<PAGE>
<TABLE>
<CAPTION>
<S> <C>
[AIM Logo appears Dear Shareholder:
here]
[PHOTO of The Liquid Assets Portfolio of Short-Term Investments Co. benefited from stabilizing economic
Charles T. Bauer, conditions during the 12 months ended August 31, 1995.
Chairman of The year covered by this report was marked by contrast. Early in 1995, the
LETTER the Board of Federal Reserve Board completed a yearlong policy of tightening interest rates
the Fund, to defuse threatening inflationary pressures. Robust economic growth, such as
TO OUR APPEARS HERE] the 5.1% annualized rate logged in the fourth quarter of 1994, was a pace most
analysts considered unsustainable.
SHAREHOLDERS The economy slowed to a moderate 2.7% annualized growth rate during the
first quarter of 1995, and then slipped during the second quarter to just 1.3%. In July
1995, the Fed turned recession-fighter and eased short-term interest rates by 0.25%.
At its August meeting, the Fed left short-term interest rates unchanged. In a recent article by The Wall
Street Journal, Fed vice chairman Alan Blinder said, "the risk of recession now looks small."
YOUR INVESTMENT PORTFOLIO
We are pleased to note that in this changing interest rate environment, the Portfolio consistently maintained its
strict investment discipline of purchasing securities of superior credit quality. The Portfolio invests only in
securities rated "First Tier" as defined in Rule 2a-7 under the Investment Company Act of 1940, which include
such taxable money market instruments as quality commercial paper and selected repurchase agreement securities.
As with any money market mutual fund, your investment in the Portfolio is neither insured nor guaranteed by the
U.S. government, and there can be no assurance that the Portfolio will be able to maintain a stable net asset
value of $1.00 per share.
In light of the central bank's tight monetary policy, the Portfolio maintained a relatively short weighted
average maturity of between three and seven days from September to December 1994. As short-term rates stabilized
and then declined,the Portfolio gradually extended weighted average maturity to a relevant range between
approximately 30 and 50 days, to end at 34 days as of August 31, 1995.
This strategy enabled the 30-day average yield of the Liquid Assets Portfolio to increase from 4.49% at the
opening of the fiscal year to 5.82% at its close, and outperform the 5.55% yield reported for similar First-Tier
institutional funds by IBC/Donoghue's Money Fund Averages(TM). The seven-day yield for the Portfolio increased
from 4.63% at the opening of the fiscal year to 5.81% at its close. Net assets of the Portfolio as of August 31,
1995, were $1.29 billion.
OUTLOOK FOR THE FUTURE
At the close of the reporting period, the short-term economic outlook appeared stable and inflation seemed firmly
under control. Economic signals, while generally constructive, were mixed. Thus, while the Fed prepared a
sanguine economic review in advance of its September 26 meeting, analysts anticipate that further easing of
short-term interest rates could be necessary.
We are pleased to send you this report concerning the Liquid Assets Portfolio. AIM is committed to customer
service and an investment objective that seeks to maximize current income while preserving capital and
maintaining liquidity. As always, we are ready to respond to your comments about this report and any questions
you may have about your Fund. Please call us at 800-659-1005.
Respectfully submitted,
/s/ Charles T. Bauer
Charles T. Bauer
Chairman
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AVERAGE MONTHLY STIC Liquid Assets Portfolio vs. IBC/Donoghue's Money Fund
YIELD COMPARISON Averages(TM)/First-Tier Institutions Only vs. IBC/Donoghue's Money Fund
Averages(TM)/Total Institutions Only
12 months ended 8/31/95 [GRAPH APPEARS HERE]
Measurement IBC/Donoghue's Money Fund IBC/Donoghue's Money Fund
Period STIC Liquid Averages(TM)/First-Tier Averages(TM)/Total
9/94-8/95 Assets Portfolio Institutional Only Institutions Only
<S> <C> <C> <C> <C>
9/94 4.71% Yield 4.48% Yield 4.40% Yield
10/94 4.86 4.64 4.56
11/94 5.28 4.93 4.84
12/94 5.65 5.36 5.24
1/95 5.70 5.52 5.38
2/95 5.99 5.77 5.65
3/95 6.05 5.82 5.72
4/95 6.11 5.83 5.73
5/95 6.07 5.81 5.71
6/95 6.05 5.77 5.68
7/95 5.89 5.65 5.56
8/95 5.82 5.55 5.47
Yields are 30-day average yields for the month-ends shown.
</TABLE>
<TABLE>
<CAPTION>
WEIGHTED AVERAGE STIC Liquid Assets Portfolio vs. IBC/Donoghue's Money Fund
MATURITY Averages(TM)/First-Tier Institutions Only vs. IBC/Donoghue's Money Fund
COMPARISON Averages(TM)/Total Institutions Only
12 months ended 8/31/95 [GRAPH APPEARS HERE]
Measurement IBC/Donoghue's Money Fund IBC/Donoghue's Money Fund
Period STIC Liquid Averages(TM)/First-Tier Averages(TM)/Total
9/94- 8/95 Assets Portfolio Institutions Only Institutions Only
<S> <C> <C> <C> <C>
9/94 6 Days 35 Days 36 Days
10/94 3 35 36
11/94 7 35 34
12/94 5 29 31
1/95 16 30 32
2/95 19 35 36
3/95 15 35 36
4/95 25 39 38
5/95 34 44 42
6/95 56 44 43
7/95 43 50 46
8/95 34 50 48
Source: IBC's Money Market Insight(R) of Holliston, MA 01746
</TABLE>
<PAGE>
SCHEDULE OF INVESTMENTS
August 31, 1995
<TABLE>
<CAPTION>
MATURITY PAR(000) VALUE
<S> <C> <C> <C>
COMMERCIAL PAPER - 35.84%(a)
CONSUMER DURABLES - 9.17%
AUTOMOBILE - 7.94%
Daimler-Benz North America Corp.
5.90% 11/07/95 $ 33,200 $ 32,835,445
- ----------------------------------------------------------------------
5.90% 11/08/95 25,000 24,721,389
- ----------------------------------------------------------------------
Ford Motor Credit Co.
5.90% 09/20/95 25,000 24,922,153
- ----------------------------------------------------------------------
5.95% 11/01/95 20,000 19,798,362
- ----------------------------------------------------------------------
102,277,349
- ----------------------------------------------------------------------
RESIDENTIAL CONSTRUCTION - 1.23%
Weyerhaeuser Real Estate Co.
5.90% 11/13/95 16,000 15,808,578
- ----------------------------------------------------------------------
Total Consumer Durables 118,085,927
- ----------------------------------------------------------------------
CONSUMER NONDURABLES - 3.44%
PUBLISHING - 1.54%
McGraw-Hill Inc.
5.64% 02/28/96 20,500 19,921,900
- ----------------------------------------------------------------------
MULTIPLE INDUSTRY - 1.90%
PepsiCo Inc.
5.53% 01/29/96 25,000 24,423,958
- ----------------------------------------------------------------------
Total Consumer Nondurables 44,345,858
- ----------------------------------------------------------------------
ENERGY - 2.39%
OIL & GAS - 2.39%
ARCO Coal Australia Inc.
6.04% 10/23/95 15,540 15,404,422
- ----------------------------------------------------------------------
6.07% 10/30/95 15,493 15,338,875
- ----------------------------------------------------------------------
Total Energy 30,743,297
- ----------------------------------------------------------------------
FINANCIAL - 15.50%
ASSET-BACKED SECURITIES - 2.94%
Delaware Funding Corp.
5.85% 09/22/95 18,389 18,326,247
- ----------------------------------------------------------------------
Falcon Asset Securitization Corp.
5.64% 01/22/96 20,000 19,551,933
- ----------------------------------------------------------------------
37,878,180
- ----------------------------------------------------------------------
BUSINESS CREDIT - 4.24%
CIT Group Holdings, Inc.
5.90% 09/20/95 25,000 24,922,153
- ----------------------------------------------------------------------
National Rural Utilities Cooperative
Finance Corp.
5.90% 09/08/95 10,000 9,988,528
- ----------------------------------------------------------------------
5.72% 12/04/95 20,000 19,701,289
- ----------------------------------------------------------------------
54,611,970
- ----------------------------------------------------------------------
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
MATURITY PAR(000) VALUE
<S> <C> <C> <C>
INSURANCE - 4.87%
Marsh & McLennan Companies Inc.
5.42% 02/27/96 $ 10,000 $ 9,730,506
- ----------------------------------------------------------------------------
5.42% 03/14/96 9,380 9,104,619
- ----------------------------------------------------------------------------
5.42% 03/29/96 16,350 15,833,067
- ----------------------------------------------------------------------------
5.51% 04/12/96 14,000 13,520,018
- ----------------------------------------------------------------------------
5.62% 04/25/96 15,000 14,445,025
- ----------------------------------------------------------------------------
62,633,235
- ----------------------------------------------------------------------------
MISCELLANEOUS - 0.62%
International Lease Finance Corp.
5.85% 09/12/95 8,000 7,985,700
- ----------------------------------------------------------------------------
MULTIPLE INDUSTRY - 2.83%
General Electric Capital Corp.
5.84% 09/14/95 11,500 11,475,747
- ----------------------------------------------------------------------------
5.88% 09/22/95 25,000 24,914,250
- ----------------------------------------------------------------------------
36,389,997
- ----------------------------------------------------------------------------
Total Financial 199,499,082
- ----------------------------------------------------------------------------
RETAIL - 2.01%
FOOD STORES - 2.01%
Winn-Dixie Stores Inc.
5.87% 10/05/95 26,000 25,855,859
- ----------------------------------------------------------------------------
UTILITIES - 1.43%
ELECTRIC SERVICES - 1.43%
Citizens Utilities Co.
5.85% 09/07/95 18,500 18,481,963
- ----------------------------------------------------------------------------
OTHER - 1.90%
MISCELLANEOUS - 1.90%
Cargill Financial Services Corp.
5.60% 12/18/95 10,000 9,832,000
- ----------------------------------------------------------------------------
5.68% 02/12/96 15,000 14,611,867
- ----------------------------------------------------------------------------
Total Other 24,443,867
- ----------------------------------------------------------------------------
Total Commercial Paper 461,455,853
- ----------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES - 15.54%
Federal National Mortgage Association -
10.18%
5.58%(b) 06/02/99 131,000 131,000,000
- ----------------------------------------------------------------------------
Student Loan Marketing Association - 5.36%
5.71%(b) 01/13/99 54,000 54,000,000
- ----------------------------------------------------------------------------
5.71%(b) 02/08/99 15,000 15,000,000
- ----------------------------------------------------------------------------
69,000,000
- ----------------------------------------------------------------------------
Total U.S. Government Agencies 200,000,000
- ----------------------------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
MATURITY PAR(000) VALUE
<S> <C> <C> <C>
PROMISSORY AND MASTER NOTE AGREEMENTS -
25.52%
Citicorp Securities, Inc.
6.0625%(c) 09/13/95 $ 94,000 $ 94,000,000
- --------------------------------------------------------------------------------
Goldman Sachs Group L.P. (The)
5.9125%(d) 01/29/96 75,000 75,000,000
- --------------------------------------------------------------------------------
Morgan (J.P.) Securities Inc.
5.9875%(e) 10/16/95 86,510 86,510,000
- --------------------------------------------------------------------------------
Morgan Stanley Group, Inc.
5.8925%(f) 01/29/96 73,000 73,000,000
- --------------------------------------------------------------------------------
Total Promissory and Master Note
Agreements 328,510,000
- --------------------------------------------------------------------------------
Total Investments, excluding Repurchase
Agreements 989,965,853
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 23.33%(g)
Fuji Securities Inc.
5.87%(h) -- 75,000 75,000,000
- --------------------------------------------------------------------------------
Goldman, Sachs & Co., Inc.
6.00%(i) 09/01/95 75,410 75,409,615
- --------------------------------------------------------------------------------
6.14%(j) 10/10/95 50,000 50,000,000
- --------------------------------------------------------------------------------
Harris-Nesbitt Thomson Securities Inc.
6.05%(k) 09/01/95 100,000 100,000,000
- --------------------------------------------------------------------------------
Total Repurchase Agreements 300,409,615
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS - 100.23% 1,290,375,468(1)
- --------------------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES - (0.23%) (2,912,810)
- --------------------------------------------------------------------------------
NET ASSETS - 100.00% $1,287,462,658
================================================================================
</TABLE>
(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 Portfolio.
(b) Interest rates are redetermined weekly. Rates shown are the rates in effect
on August 31, 1995.
(c) The Portfolio may demand prepayment of notes purchased under the Master
Note Agreement upon notice to the issuer. Interest rates on master notes
are redetermined periodically. Rates shown are the rates in effect on
August 31, 1995.
(d) The Portfolio may demand prepayment of notes upon seven calendar days'
notice. Interest rates on promissory notes are redetermined periodically.
Rate shown is the rate in effect on August 31, 1995.
(e) The Portfolio may demand prepayment of notes purchased under the Master
Note Agreement upon seven calendar days' notice. Interest rates on master
notes are redetermined periodically. Rate shown is the rate in effect on
August 31, 1995.
(f) Master Note Purchase Agreement may be terminated by either party upon three
business days' notice, at which time all amounts outstanding under the
notes purchased under the Master Note Agreement will become payable.
Interest rates on master notes are redetermined periodically. Rate shown is
the rate in effect on August 31, 1995.
(g) Collateral on repurchase agreements, including the Portfolio'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 managed by the investment advisor.
(h) Open joint repurchase agreement entered into on 08/30/95; however, either
party may terminate the agreement upon demand. Collateralized by
$332,491,000 U.S. Treasury obligations, 0.00% to 9.25% due 05/15/97 to
02/15/16.
(i) Entered into on 08/31/95 with a maturing value of $75,422,183.
Collateralized by $80,567,000 U.S. Treasury obligations, 5.875% to 6.87%
due 07/31/96 to 08/28/00.
(j) Term repurchase agreement entered into 04/11/95 with a maturity date of
10/10/95; however, either party may terminate the agreement as of any
business day not less than seven days' after receipt of written notice from
the terminating party. Collateralized by $43,260,000 U.S. Treasury
obligations, 7.25% to 8.75% due 05/01/16 to 08/15/20.
(k) Entered into on 08/31/95 with a maturing value of $100,016,806.
Collateralized by $90,778,000 U.S. Treasury obligations, 0.00% to 9.25% due
11/15/95 to 05/15/21.
(l) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
5
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
August 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investments, excluding repurchase agreements, at value
(amortized cost) $ 989,965,853
- ------------------------------------------------------------------------
Repurchase agreements 300,409,615
- ------------------------------------------------------------------------
Interest receivable 5,290,124
- ------------------------------------------------------------------------
Investment for deferred compensation plan 11,407
- ------------------------------------------------------------------------
Other assets 20,348
- ------------------------------------------------------------------------
Total assets 1,295,697,347
- ------------------------------------------------------------------------
LIABILITIES:
Payables for:
Dividends 8,081,656
- ------------------------------------------------------------------------
Deferred compensation 11,407
- ------------------------------------------------------------------------
Accrued advisory fees 91,097
- ------------------------------------------------------------------------
Accrued directors' fees 2,034
- ------------------------------------------------------------------------
Accrued administrative services fees 5,219
- ------------------------------------------------------------------------
Accrued transfer agent fees 10,645
- ------------------------------------------------------------------------
Accrued operating expenses 32,631
- ------------------------------------------------------------------------
Total liabilities 8,234,689
- ------------------------------------------------------------------------
NET ASSETS $1,287,462,658
========================================================================
NET ASSET VALUE PER SHARE:
Capital stock, $.001 par value per share 1,287,599,788
========================================================================
Net asset value, offering and redemption price per share $1.00
========================================================================
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
STATEMENT OF OPERATIONS
For the year ended August 31, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income $94,760,422
- ------------------------------------------------------------------
EXPENSES:
Advisory fees 2,451,146
- ------------------------------------------------------------------
Custodian fees 59,910
- ------------------------------------------------------------------
Administrative services fees 97,044
- ------------------------------------------------------------------
Directors' fees and expenses 14,116
- ------------------------------------------------------------------
Filing fees 255,172
- ------------------------------------------------------------------
Transfer agent fees 34,915
- ------------------------------------------------------------------
Other 61,991
- ------------------------------------------------------------------
Total expenses 2,974,294
- ------------------------------------------------------------------
Less advisory fees waived (1,127,509)
- ------------------------------------------------------------------
Net expenses 1,846,785
- ------------------------------------------------------------------
Net investment income 92,913,637
- ------------------------------------------------------------------
Net realized gain (loss) on sales of investments (74,934)
- ------------------------------------------------------------------
Net increase in net assets resulting from operations $92,838,703
==================================================================
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the year ended August 31, 1995 and the period November 4, 1993 (date
operations commenced) through August 31, 1994
<TABLE>
<CAPTION>
1995 1994
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 92,913,637 $ 44,215,233
- ----------------------------------------------------------------------------
Net realized gain (loss) on sales of
investments (74,934) (62,196)
- ----------------------------------------------------------------------------
Net increase in net assets resulting from
operations 92,838,703 44,153,037
- ----------------------------------------------------------------------------
Distributions to shareholders from net
investment income (92,913,637) (44,215,233)
- ----------------------------------------------------------------------------
Share transactions -- net 259,187,785 1,028,412,003
- ----------------------------------------------------------------------------
Net increase in net assets 259,112,851 1,028,349,807
- ----------------------------------------------------------------------------
NET ASSETS:
Beginning of period 1,028,349,807 --
- ----------------------------------------------------------------------------
End of period $1,287,462,658 $1,028,349,807
============================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $1,287,599,788 $1,028,412,003
- ----------------------------------------------------------------------------
Undistributed net realized gain (loss) on
sales of investment securities (137,130) (62,196)
- ----------------------------------------------------------------------------
$1,287,462,658 $1,028,349,807
============================================================================
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS
August 31, 1995
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
Short-Term Investments Co. (the "Fund") is registered under the Investment
Company Act of 1940, as amended, as an open-end series, diversified management
investment company. The Fund is organized as a Maryland corporation consisting
of two different portfolios, each of which offers separate series of shares:
the Liquid Assets Portfolio and the Prime Portfolio. The assets, liabilities
and operations of each portfolio are accounted for separately. Information
presented in these financial statements pertains only to the Liquid Assets
Portfolio (the "Portfolio").
The following is a summary of the significant accounting policies followed by
the Portfolio in the preparation of its financial statements.
A. Security Valuations - The Portfolio invests only in securities which have
maturities of 397 days or less. 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 premium.
B. 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, adjusted for amortization of premiums and
discounts on investments, is accrued daily. Dividends to shareholders are
declared daily and are paid on the first business day of the following
month.
C. Federal Income Taxes - The Portfolio 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 $90,712 (which may be carried forward to offset future
taxable 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.
NOTE 2 - ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master advisory agreement, AIM
receives a fee, paid monthly, with respect to the Portfolio at the annual rate
of 0.15% of the average daily net assets of the Portfolio.
AIM will, if necessary, reduce its fee for any fiscal year to the extent
required so that the amount of ordinary expenses of the Portfolio (excluding
interest, taxes, brokerage commissions and extraordinary expenses) paid or
incurred by the Portfolio for such fiscal year does not exceed the applicable
expense limitations imposed by the state securities regulations in any state in
which the Portfolio's shares are qualified for sale. During the year ended
August 31, 1995, AIM voluntarily waived fees of $1,127,509.
The Portfolio, pursuant to a master administrative services agreement with
AIM, has agreed to reimburse AIM for certain costs incurred in providing
accounting services to the Portfolio. During the year ended August 31, 1995,
the Portfolio reimbursed AIM $58,174 for such services.
During the year ended August 31, 1995, the Fund paid A I M Institutional Fund
Services, Inc. ("AIFS") $47,915 for shareholder and transfer agency services.
Effective July 1, 1995, AIFS became the exclusive transfer agent of the
Portfolio. Certain officers and directors of the Fund are officers and
directors of AIM, AIFS and Fund Management Company, the Portfolio's
distributor.
During the year ended August 31, 1995, the Portfolio paid legal fees of $4,721
for services rendered by Kramer, Levin, Naftalis, Nessen, Kamin & Frankel as
counsel to the Fund's directors. A member of that firm is a director of the
Fund.
9
<PAGE>
NOTE 3 - DIRECTORS' FEES
Directors' fees represent remuneration paid or accrued to each director who is
not an "interested person" of AIM. The Fund invests directors' fees, if so
elected by a director, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 4 - CAPITAL STOCK
Changes in capital stock during the year ended August 31, 1995 and the period
November 4, 1993 (date operations commenced) through August 31, 1994 were as
follows:
<TABLE>
<CAPTION>
1995 1994
--------------------------------- --------------------------------
SHARES AMOUNT SHARES VALUE
--------------- ---------------- --------------- ---------------
<S> <C> <C> <C> <C>
Sold 32,408,905,435 $ 32,408,905,435 20,765,848,248 $20,765,848,248
- --------------------------------------------------------------------------------------------
Issued as reinvestment
of dividends 2,458,920 2,458,920 587,397 587,397
- --------------------------------------------------------------------------------------------
Reacquired (32,152,176,570) (32,152,176,570) (19,738,023,642) (19,738,023,642)
============================================================================================
Net increase 259,187,785 $ 259,187,785 1,028,412,003 $ 1,028,412,003
============================================================================================
</TABLE>
NOTE 5 - FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a share of capital stock
of the Portfolio outstanding during the year ended August 31, 1995 and the
period November 4, 1993 (date operations commenced) through August 31, 1994.
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00
- --------------------------------------------- ---------- ----------
Income from investment operations:
Net investment income 0.06 0.03
- --------------------------------------------- ---------- ----------
Less distributions:
Dividends from net investment income (0.06) (0.03)
- --------------------------------------------- ---------- ----------
Net asset value, end of period $ 1.00 $ 1.00
============================================= ========== ==========
Total return 5.83% 3.83%(a)
============================================= ========== ==========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,287,463 $1,028,350
============================================= ========== ==========
Ratio of expenses to average net assets 0.11%(b) 0.05%(c)
============================================= ========== ==========
Ratio of net investment income to average net
assets 5.69%(b) 3.85%(c)
============================================= ========== ==========
</TABLE>
(a) Annualized.
(b) After waiver of advisory fees. Ratios are based on average net assets of
$1,634,097,113. Ratios of expenses and net investment income to average net
assets prior to waiver of advisory fees are 0.18% and 5.62%, respectively.
(c) After waiver of advisory fees. Annualized ratios of expenses and net
investment income to average net assets prior to waiver of advisory fees
are 0.18% and 3.72%, respectively.
10
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders of
Short-Term Investments Co.:
We have audited the accompanying statement of assets and liabilities of the
Liquid Assets Portfolio (a series Portfolio of Short-Term Investments Co.),
including the schedule of investments, as of August 31, 1995, and the related
statement of operations for the year then ended, and the statement of changes
in net assets and financial highlights for the year then ended and the period
November 4, 1993 (date operations commenced) through August 31, 1994. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
August 31, 1995 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Liquid Assets Portfolio as of August 31, 1995, the results of its operations
for the year then ended, and the changes in its net assets and financial
highlights for the year then ended and the period November 4, 1993 (date
operations commenced) through August 31, 1994, in conformity with generally
accepted accounting principles.
KPMG Peat Marwick LLP
October 6, 1995
Houston, Texas
11
<PAGE>
<TABLE>
<S> <C> <C> <C>
DIRECTORS
Charles T. Bauer John F. Kroeger
Bruce L. Crockett Lewis F. Pennock SHORT-TERM
Owen Daly II Ian W. Robinson INVESTMENTS CO.
Carl Frischling Louis S. Sklar (STIC)
Robert H. Graham
OFFICERS
Charles T. Bauer Chairman
Robert H. Graham President
John J. Arthur Sr. Vice President & Treasurer
Gary T. Crum Sr. Vice President
Carol F. Relihan Vice President & Secretary
Dana R. Sutton Vice President & Assistant Treasurer
Melville B. Cox Vice President Liquid Assets
Karen Dunn Kelley Vice President Portfolio
J. Abbott Sprague Vice President ------------------------------------------------
P. Michelle Grace Assistant Secretary ANNUAL
Nancy L. Martin Assistant Secretary REPORT
Ofelia M. Mayo Assistant Secretary
Kathleen J. Pflueger Assistant Secretary
Samuel D. Sirko Assistant Secretary
Stephen I. Winer Assistant Secretary
Mary J. Benson Assistant Secretary
INVESTMENT ADVISOR
A I M Advisors, Inc.
11 Greenway Plaza, Suite 1919
Houston, TX 77046
(800) 347-1919
DISTRIBUTOR
Fund Management Company
11 Greenway Plaza, Suite 1919
Houston, TX 77046
(800) 659-1005
CUSTODIAN AUGUST 31, 1995
The Bank of New York
110 Washington Street
New York, NY 10286
LEGAL COUNSEL TO FUND
Ballard Spahr Andrews & Ingersoll
1735 Market Street, 51st Floor
Philadelphia, PA 19103-7599
LEGAL COUNSEL TO DIRECTORS
Kramer, Levin, Naftalis, Nessen, Kamin & Frankel
919 Third Avenue
New York, NY 10022
TRANSFER AGENT
A I M Institutional Fund Services, Inc.
11 Greenway Plaza, Suite 1919
Houston, TX 77046
AUDITORS
KPMG Peat Marwick LLP
NationsBank Building, 700 Louisiana
Houston, TX 77002
This report may be distributed only to current shareholders or [LOGO APPEARS HERE]
to persons who have received a current prospectus. Fund Management Company
</TABLE>
