- -------------------------------------------------------------------------------
SHORT TERM
INCOME
FUND, INC.
Semi-Annual Report
February 28, 1995
(Unaudited)
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<PAGE>
1
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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 semi-annual report of Short Term Income Fund, Inc.
for the period September 1, 1994 through February 28, 1995.
The Fund's Money Market Portfolio had 48,583 shareholders and net assets of
$769,967,147 as of February 28, 1995. The Government Portfolio had 10,127
shareholders and net assets of $684,562,451 as of February 28, 1995. The Federal
Reserve, during the last fiscal year, has raised the Federal Funds Rate from
3.00% to 6.25%. Rates on taxable investments have risen accordingly.
We thank you for your support and look forward to continuing to serve your cash
management needs.
Sincerely,
/s/Steven Duff
Steven Duff
President
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<PAGE>
2
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SHORT TERM INCOME FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS
FEBRUARY 28, 1995
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Domestic Securities (86.30%)
Certificates of Deposit(3.25%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 25,000,000 American Express Centurian Bank 03/13/95 6.00% $ 25,000,000
------------ ------------
25,000,000 Total Cetificates of Deposit 25,000,000
------------ ------------
<CAPTION>
Commercial Paper (17.65 %)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 37,000,000 Ford Motor Credit Corp. 03/03/95 5.91% $ 36,987,872
37,000,000 General Electric Capital Corp. 03/03/95 5.93 36,987,831
10,000,000 Receivables Capital Corp. 03/09/95 6.03 9,986,667
27,065,000 Receivables Capital Corp. 03/10/95 6.03 27,024,402
25,000,000 Golden Gate Funding Corp. 03/20/95 6.00 24,921,097
------------ ------------
136,065,000 Total Commercial Paper 135,907,869
------------ ------------
<CAPTION>
U.S. Government Agencies (4.55 %)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 15,000,000 Federal Farm Credit Bank 08/01/95 5.38 % $ 15,000,000
20,000,000 Federal Home Loan Bank 11/18/97 (d) 6.50 20,000,000
------------ ------------
35,000,000 Total U.S. Government Agencies 35,000,000
------------ ------------
<CAPTION>
U.S. Government Obligations (12.34%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 2,061,878 Small Business Administration Variable Loan 01/25/15 (a) 7.77% $ 2,087,119
2,358,438 Small Business Administration Variable Loan 01/25/15 (a) 7.79 2,387,102
14,140,127 Small Business Administration Variable Loan 02/25/15 (a) 7.27 14,306,722
6,017,615 Small Business Administration Variable Loan 02/25/15 (a) 7.26 6,088,108
2,797,435 Small Business Administration Variable Loan 03/25/15 (a) 6.75 2,797,435
11,487,239 Small Business Administration Variable Loan 03/25/15 (a) 7.28 11,628,348
3,536,883 Small Business Administration Variable Loan 06/25/16 (a) 6.63 3,536,883
2,359,928 Small Business Administration Variable Loan 08/25/17 (a) 7.00 2,359,928
25,000,000 U.S. Treasury Bills 04/06/95 5.37 24,869,000
25,000,000 U.S. Treasury Notes 03/31/95 4.29 24,989,456
------------ ------------
94,759,543 Total U.S. Government Obligations 95,050,101
------------ ------------
<CAPTION>
Master Notes (5.20%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 40,000,000 J.P. Morgan Securities 08/18/95 (b) 6.35 % $ 40,000,000
------------ ------------
40,000,000 Total Master Notes 40,000,000
------------- ------------
<CAPTION>
Medium Term Notes (1.30%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 10,000,000 Citicorp 03/20/95 4.69% $ 10,015,253
----------- ------------
10,000,000 Total Medium Term Notes 10,015,253
----------- ------------
</TABLE>
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SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
3
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===============================================================================
<TABLE>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- -------
Short Term Bank Notes (13.24%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 25,000,000 Republic National Bank of New York 03/08/95 4.35% $ 24,999,765
15,000,000 Nationsbank 07/18/95 5.75 14,991,393
25,000,000 Nationsbank 07/18/95 5.75 24,986,499
37,000,000 Boatman's National Bank of St. Louis 08/17/95 6.08 37,000,000
------------ ------------
102,000,000 Total Short Term Bank Notes 101,977,657
------------ ------------
<CAPTION>
Time Deposits-Domestic (19.74%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 38,000,000 National Bank of Canada 03/01/95 6.06% $ 38,000,000
38,000,000 Pittsburgh National Bank 03/01/95 6.06 38,000,000
38,000,000 Toronto Dominion Bank 03/02/95 5.88 38,000,000
38,000,000 Canadian Imperial Bank of Commerce 03/02/95 5.88 38,000,000
------------ ------------
152,000,000 Total Time Deposits-Domestic 152,000,000
------------ ------------
<CAPTION>
Repurchase Agreement, Overnight (9.03%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 69,532,000 Morgan (J.P.) Securities, Inc.
(Collateralized by $70,925,100
U.S. Treasury Notes, 4.375% to 8.875%,
due 02/15/96 to 02/15/05) 03/01/95 6.08% $ 69,532,000
------------ ------------
69,532,000 Total Repurchase Agreement, Overnight 69,532,000
------------ ------------
Total Domestic Securities 664,482,880
============
<CAPTION>
FOREIGN SECURITIES (13.15%)
Foreign Commercial Paper (9.91%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 38,000,000 Union Bank of Switzerland 03/01/95 6.05% $ 38,000,000
38,000,000 Swedish Export Credit Corp. 03/03/95 5.99 37,987,397
300,000 All Nippon Airways Co., Ltd. 09/25/95 (c) 6.66 300,000
------------ ------------
76,300,000 Total Foreign Commercial Paper 76,287,397
------------ ------------
<CAPTION>
Yankee Certificates of Deposit (3.24%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 25,000,000 Credit Suisse 03/22/95 4.61% $ 24,999,861
------------ -------------
25,000,000 Total Yankee Certificates of Deposit 24,999,861
------------ -------------
Total Foreign Securities 101,287,258
-------------
Total Investments (99.45%) (Cost $765,770,138+) 765,770,138
Cash and Other Assets, Net of Liabilities (.55%) 4,197,009
-------------
Net Assets (100.00%) $ 769,967,147
-------------
Net asset value, offering and redemption price per share:
Class A shares, 582,568,368 shares outstanding (Note 3) $ 1.00
=============
Class B shares, 189,826,127 shares outstanding (Note 3) $ 1.00
=============
+ Aggregate cost for federal income tax purposes is identical.
</TABLE>
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SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
4
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SHORT TERM INCOME FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS
FEBRUARY 28, 1995 (CONTINUED)
(UNAUDITED)
===============================================================================
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 Master Note. The interest rate is adjusted
daily based upon the Federal Funds rate.
(c) This is a floating rate Foreign Commercial Paper. The interest rate is
adjusted weekly based upon the 3-month Treasury Bill Auction.
(d) This is a floating rate federal home loan bank note. The interest rate is
adjusted daily based upon the prime rate.
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SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
5
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SHORT TERM INCOME FUND, INC.
U.S. GOVERNMENT PORTFOLIO
STATEMENT OF NET ASSETS
FEBRUARY 28, 1995
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- -------
Repurchase Agreements, Overnight (70.57%
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 50,000,000 CS First Boston (Collateralized $50,215,000
U.S. Treasury Notes, 7.500%, due 02/15/05) 03/01/95 6.05% $ 50,000,000
233,122,000 Fuji Securities, Inc. (Collateralized by $195,275,000
U.S. Treasury Notes, 6.500% to 13.375%,
due 11/30/96 to 11/15/04) 03/01/95 6.02 233,122,000
100,000,000 Goldman Sachs (Collateralized by $100,000,439
U.S. Treasury Notes, 6.875% to 7.875%,
due 04/15/98 to 08/31/99) 03/01/95 6.03 100,000,000
100,000,000 Merrill Lynch (Collateralized by $101,745,000
U.S. Treasury Notes, 6.500%, due 04/30/99) 03/01/95 5.95 100,000,000
------------ -------------
483,122,000 Total Repurchase Agreements, Overnight 483,122,000
------------ -------------
<CAPTION>
U.S. Government Obligations (29.47%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 1,076,962 Small Business Administration Variable Loan 09/25/09 (a) 7.97% $ 1,075,863
11,177,058 Small Business Administration Variable Loan 05/25/14 (a) 7.40 11,167,116
2,134,147 Small Business Administration Variable Loan 09/25/14 (a) 7.99 2,132,561
539,858 Small Business Administration Variable Loan 10/25/14 (a) 7.45 539,424
809,787 Small Business Administration Variable Loan 10/25/14 (a) 7.43 809,133
5,191,109 Small Business Administration Variable Loan 11/25/14 (a) 7.21 5,166,921
6,672,000 Small Business Administration Variable Loan 12/25/14 (a) 7.19 6,657,754
7,907,153 Small Business Administration Variable Loan 05/25/16 (a) 7.27 7,932,189
2,402,668 Small Business Administration Variable Loan 04/25/17 (a) 6.75 2,402,667
15,000,000 U.S. Treasury Bills 03/09/95 4.18 14,986,616
25,000,000 U.S. Treasury Bills 03/16/95 5.13 24,947,917
25,000,000 U.S. Treasury Bills 04/06/95 5.37 24,869,000
25,000,000 U.S. Treasury Bills 04/20/95 5.56 24,812,153
50,000,000 U.S. Treasury Bills 04/27/95 5.92 49,540,042
25,000,000 U.S. Treasury Bills 05/18/95 5.91 24,689,354
------------ -------------
202,910,742 Total U.S. Governsment Obligations 201,728,710
-------------- -------------
Total Investments(100.04%)(Cost $684,850,710+) 684,850,710
-------------
Liabilities in Excess of Cash and Other Assets(-0.04%) ( 288,259)
-------------
Net Assets(100.00%) $684,562,451
=============
Net asset value, offering and redemption price per share:
Class A shares, 431,483,326 shares outstanding(Note 3) $ 1.00
=============
Class B shares, 253,079,125 shares outstanding(Note 3) $ 1.00
=============
+ Aggregate cost for federal income tax purposes is identical.
FOOTNOTES:
(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>
6
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SHORT TERM INCOME FUND, INC.
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 28, 1995
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Money Market U.S. Government
Portfolio Portfolio
------------ -----------------
INVESTMENT INCOME
Income:
<S> <C> <C>
Interest............................................................. $ 22,171,415 $ 15,758,820
------------ ------------
Expenses: (Note 2)
Investment management fee............................................ 642,251 775,316
Administration fee................................................... 771,191 595,458
Distribution fee (Class A)........................................... 747,668 520,278
Custodian, shareholder servicing and related
shareholder expenses............................................ 833,517 173,352
Legal, compliance and filing fees.................................... 36,717 22,724
Audit and accounting................................................. 33,129 26,421
Directors' fees ..................................................... 13,500 7,500
Miscellaneous........................................................ 183,255 20,921
------------ ------------
Total expenses.................................................... 3,261,228 2,141,970
------------ ------------
Net investment income..................................................... 18,910,187 13,616,850
------------ ------------
REALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments.............................. ( 11,612,852) 5,214
-------------- ------------
Increase in net assets from operations............................... 7,297,335 13,622,064
============== ============
</TABLE>
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SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
7
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SHORT TERM INCOME FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
===============================================================================
<TABLE>
<CAPTION>
Money Market Portfolio U.S. Government Portfolio
-------------------------------- ----------------------------
Six Months Six Months
Ended Year Ended Year
2/28/95 Ended 2/28/95 Ended
(Unaudited) 8/31/94 (Unaudited) 8/31/94
------------- ---------------- ----------- ----------
INCREASE (DECREASE) IN NET ASSETS
Operations:
<S> <C> <C> <C> <C>
Net investment income..................... $ 18,910,187 $ 35,247,405 $ 13,616,850 $ 14,748,649
Net realized gain (loss) on investments... ( 11,612,852) ( 462,944) 5,214 6,185
------------- ------------- ------------- -------------
Increase in net assets from operations.... 7,297,335 34,784,461 13,622,064 14,754,834
Dividends to shareholders:
Net investment income
Class A............................... ( 12,947,283) ( 20,224,664) ( 9,285,368) ( 11,731,317)
Class B............................... ( 5,789,479) ( 15,022,741) ( 4,331,482) ( 3,017,332)
Net realized gain on investments
Class A............................... ( 1,382) ( 6,463) ( 4,098) ( 5,034)
Class B............................... ( 896) ( 4,353) ( 1,116) ( 1,151)
Capital share transactions (Note 3):
Class A............................... (94,481,009) ( 29,024,564) ( 32,784,378) ( 30,464,588)
Class B............................... 232,359,335) ( 30,907,624) (172,882,934) ( 21,194,952)
------------- ------------- ------------- -------------
Contribution of capital from
investment manager (Note 2).. 9,488,117 -- -- --
------------- ------------- ------------- -------------
Total increasae (decrease)............ (328,793,932) (60,405,948) 205,667,312 ( 51,659,540)
Net assets:
Beginning of period................... 1,098,761,079 1,159,167,027 478,895,139 530,554,679
------------- ------------- ------------- -------------
End of period......................... 769,967,147 1,098,761,079 684,562,451 478,895,139
============= ============= ============= =============
</TABLE>
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SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
8
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SHORT TERM INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
===============================================================================
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. Distribution of Class B shares
commenced November 30, 1992. 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
period ended February 28, 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.
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<PAGE>
9
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===============================================================================
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 period ended February 28, 1995 the manager voluntarily waived investment
management fees and administration fees of $635,569 and $84,415, respectively,
on 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 $304,787 and
$63,637 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 $130,749,900 which was equal to
the Money Market Portfolio's amortized cost or carrying value on that date. The
securities had a fair value of $121,261,783 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 February 28, 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 $781,882,612 and $684,562,451, respectively.
Transactions in capital stock, all at $1.00 per share, were as follows:
<TABLE>
<CAPTION>
Money Market Portfolio U.S. Government Portfolio
--------------------------- ----------------------------
Six Months Year Six Months Year
Ended Ended Ended Ended
2/28/95 8/31/94 2/28/95 8/31/94
------- ------- ------- -------
Class A
<S> <C> <C> <C> <C>
Sold ....................................................... 357,303,356 1,700,098,534 319,937,144 536,615,973
Issued on reinvestment of dividends. 11,692,448 18,107,312 8,869,837 11,148,576
Redeemed ................................................... ( 463,476,813) ( 1,747,230,410) ( 296,022,603) ( 578,229,137)
------------- --------------- ------------- -------------
Net increase (decrease) ................................... (94,481,009) ( 29,024,564) 32,784,378 ( 30,464,588)
============= =============== ============= =============
Class B
Sold ....................................................... 283,766,663 1,029,117,086 654,412,634 708,239,603
Issued on reinvestment of dividends ........................ 5,891,786 14,662,636 3,542,967 2,404,230
Redeemed ................................................... (522,017,784) (1,074,687,346) (485,072,667) (731,838,785)
------------- --------------- ------------- -------------
Net increase (decrease) .................................... (232,359,335) (30,907,624) 172,882,934 (21,194,952)
============= =============== ============= =============
</TABLE>
4. Sales of Securities.
Accumulated undistributed realized losses of the Money Market Portfolio at
February 28, 1995 amounted to $12,088,890. At February 28, 1995 the Fund had tax
basis capital losses of $473,760 which may be carried forward to offset future
capital gains through August 31, 2002.
- -------------------------------------------------------------------------------
<PAGE>
10
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SHORT TERM INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
===============================================================================
5. Selected Financial Information.
<TABLE>
<CAPTION>
Money Market Portfolio
Six Months Ended Year Ended August 31,
------------------------------------------------------------------
2/28/95 1994 1993 1992 1991 1990
----------------- ------------------ ------------------ ------ ------ ------
Class A Class B Class A Class B Class A Class B
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment income 0.021 0.023 0.029 0.031 0.027 0.021 0.041 0.063 0.078
Less distributions:
Dividends from net investment income 0.021 0.023 0.029 0.031 0.027 0.021 0.041 0.063 0.078
------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= ======= ======= ======= =======
Total Return...... 4.42%*++ 4.68%*++ 2.93% 3.19% 2.69% 2.84%* 4.13% 6.48% 8.02%
Ratios/Supplemental Data
Net assets, end of period (000) $580,791 $189,176 $676,756 $422,005 $706,074 $453,093 $694,635 $676,604 $887,270
Ratios to average net assets:
Expenses........ 0.84%*+ 0.58%*+ 0.91% 0.67% 0.91%+ 0.71%* 0.83% 0.81% 0.76%
Net investment income 4.37%* 4.53%* 2.89% 3.13% 2.59%+ 2.75%* 4.03% 6.34% 7.72%
<CAPTION>
U.S. Government Portfolio
Six Months Ended Year Ended August 31,
------------------------------------------------------------------
2/28/95 1994 1993 1992 1991 1990
----------------- ------------------ ------------------ ------ ------ ------
Class A Class B Class A Class B Class A Class B
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
(for a share outstanding throughout the period
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations: ------- ------- ------- ------- ------- ------- ------- ------- -------
Net investment income 0.022 0.023 0.028 0.030 0.025 0.021 0.039 0.061 0.076
Less distributions:
Dividends from net investment income 0.022 0.023 0.028 0.030 0.025 0.021 0.039 0.061 0.076
------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= ======= ======= ======= =======
Total Return...... 4.54%* 4.80%* 2.79% 3.04% 2.56% 2.75%* 3.98% 6.25% 7.79%
Ratios/Supplemental Data
Net assets, end of period (000) $431,483 $253,079 $398,699 $ 80,196 $429,164 $101,391 $579,526 $596,085 $350,088
Ratios to average net assets:
Expenses........ 0.80%* 0.54%* 0.85% 0.60% 0.85% 0.63%* 0.77% 0.76% 0.78%
Net investment income 4.46%* 4.83%* 2.75% 2.98% 2.52% 2.68%* 3.92% 5.96% 7.41%
* Annualized
+ Net of management, administration and distribution fees waived equivalent
to 0.15%, 0.02% and .0.03% per share of average net assets.
++ Includes the effect of a capital contribution from the Manager without the
capital contribution, the total return would have been 2.81% for Class A
and 3.06% for Class B.
</TABLE>
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<PAGE>
11
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This Page Intentionally Left Blank.
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<PAGE>
12
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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
Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, MO 64105
Transfer Agent &
Dividend Disbursing Agent
Supervised Service Company
811 Main Street
Kansas City, MO 64105
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