<PAGE> 1
ANNUAL REPORT / OCTOBER 31 1999
AIM SUMMIT FUND, INC.
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
<PAGE> 2
[COVER IMAGE]
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THE PIONEER CABIN OF THE YOSEMITE VALLEY
BY CURRIER AND IVES (1857-1907, AMERICAN)
THE LITHOGRAPHY FIRM OF CURRIER AND IVES IMMORTALIZED LIFE IN
19TH-CENTURY AMERICA THROUGH ITS SERIES OF POPULAR PRINTS.
THESE NATIONAL TREASURES SHAPED A WHOLE ERA'S UNDERSTANDING OF
WHAT IT MEANS TO BE "AMERICAN." THIS CLASSIC PIECE PAYS TRIBUTE
TO THE PERSEVERANCE AND DEDICATION OF PIONEERS IN THE AMERICAN
WEST--QUALITIES THAT, TODAY, CHARACTERIZE THE DISCIPLINED INVESTOR.
-------------------------------------
AIM Summit Fund, Inc. is for shareholders who seek capital growth through
systematic investments.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o Fund performance figures are historical and reflect reinvestment of all
distributions and changes in net asset value.
o During the fiscal year end 10/31/99, Class I shares of the fund paid
distributions of $0.9467 per share.
o When sales charges are included in performance figures of Class I shares,
performance reflects the maximum 8.50% sales charge. The 8.50% sales charge
is attributable to the 15-year investment plan. Maximum sales and creation
charges total 8.50% for the smallest plan size, $50 per month. Larger plans
carry lower sales charges as outlined in the prospectus. When sales charges
are included in performance figures of Class II shares, performance reflects
the maximum 3.33% sales charge. The 3.33% sales charge sales charge is
attributable to the 15-year investment plan. Maximum sales and creation
charges total 3.33% for the smallest plan size, $50 per month. Larger plans
carry lower sales charges as outlined in the prospectus.
o The fund's average annual total returns, including sales charges, for
periods ended 9/30/99 (the most recent calendar quarter-end) are as follows:
for Class I shares, one year, 30.66%; five years, 21.83%; 10 years, 15.96%.
For Class II shares, inception (7/19/99), -11.37%.
o Because Class II shares have been offered less than one year (since
7/19/99), all total return figures for Class II shares reflect cumulative
total returns that have not yet been annualized.
o Dollar-cost averaging does not assure a profit and does not protect against
loss in declining markets. Since dollar-cost averaging involves continuous
investing regardless of fluctuating securities prices, investors should
consider their ability to continue purchases over an extended period of
time.
o The fund's investment return and principal value will fluctuate, so an
investor's shares, when redeemed, may be worth more or less than their
original cost.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The Dow Jones Industrial Average (the Dow) is a price-weighted average of 30
actively traded primarily industrial stocks.
o The unmanaged Lipper Growth Fund Index represents an average of the
performance of the 30 largest growth funds charted by Lipper, Inc., an
independent mutual funds performance monitor.
o The unmanaged Standard & Poor's Composite Index of 500 stocks (S&P 500) is
widely regarded by investors to be representative of the stock market in
general.
o An investment cannot be made in any index listed. Unless otherwise
indicated, index results include reinvested dividends and do not reflect
sales charges.
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OF A BANK AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY. THERE IS A RISK THAT YOU COULD LOSE SOME OR ALL OF
YOUR MONEY.
This report may be distributed only to current shareholders or to persons
who have received a current prospectus of the fund.
AIM SUMMIT FUND, INC.
<PAGE> 3
ANNUAL REPORT / CHAIRMAN'S LETTER
Dear Fellow Shareholder:
The fiscal year discussed in this report reconfirmed our
[PHOTO OF faith in two long-established principles of investing:
Charles T. portfolio diversification and long-term thinking. We could
Bauer, title this report "What a Difference a Year Makes."
Chairman of An investor surveying conditions when the fiscal year
the Board of opened on October 31, 1998, saw a market dominated by
THE FUND large-capitalization stocks and high-quality bonds,
APPEARS HERE] especially U.S. Treasuries. Ten months into 1998, two
well-known indexes of large-capitalization U.S. company
stocks, the S&P 500 and the Dow Jones Industrial Average,
were up by double digits, but the smaller-company stocks in
the Russell 2000 had lost 12.80%. Overseas, many markets
were languishing, especially in Asia, where many financial
difficulties originated in 1997.
In bond markets also, name-brand quality was the place
to be. The Lehman Corporate/Government Bond Index, which
follows intermediate and long-term government and investment-grade debt, was up
8.56%, while the Lehman High Yield Index, which tracks riskier "junk bonds," had
dropped 2.30%.
It would be easy for an investor to conclude that blue chips, whether equity
or fixed-income, were the only place to be. That investor, of course, would be
wrong.
MARKETS TURN
While large-capitalization stocks continue to do very well, during 1999 markets
broadened considerably, with many investment sectors performing a complete
turnaround. Year to date by October 31, 1999, the small-cap stocks in the
Russell 2000 were back in positive territory, and the many Asian markets had
staged a comeback. The same holds true for bonds. The higher-quality Lehman
index is down 1.49% year to date through October 31, 1999, while high-yield
bonds have moved into positive returns.
The point, at the risk of sounding repetitive to those of you who have
invested with us for a long time, is that this is why diversification is a
fundamental investing principle. Market sectors and asset classes go in and out
of favor, but over the long run--and the long run is several years--the markets'
overall trend has been upward. Selecting an asset class or a market sector on
the basis of a short-term snapshot of conditions is usually unwise, as is
concentrating your portfolio in one asset class. Staying fully invested in a
diversified portfolio remains a compelling strategy and one of your best
prospects for long-term gain.
LOOKING AHEAD
As we look about at the close of this fiscal year, we are encouraged by signs of
economic health in Europe and Asia, not to mention the prolonged U.S. economic
expansion. However, we are aware of how easily an investor could have been
misled by conditions just 12 months ago. For our shareholders, we therefore
reiterate our commitment to investing through a financial advisor. In addition
to helping you select investments appropriate to your time horizon and risk
tolerance, a financial advisor can keep you informed about how changing market
conditions affect you and your portfolio and can help assure that when you do
alter your investments, there's a logical reason for doing so. AIM believes
every investor should be guided by a financial professional.
FUND MANAGERS COMMENT
In the pages that follow, your fund's portfolio managers discuss how they
managed your fund during the year ended October 31, 1999, how the markets
behaved and what they foresee for the near future. We trust you will find their
discussion informative. If you have any questions or comments, we invite you to
contact our Client Services department at 800-995-4246.
Thank you for your continued participation in AIM Summit Investors
Plans--Registered Trademark--.
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman, A I M Advisors, Inc.
-------------------------------------
STAYING FULLY
INVESTED IN A DIVERSIFIED PORTFOLIO REMAINS
A COMPELLING STRATEGY AND ONE OF YOUR
BEST PROSPECTS FOR LONG-TERM GAIN.
-------------------------------------
AIM SUMMIT FUND, INC.
<PAGE> 4
ANNUAL REPORT / MANAGERS' OVERVIEW
FUND BEATS INDEX, BOOSTED BY TECHNOLOGY HOLDINGS
HOW DID AIM SUMMIT FUND PERFORM DURING THE REPORTING PERIOD?
Benefiting from the technology sector's continued strength, AIM Summit Fund
posted impressive gains for the fiscal year ended October 31, 1999. The fund's
Class I shares returned 42.79% at net asset value, that is, without the effect
of sales charges. Fund performance handily outpaced the S&P 500, which posted a
25.66% return for the fiscal year. The fund's new Class II shares, which
commenced sales on July 19, 1999, produced cumulative total return of -2.71%,
excluding sales charges, through the end of the fiscal year.
The fund's net assets soared to $2.62 billion during the fiscal year.
WHAT WERE THE MAJOR TRENDS IN THE FINANCIAL MARKETS DURING THE REPORTING PERIOD?
Investor concern over interest rates generally caused the financial markets to
be very volatile in 1999. In June and August, the Federal Reserve Board (the
Fed) raised interest rates in two quarter-point moves. Investors were unsure
what Fed policymakers would do at their October meeting, and the uncertainty
roiled the markets. The Fed chose to leave rates unchanged but adopted a
"tightening bias," indicating that it may be inclined to raise rates in the near
future.
During the summer, the equity market experienced a temporary broadening into
value, cyclical and smaller-cap stocks, but returned to its narrow, large-cap
growth focus in the fall. Most market trends of the last few years continued
during the third quarter. The largest stocks in the S&P 500 dominated that
index's return while the remainder produced lackluster results. In fact, despite
advances by the main market indexes, most stocks underperformed during this
time.
In one of the biggest shake-ups of its 103-year history, the Dow Jones
Industrial Average revised its membership in October to include Microsoft,
Intel, SBC Communications and Home Depot. The move signaled the markets'
transition to the "new economy," dominated by technology, telecommunications and
warehouse retailers. As of October 31, 1999, the fund had holdings in Microsoft
and Home Depot.
WHAT CONTRIBUTED TO THE FUND'S STRONG GAINS DURING THE REPORTING PERIOD?
The fund's sterling performance can be credited to our exposure to the
technology sector, the only S&P 500 industry group to post a positive return
during the third quarter, when most sectors of the equity market retreated.
Consumer demand has driven the remarkable pace of change in the technology
sector. As shown in the timeline below, each time technology has met consumer
demand, a new demand is born--for speedier Internet connections, faster
microprocessors, more information.
As of October 31, technology holdings accounted for more than 50% of the
fund's total net assets. The fund's 10 largest holdings reflect our continued
emphasis on market leaders in this sector. The success of these companies has
greatly contributed to the fund's excellent returns during the fiscal year.
Fund holdings in the semiconductor industry were quite successful. Toward
the end of the fiscal year, the semiconductor industry was the strongest
performing area within the technology sector in terms of stock price. Chipmakers
recovered after several years in the doldrums and are expected to post a 15%
increase in production this year. This increase is fueled primarily by the
FUND VS. S&P 500
<TABLE>
<CAPTION>
One-year total returns, excluding sales charges As of 10/31/99
================================================================================
<S> <C>
Fund's Class I Shares 42.79%
S&P 500 25.66%
================================================================================
</TABLE>
THE SPEED OF INNOVATION IN TECHNOLOGY
<TABLE>
<CAPTION>
Each time technology has met consumer demand, a new demand is born.
================================================================================
<S> <C> <C>
1875 -- Telephone
1924 -- Fax
1955 -- Fiber optics
1962 -- First paging system
1969 -- Internet born
1972 -- First e-mail
1974 -- Term "Internet" first used
================================================================================
</TABLE>
See important fund and index disclosures inside front cover.
AIM SUMMIT FUND, INC.
2
<PAGE> 5
ANNUAL REPORT / MANAGERS' OVERVIEW
proliferation of chips for communications and Internet infrastructure.
MICROSOFT IS ONE OF THE FUND'S LARGEST HOLDINGS. HOW WILL THE RULING IN THE
DEPARTMENT OF JUSTICE CASE AFFECT YOUR INVESTMENT?
After the close of the reporting period, a federal judge ruled that Microsoft is
a monopoly. As of this writing, neither a settlement nor an appeal has been
announced, and it seems unlikely that a final decision will be made until 2001.
While we cannot comment on our specific plans to buy or sell stocks, we can say
that as of this time, Microsoft remains a large holding in the fund. We believe
that the growth prospects of the company remain strong, especially with the
upcoming introduction of two new software products: Office 2000 and Windows
2000. In the short term, the stock may be volatile, but this is a core growth
company that should continue to be a part of our portfolio.
DID YOU MAKE ANY CHANGES TO THE FUND'S PORTFOLIO DURING THE FISCAL YEAR?
As earnings growth narrowed in 1999, we decided to cull the fund's holdings. The
number of holdings decreased to 140, from more than 223 a year ago. In keeping
with AIM's earnings-momentum investment strategy, we also sold stocks with
negative earnings revisions. These sales generated realized capital gains in
some cases but allowed us to concentrate on the highest growth stocks. We
believe that the overall effect of focusing on the best-performing stocks has
been positive and should improve fund performance over the long term.
WHAT IS YOUR OUTLOOK FOR THE FUTURE?
Shortly after the end of the fiscal year, Fed policymakers increased short-term
interest rates by a quarter of a percentage point, but shifted to a neutral
bias, indicating that they may or may not raise rates again for the rest of the
year. We believe that this move may improve investor confidence in the near
future since it means that the Fed is serious about heading off inflationary
pressures.
The long-term outlook for the market remains positive. The United States is
experiencing one of the longest expansion periods in its history. The U.S.
economy remains strong, inflation is low and the country is enjoying a budget
surplus. For these reasons, we remain excited about AIM Summit Fund. We continue
to find quality companies in the traditional growth sectors of technology,
health care and consumer cyclicals. And although market sectors will always go
in and out of favor, we believe that high-growth companies in the large- and
mid-cap sectors will continue to fare well in the current strong business
environment here and abroad.
PORTFOLIO COMPOSITION
As of 10/31/99, based on total net assets
<TABLE>
<CAPTION>
====================================================================================================
TOP 10 EQUITY HOLDINGS TOP 10 INDUSTRIES
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. America Online, Inc. 4.25% 1. Computers (Software & Services) 17.42%
2. JDS Uniphase Corp. 4.20 2. Communications Equipment 11.99
3. Microsoft Corp. 3.67 3. Electronics (Semiconductors) 6.36
4. Cisco Systems, Inc. 3.38 4. Computers (Networking) 4.67
5. EMC Corp. 3.14 5. Computers (Peripherals) 4.04
6. Motorola, Inc. 2.60 6. Financial (Diversified) 3.54
7. PMC-Sierra, Inc. 2.15 7. Telecommunications (Long Distance) 2.65
8. Broadcom Corp.-Class A 1.85 8. Biotechnology 2.39
9. International Business Machines Corp. 1.78 9. Computers (Hardware) 2.39
10. Nokia Oyj-ADR 1.76 10. Oil & Gas (Drilling & Equipment) 2.06
The fund's portfolio is subject to change, and there is no assurance that the
fund will continue to hold any particular security.
====================================================================================================
</TABLE>
<TABLE>
================================================================================
<S> <C> <C>
1979 -- First discussion groups online
1983 -- Cellular telephones
1991 -- World Wide Web goes public
1992 -- 14.4k modems
1996 -- 61 million Internet users; 33.6k, 56k, and cable
modems
1997 -- One million Web sites; e-commerce equals $7.4 billion
1998 -- 147 million Internet users
1999 -- Five million Web sites
2000 and beyond -- 720 million Internet users by 2005; e-commerce
predicted to top $1 trillion
================================================================================
Sources: The Wall Street Journal, Nua Ltd., IDC, eMarketer
</TABLE>
See important fund and index disclosures inside front cover.
AIM SUMMIT FUND, INC.
3
<PAGE> 6
ANNUAL REPORT / PERFORMANCE HISTORY
YOUR FUND'S LONG-TERM PERFORMANCE
RESULTS OF A $10,000 INVESTMENT
AIM SUMMIT FUND, INC. VS. BENCHMARK INDEXES
10/31/89-10/31/99
<TABLE>
<CAPTION>
in thousands
================================================================================
AIM Summit
Fund, Class I Lipper Growth
Shares S&P 500 Fund Index
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
10/89 9145 10203 10139
10/90 8775 9252 8717
10/91 12439 12344 12330
10/92 13496 13572 13293
10/93 15692 15595 15816
10/94 15788 16197 16139
10/95 20688 20474 20009
10/96 23917 25404 23408
10/97 30740 33559 30050
10/98 33655 40946 34221
10/99 48086 51454 44255
================================================================================
Source: Lipper, Inc.
</TABLE>
Past performance cannot guarantee comparable future results.
ABOUT THIS CHART
The chart compares your fund's Class I shares to benchmark indexes. It is
intended to give you a general idea of how your fund performed compared to these
benchmarks over the period 10/31/89-10/31/99. It is important to understand the
difference between your fund and an index. An index measures the performance of
a hypothetical portfolio. A market index such as the S&P 500 is not managed,
incurring no sales charges, expenses or fees. If you could buy all the
securities that make up a market index, you would incur expenses that would
affect your investment's return. An index of funds such as the Lipper Growth
Fund Index includes a number of mutual funds grouped by investment objective.
Each of those funds interprets that objective differently, and each employs a
different management style and investment strategy.
AVERAGE ANNUAL TOTAL RETURNS
As of 10/31/99, including sales charges
<TABLE>
================================================================================
<S> <C>
CLASS I SHARES
10 years 17.00%
5 years 22.73
1 year 30.65
CLASS II SHARES
Inception (7/19/99) -5.95%
================================================================================
</TABLE>
Your fund's total return includes sales charges, expenses and management fees.
For fund performance calculations and descriptions of indexes cited on this
page, please refer to the inside front cover. The performance of Class II shares
will differ from that of Class I shares due to differing fees and expenses.
MARKET VOLATILITY CAN SIGNIFICANTLY IMPACT SHORT-TERM PERFORMANCE. RESULTS OF AN
INVESTMENT MADE TODAY MAY DIFFER SUBSTANTIALLY FROM THE HISTORICAL PERFORMANCE
SHOWN.
See important fund and index disclosures inside front cover.
AIM SUMMIT FUND, INC.
4
<PAGE> 7
ANNUAL REPORT / FOR CONSIDERATION
[PHOTOGRAPH]
WHY GOOD ECONOMIC NEWS SOMETIMES RATTLES MARKETS
You turn on your television and learn the nation's unemployment rate has dropped
to its lowest level in decades. This latest tidbit of information enhances an
already rosy economic picture. The economy is growing at a brisk pace, wages are
rising and consumer spending is on the upswing.
Later in the day, you hear that financial markets plummeted in reaction to
the positive report on unemployment. Why in the world, you wonder, do markets
act that way?
Market observers often comment that "good news on Main Street is bad news on
Wall Street." And on the surface, it would appear to be that way at times.
RAPID GROWTH CAN SPUR INFLATION
It's not because the markets are opposed to good economic news. It's because a
major school of economic theory holds that when the economy grows too rapidly,
it can lead to runaway inflation. For example, if unemployment is extremely low
and wages are rising, companies have to pay more to hire and retain employees.
To cover increases in labor costs, companies may have to raise the prices of
their goods and services. If prices are rising faster than wages, consumers are
actually losing ground, even if their salaries are increasing.
FED MORE LIKELY TO RAISE INTEREST RATES
Moreover, when inflation looms as a threat, the Federal Reserve Board (the Fed)
is more likely to raise interest rates to keep it in check. And when rumors
abound that the central bank is about to tighten monetary policy, it can have a
disquieting effect on financial markets.
But if the Fed does raise interest rates slightly as a pre-emptive move
against inflation, it's not necessarily a bad thing, even if it causes a
short-term drop in markets. One well-known market analyst likened a modest
interest-rate hike to a flu shot: while it can cause some temporary discomfort,
it can prevent more serious malaise later. As Fed Chairman Alan Greenspan
observed, "Modest pre-emptive actions can obviate the need for more drastic
actions at a later date."
In three separate moves in 1999, the central bank raised the federal funds
rate--the rate banks charge each other for borrowing surplus reserves--from
4.75% to 5.50%. These moves were a bid to head off inflation, which has been
very low in recent years, but threatened to re-emerge because of torrid economic
growth.
Stocks generally react negatively to a Fed interest-rate hike because it
means higher borrowing costs for corporations, which can affect their
profitability. Bonds also tend to decline in value when their coupons fall below
prevailing interest rates.
RESPONSES OF MARKETS CAN BE A LITTLE SURPRISING
Sometimes the markets will greet a Fed rate increase with a collective
yawn--that is, the actual announcement of a tightening in monetary policy has
very little impact on stocks and bonds. Generally, in such cases, the markets
have anticipated a Fed move in the preceding weeks and have adjusted stock and
bond prices accordingly.
Other times markets will actually rally after the Fed announces a rate
increase, especially if it is more modest than expected. Such a phenomenon is
often referred to as a "relief rally." The Standard & Poor's Composite Index of
500 Stocks (S&P 500) rose 1.57% on June 30, 1999, after the Fed raised rates.
While past performance cannot guarantee comparable future results, in recent
years, Fed rate hikes have only had a transitory impact on the markets. In such
scenarios, it is advisable to remain focused on your long-term financial goals
and not get too concerned about temporary dips in stock and bond prices.
AIM SUMMIT FUND, INC.
5
<PAGE> 8
SCHEDULE OF INVESTMENTS
October 31, 1999
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMMON STOCKS & OTHER EQUITY
INTERESTS-96.11%
AUTO PARTS & EQUIPMENT-0.13%
SPX Corp.(a) 40,000 $ 3,390,000
- ---------------------------------------------------------------
AUTOMOBILES-0.99%
Ford Motor Co. 225,000 12,346,875
- ---------------------------------------------------------------
Porsche A.G., Pfd. (Germany) 5,000 13,624,047
- ---------------------------------------------------------------
25,970,922
- ---------------------------------------------------------------
BANKS (MAJOR REGIONAL)-0.80%
Fleet Boston Corp. 400,000 17,450,000
- ---------------------------------------------------------------
Northern Trust Corp. 36,000 3,476,250
- ---------------------------------------------------------------
20,926,250
- ---------------------------------------------------------------
BANKS (MONEY CENTER)-0.44%
Chase Manhattan Corp. (The) 133,500 11,664,562
- ---------------------------------------------------------------
BIOTECHNOLOGY-2.39%
Amgen, Inc.(a) 220,000 17,545,000
- ---------------------------------------------------------------
Biogen, Inc.(a) 350,000 25,943,750
- ---------------------------------------------------------------
Celera Genomics(a) 5,950 232,794
- ---------------------------------------------------------------
Genzyme Corp.(a) 500,000 19,125,000
- ---------------------------------------------------------------
62,846,544
- ---------------------------------------------------------------
BROADCASTING (TELEVISION, RADIO &
CABLE)-0.84%
AT&T Corp.-Liberty Media
Group-Class A(a) 250,000 9,921,875
- ---------------------------------------------------------------
Comcast Corp.-Class A 200,000 8,425,000
- ---------------------------------------------------------------
USA Networks, Inc.(a) 80,500 3,627,531
- ---------------------------------------------------------------
21,974,406
- ---------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-11.99%
General Instrument Corp.(a) 250,000 13,453,125
- ---------------------------------------------------------------
JDS Uniphase Corp.(a) 660,000 110,137,500
- ---------------------------------------------------------------
Lucent Technologies Inc. 500,000 32,125,000
- ---------------------------------------------------------------
Motorola, Inc. 700,000 68,206,250
- ---------------------------------------------------------------
Nokia Oyj-ADR (Finland) 400,000 46,225,000
- ---------------------------------------------------------------
Telefonaktiebolaget LM
Ericsson-ADR (Sweden) 600,000 25,650,000
- ---------------------------------------------------------------
Tellabs, Inc.(a) 300,000 18,975,000
- ---------------------------------------------------------------
314,771,875
- ---------------------------------------------------------------
COMPUTERS (HARDWARE)-2.39%
International Business Machines
Corp. 475,000 46,728,125
- ---------------------------------------------------------------
Sun Microsystems, Inc.(a) 150,000 15,871,875
- ---------------------------------------------------------------
62,600,000
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMPUTERS (NETWORKING)-4.67%
Cisco Systems, Inc.(a) 1,200,000 $ 88,800,000
- ---------------------------------------------------------------
Exodus Communications, Inc.(a) 250,000 21,500,000
- ---------------------------------------------------------------
VeriSign, Inc.(a) 100,000 12,350,000
- ---------------------------------------------------------------
122,650,000
- ---------------------------------------------------------------
COMPUTERS (PERIPHERALS)-3.68%
Adaptec, Inc.(a) 527,000 23,715,000
- ---------------------------------------------------------------
EMC Corp.(a) 1,000,000 73,000,000
- ---------------------------------------------------------------
96,715,000
- ---------------------------------------------------------------
COMPUTERS (SOFTWARE &
SERVICES)-17.42%
America Online, Inc.(a) 860,000 111,531,250
- ---------------------------------------------------------------
Computer Associates
International, Inc. 540,000 30,510,000
- ---------------------------------------------------------------
eBay, Inc.(a) 250,000 33,781,250
- ---------------------------------------------------------------
Electronics for Imaging, Inc.(a) 300,000 12,093,750
- ---------------------------------------------------------------
Inktomi Corp.(a) 330,000 33,474,375
- ---------------------------------------------------------------
Intuit, Inc.(a) 600,000 17,475,000
- ---------------------------------------------------------------
Lycos, Inc.(a) 430,000 23,005,000
- ---------------------------------------------------------------
Microsoft Corp.(a) 1,040,000 96,265,000
- ---------------------------------------------------------------
RealNetworks, Inc.(a) 200,000 21,937,500
- ---------------------------------------------------------------
Unisys Corp.(a) 450,000 10,912,500
- ---------------------------------------------------------------
VERITAS Software Corp.(a) 200,000 21,575,000
- ---------------------------------------------------------------
Yahoo! Inc.(a) 250,000 44,765,625
- ---------------------------------------------------------------
457,326,250
- ---------------------------------------------------------------
DISTRIBUTORS (FOOD &
HEALTH)-0.54%
McKesson HBOC, Inc. 710,000 14,244,375
- ---------------------------------------------------------------
ELECTRIC COMPANIES-2.05%
Illinova Corp. 415,000 13,202,187
- ---------------------------------------------------------------
Niagara Mohawk Holdings, Inc.(a) 1,185,000 18,811,875
- ---------------------------------------------------------------
Texas Utilities Co. 560,000 21,700,000
- ---------------------------------------------------------------
53,714,062
- ---------------------------------------------------------------
ELECTRICAL EQUIPMENT-1.80%
American Power Conversion
Corp.(a) 200,000 4,487,500
- ---------------------------------------------------------------
General Electric Co. 150,000 20,334,375
- ---------------------------------------------------------------
Koninklijke (Royal) Philips
Electronics N.V.-ADR
(Netherlands) 178,000 18,500,875
- ---------------------------------------------------------------
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
ELECTRICAL EQUIPMENT-(CONTINUED)
Sanmina Corp.(a) 45,000 $ 4,052,812
- ---------------------------------------------------------------
47,375,562
- ---------------------------------------------------------------
ELECTRONICS
(INSTRUMENTATION)-0.70%
Alpha Industries, Inc.(a) 100,000 5,525,000
- ---------------------------------------------------------------
PE Corp-PE Biosystems Group 23,800 1,544,025
- ---------------------------------------------------------------
Waters Corp.(a) 212,000 11,262,500
- ---------------------------------------------------------------
18,331,525
- ---------------------------------------------------------------
ELECTRONICS
(SEMICONDUCTORS)-6.36%
Analog Devices, Inc.(a) 150,000 7,968,750
- ---------------------------------------------------------------
Broadcom Corp.-Class A(a) 380,000 48,568,750
- ---------------------------------------------------------------
Maxim Integrated Products,
Inc.(a) 157,000 12,393,187
- ---------------------------------------------------------------
Microchip Technology, Inc.(a) 134,300 8,947,737
- ---------------------------------------------------------------
PMC-Sierra, Inc.(a) 600,000 56,550,000
- ---------------------------------------------------------------
Texas Instruments, Inc. 260,000 23,335,000
- ---------------------------------------------------------------
Vitesse Semiconductor Corp.(a) 200,000 9,175,000
- ---------------------------------------------------------------
166,938,424
- ---------------------------------------------------------------
ENGINEERING & CONSTRUCTION-0.30%
McDermott International, Inc. 435,000 7,884,375
- ---------------------------------------------------------------
EQUIPMENT (SEMICONDUCTOR)-0.14%
KLA-Tencor Corp.(a) 45,000 3,563,437
- ---------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-3.54%
American Express Co. 44,000 6,776,000
- ---------------------------------------------------------------
Associates First Capital
Corp.-Class A 117,938 4,304,737
- ---------------------------------------------------------------
Citigroup, Inc. 510,000 27,603,750
- ---------------------------------------------------------------
Fannie Mae 104,600 7,400,450
- ---------------------------------------------------------------
Freddie Mac 280,000 15,137,500
- ---------------------------------------------------------------
MGIC Investment Corp. 530,000 31,667,500
- ---------------------------------------------------------------
92,889,937
- ---------------------------------------------------------------
HEALTH CARE (DIVERSIFIED)-0.20%
Abbott Laboratories 127,000 5,127,625
- ---------------------------------------------------------------
HEALTH CARE (DRUGS-GENERIC &
OTHER)-0.24%
Watson Pharmaceuticals, Inc.(a) 200,000 6,350,000
- ---------------------------------------------------------------
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-0.90%
Lilly (Eli) & Co. 76,800 5,289,600
- ---------------------------------------------------------------
Pfizer, Inc. 270,000 10,665,000
- ---------------------------------------------------------------
Schering-Plough Corp. 155,200 7,682,400
- ---------------------------------------------------------------
23,637,000
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
HEALTH CARE (HOSPITAL
MANAGEMENT)-1.03%
Health Management Associates,
Inc.-Class A(a) 3,060,000 $ 27,157,500
- ---------------------------------------------------------------
HEALTH CARE (LONG TERM
CARE)-0.47%
Manor Care, Inc.(a) 780,000 12,285,000
- ---------------------------------------------------------------
HEALTH CARE (MANAGED CARE)-1.04%
United Healthcare Corp. 530,000 27,394,375
- ---------------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-1.74%
Beckman Coulter, Inc. 330,000 15,180,000
- ---------------------------------------------------------------
Guidant Corp. 620,000 30,612,500
- ---------------------------------------------------------------
45,792,500
- ---------------------------------------------------------------
INSURANCE (LIFE/HEALTH)-0.93%
AXA Financial, Inc. 508,000 16,287,750
- ---------------------------------------------------------------
UnumProvident Corp. 250,000 8,234,375
- ---------------------------------------------------------------
24,522,125
- ---------------------------------------------------------------
INSURANCE (MULTI-LINE)-1.03%
American International Group,
Inc. 261,937 26,963,140
- ---------------------------------------------------------------
INSURANCE
(PROPERTY-CASUALTY)-0.48%
XL Capital Ltd.-Class A 235,000 12,616,562
- ---------------------------------------------------------------
INVESTMENT
BANKING/BROKERAGE-1.74%
Lehman Brothers Holdings, Inc. 40,000 2,947,500
- ---------------------------------------------------------------
Morgan Stanley, Dean Witter,
Discover & Co. 154,000 16,988,125
- ---------------------------------------------------------------
Schwab (Charles) Corp. (The) 660,000 25,698,750
- ---------------------------------------------------------------
45,634,375
- ---------------------------------------------------------------
LEISURE TIME (PRODUCTS)-0.78%
Mattel, Inc. 1,540,000 20,597,500
- ---------------------------------------------------------------
LODGING-HOTELS-0.46%
Carnival Corp. 272,000 12,104,000
- ---------------------------------------------------------------
MANUFACTURING (DIVERSIFIED)-0.64%
Tyco International Ltd. 200,000 7,987,500
- ---------------------------------------------------------------
United Technologies Corp. 145,000 8,772,500
- ---------------------------------------------------------------
16,760,000
- ---------------------------------------------------------------
MANUFACTURING (SPECIALIZED)-0.61%
Parker Hannifin Corp. 350,000 16,034,375
- ---------------------------------------------------------------
NATURAL GAS-0.47%
Coastal Corp. (The) 293,600 12,367,900
- ---------------------------------------------------------------
OIL & GAS (DRILLING &
EQUIPMENT)-2.06%
Diamond Offshore Drilling, Inc. 380,000 12,065,000
- ---------------------------------------------------------------
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
OIL & GAS (DRILLING & EQUIPMENT)-(CONTINUED)
ENSCO International, Inc. 580,000 $ 11,237,500
- ---------------------------------------------------------------
Schlumberger Ltd. 260,000 15,746,250
- ---------------------------------------------------------------
Transocean Offshore, Inc. 555,000 15,089,063
- ---------------------------------------------------------------
54,137,813
- ---------------------------------------------------------------
OIL (DOMESTIC INTEGRATED)-0.70%
Atlantic Richfield Co. 142,000 13,232,625
- ---------------------------------------------------------------
USX-Marathon Group 175,500 5,111,438
- ---------------------------------------------------------------
18,344,063
- ---------------------------------------------------------------
PAPER & FOREST PRODUCTS-1.12%
Georgia Pacific Group 380,000 15,081,250
- ---------------------------------------------------------------
International Paper Co. 270,000 14,208,750
- ---------------------------------------------------------------
29,290,000
- ---------------------------------------------------------------
PUBLISHING-0.68%
Dow Jones & Co., Inc. 194,000 11,931,000
- ---------------------------------------------------------------
McGraw-Hill Cos., Inc. (The) 60,000 3,577,500
- ---------------------------------------------------------------
Reader's Digest Association,
Inc.-Class A 75,000 2,418,750
- ---------------------------------------------------------------
17,927,250
- ---------------------------------------------------------------
REAL ESTATE INVESTMENT
TRUSTS-0.50%
Starwood Hotels & Resorts
Worldwide, Inc. 575,000 13,189,063
- ---------------------------------------------------------------
RESTAURANTS-0.10%
Tricon Global Restaurants,
Inc.(a) 65,000 2,612,188
- ---------------------------------------------------------------
RETAIL (BUILDING SUPPLIES)-0.58%
Home Depot, Inc. (The) 200,000 15,100,000
- ---------------------------------------------------------------
RETAIL (COMPUTERS &
ELECTRONICS)-1.45%
Best Buy Co., Inc.(a) 544,800 30,270,450
- ---------------------------------------------------------------
Circuit City Stores-Circuit City
Group 180,000 7,683,750
- ---------------------------------------------------------------
37,954,200
- ---------------------------------------------------------------
RETAIL (DEPARTMENT STORES)-1.38%
Federated Department Stores,
Inc.(a) 440,000 18,782,500
- ---------------------------------------------------------------
Kohl's Corp.(a) 100,000 7,481,250
- ---------------------------------------------------------------
Saks, Inc.(a) 575,000 9,882,813
- ---------------------------------------------------------------
36,146,563
- ---------------------------------------------------------------
RETAIL (DISCOUNTERS)-0.18%
Family Dollar Stores, Inc. 225,000 4,640,625
- ---------------------------------------------------------------
RETAIL (FOOD CHAINS)-0.44%
Kroger Co. (The)(a) 551,000 11,467,688
- ---------------------------------------------------------------
RETAIL (GENERAL
MERCHANDISE)-1.58%
Dayton Hudson Corp. 289,000 18,676,625
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
RETAIL (GENERAL MERCHANDISE)-(CONTINUED)
Wal-Mart Stores, Inc. 400,000 $ 22,675,000
- ---------------------------------------------------------------
41,351,625
- ---------------------------------------------------------------
RETAIL (SPECIALTY)-0.44%
Bed Bath & Beyond, Inc.(a) 225,000 7,495,313
- ---------------------------------------------------------------
Linens 'n Things, Inc.(a) 100,000 3,975,000
- ---------------------------------------------------------------
11,470,313
- ---------------------------------------------------------------
RETAIL (SPECIALTY-APPAREL)-1.15%
Abercrombie & Fitch Co.-Class
A(a) 86,000 2,343,500
- ---------------------------------------------------------------
American Eagle Outfitters,
Inc.(a) 275,000 11,773,438
- ---------------------------------------------------------------
Gap, Inc. (The) 150,000 5,568,750
- ---------------------------------------------------------------
Intimate Brands, Inc. 81,270 3,332,070
- ---------------------------------------------------------------
Talbots, Inc. (The) 150,000 7,059,375
- ---------------------------------------------------------------
30,077,133
- ---------------------------------------------------------------
SERVICES
(ADVERTISING/MARKETING)-0.99%
Omnicom Group, Inc. 150,000 13,200,000
- ---------------------------------------------------------------
Outdoor Systems, Inc.(a) 300,000 12,712,500
- ---------------------------------------------------------------
25,912,500
- ---------------------------------------------------------------
SERVICES (COMMERCIAL &
CONSUMER)-0.45%
Cintas Corp. 123,700 7,452,925
- ---------------------------------------------------------------
Gartner Group, Inc.-Class B(a) 7,812 73,238
- ---------------------------------------------------------------
IMS Health, Inc. 60,000 1,740,000
- ---------------------------------------------------------------
Viad Corp. 100,000 2,456,250
- ---------------------------------------------------------------
11,722,413
- ---------------------------------------------------------------
SERVICES (COMPUTER SYSTEMS)-1.13%
Brocade Communications Systems,
Inc.(a) 110,000 29,590,000
- ---------------------------------------------------------------
SERVICES (DATA PROCESSING)-1.66%
Concord EFS, Inc.(a) 450,000 12,178,125
- ---------------------------------------------------------------
First Data Corp. 480,000 21,930,000
- ---------------------------------------------------------------
National Data Corp. 80,000 1,920,000
- ---------------------------------------------------------------
Paychex, Inc. 192,037 7,561,457
- ---------------------------------------------------------------
43,589,582
- ---------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/
WIRELESS)-0.81%
Western Wireless Corp.-Class A(a) 400,000 21,150,000
- ---------------------------------------------------------------
TELECOMMUNICATIONS (LONG
DISTANCE)-2.65%
AT&T Corp. 355,000 16,596,250
- ---------------------------------------------------------------
Global TeleSystems Group, Inc.(a) 700,000 16,756,250
- ---------------------------------------------------------------
MCI WorldCom, Inc.(a) 422,926 36,292,337
- ---------------------------------------------------------------
69,644,837
- ---------------------------------------------------------------
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
TELEPHONE-1.59%
Bell Atlantic Corp. 200,000 $ 12,987,500
- ---------------------------------------------------------------
Qwest Communications
International, Inc.(a) 800,000 28,800,000
- ---------------------------------------------------------------
41,787,500
- ---------------------------------------------------------------
WASTE MANAGEMENT-0.54%
Waste Management, Inc. 778,000 14,295,750
- ---------------------------------------------------------------
Total Common Stocks & Other
Equity Interests (Cost
$1,615,087,599) 2,522,522,589
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
CONVERTIBLE BONDS & NOTES-0.87%
COMPUTERS (PERIPHERALS)-0.36%
EMC Corp., Conv. Sub. Notes,
3.25%, 03/15/02 $ 1,450,000 9,348,875
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
TELECOMMUNICATIONS (LONG
DISTANCE)-0.51%
Level 3 Communications Inc.,
Conv. Bonds, 6.00%, 09/15/09 $11,000,000 $ 13,530,000
- ---------------------------------------------------------------
Total Convertible Bonds &
Notes (Cost $12,998,720) 22,878,875
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
<S> <C> <C>
MONEY MARKET FUNDS-3.46%
STIC Liquid Assets Portfolio(b) 45,440,308 45,440,308
- ---------------------------------------------------------------
STIC Prime Portfolio(b) 45,440,308 45,440,308
- ---------------------------------------------------------------
Total Money Market Funds
(Cost $90,880,616) 90,880,616
- ---------------------------------------------------------------
TOTAL INVESTMENTS-100.44% 2,636,282,080
- ---------------------------------------------------------------
LIABILITIES LESS OTHER
ASSETS-(0.44%) (11,667,071)
- ---------------------------------------------------------------
NET ASSETS-100.00% $2,624,615,009
===============================================================
</TABLE>
Abbreviations:
ADR - American Depositary Receipt
Conv. - Convertible
Pfd. - Preferred
Sub. - Subordinated
Notes to Schedule of Investment:
(a)
Non-income producing security.
(b)
The security shares the same
investment advisor as the Fund.
See Notes to Financial Statements.
9
<PAGE> 12
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$1,718,966,935) $2,636,282,080
- -------------------------------------------------------------
Receivables for:
Capital stock sold 99,498
- -------------------------------------------------------------
Dividends and interest 1,053,988
- -------------------------------------------------------------
Investment for deferred compensation plan 48,076
- -------------------------------------------------------------
Other assets 12,253
- -------------------------------------------------------------
Total assets 2,637,495,895
- -------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 10,772,227
- -------------------------------------------------------------
Capital stock reacquired 469,021
- -------------------------------------------------------------
Deferred compensation 48,076
- -------------------------------------------------------------
Accrued advisory fees 1,342,674
- -------------------------------------------------------------
Accrued administrative services fees 10,000
- -------------------------------------------------------------
Accrued directors' fees 1,448
- -------------------------------------------------------------
Accrued operating expenses 237,440
- -------------------------------------------------------------
Total liabilities 12,880,886
- -------------------------------------------------------------
Net assets applicable to shares outstanding $2,624,615,009
=============================================================
NET ASSETS:
Class I $2,623,900,667
- -------------------------------------------------------------
Class II $ 714,342
- -------------------------------------------------------------
Capital stock, $0.01 par value per share:
Class I:
Authorized 1,000,000,000
- -------------------------------------------------------------
Outstanding 130,118,500
=============================================================
Class II
Authorized 1,000,000,000
- -------------------------------------------------------------
Outstanding 35,504
=============================================================
Class I
Net asset value and redemption price per
share $ 20.17
=============================================================
Class II
Net asset value and redemption price per
share $ 20.12
=============================================================
</TABLE>
STATEMENT OF OPERATIONS
For the year ended October 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $72,416 foreign withholding
tax) $ 10,836,685
- ------------------------------------------------------------
Interest 4,978,635
- ------------------------------------------------------------
Total investment income 15,815,320
- ------------------------------------------------------------
EXPENSES:
Advisory fees 15,096,393
- ------------------------------------------------------------
Administrative services fees 114,068
- ------------------------------------------------------------
Custodian fees 231,799
- ------------------------------------------------------------
Directors' fees 22,879
- ------------------------------------------------------------
Transfer agent fees 49,863
- ------------------------------------------------------------
Other 467,498
- ------------------------------------------------------------
Total expenses 15,982,500
- ------------------------------------------------------------
Less: Expenses paid indirectly (28,145)
- ------------------------------------------------------------
Net expenses 15,954,355
- ------------------------------------------------------------
Net investment income (loss) (139,035)
- ------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES AND FOREIGN
CURRENCIES:
Net realized gain (loss) from:
Investment securities 418,809,758
- ------------------------------------------------------------
Foreign currencies (275,578)
- ------------------------------------------------------------
418,534,180
============================================================
CHANGE IN NET UNREALIZED APPRECIATION
(DEPRECIATION) OF:
Investment securities 367,179,343
- ------------------------------------------------------------
Foreign currencies (3,322)
============================================================
367,176,021
============================================================
Net gain from investment securities and
foreign currencies 785,710,201
============================================================
Net increase in net assets resulting from
operations $785,571,166
============================================================
</TABLE>
See Notes to Financial Statements.
10
<PAGE> 13
STATEMENT OF CHANGES IN NET ASSETS
For the years ended October 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (139,035) $ 4,083,684
- ----------------------------------------------------------------------------------------------
Net realized gain from investment securities foreign
currencies, futures and options contracts 418,534,180 123,367,355
- ----------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities and foreign currencies 367,176,021 30,378,725
- ----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 785,571,166 157,829,764
- ----------------------------------------------------------------------------------------------
Distributions to shareholders from net investment
income-Class I (4,242,441) (1,659,397)
- ----------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains-Class I (112,082,098) (156,547,424)
- ----------------------------------------------------------------------------------------------
Share transactions-net:
- ----------------------------------------------------------------------------------------------
Class I 124,655,784 180,175,249
- ----------------------------------------------------------------------------------------------
Class II 680,370 --
- ----------------------------------------------------------------------------------------------
Net increase in net assets 794,582,781 179,798,192
- ----------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 1,830,032,228 1,650,234,036
- ----------------------------------------------------------------------------------------------
End of period $2,624,615,009 $1,830,032,228
==============================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $1,290,320,756 $1,158,384,602
- ----------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (94,294) 4,164,155
- ----------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign currencies, futures and option
contracts 417,073,402 117,344,347
- ----------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities and
foreign currencies 917,315,145 550,139,124
- ----------------------------------------------------------------------------------------------
$2,624,615,009 $1,830,032,228
==============================================================================================
</TABLE>
See Notes to Financial Statements.
11
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS
October 31, 1999
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Summit Fund, Inc. (the "Fund") is a Maryland corporation registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), as a
diversified, open-end management investment company. The Fund consists of two
classes of shares: Class I shares and Class II shares. Class II shares commenced
sales on July 19, 1999. The Fund's investment objective is growth of capital.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of the significant accounting policies followed by the
Fund in the preparation of its financial statements.
A. Security Valuations -- A security listed or traded on an exchange (except
convertible bonds) is valued at its last sales price on the exchange where
the security is principally traded, or lacking any sales on a particular day,
the security is valued at the closing bid price on that day. Each security
reported on the NASDAQ National Market System is valued at the last sales
price on the valuation date or absent a last sales price, at the closing bid
price. Debt obligations (including convertible bonds) are valued on the basis
of prices provided by an independent pricing service. Prices provided by the
pricing service may be determined without exclusive reliance on quoted
prices, and may reflect appropriate factors such as yield, type of issue,
coupon rate and maturity date. Securities for which market prices are not
provided by any of the above methods are valued based upon quotes furnished
by independent sources and are valued at the last bid price in the case of
equity securities and in the case of debt obligations, the mean between the
last bid and asked prices. Securities for which market quotations are not
readily available or are questionable are valued at fair value as determined
in good faith by or under the supervision of the Company's officers in a
manner specifically authorized by the Board of Directors of the Company.
Short-term obligations having 60 days or less to maturity are valued at
amortized cost which approximates market value. For purposes of determining
net asset value per share, futures and options contracts generally will be
valued 15 minutes after the close of trading of the New York Stock Exchange
("NYSE").
Generally, trading in foreign securities is substantially completed each
day at various times prior to the close of the NYSE. The values of such
securities used in computing the net asset value of the Fund's shares are
determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of the NYSE. Occasionally, events
affecting the values of such securities and such exchange rates may occur
between the times at which they are determined and the close of the NYSE
which would not be reflected in the computation of the Fund's net asset
value. If events materially affecting the value of such securities occur
during such period, then these securities will be valued at their fair value
as determined in good faith by or under the supervision of the Board of
Directors.
B. Securities Transactions, Investment Income and Distributions -- Securities
transactions are accounted for on a trade date basis. Realized gains or
losses on sales are computed on the basis of specific identification of the
securities sold. Interest income is recorded as earned from settlement date
and is recorded on the accrual basis. Dividend income is recorded on the
ex-dividend date. The Fund may elect to use a portion of the proceeds of
capital stock redemptions as distributions for Federal income tax purposes.
Distributions from income and net realized capital gains, if any, are
generally paid annually and recorded on ex-dividend date.
On October 31, 1999, undistributed net investment income was increased by
$123,027, undistributed net realized gains decreased by $6,723,027 and
paid-in capital increased by $6,600,000 as a result of differing book/tax
treatment of foreign currency transactions, equalization credits and net
operating loss reclassifications in order to comply with the requirements of
the American Institute of Certified Public Accountants of Position 93-2. Net
assets of the Fund were unaffected by the reclassification discussed above.
C. Federal Income Taxes -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income taxes
is recorded in the financial statements.
D. Foreign Currency Translations -- Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at date of valuation. Purchases and sales of portfolio securities and
income items denominated in foreign currencies are translated into U.S.
dollar amounts on the respective dates of such transactions. The Fund does
not separately account for that portion of the results of operations
resulting from changes in foreign exchange rates on investments and the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from investments.
E. Foreign Currency Contracts -- A foreign currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a foreign currency contract to attempt to
minimize the risk to the Fund from adverse changes in the relationship
between currencies. The Fund may also enter into a foreign currency contract
for the purchase or sale of a security denominated in a
12
<PAGE> 15
foreign currency in order to "lock in" the U.S. dollar price of that
security. The Fund could be exposed to risk if counterparties to the
contracts are unable to meet the terms of their contracts or if the value of
the foreign currency changes unfavorably.
F. Bond Premiums -- It is the policy of the Fund not to amortize market premiums
on bonds for financial reporting purposes.
G. Expenses -- Distribution expenses directly attributable to a class of shares
are charged to that class' operations. All other expenses which are
attributable to more than one class are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at the annual rate of 1.00% of
the first $10 million of the Fund's average daily net assets, plus 0.75% of the
next $140 million of the Fund's average daily net assets and 0.625% of the
Fund's average daily net assets in excess of $150 million. Prior to June 30,
1999, AIM had a sub-advisory agreement with TradeStreet Investment Associates,
("TradeStreet").
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund. During the year ended October 31, 1999, AIM was
paid $114,068 for such services.
The Fund has entered into a Distribution Agreement with A I M Distributors,
Inc. ("AIM Distributors") to serve as the distributor for the Fund. The Fund has
adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the
Fund's Class II shares (the "Distribution Plan"). The Fund , pursuant to the
Distribution Plan, pays AIM Distributors compensation at the annual rate of
0.30% of the Fund's average daily net assets of Class II shares. Of this amount,
the Fund may pay a service fee of 0.25% of the average daily net assets of Class
II shares to selected dealers and financial institutions who furnish continuing
personal shareholder services to their customers who purchase and own Class II
shares of the Fund. Any amounts not paid as a service fee under the Distribution
Plan would constitute an asset-based sales charge. The Distribution Plan also
imposes a cap on the total sales charges, including asset-based sales charges
that may be paid by the Class II shares. During the period July 19, 1999 (date
sales commenced) through October 31, 1999, the Class II shares paid AIM
Distributors $195 as compensation under the Plans.
During the year ended October 31, 1999, the Fund paid legal fees of $8,316 for
services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Company's directors. A member of that firm is a director of the Company.
Substantially all shares of the Fund are held of record by State Street Bank
and Trust Company as custodian for AIM Summit Investors Plans I and II, unit
investments trusts that are sponsored by AIM Distributors. Certain officers and
directors of the Fund are officers of AIM and AIM Distributors.
NOTE 3-INDIRECT EXPENSES
During the year ended October 31, 1999, the Fund received reductions in
custodian fees of $28,145 under expense offset arrangements. The effect of the
above arrangements resulted in a reduction of the Fund's total expenses of
$28,145 during the year ended October 31, 1999.
NOTE 4-DIRECTORS' FEES
Directors' fees represent remuneration paid to directors who are not an
"interested person" of AIM. The Company invests directors' fees, if so elected
by a director, in mutual fund shares in accordance with a deferred compensation
plan.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by The Chase Manhattan Bank. The Fund may borrow up to
the lesser of (i) $1,000,000,000 or (ii) the limits set by its prospectus for
borrowings. The Fund and other funds advised by AIM which are parties to the
line of credit may borrow on a first come, first served basis. During the year
ended October 31, 1999, the Fund did not borrow under the line of credit
agreement. The funds which are party to the line of credit are charged a
commitment fee of 0.09% on the unused balance of the committed line. Prior to
May 28, 1999, the commitment fee rate was 0.05%. The commitment fee is allocated
among the funds based on their respective average net assets for the period.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended October 31, 1999 was
$2,104,224,796 and $2,129,918,843, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of October 31, 1999 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $973,683,957
- ---------------------------------------------------------
Aggregate unrealized appreciation
(depreciation) of investment securities (65,121,247)
- ---------------------------------------------------------
Net unrealized appreciation of investment
securities $908,562,710
=========================================================
</TABLE>
* Cost of investments for tax purposes is $1,727,719,370.
13
<PAGE> 16
NOTE 7-CAPITAL STOCK
Changes in capital stock outstanding during the years ended October 31, 1999 and
1998 were as follows:
<TABLE>
<CAPTION>
1999 1998
--------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Sold:
Class I 13,483,892 $ 237,827,156 13,962,660 $ 208,683,626
- -----------------------------------------------------------------------------------------------------------------------
Class II* 36,977 708,414 -- --
- -----------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class I 7,006,133 112,308,495 11,672,671 154,897,796
- -----------------------------------------------------------------------------------------------------------------------
Reacquired:
Class I (12,707,834) (225,479,867) (12,194,909) (183,406,173)
- -----------------------------------------------------------------------------------------------------------------------
Class II* (1,473) (28,044) -- --
- -----------------------------------------------------------------------------------------------------------------------
7,817,695 $ 125,336,154 13,440,422 $ 180,175,249
=======================================================================================================================
</TABLE>
* Class II shares commenced sales on July 19, 1999.
NOTE 8-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of capital stock
outstanding during each of the years in the five-year period ended October 31,
1999 for Class I shares and for the period July 19, 1999 (date sales commenced)
through October 31, 1999 for Class II shares.
<TABLE>
<CAPTION>
CLASS II
JULY 19, 1999
CLASS I TO
---------------------------------------------------------------- OCTOBER 31,
1999 1998 1997 1996 1995 1999
---------- ---------- ---------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 14.96 $ 15.15 $ 12.99 $ 12.14 $ 9.78 $20.68
- ----------------------------------------------- ---------- ---------- ---------- ---------- ---------- ------
Income from investment operations:
Net investment income -- 0.03 0.02 0.04 0.04 --
- ----------------------------------------------- ---------- ---------- ---------- ---------- ---------- ------
Net gains (losses) on securities (both
realized and unrealized) 6.16 1.23 3.34 1.69 2.81 (0.56)
- ----------------------------------------------- ---------- ---------- ---------- ---------- ---------- ------
Total from investment operations 6.16 1.26 3.36 1.73 2.85 (0.56)
- ----------------------------------------------- ---------- ---------- ---------- ---------- ---------- ------
Less distributions:
Dividends from net investment income (0.04) (0.02) (0.03) (0.03) (0.10) --
- ----------------------------------------------- ---------- ---------- ---------- ---------- ---------- ------
Distributions from net realized gains (0.91) (1.43) (1.17) (0.85) (0.39) --
- ----------------------------------------------- ---------- ---------- ---------- ---------- ---------- ------
Total distributions (0.95) (1.45) (1.20) (0.88) (0.49) --
- ----------------------------------------------- ---------- ---------- ---------- ---------- ---------- ------
Net asset value, end of period $ 20.17 $ 14.96 $ 15.15 $ 12.99 $ 12.14 $20.12
=============================================== ========== ========== ========== ========== ========== ======
Total return(a) 42.79% 9.49% 28.53% 15.61% 31.03% (2.71)%
=============================================== ========== ========== ========== ========== ========== ======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $2,623,901 $1,830,032 $1,650,234 $1,261,008 $1,050,011 $ 714
=============================================== ========== ========== ========== ========== ========== ======
Ratio of expenses to average net assets 0.67%(b) 0.67% 0.68% 0.70% 0.71% 1.46%(c)
=============================================== ========== ========== ========== ========== ========== ======
Ratio of net investment income (loss) to
average net assets (0.01)%(b) 0.23% 0.11% 0.29% 0.33% (0.80)%(c)
=============================================== ========== ========== ========== ========== ========== ======
Portfolio turnover rate 92% 83% 88% 118% 126% 92%
=============================================== ========== ========== ========== ========== ========== ======
</TABLE>
(a) Does not deduct sales charges and is not annualized for periods less than
one year.
(b) Ratios are based on average net assets of $2,381,357,904.
(c) Ratios are annualized and based on average net assets of $227,867.
14
<PAGE> 17
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors
AIM Summit Fund, Inc:
We have audited the accompanying statement of assets and
liabilities of the AIM Summit Fund, Inc., including the
schedule of investments, as of October 31, 1999, the
related statement of operations for the year then ended,
the statement of changes in net assets for each of the
years in the two-year period then ended, and financial
highlights for each of the years in the five-year period
then ended. These financial statements and financial
highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion
on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and
financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of
securities owned as of October 31, 1999, by
correspondence with the custodian and brokers. 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 financial
highlights referred to above present fairly, in all
material respects, the financial position of AIM Summit
Fund, Inc. as of October 31, 1999, and the results of its
operations for the year then ended, the changes in its
net assets for each of the years in the two-year period
then ended, and the financial highlights for each of the
years in the five-year period then ended, in conformity
with generally accepted accounting principles.
KPMG LLP
December 3, 1999
Houston, Texas
15
<PAGE> 18
<TABLE>
<CAPTION>
BOARD OF DIRECTORS OFFICERS OFFICE OF THE FUND
<S> <C> <C>
Charles T. Bauer Charles T. Bauer 11 Greenway Plaza
Chairman Chairman Suite 100
A I M Management Group Inc. Houston, TX 77046
Robert H. Graham
Bruce L. Crockett President INVESTMENT ADVISOR
Director
ACE Limited; Carol F. Relihan A I M Advisors, Inc.
Formerly Director, President, and Senior Vice President and Secretary 11 Greenway Plaza
Chief Executive Officer Suite 100
COMSAT Corporation Gary T. Crum Houston, TX 77046
Senior Vice President
Owen Daly II TRANSFER AGENT
Director Dana R. Sutton
Cortland Trust Inc. Vice President and Treasurer Boston Financial Data Services, Inc.
P.O. Box 8300
Edward K. Dunn Jr. Melville B. Cox Boston, MA 02266-8300
Chairman, Mercantile Mortgage Corp.; Vice President
Formerly Vice Chairman and President, CUSTODIAN
Mercantile-Safe Deposit & Trust Co.; and Mary J. Benson
President, Mercantile Bankshares Assistant Vice President and State Street Bank and Trust Company
Assistant Treasurer 225 Franklin Street
Jack Fields Boston, MA 02110
Chief Executive Officer Sheri Morris
Texana Global, Inc.; Assistant Vice President and COUNSEL TO THE FUND
Formerly Member Assistant Treasurer
of the U.S. House of Representatives Ballard Spahr
Renee A. Friedli Andrews & Ingersoll, LLP
Carl Frischling Assistant Secretary 1735 Market Street
Partner Philadelphia, PA 19103
Kramer, Levin, Naftalis & Frankel LLP P. Michelle Grace
Assistant Secretary COUNSEL TO THE DIRECTORS
Robert H. Graham
President and Chief Executive Officer Nancy L. Martin Kramer, Levin, Naftalis & Frankel LLP
A I M Management Group Inc. Assistant Secretary 919 Third Avenue
New York, NY 10022
Prema Mathai-Davis Ofelia M. Mayo
Chief Executive Officer, YWCA of the U.S.A.; Assistant Secretary DISTRIBUTOR
Commissioner, New York City Dept. for the
Aging; and member of the Board of Directors, Lisa A. Moss A I M Distributors, Inc.
Metropolitan Transportation Authority of Assistant Secretary 11 Greenway Plaza
New York State Suite 100
Kathleen J. Pflueger Houston, TX 77046
Lewis F. Pennock Assistant Secretary
Attorney AUDITORS
Samuel D. Sirko
Louis S. Sklar Assistant Secretary KPMG LLP
Executive Vice President 700 Louisiana
Hines Interests Stephen I. Winer Houston, TX 77002
Limited Partnership Assistant Secretary
</TABLE>
REQUIRED FEDERAL INCOME TAX INFORMATION
AIM Summit Fund paid ordinary dividends in the amount of $0.0345 per share to
shareholders during its tax year ended October 31, 1999. Of this amount, 27.38%
is eligible for the dividends received deduction for corporations. The Fund also
distributed long-term capital gains of $118,682,098 during its tax year ended
October 31, 1999.
16
<PAGE> 19
THE AIM FAMILY OF FUNDS--Registered Trademark--
<TABLE>
<CAPTION>
<S> <C> <C>
GROWTH FUNDS MONEY MARKET FUNDS A I M Management Group Inc. has provided
AIM Aggressive Growth Fund(1) AIM Money Market Fund leadership in the mutual fund industry
AIM Blue Chip Fund AIM Tax-Exempt Cash Fund since 1976 and managed approximately
AIM Capital Development Fund $120 billion in assets for more than 6.4
AIM Constellation Fund INTERNATIONAL GROWTH FUNDS million shareholders, including
AIM Dent Demographic Trends Fund AIM Advisor International Value Fund individual investors, corporate clients
AIMLarge Cap Growth Fund AIM Asian Growth Fund and Financial institutions, as of
AIM Mid Cap Equity Fund AIM Developing Markets Fund September 30, 1999.
AIM Mid Cap Growth Fund AIM Euroland Growth Fund4 The AIM Family of Funds--Registered
AIM Mid Cap Opportunities Fund AIM European Development Fund Trademark-- is distributed nationwide,
AIM Select Growth Fund AIM International Equity Fund and AIM today is the 10th-largest mutual
AIM Small Cap Growth Fund(2) AIM Japan Growth Fund fund complex in the United States in
AIM Small Cap Opportunities Fund(3) AIM Latin American Growth Fund assets under management, according to
AIM Value Fund AIM New Pacific Growth Fund Strategic Insight, an independent mutual
AIM Weingarten Fund fund monitor.
GLOBAL GROWTH FUNDS
GROWTH & INCOME FUNDS AIM Global Aggressive Growth Fund
AIM Advisor Flex Fund AIM Global Growth Fund
AIM Advisor Large Cap Value Fund
AIM Advisor Real Estate Fund GLOBAL GROWTH & INCOME FUNDS
AIM Balanced Fund AIM Global Growth & Income Fund
AIM Basic Value Fund AIM Global Utilities Fund
AIM Charter Fund
GLOBAL INCOME FUNDS
INCOME FUNDS AIM Emerging Markets Debt Fund
AIM Floating Rate Fund AIM Global Government Income Fund
AIM High Yield Fund AIM Global Income Fund
AIM High Yield Fund II AIM Strategic Income Fund
AIM Income Fund
AIM Intermediate Government Fund THEME FUNDS
AIM Limited Maturity Treasury Fund AIM Global Consumer Products and Services Fund
AIM Global Financial Services Fund
TAX-FREE INCOME FUNDS AIM Global Health Care Fund
AIM High Income Municipal Fund AIM Global Infrastructure Fund
AIM Municipal Bond Fund AIM Global Resources Fund
AIM Tax-Exempt Bond Fund of Connecticut AIM Global Telecommunications and Technology Fund(5)
AIM Tax-Free Intermediate Fund AIM Global Trends Fund(6)
</TABLE>
(1) AIM Aggressive Growth Fund reopened to new investors on November 16, 1998.
(2) AIM Small Cap Growth Fund closed to new investors on November 8, 1999. (3)
AIM Small Cap Opportunities Fund closed to new investors on November 4, 1999.
(4) On September 1, 1999, AIM Europe Growth Fund was renamed AIM Euroland Growth
Fund. Previously the fund invested in all size companies in most areas of
Europe. The fund now seeks to invest at least 65% of its assets in large-cap
companies within countries using the euro as their currency (EMU-member
countries). (5) On June 1, 1999, AIM Global Telecommunications Fund was renamed
AIM Global Telecommunications and Technology Fund. (6) Effective August 27,
1999, AIM Global Trends Fund was restructured to operate as a traditional mutual
fund. Before that date, the fund operated as a fund of funds. For more complete
information about any AIM fund(s), including sales charges and expenses, ask
your Financial advisor or securities dealer for a free prospectus(es). Please
read the prospectus(es) carefully before you invest or send money. If used as
sales material after January 20, 2000, this report must be accompanied by a
current Quarterly Review of Performance for AIM Funds.
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Invest with DISCIPLINE
--Registered Trademark--
AIM Distributors, Inc.
SUM-AR-1
