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MONEY MARKET RESERVE FUND
TAX-EXEMPT RESERVE FUND
INVESCO
ANNUAL REPORT December 31, 1998
<PAGE>
INVESCO | Annual Report | January 1999
Market Headlines
- --------------------------------------------------------------------------------
1998 was a period few market veterans will forget. The year started out on a
high note, with the economic and market outlooks bright. The tidal wave of the
Asian economic crisis finally pounded American shores in late summer, however,
swamping financial markets. Wall Street's sense of gloom deepened as the
headlines warned of one global economic calamity after another: Russian loan
default, the ominous near-collapse of the hedge fund Long-Term Capital
Management, tumbling currencies in Latin America, and a perilous banking
situation in Japan.
Following the gut-wrenching declines, however, equity markets began an equally
dizzying rebound in October. A series of three interest rate cuts by the Fed,
along with those by other central banks, pumped liquidity and confidence into
the international financial system. Despite profit warnings from large
multinational corporations, investors began to focus on the many areas of
strength within the American economy: robust consumer spending, low interest
rates and unemployment, and subdued inflation. The mixed economic picture
resulted in mixed market performance, as the technology- and healthcare-heavy
S&P 500 Index outperformed the industrial-oriented Dow Jones, and
large-capitalization stocks continued to be favored over small-cap issues.*
The fixed-income markets responded in variegated ways as well. Yields on most
bonds drifted lower throughout the first part of the year, as inflation seemed
well under control. Following the financial crisis, a global flight to quality
brought yields down even further on U.S. Treasury bonds. The high premium on
risk, however, dramatically widened the yield spread between low-risk government
bonds and corporate obligations. As confidence returned to the markets in the
fall, these trends reversed somewhat, but yield spreads remained relatively wide
on an historical basis.
Fund Management
George S. Robinson has managed Money Market Reserve Fund and Tax-Exempt Reserve
Fund since 1988. From 1986 to 1987, he was Vice President of Citicorp Investment
Bank. He began his investment career in 1965.
*The S&P 500 is an unmanaged index reflecting broad market performance, while
the Dow Jones Industrial Average illustrates results for large-capitalization
stocks.
<PAGE>
STATEMENT OF INVESTMENT SECURITIES
INVESCO Treasurer's Series Trust
December 31, 1998
- --------------------------------------------------------------------------------
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE % AMOUNT VALUE
- --------------------------------------------------------------------------------
Treasurer's Money Market Reserve Fund
67.81 COMMERCIAL PAPER
5.78 ALUMINUM
Aluminum Co of America
1/4/1999 5.40 $ 2,000,000 $ 1,999,112
================================================================================
5.77 AUTOMOBILES
Ford Motor Credit
1/5/1999 5.28 2,000,000 1,998,843
================================================================================
5.77 BANKS
Norwest Corp
1/14/1999 5.13 2,000,000 1,996,350
================================================================================
5.77 CHEMICALS
du Pont (E I) de Nemours
1/8/1999 5.34 2,000,000 1,997,953
================================================================================
4.33 COMMUNICATIONS -- EQUIPMENT & MANUFACTURING
Lucent Technologies
1/4/1999 5.29 1,500,000 1,499,348
================================================================================
4.33 FINANCIAL
Greenwich Funding
1/4/1999 5.37 1,500,000 1,499,338
================================================================================
5.77 HOUSEHOLD FURNITURE & APPLIANCES
Rubbermaid Inc
1/7/1999 5.92 2,000,000 1,998,057
================================================================================
5.77 INSURANCE
USAA Capital
1/12/1999 5.39 2,000,000 1,996,759
================================================================================
5.77 INSURANCE BROKERS
Marsh & McLennan
1/11/1999 5.51 2,000,000 1,996,987
================================================================================
5.78 MANUFACTURING
AlliedSignal Inc
1/4/1999 5.45 2,000,000 1,999,104
================================================================================
5.75 NATURAL GAS
Questar Corp
2/2/1999 5.37 2,000,000 1,990,623
================================================================================
<PAGE>
- --------------------------------------------------------------------------------
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE % AMOUNT VALUE
- --------------------------------------------------------------------------------
7.22 PUBLISHING
New York Times
1/8/1999 5.26 $ 2,500,000 $ 2,497,481
================================================================================
TOTAL COMMERCIAL PAPER (Cost $23,469,955) 23,469,955
================================================================================
21.38 MUNICIPAL SHORT-TERM NOTES(a)
7.80 HEALTH CARE RELATED
Fairview Hosp & Hlthcare Svcs of
Minnesota, (MBIA Insured), ACES,
Hosp Rev, Series A,
11/1/2015 5.65 2,700,000 2,700,000
================================================================================
13.58 INSURANCE
Health Insurance Plan of Greater
New York, (LOC - Morgan Gty Trust),
Gen Oblig, ACES, Ind Rev,
Series B-1, 7/1/2016 5.65 4,700,000 4,700,000
================================================================================
TOTAL MUNICIPAL SHORT-TERM NOTES(Cost $7,400,000) 7,400,000
================================================================================
10.81 OTHER
United Missouri Bank, Money Market
Fiduciary(b)(Cost $3,742,035) 3.98 3,742,035 3,742,035
================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $34,611,990)(c) $ 34,611,990
================================================================================
Treasurer's Tax-Exempt Reserve Fund
96.28 MUNICIPAL SHORT-TERM INVESTMENTS(a)
13.88 Daily Put Bonds
5.23 FLORIDA
Manatee Cnty, Florida (Florida
Pwr & Light Proj), AR, PCR Ref,
Series 1994, 9/1/2024 $4.70 100,000 $ 100,000
Martin Cnty, Florida (Florida
Pwr & Light Proj), AR, PCR Ref,
Series 1994, 9/1/2024 4.70 1,100,000 1,100,000
St Lucie Cnty, Florida (Florida
Pwr & Light Proj), AR, PCR Ref,
Series 1993, 1/1/2026 3.70 1,000,000 1,000,000
================================================================================
2,200,000
2.23 MARYLAND
Baltimore Cnty, Maryland (Sheppard
Pratt Residential Treatment Facil)
(LOC-Nationsbank NA), AR,
Rev, 7/1/2021 4.10 940,000 940,000
================================================================================
2.61 NEW YORK
Long Island Pwr Auth, New York (LOC -
ABN AMRO Bank NV & Morgan Gty
Trust), AR, Elec System Sub Rev,
Series 6, 5/1/2033 4.85 300,000 300,000
New York City, New York (LOC - Morgan
Gty Trust), AR, Gen Oblig, 1994
Subseries,
E-5, 8/1/2009 5.25 $ 300,000 $ 300,000
E-5, 8/1/2010 5.25 300,000 300,000
E-5, 8/1/2017 5.25 100,000 100,000
<PAGE>
- --------------------------------------------------------------------------------
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE % AMOUNT VALUE
- --------------------------------------------------------------------------------
New York City, New York (LOC-
State Street Bank), AR, Gen
Oblig, 1994
Subseries, E-4, 8/1/2022 5.25 100,000 100,000
================================================================================
1,100,000
1.43 TEXAS
Harris Cnty Indl Dev, Texas
(Shell Oil Proj), AR, PCR Ref,
Series 1997, 4/1/2027 3.35 600,000 600,000
================================================================================
2.38 WISCONSIN
Wisconsin Hlth Facils Auth
(Franciscan Hlth Care System Fing)
(LOC-Toronto Dominion Bank),
VRD, Rev, Series 1985A-2, 1/1/2016 4.00 1,000,000 1,000,000
================================================================================
TOTAL DAILY PUT BONDS(Cost $5,840,000) 5,840,000
================================================================================
80.14 Weekly Put Bonds
4.04 ALASKA
Alaska Hsg Fin Corp, VR,
Gen Mtg Rev,
1991 Series C, 6/1/2026 4.00 900,000 900,000
Alaska Indl Dev & Export Auth
(Fairbanks Gold Mining Proj)
(Amax Gold), AR, Exmp Facil Rev,
Series 1997, 5/1/2009 4.05 800,000 800,000
================================================================================
1,700,000
14.92 ARIZONA
Apache Cnty Indl Dev Auth, Arizona
(Tuscon Elec Pwr Springerville
Proj)(LOC - Bankers Trust), VR, IDR,
1983 Series C, 12/15/2018 4.15 1,400,000 1,400,000
Arizona Hlth Facils Auth (Pooled
Ln Prog)(FGIC Insured), VRD, Rev,
Series 1985, 10/1/2015 4.05 1,900,000 1,900,000
Avondale Indl Dev Auth, Arizona
(Natl Hlth Inv Proj)
(LOC - Dresdner Bank
AG), VRD, IDR Ref,
Series 1997, 12/1/2014
4.10 150,000 150,000
Maricopa Cnty Indl Dev Auth, Arizona
(McLane Co Proj)(LOC - Valley Natl
Bank of Arizona), VRD, Rev,
Series 1984, 10/1/2004 4.00 1,080,000 1,080,000
Pima Cnty Indl Dev Auth, Arizona
(Tuscon Elec Pwr Irvington Proj)
(LOC-Societe Generale), F/VR,
IDR, 1982 Series A, 10/1/2022 4.15 1,000,000 1,000,000
Pima Cnty Indl Dev Auth, Arizona
(Tucson Elec Pwr Proj)(LOC-Toronto
Dominion Bank), F/VR, IDR, 1982
Series A, 12/1/2022 4.00 $ 750,000 $ 750,000
================================================================================
6,280,000
<PAGE>
- --------------------------------------------------------------------------------
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE % AMOUNT VALUE
- --------------------------------------------------------------------------------
2.38 COLORADO
El Paso Cnty, Colorado (Briarglen
Apts Proj)(LOC - Gen Elec Cap),
AR, Multifamily Hsg Rev Ref,
Series 1994, 12/1/2024 4.10 1,000,000 1,000,000
================================================================================
1.66 FLORIDA
Dade Cnty, Florida (LOC - Morgan
Gty Trust), VRD, Aviation Rev,
Series 1984A, 10/1/2009 3.75 600,000 600,000
Tampa, Florida (FGIC Insured),
VR, Occupational License Tax,
Series 1996A, 10/1/2018 3.75 100,000 100,000
================================================================================
700,000
4.75 GEORGIA
DeKalb Cnty Hsg Auth, Georgia
(Wood Terrace Apts Proj), VRD,
Multifamily Hsg Rev Ref,
Series 1995, 12/15/2015 4.10 1,000,000 1,000,000
Georgia Muni Assn Pool
(MBIA Insured),
AR, Ctfs of Participation,
12/15/2020 4.00 1,000,000 1,000,000
================================================================================
2,000,000
2.61 KENTUCKY
Kentucky Econ Dev Fin Auth (Greater
Cincinnati Hlth Alliance)(MBIA
Insured), AR, Hosp Facils Rev,
Series 1997C, 1/1/2022 4.05 1,100,000 1,100,000
Louisiana Pub Facils Auth (Sisters
of Charity of the Incarnate Word),
AR, Unit Price Demand Rev,
Series 1997E, 7/1/2023 4.05 900,000 900,000
================================================================================
7.13 MARYLAND
Frederick Cnty, Maryland (Sheppard
Pratt Residential Treatment Facil)
(LOC- Societe Generale), VRD/FR,
Rev, Series 1995, 7/1/2025 4.10 2,100,000 2,100,000
Montgomery Cnty Hsg Opportunities
Commn, Maryland, V/FR,
Multifamily Hsg
Rev, 1988 Issue A, 7/15/2007 4.00 900,000 900,000
================================================================================
3,000,000
4.99 MISSOURI
Missouri Hlth & Edl Facils Auth
(Sisters of Mercy Hlth System), VRD,
BEARS, Hlth Facils Rev,
Series 1995B, 12/1/2016 3.95 1,200,000 1,200,000
St Louis Cnty Indl Dev Auth, Missouri
(Schnuck Mkts Kirkwood Proj)(LOC -
Bankers Trust), F/VR, IDR,
Series 1985, 12/1/2015 4.13 $ 900,000 $ 900,000
================================================================================
2,100,000
2.85 NEW HAMPSHIRE
New Hampshire Bus Fin Auth
(Wheelabrator Concord LP Proj)
(LOC-Wachovia Bank NA), AR,
Resource Recovery Rev,
1997 Series B, 1/1/2018 4.05 1,200,000 1,200,000
================================================================================
<PAGE>
- --------------------------------------------------------------------------------
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE % AMOUNT VALUE
- --------------------------------------------------------------------------------
1.19 NEW YORK
New York City, New York (LOC-UBS
AG), AR, Gen Oblig,
1995 Subseries,
B10, 8/15/2024 4.10 500,000 500,000
================================================================================
3.09 NORTH CAROLINA
East Carolina Univ, North Carolina
(Dowdy-Ficklen Stadium Proj)
(LOC-Wachovia Bank of
North Carolina), VRD,
Athletic Dept Rev,
Series 1996, 5/1/2017 4.00 300,000 300,000
Wake Cnty, Indl Facils & Pollution
Ctl Fing Auth, North Carolina
(Carolina Pwr & Liqht)
(LOC - Wachovia Bank),
AR, Rev, Series 1985A, 5/1/2015 4.00 1,000,000 1,000,000
================================================================================
1,300,000
2.61 OHIO
Hamilton Cnty, Ohio (West Park
Retirement Cmnty Issue)
(LOC - Fifth Third Bank),
VR, Hlth Care Facils Rev,
Series 1989, 7/1/2017 4.00 100,000 100,000
Lorain Cnty, Ohio (Catholic
Healthcare Partners), AR,
Hosp Facils Rev,
Series 1998A, 12/1/2027 3.95 1,000,000 1,000,000
================================================================================
1,100,000
2.38 OKLAHOMA
Tulsa Intl Airport, Oklahoma
(FGIC Insured), VRD, Gen Rev,
Series 1996, 6/1/2018 4.00 1,000,000 1,000,000
================================================================================
3.56 SOUTH CAROLINA
Dorchester Cnty, South Carolina
(BOC Group Proj) (LOC-
Wachovia Bank of Georgia),
TEAMS, Pollution Ctl Facils,
Rev Ref, Series 1993, 12/8/2000 4.10 500,000 500,000
Piedmont Muni Pwr Agency,
South Carolina
(MBIA Insured), VR, Elec Rev,
1996D Ref Series, 1/1/2025 3.95 1,000,000 1,000,000
================================================================================
1,500,000
3.45 TENNESSEE
Nashville & Davidson Cnty Metro Govt
Indl Dev Brd, Tennessee
(Multifamily Chimneytop II)
(LOC - Bank of America),
VR, Rev, 9/1/2006 3.75 $ 1,150,000 $ 1,150,000
Nashville Metro Airport Auth,
Tennessee (LOC-Societe Generale),
AR, Airport Impt Rev Ref,
Series 1993, 7/1/2019 4.00 300,000 300,000
================================================================================
1,450,000
<PAGE>
- --------------------------------------------------------------------------------
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE % AMOUNT VALUE
- --------------------------------------------------------------------------------
4.99 TEXAS
Bexar Cnty Hlth Facils Dev,
Texas (Retirement Cmnty -
Air Force) (LOC -
Rabobank Nederland), AR, Rev,
Series 1985B, 3/1/2012 4.00 500,000 500,000
Harris Cnty Hlth Facils Dev,
Texas (Sisters of Charity of
the Incarnate Word), AR,
SCH Hlth Care System
Unit Price Demand Rev,
Series 1997C, 7/1/2023 4.05 1,600,000 1,600,000
================================================================================
2,100,000
6.65 WASHINGTON
Port Seattle, Washington, VR,
Gen Oblig, Rev, 1/1/2005 4.00 1,300,000 1,300,000
Seattle, Washington, AR, Muni
Light & Pwr Rev, Series 1993,
11/1/2018 4.00 300,000 300,000
Washington Hsg Fin Commn
(Pac First Fed Svgs Bank Prog)
(LOC - Fed Home Ln Bank), VRD,
Multifamily Mtg Rev Ref,
Series 1988B, 10/1/2020 4.00 300,000 300,000
Washington Pub Pwr Supply System
(Proj #1) (LOC - Bank of America),
AR, Ref Elec Rev, Series 1993-1A-2,
7/1/2017
3.95 900,000 900,000
================================================================================
2,800,000
4.75 WYOMING
Green River, Wyoming
(Allied Corp Proj), F/FR, PCR Ref,
1982 Series, 12/1/2012 4.45 2,000,000 2,000,000
================================================================================
TOTAL WEEKLY PUT BONDS (Cost $33,730,000) 33,730,000
================================================================================
2.26 Monthly Put Bonds
2.26 FLORIDA
Marion Cnty Indl Dev Auth, Florida
(Florida Convalescent Ctrs Proj)(LOC-
Toronto Dominion Bank), VRD/FR, IDR Ref,
Series 1988A, 1/1/2011
(Cost $950,000) 3.50 950,000 950,000
================================================================================
TOTAL MUNICIPAL SHORT-TERM INVESTMENTS (Cost $40,520,000) 40,520,000
================================================================================
<PAGE>
- --------------------------------------------------------------------------------
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE % AMOUNT VALUE
- --------------------------------------------------------------------------------
3.72 TAXABLE SHORT-TERM INVESTMENTS
United Missouri Bank, Money Market
Fiduciary(b)
(Cost $1,564,177) 3.98 $ 1,564,177 $ 1,564,177
================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $42,084,177)(c) $ 42,084,177
================================================================================
The following abbreviations may be used in portfolio descriptions:
ACES(d) -- Adjustable Convertible Extendable Securities
BEARS -- Bondholders Extendable Adjustable Return Securities
AR(d) -- Adjustable Rate
F/FR -- Floating/Fixed Rate
F/VR(d) -- Floating/Variable Rate
IDR -- Industrial Development Revenue
PCR -- Pollution Control Revenue
TEAMS(d) -- Tax-Exempt Adjustable Mode Securities
V/FR -- Variable/Fixed Rate
VR(d) -- Variable Rate
VRD(d) -- Variable Rate Demand
VRD/FR(d) -- Variable Rate Demand/Fixed Rate
(a) All securities with a maturity date greater than one year have either a
variable rate, demand feature, optional or mandatory put resulting in an
effective maturity of one year or less. Rate shown reflects current rate.
(b) Principal and interest are payable on demand.
(c) Also represents cost for income tax purposes.
(d) Rate is subject to change. Rate shown reflects current rate.
See Notes to Financial Statements
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
INVESCO Treasurer's Series Trust
December 31, 1998
Treasurer's Treasurer's
Money Market Tax-Exempt
Reserve Fund Reserve Fund
- --------------------------------------------------------------------------------
ASSETS
Investment Securities:
At Cost $ 34,611,990 $ 42,084,177
================================================================================
At Value $ 34,611,990 $ 42,084,177
Cash 0 41,999
Receivables:
Investment Securities Sold 1,998,833 0
Fund Shares Sold 635,806 18,410
Interest 36,800 135,105
================================================================================
TOTAL ASSETS 37,283,429 42,279,691
================================================================================
LIABILITIES
Payables:
Custodian 1,920,660 0
Fund Shares Repurchased 1,117,512 5,563,367
Accrued Expenses and Other Payables 8,828 8,853
================================================================================
TOTAL LIABILITIES 3,047,000 5,572,220
================================================================================
Net Assets at Value $ 34,236,429 $ 36,707,471
================================================================================
Shares Outstanding(a) 34,236,429 36,707,471
Net Asset Value, Offering and Redemption
Price per Share $ 1.00 $ 1.00
================================================================================
(a) The Trust has one class of shares which may be divided into different
series, each representing an interest in a separate Fund. At December 31,
1998, there was an unlimited number of shares of beneficial interest
(without par value) authorized. Paid-in capital was $34,236,429 and
$36,707,471 for Treasurer's Money Market Reserve and Treasurer's Tax-Exempt
Reserve Funds, respectively.
See Notes to Financial Statements
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
INVESCO Treasurer's Series Trust
Year Ended December 31, 1998
Treasurer's Treasurer's
Money Market Tax-Exempt
Reserve Fund Reserve Fund
- --------------------------------------------------------------------------------
INVESTMENT INCOME
INTEREST INCOME $ 3,153,478 $ 1,160,926
EXPENSES
Investment Advisory Fees 141,183 79,720
================================================================================
Net Investment Income and Net Increase in
Net Assets from Operations $ 3,012,295 $ 1,081,206
================================================================================
See Notes to Financial Statements
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
INVESCO Treasurer's Series Trust
Year Ended December 31
Treasurer's Money
Market Reserve Fund
1998 1997
- --------------------------------------------------------------------------------
OPERATIONS AND DISTRIBUTIONS TO
SHAREHOLDERS
Net Investment Income Earned and Distributed
to Shareholders $ 3,012,295 $ 5,457,357
================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares $ 484,696,941 $ 907,820,795
Reinvestment of Dividends 2,978,475 5,366,818
================================================================================
487,675,416 913,187,613
Amounts Paid for Repurchases of Shares (520,584,938) (959,322,893)
================================================================================
NET DECREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS (32,909,522) (46,135,280)
NET ASSETS
Beginning of Period 67,145,951 113,281,231
================================================================================
End of Period $ 34,236,429 $ 67,145,951
================================================================================
----------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 484,696,941 907,820,795
Shares Issued from Reinvestment of Dividends 2,978,475 5,366,818
================================================================================
487,675,416 913,187,613
Shares Repurchased (520,584,938) (959,322,893)
================================================================================
Net Decrease in Fund Shares (32,909,522) (46,135,280)
================================================================================
See Notes to Financial Statements
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS (Continued)
- --------------------------------------------------------------------------------
INVESCO Treasurer's Series Trust
Year Ended December 31
Treasurer's Tax-Exempt
Reserve Fund
1998 1997
- --------------------------------------------------------------------------------
OPERATIONS AND DISTRIBUTIONS TO
SHAREHOLDERS
Net Investment Income Earned and Distributed
to Shareholders $ 1,081,206 $ 728,737
================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares $ 72,911,901 $ 31,372,456
Reinvestment of Dividends 1,072,533 711,015
================================================================================
73,984,434 32,083,471
Amounts Paid for Repurchases of Shares (59,361,188) (33,385,365)
================================================================================
NET INCREASE (DECREASE) IN NET ASSETS
FROM FUND SHARE TRANSACTIONS 14,623,246 (1,301,894)
NET ASSETS
Beginning of Period 22,084,225 23,386,119
================================================================================
End of Period $ 36,707,471 $ 22,084,225
================================================================================
----------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 72,911,901 31,372,456
Shares Issued from Reinvestment of Dividends 1,072,533 711,015
================================================================================
73,984,434 32,083,471
Shares Repurchased (59,361,188) (33,385,365)
================================================================================
Net Increase (Decrease) in Fund Shares 14,623,246 (1,301,894)
================================================================================
See Notes to Financial Statements
<PAGE>
- --------------------------------------------------------------------------------
INVESCO
NOTES TO FINANCIAL STATEMENTS --
INVESCO Treasurer's Series Trust
NOTE 1 -- ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. INVESCO
Treasurer's Series Trust (the "Trust") is organized under the laws of the
Commonwealth of Massachusetts and consists of four separate funds: INVESCO
Treasurer's Money Market Reserve Fund ("Money Fund"), INVESCO Treasurer's
Tax-Exempt Reserve Fund ("Tax-Exempt Fund") (collectively, the "Funds"), INVESCO
Treasurer's Prime Reserve Fund and INVESCO Treasurer's Special Reserve Fund,
each of which represents a separate portfolio of investments. The investment
objective of each of the Funds is to achieve as high a level of current income
as is consistent with the preservation of capital and the maintenance of
liquidity. Money Fund and Tax-Exempt Fund are presented herein. The Trust is
registered under the Investment Company Act of 1940 (the "Act") as a
diversified, open-end management investment company.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. 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 and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
A. SECURITY VALUATION -- Securities held by the Trust are valued at their
market value determined by the amortized cost method of valuation. If management
believes that such valuation does not reflect the securities' fair value, these
securities are valued at fair value as determined in good faith under procedures
established by the Trust's trustees.
B. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME -- Security
transactions are accounted for on the trade date. Interest income, which may be
comprised of stated coupon rate, market discount, original issue discount and
amortized premium, is recorded on the accrual basis. The Trust amortizes
discounts and premiums paid on purchases of securities to the earliest put or
call date. Cost is determined on the specific identification basis.
C. FEDERAL AND STATE TAXES -- The Trust has complied, and continues to
comply, with the provisions of the Internal Revenue Code applicable to regulated
investment companies and, accordingly, has made or intends to make sufficient
distributions of net investment income and net realized capital gains, if any,
to relieve it from all federal and state income taxes and federal excise taxes.
Of the distributions paid by Tax-Exempt Fund for the year ended December 31,
1998, 91.80% were exempt from federal income taxes.
D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- All of the Trust's net
investment income is distributed to shareholders by dividends declared daily and
paid monthly. Income dividends are reinvested at the month-end net asset value.
<PAGE>
NOTE 2 -- INVESTMENT ADVISORY AND OTHER AGREEMENTS. INVESCO Capital
Management, Inc. ("ICM") serves as the Trust's investment adviser. As
compensation for its services to the Trust, ICM receives an investment advisory
fee which is accrued daily at the applicable rate and paid monthly. The fee for
each Fund is based on the annual rate of 0.25% of each Fund's average net
assets. ICM is also responsible for providing certain administrative and
clerical services and facilities necessary for the operation of the Trust. In
accordance with the Investment Advisory Agreement, ICM bears all other expenses
of the Funds, except taxes, interest and brokerage commissions.
NOTE 3 -- TRANSACTIONS WITH AFFILIATES. Certain of the Trust's officers and
trustees are also officers and directors of ICM. At December 31, 1998, 6.33% of
outstanding shares of Tax-Exempt Fund were held by ICM or affiliated parties.
The Trust has adopted an unfunded defined benefit deferred compensation
plan covering all independent trustees of the Trust who will have served as an
independent trustee for at least five years at the time of retirement. Benefits
under this plan were based on an annual rate equal to 40% of the retainer fee at
the time of retirement. As of July 1, 1998, benefits are based on an annual rate
of 50% of the sum of the retainer fee at the time of retirement plus the annual
meeting fee.
For the year ended December 31, 1998, pension expenses, unfunded accrued
pension costs and pension liability were paid by ICM in accordance with the
Investment Advisory Agreement and were as follows:
UNFUNDED
PENSION ACCRUED PENSION
FUND EXPENSES PENSION COSTS LIABILITY
- --------------------------------------------------------------------------------
Money Fund $ 1,031 $ 4,884 $ 13,218
Tax-Exempt Fund 311 1,522 3,055
The independent directors have contributed to a deferred compensation plan,
pursuant to which they have deferred receipt of a portion of the compensation
which they would otherwise have been paid as directors of selected INVESCO
Funds. The deferred amounts are being invested in the shares of all of the
INVESCO and Treasurer's Series Trust Funds.
<PAGE>
Report of Independent Accountants
To the Board of Trustees and Shareholders of
INVESCO Treasurer's Series Trust
In our opinion, the accompanying statement of assets and liabilities,
including the statement of investment securities, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of INVESCO Treasurer's
Money Market Reserve Fund and INVESCO Treasurer's Tax-Exempt Reserve Fund, (two
of the portfolios constituting INVESCO Treasurer's Series Trust, hereafter
referred to as the "Trust") at December 31, 1998, the results of each of their
operations for the year then ended, the changes in each of their net assets for
each of the two years in the period then ended and the financial highlights for
each of the five years in the period then ended, in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Trust's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at December 31, 1998 by
correspondence with the custodian, provide a reasonable basis for the opinion
expressed above.
/s/ PricewaterhouseCoopers LLP
- -------------------------------
PricewaterhouseCoopers LLP
Denver, Colorado
January 29, 1999
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
INVESCO Treasurer's Series Trust
(For a Fund Share Outstanding Throughout Each Period)
Year Ended December 31
- ---------------------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Treasurer's Money Market Reserve Fund
PER SHARE DATA
Net Asset Value -- Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
===========================================================================================================================
INCOME AND DISTRIBUTIONS FROM
INVESTMENT OPERATIONS
Net Investment Income Earned and
Distributed to Shareholders 0.05 0.05 0.05 0.06 0.04
===========================================================================================================================
Net Asset Value -- End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
===========================================================================================================================
TOTAL RETURN 5.46% 5.48% 5.30% 5.82% 4.13%
RATIOS
Net Assets -- End of Period ($000 Omitted) $ 34,236 $ 67,146 $ 113,281 $ 141,885 $ 93,131
Ratio of Expenses to Average Net Assets 0.25% 0.25% 0.25% 0.25% 0.25%
Ratio of Net Investment Income to
Average Net Assets 5.35% 5.32% 5.17% 5.71% 4.02%
Treasurer's Tax-Exempt Reserve Fund
PER SHARE DATA
Net Asset Value -- Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
===========================================================================================================================
INCOME AND DISTRIBUTIONS FROM INVESTMENT OPERATIONS
Net Investment Income Earned and
Distributed to Shareholders 0.03 0.04 0.03 0.04 0.03
===========================================================================================================================
Net Asset Value -- End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
===========================================================================================================================
TOTAL RETURN 3.49% 3.74% 3.45% 3.90% 2.81%
RATIOS
Net Assets -- End of Period ($000 Omitted) $ 36,707 $ 22,084 $ 23,386 $ 21,928 $ 19,716
Ratio of Expenses to Average Net Assets 0.25% 0.25% 0.25% 0.25% 0.25%
Ratio of Net Investment Income to
Average Net Assets 3.38% 3.68% 3.40% 3.86% 2.69%
</TABLE>
<PAGE>
INVESCO
YOU SHOULD
KNOW WHAT
INVESCO KNOWS(TM)
We're easy to stay in touch with:
Investor Services: 1-800-525-8085
PAL (R), your Personal Account Line: 1-800-424-8085
On the World Wide Web: www.invesco.com
In Denver, visit one of our convenient Investor Centers:
Cherry Creek, 155-B Fillmore Street
Denver Tech Center, 7800 East Union Avenue, Lobby Level
INVESCO Distributors, Inc. (SM), Distributor
Post Office Box 173706
Denver, Colorado 80217-3706
