<PAGE>
- --------------------------------------------------------------------------------
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 ended February 29, 2000.
The Fund's Money Market Portfolio had 82,047 shareholders and net assets of
$1,650,562,357 as of February 29, 2000. The Government Portfolio had 12,803
shareholders and net assets of $893,762,633 as of February 29, 2000.
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
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS
FEBRUARY 29, 2000
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Commercial Paper (19.71%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 15,000,000 Bank of America Corp. 08/11/00 6.25% $ 14,589,104
15,000,000 Bank of America Corp. 08/14/00 6.25 14,581,542
25,000,000 Bear Stearns Companies Inc. 04/05/00 5.90 24,857,813
20,000,000 Caterpillar Financial Services 09/19/00 6.35 19,312,078
25,000,000 General Electric Capital Corporation 03/17/00 5.77 24,936,667
31,000,000 Island Finance Puerto Rico, Inc. 04/10/00 5.90 30,798,622
20,000,000 Island Finance Puerto Rico, Inc. 05/04/00 5.98 19,790,222
35,000,000 Lehman Brothers Holdings Inc. 06/12/00 6.24 34,390,154
25,000,000 National Rural Utilities Cooperative 03/23/00 5.82 24,912,153
9,253,000 National Rural Utilities Cooperative 03/24/00 5.77 9,219,304
8,500,000 Paine Webber Group 03/23/00 5.88 8,469,613
25,000,000 Paine Webber Group 04/13/00 5.94 24,823,819
25,000,000 Riverwoods Funding Corp. 03/10/00 5.81 24,964,062
25,000,000 Riverwoods Funding Corp. 03/21/00 5.81 24,919,722
25,000,000 Riverwoods Funding Corp. 05/10/00 5.99 24,713,194
- -------------- -------------
328,753,000 Total Commercial Paper 325,278,069
- -------------- -------------
<CAPTION>
Foreign Commercial Paper (0.91%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 15,000,000 KFW International Finance Inc. 03/02/00 5.73% $ 14,997,633
- -------------- -------------
15,000,000 Total Foreign Commercial Paper 14,997,633
- -------------- -------------
<CAPTION>
Letter of Credit Commercial Paper (22.05%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 15,000,000 Banca Serfin S.A.
LOC Barclays Bank PLC 06/05/00 6.08% $ 14,764,000
15,000,000 Banco Bozano Simonsen S.A.
LOC Banco Santander 05/17/00 6.00 14,813,114
9,500,000 Banco Bozano Simonsen S.A.
LOC Banco Santander 06/16/00 5.85 9,343,925
7,000,000 Banco Bradesco S.A.
LOC Barclays Bank PLC 06/19/00 6.09 6,873,378
15,000,000 Banco Hipotecario
LOC Barclays Bank PLC 07/26/00 6.03 14,644,750
20,000,000 Banco Itau S.A.
LOC Barclays Bank PLC 05/26/00 6.05 19,723,367
15,000,000 Banco Rio de La Plata
LOC HSBC Bank 04/10/00 6.00 14,902,500
15,000,000 Banco Rio de La Plata
LOC HSBC Bank 04/11/00 6.16 14,897,842
15,000,000 Citic Pacific Finance
LOC Bank of America 03/14/00 5.82 14,968,746
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Letter of Credit Commercial Paper (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 18,532,000 CSN Overseas
LOC Barclays Bank PLC 06/28/00 6.18% $ 18,162,611
12,000,000 Dean Health System, Inc.
LOC Rabobank Nederland 03/02/00 5.86 11,998,057
15,000,000 Dixie Overseas Ltd.
LOC Credit Agricole 03/10/00 5.84 14,978,212
15,000,000 E D & F Man Finance
LOC Rabobank Nederland 03/07/00 5.79 14,985,550
6,115,000 Formosa Plastics Corporation
LOC ABN AMRO Bank 04/10/00 5.92 6,075,117
20,000,000 GTL - Trade Corp.
LOC Banco Santander 05/22/00 6.04 19,728,944
15,000,000 GTL - Trade Corp.
LOC Banco Santander 06/26/00 6.10 14,710,912
36,500,000 New York City Go Bonds
Insured by FGIC 04/05/00 5.95 36,500,000
18,203,000 Pemex Capital Inc.
LOC Barclays Bank PLC 04/25/00 5.93 18,041,145
20,000,000 SCI Systems, Inc.
LOC ABN AMRO Bank 03/22/00 5.82 19,932,333
10,000,000 Transportadora de Gas del Sur S.A.
LOC Dresdner Bank 03/28/00 5.88 9,956,500
5,000,000 Transportadora de Gas del Sur S.A.
LOC Dresdner Bank 03/31/00 5.88 4,975,833
25,000,000 Unibanco-Uniao de Bancos Brasilieros
LOC Westdeutsche Landesbank 07/13/00 6.06 24,465,489
4,640,000 Vermont Economic Development Authority
LOC First Union National Bank 04/17/00 6.10 4,640,000
20,000,000 Vermont Yankee Nuclear Power Company
LOC Societe Generale 03/23/00 5.85 19,928,867
- -------------- -------------
367,490,000 Total Letter of Credit Commercial Paper 364,011,192
- -------------- -------------
<CAPTION>
Loan Participations (3.03%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 15,000,000 Boeing Capital Corp with Chase Manhattan Bank 03/17/00 5.81% $ 15,000,000
15,000,000 Equitable Life Assurance with Chase Manhattan Bank 03/20/00 6.21 15,000,000
20,000,000 Mt. Vernon Phenol Plant with Chase Manhattan Bank
Guaranteed by General Electric Company 05/17/00 6.14 20,000,000
- -------------- -------------
50,000,000 Total Loan Participations 50,000,000
- -------------- -------------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
FEBRUARY 29, 2000
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Master Notes (7.27%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 40,000,000 GMAC Mortgage Corp. (d) 03/01/00 5.82% $ 40,000,000
35,000,000 The Goldman Sachs Group L.P. (a) 04/18/00 5.99 35,000,000
45,000,000 Williamette Industries Incorporated (b) 06/16/00 5.95 45,000,000
- -------------- -------------
120,000,000 Total Master Notes 120,000,000
- -------------- -------------
<CAPTION>
Medium Term Notes (2.12%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 20,000,000 The Bear Stearns Companies Inc. (e) 06/07/00 5.86% $ 20,000,000
15,000,000 Goldman Sachs Group Inc. 08/07/00 6.00 15,000,000
- -------------- -------------
35,000,000 Total Medium Term Notes 35,000,000
- -------------- -------------
<CAPTION>
Other Notes (26.25%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 5,000,000 Allegheny County, PA (Union Electric Steel Corp.) (c)
LOC PNC Bank, N.A. 11/01/27 6.00% $ 5,000,000
4,005,000 American West Michigan Property Taxable Municipal IDRB (c)
LOC Comerica Bank 12/01/25 6.02 4,005,000
1,640,000 B & V Land Company, L.L.C. (c)
LOC First Michigan Bank 09/01/27 6.00 1,640,000
15,000,000 Bank America Bank Notes (j) 02/26/01 5.88 15,000,000
1,890,000 Bank of Kentucky Building (c)
LOC Firstar Bank 12/01/19 5.97 1,890,000
20,000,000 Bell County, TX Health Facility
(Scott & White Memorial Hospital) (c)
Insured by MBIA Insurance Corp. 08/15/29 5.90 20,000,000
3,750,000 Bollman Capital, L.L.C. - Series 1996A (c)
LOC First of America/Michigan National Bank 12/15/26 5.87 3,750,000
2,300,000 Burton I. Saltzman (Dave's Supermarket, Inc. Project) (c)
LOC National City Bank, Northwest 08/01/08 5.90 2,300,000
3,000,000 California PCFA Environmental Improvement Bonds
(Shell Oil Company Project) (c) 06/01/38 5.89 3,000,000
5,026,000 Capital One Funding Corporation
Floating Rate Option Notes - Series 1997D (c)
LOC Bank One Ohio 07/02/18 5.95 5,026,000
2,215,000 Carriage Inn Retirement Community of Cadiz, Inc. - Series 1996 (c)
LOC Key Bank, N.A. 10/01/17 5.95 2,215,000
2,565,000 Carriage Inn Retirement Community of Dayton, Inc. - Series 1996 (c)
LOC Key Bank, N.A. 10/01/16 5.95 2,565,000
15,000,000 Caterpillar Financial Services Corporation (g) 07/01/00 6.03 15,000,000
27,200,000 Catholic Health Initiatives - Series C 12/01/27 5.90 27,200,000
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Other Notes (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 1,500,000 Cedar Works Project (c)
LOC FirstStar Bank 05/01/09 6.02% $ 1,500,000
13,000,000 City and County of San Francisco (c)
LOC Bayerische HypoVereinsbank, A.G. 07/01/34 5.80 13,000,000
10,000,000 Columbus, GA (Foundry Project) (c)
LOC Bank of Nova Scotia 12/01/19 6.00 10,000,000
1,710,000 Community Ltd. Care (c)
LOC Fifth Third Bank 12/01/12 6.00 1,710,000
1,075,000 Crownover Lumber Co. (c)
LOC Fifth Third Bank 09/01/08 6.00 1,075,000
1,475,000 Crownover Lumber Co. (c)
LOC Fifth Third Bank 09/01/08 6.00 1,475,000
4,340,000 Defiance Metal Products Company (c)
LOC National City Bank, Northwest 09/01/09 5.87 4,340,000
6,360,000 Dickenson Press, Inc. - Series 1997 (c)
LOC First Michigan Bank 01/01/27 6.00 6,360,000
1,800,000 Dormont Manufacturing Company, Inc. (c)
LOC PNC Bank, N.A. 03/01/08 5.90 1,800,000
8,700,000 DP Fox Capital, L.L.C. (c)
LOC Michigan National Bank 09/01/29 5.93 8,700,000
7,000,000 Ferriot Inc. Project (c)
LOC FirstMerit Bank 04/01/20 5.95 7,000,000
25,000,000 First Union National Bank of North Carolina (h) 07/17/00 5.99 25,000,000
2,000,000 Frank J. Catanzaro Sons and Dads (c)
LOC FirstStar Bank 01/01/15 5.97 2,000,000
2,800,000 Gesmundo & Associates, Inc. (c)
LOC National City Bank, Northwest 08/15/27 5.84 2,800,000
6,000,000 The Goldman Sachs Group L.P. (k) 09/05/00 5.97 6,000,276
15,000,000 The Goldman Sachs Group L.P. (k) 09/05/00 5.98 15,000,000
3,400,000 The Goldman Sachs Group L.P. (k) 06/15/00 5.15 3,409,330
1,785,000 Goson Project - Series 1997 (c)
LOC FirstMerit Bank 11/01/17 5.95 1,785,000
3,835,000 Grand Valley Limited Partnership (c)
LOC National City Bank, Northwest 06/01/27 5.84 3,835,000
2,600,000 Growth Properties I, Ltd. L.P. 1997 (c)
LOC Columbus Bank & Trust Company 08/01/12 6.00 2,600,000
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
FEBRUARY 29, 2000
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Other Notes (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 10,800,000 Illinois Student Assistance Commission (c)
Insured by MBIA Insurance Corp. 09/01/32 5.84% $ 10,800,000
845,000 Jake Sweeney Automotive, Inc. (c)
LOC FirstStar Bank 04/01/10 5.97 845,000
15,000,000 John Hancock Mutual Life Insurance Company (i) 08/19/05 6.15 15,000,000
1,635,000 KBL Capital Fund, Inc. (c)
LOC Old Kent Bank & Trust Co. 07/01/15 5.95 1,635,000
4,075,000 LKWP Investments, L.L.C. (c)
LOC First Michigan Bank 03/01/27 5.95 4,075,000
3,550,000 Labelle Capital Funding - Series A (c)
LOC First of America/Michigan National Bank 09/01/26 5.95 3,550,000
4,700,000 Lam Funding, L.L.C. (c)
LOC National City Bank, Northwest 12/15/27 5.84 4,700,000
1,455,000 Machining Center (c)
LOC Comerica Bank 10/01/27 6.00 1,455,000
3,820,000 Maryland Health & Higher Education Finance Authority
(Glen Meadows Retirement Community) (c)
LOC First Union National Bank 07/01/29 6.00 3,820,000
1,815,000 Miami Valley Realty Associates (c)
LOC Key Bank, N.A. 06/01/12 6.00 1,815,000
965,000 Mt. Carmel East Professional Office Building - Series 1994 (c)
LOC National City Bank, Northwest 01/01/14 5.87 965,000
1,445,000 Mt. Carmel Partnership Project (c)
LOC National City Bank, Northwest 08/01/14 5.87 1,445,000
3,575,000 Mobile Airport (c)
LOC Regions Bank 10/01/24 5.90 3,575,000
2,150,000 Mubea, Inc. Project (c)
LOC Fifth Third Bank 12/01/04 5.87 2,150,000
18,860,000 Nebraska Public Power - Series B
LOC Bank of America/Toronto Dominion/
Bank of Nova Scotia/Commerzbank 03/21/00 5.88 18,860,000
11,639,000 Nebraska Public Power - Series B
LOC Bank of America/Toronto Dominion/
Bank of Nova Scotia/Commerzbank 04/05/00 5.98 11,639,000
4,545,000 New Federal Cold Storage (c)
LOC National City Bank, PA 11/01/12 5.87 4,545,000
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Other Notes (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 18,100,000 New York State HFA (250 West 50th Street Project) (c)
Collateralized by Federal National Mortgage Association 05/01/29 5.75% $ 18,100,000
5,000,000 New York State HFA (1501 Lexington Avenue Housing ) (c)
Guaranteed by Federal Home Loan Bank 11/01/32 5.85 5,000,000
940,000 Ohio Metallurgical Services Inc. (c)
LOC FirstMerit Bank 10/01/04 5.95 940,000
3,440,000 Opportunity Aviation, Ltd. Project (c)
LOC National City Bank, Northwest 12/02/02 5.87 3,440,000
12,850,000 PRD Financial L.L.C. (c)
LOC National City Bank, Northwest 04/01/27 5.84 12,850,000
1,100,000 Pennsylvania EDFA (Southstar Canal Road Ltd.) (c)
LOC PNC Bank, N.A. 12/01/10 6.00 1,100,000
7,700,000 Polar Plastics, Inc. (c)
LOC PNC Bank, N.A. 08/01/17 5.86 7,700,000
2,200,000 SSM Health Care Systems - Series 1995D (c)
Insured by MBIA Insurance Corp. 06/01/24 5.95 2,200,000
3,025,000 Sacramento County Housing Authority
(Hidden Oaks Apartments) - Series 1999 (c)
Guaranteed by Federal National Mortgage Association 05/15/29 6.00 3,025,000
4,500,000 Seven Z Enterprises (f)
LOC PNC Bank, N.A. 06/03/13 5.90 4,500,000
3,740,000 Shelburne Realty & Troy (c)
LOC National City Bank, Northwest 04/01/17 5.87 3,740,000
1,800,000 Soaring Eagle Partners L.P. (c)
LOC PNC Bank, N.A. 10/01/12 5.86 1,800,000
2,815,000 Sojourn Project (c)
LOC FirstMerit Bank 07/01/12 5.95 2,815,000
1,810,000 UAI Technologies, Inc. - Series 1998 (c)
LOC First Union National Bank 05/01/18 5.95 1,810,000
1,605,000 Valley City Linen Co. (c)
LOC First Michigan Bank 02/15/02 6.00 1,605,000
11,620,000 Washington State HFC (Country Manor One Project) (c)
LOC U.S. Bank of Washington 01/01/12 6.00 11,620,000
4,380,000 Windsor Medical Center, Inc. (c)
LOC FirstMerit Bank 12/03/18 5.95 4,380,000
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
FEBRUARY 29, 2000
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Other Notes (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 20,000,000 Winston-Salem, NC 03/08/00 5.97% $ 20,000,000
1,400,000 Wulfeck Family Partnership Project (c)
LOC Fifth Third Bank 09/01/17 5.97 1,400,000
1,650,000 Wynrose, Inc - Series 1995A (c)
LOC Columbus Bank and Trust Company 01/01/05 5.95 1,650,000
4,665,000 Zylstra Funding, Inc. (c)
LOC First Michigan Bank 06/01/27 6.00 4,665,000
- -------------- --------------
433,185,000 Total Other Notes 433,194,606
- -------------- --------------
<CAPTION>
Repurchase Agreement, Overnight (8.72%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 144,000,000 The Goldman Sachs Group L.P.
(Collateralized by $322,425,331 GNMA, 2.500% to
7.500%, due 12/16/18 to 2/16/30) 03/01/00 5.83% $ 144,000,000
- -------------- --------------
144,000,000 Total Repurchase Agreement, Overnight 144,000,000
- -------------- --------------
<CAPTION>
Time Deposits (6.06%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 50,000,000 Bank One, Ohio 03/01/00 5.90% $ 50,000,000
50,000,000 Toronto Doninion Bank 03/01/00 5.90 50,000,000
- -------------- --------------
100,000,000 Total Time Deposits 100,000,000
- -------------- --------------
<CAPTION>
U.S. Treasury Bills (0.59%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 10,000,000 U.S. Treasury Bills 08/24/00 5.93% $ 9,718,400
- -------------- --------------
10,000,000 Total U.S. Treasury Bills 9,718,400
- -------------- --------------
<CAPTION>
Yankee Certificates of Deposit (3.03%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 20,000,000 Bayerische HypoVereinsbank 05/04/00 5.23% $ 19,998,143
15,000,000 Commerzbank A.G. 05/18/00 5.32 14,998,458
15,000,000 Deutsche Bank A.G. 05/22/00 5.40 14,998,705
- -------------- --------------
50,000,000 Total Yankee Certificates of Deposit 49,995,306
- -------------- --------------
Total Investments (99.74%) (Cost $1,646,195,206+) $1,646,195,206
Cash and Other Assets, Net of Liabilities (0.26%) 4,367,151
--------------
Net Assets (100.00%) $1,650,562,357
==============
Net Assets Value, offering and redemption price per share:
Class A Shares, 1,341,465,410 shares outstanding (Note 3) $ 1.00
==============
Class B Shares, 310,579,251 shares outstanding (Note 3) $ 1.00
==============
+ Aggregate cost for federal income tax purposes is identical.
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
FOOTNOTES:
(a) The interest rate is adjusted daily based on opening Federal Funds
effective rate + 0.10% (daily put).
(b) The interest rate is adjusted monthly based on 1 month LIBOR + 0.05% (7 day
put).
(c) Securities payable on demand at par including accrued interest (with 7 days
notice). Interest is adjusted weekly.
(d) The interest rate is adjusted monthly based on 1 month LIBOR (7 day put).
(e) The interest rate is adjusted monthly based on 1 month LIBOR - 0.03%.
(f) This security can be put on the first business day of the month at par.
Interest is adjusted weekly.
(g) The interest rate is adjusted quarterly based on 3 month LIBOR -0.07%.
(h) The interest rate is adjusted daily based on prime -2.76%.
(i) The interest rate is adjusted quarterly based on 3 month LIBOR + 0.06% (one
year put)/Evergreen maturity.
(j) The interest rate is adjusted daily based on prime -2.87%.
(k) The interest rate is adjusted monthly based on 1 month LIBOR + .09%.
<TABLE>
<CAPTION>
KEY:
<S> <C> <C> <C> <C> <C>
EDFA = Economic Development Finance Authority IDRB = Industrial Development Revenue Bond
GO = General Obligation LOC = Letter of Credit
HFA = Hospital Finance Authority PCFA = Pollution Control Finance Authority
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
U.S. GOVERNMENT PORTFOLIO
STATEMENT OF NET ASSETS
FEBRUARY 29, 2000
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Repurchase Agreements, Overnight (66.24%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 40,000,000 CIBC World Market Corp. (Collateralized by $230,000,
U.S. Treasury Bond, 6.125%, due 11/15/27; and by $41,680,000,
U.S. Treasury Notes, 5.625% to 6.625%, due 8/15/04 to 5/15/08) 03/01/00 5.75% $ 40,000,000
40,000,000 Fuji Bank, Ltd. (Collateralized by $40,495,000,
U.S. Treasury Bills, 5.500% to 7.500%, due 8/31/01 to 11/15/01) 03/01/00 5.75 40,000,000
220,000,000 The Goldman Sachs Group L.P. (Collateralized by $409,819,333,
GNMA, 0.000% to 16.800%, due 02/16/09 to 02/20/30) 03/01/00 5.83 220,000,000
41,000,000 Morgan (JP) Securities, Inc. (Collateralized by $44,799,833,
GNMA, 6.500%, due 10/15/29) 03/01/00 5.81 41,000,000
41,000,000 Morgan Stanley & Company, Inc. (Collateralized by $72,018,388,
GNMA, 5.500% to 7.125% due 8/20/21 to 9/20/29) 03/01/00 5.80 41,000,000
210,000,000 Salomon Smith Barney, Inc. (Collateralized by $217,448,299,
GNMA ,6.000% to 7.000%, due 09/20/22 to 02/16/30; and
by $23,000,000, FMAC, 6.000%, due 7/17/24) 03/01/00 5.82 210,000,000
- ------------- --------------
592,000,000 Total Repurchase Agreements, Overnight 592,000,000
- ------------- --------------
<CAPTION>
U.S. Government Obligations (33.48%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 110,000,000 U.S. Treasury Bills 03/02/00 5.08% $ 109,984,489
50,000,000 U.S. Treasury Bills 04/27/00 5.75 49,549,541
30,000,000 U.S. Treasury Notes, 6.375% 05/15/00 4.72 30,085,890
30,000,000 U.S. Treasury Notes, 5.50% 05/31/00 4.87 30,030,015
10,000,000 U.S. Treasury Notes, 5.875% 06/30/00 5.04 10,020,581
10,000,000 U.S. Treasury Notes, 5.375% 07/31/00 5.28 9,996,551
20,000,000 U.S. Treasury Notes, 5.125% 08/31/00 5.30 19,960,841
10,000,000 U.S. Treasury Notes, 5.75% 11/15/00 5.56 9,996,847
15,000,000 U.S. Treasury Notes, 4.50% 01/31/01 6.03 14,772,955
15,000,000 U.S. Treasury Notes, 5.375% 02/15/01 6.19 14,858,911
- ------------- --------------
300,000,000 Total U.S. Government Obligations 299,256,621
- ------------- --------------
Total Investments (99.72%) (Cost $891,256,621+) $ 891,256,621
Cash and Other Assets, Net of Liabilities (0.28%) 2,506,012
--------------
Net Assets (100.00%) $ 893,762,633
==============
Net assets value, offering and redemption price per share:
Class A Shares, 743,375,843 shares outstanding (Note 3) $ 1.00
==============
Class B Shares, 150,370,458 shares outstanding (Note 3) $ 1.00
==============
Class TRA Shares, 16,332 shares outstanding (Note 3) $ 1.00
==============
+ Aggregate cost for federal income tax purposes is identical.
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 29, 2000
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Money Market U.S. Government
Portfolio Portfolio
------------------- ------------------
INVESTMENT INCOME
<S> <C> <C>
Income:
Interest.............................................................. $ 42,850,646 $ 21,985,977
------------------- ------------------
Expenses: (Note 2)
Investment management fee............................................. 2,185,432 1,057,752
Administration fee.................................................... 1,573,716 862,405
Distribution fee (Class A)............................................ 1,508,166 868,706
Custodian expenses.................................................... 83,875 53,207
Shareholder servicing and related shareholder expenses................ 1,472,578 690,792
Legal, compliance and filing fees..................................... 63,029 45,531
Audit and accounting.................................................. 55,915 51,468
Directors' fees ...................................................... 13,608 7,608
Miscellaneous......................................................... 20,715 16,882
------------------- ------------------
Total expenses.................................................... 6,977,034 3,654,351
Less:
Fees waived.................................................... ( 200,000) -0-
Expenses paid indirectly....................................... ( 7,223) ( 753)
------------------- ------------------
Net expenses.............................................. 6,769,811 3,653,598
------------------- ------------------
Net investment income..................................................... 36,080,835 18,332,379
<CAPTION>
REALIZED GAIN (LOSS) ON INVESTMENTS
<S> <C> <C>
Net realized gain (loss) on investments................................... 128,744 -0-
------------------- ------------------
Increase in net assets from operations.................................... $ 36,209,579 $ 18,332,379
=================== ==================
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
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
February 29, 2000 Ended February 29, 2000 Ended
(Unaudited) August 31, 1999 (Unaudited) August 31, 1999
--------- --------------- --------- ---------------
INCREASE (DECREASE) IN NET ASSETS
<S> <C> <C> <C> <C>
Operations:
Net investment income.................. $ 36,080,835 $ 60,582,665 $ 18,332,379 $ 37,265,475
Net realized gain (loss) on investments 128,744 441,016 -0- -0-
---------------- --------------- -------------- ---------------
Increase in net assets from operations. 36,209,579 61,023,681 18,332,379 37,265,475
Dividends to shareholders:
Net investment income
Class A.............................. ( 28,507,725) ( 47,165,724) ( 15,301,078) ( 31,513,153)
Class B.............................. ( 7,463,878) ( 13,831,208) ( 3,031,233) ( 5,752,312)
TRA Shares........................... -- -- ( 68) ( 10)
Capital share transactions (Note 3):
Class A.............................. 146,667,884 208,077,785 19,424,142 ( 28,545,156)
Class B.............................. 12,988,324 1,009,945 32,374,758 47,828,021
TRA Shares........................... -- -- 14,969 1,363
---------------- --------------- -------------- ---------------
Total increase (decrease)............ 159,894,184 209,114,479 51,813,869 19,284,228
Net assets:
Beginning of period.................. 1,490,668,173 1,281,553,694 841,948,764 822,664,536
---------------- --------------- -------------- ---------------
End of period (including undistributed
net investment income of $109,232
and $0 for the Money Market
Portfolio)......................... $ 1,650,562,357 $ 1,490,668,173 $ 893,762,633 $ 841,948,764
================ =============== ============== ===============
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
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. The Money Market Portfolio has two classes of stock
authorized, Class A and Class B. The U.S. Government Portfolio has three classes
of stock authorized, Class A, Class B and TRA Shares. The Class A shares of each
Portfolio and the TRA Class of the U.S Government 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. Additionally, the Portfolio may
allocate among its classes certain expenses, to the extent allowable to specific
classes, including transfer agent fees, government registration fees, certain
printing and postage costs, and administrative and legal expenses. Class
specific expenses of the Fund were limited to shareholder servicing fees and
transfer agent expenses. In all other respects, the Class A and Class B shares
and TRA Class 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) 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 effect 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 increases and
decreases in net assets from operations during the reporting period. Actual
results could differ from those estimates.
e) 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 29, 2000.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
================================================================================
2. Investment Management Fees and Other Transactions with Affiliates
(Continued).
Pursuant to an Administrative Services Agreement, each Portfolio pays to the
Manager an annual fee of .21% of each Portfolio's average daily net assets not
in excess of $1.25 billion, plus .20% of such assets in excess of $1.25 billion
but not in excess of $1.5 billion, plus .19% of such assets in excess of $1.5
billion.
Pursuant to a Distribution and Service Plan adopted under Securities and
Exchange Commission Rule 12b-1, the Fund and Reich & Tang Distributors, Inc.
(the Distributor) entered into a Distribution Agreement and a Shareholder
Servicing Agreement, only with respect to the Class A shares of each Portfolio
and the TRA Class of the U.S Government Portfolio. For its services under the
Shareholder Servicing Agreement, the Distributor receives from each Portfolio
with respect only to the Class A shares and the TRA Class of the U.S. Government
Portfolio, a service fee equal to .25% per annum of each Portfolio's average
daily net assets.
During the period ended February 29, 2000, the Manager voluntarily waived
investment management fees of $200,000 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 "Shareholder
servicing and related shareholder expenses" are fees of $680,532 and $206,626
for the Money Market Portfolio and the U.S. Government Portfolio, respectively,
paid to Reich & Tang Services L.P., an affiliate of the Manager as servicing
agent for the Fund.
Included in the Statements of Operations under the caption "Shareholder
servicing and related shareholder expenses" are expense offsets of $7,223 and
$753 for the Money Market Portfolio and the U.S. Government Portfolio,
respectively.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
3. Capital Stock.
At February 29, 2000, 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 $1,652,044,661 and $893,762,633, 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 Ended Year Ended Six Months Ended Year Ended
2/29/00 8/31/99 2/29/00 8/31/99
-------------- -------------- -------------- --------------
Class A
<S> <C> <C> <C> <C>
Sold................................ 1,071,437,735 1,028,092,330 573,931,138 621,528,982
Issued on reinvestment of dividends. 22,439,476 43,548,412 14,882,886 30,916,396
Redeemed............................ ( 947,209,327) ( 863,562,957) ( 569,389,882) ( 680,990,534)
-------------- -------------- -------------- --------------
Net increase (decrease)............. 146,667,884 208,077,785 19,424,142 ( 28,545,156)
============== ============== ============== ==============
<CAPTION>
Class B
<S> <C> <C> <C> <C>
Sold................................ 537,539,376 805,603,469 305,913,476 491,585,714
Issued on reinvestment of dividends. 7,322,191 13,525,260 2,696,295 4,996,507
Redeemed............................ ( 531,873,243) ( 818,118,784) ( 276,235,013) ( 448,754,200)
-------------- -------------- -------------- --------------
Net increase (decrease)............. 12,988,324 1,009,945 32,374,758 47,828,021
============== ============== ============== ==============
<CAPTION>
July 12, 1999
Six Months (Commencement
Ended of Sales)
2/29/00 August 31, 1999
-------------- ---------------
TRA Class
<S> <C> <C>
Sold............................................................... 18,925 2,363
Issued on reinvestment of dividends................................ 68 12
Redeemed........................................................... ( 4,024) ( 1,012)
-------------- -------------
Net increase (decrease)............................................ 14,969 1,363
============== =============
</TABLE>
4. Sales of Securities.
Accumulated undistributed realized losses of the Money Market Portfolio at
February 29, 2000 amounted to $1,591,536. Such amount represents tax basis
capital losses which may be carried forward to offset future capital gains
through August 31, 2004.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
================================================================================
5. Financial Highlights.
<TABLE>
<CAPTION>
Money Market Portfolio
Year Ended August 31,
CLASS A Six Months Ended ----------------------------------------------------------------
- ------- February 29, 2000 1999 1998 1997 1996 1995
----------------- --------- --------- --------- --------- ---------
<S> <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
--------- --------- --------- --------- --------- ---------
Income from investment operations:
Net investment income...................... 0.023 0.042 0.047 0.046 0.047 0.047
Less distributions:
Dividends from net investment income....... ( 0.023) ( 0.042) ( 0.047) ( 0.046) ( 0.047) ( 0.047)
------- ------- ------- ------- ------- -------
Net asset value, end of period................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= ========= =========
Total Return.................................. 4.80%* 4.30% 4.80% 4.66% 4.71% 4.82%(a)
Ratios/Supplemental Data
Net assets, end of period (000)............... $1,340,250 $1,193,420 $ 985,377 $ 801,001 $ 756,094 $ 661,795
Ratios to average net assets:
Expenses (includes expenses paid indirectly) 0.98%* 0.99% 0.97% 0.99% 0.98% 0.88%
Net investment income...................... 4.73%* 4.19% 4.57% 4.57% 4.63% 4.75%
Management, administration and
shareholder servicing fees waived........ 0.03%* 0.00% 0.02% 0.00% 0.02% 0.13%
Expenses paid indirectly................... 0.00%* 0.00% 0.00% 0.01% 0.01% 0.00%
<CAPTION>
Money Market Portfolio
Year Ended August 31,
CLASS B Six Months Ended ----------------------------------------------------------------
- ------- February 29, 2000 1999 1998 1997 1996 1995
----------------- --------- --------- --------- --------- ---------
<S> <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
--------- --------- --------- --------- --------- ---------
Income from investment operations:
Net investment income...................... 0.025 0.046 0.050 0.049 0.049 0.050
Less distributions:
Dividends from net investment income ( 0.025) ( 0.046) ( 0.050) ( 0.049) ( 0.049) ( 0.050)
------- ------- ------- ------- ------- -------
Net asset value, end of period................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= ========= =========
Total Return.................................. 5.20%* 4.67% 5.16% 5.01% 5.00% 5.08%(a)
Ratios/Supplemental Data
Net assets, end of period (000)............... $ 310,312 $ 297,248 $ 296,177 $ 267,439 $ 219,810 $ 217,877
Ratios to average net assets:
Expenses (includes expenses paid indirectly) 0.59%* 0.64% 0.62% 0.66% 0.70% 0.62%
Net investment income...................... 5.10%* 4.55% 5.07% 4.90% 4.91% 4.90%
Management, administration and
shareholder servicing fees waived........ 0.03%* 0.00% 0.02% 0.00% 0.02% 0.13%
Expenses paid indirectly................... 0.00%* 0.00% 0.00% 0.01% 0.01% 0.00%
</TABLE>
* Annualized
(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.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
5. Financial Highlights. (Continued)
<TABLE>
<CAPTION>
U.S. Government Portfolio
Year Ended August 31,
CLASS A Six Months Ended ----------------------------------------------------------------
- ------- February 29, 2000 1999 1998 1997 1996 1995
----------------- --------- --------- --------- --------- ---------
<S> <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
--------- --------- --------- --------- --------- ---------
Income from investment operations:
Net investment income....................... 0.022 0.040 0.047 0.046 0.047 0.048
Less distributions:
Dividends from net investment income........ ( 0.022) ( 0.040) ( 0.047) ( 0.046) ( 0.047) ( 0.048)
------- ------- ------- ------- ------- -------
Net asset value, end of period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= ========= =========
Total Return................................... 4.48%* 4.10% 4.82% 4.73% 4.81% 4.93%
Ratios/Supplemental Data
Net assets, end of period (000)................ $ 743,376 $ 723,952 $ 752,497 $ 735,581 $ 666,620$ 469,592
Ratios to average net assets:
Expenses.................................... 0.95%* 0.89% 0.87% 0.81% 0.81% 0.80%
Net investment income....................... 4.39%* 4.03% 4.71% 4.61% 4.68% 4.83%
<CAPTION>
U.S. Government Portfolio
Year Ended August 31,
CLASS B Six Months Ended ----------------------------------------------------------------
- ------- February 29, 2000 1999 1998 1997 1996 1995
----------------- --------- --------- --------- --------- ---------
<S> <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
--------- --------- --------- --------- --------- ---------
Income from investment operations:
Net investment income....................... 0.024 0.043 0.050 0.049 0.050 0.051
Less distributions:
Dividends from net investment income........ ( 0.024) ( 0.043) ( 0.050) ( 0.049) ( 0.050) ( 0.051)
------- ------- ------- ------- ------- -------
Net asset value, end of period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= ========= =========
Total Return................................... 4.87%* 4.44% 5.15% 5.00% 5.07% 5.19%
Ratios/Supplemental Data
Net assets, end of period (000)................ $ 150,371 $ 117,996 $ 70,168 $ 68,967 $ 126,169 $ 306,799
Ratios to average net assets:
Expenses.................................... 0.57%* 0.56% 0.55% 0.55% 0.56% 0.55%
Net investment income....................... 4.78%* 4.32% 5.03% 4.86% 5.04% 5.20%
</TABLE>
* Annualized
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
================================================================================
5. Financial Highlights. (Continued)
<TABLE>
<CAPTION>
U.S. Government Portfolio
-------------------------------------------------------
July 12, 1999
Six Months Ended (Commencement of Sales)
TRA CLASS February 29, 2000 August 31, 1999
- --------- ----------------- ---------------
<S> <C> <C>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period............. $ 1.00 $ 1.00
------------ ------------
Income from investment operations:
Net investment income......................... 0.023 0.006
Less distributions:
Dividends from net investment income.......... ( 0.023 ) ( 0.006 )
----------- -----------
Net asset value, end of period................... $ 1.00 $ 1.00
============ ============
Total Return..................................... 4.65%* 4.33%*
Ratios/Supplemental Data
Net assets, end of period (000).................. $ 16 $ 1
Ratios to average net assets:
Expenses...................................... 0.78%* 0.73%*
Net investment income......................... 4.65%* 4.25%*
</TABLE>
* Annualized
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
SHORT TERM
INCOME
FUND, INC.
Semi-Annual Report
February 29, 2000
(Unaudited)
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- ------------------------------------------------------
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.
- ------------------------------------------------------
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
State Street Kansas City
801 Pennsylvania
Kansas City, Missouri 64105
Transfer Agent &
Dividend Disbursing Agent
Reich & Tang Services, Inc.
600 Fifth Avenue
New York, New York 10020
STIF299S
- --------------------------------------------------------------------------------
<PAGE>
