<PAGE>
THE MANAGERS' OVERVIEW
MARKET VOLATILITY CHALLENGES INVESTORS IN 1996
A roundtable discussion with the fund management team for AIM Variable
Insurance Funds, Inc. about the six-month reporting period ended June 30, 1996.
Q. WHAT WERE CONDITIONS LIKE IN FINANCIAL MARKETS THE PAST SIX MONTHS?
A. Uncertainty dominated financial markets as investors became increasingly
concerned about the possibility of rising inflation. The economy had slowed to
a feeble annual growth rate of 0.5% in the fourth quarter of 1995, and that
began to turn around early this year. The rate of growth of the gross domestic
product shot up to 2.0% in the first quarter of 1996, and growth in the second
quarter had been predicted at 3.5% to 5%.
The foremost concern was that the Federal Reserve Board would nudge interest
rates higher to slow economic growth and forestall inflation, and that drove
most bond yields higher--and prices lower--during most of the reporting period.
In addition, stock investors anticipated that corporate profit growth would
fall below 1995's robust pace, particularly if rising market interest rates
began to erode profit margins.
Q. HOW WERE THE MARKETS BY THE END OF THE REPORTING PERIOD?
A. We saw more stability in stock markets as reports began to indicate that the
U.S. economy had grown with surprising strength, but with little evidence of
inflation. Stocks resumed a halting advance toward record levels, and market
leadership was broadly divided across selected sectors including cyclical
consumer, energy, industrial, and technology.
Fixed-income investors seemed less certain that inflation would be contained,
and that continued to fuel bond market volatility through the end of the
reporting period. The yield curve remained steeply sloped, with the spread
between the three-month U.S. Treasury bill, which is influenced by rates pegged
by the Fed, and the 10-year U.S. Treasury note, whose yield is set by the
market, at a relatively wide 1.56 percentage points by June 28, 1996.
Q. HOW WERE THE FUNDS POSITIONED AS OF JUNE 30?
A. The following is an overview of the fund portfolios as of June 30, 1996. Keep
in mind, the Funds' portfolio compositions are subject to change and there is
no guarantee any Fund will continue to hold any particular security mentioned
in this report.
AIM V.I. CAPITAL APPRECIATION FUND--The Fund took advantage of volatile markets
by adding new names to its portfolio, taking it to over 320 during the
reporting period. The mix of securities was further diversified by paring its
weightings in technology stocks from 45% to 25%, and increasing its emphasis on
health care stocks and consumer cyclicals like retail stocks. Among the largest
technology holdings were software developers and computer designers like
Parametric Technology Corp. and Cisco Systems, Inc. The Fund also featured such
medical patient service companies as HEALTHSOUTH Corp. and Columbia/HCA
Healthcare Corp. We were also interested in a variety of companies in the
retail sector that dominated specific themes--The Gap, Inc., Staples, Inc., and
PetSmart Inc.
AIM V.I. DIVERSIFIED INCOME FUND--The Fund increased its holdings in high-yield
bonds, and that helped to moderate the effects of market volatility during the
reporting period. When economic growth accelerated during the reporting period,
investors in higher-grade bonds worried about the potential consequences of
rising inflation. High-yield bonds, by comparison, reacted more positively to
news of a stronger economy. Healthy economic growth tends to improve the
earnings capacity of the bond-issuing companies and ease credit concerns for
lower-quality debt issuers. During the six months covered by this report, high-
yield bonds were the top-performing domestic fixed-income sector, according to
The Wall Street Journal.
Higher-yielding, lower-rated corporate bonds are commonly known as "junk
bonds." These bonds have a greater risk of price fluctuation and loss of
principal and income than U.S. government securities, such as U.S. Treasury
bonds, notes, and bills, which offer a government guarantee as to the repayment
of principal and interest if held to maturity.
AIM V.I. GROWTH FUND--The changing earnings environment set the stage for
significant changes in market leadership during the reporting period. The Fund
increased its holdings to approximately 250, spread across more than 50
industry categories. Among the Fund's top holdings were securities in the
health care sector, particularly medical patient service companies and
drugmakers including Cardinal Health, Inc. and Schering-Plough Corp. Also
featured were selected technology companies engaged in software development and
computer networking and computer peripherals, including ADC Telecommunications,
Inc. and Cisco Systems, Inc. The Fund featured such well-known names in the
retail sector as Dayton-Hudson Corp. and The Home Depot, Inc.
AIM V.I. GROWTH AND INCOME FUND--About 50% of the Fund's assets were invested
in quality defensive stocks, which tend to be less sensitive to changes in the
business cycle, and therefore less volatile. The
2
<PAGE>
The Fed expects
economic growth to
slow during the
second half of the
year, and that would
lessen the likelihood
that monetary policy
would be tightened.
Fund's top stock holdings were in multi-billion dollar medical companies,
insurance companies, telecommunications companies, and oil and gas companies.
The Fund's 25% position in convertible securities, with their stock conversion
feature, provided attractive income and the opportunity for the Fund to
capitalize on the potential for earnings appreciation.
AIM V.I. GOVERNMENT SECURITIES FUND--The Fund benefited from increased
investment in the mortgage sector as higher market interest rates helped
improve stability in the mortgage market. Average weighted maturity was
shortened to approximately six years, and duration to just over four years. The
Fund held approximately 40% of its assets in mortgage-backed securities, 13% in
U.S. Treasury securities, and 39% in U.S. agency securities. The remaining
assets were invested in cash and cash-equivalent securities.
AIM V.I. INTERNATIONAL EQUITY FUND--A number of positive developments in
foreign economies distinguished 1996 from 1995. Declining interest rates,
strengthening economies, and positive earnings trends encouraged investors to
bid up stocks and currencies in several key markets. A rising U.S. dollar
improved the profitability of European, Japanese, and Asian exports. Lower
interest rates also encouraged investors to favor stocks over local fixed-
income investments. The largest concentrations of the Fund's holdings were in
Japan, United Kingdom, France, Hong Kong, and Germany.
AIM V.I. MONEY MARKET FUND--The Fund adjusted the weighted average maturity of
the securities in its portfolio to correlate with the changing interest rate
environment. Early in the reporting period, the Fund extended the weighted
average maturity of the portfolio to lock in higher interest rates available on
longer-term money market instruments. As short-term interest rates increased,
management gradually reversed course. As the reporting period closed, weighted
average maturity stood at 27 days.
AIM V.I. GLOBAL UTILITIES FUND--The Fund increased the proportion of foreign
holdings in the portfolio to take advantage of the worldwide trend toward
privatization, particularly in former state monopolies in such industries as
electricity generation and telecommunications. That move helped offset relative
weakness in the domestic utilities market as domestic interest rates rose. As
frequent and substantial borrowers in the capital markets, utility companies
tend to be sensitive to changes in interest rates.
AIM V.I. VALUE FUND--The Fund's investment strategy seeks equities that are
relatively undervalued in the market--a task made increasingly difficult during
a prolonged domestic bull market. The Fund responded by raising its cash
position to prepare for improved market pricing on attractive opportunities.
The Fund also increased its foreign holdings, particularly in Europe, where
companies are just embarking on the major cost-cutting, restructuring, and
consolidation efforts that helped improved profitability for American companies
during the last decade.
Q. WHAT IS YOUR MARKET OUTLOOK FOR THE NEXT FEW MONTHS?
A. We anticipate continued volatility in fixed-income markets for months to
come. The specter of possible inflation continues to concern investors, despite
mounting evidence that the U.S. economy is growing reasonably and that
inflationary pressures remain modest. In its July meeting, the Fed elected to
leave monetary policy unchanged; the outlook for the rest of 1996 is less
certain.
Reports of accelerating economic growth during the first half of 1996, and
possibly in the third quarter as well, have prompted some analysts to predict
that the Fed will raise short-term interest rates in the coming months. Others
have suggested that market interest rates that have been rising for most of the
year may have forestalled any inflation threat, precluding the necessity for
Fed intervention. The Fed expects economic growth will slow during the second
half of the year, and that would lessen the likelihood that monetary policy
would be tightened.
The continued pace of economic growth is the key. Interestingly, the consumer
may play an important role in determining the strength of the economy in the
second half of the year. Strong consumer demand has helped spur economic
growth. While there has been much speculation about the climbing level of
consumer debt and its eroding effect on demand, household balance sheets have
thus far remained healthy.
3
<PAGE>
AIM V.I. CAPITAL APPRECIATION FUND SCHEDULE OF INVESTMENTS
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS - 88.44%
ADVERTISING/BROADCASTING - 1.48%
6,200 American Radio Systems Corp.(a)....................... $ 266,600
11,400 Belo (A.H.) Corp...................................... 424,650
19,900 CanWest Global Communications Corporation(a) (Canada). 542,275
13,000 Chancellor Corp. - Class A(a)......................... 406,250
9,200 Clear Channel Communications, Inc.(a)................. 757,850
26,250 Infinity Broadcasting Corp. - Class A(a).............. 787,500
27,500 Jacor Communications, Inc.(a)......................... 849,063
20,000 Paxson Communications Corp.(a)........................ 212,500
9,000 True North Communications, Inc........................ 200,250
------------
4,446,938
------------
AUTOMOBILE/TRUCK PARTS & TIRES - 0.12%
16,170 Mark IV Industries, Inc............................... 365,846
------------
BANKING - 0.25%
15,000 Bank of Boston Corp................................... 742,500
------------
BIOTECHNOLOGY - 0.46%
27,700 Guidant Corp.......................................... 1,364,225
------------
BUSINESS SERVICES - 1.63%
14,000 AccuStaff, Inc.(a).................................... 381,500
10,000 Career Horizons, Inc.(a).............................. 350,000
3,500 Corrections Corp. of America(a)....................... 245,000
15,800 CUC International, Inc.(a)............................ 560,900
6,800 Equifax, Inc.......................................... 178,500
13,700 Healthcare COMPARE Corp.(a)........................... 667,875
27,000 Manpower Inc.......................................... 1,059,750
28,050 Olsten Corp........................................... 823,968
25,000 Romac International, Inc.(a).......................... 637,500
------------
4,904,993
------------
CHEMICALS - 0.24%
15,000 Agrium, Inc. (Canada)................................. 196,640
30,000 Polymer Group, Inc.(a)................................ 525,000
------------
721,640
------------
CHEMICALS (SPECIALTY) - 0.51%
50,400 Airgas Inc.(a)........................................ 957,600
15,000 IMC Global, Inc....................................... 564,375
------------
1,521,975
------------
COMPUTER MINI/PCS - 2.30%
15,600 CDW Computer Centers Inc.(a).......................... 1,084,200
27,500 COMPAQ Computer Corp.(a).............................. 1,354,375
41,400 Dell Computer Corp.(a)................................ 2,106,225
7,200 Hewlett-Packard Co.................................... 717,300
27,800 Sun Microsystems, Inc.(a)............................. 1,636,725
------------
6,898,825
------------
</TABLE>
4
AIM V.I. CAPITAL APPRECIATION FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMPUTER NETWORKING - 6.10%
13,600 ACT Networks, Inc.(a).................................. $ 442,000
29,400 Ascend Communications, Inc.(a)......................... 1,653,750
22,400 Cabletron Systems, Inc.(a)............................. 1,537,200
43,500 Cascade Communications Corp.(a)........................ 2,958,000
15,000 Cheyenne Software, Inc.(a)............................. 288,750
15,000 CIDCO, Inc.(a)......................................... 528,750
55,000 Cisco Systems, Inc.(a)................................. 3,114,375
27,800 ECI Telecommunications Ltd. (Israel)................... 646,350
75,000 FORE Systems, Inc.(a).................................. 2,709,375
30,300 Gandalf Technologies, Inc.(a) (Canada)................. 242,400
20,500 Newbridge Networks Corp.(a) (Canada)................... 1,342,750
5,800 Shiva Corp.(a)......................................... 464,000
15,100 Sync Research, Inc.(a)................................. 215,175
40,800 3Com Corp.(a).......................................... 1,866,600
20,000 Xircom, Inc.(a)........................................ 295,000
------------
18,304,475
------------
COMPUTER PERIPHERALS - 1.67%
28,200 Adaptec, Inc.(a)....................................... 1,335,975
25,000 EMC Corp.(a)........................................... 465,625
13,000 Komag Inc.(a).......................................... 342,875
13,700 Microchip Technology, Inc.(a).......................... 339,075
29,600 U.S. Robotics Corp.(a)................................. 2,530,800
------------
5,014,350
------------
COMPUTER SOFTWARE & SERVICES - 13.94%
2,000 Bisys Group, Inc. (The)(a)............................. 75,500
31,000 BMC Software, Inc.(a).................................. 1,852,250
50,550 Cadence Design Systems, Inc.(a)........................ 1,706,063
28,000 Ceridian Corp.(a)...................................... 1,414,000
31,100 Computer Associates International, Inc................. 2,215,875
19,700 Computer Sciences Corp.(a)............................. 1,472,575
55,200 Computervision Corp.(a)................................ 552,000
21,000 Compuware Corp.(a)..................................... 829,500
15,100 CSG Systems International, Inc.(a)..................... 392,600
5,400 CyCare Systems, Inc.(a)................................ 281,475
27,800 DST Systems, Inc.(a)................................... 889,600
10,500 Electronic Arts, Inc.(a)............................... 280,875
12,300 First Data Corp........................................ 979,388
7,400 Gartner Group, Inc.(a)................................. 271,025
39,000 HBO & Co............................................... 2,642,250
13,600 HPR, Inc.(a)........................................... 289,000
5,500 IDX Systems Corp.(a)................................... 214,500
9,200 Imnet Systems, Inc.(a)................................. 280,600
13,900 Informix Corp.(a)...................................... 312,750
11,800 Integrated Systems, Inc.(a)............................ 472,738
20,000 Intuit, Inc.(a)........................................ 945,000
28,000 Macromedia(a).......................................... 612,500
30,000 McAfee Associates, Inc.(a)............................. 1,470,000
15,500 Metromail Corp.(a)..................................... 346,812
24,200 Microsoft Corp.(a) .................................... 2,907,025
15,000 National Data Corp..................................... 513,750
54,800 Network General Corp.(a)............................... 1,178,200
75,075 Oracle Systems Corp.(a)................................ 2,960,770
</TABLE>
5
AIM V.I. CAPITAL APPRECIATION FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMPUTER SOFTWARE & SERVICES - CONTINUED
39,000 PairGain Technologies Inc.(a)............................ $ 2,418,000
74,200 Parametric Technology Corp.(a)........................... 3,218,425
15,000 PC Docs Group International, Inc.(a) (Canada)............ 298,125
27,500 Physician Computer Network, Inc.(a)...................... 317,968
2,300 Pure Software, Inc.(a)................................... 78,200
16,200 Rational Software Corp.(a)............................... 870,750
2,900 Red Brick Systems, Inc.(a)............................... 106,575
8,700 S3 Inc.(a)............................................... 107,120
2,100 Shared Medical Systems Corp.............................. 134,925
8,500 SoftKey International Inc.(a)............................ 160,970
28,200 Sterling Commerce, Inc.(a)............................... 1,046,925
16,800 Sterling Software, Inc.(a)............................... 1,293,600
20,000 Structural Dynamics Research Corp.(a).................... 440,000
17,600 SunGard Data Systems, Inc.(a)............................ 706,200
38,500 Synopsys, Inc.(a)........................................ 1,530,375
1,700 Systemsoft Corp.(a)...................................... 79,900
8,600 Tecnomatix Technologies Ltd.(a) (Israel)................. 163,400
3,200 Transition Systems, Inc.(a).............................. 91,200
13,800 Verity, Inc.(a).......................................... 396,750
------------
41,818,029
------------
CONGLOMERATES - 0.54%
27,300 Corning, Inc............................................. 1,047,638
13,968 Tyco International Ltd................................... 569,196
------------
1,616,834
------------
COSMETICS & TOILETRIES - 0.24%
40,800 General Nutrition Co.(a)................................. 714,000
------------
ELECTRONIC COMPONENT/MISCELLANEOUS - 1.08%
4,000 Ametek Inc............................................... 87,000
3,600 Amphenol Corp.(a)........................................ 82,800
6,200 Anixter International Inc.(a)............................ 92,225
13,600 Berg Electronics Corp.(a)................................ 323,000
13,700 BMC Industries, Inc...................................... 393,875
14,100 Cable Design Technologies Corp.(a)....................... 461,775
10,000 Checkpoint Systems, Inc.(a).............................. 343,750
9,150 Methode Electronics, Inc................................. 155,550
3,906 Molex, Inc. - Class A.................................... 114,738
3,750 Parker-Hannifin Corp..................................... 158,906
17,200 Symbol Technologies, Inc.(a)............................. 765,400
8,600 Thermo Instrument Systems, Inc.(a)....................... 277,350
------------
3,256,369
------------
ELECTRONIC/PC DISTRIBUTORS - 0.29%
13,900 Arrow Electronics, Inc.(a)............................... 599,438
6,500 Avnet, Inc............................................... 273,813
------------
873,251
------------
FINANCE (ASSET MANAGEMENT) - 0.15%
15,000 Imperial Credit Industries, Inc.(a)...................... 453,750
------------
</TABLE>
6
AIM V.I. CAPITAL APPRECIATION FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
FINANCE (CONSUMER CREDIT) - 5.26%
17,500 ADVANTA Corp. - Class A................................ $ 892,500
12,900 ADVANTA Corp. - Class B................................ 583,725
10,900 Beneficial Corp........................................ 611,763
28,300 Capital One Financial Corp............................. 806,550
8,600 Cityscape Financial Corp.(a)........................... 440,750
34,400 Credit Acceptance Corp.(a)............................. 722,400
21,600 First USA, Inc......................................... 1,188,000
55,300 Green Tree Financial Corp.............................. 1,728,125
21,100 Household International, Inc........................... 1,603,600
85,050 MBNA Corp.............................................. 2,423,925
38,400 Medaphis Corp.(a)...................................... 1,526,400
28,000 Money Store, Inc. (The)................................ 619,500
20,300 Olympic Financial Ltd.(a).............................. 466,900
22,500 PMT Services, Inc.(a).................................. 644,062
3,000 Southern Pacific Funding Corp.(a)...................... 52,500
12,000 Student Loan Marketing Association..................... 888,000
10,000 SunAmerica, Inc........................................ 565,000
------------
15,763,700
------------
FOOD/PROCESSING - 0.20%
18,300 Richfood Holdings, Inc................................. 594,750
------------
FUNERAL SERVICES - 0.98%
40,200 Service Corp. International............................ 2,311,500
20,250 Stewart Enterprises, Inc. - Class A.................... 632,812
------------
2,944,312
------------
FURNITURE - 0.14%
15,400 Leggett & Platt, Inc................................... 427,350
------------
GAMING - 0.90%
21,300 GTECH Holdings Corp.(a)................................ 631,013
26,000 Mirage Resorts, Inc.(a)................................ 1,404,000
23,600 Trump Hotels & Casino Resorts, Inc.(a)................. 672,600
------------
2,707,613
------------
HOME BUILDING - 0.21%
27,575 Clayton Homes, Inc..................................... 551,500
4,000 Oakwood Homes Corp..................................... 82,500
------------
634,000
------------
HOTELS/MOTELS - 1.07%
17,700 Doubletree Corp.(a).................................... 628,350
26,000 Hospitality Franchise System, Inc.(a).................. 1,820,000
3,750 Promus Hotel Corp.(a).................................. 111,093
13,500 Sun International Hotels Ltd.(a)....................... 654,750
------------
3,214,193
------------
INSURANCE (LIFE & HEALTH) - 0.70%
13,700 Compdent Corp.(a)...................................... 637,050
26,800 RISCORP, Inc.(a)....................................... 489,100
28,900 United Companies Financial Corp........................ 982,600
------------
2,108,750
------------
INSURANCE (MULTI-LINE PROPERTY) - 0.52%
27,500 MGIC Investment Corp................................... 1,543,438
------------
</TABLE>
7
AIM V.I. CAPITAL APPRECIATION FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
LEISURE & RECREATION - 0.84%
27,000 Callaway Golf Co....................................... $ 897,750
21,800 Harley-Davidson, Inc................................... 896,525
16,875 Mattel, Inc............................................ 483,047
9,900 Speedway Motorsports, Inc.(a).......................... 253,687
------------
2,531,009
------------
MACHINE TOOLS - 0.14%
11,900 Kennametal Inc......................................... 404,600
------------
MACHINERY (MISCELLANEOUS) - 0.24%
11,500 Pall Corp.............................................. 277,437
14,500 Pentair, Inc........................................... 435,000
------------
712,437
------------
MEDICAL (DRUGS) - 1.73%
37,750 Cardinal Health, Inc................................... 2,722,719
20,400 Elan Corp. PLC-ADR(a) (Ireland)........................ 1,165,350
5,000 Express Scripts, Inc. - Class A(a)..................... 230,000
6,600 Jones Medical Industries, Inc.......................... 219,450
6,200 Parexel International Corp.(a)......................... 299,150
5,300 Teva Pharmaceutical Industries Ltd. - ADR (Israel)..... 200,737
9,000 Watson Pharmaceuticals Inc.(a)......................... 340,875
------------
5,178,281
------------
MEDICAL (INSTRUMENTS/PRODUCTS) - 3.36%
15,000 Advanced Technology Laboratories, Inc.(a).............. 547,500
3,400 Arterial Vascular Engineering, Inc.(a)................. 123,250
33,280 Boston Scientific Corp.(a)............................. 1,497,600
15,000 CardioThoracic Systems Inc.(a)......................... 198,750
16,500 CONMED Corp.(a)........................................ 439,313
14,800 DENTSPLY International, Inc............................ 629,000
3,100 Endosonics Corp.(a).................................... 55,413
2,100 Gulf South Medical Supply, Inc.(a)..................... 81,900
25,300 Idexx Laboratories Inc.(a)............................. 993,025
24,700 Invacare Corp.......................................... 580,450
19,400 Medtronic, Inc......................................... 1,086,400
5,100 Nellcor Puritan-Bennet, Inc.(a)........................ 247,350
10,000 Physician Sales & Service, Inc.(a)..................... 242,500
11,200 Quintiles Transnational Corp.(a)....................... 736,400
10,000 Spine-Tech, Inc.(a).................................... 290,000
5,600 Stryker Corp........................................... 127,400
61,800 Sybron International Corp.(a).......................... 1,545,000
21,400 U.S. Surgical Corp..................................... 663,400
------------
10,084,651
------------
MEDICAL (PATIENT SERVICES) - 10.22%
6,700 American Home Patient, Inc.(a)......................... 296,475
5,700 American Medical Response, Inc.(a)..................... 200,925
20,000 American Oncology Resources, Inc.(a)................... 435,000
71,800 Apria Healthcare Group Inc.(a)......................... 2,252,725
42,880 Columbia/HCA Healthcare Corp........................... 2,288,720
13,000 Foundation Health Corp.(a)............................. 466,375
47,900 Genesis Health Ventures, Inc.(a)....................... 1,502,863
66,900 Health Care & Retirement Corp.(a)...................... 1,588,875
84,712 Health Management Associates, Inc. - Class A(a)........ 1,715,418
</TABLE>
8
AIM V.I. CAPITAL APPRECIATION FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
MEDICAL (PATIENT SERVICES) - CONTINUED
73,100 HEALTHSOUTH Corp.(a)..................................... $ 2,631,600
43,700 Lincare Holdings, Inc.(a)................................ 1,715,225
27,300 Living Centers of America Inc.(a)........................ 938,438
33,900 Manor Care, Inc.......................................... 1,334,813
49,100 MedPartners/Mullikin, Inc.(a)............................ 1,024,962
11,500 OccuSystems Inc.(a)...................................... 429,812
68,000 Omnicare, Inc............................................ 1,802,000
40,000 OrNda HealthCorp(a)...................................... 960,000
7,500 Orthodontic Centers of America, Inc.(a).................. 198,750
41,000 Oxford Health Plans, Inc.(a)............................. 1,686,125
28,800 PhyCor Inc............................................... 1,094,400
26,000 Physician Reliance Network, Inc.(a)...................... 578,500
20,000 Physicians Resource Group, Inc.(a)....................... 667,500
13,000 Quorum Health Group, Inc.(a)............................. 342,875
61,500 Tenet Healthcare Corp.(a)................................ 1,314,562
14,500 Total Renal Care Holdings Inc.(a)........................ 612,625
26,400 Universal Health Services, Inc.(a)....................... 689,700
62,200 Vencor, Inc.(a).......................................... 1,897,100
------------
30,666,363
------------
METALS (MISCELLANEOUS) - 0.22%
10,000 Potash Corp. of Saskatchewan, Inc. (Canada).............. 662,500
------------
OFFICE AUTOMATION - 0.41%
18,800 Corporate Express Inc.(a)................................ 752,000
16,200 Danka Business Systems PLC-ADR (United Kingdom).......... 473,850
------------
1,225,850
------------
OFFICE PRODUCTS - 0.43%
7,100 Avery Dennison Corp...................................... 389,613
5,000 BT Office Products International, Inc.(a)................ 89,375
15,400 Reynolds & Reynolds Co. - Class A........................ 820,050
------------
1,299,038
------------
OIL & GAS (DRILLING) - 0.30%
40,000 Reading & Bates Corp.(a)................................. 885,000
------------
OIL & GAS (EXPLORATION & PRODUCTION) - 0.04%
3,600 Belco Oil & Gas Corp.(a)................................. 127,800
------------
OIL & GAS (SERVICES) - 0.51%
12,100 Camco International, Inc................................. 409,888
3,000 Chesapeake Energy Corp.(a)............................... 269,625
25,000 Global Marine, Inc.(a)................................... 346,875
10,000 Sonat Offshore Drilling Inc.............................. 505,000
------------
1,531,388
------------
OIL EQUIPMENT & SUPPLIES - 1.32%
20,000 Baker Hughes Inc......................................... 657,500
19,700 Diamond Offshore Drilling, Inc.(a)....................... 1,127,825
10,000 ENSCO International, Inc.(a)............................. 325,000
15,500 Pride Petroleum Services, Inc.(a)........................ 220,875
25,000 Rowan Companies, Inc.(a)................................. 368,750
9,300 Smith International, Inc.(a)............................. 280,162
10,000 Tidewater, Inc........................................... 438,750
30,000 Varco International, Inc.(a)............................. 543,750
------------
3,962,612
------------
</TABLE>
9
AIM V.I. CAPITAL APPRECIATION FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
POLLUTION CONTROL - 0.47%
16,800 United Waste Services, Inc.(a)......................... $ 541,800
29,000 USA Waste Services, Inc.(a)............................ 859,125
------------
1,400,925
------------
RESTAURANTS - 1.18%
23,000 Applebee's International, Inc.......................... 738,875
10,100 Cracker Barrel Old Country Store, Inc.................. 244,925
35,600 Lone Star Steakhouse & Saloon, Inc.(a)................. 1,343,900
19,600 Outback Steakhouse, Inc(a)............................. 675,893
20,200 Planet Hollywood International, Inc. - Class A(a)...... 545,400
------------
3,548,993
------------
RETAIL (FOOD & DRUG) - 1.91%
13,800 American Stores Company................................ 569,250
38,600 Eckerd (Jack) Corp.(a)................................. 873,325
27,400 Kroger Co. (The)(a).................................... 1,082,300
57,200 Safeway, Inc.(a)....................................... 1,887,600
35,400 Vons Companies, Inc. (The)(a).......................... 1,323,075
------------
5,735,550
------------
RETAIL (STORES) - 11.27%
41,700 AutoZone, Inc.(a)...................................... 1,449,075
3,700 Barnett, Inc.(a)....................................... 106,375
47,200 Bed Bath & Beyond, Inc.(a)............................. 1,262,600
13,000 Boise Cascade Office Products Corp.(a)................. 450,125
20,000 CompUSA Inc.(a)........................................ 682,500
39,000 Consolidated Stores Corp.(a)........................... 1,433,250
14,100 Dayton-Hudson Corp..................................... 1,454,063
28,000 Dillard Department Stores, Inc......................... 1,022,000
27,763 Dollar General Corp.................................... 812,053
14,000 Dollar Tree Stores, Inc.(a)............................ 444,500
5,200 Fila Holding S.p.A. - ADR (Italy)...................... 448,500
14,500 Finish Line, Inc.(a)................................... 415,063
54,400 Gap, Inc. (The)........................................ 1,747,600
19,700 Global DirectMail Corp.(a)............................. 778,150
27,400 Gymboree Corp.(a)...................................... 835,700
26,300 Heilig-Meyers Co....................................... 631,200
23,300 Kohl's Corp.(a)........................................ 853,362
29,750 Men's Wearhouse Inc. (The)(a).......................... 959,437
20,200 Meyer (Fred), Inc.(a).................................. 593,375
18,200 Micro Warehouse, Inc.(a)............................... 364,000
26,600 Nordstrom, Inc......................................... 1,183,700
21,400 Oakley, Inc.(a)........................................ 973,700
41,200 Office Depot, Inc.(a).................................. 839,450
10,000 Orchard Supply Hardware Stores Corp.(a)................ 301,250
28,200 Pep Boys - Manny, Moe & Jack........................... 958,800
18,100 Petco Animal Supplies, Inc.(a)......................... 520,375
37,900 PetSmart Inc.(a)....................................... 1,809,725
11,000 Ross Stores, Inc....................................... 382,250
33,500 Sports Authority Inc. (The)(a)......................... 1,097,125
92,025 Staples, Inc.(a)....................................... 1,794,487
19,000 Starbucks Corp.(a)..................................... 536,750
61,700 Sunglass Hut International, Inc.(a).................... 1,503,937
40,700 Tech Data Corp.(a)..................................... 885,225
4,700 Tiffany & Co........................................... 343,100
</TABLE>
10
AIM V.I. CAPITAL APPRECIATION FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
RETAIL (STORES) - CONTINUED
13,500 TJX Companies, Inc................ $ 455,625
20,500 U.S. Office Products Co.(a)....... 861,000
73,200 Viking Office Products Inc.(a).... 2,296,650
13,000 Williams-Sonoma, Inc.(a).......... 307,125
------------
33,793,202
------------
SCIENTIFIC INSTRUMENTS - 0.32%
23,400 Thermo Electron Corp.(a).......... 974,025
------------
SEMICONDUCTORS - 3.38%
69,225 Analog Devices, Inc.(a)........... 1,765,238
9,500 Integrated Process Equipment
Corp.(a).......................... 197,125
34,300 Intel Corp........................ 2,518,906
52,400 International Rectifier Corp.(a).. 844,950
20,500 Lattice Semiconductor Corp.(a).... 494,563
13,400 Linear Technology Corp............ 402,000
50,400 LSI Logic Corp.(a)................ 1,310,400
33,000 MEMC Electronic Materials,
Inc.(a)........................... 1,278,750
18,200 SCI Systems, Inc.(a).............. 739,375
13,500 Vitesse Semiconductor Corp.(a).... 324,000
10,900 Zilog Inc.(a)..................... 261,600
------------
10,136,907
------------
SHOES & RELATED APPAREL - 1.26%
12,500 NIKE, Inc. - Class B.............. 1,284,375
30,400 Nine West Group, Inc.(a).......... 1,554,200
42,400 Thrifty PayLess Holdings, Inc.(a). 731,400
6,000 Wolverine World Wide, Inc......... 195,000
------------
3,764,975
------------
TELECOMMUNICATIONS - 6.10%
8,000 ACC Corp.(a)...................... 389,000
14,700 ADC Telecommunications, Inc.(a)... 661,500
25,300 Allen Group, Inc.................. 550,275
47,362 Andrew Corp.(a)................... 2,545,708
23,000 Aspect Telecommunications
Corp.(a).......................... 1,138,500
27,000 Frontier Corp..................... 826,875
26,925 Glenayre Technologies, Inc.(a).... 1,346,250
54,200 Octel Communications Corp.(a)..... 1,070,450
5,000 Premiere Technologies, Inc.(a).... 157,500
24,400 Premisys Communications, Inc.(a).. 1,488,400
16,600 Qualcomm Inc.(a).................. 881,875
35,900 Scientific-Atlanta, Inc........... 556,450
87,120 Telefonaktiebolaget L.M.
Ericsson - ADR (Sweden)........... 1,873,080
25,800 Tellabs, Inc.(a).................. 1,725,375
2,600 TransPro, Inc..................... 17,875
9,300 U.S. Long Distance Corp.(a)....... 330,150
17,500 United States Satellite
Broadcasting Co.(a)............... 660,625
26,000 Western Wireless Corp.(a)......... 555,750
27,400 WorldCom, Inc.(a)................. 1,517,275
------------
18,292,913
------------
</TABLE>
11
AIM V.I. CAPITAL APPRECIATION FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
TELEPHONE - 0.01%
1,000 Century Telephone Enterprises, Inc.............. $ 31,875
------------
TEXTILES - 1.23%
2,500 Designer Holdings Ltd.(a)....................... 66,563
27,000 Liz Claiborne, Inc.............................. 934,875
41,300 Nautica Enterprises, Inc.(a).................... 1,187,375
28,200 Tommy Hilfiger Corp.(a)......................... 1,512,225
------------
3,701,038
------------
TRANSPORTATION (MISCELLANEOUS) - 0.41%
20,000 AirNet Systems, Inc.(a)......................... 320,000
27,000 JB Hunt Transport Services, Inc................. 563,625
10,000 Rural/Metro Corp.(a)............................ 342,500
------------
1,226,125
------------
TRUCKING - 0.16%
15,000 American Freightways Corp.(a)................... 166,875
15,900 U.S. Freightways Corp........................... 310,050
------------
476,925
------------
Total Common Stocks............................. 265,311,088
------------
<CAPTION>
PRINCIPAL
AMOUNT
-----------
<C> <S> <C>
U.S. TREASURY SECURITIES - 5.91%
U.S. TREASURY BILLS(b)
$12,300,000(c) 4.94%, 07/11/96................................. 12,279,743
4,700,000(c) 5.06%, 09/26/96................................. 4,644,211
805,000 5.08%, 10/03/96................................. 794,583
------------
Total U.S. Treasury Securities.................. 17,718,537
------------
REPURCHASE AGREEMENTS - 4.55%(d)
643,937 Daiwa Securities America Inc., 5.50%,
07/01/96(e)..................................... 643,937
13,000,000 Nomura Securities International Inc., 5.53%,
07/01/96(f)..................................... 13,000,000
------------
Total Repurchase Agreements..................... 13,643,937
------------
TOTAL INVESTMENT SECURITIES - 98.90%............ 296,673,562
OTHER ASSETS LESS LIABILITIES - 1.10%........... 3,313,352
------------
NET ASSETS - 100.00%............................ $299,986,914
============
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) Non-income producing security.
(b) U.S. Treasury bills are traded on a discount basis. In such cases the
interest rate shown represents the rate of discount paid or received at the
time of purchase by the Fund.
(c) A portion of the principal amount was pledged as collateral for open
futures contracts at 06/30/96. See Note 6 to Financial Statements.
(d) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value as being 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts and cetain non-registered investment companies managed by the
investment advisor or its affiliates.
(e) Joint repurchase agreement entered into 06/28/96 with a maturing value of
$270,069,404. Collateralized by $258,303,000 U.S. Treasury obligations,
7.875% due 11/15/07.
(f) Joint repurchase agreement entered into 06/28/96 with a maturing value of
$330,152,075. Collateralized by $335,544,000 U.S. Government Agency and
Treasury obligations, 0% to 9.55% due 07/01/96 to 09/08/15.
Abbreviations:
ADR - American Depository Receipt
See Notes to Financial Statements.
12
AIM V.I. CAPITAL APPRECIATION FUND
<PAGE>
AIM V.I. CAPITAL APPRECIATION FUND STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost $236,571,470).................. $296,673,562
Receivables for:
Investments sold................................................ 3,001,844
Capital stock sold.............................................. 579,769
Dividends and interest.......................................... 62,987
Variation margin................................................ 99,375
Investment for deferred compensation plan......................... 9,222
Organizational costs, net......................................... 5,303
Other assets...................................................... 12,442
------------
Total assets.................................................. 300,444,504
------------
LIABILITIES:
Payables for:
Investments purchased........................................... 271,989
Deferred compensation plan...................................... 9,222
Accrued advisory fees............................................. 158,981
Accrued directors' fees........................................... 7,941
Accrued administrative services fees.............................. 3,194
Accrued operating expenses........................................ 6,263
------------
Total liabilities............................................. 457,590
------------
Net assets applicable to shares outstanding....................... $299,986,914
============
Capital shares, $.001 par value per share:
Authorized...................................................... 250,000,000
============
Outstanding..................................................... 16,196,853
============
Net asset value, offering and redemption price per share.......... $ 18.52
============
</TABLE>
See Notes to Financial Statements.
13
AIM V.I. CAPITAL APPRECIATION FUND
<PAGE>
AIM V.I. CAPITAL APPRECIATION FUND STATEMENT OF OPERATIONS
For the six months ended June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $4,268 foreign withholding tax)............... $ 259,731
Interest........................................................ 912,649
-----------
Total investment income........................................ 1,172,380
-----------
EXPENSES:
Advisory fees................................................... 825,201
Custodian fees.................................................. 54,006
Administrative services fees.................................... 19,164
Directors' fees and expenses.................................... 434
Organizational costs............................................ 1,446
Other........................................................... 30,921
-----------
Total expenses................................................. 931,172
-----------
Net investment income............................................. 241,208
-----------
REALIZED AND UNREALIZED GAIN FROM INVESTMENT SECURITIES AND
FUTURES CONTRACTS:
Net realized gain from:
Investment securities........................................... 4,663,532
Futures contracts............................................... 1,030,946
-----------
5,694,478
-----------
Unrealized appreciation of:
Investment securities........................................... 20,754,282
Futures contracts............................................... 261,664
-----------
21,015,946
-----------
Net gain on investment securities and futures contracts........... 26,710,424
-----------
Net increase in net assets resulting from operations.............. $26,951,632
===========
</TABLE>
AIM V.I. CAPITAL APPRECIATION FUND STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 1996 and the eleven months ended December
31, 1995
(Unaudited)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income............................. $ 241,208 $ 532,603
Net realized gain from investment securities and
futures contracts................................ 5,694,478 3,521,243
Net unrealized appreciation of investment
securities and futures contracts................. 21,015,946 33,203,988
------------ ------------
Net increase in net assets resulting from
operations...................................... 26,951,632 37,257,834
Net increase from capital stock transactions........ 60,882,859 86,762,686
Distributions to shareholders from net investment
income............................................. -- (45,369)
------------ ------------
Net increase in net assets....................... 87,834,491 123,975,151
NET ASSETS:
Beginning of period............................... 212,152,423 88,177,272
------------ ------------
End of period..................................... $299,986,914 $212,152,423
============ ============
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in)........ $233,792,942 $172,910,083
Undistributed net investment income............... 757,219 516,011
Undistributed net realized gain (loss) from
investment securities and futures contracts ..... 5,203,455 (491,023)
Unrealized appreciation of investment securities
and futures contracts............................ 60,233,298 39,217,352
------------ ------------
$299,986,914 $212,152,423
============ ============
</TABLE>
See Notes to Financial Statements.
14
AIM V.I. CAPITAL APPRECIATION FUND
<PAGE>
AIM V.I. CAPITAL APPRECIATION FUND NOTES TO FINANCIAL STATEMENTS
June 30, 1996
(Unaudited)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
AIM Variable Insurance Funds, Inc. (the "Company"), is a Maryland corporation
organized on January 22, 1993, and is registered under the Investment Company
Act of 1940 (the "1940 Act"), as amended, as an open-end, series, management
investment company consisting of nine portfolios. Matters affecting each
portfolio are voted on exclusively by the shareholders of such portfolio. The
assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only
to the AIM V.I. Capital Appreciation Fund (the "Fund"). The Fund's investment
objective is to seek capital appreciation through investments in common stocks,
with emphasis on medium-sized and smaller emerging growth companies. Currently,
shares of the Fund are sold only to insurance company separate accounts to fund
the benefits of variable annuity contracts.
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 presentation of its financial statements.
A. Security Valuations - Equity securities, including warrants, that are traded
on a national securities exchange or NASDAQ National Market System are
valued at the last reported sales price or, in the case of over-the-counter
securities or if there has been no sale that day, at the mean between the
closing bid and asked prices on that day. Securities traded in the over-the-
counter market, except (i) securities for which representative exchange
prices are available, and (ii) securities reported in the NASDAQ National
Market System, are valued at the mean between representative last bid and
asked prices obtained from an electronic quotation reporting system, if such
prices are available, or from established market makers. Debt obligations
that are issued or guaranteed by the U.S. Treasury 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. Short-term investments with remaining
maturities of up to and including 60 days are valued at amortized cost which
approximates market value. Short-term securities that mature in more than 60
days are valued at current market quotations. Securities for which market
quotations are either not readily available or are questionable are valued
at fair value as determined in good faith by, or under the authority of, the
Board of Directors.
B. Securities Transactions, Investment Income and Distributions - Securities
transactions are accounted for on a trade date basis. Interest income is
recorded as earned from settlement date and is recorded on the accrual
basis. Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Realized gains or losses from securities transactions are
recorded on the identified cost basis.
C. Federal Income Taxes - It is the Fund's policy to continue to comply with
the requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income and capital
gains to its shareholders. Therefore, no provision for federal income taxes
is recorded in the financial statements. The Fund had capital loss
carryforwards (which may be carried forward to offset future taxable capital
gains, if any) of $232,410, which expires, if not previously utilized,
through the year 2003. The Fund cannot distribute capital gains to
shareholders until the tax loss carryforwards have been utilized.
D. Stock Index Futures Contracts - The Fund may purchase or sell stock index
futures contracts as a hedge against changes in market conditions. Initial
margin deposits required upon entering into futures contracts are satisfied
by the segregation of specific securities as collateral for the account of
the broker (the Fund's agent in acquiring the futures position). During the
period the futures contracts are open, changes in the value of the contracts
are recognized as unrealized gains or losses by "marking to market" on a
daily basis to reflect the market value of the contracts at the end of each
day's trading. Variation margin payments are made or received depending upon
whether unrealized gains or losses are incurred. When the contracts are
closed, the Fund recognizes a realized gain or loss equal to the difference
between the proceeds from, or cost of, the closing transaction and the
Fund's basis in the contract. Risks include the possibility of an illiquid
market and the change in the value of the contracts may not correlate with
changes in the value of the securities being hedged.
E. Organizational Costs - Organizational costs for the Fund of $14,461 are
being amortized over five years.
NOTE 2 - INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company 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 an annual rate of 0.65% of
the first $250 million of the Fund's average daily net assets, plus 0.60% of
the Fund's average daily net assets in excess of $250 million. This agreement
requires AIM to reduce its fees or, if necessary, make payments to the Fund to
the extent required to satisfy any expense limitations imposed by the
securities laws or regulations thereunder of any state in which the Fund's
shares are qualified for sale.
Pursuant to a master administrative services agreement between the Company and
AIM, with respect to the Fund, the Company has agreed to reimburse certain
administrative costs incurred in providing accounting services to the Fund.
During the six months ended June 30, 1996, AIM was reimbursed $19,164 for such
services.
15
AIM V.I. CAPITAL APPRECIATION FUND
<PAGE>
The Company has entered into a master distribution agreement with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Fund.
Certain officers and directors of the Company are officers of AIM and AIM
Distributors.
During the six months ended June 30, 1996, the Fund incurred legal fees of
$7,556 for services rendered by Kramer, Levin, Naftalis & Frankel as counsel to
the Board of Directors. A member of that firm is a director of the Company.
NOTE 3 - DIRECTORS' FEES
Directors' fees represent remuneration paid or accrued to each director who is
not an "interested person" of AIM. The Company may invest directors' fees, if
so elected by a director, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 4 - INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term
securities) purchased and sold by the Fund during the six months ended June 30,
1996 was $128,242,680 and $68,863,659, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
on a tax basis, as of June 30, 1996 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of investment securities......... $66,765,426
Aggregate unrealized (depreciation) of investment securities....... (6,800,059)
-----------
Net unrealized appreciation of investment securities............... $59,965,367
===========
Cost of investments for tax purposes is $236,708,195.
</TABLE>
NOTE 5 - CAPITAL STOCK
Changes in capital stock outstanding during the six months ended June 30, 1996
and the eleven months ended December 31, 1995 were as follows:
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
---------------------- ----------------------
Shares Amount Shares Amount
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Sold........................... 3,681,276 $66,256,523 6,155,688 $96,675,587
Issued as reinvestment of
distributions................. -- -- 2,823 45,369
Reacquired..................... (306,831) (5,373,664) (654,458) (9,958,270)
--------- ----------- --------- -----------
3,374,445 $60,882,859 5,504,053 $86,762,686
========= =========== ========= ===========
</TABLE>
NOTE 6 - OPEN FUTURES CONTRACTS
On June 30, 1996, $737,000 principal amount of U.S. Treasury bills were
pledged as collateral to cover margin requirements for open futures contracts:
Open futures contracts at June 30, 1996 were as follows:
<TABLE>
<CAPTION>
NO. OF UNREALIZED
CONTRACT CONTRACTS MONTH COMMITMENT APPRECIATION
<S> <C> <C> <C> <C>
S&P 500 Index 53 contracts Sep 96 Buy $131,206
</TABLE>
NOTE 7 - FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a share outstanding of
the Fund during the six months ended June 30, 1996, the eleven months ended
December 31, 1995, the year ended January 31, 1995, and the period May 5, 1993
(date operations commenced) through January 31, 1994.
<TABLE>
<CAPTION>
January 31,
-----------------
June 30, December 31,
1996 1995 1995 1994
-------- ------------ ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period...................... $ 16.55 $ 12.05 $ 12.58 $ 10.00
-------- -------- ------- -------
Income from investment
operations:
Net investment income...... 0.01 0.04 0.05 --
Net gains (losses) on
securities (both realized
and unrealized)........... 1.96 4.46 (0.54) 2.59
-------- -------- ------- -------
Total from investment
operations............... 1.97 4.50 (0.49) 2.59
-------- -------- ------- -------
Less distributions:
Dividends from net
investment income......... -- -- (0.04) (0.01)
-------- -------- ------- -------
Net asset value, end of
period...................... $ 18.52 $16.55 $12.05 $12.58
======== ======== ======= =======
Total return(a).............. 11.90% 37.38% (3.91)% 25.90%
======== ======== ======= =======
Ratios/supplemental data:
Net assets, end of period
(000s omitted).............. $299,987 $212,152 $88,177 $35,354
======== ======== ======= =======
Ratio of expenses to average
net assets.................. 0.73%(b) 0.75%(c) 0.84% 1.06%(c)
======== ======== ======= =======
Ratio of net investment
income to average net
assets...................... 0.19%(b) 0.39%(c) 0.46% 0.07%(c)
======== ======== ======= =======
Portfolio turnover rate...... 31% 37% 81% 34%
======== ======== ======= =======
</TABLE>
- ------
(a) Total returns are not annualized for periods less than one year.
(b) Ratios are annualized and based on average net assets of $256,513,359.
(c) Annualized.
16
AIM V.I. CAPITAL APPRECIATION FUND
<PAGE>
AIM V.I. DIVERSIFIED INCOME FUND SCHEDULE OF INVESTMENTS
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT(a) VALUE
--------- ------
<C> <S> <C>
U.S. DOLLAR DENOMINATED NON-CONVERTIBLE BONDS &
NOTES - 51.62%
ADVERTISING/BROADCASTING - 2.53%
Time Warner Inc.,
$ 500,000 Deb., 6.85%, 01/15/26................................ $ 478,935
750,000 Notes, 8.18%, 08/15/07............................... 747,188
-----------
1,226,123
-----------
AIRLINES - 0.94%
360,000 Airplanes Pass Through Trust, Sub. Bonds, 10.875%,
03/15/19............................................. 375,300
80,000 Greenwich Air Services, Sr. Notes, 10.50%, 06/01/06.. 79,200
-----------
454,500
-----------
AUTOMOBILE (MANUFACTURERS) - 0.93%
400,000 General Motors Corp., Deb., 8.80%, 03/01/21.......... 448,276
-----------
BANKING - 2.29%
800,000 First Union Bancorp, Sub. Deb., 7.50%, 04/15/35...... 826,432
300,000 Mercantile Bank, Sub. Notes, 6.375%, 01/15/04........ 281,355
-----------
1,107,787
-----------
BEVERAGES - 1.82%
5,000,000 Coca Cola Enterprises, Notes, 7.24%, 06/20/20(b)..... 882,550
-----------
CABLE TELEVISION - 4.51%
160,000 CAI Wireless Systems Inc., Sr. Notes, 12.25%,
09/15/02............................................. 167,200
60,000 Fundy Cable Ltd., Yankee Bonds, 11.00%, 11/15/05..... 60,600
700,000 Marcus Cable Operating Co., Sr. Disc. Notes, 13.50%,
08/01/04(c).......................................... 500,500
100,000 Rifkin Acquisition Partners LP, Sr. Sub. Notes,
11.125%, 01/15/06.................................... 97,750
170,000 Telewest PLC, Yankee Sr. Disc. Deb., 11.00%,
10/01/07(c).......................................... 100,300
400,000 United International Holdings, Sr. Disc. Notes,
12.99%, 11/15/99(b).................................. 264,000
500,000 Viacom Inc., Sr. Notes, 7.75%, 06/01/05.............. 487,510
490,000 Videotron Ltd., Sr. Disc. Notes, 11.125%,
07/01/04(c).......................................... 360,150
140,000 Wireless One Inc., Units, 13.00%, 10/15/03(d)........ 144,900
-----------
2,182,910
-----------
CHEMICALS - 0.57%
180,000 Crain Industries, Sr. Sub. Notes, 13.50%, 08/15/05... 191,700
80,000 Laroche Industries, Sr. Sub. Notes, 13.00%, 08/15/04. 84,800
-----------
276,500
-----------
CONSUMER NON-DURABLES - 0.30%
140,000 Hines Horticulture, Inc., Sr. Sub. Notes, 11.75%,
10/15/05............................................. 145,600
-----------
CONTAINERS - 1.49%
390,000 Ivex Packaging, Sr. Sub. Notes, 12.50%, 12/15/02..... 410,475
100,000 Owens-Illinois Inc., Sr. Sub. Notes, 10.50%,
06/15/02............................................. 102,250
210,000 Riverwood International, Sr. Sub. Notes, 10.875%,
04/01/08............................................. 206,850
-----------
719,575
-----------
FINANCE (CONSUMER CREDIT) - 6.28%
750,000 Associates Corp., Deb., 7.95%, 02/15/10.............. 793,808
750,000 GMAC, Notes, 9.00%, 10/15/02......................... 817,800
1,000,000 Household Finance Co., Notes, 7.125%, 09/01/05....... 990,420
400,000 Sea Containers, Sr. Sub. Deb., 12.50%, 12/01/04...... 432,000
-----------
3,034,028
-----------
FOOD/PROCESSING - 0.68%
300,000 American Rice Inc., Sec. Notes, 13.00%, 07/31/02..... 271,500
60,000 Pilgrim's Pride Corp., Sr. Sub. Notes, 10.875%,
08/01/03............................................. 56,700
-----------
328,200
-----------
</TABLE>
17
AIM V.I. DIVERSIFIED INCOME FUND
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT(a) VALUE
--------- ------
<C> <S> <C>
FOREIGN GOVERNMENT - 1.49%
$ 700,000 Province of Manitoba, Yankee Bonds, 7.75%, 07/17/16. $ 717,248
-----------
GAMING - 0.87%
110,000 Aztar Corp., Sr. Sub. Notes, 11.00%, 10/01/02....... 114,400
180,000 Coast Hotel & Casino Inc., First Mortgage Notes,
13.00%, 12/15/02
(acquired 01/23/96; cost $174,791)(e).............. 195,300
110,000 Trump Atlantic City Associates, First Mortgage
Notes, 11.25%, 05/01/06............................. 110,550
-----------
420,250
-----------
HOTELS/MOTELS - 2.56%
750,000 ITT Corp. (New), Deb., 7.375%, 11/15/15............. 705,113
550,000 John Q. Hammons Hotels Inc., Gtd. First Mortgage
Notes, 9.75%, 10/01/05.............................. 532,125
-----------
1,237,238
-----------
INSURANCE (LIFE & HEALTH) - 0.58%
200,000 American Life Holding Co., Sr. Sub. Notes, 11.25%,
09/15/04............................................ 211,000
75,000 Americo Life Inc., Sr. Sub. Notes, 9.25%, 06/01/05.. 70,875
-----------
281,875
-----------
LEISURE & RECREATION - 0.35%
150,000 Icon Health & Fitness Inc., Sr. Sub. Notes, 13.00%,
07/15/02............................................ 167,625
-----------
MACHINERY (HEAVY) - 0.32%
100,000 Fairfield Manufacturing, Sr. Sub. Notes, 11.375%,
07/01/01............................................ 102,000
50,000 Primeco Inc., Sr. Sub. Notes, 12.75%, 03/01/05...... 52,000
-----------
154,000
-----------
MACHINERY (MISCELLANEOUS) - 1.30%
210,000 AM General Corp., Sr. Notes, 12.875%, 05/01/02...... 216,825
200,000 Interlake Corp., Sr. Notes, 12.00%, 11/15/01........ 210,000
190,000 MVE Inc., Sr. Sec. Notes, 12.50%, 02/15/02.......... 203,775
-----------
630,600
-----------
MEDICAL (INSTRUMENTS/PRODUCTS) - 0.50%
80,000 Dade International Inc., Sr. Sub. Notes, 11.125%,
05/01/06
(acquired 04/30/96; cost $80,000)(e)............... 83,400
150,000 Graphic Controls Corp., Sr. Sub. Notes, 12.00%,
09/15/05............................................ 159,750
-----------
243,150
-----------
MEDICAL (PATIENT SERVICES) - 0.35%
170,000 Dynacare Inc., Yankee Sr. Notes, 10.75%, 01/15/06... 171,063
-----------
METALS (MISCELLANEOUS) - 0.73%
370,000 Rio Algom Ltd., Yankee Deb., 7.05%, 11/01/05........ 352,758
-----------
NATURAL GAS PIPELINE - 2.94%
450,000 Enron Corp., Sr. Sub. Deb., 6.75%, 07/01/05......... 427,136
525,000 Ferrellgas Partners LP, Sr. Notes, 9.375%, 06/15/06
(acquired 04/23/96; cost $525,000)(e).............. 510,563
500,000 Talisman Energy Inc., Yankee Deb., 7.125%, 06/01/07. 485,500
-----------
1,423,199
-----------
OIL & GAS (EXPLORATION & PRODUCTION) - 0.58%
90,000 Benton Oil & Gas, Sr. Notes, 11.625%, 05/01/03
(acquired 04/29/96; cost $90,000)(e)............... 93,150
190,000 HS Resources Inc., Sr. Sub. Notes, 9.875%, 12/01/03. 185,725
-----------
278,875
-----------
</TABLE>
18
AIM V.I. DIVERSIFIED INCOME FUND
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT(a) VALUE
--------- ------
<C> <S> <C>
OIL & GAS (INTEGRATED) - 0.16%
$ 80,000 Wainoco Oil Corp., Sr. Sub. Notes, 12.00%, 08/01/02.. $ 80,000
-----------
OIL & GAS (SERVICES) - 0.13%
60,000 Falcon Drilling Co. Inc., Sr. Notes, 9.75%, 01/15/01. 61,200
-----------
PAPER & FOREST PRODUCTS - 0.83%
90,000 Pacific Lumber Co., Sr. Notes, 10.50%, 03/01/03...... 87,300
150,000 Rapp International Finance, Gtd. Yankee Sec. Notes,
11.50%, 12/15/00.................................... 153,750
170,000 Repap New Brunswick, Yankee Bonds, 10.625%, 04/15/05. 159,800
-----------
400,850
-----------
PUBLISHING - 1.68%
750,000 News America Holdings, Gtd. Sr. Deb., 9.25%,
02/01/13............................................ 815,168
-----------
RAILROADS - 0.49%
250,000 Johnstown America Industries Inc., Sr. Sub. Notes,
11.75%, 08/15/05.................................... 236,875
-----------
REAL ESTATE - 1.54%
750,000 Finova Capital Corp., Notes, 7.40%, 05/06/06......... 745,868
-----------
RETAIL (FOOD & DRUG) - 1.67%
500,000 Great Atlantic & Pacific Corp., Yankee Bonds, 7.78%,
11/01/00 (acquired 10/18/95; cost $500,000)(e)...... 481,970
190,000 Penn Traffic Co., Sr. Notes, 11.50%, 04/15/06........ 178,600
150,000 Ralph's Grocery Co., Gtd. Sr. Notes, 10.45%,
06/15/04............................................ 147,000
-----------
807,570
-----------
RETAIL (STORES) - 2.66%
340,000 Apparel Retailer Inc., Sr. Disc. Deb., 12.75%,
08/15/05(c)......................................... 296,650
200,000 County Seat Stores, Sr. Sub. Notes, 12.00%, 10/01/02. 176,000
200,000 Loehmann's Holdings, Inc., Unsecured Sr. Notes,
11.875%, 05/15/03................................... 207,500
150,000 Samsonite Corp., Sr. Sub. Notes, 11.125%, 07/15/05... 152,250
50,000 Specialty Retailers, Inc., Notes, 10.00%, 08/15/00... 51,750
275,000 Specialty Retailers, Inc., Sr. Sub. Notes, 11.00%,
08/15/03............................................ 286,000
110,000 United Stationer Supply Inc., Sr. Sub. Notes, 12.75%,
05/01/05............................................ 118,388
-----------
1,288,538
-----------
SCHOOLS - 0.11%
50,000 Herff Jones Inc., Sr. Sub. Notes, 11.00%, 08/15/05... 51,625
-----------
STEEL - 1.29%
240,000 Bayou Steel Corp., First Mortgage Notes, 10.25%,
03/01/01............................................ 226,200
185,000 GS Technologies Inc., Sr. Notes, 12.00%, 09/01/04.... 189,047
230,000 Gulf States Steel Corp., First Mortgage Notes,
13.50%, 04/15/03.................................... 209,875
-----------
625,122
-----------
TELECOMMUNICATIONS - 3.39%
140,000 A+ Network Inc., Sr. Sub. Notes, 11.875%, 11/01/05... 143,850
350,000 Bell Canada, Yankee Deb., 9.50%, 10/15/10............ 410,043
270,000 Clearnet Communications, Yankee Units, 14.75%,
12/15/05 (c)(f)..................................... 163,350
100,000 Northern Telecom, Notes, 6.00%, 09/01/03............. 93,977
850,000 TCI Communications Inc., Sr. Notes, 8.00%, 08/01/05.. 830,816
-----------
1,642,036
-----------
TEXTILES - 0.60%
320,000 Consoltex Group, Sr. Sub. Notes, 11.00%, 10/01/03.... 292,000
-----------
TRANSPORTATION (MISCELLANEOUS) - 1.15%
230,000 Stena AB, Yankee Sr. Notes, 10.50%, 12/15/05......... 229,425
320,000 Trans Ocean Container, Sr. Sub. Notes, 12.25%,
07/01/04............................................ 329,600
-----------
559,025
-----------
</TABLE>
19
AIM V.I. DIVERSIFIED INCOME FUND
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT(a) VALUE
--------- ------
<C> <S> <C>
UTILITIES - 1.01%
$ 500,000 El Paso Electric Co., First Mortgage Notes,
8.90%, 02/01/06.............................. $ 491,250
-----------
Total U.S. Dollar Denominated Non-Convertible
Bonds & Notes................................ 24,981,057
-----------
U.S. DOLLAR DENOMINATED CONVERTIBLE BONDS & NOTES - 1.24%
AIRLINES - 1.24%
500,000 Continental Airlines Inc., Conv. Sr. Sub.
Notes, 6.75%, 04/15/06
(acquired 02/27/96; cost $499,825)(e)........ 598,750
-----------
Total U.S. Dollar Denominated Convertible
Bonds & Notes................................ 598,750
-----------
NON-U.S. DOLLAR DENOMINATED NON-CONVERTIBLE
BONDS & NOTES(g) - 13.74%
CANADA - 5.98%
CAD 450,000 Canadian Oil Debco Inc. (Oil & Gas), Deb.,
11.00%, 10/31/00............................. 369,314
750,000 Ontario Province (Utilities), Sr. Unsub. Deb.,
8.00%, 03/11/03.............................. 565,068
250,000 Rogers Cablesystem, Inc. (Cable Television),
Sr. Sec. Second Priority Deb., 9.65%,
01/15/14..................................... 160,221
850,000 Teleglobe Canada Inc. (Telecommunications),
Deb., 8.35%, 06/20/03........................ 640,130
1,250,000 Transalta Utilities Corp. (Electric Power),
8.35%, 12/15/03.............................. 949,333
280,000 Trans-Canada Pipelines (Oil & Gas), Notes,
8.55%, 02/01/06.............................. 210,774
-----------
2,894,840
-----------
GERMANY - 4.90%
DEM 725,000 International Bank for Reconstruction &
Development (Supranational Organization),
Unsub. Global Bonds, 7.125%, 04/12/05........ 493,768
3,000,000 LKB Global (Banking), Gtd. Notes, 6.00%,
01/25/06..................................... 1,880,204
-----------
2,373,972
-----------
ITALY - 1.89%
ITL 1,000,000,000 KFW International Finance Inc. (Finance-
Consumer Credit), Gtd. Notes, 11.625%,
11/27/98..................................... 699,918
300,000,000 Nordic Investment Bank (Finance-Consumer
Credit), Notes, 11.30%, 03/04/02............. 216,490
-----------
916,408
-----------
JAPAN - 0.97%
JPY 6,000,000 Sony Corp. (Electronic
Components/Miscellaneous), Bonds, 1.40%,
09/30/03..................................... 73,351
30,000,000 Toyota Motor Corp. (Automobile-Manufacturers),
Deb., 1.20%, 01/28/98........................ 394,185
-----------
467,536
-----------
Total Non-U.S. Dollar Denominated Non-
Convertible Bonds & Notes.................... 6,652,756
-----------
NON-U.S. DOLLAR DENOMINATED CONVERTIBLE
BONDS & NOTES(g) - 2.81%
FRANCE - 0.63%
FRF 1,419,000 Societe Generale (Banking), Conv. Deb., 3.50%,
01/01/00..................................... 304,273
-----------
JAPAN - 1.30%
JPY 40,000,000 Jusco Co. Ltd. (Consumer Non-Durables), Conv.
Deb., 1.20%, 02/20/01........................ 630,000
-----------
UNITED KINGDOM - 0.88%
BPS 300,000 Lasmo PLC (Oil Equipment & Supplies), Conv.
Deb., 7.75%, 10/04/05........................ 427,473
-----------
Total Non-U.S. Dollar Denominated Convertible
Bonds & Notes................................ 1,361,746
-----------
</TABLE>
20
AIM V.I. DIVERSIFIED INCOME FUND
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT(a) VALUE
--------- ------
<C> <S> <C>
NON-U.S. DOLLAR DENOMINATED GOVERNMENT BONDS &
NOTES(g) - 18.90%
AUSTRALIA - 2.63%
AUD 750,000 Australian Government, Gtd. Deb., 12.50%,
09/15/97......................................... $ 620,411
820,000 Queensland Treasury Corp., 8.875%, 11/08/96....... 652,617
-----------
1,273,028
-----------
CANADA - 2.97%
CAD 500,000 British Columbia Municipal Finance Authority,
Deb., 7.75%, 12/01/05............................ 366,403
850,000 New Brunswick (Province of), Deb., 8.94%,
01/15/05......................................... 637,671
25,000,000 Ontario Province, STRIP, 8.18%(b), 01/10/45....... 355,233
100,000 Quebec (Province of), Sr. Deb., 9.375%, 01/16/23.. 78,756
-----------
1,438,063
-----------
DENMARK - 2.35%
DKK 6,250,000 Kingdom of Denmark, Deb., 8.00%, 11/15/01......... 1,140,330
-----------
GERMANY - 4.83%
Bundesrepublik Deutschland,
DEM 1,000,000 Deb., 6.00%, 09/15/03............................. 651,562
1,500,000 Deb., 6.75%, 07/15/04............................. 1,009,750
1,000,000 Deb., 6.875%, 05/12/05............................ 674,712
-----------
2,336,024
-----------
SWEDEN - 2.11%
SEK 6,000,000 Swedish Government, Bonds, 10.25%, 05/05/03....... 1,019,985
-----------
UNITED KINGDOM - 4.01%
BPS 465,000 Ontario Province, Sr. Unsub. Notes, 6.875%,
09/15/00......................................... 696,922
400,000 United Kingdom Treasury Notes, 6.00%, 08/10/99.... 605,498
400,000 United Kingdom Treasury Notes, 8.00%, 12/07/00.... 638,720
-----------
1,941,140
-----------
Total Non-U.S. Dollar Denominated Government
Bonds & Notes.................................... 9,148,570
-----------
<CAPTION>
SHARES
------
CONVERTIBLE PREFERRED STOCKS - 2.53%
<C> <S> <C>
ADVERTISING/BROADCASTING - 0.25%
125 Time Warner Inc., Series K Conv. Pfd.
(acquired 04/03/96; cost $125,000)(e)............ 120,781
-----------
ELECTRIC POWER - 1.00%
10,000 Citizens Utilities Trust, $2.50 Conv. Pfd......... 482,500
-----------
INSURANCE (LIFE & HEALTH) - 1.28%
8,000 Conseco Inc., $4.28 Conv. Pfd..................... 620,000
-----------
Total Convertible Preferred Stocks............... 1,223,281
-----------
WARRANTS - 0.02%
CABLE TELEVISION - 0.01%
420 Wireless One Inc. - Wt. expiring 10/19/00(h)...... 3,360
-----------
LEISURE & RECREATION - 0.01%
150 Boomtown Inc., - Wt., expiring 11/01/98(h)
(acquired 11/03/93; cost $150)(e)................ 75
150 IHF Holdings, - Wt., expiring 11/14/99(h)......... 6,000
-----------
6,075
-----------
RETAIL (STORES) - 0.00%
200 County Seat, Inc. - Wt., expiring 10/01/01(h)..... 1,000
-----------
</TABLE>
21
AIM V.I. DIVERSIFIED INCOME FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
STEEL - 0.00%
230 Gulf States Steel Corp. - Wt., expiring 04/15/03(h). $ 1,150
-----------
Total Warrants...................................... 11,585
-----------
<CAPTION>
PRINCIPAL
AMOUNT(a)
---------
<C> <S> <C>
U.S. TREASURY SECURITIES - 3.15%
$1,000,000 Notes, 6.50%, 05/31/01............................... 1,000,940
500,000 Notes, 7.50%, 02/15/05............................... 526,205
-----------
Total U.S. Treasury Securities...................... 1,527,145
-----------
REPURCHASE AGREEMENTS(i) - 3.32%
609,213 Daiwa Securities America Inc., 5.50%, 07/01/96(j).... 609,213
1,000,000 Nomura Securities International Inc., 5.53%,
07/01/96(k).......................................... 1,000,000
-----------
Total Repurchase Agreements......................... 1,609,213
-----------
TOTAL INVESTMENTS - 97.33%........................... 47,114,103
OTHER ASSETS LESS LIABILITIES - 2.67%................ 1,292,592
-----------
NET ASSETS - 100.00%................................. $48,406,695
===========
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) Principal amount is in U.S. Dollars, except as indicated by note (g).
(b) Zero coupon bond issued at a discount. The interest rate shown represents
the rate of original issue discount.
(c) Discounted bond at purchase. Interest rate represents coupon rate at which
the bond will accrue at a specified future date.
(d) Issued as a unit. This unit also includes 420 warrants to purchase one
share of common stock at $11.55 per share.
(e) Restricted security. May be resold to qualified institutional buyers in
accordance with the provisions of Rule 144A under the Securities Act of
1933, as amended. The valuation of these securities has been determined in
accordance with procedures established by the Board of Directors. The
aggregate market value of these securities at 06/30/96 was $2,083,989 which
represented 4.31% of net assets.
(f) Issued as a unit. This unit also includes 891 warrants to purchase shares
of common stock.
(g) Foreign denominated security. Par value and coupon are denominated in
currency of country indicated.
(h) Non-income producing security acquired as part of a unit with or in
exchange for other securities.
(i) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value as being 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(j) Joint repurchase agreement entered into 06/28/96 with a maturing value of
$270,069,404. Collateralized by $258,303,000 U.S. Treasury obligations,
7.875% due 11/15/07.
(k) Joint repurchase agreement entered into 06/28/96 with a maturing value of
$330,152,075. Collateralized by $335,544,000 U.S. Government Agency and
Treasury obligations, 0% to 9.55% due 07/01/96 to 09/08/15.
Abbreviations:
AUD -Australian Dollar Gtd. -Guaranteed
BPS -British Pound Sterling ITL -Italian Lire
CAD -Canadian Dollar JPY -Japanese Yen
Conv. -Convertible Mtn. -Medium Term Notes
Deb. -Debentures Sec. -Secured
DEM -German Deutschemark Sr. -Senior
Disc. -Discounted Sub. -Subordinated
DKK -Danish Krone Unsub. -Unsubordinated
FRF -French Franc Wt. -Warrant
See Notes to Financial Statements
22
AIM V.I. DIVERSIFIED INCOME FUND
<PAGE>
AIM V.I. DIVERSIFIED INCOME FUND STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost $47,007,278)................... $ 47,114,103
Foreign currencies, at value (cost $1,032)........................ 1,027
Receivables for:
Investments sold................................................ 1,334,292
Forward contracts............................................... 56,151
Capital stock sold.............................................. 109,471
Interest........................................................ 1,064,966
Investment for deferred compensation plan......................... 8,595
Organizational costs, net......................................... 5,303
Other assets...................................................... 7,073
------------
Total assets.................................................. 49,700,981
------------
LIABILITIES:
Payables for:
Investments purchased........................................... 1,256,761
Deferred compensation plan...................................... 8,595
Accrued advisory fees............................................. 23,363
Accrued administrative service fees............................... 1,334
Accrued directors' fees........................................... 1,543
Accrued operating expenses........................................ 2,690
------------
Total liabilities............................................. 1,294,286
------------
Net assets applicable to shares outstanding....................... $ 48,406,695
============
Capital shares, $.001 par value per share:
Authorized...................................................... 250,000,000
============
Outstanding..................................................... 4,739,902
============
Net asset value, offering and redemption price per share.......... $ 10.21
============
</TABLE>
See Notes to Financial Statements.
23
AIM V.I. DIVERSIFIED INCOME FUND
<PAGE>
AIM V.I. DIVERSIFIED INCOME FUND STATEMENT OF OPERATIONS
For the six months ended June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest........................................................ $1,873,296
----------
EXPENSES:
Advisory fees................................................... 137,066
Custodian fees.................................................. 14,930
Administrative service fees..................................... 21,489
Directors' fees and expenses.................................... 3,781
Organizational costs............................................ 1,446
Other........................................................... 17,514
----------
Total expenses................................................. 196,226
----------
Net investment income............................................. 1,677,070
----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT SECURITIES,
FOREIGN CURRENCIES AND FORWARD CONTRACTS TRANSACTIONS:
Net realized gain from:
Investment securities........................................... 311,111
Foreign currencies.............................................. 68,594
Forward contracts............................................... 192,735
----------
572,440
----------
Unrealized appreciation (depreciation) of:
Investment securities........................................... (1,303,150)
Foreign currencies.............................................. (1,713)
Forward contracts............................................... 31,457
----------
(1,273,406)
----------
Net (loss) on investment securities, foreign currencies and
forward contract transactions.................................... (700,966)
----------
Net increase in net assets resulting from operations.............. $ 976,104
==========
</TABLE>
AIM V.I. DIVERSIFIED INCOME FUND STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 1996 and the eleven months ended December
31, 1995
(Unaudited)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
----------- ------------
<S> <C> <C>
OPERATIONS:
Net investment income.............................. $ 1,677,070 $ 2,460,409
Net realized gain from investment securities,
foreign currencies, and forward contracts......... 572,440 675,894
Net unrealized appreciation (depreciation) of
investment securities, foreign currencies, and
forward contracts................................. (1,273,406) 2,440,780
----------- -----------
Net increase (decrease) in net assets resulting
from operations.................................. 976,104 5,577,083
Net equalization credits............................. 110,648 653,844
Net increase from capital stock transactions......... 2,689,798 16,007,644
Distributions to shareholders from net investment
income.............................................. -- (2,879,611)
----------- -----------
Net increase in net assets........................ 3,776,550 19,358,960
NET ASSETS:
Beginning of period................................ 44,630,145 25,271,185
----------- -----------
End of period...................................... $48,406,695 $44,630,145
=========== ===========
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in)......... $45,770,324 $43,080,526
Undistributed net investment income................ 2,775,128 987,410
Undistributed net realized gain (loss) on
investment securities, foreign currencies and
forward contract transactions..................... (298,955) (871,395)
Unrealized appreciation of investment securities,
foreign currencies and forward contracts.......... 160,198 1,433,604
----------- -----------
$48,406,695 $44,630,145
=========== ===========
</TABLE>
See Notes to Financial Statements.
24
AIM V.I. DIVERSIFIED INCOME FUND
<PAGE>
AIM V.I. DIVERSIFIED INCOME FUND NOTES TO FINANCIAL STATEMENTS
June 30, 1996
(Unaudited)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
AIM Variable Insurance Funds, Inc. (the "Company"), is a Maryland corporation
organized on January 22, 1993, and is registered under the Investment Company
Act of 1940 (the "1940 Act"), as amended, as an open-end, series, management
investment company consisting of nine portfolios. Matters affecting each
portfolio are voted on exclusively by the shareholders of such portfolio. The
assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only
to the AIM V.I. Diversified Income Fund (the "Fund"). The Fund's investment
objective is to seek to achieve a high level of current income. The Fund will
seek to achieve its objective by investing primarily in a diversified portfolio
of foreign and U.S. government and corporate debt securities, including lower
rated high yield debt securities (commonly known as "junk bonds"). These high
yield bonds may involve special risks in addition to the risks associated with
investment in higher rated debt securities. High yield bonds may be more
susceptible to real or perceived adverse economic and competitive industry
conditions than higher grade bonds. Also, the secondary market in which high
yield bonds are traded may be less liquid than the market for higher grade
bonds. Currently, shares of the Fund are sold only to insurance company
separate accounts to fund the benefits of variable annuity contracts.
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 significant accounting policies followed by the Fund
in the preparation of its financial statements.
A. Security Valuations--Non-convertible bonds and notes 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 institution-size trading
in similar groups of securities, developments related to special securities,
yield, quality, coupon rate, maturity, type of issue, individual trading
characteristics and other market data. Investment securities for which
prices are not provided by the pricing service and which are listed or
traded on an exchange are valued at the last sales price on the exchange
where the security is principally traded or, lacking any sales on a
particular day, at the mean between the closing bid and asked prices on that
day unless the Board of Directors, or persons designated by the Board of
Directors, determines that the over-the-counter quotations more closely
reflect the current market value of the security. Convertible bonds are
valued at the mean between the closing bid and asked prices obtained from a
broker-dealer. Securities traded in the over-the-counter market, except (i)
securities priced by the pricing service, (ii) securities for which
representative exchange prices are available, and (iii) securities reported
in the NASDAQ National Market System, are valued at the mean between
representative last bid and asked prices obtained from an electronic
quotation reporting system, if such prices are available, or from
established market makers. Each security reported in the NASDAQ National
Market System is valued at the last sales price on the valuation date.
Securities for which market quotations are either not readily available or
are questionable are valued at fair value as determined in good faith by or
under the supervision of the Fund's officers in accordance with methods
which are specifically authorized by the Board of Directors. Short-term
obligations having 60 days or less to maturity are valued at amortized cost
which approximates market value. Generally, trading in foreign securities as
well as corporate bonds and U.S. Government securities is substantially
completed each day at various times prior to the close of the New York Stock
Exchange. 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 New
York Stock Exchange. 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 New York Stock Exchange which will 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. Foreign Currency Translation - Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S.
dollars 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.
C. Forward Currency Contracts - A forward 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 forward 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 currency contract for the amount
of a purchase or sale of a
25
AIM V.I. DIVERSIFIED INCOME FUND
<PAGE>
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
security denominated in a 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.
D. Securities Transactions, Investment Income and Distributions - Securities
transactions are accounted for on a trade date basis. Interest income is
recorded as earned from settlement date and is recorded on the accrual
basis. Dividend income and distributions to shareholders are recorded on the
ex-dividend date. It is the policy of the Fund not to amortize market
discounts and premiums on bonds for financial reporting purposes. Realized
gains or losses from securities transactions are recorded on the identified
cost basis.
E. Federal Income Taxes - For federal income tax purposes, each portfolio in
the Company is taxed as a separate entity. It is the Fund's policy to
continue to comply with the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
taxable income and capital gains to its shareholders. Therefore, no
provision for federal income taxes is recorded in the financial statements.
The Fund had capital loss carryforwards (which may be carried forward to
offset future taxable capital gains, if any) of $1,025,093, which expires,
if not previously utilized, through the year 2003. The Fund cannot
distribute capital gains to shareholders until the tax loss carryforwards
have been utilized.
F. Equalization - The Fund follows the accounting practice known as
equalization by which a portion of the proceeds from sales and the costs of
repurchases of fund shares, equivalent on a per share basis to the amount of
undistributed net investment income, is credited or charged to undistributed
net income when the transaction is recorded so that undistributed net
investment income per share is unaffected by sales or redemptions of Fund
shares.
G. Organizational Costs - Organizational costs of the Fund of $14,461 are being
amortized over five years.
NOTE 2 - INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company 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 an annual rate of 0.60% of
the first $250 million of the Fund's average daily net assets, plus 0.55% of
such Fund's average daily net assets in excess of $250 million. This agreement
requires AIM to reduce its fees or, if necessary, make payments to the Fund to
the extent required to satisfy any expense limitations imposed by the
securities laws or regulations thereunder of any state in which the Fund's
shares are qualified for sale.
Pursuant to a master administrative services agreement between the Company and
AIM, with respect to the Fund, the Company has agreed to reimburse certain
administrative costs incurred in providing accounting services to the Fund.
During the six months ended June 30, 1996, AIM was reimbursed $21,489 for such
services.
The Company has entered into a master distribution agreement with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Fund.
Certain officers and directors of the Company are officers of AIM and AIM
Distributors.
During the six months ended June 30, 1996, the Fund incurred legal fees of
$1,321 for services rendered by Kramer, Levin, Naftalis & Frankel as counsel to
the Board of Directors. A member of that firm is a director of the Company.
NOTE 3 - DIRECTORS' FEES
Directors' fees represent remuneration paid or accrued to each director who is
not an "interested person" of AIM. The Company may invest directors' fees, if
so elected by a director, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 4 - INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term
securities) purchased and sold by the Fund during the six months ended June 30,
1996 was $27,337,879 and $23,264,815, respectively.
The amount of unrealized appreciation (depreciation) of investment securities
on a tax basis as of June 30, 1996 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of investment securities......... $ 1,235,809
Aggregate unrealized (depreciation) of investment securities....... (1,128,984)
-----------
Net unrealized appreciation of investment securities............... $ 106,825
===========
</TABLE>
Investments have the same cost for tax and financial statement purposes.
26
AIM V.I. DIVERSIFIED INCOME FUND
<PAGE>
NOTE 5 - OPEN FORWARD CURRENCY CONTRACTS
Outstanding contracts at June 30, 1996 were as follows:
<TABLE>
<CAPTION>
Contract to Contract to Unrealized
Settlement Date Deliver Receive Value Appreciation
--------------- -------------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
07/18/96........ DEM 1,500,000 $ 998,037 $ 987,682 $10,355
07/25/96........ DEM 5,600,000 3,706,445 3,688,872 17,573
08/01/96........ JPY 20,000,000 193,162 182,883 10,279
09/17/96........ JPY 36,000,000 347,155 329,211 17,944
---------- ---------- -------
$5,244,799 $5,188,648 $56,151
========== ========== =======
</TABLE>
NOTE 6 - CAPITAL STOCK
Changes in capital stock outstanding during six months ended June 30,1996 and
eleven months ended December 31, 1995 were as follows:
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
---------------------- ----------------------
Shares Amount Shares Amount
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Sold........................... 1,115,084 $10,711,980 1,807,566 $17,087,317
Issued as reinvestment of
distributions................. -- -- 293,522 2,823,374
Reacquired..................... (836,909) (8,022,182) (409,796) (3,903,047)
--------- ----------- --------- -----------
278,175 $ 2,689,798 1,691,292 $16,007,644
========= =========== ========= ===========
</TABLE>
NOTE 7 - FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a share outstanding of
the Fund during the six months ended June 30, 1996, the eleven months ended
December 31, 1995, the year ended January 31, 1995 and the period May 5, 1993
(date operations commenced) through January 31, 1994.
<TABLE>
<CAPTION>
January 31,
June 30, December 31, -----------------
1996 1995 1995 1994
-------- ------------ ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period......................... $ 10.00 $ 9.12 $ 10.46 $ 10.00
------- ------- ------- -------
Income from investment
operations:
Net investment income......... 0.16 0.69 0.76 0.54
Net gains (losses) on
securities (both realized and
unrealized).................. 0.05 0.94 (1.42) 0.29
------- ------- ------- -------
Total from investment
operations.................. 0.21 1.63 (0.66) 0.83
------- ------- ------- -------
Less distributions:
Dividends from net investment
income....................... -- (0.75) (0.68) (0.35)
Distributions from net
realized capital gains....... -- -- -- (0.02)
------- ------- ------- -------
Total distributions.......... -- (0.75) (0.68) (0.37)
------- ------- ------- -------
Net asset value, end of period.. $ 10.21 $ 10.00 $ 9.12 $ 10.46
======= ======= ======= =======
Total return(a)................. 2.10% 18.11% (6.35)% 8.33%
======= ======= ======= =======
Ratios/supplemental data:
Net assets, end of period (000s
omitted)....................... $48,407 $44,630 $25,271 $14,530
======= ======= ======= =======
Ratio of expenses to average net
assets(c)...................... 0.86%(b) 0.88% 0.91% 1.05%(e)
======= ======= ======= =======
Ratio of net investment income
to average net assets(d)....... 7.28%(b) 7.65% 8.07% 6.78%(e)
======= ======= ======= =======
Portfolio turnover rate......... 54% 72% 100% 57%
======= ======= ======= =======
</TABLE>
- ------
(a) Total returns for periods less than one year are not annualized.
(b) Ratios are annualized and based on average net assets of $46,065,347.
(c) After waiver of advisory fee and expense reimbursement. Ratios of expenses
to average net assets prior to waiver of advisory fees and/or expense
reimbursements are 1.03% and 1.69% (annualized) for January 31, 1995 and
1994, respectively.
(d) After waiver of advisory fee and expense reimbursement. Ratios of net
investment income to average net assets prior to waiver of advisory fees
and/or expense reimbursements are 7.95% and 6.14% (annualized) for January
31, 1995 and 1994, respectively.
(e) Annualized.
27
AIM V.I. DIVERSIFIED INCOME FUND
<PAGE>
AIM V.I. GLOBAL UTILITIES FUND SCHEDULE OF INVESTMENTS
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
DOMESTIC COMMON STOCKS - 53.59%
COMPUTER NETWORKING - 0.88%
1,600 Ascend Communications, Inc.(a).......................... $ 90,000
800 Digital Systems International, Inc.(a).................. 12,100
-----------
102,100
-----------
COMPUTER PERIPHERALS - 0.15%
200 U.S. Robotics Corp.(a).................................. 17,100
-----------
ELECTRIC SERVICES - 22.19%
7,300 Allegheny Power System, Inc............................. 225,387
3,200 Carolina Power & Light Co............................... 121,600
5,800 DQE, Inc................................................ 159,500
4,800 Duke Power Co........................................... 246,000
4,900 FPL Group, Inc.......................................... 225,400
6,800 General Public Utilities Corp........................... 239,700
4,900 Houston Industries, Inc................................. 120,662
7,300 Illinova Corp........................................... 209,875
4,500 NIPSCO Industries, Inc.................................. 181,125
2,300 Northern States Power Co................................ 113,563
2,100 NYNEX Corp.............................................. 99,750
7,800 Pinnacle West Capital Corp.............................. 236,925
6,800 Southern Co. (The)...................................... 167,450
5,600 Texas Utilities Co...................................... 239,400
-----------
2,586,337
-----------
ENERGY ALTERNATE SOURCES - 0.93%
4,300 Teco Energy, Inc........................................ 108,575
-----------
GAS DISTRIBUTION - 1.38%
1,500 KN Energy, Inc.......................................... 50,250
3,000 Public Service Co. of Colorado.......................... 110,250
-----------
160,500
-----------
NATURAL GAS PIPELINE - 9.71%
1,700 Columbia Gas System, Inc.(a)............................ 88,613
8,200 El Paso Natural Gas Co.................................. 315,700
4,500 Enron Corp.............................................. 183,938
3,400 PanEnergy Corp.......................................... 111,775
4,200 Sonat Inc............................................... 189,000
4,900 Williams Companies Inc. (The)........................... 242,550
-----------
1,131,576
-----------
OIL & GAS (SERVICES) - 0.14%
2,300 TPC Corp.(a)............................................ 16,675
-----------
REAL ESTATE INVESTMENTS TRUSTS - 1.54%
1,300 Meditrust............................................... 43,388
600 National Health Investors, Inc.......................... 19,650
1,500 OMEGA Healthcare Investors, Inc......................... 41,438
1,500 Patriot American Hospitality, Inc....................... 44,438
1,500 Public Storage, Inc..................................... 30,938
-----------
179,852
-----------
SEMICONDUCTORS - 0.16%
300 Motorola, Inc........................................... 18,863
-----------
</TABLE>
28
AIM V.I. GLOBAL UTILITIES FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
-------- ------
<C> <S> <C>
TELECOMMUNICATIONS - 4.12%
2,700 AT&T Corp.............................................. $ 167,400
900 ADC Telecommunications(a).............................. 40,500
3,200 American Portable Telecom Inc.(a)...................... 34,400
5,400 Frontier Corp.......................................... 165,375
800 Lucent Technologies, Inc............................... 30,300
1,700 McLeod, Inc.(a)........................................ 40,800
22 MFS Communications Co. Inc.(a)......................... 828
-----------
479,603
-----------
TELEPHONE - 12.39%
6,100 Ameritech Corp......................................... 362,187
900 Bell Atlantic Corp..................................... 57,375
6,400 BellSouth Corp......................................... 271,200
3,500 Century Telephone Enterprises, Inc..................... 111,563
5,600 Cincinnati Bell, Inc................................... 291,900
1,900 GTE Corp............................................... 85,025
4,100 SBC Communications, Inc................................ 201,925
1,500 Southern New England Telecommunications Corp........... 63,000
-----------
1,444,175
-----------
Total Domestic Common Stocks........................... 6,245,356
-----------
DOMESTIC CONVERTIBLE PREFERRED STOCKS - 2.26%
ADVERTISING/BROADCASTING - 0.41%
50 Time Warner Inc.- Series K, 10.25% Conv. PIK Pfd.(b)
(Acquired 04/03/96; Cost $50,000)..................... 48,313
-----------
ELECTRIC SERVICES - 0.25%
600 Citizens Utilities Co.-$2.50 Conv. Pfd................. 28,950
-----------
GAS UTILITY - 0.44%
2,000 MCN Corp.-$2.01 Conv. PRIDES........................... 51,000
-----------
OIL & GAS (SERVICES) - 0.56%
2,500 Enron Corp.-$1.36 Conv. Pfd............................ 64,688
-----------
TELECOMMUNICATIONS - 0.60%
1,100 MFS Communications Co., Inc.-$2.68 Conv. Pfd........... 69,850
-----------
Total Domestic Preferred Stocks........................ 262,801
-----------
FOREIGN STOCKS & OTHER EQUITY INTERESTS - 20.66%
ARGENTINA - 1.16%
20,700 Central Costanera S.A.-Class B (Electric Services)..... 76,206
2,000 Telefonica de Argentina-ADR (Telephone)................ 59,250
-----------
135,456
-----------
AUSTRIA - 0.18%
270 Oesterreichisch Elektrizitatswirtschafts-AG
(Verbundgesellschaft)-Class A
(Electric Services)................................... 20,682
-----------
BRAZIL - 0.66%
1,100 Telecomunicacoes Brasileiras S/A Telebras-ADR
(Telecommunications)................................... 76,588
-----------
CANADA - 1.01%
4,300 TELUS Corp. (Telecommunications)....................... 57,950
4,000 Westcoast Energy, Inc. (Natural Gas Pipeline).......... 60,000
-----------
117,950
-----------
CHILE - 1.28%
700 Compania de Telecomunicaciones de Chile S.A.-ADR
(Telecommunications)................................... 68,687
2,600 Enersis S.A.-ADR (Electric Services)................... 80,600
-----------
149,287
-----------
</TABLE>
29
AIM V.I. GLOBAL UTILITIES FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
-------- ------
<C> <S> <C>
GERMANY - 0.48%
1,060 Veba A.G. (Electric Services).......................... $ 56,378
-----------
HONG KONG - 0.47%
1,100 Asia Satellite Telecommunications Holdings Ltd.(a)
(Telecommunications)................................... 32,725
1,200 Hong Kong Telecom Ltd.-ADR (Telephone)................. 21,600
-----------
54,325
-----------
INDONESIA - 0.37%
1,300 PT Indosat-ADR(a) (Telephone).......................... 43,550
-----------
ISRAEL - 0.56%
1,500 ECI Telecom Ltd. (Telecommunications).................. 34,875
1,900 Tadiran Telecommunications Ltd.(a)
(Telecommunications)................................... 30,401
-----------
65,276
-----------
ITALY - 0.70%
15,325 Telecom Italia Mobile S.p.A. (Telephone)............... 34,368
22,000 Telecom Italia S.p.A. (Telephone)...................... 47,369
-----------
81,737
-----------
KOREA - 0.48%
2,300 Korea Electric Power Corp.-ADR (Electric Services)..... 55,775
-----------
NETHERLANDS - 0.41%
270 Royal PTT Nederland N.V. (Telecommunications).......... 10,226
995 Royal PTT Nederland N.V.-ADR (Telecommunications)...... 37,561
-----------
47,787
-----------
NEW ZEALAND - 1.32%
2,300 Telecom Corp. of New Zealand Ltd.-ADR (Telephone)...... 153,525
-----------
NORWAY - 0.54%
2,000 Nera AS-ADR (Telecommunications)....................... 63,500
-----------
PORTUGAL - 0.68%
3,000 Portugal Telecom S.A.-ADR(a) (Telecommunications)...... 78,750
-----------
SPAIN - 3.48%
3,900 Autopistas Concesionaria Espanola S.A. (Engineering &
Construction).......................................... 45,396
1,400 Empresa Nacional de Electricidad S.A. (Electric
Services).............................................. 87,675
1,400 Empresa Nacional de Electricidad S.A.-ADR (Electric
Services).............................................. 30,100
250 Gas Natural SDG-E S.A. (Gas Distribution).............. 52,537
10,900 Iberdrola S.A. (Electric Services)..................... 111,976
1,400 Telefonica de Espana, S.A. (Telecommunications)........ 77,175
-----------
404,859
-----------
SWEDEN - 0.35%
1,900 Telefonaktiebolaget L.M. Ericsson (Telecommunications). 40,850
-----------
UNITED KINGDOM - 6.53%
400 British Sky Broadcasting Group PLC-ADR
(Advertising/Broadcasting)............................. 16,250
2,510 Hyder PLC (Water Supply)............................... 27,813
6,400 London Electricity PLC (Electric Services)............. 62,171
9,467 National Grid Group PLC (Electric Services)............ 25,068
11,950 National Power PLC (Electric Services)................. 96,506
900 National Power PLC-ADR (Electric Services)............. 21,938
2,100 NYNEX CableComms Group(a) (Telecommunications)......... 34,125
2,200 Orange PLC(a) (Telecommunications)..................... 38,500
9,050 PowerGen PLC (Electric Services)....................... 65,917
1,100 PowerGen PLC-ADR (Electric Services)................... 22,825
9,750 Scottish Power PLC (Electric Services)................. 46,031
</TABLE>
30
AIM V.I. GLOBAL UTILITIES FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
--------- ------
<C> <S> <C>
UNITED KINGDOM - (CONTINUED)
3,416 Southern Electric PLC (Electric Services)............. $ 37,852
8,925 United Utilities PLC (Water Supply)................... 75,056
500 Vodafone Group PLC-ADR (Telecommunications)........... 18,438
5,450 Wessex Water PLC (Water Supply)....................... 30,217
2,100 Wessex Water PLC Preference Shares (Water Supply)..... 1,696
6,500 Yorkshire Electricity PLC (Electric Services)......... 72,985
6,600 Yorkshire Water PLC (Water Supply).................... 67,650
-----------
761,038
-----------
Total Foreign Stocks & Other Equity Interests......... 2,407,313
-----------
<CAPTION>
PRINCIPAL
AMOUNT
---------
<C> <S> <C>
DOMESTIC CONVERTIBLE BONDS - 2.55%
ADVERTISING/BROADCASTING - 0.37%
$ 50,000 Tele-Communications, Inc., Conv. Sub. Deb., 4.50%,
02/15/06.............................................. 43,500
-----------
CABLE TV - 0.85%
100,000 International Cabletel Inc., Conv. Sub. Deb., 7.00%,
06/15/08(b)
(Acquired 06/07/96; Cost $100,000)................... 98,625
-----------
ENERGY ALTERNATE SOURCES - 0.25%
25,000 California Energy Co., Conv. Sub. Deb., 5.00%,
07/31/00(b)
(Acquired 04/26/95; Cost $22,953).................... 28,718
-----------
SEMICONDUCTORS - 0.24%
25,000 Analog Devices, Conv. Sub. Notes, 3.50%, 12/01/00..... 28,313
-----------
TELECOMMUNICATIONS - 0.84%
10,000 Broadband Technologies, Conv. Sub. Notes, 5.00%,
05/15/01(b)
(Acquired 05/17/96; Cost $10,000).................... 9,950
110,000 United States Cellular Corp., Conv. Liquid Yield
Option Notes, 6.00%, 06/15/15(c)..................... 36,507
35,000 World Communications Inc., Conv. Sub. Notes, 5.00%,
08/15/03.............................................. 51,128
-----------
97,585
-----------
Total Domestic Convertible Bonds...................... 296,741
-----------
DOMESTIC NON-CONVERTIBLE BONDS - 8.80%
ADVERTISING/BROADCASTING - 2.09%
100,000 Comcast Corp., Sr. Sub. Deb., 9.50%, 01/15/08......... 96,500
75,000 Time Warner Inc., Deb., 6.85%, 01/15/26............... 71,840
75,000 Time Warner Inc., Notes, 8.18%, 08/15/07.............. 74,718
-----------
243,058
-----------
ELECTRIC SERVICES - 2.83%
75,000 AES Corp., Sr. Sub. Notes, 10.25%, 07/15/06........... 75,422
75,000 Arizona Public Service, Deb., 8.00%, 12/30/15......... 73,155
75,000 El Paso Electric Co., First Mortgage Bonds, 8.25%,
02/01/03.............................................. 72,750
93,441 Indiana Michigan Power Co., Deb., 9.82%, 12/07/22..... 108,478
-----------
329,805
-----------
ENERGY ALTERNATE SOURCES - 0.82%
100,000 California Energy Co., Disc. Notes, 10.25%,
01/15/04(d)........................................... 96,000
-----------
FINANCE (CONSUMER CREDIT) - 0.70%
75,000 General Motors Acceptance Corp., Putable Notes, 9.00%,
10/15/02.............................................. 81,780
-----------
GAS DISTRIBUTION - 0.63%
75,000 Ferrellgas Partners Inc., Sr. Notes, Inc. 9.375%,
06/15/06(b)
(Acquired 04/23/96; Cost $75,000).................... 72,938
-----------
</TABLE>
31
AIM V.I. GLOBAL UTILITIES FUND
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
----------- ------
<C> <S> <C>
NATURAL GAS PIPELINE - 0.39%
$ 45,000 Panenergy Corp., Notes, 7.875%, 08/15/04............ $ 46,273
-----------
TELECOMMUNICATIONS - 1.34 %
150,000 AT&T Corp., Sr. Notes, 7.75%, 03/01/07.............. 156,182
-----------
Total Domestic Non-Convertible Bonds................ 1,026,036
-----------
FOREIGN NON-CONVERTIBLE BONDS - 4.15%
CANADA - 4.15%(e)
CAD 50,000 Bell Canada, Deb. Series EW (Telecommunications)
8.80%, 08/17/05..................................... 38,270
CAD 50,000 Bell Canada, Deb. (Telecommunications) 10.875%,
10/11/04............................................ 42,368
CAD 100,000 Canada Oil Debco Inc., Deb. (Oil & Gas-Services)
11.00%, 10/31/00.................................... 82,070
CAD 100,000 Ontario Hydro, Global Bonds (Electric Power) 9.00%,
06/24/02............................................ 79,290
CAD 100,000 Teleglobe Canada Inc., Deb. (Telecommunications)
8.35%, 6/20/03...................................... 75,309
CAD 70,000 Trans Canada Pipeline, Notes (Oil & Gas Services)
8.55%, 02/01/06..................................... 52,694
CAD 150,000 Transalta Utilities Corp., Deb. (Electric Power)
8.35%, 12/15/03..................................... 113,920
-----------
Total Foreign Non-Convertible Bonds................. 483,921
-----------
REPURCHASE AGREEMENT - 5.73%(f)
$667,303 Daiwa Securities America Inc., 5.50%, 07/01/96(g)... 667,303
-----------
U.S. TREASURY SECURITIES - 1.20%
U.S. TREASURY BONDS - 1.20%
130,000 7.625%, 02/15/25.................................... 140,128
-----------
TOTAL INVESTMENT SECURITIES - 98.94%................ 11,529,599
OTHER ASSETS LESS LIABILITIES - 1.06%............... 123,921
-----------
NET ASSETS - 100.00%................................ $11,653,520
===========
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) Non-income producing security.
(b) Restricted securities. May be resold to qualified institutional buyers in
accordance with provisions of Rule 144A under the Securities Act of 1933,
as amended. The valuation of these securities has been determined in
accordance with procedures established by the Board of Directors. The
aggregate market value of these securities at 06/30/96, was $258,543, which
represents 2.22% of net assets.
(c) Zero coupon bond. The interest rate shown represents the rate of the
original issue discount.
(d) Discounted bond at purchase. Interest rate shown represents coupon at which
bond will accrue at a specified future date.
(e) Foreign denominated security. Par value and coupon are denominated in the
currency of Canada.
(f) Collateral on repurchase agreement, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value as being 102 percent of the sales price of
the repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(g) Joint repurchase agreement entered into 06/28/96 with a maturing value of
$270,069,404. Collateralized by $258,303,000 U.S. Treasury obligations,
7.875% due 11/15/07.
Abbreviations:
ADR- American Depository Receipt
CAD- Canadian dollars
Conv.- Convertible
Deb.- Debentures
Pfd.- Preferred
PIK- Payment in Kind
PRIDES- Preferred Redeemable Increased Dividend Equity Securities
Sr.- Senior
Sub.- Subordinated
See Notes to Financial Statements.
32
AIM V.I. GLOBAL UTILITIES FUND
<PAGE>
AIM V.I. GLOBAL UTILITIES FUND STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost $10,511,128)........................... $11,529,599
Foreign currencies, at value (cost $17,063)........................ 17,035
Receivables for:
Capital stock sold............................................... 9,987
Investments sold................................................. 120,113
Dividends and interest........................................... 72,597
Investment for deferred compensation plan.......................... 5,991
Other assets....................................................... 13
-----------
Total assets................................................... 11,755,335
-----------
LIABILITIES:
Payables for:
Investments purchased............................................ 80,886
Deferred compensation plan....................................... 5,991
Accrued directors' fees............................................ 1,481
Accrued administrative services fees............................... 4,039
Accrued operating expenses......................................... 9,418
-----------
Total liabilities.............................................. 101,815
-----------
Net assets applicable to shares outstanding........................ $11,653,520
===========
Capital shares, $.001 par value per share:
Authorized....................................................... 250,000,000
===========
Outstanding...................................................... 967,215
===========
Net asset value, offering and redemption price per share........... $12.05
======
</TABLE>
See Notes to Financial Statements.
33
AIM V.I. GLOBAL UTILITIES FUND
<PAGE>
AIM V.I. GLOBAL UTILITIES FUND STATEMENT OF OPERATIONS
For the six months ended June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $8,398 foreign withholding tax)................. $176,375
Interest.......................................................... 84,403
--------
Total investment income......................................... 260,778
--------
EXPENSES:
Advisory fees..................................................... 33,842
Custodian fees.................................................... 12,968
Administrative services fees...................................... 22,424
Directors' fees and expenses...................................... 3,080
Professional fees................................................. 5,721
Other............................................................. 2,227
--------
Total expenses................................................... 80,262
Less expenses assumed by advisor.................................. (15,954)
--------
Net expenses..................................................... 64,308
--------
Net investment income............................................... 196,470
--------
REALIZED AND UNREALIZED GAIN FROM INVESTMENT SECURITIES AND FOREIGN
CURRENCY TRANSACTIONS:
Net realized gain from:
Investment securities............................................. 113,014
Foreign currency transactions..................................... 1,786
--------
114,800
--------
Unrealized appreciation of:
Investment securities............................................. 55,026
Foreign currencies................................................ 774
--------
55,800
--------
Net gain on investment securities and foreign currencies............ 170,600
--------
Net increase in net assets resulting from operations................ $367,070
========
</TABLE>
AIM V.I. GLOBAL UTILITIES FUND STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 1996 and the eleven months ended December
31, 1995
(Unaudited)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
----------- ------------
<S> <C> <C>
OPERATIONS:
Net investment income............................... $ 196,470 $ 180,945
Net realized gain from investment securities and
foreign currency transactions...................... 114,800 80,096
Net unrealized appreciation of investment securities
and foreign currencies............................. 55,800 929,383
----------- ----------
Net increase in net assets resulting from
operations........................................ 367,070 1,190,424
Net increase from capital stock transactions........ 2,892,483 4,441,375
Distributions to shareholders from net investment
income............................................. -- (186,096)
Distributions from net realized capital gains....... -- (9,403)
----------- ----------
Net increase in net assets......................... 3,259,553 5,436,300
NET ASSETS:
Beginning of period................................. 8,393,967 2,957,667
----------- ----------
End of period....................................... $11,653,520 $8,393,967
=========== ==========
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in).......... $10,315,489 $7,423,006
Undistributed net investment income................. 195,701 (769)
Undistributed net realized gain from investment
securities and foreign currency transactions....... 123,241 8,441
Unrealized appreciation of investment securities and
foreign currencies................................. 1,019,089 963,289
----------- ----------
$11,653,520 $8,393,967
=========== ==========
</TABLE>
See Notes to Financial Statements.
34
AIM V.I. GLOBAL UTILITIES FUND
<PAGE>
AIM V.I. GLOBAL UTILITIES FUND NOTES TO FINANCIAL STATEMENTS
June 30, 1996
(Unaudited)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
AIM Variable Insurance Funds, Inc. (the "Company"), is a Maryland corporation
organized on January 22, 1993, and is registered under the Investment Company
Act of 1940 (the "1940 Act"), as amended, as an open-end, series, management
investment company consisting of nine portfolios. Matters affecting each
portfolio are voted on exclusively by the shareholders of such portfolio. The
assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only
to the AIM V.I. Global Utilities Fund (the "Fund"). The Fund's investment
objective is to achieve a high level of current income, and as a secondary
objective the Fund seeks to achieve capital appreciation, by investing
primarily in the common and preferred stocks of public utility companies
(either domestic or foreign). Currently, shares of the Fund are sold only to
insurance company separate accounts to fund the benefits of variable annuity
contracts.
The following is a summary of the significant accounting policies followed by
the Fund in the presentation 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 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.
A. Security Valuations - Equity securities, including warrants, that are listed
on a national securities exchange or part of the NASDAQ National Market
System are valued at the last reported sales price or if there has been no
sale that day, at the mean between the closing bid and asked prices on that
day. If a mean is not available, as is the case in some foreign markets, the
closing bid will be used absent a last sales price. Non-convertible debt
securities are valued on the basis of valuations furnished by a pricing
service, which determines valuations for normal, institutional-size trading
units of such securities using market information, transactions for
comparable securities and various relationships between securities which are
generally recognized by institutional traders. Securities traded in the
over-the-counter market, except (i) securities priced by the pricing
service, (ii) securities for which representative exchange prices are
available, and (iii) securities reported in the NASDAQ National Market
System, are valued at the mean between representative last bid and asked
prices obtained from an electronic quotation reporting system, if such
prices are available, or from established market makers. Exchange listed
convertible debt securities are valued at the mean between the closing bid
and asked prices obtained from a broker-dealer. Short-term investments with
remaining maturities of up to and including 60 days are valued at amortized
cost which approximates market value. Short-term securities that mature in
more than 60 days are valued at current market quotations. Securities for
which market quotations either are not readily available or are questionable
are valued at fair value as determined in good faith by, or under the
authority of, the Board of Directors. Generally, trading in foreign
securities is substantially completed each day at various times prior to the
close of the New York Stock Exchange. 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 New York Stock Exchange. 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 New York Stock
Exchange which will 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. Interest income is
recorded as earned from settlement date and is recorded on the accrual
basis. Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Realized gains or losses from securities transactions are
recorded on the identified cost basis.
C. Federal Income Taxes - It is the Fund's policy to continue to comply with
the requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income and capital
gains to its 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.
dollars 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.
E. Forward Currency Contracts - A forward 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 forward 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 currency contract for the amount
of a purchase or sale of a security denominated in
35
AIM V.I. GLOBAL UTILITIES FUND
<PAGE>
a 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.
NOTE 2 - INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company 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 an annual rate of 0.65% of
the first $250 million of the Fund's average daily net assets, plus 0.60% of
the Fund's average daily net assets in excess of $250 million. This agreement
requires AIM to reduce its fees or, if necessary, make payments to the Fund to
the extent required to satisfy any expense limitations imposed by the
securities laws or regulations thereunder of any state in which the Fund's
shares are qualified for sale. During the six months ended June 30, 1996, AIM
waived advisory fees of $15,954.
Pursuant to a master administrative services agreement between the Company and
AIM, with respect to the Fund, the Company has agreed to reimburse certain
administrative costs incurred in providing accounting services to the Fund.
During the six months ended June 30, 1996, AIM was reimbursed $22,424 for such
services.
The Company has entered into a master distribution agreement with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Fund.
Certain officers and directors of the Company are officers of AIM and AIM
Distributors.
During the six months ended June 30, 1996, the Fund incurred legal fees of
$1,444 for services rendered by Kramer, Levin, Naftalis & Frankel as counsel to
the Board of Directors. A member of that firm is a director of the Company.
NOTE 3 - DIRECTORS' FEES
Directors' fees represent remuneration paid or accrued to each director who is
not an "interested person" of AIM. The Company may invest directors' fees, if
so elected by a director, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 4 - INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term
securities) purchased and sold by the Fund during the six months ended June 30,
1996 was $5,918,431 and $2,908,797, respectively.
The amount of unrealized appreciation of investment securities, on a tax
basis, as of June 30, 1996 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of investment securities.......... $1,183,017
Aggregate unrealized (depreciation) of investment securities........ (166,573)
----------
Net unrealized appreciation of investment securities................ $1,016,444
==========
</TABLE>
Cost of investments for tax purposes is $10,513,155.
NOTE 5 - CAPITAL STOCK
Changes in capital stock outstanding during the six months ended June 30, 1996
and the eleven months ended December 31, 1995 were as follows:
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
------------------- --------------------
Shares Amount Shares Amount
------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Sold................................ 342,939 $4,015,381 535,828 $5,682,400
Issued as reinvestment of
distributions...................... -- -- 17,742 195,499
Reacquired.......................... (97,069) (1,122,898) (134,462) (1,436,524)
------- ---------- -------- ----------
245,870 $2,892,483 419,108 $4,441,375
======= ========== ======== ==========
</TABLE>
36
AIM V.I. GLOBAL UTILITIES FUND
<PAGE>
NOTE 6 - FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a share outstanding of
the Fund during the six months ended June 30, 1996, the eleven months ended
December 31, 1995 and the period May 2, 1994 (date operations commenced)
through January 31, 1995.
<TABLE>
<CAPTION>
June 30, December 31, January 31,
1996 1995 1995
-------- ------------ -----------
<S> <C> <C> <C>
Net asset value, beginning of
period............................. $ 11.64 $9.69 $10.00
------- ------ ------
Income from investment operations:
Net investment income............. 0.20 0.29 0.27
Net gains (losses) on securities
(both realized and unrealized)... 0.21 1.98 (0.33)
------- ------ ------
Total from investment operations.. 0.41 2.27 (0.06)
------- ------ ------
Less distributions:
Dividends from net investment
income........................... -- (0.31) (0.25)
Distributions from capital gain... -- (0.01) --
------- ------ ------
Total distributions............... -- (0.32) (0.25)
------- ------ ------
Net asset value, end of period...... $12.05 $11.64 $ 9.69
======= ====== ======
Total return(a)..................... 3.52% 23.73% (0.56)%
======= ====== ======
Ratios/supplemental data:
Net assets, end of period (000s
omitted)........................... $11,654 $8,394 $2,958
======= ====== ======
Ratio of expenses to average net
assets............................. 1.23%(b) 1.47%(c) 1.31%(d)(e)
======= ====== ======
Ratio of net investment income to
average net assets................. 3.76%(b) 3.76%(c) 4.39%(d)(e)
======= ====== ======
Portfolio turnover rate............. 29% 58% 69%
======= ====== ======
</TABLE>
- ------
(a) Total return is not annualized.
(b) Ratios are annualized and based on average net assets of $10,498,902.
Annualized ratios of expenses and net investment income to average net
assets prior to waiver of advisory fees and 1.54% and 3.46%.
(c) Annualized ratios of expenses and net investment income to average net
assets prior to waiver of advisory fees and expense reimbursements are
2.44% and 2.79%, respectively.
(d) Annualized.
(e) Annualized ratios of expenses and net investment income to average net
assets prior to waiver of advisory fees and expense reimbursements are
2.80% and 2.90%, respectively.
37
AIM V.I. GLOBAL UTILITIES FUND
<PAGE>
AIM V.I. GOVERNMENT SECURITIES FUND SCHEDULE OF INVESTMENTS
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
<C> <S> <C>
U.S. GOVERNMENT AGENCIES - 77.44%
FEDERAL FARM CREDIT BANK - 0.92%
$ 200,000 Medium term notes
5.96%, 07/14/03........................................ $ 189,842
-----------
FEDERAL HOME LOAN BANK - 9.31%
Debentures
150,000 8.375%, 10/25/99....................................... 158,175
500,000 7.31%, 07/06/01........................................ 514,825
285,000 7.78%, 10/19/01........................................ 299,586
500,000 7.57%, 08/19/04........................................ 520,025
400,000 8.17%, 12/16/04........................................ 431,320
-----------
1,923,931
-----------
FEDERAL HOME LOAN MORTGAGE CORP. - 29.18%
Debentures
150,000 6.13%, 08/19/99........................................ 148,425
500,000 7.90%, 09/19/01........................................ 526,795
300,000 6.185%, 11/26/03....................................... 284,784
500,000 8.00%, 01/26/05........................................ 532,560
500,000 8.115%, 01/31/05....................................... 536,810
Pass through certificates
983,084 6.00%, 11/01/08 to 08/01/10............................ 934,485
535,461 6.50%, 12/01/08 to 07/01/23............................ 510,462
1,968,657 7.00%, 11/01/10 to 01/01/26............................ 1,910,045
351,866 10.50%, 08/01/19....................................... 383,308
258,868 8.50%, 08/01/24........................................ 266,064
-----------
6,033,738
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 25.54%
Debentures
400,000 7.55%, 04/22/02........................................ 414,232
500,000 8.50%, 02/01/05........................................ 522,340
Medium term notes
400,000 7.68%, 12/01/97........................................ 408,740
500,000 6.59%, 05/24/01........................................ 499,550
300,000 7.375%, 03/28/05....................................... 307,875
Pass through certificates
500,000 5.42%, 06/02/99........................................ 497,956
528,510 7.50%, 11/01/09 to 06/01/25............................ 523,807
609,785 8.25%, 04/01/22........................................ 623,024
653,000 6.50%, 06/01/23........................................ 627,495
377,692 8.50%, 09/01/24........................................ 388,074
483,734 7.00%, 09/01/25........................................ 466,044
-----------
5,279,137
-----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 4.85%
Pass through certificates
100,718 9.50%, 08/15/03 to 09/15/16............................ 107,861
255,285 9.00%, 09/15/08 to 10/15/16............................ 269,923
51,771 11.00%, 10/15/15....................................... 57,822
76,688 10.50%, 09/15/17 to 11/15/19........................... 84,549
515,429 6.50%, 12/15/23........................................ 483,210
-----------
1,003,365
-----------
PRIVATE EXPORT FUNDING COMPANY - 1.48%
300,000 Debentures
7.30%, 01/31/02........................................ 306,588
-----------
STUDENT LOAN MARKETING ASSOCIATION - 3.84%
Debentures
500,000 5.65%, 02/22/99........................................ 500,555
150,000 5.55%, 12/15/99........................................ 145,449
150,000 6.50%, 08/01/02........................................ 147,753
-----------
793,757
-----------
</TABLE>
38
AIM V.I. GOVERNMENT SECURITIES FUND
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
<C> <S> <C>
TENNESSEE VALLEY AUTHORITY - 2.32%
$ 500,000 Debentures
6.375%, 06/15/05...................................... $ 479,730
-----------
Total U.S. Government Agencies........................ 16,010,088
-----------
U.S. TREASURY SECURITIES - 13.21%
U.S. TREASURY NOTES & BONDS - 12.96%
300,000 6.875%, 08/31/99...................................... 304,476
1,500,000 6.25%, 05/31/00 to 08/31/00........................... 1,491,160
500,000 7.50%, 02/15/05....................................... 526,205
350,000 7.25%, 05/15/16....................................... 358,547
-----------
2,680,388
-----------
U.S. TREASURY STRIPS(a) - 0.25%
250,000 6.80%, 11/15/18....................................... 50,912
-----------
Total U.S. Treasury Securities........................ 2,731,300
-----------
REPURCHASE AGREEMENT - 8.10%(b)
1,673,158 Daiwa Securities America, Inc., 5.50%, 07/01/96(c).... 1,673,158
-----------
TOTAL INVESTMENTS - 98.75%............................ 20,414,546
OTHER ASSETS LESS LIABILITIES - 1.25%................. 258,347
-----------
NET ASSETS - 100.00%.................................. $20,672,893
===========
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) U.S. Treasury STRIPS are traded on a discount basis. In such cases the
interest rate shown represents the rate of discount paid or received at the
time of purchase by the Fund.
(b) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value as being 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(c) Joint repurchase agreement entered into 06/28/96 with a maturing value of
$270,069.404. Collateralized by $258,303,000 U.S. Treasury obligations,
7.875% due 11/15/07.
See Notes to Financial Statements.
39
AIM V.I. GOVERNMENT SECURITIES FUND
<PAGE>
AIM V.I. GOVERNMENT SECURITIES FUND STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments, at market value (cost $20,683,070).................... $20,414,546
Receivables for:
Capital stock sold............................................... 26,338
Interest......................................................... 249,399
Investment for deferred compensation plan.......................... 8,484
Organizational costs, net.......................................... 5,322
Other assets....................................................... 360
-----------
Total assets................................................... 20,704,449
-----------
LIABILITIES:
Payable for deferred compensation.................................. 8,484
Accrued advisory fees.............................................. 8,376
Accrued directors' fees............................................ 1,914
Accrued administrative service fees................................ 3,883
Accrued operating expenses......................................... 8,899
-----------
Total liabilities.............................................. 31,556
-----------
Net assets applicable to shares outstanding........................ $20,672,893
===========
Capital shares, $.001 par value per share:
Authorized....................................................... 250,000,000
===========
Outstanding...................................................... 2,068,536
===========
Net asset value, offering and redemption price per share........... $ 9.99
===========
</TABLE>
See Notes to Financial Statements.
40
AIM V.I. GOVERNMENT SECURITIES FUND
<PAGE>
AIM V.I. GOVERNMENT SECURITIES FUND STATEMENT OF OPERATIONS
For the six months ended June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME:
Interest........................................................... $ 669,478
---------
EXPENSES:
Advisory fees...................................................... 49,710
Custodian fees..................................................... 7,170
Administrative service fees........................................ 20,403
Directors' fees and expenses....................................... 3,694
Professional fees.................................................. 6,665
Organizational costs............................................... 1,606
Other.............................................................. 7,790
---------
Total expenses................................................... 97,038
---------
Net investment income................................................ 572,440
---------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT SECURITIES:
Net realized gain (loss) on sales of investment securities........... (15,111)
Unrealized appreciation (depreciation) of investment securities...... (903,548)
---------
Net gain (loss) on investment securities............................. (918,659)
---------
Net increase (decrease) in net assets resulting from operations...... $(346,219)
=========
</TABLE>
AIM V.I. GOVERNMENT SECURITIES FUND STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 1996
and the eleven months ended December 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
----------- ------------
<S> <C> <C>
OPERATIONS:
Net investment income.............................. $ 572,440 $ 821,240
Net realized gain (loss) on sales of investment
securities........................................ (15,111) (148,986)
Net unrealized appreciation (depreciation) of
investment securities............................. (903,548) 1,343,577
----------- -----------
Net increase (decrease) in net assets resulting
from operations................................. (346,219) 2,015,831
Net equalization credits............................. 44,736 199,339
Net increase from capital stock transactions......... 1,428,985 5,295,385
Distributions to shareholders from net investment
income.............................................. -- (852,380)
----------- -----------
Net increase in net assets....................... 1,127,502 6,658,175
NET ASSETS:
Beginning of period................................ 19,545,391 12,887,216
----------- -----------
End of period...................................... $20,672,893 $19,545,391
=========== ===========
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in)......... $20,380,291 $18,951,306
Undistributed net investment income................ 1,026,953 409,777
Undistributed net realized gain (loss) on sales of
investment securities............................. (465,827) (450,716)
Unrealized appreciation (depreciation) of
investment securities............................. (268,524) 635,024
----------- -----------
$20,672,893 $19,545,391
=========== ===========
</TABLE>
See Notes to Financial Statements.
41
AIM V.I. GOVERNMENT SECURITIES FUND
<PAGE>
AIM V.I. GOVERNMENT SECURITIES FUND NOTES TO FINANCIAL STATEMENTS
June 30, 1996
(Unaudited)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
AIM Variable Insurance Funds, Inc. (the "Company"), is a Maryland corporation
organized on January 22, 1993, and is registered under the Investment Company
Act of 1940 (the "1940 Act"), as amended, as an open-end, series, management
investment company consisting of nine portfolios. Matters affecting each
portfolio are voted on exclusively by the shareholders of such portfolio. The
assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only
to the AIM V.I. Government Securities Fund (the "Fund"). The Fund's investment
objective is to achieve a high level of current income consistent with
reasonable concern for safety of principal by investing in debt securities
issued, guaranteed or otherwise backed by the U.S. Government. Currently,
shares of the Fund are sold only to insurance company separate accounts to fund
the benefits of variable annuity contracts.
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 presentation of its financial statements.
A. Security Valuations - Debt obligations that are issued or guaranteed by the
U.S. Government, its agencies, authorities, and instrumentalities 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, maturity and seasoning differential. Securities for
which market prices are not provided by the pricing service are valued at
the mean between last bid and asked prices based upon quotes furnished by
independent sources. Securities for which market quotations are either 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. Short-term
obligations having 60 days or less to maturity are valued at amortized cost
which approximates market value.
B. Securities Transactions, Investment Income and Distributions - Securities
transactions are accounted for on a trade date basis. Interest income is
recorded as earned from settlement date and is recorded on the accrual
basis. Distributions to shareholders are recorded on the ex-dividend date.
Realized gains or losses from securities transactions are recorded on the
identified cost basis.
C. Federal Income Taxes - For federal income tax purposes, each portfolio in
the Company is taxed as a separate entity. It is the Fund's policy to
continue to comply with the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
taxable income and capital gains to its shareholders. Therefore, no
provision for federal income taxes is recorded in the financial statements.
The Fund had capital loss carryforwards (which may be carried forward to
offset future taxable capital gains, if any) of $399,008, which expires, if
not previously utilized, through the year 2003. The Fund cannot distribute
capital gains to shareholders until the tax loss carryforwards have been
utilized.
D. Equalization - The Fund follows the accounting practice known as
equalization by which a portion of the proceeds from sales and the costs of
repurchases of fund shares, equivalent on a per share basis to the amount of
undistributed net investment income, is credited or charged to undistributed
net income when the transaction is recorded so that undistributed net
investment income per share is unaffected by sales or redemptions of fund
shares.
E. Organizational Costs - Organizational costs for the Fund of $14,461 are
being amortized over five years.
NOTE 2 - INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company 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 an annual rate of 0.50% of
the first $250 million of the Fund's average daily net assets, plus 0.45% of
the Fund's average daily net assets in excess of $250 million. This agreement
requires AIM to reduce its fees or, if necessary, make payments to the Fund to
the extent required to satisfy any expense limitations imposed by the
securities laws or regulations thereunder of any state in which the Fund's
shares are qualified for sale.
Pursuant to a master administrative services agreement between the Company and
AIM, with respect to the Fund, the Company has agreed to reimburse certain
administrative costs incurred in providing accounting services to the Fund.
During the six months ended June 30, 1996, AIM was reimbursed $20,403 for such
services.
The Company has entered into a master distribution agreement with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor of the
Fund's shares.
42
AIM V.I. GOVERNMENT SECURITIES FUND
<PAGE>
Certain officers and directors of the Company are officers of AIM and AIM
Distributors.
During the six months ended June 30, 1996, the Fund incurred legal fees of
$1,276 for services rendered by Kramer, Levin, Naftalis & Frankel as counsel to
the Board of Directors. A member of that firm is a director of the Company.
NOTE 3 - DIRECTORS' FEES
Directors' fees represent remuneration paid or accrued to each director who is
not an "interested person" of AIM. The Company may invest a director's fees, if
so elected by such director, in mutual fund shares in accordance with a
deferred compensation plan.
NOTE 4 - INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term
securities) purchased and sold by the Fund during the six months ended June 30,
1996 was $3,051,615 and $1,007,734, respectively.
The amount of unrealized appreciation (depreciation) of investment securities
as of June 30, 1996 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of investment securities.......... $ 140,607
Aggregate unrealized (depreciation) of investment securities........ (409,131)
---------
Net unrealized appreciation (depreciation) of investment securities. $(268,524)
=========
</TABLE>
Investments have the same cost for tax and financial statement purposes.
NOTE 5 - CAPITAL STOCK
Changes in capital stock outstanding during the six months ended June 30, 1996
and the eleven months ended December 31, 1995 were as follows:
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
-------------------- --------------------
Shares Amount Shares Amount
-------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Sold............................... 334,094 $3,231,084 693,583 $6,660,171
Issued as reinvestment of
distributions..................... -- -- 85,675 852,380
Reacquired......................... (186,915) (1,802,099) (229,935) (2,217,166)
-------- ---------- -------- ----------
147,179 $1,428,985 549,323 $5,295,385
======== ========== ======== ==========
</TABLE>
NOTE 6 - FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a share outstanding of
the Fund during the six months ended June 30, 1996, the eleven months ended
December 31, 1995, the year ended January 31, 1995 and the period May 5, 1993
(date operations commenced) through January 31, 1994.
<TABLE>
<CAPTION>
January 31,
June 30, December 31, -------------------
1996 1995 1995 1994
-------- ------------ ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period...................... $ 10.17 $ 9.39 $ 10.24 $ 10.00
------- ------- ------- -------
Income from investment
operations:
Net investment income...... 0.28 0.54 0.53 0.38
Net gains (losses) on
securities (both realized
and unrealized)........... (0.46) 0.74 (0.88) 0.10
------- ------- ------- -------
Total from investment
operations............... (0.18) 1.28 (0.35) 0.48
------- ------- ------- -------
Less distributions:
Dividends from net
investment income......... -- (0.50) (0.50) (0.24)
------- ------- ------- -------
Total distributions....... -- (0.50) (0.50) (0.24)
------- ------- ------- -------
Net asset value, end of
period...................... $ 9.99 $ 10.17 $ 9.39 $ 10.24
======= ======= ======= =======
Total return(a).............. (1.77)% 13.84% (3.42)% 4.78%
======= ======= ======= =======
Ratios/supplemental data:
Net assets, end of period
(000s omitted).............. $20,673 $19,545 $12,887 $10,643
======= ======= ======= =======
Ratio of expenses to average
net assets.................. 0.97%(b) 1.19%(c) 0.95%(d) 1.00%(d)
======= ======= ======= =======
Ratio of net investment
income to average net
assets...................... 5.74%(b) 5.78%(c) 5.51%(e) 4.74%(e)
======= ======= ======= =======
Portfolio turnover rate...... 5% 41% 29% 0%
======= ======= ======= =======
</TABLE>
- ------
(a) Total returns for periods less than one year are not annualized.
(b) Ratios are annualized and are based on average net assets of $20,048,801.
(c) Annualized.
(d) Ratios of expenses to average net assets prior to waiver of advisory fees
and/or expense reimbursements are 1.10% and 1.80% (annualized) for January,
1995 and 1994, respectively.
(e) Ratios of net investment income to average net assets prior to waiver of
advisory fees and/or expense reimbursements are 5.35% and 3.94%
(annualized) for January, 1995 and 1994, respectively.
43
AIM V.I. GOVERNMENT SECURITIES FUND
<PAGE>
AIM V.I. GROWTH FUND
SCHEDULE OF INVESTMENTS
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
DOMESTIC COMMON STOCKS - 84.70%
ADVERTISING/BROADCASTING - 0.05%
2,100 Belo (A.H.) Corp. .................................. $ 78,229
------------
AEROSPACE/DEFENSE - 0.42%
5,300 Boeing Co. ......................................... 461,762
2,200 General Dynamics Corp. ............................. 136,400
------------
598,162
------------
AIRLINES - 0.55%
5,200 Delta Air Lines, Inc. .............................. 431,600
12,000 Southwest Airlines Co. ............................. 349,500
------------
781,100
------------
AUTOMOBILE (MANUFACTURERS) - 0.71%
5,000 Chrysler Corp. ..................................... 310,000
22,000 Ford Motor Co. ..................................... 712,250
------------
1,022,250
------------
BANKING - 0.48%
9,000 Fleet Financial Group, Inc. ........................ 391,500
10,000 PNC Bank Corp. ..................................... 297,500
------------
689,000
------------
BANKING (MONEY CENTER) - 0.72%
14,652 Chase Manhattan Corp. .............................. 1,034,798
------------
BEVERAGES (ALCOHOLIC) - 0.26%
5,000 Anheuser-Busch Companies, Inc. ..................... 375,000
------------
BEVERAGES (SOFT DRINKS) - 0.31%
12,400 PepsiCo Inc. ....................................... 438,650
------------
BIOTECHNOLOGY - 0.76%
6,000 AMGEN Inc.(a)....................................... 324,000
15,500 Guidant Corp. ...................................... 763,375
------------
1,087,375
------------
BUILDING MATERIALS - 0.40%
8,000 Georgia Pacific Corp. .............................. 568,000
------------
BUSINESS SERVICES - 1.70%
11,000 CUC International, Inc.(a).......................... 390,500
200 Diebold, Inc. ...................................... 9,650
17,000 Equifax, Inc. ...................................... 446,250
20,000 Healthcare COMPARE Corp.(a)......................... 975,000
1,900 Interim Services Inc.(a)............................ 81,700
15,900 Olsten Corp. ....................................... 467,062
2,500 ServiceMaster L.P. ................................. 57,500
------------
2,427,662
------------
CHEMICALS - 0.12%
3,200 Hercules, Inc. ..................................... 176,800
------------
CHEMICALS (SPECIALTY) - 0.30%
11,500 Morton International, Inc. ......................... 428,375
------------
COMPUTER MINI/PCS - 2.47%
8,000 COMPAQ Computer Corp.(a)............................ 394,000
7,500 Dell Computer Corp.(a).............................. 381,563
20,000 Gateway 2000 Inc.(a)................................ 680,000
8,500 Hewlett-Packard Co. ................................ 846,813
7,900 Stratus Computer, Inc.(a)........................... 229,100
17,000 Sun Microsystems, Inc.(a)........................... 1,000,875
------------
3,532,351
------------
</TABLE>
44
AIM V.I. GROWTH FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMPUTER NETWORKING - 2.65%
2,700 Belden, Inc. ....................................... $ 81,000
19,150 Cabletron Systems, Inc.(a).......................... 1,314,169
26,200 Cisco Systems, Inc.(a).............................. 1,483,575
20,000 3Com Corp.(a)....................................... 915,000
------------
3,793,744
------------
COMPUTER PERIPHERALS - 2.70%
15,000 Adaptec, Inc.(a).................................... 710,625
12,750 Oracle Systems Corp.(a)............................. 502,828
7,000 Seagate Technology Inc.(a).......................... 315,000
33,000 Storage Technology Corp.(a)......................... 1,262,250
9,600 U.S. Robotics Corp.(a).............................. 820,800
9,700 Western Digital Corp.(a)............................ 253,412
------------
3,864,915
------------
COMPUTER SOFTWARE & SERVICES - 6.26%
15,000 BMC Software, Inc.(a)............................... 896,250
23,200 Cadence Design Systems, Inc.(a)..................... 783,000
18,000 Ceridian Corp.(a)................................... 909,000
11,000 Computer Associates International, Inc. ............ 783,750
6,000 Computer Sciences Corp.(a).......................... 448,500
35,000 Computervision Corp.(a)............................. 350,000
21,000 CompuWare Corp.(a).................................. 829,500
5,000 First Data Corp. ................................... 398,125
25,000 Fiserv, Inc.(a)..................................... 750,000
11,000 McAfee Associates, Inc.(a).......................... 539,000
5,000 Microsoft Corp.(a).................................. 600,625
600 National Data Corp. ................................ 20,550
700 Network General Corp.(a)............................ 15,050
10,500 Parametric Technology Corp.(a)...................... 455,437
14,500 Structural Dynamics Research Corp.(a)............... 319,000
9,000 Synopsys, Inc.(a)................................... 357,750
8,500 Wallace Computer Services, Inc. .................... 507,875
------------
8,963,412
------------
CONGLOMERATES - 2.88%
7,500 Allied Signal Inc. ................................. 428,438
10,000 Dial Corp. (The).................................... 286,250
7,200 ITT Corp.(a)........................................ 477,000
20,500 Loews Corp. ........................................ 1,616,937
3,600 Textron Inc. ....................................... 287,550
18,000 Tyco International Ltd. ............................ 733,500
11,900 U.S. Industries Inc. ............................... 287,087
------------
4,116,762
------------
CONTAINERS - 0.57%
15,500 First Brands Corp. ................................. 418,500
12,000 Sealed Air Corp.(a)................................. 403,500
------------
822,000
------------
COSMETICS & TOILETRIES - 0.73%
4,000 Colgate-Palmolive Co. .............................. 339,000
6,200 Gillette Co. (The).................................. 386,725
3,500 Procter & Gamble Co. ............................... 317,188
------------
1,042,913
------------
</TABLE>
45
AIM V.I. GROWTH FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
ELECTRONIC COMPONENTS/MISCELLANEOUS - 1.38%
31,100 Amphenol Corp.(a)................................... $ 715,300
2,800 C-Cube Microsystems, Inc.(a)........................ 92,400
500 Cable Design Technologies Corp.(a).................. 16,375
13,000 Checkpoint Systems, Inc.(a)......................... 446,875
10,000 Thermo Instrument Systems, Inc.(a).................. 322,500
9,000 UCAR International, Inc.(a)......................... 374,625
------------
1,968,075
------------
ELECTRONIC/DEFENSE - 0.37%
14,500 Sundstrand Corp. ................................... 531,063
------------
ELECTRONIC/PC DISTRIBUTORS - 0.17%
5,500 Arrow Electronics, Inc.(a).......................... 237,187
------------
FINANCE (ASSET MANAGEMENT) - 1.64%
13,835 Bear Stearns Companies, Inc. (The).................. 326,852
6,500 Finova Group Inc. .................................. 316,875
8,500 Franklin Resources, Inc. ........................... 518,500
21,300 PaineWebber Group, Inc. ............................ 505,875
12,500 Salomon Inc. ....................................... 550,000
4,000 T. Rowe Price Associates, Inc. ..................... 123,000
------------
2,341,102
------------
FINANCE (CONSUMER CREDIT) - 5.32%
5,800 Beneficial Corp. ................................... 325,525
18,500 Federal Home Loan Mortgage Corp. ................... 1,581,750
50,000 Federal National Mortgage Association .............. 1,675,000
7,500 First USA, Inc. .................................... 412,500
13,900 Green Tree Financial Corp. ......................... 434,375
5,500 Household International, Inc. ...................... 418,000
27,000 MBNA Corp. ......................................... 769,500
10,500 Medaphis Corp. (a).................................. 417,375
12,000 PMI Group, Inc. (The)............................... 510,000
10,400 Student Loan Marketing Association.................. 769,600
5,400 SunAmerica, Inc. ................................... 305,100
------------
7,618,725
------------
FINANCE (SAVINGS & LOAN) - 0.25%
12,000 Washington Mutual Inc. ............................. 358,500
------------
FOOD/PROCESSING - 0.87%
19,000 ConAgra, Inc. ...................................... 862,125
3,700 Dole Food Co., Inc. ................................ 159,100
5,966 Lancaster Colony Corp. ............................. 222,979
------------
1,244,204
------------
FUNERAL SERVICES - 0.24%
6,000 Service Corp. International......................... 345,000
------------
GAMING - 0.33%
11,500 Circus Circus Enterprises(a)........................ 471,500
------------
HOME BUILDING - 0.26%
12,000 Centex Corp. ....................................... 373,500
------------
HOTELS/MOTELS - 0.22%
24,000 Host Marriott Corp.(a).............................. 315,000
------------
</TABLE>
46
AIM V.I. GROWTH FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
INSURANCE (LIFE & HEALTH) - 1.46%
34,000 Conseco, Inc. ..................................... $ 1,360,000
9,100 Provident Companies, Inc. ......................... 336,700
11,500 United Companies Financial Corp. .................. 391,000
------------
2,087,700
------------
INSURANCE (MULTI-LINE PROPERTY) - 5.27%
5,900 Ace, Ltd. ......................................... 277,300
12,600 Aetna Life & Casualty Co. ......................... 900,900
4,500 American International Group, Inc. ................ 443,812
9,500 CIGNA Corp. ....................................... 1,119,813
27,900 Everest Re Holdings, Inc. ......................... 721,913
25,000 Horace Mann Educators Corp. ....................... 793,750
16,500 MGIC Investment Corp. ............................. 926,062
19,000 Old Republic International Corp. .................. 408,500
42,000 Reliance Group Holdings, Inc. ..................... 315,000
22,000 TIG Holdings, Inc. ................................ 638,000
21,250 Travelers Group Inc. .............................. 969,531
800 Vesta Insurance Group, Inc. ....................... 26,700
------------
7,541,281
------------
LEISURE & RECREATION - 0.92%
25,800 Carnival Corp. - Class A........................... 744,975
7,000 Coleman Co., Inc. (The)(a)......................... 296,625
3,500 Eastman Kodak Co. ................................. 272,125
------------
1,313,725
------------
MACHINERY (HEAVY) - 0.19%
8,000 Harnischfeger Industries, Inc. .................... 266,000
------------
MEDICAL (DRUGS) - 7.72%
22,500 Abbott Laboratories ............................... 978,750
22,000 American Home Products Corp. ...................... 1,322,750
13,800 AmeriSource Health Corp.(a) ....................... 458,850
14,000 Bristol-Myers Squibb Co. .......................... 1,260,000
20,000 Cardinal Health, Inc. ............................. 1,442,500
7,000 Express Scripts, Inc. - Class A(a) ................ 322,000
29,000 ICN Pharmaceuticals, Inc. ......................... 674,250
16,000 Merck & Co., Inc. ................................. 1,034,000
24,000 Pharmacia & Upjohn, Inc. .......................... 1,065,000
2,000 R.P. Scherer Corp.(a) ............................. 90,750
26,000 Schering-Plough Corp. ............................. 1,631,500
20,400 Watson Pharmaceuticals, Inc.(a) ................... 772,650
------------
11,053,000
------------
MEDICAL (INSTRUMENTS/PRODUCTS) - 3.41%
26,300 Baxter International Inc. ......................... 1,242,675
13,600 Becton, Dickinson & Co. ........................... 1,091,400
8,700 Biomet, Inc.(a) ................................... 125,062
19,570 Boston Scientific Corp.(a) ........................ 880,650
18,500 Medtronic Inc. .................................... 1,036,000
3,200 Nellcor Puritan-Bennett, Inc.(a) .................. 155,200
11,100 U.S. Surgical Corp. ............................... 344,100
------------
4,875,087
------------
MEDICAL (PATIENT SERVICES) - 5.41%
28,000 Caremark International, Inc. ...................... 707,000
6,000 Columbia\HCA Healthcare Corp. ..................... 320,250
6,700 Health Care & Retirement Corp.(a) ................. 159,125
13,275 Health Management Associates, Inc. - Class A(a) ... 268,819
20,500 HEALTHSOUTH Corp.(a) .............................. 738,000
10,000 Living Centers of America, Inc.(a) ................ 343,750
17,000 Magellan Health Services, Inc.(a) ................. 365,500
24,000 MedPartners/Mullikin, Inc.(a) ..................... 501,000
</TABLE>
47
AIM V.I. GROWTH FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
MEDICAL (PATIENT SERVICES) - (CONTINUED)
8,500 Oxford Health Plans, Inc.(a) ......................... $ 349,562
8,000 Quorum Health Group, Inc.(a) ......................... 211,000
22,000 Sun Healthcare Group, Inc.(a) ........................ 313,500
29,000 Sybron International Corp.(a) ........................ 725,000
73,000 Tenet Healthcare Corp.(a) ............................ 1,560,375
38,500 Vencor, Inc.(a) ...................................... 1,174,250
------------
7,737,131
------------
NATURAL GAS PIPELINE - 0.66%
3,000 Columbia Gas System, Inc.(a) ......................... 156,374
16,000 Williams Companies Inc. (The) ........................ 792,000
------------
948,374
------------
OFFICE AUTOMATION - 0.30%
8,000 Xerox Corp. .......................................... 428,000
------------
OFFICE PRODUCTS - 0.62%
5,600 Alco Standard Corp. .................................. 253,400
5,000 Avery Dennison Corp. ................................. 274,375
7,000 Reynolds & Reynolds Co. - Class A .................... 372,750
------------
900,525
------------
OIL & GAS (DRILLING) - 0.22%
14,000 Reading & Bates Corp.(a) ............................. 309,750
------------
OIL & GAS (SERVICES) - 1.59%
6,000 Halliburton Co. ...................................... 333,000
10,100 Louisiana Land & Exploration Co. ..................... 582,013
47,500 NorAm Energy Corp. ................................... 516,562
16,600 Sonat Offshore Drilling Inc. ......................... 838,300
------------
2,269,875
------------
OIL EQUIPMENT & SUPPLIES - 1.02%
11,000 Baker Hughes Inc. .................................... 361,625
2,800 Cooper Cameron Corp.(a) .............................. 122,500
12,500 Dresser Industries, Inc. ............................. 368,750
4,700 Rowan Companies, Inc.(a) ............................. 69,325
2,900 Schlumberger Ltd. .................................... 244,325
6,900 Tidewater, Inc. ...................................... 302,737
------------
1,469,262
------------
PAPER & FOREST PRODUCTS - 1.30%
14,000 Kimberly-Clark Corp. ................................. 1,081,500
16,000 Union Camp Corp. ..................................... 780,000
------------
1,861,500
------------
PUBLISHING - 0.55%
11,000 New York Times Co. ................................... 358,875
3,000 Times Mirror Co. (The) ............................... 130,500
4,000 Tribune Co. .......................................... 290,500
------------
779,875
------------
RESTAURANTS - 0.71%
17,800 Applebee's International, Inc. ....................... 571,825
7,800 Darden Restaurants, Inc. ............................. 83,850
10,500 Outback Steakhouse, Inc.(a) .......................... 362,086
------------
1,017,761
------------
</TABLE>
48
AIM V.I. GROWTH FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
RETAIL (FOOD & DRUG) - 1.70%
20,500 Albertson's Inc. ................................... $ 848,188
12,500 American Stores Co. ................................ 515,625
10,300 Rite Aid Corp. ..................................... 306,425
23,000 Safeway, Inc.(a) ................................... 759,000
------------
2,429,238
------------
RETAIL (STORES) - 6.50%
13,000 AutoZone, Inc.(a) .................................. 451,750
21,100 Consolidated Stores Corp.(a) ....................... 775,425
10,800 Dayton-Hudson Corp. ................................ 1,113,750
23,000 Gap, Inc. (The) .................................... 738,875
13,000 Gymboree Corp.(a) .................................. 396,500
17,000 Home Depot, Inc. (The) ............................. 918,000
12,500 Lowe's Companies, Inc. ............................. 451,563
3,000 Mercantile Stores Co., Inc. ........................ 175,875
3,900 Micro Warehouse, Inc.(a) ........................... 78,000
27,600 Office Depot, Inc.(a) .............................. 562,350
25,000 Pep Boys - Manny, Moe & Jack ....................... 850,000
41,900 Price/Costco Inc.(a) ............................... 906,088
15,000 Sears, Roebuck & Co. ............................... 729,375
14,775 Staples Inc.(a) .................................... 288,112
15,500 Toys "R" Us, Inc.(a) ............................... 441,750
1,400 Viking Office Products, Inc.(a) .................... 43,925
15,600 Waban Inc.(a) ...................................... 372,450
------------
9,293,788
------------
SCIENTIFIC INSTRUMENTS - 0.67%
6,300 Millipore Corp. .................................... 263,812
13,300 Varian Associates, Inc. ............................ 688,275
------------
952,087
------------
SEMICONDUCTORS - 1.11%
9,650 Analog Devices, Inc.(a) ............................ 246,075
14,000 Intel Corp. ........................................ 1,028,125
8,300 International Rectifier Corp.(a) ................... 133,837
4,000 Lattice Semiconductor Corp.(a) ..................... 96,499
3,700 Zilog, Inc.(a) ..................................... 88,800
------------
1,593,336
------------
TELECOMMUNICATIONS - 3.42%
29,600 ADC Telecommunications, Inc.(a) .................... 1,332,000
4,700 Andrew Corp.(a) .................................... 252,625
15,000 Frontier Corp. ..................................... 459,375
8,000 Glenayre Technologies, Inc.(a) ..................... 400,000
12,000 Lucent Technologies, Inc. .......................... 454,500
11,000 MCI Communications Corp. ........................... 281,875
17,000 Tellabs, Inc.(a) ................................... 1,136,875
4,166 360 Communications Co.(a) .......................... 99,984
8,500 WorldCom, Inc. ..................................... 470,688
------------
4,887,922
------------
TELEPHONE - 0.78%
21,500 Cincinnati Bell, Inc. .............................. 1,120,688
------------
TEXTILES - 1.04%
25,000 Fruit of The Loom, Inc.(a) ......................... 637,500
24,500 Liz Claiborne, Inc. ................................ 848,312
------------
1,485,812
------------
</TABLE>
49
AIM V.I. GROWTH FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
TOBACCO - 2.04%
15,800 Philip Morris Companies, Inc. ..................... $ 1,643,200
30,000 RJR Nabisco Holdings Corp. ........................ 930,000
10,000 UST, Inc. ......................................... 342,500
------------
2,915,700
------------
Total Domestic Common Stocks .................... 121,182,771
------------
<CAPTION>
PRINCIPAL
AMOUNT
---------
<C> <S> <C>
DOMESTIC CONVERTIBLE CORPORATE BONDS - 1.10%
MACHINERY (MISCELLANEOUS) - 0.56%
$650,000 Thermo Electron Corp., Conv. Deb., 4.25%,
01/01/03(b)
(Acquired 03/14/96-03/18/96; Cost $796,053) ...... 796,250
------------
RESTAURANTS - 0.24%
290,000 Boston Chicken, Inc. Conv. Sub. Deb., 4.50%,
02/01/04 ......................................... 347,275
------------
RETAIL (STORES) - 0.30%
400,000 Staples, Inc., Conv. Sub. Deb., 4.50%, 10/01/00(b)
(Acquired 05/03/95-02/07/96; Cost $439,764) ...... 430,000
------------
Total Convertible Corporate Bonds ............... 1,573,525
------------
<CAPTION>
SHARES
------
<C> <S> <C>
FOREIGN STOCKS & OTHER EQUITY INTERESTS - 8.38%
BRAZIL - 0.34%
7,000 Telecomunicacoes Brasileiras S.A.-Telebras-ADR
(Telecommunications) ............................. 487,375
------------
CANADA - 1.38%
21,000 Canadian Pacific, Ltd. (Transportation -
Miscellaneous) .................................. 462,000
6,500 Newbridge Networks Corp.(a) (Computer Networking) . 425,750
20,100 Northern Telcom Ltd. (Telecommunications) ......... 1,092,937
------------
1,980,687
------------
FRANCE - 0.79%
11,000 Rhone-Poulenc Rorer, Inc.-ADR (Medical - Drugs) ... 738,375
1,600 Roussel-Uclaf (Medical - Drugs) ................... 384,167
------------
1,122,542
------------
ISRAEL - 1.74%
32,200 ECI Telecommunications Ltd. (Computer Networking) . 748,650
12,500 Elan Corp. PLC-ADR(a) (Medical - Drugs) ........... 714,063
12,900 SmithKline Beecham PLC-ADR (Medical - Drugs) ...... 701,438
8,600 Teva Pharmaceutical Industries Ltd.-ADR (Medical -
Drugs) ........................................... 325,725
------------
2,489,876
------------
ITALY - 0.18%
3,000 Fila Holding S.p.A.-ADR (Retail - Stores) ......... 258,750
------------
JAPAN - 1.67%
10,000 Canon, Inc. (Office Automation) ................... 208,476
15,000 Honda Motor Co. (Automobile - Manufacturers) ...... 389,521
14,000 Murata Mfg. Co., Ltd. (Electronic
Components/Miscellaneous) ........................ 531,248
1,000 Rohm Co. (Semiconductors) ......................... 66,200
9,000 Sony Corp. (Electronic Components/Miscellaneous) .. 593,334
10,000 TDK Corp. (Electronic Components/Miscellaneous) ... 597,998
------------
2,386,777
------------
</TABLE>
50
AIM V.I. GROWTH FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
SWEDEN - 0.37%
24,300 Telefonaktiebolaget L.M. Ericsson-ADR
(Telecommunications) ............................ $ 522,450
------------
SWITZERLAND - 1.26%
1,200 Ciba-Geigy Ltd. (Medical - Drugs) ................ 1,463,766
45 Roche Holding A.G. - Genuss (Medical - Drugs) .... 343,565
------------
1,807,331
------------
UNITED KINGDOM - 0.65%
48,500 Glaxo Wellcome PLC (Medical - Drugs) ............. 652,667
14,800 Stolt-Nielsen S.A. (Transportation -
Miscellaneous) ................................. 268,250
800 Stolt-Nielsen S.A.-ADR (Transportation -
Miscellaneous) ................................. 14,900
------------
935,817
------------
Total Foreign Stocks & Other Equity Interests .. 11,991,605
------------
<CAPTION>
PRINCIPAL
AMOUNT
---------
<C> <S> <C>
FOREIGN CONVERTIBLE BONDS - 0.25%
UNITED KINGDOM - 0.25%
$ 300,000 Danka Business Systems PLC, Conv. Sub. Deb.,
6.75%, 04/01/02(b) (Office Automation) (Acquired
10/26/95; Cost $384,000) ........................ 355,875
------------
REPURCHASE AGREEMENTS - 5.32%(c)
612,523 Daiwa Securities America, Inc., 5.50%,
07/01/96(d)...................................... 612,523
7,000,000 Nomura Securities International, Inc., 5.53%,
07/01/96(e) ..................................... 7,000,000
------------
Total Repurchase Agreements .................... 7,612,523
------------
TOTAL INVESTMENT SECURITIES - 99.75% ............. 142,716,299
OTHER ASSETS LESS LIABILITIES - 0.25% ............ 353,896
------------
NET ASSETS - 100.00% ............................. $143,070,195
============
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) Non-income producing security
(b) Restricted security. May be resold to qualified institutional buyers in
accordance with the provisions of Rule 144A under the Securities Act of
1933, as amended. The valuation of these securities has been determined in
accordance with procedures established by the Board of Directors. The
aggregate market value of these securities at June 30, 1996 are $1,582,125,
which represented 1.11% of the net assets.
(c) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreeement. The collateral is marked to market
daily to ensure its market value as being 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(d) Joint repurchase agreement entered into 06/28/96 with a maturing value of
$270,069,404. Collateralized by $258,303,000 U.S. Treasury obligations,
7.875% due 11/15/07.
(e) Joint repurchase agreement entered into 06/28/96 with a maturing value of
$330,152,075. Collateralized by $335,544,000 U.S. Government and Treasury
obligations, 0% to 9.55% due 07/01/96 to 09/08/15.
Abbreviations:
ADR- American Depository Receipt
Conv.- Convertible
Deb.- Debentures
Sub.- Subordinated
See Notes to Financial Statements.
51
AIM V.I. GROWTH FUND
<PAGE>
AIM V.I. GROWTH FUND STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost $130,625,643).................. $142,716,299
Foreign currencies, at market value (cost $113,854)............... 113,822
Receivables for:
Capital stock sold.............................................. 257,913
Investments sold................................................ 2,308,759
Dividends and interest.......................................... 151,882
Options written................................................. 12,915
Organizational costs, net......................................... 5,302
Investment for deferred compensation plan......................... 8,818
Other assets...................................................... 390
------------
Total assets.................................................. 145,576,100
------------
LIABILITIES:
Payables for:
Investments purchased........................................... 2,217,921
Deferred compensation plan...................................... 8,818
Options written................................................. 197,963
Accrued advisory fees............................................. 76,006
Accrued directors' fees........................................... 1,570
Accrued administrative services fees.............................. 3,038
Accrued operating expenses........................................ 589
------------
Total liabilities............................................. 2,505,905
------------
Net assets applicable to shares outstanding....................... $143,070,195
============
Capital shares, $.001 par value per share:
Authorized...................................................... 250,000,000
============
Outstanding..................................................... 9,155,020
============
Net asset value, offering and redemption price per share.......... $15.63
======
</TABLE>
See Notes to Financial Statements.
52
AIM V.I. GROWTH FUND
<PAGE>
AIM V.I. GROWTH FUND STATEMENT OF OPERATIONS
For the six months ended
June 30, 1996
(Unaudited)
<TABLE>
<S>
<C>
INVESTMENT INCOME:
Dividends (net of $8,840 foreign withholding tax)............... $ 629,772
Interest........................................................ 527,600
----------
Total investment income........................................ 1,157,372
----------
EXPENSES:
Advisory fees................................................... 397,624
Custodian fees.................................................. 34,966
Administrative services fees.................................... 18,228
Directors' fees and expenses.................................... 3,312
Organizational costs............................................ 1,446
Other........................................................... 17,386
----------
Total expenses................................................. 472,962
----------
Net investment income............................................. 684,410
----------
REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENT SECURITIES,
FOREIGN CURRENCIES, FUTURES AND OPTIONS CONTRACTS:
Net realized gain from:
Investment securities........................................... 5,334,589
Foreign currency transactions................................... 15,613
Futures contracts............................................... 1,351,204
Options contracts............................................... 16,824
----------
6,718,230
----------
Unrealized appreciation (depreciation) of:
Investment securities........................................... 1,964,381
Foreign currencies.............................................. (3,766)
Futures contracts............................................... (153,968)
Options contracts............................................... 8,649
----------
1,815,296
----------
Net gain on investment securities, foreign currencies, futures and
options contracts................................................ 8,533,526
----------
Net increase in net assets resulting from operations.............. $9,217,936
==========
</TABLE>
AIM V.I. GROWTH FUND STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 1996 and the eleven months ended December
31, 1995
(Unaudited)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income............................. $ 684,410 $ 637,435
Net realized gain from investment securities,
foreign currency transactions, futures and
options contracts................................ 6,718,230 9,511,105
Net unrealized appreciation of investment
securities, foreign currencies, futures and
options contracts................................ 1,815,296 8,357,905
------------ ------------
Net increase in net assets resulting from
operations...................................... 9,217,936 18,506,445
Net increase from capital stock transactions...... 31,252,147 38,645,259
Distributions to shareholders from net investment
income........................................... -- (48,608)
------------ ------------
Net increase in net assets....................... 40,470,083 57,103,096
NET ASSETS:
Beginning of period............................... 102,600,112 45,497,016
------------ ------------
End of period..................................... $143,070,195 $102,600,112
============ ============
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in)........ $115,871,934 $ 84,619,787
Undistributed net investment income............... 1,313,038 628,628
Undistributed net realized gain from investment
securities, foreign currency transactions,
futures and options contracts ................... 13,785,440 7,067,210
Unrealized appreciation of investment securities,
foreign currencies, futures and options
contracts........................................ 12,099,783 10,284,487
------------ ------------
$143,070,195 $102,600,112
============ ============
</TABLE>
See Notes to Financial Statements.
53
AIM V.I. GROWTH FUND
<PAGE>
AIM V.I. GROWTH FUND NOTES TO FINANCIAL STATEMENTS
June 30, 1996
(Unaudited)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
AIM Variable Insurance Funds, Inc. (the "Company"), is a Maryland corporation
organized on January 22, 1993, and is registered under the Investment Company
Act of 1940 (the "1940 Act"), as amended, as an open-end, series, management
investment company consisting of nine portfolios. Matters affecting each
portfolio are voted on exclusively by the shareholders of such portfolio. The
assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only
to the AIM V.I. Growth Fund (the "Fund"). The Fund's investment objective is to
seek growth of capital principally through investment in common stocks of
seasoned and better capitalized companies considered by AIM to have strong
earnings momentum. Currently, shares of the Fund are sold only to insurance
company separate accounts to fund the benefits of variable annuity contracts.
The following is a summary of the significant accounting policies followed by
the Fund in the presentation 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 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.
A. Security Valuations - Equity securities, including warrants, options and
futures that are listed on a national securities exchange or part of the
NASDAQ National Market System are valued at the last reported sales price
or, in the case of over-the-counter securities or if there has been no sale
that day, at the mean between the closing bid and asked prices on that day.
Securities traded in the over-the-counter market, except (i) securities for
which representative exchange prices are available, and (ii) securities
reported in the NASDAQ National Market System, are valued at the mean
between representative last bid and asked prices obtained from an electronic
quotation reporting system, if such prices are available, or from
established market makers. If no mean is available, as is the case in some
foreign market, the closing bid will be used absent a last sales price.
Exchange listed convertible debt is valued at the mean between the closing
bid and asked prices obtained from a broker-dealer. Short-term investments
with remaining maturities of up to and including 60 days are valued at
amortized cost which approximates market value. Short-term securities that
mature in more than 60 days are valued at current market quotations.
Securities for which market quotations either 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. Generally, trading in foreign
securities is substantially completed each day at various times prior to the
close of the New York Stock Exchange. 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 New York Stock Exchange. 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 New York Stock
Exchange which will 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. Interest income is
recorded as earned from settlement date and is recorded on the accrual
basis. Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Realized gains or losses from securities transactions are
recorded on the identified cost basis.
C. Federal Income Taxes - It is the Fund's policy to continue to comply with
the requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income and capital
gains to its shareholders. Therefore, no provision for federal income taxes
is recorded in the financial statements.
D. Organizational Costs - Organizational costs of $14,461 are being amortized
over five years.
E. Stock Index Futures Contracts - The Fund may purchase or sell stock index
futures contracts as a hedge against changes in market conditions. Initial
margin deposits required upon entering into futures contracts are satisfied
by the segregation of specific securities as collateral for the account of
the broker (the Fund's agent in acquiring the futures position). During the
period the futures contracts are open, changes in the value of the contracts
are recognized as unrealized gains or losses by "marking to market" on a
daily basis to reflect the market value of the contracts at the end of each
day's trading. Variation margin payments are made or received depending upon
whether unrealized gains or losses are incurred. When the contracts are
closed, the Fund recognizes a realized gain or loss equal to the difference
between the proceeds from, or cost of, the closing transaction and the
Fund's basis in the contract. Risks include the possibility of an illiquid
market and the change in the value of the contracts may not correlate with
changes in the value of the securities being hedged.
54
AIM V.I. GROWTH FUND
<PAGE>
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
F. Covered Call Options - The Fund may write call options, but only on a
covered basis; that is, the Fund will own the underlying security. Options
written by the Fund normally will have expiration dates between three and
nine months from the date written. The exercise price of a call option may
be below, equal to, or above the current market value of the underlying
security at the time the option is written. When the Fund writes a covered
call option, an amount equal to the premium received by the Fund is recorded
as an asset and an equivalent liability. The amount of the liability is
subsequently "marked-to-market" to reflect the current market value of the
option written. The current market value of a written option is the last
sale price, or in the absence of a sale, the mean between the last bid and
asked prices on that day. If a written call option expires on the stipulated
expiration date, or if the Fund enters into a closing purchase transaction,
the Fund realizes a gain (or a loss if the closing purchase transaction
exceeds the premium received when the option was written) without regard to
any unrealized gain or loss on the underlying security, and the liability
related to such option is extinguished. If a written option is exercised,
the Fund realizes a gain or a loss from the sale of the underlying security
and the proceeds of the sale are increased by the premium originally
received.
A call option gives the purchaser of such option the right to buy, and the
writer (the Fund) the obligation to sell, the underlying security at the
stated exercise price during the option period. The purchaser of a call
option has the right to acquire the security which is the subject of the call
option at any time during the option period. During the option period, in
return for the premium paid by the purchaser of the option, the Fund has
given up the opportunity for capital appreciation above the exercise price
should the market price of the underlying security increase, but has retained
the risk of loss should the price of the underlying security decline. During
the option period, the Fund may be required at any time to deliver the
underlying security against payment of the exercise price. This obligation is
terminated upon the expiration of the option period or at such earlier time
at which the Fund effects a closing purchase transaction by purchasing (at a
price which may be higher than that received when the call option was
written) a call option identical to the one originally written. The Fund will
not write a covered call option if, immediately thereafter, the aggregate
value of the securities underlying all such options, determined as of the
dates such options were written, would exceed 5% of the net assets of the
Fund.
G. 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.
H. Foreign Currency Contracts - A forward 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 forward 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 forward contract for the purchase
or sale of a security denominated in a 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.
NOTE 2 - INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company 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 an annual rate of 0.65% of
the first $250 million of the Fund's average daily net assets, plus 0.60% of
the Fund's average daily net assets in excess of $250 million. This agreement
requires AIM to reduce its fee or, if necessary, make payments to the Fund to
the extent required to satisfy any expense limitations imposed by the
securities laws or regulations thereunder of any state in which the Fund's
shares are qualified for sale.
Pursuant to a master administrative services agreement between the Company and
AIM, with respect to the Fund, the Company has agreed to reimburse certain
administrative costs incurred in providing accounting services to the Fund.
During the six months ended June 30, 1996, AIM was reimbursed $18,228 for such
services.
The Company has entered into a master distribution agreement with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Fund.
Certain officers and directors of the Company are officers of AIM and AIM
Distributors.
55
AIM V.I. GROWTH FUND
<PAGE>
During the six months ended June 30, 1996, the Fund incurred legal fees of
$4,969 for services rendered by Kramer, Levin, Naftalis & Frankel as counsel to
the Board of Directors. A member of that firm is a director of the Company.
NOTE 3 - DIRECTORS' FEES
Directors' fees represent remuneration paid or accrued to each director who is
not an "interested person" of AIM. The Company may invest directors' fees, if
so elected by a director, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 4 - INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term
securities) purchased and sold by the Fund during the six months ended June 30,
1996 was $134,226,637 and $89,694,323, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
on a tax basis, as of June 30, 1996 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of investment securities..... $13,952,077
Aggregate unrealized (depreciation) of investment securities... (1,862,202)
-----------
Net unrealized appreciation of investment securities........... $12,089,875
===========
</TABLE>
Cost of investments for tax purposes is $130,626,424.
NOTE 5 - CAPITAL STOCK
Changes in capital stock outstanding during the six months ended June 30, 1996
and the eleven months ended December 31, 1995 were as follows:
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
---------------------- ----------------------
Shares Amount Shares Amount
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Sold........................... 2,081,887 $31,772,223 3,110,541 $41,750,413
Issued as reinvestment of
distributions................. -- -- 3,426 48,608
Reacquired..................... (33,981) (520,076) (255,480) (3,153,762)
--------- ----------- --------- -----------
2,047,906 $31,252,147 2,858,487 $38,645,259
========= =========== ========= ===========
</TABLE>
NOTE 6 - OPEN COVERED CALL OPTIONS CONTRACTS WRITTEN
Transactions in call options written during the six months ended June 30, 1996
are summarized as follows:
<TABLE>
<CAPTION>
Option Contracts
---------------------
Number of Premiums
Contracts Received
--------- --------
<S> <C> <C>
Beginning of period................................ -- --
Written............................................ 1,175 $356,496
Exercised.......................................... (262) (59,545)
Expired............................................ (96) (28,908)
Closed............................................. (285) (61,431)
----- --------
End of period...................................... 532 $206,612
===== ========
</TABLE>
Open call option contracts written at June 30, 1996 were as follows:
<TABLE>
<CAPTION>
June 30, Unrealized
Contract Strike Number of Premium 1996 Appreciation
Issue Month Price Contracts Received Market Value (Depreciation)
----- -------- ------ --------- -------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
ADC Telecommunications,
Inc. .................. July 45 110 $ 52,003 $ 22,000 $ 30,003
Avery Dennison Corp. ... Oct. 55 50 25,424 14,688 10,736
Cabletron Systems,
Inc. .................. July 65 90 46,888 39,375 7,513
Eastman Kodak Co. ...... July 80 35 6,895 2,625 4,270
Franklin Resources,
Inc. .................. Oct. 55 55 22,772 42,625 (19,853)
Franklin Resources,
Inc. .................. Oct. 60 30 10,035 12,000 (1,965)
Gillette Co. (The)...... Sept. 55 62 17,638 51,150 (33,512)
Hewlett-Packard Co. .... July 115 30 12,042 375 11,667
Medtronic Inc. ......... July 55 70 12,915 13,125 (210)
--- -------- -------- --------
532 $206,612 $197,963 $ 8,649
=== ======== ======== ========
</TABLE>
56
AIM V.I. GROWTH FUND
<PAGE>
NOTE 7 - FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a share outstanding of
the Fund during the six months ended June 30, 1996, the eleven months ended
December 31, 1995, the year ended January 31, 1995 and the period May 5, 1993
(date operations commenced) through January 31, 1994.
<TABLE>
<CAPTION>
January 31,
June 30, December 31, -----------------
1996 1995 1995 1994
-------- ------------ ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning
of period................. $ 14.44 $ 10.71 $ 11.59 $ 10.00
-------- -------- ------- -------
Income from investment
operations:
Net investment income.... 0.05 0.09 0.06 0.02
Net gains (losses) on
securities (both
realized and
unrealized)............. 1.14 3.65 (0.88) 1.59
-------- -------- ------- -------
Total from investment
operations............. 1.19 3.74 (0.82) 1.61
-------- -------- ------- -------
Less distributions:
Dividends from net
investment income....... -- (0.01) (0.06) (0.02)
-------- -------- ------- -------
Net asset value, end of
period.................... $ 15.63 $ 14.44 $ 10.71 $ 11.59
======== ======== ======= =======
Total return(a)............ 8.24% 34.89% (7.11)% 16.07%
======== ======== ======= =======
Ratios/supplemental data:
Net assets, end of period
(000s omitted)............ $143,070 $102,600 $45,497 $25,115
======== ======== ======= =======
Ratio of expenses to
average net assets........ 0.77%(b) 0.84%(c) 0.95% 0.85%(c)(d)
======== ======== ======= =======
Ratio of net investment
income to average net
assets.................... 1.11%(b) 0.95%(c) 0.71% 0.51%(c)(d)
======== ======== ======= =======
Portfolio turnover rate.... 86% 125% 179% 99%
======== ======== ======= =======
</TABLE>
- ------
(a) Total returns are not annualized for periods less than one year.
(b) Ratios are annualized and based on average net assets of $123,308,614.
(c) Annualized.
(d) Annualized ratios of expenses and net investment income (loss) to average
net assets prior to waiver of advisory fees are 1.50% and (0.14)%,
respectively.
57
AIM V.I. GROWTH FUND
<PAGE>
AIM V.I. GROWTH AND INCOME FUND SCHEDULE OF INVESTMENTS
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
--------- ------
<C> <S> <C>
COMMON STOCKS - 66.87%
ADVERTISING/BROADCASTING - 0.85%
5,000 CKS Group, Inc.(a)..................................... $ 161,250
6,500 Eagle River Interactive, Inc.(a)....................... 128,375
18,000 True North Communications, Inc......................... 400,500
4,000 Viacom Inc.-Class B(a)................................. 155,500
-----------
845,625
-----------
AEROSPACE/DEFENSE - 0.64%
5,000 Rockwell International Corp............................ 286,250
3,000 United Technologies Corp............................... 345,000
-----------
631,250
-----------
AUTOMOBILE (MANUFACTURERS) - 0.86%
10,000 Chrysler Corp.......................................... 620,000
7,000 Ford Motor Co.......................................... 226,625
-----------
846,625
-----------
BANKING - 0.88%
16,000 Marshall & Ilsley Corp................................. 444,000
12,000 National City Corp..................................... 421,500
-----------
865,500
-----------
BANKING (MONEY CENTER) - 0.97%
7,000 BankAmerica Corp....................................... 530,250
6,000 Chase Manhattan Corp................................... 423,750
-----------
954,000
-----------
BEVERAGES (ALCOHOLIC) - 0.38%
5,000 Anheuser-Busch Companies, Inc.......................... 375,000
-----------
BEVERAGES (SOFT DRINKS) - 0.86%
24,000 PepsiCo. Inc........................................... 849,000
-----------
BUSINESS SERVICES - 1.75%
9,000 CUC International Inc.(a).............................. 319,500
10,000 Diebold, Inc........................................... 482,500
4,000 Dun & Bradstreet Corp.................................. 250,000
16,000 Equifax, Inc........................................... 420,000
8,810 Olsten Corp............................................ 258,803
-----------
1,730,803
-----------
CHEMICALS - 0.37%
2,500 Eastman Chemical Co.................................... 152,187
3,500 Great Lakes Chemical Corp.............................. 217,875
-----------
370,062
-----------
CHEMICALS (SPECIALITY) - 0.13%
5,000 Ferro Corp............................................. 132,500
-----------
COMPUTER MINI/PCS - 0.84%
6,000 Hewlett-Packard Co..................................... 597,750
4,000 Sun Microsystems, Inc.(a).............................. 235,500
-----------
833,250
-----------
COMPUTER NETWORKING - 0.67%
5,000 Belden Inc............................................. 150,000
5,000 Cisco Systems, Inc.(a)................................. 283,125
10,000 ECI Telecommunications Ltd. ........................... 232,500
-----------
665,625
-----------
</TABLE>
58
AIM V.I. GROWTH AND INCOME FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMPUTER PERIPHERALS - 0.70%
10,000 Oracle Systems Corp.(a)................................ $ 394,375
3,500 U.S. Robotics Corp.(a)................................. 299,250
-----------
693,625
-----------
COMPUTER SOFTWARE/SERVICES - 3.55%
10,000 Compuserve Corp.(a).................................... 211,250
5,000 Computer Associates International, Inc................. 356,250
13,000 Electronic Data Systems Corp........................... 698,750
10,000 Farallon Communications(a)............................. 147,500
8,000 Fiserv, Inc.(a)........................................ 240,000
5,500 HBO & Co............................................... 372,625
4,000 Microsoft Corp.(a)..................................... 480,500
10,000 Saville Systems PLC-ADR (Ireland)(a)................... 276,250
4,000 Shared Medical Systems Corp............................ 257,000
15,200 SoftKey International, Inc.(a)......................... 287,850
2,401 Sterling Software, Inc.(a)............................. 184,877
-----------
3,512,852
-----------
CONGLOMERATES - 0.79%
6,000 Corning, Inc........................................... 230,250
7,000 Loews Corp............................................. 552,125
-----------
782,375
-----------
COSMETICS & TOILETRIES - 2.02%
6,500 Colgate-Palmolive Co................................... 550,875
4,500 Gillette Co. (The)..................................... 280,687
8,000 Procter & Gamble Co.................................... 725,000
8,000 Warner-Lambert Co...................................... 440,000
-----------
1,996,562
-----------
ELECTRIC POWER - 3.20%
16,000 Allegheny Power System, Inc............................ 494,000
10,000 Carolina Power & Light Co.............................. 380,000
10,000 Duke Power Co.......................................... 512,500
8,000 General Public Utilities Corp.......................... 282,000
21,000 Houston Industries, Inc................................ 517,125
2,500 Northern States Power Co............................... 123,437
21,000 Southern Co............................................ 517,125
8,000 Texas Utilities Co..................................... 342,000
-----------
3,168,187
-----------
ELECTRONIC COMPONENTS/MISCELLANEOUS - 1.16%
5,000 DII Group, Inc.(a)..................................... 127,500
8,000 General Electric Co.................................... 692,000
5,000 Sony Corp.-ADR (Japan)................................. 330,625
-----------
1,150,125
-----------
ELECTRONIC/DEFENSE - 0.48%
13,000 Sundstrand Corp........................................ 476,125
-----------
ELECTRONIC/PC DISTRIBUTERS - 0.06%
1,400 Avnet, Inc............................................. 58,975
-----------
FINANCE (ASSET MANAGEMENT) - 0.80%
5,000 Merrill Lynch & Co., Inc............................... 325,625
4,500 Morgan Stanley Group, Inc.............................. 221,062
10,000 United Assets Management Corp.......................... 245,000
-----------
791,687
-----------
</TABLE>
59
AIM V.I. GROWTH AND INCOME FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
FINANCE (CONSUMER CREDIT) - 3.68%
5,500 American Express Co.................................... $ 245,437
9,000 Associates First Capital Corp.(a)...................... 338,625
12,000 Federal Home Loan Mortgage Corp........................ 1,026,000
36,000 Federal National Mortgage Association.................. 1,206,000
7,000 Household International, Inc........................... 532,000
10,300 MBNA Corp.............................................. 293,550
-----------
3,641,612
-----------
FOOD/PROCESSING - 1.21%
5,000 ConAgra, Inc........................................... 226,875
10,000 Dole Food Co., Inc..................................... 430,000
4,000 Kellogg Co............................................. 293,000
7,000 Nabisco Holdings Corp.................................. 247,625
-----------
1,197,500
-----------
FUNERAL SERVICES - 0.25%
8,000 Loewen Group, Inc...................................... 242,000
-----------
GAS DISTRIBUTION - 0.21%
3,200 National Fuel Gas Co................................... 115,200
6,000 Southwest Gas Corp..................................... 96,000
-----------
211,200
-----------
INSURANCE (LIFE & HEALTH) - 0.23%
6,100 Provident Companies, Inc............................... 225,700
-----------
INSURANCE (MULTI-LINE PROPERTY) - 4.65%
14,000 Aetna Life & Casualty Co............................... 1,001,000
14,000 Allstate Financial Corp................................ 638,750
10,000 CIGNA Corp............................................. 1,178,750
9,000 ITT Hartford Group..................................... 479,250
3,500 MBIA Inc............................................... 272,563
8,000 TIG Holdings, Inc...................................... 232,000
12,500 Travelers Group, Inc................................... 570,312
8,000 Travelers/Aetna Property Casualty Corp.(a)............. 227,000
-----------
4,599,625
-----------
LEISURE & RECREATION - 0.63%
8,000 Eastman Kodak Co....................................... 622,000
-----------
MACHINE TOOLS - 0.30%
10,000 Stanley Works.......................................... 297,500
-----------
MACHINERY (HEAVY) - 0.20%
6,000 Harnischfeger Industries, Inc.......................... 199,500
-----------
MACHINERY (MISCELLANEOUS) - 0.34%
3,500 Cooper Industries, Inc................................. 145,250
8,000 Pall Corp.............................................. 193,000
-----------
338,250
-----------
MEDICAL (DRUGS) - 6.73%
12,000 American Home Products Corp............................ 721,500
7,000 Astra AB-ADR (Sweden).................................. 306,250
14,000 Johnson & Johnson...................................... 693,000
11,500 Lilly (Eli) & Co....................................... 747,500
6,000 Pfizer Inc............................................. 428,250
24,000 Pharmacia & Upjohn, Inc................................ 1,065,000
14,800 Rhone-Poulenc Rorer, Inc............................... 993,450
10,000 Schering-Plough Corp................................... 627,500
</TABLE>
60
AIM V.I. GROWTH AND INCOME FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ---------
<C> <S> <C>
MEDICAL (DRUGS) - (CONTINUED)
18,000 SmithKline Beecham PLC-ADR (United Kingdom)................. $ 978,750
2,400 Teva Pharmaceuticals Industries Ltd.-ADR (Israel)........... 90,908
---------
6,652,108
---------
MEDICAL (PATIENT SERVICES) - 4.09%
14,000 Caremark International, Inc................................. 353,500
18,000 Columbia/HCA Healthcare Corp................................ 960,750
4,000 Foundation Health Corp.(a).................................. 143,500
8,000 Health Systems International, Inc. Class A(a)............... 217,000
4,500 Living Centers of America, Inc.(a).......................... 154,687
11,000 MedPartners/Mullikin, Inc.(a)............................... 229,625
10,000 OrNda HealthCorp(a)......................................... 240,000
7,000 PacifiCare Health Systems, Inc.(a).......................... 474,250
20,000 Tenet Healthcare Corp.(a)................................... 427,500
8,000 U.S. Healthcare, Inc........................................ 440,000
8,000 United Healthcare Corp...................................... 404,000
---------
4,044,812
---------
MEDICAL INSTRUMENTS/PRODUCTS - 1.25%
8,000 Baxter International Inc.................................... 378,000
12,000 Boston Scientific Corp.(a).................................. 540,000
12,000 Omnicare, Inc............................................... 318,000
---------
1,236,000
---------
NATURAL GAS PIPELINE - 1.27%
8,000 PanEnergy Corp.............................................. 263,000
5,500 Sonat, Inc.................................................. 247,500
15,000 Williams Companies, Inc. (The).............................. 742,500
---------
1,253,000
---------
OFFICE PRODUCTS - 0.18%
4,000 Alco Standard Corp.......................................... 181,000
---------
OIL & GAS (SERVICES) - 2.58%
10,000 Halliburton Co.............................................. 555,000
5,000 Mobil Corp.................................................. 560,625
28,100 NorAm Energy Corp........................................... 305,587
3,000 Royal Dutch Petroleum Co.-ADR (Netherlands)................. 461,250
5,000 Sonat Offshore Drilling Inc................................. 252,500
5,000 Texaco, Inc................................................. 419,375
---------
2,554,337
---------
OIL EQUIPMENT & SUPPLIES - 1.15%
8,000 Baker Hughes Inc............................................ 263,000
5,000 Diamond Offshore Drilling, Inc.(a).......................... 286,250
10,000 Rowan Companies, Inc.(a).................................... 147,500
10,000 Tidewater, Inc.............................................. 438,750
---------
1,135,500
---------
PUBLISHING - 0.66%
3,000 Gannett Co., Inc............................................ 212,250
6,000 Tribune Co.................................................. 435,750
---------
648,000
---------
REAL ESTATE INVESTMENT TRUSTS - 1.33%
9,000 FelCor Suite Hotels, Inc.................................... 274,500
7,000 National Health Investors, Inc.............................. 229,250
</TABLE>
61
AIM V.I. GROWTH AND INCOME FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
--------- -----------
<C> <S> <C>
REAL ESTATE INVESTMENT TRUSTS -
(CONTINUED)
7,000 Patriot American Hospitality, Inc.(a).... $ 207,375
9,000 Spieker Properties, Inc.................. 245,250
10,000 Starwood Lodging Trust................... 363,750
-----------
1,320,125
-----------
RETAIL (FOOD & DRUGS) - 0.47%
14,000 Safeway Inc.(a).......................... 462,000
-----------
RETAIL (STORES) - 1.50%
20,000 Price/Costco Inc.(a)..................... 432,500
7,000 Saks Holdings, Inc.(a)................... 238,875
12,000 Sears, Roebuck & Co...................... 583,500
8,000 Toys 'R' Us, Inc.(a)..................... 228,000
-----------
1,482,875
-----------
SCIENTIFIC INSTRUMENTS - 0.37%
7,000 Varian Associates, Inc................... 362,250
-----------
SEMICONDUCTORS - 2.07%
15,000 Intel Corp............................... 1,101,562
15,000 Motorola, Inc............................ 943,125
-----------
2,044,687
-----------
TELECOMMUNICATIONS - 3.62%
7,500 ADC Telecommunications, Inc.(a).......... 337,500
6,000 Airtouch Communications, Inc.(a)......... 169,500
14,000 American Portable Telecom, Inc.(a)....... 150,500
7,000 Andrew Corp.(a).......................... 376,250
20,000 Frontier Corp............................ 612,500
10,000 Lucent Technologies, Inc.(a)............. 378,750
8,500 Nokia Corp.-ADR (Finland)................ 314,500
10,000 Pacific Telesis Group.................... 337,500
4,000 Telecomunicacoes Brasileiras S/A
Telebras-ADR (Brazil)................... 278,500
5,000 Tellabs, Inc.(a)......................... 334,375
8,000 Vodafone Group PLC-ADR (United Kingdom).. 295,000
-----------
3,584,875
-----------
TELEPHONE - 3.62%
14,000 Ameritech Corp........................... 831,250
22,000 BellSouth Corp........................... 932,250
16,000 Cincinnati Bell, Inc..................... 834,000
12,000 GTE Corp................................. 537,000
9,000 SBC Communications, Inc.................. 443,250
-----------
3,577,750
-----------
TEXTILES - 0.19%
5,500 Liz Claiborne, Inc....................... 190,437
-----------
TOBACCO - 1.26%
12,000 Philip Morris Companies, Inc............. 1,248,000
-----------
TRANSPORTATION (MISCELLANEOUS) - 0.35%
12,000 Canadian Pacific Limited (Canada)........ 264,000
3,500 Trico Marine Services, Inc.(a)............ 77,875
-----------
341,875
-----------
UTILITIES - 0.52%
12,000 American Electric Power Co............... 511,500
-----------
Total Common Stocks...................... 66,135,771
-----------
</TABLE>
62
AIM V.I. GROWTH AND INCOME FUND
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- -----------
<C> <S> <C>
CONVERTIBLE CORPORATE BONDS - 16.81%
ADVERTISING/BROADCASTING - 0.19%
$400,000 Jacor Communications, Sr. Conv. LYON, 5.50%,
06/12/11(b).......................................... $ 189,000
-----------
BUSINESS SERVICES - 0.33%
150,000 Career Horizons Inc., Conv. Bonds, 7.00%, 11/01/02(c)
(Acquired 11/27/95-05/22/96; Cost $222,750).......... 318,919
-----------
CABLE TELEVISION - 0.74%
900,000 Comcast Corp., Conv. Notes, 6.00%, 04/15/07(b)........ 434,250
300,000 International Cabletel Inc., Conv. Sub. Deb., 7.00%,
06/15/08(c)
(Acquired 06/07/96; Cost $300,000)................... 295,875
-----------
730,125
-----------
CHEMICALS - 0.92%
850,000 Sandoz Capital BVI Ltd., Sr. Conv. Deb., 2.00%,
10/06/02(c)
(Acquired 01/09/96-06/05/96; Cost $869,063).......... 913,750
-----------
COMPUTER MINI/PCS - 0.83%
600,000 Apple Computer Inc., Conv. Sub. Notes, 6.00%,
06/01/01(c)
(Acquired 03/04/96; Cost $287,625)................... 574,500
200,000 Unisys Corp., Conv. Sub. Notes, 8.25%, 03/15/06....... 246,000
-----------
820,500
-----------
COMPUTER NETWORKING - 0.55%
350,000 3Com Corp., Conv. Sub. Notes, 10.25%, 11/01/01(c)
(Acquired 11/14/95-06/17/96; Cost $560,269).......... 546,000
-----------
COMPUTER PERIPHERALS - 0.56%
300,000 EMC Corp., Conv. Sub. Notes, 4.25%, 01/01/01.......... 322,500
200,000 Sanmina Corp., Conv. Sub. Notes, 5.50%, 08/15/02(c)
(Acquired 01/02/96-05/22/96; Cost $250,000).......... 230,000
-----------
552,500
-----------
COMPUTER SOFTWARE/SERVICES - 0.19%
350,000 Automatic Data Processing, Conv. LYON, 5.25%,
02/20/12(b).......................................... 179,812
-----------
CONSUMER NON-DURABLES - 0.23%
200,000 Metro Pacific Corp., Conv. Deb., 2.50%, 04/11/03(c)
(Acquired 04/02/96-05/22/96; Cost $204,000).......... 225,000
-----------
ELECTRONIC COMPONENTS/MISCELLANEOUS - 1.04%
600,000 ADT Operations Inc., Conv. Sub. LYON, 4.32%,
07/06/10(b).......................................... 337,500
150,000 Checkpoint Systems, Inc., Conv. Sub. Deb., 5.25%,
11/01/05(c)
(Acquired 10/27/95-05/27/96; Cost $189,375).......... 284,250
200,000 Dovatron International, Inc., Conv. Sub. Notes, 6.00%,
10/15/02(c)
(Acquired 01/02/96-04/18/96; Cost $216,000).......... 196,000
200,000 SCI Systems Inc., Conv. Sub. Notes, 5.00%, 05/01/06(c)
(Acquired 05/07/96-05/08/96; Cost $221,804).......... 210,500
-----------
1,028,250
-----------
FINANCE (ASSET MANAGEMENT) - 0.48%
250,000 First Financial Management, Sr. Conv. Deb., 5.00%,
12/15/99............................................. 472,500
-----------
FINANCE (CONSUMER CREDIT) - 0.21%
150,000 Aames Financial Corp., Conv. Sub. Deb., 5.50%,
03/15/06(c)
(Acquired 02/16/96; Cost $150,938)................... 206,250
-----------
FOREIGN GOVERNMENT SECURITIES - 0.41%
400,000 Republic of Italy, Conv. Notes, 5.00%, 06/28/01....... 409,000
-----------
HOTELS/MOTELS - 0.31%
250,000 HFS Inc., Sr. Conv. Notes, 4.75%, 03/01/03............ 308,750
-----------
</TABLE>
63
AIM V.I. GROWTH AND INCOME FUND
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- -----------
<C> <S> <C>
LEISURE & RECREATION - 0.52%
$ 500,000 IMAX Corp., Conv. Deb., 5.75%, 04/01/03(c)
(Acquired 04/02/96; Cost $500,000)................... $ 517,500
-----------
MACHINERY (MISCELLANEOUS) - 0.74%
600,000 Thermo Electron Corp.,Conv. Deb., 4.25%, 01/01/03(c)
(Acquired 11/28/95-05/26/96; Cost $674,545).......... 735,000
-----------
MEDICAL (DRUGS) - 0.72%
600,000 ICN Pharmaceuticals, Inc., Conv. Sub. Notes, 8.50%,
11/15/99............................................. 716,700
-----------
MEDICAL (PATIENT SERVICES) - 4.17%
300,000 American Medical Response, Conv. Sub. Notes, 5.25%,
02/01/01(c)
(Acquired 01/03/96-05/22/96; Cost $320,125).......... 328,500
150,000 Genesis Health Ventures, Sr. Conv. Sub. Deb., 6.00%,
11/30/03............................................. 314,964
200,000 HEALTHSOUTH Rehabilitation Corp., Conv. Sub. Deb.,
5.00%, 04/01/01...................................... 387,840
200,000 Multicare Co., Conv. Sub. Deb., 7.00%, 03/15/03)(c)
(Acquired 11/30/95; Cost $207,000)................... 247,960
250,000 NABI, Inc., Conv. Sub. Notes, 6.50%, 02/01/03(c)
(Acquired 02/02/96-04/24/96; Cost $256,835).......... 230,000
400,000 Phycor, Inc., Conv. Sub. Deb., 4.50%, 02/15/03........ 456,000
200,000 Prime Hospitality Corp., Conv. Sub. Notes, 7.00%,
04/15/02............................................. 296,000
500,000 Quintiles Transnational, Conv. Sub. Notes, 4.25%,
05/31/00(c)
(Acquired 04/23/96-05/23/96; Cost $529,000).......... 505,000
300,000 Renal Treatment Centers, Conv. Notes, 5.625%,
07/15/06(c)
(Acquired 06/06/96-06/07/96; Cost $299,850).......... 303,375
400,000 Rotech Medical Corp., Conv. Sub. Deb., 5.25%,
06/01/03(c)
(Acquired 05/24/96; Cost $400,350)................... 382,000
400,000 Tenet Healthcare Corp., Conv. Sub. Notes, 6.00%,
12/01/05............................................. 412,000
300,000 Veterinary Centers of America, Conv. Sub. Deb., 5.25%,
05/01/06(c)
(Acquired 04/03/96-05/30/96; Cost $295,250).......... 262,500
-----------
4,126,139
-----------
OFFICE AUTOMATION - 0.24%
200,000 Danka Business Systems PLC, (United Kingdom), Conv.
Sub. Deb., 6.75%, 04/01/02(c) (Acquired 10/27/95 -
11/30/95; Cost $264,293)............................ 237,250
-----------
OFFICE PRODUCTS - 0.56%
U.S. Office Products Co., Conv. Sub. Notes
200,000 5.50%, 02/01/01....................................... 303,736
250,000 5.50%, 05/15/03(c) (Acquired 05/14/96; Cost $250,000). 250,000
-----------
553,736
-----------
OIL & GAS (EXPLORATION & PRODUCTION) - 0.31%
250,000 Apache Corp., Conv. Sub. Deb., 6.00%, 01/15/02(c)
(Acquired 06/14/96-06/19/96; Cost $287,625).......... 302,500
-----------
OIL EQUIPMENT & SUPPLIES - 0.26%
200,000 Pride Petroleum Services, Inc., Conv. Sub. Deb.,
6.25%, 02/15/06...................................... 261,000
-----------
POLLUTION CONTROL - 0.57%
250,000 Sanifill, Inc., Conv. Sub. Deb., 5.00%, 03/01/06...... 297,500
200,000 U.S. Filter Corp., Conv. Sub. Notes, 6.00%,
09/15/05(c)
(Acquired 02/01/96; Cost $237,032)................... 271,000
-----------
568,500
-----------
RETAIL (STORES) - 0.46%
400,000 Federated Department Stores, Conv. Notes, 5.00%,
10/01/03............................................. 459,500
-----------
</TABLE>
64
AIM V.I. GROWTH AND INCOME FUND
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
<C> <S> <C>
SEMICONDUCTORS - 0.22%
$ 100,000 LSI Logic Corp., Conv. Sub. Notes, 5.50%, 03/15/01(c)
(Acquired 06/05/96; Cost $245,857)................... $ 216,500
-----------
TELECOMMUNICATIONS - 1.05%
250,000 Broadband Technologies, Conv. Sub. Notes, 5.00%,
05/15/01(c)
(Acquired 05/17/96 - 06/07/96; Cost $250,121)........ 248,750
400,000 General Instrument, Conv. Jr. Sub. Notes, 5.00%,
06/15/00............................................. 494,500
200,000 World Communications Corp., Conv. Sub. Notes, 5.00%,
08/15/03............................................. 292,161
-----------
1,035,411
-----------
Total Convertible Corporate Bonds..................... 16,630,092
-----------
<CAPTION>
SHARES
---------
<C> <S> <C>
CONVERTIBLE PREFERRED STOCKS - 7.16%
AUTOMOBILE (MANUFACTURERS) - 0.63%
6,000 American Radio Systems - $3.50 Conv. Pfd.(c)
(Acquired 06/19/96; Cost $300,000)................... 357,000
5,000 SFX Broadcasting, Inc. - Series D, $3.25 Conv. Pfd.(c)
(Acquired 05/22/96 - 05/23/96; Cost $251,350)........ 261,875
-----------
618,875
-----------
COMPUTER MINI/PCS - 0.24%
5,000 Wang Laboratories Inc. - Series B, $3.25 Dep. Conv.
Pfd.(c)
(Acquired 02/21/96 - 04/24/96; Cost $267,494)........ 238,750
-----------
COMPUTER SOFTWARE/SERVICES - 0.45%
4,000 Ceridian Corp. - $2.75 Conv. Pfd...................... 444,000
-----------
FINANCE (CONSUMER CREDIT) - 0.60%
3,000 Penncorp Financial Group - $3.375 Conv. Pfd........... 223,125
5,000 SunAmerica Inc. - Series E, $3.10 Dep. Conv. Pfd...... 373,750
-----------
596,875
-----------
FUNERAL SERVICES - 0.98%
10,000 SCI Finance LLC - Series A, $3.125 Conv. Pfd.......... 966,250
-----------
INSURANCE (LIFE & HEALTH) - 0.93%
8,000 Conseco, Inc. - $4.278 Conv. Pfd. PRIDES.............. 620,000
5,000 United Companies Financial - $2.97 Conv. Pfd. PRIDES.. 297,500
-----------
917,500
-----------
INSURANCE (MULTI-LINE PROPERTY) - 0.24%
6,000 PMI Group, Inc. (The) - $2.30 Exch. Conv. Pfd......... 237,000
-----------
MEDICAL (PATIENT SERVICES) - 0.21%
8,000 FHP International Corp. - Series A, $1.25 Conv. Pfd... 204,000
-----------
OIL & GAS (DRILLING) - 0.33%
5,000 Reading & Bates - $1.62 Conv. Pfd..................... 325,625
-----------
OIL & GAS (SERVICES) - 0.51%
10,000 Atlantic Richfield Co. - $2.228 Exch. Conv. Pfd....... 243,750
10,000 Enron Corp. - $1.359 Conv. Pfd. ACES.................. 258,750
-----------
502,500
-----------
RETAIL (STORES) - 0.74%
5,000 Ann Taylor Finance Trust - $4.25 Conv. Pfd.(c)
(Acquired 04/18/96 - 05/22/96; Cost $265,322)........ 298,125
8,000 Kmart Financing, Inc. - $3.87 Conv. Pfd............... 434,000
-----------
732,125
-----------
</TABLE>
65
AIM V.I. GROWTH AND INCOME FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
---------- -------
<C> <S> <C>
TELECOMMUNICATIONS - 0.66%
4,000 LCI International, Inc. - $1.25 Exch. Conv. Pfd...... $ 334,000
5,000 MFS Communications Co., Inc. - $2.68 Conv. Pfd. DECS. 317,500
-----------
651,500
-----------
TRANSPORTATION (MISCELLANEOUS) - 0.45%
6,000 Continental Air Finance Trust - $4.25 Conv. Pfd.(c)
(Acquired 11/21/95 - 05/22/96; Cost $317,275)....... 442,500
-----------
UTILITIES - 0.21%
8,000 MCN Corp. - $2.013 Conv. Pfd. PRIDES(c)
(Acquired 04/23/96; Cost $191,052).................. 204,000
-----------
Total Convertible Preferred Stocks................... 7,081,500
-----------
<CAPTION>
PRINCIPAL
AMOUNT
----------
<C> <S> <C>
U.S. TREASURY SECURITIES - 4.01%
U.S. TREASURY NOTES - 4.01%
$1,000,000 5.00%, 01/31/98...................................... 984,490
1,000,000 5.125%, 02/28/98..................................... 985,400
1,000,000 6.125%, 03/31/98..................................... 1,001,090
1,000,000 5.875%, 04/30/98..................................... 996,510
-----------
Total U.S. Treasury Securities....................... 3,967,490
-----------
REPURCHASE AGREEMENTS - 4.37%(d)
317,889 Daiwa Securities America, Inc., 5.50%, 07/01/96(e)... 317,889
4,000,000 Nomura Securities International, Inc., 5.53%,
07/01/96(f)......................................... 4,000,000
-----------
Total Repurchase Agreements.......................... 4,317,889
-----------
TOTAL INVESTMENTS - 99.22%........................... 98,132,742
OTHER ASSETS LESS LIABILITIES - 0.78%................ 773,575
-----------
NET ASSETS - 100.00%................................. $98,906,317
===========
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) Non-income producing security.
(b) Zero coupon bond. The interest rate shown represents the rate of the
original issue discount.
(c) Restricted security. May be resold to qualified institutional buyers in
accordance with the provisions of Rule 144A under the Securities Act of
1933, as amended. The valuation of these securities has been determined in
accordance with procedures established by the Board of Directors. The
aggregate market value of these securities at June 30, 1996 was
$10,841,129, which represented 10.96% of the net assets.
(d) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value as being 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(e) Joint repurchase agreement entered into on 06/28/96 with maturing value of
$270,069,404. Collateralized by $258,303,000 U.S. Treasury obligations,
7.875% due 11/15/07.
(f) Joint repurchase agreement entered into on 06/28/96 with a maturing value
of $330,152,075. Collateralized by $335,544,000 U.S. Government and
Treasury obligations, 0% to 9.55% due 07/01/96 to 09/08/15.
<TABLE>
<CAPTION>
Abbreviations:
<S> <C> <C>
ACES -Automatic Common Exchangeable Securities Jr. -Junior
ADR -American Depository Receipt LYON -Liquid Yield Option Notes
Conv. -Convertible Pfd. -Preferred
Deb. -Debentures PRIDES -Preferred Redeemable Increased Dividend
DECS -Dividend Enhanced Convertible Stock Equity Securities
Dep. -Depository Sr. -Senior
Exch. -Exchangeable Sub. -Subordinated
</TABLE>
See Notes to Financial Statements.
66
AIM V.I. GROWTH AND INCOME FUND
<PAGE>
AIM V.I. GROWTH AND INCOME FUND STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost $91,440,832)................... $ 98,132,742
Receivables for:
Investments sold................................................ 1,244,114
Capital stock sold.............................................. 507,306
Dividends and interest.......................................... 342,540
Investment for deferred compensation plan......................... 6,065
Other assets...................................................... 40
------------
Total assets.................................................. 100,232,807
------------
LIABILITIES:
Payables for:
Investments purchased........................................... 1,245,275
Deferred compensation plan...................................... 6,065
Accrued advisory fees............................................. 49,362
Accrued administrative services fees.............................. 2,948
Accrued directors' fees........................................... 1,500
Accrued operating expenses........................................ 21,340
------------
Total liabilities............................................. 1,326,490
------------
Net assets applicable to shares outstanding....................... $ 98,906,317
============
Capital shares, $.001 par value per share:
Authorized...................................................... 250,000,000
============
Outstanding..................................................... 7,129,403
============
Net asset value, offering and redemption price per share.......... $13.87
======
</TABLE>
See Notes to Financial Statements.
67
AIM V.I. GROWTH AND INCOME FUND
<PAGE>
AIM V.I. GROWTH AND INCOME FUND STATEMENT OF OPERATIONS
For the six months ended June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $4,765 foreign withholding tax)................ $ 595,467
Interest......................................................... 375,644
----------
Total investment income......................................... 971,111
----------
EXPENSES:
Advisory fees.................................................... 202,023
Custodian fees................................................... 33,808
Administrative services fees..................................... 17,688
Directors' fees and expenses..................................... 3,209
Other............................................................ 17,347
----------
Total expenses.................................................. 274,075
----------
Net investment income.............................................. 697,036
----------
REALIZED AND UNREALIZED GAIN FROM INVESTMENT SECURITIES, FOREIGN
CURRENCIES, AND FUTURES CONTRACTS:
Net realized gain from:
Investment securities............................................ 425,495
Foreign currencies............................................... 4,843
Futures contracts................................................ 127
----------
430,465
----------
Unrealized appreciation of:
Investment securities............................................ 4,150,638
Foreign currencies............................................... 277
----------
4,150,915
----------
Net gain on investment securities, foreign currencies, and futures
contracts......................................................... 4,581,380
----------
Net increase in net assets resulting from operations............... $5,278,416
==========
</TABLE>
AIM V.I. GROWTH AND INCOME FUND STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 1996 and the eleven months ended December
31, 1995
(Unaudited)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
----------- ------------
<S> <C> <C>
OPERATIONS:
Net investment income............................... $ 697,036 $ 336,371
Net realized gain from investment securities,
foreign currencies, and futures contracts.......... 430,465 1,441,764
Net unrealized appreciation of investment
securities, foreign currencies, and futures
contracts.......................................... 4,150,915 2,467,076
----------- -----------
Net increase in net assets resulting from
operations........................................ 5,278,416 4,245,211
Net increase from capital stock transactions........ 55,060,689 28,382,638
Distributions to shareholders from net investment
income............................................. -- (325,888)
Distributions from capital gains.................... -- (1,114,895)
----------- -----------
Net increase in net assets......................... 60,339,105 31,187,066
NET ASSETS:
Beginning of period................................. 38,567,212 7,380,146
----------- -----------
End of period....................................... $98,906,317 $38,567,212
=========== ===========
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in).......... $90,855,642 $35,794,953
Undistributed net investment income................. 707,343 10,307
Undistributed net realized gain from investment
securities, foreign currencies and futures
contracts ......................................... 651,145 220,680
Unrealized appreciation of investment securities,
foreign currencies and futures contracts........... 6,692,187 2,541,272
----------- -----------
$98,906,317 $38,567,212
=========== ===========
</TABLE>
See Notes to Financial Statements.
68
AIM V.I. GROWTH AND INCOME FUND
<PAGE>
AIM V.I. GROWTH AND INCOME FUND NOTES TO FINANCIAL STATEMENTS
June 30, 1996
(Unaudited)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
AIM Variable Insurance Funds, Inc. (the "Company"), is a Maryland corporation
organized on January 22, 1993, and is registered under the Investment Company
Act of 1940 (the "1940 Act"), as amended, as an open-end, series, management
investment company consisting of nine portfolios. Matters affecting each
portfolio are voted on exclusively by the shareholders of such portfolio. The
assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only
to the AIM V.I. Growth and Income Fund (the "Fund"). The Fund's investment
objective is to seek growth of capital, with current income as a secondary
objective. Currently, shares of the Fund are sold only to insurance company
separate accounts to fund the benefits of variable annuity contracts.
The following is a summary of the significant accounting policies followed by
the Fund in the presentation 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 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.
A. Security Valuations - Equity securities, including warrants, that are listed
on a national securities exchange or part of the NASDAQ National Market
System are valued at the last reported sales price or if there has been no
sale that day, at the mean between the closing bid and asked prices on that
day. Securities traded in the over-the-counter market, except (i) securities
for which representative exchange prices are available, and (ii) securities
reported in the NASDAQ National Market System, are valued at the mean
between representative last bid and asked prices obtained from an electronic
quotation reporting system, if such prices are available, or from
established market makers. Exchange listed convertible bonds are valued at
the mean between the closing bid and asked prices obtained from a broker-
dealer. Debt obligations that are issued or guaranteed by the U.S. Treasury
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 at the
mean between last bid and asked prices based upon quotes furnished by
independent sources. Short-term investments with remaining maturities of up
to and including 60 days are valued at amortized cost which approximates
market value. Short-term securities that mature in more than 60 days are
valued at current market quotations. 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 authority of, the Board of
Directors.
B. Securities Transactions, Investment Income and Distributions - Securities
transactions are accounted for on a trade date basis. Interest income is
recorded as earned from settlement date and is recorded on the accrual
basis. Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Realized gains or losses from securities transactions are
recorded on the identified cost basis.
C. Federal Income Taxes - It is the Fund's policy to continue to comply with
the requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income and capital
gains to its shareholders. Therefore, no provision for federal income taxes
is recorded in the financial statements.
D. Stock Index Futures Contracts - The Fund may purchase or sell stock index
futures contracts as a hedge against changes in market conditions. Initial
margin deposits required upon entering into futures contracts are satisfied
by the segregation of specific securities as collateral for the account of
the broker (the Fund's agent in acquiring the futures position). During the
period the futures contracts are open, changes in the value of the contracts
are recognized as unrealized gains or losses by "marking to market" on a
daily basis to reflect the market value of the contracts at the end of each
day's trading. Variation margin payments are made or received depending upon
whether unrealized gains or losses are incurred. When the contracts are
closed, the Fund recognizes a realized gain or loss equal to the difference
between the proceeds from, or cost of, the closing transaction and the
Fund's basis in the contract. Risks include the possibility of an illiquid
market and the change in the value of the contracts may not correlate with
changes in the value of the securities being hedged.
E. 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.
F. Foreign Currency Contracts - A forward 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 forward contract to attempt to minimize the
risk to the Fund from adverse changes in the relationship between
currencies.
69
AIM V.I. GROWTH AND INCOME FUND
<PAGE>
The Fund may also enter into a forward contract for the purchase or sale of a
security denominated in a 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.
NOTE 2 - INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company 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 an annual rate of 0.65% of
the first $250 million of the Fund's average daily net assets, plus 0.60% of
the Fund's average daily net assets in excess of $250 million. This agreement
requires AIM to reduce its fees or, if necessary, make payments to the Fund to
the extent required to satisfy any expense limitations imposed by the
securities laws or regulations thereunder of any state in which the Fund's
shares are qualified for sale.
Pursuant to a master administrative services agreement between the Company and
AIM, with respect to the Fund, the Company has agreed to reimburse certain
administrative costs incurred in providing accounting services to the Fund.
During the six months ended June 30, 1996, AIM was reimbursed $17,688 for such
services.
The Company has entered into a master distribution agreement with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Fund.
Certain officers and directors of the Company are officers of AIM and AIM
Distributors.
During the six months ended June 30, 1996, the Fund incurred legal fees of
$1,310 for services rendered by Kramer, Levin, Naftalis & Frankel as counsel to
the Board of Directors. A member of that firm is a director of the Company.
NOTE 3 - DIRECTORS' FEES
Directors' fees represent remuneration paid or accrued to each director who is
not an "interested person" of AIM. The Company may invest directors' fees, if
so elected by a director, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 4 - INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term
securities) purchased and sold by the Fund during the six months ended June 30,
1996 was $95,527,864 and $42,291,890, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
on a tax basis, as of June 30, 1996 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of investment securities......... $ 8,010,809
Aggregate unrealized (depreciation) of investment securities....... (1,318,835)
-----------
Net unrealized appreciation of investment securities............... $ 6,691,974
===========
</TABLE>
<TABLE>
<S> <C>
Cost of investments for tax purposes is $91,440,768.
</TABLE>
NOTE 5 - CAPITAL STOCK
Changes in capital stock outstanding during the six months ended June 30, 1996
and the eleven months ended December 31, 1995 were as follows:
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
---------------------- ----------------------
Shares Amount Shares Amount
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Sold........................... 4,167,365 $56,102,349 2,208,514 $27,189,904
Issued as reinvestment of
distributions................. -- -- 115,538 1,440,783
Reacquired..................... (79,192) (1,041,660) (22,290) (248,049)
--------- ----------- --------- -----------
4,088,173 $55,060,689 2,301,762 $28,382,638
========= =========== ========= ===========
</TABLE>
70
AIM V.I. GROWTH AND INCOME FUND
<PAGE>
NOTE 6 - FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a share outstanding of
the Fund during the six months ended June 30, 1996, the eleven months ended
December 31, 1995 and the period May 2, 1994 (date operations commenced)
through January 31, 1995.
<TABLE>
<CAPTION>
June 30, December 31, January 31,
1996 1995 1995
-------- ------------ -----------
<S> <C> <C> <C>
Net asset value, beginning of period. $ 12.68 $ 9.98 $10.00
------- ------- ------
Income from investment operations:
Net investment income.............. 0.10 0.14 0.11
Net gains (losses) on securities
(both realized and unrealized).... 1.09 3.11 (0.02)
------- ------- ------
Total from investment operations.. 1.19 3.25 0.09
------- ------- ------
Less distributions:
Dividends from net investment
income............................ -- (0.14) (0.11)
Distributions from capital gains... -- (0.41) --
------- ------- ------
Total distributions............... -- (0.55) (0.11)
------- ------- ------
Net asset value, end of period....... $ 13.87 $ 12.68 $ 9.98
======= ======= ======
Total return(a)...................... 9.38% 32.65% 0.90%
======= ======= ======
Ratios/supplemental data:
Net assets, end of period (000s
omitted)............................ $98,906 $38,567 $7,380
======= ======= ======
Ratio of expenses to average net
assets.............................. 0.60%(b) 0.78% 1.07%(c)(d)
======= ======= ======
Ratio of net investment income to
average net assets.................. 1.52%(b) 1.92% 1.95%(c)(d)
======= ======= ======
Portfolio turnover rate.............. 69% 145% 96%
======= ======= ======
</TABLE>
- ------
(a) Total return is not annualized.
(b) Ratios are annualized and based on average net assets of $92,396,150.
(c) Annualized.
(d) Annualized ratios of expenses and net investment income to average net
assets prior to waiver of advisory fees are 1.72% and 1.30%, respectively.
71
AIM V.I. GROWTH AND INCOME FUND
<PAGE>
AIM V.I. INTERNATIONAL EQUITY FUND SCHEDULE OF INVESTMENTS
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
SHARES MARKET
---------- VALUE
------
<C> <S> <C>
FOREIGN STOCKS & OTHER EQUITY INTERESTS - 95.16%
ARGENTINA - 1.94%
20,900 Banco de Galicia y Buenos Aires S.A. de C.V. - ADR
(Banking).......................................... $ 540,788
88,000 Perez Companc S.A. - Class B(a) (Oil & Gas -
Services)......................................... 576,631
16,500 Telefonica de Argentina S.A. - ADR (Telephone)...... 488,813
38,400 YPF Sociedad Anonima - ADR (Oil & Gas - Services)... 864,000
------------
2,470,232
------------
AUSTRALIA - 2.33%
33,000 News Corp. Ltd. (The) - ADR (Publishing)............ 664,125
131,052 QBE Insurance Group, Ltd. (Insurance - Broker)...... 777,558
336,300 QNI Ltd. (Metals - Miscellaneous)................... 750,563
109,500 Western Mining Corp. Holding Ltd. (Metals -
Miscellaneous).................................... 783,065
------------
2,975,311
------------
AUSTRIA - 0.48%
6,100 OMV AG (Oil & Gas - Exploration & Production)....... 615,442
------------
BELGIUM - 1.37%
4,000 Barco Industries (Electronic
Components/Miscellaneous).......................... 641,503
1,500 Colruyt S.A. (Retail - Food & Drug)................. 503,171
320 UCB S.A. (Medical - Drugs).......................... 599,588
------------
1,744,262
------------
BRAZIL - 0.79%
14,500 Telecomunicacoes Brasileiras S/A - Telebras - ADR
(Telecommunications)............................... 1,009,563
------------
CANADA - 1.24%
9,700 Newbridge Networks Corp.(a) (Computer Networking)... 635,350
6,500 Northern Telecom Ltd. (Telecommunications).......... 353,438
44,000 TELUS Corp. (Telecommunications).................... 592,983
------------
1,581,771
------------
CHILE - 0.46%
6,000 Compania de Telefonos de Chile S.A. - ADR
(Telephone)........................................ 588,750
------------
DENMARK - 1.26%
7,800 Danisco A/S (Food/Processing)....................... 388,768
4,300 Novo Nordisk A/S - Class B (Medical - Drugs)........ 609,200
4,500 Sophus Berendsen A/S - Class B (Retail - Stores).... 602,355
------------
1,600,323
------------
FRANCE - 7.33%
1,570 Carrefour Supermarche (Retail - Stores)............. 880,294
4,300 Castorama Dubois (Retail - Stores).................. 847,694
2,300 Cetelem (Finance - Consumer Credit)................. 517,361
5,600 Christian Dior S.A. (Consumer Non-Durables)......... 729,450
5,800 Compagnie Francaise d'Etudes et de Construction
Technip (Engineering & Construction)............... 534,489
2,400 Ecco S.A. (Business Services)....................... 604,246
2,275 Essilor International - Compagnie Generale d'Optique
(Medical Instruments/Products)..................... 644,869
1,000 LVMH Moet Hennessy Louis Vuitton (Beverages -
Alcoholic)........................................ 237,382
3,560 Pinault-Printemps-Redoute, S.A. (Retail - Food &
Drug).............................................. 1,246,512
2,000 Rexel S.A. (Transportation - Miscellaneous)......... 552,920
2,390 Roussel-Uclaf (Medical - Drugs)..................... 573,849
11,000 Schneider S.A. (Electronic
Components/Miscellaneous).......................... 577,417
1,400 Sodexho S.A. (Business Services).................... 621,666
10,300 Total S.A. - Class B (Oil & Gas - Exploration &
Production)........................................ 764,550
------------
9,332,699
------------
</TABLE>
72
AIM V.I. INTERNATIONAL EQUITY FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
---------- ------
<C> <S> <C>
GERMANY - 5.02%
12,000 Adidas A.G.(a) (Shoes & Related Apparel)............ $ 1,009,405
1,350 Altana A.G. (Chemicals)............................. 1,043,686
28,000 Continental A.G. (Automobile/Truck Parts & Tires)... 454,850
880 Gehe A.G. (Medical - Drugs)......................... 591,490
15,000 Hoechst A.G. (Chemicals)............................ 509,043
4,100 SAP A.G. - Preferred Stock (Computer
Software/Services)................................. 608,595
5,500 SGL Carbon A.G. (Metals - Miscellaneous)............ 643,867
11,300 Siemens A.G. (Electric Services).................... 604,203
17,500 Veba A.G. (Electric Services)....................... 930,763
------------
6,395,902
------------
HONG KONG - 6.12%
12,000 Asia Satellite Telecommunications Holdings Ltd. -
ADR(a) (Telecommunications)....................... 357,000
116,000 Cheung Kong Holdings Ltd. (Real Estate)............. 835,443
952,000 Cosco Pacific Ltd. (Transportation - Miscellaneous). 682,565
607,368 First Pacific Co. Ltd. (Conglomerates).............. 933,712
66,400 Hang Seng Bank Ltd. (Banking)....................... 669,078
453,600 Hong Kong & China Gas Co. Ltd. (Electric Power)..... 723,693
37,800 Hong Kong & China Gas Co. Ltd. - Rights (Electric
Power)............................................. 9,889
67,000 HSBC Holdings PLC (Banking)......................... 1,012,686
104,000 Hutchison Whampoa Ltd. (Conglomerates).............. 654,299
311,000 New World Infrastructure(a) (Building Materials).... 662,916
528,000 Shanghai Petrochemical Co., Ltd. (Chemicals)........ 150,062
84,600 Sun Hung Kai Properties Ltd. (Real Estate).......... 855,202
122,000 Varitronix International (Electronic
Components/Miscellaneous).......................... 254,534
------------
7,801,079
------------
INDONESIA - 0.73%
187,000 PT Bank International Indonesisa (Banking).......... 923,953
------------
IRELAND - 0.36%
8,000 Elan Corp. PLC-ADR(a) (Medical - Drugs)............. 457,000
------------
ISRAEL - 0.37%
12,500 Teva Pharmaceutical Industries Ltd. - ADR (Medical -
Drugs)............................................ 473,438
------------
ITALY - 3.30%
65,000 Ente Nazionale Idrocarburi S.p.A.(a) (Oil & Gas -
Exploration & Production)......................... 324,565
54,550 Istituto Mobiliare Italiano S.p.A. (Banking)........ 458,701
450,000 Parmalat Finanziaria S.p.A. (Food/Processing)....... 600,980
350,000 Pirelli S.p.A. (Automobile/Truck Parts & Tires)..... 590,629
503,800 Telecom Italia Mobile S.p.A.(a)
(Telecommunications)............................... 1,129,828
510,000 Telecom Italia S.p.A. (Telecommunications).......... 1,098,103
------------
4,202,806
------------
JAPAN - 23.80%
26,000 Alpine Electronics (Electronic
Components/Miscellaneous).......................... 487,359
50,000 Amada Co., Ltd. (Building Materials - Tools)........ 539,478
36,150 Bank of Tokyo - Mitsubishi (Banking - Money Center). 839,583
55,000 Bridgestone Corp. (Automobile/Truck Parts & Tires).. 1,051,068
58,000 Canon, Inc. (Office Products)....................... 1,209,162
31,400 Daiichi Corp. (Electronic Components/Miscellaneous). 913,016
117 DDI Corp. (Telecommunications)...................... 1,022,740
53,000 Honda Motor Co. (Automobile - Manufacturers)........ 1,376,309
15,000 Hoya Corp. (Electronic Components/Miscellaneous).... 485,530
30,000 Jusco Co. (Retail - Stores)......................... 984,776
112,000 Komatsu Ltd. (Machinery - Heavy).................... 1,106,021
41,000 Matsushita Electric Indl Co. (Electronic
Components/Miscellaneous).......................... 764,778
24,000 Murata Mfg. Co., Ltd. (Electronic
Components/Miscellaneous).......................... 910,712
4,000 Nichiei Co., Ltd. (Business Services)............... 266,996
325,000 Nippon Steel Co. (Steel)............................ 1,117,359
2,690 Nippon Television Network
(Advertising/Broadcasting)......................... 836,282
</TABLE>
73
AIM V.I. INTERNATIONAL EQUITY FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
---------- ------
<C> <S> <C>
JAPAN - (CONTINUED)
100,000 Nippon Zeon Co., Ltd. (Chemicals).................. $ 621,771
303,000 NKK Corp.(a) (Steel)............................... 919,819
51,000 Nomura Securities Co., Ltd. (Finance - Asset
Management)....................................... 997,943
100,000 NSK Ltd. (Metals - Miscellaneous).................. 758,012
39 NTT Data Communications Systems Co. (Computer
Software/Services)................................ 1,169,661
85,000 Okuma Corp.(a) (Machine Tools)..................... 948,201
12,000 Omron Corp. (Electronic Components/Miscellaneous).. 255,658
108,000 Ricoh Co., Ltd. (Office Products).................. 1,145,522
20,000 Rohm Co., Ltd. (Electronic
Components/Miscellaneous)......................... 1,324,007
42,000 Shizuoka Bank (Banking)............................ 541,490
10,200 SMC (Machinery - Miscellaneous).................... 790,893
19,000 Sony Corp. (Electronic Components/Miscellaneous)... 1,252,595
218,000 Sumitomo Heavy Industries, Ltd.(a) (Machinery -
Heavy)........................................... 954,803
21,000 TDK Corp. (Electronic Components/Miscellaneous).... 1,255,795
28,000 Toyo Communication Equipment (Telecommunications).. 629,818
45,000 Toyota Motor Corp. (Automobile - Manufacturers).... 1,127,417
56,000 Yamaha Corp.(a) (Electronic
Components/Miscellaneous)......................... 926,805
43,000 Yamatake-Honeywell (Airlines)...................... 782,426
-------------
30,313,805
-------------
MALAYSIA - 2.29%
110,000 Commerce Asset Holdings Berhad (Finance - Asset
Management)....................................... 670,275
61,000 Edaran Otomobil Nasional Berhad (Retail - Stores).. 584,446
79,000 Malayan Banking Berhad (Banking)................... 760,072
175,000 Technology Resources Industries Berhad(a)
(Conglomerates)................................... 610,343
57,000 YTL Corp. Berhad (Engineering & Construction)...... 297,054
-------------
2,922,190
-------------
MEXICO - 1.30%
745,000 Grupo Industrial Maseca S.A. de CV - Class B
(Food/Processing)................................. 777,904
19,500 Panamerican Beverages, Inc. (Beverages - Soft
Drinks)........................................... 872,625
-------------
1,650,529
-------------
NETHERLANDS - 5.43%
4,900 Akzo Nobel (Conglomerates)......................... 587,540
38,000 Elsevier N.V. (Publishing)......................... 577,074
29,200 Getronics N.V. (Computer Software/Services)........ 647,177
9,000 Gucci Group N.V. - New York shares - ADR
(Textiles)........................................ 580,500
2,600 Heineken N.V. (Beverages - Alcoholic).............. 581,437
19,000 Koninklijke Ahold N.V. (Retail - Food & Drug)...... 1,030,490
5,200 Nutricia Verenigde Bedrijven N.V.
(Food/Processing)................................. 550,337
6,300 Oce-Van Der Grinten N.V. (Office Automation)....... 667,863
2,850 Royal Dutch Petroleum Co. (Oil & Gas - Services)... 440,493
32,500 Ver Ned Uitgevuer Bezit N.V. (Publishing).......... 504,984
6,590 Wolters Kluwer N.V. (Publishing)................... 749,224
-------------
6,917,119
-------------
NORWAY - 0.60%
8,400 Norsk Hydro A.S. (Chemicals)....................... 411,644
77,000 UNI Storebrand A.S.(a) (Insurance - Life & Health). 346,489
-------------
758,133
-------------
PHILIPPINES - 2.67%
804,000 C&P Homes, Inc.(a) (Homebuilding).................. 698,130
1,696,450 Filinvest Land Inc.(a) (Real Estate)............... 696,063
3,568,000 Metro Pacific Corp. (Conglomerates)................ 1,062,229
22,200 Metropolitan Banks & Trust Co. (Banking)........... 622,786
2,480,000 Southeast Asia Cement Holdings, Inc.(a) (Building
Materials)........................................ 321,832
-------------
3,401,040
-------------
</TABLE>
74
AIM V.I. INTERNATIONAL EQUITY FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
---------- ------
<C> <S> <C>
PORTUGAL - 0.38%
18,600 Portugal Telecom S.A.(a) (Telecommunications)....... $ 486,452
------------
SINGAPORE - 2.88%
54,000 Cerebos Pacific Ltd. (Food/Processing).............. 486,038
95,000 City Developments Ltd. (Real Estate)................ 740,609
216,000 DBS Land Ltd. (Real Estate)......................... 740,921
152,000 Far East Levingston Shipbuilding Ltd.
(Transportation - Miscellaneous)................... 840,255
126,000 Overseas Union Bank Ltd. (Banking).................. 866,194
------------
3,674,017
------------
SOUTH AFRICA - 0.46%
54,000 Sasol Ltd. (Oil & Gas - Exploration & Production)... 585,737
------------
SPAIN - 3.89%
36,000 Centros Comerciales Pryca, S.A. (Retail - Food &
Drug).............................................. 899,965
13,800 Empresa Nacional de Electricidad, S.A. (Telephone).. 861,388
4,750 Gas Natural SDG - E.S.A. (Natural Gas Pipeline)..... 998,203
83,800 Iberdrola S.A. (Electric Power)..................... 860,880
12,000 Repsol S.A. (Oil & Gas - Services).................. 417,640
18,100 Tabacalera S.A. (Tobacco)........................... 912,035
------------
4,950,111
------------
SWEDEN - 2.71%
7,300 Astra AB - Class A (Medical - Drugs)................ 318,681
39,200 Autoliv AB (Automobile/Truck Parts & Tires)......... 1,196,115
6,640 Hennes & Mauritz AB - B shares (Retail - Stores).... 616,849
27,900 Securitas AB (Security & Safety Services)........... 585,807
15,700 Skandia Forsakrings AB (Insurance - Multi-Line
Property).......................................... 416,210
14,980 Telefonaktiebolaget L.M. Ericsson - ADR
(Telecommunications)............................... 322,070
------------
3,455,732
------------
SWITZERLAND - 2.34%
2,400 ADIA SA (Business Services)......................... 602,784
500 Ciba-Geigy Ltd. (Chemicals)......................... 609,902
30 Roche Holdings A.G. (Medical - Drugs)............... 229,043
550 Sandoz A.G. (Chemicals)............................. 629,539
400 Schindler Holding A.G. (Engineering & Construction). 425,532
500 Swissair A.G.(a) (Airlines)......................... 484,323
------------
2,981,123
------------
THAILAND - 2.08%
12,600 Bank of Ayudhya Ltd. (Banking)...................... 37,227
152,130 Krung Thai Bank PLC (Banking)....................... 713,156
37,300 Siam Commercial Bank Public Co. Ltd. (Banking)...... 540,729
57,300 Thai Farmers Bank PLC (Banking)..................... 627,512
86,000 Total Access Communication Public Co. Ltd.
(Telecommunications)............................... 731,000
------------
2,649,624
------------
UNITED KINGDOM - 11.23%
63,466 Argos PLC (Retail - Stores)......................... 735,295
37,000 Bass PLC (Beverages - Alcoholic).................... 464,583
76,000 B.A.T. Industries PLC (Tobacco)..................... 591,334
31,350 BOC Group PLC (Chemicals - Specialty)............... 449,631
117,000 British Petroleum Co. PLC (Oil & Gas - Exploration &
Production)........................................ 1,025,726
367,200 Burton Group PLC (Retail - Stores).................. 883,926
78,000 Compass Group PLC (Food/Processing)................. 709,256
101,000 Dixons Group PLC (Retail - Stores).................. 826,635
112,000 FKI PLC (Conglomerates)............................. 295,698
50,000 GKN PLC (Automobile/Truck Parts & Tires)............ 767,200
</TABLE>
75
AIM V.I. INTERNATIONAL EQUITY FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
---------- --------
<C> <S> <C>
UNITED KINGDOM - (CONTINUED)
60,300 Granada Group PLC (Leisure & Recreation)........... $ 806,778
83,000 Marks & Spencer PLC (Retail - Stores).............. 606,484
147,000 Medeva PLC (Medical - Drugs)....................... 575,307
97,500 Next PLC (Retail - Stores)......................... 851,743
235,000 NFC PLC (Transportation - Miscellaneous)........... 678,832
33,750 Premier Farnell PLC (Electronic
Components/Miscellaneous)......................... 354,849
59,800 Provident Financial PLC (Finance - Consumer
Credit)........................................... 426,745
7,000 Reliance Industries Ltd. - GDR (Chemicals)......... 92,750
94,000 Rentokil Group PLC (Business Services)............. 596,350
38,000 Siebe PLC (Electronic Components/Miscellaneous).... 539,991
53,500 Smiths Industries PLC (Electronics/Defense)........ 584,936
63,100 Standard Chartered PLC (Banking)................... 628,158
240,000 WPP Group (Advertising/Broadcasting)............... 808,817
------------
14,301,024
------------
Total Foreign Stocks & Other Equity Interests...... 121,219,167
------------
<CAPTION>
PRINCIPAL
AMOUNT
----------
<C> <S> <C>
CONVERTIBLE BONDS - 0.96%
BERMUDA - 0.45%
$ 490,000 MBL International Finance Bermuda, Conv. Yankee
Bonds, 3.00%, 11/30/02 (Financial Services)....... 575,750
------------
JAPAN - 0.51%
650,000 Sumitomo Bank, Conv. American Depository Notes,
0.75%,
05/31/01 (Banking)................................ 643,500
------------
Total Convertible Bonds............................ 1,219,250
------------
REPURCHASE AGREEMENTS - 4.45%(b)
664,203 Daiwa Securities America Inc., 5.50%, 07/01/96(c).. 664,203
5,000,000 Nomura Securities International Inc., 5.53%,
07/01/96(d)....................................... 5,000,000
------------
Total Repurchase Agreements........................ 5,664,203
------------
TOTAL INVESTMENTS - 100.57%........................ 128,102,620
OTHER ASSETS LESS LIABILITIES - (0.57%)............ (731,101)
------------
NET ASSETS - 100.00%............................... $127,371,519
============
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) Non-income producing security.
(b) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value as being 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(c) Joint repurchase agreement entered into 06/28/96 with a maturing value of
$270,069,404. Collateralized by $258,303,000 U.S. Treasury obligations,
7.875% due 11/15/07.
(d) Joint repurchase agreement entered into 06/28/96 with a maturing value of
$330,152,075. Collateralized by $335,544,000 U.S. Treasury obligations, 0%
to 9.55% due 07/01/96 to 09/08/15.
Abbreviations:
ADR- American Depository Receipt
Conv.- Convertible
GDR- Global Depository Receipt
See Notes to Financial Statements.
76
AIM V.I. INTERNATIONAL EQUITY FUND
<PAGE>
AIM V.I. INTERNATIONAL EQUITY FUND STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost $108,139,063).................. $128,102,620
Foreign currencies, at market value (cost $1,390,474)............. 1,395,776
Receivables for:
Capital stock sold.............................................. 169,070
Investments sold................................................ 1,235,888
Dividends and interest.......................................... 303,512
Organizational costs, net......................................... 5,302
Investment for deferred compensation plan......................... 8,804
Other assets...................................................... 601
------------
Total assets.................................................. 131,221,573
------------
LIABILITIES:
Payables for:
Investments purchased........................................... 3,731,938
Deferred compensation plan...................................... 8,804
Accrued advisory fees............................................. 75,926
Accrued directors' fees........................................... 1,648
Accrued administrative services fees.............................. 4,543
Accrued operating expenses........................................ 27,195
------------
Total liabilities............................................. 3,850,054
------------
Net assets applicable to shares outstanding....................... $127,371,519
============
Capital shares, $.001 par value per share:
Authorized...................................................... 250,000,000
============
Outstanding..................................................... 8,250,806
============
Net asset value, offering and redemption price per share.......... $15.44
======
</TABLE>
See Notes to Financial Statements.
77
AIM V.I. INTERNATIONAL EQUITY FUND
<PAGE>
AIM V.I. INTERNATIONAL EQUITY FUND STATEMENT OF OPERATIONS
For the six months ended
June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $153,280 foreign withholding tax)............. $ 973,396
Interest........................................................ 186,946
-----------
Total investment income........................................ 1,160,342
-----------
EXPENSES:
Advisory fees................................................... 386,578
Custodian fees.................................................. 76,498
Administrative services fees.................................... 27,258
Directors' fees and expenses.................................... 3,524
Organizational costs............................................ 1,446
Other........................................................... 16,002
-----------
Total expenses................................................. 511,306
-----------
Net investment income............................................. 649,036
-----------
REALIZED AND UNREALIZED GAIN FROM INVESTMENT SECURITIES AND
FOREIGN CURRENCY TRANSACTIONS:
Net realized gain from:
Investment securities........................................... 3,254,579
Foreign currency transactions................................... 9,472
-----------
3,264,051
-----------
Unrealized appreciation of:
Investment securities........................................... 8,732,000
Foreign currencies.............................................. 653
-----------
8,732,653
-----------
Net gain on investment securities and foreign currencies.......... 11,996,704
-----------
Net increase in net assets resulting from operations.............. $12,645,740
===========
</TABLE>
AIM V.I. INTERNATIONAL EQUITY FUND STATEMENT OF CHANGES IN NET ASSETS
For the six months ended
June 30, 1996 and the eleven months ended December 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income.............................. $ 649,036 $ 457,524
Net realized gain (loss) on sales of investment
securities and foreign currency transactions...... 3,264,051 (107,659)
Net unrealized appreciation of investment
securities and foreign currencies................. 8,732,653 13,454,304
------------ -----------
Net increase in net assets resulting from
operations....................................... 12,645,740 13,804,169
Net increase from capital stock transactions....... 32,468,924 13,556,877
Distributions to shareholders from net investment
income............................................ -- (123,270)
------------ -----------
Net increase in net assets........................ 45,114,664 27,237,776
NET ASSETS:
Beginning of period................................ 82,256,855 55,019,079
------------ -----------
End of period...................................... $127,371,519 $82,256,855
============ ===========
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in)......... $104,221,595 $71,752,671
Undistributed net investment income................ 1,023,935 374,899
Undistributed net realized gain (loss) from
investment securities and foreign currency
transactions...................................... 2,157,808 (1,106,243)
Unrealized appreciation of investment securities
and foreign currencies............................ 19,968,181 11,235,528
------------ -----------
$127,371,519 $82,256,855
============ ===========
</TABLE>
See Notes to Financial Statements.
78
AIM V.I. INTERNATIONAL EQUITY FUND
<PAGE>
AIM V.I. INTERNATIONAL EQUITY FUND NOTES TO FINANCIAL STATEMENTS
June 30, 1996
(Unaudited)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
AIM Variable Insurance Funds, Inc. (the "Company"), is a Maryland corporation
organized on January 22, 1993, and is registered under the Investment Company
Act of 1940 (the "1940 Act"), as amended, as an open-end, series, management
investment company consisting of nine portfolios. Matters affecting each
portfolio are voted on exclusively by the shareholders of such portfolio. The
assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only
to AIM V.I. International Equity Fund (the "Fund"). The Fund's investment
objective is to seek to provide long-term growth of capital by investing in a
diversified portfolio of international equity securities the issuers of which
are considered by AIM to have strong earnings momentum. Currently, shares of
the Fund are sold only to insurance company separate accounts to fund the
benefits of variable annuity contracts.
The following is a summary of the significant accounting policies followed by
the Fund in the presentation 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 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.
A. Security Valuations - A security listed or traded on an exchange is valued
at the last sales price on the exchange on which the securities are traded
or, lacking any sales, at the mean between the closing bid and asked prices
on the day of valuation. If a mean is not available, as is the case in some
foreign markets, the closing bid will be used absent a last sales prices.
Securities traded in the over-the-counter market are valued at the mean
between the closing bid and asked prices on valuation date. Securities for
which market quotations are either 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. Exchange listed convertible bonds are valued at the
mean between the closing bid and asked prices obtained from a broker-dealer.
Debt obligations that are issued or guaranteed by the U.S. Treasury 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 at the
mean between last bid and asked prices based upon quotes furnished by
independent sources. Investments with maturities of 60 days or less are
valued on the basis of amortized cost which approximates market value.
Generally, trading in foreign securities is substantially completed each day
at various times prior to the close of the New York Stock Exchange. 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 New York Stock
Exchange. 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 New York Stock Exchange which will 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. 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.
C. Foreign Currency Contracts - A forward 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 forward 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 forward contract for the amount
of a purchase or sale of a security denominated in a 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.
D. Securities Transactions, Investment Income and Distributions - Securities
transactions are accounted for on a trade date basis. Realized gains or
losses 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 an accrual basis. Dividend income and distributions to
shareholders are recorded on the ex-dividend date.
79
AIM V.I. INTERNATIONAL EQUITY FUND
<PAGE>
E. 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. The Fund has a capital loss
carryforward of $733,117 (which may be carried forward to offset future
taxable capital gains, if any) which expires, if not previously utilized,
through the year 2003. The Fund cannot distribute capital gains to
shareholders until the tax loss carryforwards have been utilized.
F. Organizational Costs - Organizational costs of $14,461 are being amortized
over five years.
NOTE 2 - INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company 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 an annual rate of 0.75% of
the first $250 million of the Fund's average daily net assets, plus 0.70% of
the Fund's average daily net assets in excess of $250 million. This agreement
requires AIM to reduce its fees or, if necessary, make payments to the Fund to
the extent required to satisfy any expense limitations imposed by the
securities laws or regulations thereunder of any state in which the Fund's
shares are qualified for sale.
Pursuant to a master administrative services agreement between the Company and
AIM, with respect to the Fund, the Company has agreed to reimburse certain
administrative costs incurred in providing accounting services to the Fund.
During the six months ended June 30, 1996, AIM was reimbursed $27,258 for such
services.
The Company has entered into a master distribution agreement with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Fund.
Certain officers and directors of the Company are officers of AIM and AIM
Distributors.
During the six months ended June 30, 1996, the Fund incurred legal fees of
$1,370 for services rendered by Kramer, Levin, Naftalis & Frankel as counsel to
the Board of Directors. A member of that firm is a director of the Company.
NOTE 3 - DIRECTORS' FEES
Directors' fees represent remuneration paid or accrued to each director who is
not an "interested person" of AIM. The Company may invest directors' fees, if
so elected by a director, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 4 - INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term
securities) purchased and sold by the Fund during the six months ended June 30,
1996 was $73,318,270 and $36,919,959, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
on a tax basis, as of June 30, 1996 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of investment securities......... $20,876,213
Aggregate unrealized (depreciation) of investment securities....... (915,827)
-----------
Net unrealized appreciation of investment securities............... $19,960,386
===========
</TABLE>
Cost of investments for tax purposes is $108,142,234.
NOTE 5 - CAPITAL STOCK
Changes in capital stock outstanding during the six months ended June 30, 1996
and the eleven months ended December 31, 1995 were as follows:
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
--------------------- ----------------------
Shares Amount Shares Amount
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Sold............................ 2,353,869 $34,238,643 1,612,585 $20,607,902
Issued as reinvestment of
distributions.................. -- -- 9,199 123,270
Reacquired...................... (123,603) (1,769,719) (591,239) (7,174,295)
--------- ----------- --------- -----------
2,230,266 $32,468,924 1,030,545 $13,556,877
========= =========== ========= ===========
</TABLE>
80
AIM V.I. INTERNATIONAL EQUITY FUND
<PAGE>
NOTE 6 - FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a share outstanding of
the Fund during the six months ended June 30, 1996, the eleven months ended
December 31, 1995, the year ended January 31, 1995 and the period May 5, 1993
(date operations commenced) through January 31, 1994.
<TABLE>
<CAPTION>
January 31,
June 30, December 31, -------------------
1996 1995 1995 1994
-------- ------------ ------- -------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 13.66 $ 11.03 $ 12.49 $ 10.00
-------- ------- ------- -------
Income from investment
operations:
Net investment income. 0.06 0.07 0.06 --
Net gains (losses) on
securities (both
realized and
unrealized).......... 1.72 2.58 (1.49) 2.49
-------- ------- ------- -------
Total from investment
operations.......... 1.78 2.65 (1.43) 2.49
-------- ------- ------- -------
Less distributions:
Dividends from net
investment income.... -- (0.02) (0.03) --
-------- ------- ------- -------
Net asset value, end of
period................. $ 15.44 $ 13.66 $ 11.03 $ 12.49
======== ======= ======= =======
Total return(a)......... 13.03% 24.04% (11.48)% 24.90%
======== ======= ======= =======
Ratios/supplemental
data:
Net assets, end of
period (000s omitted).. $127,372 $82,257 $55,019 $23,533
======== ======= ======= =======
Ratio of expenses to
average net assets..... 0.99%(b) 1.15%(c) 1.27%(d) 1.98%(c)(e)
======== ======= ======= =======
Ratio of net investment
income to average net
assets................. 1.26%(b) 0.75%(c) 0.60%(d) (0.15)%(c)(e)
======== ======= ======= =======
Portfolio turnover rate. 38% 67% 64% 26%
======== ======= ======= =======
</TABLE>
- ------
(a) Total returns for periods less than one year are not annualized.
(b) Ratios are annualized and based on average net assets of $103,891,240.
(c) Annualized.
(d) Ratios of expenses and net investment income to average net assets prior to
waiver of advisory fees are 1.28% and 0.59%, respectively.
(e) Annualized ratios of expenses and net investment income (loss) to average
net assets prior to waiver of advisory fees are 3.06% and (1.23)%,
respectively.
81
AIM V.I. INTERNATIONAL EQUITY FUND
<PAGE>
AIM V.I. MONEY MARKET FUND SCHEDULE OF INVESTMENTS
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- -----------
<C> <S> <C>
COMMERCIAL PAPER - 55.56%(a)
ASSET-BACKED SECURITIES - 14.08%
$ 3,000,000 Asset Securitization Cooperative Corp., 5.41%,
8/20/96......................................... $ 2,977,458
3,000,000 Clipper Receivables Corp., 5.38%, 07/23/96....... 2,990,137
3,000,000 Preferred Receivables Funding Corp., 5.42%,
07/31/96........................................ 2,986,450
-----------
8,954,045
-----------
AUTOMOBILE - 4.67%
3,000,000 Toyota Motor Credit Corp., 5.40%, 09/10/96....... 2,968,050
-----------
COMPUTERS & OFFICE EQUIPMENT - 3.92%
2,500,000 Xerox Credit Corp., 5.25%, 07/18/96.............. 2,493,801
-----------
FINANCE (MISCELLANEOUS) - 23.49%
Cargill Financial Services Corp.
1,000,000 4.94%, 08/05/96.................................. 995,197
2,000,000 4.88%, 08/06/96.................................. 1,990,240
3,000,000 Hertz Corp., 5.30%, 07/19/96..................... 2,992,050
3,000,000 Household Finance Corp., 5.30%, 08/12/96......... 2,981,450
3,000,000 International Lease Finance Corp., 5.28%,
08/09/96........................................ 2,982,840
3,000,000 Transamerica Finance Corp., 5.85%, 07/15/96...... 3,000,233
-----------
14,942,010
-----------
OIL & GAS (INTEGRATED) - 4.71%
3,000,000 Petrofina Delaware, Inc., 5.50%, 07/05/96........ 2,998,167
-----------
POLLUTION CONTROL - 4.69%
3,000,000 Browning-Ferris Industries, Inc., 5.36%,
08/12/96........................................ 2,981,240
-----------
Total Commercial Paper........................... 35,337,313
-----------
U.S. GOVERNMENT AGENCY SECURITIES - 3.93%
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 3.14%
2,000,000 5.45%(b), 06/02/99............................... 2,000,000
STUDENT LOAN MARKETING ASSOCIATION - 0.79%
500,000 5.43%(b), 08/20/98............................... 499,923
-----------
Total U.S. Government Agency Securities.......... 2,499,923
-----------
U.S. TREASURY SECURITIES - 9.41%
U.S. TREASURY BILLS - 4.68%
3,000,000 4.79%(c), 08/29/96............................... 2,976,450
U.S. TREASURY NOTES - 4.73%
3,000,000 6.50%, 09/30/96.................................. 3,010,929
-----------
Total U.S. Treasury Securities................... 5,987,379
-----------
MASTER NOTE AGREEMENTS - 9.43%
2,500,000 Citicorp Securities, Inc., 5.875%(d), 09/09/96... 2,500,000
3,500,000 Morgan (J.P.) Securities Inc., 5.725%(e),
10/09/96........................................ 3,500,000
-----------
Total Master Note Agreements..................... 6,000,000
-----------
Total Investments, excluding Repurchase
Agreement....................................... 49,824,615
-----------
REPURCHASE AGREEMENT - 21.29%(f)
13,540,321 Daiwa Securities America Inc., 5.50%,
07/01/96(g)..................................... 13,540,321
-----------
TOTAL INVESTMENTS - 99.62%....................... 63,364,936(h)
OTHER ASSETS LESS LIABILITIES - 0.38%............ 244,488
-----------
NET ASSETS - 100.00%............................. $63,609,424
===========
</TABLE>
82
AIM V.I. MONEY MARKET FUND
<PAGE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) Some commercial paper is traded on a discount basis. In such cases, the
interest rate shown represents the rate of discount paid or received at the
time of purchase by the Fund.
(b) Interest rates are redetermined weekly. Rates shown are in effect for the
period ending 06/30/96.
(c) U.S. Treasury Bills are traded on a discount basis. In such cases, the
interest rate shown represents the rate of discount paid or received at the
time of purchase by the Fund.
(d) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement upon 3 business days' notice to the issuer. Interest
rates are redetermined periodically. Rate shown is the rate in effect on
06/30/96.
(e) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement upon 7 days' notice to the issuer. Interest rates are
redetermined periodically. Rate shown is the rate in effect on 06/30/96.
(f) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value as being 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(g) Joint repurchase agreement entered into 06/28/96 with a maturing value of
$270,069,404. Collateralized by $258,303,000 U.S. Treasury obligations,
7.875% due 11/15/07.
(h) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
83
AIM V.I. MONEY MARKET FUND
<PAGE>
AIM V.I. MONEY MARKET FUND STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, excluding repurchase agreements, at value (amortized
cost)............................................................. $49,824,615
Repurchase agreement............................................... 13,540,321
Receivables for:
Capital stock sold............................................... 83,457
Interest......................................................... 174,727
Organizational costs, net.......................................... 5,302
Investment for deferred compensation plan.......................... 8,663
Other assets....................................................... 335
-----------
Total assets................................................... 63,637,420
-----------
LIABILITIES:
Payable for deferred compensation plan............................. 8,663
Accrued advisory fees.............................................. 15,093
Accrued administrative service fees................................ 1,016
Accrued directors' fees............................................ 859
Accrued operating expenses......................................... 2,365
-----------
Total liabilities.............................................. 27,996
-----------
Net assets applicable to shares outstanding........................ $63,609,424
===========
Capital shares, $.001 par value per share:
Authorized....................................................... 250,000,000
===========
Outstanding...................................................... 63,615,024
===========
Net asset value, offering and redemption price per share........... $1.00
=====
</TABLE>
AIM V.I. MONEY MARKET FUND STATEMENT OF OPERATIONS
For the six months ended
June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.......................................................... $1,772,918
----------
EXPENSES:
Advisory fees..................................................... 131,596
Custodian fees.................................................... 13,134
Administrative services fees...................................... 10,735
Directors' fees and expenses...................................... 3,911
Organizational costs.............................................. 1,216
Other............................................................. 16,473
----------
Total expenses................................................... 177,065
----------
Net investment income............................................... 1,595,853
----------
Net realized gain on sales of investment securities................. 10,637
----------
Net increase in net assets resulting from operations................ $1,606,490
==========
</TABLE>
<TABLE>
<CAPTION>
AIM V.I. MONEY MARKET FUND STATEMENT OF CHANGES IN NET ASSETS
For the six
months ended June 30 ,1996 and the eleven months ended December 31, 1995
(Unaudited)
JUNE 30, DECEMBER 31,
1996 1995
----------- ------------
<S> <C> <C>
OPERATIONS:
Net investment income.............................. $ 1,595,853 $ 2,278,242
Net realized gain (loss) on sales of investment
securities........................................ 10,637 (17,141)
----------- -----------
Net increase in net assets resulting from
operations....................................... 1,606,490 2,261,101
Net increase (decrease) from capital stock
transactions...................................... (1,906,967) 34,506,043
Distributions to shareholders from net investment
income............................................ (1,595,853) (2,278,242)
----------- -----------
Net increase (decrease) in net assets............. (1,896,330) 34,488,902
NET ASSETS:
Beginning of period................................ 65,505,754 31,016,852
----------- -----------
End of period...................................... $63,609,424 $65,505,754
=========== ===========
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in)......... $63,615,024 $65,521,991
Undistributed net realized gain (loss) on sales of
investment securities............................. (5,600) (16,237)
----------- -----------
$63,609,424 $65,505,754
=========== ===========
</TABLE>
See Notes to Financial Statements.
84
AIM V.I. MONEY MARKET FUND
<PAGE>
AIM V.I. MONEY MARKET FUND NOTES TO FINANCIAL STATEMENTS
June 30, 1996
(Unaudited)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
AIM Variable Insurance Funds, Inc. (the "Company"), is a Maryland corporation
organized on January 22, 1993, and is registered under the Investment Company
Act of 1940 (the "1940 Act"), as amended, as an open-end, series, management
investment company consisting of nine portfolios. Matters affecting each
portfolio are voted on exclusively by the shareholders of such portfolio. The
assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only
to the AIM V.I. Money Market Fund (the "Fund"). The Fund's investment objective
is to seek to provide as high a level of current income as is consistent with
the preservation of capital and liquidity. Currently, shares of the Fund are
sold only to insurance company separate accounts to fund the benefits of
variable annuity contracts.
The following is a summary of the significant accounting policies followed by
the Fund in the presentation 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 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.
A. Security Valuations - The Fund invests only in securities which have
maturities of 397 days or less from the date of purchase. The securities are
valued on the basis of amortized cost which approximates market value. This
method values a security at its cost on the date of purchase and thereafter,
assumes a constant amortization to maturity of any discount or premiums.
B. Securities Transactions, Investment Income and Distributions - Securities
transactions are accounted for on a trade date basis. Interest income,
adjusted for amortization of premiums and discounts on investments, is
recorded as earned from settlement date and is recorded on the accrual
basis. Distributions to shareholders are declared and paid daily. Realized
gains or losses from securities transactions are recorded on the identified
cost basis.
C. Federal Income Taxes - It is the Fund's policy to continue to comply with
the requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income and capital
gains to its shareholders. Therefore, no provision for federal income taxes
is recorded in the financial statements. The Fund has a capital loss
carryforward (which may be carried forward to offset future taxable gains,
if any) of $17,143 which expires, if not previously utilized, in the year
2003. The Fund cannot distribute capital gains to shareholders until the tax
loss carryforwards have been utilized.
D. Organizational Costs - Organizational costs of $14,461 are being amortized
over five years.
NOTE 2 - INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company 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 an annual rate of 0.40% of
the first $250 million of the Fund's average daily net assets, plus 0.35% of
the Fund's average daily net assets in excess of $250 million. This agreement
requires AIM to reduce its fees or, if necessary, make payments to the Fund to
the extent required to satisfy any expense limitations imposed by the
securities laws or regulations thereunder of any state in which the Fund's
shares are qualified for sale.
Pursuant to a master administrative services agreement between the Company and
AIM, with respect to the Fund, the Company has agreed to reimburse certain
administrative costs incurred in providing accounting services to the Fund.
During the six months ended June 30, 1996, AIM was reimbursed $10,735 for such
services.
The Company has entered into a master distribution agreement with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Fund.
Certain officers and directors of the Company are officers of AIM and AIM
Distributors.
During the six months ended June 30, 1996, the Fund incurred legal fees of
$1,348 for services rendered by Kramer, Levin, Naftalis & Frankel as counsel to
the Board of Directors. A member of that firm is a director of the Company.
NOTE 3 - DIRECTORS' FEES
Directors' fees represent remuneration paid or accrued to each director who is
not an "interested person" of AIM. The Company may invest directors' fees, if
so elected by a director, in mutual fund shares in accordance with a deferred
compensation plan.
85
AIM V.I. MONEY MARKET FUND
<PAGE>
NOTE 4 - CAPITAL STOCK
Changes in capital stock outstanding during six months ended June 30, 1996 and
the eleven months ended December 31, 1995 were as follows:
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
------------------------- -------------------------
Shares Amount Shares Amount
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Sold..................... 32,714,810 $ 32,714,810 80,119,672 $ 80,119,672
Issued as reinvestment of
distributions........... 1,595,853 1,595,853 2,278,242 2,278,242
Reacquired............... (36,217,630) (36,217,630) (47,891,871) (47,891,871)
----------- ------------ ----------- ------------
(1,906,967) $ (1,906,967) 34,506,043 $ 34,506,043
=========== ============ =========== ============
</TABLE>
NOTE 5 - FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a share outstanding of
the Fund during the six months ended June 30, 1996, the eleven months ended
December 31, 1995, the year ended January 31, 1995 and the period May 5, 1993
(date operations commenced) through January 31, 1994.
<TABLE>
<CAPTION>
January 31,
June 30, December 31, -------------------
1996 1995 1995 1994
-------- ------------ ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning
of period................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- -------
Income from investment
operations:
Net investment income... 0.02 0.05 0.04 0.02
------- ------- ------- -------
Less distributions:
Dividends from net
investment income...... (0.02) (0.05) (0.04) (0.02)
------- ------- ------- -------
Net asset value, end of
period................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= =======
Total return.............. 4.90%(a) 5.69%(a) 3.98% 2.27%(a)
======= ======= ======= =======
Ratios/supplemental data:
Net assets, end of period
(000s omitted)........... $63,609 $65,506 $31,017 $13,891
======= ======= ======= =======
Ratio of expenses to
average net assets....... 0.54%(b) 0.53% 0.63%(c) 0.95%(a)(d)
======= ======= ======= =======
Ratio of net investment
income to average net
assets................... 4.84%(b) 5.40% 4.14%(c) 2.29%(a)(d)
======= ======= ======= =======
</TABLE>
- ------
(a) Annualized.
(b) Ratios are annualized and based on average net assets of $66,343,380.
(c) Ratios of expenses and net investment income to average net assets prior to
waiver of advisory fees are 0.70% and 4.07%, respectively.
(d) Annualized ratios of expenses and net investment income to average net
assets prior to waiver of advisory fees are 1.53% and 1.70%, respectively.
86
AIM V.I. MONEY MARKET FUND
<PAGE>
AIM V.I. VALUE FUND SCHEDULE OF INVESTMENTS
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
DOMESTIC COMMON STOCKS - 71.52%
<C> <S> <C>
AEROSPACE/DEFENSE - 2.46%
36,000 Boeing Co................................................ $ 3,136,500
9,000 Northrop Grumman Corp.................................... 613,125
65,000 Sundstrand Corp.......................................... 2,380,625
12,000 United Technologies Corp................................. 1,380,000
-----------
7,510,250
-----------
AIRLINES - 0.44%
11,000 Delta Air Lines, Inc..................................... 913,000
11,000 Northwest Airlines Corp. - Class A(a).................... 434,500
-----------
1,347,500
-----------
AUTOMOBILE/TRUCK PARTS & TIRES - 0.24%
19,000 Borg-Warner Automotive................................... 750,500
-----------
BANKING - 0.46%
29,000 National City Corp....................................... 1,018,625
11,000 U.S. Bancorp............................................. 397,375
-----------
1,416,000
-----------
BANKING - 0.32%
14,000 Chase Manhattan Corp..................................... 988,750
-----------
BEVERAGES (SOFT DRINKS) - 0.51%
44,000 PepsiCo, Inc............................................. 1,556,500
-----------
BIOTECHNOLOGY - 0.29%
18,000 Guidant Corp............................................. 886,500
-----------
BUILDING MATERIALS - 0.23%
15,200 Snap-On, Inc............................................. 720,100
-----------
BUSINESS SERVICES - 0.78%
38,000 Dun & Bradstreet Corp.................................... 2,375,000
-----------
CABLE TELEVISION - 0.26%
36,000 Cox Communications, Inc. - Class A(a).................... 778,500
-----------
CHEMICALS (SPECIALTY) - 1.52%
15,800 Cabot Corp............................................... 387,100
55,000 IMC Global, Inc.......................................... 2,069,375
9,000 OM Group Inc............................................. 353,250
43,000 Praxair, Inc............................................. 1,816,750
-----------
4,626,475
-----------
COMPUTER MINI/PCS - 0.50%
15,000 Gateway 2000 Inc.(a)..................................... 510,000
54,000 Wang Laboratories, Inc.(a)............................... 1,019,250
-----------
1,529,250
-----------
COMPUTER NETWORKING - 0.82%
15,800 Belden Inc............................................... 474,000
12,600 Cheyenne Software, Inc.(a)............................... 242,550
22,000 Cisco Systems, Inc.(a)................................... 1,245,750
18,000 Comverse Technology, Inc................................. 549,000
-----------
2,511,300
-----------
COMPUTER PERIPHERALS - 0.51%
26,000 Adaptec, Inc.(a)......................................... 1,231,750
7,000 Seagate Technology(a).................................... 315,000
-----------
1,546,750
-----------
</TABLE>
87
AIM V.I. VALUE FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------- ------
<C> <S> <C>
COMPUTER SOFTWARE & SERVICES - 1.97%
5,400 American Management Systems, Inc.(a).................... $ 157,950
25,000 Computer Associates International, Inc.................. 1,781,250
72,000 Computervision Corp.(a)................................. 720,000
11,000 National Data Corp...................................... 376,750
34,000 Network General Corp.(a)................................ 731,000
12,500 SoftKey International, Inc.(a).......................... 236,719
3,300 S3, Inc.(a)............................................. 40,631
33,000 Wallace Computer Services, Inc.......................... 1,971,750
------------
6,016,050
------------
CONGLOMERATES - 0.23%
9,000 Loews Corp.............................................. 709,875
------------
CONTAINERS - 0.33%
37,000 First Brands Corp....................................... 999,000
------------
COSMETICS & TOILETRIES - 0.51%
8,500 Clorox Co............................................... 753,313
9,400 Colgate-Palmolive Co.................................... 796,650
------------
1,549,963
------------
ELECTRIC SERVICES - 9.43%
77,000 Allegheny Power System, Inc............................. 2,377,375
94,000 American Electric Power Co.............................. 4,006,750
40,000 Baltimore Gas & Electric Co............................. 1,135,000
16,000 CINergy Corp............................................ 512,000
96,000 Consolidated Edison Co. of New York, Inc................ 2,808,000
21,000 Dominion Resources, Inc................................. 840,000
21,000 DQE, Inc................................................ 577,500
36,000 Duke Power Co........................................... 1,845,000
62,600 Edison International Co. ............................... 1,103,325
65,000 Entergy Corp............................................ 1,844,375
37,000 FPL Group, Inc.......................................... 1,702,000
29,000 Houston Industries, Inc................................. 714,125
44,000 Illinova Corp........................................... 1,265,000
42,000 Southern Co. (The)...................................... 1,034,250
45,000 Texas Utilities Co...................................... 1,923,750
182,000 Unicom Corp............................................. 5,073,250
------------
28,761,700
------------
ELECTRONIC COMPONENTS/MISCELLANEOUS - 0.18%
6,100 Emerson Electric Co..................................... 551,288
------------
ELECTRONIC/PC DISTRIBUTORS - 0.10%
8,800 Wyle Electronics........................................ 291,500
------------
FINANCE (ASSET MANAGEMENT) - 1.67%
24,300 Donaldson, Lufkin & Jenrette, Inc....................... 753,300
12,000 Finova Group, Inc....................................... 585,000
72,000 Lehman Brothers Holdings, Inc........................... 1,782,000
22,000 Merrill Lynch & Co., Inc................................ 1,432,750
12,000 Salomon, Inc............................................ 528,000
------------
5,081,050
------------
</TABLE>
88
AIM V.I. VALUE FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------- ------
<C> <S> <C>
FINANCE (CONSUMER CREDIT) - 4.33%
9,100 A T & T Capital Corp.................................... $ 398,125
18,000 Federal Home Loan Mortgage Corp......................... 1,539,000
225,000 Federal National Mortgage Association................... 7,537,500
22,000 MBNA Corp............................................... 627,000
6,000 PMI Group, Inc. (The)................................... 255,000
36,000 Student Loan Marketing Association...................... 2,664,000
3,150 SunAmerica, Inc......................................... 177,975
------------
13,198,600
------------
FINANCE (SAVINGS & LOAN) - 0.10%
11,500 Ahmanson (H.F.) & Co.................................... 310,500
------------
FOOD/PROCESSING - 3.01%
18,000 ConAgra, Inc............................................ 816,750
49,300 Dole Food Co............................................ 2,119,900
50,000 Flowers Industries, Inc................................. 806,250
36,000 Heinz (H.J.) Co......................................... 1,093,500
3,600 Hershey Foods Corp...................................... 264,150
26,000 Hudson Foods, Inc. - Class A............................ 364,000
17,700 Interstate Bakeries Corp................................ 473,475
15,000 Kellogg Co.............................................. 1,098,750
48,300 Nabisco Holdings Corp. - Class A........................ 1,708,612
21,000 Ralcorp Holdings, Inc.(a)............................... 433,125
------------
9,178,512
------------
FUNERAL SERVICES - 1.09%
48,000 Service Corp. International............................. 2,760,000
18,000 Stewart Enterprises, Inc................................ 562,500
------------
3,322,500
------------
GAMING - 0.35%
36,000 GTECH Holdings Corp.(a)................................. 1,066,500
------------
HOME BUILDING - 0.18%
27,000 Clayton Homes, Inc...................................... 540,000
------------
INSURANCE (LIFE & HEALTH) - 0.82%
44,500 Conseco Inc............................................. 1,780,000
19,700 Provident Companies, Inc................................ 728,900
------------
2,508,900
------------
INSURANCE (MULTI-LINE PROPERTY) - 7.16%
11,000 ACE, Ltd................................................ 517,000
43,000 Aetna Life & Casualty Co................................ 3,074,500
37,000 Allstate Corp........................................... 1,688,125
14,000 American International Group, Inc....................... 1,380,750
13,200 American Re Corp........................................ 592,350
25,000 CIGNA Corp.............................................. 2,946,875
6,500 CNA Financial Corp.(a).................................. 669,500
26,000 Exel Limited............................................ 1,833,000
44,000 ITT Hartford Group, Inc................................. 2,343,000
7,000 MBIA, Inc............................................... 545,125
111,000 TIG Holdings, Inc....................................... 3,219,000
2,100 Transatlantic Holdings, Inc............................. 147,263
58,000 Travelers Group, Inc.................................... 2,646,250
9,000 Travelers/Aetna Property Casualty Corp. - Class A(a).... 255,375
------------
21,858,113
------------
</TABLE>
89
AIM V.I. VALUE FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------- ------
<C> <S> <C>
LEISURE & RECREATION - 1.67%
85,600 Callaway Golf Co........................................ $ 2,846,200
19,500 Carnival Corp. - Class A................................ 563,063
8,100 Eastman Kodak Co........................................ 629,775
37,000 Mattel, Inc............................................. 1,059,125
------------
5,098,163
------------
MACHINERY (HEAVY) - 0.39%
24,900 Case Corp............................................... 1,195,200
------------
MACHINERY (MISCELLANEOUS) - 0.59%
14,000 Cooper Industries, Inc.................................. 581,000
40,200 Pentair, Inc............................................ 1,206,000
------------
1,787,000
------------
MEDICAL (DRUGS) - 4.32%
35,000 American Home Products Corp............................. 2,104,375
8,600 Bergen Brunswig Corp.................................... 238,650
60,860 ICN Pharmaceuticals, Inc................................ 1,414,995
22,000 Pfizer Inc.............................................. 1,570,250
29,000 Pharmacia & Upjohn, Inc................................. 1,286,875
26,300 R. P. Scherer Corp.(a).................................. 1,193,362
32,200 Rhone-Poulenc Rorer, Inc................................ 2,161,425
51,000 Schering-Plough Corp.................................... 3,200,250
------------
13,170,182
------------
MEDICAL (INSTRUMENTS/PRODUCTS) - 2.87%
18,000 Arterial Vascular Engineering, Inc.(a).................. 652,500
6,500 Bausch & Lomb, Inc...................................... 276,250
127,000 Baxter International, Inc............................... 6,000,750
25,000 Boston Scientific Corp.(a).............................. 1,125,000
19,000 Hillenbrand Industries, Inc............................. 707,750
------------
8,762,250
------------
MEDICAL (PATIENT SERVICES) - 4.62%
145,000 Caremark International, Inc............................. 3,661,250
58,000 Columbia/HCA Healthcare Corp............................ 3,095,750
25,500 Health Care and Retirement Corp.(a)..................... 605,625
11,000 Health Systems International, Inc. - Class A(a)......... 298,375
6,400 Living Centers of America, Inc.(a)...................... 220,000
30,000 Manor Care, Inc......................................... 1,181,250
39,700 MedPartners/Mullikin, Inc.(a)........................... 828,738
43,000 OrNda Healthcorp(a)..................................... 1,032,000
7,000 PacifiCare Health Systems, Inc. - Class B shares(a)..... 474,250
24,000 Quorum Health Group, Inc.(a)............................ 633,000
18,000 Sybron International Corp.(a)........................... 450,000
7,000 United Healthcare Corp.................................. 353,500
23,000 U.S. Healthcare, Inc.................................... 1,265,000
------------
14,098,738
------------
METALS - 0.09%
4,000 Harsco Corp............................................. 269,000
------------
NATURAL GAS PIPELINE - 0.65%
26,000 Columbia Gas System, Inc................................ 1,355,250
16,000 El Paso Natural Gas Co.................................. 616,000
------------
1,971,250
------------
</TABLE>
90
AIM V.I. VALUE FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
OFFICE AUTOMATION - 0.32%
18,000 Xerox Corp............................................... $ 963,000
------------
OFFICE PRODUCTS - 0.19%
11,000 Reynolds & Reynolds Co. - Class A........................ 585,750
------------
OIL & GAS (EXPLORATION & PRODUCTION) - 0.29%
55,000 Oryx Energy Co.(a)....................................... 893,750
------------
OIL & GAS (INTEGRATED) - 1.57%
13,500 Mobil Corp............................................... 1,513,688
84,600 NorAm Energy Corp........................................ 920,025
9,700 Occidental Petroleum Corp................................ 240,075
26,000 Pennzoil Co.............................................. 1,202,500
11,000 Texaco Inc............................................... 922,625
------------
4,798,913
------------
OIL & GAS (REFINING & MARKETING) - 0.26%
15,960 Tosco Corp............................................... 801,968
------------
OIL EQUIPMENT & SUPPLIES - 1.61%
38,000 Baker Hughes Inc......................................... 1,249,250
33,000 BJ Services Co.(a)....................................... 1,159,125
8,000 Diamond Offshore Drilling, Inc.(a)....................... 458,000
15,000 Halliburton Co........................................... 832,500
28,000 Tidewater, Inc........................................... 1,228,500
------------
4,927,375
------------
PUBLISHING - 0.56%
37,000 New York Times Co. - Class A............................. 1,207,125
11,000 Scripps (E.W.) Co........................................ 512,875
------------
1,720,000
------------
RESTAURANTS - 0.47%
38,000 Darden Restaurants, Inc.................................. 408,500
55,000 Wendy's International, Inc............................... 1,024,375
------------
1,432,875
------------
RETAIL (FOOD & DRUG) - 0.67%
11,000 American Stores Co....................................... 453,750
48,000 Safeway, Inc.(a)......................................... 1,584,000
------------
2,037,750
------------
RETAIL (STORES) - 0.89%
18,000 Gap Inc. (The)........................................... 578,250
44,000 Sears, Roebuck & Co...................................... 2,139,500
------------
2,717,750
------------
SHOES & RELATED APPAREL - 0.13%
4,000 Nike, Inc. - Class B..................................... 411,000
------------
STEEL - 0.05%
16,300 UNR Industries, Inc...................................... 156,887
------------
TELECOMMUNICATIONS - 3.02%
53,000 A T & T Corp............................................. 3,286,000
36,000 Frontier Corp............................................ 1,102,500
22,000 Lucent Technologies, Inc................................. 833,250
90,133 MFS Communications Co., Inc.(a).......................... 3,391,254
9,000 Tellabs, Inc.(a)......................................... 601,875
------------
9,214,879
------------
</TABLE>
91
AIM V.I. VALUE FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
---------- ------
<C> <S> <C>
TELEPHONE - 4.25%
128,000 Ameritech Corp...................................... $ 7,600,000
84,000 BellSouth Corp...................................... 3,559,500
37,000 SBC Communications, Inc............................. 1,822,250
------------
12,981,750
------------
TOBACCO - 1.24%
25,000 American Brands, Inc................................ 1,134,375
42,000 Dimon, Inc.......................................... 777,000
18,000 Philip Morris Companies, Inc........................ 1,872,000
------------
3,783,375
------------
Total Domestic Common Stocks...................... 218,266,231
------------
FOREIGN STOCKS & OTHER EQUITY INTERESTS - 15.62%
AUSTRALIA - 0.47%
322,163 Westpac Banking Corp. Ltd. (Banking)................ 1,425,366
------------
CANADA - 1.94%
189,000 Canadian Pacific, Ltd. (Transportation)............. 4,158,000
CanWest Global Communications Corp.
21,000 (Advertising/Broadcasting)(a)....................... 572,250
22,000 Northern Telecom Ltd. (Telecommunications).......... 1,196,250
------------
5,926,500
------------
DENMARK - 0.61%
19,000 Danisco A/S (Food/Processing)....................... 947,000
6,500 Novo-Nordisk A/S - Class B (Medical - Drugs)........ 920,884
------------
1,867,884
------------
FRANCE - 0.17%
19,100 Rhone-Poulenc (Medical - Drugs)..................... 502,417
------------
GERMANY - 0.71%
11,000 Siemens A.G. (Electric Services).................... 588,162
29,900 VEBA A.G. (Electric Services)....................... 1,590,275
------------
2,178,437
------------
HONG KONG - 0.49%
94,000 Hutchison Whampoa Ltd. (Conglomerates).............. 591,386
90,000 Sun Hung Kai Properties Ltd. (Real Estate).......... 909,790
------------
1,501,176
------------
ITALY - 1.37%
130,300 Istituto Mobiliare Italiano S.p.A. (Banking)........ 1,095,669
590,000 Telecom Italia Mobile S.p.A.(a)
(Telecommunications)............................... 1,323,141
810,000 Telecom Italia S.p.A. (Telecommunications).......... 1,744,046
------------
4,162,856
------------
JAPAN - 2.92%
35,700 Bank of Tokyo - Mitsubishi (Banking - Money Center). 829,132
38,000 Bridgestone Corp. (Automobile/Truck Parts & Tires).. 726,192
101 DDI Corp. (Telecommunications)...................... 882,878
62,000 Fuji Photo Film (Chemicals)......................... 1,961,505
36,000 Honda Motor Co. (Automobile - Manufacturers)........ 934,851
1,360 Nippon Television Network
(Advertising/Broadcasting)......................... 422,804
46,000 Nomura Securities Co., Ltd. (Finance - Asset
Management)........................................ 900,105
26 NTT Data Communications System Co. (Computer
Software/Services)................................. 779,774
16,400 Sony Corp. (Electronic Components).................. 1,081,187
24,000 Yamaha Corp. (Electronic Components)................ 397,202
------------
8,915,630
------------
</TABLE>
92
AIM V.I. VALUE FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
---------- ------
<C> <S> <C>
NETHERLANDS - 1.51%
21,000 Unilever PLC - ADR (Food/Processing)................ $ 3,047,625
100,000 Verenigde Nederlandse Utgevbedri Verigd Bezit
(Publishing)....................................... 1,553,797
------------
4,601,422
------------
NEW ZEALAND - 0.03%
1,200 Telecom Corp. of New Zealand Ltd. - ADR
(Telecommunications)............................... 80,100
------------
NORWAY - 0.24%
165,000 UNI Storebrand A/S - Class A(a) (Insurance - Multi-
Line Property)..................................... 742,476
------------
PHILLIPPINES - 0.41%
268,000 C & P Homes, Inc.(a) (Home Building)................ 232,710
793,500 Filinvest Land Inc.(a) (Real Estate)................ 325,577
2,348,000 Metro Pacific Corp. (Conglomerates)................. 699,023
------------
1,257,310
------------
SPAIN - 0.61%
123,500 Iberdrola S.A. (Electric Power)..................... 1,268,718
17,100 Repsol S.A. (Oil & Gas - Services).................. 595,137
------------
1,863,855
------------
SWEDEN - 0.95%
6,030 Hennes & Mauritz AB - B shares (Retail - Stores).... 560,180
44,400 Skandia Forsakrings AB (Insurance - Multi-Line
Property).......................................... 1,177,052
54,000 Telefonaktiebolaget L. M. Ericsson - ADR
(Telecommunications)(a)............................ 1,161,000
------------
2,898,232
------------
SWITZERLAND - 0.88%
2,200 Ciba-Geigy Ltd. (Medical - Drugs)................... 2,683,571
------------
THAILAND - 0.13%
86,300 Krung Thai Bank PLC (Banking)....................... 404,558
------------
UNITED KINGDOM - 2.18%
160,000 Granada Group PLC (Leisure & Recreation)............ 2,140,705
53,400 SmithKline Beecham - ADR (Medical - Drugs).......... 2,903,625
160,000 Standard Chartered PLC (Finance - Asset Management). 1,592,794
------------
6,637,124
------------
Total Foreign Stocks & Other Equity Interests....... 47,648,914
------------
PREFERRED STOCKS - 0.41%
PAPER & FOREST PRODUCTS - 0.19%
23,000 James River Corp., 9.00% Conv., Pfd................. 580,750
------------
TELECOMMUNICATIONS - 0.22%
10,400 MFS Communications Co., Inc., 8.00% Conv., Pfd...... 660,400
------------
Total Preferred Stocks.............................. 1,241,150
------------
</TABLE>
93
AIM V.I. VAUE FUND
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
---------- ------
<C> <S> <C>
CORPORATE BONDS - 0.31%
FINANCE (ASSET MANAGEMENT) - 0.31%
$ 500,000 First Financial Management Corp., Conv. Bonds, 5.00%
12/15/99........................................... $ 945,000
------------
U.S. TREASURY SECURITIES - 2.84%
U.S. TREASURY BILLS(b) - 2.84%
1,200,000 5.012%, 07/05/96.................................... 1,199,022
1,200,000 4.915%, 07/11/96.................................... 1,198,034
6,500,000 5.09%, 03/06/97..................................... 6,266,650
------------
Total U.S. Treasury Securities...................... 8,663,706
------------
REPURCHASE AGREEMENTS(c) - 9.16%
957,625 Daiwa Securities America Inc., 5.50%, 07/01/96(d)... 957,625
27,000,000 Nomura Securities International Inc., 5.53%,
07/01/96(e)........................................ 27,000,000
------------
Total Repurchase Agreements......................... 27,957,625
------------
TOTAL INVESTMENTS - 99.86%.......................... 304,722,626
OTHER ASSETS LESS LIABILITIES - 0.14%............... 419,495
------------
NET ASSETS - 100.00%................................ $305,142,121
============
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS
(a) Non-income producing security.
(b) U.S. Treasury bills are traded on a discount basis. In such cases the
interest rate shown represents the rate of discount paid or received at the
time of purchase by the Fund.
(c) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value as being 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(d) Joint repurchase agreement entered into 06/28/96 with a maturing value of
$270,069,404. Collateralized by $258,303,000 U.S. Treasury obligations,
7.875% due 11/15/07.
(e) Joint repurchase agreement entered into 06/28/96 with a maturing value of
$330,152,075. Collateralized by $335,544,000 U.S. Treasury obligations, 0%
to 9.55% due 07/01/96 to 09/08/15.
Abbreviations:
ADR- American Depository Receipt
Conv.- Convertible
Pfd.- Preferred
See Notes to Financial Statements.
94
AIM V.I. VALUE FUND
<PAGE>
AIM V.I. VALUE FUND STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost $276,483,281).................. $304,722,626
Foreign currencies, at market value (cost $916,331)............... 921,851
Receivables for:
Investments sold................................................ 3,818,470
Capital stock sold.............................................. 197,089
Dividends and interest.......................................... 610,795
Investment for deferred compensation plan......................... 9,397
Organizational costs, net......................................... 5,277
Other assets...................................................... 13,553
------------
Total assets.................................................. 310,299,058
------------
LIABILITIES:
Payables for:
Investments purchased........................................... 4,665,887
Fund shares reacquired.......................................... 63,330
Deferred compensation........................................... 9,397
Options written................................................. 248,627
Accrued advisory fees............................................. 157,737
Accrued directors' fees........................................... 1,714
Accrued administrative services fees.............................. 8,302
Accrued operating expenses........................................ 1,943
------------
Total liabilities............................................. 5,156,937
------------
Net assets applicable to shares outstanding....................... $305,142,121
============
Capital shares, $.001 par value per share:
Authorized...................................................... 250,000,000
============
Outstanding..................................................... 17,927,789
============
Net asset value, offering and redemption price per share.......... $ 17.02
============
</TABLE>
See Notes to Financial Statements.
95
AIM V.I. VALUE FUND
<PAGE>
AIM V.I. VALUE FUND STATEMENT OF OPERATIONS
For the six months ended
June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest....................................................... $ 1,550,649
Dividends (net of $83,249 foreign withholding tax)............. 2,577,115
-----------
Total investment income....................................... 4,127,764
-----------
EXPENSES:
Advisory fees.................................................. 899,845
Custodian fees................................................. 66,661
Administrative service fees.................................... 19,441
Directors' fees and expenses................................... 3,881
Organizational costs........................................... 1,451
Other.......................................................... 25,645
-----------
Total expenses................................................ 1,016,924
-----------
Net investment income............................................ 3,110,840
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT SECURITIES,
FOREIGN CURRENCIES, FUTURES AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities.......................................... 12,527,918
Foreign currencies............................................. (24,024)
Futures contracts.............................................. 1,689,134
Option contracts............................................... 154,111
-----------
14,347,139
-----------
Unrealized appreciation (depreciation) of:
Investment securities.......................................... (882,595)
Foreign currencies............................................. 6,939
Futures contracts.............................................. (773,579)
Option contracts............................................... 175,832
-----------
(1,473,403)
-----------
Net gain on investment securities, foreign currencies, futures
and option contracts............................................ 12,873,736
-----------
Net increase in net assets resulting from operations............. $15,984,576
===========
</TABLE>
AIM V.I. VALUE FUND STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 1996 and the eleven months ended December
31, 1995
(Unaudited)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income............................ $ 3,110,840 $ 1,836,245
Net realized gain on sales of investment
securities, foreign currencies, futures and
option contracts ............................... 14,347,139 19,312,304
Net unrealized appreciation (depreciation) of
investment securities, foreign currencies and
option contracts................................ (1,473,403) 25,543,678
------------ ------------
Net increase (decrease) in net assets resulting
from operations................................ 15,984,576 46,692,227
Net increase from capital stock transactions....... 31,945,758 101,386,580
Distributions to shareholders from net investment
income............................................ -- (124,487)
------------ ------------
Net increase in net assets...................... 47,930,334 147,954,320
NET ASSETS:
Beginning of period.............................. 257,211,787 109,257,467
------------ ------------
End of period.................................... $305,142,121 $257,211,787
============ ============
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in)....... $240,501,431 $208,555,673
Undistributed net investment income.............. 4,930,421 1,819,581
Undistributed net realized gain from investment
securities, foreign currencies, futures and
option contracts ............................... 31,288,514 16,941,375
Unrealized appreciation of investment securities,
foreign currencies, futures and option
contracts....................................... 28,421,755 29,895,158
------------ ------------
$305,142,121 $257,211,787
============ ============
</TABLE>
See Notes to Financial Statements.
96
AIM V.I. VALUE FUND
<PAGE>
AIM V.I. VALUE FUND NOTES TO FINANCIAL STATEMENTS
June 30, 1996
(Unaudited)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
AIM Variable Insurance Funds, Inc. (the "Company"), is a Maryland corporation
organized on January 22, 1993, and is registered under the Investment Company
Act of 1940 (the "1940 Act"), as amended, as an open-end, series, management
investment company consisting of nine portfolios. Matters affecting each
portfolio are voted on exclusively by the shareholders of such portfolio. The
assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only
to the AIM V.I. Value Fund (the "Fund"). The Fund's investment objective is to
achieve long-term growth of capital by investing primarily in equity securities
judged by AIM to be undervalued relative to the current or projected earnings
of the companies issuing the securities or relative to current market values of
assets owned by the companies issuing the securities or relative to the equity
market generally. Income is a secondary objective. Currently, shares of the
Fund are sold only to insurance company separate accounts to fund the benefits
of variable annuity contracts.
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 presentation 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 mean between the closing bid and asked
prices on that day. Exchange listed convertible bonds are valued at the mean
between the closing bid and asked prices obtained from a broker-dealer. Each
security traded in the over-the-counter market (but not including securities
reported on the NASDAQ National Market System) is valued at the mean between
the last bid and asked prices based upon quotes furnished by market makers
for such securities. 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 mean of the closing bid and asked prices. Debt
obligations that are issued or guaranteed by the U.S. Treasury 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 quotations
are either 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. Short-term obligations having 60 days or less to maturity are
valued at amortized cost which approximates market value. Generally, trading
in foreign securities is substantially completed each day at various times
prior to the close of the New York Stock Exchange. 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 New York Stock Exchange.
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 New York Stock Exchange which will 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. Interest income is
recorded as earned from settlement date and is recorded on the accrual
basis. Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Realized gains or losses from securities transactions are
recorded on the identified cost basis.
C. Federal Income Taxes - For federal income tax purposes, each portfolio in
the Company is taxed as a separate entity. It is the Fund's policy to
continue to comply with the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
taxable income and capital gains to its shareholders. Therefore, no
provision for federal income taxes is recorded in the financial statements.
D. Organizational Costs - Organizational costs for the Fund of $14,461 are
being amortized over five years.
E. Stock Index Futures Contracts - The Fund may purchase or sell stock index
futures contracts as a hedge against changes in market conditions. Initial
margin deposits required upon entering into futures contracts are satisfied
by the segregation of specific securities or cash, and/or by securing a
standby letter of credit from a major commercial bank, as collateral, for
the account of the broker (the Fund's agent in acquiring the futures
position). During the period the futures contract is open, changes in the
value of the contract are recognized as unrealized gains or losses by
"marking to market" on a daily basis to reflect the market value of the
contract at the end of each day's trading. Variation margin payments are
made or received depending upon whether unrealized gains or losses are
incurred. When the contract is closed, the Fund records a realized gain or
loss equal to the
97
AIM V.I. VALUE FUND
<PAGE>
difference between the proceeds from (or cost of) the closing transaction and
the Fund's basis in the contract. Risks include the possibility of an
illiquid market and the change in the value of the contract may not correlate
with changes in the securities being hedged.
F. 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.
G. Forward Currency Contracts - A forward 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 forward 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 currency contract for the amount
of a purchase or sale of a security denominated in a 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.
H. Covered Call Options - The Fund may write call options, but only on a
covered basis; that is, the Fund will own the underlying security. Options
written by the Fund normally will have expiration dates between three and
nine months from the date written. The exercise price of a call option may
be below, equal to, or above the current market value of the underlying
security at the time the option is written. When the Fund writes a covered
call option, an amount equal to the premium received by the Fund is recorded
as an asset and an equivalent liability. The amount of the liability is
subsequently "market-to-market" to reflect the current market value of the
option written. The current market value of a written option is the last
sale price, or in the absence of a sale, the mean between the last bid and
asked prices on that day. If a written call option expires on the stipulated
expiration date, or if the Fund enters into a closing purchase transaction,
the Fund realizes a gain (or a loss if the closing purchase transaction
exceeds the premium received when the option was written) without regard to
any unrealized gain or loss on the underlying security, and the liability
related to such option is extinguished. If a written option is exercised,
the Fund realizes a gain or a loss from the sale of the underlying security
and the proceeds of the sale are increased by the premium originally
received.
A call option gives the purchaser of such option the right to buy, and the
writer (the Fund) the obligation to sell, the underlying security at the
stated exercise price during the option period. The purchaser of a call
option has the right to acquire the security which is the subject of the call
option at any time during the option period. During the option period, in
return for the premium paid by the purchaser of the option, the Fund has
given up the opportunity for capital appreciation above the exercise price
should the market price of the underlying security increase, but has retained
the risk of loss should the price of the underlying security decline. During
the option period, the Fund may be required at any time to deliver the
underlying security against payment of the exercise price. This obligation is
terminated upon the expiration of the option period or at such earlier time
at which the Fund effects a closing purchase transaction by purchasing (at a
price which may be higher than that received when the call option was
written) a call option identical to the one originally written. The Fund will
not write a covered call option if, immediately thereafter, the aggregate
value of the securities underlying all such options, determined as of the
dates such options were written, would exceed 5% of the net assets of the
Fund.
NOTE 2 - INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company 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 an annual rate of 0.65% of
the first $250 million of the Fund's average daily net assets, plus 0.60% of
the Fund's average daily net assets in excess of $250 million. These agreements
require AIM to reduce its fees or, if necessary, make payments to the Fund to
the extent required to satisfy any expense limitations imposed by the
securities laws or regulations thereunder of any state in which the Fund's
shares are qualified for sale.
Pursuant to a master administrative services agreement between the Company and
AIM, with respect to the Fund, the Company has agreed to reimburse certain
administrative costs incurred in providing accounting services to the Fund.
During the six months ended June 30, 1996, AIM was reimbursed $19,441 for such
services.
The Company has entered into a master distribution agreement with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor of the
Fund's shares.
Certain officers and directors of the Company are officers of AIM and AIM
Distributors.
During the six months ended June 30, 1996, the Fund incurred legal fees of
$1,562 for services rendered by Kramer, Levin, Naftalis & Frankel as counsel to
the Board of Directors. A member of that firm is a director of the Company.
98
AIM V.I. VALUE FUND
<PAGE>
NOTE 3 - DIRECTORS' FEES
Directors' fees represent remuneration paid or accrued to each director who is
not an "interested person" of AIM. The Company may invest a director's fees, if
so elected by such director, in mutual fund shares in accordance with a
deferred compensation plan.
NOTE 4 - INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term
securities) purchased and sold during the six months ended June 30, 1996 was
$287,762,164 and $219,287,607, respectively.
The amount of unrealized appreciation (depreciation) of investment securities
on a tax basis as of June 30, 1996 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of investment securities......... $32,268,113
Aggregate unrealized (depreciation) of investment securities....... (4,087,051)
-----------
Net unrealized appreciation of investment securities............... $28,181,062
===========
</TABLE>
Cost of investments for tax purposes is $276,541,564.
NOTE 5 - CAPITAL STOCK
Changes in capital stock outstanding during the six months ended June 30, 1996
and the eleven months ended December 31, 1995:
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
----------------------- -----------------------
Shares Amount Shares Amount
--------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Sold......................... 2,622,728 $ 42,816,667 6,903,801 $103,653,052
Issued as reinvestment of
distributions............... -- -- 7,829 124,487
Reacquired................... (664,778) (10,870,909) (176,240) (2,390,959)
--------- ------------ --------- ------------
1,957,950 $ 31,945,758 6,735,390 $101,386,580
========= ============ ========= ============
</TABLE>
NOTE 6 - OPTION CONTRACTS WRITTEN
Transactions in call options written during the six months ended June 30, 1996
are summarized as follows:
<TABLE>
<CAPTION>
Option Contracts
-------------------
Number of Premiums
Contracts Received
--------- ---------
<S> <C> <C>
Beginning of period........................................ -- --
Written.................................................... 3,000 $ 893,069
Closed..................................................... (370) (86,675)
Exercised.................................................. (680) (247,620)
Expired.................................................... (700) (134,315)
----- ---------
End of period.............................................. 1,250 $ 424,459
===== =========
</TABLE>
Open call option contracts written at June 30, 1996 were as follows:
<TABLE>
<CAPTION>
June 30,
1996 Unrealized
Contract Strike Number of Premium Market Appreciation
Issue Month Price Contracts Received Value (Depreciation)
- ----- -------- ------ --------- -------- -------- --------------
<S> <C> <C> <C> <C> <C> <C>
A T & T Corp............ Jul 60 430 $220,353 $104,813 $115,540
American Brands, Inc.... Jul 45 250 30,501 26,564 3,937
Computer Associates
International, Inc..... Oct 80 80 47,679 20,000 27,679
Emerson Electric Co..... Jul 85 60 20,305 31,500 (11,195)
Gateway 2000 Inc........ Jul 40 80 18,259 2,000 16,259
Praxair, Inc............ Oct 40 150 47,923 56,250 (8,327)
SBC Communications,
Inc.................... Jul 50 200 39,439 7,500 31,939
----- -------- -------- --------
1,250 $424,459 $248,627 $175,832
===== ======== ======== ========
</TABLE>
99
AIM V.I. VALUE FUND
<PAGE>
NOTE 7 - FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a share outstanding of
the Fund during the six months ended June 30, 1996, the eleven months ended
December 31, 1995, the year ended January 31, 1995, and the period May 5, 1993
(date operations commenced) through January 31, 1994.
<TABLE>
<CAPTION>
January 31,
June 30, December 31, ------------------
1996 1995 1995 1994
-------- ------------ -------- -------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period..... $ 16.11 $ 11.83 $ 12.17 $ 10.00
-------- -------- -------- -------
Income from investment
operations:
Net investment income.. 0.16 0.11 0.10 0.02
Net gains (losses) on
securities (both
realized and
unrealized)........... 0.75 4.18 (0.35) 2.17
-------- -------- -------- -------
Total from investment
operations........... 0.91 4.29 (0.25) 2.19
-------- -------- -------- -------
Less distributions:
Dividends from net
investment income..... -- (0.01) (0.09) (0.02)
-------- -------- -------- -------
Net asset value, end of
period.................. $ 17.02 $ 16.11 $ 11.83 $ 12.17
======== ======== ======== =======
Total return(a).......... 5.65% 36.25% (2.03)% 21.94%
======== ======== ======== =======
Ratios/supplemental data:
Net assets, end of period
(000s omitted).......... $305,142 $257,212 $109,257 $38,255
======== ======== ======== =======
Ratio of expenses to
average net assets...... 0.73%(b) 0.75%(c) 0.82% 1.00%(c)(d)
======== ======== ======== =======
Ratio of net investment
income to average net
assets.................. 2.22%(b) 1.11%(c) 1.17% 0.51%(c)(d)
======== ======== ======== =======
Portfolio turnover rate.. 88% 145% 143% 87%
======== ======== ======== =======
</TABLE>
- ------
(a) Total returns for periods less than one year are not annualized.
(b) Ratios are annualized and based on average net assets of $281,579,094.
(c) Annualized
(d) Annualized ratios of expenses and net investment income to average net
assets prior to waiver of advisory fees and/or expense reimbursements were
1.35% and 0.16%, respectively for 1994.
100
AIM V.I. VALUE FUND
<PAGE>
DIRECTORS, OFFICERS, AND OTHER SERVICE PROVIDERS OF AIM VARIABLE INSURANCE
FUNDS, INC.
<TABLE>
<CAPTION>
<S> <C> <C>
BOARD OF DIRECTORS OFFICERS OFFICE OF THE FUND
Charles T. Bauer Charles T. Bauer 11 Greenway Plaza
Chairman and Chief Executive Officer Chairman Suite 1919
A I M Management Group Inc. Houston, TX 77046
Robert H. Graham (800) 347-1919
Bruce L. Crockett President
Formerly Director, President and Chief INVESTMENT ADVISOR
Executive Officer John J. Arthur
COMSAT Corporation Senior Vice President and A I M Advisors, Inc.
Treasurer 11 Greenway Plaza
Owen Daly II Suite 1919
Director Gary T. Crum Houston, TX 77046
Cortland Trust Inc. Senior Vice President
TRANSFER AGENT AND CUSTODIAN
Carl Frischling Carol F. Relihan
Partner Vice President and State Street Bank & Trust Co.
Kramer, Levin, Naftalis & Frankel Secretary 225 Franklin Street
Boston, MA 02110
Robert H. Graham Dana R. Sutton
President and Chief Operating Officer Vice President and COUNSEL TO THE FUNDS
A I M Management Group Inc. Assistant Treasurer
Freedman, Levy, Kroll &
John F. Kroeger Robert G. Alley Simonds
Formerly, Consultant Vice President 1050 Conn. Avenue, N.W.
Wendell & Stockel Associates, Inc. Washington, D.C. 20036
Stuart W. Coco
Lewis F. Pennock Vice President COUNSEL TO THE DIRECTORS
Attorney
Melville B. Cox Kramer, Levin, Naftalis & Frankel
Ian W. Robinson Vice President 919 Third Avenue
Consultant; Formerly Executive Vice New York, NY 10022
President and Chief Financial Officer Karen Dunn Kelley
Bell Atlantic Management Services, Inc. Vice President DISTRIBUTOR
Louis S. Sklar Jonathan C. Schoolar A I M Distributors, Inc.
Executive Vice President Vice President 11 Greenway Plaza
Hines Interests Suite 1919
Limited Partnership P. Michelle Grace Houston, TX 77046
Assistant Secretary
David L. Kite
Assistant Secretary
Nancy L. Martin
Assistant Secretary
Ofelia M. Mayo
Assistant Secretary
Kathleen J. Pflueger
Assistant Secretary
Samuel D. Sirko
Assistant Secretary
Stephen I. Winer
Assistant Secretary
Mary J. Benson
Assistant Treasurer
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