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SHORT TERM
INCOME
FUND, INC.
Annual Report
August 31, 1995
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<PAGE>
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SHORT TERM 600 FIFTH AVENUE, NEW YORK, N.Y. 10020
INCOME FUND, INC. 212/830-5200
===============================================================================
Dear Shareholder:
We are pleased to present the annual report of Short Term Income Fund, Inc. for
the period September 1, 1994 through August 31, 1995.
The Fund's Money Market Portfolio had 46,101 shareholders and net assets of
$879,671,542 as of August 31, 1995. The Government Portfolio had 10,848
shareholders and net assets of $776,390,709 as of August 31, 1995.
We thank you for your support and look forward to continuing to serve your cash
management needs.
Sincerely,
/s/ Steven W. Duff
Steven W. Duff
President
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<PAGE>
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SHORT TERM INCOME FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS
AUGUST 31, 1995
===============================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Domestic Securities (55.92%)
Bankers' Acceptances (3.40%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 30,000,000 Trust Company Bank of Atlanta 09/29/95 5.97% $ 29,862,800
-------------- ------------
30,000,000 Total Bankers' Acceptances 29,862,800
-------------- ------------
<CAPTION>
Certificates of Deposit (2.27%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
$ 20,000,000 American Express Centurian Bank 09/15/95 5.82% $ 20,000,000
-------------- ------------
20,000,000 Total Certificates of Deposit 20,000,000
-------------- ------------
<CAPTION>
Commercial Paper (30.58 %)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 5,000,000 Banco Real S.A. Grand Cayman
LOC Barclays Bank 10/24/95 5.73% $ 4,958,483
40,000,000 Bear Stearns Companies Incorporated 11/07/95 5.76 39,577,156
25,000,000 Cemex S.A.
LOC Credit Suisse 09/11/95 5.79 24,959,931
10,000,000 Island Finance Puerto Rico Incorporated 09/08/95 5.75 9,988,926
15,000,000 Island Finance Pureto Rico Incorporated 09/25/95 5.79 14,942,500
10,000,000 Island Finance Puerto Rico Incorporated 10/20/95 5.80 9,922,008
40,000,000 Merrill Lynch & Company Incorporated 09/18/95 5.90 39,890,067
20,000,000 Michelin Tire Company
LOC Societe Generale 09/27/95 5.77 19,917,089
25,000,000 Petroleo Brasilerio S.A.
LOC Barclays Bank 11/20/95 5.85 24,680,000
10,000,000 Petroleo Brasilerio S.A.
LOC Barclays Bank 12/20/95 5.86 9,824,611
25,133,000 Phillip Morris Company 09/29/95 5.75 25,021,186
20,000,000 Raytheon Company 09/07/95 5.77 19,980,867
10,506,000 Seventy-Five State Street Capital Corporation
LOC Banque Paribas 10/06/95 5.79 10,447,269
15,000,000 Unibanco - Uniao de Bancos
LOC Westdeutsche Landesbank Girozentrale 10/05/95 5.89 14,917,833
-------------- ------------
270,639,000 Total Commercial Paper 269,027,926
-------------- ------------
<CAPTION>
U.S. Government Agencies (2.54%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 20,000,000 Federal Home Loan Bank 11/18/97 (c) 6.25% $ 20,000,000
2,337,760 Small Business Administration Variable Loan 08/25/17 (a) 6.75 2,337,760
-------------- ------------
22,337,760 Total U.S. Government Agencies 22,337,760
-------------- ------------
</TABLE>
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See Notes to Financial Statements.
<PAGE>
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===============================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
<CAPTION>
Medium Term Notes (2.84%)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 25,000,000 Bank One (Columbus) 03/20/96 5.98 % $ 25,000,000
-------------- ------------
25,000,000 Total Medium Term Notes 25,000,000
-------------- ------------
<CAPTION>
Short Term Bank Notes (6.82%)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 20,000,000 Bank of America 10/25/95 5.79 % $ 20,000,000
40,000,000 The Boatmen's National Bank of St. Louis, NA 02/28/96 5.80 40,000,000
-------------- ------------
60,000,000 Total Short Term Bank Notes 60,000,000
-------------- ------------
<CAPTION>
Other Notes (0.43%)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 3,795,000 Fresno County, CA 06/28/96 6.06 % $ 3,793,074
-------------- -----------
3,795,000 Total Other Notes 3,793,074
-------------- -----------
<CAPTION>
Repurchase Agreement, Overnight (7.04%)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 61,900,000 Donaldson, Lufkin & Jenrette Securities Corp.
(Collateralized by $49,247,000
U.S. Treasury Bonds, 9.125% to 9.250%,
due 02/15/16 to 05/15/18) 09/01/95 5.80% $ 61,900,000
-------------- -------------
61,900,000 Total Repurchase Agreement, Overnight 61,900,000
-------------- -------------
Total Domestic Securities 491,921,560
-------------
FOREIGN SECURITIES (44.20%)
Foreign Commercial Paper (28.85%)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 150,000 All Nippon Airways Co., Ltd. 09/25/95 (b) 6.25 % $ 150,000
15,000,000 Bank of Montreal 09/01/95 5.83 15,000,000
25,000,000 Banque Indosuez 10/17/95 5.81 24,816,319
25,000,000 Banque Paribas 09/15/95 5.93 24,943,222
40,000,000 Canadian Imperial Bank of Commerce 09/28/95 5.90 39,825,700
40,000,000 Cheltenham & Gloucester 10/23/95 5.76 39,672,400
25,000,000 Compagnie Bancaire 09/19/95 5.92 24,927,125
25,000,000 Swedish Export Credit Corporation 11/17/95 5.75 24,698,149
20,000,000 Toronto Dominion Bank 11/21/95 5.76 19,744,400
40,000,000 Union Bank of Switzerland 09/01/95 5.82 40,000,000
-------------- ------------
255,150,000 Total Foreign Commercial Paper 253,777,315
-------------- ------------
<CAPTION>
Japanese Yankee Certificates of Deposit (4.55%)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 40,000,000 Sumitomo Bank, Limited 09/11/95 5.85% $ 40,000,111
-------------- ------------
40,000,000 Total Japanese Yankee Certificates of Deposit 40,000,111
-------------- ------------
</TABLE>
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See Notes to Financial Statements.
<PAGE>
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SHORT TERM INCOME FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
AUGUST 31, 1995
===============================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Yankee Certificates of Deposit (10.80%)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 40,000,000 Bank of Nova Scotia 10/20/95 5.75% $ 40,000,000
35,000,000 Bayerische Landesbank Girozentrale 10/11/95 5.74 34,999,023
20,000,000 Societe Generale 09/22/95 5.80 20,000,000
------------- -------------
95,000,000 Total Yankee Certificates of Deposit 94,999,023
------------- -------------
Total Foreign Securities 388,776,449
-------------
Total Investments (100.12%) (Cost $880,698,009+) 880,698,009
Liabilities in excess of Cash and Other Assets (-0.12%) ( 1,026,467)
-------------
Net Assets (100.00%) $ 879,671,542
=============
Net asset value, offering and redemption price per share:
Class A shares, 663,423,996 shares outstanding (Note 3) $ 1.00
=============
Class B shares, 218,478,404 shares outstanding (Note 3) $ 1.00
=============
+ Aggregate cost for federal income tax purposes is identical.
</TABLE>
FOOTNOTES:
(a) This is a small business administration variable pool certificate. The
interest rate is adjusted periodically based upon the prime rate.
(b) This is a floating rate Foreign Commercial Paper. The interest rate is
adjusted weekly based upon the 3-month Treasury Bill Auction.
(c) This is a floating rate federal home loan bank note. The interest rate is
adjusted daily based upon the prime rate.
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
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SHORT TERM INCOME FUND, INC.
U.S. GOVERNMENT PORTFOLIO
STATEMENT OF NET ASSETS
AUGUST 31, 1995
===============================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Repurchase Agreements, Overnight (67.97%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
$ 100,000,000 CS First Boston (Collateralized $76,100,000 U.S. Treasury Bonds,
10.375% to 13.125%, due 5/15/01 to 11/15/12) 09/01/95 5.76% $ 100,000,000
127,676,000 Fuji Securities, Inc. (Collateralized by $124,720,000
U.S. Treasury Notes, 4.750% to 7.125%, due 9/30/96 to 10/15/98) 09/01/95 5.80 127,676,000
100,000,000 Goldman Sachs (Collateralized by $56,412,000
U.S. Treasury Notes, 5.625% to 7.875%, due 2/15/96 to 8/15/03
and 47,685,000 U.S. Treasury Bill, due 3/07/96) 09/01/95 5.75 100,000,000
200,000,000 Morgan (J.P.) Securities, Inc. (Collateralized by $198,000,000
U.S. Treasury Notes, 7.250%, due 11/30/96) 09/01/95 5.80 200,000,000
- ---------------- -------------
527,676,000 Total Repurchase Agreements, Overnight 527,676,000
- ---------------- -------------
<CAPTION>
U.S. Government Agencies (3.73%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
$ 1,055,998 Small Business Administration Variable Loan 09/25/09 (a) 6.96 % $ 1,054,945
10,667,255 Small Business Administration Variable Loan 05/25/14 (a) 7.16 10,657,971
2,109,492 Small Business Administration Variable Loan 09/25/14 (a) 6.97 2,107,964
1,333,870 Small Business Administration Variable Loan 10/25/14 (a) 7.21 1,332,820
5,129,122 Small Business Administration Variable Loan 11/25/14 (a) 6.99 5,105,738
6,316,773 Small Business Administration Variable Loan 12/25/14 (a) 6.97 6,303,603
2,379,675 Small Business Administration Variable Loan 04/25/17 (a) 7.25 2,379,675
- --------------- ---------------
28,992,185 Total U.S. Government Agencies 28,942,716
- --------------- ---------------
<CAPTION>
U.S. Government Obligations (28.52%)
- --------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
$ 25,000,000 U.S. Treasury Bill 09/07/95 6.19 24,975,000
25,000,000 U.S. Treasury Bill 10/05/95 6.12 24,859,750
25,000,000 U.S. Treasury Bill 12/07/95 5.54 24,636,924
25,000,000 U.S. Treasury Bill 12/14/95 5.59 24,606,389
25,000,000 U.S. Treasury Bill 12/21/95 5.56 24,582,594
25,000,000 U.S. Treasury Bill 01/11/96 5.50 24,509,583
25,000,000 U.S. Treasury Bill 01/18/96 5.55 24,478,750
50,000,000 U.S. Treasury Bill 02/08/96 5.63 48,785,555
- --------------- ---------------
225,000,000 Total U.S. Government Obligations 221,434,545
- --------------- ---------------
Total Investments(100.22%)(Cost $778,053,261+) 778,053,261
Liabilities in Excess of Cash and Other Assets(-0.22%) ( 1,662,552)
---------------
Net Assets(100.00%) $ 776,390,709
===============
Net asset value, offering and redemption price per share:
Class A shares, 469,591,744 shares outstanding(Note 3) $ 1.00
===============
Class B shares, 306,798,965 shares outstanding(Note 3) $ 1.00
===============
+ Aggregate cost for federal income tax purposes is identical.
(a) This is a small business administration variable pool certificate. The
interest rate is adjusted periodically based upon the prime rate.
</TABLE>
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See Notes to Financial Statements.
<PAGE>
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SHORT TERM INCOME FUND, INC.
STATEMENTS OF OPERATIONS
YEAR ENDED AUGUST 31, 1995
===============================================================================
<TABLE>
<CAPTION>
Money Market U.S. Government
Portfolio Portfolio
------------------- -------------------
INVESTMENT INCOME
<S> <C> <C>
Income:
Interest.............................................................. $ 47,228,729 $ 37,536,309
------------------- -------------------
Expenses: (Note 2)
Investment management fee............................................. 2,520,468 1,717,027
Administration fee.................................................... 1,686,530 1,323,622
Distribution fee (Class A)............................................ 1,533,545 1,065,325
Custodian, shareholder servicing and related
shareholder expenses............................................. 1,994,421 430,048
Legal, compliance and filing fees..................................... 85,925 53,698
Audit and accounting.................................................. 92,951 60,748
Directors' fees ...................................................... 29,308 16,773
Miscellaneous......................................................... 30,571 16,638
------------------- -------------------
Total expenses.................................................... 7,973,719 4,683,879
Less fees waived (Note 2)......................................... ( 1,144,984) --
------------------- -------------------
Net expenses.................................................. 6,828,735 4,683,879
------------------- -------------------
Net investment income..................................................... 40,399,994 32,852,430
------------------- -------------------
<CAPTION>
REALIZED GAIN (LOSS) ON INVESTMENTS
<S> <C> <C>
Net realized gain (loss) on investments................................... ( 11,438,610) 19,188
------------------- --------------------
Increase in net assets from operations.................................... $ 28,961,384 $ 32,871,618
=================== ====================
</TABLE>
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See Notes to Financial Statements.
<PAGE>
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SHORT TERM INCOME FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED AUGUST 31, 1995 AND 1994
===============================================================================
<TABLE>
<CAPTION>
Money Market Portfolio U.S. Government Portfolio
------------------------------------- -----------------------------------
1995 1994 1995 1994
---------------- ------------------ --------------- -----------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
<S> <C> <C> <C> <C>
Net investment income.................. $ 40,399,994 $ 35,247,405 $ 32,852,430 $ 14,748,649
Net realized gain (loss) on investments ( 11,438,610) ( 462,944) 19,188 6,185
---------------- ---------------- --------------- ----------------
Increase in net assets from operations. 28,961,384 34,784,461 32,871,618 14,754,834
Dividends to shareholders:
Net investment income
Class A.............................. ( 28,998,644) ( 20,224,664) ( 20,587,273) ( 11,731,317)
Class B.............................. ( 11,207,955) ( 15,022,741) ( 12,265,157) ( 3,017,332)
Net realized gain on investments
Class A.............................. -- ( 6,463) ( 11,606)* ( 5,034)
Class B.............................. -- ( 4,353) ( 7,582)* ( 1,151)
Capital share transactions (Note 3):
Class A.............................. ( 13,625,381) ( 29,024,564) 70,892,796 ( 30,464,588)
Class B.............................. ( 203,707,058) ( 30,907,624) 226,602,774 ( 21,194,952)
Contribution of capital from
investment manager (Note 2)..... 9,488,117 -- -- --
---------------- ----------------- --------------- ---------------
Total increase (decrease)............ ( 219,089,537) ( 60,405,948) 297,495,570 ( 51,659,540)
Net assets:
Beginning of year.................... 1,098,761,079 1,159,167,027 478,895,139 530,554,679
---------------- ----------------- -------------- ---------------
End of year.......................... $ 879,671,542 $ 1,098,761,079 $ 776,390,709 $ 478,895,139
================ ================= ============== ===============
* Represents a Long Term Capital Gain distribution of $0.000024715 per share
declared to shareholders of record as of August 31, 1995 and paid on September
15, 1995.
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
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SHORT TERM INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
===============================================================================
1. Summary of Accounting Policies.
Short Term Income Fund, Inc. is a no-load, diversified, open-end management
investment company registered under the Investment Company Act of 1940. The Fund
is presently comprised of two Portfolios, Money Market Portfolio and U.S.
Government Portfolio, with each Portfolio having two classes of stock
authorized, Class A and Class B. The Class A shares of each Portfolio are
subject to a service fee pursuant to each Portfolio's Distribution and Service
Plan. The Class B shares are not subject to a service fee. In all other
respects, the Class A and Class B shares represent the same interest in the
income and assets of each respective Portfolio. The Fund's financial statements
are prepared in accordance with generally accepted accounting principles for
investment companies as follows.
a) Valuation of Securities -
Investments are valued at amortized cost. Under this valuation method, a
portfolio instrument is valued at cost and any discount or premium is
amortized on a constant basis to the maturity of the instrument.
b) Federal Income Taxes -
It is the policy of each Portfolio to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to its shareholders. Therefore, no
provision for federal income tax is required.
c) Dividends and Distributions -
Dividends from investment income (including realized capital gains and
losses), determined on a class level, are declared daily and paid monthly.
With respect to the Money Market Portfolio, realized capital gains and
losses are excluded.
d) General -
Securities transactions are recorded on a trade date basis. Interest income
is accrued as earned. Realized gains and losses from securities
transactions are recorded on the identified cost basis. It is the Fund's
policy to take possession of securities as collateral under repurchase
agreements and to determine on a daily basis that the value of such
securities are sufficient to cover the value of the repurchase agreements.
2. Investment Management Fees and Other Transactions with Affiliates.
Under the Management Contract, the Money Market Portfolio pays a management fee
to Reich & Tang Asset Management, L.P. (the Manager) at the annual rate of .30%
of the Portfolio's average daily net assets not in excess of $750 million, plus
.29% of such assets in excess of $750 million but not in excess of $1 billion,
plus .28% of such assets in excess of $1 billion but not in excess of $1.5
billion, plus .27% of such assets in excess of $1.5 billion. The U.S. Government
Portfolio pays a management fee to the Manager equal to .275% of the Portfolio's
average daily net assets not in excess of $250 million, plus .25% of such assets
in excess of $250 million. The Manager has agreed to reimburse the Fund for its
net operating expenses (exclusive of taxes, brokerage, interest and
extraordinary expenses) to the extent that such expenses, including the
management fee, for any fiscal year exceed 1% of the average daily net assets of
each Portfolio for such fiscal year. No such reimbursement was required for the
year ended August 31, 1995.
Pursuant to an Administrative Services Agreement, each Portfolio pays to the
Manager an annual fee of .20% of each Portfolio's average daily net assets not
in excess of $1.25 billion, plus .19% of such assets in excess of $1.25 billion
but not in excess of $1.5 billion, plus .18% of such assets in excess of $1.5
billion.
- -------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
2. Investment Management Fees and Other Transactions with Affiliates
(Continued).
Pursuant to a Distribution and Service Plan adopted under Securities and
Exchange Commission Rule 12b-1, the Fund and Reich & Tang Distributors L.P. (the
Distributor) entered into a Distribution Agreement and a Shareholder Servicing
Agreement, only with respect to the Class A shares of each Portfolio. For its
services under the Shareholder Servicing Agreement, the Distributor receives
from each Portfolio with respect only to the Class A shares, a service fee equal
to .25% of 1% per annum of each Portfolio's average daily net assets.
For the year ended August 31, 1995 the Manager voluntarily waived investment
management fees and administration fees of $1,060,569 and $84,415, respectively,
of the Money Market Portfolio.
Fees are paid to Directors who are unaffiliated with the Manager on the basis of
$9,000 per annum plus $1,250 per meeting attended.
Included in the Statements of Operations under the caption "Custodian,
shareholder servicing and related shareholder expenses" are fees of $619,400 and
$135,121 for the Money Market Portfolio and the U.S. Government Portfolio,
respectively, paid to Fundtech Services L.P., an affiliate of the Manager as
servicing agent for the Fund.
On November 4, 1994, in order to maintain the net asset value of the Money
Market Portfolio at $1.00, the Manager purchased U.S. Government Agency
Securities, from the Money Market Portfolio for $130,750,000 which was equal to
the Money Market Portfolio's amortized cost or carrying value on that date. The
securities had a fair value of $121,261,883 on this date. The excess over fair
value ($9,488,117) that was paid by the Manager has been classified by the Money
Market Portfolio as a realized loss in the Statement of Operations and a capital
contribution in the Statement of Changes in Net Assets.
3. Capital Stock.
At August 31, 1995, 10,000,000,000 shares of $.001 par value stock were
authorized and capital paid in for the Money Market Portfolio and the U.S.
Government Portfolio amounted to $881,902,400 and $776,390,709, respectively.
Transactions in capital stock, all at $1.00 per share, were as follows:
<TABLE>
<CAPTION>
Money Market Portfolio U.S. Government Portfolio
---------------------------------- -----------------------------------
Year Year Year Year
Ended Ended Ended Ended
8/31/95 8/31/94 8/31/95 8/31/94
------------ ------------- ------------- --------------
Class A
<S> <C> <C> <C> <C>
Sold................................ 697,072,360 1,700,098,534 564,854,707 536,615,973
Issued on reinvestment of dividends. 25,911,372 18,107,312 19,605,821 11,148,576
Redeemed............................ ( 736,609,113) (1,747,230,410) ( 513,567,732) ( 578,229,137)
------------- -------------- ------------- -------------
Net increase (decrease)............. ( 13,625,381) ( 29,024,564) 70,892,796 ( 30,464,588)
============= ============== ============= =============
Class B
Sold................................ 515,705,468 1,029,117,086 1,119,846,439 708,239,603
Issued on reinvestment of dividends. 11,057,107 14,662,636 10,643,618 2,404,230
Redeemed............................ ( 730,469,633) (1,074,687,346) ( 903,887,283) ( 731,838,785)
------------- -------------- ------------- -------------
Net increase (decrease)............. ( 203,707,058) ( 30,907,624) 226,602,774 ( 21,194,952)
============= ============== ============= =============
</TABLE>
4. Sales of Securities.
Accumulated undistributed realized losses of the Money Market Portfolio at
August 31, 1995 amounted to $2,424,253. At August 31, 1995 the Fund had tax
basis capital losses of $2,413,437 which may be carried forward to offset future
capital gains through August 31, 2002.
- -------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
===============================================================================
5. Selected Financial Information.
<TABLE>
<CAPTION>
Money Market Portfolio
Year Ended August 31,
----------------------------------------------------------------------------------
1995 1994 1993 1992 1991
------------------ ----------------- ------------------ ------- -------
Class A Class B Class A Class B Class A ClassB**
------- ------- ------- ------- ------- --------
Per Share Operating Performance:
(for a share outstanding throughout the period)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
------- ------- ------- ------- --------- -------- ------- -------
Income from investment operations:
Net investment income 0.047 0.050 0.029 0.031 0.027 0.021 0.041 0.063
Less distributions:
Dividends from net investment income 0.047 0.050 0.029 0.031 0.027 0.021 0.041 0.063
------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of year $1.00 $1.00 $ 1.00 $1.00 $ 1.00 $1.00 $1.00 $1.00
======= ======= ======= ======= ======= ======= ======= =======
Total Return......... 4.82%++ 5.08%++ 2.93% 3.19% 2.69% 2.84%* 4.13% 6.48%
Ratios/Supplemental Data
Net assets, end of year (000) $661,795 $217,877 $676,756 $422,005 $706,074 $453,093 $694,635 $676,604
Ratios to average net assets:
Expenses............. 0.88%+ 0.62%+ 0.91% 0.67% 0.91%+ 0.71%* 0.83% 0.81%
Net investment income 4.75% 4.90% 2.89% 3.13% 2.59%+ 2.75%* 4.03% 6.34%
</TABLE>
<TABLE>
<CAPTION>
U.S. Government Portfolio
Year Ended August 31,
------------------------------------------------------------------------------
1995 1994 1993 1992 1991
---------------- ---------------- ------------------ ---------- --------
Class A Class B Class A Class B Class A Class B**
------- ------- ------- ------- ------- ---------
Per Share Operating Performance:
(for a share outstanding throughout the period)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
------- ------- ------- ------ ------ ------ ------ -----
Income from investment operations:
Net investment income 0.048 0.051 0.028 0.030 0.025 0.021 0.039 0.061
Less distributions:
Dividends from net investment income 0.048 0.051 0.028 0.030 0.025 0.021 0.039 0.061
------- ------- ------ ------- ------- ------- ------ ------
Net asset value, end of year $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ====== ======= ======= ======= ====== ======
Total Return......... 4.93% 5.19% 2.79% 3.04% 2.56% 2.75%* 3.98% 6.25%
Ratios/Supplemental Data
Net assets, end of year (000) $469,592 $306,799 $398,699 $80,196 $429,164 $101,391 $579,526 $596,085
Ratios to average net assets:
Expenses............. 0.80% 0.55% 0.85% 0.60% 0.85% 0.63%* 0.77% 0.76%
Net investment income 4.83% 5.20% 2.75% 2.98% 2.52% 2.68%* 3.92% 5.96%
* Annualized
** Distribution of Class B shares commenced November 30, 1992.
+ Net of management, and administration fees waived equivalent to 0.13% and
0.01%. In addition, in 1993 shareholder servicing fees equivalent to 0.03%
were waived only with respect to Class A.
++ Includes the effect of a capital contribution from the Manager without the
capital contribution, the total return would have been 3.42% for Class A
and 3.69% for Class B.
</TABLE>
- -------------------------------------------------------------------------------
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SHORT TERM INCOME FUND, INC.
INDEPENDENT AUDITOR'S REPORT
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The Board of Directors and Shareholders
Short Term Income Fund, Inc.
We have audited the accompanying statements of net assets of Money Market
Portfolio and the U.S. Government Portfolio of Short Term Income Fund, Inc. as
of August 31, 1995, and the related statements of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended and the selected financial information for each of the five
years in the period then ended. These financial statements and selected
financial information are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
selected financial information based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and selected
financial information are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of August 31, 1995, by correspondence with the custodian. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and selected financial information
referred to above present fairly, in all material respects, the financial
position of the Money Market Portfolio and the U.S. Government Portfolio of
Short Term Income Fund, Inc. as of August 31, 1995, the results of its
operations, the changes in its net assets and the selected financial information
for the periods indicated, in conformity with generally accepted accounting
principles.
/s/ McGladrey & Pullen, LLP
New York, New York
September 27, 1995
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This report is submitted for the general information of the shareholders of the
Fund. It is not authorized for distribution to prospective investors in the Fund
unless preceded or accompanied by an effective prospectus, which includes
information regarding the Fund's objectives and policies, experience of its
management, marketability of shares, and other information.
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Short Term Income Fund, Inc.
600 Fifth Avenue
New York, New York 10020
Manager
Reich & Tang Asset Management, L.P.
600 Fifth Avenue
New York, New York 10020
Custodian, Transfer Agent & Dividend
Disbursing Agent
Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, Missouri 64105
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