<PAGE> 1
[AIM LOGO APPEARS HERE]
AIM TAX-FREE
INTERMEDIATE FUND
SEMIANNUAL REPORT
SEPTEMBER 30, 1997
<PAGE> 2
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Tax-Free Intermediate Fund's performance figures are historical and
reflect reinvestment of all distributions and changes in net asset value.
Unless otherwise indicated, the Fund's performance is computed at net asset
value without a sales charge. When sales charges are included in performance
figures, performance reflects the maximum 1.00% sales charge.
o The 30-day yield is calculated on the basis of a formula defined by the SEC.
The formula is based on the portfolio's potential earnings from dividends,
interest, yield-to-maturity or yield-to-call of the bonds in the portfolio,
net of all expenses and expressed on an annualized basis.
o The taxable-equivalent yield is calculated in the same manner as the 30-day
yield with an adjustment for a stated, assumed tax rate.
o The Fund's annualized distribution rate reflects the Fund's most recent
monthly dividend distribution multiplied by 12 and divided by the most
recent month-end net asset value.
o The Fund's investment return and principal value will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their
original cost.
o The Fund's portfolio is subject to change and there is no assurance the Fund
will continue to hold any particular security.
o Past performance cannot guarantee comparable future results.
MUTUAL FUNDS, ANNUITIES, AND OTHER INVESTMENTS
ARE NOT INSURED BY THE FDIC OR ANY OTHER GOVERNMENT AGENCY;
ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR GUARANTEED BY,
ANY BANK OR ANY AFFILIATE; AND ARE SUBJECT TO INVESTMENT RISKS,
INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
----------------------------------------------------
AIM TAX-FREE
INTERMEDIATE FUND
For shareholders who seek
a high level of income
exempt from federal taxes.
The Fund purchases
high-quality municipal bonds
maturing in 10 1/2 years or less.
----------------------------------------------------
This report may be distributed only to current shareholders
or to persons who have received a current prospectus of the Fund.
<PAGE> 3
The Chairman's Letter
Dear Fellow Shareholder:
We are pleased to send you this semiannual report for AIM
Tax-Free Intermediate Fund. Effective September 25, 1997,
the Fund's name was changed from Intermediate Portfolio--AIM
Tax-Free Intermediate Shares to AIM Tax-Free Intermediate
[PHOTO OF Fund so its name would correspond more closely with those of
Charles T. other AIM funds. Your Fund's investment strategy remains
Bauer, unchanged.
Chairman of As the reporting period ended in September 1997, the
the Board of market environment continued to be favorable for
THE FUND fixed-income investments. The course was not smooth; indeed,
APPEARS HERE] bond markets fluctuated widely during the six-month
reporting period amid concerns that vigorous economic growth
might accelerate inflation. Only after subsequent reports
indicated that economic growth had moderated and that
inflation was still low did bond markets recover.
On the following pages, your Fund's portfolio management team offers a
complete discussion of recent market activity and how the Fund was affected.
They also discuss the Fund's portfolio strategy, why they believe the portfolio
is well-positioned for attractive current income, and why they are confident
that the reasons for investing in the Fund remain as compelling as ever. These
discussions are offered to help you better understand the relative performance
of your Fund.
The point we want to emphasize most is that market volatility has become
the norm rather than the exception. Those of you who are long-time investors,
and those who are new shareholders in The AIM Family of Funds--Registered
Trademark--, should recognize that periods of falling prices in both stock and
bond markets are inevitable. Indeed, we can learn important lessons about
investing in periods of market uncertainty.
That's why it is a good idea to reassess your financial goals periodically
with your financial consultant. Managing your investments in changing markets
can be challenging. But your financial consultant knows a few time-tested
investment strategies that can help. Diversification, for example, can help you
cushion the effects of volatility and reduce your risk exposure in any type of
security.
In our experience, we have observed that the best action to take is to
stay focused--not on the market, but on your long-term goals. The market can
change from day to day. Those who try to "time" the market, over time, tend to
be less successful than those who continue to follow a disciplined investment
strategy.
It's also important to maintain realistic expectations about investing.
Short-term volatility in financial markets may tempt some investors to liquidate
investments regardless of their personal financial objectives. Remember that
time is the best medicine for uncertain markets. The market's performance
earlier in the reporting period was driven by concerns about the possibility of
rising inflation. Yet, no evidence of significant inflation has materialized.
We appreciate the trust you have placed in us and we look forward to our
continued close association. If you have any questions or comments about this
report, we invite you to call Client Services at 800-246-5463. We also invite
you to visit AIM's Internet Web site at www.aimfunds.com.
Sincerely,
/s/CHARLES T. BAUER
Charles T. Bauer
Chairman
<PAGE> 4
The Managers' Overview
THE MANAGERS' OVERVIEW: MUNICIPAL BONDS WEATHER STORMY MARKET, PROVIDE SOLID
INCOME
- --------------------------------------------------------------------------------
A roundtable discussion with the Fund management team for AIM Tax-Free
Intermediate Fund for the six months ended September 30, 1997.
Q. IT WAS A TURBULENT SIX MONTHS FOR THE BOND MARKET. HOW DID THE FUND PERFORM
DURING THE REPORTING PERIOD?
A. The period was indeed marked by frequent and often dramatic fluctuations in
the bond market. On August 8, 1997, for example, the yield on the benchmark
30-year U.S. Treasury bond rose 14 basis points (a basis point is one
one-hundredth of 1%) while on September 16, it dropped 17 basis points--its
second-largest, single-day decline in the 1990s. Despite such volatility,
however, your Fund continued to provide attractive current income, exempt
from federal taxes, while maintaining relative share-price stability.
As of September 30, 1997, the Fund's 30-day distribution rate at net
asset value was 4.65%. Translated into its taxable equivalent, the Fund's
30-day distribution rate at net asset value was 7.70%, assuming the highest
marginal federal tax rate of 39.6%. The Fund's 30-day yield, as defined by
the SEC, was 3.96%, when calculated at maximum offering price. Its 30-day
taxable-equivalent yield was 6.56%, assuming the highest marginal federal
tax rate of 39.6%. Six-month total return was 4.66%.
During the reporting period, net asset value per share remained within
a relatively narrow range of $10.69 to $11.01, continuing the Fund's history
of relative price stability as illustrated by the accompanying chart.
Q. WHAT IGNITED THE VOLATILITY IN THE BOND MARKET?
A. Investors were concerned that a rapidly growing economy would prompt the
Federal Reserve Board (the Fed) to tighten monetary policy to keep inflation
in check and that perpetuated market volatility. However, inflation remained
modest despite strong economic growth. For the 12-month period ended
September 30, 1997, consumer prices rose just 2.2%, compared to a 3.3%
increase for all of 1997. That caused the Fed to leave interest rates
unchanged during the reporting period.
Q. WHAT WAS THE IMPACT OF THE LOW-INFLATION ENVIRONMENT ON FIXED-INCOME
SECURITIES?
A. Generally, it was positive. After a selloff in the first half of April, the
bond market staged a strong rally that persisted through the end of July.
The rally was interrupted in August when inflation concerns resurfaced,
sending bond prices lower and yields higher. But the market recouped most of
its late-summer losses in September amid mounting evidence that inflation
was not a serious threat. The rally in the bond market was reflected in the
yield on the five-year U.S. Treasury note, which fell from 6.75% at the
beginning of the six-month reporting period to 5.99% at its close.
Q. HOW DID MUNICIPAL SECURITIES PERFORM DURING THE REPORTING PERIOD?
A. The municipal bond market tended to reflect trends in the U.S. Treasury
security market. However, price and yield swings were less pronounced in the
municipal
PORTFOLIO COMPOSITION
As of 9/30/97, based on total assets
================================================================================
General
Obligation
Bonds
35%
Revenue
Bonds
65%
Number of Holdings 188
Average Maturity 5.7 Years
Duration 4.2 Years
================================================================================
TOP FIVE BOND HOLDINGS
As of 9/30/97, based on total net assets
<TABLE>
<CAPTION>
================================================================================
COUPON MATURITY %
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
1. New York (City of) 5.25% 07/01/03 3.00
Municipal Assistance Corp.
2. Hawaii (State of) 6.00% 03/01/07 2.89
3. Louisiana (State of) 6.00% 04/15/07 2.88
4. New York (City of) 5.60% 11/01/05 2.74
5. Nassau (County of) 5.15% 03/01/07 2.70
Please keep in mind the Fund's portfolio is subject to change and there is no
assurance the Fund will continue to hold any particular security.
================================================================================
</TABLE>
2
<PAGE> 5
The Manager's Overview
bond market than in the U.S. Treasury security market. Consequently,
municipal bonds tended to be more stable in value in the volatile market
environment.
A continuing lack of new issues also enhanced the relative price
stability of municipal bonds. One of the factors contributing to the new
issue shortage has been the healthy economy, which has bolstered the tax
receipts of state and local governments and made it less necessary for these
entities to issue new municipal bonds.
Q. HOW DID YOU TAKE ADVANTAGE OF MARKET TRENDS?
A. We maintained our emphasis on revenue bonds, whose creditworthiness tends
to be less sensitive to the political environment than general obligation
bonds. Revenue bonds are paid off with funds generated by various projects
while general obligation bonds are paid off with tax dollars. State and
local governments are finding it increasingly difficult to raise taxes to
support the issuance of general obligation bonds because of taxpayer
opposition.
As of September 30, 1997, the Fund was 65% invested in revenue bonds
and 35% invested in general obligation bonds. The portfolio had a weighted
average maturity of 5.7 years and a duration of 4.2 years. Funds with
shorter duration and weighted average maturity tend to be less sensitive to
market fluctuations.
Q. DID YOU CONTINUE TO EMPHASIZE HIGHER-QUALITY MUNICIPAL BONDS IN THE
PORTFOLIO?
A. Yes, we continued our focus on higher-rated issues with good liquidity.
During the reporting period, we observed that the yield differentials
between higher- and lower-quality bonds were unusually narrow. Consequently,
there was little advantage in assuming greater risk by holding lower-rated
bonds when their yields were not substantially greater than higher-rated
issues.
As of September 30, 1997, the Fund had an average portfolio quality
rating of AA+/Aa+ as measured by Standard & Poor's Corporation (S&P) and
Moody's Investors Service, Inc., two widely known credit rating agencies.
S&P and Moody's ratings are historical and are based on analysis of the
credit quality of the individual municipal securities in the Fund's
portfolio.
Approximately 69% of the portfolio's holdings were securities
rated AAA, and 100% of the portfolio securities were rated A or better.
Credit-enhanced securities--those backed by insurance or escrowed with U.S.
Treasury securities--comprised about 59% of the portfolio.
MORNINGSTAR RATINGS
As of 9/30/97
================================================================================
FUNDS IN TAX-EXEMPT
PERIOD RATING FIXED INCOME CATEGORY
- --------------------------------------------------------------------------------
Overall ***** N/A
10 Years ***** 326
5 Years ***** 668
3 Years ***** 1,374
================================================================================
Morningstar proprietary ratings reflect risk-adjusted performance through
9/30/97. The ratings are subject to change every month. Ratings are calculated
from the fund's three-, five-, and 10-year returns (with fee adjustments) in
excess of 90-day Treasury bill returns, and a risk factor that reflects fund
performance below 90-day T-bill returns. If the fund scores in the top 10% of
its category it receives 5 stars; if it falls in the next 22.5% it receives 4
stars; a place in the middle 35% earns it 3 stars; those in the next 22.5%
receive 2 stars; and the bottom 10% get 1 star.
CALCULATING YOUR TAXABLE-EQUIVALENT DISTRIBUTION RATE AND YIELD
In this report, we discuss your Fund's taxable-equivalent distribution rate and
yield. These figures represent the annualized distribution rate and yield a
taxable bond fund would have to provide to equal the distribution rate and yield
of your tax-exempt Fund.
It's easy to calculate the taxable-equivalent yield and distribution rate
of a municipal bond fund. Simply divide the fund's tax-free distribution rate
and/or yield by 1 minus your federal income tax bracket (15%, 28%, 31%, 36%, or
39.6%). If you are in the 28% federal income tax bracket and the tax-free
distribution rate of your Fund is 5.0%, you would use the following formula to
determine your taxable-equivalent distribution rate.
================================================================================
5.0% divided by (1 - 0.28) =
5.0% divided by (0.72) =
6.9% Taxable-Equivalent
Distribution Rate
================================================================================
In this example, a tax-exempt bond fund with a 5.0% distribution rate would
be equal to a taxable bond fund with a 6.9% distribution rate if you are in the
28% federal income tax bracket.
3
<PAGE> 6
The Managers' Overview
A HISTORY OF NET ASSET VALUE STABILITY
From 5/11/87 -- 9/30/97
===============================================================================
5/11/87 10.00 12/30/90 10.01 9/30/94 10.56
6/30/87 9.93 3/31/91 10.07 12/30/94 10.38
9/30/87 9.59 6/30/91 10.07 3/31/95 10.67
12/30/87 9.79 9/30/91 10.2 6/30/95 10.76
3/31/88 9.89 12/30/91 10.33 9/30/95 10.84
6/30/88 9.82 3/31/92 10.27 12/30/95 10.92
9/30/88 9.86 6/30/92 10.43 3/31/96 10.79
12/30/88 9.81 9/30/92 10.55 6/30/96 10.72
3/31/89 9.69 12/30/92 10.58 9/30/96 10.74
6/30/89 9.94 3/31/93 10.74 12/30/96 10.80
9/30/89 9.77 6/30/93 10.87 3/31/97 10.73
12/30/89 9.99 9/30/93 11.03 6/30/97 10.86
3/31/90 9.89 12/30/93 11.02 9/30/97 10.97
6/30/90 9.93 3/31/94 10.62
9/30/90 9.88 6/30/94 10.61
===============================================================================
Source: Towers Data Systems. There is no guarantee the Fund will maintain a
constant net asset value. Investment return will vary so that you may have a
gain or a loss when you sell shares. Past performance cannot guarantee
comparable future results.
Q. ISN'T THE FUND ALSO MANAGED FOR TAX EFFICIENCY?
A. Yes, we make every effort to avoid transactions that would result in
capital gains that are not offset by capital losses. For more than three
years, the Fund has paid no taxable capital gains distributions or ordinary
income distributions.
Q. WHAT IMPACT DO YOU EXPECT THE TAXPAYERS' RELIEF ACT OF 1997 TO HAVE ON THE
MUNICIPAL BOND MARKET?
A. We don't expect the Taxpayers' Relief Act to diminish the popularity of
municipal bonds as an attractive tax-free investment. While the act creates
the new Roth Individual Retirement Account, which will also pay tax-free
distributions, only individuals earning less than $110,000 annually in
adjusted gross income will be eligible to invest in Roth IRAs. For couples,
the phase-out occurs when annual adjusted gross income is between $150,000
and $160,000. Moreover, the yearly contribution an individual investor will
be able to make to a Roth IRA will be limited to $2,000.
The act may lead to a slight increase in municipal bond supply as it
removes the limits on the amount of tax-exempt bonds private colleges and
other non-hospital 501(c)(3) organizations can issue.
Q. DO YOU EXPECT THE TAX CODE TO BE SIMPLIFIED?
A. Simplification of the tax code is likely to be a key issue in the 1998
election campaign with much of the attention focusing on two far-reaching
proposals: a flat tax and a national sales tax. We believe the prospects
that either of these plans will be adopted are fairly remote for a number
of reasons. For one, both plans would eliminate most tax writeoffs--a move
that would likely generate strong opposition.
If there is a more modest simplification of the tax code, we don't
expect municipal bonds to lose their tax-exempt status. If municipal bonds
were subject to federal taxes like other fixed-income securities, their
interest rates would have to be higher than their current levels to attract
potential buyers. That would mean that state and local governments might
have to raise taxes to support bond issues. We don't believe Washington
would put state and local governments in such a predicament at a time when
more and more spending responsibilities are being shifted to the state and
local levels.
Q. WHAT IS YOUR MARKET OUTLOOK?
A. As 1997 draws to a close, economic growth appears to be moderating and
inflation remains low. If these conditions persist, it should prove
beneficial for municipal bonds and other investments.
In October, shortly after the reporting period ended, Fed Chairman
Alan Greenspan raised the specter of an interest-rate hike by suggesting in
congressional testimony that economic growth had been on an "unsustainable
track" and that financial markets reflected an "optimistic outlook." Later
in the month, world financial markets were jolted by currency devaluations
in Southeast Asia and a dramatic decline in equity markets both here and
abroad. The consensus of market watchers was that this market turmoil
probably had significantly reduced any potential near-term rate hike, as
the Fed would probably not take any action that could destabilize the
markets further.
Regardless of market and interest-rate trends, we will continue to
manage your Fund to provide attractive current income, exempt from federal
taxes, while maintaining relative stability of net asset value.
================================================================================
AVERAGE ANNUAL TOTAL RETURNS
As of 9/30/97
- --------------------------------------------------------------------------------
Including sales charges
10 Years 6.85%
5 Years 5.39%
1 Year 5.97%*
*7.05% excluding sales charges
================================================================================
--------------------------------
We don't expect the
Taxpayers' Relief Act to
diminish the popularity of
municipal bonds as an attractive
tax-free investment.
--------------------------------
4
<PAGE> 7
SCHEDULE OF INVESTMENTS
September 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
RATING(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
ALABAMA-0.22%
Alabama State Municipal
Electric Authority;
Power Supply Series A RB
6.30%, 09/01/01(b) AAA Aaa $ 400 $ 430,136
- -----------------------------------------------------------------
ALASKA-2.51%
Alaska Housing Finance
Corp.; General Mortgage
Series A RB
3.70%, 06/01/26(c)(d) A1+ VMIG1 2,750 2,750,000
- -----------------------------------------------------------------
Anchorage (City of);
School Series 1994 GO
5.50%, 07/01/06(b) AAA Aaa 1,950 2,073,591
- -----------------------------------------------------------------
4,823,591
- -----------------------------------------------------------------
ARIZONA-4.37%
Arizona (State of);
Educational Loan
Marketing Corp. Series A
Refunding RB
6.55%, 03/01/99 -- A 1,000 1,030,430
- -----------------------------------------------------------------
Cochise (County of);
Series 1990 Certificates
of Participation
4.15%, 08/01/98(b) AAA Aaa 180 180,601
- -----------------------------------------------------------------
Maricopa County Gilbert
Unified School District
#41 (Project of 1988);
School Improvement
Series 1992 E GO
6.20%, 07/01/02(e) AAA Aaa 1,250 1,359,225
- -----------------------------------------------------------------
Maricopa County School
District #90 (Ruth
Fisher Elementary);
Series 1997 GO
4.70%, 07/01/99 -- A2 1,300 1,306,825
- -----------------------------------------------------------------
Maricopa County Unified
School District #95
(Queen Creek Project of
1995); Series 1997 B GO
4.50%, 07/01/99(b) -- Aaa 200 201,858
- -----------------------------------------------------------------
4.50%, 07/01/01(b) -- Aaa 300 303,693
- -----------------------------------------------------------------
Mesa Industrial
Development Authority
(Western Health
Network-Mesa Lutheran
Project); Health Care
Facilities Refunding
Series 1988 B1 RB
7.50%, 01/01/04(b) AAA Aaa 700 739,186
- -----------------------------------------------------------------
Mohave County Unified
School District #1; Lake
Havasu Series A GO
5.40%, 07/01/06(b) AAA Aaa 200 210,368
- -----------------------------------------------------------------
Navajo County Unified
School District #10;
Series 1997 A GO
4.25%, 07/01/98(b) -- Aaa 400 401,228
- -----------------------------------------------------------------
Navajo County Unified
School District; Series
1997 A GO
5.00%, 07/01/07(b) AAA Aaa 450 462,906
- -----------------------------------------------------------------
Phoenix (City of); Senior
Lien Street and Highway
User Refunding Series
1992 RB
6.20%, 07/01/02 AA A1 1,000 1,087,380
- -----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATING(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
ARIZONA-(CONTINUED)
Yuma Industrial
Development Authority
(Yuma Regional Medical
Center Project); Health
Care Facilities Series
1997 Refunding RB
5.70%, 08/01/06(b) AAA Aaa $1,000 $ 1,079,750
- -----------------------------------------------------------------
8,363,450
- -----------------------------------------------------------------
ARKANSAS-2.97%
Arkansas State Development
Financial Authority;
Correction Facility
Series 1996 RB
6.25%, 10/01/06(b) AAA Aaa 1,800 2,036,574
- -----------------------------------------------------------------
Little Rock (City of)
(Baptist Medical
Center); Health Facility
Hospital RB
6.70%, 11/01/04()(b) AAA Aaa 1,400 1,557,962
- -----------------------------------------------------------------
North Little Rock (City
of); Electric System
Refunding Series 1992 A
RB
6.00%, 07/01/01()(b) AAA Aaa 500 533,340
- -----------------------------------------------------------------
Sebastian (County of)
Arkansas Community Jr.
College District;
Refunding & Improvement
Series 1997 GO
5.10%, 04/01/06()(b) -- Aaa 500 518,125
- -----------------------------------------------------------------
5.20%, 04/01/07()(b) -- Aaa 1,000 1,043,380
- -----------------------------------------------------------------
5,689,381
- -----------------------------------------------------------------
CALIFORNIA-1.65%
Folsom (City of) (School
Facilities Project);
Series 1994 B GO
6.00%, 08/01/02()(b) AAA Aaa 500 538,925
- -----------------------------------------------------------------
Inglewood (City of)
(Daniel Freeman Hospital
Inc.); Insured Hospital
Series 1991 RB
6.50%, 05/01/01 A -- 400 428,056
- -----------------------------------------------------------------
Oakland (City of); Housing
Finance Issue D-1 RB
6.70%, 01/01/98 A+ -- 160 161,034
- -----------------------------------------------------------------
Orange (County of);
Refunding Recovery
Series A RB
5.50%, 06/01/06(b) AAA Aaa 1,000 1,071,000
- -----------------------------------------------------------------
Parking Authority of the
City and County of San
Francisco; Parking Meter
Series 1994 RB
6.75%, 06/01/05(b) AAA Aaa 500 573,925
- -----------------------------------------------------------------
State Public Works Board
of the State of
California (Department
of Corrections) (State
Prison- Madera County);
Lease Series 1990 A RB
7.00%, 09/01/00 A A 100 107,990
- -----------------------------------------------------------------
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
RATING(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
CALIFORNIA-(CONTINUED)
West End Water
Development, Treatment,
and Conservation Joint
Powers Authority; 1990
Water Facilities
Certificate of
Participation
7.00%, 10/01/00 BBB+ A $ 250 $ 266,893
- -----------------------------------------------------------------
3,147,823
- -----------------------------------------------------------------
COLORADO-0.04%
Colorado Student
Obligation Bond
Authority; Student Loan
Series 1985 B RB
6.125%, 12/01/98 -- A 80 81,549
- -----------------------------------------------------------------
CONNECTICUT-2.09%
Berlin (City of); Series
1997 GO
5.75%, 06/15/99 AAA Aaa 450 462,636
- -----------------------------------------------------------------
5.00%, 06/15/00 AAA Aaa 350 357,322
- -----------------------------------------------------------------
Connecticut (State of)
Special Tax Obligation;
Second Lien
Transportation and
Infrastructure Purpose
S-1 RB
3.60%, 12/01/10(c)(d) A1+ VMIG1 920 920,000
- -----------------------------------------------------------------
New Haven (City of);
Series 1997 GO
6.00%, 02/15/06(b) AAA Aaa 2,050 2,248,809
- -----------------------------------------------------------------
3,988,767
- -----------------------------------------------------------------
DELAWARE-0.42%
Delaware Transportation
Authority; Senior Lien
Transportation System
Series 1991 RB
6.00%, 07/01/01(e)(f) AAA Aaa 750 797,070
- -----------------------------------------------------------------
DISTRICT OF COLUMBIA-6.13%
District of Columbia;
Refunding Series B GO
6.75%, 06/01/99(b) AAA Aaa 750 772,875
- -----------------------------------------------------------------
6.125%, 06/01/03(b) AAA Aaa 3,020 3,236,141
- -----------------------------------------------------------------
5.50%, 06/01/07(b) AAA Aaa 3,000 3,155,850
- -----------------------------------------------------------------
District of Columbia
(American Association
Advancement Science);
Series 1997 RB
5.00%, 01/01/05()(b) AAA Aaa 800 815,024
- -----------------------------------------------------------------
5.50%, 01/01/06(b) AAA Aaa 1,235 1,298,331
- -----------------------------------------------------------------
District of Columbia
(Medlantic Healthcare
Group); Series 1996 A RB
6.00%, 08/15/06(b) AAA Aaa 1,550 1,685,253
- -----------------------------------------------------------------
6.00%, 08/15/07(b) AAA Aaa 500 532,459
- -----------------------------------------------------------------
District of Columbia (The
Howard University
Issue); University
Series 1990 A RB
6.90%, 10/01/00 A+ A3 200 214,406
- -----------------------------------------------------------------
11,710,339
- -----------------------------------------------------------------
FLORIDA-1.79%
Dade (County of); Water
and Sewer RB
5.00%, 10/01/99(b) AAA Aaa 225 229,703
- -----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATING(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
FLORIDA-(CONTINUED)
Palm Beach County Solid
Waste Authority;
Refunding Series 1997 A
RB
5.50%, 10/01/06(b) AAA Aaa $3,000 $ 3,183,420
- -----------------------------------------------------------------
3,413,123
- -----------------------------------------------------------------
GEORGIA-4.06%
Albany (City of); Sewer
System Series 1992 RB
6.30%, 07/01/02(e) AAA Aaa 500 543,135
- -----------------------------------------------------------------
Dekalb Private Hospital
Authority (Egleston
Children's Hospital at
Emory University, Inc.
Project); Series 1994 A
RB
3.65%, 03/01/24(c)(d) A1+ VMIG1 460 460,000
- -----------------------------------------------------------------
Emanuel County School
District (Georgia State
Aid Intercept Program);
Series 1997 GO
4.15%, 08/01/99 AA- -- 1,170 1,169,942
- -----------------------------------------------------------------
Fulton (County of); Water
and Sewer Refunding
Series 1992 RB
5.75%, 01/01/02(b) AAA Aaa 715 755,626
- -----------------------------------------------------------------
Georgia (State of); Series
1988 D GO
7.10%, 06/01/99 AAA Aaa 2,000 2,083,300
- -----------------------------------------------------------------
Georgia State Municipal
Electric Authority;
Series V RB
6.00%, 01/01/01(b) AAA Aaa 1,000 1,053,360
- -----------------------------------------------------------------
Marietta County School
District; Refunding
Series 1993 GO
5.50%, 01/01/07 AA- A 1,110 1,156,875
- -----------------------------------------------------------------
Metropolitan Atlanta Rapid
Transit Authority; Sales
Tax Refunding Series M
RB
6.15%, 07/01/02 AA- A1 500 541,505
- -----------------------------------------------------------------
7,763,743
- -----------------------------------------------------------------
HAWAII-2.89%
Hawaii (State of);
Refunding Series 1997 GO
6.00%, 03/01/07(b) AAA Aaa 5,000 5,513,500
- -----------------------------------------------------------------
ILLINOIS-5.21%
Chicago (City of); Series
1997 GO
6.00%, 01/01/06(b) AAA Aaa 500 547,175
- -----------------------------------------------------------------
Chicago (City of) (Central
Public Library Project);
Adjustable Rate Series
1988 C GO
6.10%, 01/01/99(b) AAA Aaa 500 511,300
- -----------------------------------------------------------------
Chicago Park District;
Capital Improvement
Series 1991 GO
5.80%, 01/01/98(e) AA- A1 750 753,435
- -----------------------------------------------------------------
Chicago (City of) Metro
Water Reclamation
District; Refunding
Series 1997 GO
4.15%, 12/01/99 AA Aa2 1,000 1,003,230
- -----------------------------------------------------------------
Hoffman Estates Illinois
Multifamily Housing
(Park Place Apartments
Project); Refunding
Series 1996 RB
5.75%, 06/01/21(f) AAA Aaa 1,250 1,314,650
- -----------------------------------------------------------------
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
RATING(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
ILLINOIS-(CONTINUED)
Illinois Development
Financial Authority;
Series 1997 IDR
4.80%, 08/01/07(f) A1+ NRR $1,000 $ 1,000,400
- -----------------------------------------------------------------
Illinois Educational
Facilities Authority
(Augustana College);
Series 1997 RB
4.80%, 10/01/99(b) AAA NRR 375 379,331
- -----------------------------------------------------------------
Illinois Health Facilities
Authority (Edward
Obligated Group); Series
1997 A RB
4.90%, 02/15/08(b) AAA Aaa 835 845,788
- -----------------------------------------------------------------
Illinois Health Facilities
Authority (Highland Park
Hospital); Series 1991 A
RB
4.80%, 10/01/99(b) AAA Aaa 500 506,250
- -----------------------------------------------------------------
5.50%, 10/01/06(b) AAA Aaa 500 529,375
- -----------------------------------------------------------------
Illinois Health Facilities
Authority (Mercy
Hospital and Medical
Center); Refunding
Series 1992 RB
6.20%, 01/01/00 A- Baa1 250 257,018
- -----------------------------------------------------------------
Illinois Regional Transit
Authority; Series B RB
6.30%, 06/01/04(e)(f) AAA Aaa 1,000 1,122,330
- -----------------------------------------------------------------
Joliet (City of);
Waterworks and Sewer
Series 1991 RB
6.95%, 01/01/01(b) AAA Aaa 250 269,918
- -----------------------------------------------------------------
Kane (County of) Public
Building Commission;
Unlimited Tax Public
Building Series B GO
6.20%, 12/01/01 -- Aa 700 729,169
- -----------------------------------------------------------------
Kane County School
District #131 (Aurora
East Side Project);
Series 1998 A GO
7.10%, 12/01/98(e)(f) AAA Aaa 175 181,183
- -----------------------------------------------------------------
9,950,552
- -----------------------------------------------------------------
INDIANA-0.99%
Frankfort Middle School
Building Corp.;
Refunding Series 1996 RB
5.20%, 01/10/07(b) AAA Aaa 295 305,060
- -----------------------------------------------------------------
Indiana Transportation
Finance Authority;
Airport Facilities Lease
Series A RB
6.00%, 11/01/01 A A2 500 530,115
- -----------------------------------------------------------------
Indiana Transportation
Finance Authority;
Highway Series A RB
5.50%, 06/01/07(b) AAA Aaa 1,000 1,066,280
- -----------------------------------------------------------------
1,901,455
- -----------------------------------------------------------------
IOWA-0.27%
Iowa Student Loan
Liquidity Corp.; Student
Loan Series 1992 A RB
6.25%, 03/01/00 -- Aa1 500 519,175
- -----------------------------------------------------------------
KENTUCKY-0.35%
Kentucky State Turnpike
Authority (Economic
Development Road
Revitalization Project);
RB
7.125%, 05/15/00(e)(f) AAA Aaa 260 283,020
- -----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATING(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
KENTUCKY-(CONTINUED)
Western Kentucky
University (Consolidated
Educational Buildings);
Refunding Series M RB
4.70%, 05/01/99(b) AAA Aaa $ 390 $ 394,895
- -----------------------------------------------------------------
677,915
- -----------------------------------------------------------------
LOUISIANA-5.56%
Jefferson Parish School
Board; Sales and Use Tax
RB
6.00%, 02/01/04(b) AAA Aaa 1,720 1,851,752
- -----------------------------------------------------------------
Louisiana (State of);
Series A GO
6.00%, 04/15/07(b) AAA Aaa 5,000 5,510,900
- -----------------------------------------------------------------
Louisiana Offshore
Terminal Authority
(Loop, Inc.);
Deepwater Port Refunding
Series 1992 RB
6.00%, 09/01/01 A Baa1 1,000 1,053,930
- -----------------------------------------------------------------
6.20%, 09/01/03 A Baa1 1,000 1,077,650
- -----------------------------------------------------------------
Louisiana Public
Facilities Authority
(Tulane University of
Louisiana); Series 1987
C RB
7.30%, 08/15/99 A+ A1 270 278,330
- -----------------------------------------------------------------
Ouachita (Parish of)
Hospital Service
District #1 (Glenwood
Regional Medical
Center); Hospital
Refunding Series 1996 RB
5.00%, 05/15/99 A -- 850 859,554
- -----------------------------------------------------------------
10,632,116
- -----------------------------------------------------------------
MASSACHUSETTS-0.22%
New England Education Loan
Marketing Corp.; Student
Loan Refunding Senior
Issue 1992 D RB
6.20%, 09/01/00 -- Aaa 400 420,344
- -----------------------------------------------------------------
MICHIGAN-3.10%
Dearborn (City of)
Economic Development
Corp. (Oakwood Obligated
Group); Hospital Series
1991 A RB
6.95%, 08/15/21(e)(f) AAA Aaa 1,000 1,115,310
- -----------------------------------------------------------------
Detroit (City of) School
District; GO
5.60%, 05/01/01 AA Aa2 765 795,309
- -----------------------------------------------------------------
Michigan State Building
Authority; Refunding
Series I RB
6.40%, 10/01/04 AA- A1 2,000 2,173,300
- -----------------------------------------------------------------
Michigan State Strategic
Fund; Refunding Series
1988 PCR
3.60%, 04/15/18(c) -- Aaa 1,634 1,634,000
- -----------------------------------------------------------------
North Muskegon School
District; GO
7.00%, 05/01/98(b) AAA Aaa 200 203,602
- -----------------------------------------------------------------
5,921,521
- -----------------------------------------------------------------
MINNESOTA-1.46%
Minnesota (State of)
Housing Financial Agency
(Single Family Meeting
Group); Hospital Series
1997 G RB
4.15%, 12/01/98(f) A1+ -- 2,000 2,006,200
- -----------------------------------------------------------------
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
RATING(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
MINNESOTA-(CONTINUED)
Southern Minnesota
Municipal Power Agency;
Power Supply System
Series A RB
5.60%, 01/01/04 A+ A2 $ 745 $ 780,447
- -----------------------------------------------------------------
2,786,647
- -----------------------------------------------------------------
MISSOURI-1.01%
Camden County Public
Facility Authority (Law
Enforcement Center
Project); Series 1997 RB
4.00%, 10/01/98(b) AAA Aaa 1,000 1,001,440
- -----------------------------------------------------------------
Fort Osage Reorganization
School District #1
(Missouri School
District Direct Deposit
Program); Series 1997 GO
4.95%, 03/01/06 AA Aa2 405 414,493
- -----------------------------------------------------------------
State Environmental
Improvement and Energy
Resource Authority (City
of Branson Project)
(State Revolving Fund
Program); Water Series
1995 A PCR
5.00%, 07/01/99(b) AAA Aaa 500 508,395
- -----------------------------------------------------------------
1,924,328
- -----------------------------------------------------------------
MONTANA-0.23%
Montana Higher Education
Assistance Corp.;
Student Loan Series 1992
A RB
6.60%, 12/01/00 -- A 420 446,321
- -----------------------------------------------------------------
NEVADA-0.26%
Clark County Improvement
District No. 65 (Lamb
Boulevard III); Series
1992 GO
6.20%, 12/01/02 AA- A1 120 123,924
- -----------------------------------------------------------------
Nevada (State of) (Nevada
Municipal Bond Bank
Project Nos. 38-39);
Limited Tax Series 1992
A GO
6.00%, 07/01/01(e) AA -- 350 370,720
- -----------------------------------------------------------------
494,644
- -----------------------------------------------------------------
NEW JERSEY-1.49%
Gloucester County
Utilities Authority;
Sewer Refunding Series
1991 RB
6.10%, 01/01/00 AA- A1 225 235,868
- -----------------------------------------------------------------
Jersey City (City of)
(Qualified School Bond);
GO
6.40%, 02/15/00 AA A3 1,000 1,051,540
- -----------------------------------------------------------------
New Jersey Transportation
Trust Fund Authority;
Transportation System
Series 1992 A RB
5.90%, 06/15/99(e) NRR Aaa 1,000 1,031,190
- -----------------------------------------------------------------
Trenton (City of); Fiscal
Year Adjustment GO
6.10%, 08/15/02(b) AAA Aaa 500 537,065
- -----------------------------------------------------------------
2,855,663
- -----------------------------------------------------------------
NEW MEXICO-1.10%
Albuquerque (City of);
Joint Water and Sewer
Series 1990 A RB
6.00%, 07/01/00(e)(f) AAA -- 1,000 1,048,240
- -----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATING(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
NEW MEXICO-(CONTINUED)
San Juan (County of)
(Gross Tax Receipts
Project); Refunding
Series 1997 A RB
4.10%, 03/15/99(b) AAA Aaa $ 520 $ 520,785
- -----------------------------------------------------------------
Santa Fe (City of); Series
1994 A RB
5.50%, 06/01/03(e) AAA Aaa 500 528,030
- -----------------------------------------------------------------
2,097,055
- -----------------------------------------------------------------
NEW YORK-12.60%
Nassau (County of); GO
5.15%, 03/01/07(b) AAA Aaa 5,000 5,169,300
- -----------------------------------------------------------------
New York (City of);
Refunding Series D GO
5.60%, 11/01/05 BBB+ Baa1 5,000 5,241,100
- -----------------------------------------------------------------
New York (City of); Series
G GO
5.90%, 02/01/05 BBB+ Baa1 1,150 1,222,174
- -----------------------------------------------------------------
New York (City of)
Municipal Assistance
Corp.; Series I RB
5.25%, 07/01/03 AA- Aa2 5,500 5,731,770
- -----------------------------------------------------------------
New York (State of)
Dormitory Authority;
Mental Health Facilities
Series A RB
6.00%, 02/15/05 A- Baa1 1,000 1,069,170
- -----------------------------------------------------------------
6.00%, 08/15/07 A- Baa1 1,775 1,917,533
- -----------------------------------------------------------------
New York (State of)
Dormitory Authority
(Pace University Issue);
Series 1997 RB
6.00%, 07/01/07 AAA Aaa 1,275 1,402,232
- -----------------------------------------------------------------
New York (State of)
Medical Care Facilities
Financing Agency;
Hospital & Nursing Home
Series 1995 A RB
5.60%, 02/15/05(b) AAA -- 1,535 1,620,085
- -----------------------------------------------------------------
United Nations Development
Corp.; Refunding Senior
Lien Series 1997 B RB
4.20%, 07/01/99 -- A2 700 700,322
- -----------------------------------------------------------------
24,073,686
- -----------------------------------------------------------------
NORTH DAKOTA-0.37%
Grand Forks Health Care
System (Altru Health
System Obligated Group);
Series 1997 RB
4.55%, 08/15/00 AAA Aaa 705 712,706
- -----------------------------------------------------------------
OHIO-4.65%
Franklin (County of); 1991
Issue GO
6.30%, 12/01/01(e)(f) NRR -- 1,500 1,646,055
- -----------------------------------------------------------------
Greene (County of); Water
System Series A RB
5.45%, 12/01/06(b) AAA Aaa 585 624,950
- -----------------------------------------------------------------
Hilliard City School
District; School
Improvement Refunding
Series 1992 GO
6.05%, 12/01/00(b) AAA Aaa 500 529,205
- -----------------------------------------------------------------
6.15%, 12/01/01(b) AAA Aaa 250 268,813
- -----------------------------------------------------------------
Lucas County (St.
Vincent's Medical
Center); Hospital Series
A RB
6.75%, 08/15/00(b)(f) AAA Aaa 2,000 2,159,320
- -----------------------------------------------------------------
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
RATING(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
OHIO-(CONTINUED)
Miami County (Upper Valley
Medical Center);
Refunding Hospital
Facility Series 1996 B
RB
5.00%, 05/15/98(b) AAA Aaa $ 585 $ 589,604
- -----------------------------------------------------------------
Ohio (State of)
(Elementary & Secondary
Education Facilities);
Series 1997 RB
5.10%, 12/01/05 AA- Aa3 1,500 1,553,550
- -----------------------------------------------------------------
Ohio State Public
Facilities Commission;
Mental Health Series A
RB
7.00%, 12/01/97 AA- Aa3 1,500 1,507,785
- -----------------------------------------------------------------
8,879,282
- -----------------------------------------------------------------
OKLAHOMA-4.19%
Norman (City of) Hospital
Authority; Refunding
Series A RB
5.20%, 09/01/06(b) AAA Aaa 310 324,843
- -----------------------------------------------------------------
5.30%, 09/01/07(b) AAA Aaa 1,090 1,151,018
- -----------------------------------------------------------------
Oklahoma Housing Finance
Agency; Single Family
Mortgage Series A RB
6.55%, 03/01/00(b) AAA Aaa 130 135,716
- -----------------------------------------------------------------
Oklahoma State Turnpike
Authority; RB
7.875%, 01/01/99(e)(f) AAA -- 4,780 5,097,440
- -----------------------------------------------------------------
Southern Oklahoma Memorial
Hospital Authority;
Hospital Series 1993 A
RB
5.60%, 02/01/00(e) A A 1,250 1,290,575
- -----------------------------------------------------------------
7,999,592
- -----------------------------------------------------------------
OREGON-0.86%
Portland (City of); Sewer
System Series 1994 A RB
5.45%, 06/01/03 A+ A1 1,065 1,119,336
- -----------------------------------------------------------------
5.55%, 06/01/04 A+ A1 500 529,300
- -----------------------------------------------------------------
1,648,636
- -----------------------------------------------------------------
PENNSYLVANIA-1.43%
Chester Upland School
Authority; Refunding
Series 1997 B RB
4.60%, 09/01/06(b) AAA Aaa 505 501,697
- -----------------------------------------------------------------
4.70%, 09/01/07(b) AAA Aaa 535 533,299
- -----------------------------------------------------------------
Pennsylvania Industrial
Development Authority;
Economic Development
Series 1991 A RB
6.50%, 01/01/98(e) NRR NRR 100 100,663
- -----------------------------------------------------------------
6.50%, 07/01/98(e) NRR NRR 150 153,045
- -----------------------------------------------------------------
York (City of); Pooled
Financing RB
3.50%, 09/01/26(c)(d) A+ -- 1,450 1,450,000
- -----------------------------------------------------------------
2,738,704
- -----------------------------------------------------------------
RHODE ISLAND-1.32%
Rhode Island (State of);
Refunding Series 1992 A
GO
6.10%, 06/15/03(b) AAA Aaa 1,000 1,078,010
- -----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATING(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
RHODE ISLAND-(CONTINUED)
Rhode Island State
Turnpike and Bridge
Authority; Refunding
Series 1997 A RB
5.00%, 12/01/99 A -- $1,395 $ 1,420,919
- -----------------------------------------------------------------
2,498,929
- -----------------------------------------------------------------
SOUTH DAKOTA-1.08%
Rapid City (City of);
Sales Tax Series 1995 A
RB
5.60%, 06/01/05(b) AAA Aaa 255 273,159
- -----------------------------------------------------------------
South Dakota Health and
Education Facility
(McKennan Hospital);
Refunding Series 1996 RB
5.40%, 07/01/06(b) AAA Aaa 1,680 1,764,622
- -----------------------------------------------------------------
2,037,781
- -----------------------------------------------------------------
TENNESSEE-2.73%
Knoxville (City of);
Refunding Series B GO
4.85%, 05/01/99 AA Aa3 700 709,737
- -----------------------------------------------------------------
Nashville and Davidson
(County of) Health and
Education Facilities
Board (Meharry Medical
College); RB
7.875%, 12/01/04(e) NRR Aaa 1,035 1,160,556
- -----------------------------------------------------------------
Nashville and Davidson
(County of) Health and
Education Facilities
Board (Multifamily
Housing Project); Series
1996 RB
5.50%, 01/01/07(f) AAA NRR 2,700 2,802,762
- -----------------------------------------------------------------
Tennessee School Board
Authority (College and
University Improvement);
RB
5.75%, 05/01/06 AA A1 550 551,782
- -----------------------------------------------------------------
5,224,837
- -----------------------------------------------------------------
TEXAS-10.27%
Alamo Community College
District; Series 1990 GO
6.90%, 02/15/00(e)(f) AA Aaa 500 531,585
- -----------------------------------------------------------------
Austin (City of); Combined
Utility System Refunding
Series 1986 RB
7.20%, 05/15/98(e) NRR NRR 25 25,512
- -----------------------------------------------------------------
7.20%, 05/15/98 A A 175 177,468
- -----------------------------------------------------------------
Austin (City of); Utility
System Series 1998 A RB
7.50%, 11/15/98 A A2 750 779,678
- -----------------------------------------------------------------
Carrollton (County of)
Texas Farmers Branch
Independent School
District; Public
Property Financial
Contractual Obligation
Series 1997 I GO
4.40%, 02/15/00 -- Aa2 1,135 1,143,320
- -----------------------------------------------------------------
Clint Independent School
District; Unlimited Tax
Refunding Series 1991 GO
6.30%, 03/01/00(b) -- Aaa 185 191,081
- -----------------------------------------------------------------
</TABLE>
9
<PAGE> 12
<TABLE>
<CAPTION>
RATING(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
TEXAS-(CONTINUED)
Comal County Industrial
Development Authority
(The Coleman Company,
Inc. Project); Series
1980 IDR
9.25%, 08/01/00(e) NRR NRR $ 505 $ 547,031
- -----------------------------------------------------------------
Conroe (City of)
Independent School
District; Unlimited
School Tax GO
7.375%, 02/01/01(b) AAA Aaa 115 126,108
- -----------------------------------------------------------------
Dallas (City of);
Waterwork & Sewer System
Series A RB
5.50%, 10/01/05 AA Aa2 1,000 1,007,500
- -----------------------------------------------------------------
Gatesville Independent
School District;
Unlimited Tax School
Building and Refunding
Series 1995 RB
5.80%, 02/01/03(b) -- Aaa 485 518,562
- -----------------------------------------------------------------
Harris (County of) (Port
of Houston Authority);
RB
5.75%, 05/01/02 A A 2,615 2,670,144
- -----------------------------------------------------------------
Harris County Health
Facilities Development
Corp. (Memorial Hospital
System Project);
Hospital Series 1992 RB
6.70%, 06/01/00(e) A- A2 1,000 1,064,320
- -----------------------------------------------------------------
Harris County Health
Facilities Development
Corp. (School Health
Care System Project);
Series B RB
4.00%, 07/01/98 AA Aa3 840 842,033
- -----------------------------------------------------------------
5.10%, 07/01/06 AA Aa3 1,000 1,024,010
- -----------------------------------------------------------------
Keller (City of)
Independent School
District; Series 1994
Certificates of
Participation
5.75%, 08/15/01(b) AAA Aaa 915 965,746
- -----------------------------------------------------------------
Kerrville (City of);
Electric System
Refunding Series 1991 RB
6.375%, 11/01/01(b) AAA Aaa 185 199,639
- -----------------------------------------------------------------
La Marque Independent
School District;
Unlimited Schoolhouse
Tax Series 1992 GO
7.50%, 08/15/99(b) AAA Aaa 575 611,771
- -----------------------------------------------------------------
7.50%, 08/15/02(b) AAA Aaa 750 855,030
- -----------------------------------------------------------------
Lubbock Health Facility
Development Corp.;
Methodist Hospital
Refunding Series 1993 B
5.40%, 12/01/05(b) AAA Aaa 500 525,535
- -----------------------------------------------------------------
Plano Independent School
District; GO
5.80%, 02/15/05(b) AAA Aaa 2,025 2,166,892
- -----------------------------------------------------------------
San Antonio (City of);
Electric and Gas System
Prerefunding Series 1989
A RB
7.00%, 02/01/01 -- Aaa 400 420,885
- -----------------------------------------------------------------
Tarrant (County of) Health
Facilities Development
Corp.; Texas Health
Resources System Series
1997 A RB
5.50%, 02/15/05(b) AAA Aaa 1,000 1,053,080
- -----------------------------------------------------------------
Temple (City of) (Bell
County); Refunding
Series 1992 GO
5.80%, 02/01/01(b) AAA Aaa 250 262,442
- -----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATING(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
TEXAS-(CONTINUED)
Texarkana (City of); Water
and Sewer Utility
Improvement Series 1996
GO
6.75%, 02/15/98(b) AAA Aaa $ 280 $ 283,031
- -----------------------------------------------------------------
Texas Municipal Power
Agency; RB
5.75%, 09/01/02(e)(f) AAA Aaa 1,000 1,062,620
- -----------------------------------------------------------------
Texas Turnpike Authority
(Addison Airport Toll
Tunnel Project); Dallas
North Tollway Series
1994 RB
6.30%, 01/01/05(b) AAA Aaa 500 554,420
- -----------------------------------------------------------------
University of Texas
System; General Tuition
Series 1986 Refunding RB
7.75%, 08/15/98(e) AA+ Aa1 10 10,336
- -----------------------------------------------------------------
19,619,779
- -----------------------------------------------------------------
UTAH-1.69%
Intermountain Power Agency
(Utah Power Supply);
Refunding Series 1997 B
RB
6.00%, 07/01/07(b) AAA Aaa 1,000 1,105,560
- -----------------------------------------------------------------
Salt Lake (City of)
Municipal Building
Authority; Series A RB
6.50%, 10/15/00 A+ A1 570 594,852
- -----------------------------------------------------------------
Utah (State of) (Board of
Water Resources
Program); Revolving Fund
Recapitalization Series
1992 B RB
6.10%, 04/01/02 AA -- 500 538,325
- -----------------------------------------------------------------
Utah Municipal Finance
Cooperative (Pooled
Capital Improvement
Financing Program)
(University Hospital
Project); Local
Government Series August
1, 1991 RB
6.50%, 05/15/99 AA- -- 475 493,611
- -----------------------------------------------------------------
Utah Water Financing
Agency; Series A RB
4.40%, 10/01/99(b) AAA Aaa 500 503,410
- -----------------------------------------------------------------
3,235,758
- -----------------------------------------------------------------
VIRGINIA-1.32%
Medical College of Hampton
Roads; General Refunding
Series 1991 A RB
6.00%, 11/15/99 A- -- 605 625,932
- -----------------------------------------------------------------
Norfolk (City of)
Redevelopment and
Housing Authority (State
Board for Community
Colleges- Tidewater);
Educational Facility
Series 1995 RB
5.30%, 11/01/04 AA Aa 535 563,322
- -----------------------------------------------------------------
5.40%, 11/01/05 AA Aa 500 530,870
- -----------------------------------------------------------------
Portsmouth (City of); Port
Improvement Unlimited
Tax Refunding GO
6.40%, 11/01/03 AA- A 300 327,537
- -----------------------------------------------------------------
Portsmouth (City of);
Public Utility Refunding
Series 1992 GO
5.90%, 11/01/01 AA- A 450 477,683
- -----------------------------------------------------------------
2,525,344
- -----------------------------------------------------------------
</TABLE>
10
<PAGE> 13
<TABLE>
<CAPTION>
RATING(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
WASHINGTON-5.67%
King (County of); Series A
RB
5.80%, 01/01/05 AA+ Aa1 $1,000 $ 1,080,810
- -----------------------------------------------------------------
Seattle (City of) (West
Seattle Bridge); Limited
Tax Refunding Series
1991 GO
6.40%, 10/01/01 AA+ Aa1 250 269,935
- -----------------------------------------------------------------
Seattle (Port of); Series
1992 A RB
6.00%, 11/01/01 AA- A-1 500 532,035
- -----------------------------------------------------------------
Snohomish (County of)
Public Utilities
District #1; RB
5.70%, 01/01/06(b) AAA Aaa 4,000 4,257,920
- -----------------------------------------------------------------
Washington Health Care
Facility Authority (Our
Lady of Lourdes Health
Center); Refunding RB
7.35%, 12/01/97(d) A -- 500 502,450
- -----------------------------------------------------------------
Washington Public Power
Supply System (Nuclear
Electric Project #2);
Refunding Series 1997 B
RB
5.50%, 07/01/05 AA- Aa1 2,000 2,089,500
- -----------------------------------------------------------------
5.50%, 07/01/06 AA- Aa1 2,000 2,091,580
- -----------------------------------------------------------------
10,824,230
- -----------------------------------------------------------------
WISCONSIN-5.53%
Middleton (City of); GO
4.00%, 03/01/99 -- Aa2 1,000 1,003,650
- -----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATING(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
WISCONSIN-(CONTINUED)
Sturgeon Bay (City of);
Series 1996 A BAN
4.30%, 10/01/97 -- MIG-1 $1,000 $ 1,000,000
- -----------------------------------------------------------------
Sturgeon Bay (City of)
(Marshfield Clinic);
Series 1996 A BAN
5.20%, 02/15/07(b) AAA Aaa 3,210 3,310,633
- -----------------------------------------------------------------
Wisconsin (State of);
Series A GO
5.75%, 05/01/99 AA Aa2 1,000 1,028,000
- -----------------------------------------------------------------
Wisconsin (State of);
Transportation Series
1992 B RB
4.90%, 07/01/99 AA- A1 2,000 2,030,920
- -----------------------------------------------------------------
Wisconsin (State of)
Health & Educational
Facilities Authority
(Aurora Health Care
Inc.); Series 1997 RB
6.00%, 08/15/06(b) AAA Aaa 2,000 2,186,619
- -----------------------------------------------------------------
10,559,822
- -----------------------------------------------------------------
TOTAL INVESTMENTS-104.10% 198,929,294
- -----------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-(4.10)% (7,826,561)
- -----------------------------------------------------------------
NET ASSETS-100.00% $191,102,733
- -----------------------------------------------------------------
</TABLE>
Investment Abbreviations:
BAN - Bond Anticipation Notes
GO - General Obligation Bonds
IDR - Industrial Development Revenue Bonds
NRR - Not re-rated
PCR - Pollution Control Revenue Bonds
RB - Revenue Bonds
NOTES TO SCHEDULE OF INVESTMENTS:
(a) Ratings assigned by Standard & Poor's Corporation ("S&P") and Moody's
Investors Service, Inc. ("MOODY'S"). NRR indicates a security that is not
re-rated subsequent to funding of an escrow fund (consisting of U.S.
Treasury obligations); this funding is pursuant to an advance refunding of
the security.
(b) Secured by bond insurance.
(c) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined periodically.
Rate shown is the rate in effect on 09/30/97.
(d) Secured by a letter of credit.
(e) Secured by an escrow fund of U.S. Treasury obligations.
(f) Subject to an outstanding irrevocable call or mandatory put by the issuer.
Market value and maturity date reflect such call or put.
See Notes to Financial Statements.
11
<PAGE> 14
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$193,154,422) $ 198,929,294
- ---------------------------------------------------------
Cash 193,282
- ---------------------------------------------------------
Receivables for:
Capital stock sold 296,543
- ---------------------------------------------------------
Interest 2,857,796
- ---------------------------------------------------------
Investment for deferred compensation plan 14,674
- ---------------------------------------------------------
Other assets 42,508
- ---------------------------------------------------------
Total assets 202,334,097
- ---------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 10,404,608
- ---------------------------------------------------------
Capital stock reacquired 307,724
- ---------------------------------------------------------
Dividends 371,344
- ---------------------------------------------------------
Deferred compensation plan 14,674
- ---------------------------------------------------------
Accrued advisory fees 46,889
- ---------------------------------------------------------
Accrued administrative service fees 4,436
- ---------------------------------------------------------
Accrued directors' fees 2,600
- ---------------------------------------------------------
Accrued transfer agent fees 9,493
- ---------------------------------------------------------
Accrued operating expenses 69,596
- ---------------------------------------------------------
Total liabilities 11,231,364
- ---------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES
OUTSTANDING $ 191,102,733
- ---------------------------------------------------------
Capital stock, $.001 par value per share:
Authorized 1,000,000,000
- ---------------------------------------------------------
Outstanding 17,428,094
- ---------------------------------------------------------
NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE $ 10.97
- ---------------------------------------------------------
OFFERING PRICE PER SHARE:
(Net asset value of
$10.97 divided by 99.00%) $ 11.08
- ---------------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income $ 4,604,618
- --------------------------------------------------------
EXPENSES:
Advisory fees 276,788
- --------------------------------------------------------
Custodian fees 5,257
- --------------------------------------------------------
Transfer agent fees 26,541
- --------------------------------------------------------
Registration and filing fees 39,242
- --------------------------------------------------------
Administrative service fees 24,219
- --------------------------------------------------------
Directors' fees 4,742
- --------------------------------------------------------
Other 66,703
- --------------------------------------------------------
Total expenses 443,492
- --------------------------------------------------------
Net investment income 4,161,126
- --------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES:
Net realized gain (loss) on sales of
investment securities (36,109)
- --------------------------------------------------------
Net unrealized appreciation of investment
securities 4,139,362
- --------------------------------------------------------
Net gain on investment securities 4,103,253
- --------------------------------------------------------
Net increase in net assets resulting from
operations $ 8,264,379
- --------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
12
<PAGE> 15
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1997 AND YEAR ENDED MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30, MARCH 31,
1997 1997
<S> <C> <C>
OPERATIONS:
Net investment income $ 4,161,126 $ 4,272,718
- --------------------------------------------------------------------------------------------
Net realized gain (loss) on sales of investment securities (36,109) 7,036
- --------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investment
securities 4,139,362 (1,085,090)
- --------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 8,264,379 3,194,664
- --------------------------------------------------------------------------------------------
Dividends to shareholders from net investment income (4,313,294) (4,406,557)
- --------------------------------------------------------------------------------------------
Distributions from capital -- (21,485)
- --------------------------------------------------------------------------------------------
Net increase from capital stock transactions 13,809,868 91,508,711
- --------------------------------------------------------------------------------------------
Net increase in net assets 17,760,953 90,275,333
- --------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 173,341,780 83,066,447
- --------------------------------------------------------------------------------------------
End of period $191,102,733 $173,341,780
- --------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $186,631,413 $172,821,545
- --------------------------------------------------------------------------------------------
Undistributed net investment income (163,114) (10,946)
- --------------------------------------------------------------------------------------------
Undistributed realized gain (loss) on sales of investment
securities (1,140,438) (1,104,329)
- --------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities 5,774,872 1,635,510
- --------------------------------------------------------------------------------------------
$191,102,733 $173,341,780
- --------------------------------------------------------------------------------------------
</TABLE>
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Tax Exempt Funds, Inc. (the "Company") is registered under the Investment
Company Act of 1940, as amended, as a diversified, open-end management
investment company. The Company is organized as a Maryland corporation
consisting of three separate portfolios; AIM Tax-Free Intermediate Fund
(formerly the Intermediate Portfolio), AIM Tax-Exempt Cash Fund and AIM Tax-
Exempt Bond Fund of Connecticut. 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 Tax-Free Intermediate Fund
(the "Fund"). The investment objective of the Fund is to generate as high a
level of tax-exempt income as is consistent with preservation of capital by
investing in high quality, intermediate-term municipal securities having a
maturity of ten and one-half years or less.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements. The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities 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 -- Portfolio securities are valued based on market
quotations or at fair value determined by a pricing service approved by the
Company's Board of Directors, provided that securities with a demand feature
exercisable within one to seven days are valued at par. Prices provided by
the pricing service represent valuations of the mean between current bid and
asked market prices which may be determined without exclusive reliance on
quoted prices and may reflect appropriate factors such as institution-size
trading in similar groups of securities, yield, quality, coupon rate,
maturity, type of issue, individual trading characteristics and other market
data. Portfolio securities for which prices are not provided by the pricing
service are valued at the mean between the last available bid and asked
prices, unless the Board of Directors or its designees determines that the
mean between the last available bid and asked prices does not accurately
reflect the current market value of the security. 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
13
<PAGE> 16
accordance with methods which are specifically authorized by the Board of
Directors. Notwithstanding the above, short-term obligations with maturities
of sixty days or less are valued at amortized cost.
B. Securities Transactions and Investment Income -- Securities transactions are
recorded on a trade date basis. Realized gains and losses are computed on the
basis of specific identification of the securities sold. Interest income,
adjusted for amortization of premiums and original issue discounts, is earned
from settlement date and is recorded on the accrual basis.
C. Dividends and Distributions to Shareholders -- It is the policy of the Fund
to declare daily dividends from net investment income. Such dividends are
paid monthly. Net realized capital gains (including net short-term capital
gains and market discounts), if any, are distributed annually.
D. 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 (which may be carried forward to offset future taxable capital
gains, if any) of $1,104,049, 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. In addition, the Fund intends
to invest in such municipal securities to allow it to qualify to pay "exempt
interest dividends," as defined in the Internal Revenue Code.
NOTE 2-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 the annual rate of 0.30% of
the first $500 million of the Fund's average daily net assets, plus 0.25% of the
Fund's average daily net assets in excess of $500 million, but not in excess of
$1 billion, plus 0.20% of the Fund's average daily net assets in excess of $1
billion.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to reimburse AIM for certain costs incurred in providing accounting
services to the Fund. During the six months ended September 30, 1997, the Fund
reimbursed AIM $24,219 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agent and
shareholder services to the Fund. During the six months ended September 30,
1997, the Fund paid AFS $15,959 for such services.
Under the terms of a master distribution agreement between the Company and the
Fund, A I M Distributors, Inc. ("AIM Distributors") acts as the exclusive
distributor of the Fund's shares. AIM Distributors received commissions of
$10,141 from sales of capital stock during the six months ended September 30,
1997. Such commissions are not an expense of the Company. They are deducted
from, and are not included in, the proceeds from sales of capital stock. Certain
officers and directors of the Company are officers of AIM, AFS and AIM
Distributors.
During the six months ended September 30, 1997, the Fund paid legal fees of
$898 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-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by The Chase Manhattan Bank. The Fund may borrow up to
the lesser of (i) $500,000,000 or (ii) the limits set by its prospectus for
borrowings. The Fund and other funds advised by AIM which are parties to the
line of credit may borrow on a first come, first served basis. Interest on
borrowings under the line of credit is payable on maturity or prepayment date.
Prior to an amendment of the line of credit on July 15, 1997, the Fund was
limited to borrowings up to the lesser of i) $325,000,000 or ii) the limits set
by its prospectus for borrowings. During the six months ended September 30,
1997, the Fund did not borrow under the line of credit agreement. The funds
which are parties to the line of credit are charged a commitment fee of 0.05% on
the unused balance of the committed line. The commitment fee is allocated among
such funds based on their respective average net assets for the period.
NOTE 5-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold during the six months ended September 30, 1997 was
$52,804,993 and $13,929,392, respectively.
The amount of unrealized appreciation (depreciation) of investment securities
as of September 30, 1997 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $5,797,057
- ---------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (22,185)
- ---------------------------------------------------------
Net unrealized appreciation of investment
securities $5,774,872
- ---------------------------------------------------------
Investments have the same cost for tax and financial
statement purposes.
</TABLE>
14
<PAGE> 17
NOTE 6-CAPITAL STOCK
Changes in capital stock outstanding for the six months ended September 30, 1997
and the year ended March 31, 1997 were as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30, MARCH 31,
1997 1997
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold 2,348,521 $ 25,504,083 11,037,256 $119,260,028
- ------------------------------------------------------------ ---------- ------------ ---------- ------------
Issued as reinvestment of dividends 207,279 2,255,997 277,497 2,985,870
- ------------------------------------------------------------ ---------- ------------ ---------- ------------
Reacquired (1,282,277) (13,950,212) (2,855,695) (30,737,187)
- ------------------------------------------------------------ ---------- ------------ ---------- ------------
1,273,523 $ 13,809,868 8,459,058 $ 91,508,711
---------- ------------ ---------- ------------
</TABLE>
NOTE 7- FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of capital stock
outstanding during the six months ended September 30, 1997 and each of the years
in the five-year period ended March 31, 1997.
<TABLE>
<CAPTION>
MARCH 31,
SEPTEMBER 30, ----------------------------------------------------
1997 1997 1996 1995 1994 1993
-------------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.73 $10.79 $10.67 $10.62 $10.74 $10.27
- ------------------------------------------------------- -------- -------- ------- ------- ------- -------
Income from investment operations:
Net investment income 0.25 0.50 0.52 0.49 0.48 0.53
- ------------------------------------------------------- -------- -------- ------- ------- ------- -------
Net gains (losses) on securities (both realized and
unrealized) 0.25 (0.04) 0.12 0.04 (0.10) 0.47
- ------------------------------------------------------- -------- -------- ------- ------- ------- -------
Total from investment operations 0.50 0.46 0.64 0.53 0.38 1.00
- ------------------------------------------------------- -------- -------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income (0.26) (0.52) (0.52) (0.48) (0.48) (0.53)
- ------------------------------------------------------- -------- -------- ------- ------- ------- -------
Distributions from net realized capital gains -- -- -- -- (0.02) --
- ------------------------------------------------------- -------- -------- ------- ------- ------- -------
Total distributions (0.26) (0.52) (0.52) (0.48) (0.50) (0.53)
- ------------------------------------------------------- -------- -------- ------- ------- ------- -------
Net asset value, end of period $ 10.97 $10.73 $10.79 $10.67 $10.62 $10.74
- ------------------------------------------------------- -------- -------- ------- ------- ------- -------
Total return(a) 4.66% 4.33% 6.06% 5.17% 3.47% 10.01%
- ------------------------------------------------------- -------- -------- ------- ------- ------- -------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $191,103 $173,342 $83,066 $82,355 $99,757 $70,120
- ------------------------------------------------------- -------- -------- ------- ------- ------- -------
Ratio of expenses to average net assets 0.48%(b) 0.56% 0.65% 0.59% 0.61%(c) 0.38%(c)
- ------------------------------------------------------- -------- -------- ------- ------- ------- -------
Ratio of net investment income to average net assets 4.51%(b) 4.63% 4.81% 4.65% 4.37%(c) 5.00%(c)
- ------------------------------------------------------- -------- -------- ------- ------- ------- -------
Portfolio turnover rate 8% 26% 32% 75% 26% 29%
- ------------------------------------------------------- -------- -------- ------- ------- ------- -------
</TABLE>
(a) Does not deduct sales charges and for periods less than one year, total
return is not annualized.
(b) Ratios are annualized and based on average net assets of $184,021,262.
(c) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements are
0.64% and 0.66% for the period 1994-1993, respectively. Ratios of net
investment income to average net assets prior to fee waivers and/or expense
reimbursements are 4.35% and 4.71% for the period 1994-1993, respectively.
15
<PAGE> 18
Directors & Officers
<TABLE>
<S> <C>
BOARD OF DIRECTORS OFFICERS OFFICE OF THE FUND
Charles T. Bauer Charles T. Bauer 11 Greenway Plaza
Chairman Chairman Suite 100
A I M Management Group Inc. Houston, TX 77046
Robert H. Graham
Bruce L. Crockett President
Director, ACE Limited INVESTMENT ADVISOR
Formerly Director, President, and Chief
Executive Officer John J. Arthur A I M Advisors, Inc.
COMSAT Corporation Senior Vice President and Treasurer 11 Greenway Plaza
Suite 100
Owen Daly II Gary T. Crum Houston, TX 77046
Director Senior Vice President
Cortland Trust Inc. TRANSFER AGENT
Carol F. Relihan
Jack Fields Senior Vice President and Secretary A I M Fund Services, Inc.
Formerly Member of the P.O. Box 4739
U.S. House of Representatives Houston, TX 77210-4739
Dana R. Sutton
Carl Frischling Vice President and Assistant Treasurer CUSTODIAN
Partner
Kramer, Levin, Naftalis & Frankel Stuart W. Coco The Bank of New York
Vice President 90 Washington Street, 11th Floor
Robert H. Graham New York, NY 10286
President and Chief Executive Officer Melville B. Cox
A I M Management Group Inc. Vice President COUNSEL TO THE FUND
John F. Kroeger Karen Dunn Kelly Ballard Spahr
Formerly Consultant Vice President Andrews & Ingersoll
Wendell & Stockel Associates, Inc. 1735 Market Street
P. Michelle Grace Philadelphia, PA 19103
Lewis F. Pennock Assistant Secretary
Attorney COUNSEL TO THE DIRECTORS
Nancy L. Martin
Ian W. Robinson Assistant Secretary Kramer, Levin, Naftalis & Frankel
Consultant; Formerly Executive 919 Third Avenue
Vice President and Ofelia M. Mayo New York, NY 10022
Chief Financial Officer Assistant Secretary
Bell Atlantic Management DISTRIBUTOR
Services, Inc. Kathleen J. Pflueger
Assistant Secretary A I M Distributors, Inc.
Louis S. Sklar 11 Greenway Plaza
Executive Vice President Samuel D. Sirko Suite 100
Hines Interests Assistant Secretary Houston, TX 77046
Limited Partnership
Stephen I. Winer
Assistant Secretary
</TABLE>
<PAGE> 19
<TABLE>
<S> <C>
THE AIM FAMILY OF FUNDS--Registered Trademark--
AGGRESSIVE GROWTH
AIM Aggressive Growth Fund*
AIM Capital Development Fund
AIM Constellation Fund
AIM Global Aggressive Growth Fund
GROWTH OF CAPITAL
AIM Advisor International Value Fund
[PHOTO OF AIM Blue Chip Fund
11 GREENWAY PLAZA AIM Global Growth Fund
APPEARS HERE] AIM Growth Fund
AIM International Equity Fund
AIM Value Fund
AIM Weingarten Fund
GROWTH AND INCOME OR INCOME WITH CAPITAL GROWTH
AIM Advisor Flex Fund
AIM Advisor Large Cap Value Fund
AIM Advisor MultiFlex Fund
AIM Advisor Real Estate Fund
AIM Balanced Fund
AIM Charter Fund
AIM Global Utilities Fund
HIGH CURRENT INCOME OR CURRENT INCOME
AIM High Yield Fund
AIM Global Income Fund
AIM Income Fund
CURRENT TAX-FREE INCOME
AIM Municipal Bond Fund
AIM Tax-Exempt Bond Fund of Connecticut
AIM Tax-Free Intermediate Fund
CURRENT INCOME AND HIGH DEGREE OF SAFETY
AIM Intermediate Government Fund
AIM Limited Maturity Treasury Shares
AIM Money Market Fund
AIM Tax-Exempt Cash Fund
A I M Management Group Inc. has provided leadership in the *AIM Aggressive Growth Fund was closed to new investors on
mutual fund industry since 1976 and managed approximately June 5, 1997. For more complete information about any AIM
$82 billion in assets for more than 3.6 million shareholders, Fund(s), including sales charges and expenses, ask your
including individual investors, corporate clients, and financial financial consultant or securities dealer for a free
institutions as of September 30, 1997. The AIM Family of prospectus(es). Please read the prospectus(es) carefully
Funds--Registered Trademark-- is distributed nationwide, and before you invest or send money.
AIM today ranks among the nation's top 15 mutual fund
companies in assets under management, according to Lipper INVEST WITH DISCIPLINE-SM-
Analytical Services, Inc.
[AIM LOGO APPEARS HERE] -----------------
BULK RATE
A I M Distributors, Inc. U.S. POSTAGE
11 Greenway Plaza, Suite 100 PAID
Houston, TX 77046 HOUSTON, TX
Permit No. 1919
-----------------
</TABLE>
