. Management monitors other principal DAC assumptions, such as persistency rates, mortality rate, interest margin and maintenance expense level assumptions each quarter. Unless management identifies a material deviation over the course of the quarterly monitoring, management reviews and updates these DAC assumptions annually in the third quarter of each year. When assumptions are changed, the percentage of estimated gross profits or portion of interest margins used to amortize DAC may also change. A change in the required amortization percentage is applied retrospectively; an increase in amortization percentage will result in an acceleration of DAC amortization while a decrease in amortization percentage will result in a deceleration of DAC amortization. The impact on results of operations of changing assumptions with respect to the amortization of DAC can be either positive or negative in any particular period, and is reflected in the period that such changes are made. These adjustments are collectively referred to as unlocking adjustments. Unlocking adjustments resulted in net increases in amortization of $40,000 in 2002 and $33,600 in 2001, with a net decrease in amortization of $12,300 in 2000. Guaranteed minimum death benefits The majority of the variable annuity contracts offered by the Company contain guaranteed minimum death benefit (GMDB) provisions. At time of issue, these contracts typically guarantee that the death benefit payable will not be less than the amount invested, regardless of the performance of the customer's account. Most contracts also provide for some type of periodic adjustment of the guaranteed amount based on the change in value of the contract. A large portion of the Company's contracts containing a GMDB provision adjust once every six years. The periodic adjustment of these contracts can either increase or decrease the guaranteed amount, though not below the amount invested, adjusted for withdrawals. When market values of the customer's accounts decline, the death benefit payable on a contract with a GMDB may exceed the accumulated contract value. Currently, the amount paid in excess of contract value is expensed when payable. Amounts expensed in 2002, 2001 and 2000 were $37,361, $16,202 and $835, respectively. Liabilities for future policy benefits Liabilities for fixed and variable universal life insurance and fixed and variable deferred annuities are accumulation values. Liabilities for equity indexed deferred annuities issued before 1999 are equal to the present value of guaranteed benefits and the intrinsic value of index-based benefits. Liabilities for equity indexed deferred annuities issued in 1999 or later are equal to the accumulation of host contract values covering guaranteed benefits and the market value of embedded equity options. Liabilities for fixed annuities in a benefit status are based on established industry mortality tables and interest rates ranging from 5% to 9.5%, depending on year of issue, with an average rate of approximately 6.5%. IDS Life Insurance Company ------------------------------------------------------------------------------- Liabilities for future benefits on traditional life insurance, principally term and whole life insurance, are based on the net level premium method, using anticipated mortality, policy persistency and interest earning rates. Anticipated mortality rates are based on established industry mortality tables, with modifications based on Company experience. Anticipated policy persistency rates vary by policy form, issue age and policy duration with persistency on level term and cash value plans generally anticipated to be better than persistency on yearly renewable term insurance plans. Anticipated interest rates range from 4% to 10%, depending on policy form, issue year and policy duration. Liabilities for future disability income and long-term care policy benefits include both policy reserves and claim reserves. Policy reserves are based on the net level premium method, using anticipated morbidity, mortality, policy persistency and interest earning rates. Anticipated morbidity and mortality rates are based on established industry morbidity and mortality tables. Anticipated policy persistency rates vary by policy form, issue age, policy duration and, for disability income policies, occupation class. Anticipated interest rates for disability income and long-term care policy reserves are 3% to 9.5% at policy issue and grade to ultimate rates of 5% to 7% over 5 to 10 years. Claim reserves are calculated based on claim continuance tables and anticipated interest earnings. Anticipated claim continuance rates are based on established industry tables. Anticipated interest rates for claim reserves for both disability income and long-term care range from 5% to 8%. Liabilities for reported and unpaid life insurance claims are equal to the death benefits payable. For disability income and long-term care claims, unpaid claims liabilities are equal to benefit amounts due and accrued. Liabilities for incurred but not reported claims are estimated based on periodic analysis of the actual reported claim lag. Where applicable, amounts recoverable from reinsurers are separately recorded as receivables. For life insurance, no claim adjustment expense reserve is held. The claim adjustment expense reserves for disability income and long-term care are based on the claim reserves. The Company does not issue participating insurance contracts and has no short-duration life insurance liabilities. Reinsurance Reinsurance premiums and benefits paid or provided are accounted for on a basis consistent with that used in accounting for original policies issued and with the terms of the reinsurance contracts. The maximum amount of life insurance risk retained by the Company is $750 on any policy insuring a single life and $1,500 on any policy insuring a joint-life combination. The Company generally retains 10% of the mortality risk on new life insurance policies. Risk not retained is reinsured with other life insurance companies. Risk on universal life and variable universal life policies is reinsured on a yearly renewable term basis. Risk on term insurance and long-term care policies is reinsured on a coinsurance basis. The Company retains all accidental death benefit, disability income and waiver of premium risk. Federal income taxes The Company's taxable income is included in the consolidated federal income tax return of American Express Company. The Company provides for income taxes on a separate return basis, except that, under an agreement between AEFC and American Express Company, tax benefit is recognized for losses to the extent they can be used on the consolidated tax return. It is the policy of AEFC and its subsidiaries that AEFC will reimburse subsidiaries for all tax benefits. Separate account business The separate account assets and liabilities represent funds held for the exclusive benefit of the variable annuity and variable life insurance contract owners. The Company receives investment management fees from the proprietary mutual funds used as investment options for variable annuities and variable life insurance. The Company receives mortality and expense risk fees from the separate accounts. The Company makes contractual mortality assurances to the variable annuity contract owners that the net assets of the separate accounts will not be affected by future variations in the actual life expectancy experience of the annuitants and beneficiaries from the mortality assumptions implicit in the annuity contracts. The Company makes periodic fund transfers to, or withdrawals from, the separate account assets for such actuarial adjustments for variable annuities that are in the benefit payment period. The Company also guarantees that the rates at which administrative fees are deducted from contract funds will not exceed contractual maximums. For variable life insurance, the Company guarantees that the rates at which insurance charges and administrative fees are deducted from contract funds will not exceed contractual maximums. The Company also guarantees that the death benefit will continue to be payable at the initial level regardless of investment performance so long as minimum premium payments are made. IDS Life Insurance Company ------------------------------------------------------------------------------- Accounting developments In July 2000, the Financial Accounting Standards Board's (FASB's) Emerging Issues Task Force (EITF) issued a consensus on Issue 99-20, "Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets." The Company adopted the consensus as of January 1, 2001. Issue 99-20 prescribes procedures for recording interest income and measuring impairment on retained and purchased beneficial interests. The consensus primarily affects the Company's CDO investments. Adoption of the consensus required the Company to adjust the carrying amount of these investments downward by $21,416, net of tax, which is reflected as a cumulative effect of accounting change in the Consolidated Statement of Income. Effective January 1, 2001, the Company adopted Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended (SFAS No. 133), which requires an entity to recognize all derivatives as either assets or liabilities on the balance sheet and measure those instruments at fair value. Changes in the fair value of a derivative are recorded in earnings or directly to other comprehensive income, depending on the instrument's designated use. The adoption of SFAS No. 133 resulted in a cumulative after-tax reduction to other comprehensive income of $1,162. The cumulative impact to earnings was not significant. See Note 8 for further discussion of the Company's derivative and hedging activities. SFAS No. 133 also provided a one-time opportunity to reclassify held-to-maturity security investments to available-for-sale without tainting the remaining securities in the held-to-maturity portfolio. The Company elected to take the opportunity in 2001 to reclass all its held-to-maturity investments to available-for-sale. The Company adopted SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities," which superseded SFAS No. 125. The Statement was effective for transfers and servicing of financial assets and extinguishments of liabilities occurring after March 31, 2001. The Statement was effective for recognition and reclassification of collateral and for disclosures relating to securitization transactions and collateral for fiscal years ending after December 15, 2000. The impact on the Company's financial position or results of operations of adopting the Statement was not significant. In January 2003, the FASB issued Interpretation No. 46, "Consolidation of Variable Interest Entities" (FIN 46), which addresses consolidation by business enterprises of variable interest entities (VIEs). The accounting provisions and expanded disclosure requirements for VIEs existing at December 31, 2002, are fully effective for reporting periods beginning after June 15, 2003. An entity shall be subject to consolidation according to the provisions of FIN 46, if, by design, either (i) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support from other parties, or (ii) as a group, the holders of the equity investment at risk lack: (a) direct or indirect ability to make decisions about an entity's activities; (b) the obligation to absorb the expected losses of the entity if they occur; or (c) the right to receive the expected residual return of the entity if they occur. In general, FIN 46 will require a VIE to be consolidated when an enterprise has a variable interest that will absorb a majority of the VIE's expected losses or receive a majority of the VIE's expected residual return. It is likely that the Company will consolidate or disclose information about VIEs when FIN 46 becomes effective in the third quarter of 2003. The entities primarily impacted by FIN 46 relate to structured investments, including CDOs and secured loan trusts (SLTs), which are owned by the Company. The application of FIN 46 for CDOs and SLTs will have no effect on the cash flows of the Company. The CDO entities contain debt issued to investors, which are non-recourse to the Company and are solely supported by portfolios of high-yield bonds and loans. The Company often invests in the residual and rated debt tranches of the CDO structures that are either managed by a related party or a third-party. With regards to those CDOs in which the Company owns a residual tranche and which a related party manages, the portfolios of high-yield bonds and loans have a fair value at December 31, 2002 of approximately $2.0 billion for the benefit of the $2.7 billion in CDO debt investors. Substantially all of the Company's interest in the rated debt tranches along with rated tranches owned by AEFC were placed in a securitization trust described in Note 2. The SLTs provide returns to investors primarily based on the performance of an underlying portfolio of up to $3.3 billion in high-yield loans. Currently, the underlying portfolio consists of $2.9 billion in high-yield loans with a market value of $2.6 billion, which are managed by a related party. While the potential consolidation of these entities may impact the results of operations at adoption and for each reporting period thereafter, the Company's maximum exposure to economic loss as a result of its investment in these entities is represented by the carrying values at December 31, 2002 because any further reduction in the value of the assets will be absorbed by the non-recourse debt or other unrelated entities. The CDO residual tranches have an adjusted cost basis of $13,363 and the SLTs have an adjusted cost basis of $656,565. The Company continues to evaluate other relationships and interests in entities that may be considered VIEs, including affordable housing investments. The impact of adopting FIN 46 on the Consolidated Financial Statements is still being reviewed. IDS Life Insurance Company ------------------------------------------------------------------------------- 2. INVESTMENTS Fixed maturity and equity securities
The following is a summary of securities available-for-sale at December 31, 2002: Gross Gross Amortized unrealized unrealized Fair cost gains losses value Fixed maturities: U.S. Government agency obligations $ 84,075 $ 12,015 $ 687 $ 95,403 State and municipal obligations 29,202 2,522 -- 31,724 Corporate bonds and obligations 9,614,296 611,060 116,345 10,109,011 Mortgage and other asset-backed securities 12,145,797 393,342 10,067 12,529,072 Structured investments 1,306,245 2,112 59,101 1,249,256 Foreign government bonds and obligations 29,611 8,027 -- 37,638 ----------- ---------- -------- ----------- Total fixed maturity securities $23,209,226 $1,029,078 $186,200 $24,052,104 =========== ========== ======== =========== Common stocks $ 19 $ 2 $ -- $ 21 =========== ========== ======== ===========
The amortized cost and fair value of fixed maturity securities at December 31, 2002 by contractual maturity are as follows: Amortized Fair cost value Due within one year $ 768,066 $ 779,833 Due from one to five years 2,740,513 2,887,899 Due from five to ten years 5,865,084 6,165,165 Due in more than ten years 1,689,766 1,690,135 Mortgage and other asset-backed securities 12,145,797 12,529,072 ---------- ---------- Total $23,209,226 $24,052,104 =========== =========== The timing of actual receipts may differ from contractual maturities because issuers may have the right to call or prepay obligations.
The following is a summary of securities available-for-sale at December 31, 2001: Gross Gross Amortized unrealized unrealized Fair cost gains losses value Fixed maturities: U.S. Government agency obligations $ 31,074 $ 2,190 $ 56 $ 33,208 State and municipal obligations 7,826 149 -- 7,975 Corporate bonds and obligations 10,281,693 272,539 113,061 10,441,171 Mortgage and other asset-backed securities 8,292,576 103,109 32,801 8,362,884 Structured investments 1,377,195 3,793 105,304 1,275,684 Foreign government bonds and obligations 31,708 4,507 -- 36,215 ----------- -------- -------- ----------- Total fixed maturity securities $20,022,072 $386,287 $251,222 $20,157,137 ----------- -------- -------- ----------- Common stocks $ 805 $ 899 $ -- $ 1,704 =========== ======== ========= ===========
Pursuant to the adoption of SFAS No. 133 the Company reclassified all held-to-maturity securities with a carrying value of $6,463,613 and net unrealized gains of $8,185 to available-for-sale as of January 1, 2001. At December 31, 2002 and 2001, bonds carried at $14,523 and $14,639, respectively, were on deposit with various states as required by law. IDS Life Insurance Company ------------------------------------------------------------------------------- At December 31, 2002, fixed maturity securities comprised approximately 84 percent of the Company's total investments. These securities are rated by Moody's and Standard & Poor's (S&P), except for approximately $1.4 billion of securities which are rated by AEFC's internal analysts using criteria similar to Moody's and S&P. Ratings are presented using S&P's convention and if the two agencies' ratings differ, the lower rating is used. A summary of fixed maturity securities, at fair value, by rating on December 31, is as follows: Rating 2002 2001 AAA 53% 45% AA 1 1 A 14 15 BBB 25 34 Below investment grade 7 5 --- --- Total 100% 100% === === At December 31, 2002, approximately 93% of the securities rated AAA are GNMA, FNMA and FHLMC mortgage-backed securities. No holdings of any other issuer were greater than ten percent of stockholder's equity. Available-for-sale securities were sold during 2002 with proceeds of $10,093,228 and gross realized gains and losses of $297,477 and $135,824, respectively. Available-for-sale securities were sold during 2001 with proceeds of $5,493,141 and gross realized gains and losses of $116,565 and $390,732, respectively. Available-for-sale securities were sold during 2000 with proceeds of $1,237,116 and gross realized gains and losses of $25,101 and $21,147, respectively. During the years ended December 31, 2002, 2001, and 2000, the Company also recognized losses of $145,524, $348,730, and $38,816 respectively due to other-than-temporary impairments on structured investments and corporate debt securities. These amounts are reflected in the net realized loss on investments in the Consolidated Statements of Income. The 2001 realized losses and other-than temporary impairments include the effect of the write-downs and sale of high-yield securities discussed below. The net unrealized gain on available-for-sale securities as of December 31, 2002 and 2001, was $842,880 and $135,964, respectively, with the $706,916 change, net of taxes and deferred policy acquisition costs, reflected as a separate component in accumulated other comprehensive income for the year ended December 31, 2002. For the years ended December 31, 2001 and 2000 the change in net unrealized losses on available-for-sale securities was a decrease of $667,340 and $122,196, respectively. During 2001, the Company recorded pretax losses of $828,175 to recognize the impact of higher default rate assumptions on certain structured investments; to write down lower rated securities (most of which were sold during 2001) in connection with Company's decision to lower its risk profile by reducing the level of its high-yield portfolio, allocating holdings toward stronger credits, and reducing the concentration of exposure to individual companies and industry sectors; to write down certain other investments; and, to adopt EITF Issue 99-20, as previously discussed. Within the Consolidated Statements of Income, $623,958 of these losses are included in Net realized losses on investments and $171,269 are included in Net investment income, with the remaining losses recorded as a cumulative effect of accounting change. During 2001, the Company placed a majority of its rated CDO securities and related accrued interest, (collectively referred to as transferred assets), having an aggregate book value of $675,347, into a securitization trust. In return, the Company received $89,535 in cash relating to sales to unaffiliated investors and retained interests with allocated book amounts aggregating $585,812. As of December 31, 2002, the retained interests had a carrying value of approximately $562,000, of which approximately $388,000 is considered investment grade. The book amount is determined by allocating the previous carrying value of the transferred assets between assets sold and the retained interests based on their relative fair values. Fair values are based on the estimated present value of future cash flows. The retained interests are accounted for in accordance with EITF Issue 99-20. Fair values of fixed maturity and equity securities represent quoted market prices and estimated values when quoted prices are not available. Estimated values are determined by established procedures involving, among other things, review of market indices, price levels of current offerings of comparable issues, price estimates, estimated future cash flows and market data from independent brokers. IDS Life Insurance Company ------------------------------------------------------------------------------- Mortgage loans on real estate At December 31, 2002, approximately 12% of the Company's investments were mortgage loans on real estate. Concentration of credit risk by region of the United States and by type of real estate are as follows:
December 31, 2002 December 31, 2001 On balance Funding On balance Funding Region sheet commitments sheet commitments East North Central $ 611,886 $ -- $ 670,387 $ 1,873 West North Central 493,310 25,500 549,015 -- South Atlantic 765,443 2,800 815,837 9,490 Middle Atlantic 318,699 19,100 352,821 9,363 New England 227,150 5,800 274,486 8,700 Pacific 355,622 5,250 355,945 14,618 West South Central 210,435 1,000 214,000 600 East South Central 63,859 -- 55,798 -- Mountain 406,459 -- 413,053 27 ---------- ------- ---------- ------- 3,452,863 59,450 3,701,342 44,671 Less reserves for losses 35,212 -- 20,948 -- ---------- ------- ---------- ------- Total $3,417,651 $59,450 $3,680,394 $44,671 ========== ======= ========== ======= December 31, 2002 December 31, 2001 On balance Funding On balance Funding Property type sheet commitments sheet commitments Department/retail stores $ 991,984 $20,722 $1,117,195 $13,200 Apartments 622,185 -- 694,214 11,531 Office buildings 1,178,434 25,628 1,203,090 7,650 Industrial buildings 344,604 13,100 333,713 2,263 Hotels/motels 102,184 -- 108,019 -- Medical buildings 95,189 -- 106,927 6,000 Nursing/retirement homes 35,873 -- 39,590 -- Mixed use 54,512 -- 86,972 27 Other 27,898 -- 11,622 4,000 ---------- ------- ---------- ------- 3,452,863 59,450 3,701,342 44,671 Less reserves for losses 35,212 -- 20,948 -- ---------- ------- ---------- ------- Total $3,417,651 $59,450 $3,680,394 $44,671 ========== ======= ========== =======
Mortgage loan fundings are restricted by state insurance regulatory authorities to 80 percent or less of the market value of the real estate at the time of origination of the loan. The Company holds the mortgage document, which gives it the right to take possession of the property if the borrower fails to perform according to the terms of the agreement. Commitments to fund mortgages are made in the ordinary course of business. The fair value of the mortgage commitments is $nil. At December 31, 2002, 2001 and 2000, the Company's investment in impaired loans was $33,130, $39,601 and $24,999, respectively, with related reserves of $9,100, $7,225 and $4,350, respectively. During 2002, 2001 and 2000, the average recorded investment in impaired loans was $36,583, $24,498 and $27,063, respectively. The Company recognized $1,090, $1,285 and $1,033 of interest income related to impaired loans for the years ended December 31, 2002, 2001 and 2000, respectively. IDS Life Insurance Company ------------------------------------------------------------------------------- The following table presents changes in the reserves for mortgage loan losses: 2002 2001 2000 Balance, January 1 $20,948 $11,489 $ 28,283 Provision for mortgage loan losses 14,264 14,959 (14,894) Loan payoffs -- -- (1,200) Foreclosures and write-offs -- (5,500) (700) ------- ------- -------- Balance, December 31 $35,212 $20,948 $ 11,489 ======= ======= ======== Sources of investment income and realized losses on investments Net investment income for the years ended December 31 is summarized as follows: 2002 2001 2000 Income on fixed maturities $1,331,547 $1,276,966 $1,473,560 Income on mortgage loans 274,524 290,608 286,611 Other (15,642) (41,927) 9,834 ---------- ---------- ---------- 1,590,429 1,525,647 1,770,005 Less investment expenses 28,573 39,959 39,400 ---------- ---------- ---------- Total $1,561,856 $1,485,688 $1,730,605 ========== ========== ========== Net realized losses on investments for the years ended December 31 is summarized as follows: 2002 2001 2000 Fixed maturities $ 16,129 $(622,897) $(34,862) Mortgage loans (15,586) (17,834) 16,794 Other investments (5,050) (9,321) 1,093 -------- --------- -------- Total $ (4,507) $(649,752) $(16,975) ======== ========= ======== 3. INCOME TAXES The Company qualifies as a life insurance company for federal income tax purposes. As such, the Company is subject to the Internal Revenue Code provisions applicable to life insurance companies.
The income tax expense (benefit) for the years ended December 31 consists of the following: 2002 2001 2000 Federal income taxes Current $(30,648) $ 88,121 $176,397 Deferred 116,996 (234,673) 37,704 -------- --------- -------- 86,348 (146,552) 214,101 State income taxes -- current 1,478 1,330 7,526 -------- --------- -------- Income tax expense (benefit) before cumulative effect of accounting change 87,826 (145,222) 221,627 Cumulative effect of accounting change income tax benefit -- (11,532) -- -------- --------- -------- Income tax expense (benefit) $ 87,826 $(156,754) $221,627 ======== ========= ========
Income tax expense (benefit) before the cumulative effect of accounting change differs from that computed by using the federal statutory rate of 35%. The principal causes of the difference in each year are shown below:
2002 2001 2000 Provision Rate Provision Rate Provision Rate Federal income taxes based on the statutory rate $164,502 35.0% $ (66,136) (35.0)% $282,542 35.0% Tax-exempt interest and dividend income (5,260) (1.1) (4,663) (2.5) (3,788) (0.5) State taxes, net of federal benefit 961 0.2 865 0.4 4,892 0.6 Affordable housing credits (70,000) (14.9) (73,200) (38.7) (54,569) (6.8) Other, net (2,377) (0.5) (2,088) (1.1) (7,450) (0.8) -------- ---- --------- ----- -------- ---- Total income taxes $ 87,826 18.7% $(145,222) (76.9)% $221,627 27.5% ======== ==== ========= ===== ======== ====
A portion of life insurance company income earned prior to 1984 was not subject to current taxation but was accumulated, for tax purposes, in a "policyholders' surplus account." At December 31, 2002, the Company had a policyholders' surplus account balance of $20,114. The policyholders' surplus account is only taxable if dividends to the stockholder exceed the stockholder's surplus account or if the Company is liquidated. Deferred income taxes of $7,040 have not been established because no distributions of such amounts are contemplated. IDS Life Insurance Company ------------------------------------------------------------------------------- Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred income tax assets and liabilities as of December 31 are as follows: 2002 2001 Deferred income tax assets: Policy reserves $ 683,144 $ 705,637 Other investments 319,829 333,857 Other 29,789 24,640 --------- --------- Total deferred income tax assets 1,032,762 1,064,134 --------- --------- Deferred income tax liabilities: Deferred policy acquisition costs 929,751 861,892 Net unrealized gain -- available-for-sale securities 267,787 45,934 Other 17,283 -- --------- --------- Total deferred income tax liabilities 1,214,821 907,826 --------- --------- Net deferred income tax (liability) asset $ (182,059) $ 156,308 ========== ========== The Company is required to establish a valuation allowance for any portion of the deferred income tax assets that management believes will not be realized. In the opinion of management, it is more likely than not that the Company will realize the benefit of the deferred income tax assets and, therefore, no such valuation allowance has been established. 4. STOCKHOLDER'S EQUITY Retained earnings available for distribution as dividends to AEFC are limited to the Company's surplus as determined in accordance with accounting practices prescribed by state insurance regulatory authorities. The Company's statutory unassigned surplus aggregated $1,323,324 and $1,262,335 as of December 31, 2002 and 2001, respectively (see Note 3 with respect to the income tax effect of certain distributions). In addition, any dividend distributions in 2003 in excess of $240,838 would require approval of the Department of Commerce of the State of Minnesota. Statutory net income (loss) for the years ended December 31 and capital and surplus as of December 31 are summarized as follows: 2002 2001 2000 Statutory net income (loss) $ 159,794 $ (317,973) $ 344,973 Statutory capital and surplus 2,408,379 1,947,350 1,778,306 --------- --------- --------- The National Association of Insurance Commissioners (NAIC) revised the Accounting Practices and Procedures Manual in a process referred to as Codification. The revised regulations took effect January 1, 2001. The domiciliary states of the Company and its insurance subsidiaries adopted the provisions of the revised manual, with the exception of certain provisions not adopted by its subsidiaries organized in the state of New York. The revised manual changed, to some extent, prescribed statutory accounting practices and resulted in changes to the accounting practices that the Company uses to prepare its statutory-basis financial statements. The impact of implementing these changes was a decrease of $39,997 to the Company's statutory-basis capital and surplus as of January 1, 2001. Effective January 1, 2002 the Company's subsidiaries organized in the state of New York adopted additional provisions of the manual which resulted in an increase of $5,597 to the Company's statutory-basis capital and surplus as of January 1, 2002. 5. RELATED PARTY TRANSACTIONS The Company loans funds to AEFC under a collateral loan agreement. The balance of the loan was $nil at December 31, 2002 and 2001. This loan can be increased to a maximum of $75,000 and pays interest at a rate equal to the preceding month's effective new money rate for the Company's permanent investments. Interest income on related party loans totaled $nil in 2002, 2001 and 2000. The Company participates in the American Express Company Retirement Plan which covers all permanent employees age 21 and over who have met certain employment requirements. Company contributions to the plan are based on participants' age, years of service and total compensation for the year. Funding of retirement costs for this plan complies with the applicable minimum funding requirements specified by ERISA. The Company's share of the total net periodic pension cost was $294, $263 and $250 in 2002, 2001 and 2000, respectively. The Company also participates in defined contribution pension plans of American Express Company which cover all employees who have met certain employment requirements. Company contributions to the plans are a percent of either each employee's eligible compensation or basic contributions. Costs of these plans charged to operations in 2002, 2001 and 2000 were $1,411, $662 and $1,707, respectively. IDS Life Insurance Company ------------------------------------------------------------------------------- The Company participates in defined benefit health care plans of AEFC that provide health care and life insurance benefits to retired employees and retired financial advisors. The plans include participant contributions and service related eligibility requirements. Upon retirement, such employees are considered to have been employees of AEFC. AEFC expenses these benefits and allocates the expenses to its subsidiaries. The cost of these plans charged to operations in 2002, 2001 and 2000 was $1,835, $1,011 and $1,136, respectively. Charges by AEFC for use of joint facilities, technology support, marketing services and other services aggregated $526,081, $505,526 and $582,836 for 2002, 2001 and 2000, respectively. Certain of these costs are included in DAC. Expenses allocated to the Company may not be reflective of expenses that would have been incurred by the Company on a stand-alone basis. Included in other liabilities at December 31, 2002 and 2001 are $55,602 and $68,919, respectively, payable to AEFC for federal income taxes. 6. LINES OF CREDIT The Company has available lines of credit with AEFC aggregating $200,000 ($100,000 committed and $100,000 uncommitted). The interest rate for any borrowings is established by reference to various indices plus 20 to 45 basis points, depending on the term. There were no borrowings outstanding under this agreement at December 31, 2002 and 2001. 7. COMMITMENTS AND CONTINGENCIES At December 31, 2002, 2001 and 2000, traditional life and universal life-type insurance in force aggregated $119,173,734, $108,255,014 and $98,060,472 respectively, of which $38,008,734, $25,986,706 and $17,429,851 was reinsured at the respective year ends. The Company also reinsures a portion of the risks assumed under long-term care policies. Under all reinsurance agreements, premiums ceded to reinsurers amounted to $129,345, $114,534 and $89,506 and reinsurance recovered from reinsurers amounted to $60,567, $43,388, and $32,500 for the years ended December 31, 2002, 2001 and 2000, respectively. Reinsurance contracts do not relieve the Company from its primary obligation to policyholders. At December 31, 2002, the Company had no commitments to purchase investments other than mortgage loan fundings (see Note 2). The Company is a party to litigation and arbitration proceedings in the ordinary course of its business, none of which is expected to have a material adverse affect on the Company. In recent years, life insurance companies have been named as defendants in lawsuits, including class action lawsuits, alleging improper life insurance sales practices, alleged agent misconduct, failure to properly supervise agents and other matters relating to life insurance policies and annuity contracts. The Company and its affiliates were named defendants in three purported class-action lawsuits alleging improper insurance and annuity sales practices including improper replacement of existing annuity contracts and insurance policies, improper use of annuities to fund tax deferred contributory retirement plans, alleged agent misconduct, failure to properly supervise agents and other matters relating to life insurance policies and annuity contracts. A fourth lawsuit was filed against the Company and its affiliates in federal court. In January 2000, AEFC reached an agreement in principle to settle the four class action lawsuits described above. It is expected the settlement will provide $215,000 of benefits to more than two million participants in exchange for a release by class members of all insurance and annuity state and federal market conduct claims dating back to 1985. The settlement received court approval. Implementation of the settlement commenced October 15, 2001 and is substantially complete. Claim review payments have been made. Numerous individuals opted out of the settlement described above and therefore did not release their claims against AEFC and its subsidiaries. Some of these class members who opted out were represented by counsel and presented separate claims to AEFC and the Company. Most of their claims have been settled. The outcome of any litigation or threatened litigation cannot be predicted with any certainty. However, in the aggregate, the Company does not consider any lawsuits in which it is named as a defendant to have a material impact on the Company's financial position or operating results. The IRS routinely examines the Company's federal income tax returns and is currently conducting an audit for the 1993 through 1996 tax years. Management does not believe there will be a material adverse effect on the Company's consolidated financial position as a result of these audits. IDS Life Insurance Company ------------------------------------------------------------------------------- 8. DERIVATIVE FINANCIAL INSTRUMENTS The Company maintains an overall risk management strategy that incorporates the use of derivative instruments to minimize significant unplanned fluctuations in earnings caused by interest rate and equity market volatility. The Company does not enter into derivative instruments for speculative purposes. As prescribed by SFAS No. 133, derivative instruments that are designated and qualify as hedging instruments are classified as cash flow hedges, fair value hedges, or hedges of a net investment in a foreign operation, based upon the exposure being hedged. The Company currently has economic hedges that either do not qualify or are not designated for hedge accounting treatment under SFAS No. 133. The Company enters into interest rate swaps, caps and floors to manage the Company's interest rate risk and options and futures to manage equity-based risk. The values of derivative financial instruments are based on market values, dealer quotes or pricing models. Market risk is the possibility that the value of the derivative financial instruments will change due to fluctuations in a factor from which the instrument derives its value, primarily an interest rate or equity market index. The Company is not impacted by market risk related to derivatives held for non- trading purposes beyond that inherent in cash market transactions. Derivatives held for purposes other than trading are largely used to manage risk and, therefore, the cash flow and income effects of the derivatives are inverse to the effects of the underlying transactions. Credit risk is the possibility that the counterparty will not fulfill the terms of the contract. The Company monitors credit risk related to derivative financial instruments through established approval procedures, including setting concentration limits by counterparty, and requiring collateral, where appropriate. A vast majority of the Company's counterparties are rated A or better by Moody's and Standard & Poor's. Interest rate caps, swaps and floors are primarily used to protect the margin between interest rates earned on investments and the interest rates credited to related annuity contract holders. No interest rate swaps or floors were outstanding as of December 31, 2002. The interest rate caps expire in January 2003. The fair value of the interest rate caps is included in Other assets. Changes in the value of the interest rate caps are included in Other insurance and operating expenses. A purchased (written) option conveys the right (obligation) to buy or sell an instrument at a fixed price for a set period of time or on a specific date. The Company writes and purchases index options to manage the risks related to annuity products that pay interest based upon the relative change in a major stock market index between the beginning and end of the product's term (equity-indexed annuities). The Company views this strategy as a prudent management of equity market sensitivity, such that earnings are not exposed to undue risk presented by changes in equity market levels. The equity indexed annuities contain embedded derivatives, essentially the equity based return of the product, which must be separated from the host contract and accounted for as derivative instruments per SFAS No. 133. As a result of fluctuations in equity markets, and the corresponding changes in value of the embedded derivatives, the amount of interest credited incurred by the Company related to the annuity product will positively or negatively impact reported earnings. The purchased and written options are carried at fair value and included in Other assets and Other liabilities, respectively. The fair value of the embedded options are included in Future policy benefits for fixed annuities. The changes in fair value of the options are recognized in Other insurance and operating expenses and the embedded derivatives are recognized in Interest credited on universal life-type insurance and investment contracts. The purchased and written options expire on various dates through 2009. The Company also purchases futures to hedge its obligations under equity indexed annuities. The futures purchased are marked-to-market daily and exchange traded, exposing the Company to no counterparty risk. The futures contracts mature in 2003. Index options may be used to manage the equity market risk related to the fee income that the Company receives from its separate accounts and the underlying mutual funds. The amount of the fee income received is based upon the daily market value of the separate account and mutual fund assets. As a result, the Company's fee income could be impacted significantly by fluctuations in the equity market. There are no index options outstanding as of December 31, 2002 related to this strategy. IDS Life Insurance Company ------------------------------------------------------------------------------- 9. FAIR VALUES OF FINANCIAL INSTRUMENTS The Company discloses fair value information for financial instruments for which it is practicable to estimate that value. Fair values of life insurance obligations and all non-financial instruments, such as DAC, are excluded. Off-balance sheet intangible assets, such as the value of the field force, are also excluded. Management believes the value of excluded assets and liabilities is significant. The fair value of the Company, therefore, cannot be estimated by aggregating the amounts presented.
2002 2001 Carrying Fair Carrying Fair Financial Assets value value value value Fixed maturities $24,052,104 $24,052,104 $20,157,137 $20,157,137 Common stocks 21 21 1,704 1,704 Mortgage loans on real estate 3,417,651 3,815,362 3,680,394 3,845,950 Cash and cash equivalents 4,424,061 4,424,061 1,150,251 1,150,251 Other investment 110,574 108,813 75,721 75,721 Derivatives 24,016 24,016 34,477 34,477 Separate account assets 21,980,674 21,980,674 27,333,697 27,333,697 ---------- ---------- ---------- ---------- Financial Liabilities Future policy benefits for fixed annuities $21,911,497 $21,282,750 $18,139,462 $17,671,777 Derivatives 9,099 9,099 2,506 2,506 Separate account liabilities 19,391,316 18,539,425 24,280,092 23,716,854 ---------- ---------- ---------- ----------
At December 31, 2002 and 2001, the carrying amount and fair value of future policy benefits for fixed annuities exclude life insurance-related contracts carried at $1,432,294 and $1,368,254, respectively, and policy loans of $67,523 and $84,557, respectively. The fair value of these benefits is based on the status of the annuities at December 31, 2002 and 2001. The fair value of deferred annuities is estimated as the carrying amount less any applicable surrender charges and related loans. The fair value for annuities in non-life contingent payout status is estimated as the present value of projected benefit payments at rates appropriate for contracts issued in 2002 and 2001. At December 31, 2002 and 2001, the fair value of liabilities related to separate accounts is estimated as the carrying amount less any applicable surrender charges and less variable insurance contracts carried at $2,589,358 and $3,053,605, respectively. S-6406-20 F (5/03) STATEMENT OF ADDITIONAL INFORMATION FOR AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 IDS LIFE VARIABLE ACCOUNT 10 MAY 1, 2003 IDS Life Variable Account 10 is a separate account established and maintained by IDS Life Insurance Company (IDS Life). This Statement of Additional Information (SAI) is not a prospectus. It should be read together with the prospectus dated the same date as this SAI, which may be obtained by writing or calling us at the address and telephone number below. IDS Life Insurance Company 70100 AXP Financial Center Minneapolis, MN 55474 (800) 862-7919 TABLE OF CONTENTS Performance Information p. 3 Calculating Annuity Payouts p. 10 Rating Agencies p. 11 Principal Underwriter p. 11 Independent Auditors p. 11 Financial Statements IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 2 PERFORMANCE INFORMATION The subaccounts may quote various performance figures to illustrate past performance. We base total return and current yield quotations (if applicable) on standardized methods of computing performance as required by the Securities and Exchange Commission (SEC). An explanation of the methods used to compute performance follows below. AVERAGE ANNUAL TOTAL RETURN We will express quotations of average annual total return for the subaccounts in terms of the average annual compounded rate of return of a hypothetical investment in the contract over a period of one, five and ten years (or, if less, up to the life of the subaccounts), calculated according to the following formula: P(1 + T)(TO THE POWER OF 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 the period, at the end of the period (or fractional portion thereof) We calculated the following performance figures on the basis of historical performance of each fund. We show actual performance from the date the subaccounts began investing in the funds. We also show performance from the commencement date of the funds as if the subaccounts invested in them at that time, which, in some cases, they did not. Although we base performance figures on historical earnings, past performance does not guarantee future results. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 3 AVERAGE ANNUAL TOTAL RETURN(a) WITH SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC3 Blue Chip Advantage Fund (9/99; 9/99)(1) (23.79%) (13.17%) BD3 Bond Fund (9/99; 10/81) 4.26 4.95 CR3 Capital Resource Fund (9/99; 10/81) (23.15) (14.84) CM3 Cash Management Fund (9/99; 10/81) (0.08) 2.43 DE3 Diversified Equity Income Fund (9/99; 9/99) (20.17) (5.71) EM3 Emerging Markets Fund (5/00; 5/00) (6.65) (14.40) ES3 Equity Select Fund (5/01; 5/01) (14.92) (10.25) EI3 Extra Income Fund (9/99; 5/96) (7.72) (4.20) FI3 Federal Income Fund (9/99; 9/99) 4.55 5.20 GB3 Global Bond Fund (9/99; 5/96) 13.64 4.63 GR3 Growth Fund (9/99; 9/99) (27.20) (20.34) IE3 International Fund (9/99; 1/92) (19.38) (17.01) MF3 Managed Fund (9/99; 4/86) (14.09) (6.32) ND3 NEW DIMENSIONS FUND(R) (9/99; 5/96) (23.02) (10.70) SV3 Partners Small Cap Value Fund (8/01; 8/01) (13.31) (5.56) IV3 S&P 500 Index Fund (5/00; 5/00) (23.54) (17.94) SC3 Small Cap Advantage Fund (9/99; 9/99) (18.21) (3.88) ST3 Stock Fund (8/01; 8/01) (22.03) (18.63) SA3 Strategy Aggressive Fund (9/99; 1/92) (33.02) (16.86) AIM V.I. 3AC Capital Appreciation Fund, Series II Shares (8/01; 5/93)(2) (25.63) (21.02) 3AD Capital Development Fund, Series II Shares (8/01; 5/98)(2) (22.73) (18.63) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 3AL AllianceBernstein Growth and Income Portfolio (Class B) (8/01; 1/91)(3) (23.39) (19.86) 3AB AllianceBernstein International Value Portfolio (Class B) (8/01; 5/01)(4) (6.57) (6.70) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 3AI VP International, Class II (8/01; 5/94)(5) (21.70) (20.75) 3AV VP Value, Class II (8/01; 5/96)(5) (13.99) (8.19) CALVERT VARIABLE SERIES, INC. 3SR Social Balanced Portfolio (5/00; 9/86) (13.37) (9.74) EVERGREEN VA 3CG Capital Growth Fund, Class 2 (8/01; 3/98)(6) (23.76) (20.98) FIDELITY(R) VIP 3FG Growth & Income Portfolio Service Class 2 (8/01; 12/96)(7) (18.00) (13.61) 3FM Mid Cap Portfolio Service Class 2 (8/01; 12/98)(7) (11.21) (5.98) 3FO Overseas Portfolio Service Class 2 (8/01; 1/87)(7) (21.59) (19.53) FTVIPT 3RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(8) 0.82 9.73 3SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(8) (10.46) 6.44 3MS Mutual Shares Securities Fund - Class 2 (8/01; 11/96)(8) (12.99) (12.11) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC3 Blue Chip Advantage Fund (9/99; 9/99)(1) (23.79%) --% --% (13.17%) BD3 Bond Fund (9/99; 10/81) 4.26 3.07 5.68 8.75 CR3 Capital Resource Fund (9/99; 10/81) (23.15) (5.36) 2.53 8.87 CM3 Cash Management Fund (9/99; 10/81) (0.08) 2.84 3.01 4.86 DE3 Diversified Equity Income Fund (9/99; 9/99) (20.17) -- -- (5.71) EM3 Emerging Markets Fund (5/00; 5/00) (6.65) -- -- (14.40) ES3 Equity Select Fund (5/01; 5/01) (14.92) -- -- (10.25) EI3 Extra Income Fund (9/99; 5/96) (7.72) (3.23) -- (0.04) FI3 Federal Income Fund (9/99; 9/99) 4.55 -- -- 5.20 GB3 Global Bond Fund (9/99; 5/96) 13.64 3.16 -- 3.81 GR3 Growth Fund (9/99; 9/99) (27.20) -- -- (20.35) IE3 International Fund (9/99; 1/92) (19.38) (7.10) 0.65 0.36 MF3 Managed Fund (9/99; 4/86) (14.09) (1.02) 5.26 7.36 ND3 NEW DIMENSIONS FUND(R) (9/99; 5/96) (23.02) (1.15) -- 3.85 SV3 Partners Small Cap Value Fund (8/01; 8/01) (13.31) -- -- (5.56) IV3 S&P 500 Index Fund (5/00; 5/00) (23.54) -- -- (17.94) SC3 Small Cap Advantage Fund (9/99; 9/99) (18.21) -- -- (3.88) ST3 Stock Fund (8/01; 8/01) (22.03) -- -- (18.63) SA3 Strategy Aggressive Fund (9/99; 1/92) (33.02) (9.49) 0.46 1.13 AIM V.I. 3AC Capital Appreciation Fund, Series II Shares (8/01; 5/93)(2) (25.63) (3.54) -- 6.00 3AD Capital Development Fund, Series II Shares (8/01; 5/98)(2) (22.73) -- -- (2.56) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 3AL AllianceBernstein Growth and Income Portfolio (Class B) (8/01; 1/91)(3) (23.39) 2.26 9.82 8.92 3AB AllianceBernstein International Value Portfolio (Class B) (8/01; 5/01)(4) (6.57) -- -- (5.22) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 3AI VP International, Class II (8/01; 5/94)(5) (21.70) (4.19) -- 0.97 3AV VP Value, Class II (8/01; 5/96)(5) (13.99) 2.59 -- 7.09 CALVERT VARIABLE SERIES, INC. 3SR Social Balanced Portfolio (5/00; 9/86) (13.37) (0.56) 5.34 6.59 EVERGREEN VA 3CG Capital Growth Fund, Class 2 (8/01; 3/98)(6) (23.76) -- -- (3.03) FIDELITY(R) VIP 3FG Growth & Income Portfolio Service Class 2 (8/01; 12/96)(7) (18.00) (0.73) -- 3.66 3FM Mid Cap Portfolio Service Class 2 (8/01; 12/98)(7) (11.21) -- -- 14.16 3FO Overseas Portfolio Service Class 2 (8/01; 1/87)(7) (21.59) (5.30) 3.36 2.93 FTVIPT 3RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(8) 0.82 1.19 8.75 8.32 3SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(8) (10.46) -- -- (0.83) 3MS Mutual Shares Securities Fund - Class 2 (8/01; 11/96)(8) (12.99) 2.71 -- 5.13
IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 4 AVERAGE ANNUAL TOTAL RETURN(a) WITH SELECTION OF MAV AND EEP DEATH BENEFIT RIDERS FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT GOLDMAN SACHS VIT 3UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (23.02%) (11.49%) 3MC Mid Cap Value Fund (9/99; 5/98) (5.91) 8.17 INVESCO VIF 3ID Dynamics Fund (8/01; 8/97) (32.97) (28.30) 3FS Financial Services Fund (8/01; 9/99) (15.78) (14.09) 3TC Technology Fund (8/01; 5/97) (47.83) (42.56) 3TL Telecommunications Fund (8/01; 9/99) (51.77) (48.58) JANUS ASPEN SERIES 3GT Global Technology Portfolio: Service Shares (5/00; 1/00)(9) (41.95) (41.45) 3IG International Growth Portfolio: Service Shares (5/00; 5/94)(9) (26.86) (26.84) LAZARD RETIREMENT SERIES 3IP International Equity Portfolio (9/99; 9/98) (11.89) (12.97) MFS(R) 3MG Investors Growth Stock Series - Service Class (5/00; 5/99)(10) (28.81) (24.58) 3MD New Discovery Series - Service Class (5/00; 5/98)(10) (32.87) (18.33) 3UT Utilities Series - Service Class (8/01; 1/95)(10) (24.02) (24.49) PIONEER VCT 3PE Pioneer Equity Income VCT Portfolio - Class II Shares (8/01; 3/95)(11) (17.20) (14.42) 3EU Pioneer Europe VCT Portfolio - Class II Shares (8/01; 10/98)(12) (20.20) (17.15) PUTNAM VARIABLE TRUST 3HS Putnam VT Health Sciences Fund - Class IB Shares (8/01; 4/98)(13) (21.48) (17.85) 3PI Putnam VT International Equity Fund - Class IB Shares (8/01; 1/97)(14) (18.82) (16.86) (previously Putnam VT International Growth Fund - Class IB Shares) 3VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(14) (31.68) (15.25) STRONG FUNDS 3SO Strong Opportunity Fund II - Advisor Class (8/01; 5/92)(15) (28.05) (22.09) WANGER 3IT International Small Cap (9/99; 5/95) (15.00) (9.72) 3SP U.S. Smaller Companies (9/99; 5/95) (17.96) (1.76) WELLS FARGO VT 3AA Asset Allocation Fund (5/01; 4/94)(16) (14.02) (11.15) 3WI International Equity Fund (5/01; 7/00) (24.04) (21.02) 3SG Small Cap Growth Fund (5/01; 5/95)(17) (39.25) (28.88) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT GOLDMAN SACHS VIT 3UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (23.02%) --% --% (3.69%) 3MC Mid Cap Value Fund (9/99; 5/98) (5.91) -- -- 2.67 INVESCO VIF 3ID Dynamics Fund (8/01; 8/97) (32.97) (4.65) -- (3.83) 3FS Financial Services Fund (8/01; 9/99) (15.78) -- -- 0.73 3TC Technology Fund (8/01; 5/97) (47.83) (7.63) -- (4.61) 3TL Telecommunications Fund (8/01; 9/99) (51.77) -- -- (33.63) JANUS ASPEN SERIES 3GT Global Technology Portfolio: Service Shares (5/00; 1/00)(9) (41.95) -- -- (38.93) 3IG International Growth Portfolio: Service Shares (5/00; 5/94)(9) (26.86) (1.23) -- 6.90 LAZARD RETIREMENT SERIES 3IP International Equity Portfolio (9/99; 9/98) (11.89) -- -- (5.27) MFS(R) 3MG Investors Growth Stock Series - Service Class (5/00; 5/99)(10) (28.81) -- -- (10.02) 3MD New Discovery Series - Service Class (5/00; 5/98)(10) (32.87) -- -- 1.21 3UT Utilities Series - Service Class (8/01; 1/95)(10) (24.02) (1.94) -- 7.58 PIONEER VCT 3PE Pioneer Equity Income VCT Portfolio - Class II Shares (8/01; 3/95)(11) (17.20) 0.66 -- 8.74 3EU Pioneer Europe VCT Portfolio - Class II Shares (8/01; 10/98)(12) (20.20) -- -- (9.89) PUTNAM VARIABLE TRUST 3HS Putnam VT Health Sciences Fund - Class IB Shares (8/01; 4/98)(13) (21.48) -- -- (2.70) 3PI Putnam VT International Equity Fund - Class IB Shares (8/01; 1/97)(14) (18.82) 1.06 -- 3.21 (previously Putnam VT International Growth Fund - Class IB Shares) 3VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(14) (31.68) (5.40) -- (1.32) STRONG FUNDS 3SO Strong Opportunity Fund II - Advisor Class (8/01; 5/92)(15) (28.05) 1.24 9.10 9.95 WANGER 3IT International Small Cap (9/99; 5/95) (15.00) 3.95 -- 9.89 3SP U.S. Smaller Companies (9/99; 5/95) (17.96) 1.67 -- 11.63 WELLS FARGO VT 3AA Asset Allocation Fund (5/01; 4/94)(16) (14.02) 1.07 -- 6.82 3WI International Equity Fund (5/01; 7/00) (24.04) -- -- (20.75) 3SG Small Cap Growth Fund (5/01; 5/95)(17) (39.25) (13.62) -- (3.16)
(a) Current applicable charges deducted from performance include a $30 annual contract administrative charge, a 0.25% MAV fee, a 0.40% annual EEP fee, and a 0.55% annual mortality and expense risk fee. Premium taxes are not reflected in these total returns. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 5 AVERAGE ANNUAL TOTAL RETURN(a) FOR PERIODS ENDING DEC. 31, 2002
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC3 Blue Chip Advantage Fund (9/99; 9/99)(1) (23.14%) (12.52%) BD3 Bond Fund (9/99; 10/81) 4.91 5.60 CR3 Capital Resource Fund (9/99; 10/81) (22.50) (14.19) CM3 Cash Management Fund (9/99; 10/81) 0.57 3.08 DE3 Diversified Equity Income Fund (9/99; 9/99) (19.52) (5.06) EM3 Emerging Markets Fund (5/00; 5/00) (6.00) (13.75) ES3 Equity Select Fund (5/01; 5/01) (14.27) (9.60) EI3 Extra Income Fund (9/99; 5/96) (7.07) (3.55) FI3 Federal Income Fund (9/99; 9/99) 5.20 5.85 GB3 Global Bond Fund (9/99; 5/96) 14.29 5.28 GR3 Growth Fund (9/99; 9/99) (26.55) (19.69) IE3 International Fund (9/99; 1/92) (18.73) (16.36) MF3 Managed Fund (9/99; 4/86) (13.44) (5.67) ND3 NEW DIMENSIONS FUND(R) (9/99; 5/96) (22.37) (10.05) SV3 Partners Small Cap Value Fund (8/01; 8/01) (12.66) (4.91) IV3 S&P 500 Index Fund (5/00; 5/00) (22.89) (17.29) SC3 Small Cap Advantage Fund (9/99; 9/99) (17.56) (3.23) ST3 Stock Fund (8/01; 8/01) (21.38) (17.98) SA3 Strategy Aggressive Fund (9/99; 1/92) (32.37) (16.21) AIM V.I. 3AC Capital Appreciation Fund, Series II Shares (8/01; 5/93)(2) (24.98) (20.37) 3AD Capital Development Fund, Series II Shares (8/01; 5/98)(2) (22.08) (17.98) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 3AL AllianceBernstein Growth and Income Portfolio (Class B) (8/01; 1/91)(3) (22.74) (19.21) 3AB AllianceBernstein International Value Portfolio (Class B) (8/01; 5/01)(4) (5.92) (6.05) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 3AI VP International, Class II (8/01; 5/94)(5) (21.05) (20.10) 3AV VP Value, Class II (8/01; 5/96)(5) (13.34) (7.54) CALVERT VARIABLE SERIES, INC. 3SR Social Balanced Portfolio (5/00; 9/86) (12.72) (9.09) EVERGREEN VA 3CG Capital Growth Fund, Class 2 (8/01; 3/98)(6) (23.11) (20.33) FIDELITY(R) VIP 3FG Growth & Income Portfolio Service Class 2 (8/01; 12/96)(7) (17.35) (12.96) 3FM Mid Cap Portfolio Service Class 2 (8/01; 12/98)(7) (10.56) (5.33) 3FO Overseas Portfolio Service Class 2 (8/01; 1/87)(7) (20.94) (18.88) FTVIPT 3RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(8) 1.47 10.38 3SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(8) (9.81) 7.09 3MS Mutual Shares Securities Fund - Class 2 (8/01; 11/96)(8) (12.34) (11.46) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT AXP(R) VARIABLE PORTFOLIO - BC3 Blue Chip Advantage Fund (9/99; 9/99)(1) (23.14%) --% --% (12.52%) BD3 Bond Fund (9/99; 10/81) 4.91 3.72 6.33 9.40 CR3 Capital Resource Fund (9/99; 10/81) (22.50) (4.71) 3.18 9.52 CM3 Cash Management Fund (9/99; 10/81) 0.57 3.49 3.66 5.51 DE3 Diversified Equity Income Fund (9/99; 9/99) (19.52) -- -- (5.06) EM3 Emerging Markets Fund (5/00; 5/00) (6.00) -- -- (13.75) ES3 Equity Select Fund (5/01; 5/01) (14.27) -- -- (9.60) EI3 Extra Income Fund (9/99; 5/96) (7.07) (2.58) -- 0.61 FI3 Federal Income Fund (9/99; 9/99) 5.20 -- -- 5.85 GB3 Global Bond Fund (9/99; 5/96) 14.29 3.81 -- 4.46 GR3 Growth Fund (9/99; 9/99) (26.55) -- -- (19.70) IE3 International Fund (9/99; 1/92) (18.73) (6.45) 1.30 1.01 MF3 Managed Fund (9/99; 4/86) (13.44) (0.37) 5.91 8.01 ND3 NEW DIMENSIONS FUND(R) (9/99; 5/96) (22.37) (0.50) -- 4.50 SV3 Partners Small Cap Value Fund (8/01; 8/01) (12.66) -- -- (4.91) IV3 S&P 500 Index Fund (5/00; 5/00) (22.89) -- -- (17.29) SC3 Small Cap Advantage Fund (9/99; 9/99) (17.56) -- -- (3.23) ST3 Stock Fund (8/01; 8/01) (21.38) -- -- (17.98) SA3 Strategy Aggressive Fund (9/99; 1/92) (32.37) (8.84) 1.11 1.78 AIM V.I. 3AC Capital Appreciation Fund, Series II Shares (8/01; 5/93)(2) (24.98) (2.89) -- 6.65 3AD Capital Development Fund, Series II Shares (8/01; 5/98)(2) (22.08) -- -- (1.91) ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. 3AL AllianceBernstein Growth and Income Portfolio (Class B) (8/01; 1/91)(3) (22.74) 2.91 10.47 9.57 3AB AllianceBernstein International Value Portfolio (Class B) (8/01; 5/01)(4) (5.92) -- -- (4.57) AMERICAN CENTURY(R) VARIABLE PORTFOLIOS, INC. 3AI VP International, Class II (8/01; 5/94)(5) (21.05) (3.54) -- 1.62 3AV VP Value, Class II (8/01; 5/96)(5) (13.34) 3.24 -- 7.74 CALVERT VARIABLE SERIES, INC. 3SR Social Balanced Portfolio (5/00; 9/86) (12.72) 0.09 5.99 7.24 EVERGREEN VA 3CG Capital Growth Fund, Class 2 (8/01; 3/98)(6) (23.11) -- -- (2.38) FIDELITY(R) VIP 3FG Growth & Income Portfolio Service Class 2 (8/01; 12/96)(7) (17.35) (0.08) -- 4.31 3FM Mid Cap Portfolio Service Class 2 (8/01; 12/98)(7) (10.56) -- -- 14.81 3FO Overseas Portfolio Service Class 2 (8/01; 1/87)(7) (20.94) (4.65) 4.01 3.58 FTVIPT 3RE Franklin Real Estate Fund - Class 2 (9/99; 1/89)(8) 1.47 1.84 9.40 8.97 3SI Franklin Small Cap Value Securities Fund - Class 2 (9/99; 5/98)(8) (9.81) -- -- (0.18) 3MS Mutual Shares Securities Fund - Class 2 (8/01; 11/96)(8) (12.34) 3.36 -- 5.78
IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 6 AVERAGE ANNUAL TOTAL RETURN(a) FOR PERIODS ENDING DEC. 31, 2002 (CONTINUED)
PERFORMANCE OF THE SUBACCOUNT SINCE SUBACCOUNT INVESTING IN: 1 YEAR COMMENCEMENT GOLDMAN SACHS VIT 3UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (22.37%) (10.84%) 3MC Mid Cap Value Fund (9/99; 5/98) (5.26) 8.82 INVESCO VIF 3ID Dynamics Fund (8/01; 8/97) (32.32) (27.65) 3FS Financial Services Fund (8/01; 9/99) (15.13) (13.44) 3TC Technology Fund (8/01; 5/97) (47.18) (41.91) 3TL Telecommunications Fund (8/01; 9/99) (51.12) (47.93) JANUS ASPEN SERIES 3GT Global Technology Portfolio: Service Shares (5/00; 1/00)(9) (41.30) (40.80) 3IG International Growth Portfolio: Service Shares (5/00; 5/94)(9) (26.21) (26.19) LAZARD RETIREMENT SERIES 3IP International Equity Portfolio (9/99; 9/98) (11.24) (12.32) MFS(R) 3MG Investors Growth Stock Series - Service Class (5/00; 5/99)(10) (28.16) (23.93) 3MD New Discovery Series - Service Class (5/00; 5/98)(10) (32.22) (17.68) 3UT Utilities Series - Service Class (8/01; 1/95)(10) (23.37) (23.84) PIONEER VCT 3PE Pioneer Equity Income VCT Portfolio - Class II Shares (8/01; 3/95)(11) (16.55) (13.77) 3EU Pioneer Europe VCT Portfolio - Class II Shares (8/01; 10/98)(12) (19.55) (16.50) PUTNAM VARIABLE TRUST 3HS Putnam VT Health Sciences Fund - Class IB Shares (8/01; 4/98)(13) (20.83) (17.20) 3PI Putnam VT International Equity Fund - Class IB Shares (8/01; 1/97)(14) (18.17) (16.21) (previously Putnam VT International Growth Fund - Class IB Shares) 3VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(14) (31.03) (14.60) STRONG FUNDS 3SO Strong Opportunity Fund II - Advisor Class (8/01; 5/92)(15) (27.40) (21.44) WANGER 3IT International Small Cap (9/99; 5/95) (14.35) (9.07) 3SP U.S. Smaller Companies (9/99; 5/95) (17.31) (1.11) WELLS FARGO VT 3AA Asset Allocation Fund (5/01; 4/94)(16) (13.37) (10.50) 3WI International Equity Fund (5/01; 7/00) (23.39) (20.37) 3SG Small Cap Growth Fund (5/01; 5/95)(t)(17) (38.60) (28.23) PERFORMANCE OF THE FUND SINCE SUBACCOUNT INVESTING IN: 1 YEAR 5 YEARS 10 YEARS COMMENCEMENT GOLDMAN SACHS VIT 3UE CORE(SM) U.S. Equity Fund (9/99; 2/98) (22.37%) --% --% (3.04%) 3MC Mid Cap Value Fund (9/99; 5/98) (5.26) -- -- 3.32 INVESCO VIF 3ID Dynamics Fund (8/01; 8/97) (32.32) (4.00) -- (3.18) 3FS Financial Services Fund (8/01; 9/99) (15.13) -- -- 1.38 3TC Technology Fund (8/01; 5/97) (47.18) (6.98) -- (3.96) 3TL Telecommunications Fund (8/01; 9/99) (51.12) -- -- (32.98) JANUS ASPEN SERIES 3GT Global Technology Portfolio: Service Shares (5/00; 1/00)(9) (41.30) -- -- (38.28) 3IG International Growth Portfolio: Service Shares (5/00; 5/94)(9) (26.21) (0.58) -- 7.55 LAZARD RETIREMENT SERIES 3IP International Equity Portfolio (9/99; 9/98) (11.24) -- -- (4.62) MFS(R) 3MG Investors Growth Stock Series - Service Class (5/00; 5/99)(10) (28.16) -- -- (9.37) 3MD New Discovery Series - Service Class (5/00; 5/98)(10) (32.22) -- -- 1.86 3UT Utilities Series - Service Class (8/01; 1/95)(10) (23.37) (1.29) -- 8.23 PIONEER VCT 3PE Pioneer Equity Income VCT Portfolio - Class II Shares (8/01; 3/95)(11) (16.55) 1.31 -- 9.39 3EU Pioneer Europe VCT Portfolio - Class II Shares (8/01; 10/98)(12) (19.55) -- -- (9.24) PUTNAM VARIABLE TRUST 3HS Putnam VT Health Sciences Fund - Class IB Shares (8/01; 4/98)(13) (20.83) -- -- (2.05) 3PI Putnam VT International Equity Fund - Class IB Shares (8/01; 1/97)(14) (18.17) 1.71 -- 3.86 (previously Putnam VT International Growth Fund - Class IB Shares) 3VS Putnam VT Vista Fund - Class IB Shares (9/99; 1/97)(14) (31.03) (4.75) -- (0.67) STRONG FUNDS 3SO Strong Opportunity Fund II - Advisor Class (8/01; 5/92)(15) (27.40) 1.89 9.75 10.60 WANGER 3IT International Small Cap (9/99; 5/95) (14.35) 4.60 -- 10.54 3SP U.S. Smaller Companies (9/99; 5/95) (17.31) 2.32 -- 12.28 WELLS FARGO VT 3AA Asset Allocation Fund (5/01; 4/94)(16) (13.37) 1.72 -- 7.47 3WI International Equity Fund (5/01; 7/00) (23.39) -- -- (20.10) 3SG Small Cap Growth Fund (5/01; 5/95)(t)(17) (38.60) (12.97) -- (2.51)
(a) Current applicable charges deducted from fund performance include a $30 annual contract administrative charge and a 0.55% annual mortality and expense risk fee. Premium taxes are not reflected in these total returns. See accompanying notes to the performance information. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 7 NOTES TO PERFORMANCE INFORMATION (1) Commencement date of the subaccount; Commencement date of the fund. (2) Performance shown for periods prior to the inception date of the Series II class of shares reflect the historical results of the Series I class, adjusted to reflect the impact that the Series II class Rule 12b-1 plan would have had if the Series II class had then existed. The Series I and Series II share classes invest in the same portfolio of securities and will have substantially similar performance, except to the extent that expenses borne by each class differ. (3) Because Class B shares were not offered until June 1, 1999, standardized Class A fund performance for prior periods represents historical results of Class A shares. For periods beginning June 1, 1999, Class B's results reflect an additional 12b-1 fee expense, which also affects future performance. (4) Because Class B shares were not offered until Aug. 15, 2001, standardized Class A fund performance for prior periods represents historical results of Class A shares. For periods beginning Aug. 15, 2001, Class B's results reflect an additional 12b-1 fee expense, which also affects future performance. (5) If Class II had existed during the periods presented, its performance would have been substantially similar to that of the existing class of the fund because each represents an investment in the same portfolio of securities. However, performance of Class II would have been lower because of its higher expense ratio. (6) Historical performance shown for Class 2 prior to its inception is based on the performance of Class I, the original class offered. These historical returns have not been adjusted to reflect the effect of the 0.25% 12b-1 fees applicable to Class 2 shares. Class 1 does not pay 12b-1 fees. If these fees had been reflected, returns would have been lower. The investment return and principal value of an investment will fluctuate so that investors' shares, when redeemed, may be worth more or less than their original cost. Performance includes the reinvestment of income dividends and capital gain distributions. (7) Initial offering of the Service Class 2 of each fund took place on Jan. 12, 2000. Returns prior to Jan. 12, 2000 through Nov. 3, 1997 (Jan. 12, 2000 through Dec. 28, 1998 for VIP Mid Cap) are those of the Service Class, which reflect a 12b-1 fee of 0.10%. Service Class 2 returns prior to Nov. 3, 1997 are those of the Initial Class, which has no 12b-1 fee. If Service Class 2's 12b-1 fee of 0.25% had been reflected, returns prior to Jan. 12, 2000 would have been lower. (8) Ongoing stock market volatility can dramatically change the fund's short-term performance; current results may differ. Because Class 2 shares were not offered until Jan. 6, 1999, standardized Class 2 Fund performance for prior periods represents historical results of Class 1 shares. For periods beginning Jan. 6, 1999 Class 2's results reflect an additional 12b-1 fee expense, which also affects future performance. (9) In recent years returns have sustained significant gains and losses due to market volatility in the technology sector. The returns shown for Service Shares for periods prior to their inception (Dec. 31, 1999) are derived from the historical performance of the Institutional Shares, adjusted to reflect the higher operating expenses of Service Shares. (10) Service Class shares commenced operations in May 2000. Service Class shares carry a 0.25% annual Rule 12b-1 fee. Service Class share performance includes the performance of the series' Initial Class shares for periods prior to the inception of Service Class shares (blended performance). These blended performance figures have not been adjusted to take into account differences in the class-specific operating expenses (such as Rule 12b-1 fees). Because operating expenses of Service Class shares are higher than those of Initial class shares, the blended Service Class share performance is higher than it would have been had the Service Class shares been offered for the entire period. (11) Performance of the portfolio's Class I shares are from inception date of March 1, 1995. Although Class II shares invest in the same portfolio investments as Class I shares, Class II shares would have the same investment results except for the difference in class expense. Class II shares are subject to a 0.25% distribution fee, which Class I shares do not pay. Consequently, the performance of Class II shares will be lower. (12) Performance of the portfolio's Class I shares are from inception date of Oct. 30, 1998. Although Class II shares invest in the same portfolio investments as Class I shares, Class II shares would have the same investment results except for the difference in class expense. Class II shares are subject to a 0.25% distribution fee, which Class I shares do not pay. Consequently, the performance of Class II shares will be lower. (13) The Trustees of Putnam Variable Trust currently limit 12b-1 fee payments on Class IB Shares to 0.25% of average net assets. (14) Performance information for Class IB shares for periods prior to April 30, 1998 are based on the performance of the fund's Class IA shares (not offered as an investment option) adjusted to reflect the fees paid by Class IB shares, including a Rule 12b-1 fee of 0.25%. Restated to reflect an increase in 12b-1 fees effective April 30, 2001. Actual 12b-1 fees during the most recent fiscal year were 0.22%. (15) Performance is historical and does not represent future results. Investment returns and principal value vary, and you may have a gain or loss when you sell shares. The performance of the Advisor Class shares prior to 7/12/01 is based on the Fund's Investor Class shares' performance, restated for the higher expense ratio of the Advisor Class shares. (16) Performance for periods prior to Sept. 20, 1999 reflects performance of the Life and Annuity Trust Asset Allocation Fund, its predecessor fund. Effective at the close of business Sept. 17, 1999, the Life and Annuity Trust Funds were reorganized into the Wells Fargo Variable Trust Funds. (17) Performance for periods prior to Sept. 20, 1999 reflects performance of the Norwest Select Small Company Stock Fund (the accounting survivor of a merger of the Life and Annuity Trust Strategic Growth Fund and the Norwest Select Small Company Stock Fund), its predecessor fund. Effective at the close of business Sept. 17, 1999, the Life and Annuity Trust and Norwest Select Funds were reorganized into the Wells Fargo Variable Trust Funds. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 8 CUMULATIVE TOTAL RETURN Cumulative total return represents the cumulative change in the value of an investment for a given period (reflecting change in a subaccount's accumulation unit value). We compute cumulative total return by using 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 the period, at the end of the period (or fractional portion thereof). All total return figures reflect the deduction of all applicable charges including the contract administrative charge and mortality and expense risk fee. ANNUALIZED YIELD FOR A SUBACCOUNT INVESTING IN A MONEY MARKET FUND ANNUALIZED SIMPLE YIELD For a subaccount investing in a money market fund, we base quotations of simple yield on: (a) the change in the value of a hypothetical subaccount (exclusive of capital changes and income other than investment income) at the beginning of a particular seven-day period; (b) less a pro rata share of the subaccount expenses accrued over the period; (c) dividing this difference by the value of the subaccount at the beginning of the period to obtain the base period return; and (d) raising the base period return to the power of 365/7. The subaccount's value includes: - any declared dividends, - the value of any shares purchased with dividends paid during the period, and - any dividends declared for such shares. It does not include any realized or unrealized gains or losses. ANNUALIZED COMPOUND YIELD We calculate compound yield using the base period return described above, which we then compound according to the following formula: Compound Yield = [(Base Period Return + 1)(TO THE POWER OF 365/7)] - 1 You must consider (when comparing an investment in subaccounts investing in money market funds with fixed annuities) that fixed annuities often provide an agreed-to or guaranteed yield for a stated period of time, whereas the subaccount's yield fluctuates. In comparing the yield of the subaccount to a money market fund, you should consider the different services that the contract provides. ANNUALIZED YIELD BASED ON THE SEVEN-DAY PERIOD ENDED DEC. 31, 2002
SUBACCOUNT INVESTING IN: SIMPLE YIELD COMPOUND YIELD CM3 AXP(R) Variable Portfolio - Cash Management Fund 0.25% 0.25%
ANNUALIZED YIELD FOR A SUBACCOUNT INVESTING IN AN INCOME FUND For the subaccounts investing in income funds, we base quotations of yield on all investment income earned during a particular 30-day period, less expenses accrued during the period (net investment income) and compute it by dividing net investment income per accumulation unit by the value of an accumulation unit on the last day of the period, according to the following formula: YIELD = 2[(a - b + 1)(TO THE POWER OF 6) - 1] ----- cd where: a = dividends and investment income earned during the period b = expenses accrued for the period (net of reimbursements) c = the average daily number of accumulation units outstanding during the period that were entitled to receive dividends d = the maximum offering price per accumulation unit on the last day of the period The subaccount earns yield from the increase in the net asset value of shares of the fund in which it invests and from dividends declared and paid by the fund, which are automatically invested in shares of the fund. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 9 ANNUALIZED YIELD BASED ON THE 30-DAY PERIOD ENDED DEC. 31, 2002
SUBACCOUNT INVESTING IN: YIELD BD3 AXP(R) Variable Portfolio - Bond Fund 5.16% EI3 AXP(R) Variable Portfolio - Extra Income Fund 4.41 FI3 AXP(R) Variable Portfolio - Federal Income Fund 2.96 GB3 AXP(R) Variable Portfolio - Global Bond Fund 3.15
The yield on the subaccount's accumulation unit may fluctuate daily and does not provide a basis for determining future yields. Independent rating or statistical services or publishers or publications such as those listed below may quote subaccount performance, compare it to rankings, yields or returns, or use it in variable annuity accumulation or settlement illustrations they publish or prepare. The Bank Rate Monitor National Index, Barron's, Business Week, CDA Technologies, Donoghue's Money Market Fund Report, Financial Services Week, Financial Times, Financial World, Forbes, Fortune, Global Investor, Institutional Investor, Investor's Business Daily, Kiplinger's Personal Finance, Lipper Analytical Services, Money, Morningstar, 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. CALCULATING ANNUITY PAYMENTS THE VARIABLE ACCOUNT We do the following calculations separately for each of the subaccounts of the variable account. The separate monthly payouts, added together, make up your total variable annuity payout. INITIAL PAYOUT: To compute your first monthly payment, we: - determine the dollar value of your contract on the valuation date and then deduct any applicable premium tax; then - apply the result to the annuity table contained in the contract or another table at least as favorable. The annuity table shows the amount of the first monthly payment for each $1,000 of value which depends on factors built into the table, as described below. ANNUITY UNITS: We then convert the value of your subaccount to annuity units. To compute the number of units credited to you, we divide the first monthly payment by the annuity unit value (see below) on the valuation date. The number of units in your subaccount is fixed. The value of the units fluctuates with the performance of the underlying fund. SUBSEQUENT PAYOUTS: To compute later payouts, we multiply: - the annuity unit value on the valuation date; by - the fixed number of annuity units credited to you. ANNUITY UNIT VALUES: We originally set this value at $1 for each subaccount. To calculate later values we multiply the last annuity value by the product of: - the net investment factor; and - the neutralizing factor. The purpose of the neutralizing factor is to offset the effect of the assumed rate built into the annuity table. With an assumed investment rate of 5%, the neutralizing factor is 0.999866 for a one day valuation period. NET INVESTMENT FACTOR: We determine the net investment factor by: - adding the fund's current net asset value per share plus the per share amount of any accrued income or capital gain dividends to obtain a current adjusted net asset value per share; then - dividing that sum by the previous adjusted net asset value per share; and - subtracting the percentage factor representing the mortality and expense risk fee from the result. Because the net asset value of the fund may fluctuate, the net investment factor may be greater or less than one, and the annuity unit value may increase or decrease. You bear this investment risk in a subaccount. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 10 THE FIXED ACCOUNT We guarantee your fixed annuity payout amounts. Once calculated, your payout will remain the same and never change. To calculate your annuity payouts we: - take the value of your fixed account at the settlement date or the date you selected to begin receiving your annuity payouts; then - using an annuity table, we apply the value according to the annuity payout plan you select. The annuity payout table we use will be the one in effect at the time you choose to begin your annuity payouts. The values in the table will be equal to or greater than the table in your contract. RATING AGENCIES We receive ratings from independent rating agencies. These agencies evaluate the financial soundness and claims-paying ability of insurance companies on a number of different factors. The ratings reflect each agency's estimation of our ability to meet our contractual obligations such as making annuity payouts and paying death benefits and other distributions. As such, the ratings relate to our fixed account and not to the subaccounts. This information generally does not relate to the management or performance of the subaccounts. For detailed information on the agency ratings given to IDS Life, refer to the American Express Web site at (americanexpress.com/advisors) or contact your sales representative. Or view our current ratings by visiting the agency Web sites directly at: A.M. Best www.ambest.com Fitch www.fitchratings.com Moody's www.moodys.com/insurance
A.M. Best -- Rates insurance companies for their financial strength. Fitch (formerly Duff & Phelps) -- Rates insurance companies for their claims-paying ability. Moody's -- Rates insurance companies for their financial strength. PRINCIPAL UNDERWRITER IDS Life serves as principal underwriter for the contract, which it offers on a continuous basis. IDS Life is registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934 as a broker-dealer and is a member of the National Association of Securities Dealers, Inc. (NASD). Our sales representatives are licensed insurance and annuity agents and are registered with the NASD as our representatives. IDS Life is ultimately controlled by American Express Company. IDS Life currently pays underwriting commissions for its role as principal underwriter. For the past three years, the aggregate dollar amount of underwriting commissions paid in its role as principal underwriter has been: 2002: $37,418,102; 2001: $41,792,624; and 2000: $56,851,815. IDS Life retains no underwriting commission from the sale of the contract. INDEPENDENT AUDITORS The financial statements appearing in this SAI have been audited by Ernst & Young LLP (220 South Sixth Street, Suite 1400, Minneapolis, MN 55402) independent auditors, as stated in their report appearing herein. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 11 REPORT OF INDEPENDENT AUDITORS THE BOARD OF DIRECTORS IDS LIFE INSURANCE COMPANY We have audited the accompanying individual statements of assets and liabilities of the segregated asset subaccounts of IDS Life Variable Account 10 - American Express Retirement Advisor Advantage(R) Variable Annuity - Band 3 (comprised of subaccounts BC3, BD3, CR3, CM3, DE3, EM3, ES3, EI3, FI3, GB3, GR3, IE3, MF3, ND3, SV3, IV3, SC3, ST3, SA3, 3AC, 3AD, 3AB, 3AL, 3AI, 3AV, 3SR, 3CG, 3FG, 3FM, 3FO, 3RE, 3SI, 3MS, 3UE, 3MC, 3ID, 3FS, 3TC, 3TL, 3GT, 3IG, 3IP, 3MG, 3MD, 3UT, 3PE, 3EU, 3HS, 3PI, 3VS, 3SO, 3IT, 3SP, 3AA, 3WI and 3SG) as of December 31, 2002, and the related statements of operations and changes in nets assets for the periods indicated therein. These financial statements are the responsibility of the management of IDS Life Insurance Company. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned at December 31, 2002 with the affiliated and unaffiliated mutual fund managers. 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 individual financial position of the segregated asset subaccounts of IDS Life Variable Account 10 - American Express Retirement Advisor Advantage(R) Variable Annuity - Band 3 at December 31, 2002, and the individual results of their operations and the changes in their net assets for the periods indicated therein, in conformity with accounting principles generally accepted in the United States. /s/ Ernst & Young LLP Minneapolis, Minnesota March 21, 2003 IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 12 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ---------------------------------------------------------------- DECEMBER 31, 2002 BC3 BD3 CR3 CM3 DE3 ASSETS Investments in shares of mutual funds and portfolios: at cost $ 262,697 $ 885,758 $ 122,124 $ 3,241,265 $ 1,040,408 ---------------------------------------------------------------- at market value $ 197,932 $ 900,431 $ 119,810 $ 3,241,265 $ 1,040,055 Dividends receivable -- 3,667 -- 4,206 -- Accounts receivable from IDS Life for contract purchase payments -- 7,468 -- 1,081,894 -- Receivable from mutual funds and portfolios for share redemptions -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total assets 197,932 911,566 119,810 4,327,365 1,040,055 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 95 417 58 2,625 251 Contract terminations -- -- -- -- -- Payable to mutual funds and portfolios for investments purchased -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 95 417 58 2,625 251 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 197,837 911,149 119,752 4,324,740 1,039,804 Net assets applicable to contracts in payment period -- -- -- -- -- Net assets applicable to seed money -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 197,837 $ 911,149 $ 119,752 $ 4,324,740 $ 1,039,804 ==================================================================================================================================== Accumulation units outstanding 313,942 761,704 202,292 3,911,088 1,262,412 ==================================================================================================================================== Net asset value per accumulation unit $ 0.63 $ 1.20 $ 0.59 $ 1.11 $ 0.82 ====================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ---------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) EM3 ES3 EI3 FI3 GB3 ASSETS Investments in shares of mutual funds and portfolios: at cost $ 4,281,090 $ 2,223,700 $ 2,814,753 $ 1,525,440 $ 286,141 ---------------------------------------------------------------- at market value $ 3,646,305 $ 2,021,954 $ 2,811,596 $ 1,539,965 $ 297,056 Dividends receivable -- -- 5,624 3,680 1,094 Accounts receivable from IDS Life for contract purchase payments -- -- -- -- -- Receivable from mutual funds and portfolios for share redemptions -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total assets 3,646,305 2,021,954 2,817,220 1,543,645 298,150 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 1,737 970 799 723 207 Contract terminations -- -- 1,505,278 -- -- Payable to mutual funds and portfolios for investments purchased -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 1,737 970 1,506,077 723 207 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 191,345 284,547 1,311,143 1,542,922 297,943 Net assets applicable to contracts in payment period -- -- -- -- -- Net assets applicable to seed money 3,453,223 1,736,437 -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 3,644,568 $ 2,020,984 $ 1,311,143 $ 1,542,922 $ 297,943 ==================================================================================================================================== Accumulation units outstanding 277,030 327,689 1,479,516 1,274,641 251,492 ==================================================================================================================================== Net asset value per accumulation unit $ 0.69 $ 0.87 $ 0.89 $ 1.21 $ 1.18 ====================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 13 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ---------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) GR3 IE3 MF3 ND3 SV3 ASSETS Investments in shares of mutual funds and portfolios: at cost $ 656,791 $ 264,567 $ 104,755 $ 1,916,812 $ 4,629,380 ---------------------------------------------------------------- at market value $ 502,915 $ 267,600 $ 97,883 $ 1,723,204 $ 4,325,970 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 303 -- -- 376,428 10 Receivable from mutual funds and portfolios for share redemptions -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total assets 503,218 267,600 97,883 2,099,632 4,325,980 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 243 107 53 831 2,082 Contract terminations -- -- -- -- -- Payable to mutual funds and portfolios for investments purchased -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 243 107 53 831 2,082 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 502,975 267,493 97,830 2,098,801 585,779 Net assets applicable to contracts in payment period -- -- -- -- -- Net assets applicable to seed money -- -- -- -- 3,738,119 ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 502,975 $ 267,493 $ 97,830 $ 2,098,801 $ 4,323,898 ==================================================================================================================================== Accumulation units outstanding 1,063,816 487,561 120,076 3,029,005 626,823 ==================================================================================================================================== Net asset value per accumulation unit $ 0.47 $ 0.55 $ 0.81 $ 0.69 $ 0.93 ====================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ---------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) IV3 SC3 ST3 SA3 3AC ASSETS Investments in shares of mutual funds and portfolios: at cost $ 672,257 $ 386,254 $ 2,000,793 $ 220,116 $ 3,276 ---------------------------------------------------------------- at market value $ 543,809 $ 349,481 $ 1,494,943 $ 212,666 $ 2,720 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 47,065 -- -- -- -- Receivable from mutual funds and portfolios for share redemptions -- -- -- -- 1 ------------------------------------------------------------------------------------------------------------------------------------ Total assets 590,874 349,481 1,494,943 212,666 2,721 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 260 165 722 120 1 Contract terminations -- -- -- -- -- Payable to mutual funds and portfolios for investments purchased -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 260 165 722 120 1 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 590,614 349,316 -- 212,546 2,720 Net assets applicable to contracts in payment period -- -- -- -- -- Net assets applicable to seed money -- -- 1,494,221 -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 590,614 $ 349,316 $ 1,494,221 $ 212,546 $ 2,720 ==================================================================================================================================== Accumulation units outstanding 973,266 392,663 -- 385,725 3,708 ==================================================================================================================================== Net asset value per accumulation unit $ 0.61 $ 0.89 $ 0.75 $ 0.55 $ 0.73 ====================================================================================================================================
See accompanying notes to financial statements IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 14 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ---------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 3AD 3AB 3AL 3AI 3AV ASSETS Investments in shares of mutual funds and portfolios: at cost $ 150,522 $ 553,760 $ 260,103 $ 187,827 $ 478,557 ---------------------------------------------------------------- at market value $ 138,171 $ 557,441 $ 231,150 $ 187,069 $ 434,296 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments -- -- 7,124 5 7,279 Receivable from mutual funds and portfolios for share redemptions 60 230 103 65 201 ------------------------------------------------------------------------------------------------------------------------------------ Total assets 138,231 557,671 238,377 187,139 441,776 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 60 230 103 65 201 Contract terminations -- -- -- -- -- Payable to mutual funds and portfolios for investments purchased -- -- 7,124 5 7,279 ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 60 230 7,227 70 7,480 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 138,171 557,441 231,150 187,069 434,296 Net assets applicable to contracts in payment period -- -- -- -- -- Net assets applicable to seed money -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 138,171 $ 557,441 $ 231,150 $ 187,069 $ 434,296 ==================================================================================================================================== Accumulation units outstanding 180,289 605,559 309,718 253,884 483,056 ==================================================================================================================================== Net asset value per accumulation unit $ 0.77 $ 0.92 $ 0.75 $ 0.74 $ 0.90 ====================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ---------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 3SR 3CG 3FG 3FM 3FO ASSETS Investments in shares of mutual funds and portfolios: at cost $ 7,531 $ 33,529 $ 217,903 $ 317,481 $ 245,672 ---------------------------------------------------------------- at market value $ 6,235 $ 32,398 $ 192,711 $ 303,009 $ 242,627 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments -- -- -- 8 -- Receivable from mutual funds and portfolios for share redemptions 3 16 88 139 78 ------------------------------------------------------------------------------------------------------------------------------------ Total assets 6,238 32,414 192,799 303,156 242,705 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 3 16 88 139 78 Contract terminations -- -- -- -- -- Payable to mutual funds and portfolios for investments purchased -- -- -- 8 -- ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 3 16 88 147 78 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 6,235 32,398 192,711 303,009 242,627 Net assets applicable to contracts in payment period -- -- -- -- -- Net assets applicable to seed money -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 6,235 $ 32,398 $ 192,711 $ 303,009 $ 242,627 ==================================================================================================================================== Accumulation units outstanding 8,008 44,249 233,173 325,426 324,271 ==================================================================================================================================== Net asset value per accumulation unit $ 0.78 $ 0.73 $ 0.83 $ 0.93 $ 0.75 ====================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 15 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ---------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 3RE 3SI 3MS 3UE 3MC ASSETS Investments in shares of mutual funds and portfolios: at cost $ 281,160 $ 370,595 $ 120,916 $ 537,647 $ 634,944 ---------------------------------------------------------------- at market value $ 279,651 $ 344,449 $ 110,521 $ 467,842 $ 587,651 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 7,462 -- -- -- -- Receivable from mutual funds and portfolios for share redemptions 132 159 53 222 1,200 ------------------------------------------------------------------------------------------------------------------------------------ Total assets 287,245 344,608 110,574 468,064 588,851 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 132 159 53 222 275 Contract terminations -- -- -- -- 925 Payable to mutual funds and portfolios for investments purchased 7,462 -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 7,594 159 53 222 1,200 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 279,651 344,449 110,521 467,842 587,651 Net assets applicable to contracts in payment period -- -- -- -- -- Net assets applicable to seed money -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 279,651 $ 344,449 $ 110,521 $ 467,842 $ 587,651 ==================================================================================================================================== Accumulation units outstanding 204,619 281,793 130,426 694,276 449,654 ==================================================================================================================================== Net asset value per accumulation unit $ 1.37 $ 1.22 $ 0.85 $ 0.67 $ 1.31 ====================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ---------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 3ID 3FS 3TC 3TL 3GT ASSETS Investments in shares of mutual funds and portfolios: at cost $ 99,038 $ 3,209 $ 1,351 $ 1,237 $ 128,007 ---------------------------------------------------------------- at market value $ 97,105 $ 2,860 $ 1,240 $ 1,329 $ 85,883 Dividends receivable -- 19 -- -- -- Accounts receivable from IDS Life for contract purchase payments -- -- -- -- -- Receivable from mutual funds and portfolios for share redemptions 40 1 182 1 209 ------------------------------------------------------------------------------------------------------------------------------------ Total assets 97,145 2,880 1,422 1,330 86,092 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 40 1 182 1 40 Contract terminations -- -- -- -- 169 Payable to mutual funds and portfolios for investments purchased -- 19 -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 40 20 182 1 209 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 97,105 2,860 1,240 1,329 85,883 Net assets applicable to contracts in payment period -- -- -- -- -- Net assets applicable to seed money -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 97,105 $ 2,860 $ 1,240 $ 1,329 $ 85,883 ==================================================================================================================================== Accumulation units outstanding 149,186 3,484 2,576 3,227 342,673 ==================================================================================================================================== Net asset value per accumulation unit $ 0.65 $ 0.82 $ 0.48 $ 0.41 $ 0.25 ====================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 16 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ---------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 3IG 3IP 3MG 3MD 3UT ASSETS Investments in shares of mutual funds and portfolios: at cost $ 396,311 $ 417,532 $ 530,082 $ 388,228 $ 124,284 ---------------------------------------------------------------- at market value $ 393,955 $ 410,768 $ 382,341 $ 297,200 $ 95,219 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 48 -- -- 49 -- Receivable from mutual funds and portfolios for share redemptions 155 178 178 138 46 ------------------------------------------------------------------------------------------------------------------------------------ Total assets 394,158 410,946 382,519 297,387 95,265 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 155 178 178 138 46 Contract terminations -- -- -- -- -- Payable to mutual funds and portfolios for investments purchased 48 -- -- 49 -- ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 203 178 178 187 46 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 393,955 410,768 382,341 297,200 95,219 Net assets applicable to contracts in payment period -- -- -- -- -- Net assets applicable to seed money -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 393,955 $ 410,768 $ 382,341 $ 297,200 $ 95,219 ==================================================================================================================================== Accumulation units outstanding 874,663 635,602 785,044 485,070 139,161 ==================================================================================================================================== Net asset value per accumulation unit $ 0.45 $ 0.65 $ 0.49 $ 0.61 $ 0.68 ====================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ---------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 3PE 3EU 3HS 3PI 3VS ASSETS Investments in shares of mutual funds and portfolios: at cost $ 144,530 $ 25 $ 141,588 $ 686,120 $ 641,783 ---------------------------------------------------------------- at market value $ 142,312 $ 24 $ 112,740 $ 693,574 $ 310,130 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments -- -- -- -- 65 Receivable from mutual funds and portfolios for share redemptions 63 -- 54 288 151 ------------------------------------------------------------------------------------------------------------------------------------ Total assets 142,375 24 112,794 693,862 310,346 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 63 -- 54 288 151 Contract terminations -- -- -- -- -- Payable to mutual funds and portfolios for investments purchased -- -- -- -- 65 ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 63 -- 54 288 216 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 142,312 24 112,740 693,574 310,130 Net assets applicable to contracts in payment period -- -- -- -- -- Net assets applicable to seed money -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 142,312 $ 24 $ 112,740 $ 693,574 $ 310,130 ==================================================================================================================================== Accumulation units outstanding 174,668 31 144,808 881,161 524,988 ==================================================================================================================================== Net asset value per accumulation unit $ 0.81 $ 0.79 $ 0.78 $ 0.79 $ 0.59 ====================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 17 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ---------------------------------------------------------------- DECEMBER 31, 2002 (CONTINUED) 3SO 3IT 3SP 3AA 3WI ASSETS Investments in shares of mutual funds and portfolios: at cost $ 295,340 $ 1,056,488 $ 893,932 $ 26,698 $ 100,509 ---------------------------------------------------------------- at market value $ 226,551 $ 1,082,377 $ 818,631 $ 24,388 $ 99,811 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 5 -- 6,834 6,820 -- Receivable from mutual funds and portfolios for share redemptions 103 464 379 8 32 ------------------------------------------------------------------------------------------------------------------------------------ Total assets 226,659 1,082,841 825,844 31,216 99,843 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 103 464 379 8 32 Contract terminations -- -- -- -- -- Payable to mutual funds and portfolios for investments purchased 5 -- 6,834 6,820 -- ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 108 464 7,213 6,828 32 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 226,551 1,082,377 816,189 24,388 99,811 Net assets applicable to contracts in payment period -- -- 2,442 -- -- Net assets applicable to seed money -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 226,551 $ 1,082,377 $ 818,631 $ 24,388 $ 99,811 ==================================================================================================================================== Accumulation units outstanding 314,349 1,483,880 846,698 28,992 144,415 ==================================================================================================================================== Net asset value per accumulation unit $ 0.72 $ 0.73 $ 0.96 $ 0.84 $ 0.69 ====================================================================================================================================
SEGREGATED ASSET SUBACCOUNT ------------ DECEMBER 31, 2002 (CONTINUED) 3SG ASSETS Investments in shares of mutual funds and portfolios: at cost $ 3,452 ------------ at market value $ 3,468 Dividends receivable -- Accounts receivable from IDS Life for contract purchase payments -- Receivable from mutual funds and portfolios for share redemptions 2 ------------------------------------------------------------------------------------------------------------------------------------ Total assets 3,470 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 2 Contract terminations -- Payable to mutual funds and portfolios for investments purchased -- ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 2 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 3,468 Net assets applicable to contracts in payment period -- Net assets applicable to seed money -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 3,468 ==================================================================================================================================== Accumulation units outstanding 5,984 ==================================================================================================================================== Net asset value per accumulation unit $ 0.58 ====================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 18 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 BC3 BD3 CR3 CM3 DE3 INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 2,923 $ 36,196 $ 784 $ 80,209 $ 10,775 Variable account expenses 2,190 3,750 1,027 37,643 2,926 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 733 32,446 (243) 42,566 7,849 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 381,143 6,675,424 3,473,104 201,164,166 14,676,397 Cost of investments sold 438,959 6,679,233 3,493,950 201,164,176 14,810,456 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (57,816) (3,809) (20,846) (10) (134,059) Distributions from capital gains -- -- 15,738 -- 1,303 Net change in unrealized appreciation or depreciation of investments (50,618) 17,554 (6,954) 9 (3,499) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (108,434) 13,745 (12,062) (1) (136,255) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (107,701) $ 46,191 $ (12,305) $ 42,565 $ (128,406) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) EM3 ES3 EI3 FI3 GB3 INVESTMENT INCOME Dividend income from mutual funds and portfolios $ -- $ -- $ 121,580 $ 23,677 $ 19,857 Variable account expenses 20,414 10,679 9,062 4,461 2,173 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (20,414) (10,679) 112,518 19,216 17,684 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 537,090 631,854 34,293,082 1,014,227 2,830,358 Cost of investments sold 641,316 633,744 34,460,817 1,013,628 2,814,930 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (104,226) (1,890) (167,735) 599 15,428 Distributions from capital gains -- -- -- 6,166 -- Net change in unrealized appreciation or depreciation of investments (85,109) (286,993) 11,888 16,060 14,834 ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (189,335) (288,883) (155,847) 22,825 30,262 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (209,749) $ (299,562) $ (43,329) $ 42,041 $ 47,946 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) GR3 IE3 MF3 ND3 SV3 INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 412 $ 4,288 $ 5,079 $ 11,439 $ 4,960 Variable account expenses 3,755 3,397 1,096 12,237 25,281 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (3,343) 891 3,983 (798) (20,321) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 977,913 87,048,601 363,319 5,748,826 30,103 Cost of investments sold 1,261,846 86,136,509 414,541 6,182,811 29,109 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (283,933) 912,092 (51,222) (433,985) 994 Distributions from capital gains -- 82 20,944 2,613 17,888 Net change in unrealized appreciation or depreciation of investments 29,442 2,013 (8,418) (148,644) (608,764) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (254,491) 914,187 (38,696) (580,016) (589,882) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (257,834) $ 915,078 $ (34,713) $ (580,814) $ (610,203) ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 19 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) IV3 SC3 ST3 SA3 3AC INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 5,348 $ -- $ 9,480 $ -- $ -- Variable account expenses 3,055 2,270 9,293 2,298 34 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 2,293 (2,270) 187 (2,298) (34) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 401,047 566,564 9,458 12,093,417 11,955 Cost of investments sold 535,717 628,785 10,977 12,297,015 13,523 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (134,670) (62,221) (1,519) (203,598) (1,568) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (7,021) (38,976) (403,993) (11,779) (543) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (141,691) (101,197) (405,512) (215,377) (2,111) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (139,398) $ (103,467) $ (405,325) $ (217,675) $ (2,145) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 3AD 3AB 3AL 3AI 3AV INVESTMENT INCOME Dividend income from mutual funds and portfolios $ -- $ 287 $ 747 $ 1,202 $ 1,244 Variable account expenses 271 1,720 832 643 1,519 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (271) (1,433) (85) 559 (275) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 5,373 2,355,311 117,337 6,694,566 7,744 Cost of investments sold 5,912 2,325,394 131,387 6,647,067 8,555 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (539) 29,917 (14,050) 47,499 (811) Distributions from capital gains -- -- 4,595 -- 8,681 Net change in unrealized appreciation or depreciation of investments (12,591) (1,729) (27,646) (809) (46,738) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (13,130) 28,188 (37,101) 46,690 (38,868) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (13,401) $ 26,755 $ (37,186) $ 47,249 $ (39,143) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 3SR 3CG 3FG 3FM 3FO INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 183 $ -- $ 1,650 $ 1,256 $ 49 Variable account expenses 33 33 799 1,045 616 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 150 (33) 851 211 (567) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 668 26 4,831 2,985 6,017,201 Cost of investments sold 788 28 5,035 3,212 5,960,885 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (120) (2) (204) (227) 56,316 Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (839) (1,131) (26,404) (17,373) (3,144) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (959) (1,133) (26,608) (17,600) 53,172 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (809) $ (1,166) $ (25,757) $ (17,389) $ 52,605 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 20 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 3RE 3SI 3MS 3UE 3MC INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 8,459 $ 812 $ 4 $ 2,962 $ 6,125 Variable account expenses 1,689 1,411 308 3,718 2,410 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 6,770 (599) (304) (756) 3,715 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 200,589 86,684 292 1,557,749 134,802 Cost of investments sold 195,535 99,663 320 1,828,438 145,021 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments 5,054 (12,979) (28) (270,689) (10,219) Distributions from capital gains -- 5,679 11 -- 1,787 Net change in unrealized appreciation or depreciation of investments (9,803) (33,497) (10,395) 51,197 (48,745) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (4,749) (40,797) (10,412) (219,492) (57,177) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 2,021 $ (41,396) $ (10,716) $ (220,248) $ (53,462) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 3ID 3FS 3TC 3TL 3GT INVESTMENT INCOME Dividend income from mutual funds and portfolios $ -- $ 19 $ -- $ -- $ -- Variable account expenses 139 12 186 2 379 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (139) 7 (186) (2) (379) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 145 112 1,132,627 1 37,112 Cost of investments sold 159 137 1,165,252 1 60,443 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (14) (25) (32,625) -- (23,331) Distributions from capital gains -- 9 -- -- -- Net change in unrealized appreciation or depreciation of investments (2,097) (350) (112) 91 (11,973) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (2,111) (366) (32,737) 91 (35,304) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (2,250) $ (359) $ (32,923) $ 89 $ (35,683) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 3IG 3IP 3MG 3MD 3UT INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 1,811 $ 1,834 $ -- $ -- $ 2,527 Variable account expenses 2,642 1,850 2,685 2,109 553 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (831) (16) (2,685) (2,109) 1,974 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 13,009,112 8,687,211 279,316 295,291 772 Cost of investments sold 12,901,387 8,627,935 363,943 366,758 993 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments 107,725 59,276 (84,627) (71,467) (221) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (3,394) 5,085 (84,925) (89,005) (30,610) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments 104,331 64,361 (169,552) (160,472) (30,831) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 103,500 $ 64,345 $ (172,237) $ (162,581) $ (28,857) ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 21 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 3PE 3EU 3HS 3PI 3VS INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 1,939 $ -- $ -- $ 3,135 $ -- Variable account expenses 362 35 633 2,874 3,636 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 1,577 (35) (633) 261 (3,636) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 1,190,741 1,395,419 551 8,524,372 425,328 Cost of investments sold 1,182,018 1,377,966 641 8,540,156 801,876 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments 8,723 17,453 (90) (15,784) (376,548) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (2,218) (1) (26,477) 5,176 116,409 ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments 6,505 17,452 (26,567) (10,608) (260,139) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 8,082 $ 17,417 $ (27,200) $ (10,347) $ (263,775) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 3SO 3IT 3SP 3AA 3WI INVESTMENT INCOME Dividend income from mutual funds and portfolios $ 1,014 $ -- $ -- $ 249 $ 7 Variable account expenses 804 4,886 5,004 63 168 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 210 (4,886) (5,004) 186 (161) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 570 12,185,128 949,573 449 3,145,465 Cost of investments sold 751 12,299,645 979,761 509 3,132,994 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (181) (114,517) (30,188) (60) 12,471 Distributions from capital gains 4,627 -- -- 85 -- Net change in unrealized appreciation or depreciation of investments (46,961) 61,802 (152,303) (1,912) (692) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (42,515) (52,715) (182,491) (1,887) 11,779 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (42,305) $ (57,601) $ (187,495) $ (1,701) $ 11,618 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNT ------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 3SG INVESTMENT INCOME Dividend income from mutual funds and portfolios $ -- Variable account expenses 56 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (56) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments in mutual funds and portfolios: Proceeds from sales 130,946 Cost of investments sold 141,081 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (10,135) Distributions from capital gains -- Net change in unrealized appreciation or depreciation of investments 35 ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (10,100) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (10,156) ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 22 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 BC3 BD3 CR3 CM3 DE3 OPERATIONS Investment income (loss) -- net $ 733 $ 32,446 $ (243) $ 42,566 $ 7,849 Net realized gain (loss) on sales of investments (57,816) (3,809) (20,846) (10) (134,059) Distributions from capital gains -- -- 15,738 -- 1,303 Net change in unrealized appreciation or depreciation of investments (50,618) 17,554 (6,954) 9 (3,499) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (107,701) 46,191 (12,305) 42,565 (128,406) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 3,456 75,827 1,259 16,400,339 140,478 Net transfers(1) (180,736) (308,736) (87,349) (1,768,769) 859,705 Transfers for policy loans (3,030) -- 1,872 (19,135) (6,893) Contract charges (106) (80) (70) (554) (112) Contract terminations: Surrender benefits (111,290) (23,949) (5,956) (16,548,478) (112,852) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (291,706) (256,938) (90,244) (1,936,597) 880,326 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 597,244 1,121,896 222,301 6,218,772 287,884 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 197,837 $ 911,149 $ 119,752 $ 4,324,740 $ 1,039,804 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 728,975 984,546 291,207 5,658,076 281,449 Contract purchase payments 4,536 65,587 1,922 14,868,286 140,211 Net transfers(1) (271,039) (267,402) (85,555) (1,608,368) 983,310 Transfers for policy loans (3,151) -- 3,025 (17,331) (6,515) Contract charges (150) (70) (98) (502) (124) Contract terminations: Surrender benefits (145,229) (20,957) (8,209) (14,989,073) (135,919) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 313,942 761,704 202,292 3,911,088 1,262,412 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) EM3 ES3 EI3 FI3 GB3 OPERATIONS Investment income (loss) -- net $ (20,414) $ (10,679) $ 112,518 $ 19,216 $ 17,684 Net realized gain (loss) on sales of investments (104,226) (1,890) (167,735) 599 15,428 Distributions from capital gains -- -- -- 6,166 -- Net change in unrealized appreciation or depreciation of investments (85,109) (286,993) 11,888 16,060 14,834 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (209,749) (299,562) (43,329) 42,041 47,946 =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 1,687 10,954 364,032 57,819 16,488 Net transfers(1) 178,232 247,128 (102,421) 797,537 (24,917) Transfers for policy loans -- (116) -- -- -- Contract charges (4) (64) (90) (60) (11) Contract terminations: Surrender benefits -- -- (382,503) (34,766) -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 179,915 257,902 (120,982) 820,530 (8,440) ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 3,674,402 2,062,644 1,475,454 680,351 258,437 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 3,644,568 $ 2,020,984 $ 1,311,143 $ 1,542,922 $ 297,943 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 3,269 37,676 1,549,237 591,528 249,453 Contract purchase payments 2,195 11,990 381,550 49,632 15,704 Net transfers(1) 271,572 278,230 (42,003) 662,666 (13,655) Transfers for policy loans -- (138) -- -- -- Contract charges (6) (69) (97) (51) (10) Contract terminations: Surrender benefits -- -- (409,171) (29,134) -- ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 277,030 327,689 1,479,516 1,274,641 251,492 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 23 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) GR3 IE3 MF3 ND3 SV3 OPERATIONS Investment income (loss) -- net $ (3,343) $ 891 $ 3,983 $ (798) $ (20,321) Net realized gain (loss) on sales of investments (283,933) 912,092 (51,222) (433,985) 994 Distributions from capital gains -- 82 20,944 2,613 17,888 Net change in unrealized appreciation or depreciation of investments 29,442 2,013 (8,418) (148,644) (608,764) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (257,834) 915,078 (34,713) (580,814) (610,203) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 90,897 34,557 1,364 142,999 60,999 Net transfers(1) (59,234) (704,499) (40,660) (112,827) 159,375 Transfers for policy loans (2,095) -- -- (7,299) -- Contract charges (318) (43) (31) (797) (375) Contract terminations: Surrender benefits (95,446) (21,397) (106,487) (243,678) (3,287) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (66,196) (691,382) (145,814) (221,602) 216,712 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 827,005 43,797 278,357 2,901,217 4,717,389 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 502,975 $ 267,493 $ 97,830 $ 2,098,801 $ 4,323,898 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 1,285,419 65,188 295,986 3,252,328 411,004 Contract purchase payments 153,550 59,499 1,583 177,174 59,827 Net transfers(1) (177,671) 394,472 (45,897) (77,133) 159,599 Transfers for policy loans (2,996) -- -- (8,002) -- Contract charges (583) (69) (35) (1,023) (403) Contract terminations: Surrender benefits (193,903) (31,529) (131,561) (314,339) (3,204) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 1,063,816 487,561 120,076 3,029,005 626,823 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) IV3 SC3 ST3 SA3 3AC OPERATIONS Investment income (loss) -- net $ 2,293 $ (2,270) $ 187 $ (2,298) $ (34) Net realized gain (loss) on sales of investments (134,670) (62,221) (1,519) (203,598) (1,568) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (7,021) (38,976) (403,993) (11,779) (543) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (139,398) (103,467) (405,325) (217,675) (2,145) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 19,959 36,724 -- 27,190 2,747 Net transfers(1) 104,499 126,271 12 36,837 (3,833) Transfers for policy loans -- 369 -- (3,138) -- Contract charges (50) (79) -- (325) (5) Contract terminations: Surrender benefits (125) (118,641) -- (124,753) -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 124,283 44,644 12 (64,189) (1,091) ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 605,729 408,139 1,899,534 494,410 5,956 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 590,614 $ 349,316 $ 1,494,221 $ 212,546 $ 2,720 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 770,207 378,441 -- 607,048 6,095 Contract purchase payments 30,090 39,162 -- 40,231 3,075 Net transfers(1) 173,207 105,489 -- (29,395) (5,456) Transfers for policy loans -- 390 -- (3,950) -- Contract charges (69) (84) -- (476) (6) Contract terminations: Surrender benefits (169) (130,735) -- (227,733) -- ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 973,266 392,663 -- 385,725 3,708 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 24 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 3AD 3AB 3AL 3AI 3AV OPERATIONS Investment income (loss) -- net $ (271) $ (1,433) $ (85) $ 559 $ (275) Net realized gain (loss) on sales of investments (539) 29,917 (14,050) 47,499 (811) Distributions from capital gains -- -- 4,595 -- 8,681 Net change in unrealized appreciation or depreciation of investments (12,591) (1,729) (27,646) (809) (46,738) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (13,401) 26,755 (37,186) 47,249 (39,143) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 1,918 52,337 72,168 36,074 59,823 Net transfers(1) 146,505 273,092 69,319 102,513 262,878 Transfers for policy loans -- -- -- -- -- Contract charges (7) (1) (163) (2) (202) Contract terminations: Surrender benefits -- (98) (4,407) -- -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 148,416 325,330 136,917 138,585 322,499 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 3,156 205,356 131,419 1,235 150,940 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 138,171 $ 557,441 $ 231,150 $ 187,069 $ 434,296 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 3,211 209,971 136,127 1,324 145,573 Contract purchase payments 1,994 55,284 87,887 45,860 63,338 Net transfers(1) 175,093 340,429 91,492 206,703 274,370 Transfers for policy loans -- -- -- -- -- Contract charges (9) (1) (216) (3) (225) Contract terminations: Surrender benefits -- (124) (5,572) -- -- ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 180,289 605,559 309,718 253,884 483,056 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 3SR 3CG 3FG 3FM 3FO OPERATIONS Investment income (loss) -- net $ 150 $ (33) $ 851 $ 211 $ (567) Net realized gain (loss) on sales of investments (120) (2) (204) (227) 56,316 Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (839) (1,131) (26,404) (17,373) (3,144) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (809) (1,166) (25,757) (17,389) 52,605 =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 149 33,556 12,974 92,094 39,441 Net transfers(1) 1,370 -- 73,117 94,444 146,294 Transfers for policy loans -- -- -- -- -- Contract charges (4) (1) (2) (41) (13) Contract terminations: Surrender benefits (109) -- -- (3,112) (2,412) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 1,406 33,555 86,089 183,385 183,310 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 5,638 9 132,379 137,013 6,712 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 6,235 $ 32,398 $ 192,711 $ 303,009 $ 242,627 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 6,328 10 132,462 131,673 7,097 Contract purchase payments 172 44,240 13,970 95,615 47,631 Net transfers(1) 1,661 -- 86,744 101,489 272,093 Transfers for policy loans -- -- -- -- -- Contract charges (5) (1) (3) (44) (17) Contract terminations: Surrender benefits (148) -- -- (3,307) (2,533) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 8,008 44,249 233,173 325,426 324,271 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 25 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 3RE 3SI 3MS 3UE 3MC OPERATIONS Investment income (loss) -- net $ 6,770 $ (599) $ (304) $ (756) $ 3,715 Net realized gain (loss) on sales of investments 5,054 (12,979) (28) (270,689) (10,219) Distributions from capital gains -- 5,679 11 -- 1,787 Net change in unrealized appreciation or depreciation of investments (9,803) (33,497) (10,395) 51,197 (48,745) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 2,021 (41,396) (10,716) (220,248) (53,462) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 59,931 24,863 6,460 1,206,208 36,908 Net transfers(1) (35,080) 173,726 114,769 (1,302,594) 351,157 Transfers for policy loans (368) -- -- (2,267) 1,814 Contract charges (193) (104) (1) (203) (176) Contract terminations: Surrender benefits (30,646) (16,317) -- (31,231) (24,392) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (6,356) 182,168 121,228 (130,087) 365,311 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 283,986 203,677 9 818,177 275,802 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 279,651 $ 344,449 $ 110,521 $ 467,842 $ 587,651 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 210,936 150,319 10 943,339 200,117 Contract purchase payments 43,076 18,008 7,800 19,129 26,218 Net transfers(1) (26,836) 125,791 122,617 (224,012) 240,159 Transfers for policy loans (269) -- -- (2,630) 1,188 Contract charges (139) (77) (1) (265) (125) Contract terminations: Surrender benefits (22,149) (12,248) -- (41,285) (17,903) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 204,619 281,793 130,426 694,276 449,654 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 3ID 3FS 3TC 3TL 3GT OPERATIONS Investment income (loss) -- net $ (139) $ 7 $ (186) $ (2) $ (379) Net realized gain (loss) on sales of investments (14) (25) (32,625) -- (23,331) Distributions from capital gains -- 9 -- -- -- Net change in unrealized appreciation or depreciation of investments (2,097) (350) (112) 91 (11,973) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (2,250) (359) (32,923) 89 (35,683) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 7,045 1,250 34,154 1,231 10,002 Net transfers(1) 91,059 2,062 -- -- 35,017 Transfers for policy loans -- -- -- -- -- Contract charges (7) (5) (1) (1) (175) Contract terminations: Surrender benefits -- (98) -- -- (9,400) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 98,097 3,209 34,153 1,230 35,444 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 1,258 10 10 10 86,122 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 97,105 $ 2,860 $ 1,240 $ 1,329 $ 85,883 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 1,309 10 11 11 201,887 Contract purchase payments 9,639 1,468 2,566 3,217 29,325 Net transfers(1) 138,249 2,142 -- -- 140,499 Transfers for policy loans -- -- -- -- -- Contract charges (11) (5) (1) (1) (581) Contract terminations: Surrender benefits -- (131) -- -- (28,457) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 149,186 3,484 2,576 3,227 342,673 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 26 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 3IG 3IP 3MG 3MD 3UT OPERATIONS Investment income (loss) -- net $ (831) $ (16) $ (2,685) $ (2,109) $ 1,974 Net realized gain (loss) on sales of investments 107,725 59,276 (84,627) (71,467) (221) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (3,394) 5,085 (84,925) (89,005) (30,610) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 103,500 64,345 (172,237) (162,581) (28,857) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 64,604 40,891 31,554 40,282 903 Net transfers(1) (116,626) 122,639 (96,311) (10,435) -- Transfers for policy loans (698) 368 1,990 -- -- Contract charges (157) (66) (233) (145) (141) Contract terminations: Surrender benefits (26,273) (1,772) (89) (64,533) (93) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (79,150) 162,060 (63,089) (34,831) 669 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 369,605 184,363 617,667 494,612 123,407 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 393,955 $ 410,768 $ 382,341 $ 297,200 $ 95,219 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 605,897 253,393 913,438 547,539 138,296 Contract purchase payments 129,941 61,088 49,936 52,444 1,235 Net transfers(1) 187,163 323,069 (180,943) (27,085) -- Transfers for policy loans (1,437) 553 3,200 -- -- Contract charges (305) (97) (439) (220) (213) Contract terminations: Surrender benefits (46,596) (2,404) (148) (87,608) (157) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 874,663 635,602 785,044 485,070 139,161 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 3PE 3EU 3HS 3PI 3VS OPERATIONS Investment income (loss) -- net $ 1,577 $ (35) $ (633) $ 261 $ (3,636) Net realized gain (loss) on sales of investments 8,723 17,453 (90) (15,784) (376,548) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (2,218) (1) (26,477) 5,176 116,409 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 8,082 17,417 (27,200) (10,347) (263,775) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 8,209 3,396 13,448 21,629 27,894 Net transfers(1) 126,013 (17,713) 375 280,228 (291,386) Transfers for policy loans -- -- -- -- (3,812) Contract charges (1) (1) (164) (1) (303) Contract terminations: Surrender benefits -- (3,084) (106) (96) (93,099) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 134,221 (17,402) 13,553 301,760 (360,706) ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 9 9 126,387 402,161 934,611 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 142,312 $ 24 $ 112,740 $ 693,574 $ 310,130 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 10 10 128,607 418,356 1,092,048 Contract purchase payments 28,692 3,675 16,064 22,774 37,817 Net transfers(1) 145,967 -- 475 440,166 (478,596) Transfers for policy loans -- -- -- -- (4,546) Contract charges (1) (1) (201) (1) (447) Contract terminations: Surrender benefits -- (3,653) (137) (134) (121,288) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 174,668 31 144,808 881,161 524,988 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 27 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 3SO 3IT 3SP 3AA 3WI OPERATIONS Investment income (loss) -- net $ 210 $ (4,886) $ (5,004) $ 186 $ (161) Net realized gain (loss) on sales of investments (181) (114,517) (30,188) (60) 12,471 Distributions from capital gains 4,627 -- -- 85 -- Net change in unrealized appreciation or depreciation of investments (46,961) 61,802 (152,303) (1,912) (692) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (42,305) (57,601) (187,495) (1,701) 11,618 =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 42,580 51,418 68,244 14,318 1,046 Net transfers(1) 92,086 491,742 34,504 3,900 86,708 Transfers for policy loans -- (5,505) (3,199) -- -- Contract charges (156) (350) (319) (5) (7) Contract terminations: Surrender benefits (82) (51,547) (51,246) -- (9) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 134,428 485,758 47,984 18,213 87,738 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 134,428 654,220 958,142 7,876 455 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 226,551 $ 1,082,377 $ 818,631 $ 24,388 $ 99,811 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 135,509 768,839 819,784 8,116 506 Contract purchase payments 51,413 65,599 62,318 16,350 1,283 Net transfers(1) 127,770 713,258 11,404 4,532 142,645 Transfers for policy loans -- (6,332) (2,805) -- -- Contract charges (213) (434) (293) (6) (9) Contract terminations: Surrender benefits (130) (57,050) (43,710) -- (10) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 314,349 1,483,880 846,698 28,992 144,415 ===================================================================================================================================
See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 28 STATEMENT OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNT ------------ YEAR ENDED DECEMBER 31, 2002 (CONTINUED) 3SG OPERATIONS Investment income (loss) -- net $ (56) Net realized gain (loss) on sales of investments (10,135) Distributions from capital gains -- Net change in unrealized appreciation or depreciation of investments 35 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (10,156) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 1,195 Net transfers(1) 10,055 Transfers for policy loans 369 Contract charges (33) Contract terminations: Surrender benefits (9) ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 11,577 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 2,047 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 3,468 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 2,169 Contract purchase payments 1,631 Net transfers(1) 1,664 Transfers for policy loans 572 Contract charges (42) Contract terminations: Surrender benefits (10) ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 5,984 ===================================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 29 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2001 BC3 BD3 CR3 CM3 DE3 OPERATIONS Investment income (loss) -- net $ 784 $ 34,948 $ (727) $ 232,236 $ 1,754 Net realized gain (loss) on sale of investments (98,973) 9,785 (155,527) (180) 15,880 Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments 8,389 (5,986) 77,338 (9) (3,401) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (89,800) 38,747 (78,916) 232,047 14,233 =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 12,629 102,774 7,965 12,532,302 23,747 Net transfers(1) 264,035 578,387 46,804 (4,219,613) 193,867 Transfers for policy loans -- -- -- (3,472) -- Contract charges (97) (18) (67) (422) (76) Contract terminations: Surrender benefits (36,893) (33,915) (3,000) (9,369,308) (163,632) Death benefits -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 239,674 647,228 51,702 (1,060,513) 53,906 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 447,370 435,921 249,515 7,047,238 219,745 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 597,244 $ 1,121,896 $ 222,301 $ 6,218,772 $ 287,884 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 453,558 409,536 266,218 6,615,282 218,167 Contract purchase payments 15,353 93,465 9,392 11,574,554 24,242 Net transfers(1) 303,239 511,400 19,648 (3,894,708) 198,574 Transfers for policy loans -- -- -- (3,192) -- Contract charges (113) (16) (82) (385) (77) Contract terminations: Surrender benefits (43,062) (29,839) (3,969) (8,633,475) (159,457) Death benefits -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 728,975 984,546 291,207 5,658,076 281,449 ===================================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 30 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) EM3 ES3(1) EI3 FI3 GB3 OPERATIONS Investment income (loss) -- net $ (19,606) $ (7,461) $ 151,488 $ 13,713 $ 3,420 Net realized gain (loss) on sale of investments (310,796) (47,771) (222,323) 5,365 6,523 Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments 257,738 85,247 124,421 (1,551) (3,993) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (72,664) 30,015 53,586 17,527 5,950 =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 9 2,001,788 28,149 47,030 4,415 Net transfers(2) 1,302 30,841 318,431 623,192 243,869 Transfers for policy loans -- -- -- (8,413) -- Contract charges -- -- (81) -- (6) Contract terminations: Surrender benefits -- -- (6,983) -- -- Death benefits -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 1,311 2,032,629 339,516 661,809 248,278 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 3,745,755 -- 1,082,352 1,015 4,209 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 3,674,402 $ 2,062,644 $ 1,475,454 $ 680,351 $ 258,437 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 1,252 -- 1,185,569 934 4,092 Contract purchase payments 14 1,930 30,373 41,646 4,248 Net transfers(2) 2,003 35,746 340,788 556,291 241,119 Transfers for policy loans -- -- -- (7,343) -- Contract charges -- -- (85) -- (6) Contract terminations: Surrender benefits -- -- (7,408) -- -- Death benefits -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 3,269 37,676 1,549,237 591,528 249,453 ===================================================================================================================================
(1) For the period May 1, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 31 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2001 (CONTINUED) GR3 IE3 MF3 ND3 SV3(1) OPERATIONS Investment income (loss) -- net $ (6,112) $ 2,231 $ 5,143 $ (11,509) $ (9,094) Net realized gain (loss) on sale of investments (626,041) 273,137 (34,787) (1,421,391) 9,538 Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments 96,024 15,747 18,304 616,580 305,354 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (536,129) 291,115 (11,340) (816,320) 305,798 =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 87,097 8,016 164,766 223,803 4,012,515 Net transfers(2) (341,843) (320,543) (18,863) (456,464) 399,076 Transfers for policy loans 383 -- -- 521 -- Contract charges (391) (43) (36) (708) -- Contract terminations: Surrender benefits (32,568) (11,447) (9,000) (270,298) -- Death benefits -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (287,322) (324,017) 136,867 (503,146) 4,411,591 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 1,650,456 76,699 152,830 4,220,683 -- ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 827,005 $ 43,797 $ 278,357 $ 2,901,217 $ 4,717,389 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 1,761,529 80,621 144,523 3,919,497 -- Contract purchase payments 115,884 11,347 162,392 240,350 12,780 Net transfers(2) (539,778) (12,152) (1,215) (608,454) 398,224 Transfers for policy loans 552 -- -- 588 -- Contract charges (553) (55) (36) (777) -- Contract terminations: Surrender benefits (52,214) (14,573) (9,678) (298,876) -- Death benefits -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 1,285,420 65,188 295,986 3,252,328 411,004 ===================================================================================================================================
(1) For the period Aug. 14, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 32 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) IV3 SC3 ST3(1) SA3 3AC(1) OPERATIONS Investment income (loss) -- net $ (131) $ (2,670) $ 1,698 $ (2,764) $ (6) Net realized gain (loss) on sale of investments (1,765,553) (30,350) (305) (670,328) -- Distributions from capital gains -- -- -- -- 479 Net change in unrealized appreciation or depreciation of investments 893,596 7,734 (101,857) 336,284 (13) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (872,088) (25,286) (100,464) (336,808) 460 =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 2,851 15,918 1,999,998 48,432 275 Net transfers(2) 433,418 223,978 -- (181,643) 5,221 Transfers for policy loans -- 64 -- 457 -- Contract charges (8) (73) -- (370) -- Contract terminations: Surrender benefits (8,248,026) (138,514) -- (10,151) -- Death benefits (3,318) -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (7,815,083) 101,373 1,999,998 (143,275) 5,496 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 9,292,900 332,052 -- 974,493 -- ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 605,729 $ 408,139 $ 1,899,534 $ 494,410 $ 5,956 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 285,103 286,198 -- 798,425 -- Contract purchase payments 3,071 15,253 -- 55,944 291 Net transfers(2) 513,204 205,147 -- (236,405) 5,804 Transfers for policy loans -- 64 -- 539 -- Contract charges (10) (74) -- (405) -- Contract terminations: Surrender benefits (26,869) (128,147) -- (11,050) -- Death benefits (4,292) -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 770,207 378,441 -- 607,048 6,095 ===================================================================================================================================
(1) For the period Aug. 13, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 33 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) 3AD(1) 3AB(1) 3AL(1) 3AI(1) 3AV(1) OPERATIONS Investment income (loss) -- net $ (3) $ (65) $ (90) $ (1) $ (116) Net realized gain (loss) on sale of investments -- 2 3,162 -- 4,300 Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments 240 5,410 (1,307) 51 2,477 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 237 5,347 1,765 50 6,661 =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 578 9 129,654 1,185 141,399 Net transfers(2) 2,341 200,000 -- -- 2,880 Transfers for policy loans -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits -- -- -- -- -- Death benefits -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 2,919 200,009 129,654 1,185 144,279 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 3,156 $ 205,356 $ 131,419 $ 1,235 $ 150,940 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- -- -- Contract purchase payments 622 10 136,127 1,324 142,560 Net transfers(2) 2,589 209,961 -- -- 3,013 Transfers for policy loans -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits -- -- -- -- -- Death benefits -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 3,211 209,971 136,127 1,324 145,573 ===================================================================================================================================
(1) For the period Aug. 13, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 34 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) 3SR 3CG(1) 3FG(1) 3FM(1) 3FO(1) OPERATIONS Investment income (loss) -- net $ 198 $ -- $ (31) $ (41) $ (5) Net realized gain (loss) on sale of investments (122) -- -- 1 -- Distributions from capital gains 104 -- -- -- -- Net change in unrealized appreciation or depreciation of investments (308) -- 1,212 2,901 99 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (128) -- 1,181 2,861 94 =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 830 9 1,186 9,152 6,618 Net transfers(2) 340 -- 130,012 125,000 -- Transfers for policy loans -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (122) -- -- -- -- Death benefits -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 1,048 9 131,198 134,152 6,618 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 4,718 -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 5,638 $ 9 $ 132,379 $ 137,013 $ 6,712 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 4,896 -- -- -- -- Contract purchase payments 876 10 1,277 9,244 7,097 Net transfers(2) 693 -- 131,185 122,429 -- Transfers for policy loans -- -- -- -- -- Contract charges -- -- -- -- -- Contract terminations: Surrender benefits (137) -- -- -- -- Death benefits -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 6,328 10 132,462 131,673 7,097 ===================================================================================================================================
(1) For the period Aug. 13, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 35 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) 3RE 3SI 3MS(1) 3UE 3MC OPERATIONS Investment income (loss) -- net $ 6,928 $ (167) $ -- $ (127) $ 1,658 Net realized gain (loss) on sale of investments 20,183 (8,415) -- (23,375) (3,466) Distributions from capital gains -- 2,370 -- -- 12,617 Net change in unrealized appreciation or depreciation of investments 2,232 6,700 -- (64,516) (676) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 29,343 488 -- (88,018) 10,133 =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 8,238 33,993 9 29,985 81,997 Net transfers(2) 68,584 164,697 -- 328,864 227,145 Transfers for policy loans -- -- -- (53) (4,996) Contract charges (72) (20) -- (200) (83) Contract terminations: Surrender benefits (1,253) (6,564) -- (24,224) (56,438) Death benefits (6,040) -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 69,457 192,106 9 334,372 247,625 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 185,186 11,083 -- 571,823 18,044 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 283,986 $ 203,677 $ 9 $ 818,177 $ 275,802 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 147,540 9,257 -- 577,230 14,593 Contract purchase payments 6,495 25,689 10 32,330 65,228 Net transfers(2) 62,644 120,960 -- 362,668 167,062 Transfers for policy loans -- -- -- (60) (3,853) Contract charges (55) (15) -- (224) (65) Contract terminations: Surrender benefits (1,036) (5,572) -- (28,605) (42,848) Death benefits (4,652) -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 210,936 150,319 10 943,339 200,117 ===================================================================================================================================
(1) For the period Aug. 13, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 36 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) 3ID(1) 3FS(1) 3TC(1) 3TL(1) 3GT OPERATIONS Investment income (loss) -- net $ (1) $ -- $ -- $ -- $ 211 Net realized gain (loss) on sale of investments -- -- -- -- (161,454) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments 164 1 1 1 55,614 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 163 1 1 1 (105,629) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 1,095 9 9 9 20,612 Net transfers(2) -- -- -- -- 40,583 Transfers for policy loans -- -- -- -- -- Contract charges -- -- -- -- (227) Contract terminations: Surrender benefits -- -- -- -- (81,420) Death benefits -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 1,095 9 9 9 (20,452) ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- -- 212,203 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 1,258 $ 10 $ 10 $ 10 $ 86,122 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- -- 309,990 Contract purchase payments 1,309 10 11 11 40,841 Net transfers(2) -- -- -- -- 40,845 Transfers for policy loans -- -- -- -- -- Contract charges -- -- -- -- (508) Contract terminations: Surrender benefits -- -- -- -- (189,281) Death benefits -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 1,309 10 11 11 201,887 ===================================================================================================================================
(1) For the period Aug. 13, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 37 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) 3IG 3IP 3MG 3MD 3UT(1) OPERATIONS Investment income (loss) -- net $ (111) $ (713) $ (2,289) $ (2,118) $ (81) Net realized gain (loss) on sale of investments (47,101) (11,802) (107,641) (34,274) (2,782) Distributions from capital gains -- 953 3,682 11,262 -- Net change in unrealized appreciation or depreciation of investments (6,034) (9,460) (25,399) 12,810 1,545 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (53,246) (21,022) (131,647) (12,320) (1,318) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 61,719 5,085 141,372 49,174 124,725 Net transfers(2) (46,691) 148,913 125,534 127,146 -- Transfers for policy loans -- 64 (16) -- -- Contract charges (93) (74) (72) (98) -- Contract terminations: Surrender benefits (37,148) (3,464) (123) (6,910) -- Death benefits -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (22,213) 150,524 266,695 169,312 124,725 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 445,064 54,861 482,619 337,620 -- ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 369,605 $ 184,363 $ 617,667 $ 494,612 $ 123,407 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 555,627 56,924 532,539 352,144 -- Contract purchase payments 74,737 6,709 208,754 56,265 138,296 Net transfers(2) 35,872 193,586 172,490 147,288 -- Transfers for policy loans -- 89 (23) -- -- Contract charges (150) (92) (104) (115) -- Contract terminations: Surrender benefits (60,189) (3,823) (218) (8,043) -- Death benefits -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 605,897 253,393 913,438 547,539 138,296 ===================================================================================================================================
(1) For the period Aug. 13, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 38 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) 3PE(1) 3EU(1) 3HS(1) 3PI(1) 3VS OPERATIONS Investment income (loss) -- net $ -- $ -- $ (84) $ (127) $ (6,355) Net realized gain (loss) on sale of investments -- -- 3,560 1 (438,325) Distributions from capital gains -- -- -- -- 163,984 Net change in unrealized appreciation or depreciation of investments -- -- (2,371) 2,278 (303,292) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations -- -- 1,105 2,152 (583,988) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 9 9 125,282 9 99,376 Net transfers(2) -- -- -- 400,000 (271,807) Transfers for policy loans -- -- -- -- 383 Contract charges -- -- -- -- (338) Contract terminations: Surrender benefits -- -- -- -- (30,701) Death benefits -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 9 9 125,282 400,009 (203,087) ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- -- -- -- 1,721,686 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 9 $ 9 $ 126,387 $ 402,161 $ 934,611 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- -- -- -- 1,330,395 Contract purchase payments 10 10 128,607 10 100,690 Net transfers(2) -- -- -- 418,346 (306,017) Transfers for policy loans -- -- -- -- 424 Contract charges -- -- -- -- (380) Contract terminations: Surrender benefits -- -- -- -- (33,064) Death benefits -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 10 10 128,607 418,356 1,092,048 ===================================================================================================================================
(1) For the period Aug. 13, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 39 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) 3SO(1) 3IT 3SP 3AA(2) 3WI(2) OPERATIONS Investment income (loss) -- net $ 415 $ (3,283) $ (4,873) $ 58 $ (41) Net realized gain (loss) on sale of investments 8,142 (272,864) 36,829 (339) (297) Distributions from capital gains 20,545 177,936 -- 210 -- Net change in unrealized appreciation or depreciation of investments (21,828) (26,983) 83,242 (398) (6) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 7,274 (125,194) 115,198 (469) (344) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 127,154 120,217 56,138 409 269 Net transfers(3) -- 23,742 (230,847) 7,936 535 Transfers for policy loans -- (799) -- -- -- Contract charges -- (382) (202) -- (5) Contract terminations: Surrender benefits -- (13,798) (23,788) -- -- Death benefits -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 127,154 128,980 (198,699) 8,345 799 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- 650,434 1,041,643 -- -- ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 134,428 $ 654,220 $ 958,142 $ 7,876 $ 455 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- 599,215 990,217 -- -- Contract purchase payments 135,509 132,754 50,060 425 270 Net transfers(3) -- 52,731 (198,497) 7,691 242 Transfers for policy loans -- (1,130) -- -- -- Contract charges -- (415) (186) -- (6) Contract terminations: Surrender benefits -- (14,316) (21,810) -- -- Death benefits -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 135,509 768,839 819,784 8,116 506 ===================================================================================================================================
(1) For the period Aug. 13, 2001 (commencement of operations) to Dec. 31, 2001. (2) For the period May 1, 2001 (commencement of operations) to Dec. 31, 2001. (3) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 40 STATEMENT OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNT ------------ PERIOD ENDED DECEMBER 31, 2001 (CONTINUED) 3SG(1) OPERATIONS Investment income (loss) -- net $ (7) Net realized gain (loss) on sale of investments (89) Distributions from capital gains -- Net change in unrealized appreciation or depreciation of investments (19) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (115) =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 79 Net transfers(2) 2,025 Transfers for policy loans 64 Contract charges (6) Contract terminations: Surrender benefits -- Death benefits -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 2,162 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 2,047 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- Contract purchase payments 87 Net transfers(2) 2,016 Transfers for policy loans 75 Contract charges (9) Contract terminations: Surrender benefits -- Death benefits -- ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 2,169 ===================================================================================================================================
(1) For the period May 1, 2001 (commencement of operations) to Dec. 31, 2001. (2) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. See accompanying notes to financial statements. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 41 NOTES TO FINANCIAL STATEMENTS 1. ORGANIZATION IDS Life Variable Account 10 (the Account) was established under Minnesota law as a segregated asset account of IDS Life Insurance Company (IDS Life). The Account is registered as a unit investment trust under the Investment Company Act of 1940, as amended (the 1940 Act) and exists in accordance with the rules and regulations of the Insurance Division, Department of Commerce of the State of Minnesota. The Account is comprised of various subaccounts. Each subaccount invests exclusively in shares of the following funds or portfolios (collectively, the Funds), which are registered under the 1940 Act as open-end management investment companies. The subaccounts' investments in shares of the Funds as of Dec. 31, 2002 were as follows:
SUBACCOUNT INVESTS EXCLUSIVELY IN SHARES OF SHARES --------------------------------------------------------------------------------------------------------- BC3 AXP(R) Variable Portfolio - Blue Chip Advantage Fund 31,489 BD3 AXP(R) Variable Portfolio - Bond Fund(1) 85,745 CR3 AXP(R) Variable Portfolio - Capital Resource Fund 7,710 CM3 AXP(R) Variable Portfolio - Cash Management Fund 3,242,428 DE3 AXP(R) Variable Portfolio - Diversified Equity Income Fund 129,555 EM3 AXP(R) Variable Portfolio - Emerging Markets Fund 520,679 ES3 AXP(R) Variable Portfolio - Equity Select Fund 230,734 EI3 AXP(R) Variable Portfolio - Extra Income Fund(2) 495,438 FI3 AXP(R) Variable Portfolio - Federal Income Fund(3) 145,639 GB3 AXP(R) Variable Portfolio - Global Bond Fund 28,372 GR3 AXP(R) Variable Portfolio - Growth Fund 104,652 IE3 AXP(R) Variable Portfolio - International Fund 40,886 MF3 AXP(R) Variable Portfolio - Managed Fund 8,170 ND3 AXP(R) Variable Portfolio - NEW DIMENSIONS FUND(R) 138,996 SV3 AXP(R) Variable Portfolio - Partners Small Cap Value Fund 461,676 IV3 AXP(R) Variable Portfolio - S&P 500 Index Fund 90,522 SC3 AXP(R) Variable Portfolio - Small Cap Advantage Fund 40,242 ST3 AXP(R) Variable Portfolio - Stock Fund 200,312 SA3 AXP(R) Variable Portfolio - Strategy Aggressive Fund 37,453 3AC AIM V.I. Capital Appreciation Fund, Series II Shares 166 3AD AIM V.I. Capital Development Fund, Series II Shares 14,762 3AB AllianceBernstein VP International Value Portfolio (Class B) 59,747 3AL AllianceBernstein VP Growth and Income Portfolio (Class B) 14,018 3AI American Century(R) VP International, Class II 35,975 3AV American Century(R) VP Value, Class II 71,079 3SR Calvert Variable Series, Inc. Social Balanced Portfolio 4,157 3CG Evergreen VA Capital Growth Fund - Class 2 3,000 3FG Fidelity(R) VIP Growth & Income Portfolio Service Class 2 17,960 3FM Fidelity(R) VIP Mid Cap Portfolio Service Class 2 17,424 3FO Fidelity(R) VIP Overseas Portfolio Service Class 2 22,259 3RE FTVIPT Franklin Real Estate Fund - Class 2 15,640 3SI FTVIPT Franklin Small Cap Value Securities Fund - Class 2 35,843 3MS FTVIPT Mutual Shares Securities Fund - Class 2 9,195 3UE Goldman Sachs VIT CORE(SM) U.S. Equity Fund 55,105 3MC Goldman Sachs VIT Mid Cap Value Fund 55,386 3ID INVESCO VIF - Dynamics Fund 11,371 3FS INVESCO VIF - Financial Services Fund 272 3TC INVESCO VIF - Technology Fund 152 3TL INVESCO VIF - Telecommunications Fund 485 3GT Janus Aspen Series Global Technology Portfolio: Service Shares 35,636 3IG Janus Aspen Series International Growth Portfolio: Service Shares 22,931 3IP Lazard Retirement International Equity Portfolio 50,650 3MG MFS(R) Investors Growth Stock Series - Service Class 54,698 3MD MFS(R) New Discovery Series - Service Class 28,632 3UT MFS(R) Utilities Series - Service Class 7,948 3PE Pioneer Equity Income VCT Portfolio - Class II Shares 9,375 3EU Pioneer Europe VCT Portfolio - Class II Shares 4 3HS Putnam VT Health Sciences Fund - Class IB Shares 12,097 3PI Putnam VT International Equity Fund - Class IB Shares 68,671 (previously Putnam VT International Growth Fund - Class IB Shares) 3VS Putnam VT Vista Fund - Class IB Shares 39,407 3SO Strong Opportunity Fund II - Advisor Class 16,417 3IT Wanger International Small Cap 81,566
IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 42
SUBACCOUNT INVESTS EXCLUSIVELY IN SHARES OF SHARES --------------------------------------------------------------------------------------------------------- 3SP Wanger U.S. Smaller Companies 44,226 3AA Wells Fargo VT Asset Allocation Fund 2,343 3WI Wells Fargo VT International Equity Fund 17,298 3SG Wells Fargo VT Small Cap Growth Fund 715
(1) Effective June 27, 2003, AXP(R) Variable Portfolio - Bond Fund will change its name to AXP(R) Variable Portfolio - Diversified Bond Fund. (2) Effective June 27, 2003, AXP(R) Variable Portfolio - Extra Income Fund will change its name to AXP(R) Variable Portfolio - High Yield Bond Fund. (3) Effective June 27, 2003, AXP(R) Variable Portfolio - Federal Income Fund will change its name to AXP(R) Variable Portfolio - Short Term U.S. Government Fund. The assets of each subaccount of the Account are not chargeable with liabilities arising out of the business conducted by any other segregated asset account or by IDS Life. IDS Life serves as issuer of the contract. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES INVESTMENTS IN THE FUNDS Investments in shares of the Funds are stated at market value which is the net asset value per share as determined by the respective Funds. Investment transactions are accounted for on the date the shares are purchased and sold. Realized gains and losses on the sales of investments are computed using the average cost method. Income from dividends and gains from realized capital gain distributions are reinvested in additional shares of the Funds and are recorded as income by the subaccounts on the ex-dividend date. Unrealized appreciation or depreciation of investments in the accompanying financial statements represents the subaccounts' share of the Funds' undistributed net investment income, undistributed realized gain or loss and the unrealized appreciation or depreciation on their investment securities. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of increase and decrease in net assets from operations during the period. Actual results could differ from those estimates. VARIABLE PAYOUT Net assets allocated to contracts in the payout period are periodically compared to a computation which uses the Annuity 2000 Basic Mortality Table and which assumes future mortality improvement. The assumed investment return is 5% unless the annuitant elects otherwise, in which case the rate would be 3.5%, as regulated by the laws of the respective states. The mortality risk is fully borne by IDS Life and may result in additional amounts being transferred into the variable annuity account by IDS Life to cover greater longevity of annuitants than expected. Conversely, if amounts allocated exceed amounts required, transfers may be made to the insurance company. FEDERAL INCOME TAXES IDS Life is taxed as a life insurance company. The Account is treated as part of IDS Life for federal income tax purposes. Under existing federal income tax law, no income taxes are payable with respect to any investment income of the Account to the extent the earnings are credited under the contracts. Based on this, no charge is being made currently to the Account for federal income taxes. The Company will review periodically the status of this policy in the event of changes in the tax law. A charge may be made in future years for any federal income taxes that would be attributable to the contracts. 3. VARIABLE ACCOUNT EXPENSES IDS Life makes contractual assurances to the Account that possible future adverse changes in administrative expenses and mortality experience of the contract owners and annuitants will not affect the Account. IDS Life deducts a daily mortality and expense risk fee equal, on an annual basis, to 0.55% of the average daily net assets of each subaccount. 4. CONTRACT CHARGES IDS Life deducts a contract administrative charge of $30 per year. This charge reimburses IDS Life for expenses incurred in establishing and maintaining the annuity records. Certain products may waive this charge based upon the underlying contract value. An optional maximum anniversary value death benefit rider, enhanced earnings death benefit rider and enhanced earnings plus death benefit rider are available on certain products and if selected, the related fees are deducted annually from the contract value on the contract anniversary. Additional information can be found in the applicable product's prospectus. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 43 5. RELATED PARTY TRANSACTIONS Management fees were paid indirectly to IDS Life, in its capacity as investment manager for the American Express(R) Variable Portfolio Funds. The Fund's Investment Management Services Agreement provides for a fee at a percentage of each Fund's average daily net assets in reducing percentages, to give effect to breakpoints in fees due to assets under management within each Fund as follows:
FUND PERCENTAGE RANGE ----------------------------------------------------------------------------------------------------------- AXP(R) Variable Portfolio - Blue Chip Advantage Fund 0.560% to 0.470% AXP(R) Variable Portfolio - Bond Fund 0.610% to 0.535% AXP(R) Variable Portfolio - Capital Resource Fund 0.630% to 0.570% AXP(R) Variable Portfolio - Cash Management Fund 0.510% to 0.440% AXP(R) Variable Portfolio - Diversified Equity Income Fund 0.560% to 0.470% AXP(R) Variable Portfolio - Emerging Markets Fund 1.170% to 1.095% AXP(R) Variable Portfolio - Equity Select Fund 0.650% to 0.560% AXP(R) Variable Portfolio - Extra Income Fund 0.620% to 0.545% AXP(R) Variable Portfolio - Federal Income Fund 0.610% to 0.535% AXP(R) Variable Portfolio - Global Bond Fund 0.840% to 0.780% AXP(R) Variable Portfolio - Growth Fund 0.630% to 0.570% AXP(R) Variable Portfolio - International Fund 0.870% to 0.795% AXP(R) Variable Portfolio - Managed Fund 0.630% to 0.550% AXP(R) Variable Portfolio - NEW DIMENSIONS FUND(R) 0.630% to 0.570% AXP(R) Variable Portfolio - Partners Small Cap Value Fund 1.020% to 0.920% AXP(R) Variable Portfolio - S&P 500 Index Fund 0.290% to 0.260% AXP(R) Variable Portfolio - Small Cap Advantage Fund 0.790% to 0.650% AXP(R) Variable Portfolio - Stock Fund 0.560% to 0.470% AXP(R) Variable Portfolio - Strategy Aggressive Fund 0.650% to 0.575% -----------------------------------------------------------------------------------------------------------
For the following Funds the fee may be adjusted upward or downward by a performance incentive adjustment. The adjustment is based on a comparison of the performance of each Fund to an index of similar funds up to a maximum percentage of each Fund's average daily net assets. Effective Dec. 1, 2002, the performance incentive adjustment was added to some of the funds and the maximum changed for others.
MAXIMUM MAXIMUM ADJUSTMENT ADJUSTMENT FUND (PRIOR TO DEC. 1, 2002) (AFTER DEC. 1, 2002) ------------------------------------------------------------------------------------------------------------------ AXP(R) Variable Portfolio - Blue Chip Advantage Fund 0.08% 0.12% AXP(R) Variable Portfolio - Capital Resource Fund N/A 0.12% AXP(R) Variable Portfolio - Diversified Equity Income Fund 0.08% 0.12% AXP(R) Variable Portfolio - Emerging Markets Fund 0.12% 0.12% AXP(R) Variable Portfolio - Equity Select Fund 0.12% 0.12% AXP(R) Variable Portfolio - Growth Fund 0.12% 0.12% AXP(R) Variable Portfolio - International Fund N/A 0.12% AXP(R) Variable Portfolio - Managed Fund N/A 0.08% AXP(R) Variable Portfolio - NEW DIMENSIONS FUND(R) N/A 0.12% AXP(R) Variable Portfolio - Partners Small Cap Value Fund 0.12% 0.12% AXP(R) Variable Portfolio - Small Cap Advantage Fund 0.12% 0.12% AXP(R) Variable Portfolio - Stock Fund 0.08% 0.12% AXP(R) Variable Portfolio - Strategy Aggressive Fund N/A 0.12% ------------------------------------------------------------------------------------------------------------------
IDS Life, in turn, paid to American Express Financial Corporation (AEFC) a portion of these management fees based on a percentage of each Fund's average daily net assets for the year. This fee was equal to 0.35% for AXP(R) Variable Portfolio - International Fund and AXP(R) Variable Portfolio - S&P 500 Index Fund and 0.25% for each remaining Fund. The American Express(R) Variable Portfolio Funds also have an agreement with IDS Life for distribution services. Under a Plan and Agreement of Distribution, each Fund pays a distribution fee at an annual rate up to 0.125% of each Fund's average daily net assets. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 44 The American Express(R) Variable Portfolio Funds have an Administrative Services Agreement with AEFC. Under this agreement, each Fund pays AEFC a fee for administration and accounting services at a percentage of each Fund's average daily net assets in reducing percentages annually as follows:
FUND PERCENTAGE RANGE ----------------------------------------------------------------------------------------------------------- AXP(R) Variable Portfolio - Blue Chip Advantage Fund 0.040% to 0.020% AXP(R) Variable Portfolio - Bond Fund 0.050% to 0.025% AXP(R) Variable Portfolio - Capital Resource Fund 0.050% to 0.030% AXP(R) Variable Portfolio - Cash Management Fund 0.030% to 0.020% AXP(R) Variable Portfolio - Diversified Equity Income Fund 0.040% to 0.020% AXP(R) Variable Portfolio - Emerging Markets Fund 0.100% to 0.050% AXP(R) Variable Portfolio - Equity Select Fund 0.060% to 0.030% AXP(R) Variable Portfolio - Extra Income Fund 0.050% to 0.025% AXP(R) Variable Portfolio - Federal Income Fund 0.050% to 0.025% AXP(R) Variable Portfolio - Global Bond Fund 0.060% to 0.040% AXP(R) Variable Portfolio - Growth Fund 0.050% to 0.030% AXP(R) Variable Portfolio - International Fund 0.060% to 0.035% AXP(R) Variable Portfolio - Managed Fund 0.040% to 0.020% AXP(R) Variable Portfolio - NEW DIMENSIONS FUND(R) 0.050% to 0.030% AXP(R) Variable Portfolio - Partners Small Cap Value Fund 0.080% to 0.055% AXP(R) Variable Portfolio - S&P 500 Index Fund 0.080% to 0.065% AXP(R) Variable Portfolio - Small Cap Advantage Fund 0.060% to 0.035% AXP(R) Variable Portfolio - Stock Fund 0.040% to 0.020% AXP(R) Variable Portfolio - Strategy Aggressive Fund 0.060% to 0.035% -----------------------------------------------------------------------------------------------------------
The American Express(R) Variable Portfolio Funds pay custodian fees to American Express Trust Company, an affiliate of IDS Life. 7. INVESTMENT TRANSACTIONS The subaccounts' purchases of Funds' shares, including reinvestment of dividend distributions, for the year ended Dec. 31, 2002 were as follows:
SUBACCOUNT INVESTMENT PURCHASES --------------------------------------------------------------------------------------------------------- BC3 AXP(R) Variable Portfolio - Blue Chip Advantage Fund $ 89,985 BD3 AXP(R) Variable Portfolio - Bond Fund 7,199,863 CR3 AXP(R) Variable Portfolio - Capital Resource Fund 3,398,293 CM3 AXP(R) Variable Portfolio - Cash Management Fund 198,962,427 DE3 AXP(R) Variable Portfolio - Diversified Equity Income Fund 15,484,879 EM3 AXP(R) Variable Portfolio - Emerging Markets Fund 696,615 ES3 AXP(R) Variable Portfolio - Equity Select Fund 879,049 EI3 AXP(R) Variable Portfolio - Extra Income Fund 34,261,705 FI3 AXP(R) Variable Portfolio - Federal Income Fund 1,860,431 GB3 AXP(R) Variable Portfolio - Global Bond Fund 2,840,667 GR3 AXP(R) Variable Portfolio - Growth Fund 907,952 IE3 AXP(R) Variable Portfolio - International Fund 86,358,205 MF3 AXP(R) Variable Portfolio - Managed Fund 242,570 ND3 AXP(R) Variable Portfolio - NEW DIMENSIONS FUND(R) 4,991,795 SV3 AXP(R) Variable Portfolio - Partners Small Cap Value Fund 244,298 IV3 AXP(R) Variable Portfolio - S&P 500 Index Fund 480,530 SC3 AXP(R) Variable Portfolio - Small Cap Advantage Fund 476,235 ST3 AXP(R) Variable Portfolio - Stock Fund 9,491 SA3 AXP(R) Variable Portfolio - Strategy Aggressive Fund 12,022,872 3AC AIM V.I. Capital Appreciation Fund, Series II Shares 10,830 3AD AIM V.I. Capital Development Fund, Series II Shares 153,518 3AB AllianceBernstein VP International Value Portfolio (Class B) 2,679,208 3AL AllianceBernstein VP Growth and Income Portfolio (Class B) 258,764 3AI American Century(R) VP International, Class II 6,833,710 3AV American Century(R) VP Value, Class II 338,649 3SR Calvert Variable Series, Inc. Social Balanced Portfolio 2,224 3CG Evergreen VA Capital Growth Fund - Class 2 33,548 3FG Fidelity(R) VIP Growth & Income Portfolio Service Class 2 91,771 3FM Fidelity(R) VIP Mid Cap Portfolio Service Class 2 186,581 3FO Fidelity(R) VIP Overseas Portfolio Service Class 2 6,199,944 3RE FTVIPT Franklin Real Estate Fund - Class 2 201,003 3SI FTVIPT Franklin Small Cap Value Securities Fund - Class 2 273,932 3MS FTVIPT Mutual Shares Securities Fund - Class 2 121,227 3UE Goldman Sachs VIT CORE(SM) U.S. Equity Fund 1,426,906 ---------------------------------------------------------------------------------------------------------
IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 45
SUBACCOUNT INVESTMENT PURCHASES --------------------------------------------------------------------------------------------------------- 3MC Goldman Sachs VIT Mid Cap Value Fund $ 505,615 3ID INVESCO VIF - Dynamics Fund 98,103 3FS INVESCO VIF - Financial Services Fund 3,337 3TC INVESCO VIF - Technology Fund 1,166,594 3TL INVESCO VIF - Telecommunications Fund 1,229 3GT Janus Aspen Series Global Technology Portfolio: Service Shares 72,177 3IG Janus Aspen Series International Growth Portfolio: Service Shares 12,929,131 3IP Lazard Retirement International Equity Portfolio 8,849,255 3MG MFS(R) Investors Growth Stock Series - Service Class 213,542 3MD MFS(R) New Discovery Series - Service Class 258,351 3UT MFS(R) Utilities Series - Service Class 3,415 3PE Pioneer Equity Income VCT Portfolio - Class II Shares 1,326,539 3EU Pioneer Europe VCT Portfolio - Class II Shares 1,377,982 3HS Putnam VT Health Sciences Fund - Class IB Shares 13,471 3PI Putnam VT International Equity Fund - Class IB Shares 8,826,393 (previously Putnam VT International Growth Fund - Class IB Shares) 3VS Putnam VT Vista Fund - Class IB Shares 60,986 3SO Strong Opportunity Fund II - Advisor Class 139,835 3IT Wanger International Small Cap 12,666,000 3SP Wanger U.S. Smaller Companies 992,553 3AA Wells Fargo VT Asset Allocation Fund 18,933 3WI Wells Fargo VT International Equity Fund 3,233,042 3SG Wells Fargo VT Small Cap Growth Fund 142,467
8. FINANCIAL HIGHLIGHTS The table below shows certain financial information regarding the subaccounts.
BC3 BD3 CR3 CM3 DE3 ------------------------------------------------------------ ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 0.99 $ 1.06 $ 0.94 $ 1.07 $ 1.01 At Dec. 31, 2001 $ 0.82 $ 1.14 $ 0.76 $ 1.10 $ 1.02 At Dec. 31, 2002 $ 0.63 $ 1.20 $ 0.59 $ 1.11 $ 0.82 --------------------------------------------------------------------------------------------------- UNITS (000s) At Dec. 31, 2001 729 985 291 5,658 281 At Dec. 31, 2002 314 762 202 3,911 1,262 --------------------------------------------------------------------------------------------------- NET ASSETS (000s) At Dec. 31, 2001 $ 597 $ 1,122 $ 222 $ 6,219 $ 288 At Dec. 31, 2002 $ 198 $ 911 $ 120 $ 4,325 $ 1,040 --------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 0.70% 6.32% 0.27% 3.60% 0.98% For the year ended Dec. 31, 2002 0.73% 5.17% 0.42% 1.15% 2.07% --------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.55% 0.55% 0.55% 0.55% 0.55% For the year ended Dec. 31, 2002 0.55% 0.55% 0.55% 0.55% 0.55% --------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (17.17%) 7.55% (19.15%) 2.80% 0.99% For the year ended Dec. 31, 2002 (23.17%) 5.26% (22.37%) 0.91% (19.61%) --------------------------------------------------------------------------------------------------- EM3 ES3(4) EI3 FI3 GB3 ------------------------------------------------------------ ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 0.75 -- $ 0.91 $ 1.09 $ 1.03 At Dec. 31, 2001 $ 0.73 $ 1.01 $ 0.95 $ 1.15 $ 1.04 At Dec. 31, 2002 $ 0.69 $ 0.87 $ 0.89 $ 1.21 $ 1.18 --------------------------------------------------------------------------------------------------- UNITS (000s) At Dec. 31, 2001 3 38 1,549 592 249 At Dec. 31, 2002 277 328 1,480 1,275 251 --------------------------------------------------------------------------------------------------- NET ASSETS (000s) At Dec. 31, 2001 $ 3,674 $ 2,063 $ 1,475 $ 680 $ 258 At Dec. 31, 2002 $ 3,645 $ 2,021 $ 1,311 $ 1,543 $ 298 --------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 0.02% -- 10.89% 4.22% 4.82% For the year ended Dec. 31, 2002 -- -- 7.43% 2.92% 4.95% --------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.55% 0.55% 0.55% 0.55% 0.55% For the year ended Dec. 31, 2002 0.55% 0.55% 0.55% 0.55% 0.55% --------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (2.67%) 1.00% 4.40% 5.50% 0.97% For the year ended Dec. 31, 2002 (5.48%) (13.86%) (6.32%) 5.22% 13.46% ---------------------------------------------------------------------------------------------------
IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 46
GR3 IE3 MF3 ND3 SV3(5) ------------------------------------------------------------ ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 0.94 $ 0.95 $ 1.06 $ 1.08 -- At Dec. 31, 2001 $ 0.64 $ 0.67 $ 0.94 $ 0.89 $ 1.07 At Dec. 31, 2002 $ 0.47 $ 0.55 $ 0.81 $ 0.69 $ 0.93 --------------------------------------------------------------------------------------------------- UNITS (000s) At Dec. 31, 2001 1,285 65 296 3,252 411 At Dec. 31, 2002 1,064 488 120 3,029 627 --------------------------------------------------------------------------------------------------- NET ASSETS (000s) At Dec. 31, 2001 $ 827 $ 44 $ 278 $ 2,901 $ 4,717 At Dec. 31, 2002 $ 503 $ 267 $ 98 $ 2,099 $ 4,324 --------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- 1.60% 2.50% 0.21% -- For the year ended Dec. 31, 2002 0.06% 0.75% 2.54% 0.51% 0.11% --------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.55% 0.55% 0.55% 0.55% 0.55% For the year ended Dec. 31, 2002 0.55% 0.55% 0.55% 0.55% 0.55% --------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (31.91%) (29.47%) (11.32%) (17.59%) 7.00% For the year ended Dec. 31, 2002 (26.56%) (17.91%) (13.83%) (22.47%) (13.08%) --------------------------------------------------------------------------------------------------- IV3 SC3 ST3(6) SA3 3AC(6) ------------------------------------------------------------ ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 0.90 $ 1.16 -- $ 1.22 -- At Dec. 31, 2001 $ 0.79 $ 1.08 $ 0.95 $ 0.81 $ 0.98 At Dec. 31, 2002 $ 0.61 $ 0.89 $ 0.75 $ 0.55 $ 0.73 --------------------------------------------------------------------------------------------------- UNITS (000s) At Dec. 31, 2001 770 378 -- 607 6 At Dec. 31, 2002 973 393 -- 386 4 --------------------------------------------------------------------------------------------------- NET ASSETS (000s) At Dec. 31, 2001 $ 606 $ 408 $ 1,900 $ 494 $ 6 At Dec. 31, 2002 $ 591 $ 349 $ 1,494 $ 213 $ 3 --------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 0.55% -- 0.13% 0.19% -- For the year ended Dec. 31, 2002 0.96% -- 0.56% -- -- --------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.55% 0.55% 0.55% 0.55% 0.55% For the year ended Dec. 31, 2002 0.55% 0.55% 0.55% 0.55% 0.55% --------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (12.22%) (6.90%) (5.00%) (33.61%) (2.00%) For the year ended Dec. 31, 2002 (22.78%) (17.59%) (21.05%) (32.10%) (25.51%) ---------------------------------------------------------------------------------------------------
3AD(6) 3AB(6) 3AL(6) 3AI(6) 3AV(6) ------------------------------------------------------------ ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- -- At Dec. 31, 2001 $ 0.98 $ 0.98 $ 0.97 $ 0.93 $ 1.04 At Dec. 31, 2002 $ 0.77 $ 0.92 $ 0.75 $ 0.74 $ 0.90 --------------------------------------------------------------------------------------------------- UNITS (000s) At Dec. 31, 2001 3 210 136 1 146 At Dec. 31, 2002 180 606 310 254 483 --------------------------------------------------------------------------------------------------- NET ASSETS (000s) At Dec. 31, 2001 $ 3 $ 205 $ 131 $ 1 $ 151 At Dec. 31, 2002 $ 138 $ 557 $ 231 $ 187 $ 434 --------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 -- 0.09% 0.49% 1.07% 0.45% --------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.55% 0.55% 0.55% 0.55% 0.55% For the year ended Dec. 31, 2002 0.55% 0.55% 0.55% 0.55% 0.55% --------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (2.00%) (2.00%) (3.00%) (7.00%) 4.00% For the year ended Dec. 31, 2002 (21.43%) (6.12%) (22.68%) (20.43%) (13.46%) --------------------------------------------------------------------------------------------------- 3SR 3CG(6) 3FG(6) 3FM(6) 3FO(6) ------------------------------------------------------------ ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 0.96 -- -- -- -- At Dec. 31, 2001 $ 0.89 $ 0.95 $ 1.00 $ 1.04 $ 0.95 At Dec. 31, 2002 $ 0.78 $ 0.73 $ 0.83 $ 0.93 $ 0.75 --------------------------------------------------------------------------------------------------- UNITS (000s) At Dec. 31, 2001 6 -- 132 132 7 At Dec. 31, 2002 8 44 233 325 324 --------------------------------------------------------------------------------------------------- NET ASSETS (000s) At Dec. 31, 2001 $ 6 -- $ 132 $ 137 $ 7 At Dec. 31, 2002 $ 6 $ 32 $ 193 $ 303 $ 243 --------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 7.75% -- -- -- -- For the year ended Dec. 31, 2002 3.04% -- 1.13% 0.66% 0.04% --------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.55% 0.55% 0.55% 0.55% 0.55% For the year ended Dec. 31, 2002 0.55% 0.55% 0.55% 0.55% 0.55% --------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (7.29%) (5.00%) 0.00% 4.00% (5.00%) For the year ended Dec. 31, 2002 (12.36%) (23.16%) (17.00%) (10.58%) (21.05%) ---------------------------------------------------------------------------------------------------
IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 47
3RE 3SI 3MS(6) 3UE 3MC ------------------------------------------------------------ ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 1.26 $ 1.20 -- $ 0.99 $ 1.24 At Dec. 31, 2001 $ 1.35 $ 1.35 $ 0.97 $ 0.87 $ 1.38 At Dec. 31, 2002 $ 1.37 $ 1.22 $ 0.85 $ 0.67 $ 1.31 --------------------------------------------------------------------------------------------------- UNITS (000s) At Dec. 31, 2001 211 150 -- 943 200 At Dec. 31, 2002 205 282 130 694 450 --------------------------------------------------------------------------------------------------- NET ASSETS (000s) At Dec. 31, 2001 $ 284 $ 204 -- $ 818 $ 276 At Dec. 31, 2002 $ 280 $ 344 $ 111 $ 468 $ 588 --------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 3.55% 0.39% -- 0.53% 1.73% For the year ended Dec. 31, 2002 2.77% 0.32% 0.01% 0.43% 1.40% --------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.55% 0.55% 0.55% 0.55% 0.55% For the year ended Dec. 31, 2002 0.55% 0.55% 0.55% 0.55% 0.55% --------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 7.14% 12.50% (3.00%) (12.12%) 11.29% For the year ended Dec. 31, 2002 1.48% (9.63%) (12.37%) (22.99%) (5.07%) --------------------------------------------------------------------------------------------------- 3ID(6) 3FS(6) 3TC(6) 3TL(6) 3GT ------------------------------------------------------------ ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- $ 0.68 At Dec. 31, 2001 $ 0.96 $ 0.97 $ 0.91 $ 0.84 $ 0.43 At Dec. 31, 2002 $ 0.65 $ 0.82 $ 0.48 $ 0.41 $ 0.25 --------------------------------------------------------------------------------------------------- UNITS (000s) At Dec. 31, 2001 1 -- -- -- 202 At Dec. 31, 2002 149 3 3 3 343 --------------------------------------------------------------------------------------------------- NET ASSETS (000s) At Dec. 31, 2001 $ 1 -- -- -- $ 86 At Dec. 31, 2002 $ 97 $ 3 $ 1 $ 1 $ 86 --------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- 0.65% For the year ended Dec. 31, 2002 -- 0.88% -- -- -- --------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.55% 0.55% 0.55% 0.55% 0.55% For the year ended Dec. 31, 2002 0.55% 0.55% 0.55% 0.55% 0.55% --------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (4.00%) (3.00%) (9.00%) (16.00%) (36.76%) For the year ended Dec. 31, 2002 (32.29%) (15.46%) (47.25%) (51.19%) (41.86%) ---------------------------------------------------------------------------------------------------
3IG 3IP 3MG 3MD 3UT(6) ------------------------------------------------------------ ACCUMULATION UNIT VALUE At Dec. 31, 2000 $ 0.80 $ 0.96 $ 0.91 $ 0.96 -- At Dec. 31, 2001 $ 0.61 $ 0.73 $ 0.68 $ 0.90 $ 0.89 At Dec. 31, 2002 $ 0.45 $ 0.65 $ 0.49 $ 0.61 $ 0.68 --------------------------------------------------------------------------------------------------- UNITS (000s) At Dec. 31, 2001 606 253 913 548 138 At Dec. 31, 2002 875 636 785 485 139 --------------------------------------------------------------------------------------------------- NET ASSETS (000s) At Dec. 31, 2001 $ 370 $ 184 $ 618 $ 495 $ 123 At Dec. 31, 2002 $ 394 $ 411 $ 382 $ 297 $ 95 --------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 0.52% 0.01% 0.06% -- -- For the year ended Dec. 31, 2002 0.37% 0.54% -- -- 2.50% --------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.55% 0.55% 0.55% 0.55% 0.55% For the year ended Dec. 31, 2002 0.55% 0.55% 0.55% 0.55% 0.55% --------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (23.75%) (23.96%) (25.27%) (6.25%) (11.00%) For the year ended Dec. 31, 2002 (26.23%) (10.96%) (27.94%) (32.22%) (23.60%) --------------------------------------------------------------------------------------------------- 3PE(6) 3EU(6) 3HS(6) 3PI(6) 3VS ------------------------------------------------------------ ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- -- -- -- $ 1.29 At Dec. 31, 2001 $ 0.98 $ 0.98 $ 0.98 $ 0.96 $ 0.86 At Dec. 31, 2002 $ 0.81 $ 0.79 $ 0.78 $ 0.79 $ 0.59 --------------------------------------------------------------------------------------------------- UNITS (000s) At Dec. 31, 2001 -- -- 129 418 1 ,092 At Dec. 31, 2002 175 -- 145 881 525 --------------------------------------------------------------------------------------------------- NET ASSETS (000s) At Dec. 31, 2001 -- -- $ 126 $ 402 $ 935 At Dec. 31, 2002 $ 142 -- $ 113 $ 694 $ 310 --------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 -- -- -- -- -- For the year ended Dec. 31, 2002 2.93% -- -- 0.59% -- --------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.55% 0.55% 0.55% 0.55% 0.55% For the year ended Dec. 31, 2002 0.55% 0.55% 0.55% 0.55% 0.55% --------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (2.00%) (2.00%) (2.00%) (4.00%) (33.33%) For the year ended Dec. 31, 2002 (17.35%) (19.39%) (20.41%) (17.71%) (31.40%) ---------------------------------------------------------------------------------------------------
IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 48
3SO(6) 3IT 3SP 3AA(4) 3WI(4) 3SG(4) ------------------------------------------------------------------------- ACCUMULATION UNIT VALUE At Dec. 31, 2000 -- $ 1.09 $ 1.05 -- -- -- At Dec. 31, 2001 $ 0.99 $ 0.85 $ 1.17 $ 0.97 $ 0.90 $ 0.94 At Dec. 31, 2002 $ 0.72 $ 0.73 $ 0.96 $ 0.84 $ 0.69 $ 0.58 ---------------------------------------------------------------------------------------------------------------- UNITS (000s) At Dec. 31, 2001 136 769 820 8 1 2 At Dec. 31, 2002 314 1,484 847 29 144 6 ---------------------------------------------------------------------------------------------------------------- NET ASSETS (000s) At Dec. 31, 2001 $ 134 $ 654 $ 958 $ 8 -- $ 2 At Dec. 31, 2002 $ 227 $ 1,082 $ 819 $ 24 $ 100 $ 3 ---------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME RATIO(1) For the year ended Dec. 31, 2001 0.47% -- 0.07% 0.71% -- -- For the year ended Dec. 31, 2002 0.69% -- -- 2.15% 0.02% -- ---------------------------------------------------------------------------------------------------------------- EXPENSE RATIO(2) For the year ended Dec. 31, 2001 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% For the year ended Dec. 31, 2002 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% ---------------------------------------------------------------------------------------------------------------- TOTAL RETURN(3) For the year ended Dec. 31, 2001 (1.00%) (22.02%) 11.43% (3.00%) (10.00%) (6.00%) For the year ended Dec. 31, 2002 (27.27%) (14.12%) (17.95%) (13.40%) (23.33%) (38.30%) ----------------------------------------------------------------------------------------------------------------
(1) These amounts represent the dividends, excluding distributions of capital gains, received by the subaccount from the underlying mutual fund, net of management fees assessed by the fund manager, divided by the average net assets. These ratios exclude variable account expenses that result in direct reductions in the unit values. The recognition of investment income by the subaccount is affected by the timing of the declaration of dividends by the underlying fund in which the subaccounts invest. (2) These ratios represent the annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying fund are excluded. (3) These amounts represent the total return for the periods indicated, including changes in the value of the underlying fund, and reflect deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units; inclusion of these expenses in the calculation would result in a reduction in the total return presented. Investment options with a date notation indicate the effective date of that investment option in the variable account. The total return is calculated for the period indicated or from the effective date through the end of the reporting period. (4) Operations commenced on May 1, 2001. (5) Operations commenced on Aug. 14, 2001. (6) Operations commenced on Aug. 13, 2001. IDS LIFE VARIABLE ACCOUNT 10 -- AMERICAN EXPRESS RETIREMENT ADVISOR ADVANTAGE(R) VARIABLE ANNUITY - BAND 3 49 IDS Life Insurance Company ------------------------------------------------------------------------------- REPORT OF INDEPENDENT AUDITORS THE BOARD OF DIRECTORS IDS LIFE INSURANCE COMPANY We have audited the accompanying consolidated balance sheets of IDS Life Insurance Company (a wholly-owned subsidiary of American Express Financial Corporation) as of December 31, 2002 and 2001, and the related consolidated statements of income, stockholder's equity and cash flows for each of the three years in the period ended December 31, 2002. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. 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 consolidated financial position of IDS Life Insurance Company at December 31, 2002 and 2001, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States. ERNST & YOUNG LLP January 27, 2003 Minneapolis, Minnesota IDS Life Insurance Company -------------------------------------------------------------------------------
Consolidated Balance Sheets December 31, (In thousands, except share amounts) 2002 2001 Assets Investments: Available-for-sale: Fixed maturities, at fair value (amortized cost: 2002, $23,209,226; 2001, $20,022,072) $24,052,104 $20,157,137 Common stocks, at fair value (cost: 2002, $19; 2001, $805) 21 1,704 Mortgage loans on real estate 3,417,651 3,680,394 Policy loans 597,144 619,571 Other investments 752,558 621,897 ------- ------- Total investments 28,819,478 25,080,703 Cash and cash equivalents 4,424,061 1,150,251 Amounts recoverable from reinsurers 633,510 529,166 Amounts due from brokers 501 90,794 Other accounts receivable 56,245 46,349 Accrued investment income 296,595 278,199 Deferred policy acquisition costs 3,309,783 3,107,187 Deferred income taxes, net -- 156,308 Other assets 117,788 123,246 Separate account assets 21,980,674 27,333,697 ---------- ---------- Total assets $59,638,635 $57,895,900 =========== =========== Liabilities and stockholder's equity Liabilities: Future policy benefits: Fixed annuities $23,411,314 $19,592,273 Universal life-type insurance 3,515,010 3,433,904 Traditional life insurance 247,441 241,165 Disability income and long-term care insurance 1,466,171 1,227,172 Policy claims and other policyholders' funds 85,400 71,879 Amounts due to brokers 3,342,989 1,740,031 Deferred income taxes, net 182,059 -- Other liabilities 463,326 437,017 Separate account liabilities 21,980,674 27,333,697 ---------- ---------- Total liabilities 54,694,384 54,077,138 ---------- ---------- Commitments and contingencies Stockholder's equity: Capital stock, $30 par value per share; 100,000 shares authorized, issued and outstanding 3,000 3,000 Additional paid-in capital 1,088,327 688,327 Accumulated other comprehensive income, net of tax: Net unrealized securities gains 497,319 83,443 Net unrealized derivative gains (losses) 764 1,332 --- ----- Total accumulated other comprehensive income 498,083 84,775 Retained earnings 3,354,841 3,042,660 --------- --------- Total stockholder's equity 4,944,251 3,818,762 --------- --------- Total liabilities and stockholder's equity $59,638,635 $57,895,900 =========== ===========
See accompanying notes to consolidated financial statements. IDS Life Insurance Company -------------------------------------------------------------------------------
Consolidated Statements of Income Years ended December 31, (In thousands) 2002 2001 2000 Revenues Premiums: Traditional life insurance $ 67,978 $ 59,415 $ 56,187 Disability income and long-term care insurance 273,737 255,428 231,311 ------- ------- ------- Total premiums 341,715 314,843 287,498 Net investment income 1,561,856 1,485,688 1,730,605 Policyholder and contractholder charges 522,777 489,583 438,127 Management and other fees 404,787 473,406 598,168 Net realized loss on investments (4,507) (649,752) (16,975) ------ -------- ------- Total revenues 2,826,628 2,113,768 3,037,423 --------- --------- --------- Benefits and expenses Death and other benefits: Traditional life insurance 36,881 35,519 29,042 Universal life-type insurance and investment contracts 221,544 175,247 131,467 Disability income and long-term care insurance 52,962 44,725 40,246 Increase in liabilities for future policy benefits: Traditional life insurance 2,768 7,231 5,765 Disability income and long-term care insurance 134,605 123,227 113,239 Interest credited on universal life-type insurance and investment contracts 1,157,636 1,137,636 1,169,641 Amortization of deferred policy acquisition costs 312,402 371,342 362,106 Other insurance and operating expenses 437,823 407,798 378,653 ------- ------- ------- Total benefits and expenses 2,356,621 2,302,725 2,230,159 --------- --------- --------- Income (loss) before income tax expense (benefit) and cumulative effect of accounting change 470,007 (188,957) 807,264 Income tax expense (benefit) 87,826 (145,222) 221,627 ------ -------- ------- Income (loss) before cumulative effect of accounting change 382,181 (43,735) 585,637 Cumulative effect of accounting change (net of income tax benefit of $11,532) -- (21,416) -- ---------- ---------- ---------- Net income (loss) $ 382,181 $ (65,151) $ 585,637 ========== ========== ==========
See accompanying notes to consolidated financial statements. IDS Life Insurance Company -------------------------------------------------------------------------------
Consolidated Statements of Stockholder's Equity Accumulated other Additional comprehensive Total Capital paid-in income (loss), Retained stockholder's For the three years ended December 31, 2002 (In thousands) stock capital net of tax earnings equity Balance, January 1, 2000 $3,000 $ 288,327 $(411,230) $2,932,174 $2,812,271 Comprehensive income: Net income -- -- -- 585,637 585,637 Net unrealized holding gains on available-for-sale securities arising during the year, net of deferred policy acquisition costs of ($5,154) and income tax expense of ($46,921) -- -- 87,138 -- 87,138 Reclassification adjustment for gains included in net income, net of income tax expense of $5,192 -- -- (9,642) -- (9,642) ------ ----------- --------- ---------- ---------- Other comprehensive income -- -- 77,496 -- 77,496 ------ ----------- --------- ---------- ---------- Comprehensive income -- -- -- -- 663,133 Cash dividends -- -- -- (410,000) (410,000) ------ ----------- --------- ---------- ---------- Balance, December 31, 2000 3,000 288,327 (333,734) 3,107,811 3,065,404 Comprehensive income: Net loss -- -- -- (65,151) (65,151) Cumulative effect of adopting SFAS No. 133, net of income tax benefit of $626 -- -- (1,162) -- (1,162) Net unrealized holding losses on available-for-sale securities arising during the year, net of deferred policy acquisition costs of ($20,191) and income tax benefit of $6,064 -- -- (11,262) -- (11,262) Reclassification adjustment for losses on available-for-sale securities included in net loss, net of income tax benefit of $228,003 -- -- 423,434 -- 423,434 Reclassification adjustment for losses on derivatives included in net loss, net of income tax benefit of $4,038 -- -- 7,499 -- 7,499 ------ ----------- --------- ---------- ---------- Other comprehensive income -- -- 418,509 -- 418,509 ------ ----------- --------- ---------- ---------- Comprehensive income -- -- -- -- 353,358 Capital contribution -- 400,000 -- -- 400,000 ------ ----------- --------- ---------- ---------- Balance, December 31, 2001 3,000 688,327 84,775 3,042,660 3,818,762 Comprehensive income: Net income -- -- -- 382,181 382,181 Net unrealized holding gains on available-for-sale securities arising during the year, net of deferred policy acquisition costs of ($75,351) and income tax expense of ($228,502) -- -- 424,360 -- 424,360 Reclassification adjustment for gains on available-for-sale securities included in net income, net of income tax expense of $5,645 -- -- (10,484) -- (10,484) Reclassification adjustment for gains on derivatives included in net income, net of income tax expense of $305 -- -- (568) -- (568) ------ ----------- --------- ---------- ---------- Other comprehensive income -- -- 413,308 -- 413,308 ------ ----------- --------- ---------- ---------- Comprehensive income -- -- -- -- 795,489 Cash dividends -- -- -- (70,000) (70,000) Capital contribution -- 400,000 -- -- 400,000 ------ ----------- --------- ---------- ---------- Balance, December 31, 2002 $3,000 $1,088,327 $ 498,083 $3,354,841 $4,944,251 ====== ========== ========= ========== ==========
See accompanying notes to consolidated financial statements. IDS Life Insurance Company -------------------------------------------------------------------------------
Consolidated Statements of Cash Flows Years ended December 31, (In thousands) 2002 2001 2000 Cash flows from operating activities Net income (loss) $ 382,181 $ (65,151) $ 585,637 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Cumulative effect of accounting change, net of tax -- 21,416 -- Policy loans, excluding universal life-type insurance: Issuance (35,345) (43,687) (61,313) Repayment 49,256 54,004 56,088 Change in amounts recoverable from reinsurers (104,344) (112,686) (89,312) Change in other accounts receivable (9,896) (4,025) 6,254 Change in accrued investment income (5,139) 56,729 8,521 Change in deferred policy acquisition costs, net (277,947) (175,723) (291,634) Change in liabilities for future policy benefits for traditional life, disability income and long-term care insurance 245,275 223,177 206,377 Change in policy claims and other policyholder's funds 13,521 19,812 27,467 Deferred income tax provision (benefit) 116,995 (246,205) 37,704 Change in other liabilities 26,309 (24,509) (120,256) Amortization of premium, net 65,869 108,958 37,909 Net realized loss on investments 4,507 649,752 16,975 Policyholder and contractholder charges, non-cash (232,725) (217,496) (151,745) Other, net 13,820 (83,023) (9,279) ------- ------- ------- Net cash provided by operating activities 252,337 161,343 259,393 ------- ------- ------- Cash flows from investing activities Held-to-maturity securities: Purchases -- -- (4,487) Maturities, sinking fund payments and calls -- -- 589,742 Sales -- -- 50,067 Available-for-sale securities: Purchases (16,287,891) (9,477,740) (1,454,010) Maturities, sinking fund payments and calls 3,078,509 2,706,147 1,019,403 Sales 10,093,228 5,493,141 1,237,116 Other investments, excluding policy loans: Purchases (543,843) (442,876) (706,082) Sales 509,588 370,636 435,633 Change in amounts due from brokers 90,293 (75,492) (15,157) Change in amounts due to brokers 1,602,958 1,293,684 298,236 --------- --------- ------- Net cash (used in) provided by investing activities (1,457,158) (132,500) 1,450,461 ---------- -------- --------- Cash flows from financing activities Activities related to universal life-type insurance and investment contracts: Considerations received 4,638,111 2,088,114 1,842,026 Surrenders and other benefits (1,655,631) (2,810,401) (3,974,966) Interest credited to account balances 1,157,636 1,137,636 1,169,641 Universal life-type insurance policy loans: Issuance (80,831) (83,720) (134,107) Repayment 89,346 72,805 82,193 Capital contribution 400,000 400,000 -- Dividends paid (70,000) -- (410,000) --------- ------- ---------- Net cash provided by (used in) financing activities 4,478,631 804,434 (1,425,213) --------- ------- ---------- Net increase in cash and cash equivalents 3,273,810 833,277 284,641 Cash and cash equivalents at beginning of year 1,150,251 316,974 32,333 --------- ------- ---------- Cash and cash equivalents at end of year $ 4,424,061 $ 1,150,251 $ 316,974 ============ =========== =========== Supplemental disclosures: Income taxes paid $ -- $ -- $ 225,704 Interest on borrowings 7,906 23,688 3,299 --------- ------- ----------
See accompanying notes to consolidated financial statements. IDS Life Insurance Company ------------------------------------------------------------------------------- Notes to Consolidated Financial Statements (In thousands) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of business IDS Life Insurance Company (the Company) is a stock life insurance company organized under the laws of the State of Minnesota whose products are primarily distributed through branded financial advisors. The Company is a wholly-owned subsidiary of American Express Financial Corporation (AEFC), which is a wholly-owned subsidiary of American Express Company. The Company serves residents of all states except New York. IDS Life Insurance Company of New York is a wholly-owned subsidiary of the Company and serves New York State residents. The Company also wholly-owns American Enterprise Life Insurance Company, which issues fixed and variable annuity contracts for sale through insurance agencies and broker-dealers who may also be associated with financial institutions, such as banks. American Centurion Life Assurance Company is a wholly-owned subsidiary that offers fixed and variable annuities to American Express(R) Cardmembers and others in New York and through insurance agencies and broker-dealers who may also be associated with financial institutions, such as banks, in New York. American Partners Life Insurance Company is a wholly-owned subsidiary that offers fixed and variable annuities to American Express(R) Cardmembers and others who reside in states other than New York. The Company also wholly-owns IDS REO 1, LLC and American Express Corporation. These subsidiaries hold real estate, mortgage loans on real estate and/or affordable housing investments. The Company's principal products are deferred annuities and universal life insurance which are issued primarily to individuals. It offers single premium and flexible premium deferred annuities on both a fixed and variable dollar basis. Immediate annuities are offered as well. The Company's fixed deferred annuities guarantee a relatively low annual interest rate during the accumulation period (the time before annuity payments begin). However, the Company has the option of paying a higher rate set at its discretion. In addition, persons owning one type of annuity may have their interest calculated based on any increase in a broad-based stock market index. The Company also offers variable annuities, including the American Express Retirement Advisor Advantage(R) Variable Annuity and the American Express Retirement Advisor Select(R) Variable Annuity. Life insurance products currently offered by the Company include universal life (fixed and variable, single life and joint life), single premium life and term products. Waiver of premium and accidental death benefit riders are generally available with these life insurance products. The Company also markets disability income insurance. Although the Company discontinued marketing proprietary long-term care insurance at the end of 2002, long-term care insurance is available through a non-proprietary product distributed by an affiliate. Under the Company's variable life insurance and variable annuity products described above, the purchaser may choose among investment options that include the Company's "general account" as well as from a variety of portfolios including common stocks, bonds, managed assets and/or short- term securities. Basis of presentation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States which vary in certain respects from reporting practices prescribed or permitted by state insurance regulatory authorities (see Note 4). Certain prior year amounts have been reclassified to conform to the current year's presentation. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenue recognition Profits on fixed deferred annuities are the excess of contractholder charges and investment income earned from investment of contract considerations over interest credited to contract values, amortization of deferred acquisition costs, and other expenses. Profits on variable deferred annuities also include the excess of management and other fees over the costs of guaranteed benefits provided. Policyholder and contractholder charges include policy fees and surrender charges. Management and other fees include investment management fees from underlying proprietary mutual funds, certain fee revenues from underlying nonproprietary mutual funds and mortality and expense risk fees from the variable annuity separate accounts. IDS Life Insurance Company ------------------------------------------------------------------------------- Profits on fixed universal life insurance are the excess of contractholder charges and investment income earned from investment of contract considerations over interest credited to contract values, death and other benefits paid in excess of contract values, amortization of deferred acquisition costs, and other expenses. Profits on variable universal life insurance also include management and other fees. Policyholder and contractholder charges include the monthly cost of insurance charges, issue and administrative fees and surrender charges. These charges also include the minimum death benefit guarantee fees received from the variable life insurance separate accounts. Management and other fees include investment management fees from underlying proprietary mutual funds, certain fee revenues from underlying nonproprietary mutual funds and mortality and expense risk fees from the variable life insurance separate accounts. Premiums on traditional life, disability income and long-term care insurance policies are recognized as revenue when due, and related benefits and expenses are associated with premium revenue in a manner that results in recognition of profits over the lives of the insurance policies. This association is accomplished by means of the provision for future policy benefits and the deferral and subsequent amortization of policy acquisition costs. Investments -- Fixed maturity and equity securities All fixed maturity securities and marketable equity securities are classified as available-for-sale and carried at fair value. Unrealized gains and losses on securities classified as available-for-sale are carried as a separate component of accumulated other comprehensive income (loss), net of the related deferred policy acquisition costs and income taxes. Gains and losses are recognized in the results of operations upon disposition of the securities using the specific identification method. In addition, losses are also recognized when management determines that a decline in a security's fair value is other-than-temporary, which requires judgment regarding the amount and timing of recovery. Indicators of other-than-temporary impairment for fixed maturity securities include, but are not limited to, issuer downgrade, default, or bankruptcy. The Company also considers the extent to which cost exceeds fair value, the duration of time of that decline, and management's judgment about the issuer's current and prospective financial condition. The charges are reflected in net realized loss on investments within the Consolidated Statements of Income. Fair value of fixed maturity and equity securities is generally based on quoted market prices. However, the Company's investment portfolio also contains structured investments of various asset quality, including collateralized debt obligations (CDOs) and secured loan trusts (backed by high-yield bonds and bank loans), which are not readily marketable. As a result, the carrying values of these structured investments are based on estimated cash flow projections which require a significant degree of management judgment as to default and recovery rates of the underlying investments and, as such, are subject to change. The Company's CDO investments are accounted for in accordance with Emerging Issues Task Force (EITF) Issue 99-20 "Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets." The Company's secured loan trusts are accounted for in accordance with EITF Issue 96-12 "Recognition of Interest Income and Balance Sheet Classification of Structured Notes." Net investment income, which primarily consists of interest earned on fixed maturity securities, is generally accrued as earned using the effective interest method, which makes an adjustment of the yield for security premiums, discounts and anticipated prepayments on mortgage-backed securities. Prepayment estimates are based on information received from brokers who deal in mortgage-backed securities. Investments -- Mortgage loans on real estate Mortgage loans on real estate reflect principal amounts outstanding less reserves for losses. The estimated fair value of the mortgage loans is determined by discounted cash flow analyses using mortgage interest rates currently offered for mortgages of similar maturities. The reserve for losses is measured as the excess of the loan's recorded investment over its present value of expected principal and interest payments discounted at the loan's effective interest rate or the fair value of collateral. Additionally, the level of the reserve for losses considers other factors, including historical experience and current economic and political conditions. Management regularly evaluates the adequacy of the reserve for mortgage loan losses and believes it is adequate to absorb estimated losses in the portfolio. The Company generally stops accruing interest on mortgage loans for which interest payments are delinquent more than three months. Based on management's judgment as to the ultimate collectibility of principal, interest payments received are either recognized as income or applied to the recorded investment in the loan. Investments -- Policy loans Policy loans are carried at the aggregate of the unpaid loan balances, which do not exceed the cash surrender values of the related policies. IDS Life Insurance Company ------------------------------------------------------------------------------- Investments -- Other investments Included in Other investments are affordable housing investments, trading securities, syndicated loans and real estate. Affordable housing investments are carried at amortized cost as the Company has no influence over the operating or financial policies of the general partner. Trading securities are held at fair market value with changes in value recognized in the Consolidated Statements of Income within Net investment income. Syndicated loans reflect principal amounts outstanding less reserves for losses and real estate is carried at its estimated fair value. Cash and cash equivalents The Company considers investments with a maturity at the date of their acquisition of three months or less to be cash equivalents. These securities are carried principally at amortized cost, which approximates fair value. Deferred policy acquisition costs The costs of acquiring new business, including for example, direct sales commissions, related sales incentive bonuses and awards, underwriting costs, policy issue costs and other related costs, have been deferred on the sale of insurance and annuity contracts. The deferred acquisition costs (DAC) for universal life and variable universal life insurance and certain installment annuities are amortized as a percentage of the estimated gross profits expected to be realized on the policies. DAC for other annuities are amortized using the interest method. For traditional life, disability income and long-term care insurance policies, the costs are amortized in proportion to premium revenue. Amortization of DAC requires the use of certain assumptions including interest margins, mortality rates, persistency rates, maintenance expense levels and customer asset value growth rates for variable products. The customer asset value growth rate is the rate at which contract values are assumed to appreciate in the future. This rate is net of asset fees, and anticipates a blend of equity and fixed income investments. Management routinely monitors a wide variety of trends in the business, including comparisons of actual and assumed experience. Management reviews and, where appropriate, adjusts its assumptions with respect to customer asset value growth rates on a quarterly basis. Management monitors other principal DAC assumptions, such as persistency rates, mortality rate, interest margin and maintenance expense level assumptions each quarter. Unless management identifies a material deviation over the course of the quarterly monitoring, management reviews and updates these DAC assumptions annually in the third quarter of each year. When assumptions are changed, the percentage of estimated gross profits or portion of interest margins used to amortize DAC may also change. A change in the required amortization percentage is applied retrospectively; an increase in amortization percentage will result in an acceleration of DAC amortization while a decrease in amortization percentage will result in a deceleration of DAC amortization. The impact on results of operations of changing assumptions with respect to the amortization of DAC can be either positive or negative in any particular period, and is reflected in the period that such changes are made. These adjustments are collectively referred to as unlocking adjustments. Unlocking adjustments resulted in net increases in amortization of $40,000 in 2002 and $33,600 in 2001, with a net decrease in amortization of $12,300 in 2000. Guaranteed minimum death benefits The majority of the variable annuity contracts offered by the Company contain guaranteed minimum death benefit (GMDB) provisions. At time of issue, these contracts typically guarantee that the death benefit payable will not be less than the amount invested, regardless of the performance of the customer's account. Most contracts also provide for some type of periodic adjustment of the guaranteed amount based on the change in value of the contract. A large portion of the Company's contracts containing a GMDB provision adjust once every six years. The periodic adjustment of these contracts can either increase or decrease the guaranteed amount, though not below the amount invested, adjusted for withdrawals. When market values of the customer's accounts decline, the death benefit payable on a contract with a GMDB may exceed the accumulated contract value. Currently, the amount paid in excess of contract value is expensed when payable. Amounts expensed in 2002, 2001 and 2000 were $37,361, $16,202 and $835, respectively. Liabilities for future policy benefits Liabilities for fixed and variable universal life insurance and fixed and variable deferred annuities are accumulation values. Liabilities for equity indexed deferred annuities issued before 1999 are equal to the present value of guaranteed benefits and the intrinsic value of index-based benefits. Liabilities for equity indexed deferred annuities issued in 1999 or later are equal to the accumulation of host contract values covering guaranteed benefits and the market value of embedded equity options. Liabilities for fixed annuities in a benefit status are based on established industry mortality tables and interest rates ranging from 5% to 9.5%, depending on year of issue, with an average rate of approximately 6.5%. IDS Life Insurance Company ------------------------------------------------------------------------------- Liabilities for future benefits on traditional life insurance, principally term and whole life insurance, are based on the net level premium method, using anticipated mortality, policy persistency and interest earning rates. Anticipated mortality rates are based on established industry mortality tables, with modifications based on Company experience. Anticipated policy persistency rates vary by policy form, issue age and policy duration with persistency on level term and cash value plans generally anticipated to be better than persistency on yearly renewable term insurance plans. Anticipated interest rates range from 4% to 10%, depending on policy form, issue year and policy duration. Liabilities for future disability income and long-term care policy benefits include both policy reserves and claim reserves. Policy reserves are based on the net level premium method, using anticipated morbidity, mortality, policy persistency and interest earning rates. Anticipated morbidity and mortality rates are based on established industry morbidity and mortality tables. Anticipated policy persistency rates vary by policy form, issue age, policy duration and, for disability income policies, occupation class. Anticipated interest rates for disability income and long-term care policy reserves are 3% to 9.5% at policy issue and grade to ultimate rates of 5% to 7% over 5 to 10 years. Claim reserves are calculated based on claim continuance tables and anticipated interest earnings. Anticipated claim continuance rates are based on established industry tables. Anticipated interest rates for claim reserves for both disability income and long-term care range from 5% to 8%. Liabilities for reported and unpaid life insurance claims are equal to the death benefits payable. For disability income and long-term care claims, unpaid claims liabilities are equal to benefit amounts due and accrued. Liabilities for incurred but not reported claims are estimated based on periodic analysis of the actual reported claim lag. Where applicable, amounts recoverable from reinsurers are separately recorded as receivables. For life insurance, no claim adjustment expense reserve is held. The claim adjustment expense reserves for disability income and long-term care are based on the claim reserves. The Company does not issue participating insurance contracts and has no short-duration life insurance liabilities. Reinsurance Reinsurance premiums and benefits paid or provided are accounted for on a basis consistent with that used in accounting for original policies issued and with the terms of the reinsurance contracts. The maximum amount of life insurance risk retained by the Company is $750 on any policy insuring a single life and $1,500 on any policy insuring a joint-life combination. The Company generally retains 10% of the mortality risk on new life insurance policies. Risk not retained is reinsured with other life insurance companies. Risk on universal life and variable universal life policies is reinsured on a yearly renewable term basis. Risk on term insurance and long-term care policies is reinsured on a coinsurance basis. The Company retains all accidental death benefit, disability income and waiver of premium risk. Federal income taxes The Company's taxable income is included in the consolidated federal income tax return of American Express Company. The Company provides for income taxes on a separate return basis, except that, under an agreement between AEFC and American Express Company, tax benefit is recognized for losses to the extent they can be used on the consolidated tax return. It is the policy of AEFC and its subsidiaries that AEFC will reimburse subsidiaries for all tax benefits. Separate account business The separate account assets and liabilities represent funds held for the exclusive benefit of the variable annuity and variable life insurance contract owners. The Company receives investment management fees from the proprietary mutual funds used as investment options for variable annuities and variable life insurance. The Company receives mortality and expense risk fees from the separate accounts. The Company makes contractual mortality assurances to the variable annuity contract owners that the net assets of the separate accounts will not be affected by future variations in the actual life expectancy experience of the annuitants and beneficiaries from the mortality assumptions implicit in the annuity contracts. The Company makes periodic fund transfers to, or withdrawals from, the separate account assets for such actuarial adjustments for variable annuities that are in the benefit payment period. The Company also guarantees that the rates at which administrative fees are deducted from contract funds will not exceed contractual maximums. For variable life insurance, the Company guarantees that the rates at which insurance charges and administrative fees are deducted from contract funds will not exceed contractual maximums. The Company also guarantees that the death benefit will continue to be payable at the initial level regardless of investment performance so long as minimum premium payments are made. IDS Life Insurance Company ------------------------------------------------------------------------------- Accounting developments In July 2000, the Financial Accounting Standards Board's (FASB's) Emerging Issues Task Force (EITF) issued a consensus on Issue 99-20, "Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets." The Company adopted the consensus as of January 1, 2001. Issue 99-20 prescribes procedures for recording interest income and measuring impairment on retained and purchased beneficial interests. The consensus primarily affects the Company's CDO investments. Adoption of the consensus required the Company to adjust the carrying amount of these investments downward by $21,416, net of tax, which is reflected as a cumulative effect of accounting change in the Consolidated Statement of Income. Effective January 1, 2001, the Company adopted Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended (SFAS No. 133), which requires an entity to recognize all derivatives as either assets or liabilities on the balance sheet and measure those instruments at fair value. Changes in the fair value of a derivative are recorded in earnings or directly to other comprehensive income, depending on the instrument's designated use. The adoption of SFAS No. 133 resulted in a cumulative after-tax reduction to other comprehensive income of $1,162. The cumulative impact to earnings was not significant. See Note 8 for further discussion of the Company's derivative and hedging activities. SFAS No. 133 also provided a one-time opportunity to reclassify held-to-maturity security investments to available-for-sale without tainting the remaining securities in the held-to-maturity portfolio. The Company elected to take the opportunity in 2001 to reclass all its held-to-maturity investments to available-for-sale. The Company adopted SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities," which superseded SFAS No. 125. The Statement was effective for transfers and servicing of financial assets and extinguishments of liabilities occurring after March 31, 2001. The Statement was effective for recognition and reclassification of collateral and for disclosures relating to securitization transactions and collateral for fiscal years ending after December 15, 2000. The impact on the Company's financial position or results of operations of adopting the Statement was not significant. In January 2003, the FASB issued Interpretation No. 46, "Consolidation of Variable Interest Entities" (FIN 46), which addresses consolidation by business enterprises of variable interest entities (VIEs). The accounting provisions and expanded disclosure requirements for VIEs existing at December 31, 2002, are fully effective for reporting periods beginning after June 15, 2003. An entity shall be subject to consolidation according to the provisions of FIN 46, if, by design, either (i) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support from other parties, or (ii) as a group, the holders of the equity investment at risk lack: (a) direct or indirect ability to make decisions about an entity's activities; (b) the obligation to absorb the expected losses of the entity if they occur; or (c) the right to receive the expected residual return of the entity if they occur. In general, FIN 46 will require a VIE to be consolidated when an enterprise has a variable interest that will absorb a majority of the VIE's expected losses or receive a majority of the VIE's expected residual return. It is likely that the Company will consolidate or disclose information about VIEs when FIN 46 becomes effective in the third quarter of 2003. The entities primarily impacted by FIN 46 relate to structured investments, including CDOs and secured loan trusts (SLTs), which are owned by the Company. The application of FIN 46 for CDOs and SLTs will have no effect on the cash flows of the Company. The CDO entities contain debt issued to investors, which are non-recourse to the Company and are solely supported by portfolios of high-yield bonds and loans. The Company often invests in the residual and rated debt tranches of the CDO structures that are either managed by a related party or a third-party. With regards to those CDOs in which the Company owns a residual tranche and which a related party manages, the portfolios of high-yield bonds and loans have a fair value at December 31, 2002 of approximately $2.0 billion for the benefit of the $2.7 billion in CDO debt investors. Substantially all of the Company's interest in the rated debt tranches along with rated tranches owned by AEFC were placed in a securitization trust described in Note 2. The SLTs provide returns to investors primarily based on the performance of an underlying portfolio of up to $3.3 billion in high-yield loans. Currently, the underlying portfolio consists of $2.9 billion in high-yield loans with a market value of $2.6 billion, which are managed by a related party. While the potential consolidation of these entities may impact the results of operations at adoption and for each reporting period thereafter, the Company's maximum exposure to economic loss as a result of its investment in these entities is represented by the carrying values at December 31, 2002 because any further reduction in the value of the assets will be absorbed by the non-recourse debt or other unrelated entities. The CDO residual tranches have an adjusted cost basis of $13,363 and the SLTs have an adjusted cost basis of $656,565. The Company continues to evaluate other relationships and interests in entities that may be considered VIEs, including affordable housing investments. The impact of adopting FIN 46 on the Consolidated Financial Statements is still being reviewed. IDS Life Insurance Company ------------------------------------------------------------------------------- 2. INVESTMENTS Fixed maturity and equity securities
The following is a summary of securities available-for-sale at December 31, 2002: Gross Gross Amortized unrealized unrealized Fair cost gains losses value Fixed maturities: U.S. Government agency obligations $ 84,075 $ 12,015 $ 687 $ 95,403 State and municipal obligations 29,202 2,522 -- 31,724 Corporate bonds and obligations 9,614,296 611,060 116,345 10,109,011 Mortgage and other asset-backed securities 12,145,797 393,342 10,067 12,529,072 Structured investments 1,306,245 2,112 59,101 1,249,256 Foreign government bonds and obligations 29,611 8,027 -- 37,638 ----------- ---------- -------- ----------- Total fixed maturity securities $23,209,226 $1,029,078 $186,200 $24,052,104 =========== ========== ======== =========== Common stocks $ 19 $ 2 $ -- $ 21 =========== ========== ======== ===========
The amortized cost and fair value of fixed maturity securities at December 31, 2002 by contractual maturity are as follows: Amortized Fair cost value Due within one year $ 768,066 $ 779,833 Due from one to five years 2,740,513 2,887,899 Due from five to ten years 5,865,084 6,165,165 Due in more than ten years 1,689,766 1,690,135 Mortgage and other asset-backed securities 12,145,797 12,529,072 ---------- ---------- Total $23,209,226 $24,052,104 =========== =========== The timing of actual receipts may differ from contractual maturities because issuers may have the right to call or prepay obligations.
The following is a summary of securities available-for-sale at December 31, 2001: Gross Gross Amortized unrealized unrealized Fair cost gains losses value Fixed maturities: U.S. Government agency obligations $ 31,074 $ 2,190 $ 56 $ 33,208 State and municipal obligations 7,826 149 -- 7,975 Corporate bonds and obligations 10,281,693 272,539 113,061 10,441,171 Mortgage and other asset-backed securities 8,292,576 103,109 32,801 8,362,884 Structured investments 1,377,195 3,793 105,304 1,275,684 Foreign government bonds and obligations 31,708 4,507 -- 36,215 ----------- -------- -------- ----------- Total fixed maturity securities $20,022,072 $386,287 $251,222 $20,157,137 ----------- -------- -------- ----------- Common stocks $ 805 $ 899 $ -- $ 1,704 =========== ======== ========= ===========
Pursuant to the adoption of SFAS No. 133 the Company reclassified all held-to-maturity securities with a carrying value of $6,463,613 and net unrealized gains of $8,185 to available-for-sale as of January 1, 2001. At December 31, 2002 and 2001, bonds carried at $14,523 and $14,639, respectively, were on deposit with various states as required by law. IDS Life Insurance Company ------------------------------------------------------------------------------- At December 31, 2002, fixed maturity securities comprised approximately 84 percent of the Company's total investments. These securities are rated by Moody's and Standard & Poor's (S&P), except for approximately $1.4 billion of securities which are rated by AEFC's internal analysts using criteria similar to Moody's and S&P. Ratings are presented using S&P's convention and if the two agencies' ratings differ, the lower rating is used. A summary of fixed maturity securities, at fair value, by rating on December 31, is as follows: Rating 2002 2001 AAA 53% 45% AA 1 1 A 14 15 BBB 25 34 Below investment grade 7 5 --- --- Total 100% 100% === === At December 31, 2002, approximately 93% of the securities rated AAA are GNMA, FNMA and FHLMC mortgage-backed securities. No holdings of any other issuer were greater than ten percent of stockholder's equity. Available-for-sale securities were sold during 2002 with proceeds of $10,093,228 and gross realized gains and losses of $297,477 and $135,824, respectively. Available-for-sale securities were sold during 2001 with proceeds of $5,493,141 and gross realized gains and losses of $116,565 and $390,732, respectively. Available-for-sale securities were sold during 2000 with proceeds of $1,237,116 and gross realized gains and losses of $25,101 and $21,147, respectively. During the years ended December 31, 2002, 2001, and 2000, the Company also recognized losses of $145,524, $348,730, and $38,816 respectively due to other-than-temporary impairments on structured investments and corporate debt securities. These amounts are reflected in the net realized loss on investments in the Consolidated Statements of Income. The 2001 realized losses and other-than temporary impairments include the effect of the write-downs and sale of high-yield securities discussed below. The net unrealized gain on available-for-sale securities as of December 31, 2002 and 2001, was $842,880 and $135,964, respectively, with the $706,916 change, net of taxes and deferred policy acquisition costs, reflected as a separate component in accumulated other comprehensive income for the year ended December 31, 2002. For the years ended December 31, 2001 and 2000 the change in net unrealized losses on available-for-sale securities was a decrease of $667,340 and $122,196, respectively. During 2001, the Company recorded pretax losses of $828,175 to recognize the impact of higher default rate assumptions on certain structured investments; to write down lower rated securities (most of which were sold during 2001) in connection with Company's decision to lower its risk profile by reducing the level of its high-yield portfolio, allocating holdings toward stronger credits, and reducing the concentration of exposure to individual companies and industry sectors; to write down certain other investments; and, to adopt EITF Issue 99-20, as previously discussed. Within the Consolidated Statements of Income, $623,958 of these losses are included in Net realized losses on investments and $171,269 are included in Net investment income, with the remaining losses recorded as a cumulative effect of accounting change. During 2001, the Company placed a majority of its rated CDO securities and related accrued interest, (collectively referred to as transferred assets), having an aggregate book value of $675,347, into a securitization trust. In return, the Company received $89,535 in cash relating to sales to unaffiliated investors and retained interests with allocated book amounts aggregating $585,812. As of December 31, 2002, the retained interests had a carrying value of approximately $562,000, of which approximately $388,000 is considered investment grade. The book amount is determined by allocating the previous carrying value of the transferred assets between assets sold and the retained interests based on their relative fair values. Fair values are based on the estimated present value of future cash flows. The retained interests are accounted for in accordance with EITF Issue 99-20. Fair values of fixed maturity and equity securities represent quoted market prices and estimated values when quoted prices are not available. Estimated values are determined by established procedures involving, among other things, review of market indices, price levels of current offerings of comparable issues, price estimates, estimated future cash flows and market data from independent brokers. IDS Life Insurance Company ------------------------------------------------------------------------------- Mortgage loans on real estate At December 31, 2002, approximately 12% of the Company's investments were mortgage loans on real estate. Concentration of credit risk by region of the United States and by type of real estate are as follows:
December 31, 2002 December 31, 2001 On balance Funding On balance Funding Region sheet commitments sheet commitments East North Central $ 611,886 $ -- $ 670,387 $ 1,873 West North Central 493,310 25,500 549,015 -- South Atlantic 765,443 2,800 815,837 9,490 Middle Atlantic 318,699 19,100 352,821 9,363 New England 227,150 5,800 274,486 8,700 Pacific 355,622 5,250 355,945 14,618 West South Central 210,435 1,000 214,000 600 East South Central 63,859 -- 55,798 -- Mountain 406,459 -- 413,053 27 ---------- ------- ---------- ------- 3,452,863 59,450 3,701,342 44,671 Less reserves for losses 35,212 -- 20,948 -- ---------- ------- ---------- ------- Total $3,417,651 $59,450 $3,680,394 $44,671 ========== ======= ========== ======= December 31, 2002 December 31, 2001 On balance Funding On balance Funding Property type sheet commitments sheet commitments Department/retail stores $ 991,984 $20,722 $1,117,195 $13,200 Apartments 622,185 -- 694,214 11,531 Office buildings 1,178,434 25,628 1,203,090 7,650 Industrial buildings 344,604 13,100 333,713 2,263 Hotels/motels 102,184 -- 108,019 -- Medical buildings 95,189 -- 106,927 6,000 Nursing/retirement homes 35,873 -- 39,590 -- Mixed use 54,512 -- 86,972 27 Other 27,898 -- 11,622 4,000 ---------- ------- ---------- ------- 3,452,863 59,450 3,701,342 44,671 Less reserves for losses 35,212 -- 20,948 -- ---------- ------- ---------- ------- Total $3,417,651 $59,450 $3,680,394 $44,671 ========== ======= ========== =======
Mortgage loan fundings are restricted by state insurance regulatory authorities to 80 percent or less of the market value of the real estate at the time of origination of the loan. The Company holds the mortgage document, which gives it the right to take possession of the property if the borrower fails to perform according to the terms of the agreement. Commitments to fund mortgages are made in the ordinary course of business. The fair value of the mortgage commitments is $nil. At December 31, 2002, 2001 and 2000, the Company's investment in impaired loans was $33,130, $39,601 and $24,999, respectively, with related reserves of $9,100, $7,225 and $4,350, respectively. During 2002, 2001 and 2000, the average recorded investment in impaired loans was $36,583, $24,498 and $27,063, respectively. The Company recognized $1,090, $1,285 and $1,033 of interest income related to impaired loans for the years ended December 31, 2002, 2001 and 2000, respectively. IDS Life Insurance Company ------------------------------------------------------------------------------- The following table presents changes in the reserves for mortgage loan losses: 2002 2001 2000 Balance, January 1 $20,948 $11,489 $ 28,283 Provision for mortgage loan losses 14,264 14,959 (14,894) Loan payoffs -- -- (1,200) Foreclosures and write-offs -- (5,500) (700) ------- ------- -------- Balance, December 31 $35,212 $20,948 $ 11,489 ======= ======= ======== Sources of investment income and realized losses on investments Net investment income for the years ended December 31 is summarized as follows: 2002 2001 2000 Income on fixed maturities $1,331,547 $1,276,966 $1,473,560 Income on mortgage loans 274,524 290,608 286,611 Other (15,642) (41,927) 9,834 ---------- ---------- ---------- 1,590,429 1,525,647 1,770,005 Less investment expenses 28,573 39,959 39,400 ---------- ---------- ---------- Total $1,561,856 $1,485,688 $1,730,605 ========== ========== ========== Net realized losses on investments for the years ended December 31 is summarized as follows: 2002 2001 2000 Fixed maturities $ 16,129 $(622,897) $(34,862) Mortgage loans (15,586) (17,834) 16,794 Other investments (5,050) (9,321) 1,093 -------- --------- -------- Total $ (4,507) $(649,752) $(16,975) ======== ========= ======== 3. INCOME TAXES The Company qualifies as a life insurance company for federal income tax purposes. As such, the Company is subject to the Internal Revenue Code provisions applicable to life insurance companies.
The income tax expense (benefit) for the years ended December 31 consists of the following: 2002 2001 2000 Federal income taxes Current $(30,648) $ 88,121 $176,397 Deferred 116,996 (234,673) 37,704 -------- --------- -------- 86,348 (146,552) 214,101 State income taxes -- current 1,478 1,330 7,526 -------- --------- -------- Income tax expense (benefit) before cumulative effect of accounting change 87,826 (145,222) 221,627 Cumulative effect of accounting change income tax benefit -- (11,532) -- -------- --------- -------- Income tax expense (benefit) $ 87,826 $(156,754) $221,627 ======== ========= ========
Income tax expense (benefit) before the cumulative effect of accounting change differs from that computed by using the federal statutory rate of 35%. The principal causes of the difference in each year are shown below:
2002 2001 2000 Provision Rate Provision Rate Provision Rate Federal income taxes based on the statutory rate $164,502 35.0% $ (66,136) (35.0)% $282,542 35.0% Tax-exempt interest and dividend income (5,260) (1.1) (4,663) (2.5) (3,788) (0.5) State taxes, net of federal benefit 961 0.2 865 0.4 4,892 0.6 Affordable housing credits (70,000) (14.9) (73,200) (38.7) (54,569) (6.8) Other, net (2,377) (0.5) (2,088) (1.1) (7,450) (0.8) -------- ---- --------- ----- -------- ---- Total income taxes $ 87,826 18.7% $(145,222) (76.9)% $221,627 27.5% ======== ==== ========= ===== ======== ====
A portion of life insurance company income earned prior to 1984 was not subject to current taxation but was accumulated, for tax purposes, in a "policyholders' surplus account." At December 31, 2002, the Company had a policyholders' surplus account balance of $20,114. The policyholders' surplus account is only taxable if dividends to the stockholder exceed the stockholder's surplus account or if the Company is liquidated. Deferred income taxes of $7,040 have not been established because no distributions of such amounts are contemplated. IDS Life Insurance Company ------------------------------------------------------------------------------- Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred income tax assets and liabilities as of December 31 are as follows: 2002 2001 Deferred income tax assets: Policy reserves $ 683,144 $ 705,637 Other investments 319,829 333,857 Other 29,789 24,640 --------- --------- Total deferred income tax assets 1,032,762 1,064,134 --------- --------- Deferred income tax liabilities: Deferred policy acquisition costs 929,751 861,892 Net unrealized gain -- available-for-sale securities 267,787 45,934 Other 17,283 -- --------- --------- Total deferred income tax liabilities 1,214,821 907,826 --------- --------- Net deferred income tax (liability) asset $ (182,059) $ 156,308 ========== ========== The Company is required to establish a valuation allowance for any portion of the deferred income tax assets that management believes will not be realized. In the opinion of management, it is more likely than not that the Company will realize the benefit of the deferred income tax assets and, therefore, no such valuation allowance has been established. 4. STOCKHOLDER'S EQUITY Retained earnings available for distribution as dividends to AEFC are limited to the Company's surplus as determined in accordance with accounting practices prescribed by state insurance regulatory authorities. The Company's statutory unassigned surplus aggregated $1,323,324 and $1,262,335 as of December 31, 2002 and 2001, respectively (see Note 3 with respect to the income tax effect of certain distributions). In addition, any dividend distributions in 2003 in excess of $240,838 would require approval of the Department of Commerce of the State of Minnesota. Statutory net income (loss) for the years ended December 31 and capital and surplus as of December 31 are summarized as follows: 2002 2001 2000 Statutory net income (loss) $ 159,794 $ (317,973) $ 344,973 Statutory capital and surplus 2,408,379 1,947,350 1,778,306 --------- --------- --------- The National Association of Insurance Commissioners (NAIC) revised the Accounting Practices and Procedures Manual in a process referred to as Codification. The revised regulations took effect January 1, 2001. The domiciliary states of the Company and its insurance subsidiaries adopted the provisions of the revised manual, with the exception of certain provisions not adopted by its subsidiaries organized in the state of New York. The revised manual changed, to some extent, prescribed statutory accounting practices and resulted in changes to the accounting practices that the Company uses to prepare its statutory-basis financial statements. The impact of implementing these changes was a decrease of $39,997 to the Company's statutory-basis capital and surplus as of January 1, 2001. Effective January 1, 2002 the Company's subsidiaries organized in the state of New York adopted additional provisions of the manual which resulted in an increase of $5,597 to the Company's statutory-basis capital and surplus as of January 1, 2002. 5. RELATED PARTY TRANSACTIONS The Company loans funds to AEFC under a collateral loan agreement. The balance of the loan was $nil at December 31, 2002 and 2001. This loan can be increased to a maximum of $75,000 and pays interest at a rate equal to the preceding month's effective new money rate for the Company's permanent investments. Interest income on related party loans totaled $nil in 2002, 2001 and 2000. The Company participates in the American Express Company Retirement Plan which covers all permanent employees age 21 and over who have met certain employment requirements. Company contributions to the plan are based on participants' age, years of service and total compensation for the year. Funding of retirement costs for this plan complies with the applicable minimum funding requirements specified by ERISA. The Company's share of the total net periodic pension cost was $294, $263 and $250 in 2002, 2001 and 2000, respectively. The Company also participates in defined contribution pension plans of American Express Company which cover all employees who have met certain employment requirements. Company contributions to the plans are a percent of either each employee's eligible compensation or basic contributions. Costs of these plans charged to operations in 2002, 2001 and 2000 were $1,411, $662 and $1,707, respectively. IDS Life Insurance Company ------------------------------------------------------------------------------- The Company participates in defined benefit health care plans of AEFC that provide health care and life insurance benefits to retired employees and retired financial advisors. The plans include participant contributions and service related eligibility requirements. Upon retirement, such employees are considered to have been employees of AEFC. AEFC expenses these benefits and allocates the expenses to its subsidiaries. The cost of these plans charged to operations in 2002, 2001 and 2000 was $1,835, $1,011 and $1,136, respectively. Charges by AEFC for use of joint facilities, technology support, marketing services and other services aggregated $526,081, $505,526 and $582,836 for 2002, 2001 and 2000, respectively. Certain of these costs are included in DAC. Expenses allocated to the Company may not be reflective of expenses that would have been incurred by the Company on a stand-alone basis. Included in other liabilities at December 31, 2002 and 2001 are $55,602 and $68,919, respectively, payable to AEFC for federal income taxes. 6. LINES OF CREDIT The Company has available lines of credit with AEFC aggregating $200,000 ($100,000 committed and $100,000 uncommitted). The interest rate for any borrowings is established by reference to various indices plus 20 to 45 basis points, depending on the term. There were no borrowings outstanding under this agreement at December 31, 2002 and 2001. 7. COMMITMENTS AND CONTINGENCIES At December 31, 2002, 2001 and 2000, traditional life and universal life-type insurance in force aggregated $119,173,734, $108,255,014 and $98,060,472 respectively, of which $38,008,734, $25,986,706 and $17,429,851 was reinsured at the respective year ends. The Company also reinsures a portion of the risks assumed under long-term care policies. Under all reinsurance agreements, premiums ceded to reinsurers amounted to $129,345, $114,534 and $89,506 and reinsurance recovered from reinsurers amounted to $60,567, $43,388, and $32,500 for the years ended December 31, 2002, 2001 and 2000, respectively. Reinsurance contracts do not relieve the Company from its primary obligation to policyholders. At December 31, 2002, the Company had no commitments to purchase investments other than mortgage loan fundings (see Note 2). The Company is a party to litigation and arbitration proceedings in the ordinary course of its business, none of which is expected to have a material adverse affect on the Company. In recent years, life insurance companies have been named as defendants in lawsuits, including class action lawsuits, alleging improper life insurance sales practices, alleged agent misconduct, failure to properly supervise agents and other matters relating to life insurance policies and annuity contracts. The Company and its affiliates were named defendants in three purported class-action lawsuits alleging improper insurance and annuity sales practices including improper replacement of existing annuity contracts and insurance policies, improper use of annuities to fund tax deferred contributory retirement plans, alleged agent misconduct, failure to properly supervise agents and other matters relating to life insurance policies and annuity contracts. A fourth lawsuit was filed against the Company and its affiliates in federal court. In January 2000, AEFC reached an agreement in principle to settle the four class action lawsuits described above. It is expected the settlement will provide $215,000 of benefits to more than two million participants in exchange for a release by class members of all insurance and annuity state and federal market conduct claims dating back to 1985. The settlement received court approval. Implementation of the settlement commenced October 15, 2001 and is substantially complete. Claim review payments have been made. Numerous individuals opted out of the settlement described above and therefore did not release their claims against AEFC and its subsidiaries. Some of these class members who opted out were represented by counsel and presented separate claims to AEFC and the Company. Most of their claims have been settled. The outcome of any litigation or threatened litigation cannot be predicted with any certainty. However, in the aggregate, the Company does not consider any lawsuits in which it is named as a defendant to have a material impact on the Company's financial position or operating results. The IRS routinely examines the Company's federal income tax returns and is currently conducting an audit for the 1993 through 1996 tax years. Management does not believe there will be a material adverse effect on the Company's consolidated financial position as a result of these audits. IDS Life Insurance Company ------------------------------------------------------------------------------- 8. DERIVATIVE FINANCIAL INSTRUMENTS The Company maintains an overall risk management strategy that incorporates the use of derivative instruments to minimize significant unplanned fluctuations in earnings caused by interest rate and equity market volatility. The Company does not enter into derivative instruments for speculative purposes. As prescribed by SFAS No. 133, derivative instruments that are designated and qualify as hedging instruments are classified as cash flow hedges, fair value hedges, or hedges of a net investment in a foreign operation, based upon the exposure being hedged. The Company currently has economic hedges that either do not qualify or are not designated for hedge accounting treatment under SFAS No. 133. The Company enters into interest rate swaps, caps and floors to manage the Company's interest rate risk and options and futures to manage equity-based risk. The values of derivative financial instruments are based on market values, dealer quotes or pricing models. Market risk is the possibility that the value of the derivative financial instruments will change due to fluctuations in a factor from which the instrument derives its value, primarily an interest rate or equity market index. The Company is not impacted by market risk related to derivatives held for non- trading purposes beyond that inherent in cash market transactions. Derivatives held for purposes other than trading are largely used to manage risk and, therefore, the cash flow and income effects of the derivatives are inverse to the effects of the underlying transactions. Credit risk is the possibility that the counterparty will not fulfill the terms of the contract. The Company monitors credit risk related to derivative financial instruments through established approval procedures, including setting concentration limits by counterparty, and requiring collateral, where appropriate. A vast majority of the Company's counterparties are rated A or better by Moody's and Standard & Poor's. Interest rate caps, swaps and floors are primarily used to protect the margin between interest rates earned on investments and the interest rates credited to related annuity contract holders. No interest rate swaps or floors were outstanding as of December 31, 2002. The interest rate caps expire in January 2003. The fair value of the interest rate caps is included in Other assets. Changes in the value of the interest rate caps are included in Other insurance and operating expenses. A purchased (written) option conveys the right (obligation) to buy or sell an instrument at a fixed price for a set period of time or on a specific date. The Company writes and purchases index options to manage the risks related to annuity products that pay interest based upon the relative change in a major stock market index between the beginning and end of the product's term (equity-indexed annuities). The Company views this strategy as a prudent management of equity market sensitivity, such that earnings are not exposed to undue risk presented by changes in equity market levels. The equity indexed annuities contain embedded derivatives, essentially the equity based return of the product, which must be separated from the host contract and accounted for as derivative instruments per SFAS No. 133. As a result of fluctuations in equity markets, and the corresponding changes in value of the embedded derivatives, the amount of interest credited incurred by the Company related to the annuity product will positively or negatively impact reported earnings. The purchased and written options are carried at fair value and included in Other assets and Other liabilities, respectively. The fair value of the embedded options are included in Future policy benefits for fixed annuities. The changes in fair value of the options are recognized in Other insurance and operating expenses and the embedded derivatives are recognized in Interest credited on universal life-type insurance and investment contracts. The purchased and written options expire on various dates through 2009. The Company also purchases futures to hedge its obligations under equity indexed annuities. The futures purchased are marked-to-market daily and exchange traded, exposing the Company to no counterparty risk. The futures contracts mature in 2003. Index options may be used to manage the equity market risk related to the fee income that the Company receives from its separate accounts and the underlying mutual funds. The amount of the fee income received is based upon the daily market value of the separate account and mutual fund assets. As a result, the Company's fee income could be impacted significantly by fluctuations in the equity market. There are no index options outstanding as of December 31, 2002 related to this strategy. IDS Life Insurance Company ------------------------------------------------------------------------------- 9. FAIR VALUES OF FINANCIAL INSTRUMENTS The Company discloses fair value information for financial instruments for which it is practicable to estimate that value. Fair values of life insurance obligations and all non-financial instruments, such as DAC, are excluded. Off-balance sheet intangible assets, such as the value of the field force, are also excluded. Management believes the value of excluded assets and liabilities is significant. The fair value of the Company, therefore, cannot be estimated by aggregating the amounts presented.
2002 2001 Carrying Fair Carrying Fair Financial Assets value value value value Fixed maturities $24,052,104 $24,052,104 $20,157,137 $20,157,137 Common stocks 21 21 1,704 1,704 Mortgage loans on real estate 3,417,651 3,815,362 3,680,394 3,845,950 Cash and cash equivalents 4,424,061 4,424,061 1,150,251 1,150,251 Other investment 110,574 108,813 75,721 75,721 Derivatives 24,016 24,016 34,477 34,477 Separate account assets 21,980,674 21,980,674 27,333,697 27,333,697 ---------- ---------- ---------- ---------- Financial Liabilities Future policy benefits for fixed annuities $21,911,497 $21,282,750 $18,139,462 $17,671,777 Derivatives 9,099 9,099 2,506 2,506 Separate account liabilities 19,391,316 18,539,425 24,280,092 23,716,854 ---------- ---------- ---------- ----------
At December 31, 2002 and 2001, the carrying amount and fair value of future policy benefits for fixed annuities exclude life insurance-related contracts carried at $1,432,294 and $1,368,254, respectively, and policy loans of $67,523 and $84,557, respectively. The fair value of these benefits is based on the status of the annuities at December 31, 2002 and 2001. The fair value of deferred annuities is estimated as the carrying amount less any applicable surrender charges and related loans. The fair value for annuities in non-life contingent payout status is estimated as the present value of projected benefit payments at rates appropriate for contracts issued in 2002 and 2001. At December 31, 2002 and 2001, the fair value of liabilities related to separate accounts is estimated as the carrying amount less any applicable surrender charges and less variable insurance contracts carried at $2,589,358 and $3,053,605, respectively. S-6407-20 D (5/03) PART C. Item 24. Financial Statements and Exhibits (a) Financial statements included in Part B of this Registration Statement: The audited financial statements of the IDS Life Variable Account 10 for Retirement Advisor Variable Annuity(R) including: Report of Independent Auditors dated March 21, 2003. Statements of Assets and Liabilities for the year ended Dec. 31, 2002. Statements of Operations for the year ended Dec. 31, 2002. Statements of Changes in Net Assets for the years ended Dec. 31, 2002 and 2001. Notes to Financial Statements. The audited financial statements of the IDS Life Insurance Company for Retirement Advisor Variable Annuity(R) including: Report of Independent Auditors dated Jan. 27, 2003. Consolidated Balance Sheets as of Dec. 31, 2002 and 2001. Consolidated Statements of Income for the years ended Dec. 31, 2002, 2001 and 2000. Consolidated Statements of Stockholder's Equity for the three years ended Dec. 31, 2002, 2001 and 2000. Consolidated Statements of Cash Flows for the years ended Dec. 31, 2002, 2001 and 2000. Notes to Consolidated Financial Statements. The audited financial statements of the IDS Life Variable Account 10 for Retirement Advisor Variable Annuity(R) - Band 3 including: Report of Independent Auditors dated March 21, 2003. Statements of Assets and Liabilities for the year ended Dec. 31, 2002. Statements of Operations for the year ended Dec. 31, 2002. Statements of Changes in Net Assets for the years ended Dec. 31, 2002 and 2001. Notes to Financial Statements. The audited financial statements of the IDS Life Insurance Company for Retirement Advisor Variable Annuity(R) - Band 3 including: Report of Independent Auditors dated Jan. 27, 2003. Consolidated Balance Sheets as of Dec. 31, 2002 and 2001. Consolidated Statements of Income for the years ended Dec. 31, 2002, 2001 and 2000. Consolidated Statements of Stockholder's Equity for the three years ended Dec. 31, 2002, 2001 and 2000. Consolidated Statements of Cash Flows for the years ended Dec. 31, 2002, 2001 and 2000. Notes to Consolidated Financial Statements. The audited financial statements of the IDS Life Variable Account 10 for Retirement Advisor Advantage(R) Variable Annuity/Retirement Advisor Select(R) Variable Annuity including: Report of Independent Auditors dated March 21, 2003. Statements of Assets and Liabilities for the year ended Dec. 31, 2002. Statements of Operations for the year ended Dec. 31, 2002. Statements of Changes in Net Assets for the years ended Dec. 31, 2002 and 2001. Notes to Financial Statements. The audited financial statements of the IDS Life Insurance Company for Retirement Advisor Advantage (R) Variable Annuity/ Retirement Advisor Select(R) Variable Annuity including: Report of Independent Auditors dated Jan. 27, 2003. Consolidated Balance Sheets as of Dec. 31, 2002 and 2001. Consolidated Statements of Income for the years ended Dec. 31, 2002, 2001 and 2000. Consolidated Statements of Stockholder's Equity for the three years ended Dec. 31, 2002, 2001 and 2000. Consolidated Statements of Cash Flows for the years ended Dec. 31, 2002, 2001 and 2000. Notes to Consolidated Financial Statements. The audited financial statements of the IDS Life Variable Account 10 for Retirement Advisor Advantage(R) Variable Annuity - Band 3 including: Report of Independent Auditors dated March 21, 2003. Statements of Assets and Liabilities for the year ended Dec. 31, 2002. Statements of Operations for the year ended Dec. 31, 2002. Statements of Changes in Net Assets for the years ended Dec. 31, 2002 and 2001. Notes to Financial Statements. The audited financial statements of the IDS Life Insurance Company for Retirement Advisor Advantage (R) Variable Annuity - Band 3 including: Report of Independent Auditors dated Jan. 27, 2003. Consolidated Balance Sheets as of Dec. 31, 2002 and 2001. Consolidated Statements of Income for the years ended Dec. 31, 2002, 2001 and 2000. Consolidated Statements of Stockholder's Equity for the three years ended Dec. 31, 2002, 2001 and 2000. Consolidated Statements of Cash Flows for the years ended Dec. 31, 2002, 2001 and 2000. Notes to Consolidated Financial Statements. (b) Exhibits: 1.1 Resolution of the Board of Directors of IDS Life Insurance Company establishing the IDS Life Variable Account 10 dated August 23, 1995, filed electronically as Exhibit 1 to Registrant's Initial Registration Statement No. 33-62407 is incorporated herein by reference. 1.2 Resolution of the Board of Directors of IDS Life Insurance Company establishing 105 additional subaccounts within the separate account, filed electronically as Exhibit 1.2 to Pre-Effective Amendment No. 1 to Registration Statement No. 333-79311 filed on or about Aug. 10, 1999, is incorporated herein by reference. 1.3 Resolution of the Board of Directors of IDS life Insurance Company establishing 25 additional subaccounts within the separate account, filed electronically as Exhibit 1.3 to Registrant's Post-Effective Amendment No. 2 to Registration Statement No. 333-79311, is incorporated herein by reference. 1.4 Resolution of the Board of Directors of IDS Life Insurance Company establishing 12 additional subaccounts within the separate account, filed electronically as Exhibit 1.3 to Registrant's Post-Effective Amendment No. 3 to Registration Statement No. 333-79311, is incorporated herein by reference. 1.5 Resolution of the Board of Directors of IDS Life Insurance Company establishing 69 additional subaccounts within the separate account, filed electronically as Exhibit 1.5 to Registrant's Post-Effective Amendment No. 6 to Registration Statement No. 333-79311, is incorporated herein by reference. 1.6 Resolution of the Board of Directors of IDS Life Insurance Company establishing 112 additional subaccounts within the separate account, dated Feb. 11, 2002, filed electronically as Exhibit 1.6 to Registrant's Post-Effective Amendment No. 8 to Registration Statement No. 333-79311, is incorporated herein by reference. 1.7 Resolution of the Board of Directors of IDS Life Insurance Company establishing 3 additional subaccounts within the separate account, dated Feb. 28, 2002, filed electronically as Exhibit 1.7 to Registrant's Post-Effective Amendment No. 10 to Registration Statement No. 333-79311, is incorporated herein by reference. 2. Not applicable. 3. Not applicable. 4.1 Form of Deferred Annuity Contract for non-qualified contracts (form 31043) filed electronically as Exhibit 4.1 to Registrant's Initial Registration Statement No. 333-79311, filed on or about May 26, 1999, is incorporated herein by reference. 4.2 Form of Deferred Annuity Contract for tax qualified contracts (form 31044) filed electronically as Exhibit 4.2 to Registrant's Initial Registration Statement No. 333-79311, filed on or about May 26, 1999, is incorporated herein by reference. 4.3 Form of Deferred Annuity Contract for IRA contracts (form 31045-IRA) filed electronically as Exhibit 4.3 to Registrant's Initial Registration Statement No. 333-79311, filed on or about May 26, 1999, is incorporated herein by reference. 4.4 Form of Deferred Annuity Contract for non-qualified contracts (form 31046) filed electronically as Exhibit 4.4 to Registrant's Initial Registration Statement No. 333-79311, filed on or about May 26, 1999, is incorporated herein by reference. 4.5 Form of Deferred Annuity Contract for tax qualified contracts (form 31047) filed electronically as Exhibit 4.5 to Registrant's Initial Registration Statement No. 333-79311, filed on or about May 26, 1999, is incorporated herein by reference. 4.6 Form of Deferred Annuity Contract for IRA contracts (form 31048-IRA) filed electronically as Exhibit 4.6 to Registrant's Initial Registration Statement No. 333-79311, filed on or about May 26, 1999, is incorporated herein by reference. 4.7 Form of TSA Endorsement (form 31049), filed electronically as Exhibit 4.7 to Pre-Effective Amendment No. 1 to Registration Statement No. 333-79311 filed on or about Aug. 10, 1999 is incorporated herein by reference. 4.8 Form of Maximum Anniversary Value Death Benefit Rider, filed electronically as Exhibit 4.8 to Post-Effective Amendment No. 4 to Registration Statement No. 333-79311, is incorporated herein by reference. 4.9 Form of Enhanced Earnings Death Benefit Rider, filed electronically as Exhibit 4.9 to Post-Effective Amendment No. 4 to Registration Statement No. 333-79311, is incorporated herein by reference. 4.10 Form of Enhanced Earnings Plus Death Benefit Rider, filed electronically as Exhibit 4.10 to Post-Effective Amendment No. 4 to Registration Statement No. 333-79311, is incorporated herein by reference. 4.11 Form of Traditional IRA or SEP-IRA Annuity Endorsement (form 131061) filed electronically herewith. 4.12 Form of Roth IRA Annuity Endorsement (form 131062) filed electronically herewith. 4.13 Form of SIMPLE IRA Annuity Endorsement (form 131063) filed electronically herewith. 4.14 Form of Deferred Annuity Contract for non-qualified contracts (form 131041) filed electronically herewith. 5. Form of Variable Annuity Application (form 31063), filed electronically as Exhibit 5 to Pre-Effective Amendment No. 1 to Registration Statement No. 333-79311 filed on or about Aug. 10, 1999 is incorporated herein by reference. 6.1 Certificate of Incorporation of IDS Life dated July 24, 1957, filed electronically as Exhibit 6.1 to Registrant's Initial Registration Statement No. 33-62407 is incorporated herein by reference. 6.2 Amended By-Laws of IDS Life filed electronically as Exhibit 6.2 to Registrant's Initial Registration Statement No. 33-62407 is incorporated herein by reference. 6.3 Copy of Amended and Restated By-Laws of IDS Life Insurance Company, filed electronically as Exhibit 6.2 to Post-Effective Amendment No. 13 to Registration Statement No. 33-47302, is incorporated herein by reference. 7. Not applicable. 8.1(a) Copy of Participation Agreement between IDS Life Insurance Company and AIM Variable Insurance Funds, Inc. and AIM Distributors, Inc., dated March 4,1996, filed electronically as Exhibit 8.4 to Post-Effective Amendment No. 2 to Registration Statement No. 33-62407 is incorporated herein by reference. 8.1(b) Copy of Participation Agreement By and Among AIM Variable Insurance Funds, Inc., A I M Distributors, Inc., and IDS Life Insurance Company, on Behalf of Itself and Its Separate Accounts, dated Oct. 7, 1996, filed electronically as Exhibit 8.1(b) to Post-Effective Amendment No. 3 to Registration Statement No. 333-79311 is incorporated herein by reference. 8.2 Copy of Participation Agreement by and among IDS Life Insurance Company, American Express Financial Advisors Inc., Alliance Capital Management L.P. and Alliance Fund Distributors dated March 1, 2000 is filed electronically herewith. 8.3 Copy of Participation Agreement By and Among Calvert Variable Series, Inc. and Calvert Asset Management Co. and Calvert Distributors Inc. and IDS Life Insurance Company, dated April 14, 2000, filed as Exhibit 8.7 to Post-Effective Amendment No. 3 to Registration Statement No. 333-79311 is incorporated herein by reference. 8.4 Copy of Participation Agreement between IDS Life Insurance Company and Warburg Pincus Trust and Warburg Pincus Counselors, Inc. and Counselors Securities Inc., dated March 1, 1996, filed electronically as Exhibit 8.3 to Post-Effective Amendment No. 2 to Registration statement No. 33-62407 is incorporated herein by reference. 8.5 Copy of Participation Agreement by and between Evergreen Variable Annuity Trust and IDS Life Insurance Company, dated August 13, 2001 filed electronically as Exhibit 8.5(a) to Post-Effective Amendment No. 10 to Registration Statement No. 333-79311, is incorporated herein by reference. 8.6 Copy of Participation Agreement among Variable Insurance Products Fund, Fidelity Distributors Corporation and IDS Life Insurance Company, dated Sept. 1, 1999, filed electronically as Exhibit 8.8(a) to Post-Effective Amendment No. 3 to Registration Statement No. 333-79311 is incorporated herein by reference. 8.7 Copy of Participation Agreement between IDS Life Insurance Company and Templeton Variable Products Series Fund and Franklin Templeton Distributors, Inc. dated March 1, 1996, filed electronically as Exhibit 8.2 to Post-Effective Amendment No. 2 to Registration Statement No. 33-62407 is incorporated herein by reference. 8.8 Copy of Participation Agreement By and Between Goldman Sachs Variable Insurance Trust, Goldman, Sachs & Co. and IDS Life Insurance Company, dated September 1, 1999, filed electronically as Exhibit 8.3 to Post-Effective Amendment No. 3 to Registration Statement No. 333-79311 is incorporated herein by reference. 8.9 Copy of Participation Agreement between IDS Life Insurance Company and INVESCO Variable Investment Funds, Inc, and INVESCO Distributors, Inc., dated August 13, 2001 filed electronically as Exhibit 8.9 to Post-Effective Amendment No. 10 to Registration Statement No. 333-79311, is incorporated herein by reference. 8.10 Copy of Participation Agreement Between Janus Aspen Series and IDS Life Insurance Company, dated April 21, 2000, filed electronically as Exhibit 8.10 to Post-Effective Amendment No. 3 to Registration Statement No. 333-79311 is incorporated herein by reference. 8.11 Copy of Participation Agreement by and among IDS Life Insurance Company, Lazard Asset Management and Lazard Retirement Series, Inc., dated September 1, 1999, filed as Exhibit 8.11 to Post-Effective Amendment No. 3 to Registration Statement No. 333-79311 is incorporated herein by reference. 8.12 Copy of Participation Agreement Among MFS Variable Insurance Trust, IDS Life Insurance Company and Massachusetts Financial Services Company, dated March 1, 2000, filed as Exhibit 8.12 to Post-Effective Amendment No. 3 to Registration Statement No. 333-79311 is incorporated herein by reference. 8.13 Copy of Participation Agreement among Pioneer Variable Contracts Trust, IDS Life Insurance Company, Pioneer Investment Management, Inc. and Pioneer Funds Distributor, Inc. dated August 13, 2001 filed electronically as Exhibit 8.13(a) to Post-Effective Amendment No. 10 to Registration Statement No. 333-79311, is incorporated herein by reference. 8.14 Copy of Participation Agreement by and among IDS Life Insurance Company and Putnam Capital Manager Trust and Putnam Mutual Funds Corp., dated March 1, 1996, filed electronically as Exhibit 8.1 to Post-Effective Amendment No. 2 to Registration Statement No. 33-62407 is incorporated herein by reference. 8.15 Copy of Participation Agreement by and among Royce Capital Fund and Royce & Associates, Inc. and IDS Life Insurance Company, dated September 1, 1999, filed as Exhibit 8.5 to Post-Effective Amendment No. 3 to Registration Statement No. 333-79311 is incorporated herein by reference. 8.16 Copy of Participation Agreement by and among IDS Life Insurance Company and Strong Opportunity Fund II, Inc. and Strong Investor Services, Inc. and Strong Investments, Inc. dated August 13, 2001 filed electronically as Exhibit 8.16 to Post-Effective Amendment No. 10 to Registration Statement No. 333-79311, is incorporated herein by reference. 8.17 Copy of Participation Agreement between IDS Life Insurance Company and TCI Portfolios, Inc., dated April 24, 1996, filed electronically as Exhibit 8.5 to Post-Effective Amendment No. 2 to Registration Statement No. 33-62407 is incorporated herein by reference. 8.18 Copy of Participation Agreement by and among Wanger Advisors Trust and Liberty Wanger Asset Management, L.P. and IDS Life Insurance Company dated August 30, 1999 filed electronically as Exhibit 8.17 to Post-Effective Amendment No. 10 to Registration Statement No. 333-79311, is incorporated herein by reference. 8.19 Copy of Participation Agreement by and among Wells Fargo Variable Trust and IDS Life Insurance Company and Stephens Inc. dated May 1, 2000 filed electronically as Exhibit 8.18(a) to Post-Effective Amendment No. 10 to Registration Statement No. 333-79311, is incorporated herein by reference. 9. Opinion of counsel and consent to its use as the legality of the securities being registered is filed electronically herewith. 10.1 Consent of Independent Auditors for Retirement Advisor Variable Annuity(R) is filed electronically herewith. 10.2 Consent of Independent Auditors for Retirement Advisor Variable Annuity(R) - Band 3 is filed electronically herewith. 10.3 Consent of Independent Auditors for Retirement Advisor Advantage(R) Variable Annuity/ Retirement Advisor Select(R) Variable Annuity is filed electronically herewith. 10.4 Consent of Independent Auditors for Retirement Advisor Advantage(R) Variable Annuity - Band 3 is filed electronically herewith. 11. None. 12. Not applicable. 13. Schedule for computation of each performance quotation provided in the Registration Statement in response to Item 21 is incorporated by reference to Exhibit 13 of Registrant's Post-Effective Amendment No. 2, filed on or about May 1, 2000. 14. Not applicable. 15.1 Power of Attorney to sign Amendment to this Registration Statement, dated April 9, 2002 filed electronically as Exhibit 15 to Post-Effective Amendment No. 10 to Registration Statement No. 333-79311, is incorporated herein by reference. 15.2 Power of Attorney to sign Amendments to this Registration Statement, dated September 11, 2002, is filed electronically herewith. 15.3 Power of Attorney to sign Amendments to this Registration Statement, dated April 16, 2003, is filed electronically herewith. Item 25.
Item 25. Directors and Officers of the Depositor (IDS Life Insurance Company) -------------------------------------------------------------------- Name Principal Business Address* Position and Offices with Depositor ------------------------------------------------------ ---------------------------------------- Gumer C. Alvero Director and Executive Vice President - Annuities Timothy V. Bechtold Director and President Walter S. Berman Interim Treasurer Barbara H. Fraser Director, Chairman of the Board and Chief Executive Officer Lorraine R. Hart Vice President, Investments Eric L. Marhoun Vice President, Assistant General Counsel and Assistant Secretary Timothy S. Meehan Secretary Jeryl A. Millner Vice President and Controller Mary Ellyn Minenko Vice President, Assistant General Counsel and Assistant Secretary Barry J. Murphy Director Teresa J. Rasmussen Vice President, General Counsel and Assistant Secretary Stephen W. Roszell Director Bridget Sperl Executive Vice President - Client Service John T. Sweeney Director and Executive Vice President - Finance Beth E. Weimer Chief Compliance Officer
* Unless otherwise noted, the business address is 70100 AXP Financial Center, Minneapolis, MN 55474. Item 26. Item 26. Persons Controlled by or Under Common Control with the Depositor or Registrant (Continued) The following list includes the names of major subsidiaries of American Express Company.
Jurisdiction of Name of Subsidiary Incorporation I. Travel Related Services American Express Travel Related Services Company, Inc. New York II. International Banking Services American Express Bank Ltd. Connecticut III. Companies engaged in Financial Services Advisory Capital Income, LLC Minnesota Advisory Capital Partners LLC Minnesota Advisory Capital Strategies Group Inc. Minnesota Advisory Convertible Arbitage Minnesota Advisory Select LLC Delaware American Centurion Life Assurance Company New York American Enterprise Investment Services Inc. Minnesota American Enterprise Life Insurance Company Indiana American Enterprise REO 1, LLC Minnesota American Express Asset Management Group Inc. Minnesota American Express Asset Management International Inc. Minnesota American Express Asset Management International (Japan) Ltd. Japan American Express Asset Management Ltd. England American Express Certificate Company Delaware American Express Client Service Corporation Minnesota American Express Corporation Delaware American Express Company New York American Express Financial Advisors Inc. Delaware American Express Financial Advisors Japan Inc. Delaware American Express Financial Corporation Delaware American Express Insurance Agency of Alabama Inc. Alabama American Express Insurance Agency of Arizona Inc. Arizona American Express Insurance Agency of Idaho Inc. Idaho American Express Insurance Agency of Maryland Inc. Maryland American Express Insurance Agency of Massachusetts Inc. Massachusetts American Express Insurance Agency of Nevada Inc. Nevada American Express Insurance Agency of New Mexico Inc. New Mexico American Express Insurance Agency of Oklahoma Inc. Oklahoma American Express Insurance Agency of Texas Inc. Texas American Express Insurance Agency of Wyoming Inc. Wyoming American Express International Deposit Corporation Cayman Island American Express Personal Trust Services, FSB Federal American Express Property Casualty Insurance Agency of Kentucky Inc. Kentucky American Express Property Casualty Insurance Agency of Maryland Inc. Maryland American Express Property Casualty Insurance Agency of Mississippi Inc. Mississippi American Express Property Casualty Insurance Agency of Pennsylvania Inc. Pennsylvania American Express Property Casualty Insurance Agency - WI Wisconsin American Express Trust Company Minnesota American Partners Life Insurance Company Arizona AMEX Assurance Company Illinois IDS Cable Corporation Minnesota IDS Cable II Corporation Minnesota IDS Capital Holdings Inc. Minnesota IDS Futures Brokerage Group Minnesota IDS Futures Corporation Minnesota IDS Insurance Agency of Arkansas Arkansas IDS Insurance Agency of Utah Inc. Utah IDS Life Insurance Company Investors Syndicate Development Corporation Minnesota IDS REO1, LLC Minnesota IDS REO2, LLC Minnesota IDS Life Insurance Company of New York New York IDS Management Corporation Minnesota IDS Partnership Services Corporation Minnesota IDS Property Casualty Insurance Company Wisconsin IDS Realty Corporation Minnesota Kenwood Capital Management LLC Delaware Northwinds Marketing Group, LLC Delaware
Item 27. Number of Contract owners As of March 31, 2003, there were 74,531 non-qualified contract owners and 109,326 qualified contract owners in the IDS Life Variable Account 10. Item 28. Indemnification The amended and restated By-Laws of the depositor provide that the depositor will indemnify, to the fullest extent now or hereafter provided for or permitted by law, each person involved in, or made or threatened to be made a party to, any action, suit, claim or proceeding, whether civil or criminal, including any investigative, administrative, legislative, or other proceeding, and including any action by or in the right of the depositor or any other corporation, or any partnership, joint venture, trust, employee benefit plan, or other enterprise (any such entity, other than the depositor, being hereinafter referred to as an "Enterprise"), and including appeals therein (any such action or process being hereinafter referred to as a "Proceeding"), by reason of the fact that such person, such person's testator or intestate (i) is or was a director or officer of the depositor, or (ii) is or was serving, at the request of the depositor, as a director, officer, or in any other capacity, or any other Enterprise, against any and all judgments, amounts paid in settlement, and expenses, including attorney's fees, actually and reasonably incurred as a result of or in connection with any Proceeding, except as provided below. No indemnification will be made to or on behalf of any such person if a judgment or other final adjudication adverse to such person establishes that such person's acts were committed in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action so adjudicated, or that such person personally gained in fact a financial profit or other advantage to which such person was not legally entitled. In addition, no indemnification will be made with respect to any Proceeding initiated by any such person against the depositor, or a director or officer of the depositor, other than to enforce the terms of this indemnification provision, unless such Proceeding was authorized by the Board of Directors of the depositor. Further, no indemnification will be made with respect to any settlement or compromise of any Proceeding unless and until the depositor has consented to such settlement or compromise. The depositor may, from time to time, with the approval of the Board of Directors, and to the extent authorized, grant rights to indemnification, and to the advancement of expenses, to any employee or agent of the depositor or to any person serving at the request of the depositor as a director or officer, or in any other capacity, of any other Enterprise, to the fullest extent of the provisions with respect to the indemnification and advancement of expenses of directors and officers of the depositor. Insofar as indemnification for liability arising under the Securities Act of 1933 (the "Act") may be permitted to directors, officers and controlling persons of the depositor or 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 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 director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, 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. Item 29. Principal Underwriters Item 29 Principal Underwriter (IDS Life Insurance Company) (a) IDS Life is the principal underwriter, depositor, sponsor or investment adviser for IDS Life Variable Annuity Fund A, IDS Life Variable Annuity Fund B, IDS Life Series Fund, Inc., AXP Variable Portfolio - Income Series, Inc., AXP Variable Portfolio - Investment Series, Inc., AXP Variable Portfolio - Managed Series, Inc., AXP Variable Portfolio - Money Market Series, Inc., AXP Variable Portfolio - Partners Series, Inc., IDS Life Account MGA, IDS Life Account SBS, IDS Life Accounts F, G, H, IZ, JZ, KZ, LZ, MZ, N, PZ, QZ, RZ, SZ and TZ, IDS Life Variable Account 10, IDS Life Variable Life Separate Account and IDS Life Variable Account for Smith Barney. (b) As to each director, officer, or partner of the principal underwriter: Name and Principal Business Address* Position and Offices with Underwriter ------------------------------------ ------------------------------------- Gumer C. Alvero Director and Executive Vice President - Annuities Timothy V. Bechtold Director and President Walter S. Berman Interim Treasurer Barbara H. Fraser Director, Chairman of the Board and Chief Executive Officer Lorraine R. Hart Vice President, Investments Eric L. Marhoun Vice President, Assistant General Counsel and Assistant Secretary Timothy S. Meehan Secretary Jeryl A. Millner Vice President and Controller Mary Ellyn Minenko Vice President, Assistant General Counsel and Assistant Secretary Barry J. Murphy Director Teresa J. Rasmussen Vice President, General Counsel and Assistant Secretary Stephen W. Roszell Director Bridget Sperl Executive Vice President - Client Service John T. Sweeney Director and Executive Vice President - Finance Beth E. Weimer Chief Compliance Officer * Unless otherwise noted, the business address is 70100 AXP Financial Center, Minneapolis, MN 55474. (c) Name of Net Underwriting Principal Discounts and Compensation on Brokerage Underwriter Commissions Redemption Commissions Compensation ----------- ----------- ---------- ----------- ------------ IDS Life Insurance $37,418,102 None None None Company
Item 30. Location of Accounts and Records IDS Life Insurance Company 70100 AXP Financial Center Minneapolis, MN 55474 Item 31. Management Services Not applicable. Item 32. Undertakings (a) Registrant undertakes to file a post-effective amendment to this registration statement as frequently as is necessary to ensure that the audited financial statements in the registration statement are never more than 16 months old for so long as payments under the variable annuity contracts may be accepted. (b) Registrant undertakes to include either (1) as part of any application to purchase a contract offered by the prospectus, a space that an applicant can check to request a Statement of Additional Information, or (2) a post card or similar written communication affixed to or included in the prospectus that the applicant can remove to send for a Statement of Additional Information. (c) Registrant undertakes to deliver any Statement of Additional Information and any financial statements required to be made available under this Form promptly upon written or oral request. (d) Registrant represents that it is relying upon the no-action assurance given to the American Council of Life Insurance (pub. avail. Nov. 28, 1988). Further, Registrant represents that it has complied with the provisions of paragraphs (1)-(4) of that no-action letter. (e) The sponsoring insurance company represents that the fees and charges deducted under the contract, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by the insurance company. SIGNATURES As required by the Securities Act of 1933 and the Investment Company Act of 1940, IDS Life Insurance Company, on behalf of the Registrant certifies that it meets all of the requirements for 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 State of Minnesota, on the 28th day of April, 2003. IDS LIFE VARIABLE ANNUITY ACCOUNT 10 ------------------------------------ (Registrant) By IDS Life Insurance Company ------------------------------------ (Sponsor) By /s/ Timothy V. Bechtold* ---------------------------------- Timothy V. Bechtold President As required by the Securities Act of 1933, Amendment to this Registration Statement has been signed by the following persons in the capacities indicated on the 28th day of April, 2003. /s/ Gumer C. Alvero* Director ------------------------------------ Gumer C. Alvero /s/ Timothy V. Bechtold* Director and President ------------------------------------ Timothy V. Bechtold /s/ Barbara H. Fraser** Chairman of the Board of Directors ------------------------------------ and Chief Executive Officer Barbara H. Fraser (Chief Executive Officer) /s/ Jeryl A. Millner*** Vice President and Controller ------------------------------------ (Principal Accounting Officer) Jeryl A. Millner /s/ Barry J. Murphy* Director ------------------------------------ Barry J. Murphy /s/ Stephen W. Roszell* Director ----------------------------------- Stephen W. Roszell /s/ John T. Sweeney* Director and Executive ------------------------------------ Vice President - Finance John T. Sweeney (Principal Financial Officer) * Signed pursuant to Power of Attorney dated April 9, 2002, filed electronically as Exhibit 15 to Post-Effective Amendment No. 10 to Registration Statement No. 333-79311, is incorporated by reference. ** Signed pursuant to Power of Attorney, dated September 11, 2002, filed electronically herewith as Exhibit 15.2, by: *** Signed pursuant to Power of Attorney, dated April 16, 2003, filed electronically herewith as Exhibit 15.3, by: /s/ Mary Ellyn Minenko ------------------ Mary Ellyn Minenko Counsel CONTENTS OF POST-EFFECTIVE AMENDMENT NO. 14 TO REGISTRATION STATEMENT This Post-Effective Amendment is comprised of the following papers and documents: The Cover Page. Part A. The Prospectuses. Part B. Statements of Additional Information. Financial Statements. Part C. Other Information. The signatures. Exhibits.